Audit Report on Financial Statements issued by an Independent Auditor

AEDAS HOMES, S.A. AND SUBSIDIARIES Consolidated Financial Statements and Consolidated Management Report for the year ended March 31, 2021

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AUDIT REPORT ON CONSOLIDATED FINANCIAL STATEMENTS ISSUED BY AN INDEPENDENT AUDITOR

Translation of a report and financial statements originally issued in Spanish. In the event of discrepancy, the Spanish-language version prevails (See Note 25)

To the shareholders of AEDAS HOMES, S.A.:

Audit report on the consolidated financial statements

Opinion

We have audited the consolidated financial statements of AEDAS HOMES, S.A. (the parent) and its subsidiaries (the Group), which comprise the consolidated balance sheet at March 31, 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows, and the notes thereto, for the year then ended.

In our opinion, the accompanying consolidated financial statements give a true and fair view, in all material respects, of consolidated equity and the consolidated financial position of the Group at March 31, 2021 and of its financial performance and its consolidated cash flows, for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union (IFRS-EU), and other provisions in the regulatory framework applicable in Spain.

Basis for opinion

We conducted our audit in accordance with prevailing audit regulations in Spain. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report.

We are independent of the Group in accordance with the ethical requirements, including those related to independence, that are relevant to our audit of the consolidated financial statements in Spain as required by prevailing audit regulations. In this regard, we have not provided non-audit services nor have any situations or circumstances arisen that might have compromised our mandatory independence in a manner prohibited by the aforementioned requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our audit opinion thereon, and we do not provide a separate opinion on these matters.

Measurement of inventories

Description At March 31, 2021, the Group carried inventories at 1,394,499,790 euros, which mainly comprise land and sites, as well as various developments in progress and completed developments that are being held for the purpose of selling the homes being built. The disclosures pertaining to these assets can be found in Note 11 to the accompanying consolidated financial statements. As detailed in Note 4.4, the Group's inventories are measured at their acquisition cost, grossed up primarily by the cost of any development works, related purchase costs, construction cost, and capitalized borrowing costs, or their estimated market value, if lower.

At each reporting date, the parent's directors test these inventories for indications of impairment. Impairment losses are recognized when their carrying amount exceeds their recoverable amount. To determine the inventories recoverable amount, the parent's directors rely primarily on the appraisals provided by an independent expert in keeping with the valuation standards prescribed by the Royal Institution of Chartered Surveyors (RICS). The risk of the incorrect initial recognition of these assets, the incorrect capitalization of eligible costs and the possible impairment of these assets, as well as the materiality of the amounts involved, have led us to conclude that the measurement of the Group's inventories constitutes the key audit matter.

Our response In this regard, our audit procedures included the following, among others:

Understanding Group management´s processes to determine the inventories recoverable amount the inventory, including evaluation of the design and implementation of the relevant controls.
Reviewing the purchase deeds for real estate assets and analyzing a sample of costs capitalized as an increase in inventories.
Reviewing, in collaboration with our valuation experts, the valuation methodology used by the independent expert for a sample of the properties appraised by the latter, which encompassed a mathematical assessment of the model, an analysis of the projected cash flows, and a review of the discount rates used.
Reviewing the disclosures included in the notes to the accompanying consolidated financial statements in conformity with the applicable regulatory financial reporting framework.

Other information: consolidated management report

Other information refers exclusively to the 2021 consolidated management report, the preparation of which is the responsibility of the parent company's directors and is not an integral part of the consolidated financial statements.

Our audit opinion on the consolidated financial statements does not cover the consolidated management report. Our responsibility for the consolidated management report, in conformity with prevailing audit regulations in Spain, entails:

a. Checking only that certain information included in the Corporate Governance Report and the Annual Report on the Remunerations of Directors, to which the Audit Law refers, was provided as stipulated by applicable regulations and, if not, disclose this fact.
b. Assessing and reporting on the consistency of the remaining information included in the consolidated management report with the consolidated financial statements, based on the knowledge of the Group obtained during the audit, in addition to evaluating and reporting on whether the content and presentation of this part of the consolidated management report are in conformity with applicable regulations. If, based on the work we have performed, we conclude that there are material misstatements, we are required to disclose this fact.

Based on the work performed, as described above, we have verified that the information referred to in paragraph a) above is provided as stipulated by applicable regulations and that the remaining information contained in the consolidated management report is consistent with that provided in the 2021 consolidated financial statements and its content and presentation are in conformity with applicable regulations.

Responsibilities of the parent company´s directors and the audit and control committee for the consolidated financial statements

The directors of the parent company are responsible for the preparation of the accompanying consolidated financial statements so that they give a true and fair view of the equity, financial position and results of the Group, in accordance with IFRS-EU, and other provisions in the regulatory framework applicable to the Group in Spain, and for such internal control as they determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors of the parent company are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The audit and control committee is responsible for overseeing the Group's financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with prevailing audit regulations in Spain will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with prevailing audit regulations in Spain, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the audit and control committee of the parent company regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the audit and control committee of the parent company with a statement that we have complied with relevant ethical requirements, including those related to independence, and to communicate with them all matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the audit and control committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.

We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.

Report on other legal and regulatory requirements

European single electronic format

We have examined the digital files of the European single electronic format (ESEF) of AEDAS HOMES, S.A. and subsidiaries for the 2021 financial year, which include the XHTML file containing the consolidated financial statements for the year, and the XBRL files as labeled by the entity, which will form part of the annual financial report.

The directors of AEDAS HOMES S.A. are responsible for submitting the annual financial report for the 2021 financial year, in accordance with the formatting and mark-up requirements set out in Delegated Regulation EU 2019/815 of 17 December 2018 of the European Commission (hereinafter referred to as the ESEF Regulation). In this regard, the Corporate Governance Report and the Annual Report on the Remunerations of Directors have been incorporated by reference in the consolidated management report.

Our responsibility consists of examining the digital files prepared by the directors of the parent company, in accordance with prevailing audit regulations in Spain. These standards require that we plan and perform our audit procedures to obtain reasonable assurance about whether the contents of the consolidated financial statements included in the aforementioned digital files correspond in their entirety to those of the consolidated financial statements that we have audited, and whether the consolidated financial statements and the aforementioned files have been formatted and marked up, in all material respects, in accordance with the ESEF Regulation.

In our opinion, the digital files examined correspond in their entirety to the audited consolidated financial statements, which are presented and have been marked up, in all material respects, in accordance with the ESEF Regulation.

Additional report to the audit and control committee

The opinion expressed in this audit report is consistent with the additional report we issued to the audit and control committee on May 9, 2021.

Term of engagement

The ordinary general shareholders' meeting held on June 23, 2020 appointed us as auditors for 3 years, commencing on March 31, 2021.

Previously, we were appointed as auditors by the shareholders for one year and we have been carrying out the audit of the consolidated financial statements continuously since December 31, 2016.

ERNST & YOUNG, S.L. (Registered in the Official Register of Auditors under No. S0530)

(signed in the original version)

Alfonso Balea López (Registered in the Official Register of Auditors under No. 20970)

_____________________________

May 9, 2021

Aedas Homes, S.A. and subsidiaries

Consolidated financial statements for the year ended March 31, 2021 prepared under the International Financial Reporting Standards (IFRS) adopted by the European Union, Group Management Report and Independent Auditor's Report

(Free translation from the original in Spanish. In case of discrepancy, the Spanish-language version prevails)

AEDAS HOMES, S.A. and subsidiaries CONSOLIDATED BALANCE SHEET AT MARCH 31, 2021 AND MARCH 31, 2020

(Eu ros)
-------------

AS SET S	Not e	Mar ch 31, 202 1	Mar ch 31, 202 0	EQ UIT Y A ND LIA BIL ITIE S	Not e	Mar ch 31, 202 1	Mar ch 31, 202 0
NO N-C SSE TS: UR REN T A				EQ UIT Y:
Inta ngi ble ets ass	7	1,49 4,84 1	1,24 4,6 14	Cap ital		47, 966 ,587	47, 966 ,587
Sof twa re		1,46 3,37 9	1,17 0,13 8	Sha apit al re c		47, 966 ,587	47, 966 ,587
Oth er i ntan gibl sets e as		31,4 62	74,4 76	Sha ium re p rem		500 ,076 ,72 1	500 ,076 ,72 1
Pro ty, pla nt a nd ipm ent per equ	8	3,24 1,89 9	3,38 0,92 3	Par ent co mp any res erv es		(30 3) 7,09 5,36	(30 8) 7,92 9,66
Lan d a nd b uild ings		2,4 87,2 02	2,6 39,8 82	(Ow n P nt C har nd ity hol din gs) are om pan y s es a equ		(65 ,075 ,384 )	(36 ,940 ,235 )
Pla nt a nd o the r PP &E		732 ,523	740 ,719	R eta ine d e ing s (P rior riod los ) arn pe ses		(10 ,744 ,632 )	(11 ,81 1,33 2)
Wo rk in nd p ents pro gre ss a rep aym		22, 174	322	R s at ful ly-c olid ate d c ies ese rve ons om pan		(2,2 93,9 16)	(3,5 46, 171 )
Inv est nt p erty me rop	9	1,70 4,3 13	-	Oth ont ribu tion er o wn er c s		740 ,071 ,256	740 ,071 ,256
Lan d		286 ,114	-	Pro fit/( loss ) fo r th ttrib uta ble to e qui ty h old of the t e ye ar a ers pa ren		85, 104 ,149	3,1 57,8 75
Bui ldin gs		1,41 8,19 9	-	Oth qui ty i nst ent er e rum s		4,4 06,9 66	2,5 35,3 63
Gro Non t in tme nts in ies and iate -cu rren ves up com pan as soc s	10	11,4 21,9 75	8,89 0,37 5	Non ntro llin g in tere sts -co		1,88 9,48 9	2,4 01,7 32
Inve stm ents in a ciat sso es		3,96 4,7 99	2,94 8,36 7	Tot al e qui ty	14	994 ,305 ,873	935 ,982 ,128
Loa ns t iate o as soc s		7,45 7,17 6	5,94 2,0 08	NO N-C IES UR REN T L IAB ILIT :
Non t fin ial I stm ent -cu rren anc nve s	10	1,08 8,04 9	1,71 5,25 1	Non t pa yab les -cu rren	15	89, 511 ,657	3,98 1,76 0
Oth er f inan cial ets ass		1,08 8,04 9	1,71 5,25 1	Bon ds a nd o the arke tab le s ritie r m ecu s		32,3 54,8 34	2,54 6,9 15
Def d ta ts erre x a sse	17	13,8 03,0 58	23, 021 ,317	Deb ts w ith c red it in stitu tion s		56,0 78,4 04	-
Tot al n t as set on- cur ren s		32, 754 ,135	38,2 52,4 80	Oth er f inan cial liab ilitie s		1,07 8,4 19	1,43 4,84 5
				Tot al n t lia bilit ies on- cur ren		89, 511 ,657	3,98 1,76 0
CU RR ENT AS SET S:				CU RR ENT LIA BIL ITIE S:
Inv ent orie s	11	1,39 4,4 99,7 90	1,34 3,93 9,50 8	Cur t pr ovi sio ren ns		13,6 66,0 26	4,5 37,3 33
Tra de and oth ivab les er r ece	10, 12	51, 144 ,420	43,4 50,2 66	Dev elo ent loa clas sifi ed nt d in t he lon g te pm ns as c urre ue rm	15	165 ,006 ,520	134 ,901 ,390
Tra de ivab les rece		45, 262 ,865	38, 776 ,164	C nt b win urre orro gs	15	100 ,942 ,788	214 ,287 ,40 1
Tra de ivab les from ocia tes rece ass	20	78,8 33	234 ,556	Bon ds a nd o the arke tab le s ritie r m ecu s		22, 301 ,428	59,5 22, 751
Sun dry ivab les rece		652 ,618	590 ,377	Deb t wi th f inan cial ins titut ions		77, 175 ,037	150 ,783 ,796
Per nel son		12,9 13	10,5 76	Der ivat ives		-	2,6 15,4 56
Cur rent tax ets ass	17	75,4 98	1,80 2	Oth er f inan cial liab ilitie s		1,46 6,32 3	1,36 5,39 8
Oth ivab les from blic tho ritie er r ece pu au s	17	5,06 1,69 3	3,83 6,79 1	Cur t bo ing s fr rel ate d c ies and oci ate ren rrow om om pan ass s		-	1,68 0,84 3
Cur t in tme nts in Gro ies and iate ren ves up com pan as soc s	10	620 ,939	272 ,593	Tra de and oth ble er p aya s	16	323 ,553 ,275	289 ,671 ,780
Loa ns t iate o as soc s Cur t Fi cia l As set ren nan s	10	620 ,939 15,0 90,4 50	272 ,593 13,0 74,6 21	Sup plie rs Pay able for vice ceiv ed ser s re		140 ,339 ,246 6,1 59,7 82	103 ,772 ,527 9,89 9,52 8
Loa ns t nies o co mpa		-	56,8 38	efits Em ploy ben yab le ee pa		3,5 16,7 80	1,04 5,18 2
Oth nt fi cial ets er c urre nan ass		15,0 90,4 50	13,0 17,7 83	Cur t tax liab ilitie ren s	17	19,2 37,3 38	6,5 52,2 55
Pre nts d a ued inc pay me an ccr om e	10	6,70 8,67 1	9,9 39,9 16	Oth bles to pub lic a utho ritie er p aya s		22, 509 ,962	6,7 16,3 86
Cas h a nd h e qui val ent cas s	13	186 ,167 ,734	136 ,113 ,25 1	Cus tom ents er p rep aym		131 ,790 ,167	161 ,685 ,902
Tot al c nt a ts urre sse		1,65 4,2 32,0 04	1,54 6,79 0,15 5	Tot al c nt l iab ilitie urre s		603 ,168 ,609	645 ,078 ,747
TOT AL AS SET S		1,68 6,98 6,13 9	1,58 5,04 2,63 5	TOT AL EQ UIT Y A ND LIA BIL ITIE S		1,68 6,98 6,13 9	1,58 5,04 2,63 5

The accompanying notes 1 to 24 are an integral part of the consolidated balance sheet at March 31, 2021.

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED MARCH 31, 2021 AND THE THREE MONTHS ENDED MARCH

31, 2020 (Euros)

	Note	Year ended March 31, 2021	Three months ended March 31, 2020
Revenue - property development	19.a	667,605,815	70,040,084
Cost of goods sold - property development		(479,438,078)	(50,138,720)
Gross margin - Property development		188,167,737	19,901,364
Gross margin - Property development %		28.2%	28.4%
Revenue - land	19.a	4,340,287	-
Cost of goods sold - land		(3,535,157)	-
Gross margin - Land		805,130	-
Gross margin - Land %		18.6%	-
Revenues	19.a	671,946,102	70,040,084
Cost of goods sold	11 & 19.b	(482,973,235)	(50,138,720)
GROSS MARGIN		188,972,867	19,901,364
GROSS MARGIN %		28.1%	28.4%
Marketing		(7,871,092)	(2,477,782)
Sales commissions		(12,518,978)	(1,988,246)
Other direct development costs		(1,539,169)	(505,749)
Taxes related with developments		(6,828,404)	(398,588)
NET MARGIN		160,215,224	14,530,999
NET MARGIN %		23.8%	20.7%
General expenses	19.c	(29,442,506)	(6,849,169)
Other operating income		2,649,029	294,192
Other operating expenses		(199,919)	(32,605)
EBITDA		133,221,828	7,943,417
EBITDA %		19.8%	11.3%
Depreciation and amortisation	7, 8 & 9	(2,196,613)	(471,648)
Impairment of inventories	11	(2,852,204)	-
OPERATING PROFIT/(LOSS)		128,173,011	7,471,769
Finance income		410,525	117,993
Finance costs - borrowings from group companies	19.d	(25,468)	(12,738)
Finance costs - bank borrowings, net of capitalised borrowing costs	19.d	(15,013,162)	(3,045,889)
Change in fair value of financial instruments	10	399,243	(1,418,817)
Exchange differences		(3,968)	(612)
NET FINANCE COST		(14,232,830)	(4,360,063)
Share of profit/(loss) of associates		(415,034)	(84,130)
PROFIT/(LOSS) BEFORE TAX		113,525,147	3,027,576
Income tax	17	(28,471,045)	284,532
PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS	19.a	85,054,102	3,312,108
PROFIT/(LOSS) FROM DISCONTINUED OPERATIONS		-	-
PROFIT/(LOSS) FOR THE PERIOD		85,054,102	3,312,108
Attributable to non-controlling interests		(50,047)	154,233
Attributable to equity holders of the parent		85,104,149	3,157,875
Basic earnings per share		1,77	0.07
Diluted earnings per share		1,91	0.07

The accompanying notes 1 to 24 are an integral part of the consolidated income statement for the year ended March 31, 2021.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED MARCH 31, 2020 AND THE THREE MONTHS ENDED MARCH 31, 2020

(Euros)

	No te	Ye de d Ma h 3 1, 2 0 2 1 ar en rc	T hr t hs de d Ma h 3 1, ee m on en rc 2 0 2 0
O / ( O S S ) O O ( ) P R F I T L F R T H E P E R I D I	3	8 0 4, 1 0 2 5, 5	3, 3 1 2, 1 0 8
Inc d e ise d d ire t ly in i ty om e a n xp en se re co g n c eq u
O C O S C O G S C Q ( ) T T A L I N M E A N D E X P E N E R E N I E D D I R E T L Y I N E U I T Y I I		-	-
T O T A L A M O U N T S T R A N S F E R R E D T O P R O F I T O R L O S S ( I I I )		-	-
T O T A L R E C O G N I S E D I N C O M E A N D E X P E N S E ( I+ I I+ I I I )		8 0 4, 1 0 2 5, 5	3, 3 1 2, 1 0 8
f To ta l re ise d inc d e t tr i bu ta b le to i ty ho l de t he Pa t co g n om e a n xp en se a eq u rs o ren		8 1 0 1 9 5, 4, 4	3, 1 8 5 7, 7 5
To ta l re ise d inc d e t tr i bu ta b le to tro l l ing in ter ts co g n om e a n xp en se a no n-c on es		( 0, 0 ) 5 4 7	1 2 3 3 5 4,

The accompanying notes 1 to 24 are an integral part of the consolidated statement of comprehensive income for the year ended March 31, 2021.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED MARCH 31, 2021 AND THE THREE MONTHS ENDED MARCH 31, 2020

(Euros)

	Cap ital (No te 1 4.a )	Sha re miu pre m (No ) te 1 4.b	of t Res he erv es Par ent	(Ow n P nt are Com pan y sha d res an ity equ hol din gs)	Ret ain ed nin ear gs (pri erio d or-p ) los ses (No te 1 4.g )	Res t erv es a full y sol idat ed con ies com pan	Sha reh old er/o wn er trib utio (No te con ns ) 14.h	fit/( ) fo Pro loss r the ye ar	Oth er ity equ inst ent rum s (No te 1 4.j)	Non ntro llin -co g inte ts res	TOT AL
OP ENI NG BA LAN CE AT JAN UA RY 1 20 20	47, 966 ,587	500 ,076 ,72 1	(30 9,86 8,83 6)	(30 ,603 ,842 )	(41 ,470 ,848 )	(3,5 46, 171 )	740 ,071 ,256	31, 571 ,885	2,1 79,7 70	2,4 97,4 99	938 ,874 ,02 1
Tot al r gni sed inc nd eco om e a exp ens e	-	-	-	-		-	-	3,1 57,8 75	-	154 ,233	3,3 12,1 08
Dis trib utio f pr ior- iod fit n o per pro	-	-	1,91 2,3 69	-	29, 659 ,516	-	-	(31 ,57 1,88 5)	-	-	-
Tra ctio ith sha reh old nsa ns w ers	-	-	26, 799	(6,3 36,3 93)	-	-	-		-	(25 0,00 0)	(6,5 59,5 94)
gs ( net) Tra ctio ith o sha and uity ho ldin nsa ns w wn res eq	-	-	26, 799	(6,3 93) 36,3	-	-	-		-	-	(6,3 94) 09,5
Dist ribu tion of divi den ds a nd r nt o f eq uity epa yme trib utio con ns	-	-	-	-	-	-	-		-	(25 0,00 0)	(25 0,00 0)
Con sol idat ion d o the r ch sc ope an ang es	-	-	-	-	-	-	-		355 ,593	-	355 ,593
CLO SIN G B ALA NC E A T M AR CH 31, 202 0	47, 966 ,587	500 ,076 ,72 1	(30 7,92 9,66 8)	(36 ,940 ,235 )	(11 ,81 1,33 2)	(3,5 46, 171 )	740 ,071 ,256	3,1 57,8 75	2,5 35,3 63	2,4 01,7 32	935 ,982 ,128
Tot al r gni sed inc nd eco om e a exp ens e	-	-	-	-	-	-	-	85, 104 ,149	-	(50 ,047 )	85,0 54, 102
Dis trib utio f pr ior- iod fit n o per pro	-	-	935 ,882	-	1,06 6,70 0	1,15 5,29 3	-	(3,1 57,8 75)	-	-	-
Tra ctio ith sha reh old nsa ns w ers	-	-	(10 1,57 7)	(28 ,135 ,149 )	-	-	-	-	-	-	(28 ,236 ,726 )
Tra ctio ith o sha and uity ho ldin gs ( net) nsa ns w wn res eq	-	-	(10 1,57 7)	(28 ,135 ,149 )	-	-	-	-	-	-	(28 ,236 ,726 )
of f eq Dist ribu tion divi den ds a nd r nt o uity epa yme trib utio con ns	-	-	-	-	-	-	-	-	-	-	-
Con sol idat ion d o the r ch sc ope an ang es	-	-	-	-	-	96,9 62	-	-	1,87 1,60 3	(46 2,19 6)	1,50 6,36 9
CLO SIN G B ALA NC E A T M AR CH 31, 202 1	47, 966 ,587	500 ,076 ,72 1	(30 7,09 5,36 3)	(65 ,075 ,384 )	(10 ,744 ,632 )	(2,2 93,9 16)	740 ,071 ,256	85, 104 ,149	4,4 06,9 66	1,88 9,48 9	994 ,305 ,873

The accompanying notes 1 to 24 are an integral part of the consolidated statement of changes in equity for the year ended March 31, 2021.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2021 AND THE THREE MONTHS ENDED MARCH 31, 2020

	(Euros)
	Note	Year ended March 31, 2021	Three months ended March 31, 2020
1. CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before tax		113,525,147	3,027,576
Adjustments for finance income/costs		14,232,830	4,360,063
Finance income		(410,525)	(117,993)
Finance costs	19.e	27,495,666	4,629,469
Borrowing costs capitalised in inventories	11	(12,457,036)	(1,570,841)
Change in fair value of financial instruments		(399,243)	1,418,817
Exchange differences		3,968	611
Share of profit/(loss) of associates		415,034	84,130
Operating profit/(loss)		128,173,011	7,471,769
Depreciation and amortisation charges	7,8 & 9	2,196,613	471,648
Impairment of inventories	11	2,852,204	-
EBITDA		133,221,828	7,943,417
Other adjustments to profit		(22,456,426)	295,858
Provisions		1,871,605	355,590
Realised finance gains/losses (fair value and exchange differences)		(3,968)	(602)
Unrealised share of profit/(loss) of associates		(415,034)	(84,130)
Net increase/(decrease) in other non-current assets and liabilities		(23,938,601)	25,000
Impairment of balances for commercial operations		29,572	-
Other cash flows used in operating activities		(13,662,297)	(2,187,552)
Interest received		119,016	78
Interest paid		(13,781,313)	(2,187,630)
Changes in working capital (excluding purchases or sales of land during the financial year)		(88,393,376)	(49,410,047)
(Increase)/decrease in inventories	11	42,405,741	(51,644,922)
(Increase)/decrease in trade receivables	12	(21,524,085)	5,630,259
(Increase/(decrease) in trade payables	16	(7,490,658)	19,629,622
(Increase)/decrease of other current assets less current liabilities	10	(101,784,374)	(23,025,006)
Changes in working capital arising from purchases and sales of land during the financial year	11, 12 & 16	(63,202,056)	(15,251,167)
Net cash used in operating activities (1)		(54,492,327)	(58,609,491)
2. CASH FLOWS FROM INVESTING ACTIVITIES
Investments disposals		(4,332,079)	(172,340)
Group companies and associates		(3,231,080)	(38,700)
Intangible assets	7	(882,449)	(80,121)
Property, plant and equipment	8	(218,550)	(53,519)
Net cash from/(used in) investing activities (2)		(4,332,079)	(172,340)
3. CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from and payments for equity instruments		(24,265,619)	(6,309,592)
Acquisition of own equity instruments		(24,265,619)	(11,309,578)
Disposal of own equity instruments		-	4,999,986
Proceeds from and repayment of financial liabilities	15	133,144,508	52,462,057
Issue of bonds and other marketable securities		58,810,883	24,899,442
New financing obtained from banks		399,356,225	85,351,262
Issue of debt with related parties		-	41,404
Repayment of bonds and other marketable securities		(67,400,000)	(41,000,000)
Repayment of debt with financial institutions		(257,041,260)	(16,830,051)
Repayment of debt with related parties		(581,340)	-
Net cash from financing activities (3)		108,878,889	46,152,465
4. Effect of changes in exchange rates on cash and cash equivalents (4)		-	-
5. NET INCREASE IN CASH AND CASH EQUIVALENTS (1+2+3+4)		50,054,483	(12,629,366)
Cash and cash equivalents at beginning of year	13	136,113,251	148,742,617
Cash and cash equivalents, closing balance	13	186,167,734	136,113,251

The accompanying notes 1 to 24 are an integral part of the consolidated statement of cash flows for the year ended March 31, 2021.

Aedas Homes, S.A. and subsidiaries

Notes to the consolidated financial statements for the year ended March 31, 2021

1. The Aedas Homes Group's business

The Aedas Homes Group comprises Aedas Homes, S.A. (the Parent or Company) and its subsidiaries.

The Parent Company is a company incorporated in Spain, with registered office at Paseo de la Castellana, 42, Madrid (Spain); it is registered in the Commercial Register of Madrid, Spain.

Aedas Homes, S.A. and its subsidiaries (together, the Aedas Group or the Group) are devoted to the following business activities, pursuant to article 2 of the Company's bylaws:

a) The acquisition, development and refurbishment of all manner of properties, whether for holding, use, disposal or lease.
b) The acquisition, holding, usage, sale and administration of marketable Spanish or international securities and of any titles or rights, such as the shares of limited-liability companies, that give it an equity interest in other companies, all of which as principal and not agent.

The above-mentioned activities may be performed by the Parent or by any Group companies either directly or indirectly, as well as through ownership interests in other companies with an identical or similar corporate purpose. At present, the Parent holds equity interests in other companies. Appendix I of these notes itemizes the activities conducted by the subsidiaries of Aedas Homes, S.A.

The Group operates only in Spain.

The Parent was incorporated under the name of SPV Spain 19, S.L.U. as a result of the subscription and payment of 3,000 indivisible equity interests (participaciones sociales), numbered sequentially, with a unit par value of 1 euro. They were paid for in cash. Hipoteca 43 Lux, S.A.R.L. purchased 100% of these interests on July 5, 2016. The Company's name was changed to Aedas Homes Group, S.L.U. on July 18, 2016. It assumed its current name in the wake of the restructuring transaction agreed on May 23, 2017.

On September 12, 2017, the Company's legal form of incorporation was changed to that of a public limited company (sociedad anónima) so that it took the name of Aedas Homes, S.A. (Sociedad Unipersonal). Since then, the Company has not changed its corporate name.

The shares representing the share capital of Aedas Homes S.A. have been trading on the continuous stock markets of Madrid, Barcelona, Bilbao and Valencia since October 20, 2017.

The deeds declaring the loss of sole-shareholder status (sociedad unipersonal) were placed on public record on November 23, 2017.

On March 30, 2020, the Shareholders' Meeting of the Parent Company, at the proposal of the Board of Directors, agreed to change the Company's fiscal year to the twelve-month period from April 1 to March 31 the following year, except for the first fiscal year, to which the previous consolidated financial statements related, which ran from January 1, 2020 until March 31, 2020. These consolidated financial statements therefore relate to the twelve-month period from April 1, 2020 until March 31, 2021.

According to the ESEF taxonomy and in accordance with the technical standard 32-60-254 developed by the European Securities and Markets Authority (ESMA) published on December 18, 2017, Appendix III indicates the mandatory elements of the base taxonomy that must be marked with respect to the fiscal years beginning on or after January 1, 2020.

2. Basis of presentation of the consolidated financial statements

a) Basis of presentation

The consolidated financial statements of the Group comprising Aedas Homes, S.A. and its subsidiaries for the year ended March 31, 2021 were prepared from the accounting records of the Parent and the other companies comprising the Group (refer to Appendix I) in keeping with the International Financial Reporting Standards adopted by the European Union (IFRS-EU).

The consolidated financial statements were prepared under the IFRS-EU in effect on the date of their issuance. They take into consideration all of the accounting principles and standards and measurement criteria that are mandatorily applicable under IFRS-EU such that they present fairly the Group's equity and financial position as at March 31, 2021 and its financial performance, the changes in its equity and in cash flows, all on a consolidated basis, for the year then ended.

However, given that the accounting principles and measurement criteria used to prepare the Group's consolidated financial statements for the year ended March 31, 2021 may differ from those used by certain of the Group entities, the appropriate adjustments and reclassifications have been made upon consolidation in order to standardize the various principles and criteria and bring them in line with IFRS-EU.

In order to present the different items that make up the annual consolidated financial statements on a uniform basis, the accounting policies and measurement rules used by the Parent have been applied to all of the companies consolidated.

The Group uses additional performance measures to those defined by IFRS, given that these measures incorporate essential information to assess the Group's performance.

In the consolidated income statement, GROSS MARGIN, NET MARGIN y EBITDA are defined as:

GROSS MARGIN: the difference between the Revenues and Cost of goods sold. Detailed information if provided in Notes 19 a) and 19 b) regarding these items of the income statement. The Percentage GROSS MARGIN is calculated by dividing the GROSS MARGIN in absolute terms by the Revenues.
NET MARGIN: the difference between the GROSS MARGIN and other costs: Marketing, Sales commissions, Other direct development costs and Taxes related with developments. The percentage NET MARGIN is calculated by dividing the NET MARGIN in absolute terms by the Revenues.
EBITDA: the difference between the NET MARGIN and other costs/revenues: General expenses, Other operating income and Other operating expenses. The percentage EBITDA is calculated by dividing the EBITDA in absolute terms by the Revenues.

b) Adoption of the International Financial Reporting Standards

The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union (IFRS-EU) pursuant to Regulation (EC) No. 1606/2002 of the European Parliament and of the Council, which were effective as at March 31, 2021.

The consolidated financial statements were prepared on a historical cost basis, except for certain assets and financial instruments which have been measured at their revalued amounts or fair values at the reporting date, as explained in the accounting policies section below. As a general rule, historical cost values are based on the fair value of the consideration paid for goods and services.

Unless indicated otherwise, the figures shown in the documents comprising these consolidated financial statements (consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and these notes to the financial statements) are expressed in euros.

a) Standards and interpretations approved by the European Union and applied for the first time during the current reporting period

The accounting standards used to prepare these consolidated financial statements correspond are those used to prepare the consolidated financial statements for the three months ended March 31, 2020, except the following:

Amendment to IFRS 16 - Covid-19-Related Rent Concessions: applicable for annual reporting periods beginning on or after 1 June 2020. Earlier application is permitted,

This amendment has not had an impact on the Group's consolidated financial statements.

b) Standards and interpretations issued by the IASB not yet applicable in the current reporting period

The Group intends to apply the IASB standards, interpretations and amendments that are not of mandatory application in the European Union at the date of preparing the accompanying consolidated financial statements, when said standards, interpretations and amendments take effect, insofar as they apply to the Group.

On the date of preparing these Consolidated Financial Statements, the following standards, amendments to standards and interpretations had been published by the IASB but were not mandatory:

Mandatory Implementation: effective for periods beginning on or after January 1, 2021

Amendments to IFRS 4 - Deferral of IFRS 9.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform – Phase 2.

Mandatory Implementation: effective for periods beginning on or after January 1, 2022

Amendments to IAS 37 Cost of Fulfilling a Contract.
Amendments to IFRS 3 Reference to the Conceptual Framework.
Amendments to IAS 16 Proceeds before Intended Use.
Amendments to IAS 1 Classification of Liabilities as Current or Non-current.
Annual Improvements 2018-2020 Cycle (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41).

Mandatory Implementation: effective for periods beginning on or after January 1, 2023

- IFRS 17 Insurance Contracts

Although the Group is still in the process of analysing their impact, based on the analysis performed to date, it estimates that their first-time application will not have a significant impact on its consolidated financial statements.

c) Functional and presentation currency

The accompanying consolidated financial statements are presented in euros, which is the currency of the primary economic environment in which the Group operates. The Group does not currently trade abroad or in any currencies other than the euro.

d) Responsibility for the information presented and estimates made

The Group Parent's directors are responsible for the information included in these consolidated financial statements.

The Group's consolidated financial statements for the year ended March 31, 2021 make occasional use of estimates made by the senior executives of the Group and of its consolidated companies, later ratified by their respective directors, in order to quantify certain of the assets, liabilities, income, expenses and obligations recognised therein. Essentially, these estimates refer to:

‐ Evaluation of the net realisable value of the Group's inventories: the Group has assessed, as of the reporting date, the realisable value of its inventories, understood as their estimated sale price less all of the estimated costs necessary to complete their construction. The market value of the Group's properties, has been determined on the basis of an assessment carried out by independent expert appraisers. Specifically, Savills Aguirre Newman Valoraciones y Tasaciones, S.A. appraised the Group's portfolio of real estate assets as at February 28, 2021, adjusted by the purchases and sales of inventories during March 2021 and the variation of work in progress in March 2021, and without taking supplier prepayments into consideration. The assets were appraised using the 'market value' assumption, in keeping with the Valuation - Professional Standards and Guidance notes published by Great Britain's Royal Institution of Chartered Surveyors (RICS) (see Note 11).
The probability of obtaining future taxable income when recognising deferred tax assets (refer to Note 4.10).

Although these estimates were made on the basis of the best information available at March 31, 2021 regarding the facts analysed, future events could make it necessary to revise these estimates (upwards or downwards) in coming years. Changes in accounting estimates would be applied prospectively in accordance with IAS 8, recognising the effects of the change in estimates in the related consolidated income statement.

e) Basis of consolidation

In order to present the financial information on a uniform basis, the accounting policies and measurement rules used by the Parent have been applied to all of the companies consolidated.

The universe of companies included in the consolidation scope in the year ended March 31, 2021, and the three months ended March 31, 2020 is listed in Appendix I.

Subsidiaries

Subsidiaries are investees over which the Parent exercises control either directly or indirectly via other subsidiaries. The Parent controls a subsidiary when it is exposed, or has rights, to variable returns from its involvement with it and has the ability to affect those returns through its power over the investee. The Parent is deemed to have power over an investee when it has existing rights that give it the current ability to direct its relevant activities. The Parent is exposed, or has rights, to variable returns from its involvement with the investee when the returns obtained from its involvement have the potential to vary as a result of the entity's performance.

The Parent re-evaluates whether it controls an investee when events and circumstances indicate the existence of changes in one or more of the control elements itemised above. The Parent consolidates a subsidiary from when it obtains control (and deconsolidates when it ceases to have such control).

At present, all of the Group companies are consolidated using the full consolidation method, with the exception of Winslaro ITG, S.L., Servicios Inmobiliarios Licancabur, S.L., Urbania Lamatra I, S.L. and Urbania Lamatra II, S.L., that are accounted for using the equity method.

Any non-controlling interests are measured at their percentage interest in the fair values of the identifiable assets and liabilities recognised. Accordingly, any loss attributable to non-controlling interests in excess of the carrying amount of such interests is recognised with a charge against the Parent's equity. Minority interests in:

1. The equity of the Group's investees: are presented under "Non-controlling interests" in the consolidated balance sheet within Group equity.
1. Profit or loss for the year: are presented under "Profit/(loss) for the year attributable to noncontrolling interests" in the consolidated income statement.

The income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the acquisition date or until the date of change in control, as warranted.

Material intra-group balances and transactions among fully-consolidated investees are eliminated upon consolidation, as are the gains or losses included in the inventories deriving from purchases from other Group companies.

The Parent has the same reporting date as all its subsidiaries with the exception of Winslaro ITG, S.L., Servicios Inmobiliarios Licancabur, S.L., Urbania Lamatra I, S.L. and Urbania Lamatra II, S.L., whose fiscal year coincides with the calendar year.

All of the assets, liabilities, equity, income, expenses and cash flows related with transactions among the Group companies are fully eliminated upon consolidation.

Investments in associates and joint ventures

Investments in an associate or, where applicable, in a joint venture, are recognised under the equity method; initially the investment in an associate or a joint venture is recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The investor's share of the investee's profit or loss is recognised in the investor's profit or loss. Distributions received from an investee reduce the carrying amount of the investment. Adjustments to the carrying amount may also be necessary for changes in the investor's proportionate interest in the investee arising from changes in the investee's other comprehensive income. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange translation differences. The investor's share of those changes is recognised in the investor's other comprehensive income.

The Parent has notified all the companies in which it has ownership interests of 10% or more, directly or indirectly through subsidiaries, of this fact, in keeping with article 155 of Spain's Corporate Enterprises Act. The list of non-Group companies that hold an equity interest in any of the fullyconsolidated subsidiaries of 10% or more is provided in Appendix II.

f) First-time consolidation differences

The assets, liabilities and contingent liabilities of newly-acquired subsidiaries are stated at their acquisition-date fair values. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If the cost of acquisition is less than the fair value of the identifiable net assets acquired (i.e., a bargain acquisition), the gain is recognised in profit and loss in the period of the acquisition.

The Group has not recognised any such goodwill or negative differences of consolidation to date.

g) Comparative information

For comparative purposes, the information contained in the accompanying consolidated financial statements for the year ended March 31, 2021 is presented alongside the information at March 31, 2020 in respect of the consolidated balance sheet, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows.

As stated in Note 1, the Company has changed its fiscal year. . It now covers the twelve-month period from April 1 to March 31 the following year, except in the case of the first fiscal year, covered by the previous consolidated financial statements, which was from January 1, 2020 to March 31, 2020, and this should be taken into account for the purposes of comparison. The consolidated financial statements for the current period therefore relate to a period of twelve months, compared to the three months for the previous period, and this should be borne in mind for the purposes of comparison.

Note, additionally, that the Group has modified the structure of its consolidated income statement and its consolidated cash flow statement for the year ended March 31, 2021, and the corresponding comparative figures for the three months ended March 31, 2020, so that they are easier for its investors to understand.

Any comparison should consider the changes in the Group's capital structure outlined in Note 1.

3. Distribution of profit/(loss)

The distribution of profit proposed by the Parent's directors for the year ended March 31, 2021, pending ratification at the Annual General Meeting, is as follows:

	Euros

Basis of distribution
Profit/(loss) for the period	67,251,490
Remaining balance	2,260,054
TOTAL	69,511,544

Distribution to:
Allocation to legal reserves	6,032,099
Dividend payable	62,497,874
Voluntary reserves	981,571
TOTAL	69,511,544

On May 7, 2021, the Board of Directors will propose the distribution of a dividend of €1.40 per share from the profits for the year ended March 31, 2021, consisting of an ordinary dividend of €0.90 per share and an extraordinary dividend of €0.50 per share (see Notes 14.i and 24).

4. Recognition and measurement standards

The following accounting principles, policies and measurement criteria were used to draw up the Group's consolidated financial statements for the year ended March 31, 2021:

4.1 Intangible assets

Intangible assets are identifiable non-monetary assets, without physical substance, which arise as a result of a legal transaction or are developed by the consolidated companies. Only assets whose cost can be estimated reasonably objectively and from which the consolidated companies consider it probable that future economic benefits will be generated are recognised.

Intangible assets are initially recognised at acquisition cost and subsequently measured at cost less any accumulated amortization and impairment losses.

a) Software

The Group recognizes computer software at the amount of costs incurred to acquire and develop it; these costs include website development costs. Software maintenance costs are expensed currently. Software is amortised using the straight-line method over a five-year period.

4.2 Property, plant and equipment

The items comprising property, plant and equipment are measured initially at acquisition cost and are subsequently carried net of accumulated depreciation and any impairment losses.

Acquisition or production cost for items of property, plant and equipment that require more than one year to ready for use (qualifying assets) include borrowing costs accrued prior to readying the assets for use when such expenses have been invoiced by the supplier or correspond to specific or generic loans or other external financing directly allocable to the acquisition, manufacture or construction of the asset.

The cost of maintaining and repairing the various items making up property, plant and equipment are charged to the consolidated income statement in the year incurred. On the other hand, amounts spent to upgrade these assets that increase their productivity, capacity or efficiency or lengthen their useful lives are capitalized.

Interest and other financial charges incurred during the construction of property, plant and equipment are recognised as an increase in the cost of the construction in progress.

The work that the Group performs on its own assets is recognised at cost, which is external costs plus internal costs, determined on the basis of in-house consumption of warehouse materials, direct labour costs incurred and general manufacturing costs allocated based on throughput rates similar to those used to value inventories.

Depreciation is calculated on a straight-line basis based on the assets' cost less residual value. The land on which the Group's buildings and other structures stand is deemed to have an indefinite useful life and, therefore, is not depreciated.

The annual depreciation charges are made with a balancing entry in the consolidated income statement as a function of the assets' estimated useful lives. The average estimated useful lives of the items comprising property, plant and equipment are shown below:

	Annual depreciation rate
Straight-line depreciation charge:
Buildings	14%
Other plant	20%
Furniture & fittings	10%
Computer equipment	25%
Other items of PP&E	20%

Assets under construction earmarked for production or for administrative or commercial use, are recognised at cost, less any impairment losses. Cost includes professional fees. Depreciation of these assets commences when the assets are ready for their intended use.

Impairment of intangible assets and property, plant and equipment

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets for indications of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). If the asset does not generate cash flows that are independent from those of other assets, the Parent Company estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. To estimate value in use, the Group discounts the asset's estimated future cash flows 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 in question for which the estimated future cash flows have not been adjusted.

If the estimated recoverable amount of an asset (or CGU) is lower than its carrying amount, the carrying amount of that asset (or CGU) is written down to its recoverable amount. The impairment loss is expensed in profit and loss immediately.

When an impairment loss subsequently reverts, the carrying amount of the asset (or CGU) is written up to its newly estimated recoverable amount, so long as the restated carrying amount does not exceed the carrying amount that would have been recognised had no impairment loss been recognised for the asset (or CGU) in prior years. The impairment loss is reversed in profit and loss immediately.

4.3 Investment property

For lease agreements with purchase option for which the Group is the lessor and it is estimated that not all the risks and rewards incidental to ownership of the underlying asset are substantially transferred, the Group records such assets as investment property, being depreciated on a straight-line basis over their useful life (they are depreciated over a period of 50 years, at an annual rate of 2%), and lease payments are recognised as income on a straight-line basis. If the purchase option is exercised, the investment property is reclassified to inventories at its carrying amount, the result of the sale being recognised as the difference between the price of exercising the purchase option (after discounting the premium and the percentage of rent paid stipulated in the contract) and the carrying amount of the property.

4.4 Inventories

This consolidated balance sheet heading includes the assets that the consolidated companies:

1. Hold for sale in the ordinary course of their businesses
1. Have in the process of production, construction or development to this end
1. Expect to consume in the production process or in the provision of services

The Parent's directors believe that the Group's inventories do not qualify as investment properties under IAS 40. As a result, the land and other properties it holds for sale are considered inventories once integrated into a real estate development.

Land and sites are measured at the lower of (i) acquisition cost plus any planning costs, costs specific to the acquisition (transfer tax, registration fees, etc.) and the borrowing costs incurred during execution of the planning work; or (ii) estimated market value.

Construction in progress refers to costs incurred in property developments, or sections thereof, whose construction is not complete at the reporting date. These costs include those corresponding to the site, urban planning, construction work, capitalised borrowing costs incurred from the start of the technical and administrative work required prior to commencing construction and during the construction period itself, and other direct costs and indirect costs that can be allocated to the developments.

The Group companies transfer the costs accumulated under "Construction in progress" to "Finished properties" when the construction of its developments or sections thereof is complete.

Sales costs, other than sales commissions conditional upon the sale going through, are expensed currently.

Costs accumulated for developments for which the forecast construction termination date is within 12 months of the reporting date are classified as "Short-cycle developments in progress".

The Group reviews its inventories for indications of impairment periodically, recognising the required impairment provisions as warranted in keeping with the criteria described below. The cost of the land and sites and developments in progress and completed is reduced to their fair value by recognising the appropriate impairment provision. If the fair value of the Group's inventories is above cost, however, the cost/contribution amounts are left unchanged.

The fair value of the Group's inventories is estimated based on appraisals performed by independent experts not related to the Group (Savills Aguirre Newman Valoraciones y Tasaciones, S.A.). Those appraisals calculate fair value primarily using the dynamic residual method for land and the discounted cash flow method for developments in progress and finished developments, in keeping with the Valuation and Appraisal Standards published by the Royal Institute of Chartered Surveyors (RICS) of Great Britain, and the International Valuation Standards (IVS) published by the International Valuation Standards Committee (IVSC).

To calculate fair value, the Group uses the dynamic residual method and the discounted cash flow method for inventories of land and developments in progress/finished developments, respectively, as mentioned above. The methodology consists of estimating the value of the land/developments in progress/finished developments by means of the comparative or discounted cash flow method which is then reduced by the development costs still to be incurred for each property, depending on its stage of completion (such costs therefore include any planning costs, construction costs, fees, duties, sales costs, etc.), and the developer's margin in order to estimate the residual value. The sources of income and costs are spread out in time to reflect the development timelines and sales estimated by the appraiser. The discount rate used is that representing the average annual return on the project, adjusted for the property's intrinsic characteristics and risks, without factoring in external borrowings, that a developer would obtain on a development of similar characteristics to that being analysed. The discount rate is arrived at by adding the risk-free rate and the risk premium (determined by assessing the development's risk in light of the nature of the property to be developed or under development, its location, liquidity, execution timeline and the investment required).

Given the uncertainty intrinsic in any forward-looking information, actual results may well differ from the projections used to estimate the recoverable amount of the Group's inventories, which could make it necessary to change these estimates (upwards or downwards) in future years; as disclosed in Note 2.d, any such changes would be applied prospectively.

As stated in Note 2.d, all the Group's assets (except for those covered by a pre-sale agreement and prepayments to suppliers) had been valued by an independent expert and that expert's appraisal values were used as inputs in testing its inventories for impairment.

Note that the appraisals took the form of individual asset-by-asset analysis, factoring in the building standards planned for each, which in term determine the associated contracting costs and sales price ranges. An individual assessment was also made of the average length of time expected to be needed to obtain the various planning permits and requirements and the average length of time needed to build each development as function of its nature and density.

4.5 Trade receivables

Trade receivables do not accrue interest and are recognised at their face value less provisions for impairment, if any.

For the impairment calculation of trade receivables as of March 31, 2021, the Group applies the simplified approach under IFRS 9 Financial Instruments (loss allowance at an amount equal to lifetime expected credit losses). Although, it causes no impact in the consolidated financial statements, mainly due to the fact that the agreements signed with customers are terminable if they fail to comply with their payment commitments.

4.6 Customer prepayments

The amounts received from customers as down payments for land and/or buildings, whether in cash or trade bills, before the sale is recognised are recognised under "Customer prepayments" within current liabilities.

4.7 Financial instruments by category

4.7.1 Financial assets

Financial assets are measured at its fair value plus or minus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset. Despite this, at initial recognition, the Group measures trade receivables at their transaction price if the trade receivables do not contain a significant financing component.

The Group companies' financial assets are mainly classified as subsequently measured at amortised cost, because mainly such financial assets are held within a business model whose objective is 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.

Financial assets are derecognised by the different Group companies when the contractual rights over the cash flows of the financial asset expire or when substantially all the risks and benefits inherent to ownership of the financial asset are transferred.

At the end of each reporting period, the Parent's directors assess and recognize the applicable loss allowance for expected credit losses.

4.7.2 Financial liabilities and equity

An equity instrument is any contract that evidences a residual interest in the net assets of the Group.

The Group companies' financial liabilities are mainly held-to-maturity financial liabilities, which are classified as subsequently measured at amortised cost.

4.7.3 Equity instruments

The equity instruments issued by the Parent are recognised in equity at the amount received net of direct issuance costs.

4.7.4 Bank loans

Interest-bearing bank loans and overdrafts are recognised at the amount received, net of direct issuance costs. Finance costs, including premiums payable upon settlement or repayment and direct issuance costs, are recognised on an accrual basis in the consolidated income statement using the effective interest method and they are added to the carrying amount of the financial instrument to the extent that they are not settled in the year in which they accrue.

4.7.5 Trade payables

Trade payables do not accrue interest and are recognised at face value.

4.7.6 Derivatives

Derivatives are recognised at fair value and subsequent changes in their fair value are recognised in profit and loss.

4.8 Own shares of the Parent Company

Own shares acquired by the Parent during the year are recognised at the amount of consideration given in exchange and are presented as a deduction from equity. The gains and losses resulting from the purchase, sale, issuance or cancellation of own equity instruments are recognised directly in equity and are not reclassified to profit or loss under any circumstances.

4.9 Provisions and contingent liabilities

In drawing up the consolidated financial statements, the Parent's directors distinguish between:

a. Provisions: liabilities recognised to cover a present obligation arising from past events, of uncertain timing and/or amount, the settlement of which is expected to result in an outflow of resources embodying economic benefits.
b. Contingent liabilities: a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

The consolidated financial statements recognize all provisions in respect of which it is considered more likely than not that a present obligation exists.

Contingent liabilities are not recognised in the financial statements, but they are disclosed in the accompanying notes to the consolidated financial statements, unless the possibility of an outflow of resources embodying economic benefits is deemed remote, as required under IAS 37.

Provisions (which are estimated using the best information available regarding the consequences of the event giving rise to their recognition and re-estimated at each reporting date) are used to cover the specific obligations for which they were initially recognised; they are reversed, in full or in part, when these obligations cease to exist or diminish.

The compensation to be received from a third party when an obligation is settled is recognised as a separate asset so long as it is virtually certain that the reimbursement will be received, unless the risk has been contractually externalized so that the Company is legally exempt from having to settle, in which case the reimbursement is taken into consideration in estimating the amount of the provision, if any.

Provisions for completion of construction project

Provisions for completion of construction project are recorded in the accounts on completion of the work at the amount of the invoices still to be received in relation to the development concerned.

There were no contingent liabilities, contingent assets or penalties for delays in delivering houses at either reporting date, March 31, 2021 and March 31, 2020.

4.10 Income tax

The consolidated income tax expense is recognised in the consolidated income statement, except when it relates to transactions recognised directly in consolidated equity, in which case the related tax is likewise recognised in consolidated equity.

Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax expense (deferred tax income).

Deferred tax assets and liabilities are those expected to be recoverable or payable on the differences between the carrying amounts of assets or liabilities in the financial statements and the tax bases used to calculate taxable income and are recognised using the liability method in the consolidated balance sheet. They are measured at the tax rates that are expected to apply when the asset is realised or the liability is settled.

Deferred tax assets or liabilities are recognised for temporary differences originating from investments in subsidiaries and associates and interests in joint ventures unless the Group can control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

However:

1. Deferred tax assets are only recognised to the extent that it is probable that the consolidated entities will generate sufficient taxable profit in the future against which these assets can be utilised.
1. Under no circumstances are deferred taxes recognised in connection with goodwill arising in a business combination.

Recognised deferred tax assets and liabilities are reassessed at each reporting date to check that they still qualify for recognition and the appropriate adjustments are made on the basis of the outcome of the analyses performed, factoring in any applicable quantitative and/or time limits.

At December 27, 2017, the Board of Directors resolved to avail of the consolidated tax regime (contemplated in article 55 et seq. of the Spanish Corporate Income Tax - Law 27/2014) in 2018 and thereafter, Aedas Homes, S.A. being the parent of the tax group.

4.11 Revenue and expenses

The Group recognizes their ordinary income in a way that the transference of goods and services that are committed with their clients is recorded by the amount that reflects the compensation that the entity expects to receive in exchange to those goods or services, performing an analysis according to the following steps:

Identification of the contract.
Identification of the different performance obligations.
Determination of the transaction price.
Allocation of the transaction price to the performance obligations.
Recognition the revenue when the entity satisfies the performance obligations.

Given the characteristics of the contracts signed with clients do not differ significantly, and according to the standard, the Group applies a collective accounting treatment to them.

The Group companies recognize property development sales and the related cost when the properties are handed over and title thereto has been transferred. For these purposes, the sale of a finished residential product is understood to have occurred when the keys are handed over, which coincides with the exchange of the deeds. A sale is not deemed closed for revenue recognition purposes until this happens.

Ordinary income does not include discounts, value added tax and other sales taxes.

Expenses are recognised on an accrual basis.

Interest income is recognised using the effective interest method, by reference to the principal outstanding and the applicable effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's carrying amount.

Expenses are recognised in the income statement when a decrease in future economic benefits related to a decrease in an asset or an increase in a liability has arisen that can be measured reliably. This means that recognition of expenses occurs simultaneously with the recognition of an increase in liabilities or a decrease in assets.

An expense is recognised immediately when an expenditure produces no future economic benefits or when future economic benefits do not qualify for recognition as an asset.

Similarly, an expense is recognised when a liability is assumed and no asset is recorded, such as a liability related to extension of a guarantee.

As a general rule, commissions paid to external agents that are not specifically allocable to the developments, albeit unquestionably related thereto, incurred between the start of the development work and recognition of the related sales as revenue are accrued under "Prepayments and accrued income" on the asset side of the balance sheet and are expensed upon recognition of the related revenue so long as at each reporting date the margin deriving from the sales contracts entered into and pending recognition as revenue is higher than such expenses. If a given development does not present a positive margin, these expenses are reclassified to the consolidated income statement.

Sales costs, other than sales commissions conditional upon the sale going through, are expensed currently to the consolidated income statement.

4.12 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets assets that necessarily take a substantial period of time to ready for their intended use or sale - are capitalised within the cost of those assets until such time as the assets are substantially ready for their intended use or sale or their development is suspended. Interest income earned on the temporary investment of specific borrowings pending investment in qualifying assets is deducted from the borrowing costs eligible for capitalization.

In the case of funds obtained from generic loans, the amount of borrowing costs eligible for capitalization is determined by applying a capitalization rate to the sum invested in the asset in question. That capitalization rate is the weighted average rate of interest borne on the loans received by the consolidated companies that were outstanding during the reporting period other than loans arranged specifically to finance certain assets. The amount of borrowing costs capitalized during the year did not exceed total interest expense incurred during the same.

4.13 Operating profit/(loss)

Operating profit or loss is presented before the Group's share of associates' earnings, income from financial investments and finance costs.

4.14 Redundancy payments

Under prevailing labour law, the Group is obliged to pay severance to employees who are discontinued under certain circumstances. Redundancy payments that can be reasonably estimated are recognised as an expense in the year in which the redundancy decision is taken.

No provision has been recognised in the accompanying consolidated financial statements in this connection at either March 31, 2021 or March 31, 2020 as no workforce restructuring is currently contemplated.

4.15 Director and key management personnel remuneration

The remuneration earned by the Parent's key management personnel (refer to Note 21) is recognised on an accrual basis such that the Group recognizes the corresponding provision at each reporting date in respect of any amounts that have not yet been paid.

In the case of equity-settled share-based transactions, both the services provided to the Group companies and the related increase in equity are measured at the fair value of the equity instruments granted with reference to the date of their grant. If, on the other hand, they are settled in cash, the goods and services received and the corresponding liability are recognised at the fair value of the latter, with reference to the date on which the vesting conditions are met.

4.16 Environmental assets and liabilities

Environmental assets are long-lived assets used in the ordinary course of the Group's business whose ultimate purpose is to minimize the Group's environmental impact and to improve its environmental record and include assets designed to reduce or eliminate future contamination.

Given the activities in which the Group is involved, it has no environmental liabilities, expenses, assets, provisions or contingencies that could be material in respect of its equity, financial position or performance. Environmental disclosures are accordingly not provided in these consolidated financial statements.

4.17 Related-party transactions

The Group carries out all transactions with related parties (whether financial, commercial or other in nature) at transfer prices that meet the OECD's rules governing transactions with Group companies and associates. The Group has duly met its documentation requirements in respect of these transfer prices so that the Parent's directors believe there is no significant risk of related liabilities of material amount.

In the event of a significant difference between the price so established and the fair value of a transaction between related parties, the difference would be considered a distribution of profits or contribution of funds between Group companies and as such would be recognised with a charge or credit to a reserves account, as warranted.

The Group Aedas Homes conducts all related-party transactions on an arm's length basis.

4.18 Distinction between current and non-current

The following assets are classified as current assets: assets associated with the normal operating cycle (which is generally considered one year); other assets that are expected to mature, be sold or realized within twelve months of the reporting date; financial assets held for trading other than financial derivatives due for settlement more than 12 months from the reporting date; and cash and cash equivalents. Any assets that do not meet these criteria are classified as non-current assets.

Likewise, the following liabilities are classified as current liabilities: those related with the normal operating cycle; financial liabilities held for trading other than financial derivatives due for settlement more than 12 months from the reporting date; and, in general, all liabilities that fall due or will be extinguished within 12 months of the reporting date. All other liabilities are presented as non-current.

The breakdown of short and long-term inventories is included in Note 11.

4.19 Business combinations

Business combinations are accounted for using the acquisition method, which requires identification of the acquisition date, calculation of the cost of the combination and recognition of the identifiable assets acquired and liabilities assumed at their acquisition-date fair values.

Goodwill (or a gain on a bargain purchase) is calculated as the difference between the fair values of the net assets acquired and the cost of the business combination, all as of the acquisition date.

The cost of a business combination is the aggregate of:

The acquisition-date fair values of the assets received, the liabilities incurred or assumed and any equity instruments issued.
The fair value of any contingent consideration that depends on future events or delivery of predetermined conditions.

The cost of a business combination does not include expenses related with the issuance of any equity instruments or financial liabilities delivered in exchange for the assets acquired.

In the exceptional event of a gain on a bargain purchase, the gain is recognised in the income statement.

If at the end of the reporting period in which the business combination occurs it is not possible to complete the valuation work needed to apply the acquisition method outlined above, the business combination is accounted for provisionally. The provisional amounts recognised can be adjusted within a measurement period of no more than one year from the acquisition date to reflect access to new information. The effects of any such adjustments are accounted for retroactively, modifying the comparative information as necessary.

Subsequent changes in the fair value of the contingent consideration are recognised in profit or loss, unless the consideration has been classified in equity, in which case subsequent changes in its fair value are not recognised.

4.20 Share-based payments

The Parent recognizes, on the one hand, the goods and services received as an asset or expense, depending on their nature, at the time they are received and, the corresponding increase in equity, if the transaction is settled using equity instruments, or the corresponding liability, if it is settled in an amount that is based on the value of the equity instruments, on the other.

4.21 Leases

The assets and liabilities arising from all leases (except for the short-term leases and leases of low-value assets) in which the Group acts as the lessee, under a contract, or part of a contract, which conveys the right to control the use of an identified asset for a period of time in exchange for consideration are recognised in the consolidated balance sheets.

The rights of use assets are amortised on a straight-line basis over the estimated useful life or the term of the lease, whichever is shorter.

The lease contracts of the Group do not include dismantling or restoration obligations.

The right of use assets are not presented separately in the consolidated balance sheet.

4.22 Segment information

The Group has defined neither operating nor geographical segments since its business consists exclusively of property development in Spain.

4.23 Investments in associates

5, Earnings/(loss) per share

a) Basic earnings/(loss) per share

Earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Parent (i.e., after tax and profit/loss attributable to non-controlling interests) by the weighted average number of shares outstanding during the reporting period.

Accordingly:

	Euros
	Year ended	Three months
	March 31,	ended March
	2021	31, 2020
Profit/(loss) for the period attributable to equity holders of the
Parent	85,104,149	3.157.875
Number of shares outstanding (Note 14)	47,966,587	47,966,587
Basic earnings/(loss) per share	1.77	0.07

b) Diluted earnings/(loss) per share

Diluted earnings per share is calculated similarly to basic earnings per share; however, the weighted average number of shares outstanding is adjusted to factor in the potential dilutive effect of options over the Parent's shares, warrants and convertible debt outstanding at each year-end.

As of March 31, 2021, the Parent held 3,325,249 own shares (1,820,671 at March 31, 2020), not holding any other dilutive equity instrument, so the diluted earnings per share amounts to 1.91 euros (the diluted earnings per share was 0.07 euros at the end of the three months ended March 31, 2020).

6. Changes in the Group's composition

At March 31, 2021, the Company was the parent of a group of companies. Appendix I itemizes the Group companies consolidated by the Parent and provides their salient information as at March 31, 2021, before making the corresponding standardization adjustments, as appropriate, to their separate financial statements in order to adapt them for IFRS-EU reporting purposes. The figures disclosed in Appendix I were provided by the Group entities and their equity positions are those stated in their accounting records as of the reporting date.

The description of the main changes, during the year ended March 31, 2021, in the investments in Group companies and associates, is as follows:

‐ On September 30, 2020, SPV REOCO 15, S.L. acquired treasury stock representing 20% of its capital; it purchased those shares from Promociones y Propiedades Inmobiliarias Espacio, SLU. As a result of that acquisition, SPV REOCO 1, S.L.U. is now the sole shareholder of SPV REOCO 15, S.L. A public deed attesting to the reduction of SPV REOCO 15, S.L.'s share capital by 600 euros (in order to cancel those shares) and, as part of the same proceedings, an increase in share capital by the same amount (to reach the minimum threshold) was placed on public record on the same date.
‐ On February 23, 2021, SPV REOCO 1, S.L.U. acquired shares representing 5.3% of the share capital of the company FACORNATA SERVICIOS Y GESTIONES, S.L., owned by the company Taller de Estudios de Inversión, S.L. As a result of that acquisition, SPV REOCO 1, S.L.U. is now the sole shareholder of FACORNATA SERVICIOS Y GESTIONES, S.L.

The description of the main changes, during the three months ended March 31, 2020, in the investments in Group companies and associates, is as follows:

‐ On March 4, 2020, the company changed its name from IPALA ASSET DEVELOPMENT, S.L.U., to LIVE VIRTUAL TOURS, S.L.U. in a notarised document executed on that date, also changing its corporate objects and fiscal year (to the twelve-month period from April 1 to March 31 the following year) and appointed new directors, as agreed by its sole shareholder SPV Reoco 1, S.L.U. The companies FALCON DESARROLLOS INMOBILIARIOS, S.L.U. and PARKER DESARROLLOS INMOBILIARIOS, S.L.U., were also incorporated in a notarised document on that date, the sole shareholder being SPV REOCO 1, S.L.U. in both cases.

7. Intangible assets

The reconciliation of the movements under this heading during the year ended March 31, 2021 and the three months ended March 31, 2020 is as follows:

	Euros
	Software	Advances for intangible assets	Total
Cost:
Balance at April 1, 2020	1,760,518	74,476	1,834,994
Additions	882,449	-	882,449
Reclassifications	43,014	(43,014)	-
Balance at March 31, 2021	2,685,981	31,462	2,717,443
Accumulated amortization:
Balance at April 1, 2020	(590,380)	-	(590,380)
Charges	(632,222)	-	(632,222)
Derecognitions	-	-	-
Total accumulated depreciation at March 31, 2021	(1,222,602)	-	(1,222,602)
Carrying amount at March 31, 2021	1,463,379	31,462	1,494,841

	Euros
	Software	Advances for intangible assets	Total
Cost:
Balance at January 1, 2020	1,645,986	108,886	1,754,872
Additions	24,794	55,328	80,122
Reclassifications	89,738	(89,738)	-
Balance at March 31, 2020	1,760,518	74,476	1,834,994
Accumulated amortization:
Balance at January 1, 2020	(455,366)	-	(455,366)
Charges	(135,014)	-	(135,014)
Derecognitions	-	-	-
Total accumulated depreciation at March 31, 2020	(590,380)	-	(590,380)
Carrying amount at March 31, 2020	1,170,138	74,476	1,244,614

The main additions recognised in the year ended March 31, 2021 and the three months ended March 31, 2020 are related to the development of computer applications in order to accelerate and increase the efficiency and improvement of administrative and business processes. The amounts stated under "Advances for intangible assets" correspond to investments in the development of applications currently being carried out.

No items of intangible assets had been pledged as collateral at either March 31, 2021 or March 31, 2020.

As of March 31, 2021 there are fully amortised intangible assets and still in use for a total amount of 352,478 euros (56,563 euros as of March 31, 2020).

8. Property, plant and equipment

The reconciliation of the movements under this heading during the year ended March 31, 2021 and the three months ended March 31, 2020 is as follows:

	Euros
	Buildings	Other plant	Furniture & fittings	Computer equipment	Other items of PP&E	Prepayments for PP&E	Total
Cost:
Balance at April 1, 2020	562,505	63,717	288,779	580,377	80,266	322	1,575,966
Additions	50,810	8,910	10,951	64,016	2,070	56,793	193,550
Derecognitions	-	-	-	-		-	-
Reclassifications	-	-	33,834	1,107	-	(34,941)	-
Balance at March 31, 2021	613,315	72,627	333,564	645,500	82,336	22,174	1,769,516
Accumulated depreciation:
Balance at April 1, 2020	(180,778)	(28,561)	(69,598)	(315,998)	(33,921)	-	(628,856)
Charges	(103,156)	(13,320)	(31,470)	(141,185)	(15,730)	-	(304,861)
Derecognitions	-	-	-			-	-
Total accumulated depreciation at March 31, 2021	(283,934)	(41,881)	(101,068)	(457,183)	(49,651)	-	(933,717)
Carrying amount at March 31, 2021	329,381	30,746	232,496	188,317	32,685	22,174	835,799

	Euros
	Buildings	Other plant	Furniture & fittings	Computer equipment	Other items of PP&E	Prepayments for PP&E	Total
Cost:
Balance at January 1, 2020	558,900	63,182	284,832	535,460	79,512	561	1,522,447
Additions	3,605	535	2,904	40,960	754	4,761	53,519
Derecognitions	-	-	-	-	-	-	-
Reclassifications	-	-	1,043	3,957	-	(5,000)	-
Balance at March 31, 2020	562,505	63,717	288,779	580,377	80,266	322	1,575,966
Accumulated depreciation:
Balance at January 1, 2020	(155,538)	(25,393)	(62,170)	(281,804)	(30,025)	-	(554,930)
Charges	(25,240)	(3,168)	(7,428)	(34,194)	(3,896)	-	(73,926)
Derecognitions	-	-	-	-	-	-	-
Total accumulated depreciation at March 31, 2020	(180,778)	(28,561)	(69,598)	(315,998)	(33,921)	-	(628,856)
Carrying amount at March 31, 2020	381,727	35,156	219,181	264,379	46,345	322	947,110

The main additions recognised in the year ended March 31, 2021 relate to the purchase of computer equipment and capital expenditure on the new office facilities. The main additions recognised in the three months ended March 31, 2020 related to capital expenditure on the new office facilities.

As of March 31, 2021, there are items of property, plant and equipment that are fully depreciated and still in use for a total amount of 185,548 euros (30,720 as of March 31, 2020).

It is Group policy to take out all the insurance policies deemed necessary to cover the risks to which its property, plant and equipment is exposed.

No item of property, plant and equipment had been pledged as collateral at March 31, 2021 and March 31, 2020.

The Group had no contractual commitments for the purchase of property, plant and equipment at March 31, 2021 and March 31, 2020.

Additionally, right of use assets are recognised under "Property, plant and equipment" heading for a total amount of 2,406,100 euros at March 31, 2021 (2,433,813 euros at March 31, 2020). Set out below, are the carrying amounts of the Group's right-of-use assets and lease liabilities and the movements during the period:

	Right of use assets
	Buildings	Plant and other PP&E	TOTAL	Lease Liabilities
Balance at January 1, 2020	2,469,747	188,456	2,658,203	2,708,259
Additions	22,967	-	22,967	22,967
Depreciation expense	(249,910)	(12,798)	(262,708)	-
Interest Expense	-	-	-	27,856
Modification to lease terms – other adjustments	15,351	-	15,351	15,351
Lease Payments	-	-	-	(282,664)
Balance at March 31, 2020	2,258,155	175,658	2,433,813	2,491,769
Additions	909,068	127,862	1,036,930	1,036,930
Depreciation expense	(1,193,468)	(61,364)	(1,254,832)	-
Interest Expense	-	-	-	104,928
Modification to lease terms – other adjustments	184,065	6,124	190,189	190,189
Lease Payments	-	-	-	(1,348,339)
Balance at March 31, 2021	2,157,820	248,280	2,406,100	2,475,476

For the year ended March 31, 2021, the Group has recognised leases of low-value assets and short-term lease payments, for a total amount of 161,919 euros (44,105 euros for the three months ended March 31, 2020).

For the lease liabilities recognised at March 31, 2021, an amount of 1,429,457 euros is due within one year, and an amount of 1,046,019 euros is due within one to five years (for the lease liabilities recognised at March 31, 2020, an amount of 1,056,924 euros was due within one year, and an amount of 1,434,845 euros was due within one to five years).

9. Investment property

The reconciliation of the movements under this heading during the year ended March 31, 2021 is as follows:

		Euros
	Land	Buildings	Total
Cost:
Balance at April 1, 2020	-	-	-
Additions	-	-	-
Derecognitions	-	-	-
Reclassifications	286,114	1,423,053	1,709,167
Balance at March 31, 2021	286,114	1,423,053	1,709,167

Accumulated depreciation:
Balance at April 1, 2020	-	-	-
Charges	-	(4,854)	(4,854)
Derecognitions	-	-	-
Balance at March 31, 2021	-	(4,854)	(4,854)
Carrying amount at March 31, 2020	286,114	1,418,199	1,704,313

The reclassifications recognised in the financial year ended March 31, 2021 relate to homes on two developments built by Group companies that have been rented under a lease with an option to purchase and therefore reclassified from inventories to investment property.

10. Current and non-current financial assets and liabilities

The breakdown of the Group's financial assets and liabilities at March 31, 2021 and March 31, 2020 is provided in the table below:

	Euros
	March 31, 2021		March 31, 2020
	Non-current	Current	Non-current	Current
Investments in associates	3,964,799	-	2,948,367	-
Loans to associates	7,457,176	620,939	5,942,008	272,593
Guarantees and deposits extended	1,088,049	-	1,715,251	-
Trade and other receivables (Note 12)	-	51,144,420	-	43,450,266
Current financial assets	-	15,090,450	-	13,074,621
Current provisions	-	(13,666,026)	-	(4,537,333)
Borrowings from related parties (Note 15)	-	-	-	(1,680,843)
Financial debts (Note 15)	(89,511,657)	(100,942,788)	(3,981,760)	(214,287,401)
Bank borrowings in the long term (Note 15)	-	(165,006,520)	-	(134,901,390)
Trade and other payables (Note 16)	-	(323,553,275)	-	(289,671,780)
Prepayments and accrued income	-	6,708,671	-	9,939,916
Total	(77,001,633)	(529,604,129)	6,623,866	(578,341,351)

"Current financial assets" on the accompanying consolidated balance sheet includes fixed-term deposits that mature less than one year after the reporting date, A total amount of 13,859,668 euros of those fixed-term deposits have been pledged to secure sureties and surety insurance extended to house buyers at March 31, 2021 (6,209,780 euros at March 31, 2020).
Provisions for completing building work are recorded for 61 developments for an amount of 13,666,026 euros under the heading of "Current provisions" (27 developments and 4,537,333 euros as at March 31, 2020).
"Investments in associates" on the accompanying consolidated balance sheet includes investments in associates and joint ventures, accounted for using the equity method. Summarised financial information of the associates, and reconciliation with the carrying amount of the investment in the consolidated financial statements are set out below:

March 31, 2021

	Euros
	Year ended March 31, 2021 (*)
	WINSLARO ITG, S.L.	SERV. INMOBILIARIOS LICANCABUR, S.L.	URBANIA LAMATRA I, S.L.	URBANIA LAMATRA II, S.L.
Summarised statement of financial position of associates
Non-current assets	213,864	318,732	251,339	593,649
Current assets	18,149,633	24,274,278	8,826,811	53,339,851
Non-current liabilities	(10,625,265)	(15,303,598)	(6,599,727)	(41,814,457)
Current liabilities	(2,655,281)	(2,600,992)	(36,328)	(2,232,212)
Equity	5,082,951	6,688,420	2,442,095	9,886,832
Ownership interest attributable to the Parent	20%	25%	10%	10%
Group's share in equity	1,016,590	1,672,105	244,210	988,683
Goodwill	332	-	32,844	10,035
Group's carrying amount of the investment	1,016,922	1,672,105	277,054	998,718

Other operating expenses	(43,545)	(44,925)	(30,491)	(1,039,752)
Finance costs	(307,851)	(804,583)	(235,317)	(1,084,180)
Profit/(loss) before tax	(351,396)	(849,508)	(265,808)	(2,123,932)
Income tax	87,867	212,377	65,327	293,952
Profit/(loss) for the period from continuing operations	(263,529)	(637,131)	(200,481)	(1,829,980)
Group's share of profit for the period	(52,706)	(159,282)	(20,048)	(182,998)

(*) The close of the fiscal year of the companies coincides with the end of the calendar year.

March 31, 2020

	Euros
	Three months ended March 31, 2020 (*)
	WINSLARO ITG, S.L.	SERV. INMOBILIARIOS LICANCABUR, S.L.	URBANIA LAMATRA I, S.L.	URBANIA LAMATRA II, S.L.
Summarised statement of financial position of associates
Non-current assets	95,702	133,287	169,464	297,163
Current assets	18,003,713	17,654,950	8,367,814	51,371,490
Non-current liabilities	(6,376,462)	(11,540,750)	(5,878,264)	(35,220,545)
Current liabilities	(8,703,815)	(430,084)	(199,840)	(10,405,458)
Equity	3,019,138	5,817,403	2,459,174	6,042,650
Ownership interest attributable to the Parent	20%	25%	10%	10%
Group's share in equity	603,827	1,454,351	245,917	604,265
Goodwill	(17,859)	20,200	28,330	9,336
Group's carrying amount of the investment	585,968	1,474,551	274,247	613,601

Other operating expenses	(9,691)	(10,571)	(33,503)	(40,690)
Finance income	-	3,175	-	-
Finance costs	(82,197)	(151,172)	(71,859)	(395,483)
Profit/(loss) before tax	(91,888)	(158,568)	(105,362)	(436,173)
Income tax	22,972	39,642	26,341	109,043
Profit/(loss) for the period from continuing operations	(68,916)	(118,926)	(79,021)	(327,130)
Group's share of profit for the period	(13,783)	(29,732)	(7,902)	(32,713)

(*) The close of the fiscal year of the companies coincides with the end of the calendar year.

"Loans to associates" on the accompanying consolidated balance sheet includes loans to associates and joint ventures. The breakdown at March 31, 2021 and March 31, 2020 is as follows:

March 31, 2021

	Limit	Principal	Maturity date	Interest
SERV, INMOBILIARIOS LICANCABUR, S.L.	5,300,000	3,547,886	July 29, 2025	Euribor + 5,5%
URBANIA LAMATRA I, S.L.	1,000,000	593,840	December 14, 2023	Euribor + 5,5%
URBANIA LAMATRA II, S.L.	3,140,000	1,329,510	July 26, 2025	Euribor + 6,5%
WINSLARO ITG, S.L.	4,520,000	1,985,940	June 11, 2025	Euribor + 5,5%
Total	13,960,000	7,457,176

March 31, 2020

	Limit	Principal	Maturity date	Interest
SERV, INMOBILIARIOS LICANCABUR, S.L.	5,300,000	2,885,188	July 29, 2025	Euribor + 5,5%
URBANIA LAMATRA I, S.L.	1,000,000	551,395	December 14, 2023	Euribor + 6.5%
URBANIA LAMATRA II, S.L.	3,140,000	1,283,425	July 26, 2025	Euribor + 5,5%
WINSLARO ITG, S.L.	4,520,000	1,222,000	June 11, 2025	Euribor + 5,5%
Total	13,960,000	5,942,008

"Prepayments and accrued income" on the accompanying consolidated balance sheet includes the marketing fees for the promotions, which are transferred to income once the sale of the property happens. As a general rule, commissions paid to external agents that are not specifically allocable to the developments, albeit unquestionably related thereto, incurred between the start of the development work and recognition of the related sales as revenue are accrued under "Prepayments and accrued income" on the asset side of the balance sheet and are expensed upon recognition of the related revenue so long as at each reporting date the margin deriving from the sales contracts entered into and pending recognition as revenue is higher than such expenses. If a given development does not present a positive margin, these expenses are reclassified to the consolidated income statement.

Variation in other current assets and liabilities during the year ended March 31, 2021 are broken down between the amount shown in the cash flow statement and other items, as follows:

	Euros
	31.03.2021	31.03.2020	Variation	Transfer to cash flows	Others
Current interest on loans	-	56,838	(56,838)	-	56,838
Current deposits	13,859,668	6,209,780	7,649,888	(7,649,888)	-
Guarantees extended	366,667	6,353,003	(5,986,336)	2,015,230	3,971,106
Deposits extended	864,115	455,000	409,115	(409,115)	-
Prepayments and accrued income	6,708,671	9,939,916	(3,231,245)	3,231,245	-
Total other current assets	21,799,121	23,014,537	(1,215,416)	(2,812,528)	4,027,944
Bonds and other marketable securities	(22,301,428)	(59,522,751)	37,221,323	364,269	(37,585,592)
Debt with financial institutions	(242,181,557)	(285,685,186)	43,503,629	(105,201,862)	61,698,233
Derivatives	-	(2,615,457)	2,615,457	(2,216,214)	(399,243)
Other financial liabilities	(1,466,323)	(1,365,398)	(100,925)	(1,046,731)	1,147,656
Current provisions	(13,666,026)	(4,537,334)	(9,128,692)	9,128,692	-
Total other current liabilities	(279,615,334)	(353,726,126)	74,110,792	(98,971,846)	24,861,054
Total other current assets less current liabilities	(257,816,213)	(330,711,589)	72,895,376	(101,784,374)	28,888,998

Variation in other current assets and liabilities during the three months ended March 31, 2020 are broken down between the amount shown in the cash flow statement and other items, as follows:

	Euros
	31.03.2020	31.12.2019	Variation	Transfer to cash flows	Others
Current interest on loans	56,838	28,574	28,264	-	(28,264)
Current deposits	6,209,780	5,787,865	421,915	(421,915)	-
Guarantees extended	6,353,003	1,810,214	4,542,789	(4,542,789)	-
Deposits extended	455,000	405,000	50,000	(50,000)	-
Prepayments and accrued income	9,939,916	9,820,467	119,449	(119,449)	-
Total other current assets	23,014,537	17,852,120	5,162,417	(5,134,153)	(28,264)
Bonds and other marketable securities	(59,522,751)	(78,009,410)	18,486,660	156,627	(18,643,286)
Debt with financial institutions	(285,685,186)	(229,066,916)	(56,618,270)	(12,808,140)	69,426,410
Derivatives	(2,615,457)	(1,196,640)	(1,418,817)		1,418,817
Other financial liabilities	(1,365,398)	(1,045,683)	(319,715)	32,283	287,432
Current provisions	(4,537,334)	(8,912,312)	4,374,978	(5,271,621)	896,643
Total other current liabilities	(353,726,125)	(318,230,961)	(35,495,163)	(17,890,852)	53,386,015
Total other current assets less current liabilities	(330,711,588)	(300,378,841)	(30,332,746)	(23,025,004)	53,357,751

11. Inventories

The composition and variation in the Group's inventories at March 31, 2021 and March 31, 2020 are as follows:

	Euros
	March 31, 2021	March 31, 2020	Variation
Land and sites	582,439,385	617,511,672	(35,072,287)
Developments in progress (*)	581,043,918	626,812,052	(45,768,134)
Completed buildings	213,667,797	80,188,609	133,479,188
Prepayments to suppliers	17,348,690	19,427,175	(2,078,485)
Total	1,394,499,790	1,343,939,508	50,560,282

(*) At March 31, 2021, "Developments in progress" includes the cost of the land on which the developments are being carried out in the amount of 275,650,335 euros (292,025,960 euros at March 31, 2020),

The reconciliation of the movement during the year ended March 31, 2021 of the inventory balances is as follows:

						Capitalized
Euros			Land		Derecognitions	borrowing	Impairment
	March 31, 2020	Prepayments	purchases	Cost of sales	(Note 19.b)	costs	(Note 19.b)	March 31, 2021
Inventories	1,343,939,508	(2,078,485)	101,867,681	425,848,656	(484,682,402)	12,457,036	(2,852,204)	1,394,499,790

Variation in inventories are broken down between the amount shown in the cash flow statement and other items, as follows:

	Euros
	Variation	Transfer to Cash Flows	Transfers Impairment		Other
Land and sites	(35,072,287)	(125,520,028)	157,740,111	2,852,204	-
Developments in progress	(45,768,134)	(410,104,759)	456,242,210	-	(369,317)
Completed buildings	133,479,188	480,503,133	(613,982,321)	-	-
Prepayments to suppliers	(2,078,485)	-	-	-	2,078,485
Total	50,560,282	(55,121,654)	-	2,852,204	1,709,168
Changes in working capital arising from purchases and sales of land – Inventories		(97,527,395)
Changes in inventories excluding purchases or sales of land - Inventories		42,405,741

In the year ended March 31, 2021, the variation in the heading 'Land and sites' relates to land purchases for the sum of 101,867,681 euros, a decrease due to reclassification the sum of 157,740,111 euros to Developments in progress, land sales amounting to 3,535,157 euros, impairment of inventories amounting to 2,852,204 euros and the rest to investments in work undertaken on them. Additionally, during the year ended March 31, 2021 the Group completed the works on 40 housing developments developed by subsidiaries, which implied the transfer of a balance of 613,982,321 euros from "Developments in progress" to "Completed buildings".

The variation in inventories during the year ended March 31, 2021 generated a net cash outflow of 55,121,654 euros, of which 97,527,395 euros relates to the purchase and sale of land and a net cash generation of 42,405,741 euros consisting of changes in working capital without taking purchases and sales of land into consideration.

The cash flows in the year ended March 31, 2021 arising from the purchase and sale of land in the current year and as a result of the price deferred in previous years amount to the net sum of 63,202,056 euros of net cash consumption, broken down as follows:

Purchase of land (year ended March 31, 2021)	(101,867,681)
Deferred Price for Land Purchase 2021	13,068,539
Purchase of land paid in kind (Note 20)	8,655,232
Purchase of land as payment of debt	2,284,356
Deferred Payment of Previous Purchases	(3,457,787)
Land Purchase Payments in the year ended March 31, 2021	(81,317,341)
Sale of land (year ended March 31, 2021) Deferred Price for Land Sales (year ended March 31, 2021)	4,340,286 -
Deferred Receipt of Price of Previous Sales	13,774,999
Receipts from the Sale of Land in the year ended March 31, 2021 Changes in working capital arising from	18,115,285
purchases and sales of land during the financial year	(63,202,056)

The composition and variation in the Group's inventories at March 31, 2020 and December 31, 2019 were as follows:

	Euros
	31.03.2020	31.12.2019	Variation
Land and sites	617,511,672	619,610,481	(2,098,809)
Developments in progress	626,812,052	542,290,101	84,521,951
Completed buildings	80,188,609	95,192,155	(15,003,546)
Prepayments to suppliers	19,427,175	18,336,826	1,090,349
Total	1,343,939,508	1,275,429,563	68,509,945

(*) At March 31, 2020, "Developments in progress" includes the cost of the land on which the developments are being carried out in the amount of 292,025,960 euros (282,982,597 euros at March 31, 2020).

The reconciliation of the movement of inventory balances during the three months ended March 31, 2020 is as follows:

Euros						Capitalized
			Land		Derecognitions	borrowing	Impairment
	Dec. 31, 2019	Prepayments	purchases	Cost of sales	(Note 19.b)	costs	(Note 19.b)	March 31, 2020
Inventories	1,275,429,563	1,090,349	14,878,032	101,109,443	(50,138,720)	1,570,841	-	1,343,939,508

Variation in inventories during the three months ended March 31, 2020 are broken down between the amount shown in the cash flow statement and other items, as follows:

	Euros
	Variation	Transfer to Cash Flows	Transfers	Impairment	Other
Land and sites	(2,098,809)	(39,232,202)	41,331,011	-	-
Developments in progress	84,521,951	(77,440,822)	(6,488,633)	-	(592,496)
Completed buildings	(15,003,546)	50,150,070	(34,842,378)	-	(304,146)
Prepayments to suppliers	1,090,349	-	-	-	(1,090,349)
Total	68,509,945	(66,522,954)	-	-	(1,986,991)
Changes in working capital arising from purchases and sales of land – Inventories		(14,878,032)
Changes in inventories excluding purchases or sales of land – Inventories		(51,644,922)

In the three months ended March 31, 2020, the variation in the heading 'Land and sites' relates to land purchased for the sum of 14,878,032 euros, a decrease due to reclassification of the sum of 41,331,011 euros to Developments in progress and the rest to investment in work undertaken on them. Additionally, during the three months ended March 31, 2020 the Group completed the works on 2 housing developments developed by subsidiaries, which implied the transfer of a balance of 34,842,378 euros from "Developments in progress" to "Completed buildings".

The variation in inventories during the three months ended March 31, 2020 generated a net cash outflow of 66,522,954 euros, of which 14,878,032 euros related to the purchase and sale of land and a net cash outflow of 51,644,922 euros consisting of changes in working capital without taking purchases and sales of land into consideration.

The cash flows in the three months ended March 31, 2020 arising from the purchase and sale of land in the current year and as a result of the price deferred in previous years amount to the net sum of 15,251,167 euros of net cash consumption, broken down as follows:

Purchase of land (three months ended March 31, 2020) Deferred Price for Land Purchase (three months ended March 31, 2020)	(14,878,032) 36,865
Deferred Payment of Previous Purchases Land Purchase Payments in the three months ended March 31, 2020	(410,000) (15,251,167)
Sale of land (three months ended March 31, 2020) Deferred Price for Land Sales (three months ended March 31, 2020)	- -
Deferred Receipt of Price of Previous Sales Receipts from the Sale of Land the three months ended March 31, 2020	- -
Changes in working capital arising from purchases

The outstanding amount of land acquired by the Group amounted to 13,142,353 euros at March 31, 2021 and 3,531,601 euros at March 31, 2020, of which 13,068,539 relate to land acquisitions made during the year ended March 31, 2021 (36,865 euros to land acquisitions made during the three months ended March 31, 2020) (refer to Note 16).

and sales of land during the financial year (15,251,167)

In the year ended March 31, 2021, the Group capitalized 12,457,036 euros (1,570,841 euros in the three months ended March 31, 2020) of borrowing costs in inventories (Note 4.4). The average cost of the borrowings capitalised was approximately 1.78% (2.07% in the three months ended March 31, 2020).

The Group derecognised inventories in the amount of 484,682,402 euros during the year ended March 31, 2021: 479,438,078 euros related to completed housing units sold, 3,535,157 euros to land sold and 1,709,167 euros to inventories transferred to investment property (50,138,720 euros in the three months ended March 31, 2020 relating entirely to completed housing units sold) (Note 19.a).

None of the Group's inventories are located outside of Spain. The locations of the Group's inventories, stated at their carrying amounts, without considering prepayments to suppliers, are as follows:

	Euros
	March 31, 2021	March 31, 2020
Madrid	419,264,300	457,552,739
Catalonia	215,012,936	189,897,621
Costa del Sol	273,304,435	275,832,527
Rest of Andalusia	174,758,597	152,205,297
Balearic Islands and Spanish east coast	294,810,832	249,024,149
Total	1,377,151,100	1,324,512,333

As of March 31, 2021, there are contractual commitments to the purchase of plots for an amount of 52,623,200 euros (45,204,281 as of March 31, 2020), of which an amount of 2,130,000 euros have been paid, as advances (11,100,000 as of March 31, 2020), and which are included as Prepayments to Suppliers under the Current Assets on the Balance Sheet. Of the total amount recognised under "Trade and other accounts payable - Customer prepayments" within Current Liabilities on the consolidated balance sheet at March 31, 2021, an amount of 131,790,167 euros (161,685,902 euros at March 31, 2020) corresponds to down payments from customers for house unit reservations and private house contracts.

At March 31, 2021, and March 31, 2020, there are no sales commitments.

The Group periodically reviews the carrying amounts of its inventories for signs of impairment, recognising the required impairment provisions necessary. The cost of the land and sites, developments in progress and completed developments is reduced to fair value by recognising the appropriate provisions for impairment. If the fair value of the Group's inventories is above cost, however, the cost/contribution amounts are left unchanged.

The assets were appraised using the 'market value' assumption, in keeping with the Valuation - Professional Standards and Guidance notes published by Great Britain's Royal Institution of Chartered Surveyors (RICS). To that end the appraisals took the form of individual asset-by-asset analysis, factoring in the building standards planned for each, which in term determine the associated contracting costs and sales price ranges. An individual assessment was also made of the average length of time expected to be needed to obtain the various planning permits and requirements and the average length of time needed to build each development as function of its nature and density.

Lastly, the appraisal exercise entailed the calculation of a discount rate for each project, which was then stressed depending on the state of progress of the various developments. The discount rates used vary depending on the state of development of the asset (untransformed land, developments under construction, developments being sold from plan and finished developments). They range between 6% and 16%, the weighted average discount rate being 11.54%.

Having made a first estimate of how much the assets are worth, the valuation methods are checked to ensure the reasonableness of certain ratios such as the percentage of land to finished product, profit over construction costs or profit as a function of sales.

Other assumptions are unchanged from one development to the next, the main ones being:

It has been assumed that off-plan sales will not be made before construction of the developments begins.
As a general rule, it has been assumed that approximately 70% 75% of sales (off-plan sales under private sale-purchase agreements) take place during construction of the various developments, with the rest of the units being sold in the three to nine months following their completion.
The estimates do not assume any increase in sales prices with respect to market prices as of the reporting date, in general. The average sale price assumed was 2,743 euros per square meter.
As a general rule, it has been assumed that it takes between 27 and 36 months from drawing up the plans for a development and obtaining the required permits until the marketing and sale of the development is complete.

The net realizable value assigned to the portfolio of inventories amounts to 1,907 million euros (2,009 million euros at March 31, 2020). Said value has been determined on the basis of the valuation carried by the independent appraiser Savills Aguirre Newman Valoraciones y Tasaciones, S.A. as at February 28, 2021, adjusted by the purchases and sales of inventories during March 2021 and the variation of work in progress in March 2021, and without taking supplier prepayments into consideration . On the basis of the external appraiser's methodology, the key valuation hypotheses are the discount rate and selling prices (refer to Note 4.4). As a result of the above, the Group recognised an impairment loss of 4,395,147 euros at March 31, 2021 (1,542,943 euros at March 31, 2020), and tacit unrecorded capital gains amounting to 512 million euros (671 million euros at March 31, 2020). The additional impairment loss recognised is of minimal impact and reflects the potential delay in the ability to complete and deliver homes factored into the external appraiser's valuation assumptions as a result of COVID-19. In addition, the reduction of unrecorded tacit capital gains of 117.5 million euros is due to their materialisation as a result of homes delivered during the year.

The inventory impairment charge breaks down as follows by region:

	Euros
	March 31, 2021	March 31, 2020
Madrid	(2,057,066)	(815,039)
Costa del Sol	(1,379,948)	(474,983)
Rest of Andalusia	(911,440)	(252,921)
Balearic Islands and Spanish east coast	(46,693)	-
Total	(4,395,147)	(1,542,943)

The breakdown of the inventory impairment charge by inventory category:

	Euros
	March 31, 2021	March 31, 2020
Land and sites	(4,395,147)	(1,542,943)
Developments in progress	-	-
Completed buildings	-	-
Total	(4,395,147)	(1,542,943)

The sensitivity analysis performed as of February 28, 2021 is as follows:

The discount rate was varied by 100 basis points in both directions, based on the different economic scenarios forecast for the short and medium term and considering the rate of return that other developers with different profiles to that of the Group would demand.
As for sales prices, the directors ran sensitivity analyses modelling variations of +/-1%, +/-5%, and +/-10% even though they believe it is unlikely that sales prices will differ by 10% (in either direction) with respect to the prices used for valuation purposes.

The sensitivity analysis was run keeping all other variables constant.

The above variations in the key assumptions would affect the net realizable and carrying amounts of the Group's inventories as follows:

	Thousands of euros
	Discount rate
Assumption	+1%	-1%
	Increase/(decrease)

Change in carrying amount (*)	(3.602)	1.452

	Thousands of euros
	Sale price
Assumption	-1%	+1%	-5%	+5%	-10%	+10%
	Increase/(decrease)

Change in carrying amount (*)	(2.487)	1.058	(19.453)	3.275	(72.155)	3.624

(*) The carrying amount is the lower of cost and the net realizable value. Increases in the net realizable value are not necessarily accompanied by an impact on the inventories' carrying amount.

The impact of the sensitivity analysis on the valuations compiled by the independent expert is as follows:

A 100 basis point reduction in the discount rate would increase the valuation by 42 million euros, while a 100 basis point increase would decrease it by 40 million euros.
A 1% decrease in sales prices would decrease the expert's valuation by 47 million euros, while a 1% increase would increase it by 47 million euros.
A 5% decrease in sales prices would decrease the expert's valuation by 234 million euros, while a 5% increase would increase it by 233 million euros.
A 10% decrease in sales prices would decrease the expert's valuation by 468 million euros, while a 10% increase would increase it by 466 million euros.

At March 31, 2021, "Inventories" includes assets with a gross carrying amount of 596 million euros (550 million euros at March 31, 2020) that have been pledged as collateral to secure the development loans obtained by the Group (Note 15).

At the reporting date, the Group had insurance policies covering the inventories on which development work had begun.

As of March 31, 2021, the Group has recognised current provisions for a total amount of 13,666,026 euros, corresponding to provisions for the completion of construction projects (4,537,333 euros at March 31, 2020).

The Group has certain assets and liabilities that are recognised within current assets or current liabilities, respectively, but are expected to be realized or settled more than 12 months from the reporting date. Specifically:

	Euros
	March 31, 2021	March 31, 2020
Inventories (long production cycle) before impairment	815,059,827	875,395,448
Inventories (short production cycle) before impairment	566,486,419	450,659,828
Total current assets	1,654,232,004	1,546,790,155
Borrowings secured to finance inventories (long cycle) – note 15	165,006,520	136,569,494
Total current liabilities	603,168,609	645,078,747

12. Trade and other receivables

"Trade and other receivables" broke down as follows at March 31, 2021 and March 31, 2020:

	Euros
	March 31, 2021	March 31, 2020
Trade receivables	45,262,864	38,776,164
Trade receivables from associates	78,833	234,556
Sundry receivables	652,618	590,377
Personnel	12,913	10,576
Current tax asset (Note 17.b)	75,498	1,802
Taxes payable (Note 17.b)	5,061,693	3,836,791
Total	51,144,420	43,450,266

The change in trade and other receivables during the year ended March 31, 2021 breaks down between the amount shown in the cash flow statement and other items, as follows:

	Euros
	31.03.2021	31.03.2020	Variation	Transfer to cash flows	Others
Customers for sales of land	-	13,775,000	(13,775,000)	13,775,000	-
Customers for sales of developments – remittances	24,236,487	24,956,748	(720,261)	720,261	-
Sundry customers	21,026,378	44,416	20,981,962	(21,011,534)	29,572
Trade receivables from associates	78,833	234,556	(155,723)	155,723	-
Sundry receivables	652,618	590,377	62,241	(62,241)	-
Personnel	12,913	10,576	2,337	(2,337)	-
Current tax asset (Note 17.b)	75,498	1,802	73,696	(99,056)	25,360
Taxes payable (Note 17.b)	5,061,693	3,836,791	1,224,902	(1,224,902)	-
Total Trade and other receivables	51,144,420	43,450,266	7,694,154	(7,749,085)	54,932
Changes in working capital arising from purchases and sales of land – Trade receivables				13,775,000
Changes in working capital excluding purchases or sales of land – Trade receivables				(21,524,085)

As can be seen in the table, the increase of 7.7 million euros in total trade and other receivables has led to the consumption of 7.7 million euros in net cash which is mainly due to the collection of deferred payments of land sold in previous years (13.7 million euros) and the increase in customer for sales of developments (21 million euros).

The heading "Customers for sales of developments - remittances" includes the sums receivable from customers as a result of signing private sales contracts for homes, which represent between 15% and 25% of the total price of the sale, which is charged monthly in linear instalments until the estimated date of delivery of the development, during the construction phase, which lasts an average of 18 months. The cash obtained from a private sales contract is generated over the following time scale: 5% upon signing the private contract, 15%-25% in monthly instalments until the property is delivered and 80%-70% on signing the deed of sale when the customer takes physical possession of the property. The amounts received from customers prior to signing the deed of sale are deposited in a special account that is held separately from any other type of funds belonging to the Group, and can only be used for the construction of developments (see Note 13).

The change in trade and other receivables during the three months ended March 31, 2020 breaks down between the amount shown in the cash flow statement and other items, as follows:

	Euros
	31.03.2020	31.12.2019	Variation	Transfer to cash flows	Others
Customers for sales of land	13,775,000	13,775,000	-	-	-
Customers for sales of developments – remittances	24,956,748	29,848,979	(4,892,231)	4,892,231	-
Sundry customers	44,416	117,564	(73,148)	73,148	-
Trade receivables from associates	234,556	160,321	74,235	(74,235)	-
Sundry receivables	590,377	590,401	(24)	24	-
Personnel	10,576	10,160	416	(416)	-
Current tax asset (Note 17.b)	1,802	1,418,455	(1,416,653)	1,416,653	-
Taxes payable (Note 17.b)	3,836,791	3,159,650	677,141	(677,146)	5
Total Trade and other receivables	43,450,266	49,080,530	(5,630,264)	5,630,259	5
Changes in working capital arising from purchases and sales of land – Trade receivables				-
Changes in working capital excluding purchases or sales of land – Trade receivables			5,630,259

As can be seen in the table, the decrease of 5.6 million euros in total trade and other receivables has generated net cash of 5.6 million euros which is mainly due to the receipt of remittances from customers for sales of housing developments (4.9 million euros) and the tax rebate from the tax authorities in respect of the Tax Group's 2018 Corporate Income Tax (1.4 million euros).

The Group regularly analyses its credit risk in respect of its accounts receivable updating the corresponding provision for impairment accordingly. The Parent's directors believe that the carrying amounts of the Group's trade and other receivables approximate their fair value.

Under "Trade receivables" a balance of 24,236,487 euros (24,956,748 euros at March 31, 2020) has been recognised for trade bills, which includes customer remittances falling due in the short term in the amount of 21,294,892 euros (23,616,299 euros at March 31, 2020).

In order to calculate the impairment of accounts receivable at March 31, 2021 and March 31, 2020, the Group has applied the simplified approach under IFRS 9 Financial Instruments (loss allowance at an amount equal to lifetime expected credit losses). However, this has no impact on the consolidated financial statements, mainly due to the fact that the agreements signed with customers can be terminated if they fail to comply with their payment commitments.

Trade receivables do not accrue interest. The directors believe that the carrying amounts of the Company's trade and other receivables approximate their fair value.

13. Cash and cash equivalents

"Cash and cash equivalents" includes the Group's cash on hand and short-term bank deposits with original maturities of three months or less. The carrying amount of these assets approximates their fair value.

	Euros
	March 31, 2021	March 31, 2020
Demand deposits in current accounts	186,167,734	136,113,251
Total	186,167,734	136,113,251

The amount pledged at March 31, 2021 to cover guarantees delivered to customers is zero euros (1,092,366 euros at March 31, 2020), to cover corporate financing costs amounts to 2,230,220 euros (5,874,171 euros at March 31, 2020) and to cover sureties amounts to 250,258 euros (831,827 euros at March 31, 2020).

There were no restrictions on the use of the Group's cash at March 31, 2021 except for the fact, as required under Spanish Law 20/2015, that down payments received in connection with residential developments must be deposited in a special account separate from the rest of the Group's funds and may only be used to cover expenses deriving from the construction of the developments. The balance subject to this restriction amounted to 60,159,700 euros at March 31, 2021 (43,445,157 at March 31, 2020). The amount of cash that was restricted at March 31, 2021 accordingly totalled 62,640,178 euros (50,151,155 euros at March 31, 2020).

Cash and cash equivalents include receipts from customers in the form of banker's cheques not credited to account amounting to 14.250 million euros at March 31, 2021.

14. Equity

a) Share capital

March 31, 2021, and March 31, 2020, the Parent's share capital accordingly consisted of 47,966,587 shares, with a par value of one euro each. The shares are fully subscribed and paid in.

None of the Parent's shares was pledged at either March 31, 2021 or March 31, 2020.

The breakdown of the Parent's significant shareholders (those with equity interests of 3% or more) at March 31, 2021, according to the information reported to Spain's securities market regulator, the CNMV, by the shareholders themselves was as follows:

		% Voting rights attached to shares		% Voting rights through financial instruments
	Total shareholding %	Direct shareholding %	Indirect shareholding %	Direct shareholding %	Indirect shareholding %
HIPOTECA 43 LUX S.A.R.L.	60.64	60.64	-	-	-
HELIKON LONG SHORT EQUITY FUND MASTER ICAV	5.04	5.04	-	-	-
T. ROWE PRICE ASSOCIATES, INC	4.93	-	4.93	-	-
T. ROWE PRICE INTERNATIONAL FUNDS, INC.	3.73	-	3.73	-	-

The breakdown of the Parent's significant shareholders (those with equity interests of 3% or more) at March 31, 2020, according to the information reported to Spain's securities market regulator, the CNMV, by the shareholders themselves was as follows:

		% Voting rights attached to shares		% Voting rights through financial instruments
	Total shareholding %	Direct shareholding %	Indirect shareholding %	Direct shareholding %	Indirect shareholding %
HIPOTECA 43 LUX S.A.R.L. (*)	60.40	60.40	-	-	-
UBS GROUP AG	5.19	-	0.07	5.12	-
T. ROWE PRICE ASSOCIATES, INC	5.08	-	5.08	-	-
RYE BAY EUROPEAN MASTER FUND LIMITED	5.08	-	-	5.08	-
T. ROWE PRICE INTERNATIONAL FUNDS, INC.	4.09	-	4.09	-	-

(*) Percentage interests according to the shareholder register managed by Computershare (IBERCLEAR)

b) Share premium

There were no movements in the share premium account during year ended March 31, 2021 or the three months ended 31 March 2020. It stood at 500,076,721 euros at both reporting dates.

The balance of the share premium account can be freely distributed.

c) Legal reserve

In accordance with article 274 of the consolidated text of the Spanish Corporate Enterprises Act, 10% of profits must be earmarked to endowment of the legal reserve each year until it represents at least 20% of share capital.

The legal reserve may be used to increase capital in an amount equal to the portion of the balance that exceeds 10% of capital after the increase.

Except for this purpose, until the legal reserve exceeds the limit of 20% of capital, it can only be used to offset losses, if there are no other reserves available.

The Parent's legal reserve has yet to be fully endowed. At March 31, 2021 it stood at 3,561,218 euros (March 31, 2020: 3,109,529 euros).

c) Voluntary reserves

Parent company reserves

This reserve came about as a result of the difference between the fair value at which the real estate development business was contributed by the then Sole Shareholder in 2017 and the amounts at which that business was carried in the latter's financial statements at the time. The movements during the reporting periods ended March 31, 2021 and March 31, 2020 stem from the impact of the purchase and sale of treasury stock, as detailed in section f) below.

Reserves of fully-consolidated companies

The movement during the year ended March 31, 2021 is mainly due to the changes in the Group's composition (buyback by SPV Reoco 15, S.L.U. of treasury stock representing 20% of its share capital from Promociones y Propiedades Inmobiliarias Espacio, S.L.U.) and the purchase by SPV REOCO 1, S.L.U. of shares representing 5.3% of the capital stock of the company FACORNATA SERVICIOS Y GESTIONES, S.L. which were previously owned by Taller de Estudios de Inversión, S.L.).

There were no movements during the three months ended March 31, 2020.

e) Capitalisation reserve

Article 25 of Spain's Corporate Income Tax Act (Law 27/2014) allows enterprises to reduce their income TAX base by 10% of the increase in their own funds for the year provided that the increased own funds remain in equity for five years from the end of tax year in which they are applied to reduce taxable income, unless used to offset losses. Enterprises opting to apply this tax benefit must set up a capitalisation reserve in the amount of the increase in own funds. That reserve must feature as a separate and appropriately named reserve account on reporters' balance sheets and is restricted for five years.

At March 31, 2021, the Parent had recognised a capitalisation reserve of 893,761 euros (March 31, 2020: 409,568 euros).

f) Own shares

The Parent arranged a liquidity contract with BANCO DE SABADELL, S.A. (the "Financial Broker") on 28 March 2018 with the sole object of fostering the frequency and regularity with which the Company's shares are traded, within the limits established at the Company's Annual General Meeting and, specifically, CNMV Circular 1/2017 on liquidity agreements.

The initial term of the contract was 12 months from its date of effect, which was April 5, 2018.

The Parent suspended the liquidity agreement on December 28, 2018 due to a shortfall in the cash and shares allocated to the contract account pursuant to CNMV Circular 1/2017. It renewed the contract on January 24, 2019, having replenished the corresponding balances, as stipulated in the CNMV rules. On March 20, 2019, the contract was terminated, the underlying objectives having been met. While in effect, 94,178 shares were bought at an average price of 22.7610 euros per share and 92,784 shares were sold at an average price of 22.9339 per share, leaving an outstanding balance of 28,031 shares, which were sold as a block on March 29, 2019 for 22.80 per share.

The Board of Directors of the Parent agreed at a meeting held on 25 July 2019 to roll out a share buyback programme, initially in the form of a Discretionary Programme and then, as approved at a Board meeting on 25 September 2019, a Repurchase Programme, under which it authorised the buyback of up to 2,500,000 shares for up to 50,000,000 euros. The Repurchase Programme is valid for up to 36 months and is being managed by JB Capital Markets, S.V., S.A.U.

On February 25, 2020, the Board of Directors agreed to increase the size of the Parent's buyback programme from 50 million euros to 150 million euros, without changing any of the other terms and conditions it had approved on September 25, 2019.

Under the scope of the Parent's buyback effort (Discretionary Programme, Repurchase Programme and block trades), which began on 7 August 2019, a total of 3,325,249 shares representing 6.93% of capital has been bought back at an average price of 19.57 euros per share.

On January 8, 2020, the Parent entered into an equity swap agreement with Goldman Sachs International (GSI) covering a notional amount of up to 50 million euros and a maximum of 2,400,000 shares. The settlement date is 8 January 2021. On the date it was arranged the Company sold GSI 236,406 shares for 4,999,987 euros under the scope of that agreement. Given the Company's obligation to repurchase those shares, they compute as indirectly held treasury stock. On October 5, 2020, the Parent Company proceeded to liquid this equity swap by the repurchase of 236,406 shares for an amount of 4,999,987 euros The Company did not sell any other treasury stock during the year ended March 31, 2021 or in the three months ended March 31, 2020.

At March 31, 2021, the Company carried 3,325,249 shares at 65,075,384 euros (at March 31, 2020: 1,820,671 shares at 36,940,235 euros).

g) Prior-year results

At the Annual General Meeting held on June 23, 2020, the Parent's shareholders ratified the following resolution for the appropriation of the profit for the three-month fiscal year ended March 31, 2020 formulated by the Board of Directors at a meeting held on May 20, 2020:

	Euros
Basis of appropriation
Profit for the year (as per statement of profit or loss)	4,516,890
TOTAL	4,516,890
Appropriation to:
Endowment of the legal reserve (art. 273 Corp. Enterprises Act)	451,689
Offset of prior-year losses	3,581,008
Capitalisation reserve (art. 25 of Corp. Income Tax Act)	484,193
TOTAL	4,516,890

As a result of the above appropriation of profit, the "Prior-period losses" account showed a credit of 2,260,054 euros. On November 24, 2020, the Board of Directors approved the reclassification of said amount to "Retained earnings".

h) Owner contributions

The Parent did not receive any new owner contributions during the year ended March 31, 2021 or the three months ended March 31, 2020.

At March 31, 2021 and March 31, 2020, the Parent's Majority Shareholder had contributed a total of 740,071,256 euros.

i) Dividend distributions

As provided for in article 273 of the Corporate Enterprises Act, once the legal and bylaw-stipulated requirements have been met, dividends may be distributed against profit for the year or freely distributable reserves so long as the value of equity is not lower than, or would not fall below share capital as a result of the distribution. Any profit recognised directly in equity may not be distributed either directly or indirectly for such purposes. If prior-year losses were to reduce the Company's equity to below the amount of share capital, profit would have to be allocated to offset those losses.

The Company did not distribute any dividends during the reporting periods ended March 31, 2021 or March 31, 2020. However, there were no restrictions on the payment of dividends at 31 March 2021 other than those contemplated in company law.

j) Other equity instruments

On September 26, 2017, the Majority Shareholder approved a long-term incentive plan payable entirely in shares for the CEO, Senior Management and certain key personnel, structured into three overlapping three-year periods or cycles (from the IPO, i.e., October 20, 2017, to March 31, 2021; from January 1, 2019 to March 31, 2022; and from April 1, 2020 to March 31, 2023). The metrics to be used to measure delivery of the targets for the first cycle are, in equal parts: (i) EBITDA; (ii) the net development margin; and (iii) the shareholder return. For each there are minimum thresholds below which the bonuses do not accrue; there is also scope for outperformance. The number of shares to be received by each participant will be determined by the price of the shares in each three-year cycle (the IPO price for the first cycle and the average trading price during the 20 trading sessions prior to the start of the second and third cycles) and the level of target delivery. All of the shares received by the CEO and 50% of those received by the Senior Management cannot be sold for a year after they are received, In the case of the CEO and members of the Management Committee, this bonus is subject to repayment under certain circumstances. The cost of this incentive plan will be assumed by the Group. The maximum amount receivable by the plan beneficiaries is 11 million euros. The plan was endorsed by the Appointments and Remuneration Committee on February 27, 2018.

The amount recognised under "Other equity instruments" in respect of the commitment assumed under the long-term incentive plan by the Parent vis-a-vis its key management personnel stood at 4,406,966 euros (2.535.363 euros at March 31, 2020).

k) Non-controlling interests

This heading presents the share of the equity of the fully-consolidated Group companies that is held by minority shareholders.

The reconciliation, by subsidiary, of the opening and closing balances of non-controlling interests in the year ended March 31, 2021 is as follows:

	Ownership	Euros
	interest attributable to the Parent	Mar. 31, 2020	Profit/(loss) attributable to non-controlling interests	Other changes	Mar. 31, 2021
SPV REOCO 15, S.L.U	100 %	337,737	-	(337,737)	-
SPV SPAIN 2, S.L.	87.5%	1,574,575	(30,395)	-	1,544,180
ESPEBE 11, S.L.	80%	364,960	(19,652)	1	345,309
FACORNATA SERVICIOS Y GESTIONES, S.L.	100%	124,460	-	(124,460)	-
Total		2,401,732	(50,047)	(462,196)	1,889,489

On September 30, 2020, Group subsidiary SPV REOCO 15, S.L. acquired treasury stock representing 20% of its capital from Promociones y Propiedades Inmobiliarias Espacio, SLU. As a result of that acquisition, SPV REOCO 1, S.L.U. is now the sole shareholder of SPV REOCO 15, S.L. A public deed attesting to the reduction of SPV REOCO 15, S.L.'s share capital by 600 euros (in order to cancel those shares) and, as part of the same proceedings, an increase in share capital of the same amount (to reach the minimum threshold) was executed on the same date.

On February 23, 2021, SPV REOCO 1, S.L.U. acquired shares representing 5.3% of the share capital of the company FACORNATA SERVICIOS Y GESTIONES, S.L., which were owned by the company Taller de Estudios de Inversión, S.L. As a result of that acquisition, SPV REOCO 1, S.L.U. is now the sole shareholder of FACORNATA SERVICIOS Y GESTIONES, S.L.

The reconciliation, by subsidiary, of the opening and closing balances of non-controlling interests in the three months ended March 31, 2020 is as follows:

	Ownership	Euros
	interest attributable to the Parent	Dec. 31, 2019	Profit/(loss) attributable to non-controlling interests	Other changes	Mar. 31, 2020
SPV REOCO 15, S.L.U	80%	347,421	(9,684)	-	337,737
SPV SPAIN 2, S.L.	87.5%	1,659,725	164,850	(250,000)	1,574,575
ESPEBE 11, S.L.	80%	365,614	(654)	-	364,960
FACORNATA SERVICIOS Y GESTIONES, S.L.	94.68%	124,739	(279)	-	124,460
Total		2,497,499	154,233	(250,000)	2,401,732

At its Shareholders' Meeting held on March 25, 2020, the company SPV Spain 2, S.L. agreed to the distribution of an interim dividend for the three months ended March 31, 2020 with 250,000 euros being payable to the minority members, which was paid in April 2020.

15. Borrowings and other financial liabilities

The Group had the following borrowings at March 31, 2021:

	Euros
	March 31, 2021
		Current liabilities		Non-current
	Limit	Due in the long term	Due in the short-term	liabilities	Total
Mortgage loans secured by inventories	492,409,633	165,006,520	2,325,091	-	167,331,611
Interest on development loans	-	-	548,625	-	548,625
Total development loans	492,409,633	165,006,520	2,873,716	-	167,880,236
Commercial paper issued (*)	56,700,000	-	22,301,428	32,354,834	54,656,262
Syndicated loan (*)	100,000,000	-	49,434,679	49,434,678	98,869,357
Corporate credit facilities (*)	31,500,000	-	24,812,149	6,643,726	31,455,874
Lease liabilities	-	-	1,429,457	1,046,019	2,475,476
Other assets	-	-	91,360	32,400	123,760
Total other borrowings	188,200,000	-	98,069,073	89,511,657	187,580,729
Total	680,609,633	165,006,520	100,942,789	89,511,657	355,460,965

(*) Corresponds to unsecured debt.

The Group had the following borrowings at March 31, 2020:

	Euros
	March 31, 2020
	Current liabilities		Non-current
	Limit	Due in the long term	Due in the short-term	liabilities	Total
Shareholder Credit Facility Agreement with External Shareholders	6,675,000	1,668,104	12,739	-	1,680,843
All borrowings from non-controlling shareholders	6,675,000	1,668,104	12,739	-	1,680,843
Mortgage loans secured by inventories	676,831,933	125,404,309	425,065	-	125,829,374
Interest on development loans	-	-	140,702	-	140,702
Total development loans	676,831,933	125,404,309	565,766	-	125,970,075
Mortgage loans secured by inventories	9,497,081	9,497,081	-	-	9,497,081
Interest on mortgages secured by inventories	-	-	33,894	-	33,894
Total loans taken over as part of land purchase	9,497,081	9,497,081	33,894	-	9,530,975

Commercial paper issued (*)	-	-	59,522,751	2,546,914	62,069,665
Syndicated loan (*)	150,000,000	-	150,184,136	-	150,184,136
Derivatives	-	-	2,615,456	-	2,615,456
Interest on collateral provided	-	-	3,066	-	3,066
Dividends (Note 14.i)	-	-	250,000	-	250,000
Lease liabilities	-	-	1,056,924	1,434,845	2,491,769
Other assets	-	-	55,408	-	55,408
Total other borrowings	150,000,000	-	213,687,741	3,981,760	217,669,501
Total	843,004,014	136,569,494	214,300,140	3,981,760	354,851,394

(*) Corresponds to unsecured debt.

As of March 31, 2021, the total interest payable amounts to 603,119 euros (1,290,752 euros at March 31, 2020).

At March 31, 2021, 71.60% of total recognised debt (39.61% at March 31, 2020) was due in the long term.

Loans from non-controlling shareholders

The loan provided by Promociones y Propiedades Inmobiliarias Espacio, S.L.U. to SPV Reoco 15, S.L. - in the amount of 6,675,000 euros, falling due on December 31, 2022, bearing interest at an annual rate of 1M EURIBOR plus a spread of 3.5% - was fully repaid on September 30, 2020. 1,668,104 euros of that loan had been drawn down at March 31, 2020.

Development loans

At March 31, 2021, the AEDAS Group had arranged development loans in an aggregate amount of 540,226,673 euros (676,831,933 at March 31, 2020) in order to finance 75 developments (51 developments at March 31, 2020). These loans, measured at amortised cost, amounts to 167,331,611 euros at March 31, 2021 (125,829,374 euros at March 31, 2020). The development loans carried interest at Euribor plus spreads ranging between 100 y 300 basis points.

The AEDAS Group had arranged development loans for an aggregate amount of 540.2 million euros. The nominal amount drawn down at March 31, 2021 stood at 168.1 million euros (which is equivalent to 31.12%), being the remainder available up to the maximum limit is 324.3 million euros.

This amount can be drawn down as two types of conditions are fulfilled: (i) When a specific volume of sales contracts is achieved in each development (a percentage that varies from case to case, but must be at least 30%), (ii) Execution and invoicing of each milestone of the project.

As of March 31, 2021, the conditions were met to access an additional 37.9 million euros, of which 22.8 million euros consist of the undrawn down land tranche freely available to the AEDAS Group and 15.1 million euros relating to supplier invoices already paid and therefore linked to compliance with the conditions described in the previous paragraph.

Loans taken on to purchase land

On February 23, 2016, Group subsidiary SPV Spain 7, S.L.U. acquired a plot of land which it financed by assuming the mortgage which the seller had taken out over the site. That mortgage amounts to 11,500,000 euros and falls due on February 23, 2018. It was partially cancelled (in the amount of 2,002,919 euros) on February 15, 2018 and on February 22, 2018 its terms were amended to extend its maturity to February 23, 2020. During the year ended March 31, 2021, said loan was fully repaid before maturity. During the three months ended March 31, 2020, an 18-month extension was agreed, with the new expiration date being August 23, 2021. It carried interest at 12-month Euribor plus a spread of 3.25%.

The above loan agreement did not entail any covenants. The loan agreement did not contain any change of control clauses.

Borrowings (Development Loans) classified as current due in the long term

The breakdown of the due dates of the loans classified as short-term but falling due in the long term is as follows:

	Euros
	Current
Year		March 31, 2021 March 31, 2020

March 31, 2022	-	11,018,587
March 31, 2023	3,086,141	4,833,259
March 31, 2024	4,324,007	3,149,960
March 31, 2025	4,787,639	3,055,402
March 31, 2026 and subsequent	152,808,733	114,512,286
	165,006,520	136,569,494

Bonds and other marketable securities

On June 12, 2020, the Parent arranged the AEDAS HOMES 2020 Commercial Paper Programme on Spain's alternative fixed income market (MARF for its acronym in Spanish). Under the new programme, it can issue up to 150,000,000 euros of commercial paper with terms of up to 24 months, with the aim of continuing to diversify the Group's sources of financing. It substitutes the commercial paper programme arranged on June 14, 2019.

During the year ended March 31, 2021, the Parent completed several issues under the scope of the new programme with an aggregate face value of 61.8 million euros, notably including the issue on September 15, 2020 of 34.1 million euros, 70% of the face value of which is secured by the Kingdom of Spain as part of its COVID-19 surety lines; this issue has been rated BBB by Axesor.

Also during the year ended March 31, 2021, the Parent repaid 67.4 million euros of commercial paper at maturity, leaving a balance of 56.7 million euros outstanding at March 31, 2021 due in several tranches by September 2022 at the latest. The effective annual cost of the commercial paper issues is 3.16%.

During the three-month fiscal year ended March 31, 2020, the Parent completed several commercial paper issues with a total face value of 25 million euros and repaid 41 million euros of commercial paper at maturity, leaving 62.3 million euros outstanding, due in several tranches by July 2021 at the latest, as of year-end 2020. The effective annual cost of the commercial paper issues during that period was 0.99%.

The commercial paper is initially recognised at the fair value of the consideration received plus directly attributable transaction costs. Subsequently, the implicit interest on the paper is accrued using the effective interest rate on the transaction so that the carrying amount of these borrowings is adjusted for the interest accrued. At March 31, 2021, the commercial paper recognised on the Group's balance sheet using the effective interest rate method amounted to 54,656,262 euros (62,069,665 euros at March 31, 2020).

Syndicated loan

On August 6, 2018, the Parent arranged a 150-million-euro corporate loan which it used to finance future land purchases; it initially had six months to draw the loan down; that deadline was later extended to August 5, 2019 in exchange for a 0.25% fee. The loan originally had a maturity of 24 months and bore interest at 3m EURIBOR plus 3.5% in year one and plus 4.25% in year two. That loan was repaid at maturity and refinanced thanks to three new agreements: a syndicated loan of 134,215,000 euros and two loans backed by state guarantees totalling 15,785,000 euros. Those loans are repayable in five instalments between December 31, 2020 and August 6, 2022. They bear interest at 3m EURIBOR plus 4.5% in year one and 5.5% in year two. If the EURIBOR is negative, a benchmark rate of 0% will apply.

During the year ended March 31, 2021, a nominal amount of 50 million euros was repaid, of which 30 million euros were repaid before maturity, on February 19, 2021.

The balance drawn down at March 31, 2021 was 100 million euros and the amount recognised at amortised cost was 98,869,357 euros (149,067,980 euros at March 31, 2020). The interest payable at March 31, 2021 is zero euros (1,116,156 euros at March 31, 2020).

As a guarantee of said corporate syndicated loan, a mortgage promise was formalized on the properties without mortgage guarantee granted by financial entities.

At March 31, 2021, the Group was in compliance with all of the above covenants, as indicated below:

	Covenant	March 31, 2021

Leverage ratio	<3.5x	1.87
LTC ratio	<35%	17.9%
LTV ratio (unemcumbered)	<40%	17.9%
Interest coverage ratio	>4x	10.08
Consolidated equity	>900M €	994M €
Equity / net debt	>1.7x	3.99

Corporate credit facilities

During the year ended March 31, 2021, the Parent arranged four credit lines totalling 38 million euros to complement its developer loans. Three of the loans, arranged with different banks that had already provided developer loans, have state-backed guarantees. The credit lines bear fixed (2% - 2.5% - 3.5%) and variable rates of interest (EURIBOR plus a spread of 2.50%); they all have grace periods of at least 10 months and maturities between 12 and 24 months.

During the year ended March 31, 2021, a nominal amount of 6,5 million euros has been repaid. The balance drawn down at March 31, 2021 was 31,5 million euros and the amount recognised at amortised cost was 31,455,874 euros. The interest payable at March 31, 2021 amounted to 54,494 euros.

Derivatives

On October 17, 2017, AEDAS Homes arranged an equity swap with Goldman Sachs to hedge the exposure arising from its obligation to deliver a certain number of shares to employees of AEDAS Homes under the long-term incentive plan (LTIP) approved by the Board of Directors on September 26, 2017. On October 23, 2020, the Parent agreed an addendum to said equity swap agreement. As a result of the addendum, the manner of settlement of the equity swap changed from cash to shares; it will be settled net, as a function of the price at which Goldman Sachs sells the shares. On December 15, 2020, AEDAS Homes settled said Equity Swap, receiving 115,829 treasury shares.

Additionally, as mentioned in Note 14.f), on January 8, 2020, the PARENT arranged an equity swap agreement with Goldman Sachs International (GSI) for a maximum notional amount of 50 million euros and a maximum number of shares of 2,400,000. On October 5, 2020, the Parent settled said equity, repurchasing 236,406 shares for 4,999,987 euros.

In the year ended March 31, 2021, the Parent Company settled all the derivatives (the fair value of the derivative at March 31, 2020 was 2,615,456 euros).

Financial assets and liabilities recognised at fair value are categorized by the Group in the following three levels based on the relevance of the inputs used in the fair value measurement:

Level 1: quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2: different inputs as stated in Level 1, which are directly (prices) or indirectly (derived from prices) observable.
Level 3: inputs which are not based on observable market data (unobservable inputs).

	Euros
THREE MONTHS ENDED MARCH 31, 2020	LEVEL 1	LEVEL 2	LEVEL 3
Derivatives	2,615,456	-	-
Total	2,615,456	-	-

Changes in liabilities arising from financing activities

Information is given below on the changes in liabilities derived from financing activities during the year ended March 31, 2021 and the three months ended March 31, 2020, including both those that are derived from cash flows, and those which are not:

	Non-current debt with credit entities	Commercial paper non current debt	Other non current debts	Current debt with credit entities	Current debt with related parties	Commercial paper current debt	Other current debt	TOTAL
Balance at December 31, 2019	-	-	1,682,467	229,066,917	1,677,816	78,009,410	2,242,323	312,678,933
Changes from financing cash flows (2)	-	2,542,728	-	68,521,211	41,404	(18,643,286)	-	52,462,057
Changes in fair values	-	-	-	-	-	-	1,418,817	1,418,817
Subrogation of development loans	-	-	-	(11,720,399)	-	-	-	(11,720,399)
Accrued interest without effect on financing cash flows	-	4,186	-	(182,543)	(38,377)	156,627	1,990	(58,117)
Other changes	-	-	-	-	-	-	30,293	30,293
Property, plant and equipment suppliers - Lease contracts	-	-	(247,622)	-	-	-	37,432	(210,190)
Short-term transfer without effect on financing cash flows	-	-	-	-	-	-	-	-
Dividends to be paid to third parties	-	-	-	-	-	-	250,000	250,000
Balance at March 31, 2020	-	2,546,914	1,434,845	285,685,186	1,680,843	59,522,751	3,980,855	354,851,394
Changes from financing cash flows (1)	36,507,500	46,139,891	-	105,807,465	(581,340)	(54,729,009)	-	133,144,507
Changes in fair values	-	-	-	-	-	-	(2,615,457)	(2,615,457)
Subrogation of development loans	-	-	-	(132,752,008)	-	-	-	(132,752,008)
Accrued interest without effect on financing cash flows	787,347	811,446	-	2,224,472	(12,739)	364,269	(3,065)	4,171,730
Other changes	(25,000,000)	-	32,400	25,000,000	(1,086,764)	-	(18,543)	(1,072,907)
Property, plant and equipment suppliers - Lease contracts	-	-	(388,826)	-	-	-	372,532	(16,294)
Short-term transfer without effect on financing cash flows	43,783,557	(17,143,417)	-	(43,783,557)	-	17,143,417	-	-
Dividends to be paid to third parties	-	-	-	-	-	-	(250,000)	(250,000)
Balance at March 31, 2021	56,078,404	32,354,834	1,078,419	242,181,558	-	22,301,428	1,466,322	355,460,965

(1) In the year ended March 31, 2021, the generation of net cash relating to debt with credit institutions amounted 142,314,965 euros, and consists of loan drawdowns amounting to 399,356,225 euros and loan repayments amounting to 257,041,260 euros.
(2) In the three months ended March 31, 2020, the generation of net cash relating to debt with credit institutions amounted to 68,521,211 euros and consisted of drawdowns on developer loans amounting to 85,351,262 euros and repayments of developer loans on the delivery of homes amounting to 16,830,051 euros.

16. Trade and other payables

The following table provides the breakdown of this heading at March 31, 2021 and March 31, 2020:

	Euros
	March 31, 2021	March 31, 2020
Suppliers	140,339,246	103,772,527
Accrued for services received	6,159,782	9,899,528
Employee benefits payable	3,516,780	1,045,182
Current tax liabilities (Note 17)	19,237,338	6,552,255
Other accounts payable to public authorities (Note 17)	22,509,962	6,716,386
Customer advances (Note 11)	131,790,167	161,685,902
Total	323,553,275	289,671,780

The variation in trade creditors and other payables during the year ended of March 31, 2021 is broken down between the amount shown in the cash flow statement and other items, as follows:

	Euros
	31.03.2021	31.03.2020	Variation	Transfer to cash flows	Others
Suppliers	140,339,246	103,772,527	36,566,719	34,966,474	1,600,245
Accrued for services received	6,159,782	9,899,528	(3,739,746)	(3,739,746)	-
Employee benefits payable	3,516,780	1,045,182	2,471,598	2,471,598	-
Current tax liabilities (Note 17)	19,237,338	6,552,255	12,685,083	(6,536,486)	19,221,569
Other accounts payable to public authorities (Note 17)	22,509,962	6,716,386	15,793,576	15,793,576	-
Customer advances (Note 11)	131,790,167	161,685,902	(29,895,735)	(29,895,735)	-
Total	323,553,275	289,671,780	33,881,495	13,059,681	20,821,814
Changes in working capital arising from purchases and sales of land – Trade payables				20,550,339
Changes in working capital excluding purchases or sales of land – Trade payables				(7,490,658)

The variation in trade creditors and other payables during the year ended of March 31, 2021 has generated a net cash generation of 13,059,681 euros, of which 20,550,339 euros of net cash generation correspond to the purchase and sale of land and a net cash outflow of 7,490,658 euros correspond to changes in current capital without considering purchases or sales of land.

The customer advances account includes the amount collected from customers before signature of the public deed, which represents around 20%-30% of the sales price of a home (see Note 12).

The variation in trade creditors and other payables during the three months ended of March 31, 2020 is broken down between the amount shown in the cash flow statement and other items, as follows:

	Euros
	31.03.2020	31.12.2019	Variation	Transfer to cash flows	Others
Suppliers	103,772,527	82,738,943	21,033,584	18,778,386	2,255,198
Accrued for services received	9,899,528	8,760,829	1,138,699	1,138,699	-
Employee benefits payable	1,045,182	2,222,749	(1,177,567)	(1,177,567)	-
Current tax liabilities (Note 17)	6,552,255	5,635,915	916,340	916,340	-
Other accounts payable to public authorities (Note 17)	6,716,386	13,586,969	(6,870,583)	(6,870,583)	-
Customer advances (Note 11)		161,685,902 155,214,690	6,471,212	6,471,212	-
Total		289,671,780 268,160,095	21,511,685	19,256,487	2,255,198
Changes in working capital arising from purchases and sales of land – Trade payables				(373,135)
Changes in working capital excluding purchases or sales of land – Trade payables				19,629,622

The variation in trade creditors and other payables during the three months ended of March 31, 2020 generated a net cash generation of 19,256,487 euros, of which 373,135 euros of net cash outflow correspond to the purchase and sale of land and a net cash generation of 19,629,622 euros correspond to changes in current capital without considering purchases or sales of land.

"Trade and other payables" as of March 31, 2020, includes payments due for the land contributed and/or acquired during the reporting period in the amount of 3,531,601 euros (3,904,736 euros at the end of year 2019). This variation is due to the consumption of 373,135 euros in net cash in respect of the deferred payment of land during the three-month period of 2020 (Note 11).

The directors believe that the carrying amounts of the Group's trade payables approximate their fair value.

Information on late payments to suppliers under Additional Provision Three "Disclosure requirements" of Law 15/2010

Below are the disclosures required under additional provision three of Spanish Law 15/2010 (of July 5, 2010) (as amended by final provision two of Law 31/2014, of December 3, 2014), prepared in accordance with the related resolution issued by the Spanish Institute of Accountants and Auditors (ICAC) on January 29, 2016, regarding the information to be disclosed in the notes to the financial statements in relation to the average term of payment to trade suppliers.

	Year ended March 31, 2021	Three months ended March 31, 2020
	Days	Days
Average supplier payment term	61.45	46.39
Ratio of paid transactions	63.28	57.46
Ratio of outstanding transactions	48.71	32.18
	Euros	Euros
Total payments made	442,141,268	95,100,077
Total payments outstanding	63,493,458	74,053,411

In keeping with the ICAC Resolution, in calculating the average supplier payment term, the Company considered the commercial transactions relating to goods or services delivered and accrued since Law 31/2014 (of December 3, 2014) came into effect.

Exclusively for the purposes of this Resolution, suppliers are trade creditors in respect of amounts due in exchange for the goods and services supplied shown under "Trade payables" in current liabilities in the accompanying balance sheet.

"Average supplier payment term" is the period between delivery of the goods or provision of the services by the supplier and effective payment for the transaction.

The maximum legal term applicable to the Company under Law 3/2004 of December 29, 2014), establishing measures to combat supplier non-payment, and the transitional relief provided under Law 15/2010 (of July 5, 2010) and Royal Decree-Law 4/2013 (of February 22, 2013) on measures to support entrepreneurs and stimulate growth and job creation, is 60 calendar days from the date of receipt of the merchandise or performance of the service (30 days if the parties have not entered into a prior agreement in respect of payment terms).

17. Taxes payable and receivable and tax situation

a) Applicable legislation and years open to inspection

In accordance with prevailing tax legislation, tax returns cannot be considered final until they have been inspected by the tax authorities or until the four-year inspection period has elapsed. As of March 31, 2021, all the taxes to which the Parent and other Group companies are subject were open to inspection for all the years that have not become statute-barred

The Parent's directors do not anticipate the accrual of additional liabilities other than those already provided for as a result of any review by the tax authorities of the years open to inspection.

b) Taxes payable and receivable

The breakdown of taxes payable to and receivable from the tax authorities is as follows:

	Euros
	March 31, 2021		March 31, 2020
	Current	Non-current	Current	Non-current
Taxes payable:
VAT payable	(15,890,869)	-	(3,826,038)	-
Payable in respect of withholdings	(547,461)	-	(988,965)	-
Other taxes payable to the tax authorities	(5,760,181)	-	(1,571,598)	-
Social security contributions payable	(311,451)	-	(329,785)	-
Taxes payable (Note 16)	(22,509,962)	-	(6,716,386)	-
Current tax liabilities	(19,237,338)	-	(6,552,255)	-
Taxes receivable:
Tax rebates receivable from the tax authorities –	4,261,693		3,036,791
VAT (and IGIC)		-		-
Social security contributions receivable	800,000	-	800,000	-
Taxes receivable (Note 12)	5,061,693	-	3,836,791	-
Current tax assets	75,498	-	1,802	-
Deferred tax asset	-	13,803,058	-	23,021,317
Deferred tax liabilities	-	-	-	-
Net deferred tax assets	(36,610,109)	13,803,058	(9,430,048)	23,021,317

c) Reconciliation of accounting profit/(loss) and tax income/(expense)

The reconciliation of accounting profit/(loss) and tax income/(expense) is as follows:

	Euros
	Year ended March	Three months ended
	31, 2021	March 31, 2020
Profit/(loss) before tax	113,525,147	3,027,576
Permanent differences	481,406	116,247
Temporary differences	(13,988,535)	1,698,103
Taxable income/(tax loss) before utilization of tax losses/credits	100,018,018	4,841,926
Capitalization reserve	(2,506,759)	(484,193)
Non-capitalised tax credits applied	(675)	-
Capitalised tax credits applied	(20,459,793)	(692,350)
Taxable income/(tax loss)	77,050,791	3,665,383
Tax rate	25%	25%
Tax accrued (expense)	(19,262,698)	(916,346)
Capitalised tax credits applied	(5,114,948)	(173,087)
Capitalisation (reduction) of tax credits generated in previous years	343,852	-
Capitalisation of deductible temporary differences generated in previous years	-	-
Capitalisation (application) of deductible temporary differences generated in the financial year	(4,446,573)	424,525
Previous year income tax adjustment (current expense)	9,912	-
Previous year income tax adjustment (deferred expense)	-	-
Capitalisation of the capitalization reserve pending application	-	949,440
Other adjustments	(590)	-
Current income tax (expense)/income	(19,252,786)	(916,346)
Deferred tax (expense)/income	(9,218,259)	1,200,878

The settlement of the Income Tax is as follows:

	Euros
	Year ended March 31, 2021	Three months ended March 31, 2020
Profit/(loss) before tax	113,525,147	3,027,576
Permanent differences	481,406	116,247
Temporary differences	(13,988,535)	1,698,103
Taxable income/(tax loss) before utilization of tax losses/credits	100,018,018	4,841,926
Capitalization reserve	(2,506,759)	(484,193)
Tax credits applied (generated before the incorporation to the tax group)	(20,460,468)	-
Tax credits applied (tax group)	-	(668,926)
Taxable income/(tax loss)	77,050,791	3,688,807
Tax rate	25%	25%
Tax at 25 % on the Taxable Base	19,262,698	922,202
Deductions	-	-
Tax credits	-	-
Tax charge	19,262,698	922,202
Withholdings	(25,360)	-
Payments on account	-	(995,893)
Tax payable (+) / refundable (-)	19,237,338	(73,696)

d) Unrecognised deferred taxes

The breakdown of tax losses not capitalised as tax assets at March 31, 2021 and at March 31, 2020 is:

		Euros
	March 31, 2021	March 31, 2020
AEDAS HOMES S.A. Other Group companies	- 2,615,769	- 3,966,071
TOTAL	2,615,769	3,966,071

The Group has analysed the scope for applying its tax credits as a function of its business plan taking into account its application to file its taxes under the consolidated tax regime from January 1, 2018.

e) Deferred taxes

The breakdown of tax losses recognised as tax assets by the various Group companies at March 31, 2021 and March 31, 2020 is as follows:

	Euros
	March 31, 2021	March 31, 2020
AEDAS HOMES S.A. Other Group companies	1,675,676 12,127,382	2,254,531 20,766,786
TOTAL	13,803,058	23,021,317

The reconciliation of deferred tax assets at the beginning and end of the year ended March 31, 2021 is shown below:

	Euros
	Mar. 31, 2020	Changes recognised in		Mar. 31, 2021
	Opening balance	Income statement	Equity	Closing balance

Deferred tax assets
Tax loss carryforwards	12,108,518	(4,771,686)	-	7,336,832
Deductible temporary
differences	10,912,799	(4,446,573)	-	6,466,226
Total	23,021,317	(9,218,259)	-	13,803,058

In the financial year ended March 31, 2021, the variation in deferred tax assets mainly relates to offsetting tax loss carry forwards of 5,114,948 euros, the capitalisation of tax loss carry forwards in the amount of 343,852 euros, other adjustments to tax loss carry forwards in the amount of 590 euros, the increase due to the capitalisation of taxable temporary differences of 470,756 euros, the application of the tax asset of the capitalisation reserve of 949,440 euros, the application of the tax credit for the difference between the book value and the tax value of certain assets amounting to 3,867,969 euros and the application of other temporary differences amounting to 99,920 euros.

The reconciliation of deferred tax assets at the beginning and end of the three months ended March 31, 2020 is shown below:

	Euros
	Dec. 31, 2019	Changes recognised in		Mar. 31, 2020
	Opening			Closing
	balance	Income statement	Equity	balance

Deferred tax assets
Tax loss carryforwards	12,281,605	(173,087)	-	12,108,518
Deductible temporary
differences	9,538,834	1,373,965	-	10,912,799
Total	21,820,439	1,200,878	-	23,021,317

The variation of tax credits during the three months ended March 31, 2020 related mainly to an application of tax loss carryforwards from previous years amounting to 173,087 euros, an increase due to the application and reversal of deductible temporary differences amounting to 424,525 euros and the activation of the capitalisation reserve pending deduction in the amount of 949,440 euros.

At December 27, 2017, the Board of Directors resolved to opt for the consolidated tax regime (provided for in article 55 et seq, of the Spanish Corporate Income Tax - Law 27/2014) in 2018 and thereafter, Aedas Homes, S.A., being the parent of the tax group.

The Company's directors believe there are no indications that the deferred tax assets recognised are impaired. Their opinion is based on:

The projections drawn up by the Group for 2020-2023;
The appraisal of its inventories provided by Savills Aguirre Newman Valoraciones y Tasaciones, S.A. which indicates a gross asset value (GAV) of 1,907 million euros assuming a 100% ownership interest (Note 11).

On the basis of the foregoing, the Parent Company's directors believe that it will be able to utilize the tax assets recognised within the horizon of the business plan, i.e., by 2023, at the latest.

18. Sureties and guarantees extended to third parties and other contingent liabilities

The balance of sureties extended to customers to guarantee their down payments stood at 148,695,927 euros at March 31, 2021 (157,574,444 euros at March 31, 2020). The total limit on surety lines extended stood at 439,514,520 euros at March 31, 2021 (398,383,095 euros as of March 31, 2020). In addition, surety insurance has been taken out for the same reason, the amount of which was 37,333,255 euros as of March 31, 2021 (22,360,610 euros as of March 31, 2020). The total limit of the insurance line formalized is 81,847,507 euros as of March 31, 2020 (55,796,000 euros as of March 31, 2020).

Performance bonds amounted to 20,917,898 euros at March 31, 2021 (14,831,525 euros at March 31, 2020).

There were no contingent guarantees or liabilities at March 31, 2021 and March 31, 2020.

19. Income and expenses

a) Revenues

The breakdown of "Revenues" in the income statements for the year ended March 31, 2021 and the three months ended March 31, 2020 is provided below:

	Euros
	Year ended March 31, 2021	Three months ended March 31, 2020
By business segment
Land sales	4,340,287	-
Development sales	667,487,731	70,040,084
Development rental (Note 5)	118,084	-
Total	671,946,102	70,040,084

Sales of developments in the year ended March 31, 2021 amounted to 667,487,731 euros, corresponding to the delivery of 1.963 homes of the 56 developments (70,040,084 euros in the three months ended March 31, 2020, corresponding to the delivery of homes of the 21 developments).

In the year ended March 31, 2021, the Group companies sold land for 4,340,286 euros (no land sales were made in the three months ended March 31, 2020) (see Note 11).

All reported revenue was generated in Spain.

b) Cost of goods sold

The breakdown of the cost of goods sold in the income statements for the year ended March 31, 2021 and the three months ended March 31, 2020 is shown below:

	Euros Group total

	Year ended March 31,	Three months ended
	2021	March 31, 2020
Changes in inventories of finished products and work in progress	77,012,763	67,947,574
Consumption of inventories	(527,716,337)	(115,987,485)
Changes in land inventories	(32,269,661)	(2,098,809)
Total	(482,973,235)	(50,138,720)

c) General expenses and average workforce

The breakdown of "General expenses" is provided below:

	Euros
	Year ended March 31, 2021	Three months ended March 31, 2020
Employee expenses	(21,334,545)	(4,785,543)
Rent and fees	(161,919)	(44,105)
Repairs and upkeep	(1,256,575)	(293,908)
Independent professional services	(3,658,647)	(941,125)
Insurance premiums	(100,557)	(28,803)
Publicity and public relations	(1,532,277)	(374,255)
Utilities	(26,916)	(5,391)
Other services and taxes	(1,134,307)	(326,990)
Banking and similar services	(236,763)	(49,049)
Total General expenses	(29,442,506)	(6,849,169)

The average number of people employed by the various Group companies in the year ended March 31, 2021 was 237 (three months ended March 31, 2020: an average of 226).

The breakdown, by job category, of the headcounts at March 31, 2021 and March 31, 2020 is shown below:

	March 31, 2021			March 31, 2020
	Women	Men	Total	Women	Men	Total

Graduates	76	85	161	76	78	154
Diploma holders	18	28	46	18	26	44
Other	22	12	34	21	15	36
Total	116	125	241	115	119	234

One employee with a disability of a severity of 33% or higher is employed by the Group at March 31, 2021 and March 31, 2020.

d) Finance costs

Finance costs, calculated using the effective interest rate method, are broken down below:

	Euros
	Year ended March 31, 2021	Three months ended March 31, 2020
Finance costs, borrowings from minority shareholder	(25,468)	(12,738)
Finance costs, other borrowings	(27,470,198)	(4,616,731)
Borrowing costs capitalised in inventories	12,457,036	1,570,841
Total	(15,038,630)	(3,058,628)

20. Related-party transactions

The Group's related parties include, in addition to its subsidiaries, jointly-controlled companies and associates, its shareholders, key management personnel (the members of its Board of Directors and its executives, along with their close family members) and the entities over which its key management personnel have control or significant influence. Specifically, related-party transactions are those performed with non-Group agents with whom there is a relationship in accordance with the definitions and criteria derived from Spain's Ministry of Finance Order EHA 3050/2004 (of September 15, 2004) and CNMV Circular 1/2005 (of April 1, 2005). Pursuant to these criteria, the following are considered related parties:

Minority shareholders.
Reoco Miradola, S.L., whose major investor is a fund managed by CastleLake L.P, which is the CastleLake Funds manager and 100% indirect shareholder of Hipoteca Lux 43, S.A.R.L. (Majority Shareholder of Aedas Homes, S.A.).
Urbania Lamatra Holding, S.L., whose major investor is a fund managed by CastleLake L.P., which is the CastleLake Funds manager and 100% indirect shareholder of Hipoteca Lux 43, S.A.R.L. (Majority Shareholder of Aedas Homes, S.A.).
CastleLake L.P., as CastleLake Funds manager and 100% indirect shareholder of Hipoteca 43 Lux, S.A.R.L. (Majority Shareholder of Aedas Homes, S.A.).

The main transactions with related parties in the year ended March 31, 2021 were the following:

Contracts entered into with minority shareholders: loan, management and sales agreements.
Owner contributions and loans extended to Winslaro ITG, S.L., Servicios Inmobiliarios Licancabur, S.L., Urbania Lamatra I, S.L. and Urbania Lamatra II, S.L.
Monitoring agreement entered into by and between SPV Reoco 1, S.L., on the one hand, with Urbania Lamatra I, S.L. and Urbania Lamatra II, S.L., on the other
Services agreement entered into by and between SPV Reoco 1, S.L., on the one hand, and Winslaro ITG, S.L. and Servicios Inmobiliarios Licancabur, S.L., on the other.
Agreement for the purchase of inventories by a minority shareholder.
Termination of a land sale agreement with a minority shareholder and payment by means of the delivery of land, sale of shares and repayment of loans extended by that same shareholder (Note 11).

The main transactions with related parties in the three months ended March 31, 2020 were the following:

Contracts granted by minority shareholders: loans and management and commercialization services.
Shareholders contributions and credits granted to Winslaro ITG, S.L., Servicios Inmobiliarios Licancabur, S.L., Urbania Lamatra I, S.L. and Urbania Lamatra II, S.L.
Monitoring contract granted by SPV Reoco 1, S.L. with Urbania Lamatra I, S.L.
Contract for the provision of services granted by SPV Reoco 1, S.L. with Winslaro ITG, S.L. and Servicios Inmobiliarios Licancabur, S.L.

	Euros
	Income			Expenses
	Revenue
	Revenue	Services	Finance	Cost of sales –	External
Year ended March 31, 2021	from sales	rendered	income	Supplies	services	Finance costs
Minority shareholders	471,000	-	-	(8,655,232)	(17,258)	(25,468)
Winslaro ITG, S.L.	-	149,024	61,584	-	-	-
Serv. Inmobiliario Licancabur, S.L.	-	251,293	199,999	-	-	-
Urbania Lamatra I, S.L.	-	84,000	23,710	-	-	-
Urbania Lamatra II, S.L.	-	84,000	63,052	-	-	-
	471,000	568,317	348,346	(8,655,232)	(17,258)	(25,468)

The related party transactions in the year ended March 31, 2021 and the balances outstanding with parties related to the Group at March 31, 2021 are shown in the tables below:

	Euros
March 31, 2021	Trade and other receivables	Loans	Prepaid Expenses	Liabilities with Shareholders (Note 15)	Trade and other current accounts payable	Customer prepayments
Minority Shareholders	-	-	745,617	-	(2,966,070)	(244,000)
Winslaro ITG, S.L.	36,250	2,125,053	-	-	-	-
Serv. Inmobiliarios Licancabur, S.L.	42,583	3,824,831	-	-	-	-
Urbania Lamatra I, S.L.	-	660,022	-	-	-	-
Urbania Lamatra II, S.L.	-	1,468,209	-	-	-	-
	78,833	8,078,115	745,617	-	(2,966,070)	(244,000)

The transactions in the three months ended March 31, 2020 with parties related and the balances outstanding with parties related to the Group at March 31, 2020 are shown in the tables below:

	Euros
	Income			Expenses
	Revenue
	Revenue Services		Finance	Cost of sales –	External
Three months ended March 31, 2020	from sales	rendered	income	Supplies	services	Finance costs
Minority shareholders	-	-	-	-	(85,556)	(12,738)
Winslaro ITG, S.L.	-	24,932	16,439	-	-	-
Serv. Inmobiliario Licancabur, S.L.	-	24,932	37,871	-	-	-
Urbania Lamatra I, S.L.	-	21,000	7,186	-	-	-
Urbania Lamatra II, S.L.	-	35,767	28,156	-	-	-
	-	106,631	89,652	-	(85,556)	(12,738)

	Euros
	Trade and other		Prepaid	Liabilities with Shareholders	Trade and other current accounts	Customer
March 31, 2020	receivables	Loans	Expenses	(Note 15)	payable	prepayments
Minority Shareholders	-	-	-	(1,680,843)	(564,195)	-
Winslaro ITG, S.L.	93,162	1,299,529	-	-	-	-
Serv. Inmobiliarios Licancabur, S.L.	67,987	2,962,134	-	-	-	-
Urbania Lamatra I, S.L.	16,940	593,867	-	-	-	-
Urbania Lamatra II, S.L.	56,467	1,359,071	-	-	-	-
	234,556	6,214,601	-	(1,680,843)	(564,195)	-

21. Remuneration and other benefits provided to the directors, key management personnel and the Group auditor

Changes to the governing bodies

The Board of Directors of the Parent consists of the following members:

Cristina Álvarez,
Evan Andrew Carruthers
Eduardo Edmundo D'Alessandro Cishek
Santiago Fernandez Valbuena
Javier Martínez Piqueras
Javier Lapastora Turpín
David Martinez Montero
Milagros Méndez Ureña
Miguel Temboury Redondo

The Parent's Board of Directors, at a meeting held on October 21, 2020, resolved, unanimously, on the basis of a recommendation and report from the Appointments and Remuneration Committee, to appoint, by means of co-option, Javier Martínez-Piqueras as independent director, for the bylaw-stipulated term of three years. Javier Martínez-Piqueras replaces Emile K. Haddad, whose tenure had expired (on September 27, 2020). The appointment of Javier Martínez-Piqueras was subject to ratification by the Company's shareholders at the next Annual General Meeting.

Disclosures regarding director conflicts of interest

Neither the current nor former directors of the Parent carried out transactions with the Parent or any of its Group companies other than in the ordinary course of business or other than on an arm's length basis during the year ended March 31, 2021.

Nor did the members of the Parent's Board of Directors or their related parties, as defined in Spain's Corporate Enterprises Act, engage in relations with other companies whose business activities could represent a conflict of interest for them or the Parent during the year ended March 31, 2021 or the three months ended March 31, 2020 on the basis that none of the notices required under article 229 of that Act have been filed with the competent authorities. Accordingly, there are no related disclosures in these consolidated financial statements.

Director remuneration and other benefits

The remuneration accrued by the members of the Company's Board of Directors amounted to 1,930,116 euros in the year ended March 31, 2021 and 372,616 euros in the three months ended March 31, 2020.

Key management personnel remuneration and other benefits

The remuneration paid to the Parent's key management personnel and professionals performing similar executive duties during the year ended March 31, 2021 and the three months ended March 31, 2020 was as follows:

	Year ended March 31, 2021		Advances
No, of individuals March 31, 2021	Fixed and Variable remuneration	Other remuneration	Total	No,	Amount
7	1,330,902	609,712	1,940,614	-	-

	Three months ended March 31, 2020				Advances
No, of individuals March 31, 2020	Fixed and Variable remuneration	Other remuneration	Total	No,	Amount
7	327,617	118,905	446,522	-	-

The Parent has no pension obligations to its key management personnel nor has it extended these professionals any advances, loans or guarantees and there were no special incentive plans over shares of Aedas Homes, S.A. at March 31, 2021 and March 31, 2020, except the incentive described below:

On September 26, 2017, the former Sole Shareholder approved a long-term incentive plan payable entirely in shares for around 50 key employees, including the CEO and key management personnel, among others, structured into three overlapping three-year periods or cycles (from the IPO to March 31, 2021; from January 1, 2019 to March 31, 2022; and from April 1, 2020 to March 31, 2023). The metrics to be used to measure delivery of the targets for the first cycle are, in equal parts: (i) EBITDA; (ii) the net development margin; and (iii) the shareholder return. For each there are minimum thresholds below which the bonuses do not accrue; there is also scope for outperformance. The number of shares to be received by each participant will be determined by the price of the shares in each three-year cycle (the IPO price for the first cycle and the average trading price during the 20 trading sessions prior to the start of the second and third cycle) and the level of target delivery. All of the shares received by the CEO and 50% of those received by the key management personnel are subject to a one-year lock-up from when they are received. In the case of the CEO and members of the Management Committee, this bonus is subject to repayment under certain circumstances. The cost of this incentive plan will be assumed by the Group. The maximum amount payable to the plan beneficiaries is 11 million euros. The plan was endorsed by the Appointments and Remuneration Committee on February 27, 2018.

Auditor fees

The fees accrued in respect of services provided by the Company's auditor, Ernst & Young, S.L. in the year ended March 31, 2021 and the three months ended March 31, 2020 is as follows:

	Euros
	Three months Year ended ended March March 31, 2021 31, 2020
Audit and related services
Audit services and limited review	182,250	103,500
Other assurance services	60,700	21,700
Total	242,950	125,200

22. Environmental disclosures

The Group's business activities do not have a significant environmental impact so that it does not hold any fixed assets for the purpose of minimising its environmental impact and/or enhancing environmental protection.

23. Risk management

The Group, of which Aedas Homes is the Parent (Note 1), manages its capital so as to ensure that the Group companies will be able to continue as profitable concerns while maximising shareholder returns by balancing its debt versus equity structure.

Financial risk management is centralised in the Corporate Finance Department, which has established the mechanisms necessary for controlling exposure to credit and liquidity risk and, to a lesser extent, interest rate risk.

Credit risk:

The Group is not significantly exposed to credit risk as collection of the proceeds from the sale of its developments to customers is guaranteed by the properties sold; in addition, it places its cash surpluses with highly solvent banks in respect of which counterparty risk is not material.

No accounts receivable from Group companies, related parties or third parties were past due at March 31, 2021.

The Group is currently in the process of formulating a policy for managing its potential cash surpluses.

Liquidity risk:

The Group determines its liquidity requirements by means of cash forecasts. These forecasts identify the amount and timing of the funds needed, and new funding requirements are planned accordingly.

In order to ensure ongoing liquidity and the ability to service all the payment commitments arising from its business operations, the Group holds the cash balances shown on the balance sheet as well as the credit lines and financing agreements detailed in Note 15.

Apart from access to general credit markets, the Group has two specific mechanisms for financing construction: development loans and customer prepayments. Once the land has been purchased, these mechanisms cover all the financing needs for this period.

Development loans

As stated in Note 15, the AEDAS Group had arranged development loans for an aggregate amount of 540.2 million euros. The nominal amount drawn down at March 31, 2021 stood at 168.1 million euros (which is equivalent to 31.12%), being the remainder available up to the maximum limit is 324.3 million euros.

Customer prepayments

At March 31, 2021, the Group recognised 131.8 million euros of customer down payments for housing units (pre-sales and private contracts), of which 24.2 million euros consist of payment commitments in the form of direct debits. These advances are close to 20% of the sale price of the homes concerned. Unilateral cancellation by the client is subject to a penalty of 50% of the advance paid.

Having used a significant part of the advance payments to finance construction of the homes, 60.2 million euros remains in special accounts for exclusive use in the execution of the developments concerned, as stated in Note 13.

There is a certain liquidity risk due to the possible cancellation of purchase contracts, with the subsequent reimbursement of 50% of the advance payments made. In the last 12 months, cancellations have made it necessary to reimburse 1,695,954 euros.

The Group has registered a note issuance facility on the MARF for 150 million euros, as stated in Note 15, with an outstanding balance of issues as of March 31, 2021 of 56.7 million euros. The purpose of this facility is mainly to diversify the Group's sources of financing, to provide it with alternatives to bank funding with terms of up to 24 months, and to make the company better known to credit investors in order to prepare for possible access to capital markets in the longer term. To the extent that this activity introduces debt maturities of less than 12 months, the Group compares them with the sum of the immediate availability of development loans for invoices already paid and freely available cash funds. As of March 31, 2021, nominal amount of promissory notes maturing in less than 12 months stood at 22.6 million euros. In comparison, as of March 31, 2021, freely available cash amounted to 123.5 million euros, and the immediate availability of development loans amounted to 37.9 million euros, so the sum (161.4 million euros) exceeds the amount of short-term promissory notes due by 138.8 million euros.

Lastly, it should be said that the Group expects to generate a cash surplus as a result of its housing development and sale operations (taking into account the use of specific funding mechanisms), which should help it meet its commitments to financial institutions, suppliers and shareholders.

The Parent Company's directors are confident that these arrangements will be sufficient to meet its cash requirements and those of its subsidiaries going forward. In this regard, cash is managed at the Group level, so that the operating companies do not face liquidity shortfalls and can concentrate on completing their real estate developments, which are expected to be financed in the way described.

Market risk: interest rate risk

Although both the Group's cash balances and its borrowings expose it to interest rate risk, which could have an adverse impact on its net financial results and cash flows, the Parent's directors have not deemed it necessary to arrange interest rate hedging instruments.

Changes of 100 basis points in interest rates would have increased financial expenses by 4,501,416 euros in the year ended March 31, 2021 (and by 635,539 euros in the three months ended March 31, 2020).

Risks associated with Covid-19

In relation to the risks associated with Covid-19, the Group's directors and management are constantly monitoring developments with respect to the global pandemic with a view to assuredly mitigating any potential impacts, whether financial or non-financial.

The Company is monitoring the status of the relevant risk factors with the aim of correctly assessing the potential impact of the pandemic on AEDAS Homes' financial performance and readying the Company to take appropriate risk mitigation measures. Specifically, it is undertaking an extraordinary review of its corporate risk map in order to identify potential areas of risk in need of reinforced supervision. Those risks relate essentially to sales and access to financing.

The following risk categories have been deemed relevant from the Covid-19 perspective and located in the upper quadrant of the corporate risk map as a result of the assessment carried out by the Company's senior management team:

1. Fall in demand for new-build homes: volatility or external factors that could affect supply and demand in the housing market and could impede delivery of the growth forecasts contained in the Company's business plan. The Covid-19 pandemic has deteriorated Spain's key macroeconomic indicators, a situation that could have an adverse impact on delivery of the Company's business targets.
1. Availability of financing (customers): the risk that AEDAS Homes customers could find it hard to secure the financing needed to purchase homes developed by the Company, potentially impeding delivery of the Company's sales targets and even triggering the cancellation of pre-sales and private sales contracts by customers faced with such difficulties.
1. Availability of financing (AEDAS Homes): a scarcity of financing opportunities or the existence unpalatable financing terms that would increase the cost of borrowing and thereby erode the Company's profitability. More specifically, this risk factor could take the form of the banks imposing harsher terms on the developer loans they extend to the Company, which in turn could have an adverse impact on its development margins.
1. Securities market risk: adverse impacts on the Company's market value due to adverse trends in the securities markets or regulatory changes that make it harder to attract or retain investors. For example, the volatility observed in the markets since the onset of the health crisis in March 2020.
1. Liquidity: a shortfall in liquid funds such that it is hard for the Company to meet its payment obligations and commitments on the agreed-upon dates. The Company has taken appropriate cash preservation measures so as to be able to continue to meet its financial obligations.
1. Sales: the introduction of misguided sales policies or inadequate sales management with an adverse impact on sales and the completion of contracts. More specifically, this risk factor could

materialise as a result of changes in customer preferences and/or needs due to new habits or customs deriving from the pandemic, e.g., working from home.

The Company is taking the following measures with a view to monitoring and managing the risk factors itemised above:

Identification of the adequate monitoring indicators
Establishment of tolerance thresholds that reflect the Company's risk appetite in relation to each risk category
Regular monitoring of the status of the risk indicators so identified
Implementation and oversight of action plans designed to mitigate the risk factors

In addition, in early March 2020, the Company activated its Crisis Committee in order to take all the measures needed to guarantee the continuity of its business and the wellbeing of its employees. That Crisis Committee took measures to introduce remote working on a widespread basis and to guarantee the continuity of construction work at its ongoing developments.

The Company plans to continue to take any and all measures deemed necessary for monitoring and managing the risks deriving from the Covid-19 pandemic with the aim of guaranteeing, to the best of its abilities, delivery of its business targets.

In addition, in March 2020, the Group implemented a capital preservation policy designed to safeguard its capital structure, to which end liquidity developments are being constantly monitored across all Group companies. So far, the liquidity indicators have remained consistently satisfactory.

24. Events after the reporting period

No events have taken place since the end of the reporting period that could have a material impact on the information presented in the consolidated financial statements authorised for issue by the directors or that are worthy of disclosure on account of their materiality, other than that disclosed below:

At April 14, 2021, the Company had made early repayment of corporate credit facilities for a nominal amount of EUR 10 million.
On April 20, 2021, the AEDAS Homes Board of Directors approved the strategic sustainability plan. The ESG Strategic Plan for 2021-2023 prepared by AEDAS Homes continues the path of previous CSR Plans, becoming a more ambitious roadmap by aligning with the Sustainable Development Goals set by the United Nations (UN) for 2030.

This Strategic Plan specifies a unique corporate vision that is structured on the basis of three dimensions (Governance, Environmental and Social), which in turn consist of 8 lines of action that include 27 specific actions. By implementing the various initiatives set out in the Plan, AEDAS Homes has assumed three ambitious commitments for 2030, one for each of the dimensions.

On April 26, 2021, the company SPV Reoco 1, S.L.U. changed its name to Aedas Homes Opco, S.L.U. in a notarised document.
During the month of April 2021, the Company has amortized developer loans for an amount of 11.4 million euros, of which 5.1 million euros correspond to subrogations and the rest to cancellations. These cancelations represent a risk reduction of 18 million euros.
At May 4, 2021, the total treasury stock held by AEDAS Homes at close of market was 3,360,253 securities representing 7.01% of the capital acquired at an average price of 19.60 €/share. The total number of securities acquired through Discretionary Management was 148,724 securities representing 0.31% of the capital at an average price of 20.31€/share; the total number of securities acquired through the Buyback Programme was 1,195,054 securities representing 2.49% of the capital at an average price of 19.92€/share and the total number of securities acquired in the block market was 2,016,475 securities, representing 4.20% of the capital at an average price of 19.36 €/share.
On May 7, 2021, the Board of Directors of AEDAS Homes proposed a policy of remunerating its shareholders based on four pillars: (i) volume of net income generated; (ii) visibility on cash

generation; (iii) debt ratios and the liquidity necessary to maintain organic growth; and (iv) any other strategic operation that may be considered in the future.

The resolutions adopted by the General Meeting of Shareholders and the Board of Directors when executing the Shareholder Remuneration Policy take into account the provisions of applicable legislation and good corporate governance practice, and will follow the general recommendations on good governance recognised by the international market in this respect.

On this basis, the Parent Company's Board of Directors, at its meeting held on May 7, 2021, resolved to:

• Submit an annual proposal to the General Meeting of Shareholders that ordinary dividends equivalent to 50% of the net profit should be distributed up to and including the 2023/24 financial year.

• Consider the possibility of supplementing ordinary dividends with extraordinary dividends that can be approved on the basis of the cash generated by sales of land during the year and the level of the Company's commercial performance.

• Limit dividend distributions to an indebtedness of 20% LTV (loan-to-value of assets).

• Propose the distribution of a dividend of €1.40 per share payable from the profit for the 2020/2021 financial year:

ordinary dividend of €0.90 per share; and
extraordinary dividend of €0.50 per share.

The Parent Company envisages a form of payment that can consist either of a cash payment or treasury shares.

In any case, the Parent Company's Board of Directors reserves the right to amend this policy if major changes occur that could affect the Company's profits or its financing needs, making it impracticable to maintain this policy, including, amongst others, changes in macroeconomic conditions or the decision to carry out major corporate transactions or acquisitions that would a significant affect this decision.

25. Translation of financial statements

Free translation of financial statements originally issued in Spanish. In the event of discrepancy, the Spanishlanguage version prevails.

	Registered Business office activity		Shareholding			Auditor	Consolidation method
Company			March 31, 2021		Shareholder
SPV REOCO 1, S.L.U.	Madrid	Development	100%	Direct	AEDAS HOMES S.A.	ERNST & YOUNG, S.L.	Full consolidation method
DAMALANA SERVICIOS Y GESTIONES, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
ESPEBE 18, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
SPV REOCO 15, S.L.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
SPV SPAIN 2, S.L.	Madrid	Development	87.50%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
ESPEBE 11, S.L.	Madrid	Development	80%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
FACORNATA SERVICIOS Y GESTIONES, S.L.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
SERVICIOS INMOBILIARIOS LICANCABUR S.L.U.	Madrid	Development	25%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Equity method
SERVICIOS INMOBILIARIOS MAUNA LOA, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
TURNKEY PROJECTS DEVELOPMENT, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
WINSLARO ITG, S.L.	Madrid	Development	20%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Equity method
EGON ASSET DEVELOPMENT, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
LIVE VIRTUAL TOURS, S.L.U.	Madrid	Audiovisual distribution	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
URBANIA LAMATRA I, S.L.	Madrid	Development	10%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Equity method
URBANIA LAMATRA II, S.L.	Madrid	Development	10%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Equity method
FALCON DESARROLLOS INMOBILIARIOS, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
PARKER DESARROLLOS INMOBILIARIOS, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method

Appendix I - Subsidiaries included in the scope of consolidation at March 31, 2021

	Registered Business		Shareholding				Consolidation
Company	office	activity	March 31, 2020		Shareholder	Auditor	method
SPV REOCO 1, S.L.U.	Madrid	Development	100%	Direct	AEDAS HOMES S.A.	ERNST & YOUNG, S.L.	Full consolidation method
DAMALANA SERVICIOS Y GESTIONES, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
ESPEBE 18, S.L.U.	Madrid	Development	100%	AEDAS HOMES, S.A., Indirect through SPV REOCO 1, S.L.U.		-	Full consolidation method
SPV REOCO 15, S.L.	Madrid	Development	80%	AEDAS HOMES, S.A., Indirect through SPV REOCO 1, S.L.U.		-	Full consolidation method
SPV SPAIN 2, S.L.	Madrid	Development	87.50%	AEDAS HOMES, S.A., Indirect through SPV REOCO 1, S.L.U.		-	Full consolidation method
ESPEBE 11, S.L.	Madrid	Development	80%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
FACORNATA SERVICIOS Y GESTIONES, S.L.	Madrid	Development	94.70%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
SERVICIOS INMOBILIARIOS LICANCABUR S.L.U.	Madrid	Development	25%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Equity method
SERVICIOS INMOBILIARIOS MAUNA LOA, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
TURNKEY PROJECTS DEVELOPMENT, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
WINSLARO ITG, S.L.	Madrid	Development	20%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Equity method
EGON ASSET DEVELOPMENT, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
LIVE VIRTUAL TOURS, S.L.U.	Madrid	Audiovisual distribution	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
URBANIA LAMATRA I, S.L.	Madrid	Development	10%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Equity method
URBANIA LAMATRA II, S.L.	Madrid	Development	10%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Equity method
FALCON DESARROLLOS INMOBILIARIOS, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method
PARKER DESARROLLOS INMOBILIARIOS, S.L.U.	Madrid	Development	100%	Indirect	AEDAS HOMES, S.A., through SPV REOCO 1, S.L.U.	-	Full consolidation method

Subsidiaries included in the scope of consolidation at March 31, 2020

	Equity at March 31, 2021 (euros) (*)
Company	Capital	Share premium	Reserves	Retained earnings (prior‐year losses)	Profit/(loss) for the year	Other owner contributions	(Interim dividend)	Total equity
SPV REOCO 1, S.L.U.	44,807,030	403,236,299	(321,618,002)	(4,801,688)	76,361,890	61,533,015	(56,000,000)	203,518,544
DAMALANA SERVICIOS Y GESTIONES, S.L.U.	3,010	‐	(353)	(4,763,598)	(1,377,431)	8,000,000	‐	1,861,628
ESPEBE 18, S.L.U.	3,000	‐	142	(1,431,013)	258,934	1,540,000	‐	371,063
SPV REOCO 15, S.L.	3,000	‐	(324,095)	(889,167)	(490,350)	2,555,125	‐	854,513
SPV SPAIN 2, S.L.	100,000	978,848	8,204,620	‐	(243,172)	4,124,175	‐	13,164,471
ESPEBE 11, S.L.	3,000	‐	1,126,446	(3,271)	(98,253)	‐	‐	1,027,922
FACORNATA SERVICIOS Y GESTIONES, S.L.	3,010	‐	70,079	(5,242)	(19,571)	‐	‐	48,276
SERVICIOS INMOBILIARIOS LICANCABUR, S.L.U.	3,000	‐	(215)	(320,333)	(637,131)	7,643,099	‐	6,688,420
SERVICIOS INMOBILIARIOS MAUNA LOA, S.L.U.	3,255,768	1,443,152	(3,520)	(357,084)	2,940,251	1,500	(1,900,000)	5,380,067
TURNKEY PROJECTS DEVELOPMENT, S.L.U.	3,000	‐	(1,264)	(3,696)	(194,536)	264,600	‐	68,104
WINSLARO ITG, S.L.	3,000	‐	(371)	(377,949)	(263,529)	5,721,800	‐	5,082,951
EGON ASSET DEVELOPMENT, S.L.U.,	3,000	‐	(1,405)	(2,037)	(22,804)	162,400	‐	139,154
LIVE VIRTUAL TOURS, S.L.U.	3,000	‐	258	‐	(76,347)	87,839	‐	14,750
URBANIA LAMATRA I, S.L.	3,000	‐	(292)	(492,405)	(265,808)	3,197,600	‐	2,442,095
URBANIA LAMATRA II, S.L.	3,000	‐	(333)	(259,212)	(1,829,980)	12,611,900	‐	10,525,375
FALCON DESARROLLOS INMOBILIARIOS, S.L.U.	3,000	‐	(1,575)	‐	(211)	1,500	‐	2,714
PARKER DESARROLLOS INMOBILIARIOS, S.L.U.	3,000	‐	(1,582)	‐	180	1,500	‐	3,098

Salient financial information about the directly and indirectly held investees is provided below:

	Equity at March 31, 2020 (euros) (*)
Company	Capital	Share premium	Reserves	Retained earnings (prior‐year losses)	Profit/(loss) for the year	Other owner contributions	(Interim dividend)	Total equity
SPV REOCO 1, S.L.U.	44,807,030	403,236,299	(321,618,002)	(4,738,831)	(62,857)	61,533,015	‐	183,156,654
DAMALANA SERVICIOS Y GESTIONES, S.L.U.	3,010	‐	(353)	(4,418,627)	(344,972)	8,000,000	‐	3,239,058
ESPEBE 18, S.L.U.	3,000	‐	142	(1,429,894)	(1,119)	1,540,000	‐	112,129
SPV REOCO 15, S.L.	3,000	‐	(344)	(840,746)	(48,421)	2,555,125	‐	1,668,614
SPV SPAIN 2, S.L.	100,000	978,848	6,885,817	‐	1,318,803	4,124,175	‐	13,407,643
ESPEBE 11, S.L.	3,000	‐	1,126,446	‐	(3,271)	‐	‐	1,126,175
FACORNATA SERVICIOS Y GESTIONES, S.L.	3,010	‐	470,079	‐	(5,242)	‐	‐	467,847
SERVICIOS INMOBILIARIOS LICANCABUR, S.L.U.	3,000	‐	(215)	(282,206)	(118,926)	6,215,750	‐	5,817,403
SERVICIOS INMOBILIARIOS MAUNA LOA, S.L.U.	3,255,768	1,443,152	(235)	(137,774)	(219,311)	1,500	‐	4,343,100
TURNKEY PROJECTS DEVELOPMENT, S.L.U.	3,000	‐	(1,264)	(725)	(2,971)	264,600	‐	262,640
WINSLARO ITG, S.L.	3,000	‐	(371)	(218,076)	(68,916)	3,303,500	‐	3,019,137
EGON ASSET DEVELOPMENT, S.L.U.,	3,000	‐	(1,405)	‐	(2,037)	162,400	‐	161,958
LIVE VIRTUAL TOURS, S.L.U.	3,000	‐	(1,082)	‐	1,341	56,000	‐	59,259
URBANIA LAMATRA I, S.L.	3,000	‐	(292)	(433,564)	(79,021)	2,969,050	‐	2,459,173
URBANIA LAMATRA II, S.L.	3,000	‐	(333)	(563,637)	(327,130)	6,930,750	‐	6,042,650
FALCON DESARROLLOS INMOBILIARIOS, S.L.U.	3,000	‐	‐	‐	‐	‐	‐	3,000
PARKER DESARROLLOS INMOBILIARIOS, S.L.U.	3,000	‐	‐	‐	‐	‐	‐	3,000

(*) Unaudited figures, with the exception of the financial statements for the year ended March 31, 2021 and the three months ended March 31, 2020 of SPV REOCO 1, S.L.U., audited by ERSNT & YOUNG, S.L.

Appendix II - List of non-Group companies that hold an equity interest in any of the fullyconsolidated subsidiaries of 10% or more at March 31, 2021

Company invested in	Shareholder	Ownership interest, %
SPV SPAIN 2, S.L.	PROMOCIONES Y PROPIEDADES INMOBILIARIAS ESPACIO, S.L	12.50%
ESPEBE 11, S.L.	PROMOCIONES Y PROPIEDADES INMOBILIARIAS ESPACIO, S.L.	20%
WINSLARO ITG, S.L.	REOCO MIRADOLA, S.L.	80%
SERVICIOS INMOBILIARIOS LICANCABUR, S.L.	REOCO MIRADOLA, S.L.	75%
URBANIA LAMATRA I, S.L.	URBANIA LAMATRA II, S.L.	90%
URBANIA LAMATRA II, S.L.	URBANIA LAMATRA II, S.L.	90%

List of non-Group companies that hold an equity interest in any of the fully-consolidated subsidiaries of 10% or more at March 31, 2020

Company invested in	Shareholder	Ownership interest, %
SPV SPAIN 2, S.L.	PROMOCIONES Y PROPIEDADES INMOBILIARIAS ESPACIO, S.L	12.50%
SPV REOCO 15, S.L.	PROMOCIONES Y PROPIEDADES INMOBILIARIAS ESPACIO, S.L.	20%
ESPEBE 11, S.L.	PROMOCIONES Y PROPIEDADES INMOBILIARIAS ESPACIO, S.L.	20%
WINSLARO ITG, S.L.	REOCO MIRADOLA, S.L.	80%
SERVICIOS INMOBILIARIOS LICANCABUR, S.L.	REOCO MIRADOLA, S.L.	75%
URBANIA LAMATRA I, S.L.	URBANIA LAMATRA II, S.L.	90%
URBANIA LAMATRA II, S.L.	URBANIA LAMATRA II, S.L.	90%

Appendix III - Fundamental annexes required according to the ESEF taxonomy and in accordance with the technical standard 32-60-254 developed by the European Securities and Markets Authority (ESMA) published on December 18, 2017:

Name of the reporting entity or other forms of identification	Aedas Homes, S.A.
Domicile of entity	Paseo de la Castellana, 42, Madrid (Spain)
Legal form of entity	Sociedad Anónima
Country of incorporation of the entity	Spain
Address of entity's registered office	Paseo de la Castellana, 42, Madrid (Spain)
Main center of activity	Paseo de la Castellana, 42, Madrid (Spain)
Description of the nature of the entity's operations and its main activities	The acquisition, promotion and rehabilitation of any real estate, for the possession, enjoyment, sale and lease of the same. The acquisition, possession, enjoyment, exchange, sale and administration of national or foreign securities as well as any type of securities or rights, such as shares in limited liability companies, which grant a share in companies, all on their own and no brokerage activity. The acquisition, promotion and rehabilitation of any real estate, for the possession, enjoyment, sale and lease of the same.
Name of the Parent company	Aedas Homes, S.A.
Name of ultimate parent of group	Aedas Homes, S.A.

Index

1.1 AEDAS Homes at a glance

Despite the extraordinary events induced by the global pandemic, AEDAS Homes posted its best ever earnings performance in FY 2020-21

AEDAS Homes attained excellent business momentum in FY 2020-21, which positioned it as the leading residential developer in Spain.

AEDAS Homes is a next-generation developer, specialised in new homes. It was set up in 2016 and its shares are listed on the Spanish stock exchange. Thanks to the best land bank in Spain, it sells sustainable, high-quality housing located in the areas experiencing strongest demand. Excellent execution of its business plan and full delivery of its guidance have earned it a reputation as a hallmark player in the Spanish home development sector.

It develops sites it owns that are carefully selected for their location and other key screening criteria, including minimum return hurdles, pinpointed to enable it to tap into pockets of demand.

At the heart of our development platform lies our prestigious team of professionals who boast extensive experience in the home development sector and enjoy the backing of an independent Board of Directors. The Company's agile and decentralised business model, articulated around six regional units, enables us to leverage local know-how, adapt to evolving market trends and focus on our customers.

Our scalable business model and sustainable and feasible business plan ensure we will be able to honour our commitment to creating quality homes for our customers and long-term value for our shareholders.

AEDAS Homes invest in Spain's most dynamic residential markets due to their demand.

AEDAS Homes in Spain

1 The opening of the Northern Territorial Directorate took place in April 2021

The homes we build Customer profile

We build high-quality sustainable homes in Spain for the private home buyer and the institutional build-to-rent segments.

Most of AEDAS Homes' customers are firsttime home buyers.

Some 83% of the units delivered in 2020-21 boast compelling sustainability credentials.

92% of AEDAS Homes' customers are Spanish. The remaining 8% are overseas buyers.

Key indicators2

All figures in units as of 31 March 2021, except Employees 3 It includes BtS (1.537) and BtR (943)

Employees

A unique approach to residential development

Land purchase

Exclusive focus on areas with proven longterm demand dynamics, concentrated in five key Spanish regions.
The regional teams have in-depth knowledge of the local land markets, enabling them to find off-market deals.
Due diligence, negotiations and closings are centralised.
The capital structure and liquidity position create room for small and large acquisitions

Decentralised and scalable business model

Nimble and flexible organisational structure
Regional teams with rich experience so as to leverage local know-how
Centralised oversight; the key functions are kept in-house
Design, sales and construction outsourced to trusted partners
Limited fixed-cost base

Sales strategy

Customer-centred marketing approach
In-depth market studies to ensure optimal product definition
Focus on private sale segment, complemented by the build-to-rent segment, a growing business line.
Innovative use of technology at all customer touch points

Prudent ramp-up approach to development

Nationwide risk controls and investment/ project management
Continuous fine-tuning of the capital structure
Responsibility: results-oriented remuneration
Focus on preserving margins and ROE

1.2 Chairman's Statement

Dear Shareholders:

Your Company has navigated the 2020- 21 COVID storm with confidence and craftmanship. Unlike any other year in recent memory, 2020 was shaped by experiences beyond our control, with the global pandemic causing significant disruption at every level of society and the economy. Nevertheless, the Company is delivering its strongest operating results to date, and this result could not have been achieved without the resilience, drive and commitment of the AEDAS Homes team, which demonstrated true leadership by responding quickly and decisively in the face of uncertainty.

Responding decisively

The Board supported the Company's management team in their swift response to the outbreak of COVID-19 in Spain in mid-March last year and monitored the situation closely as the pandemic evolved. The Company had been delivering a strong performance up to that date, and thanks to its effective management at the outset of the health crisis—especially in terms of protecting its employees, pivoting seamlessly to remote working while keeping all teams in constant contact and

instituting strict safety protocols across all construction sites to safeguard the health of all subcontractors and suppliers—this performance continued uninterrupted.

The Company also started with a strong financial position that was only reinforced by a strategy to protect and preserve capital, which included exercising extraordinary cost discipline, holding back on investment for a period, and postponing payment of the dividend originally scheduled for November 2020. Doing so enabled the Company to focus on the challenges at hand, which will ultimately ensure that it will be able to honour its commitments to its shareholders.

"AEDAS Homes team has demonstrated true leadership by responding quickly and decisively in the face of uncertainty"

Delivering a strong financial performance

From 1 April 2020 to 31 March 2021, AEDAS Homes delivered a total of 1,963 units, including the Company's first turnkey Build to Rent development. These deliveries brought in total revenues of €671.9 million and EBITDA of €133.2 million and reflect the Company's capacity to continue its rampup and deliver on its Business Plan targets, despite the adverse context.

Shareholder remuneration

AEDAS Homes has established a Shareholder Remuneration Policy based on four pillars: (i) the volume of net results generated by the Company through its activity, (ii) visibility on cash generation, (iii) debt ratios and the necessary liquidity level to maintain organic growth and (iv) any other strategic operations that may be considered in the future. The company envisages a form of payment that can be both in cash and through the delivery of own shares.

The resolutions adopted by the Annual General Meeting and the Board of Directors to execute the Shareholder Remuneration Policy take into account the provisions of applicable legislation and Good Corporate Governance practices and are also in line with general recommendations of good governance recognised internationally.

On this basis, the Board of Directors, at its meeting on 7 May 2021, agreed to the following:

To propose to the AGM, on an annual basis, the distribution of ordinary dividends equivalent to 50% of net profit up through fiscal year 2023-24
The possibility of supplementing ordinary dividends with extraordinary dividends that may be approved based on the cash generated by the sale of land during the fiscal year and the Company's sales performance
To ensure dividend distribution is in line with the Company's debt threshold of 20% of Loan-to-Value (net debt over gross asset value).
To propose the distribution of a dividend of €1.40 per share out of 2020-21 results, in line with the following breakdown:
an ordinary dividend of €0.90 per share; and
an extraordinary dividend of €0.50 per share.

The Board of Directors reserves the right to modify this policy in the event of any relevant changes that could affect the Company's results or its financing needs and thus render its maintenance impractical. This includes, but is not limited to, changes in macroeconomic conditions or the decision to carry out important corporate transactions or acquisitions that would have significant weight in this decision.

Board engagement with stakeholders

The Board, and I personally, have taken great care in ensuring that our stakeholders' health was not compromised, and our teams' morale was not soured by the pandemic. Facing uncertain diagnostics and a hard response to the problem from public officials, both the measures that we adopted and our risk identification and control system have ensured the Company's protection. This was bolstered by the strength of our financial position and the quality of our assets.

Industry outlook

Although the Spanish economy has suffered significantly during the pandemic, in the residential development sector, the COVID-19 health crisis has confirmed two fundamental aspects of our industry: first, that there is an undeniable shortage of desirable housing in major cities; and second, that homebuilders lacking scale and diversified financial sources are struggling and are likely to continue to do so. We are convinced that these trends will become more apparent and more widely understood over the coming years and that AEDAS Homes will benefit significantly from this situation. Our company is not a macro play on the Spanish economy—it is an investment in a growing industry with fastchanging shapes and features.

Board appointments and evaluation

AEDAS Homes has an experienced, committed, independent Board that believes that effective corporate governance serves as the foundation for the kind of sustainable growth that contributes to value creation for its shareholders.

In October 2020, the Board welcomed Javier Martinez-Piqueras, who was appointed independent director for the statutory period of three years, upon the expiration of the nomination of Emile H. Haddad, who left the Board after ably serving since 2017. Javier brings wide-ranging experience advising large company boards at a global level on capital and equity related solutions, and his deep understanding of the real estate sector will be an asset to the Board. His appointment is subject to further ratification at the next Annual General Meeting.

In accordance with the Spanish Capital Corporations Law and the CNMV Corporate Governance Code, the Board once again carried out its annual self-assessment. All directors actively participated in the process and contributed their comments and suggestions for improvement.

"The Board, and I personally, have taken great care in ensuring that our stakeholders' health was not compromised, and our teams' morale was not soured by the pandemic"

Leading the way to a sustainable future

With the goal of achieving sustainable, long-term growth and generating value for shareholders, the Company dedicated significant time and effort in 2020-21 to designing an ESG Strategic Plan for the coming years. This Plan, which was approved unanimously in an extraordinary Board meeting in April 2021, defines the Company's strategic ESG priorities, sets clear objectives, translates them into concrete actions for the short, mid and long term, and establishes the governance and monitoring model to ensure its compliance and supervision.

By approving this Plan and the resources needed to make it a success, the Board is recognising the risks related to climate change and is communicating its commitment to those areas where AEDAS Homes can make a measurable difference, especially in terms of building sustainable cities and communities, fostering opportunities for decent work and economic growth, and making contributions to industry, innovation and infrastructure.

The Audit and Control Committee will closely monitor the progress and results of the Plan, and the Company will be communicating this progress to its stakeholders on a regular basis.

Annual General Meeting

We will be holding our Annual General Meeting on Friday, 18 June 2021. As our main priority is the safety of our shareholders and employees, we will be making a decision in line with guidance from Spanish health authorities as to how the AGM will be held and as we get closer to the date, further details will be announced.

Looking ahead

As we move into our maturity stage in terms of homes delivered and the optimization of operations, we are confident that our story will be seen with a clearer lens by the media and the capital markets. You can remain assured that your Board and your Executive team will spare no efforts to ensure our continuing success. Thank you for your trust.

Santiago Fernández Valbuena Chairman of the Board of Directors

1.3 Chief Executive's Statement

The 2020-21 fiscal year was defined by the unprecedented Covid-19 health crisis, strict mobility restrictions across Spain and the near decimation of the country's tourism industry, a drop in GDP and a rise in unemployment.

However, despite the pandemic and overall context, AEDAS Homes returned an outstanding performance during the tumultuous twelve-month period from April 2020 to March 2021, due largely to having faced those first few months of uncertainty from a position of operational and financial strength: an excellent land bank, strong order book, well-capitalised balance sheet, and healthy cash position.

Response to the Covid-19 pandemic

In the line with our company's ongoing commitment to health and safety, at the outset of the pandemic our first priority was to protect and support our employees, customers, contractors and suppliers by implementing a series of measures to safeguard their health and well-being. We also offered customers the possibility of requesting deferment of their April and May monthly payments, with 18% of customers deciding to do so.

Our second priority was to preserve our strong cash position, so as to ensure the continuity of our business in the short term and position ourselves to take advantage of opportunities in the future. In our first quarter, this included temporarily suspending our land investment activity, freezing hiring, postponing all non-essential expenditures and drawing down available developer loans to ensure seamless operating activity. In the second quarter, we successfully extended our €150 million Syndicated Facility until 2022 and under the scope of the MARF ICO COVID commercial paper state guarantee scheme, issued €34.1 million at 24 months, the maximum term permitted under this scheme.

"Despite the pandemic and overall context, AEDAS Homes has faced the uncertainty from a position of operational and financial strength"

In the third quarter, we announced the Board's decision to maintain the dividend but defer its distribution until after the presentation of FY 2020-21 financial results in May 2021, a protective measure which was designed to ensure maximum cash availability and protect the company's solvency.

Our solid financial position, reasonable level of debt and excellent visibility over future cash generation—given our strong order book going into the pandemic—afforded us significant stability during the period.

Land investment 2020-21

Despite our decision to hold back on land investment as part of our capital preservation strategy in the first months of the pandemic, by June we had resumed our investment activity and continued to successfully replenish our landbank by making selective investments in areas of strong demand. In total, we acquired land for 1,945 additional units for €132.3 million in 24 transactions, bringing our landbank to 15,484 units (net of deliveries). At the March close, the landbank had an appraised GAV of €1,906 million, yielding a NAV of €33.68 per share.

Year-end operating figures and financial results

This past year, our operations teams worked around the clock to ensure that construction continued as normally as possible despite strict protocols across all our sites, which meant that any operational delays from the lockdown in the spring had no significant cumulative effect on

completions by year-end. And after the easing of lockdown measures in early summer, we experienced a strong, sustained rebound in sales activity, culminating in our best quarter ever with 617 retail units sold between January and March 2021, far above pre-Covid levels.

By the end of December 2020, we had sold virtually all of our deliveries for FY 2020-21, which allowed us to enter the last quarter of our fiscal year with our targets fully de-risked and hand over keys to 1,963 homes as scheduled, fully meeting our annual delivery target and marking another significant milestone in the history of our young company - a milestone which takes on greater meaning in light of the extremely challenging circumstances of the last 12 months.

Earnings-wise, the company recorded record revenues of €671.9 million (€667.6 million from the sales of homes), a gross margin of 28.1% and net profit of €85.1 million. We closed the fiscal year in a very solid financial position: inventories of €1,394 million (up 3.8% during the twelve-month period); unrestricted cash of €123.5 million and an LTV of 12.0%.

Visibility over future delivery targets

At the time of writing this letter, the eventual outcome of the pandemic and its long-term effects on society and the economy are still far from certain. For that reason, AEDAS Homes will continue to take a prudent approach, sticking to our Business Plan which we designed for attainable and sustainable growth. But we can look down the road with peace of mind, as we continue to have strong visibility over delivery guidance for the coming years.

Over the course of 2020-21, we put 3,031 units on the market and broke ground on 2,599 units, bringing our total units on the market to 6,693 and total units under construction to 4,586 at year end. Our net sales for the period total 2,480 units (€692.6 million), with 1,537 retail units and 943 Build to Rent units sold.

In terms of sales coverage for the coming years, at March close we had sold 72% of the units we plan to deliver to customers in FY 2021-22 and 40% of those scheduled for delivery in FY 2022-23. In revenue terms, the Company's Order Book, with 3,428 units sold, 63% of which are under private sales contract, is valued at €989.6 million.

Thanks to our financial resilience, differential business model and committed team of professionals, we ended the 2020- 21 fiscal year in a very strong position and with an optimistic outlook. As of today, AEDAS Homes' ramp-up remains on track and we expect to hit our run-rate in 2022-23 as planned, delivering 3,000 units annually.

Housing market fundamentals

The Spanish residential property market was significantly affected by the pandemic in 2020. The total volume of market-rate home transactions declined 14.5% year-onyear, according to year-end figures from the Ministry of Public Works and Transport. However, it was the second-hand housing market (down 16.7% in the period) that bore the brunt of the impact of the pandemic while the new-build market actually posted a 7.9% year-on-year increase in the number of sales transactions registered

with notaries. New-build transactions also accounted for a greater share of the total market-rate residential transactions in Spain (11.7% in 2020 compared to 9.3% in 2019).

According to a report released by IMIE TINSA for the fourth quarter of 2020, average house prices in Spain (both second hand and new-build homes) declined 2.3% since the State of Emergency was declared in March 2020, representing an overall 1.7% decline since December 2019. Nevertheless, prices remain 12.8% above their lows after the last economic crisis, and 34% below their pre-crisis historic maximums.

Demand for new-build housing in the key markets where AEDAS operates outstrips what the sector is currently able to deliver, resulting in undersupply. This mismatch means that prices for new-build homes despite the adverse economic context were unaffected during the past year.

AEDAS Homes' developments, due to their location in areas of proven demand and the amenities they offer, are perfectly adapted to the post-Covid needs of homeowners. Prior to the pandemic, the tastes of homebuyers had been evolving for some time, but this was accelerated by months in lockdown, which brought their needs into sharp focus: a home with a modern design;

"AEDAS Homes has reported record revenues of €671.9m, a gross margin of 28.1% and a net profit of €85.1m"

larger, well laid-out spaces that make teleworking easier; energy efficiency; a location close to cities but not in the centre; and access to private gardens or terraces. This is a product segment that AEDAS is well positioned to deliver in, and this was key to our strong sales results, especially in the second half of our fiscal year.

The evolution of the pandemic continues to have a significant influence in the economy, as authorities respond to new waves of infection by restricting mobility and then relaxing measures as the number of cases drops, leading to fluctuations in activity and employment. The Bank of Spain, in its 1/2021 Economic Bulletin, reported modest quarter-on-quarter growth in Q4 2020 while at the same time projecting that the Spanish GDP will fall slightly in Q1 2021 (in line with the euro area as a whole). A significant rebound in the second half of the year is expected, driven by the vaccine rollout, lifting of restrictions and increase in consumption, as well as the distribution of NextGenerationEU recovery funds. Within Spain, the residential development and construction sectors are expected to continue playing a key role in the country's ongoing economic reactivation.

Land investment strategy

After reactivating our land investment activity in early June, we continued to follow our strict, demand-driven investment strategy, investing primarily in ready-to-build land, which allows us to launch projects immediately and thus capture a better return on equity for the Company and our shareholders. The size of our landbank, which gives us more than three years of visibility, enabled us to pursue a selective investment policy during 2020-21, despite the pandemic. We focused largely on our historic footprint, including significant investments in Madrid and Barcelona, and made our first investment in Las Palmas de Gran Canaria, a market we have been watching for some time. We raised our net development margin hurdle rate to 23% for investments made this year to be launched in 2021-22.

We also continued to build up a long-term land supply, co-investing in fully permitted land through our off-balance sheet agreement with Castlelake. AEDAS holds a minority stake in this strategic vehicle, which invests in land that will reach ready to build status over a longer period of time, allowing us to capture value earlier in the investment process giving us the optionality to access land when needed.

Build to Rent strategy

Appetite for Build to Rent developments has continued to grow since we signed our first agreement with an institutional investor to deliver turnkey developments for rental market in 2019. This past year, investors continued to expand their portfolios and build their positions in the segment, which represented a major opportunity for AEDAS Homes to expand our market reach and further de-risk our Business Plan. Over the course of 2020-21, we signed two additional agreements of this nature, the first with a joint venture between Grupo Lar and Primonial to deliver five turnkey developments with a total of 655 units, for €122 million, and the second with Sociedad Anónima Inmobiliaria Vascongada, owned by Lazora, to deliver two turnkey projects, with a total of 288 units, for €43.2 million.

If additional attractive Build to Rent opportunities present themselves, we will pursue them, as this allows to us to further de-risk our Business Plan and rotate assets faster.

Making a firm commitment to ESG targets

We take a long-term view of our business, and our strong and effective corporate governance structure provides the foundation for the company's performance and our positive impact on the communities where we build homes. Part of this long-term vision includes making a firm commitment to ESG targets.

In April 2021, the AEDAS Homes Board of Directors approved the company's threeyear ESG Strategic Plan, which comprises a series of short and mid-term targets and concrete actions we will be implementing to further improve our already strong environmental and social credentials and benefit our stakeholders, as well as longterm targets aligned with the 2030 Agenda for Sustainable Development.

With the approval of this Plan, our Board has formally recognised the risks related to climate change and taken ownership of the initiatives the company will be putting into place to manage them, prioritizing our contributions to SDG 8 (decent work and economic growth), SDG 9 (industry, innovation and infrastructure) and SDG 11 (sustainable cities and communities.

Since buildings and construction activity account for over a third of CO2 emissions, this Plan places a special emphasis on decarbonization and designing our developments to be highly energy efficient and to minimise the carbon footprint produced throughout the life cycle of the building. It will also strengthen our commitment to providing an innovative customer experience, deepen our involvement within the local communities where we operate, and help us to maintain our talented team and provide them further opportunities for professional growth.

Building faster, building better

At AEDAS Homes, we are proud to be leaders in Spain in the implementation of Modern Methods of Construction and building homes offsite.

Offsite construction is a faster, greener, more efficient way of building, and at present, we are the only Spanish homebuilder that has delivered a significant number of homes manufactured in an assembly plant. We view offsite construction as a critical part of our commitment to building faster—providing more homes, more quickly–and building better– more safely, more efficiently and with lower environmental impact, and we will continue to scale up our use of "smart construction", that is, combining innovation and digitization to deliver sustainable homes to our customers.

Evolution of share price

At the end of March, the AEDAS Homes share was trading at a 33.5% discount over the latest reported NAV (also on 31 March 2021). The FY 2020-21 period began with the share trading at €17.5, hitting the minimum on 20 May 2020, at €13.12, and reaching its maximum value on 5 January 2021, at €23. It closed the period at €22.4 on 31 March 2021.

Over the twelve-month period, the share price experienced a 28% increase, effectively recovering from the negative impact caused by the pandemic, returning to pre-Covid trading levels. In relative terms, its behaviour is comparable to the IBEX 35, which experienced an overall increase of 30.4% between 1 April 2020 and 31 March 2021, and to the Madrid Stock Exchange index, which was up 31.2% over the same period.

The share saw its liquidity reduced during the 2020-21 fiscal year in comparison to the prior twelve-month period (April 2019 – March 2020), with a trading volume during fiscal year 2020-21 equivalent to 10% of the total number of shares of the Company. This reduction in liquidity could be explained by the lower free-float in the market due to the increase in the Company's treasury stock position as well as to an increase in the participation of Castlelake, our main shareholder.

Outstanding effort in an exceptional year

In closing, I would like to express my appreciation and gratitude to the entire AEDAS Homes team and all our external collaborators for their tremendous effort this year. Our team has faced this unprecedented situation with enthusiasm and determination, giving the best of themselves to fulfil the commitments we made to our customers and shareholders.

David Martínez Montero AEDAS Homes' CEO

1.4 Market indicators

The last year has been marked by the health crisis induced by COVID. After a period of sustained GDP growth between 2014 and 2019, the Spanish economy contracted by approximately 11% year-on-year in 2020, according to Spain's national statistics office, the INE. The impact was largely concentrated in the second quarter due to strict lockdown measures, followed by some signs of recovery during the second half of the year. According to the IMF's most recent forecasts, Spanish GDP will expand by 6.4% in 2021, which would put it at the forefront of the advanced economies in terms of the post-pandemic recovery.

The health crisis also took a toll on jobs in Spain. Job destruction was concentrated between March and June 2020, during Spain's strict lockdown, when nearly 355,000 jobs were destroyed, according to the latest data reported by the INE, leaving unemployment at 16.1% by the end of 2020, which is nevertheless well below the peak of 26% reached during the last financial crisis. The impact on the job market has been mitigated by the rollout of certain governmental measures, particularly the furlough scheme.

Trend in unemployment

INE data

The pandemic stalled the growth observed in the Spanish population since 2016, which declined by 106,146 people in 2020. Despite the fact that the population shrank by 0.2% in 2020, according to recent data published by the INE, Spain had a total population of over 47 million as of January 2021, more than 5 million of whom were foreign residents.

Prior to the crisis, internal migratory movements in Spain were concentrated in the major cities, which, on account of their relative economic buoyancy, had been attracting people from less economically active areas, driving new housing development in those recipient regions. Those are the markets AEDAS Homes selects to carry out its developments.

AEDAS Homes' top 10 business markets currently account for over 50% of the Spanish population. According to the INE, those regions are expected to post annual population growth over the coming decade, unlike most Spanish regions.

The ADEAS Homes footprint

Size indicates AEDAS Homes' relative presence

The pandemic and the resulting economic situation and shift to remote working have created new trends in the demand for homes, prompting renewed interest in the less economically active regions.

According to the INE, the savings rate in Spain increased from an average of 8.3% in 2019 to 14.5% in 2020. During the second quarter of 2020, the savings rate peaked at 31.2%4 , hit hard by the economic paralysis sustained during the lockdown, with Spanish households earmarking most of their income to savings. Average rates of interest on mortgages arranged through to January 2021 stood at 2.47%, down 2.9%5 year-on-year. The incidence of higher savings in the context of low interest rates is propitious for demand for housing, particularly in the medium and mediumupper segments at which AEDAS Homes targets its products.

4 INE, household saving rate 5 INE data

Mortgage rates (%)

On the demand side, the lockdown triggered by the pandemic has spurred new trends like home-working, shifting the home market towards more spacious and modern homes with different features. As a result, demand for new homes has gained weight in the overall transaction mix, increasing from 18% in January 2020 to 21% by January 2021 (INE data), a positive trend for the new homes being built by AEDAS Homes, which are already suited for those new demand traits post-COVID.

Housing sale transactions totalled 415,000 in 2020, down 17% from 2019, shaped largely by the second-quarter shutdown.

Total house purchases, new and second-hand

According to the INE, house prices were one of the indicators that best resisted the fallout from COVID in absolute terms, notwithstanding house price corrections in certain Spanish provinces. In year-on-year terms, during the fourth quarter of 2020, the growth in house prices eased by 0.2pp to 1.5%.

However, on that same basis, new home prices increased to 8.2% year-on-year, evidencing strong demand terms for new developments, coupled with product scarcity, which is driving prices higher in that segment. In contrast, growth in second-hand house prices continued to slow, to 0.4% year-on-year by the fourth quarter.

On the supply side, the uncertainty provoked by the pandemic and the liquidity crunch triggered by the tightening of developer financing terms drove a contraction in new housing permits after a period of sustained growth in recent years. Those supply-side developments will generate a scarcity in new housing launches which, coupled with rising demand, could buoy the residential development market and create attractive opportunities for AEDAS Homes going forward.

New home permits

The stock of unsold housing left over from the last cycle stood at c.457,000 homes at the end of 2019; that stock is estimated to have increased in 2020 due to the lack of sales, particularly during the months of lockdown. The slow pace of turnover in that stock indicates that most of that product is characterised by obsolete designs, located in markets in low demand, such that it can be considered residual.

In sum, the emerging trends in desired new housing shaped by the pandemic - more spacious houses with terraces, etc., - put AEDAS Homes in an ideal position for servicing demand for that class of product in Spain. That, coupled with the scarcity of new market launches on account of the drop in new building permits and tighter

financing conditions, drove an increase in new house prices in 2020. Moreover, the interplay of those supply and demand factors creates an attractive situation for AEDAS Homes going forward. In short, COVID has reinforced the market for highquality residential developments in which demand has increased precisely as supply has declined. That, coupled with the growth in savings and continued low interest rates, bodes well for AEDAS Homes' growth prospects in the years to come.

1.5 Strategy, principles and cultural hallmarks

AEDAS Homes is a high-end new home developer. It was set up in 2016 and its shares are listed on the Spanish stock exchange. Since its foundation, the Company has grown exponentially, whether measured in terms of the number of developments launched or the number of homes delivered to customers, emerging as a benchmark player in the Spanish residential development sector.

Despite the passage of time, AEDAS Homes continues to bring the same sense of enthusiasm and dedication to its mission of creating places to live in which its customers and their nearest and dearest can feel their happiest by developing homes that are high-quality, sustainable, aesthetically beautiful, health, safe, accessible and entertaining, with exclusive services and common areas.

AEDAS Homes is proving a major catalyst in Spain's home development market. Its present and future is predicated on earning the trust of its various stakeholders, including its customers, employees, investors, suppliers and the authorities.

It is building that trust by leveraging the following drivers:

1. Empathy, accompanying our customers on one of the most important decisions in their lives.
1. The design of sustainable, attractive, health, safe, entertaining and accessible homes.
1. Building to the highest standards of quality.
1. Innovation in construction, sales formulae and the home user experience.
1. Nurturing a multidisciplinary team made up of the finest professionals aligned around a culture of service and continuous improvement.
1. Achieving a positive impact on the communities in which we live and work.

AEDAS Homes' strategy

AEDAS Homes has a solid long-term growth plan. In the years to come, the Company plans to continue to buy land to lock in future business, framed by the strict profitability, asset type and location criteria that have this far enabled it to build the best residential land bank in Spain.

The Company expects to reach its cruising speed in 2022, which is equivalent to the delivery of 3,000 homes a year, a milestone that will translate into annual revenue of over €1 billion, as well as stable and recurring cash flow that will pave the way for growing shareholder remuneration. From that year on, thanks to the experience accumulated and a solid track record underpinned by rigour, professionalism and transparency, AEDAS Homes aspires to be the paradigmatic brand associated with top-quality new housing developments in Spain.

To attain its goals, AEDAS Homes plans to continue to spearhead and forge the response to the sector's biggest challenges: it will embed sustainability and decarbonisation into homebuilding; it will consolidate its leadership of industrialised development; it will expand its build-torent business; it will open up new avenues for growth for the sector linked with innovation and social responsibility; and it will foster public-private collaboration to help young people access affordable housing.

AEDAS Homes is aware that the construction industry (most particularly the building segment) is suffering serious endemic problems shaped by a number of factors: ageing of the working population, lack of skilled workers, low margins and scant investment in R&D. Aware of that situation, AEDAS Homes is spearheading the introduction of Modern Methods of Construction (MMC) designed to reduce prevailing risks and provide greater visibility, quality and certainty with regard to planned delivery of our homes to our customers. Moreover, the MMC thrust will allow us to shorten execution times with the attendant favourable impact on our returns, as well as the environmental footprint of our business activities.

Elsewhere, growth in the home rental segment represents a major opportunity for the Company to expand its market reach. Numerous institutional investors are building positions and expanding their portfolios in the segment, drawn by solid rental market fundamentals, which is creating a significant business opportunity for AEDAS Homes, in its capacity as a leading developer, to offer new, high-quality homes designed specifically with rental in mind (build-to-rent). This trend of block sales of turnkey-developed complexes to institutional investors will contribute to delivery of AEDAS Homes' business targets.

Our cornerstones

Relentless focus on what our customers need

In-depth market studies for optimal product definition

AEDAS Homes believes in the value of data as a means to differentiation by providing in-depth and timely knowledge of consumer preferences so that it can adapt to market trends flexibly and speedily. Having a database that houses all of the Company's know-how enables decisions to be made - quickly - on the basis of the best information, with minimal errors.

The importance of data as a means of anticipating market trends is underpinned by forecasting models that make use of artificial intelligence and automated analysis; oversight of the progress being made on construction work; and constant listening to customers, among other tools.

Data analytics can improve customer relations as better insight into market trends allows us to fine-tune our product designs and align them with real demand needs.

Innovative use of technology

A good example of AEDAS Homes' innovative use of technology is its Live Virtual Tours platform which allows it to connect potential buyers with a sales advisor who can resolve any questions while 'walking' them virtually through the development and its grounds, showing them the various rooms and finishes on offer.

The platform offers a number of terrific advantages: it creates a relationship of trust between the customer, advisor and Company; it enables detailed observation so that buyers can be certain of what they are buying, leaving nothing to the imagination; and it shortens the time between on-site visits and the purchase decision.

Decentralised approach: single strategy, decentralised execution

Highly-experienced regional in-house teams with key local market know-how

During its early years in the business, AEDAS Homes focused on setting up a network of fully-functioning local offices led by professionals with ample experience and local market knowledge. That has led to the creation of a multidisciplinary team of over 230 professionals, distributed among the various regional units that cover the areas of Spain in which housing demand is most dynamic.

That decentralised approach allows the Company to manage each project on the basis of local needs and criteria, albeit framed at all times by a shared overall strategy, guaranteeing optimal results.

Centralised oversight

AEDAS Homes is firmly committed to local talent in its various regional markets, albeit framed by centralised supervision, from the head offices in Madrid.

The Company monitors the progress of its developments from its head offices, which is where the key departments that support the regional management teams are based.

Scalable business model: nimble and flexible structure

The essential functions are kept in-house relying on lean and locally scalable teams and processes

Each of the regional units is responsible for organising, running and planning the housing developments and land permitting processes in the areas within their purview, in keeping with the guidelines provided by AEDAS Homes to ensure delivery of the Company's earnings guidance and its quality and timing commitments. That decentralisation allows the Company to manage each project in accordance with local needs and criteria, which translates into better developments and, ultimately, more satisfied customers and happier shareholders.

Contractors, architects and sales agents are outsourced

AEDAS Homes is looking to build a pool of trusted partners - architects, engineering firms, builders and project managers - with which it can work repeatedly. It is also working to identify reliable subcontractors and industrial suppliers so as to tighten control of its works even further. AEDAS Homes wants to keep two-thirds of its developments in the hands of its Preferred Architects, putting just one-third out to tender. In parallel, it plans to cut tendering turnaround times by using negotiated procedures 50% of the time.

"One of AEDAS Homes' strategic goals is to be the paradigm for profitability in the housing development sector"

Focus on preserving margins and ROE: selective investment and efficient development

One of AEDAS Homes' strategic goals is to be the paradigm for profitability in the housing development sector, delivering higher margins and returns on equity than its peers.

Select investment.

Since it began to invest in its land bank, the Company has followed strict investment criteria for new acquisitions centred on the selection of the best sites in terms of liquidity, current and prospective demand and expected returns.

That investment effort has meant that all subsequent developments have delivered higher than expected returns.

AEDAS Homes analyses over 1,000 investment opportunities each year, each of which very different in terms of size and property profile. When it buys land, the Company usually establishes a profitability threshold: the resulting development should be expected to yield a net development margin of at least 20%. Nevertheless, in recent quarters, the Company has been concluding ah-hoc land transactions offer a return in excess of that minimum return hurdle of around 300 basis points. AEDAS Homes takes a dynamic approach to investing, adjusting its activities to align them with market conditions. As for pipeline coverage, in recent years, the Company has kept the ratio between its land bank and

its annual delivery target of 3,000 homes stable at around 5 times; in the medium and longer term, however, AEDAS Homes is aiming for a somewhat lower coverage ratio, of closer to 4 times.

Efficient development.

One of the keys to boosting margins during a development is its efficient and proactive management end to end. That effort ranges from execution cost streamlining and controls to sales policy and process finetuning, aimed at delivering continual and accelerating revaluation of a property as the development advances.

The Company also takes steps to optimise its capital structure and sources of financing (lowering its average cost of capital and broadening the latter).

Elsewhere, AEDAS Homes bases its employee remuneration policy on 360o performance assessments and the delivery of business targets, so aligning the interests of the Company's shareholders and its professionals.

Those policies and processes have enabled AEDAS Homes to post above sector average margins on a recurring basis, thus delivering the strategic target of being able to offer its shareholders higher returns.

Our business principles

Health and safety

AEDAS Homes is committed to providing a safe working environment for its employees; its ISO 45001-certified occupational health and safety management system has been in place since 2017.

For more information about health and safety at AEDAS Homes, refer to page 110.

AEDAS Homes wants to be a partner of trust for all of its stakeholders: customers, shareholders, employees.

For more information about governance at AEDAS Homes, refer to page 138.

AEDAS Homes wants to "be a green developer and turn its developments into environmental paradigms", this being a priority thrust of its development effort.

For more information about AEDAS Homes' environmental performance and commitments, refer to page 128.

AEDAS Homes is aware of the impact its business activities have on its communities in which it develops homes, in terms of diversity, for example.

For more information about AEDAS Homes' social dimension, refer to page 134.

Safeguarding the Company's financial health

For financial information, refer to page 152.

1.6 Key indicators (KPIs)

Alternative Performance Measures

Housing units are considered launched once marketing is underway, i.e., they are classified as 'launched' subsequent to This KPI is used by the Company's directors to monitor its activity and growth. It is a leading indicator insofar as it foreshadows the Group's ability to generate revenue.

and to ensure the efficient and effective use of its own funds.

the design phase, once they are put up for sale.

Metric Trend	Definition	Rationale for usage
Growth Home launches	Housing units are considered launched once marketing is underway, i.e., they are classified as 'launched' subsequent to the design phase, once they are put up for sale.	This KPI is used by the Company's directors to monitor its activity and growth. It is a leading indicator insofar as it foreshadows the Group's ability to generate revenue.
ROE ROE (%)	Calculated as operating profit divided by average equity.	This yardstick is used to analyse the Company's profitability and to ensure the efficient and effective use of its own funds.
The Company has not paid any dividends to date. The first dividend will be paid out Dividend policy Payout from FY 2020-21 profits and the payout is equivalent to 77%.	Percentage of profits earmarked to dividend payments.	Provides a measure of shareholder remuneration via dividends.

Revenue from sales – Change in inventories – Cost of sales (without factoring in provisions for the impairment of

Gross Development Margin – Sales & marketing expenses (included within Other operating expenses in the statement of

⁶Margin contraction in 2020 versus 2019 when the delivery mix was skewed towards houses with a very high ASP. Nevertheless, in FY 2020-21 the Company delivered all of the profitability-related guidance set down in its Business Plan.

Net Development Margin – Impairment of inventories + Revenue from services + Other operating income – Employee benefits expense – Other operating expenses other than sales The Company's directors use the Gross Development Margin to measure its performance as this yardstick provides information about how its development projects are performing by starting from third-party sales and subtracting the costs incurred to

Calculation of this APM factors in the impairment charges applied to real estate assets sold during the reporting period. Note that the Gross Development Margin does not include any gains realised on the sale of land. In short, the Gross Development Margin is tracked by the Company's directors in order to monitor the performance and profitability of its

The Net Development Margin is used by the Company's directors as a yardstick for its performance as it provides information about the net margin generated on the developments that generated sales revenue during the reporting period. The Net Development Margin is calculated based on the Gross Development Margin, net of certain expenses associated with the marketing effort. Note that the Net Development Margin does not include any gains realised on

The Company's directors use EBITDA to measure its performance as it provides information for analysing

profitability (before interest, tax, depreciation and amortisation) by approximating the operating flows that generate cash. It is also a measure that is widely used by the investment community to appraise enterprises' performance; it is further used by the rating agencies and creditor community to evaluate leverage and interest coverage by comparing EBITDA with an entity's net debt and debt service obligations.

make such sales.

the sale of land.

property development business.

inventories).

profit or loss).

& marketing expenses.

Evolución	Definición	Explicación del uso
	Revenue from sales – Change in inventories – Cost of sales (without factoring in provisions for the impairment of inventories).	The Company's directors use the Gross Development Margin to measure its performance as this yardstick provides information about how its development projects are performing by starting from third-party sales and subtracting the costs incurred to make such sales. Calculation of this APM factors in the impairment charges applied to real estate assets sold during the reporting period. Note that the Gross Development Margin does not include any gains realised on the sale of land. In short, the Gross Development Margin is tracked by the Company's directors in order to monitor the performance and profitability of its property development business.
Net Development	Gross Development Margin – Sales & marketing expenses (included within Other operating expenses in the statement of profit or loss). 6Margin contraction in 2020 versus 2019 when the delivery mix was skewed towards houses with a very high ASP. Nevertheless, in FY 2020-21 the Company delivered all of the profitability-related guidance set down in its Business Plan.	The Net Development Margin is used by the Company's directors as a yardstick for its performance as it provides information about the net margin generated on the developments that generated sales revenue during the reporting period. The Net Development Margin is calculated based on the Gross Development Margin, net of certain expenses associated with the marketing effort. Note that the Net Development Margin does not include any gains realised on the sale of land.
	Net Development Margin – Impairment of inventories + Revenue from services + Other operating income – Employee benefits expense – Other operating expenses other than sales & marketing expenses.	The Company's directors use EBITDA to measure its performance as it provides information for analysing profitability (before interest, tax, depreciation and amortisation) by approximating the operating flows that generate cash. It is also a measure that is widely used by the investment community to appraise enterprises' performance; it is further used by the rating agencies and creditor community to evaluate leverage and interest coverage by comparing EBITDA with an entity's net debt and debt service obligations.

APM

interests

Weighted average cost of the Company's borrowings on a given

date, factoring in corporate debt and developer loans.

Used in the Company's financial statements; it is calculated based on net profit, factoring in the net finance cost and tax

Net Debt measures an enterprise's net financial position. It is also a metric that is widely used by investors to analyse companies' net leverage and by rating agencies and creditors

expense.

to assess net debt.

Trend	Definition	Rationale for usage
	Group net profit after tax and including non-controlling interests	Used in the Company's financial statements; it is calculated based on net profit, factoring in the net finance cost and tax expense.
	Gross debt – unrestricted cash	Net Debt measures an enterprise's net financial position. It is also a metric that is widely used by investors to analyse companies' net leverage and by rating agencies and creditors to assess net debt.
	Weighted average cost of the Company's borrowings on a given date, factoring in corporate debt and developer loans.

APM

Definition: The value of the Company's assets, and, by extension, its GAV, is calculated by an independent appraiser,

That appraiser uses the RICS methodology to calculate the market value of properties. The RICS defines market value as the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing and where the parties have each acted knowledgeably, prudently and without compulsion. GAV is calculated on the basis of a series of assumptions made at the

Definition: The market value of the Company's equity or net worth, i.e., the total value of its assets minus the total value of

Definition: A measure of what the Company's assets are expected to be worth on the open market once all

development work has been completed.

specifically Savills Aguirre Newman.

appraiser's judgement.

its liabilities.

Trend	Definition	Rationale for usage
	Definition: The value of the Company's assets, and, by extension, its GAV, is calculated by an independent appraiser, specifically Savills Aguirre Newman. That appraiser uses the RICS methodology to calculate the market value of properties. The RICS defines market value as the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing and where the parties have each acted knowledgeably, prudently and without compulsion. GAV is calculated on the basis of a series of assumptions made at the appraiser's judgement.
	Definition: The market value of the Company's equity or net worth, i.e., the total value of its assets minus the total value of its liabilities.	One of the Company's asset valuation methods.
	Definition: A measure of what the Company's assets are expected to be worth on the open market once all development work has been completed.

APM

Net profit attributable to equity holders of the parent divided

Calculated as the sum of the dividends received by the Company's shareholders, the share price gain/correction during the year and other payments such as the delivery or buyback

This metric is also used as a benchmark for the dividend per share. It is used to analyse the Company's profitability for

This financial indicator is used by investors and financial analysts to evaluate the remuneration earned by shareholders over the course of the year in exchange for the capital they put

shareholder remuneration purposes.

up.

by the number of shares outstanding.

of shares.

Trend	Definition	Rationale for usage
Earnings per	Net profit attributable to equity holders of the parent divided by the number of shares outstanding.	This metric is also used as a benchmark for the dividend per share. It is used to analyse the Company's profitability for shareholder remuneration purposes.
Total shareholder	Calculated as the sum of the dividends received by the Company's shareholders, the share price gain/correction during the year and other payments such as the delivery or buyback of shares.	This financial indicator is used by investors and financial analysts to evaluate the remuneration earned by shareholders over the course of the year in exchange for the capital they put up.

Return

Leverage provides a measure of the Company's indebtedness. It is widely used by investors to analyse real estate companies' leverage and by rating agencies and creditors to assess their

LTV provides a measure of the Company's indebtedness relative to the market value of its properties. It is widely used by investors to analyse real estate companies' leverage and by

rating agencies and creditors to assess their net debt.

The LTC ratio provides another measure of the Company's indebtedness. It is widely used by investors to analyse real estate companies' leverage and by rating agencies and

creditors to assess their net debt.

net debt.

Net Debt/(Cash) / (Market value of appraised assets (GAV) + Sale options over inventories) Calculated at the end of the

Calculated at the end of the financial year.

financial year.

Metric Trend	Definition	Rationale for usage
DFN/EBITDA	Calculated by dividing net debt by EBITDA.	Leverage provides a measure of the Company's indebtedness. It is widely used by investors to analyse real estate companies' leverage and by rating agencies and creditors to assess their net debt.
LTV (%)	Net Debt/(Cash) / (Market value of appraised assets (GAV) + Sale options over inventories) Calculated at the end of the financial year.	LTV provides a measure of the Company's indebtedness relative to the market value of its properties. It is widely used by investors to analyse real estate companies' leverage and by rating agencies and creditors to assess their net debt.
LTC (%)	Net Debt/(Cash) / (Inventories - Prepayments to suppliers) Calculated at the end of the financial year.	The LTC ratio provides another measure of the Company's indebtedness. It is widely used by investors to analyse real estate companies' leverage and by rating agencies and creditors to assess their net debt.

Leverage

2.1 Organisational Structure

Article 2 of AEDAS Homes' Bylaws states that the Company's core object is to acquire, permit, manage, market and develop properties of any kind for holding, use, management, sale or lease.

AEDAS Homes had a total of 2376employees at year-end 2020. Those professionals work all throughout Spain.

"AEDAS Homes' social main purpose is the acquisition, development, management, marketing and development of any real estate"

The Company's head offices are located in Madrid and serve its six regional units which are located in the main new homebuilding markets in Spain:

Central Spain: Madrid.
Northern Spain: Valladolid, Pontevedra and Navarre.
Andalusia and Canary Islands: Seville, Granada, Canary Island.
Costa del Sol: Malaga.
East and Balearics: Valencia, Alicante, Murcia and Mallorca.
Catalonia and Aragon: Barcelona, Tarragona and Zaragoza.

The Distribution of Employees by gender and by qualification as of March 31, 2021 is detailed below.

Headcount Breakdown by gender

Main governance bodies

The general meeting is the Company's highest decision-making and control body in respect of the matters within the shareholders' purview and it is the vehicle around which the shareholders' right to intervene in the company's decision-making is articulated.

The Board of Directors has authority over any and all matters that are not specifically vested in the shareholders in general meeting by the Bylaws or prevailing company law. The Board of Directors, which is vested with the broadest powers to manage, direct, administer and represent the Company, generally delegates the Company's everyday management in the Board's steering committees and the management team, establishing the content of, limits to and modus operandi for such delegation of powers, so that it can concentrate on its general supervisory duty as well as attending to matters of particular significance to the Company.

The Board of Directors is made up of nine members. Six are independent directors, two are proprietary and the ninth is an executive director. It is regulated by the Board Regulations, the purpose of which is to set the guidelines governing the actions of the Board of Directors, the basic rules governing how it is organised and run, the rules of conduct its members must abide by and the directors' duties. The Board Regulations were approved by the Board of Directors.

The Board of Directors has set up the following board committees:

The Audit and Control Committee, made up of three directors, two of whom independent (one of whom chairs this committee) and the third, proprietary. Article 14 of the Board Regulations regulates the Audit and Control Committee, its composition, its powers and its modus operandi.
The Appointments and Remuneration Committee, made up of three directors, two of whom are independent (one of whom chairs this committee) and the third, proprietary. Article 15 of the Board Regulations regulates the Appointments and Remuneration Committee, its composition, its powers and its modus operandi.
The Technology, Innovation and Cybersecurity Committee, made up of three directors, one of whom (the committee chairperson) is independent, one proprietary, and one executive. Another two company executives also sit on this committee. There are specific regulations addressing the composition, powers and rules of operation of this committee.

In addition, the company has a Management Committee, a Business Committee, a Strategy Committee, an Investment Committee and a Technology Committee made up of AEDAS Homes executives. Each is governed by its own set of rules, which are approved by the company's CEO and address their make-up, powers and rules of operation.

There is also a Compliance Committee made up of the heads of the Corporate Resources, Legal and Risk Departments whose composition, powers and rules of operation are set down in the boardapproved Compliance Policy and Manual. AEDAS Homes additionally has an Internal Control Body which oversees anti-money laundering and counter terrorism financing (AML/CTF) matters whose composition, powers and rules of operation are set down in the AML/CTF Manual approved by the Internal Control Body itself.

AEDAS Homes has created an ESG Committee to ensure the correct implementation and supervision of the ESG Strategic Plan (2021-2023), made up of the CEO of the Company, the Chief Financial Officer, the Director of Brand and Innovation and the Director of Corporate Resources, who simultaneously assumes the role of ESG Coordinator.

He will be in charge of reviewing the scorecard of the ESG Strategic Plan. This Committee is also in charge of the consolidation and analysis of the semiannual report of milestones and indicators associated with the ESG Strategic Plan and of course the Boost and support of the actions, through the figure of ESG Coordinator.

"AEDAS Homes has created an ESG Committee to ensure the correct implementation and supervision of the ESG Strategic Plan (2021-2023)"

2.2 Board of Directors

The Board of Directors is made up of nine members. Six are independent directors, two are proprietary and the ninth is an

executive director. Below is a description of the members of the Board of Directors and the relevant experience they bring:

Santiago Fernández Valbuena

Appointment to the Board

Independent Director of AEDAS Homes since September 2017 and Chairman of the Board of Directors. Re-elected by the General Shareholders' Meeting of June 23, 2020.

Committee membership

Independent Director of AEDAS Homes since September 2017 and Chairman of the Board of Directors

Career and experience

Santiago Fernández Valbuena (22nd April 1958) Santiago has a B.A. in Economics from the Universidad Complutense, is Doctor of Economics (PhD) and a Master from the Northeastern University of Boston (MS).

Santiago has been president at Telefónica Latin-America (2011 - 2014), General Director of Finance and Strategy (2010 - 2011) and General Director of Finance and Corporate Development (2002 - 2010) at Grupo Telefónica. Previously, he was President at Fonditel, General Director at Société Générale Valores and Stock Director at Beta Capital.

He is also an Associate Professor at the Universidad Complutense (currently on leave) and at the Universidad de Murcia, having also taught at IE Business School.

Santiago is Vicepresident at EBN Bank, as Proprietary Director at this company since November 2015. Since 2008 he is also Independent Director and member of the Auditing Committee at Ferrovial, S.A. Previously he was Vicepresident at Metrovacesa (1999 - 2007).

He owns 3.000 shares of the company, acquired on the 3rd of October 2018 at 25,86€ per share.

He has no purchase options over shares in the Company, nor does he have any prior relation with any of the other members of the Board of Directors nor of the Company.

David Martínez Montero

Appointment to the Board

Chief Executive Officer at AEDAS Homes since 2016 (Executive Director). Re-elected by the General Shareholders' Meeting of June 23, 2020.

Committee membership

CEO and member of the Technology, Innovation and Cybersecurity Committee.

Career and experience

David Martínez Montero (7th November 1970). David holds a civil engineering degree from the Universidad Politécnica de Madrid (UPM) and an Executive MBA from IESE.

During his professional career he has been Managing Director at Distrito Castellana

Norte (BBVA & Grupo San José) – between 2013 and 2016, Chief Executive Officer at Valdebebas – between 2005 and 2013, Managing Director at 4 Torres Business Area – between 2002 and 2005 and Project Manager at Bovis – between 1998 and 2005, and Project Manager at Ferrovial between 1996 and 1998. Additionally, he is a member of the Urban Land Institute committee, Madrid.

He has 73.328 shares of AEDAS Homes since the 23rd November 2017 and acquired a further 3.000 shares on the 4th October 2018 at 26,66€ per share. He has no purchase options over these, nor does he have any prior relation with any of the other members of the Board of Directors nor of the Company.

Evan Andrew Carruthers

Appointment to the Board

Joined AEDAS Homes as a Proprietary Director, representing Hipoteca 43 Lux S.A.R.L, in September 2017. Re-elected by the General Shareholders' Meeting of June 23, 2020.

Committee membership

Member of the Board of Directors and member of the Appointments and Remuneration Committee.

Career and experience

Evan Andrew Carruthers (12th March 1979). Evan holds a B.A in business administration, with a specialty in finance from the St. Thomas University, Minneapolis, Minnesota (USA).

Evan co-founded Castlelake in 2005, in partnership with CEO and managing partner, Rory Joseph O'Neill (CEO and Managing Partner at Castlelake), and as Managing Partner, he is responsible for the firm's global investment activities across all asset classes, guiding the firm's relationshipdriven approach, and leading all investment teams at Castlelake. He is also a voting member of Castlelake's Investment Review Committee.

Prior to co-founding Castlelake, he was an investment manager with Cargill Value Investment (CVI, now CarVal Investors), where he was responsible for corporate and asset-based investments in North America and was instrumental in the development of Cargill's global aircraft investing business. Prior to joining CVI, Evan was with Piper

Jaffray, a Minneapolis-based investment banking firm, in several capacities.

He has deep sector expertise, spanning back to the year 2000. He has invested capital in more than 40 countries across multiple industries and has been instrumental in the development of the firm's asset- and creditbased investment activities.

Additionally, Evan is an Independent Director at Five Point Holdings, LLC, a listed North-American company, since May 2017, company of which Emile Haddad is President and CEO. Since October 2014 he is also Proprietary Director at the following companies: Castlelake Lease Aircraft Trust 2014-1 (CLAS 2014-1); Castlelake Lease Aircraft Trust 2015-1 (CLAS 2015-1); Castlelake Lease Aircraft Trust 2016-1 (CLAS 2016-1); Castlelake Lease Aircraft Trust 2017-1 (CLAS 2017-1); y de Castlelake Lease Aircraft Trust 2018-1 (CLAS 2018-1).

He has a total of 27,000 shares of AEDAS Homes which were acquired on the 15th and 16th October 2018, a quantity of 10,400 and 16,600 shares at an average price of 23.99€ per share for the first bucket and 24.36€ per share for the second. He has no options on AEDAS Homes.

He is related to Eduardo D'Alessandro, Proprietary Director of AEDAS Homes and Managing Partner at Castlelake.

Eduardo Edmundo D'Alessandro Cishek

Appointment to the Board

joined AEDAS Homes as a Propietary Director representing Hipoteca 43 Lux S.a.r.l in September 2017. Re-elected by the General Shareholders' Meeting of June 23, 2020

Committee membership

Member of the Board of Directors, member of the Audit and Control Committee and also member of the Technology, Innovation and Cybersecurity Committee.

Career and experience

Eduardo Edmundo D'Alessandro (17th December 1980). Eduardo received his B.Sc. in finance from Manhattanville College (cum laude) and received his M.B.A. from the London School of Economics.

He joined Castlelake in 2011 and became a partner in 2017. Eduardo leads the firm's investment approach to Spanish land banking and is also responsible for its strategy in Portugal, Italy and Greece, the United Kingdom and Ireland. His expertise also includes direct asset and nonperforming loan opportunities Germany and Eastern Europe. He is responsible for nonperforming loan and real estate investment opportunities in southern Europe, the United Kingdom and Ireland. He is also a rotating, voting member of the firm's Investment Review Committee.

Prior to joining Castlelake, he was an investment consultant at Deutsche Bank in their special situations group, focusing on non-performing loan investments across Europe. Prior to Deutsche Bank, he was an investment associate at CarVal Investors (CVI) within the Loan Portfolio Group. At CVI, he worked on non-performing loan and real estate investments in the United Kingdom, Germany and Spain.

Eduardo has no shares nor options on AEDAS Homes and works with Evan Carruthers at Castlelake.

Milagros Méndez Ureña

Appointment to the Board

Joined AEDAS Homes as an independent director on 4 April 2019, being ratified by the General Shareholders' Meeting on May 9, 2019.

Committee membership

Member of the Board of Directors

Career and experience

Milagros Méndez Ureña (14 September 1960), a Spanish national. Licensed in Law and Graduated in Business Studies at the Comillas Pontifical University (ICADE) in 1982. In addition, she studied a master's degree in Derivatives at SDSU (San Diego State University).

She started her professional career as a broker of pesetas at Intermoney. Milagros combined her job with writing a book which goes by the title "A year in the currency market".

In 1986, she joined Continental Bank in the Capital Markets department, and specialised in the distribution of Fixed Income.

In 1988 she became the Founding Member and Head of Fixed Income at FG Inversiones Bursátiles, Sociedad de Valores y Bolsa.

In 1996, she joined Banco Urquijo as Head of Treasury.

In 1998, for a brief year, she was a Director at the Spanish Fixed Income Market at the Association of Intermediaries of Financial Assets.

In the year 2000 she joined Afina, creating a Securities Company as a Founder and Managing Director.

In 2005 she was named Director of Institutional Fixed Income Distribution, Equity and Derivatives at Interdin Sociedad de Valores y Bolsa.

In 2014, she joined Banco Sabadell, Ibersecurities SVB as Head of Business Development, New Markets and Agents.

In 2015, Milagros decided to start up Aldebaran Advisory as Founder and Managing Director, working on a project to project basis with Sabadell.

In 2017 she was named Senior Advisor to Alma Capital Asset Management.

In 2018 she was named Senior Advisor to Innova Health Private Equity as a representative to Spain, Portugal and the United Kingdom.

Recently, she has been hired by Mercer Asset Management, to sell investment funds.

Milagros has a consolidated and successful experience in the financial markets, with a distinguished commercial profile and being very accustomed to work with and coordinate a team.

Javier Lapastora Turpin

Appointment to the Board

Joined AEDAS Homes as an Independent Director in September 2017 acting as the Chairman of the Audit Committee. Re-elected by the General Shareholders' Meeting of June 23, 2020.

Committee membership

Member of the Board of Directors and Chairman of the Audit and Control Committee.

Career and experience

Javier Lapastora Turpín (5th September 1966). Javier has a bachelor's degree in Business Administration from CUNEF (Complutense University), as well as PDD (Programa de Desarrollo Directivo) from the IE Business School. He is a registered auditor in Spain (ROAC) and a member of the Accounting Experts register of the ICJCE.

He was a partner in PwC from 2002 to 2015 where he was real estate and construction department head from 2007 to 2011 and managing partner of the audit and assurance practice from 2011 to 2015.

He is presently an entrepreneur with interests in different companies with activities as investments, project management, real estate or franchises and currently a member of the Economic Counsel at the Archdiocese of Madrid.

He also serves as an Independent director in Servicios Financieros Carrefour EFC, SA since June 2016 and in Mostostal Warzawa, SA (Poland) since October 2017. At the same time, he is a Propietary Director in Glendalough Investments, SL since March 2015, in Clonmacnoise Developments, SL since April 2015, in Bazkariak Kalitate, SL since May 2015, in Kilmore Managements Services, SL since May 2015, in Tullamore Properties, SL since May 2015, Connemara Properties, SL since February 2018 and in Westhill Investmemts, SL since February 2017.

He owns 1.579 shares in AEDAS Homes, acquired the 19th of October of 2017 at a 31,65€ per share.

He has no purchase options over shares in the Company, nor does he have any prior relation with any of the other members of the Board of Directors nor of the Company.

Miguel Temboury Redondo

Appointment to the Board

Joined AEDAS Homes as an Independent Director in September 2017. Re-elected by the General Shareholders' Meeting of June 23, 2020.

Committee membership

Member of the Board of Directors and President of the Appointments and Remuneration Committee.

Career and experience

Miguel Temboury Redondo (1st April 1969). Miguel holds a bachelor's degree in Law and Business Administration and Management from ICADE (E-3).

He was Deputy Secretary of Economy and Competitiveness for the Spanish government from 2011 to 2016 and a member of both the Governing Committee of FROB and the Board of Directors of SEPI from 2012 to 2016. In 2004, he began practicing as an attorney in the private

sector, first at Pérez-Llorca, and then founded his own firm, Temboury Abogados, in 2007. He was President of the Court of Arbitration of the Official Chamber of Commerce and Industry of Madrid from 2007 to 2012 and Chief of Staff to the Minister of the Interior from 2002 to 2004.

Miguel served as State's Attorney from 1996 to 2002. He currently works as an attorney in private practice and has been a Senior Advisor to Barclays Bank España since September 2017. He has served as an Independent Director of Singular Bank, as well as President of its Appointments and Remuneration Committee, and as Secretary non-director of the Appointments and Remuneration Committee of Abengoa. since February 2019.

Miguel holds no shares or share options in AEDAS Homes, and he has no relationship with the other Directors or managers of the Company.

Cristina Álvarez Álvarez

Appointment to the Board

Joined AEDAS Homes as an Independent Director in October 2017. Re-elected by the General Shareholders' Meeting of June 23, 2020.

Committee membership

Member of the Board of Directors and she is President of the Technology, Innovation and Cyber-security Committee and a member of the Appointments and Remuneration Committee.

Career and experience

Cristina Álvarez Álvarez (April 18th, 1969). Cristina is a graduate in Telecommunications Engineering from the Universidad Politécnica de Madrid (UPM) 1987-1992 and a PDD from IESE (2001) and also works as an academic director of the Executive Master's of the Instituto de Empresa: "Digital Transformation and Innovation Leadership". Cristina was awarded the prize "Engineering of the year 2016" by the COIT/AEIT, "AUTELSI Award"

in recognition for her professional career in TIC 2017, and "Digital Leader 2016" awarded by Cionet. She's a Global Advisor in CAST software and provides counselling to entrepreneurs.

She's a Senior Executive with 25 years of professional experience in the telecommunications and technology sectors in companies like Alcatel (Nokia) (1992 – 1995), Vodafone (1996 – 2006) where she worked as a Director of Product Engineering Investments, Telefónica (2006 – October 2017) where she worked as Director of Investment and General Director of Service Development, being part of the Executive Committee of Telefónica España since 2009. Since February 2019, Cristina Álvarez, is Global Chief Technology Officer (CTO) of Banco Santander and since january 2020 member of the Board of Openbank.

Cristina has no shares or share options of AEDAS Homes, and she has no relationship with the other Directors or managers of the Company.

Javier Martínez-Piqueras Barceló

Appointment to the Board

Joined AEDAS Homes as an independent director on 21 October 2020.

Committee membership

Member of the Board of Directors

Career and experience

Javier Martínez-Piqueras (15 March 1973). Javier holds a dual bachelor's degree in Business Administration/Economics and Law from Universidad Pontificia Comillas (ICADE E-3).

Over the course of his 22-year career in Investment Banking, Javier has specialized in Equity Capital Markets (ECM). In 1997 he joined Bank of America Merrill Lynch, becoming Managing Director Head of ECM and Corporate Equity Derivatives for Iberia (Spain and Portugal). In 2012, he moved to UBS, where he held several senior positions, such as Head of ECM and Corporate Solutions for EMEA, and most recently, Global Head of ECM, Corporate Solutions and Equity Linked, leading a team of 120 professionals across the globe until December 2019.

He brings deep experience advising large company boards at a global level on capital and equity related solutions. Javier has a strong market understanding of the Real Estate sector and has been closely following AEDAS since its founding.

Since 1993, he has been on the Board of OMEGA 93 S.L., a family-owned real estate company, and in July 2020, he joined the Board of Directors of Millenium Hotels Real Estate as an Independent Board Member, and member of the Audit and Control Commission.

Javier has no shares in the Company, and no purchase options over these, nor does he have any prior relationship with any of the other members of the Board of Directors or the Company.

The following chart depicts the composition of AEDAS Homes1 Board of Directors at 31 Marcg 2021:

Cristina Alvarez Alvarez
Member


√

√
√ C
0%
07/10/2017
Spanish
Board Member of Openbank
52

C = Chair of any of the committees.

Below is the boardroom composition by director type.

The next chart depicts the areas of expertise of the Company's directors:

Board of Directors

In FY 2020-21, the Board of Directors met on 10 occasions: specifically on 20 May, 22 June, 25 June (meeting held in writing with no in-person session), 28 July, 24 August (meeting held in writing with no in-person session), 21 October, 9 November (meeting held in writing) and 24 November 2020 and on 3 February and 23 March 2021. The most important matters addressed at those meetings:

Business update
Financial information
Financial statement issuance authorisation
Annual General Meeting (call, resolutions, reports)
Reports from the chairs of the Audit and Compliance Committee, Appointments and Remuneration Committee and Innovation, Technology and Cybersecurity Committee on the items discussed at their respective meetings
Risk indicators
Removal and appointment of the Secretary of the Board of Directors
Amendment of the commercial paper programme
Financing (renewal of the syndicated loan agreement)
Setting on record of the Board's authorisation for the derivative acquisition of own shares
Establishment of CEO targets and director remuneration
Acceptance of renewal of director positions
Approval of special investment and divestment transactions
Establishment of Board meeting schedule for FY 2021-22
Suspension of the interim dividend in November 2020 and delay of its approval until the 2021 AGM
Information on potential corporate refinancing scenarios
Approval of a dividend distribution regime framed by the Shareholder Remuneration Policy
Self-assessment of the performance of the Board and its committees and the related improvement plans

Its committees met as follows:

The Audit and Control Committee met 9 times, on the following dates: 13 May, 20 May, 22 June, 28 July, 21 October, 17 November and 24 November 2020, and 3 February and 23 March 2021.
The Appointments and Remuneration Committee met 8 times, on the following dates: 20 May, 1 June (meeting held in writing with no in-person session), 22 June, 28 July, 21 October and 24 November 2020 and on 3 February and 23 March 2021.
The Innovation, Technology and Cybersecurity Committee met 3 times, as follows: 14 May and 7 October 2020 and 27 January 2021.

2020 Annual General Meeting

The Company held its Annual General Meeting for 2020 on 23 June 2020 (first and only shareholder meeting held in FY 2020-21) at which it submitted the following resolutions, all of which were ratified:

1. Approval of the individual and consolidated annual accounts corresponding to the three-month financial year ended 31 March 2020
1. Approval of the individual and consolidated management reports corresponding to the three-month financial year ended 31 March 2020
1. Approval of the Board of Directors' management and actions during the three-month financial year ended 31 March 2020.
1. Approval of the proposed application of results for the three-month financial year ended 31 March 2020.
1. Re-election of directors.
2. 5.1. Re-election of Mr. David Martínez Montero as executive director for the statutory term of three years.
5.2. Re-election of Mr. Santiago Fernández Valbuena as independent director for the statutory term of three years.
5.3. Re-election of Mr. Eduardo d'Alessandro Cishek as proprietary director for the statutory term of three years.
5.4. Re-election of Mr. Javier Lapastora Turpin as independent director for the statutory term of three years.
5.5. Re-election of Ms. Cristina Álvarez Álvarez as independent director for the statutory term of three years.
5.6. Re-election of Mr. Miguel Temboury Redondo as independent director for the statutory term of three years.
5.7. Re-election of Mr. Evan Andrew Carruthers as proprietary director for the statutory term of three years.
1. Re-election of Ernst and Young, S.L., as auditor of the Company's accounts and of its consolidated group for financial years 2020-2021, 2021-2022 and 2022-2023.
1. Approval, where appropriate, of the amendment to the term of the long term incentive plan by virtue of which shares of the Company are granted to the Chief Executive Officer.
1. Approval, where appropriate, of a new director remuneration policy.
1. Approval, where appropriate, of the amendment to article 13 ("Adoption of resolutions at the General Meeting") of the Bylaws in order to include technical improvements and to article 24 ("Approval of the annual accounts and application of profits") in order to include the possibility of interim dividends to be agreed upon and paid in kind.
2. 9.1. Amendment relating to technical improvements.
3. 9.2. Amendment relating to the possibility of interim dividends to be agreed upon and paid in kind.
Approval, where appropriate, of the amendment to article 9 ("Call notice"), article 10 ("Information available on the corporate website as from the call date"), article 14 ("Third parties at the General Meeting"), article 15 ("Representation") of the Regulations of the General Meeting of the Company and addition of an Additional Provision ("Telematic attendance at the General Meeting") in such Regulations to expressly regulate telematic attendance to the General Shareholders' Meeting, as well as approval of the amendment to article 16 ("Public request for proxy representation"), article 26 ("Right to information during the General Meeting"), article 27 ("Postponement and suspension of the General Meeting"), article 29 ("Voting on proposed resolutions"), article 32 ("Qualified majorities") and article 34 ("Publication of resolutions") of the Regulations of the General Meeting of the Company in order to include technical improvements.

10.1. Amendments relating to the telematic attendance to the General Shareholders' Meeting.

10.2. Amendments relating to technical improvements.

1. Authorization to the Board of Directors for the buyback of treasury shares, under the terms provided for in current legislation.
1. Delegation of powers to formalize, notarize and implement the resolutions adopted.
1. Consultative vote on the annual director remuneration report corresponding to the three-month financial year ended 31 March 2020.

The Annual General Meeting was attended by 79 shareholders, present or duly represented, holders of a total of 38,260,476 shares, or share capital with a par value of €38,260,476, i.e., 79.765% of share capital. AEDAS Homes' share capital amounts to €47,966,587, represented by 47,966,587 ordinary shares with a unit par value of €1.

2.3 Director Remuneration Policy

AEDAS Homes designed its director Remuneration Policy in keeping with the Company's size and financial situation, market standards for comparable companies and the amount of time devoted by the Company's directors.

The overriding purpose of the Remuneration Policy is to define and control the Company's remuneration practices vis-a-vis its directors. It establishes a remuneration regime that is deemed appropriate for the

dedication and responsibilities assumed by the Company's directors with the aim of attracting, retaining and motivating boardroom talent.

The Remuneration Policy is public and can be downloaded from AEDAS Homes' corporate website.

2.4 Appointments and Remuneration Committee

Statement by the Chairman of the Appointments and Remuneration Committee

Dear shareholder,

On behalf of the Board of Directors of AEDAS Homes, S.A., I am pleased to introduce this report on the activities of the Appointments and Remuneration Committee (hereinafter, the Committee) in FY 2020-21.

The purpose of this document is to inform you about the duties and purview of this Committee and provide an account of the work we did last year.

The Committee provides the Board of Directors with information and advice on the Company's appointments and remuneration obligations, framed by best practices in the corporate governance arena, and verifies that the remuneration policies established by the Company are being upheld. The Committee periodically reviews the Company's director and senior officer remuneration policies, including the share-based payment schemes,

and their application, ensuring that individual remuneration is aligned with each professional's contribution, without generating unsubstantiated imbalances between directors or between officers.

The Committee's duties additionally include: assessing the skills, knowledge and experience needed in the boardroom; establishing a target for female representation on the Management Committee; submitting proposals for the appointment, re-election or removal of independent directors or officers to the Board of Directors; and studying and organising Chairman and CEO succession matters.

The Appointments and Remuneration Committee met eight times in FY 2020-21. The main initiatives undertaken:

Review and validation of the annual corporate governance and annual director remuneration reports for the three-month financial year ended 31 March 2020 in respect of the activities pertaining to the Committee.
Proposals for the re-election of four independent directors and reports on the re-election of another three.
Review of the terms of contract applicable to the new Director of Legal Affairs; approval of the CEO's targets and review of his remuneration in relation to the newly approved director remuneration policy.
Approval of an amendment to the LTIP and its proposal to the Board of Directors.
Approval of the Skills Matrix pertaining to the members of the Board of Directors (and its update following one resignation and the appointment of a new director).
Selection of a candidate for an independent director vacancy.
Report on the variable remuneration of the senior management team.
Self-assessment of the performance of the Board and its committees and the related continuous improvement plans.
Approval of the Committee's Activities Report for the three months ended 31 March 2021 and of the Work Plan for FY 2020-21.
Provision, by the Committee's Chairman, of an account of the Committee's activities at the Annual General Meeting.

Miguel Temboury

Chairman of the Appointments and Remuneration Committee

Duties

The Committee's organisation and responsibilities are set down in article 15 of the Board Regulations, the Appointments and Remuneration Committee Regulations, article 22 of the Bylaws and article 529 quindecies of Spain's Corporate Enterprises Act.

Those provisions are replicated below:

Board Regulations, article 15 Appointments and Remuneration Committee. Composition, duties and functioning

1. The Board of Directors shall set up a permanent Appointments and Remuneration Committee with the power to inform and advise. The Committee shall not have executive powers but will rather inform, advise and make proposals to the Board on the matters within its purview, as stipulated in this article. The Appointments and Remuneration Committee shall be made up of at least three and at most five members, designated by the Board of Directors at the proposal of the Chairman of the Board and selected from among its non-executive members. At least two members of the Appointments and Remuneration Committee must be independent directors.
1. The Board of Directors shall also appoint a chairperson from among the independent directors comprising the Committee. The Board can appoint a vice-chairperson if it deems opportune, in which case the provisions pertaining to the appointment of the chairperson shall similarly apply to the appointment of the vice-chairperson.
1. The Board shall also appoint a secretary to the Appointments and Remuneration Committee, who need not be a member thereof. Nor does a non-member secretary need be a member of the Board of Directors. The secretary of the Board of Directors may be appointed secretary of the Appointments and Remuneration Committee, whose secretary may also be someone different.
1. The directors who sit on the Appointments and Remuneration Committee shall exercise their committee duties for as long as they serve on the Board, unless the Board of Directors deems otherwise. The renewal, reelection and dismissal of the members of the Committee shall be governed by the terms and conditions stipulated by the Board of Directors.
1. Verifying compliance with the remuneration policies established by the Company.
1. Periodically reviewing the remuneration policy for directors and senior officers, including share-based remuneration systems and their application, and ensuring that their individual compensation is proportionate to the amounts paid to other directors and senior officers;
1. Ensuring that potential conflicts of interest do not jeopardise the independence of the advice provided by the Committee;
1. Verifying the information on director and senior officer remuneration that is disclosed in corporate documents, including the annual director remuneration report. […]

Bylaws, Article 22.- Board committees

The Board of Directors will create an Audit and Control Committee and an Appointments and Remuneration Committee, each entrusted with the respective information, supervision, advisory and proposal duties specified by law and in these Bylaws and further developed in the Regulations of the Board of Directors.

In addition, the Board of Directors may create other committees with consultative or advisory duties. By way of exception, those committees may be given decisionmaking powers.

Article 529 quindecies, section 3 of the Corporate Enterprises Act

Without prejudice to the other duties stipulated in the by-laws or in compliance with them, the board of directors' regulations, the appointments and remuneration committee shall have, as a minimum, the following duties:

Evaluating the universe of skills, knowledge and experience needed on the Board of Directors. To this end, define the duties and capabilities necessary in candidates who shall fill each vacancy and evaluate the time and dedication necessary in order to efficiently fulfil their commitment.
Establish an objective regarding the representation of the least represented gender in the board of directors and develop guidelines on how to reach said objective.
Submit to the board of directors, proposals for the appointment of independent directors for their nomination by co-option or for their submission to the shareholders' general meeting' decision, in addition to proposals for the re-election or dismissal of said directors, by the shareholders' general meeting.
Inform of any proposals for appointment of all other directors for their nomination by co-option or for their submission to the shareholders' general meeting's decision, in addition to proposals for the re-election or dismissal of said directors, by the shareholders' general meeting.
Inform of any proposals for appointment or dismissal of senior management and the basic conditions of their contracts.
Research and organise the succession of the chairperson to the board of directors and the first executive of the company and, when relevant, formulate proposals to the board of directors so that said succession be processed in an ordered and well-executed manner.
Propose to the board of directors, the directors' and managing directors' remuneration policy and of whoever else performs senior management duties under the direct supervision of the board, executive committees or delegated directors, in addition to the individual remuneration and other contractual conditions of executive directors, ensuring compliance with the same.

Appointments and Remuneration Committee Regulations

The Committee Regulations are not transcribed in full.

Members and areas of expertise

At 31 March 2021, AEDAS Homes, S.A.'s Appointments and Remuneration Committee was made up of three members, its Chairman and another two Board members. Two of the Committee's members are independent directors.

Member	Position	Category on the Board of Directors
Sr. Miguel Temboury Redondo	Chairman	Independent
Sra. Cristina Álvarez Álvarez	Member	Independent
Sr. Evan Carruthers	Member	Proprietary

Alfonso Benavides Grases, who is the non-director Secretary of the Board of Directors, is also the Secretary of the Appointments and Remuneration Committee.

2.5 Audit and Control Committee

Statement from the Chair of the Audit and Control Committee

Dear Shareholders:

On behalf of the Board of Directors, I am pleased to present this report on the activities of the Audit and Control Committee (the "Committee" or the "ACC"), corresponding to fiscal year 2020- 21.

The purpose of this document is to inform you about the responsibilities and areas of focus of this Committee, as well as the work that we have carried out.

The Committee assists the Board of Directors in complying with its obligations in matters of corporate governance, monitors the reliability of the financial information that is presented to the Board including the internal control system of financial information (SCIIF), is concerned with the Supervision of both external and internal audit functions, the monitoring of corporate risks and the control of legal compliance. The Committee includes the supervision of compliance with legislation on the anti-money laundering and terrorist financing.

Fiscal year 2020-21 was especially demanding due to the COVID-19 pandemic, which had a global impact and has significantly affected the economy, not only in Spain but in all other countries around the world. The quick reaction of AEDAS Homes to adequately manage the crisis produced by this pandemic required the implementation of work from home plans and telematic management of systems and controls which were supervised by the Committee to ensure that we were sufficiently covered in this area.

The Audit and Control Committee met nine times during the 2020- 21 period; all meetings were via videoconference, in line with the Company's strict adherence to COVID-19 protocols. As a result of the change in accounting year approved by the Annual General Meeting on 31 March 2020, the Committee needed to adapt its activities to the new 2020-21 financial year.

Throughout 2020-21, the Audit and Control Committee provided the Company with strong guidance in its efforts to further improve the culture of quality and customer service. To do so, the Committee carried out an in-depth analysis of the Company's practices and met with key members of the organization with oversight of these areas. After this review was complete, the Committee made a series of recommendations to the Board, and in response, the Company committed to implement series of measures designed to further improve the quality of the homes delivered and the overall experience of customers.

Going forward, the Committee will be responsible for supervising the implementation ESG Strategic Plan 2021-2023, monitoring of the Company's progress towards reaching its ESG targets and reporting this to the Board.

Javier Lapastora Turpín Chair of the Audit and Control Committee

Responsibilities

Although the responsibilities attributable to the Committee are established in the Companies Law (Ley de Sociedades de Capital) and in the regulations of the Board of Directors, the main ones are as follows:

Report to the board on the result of the audit, explaining how it has contributed to the integrity of the financial information.
Supervise the effectiveness of the company's internal control, internal audit and risk management systems.
Discuss with the external auditor of the company any significant weaknesses of the internal control detected in the development of its audit.
Supervise the process of preparation and presentation of financial information.
Submit selection proposals, appointment, reelection and replacement of the accounts auditor to the Board of Directors.
Evaluate the independence of the auditors each year and prior to the issuance of the audit report.
Inform the Board of Directors in advance on the periodic financial information that must be published, the creation or acquisition of interests in special-purpose entities or with residence in tax havens, and operations with related parties.

Members and areas of competence

As of 31 March 2021, the Audit and Control Committee is made up of three members: the president and two other members. All members must be on the Board of Directors and at least two of them must be independent directors.

Mr. Luis Vega Sorrosal, non-director Deputy Secretary of the Board of Directors, acts as secretary of the Committee.

Member	Position in the ACC	Type of director
Mr. Javier Lapastora Turpín	Chair	Independent
Mr. Santiago Fernández Valbuena	Member	Independent
Mr. Eduardo D'Alessandro Cishek	Member	Proprietary director

The chair, Mr. Javier Lapastora, has extensive experience in auditing and accounting as he is a registered auditor in Spain and a former PwC audit partner. He is a member of the Register of Accounting Experts of the ICJCE in Spain.

The Committee is confident that its members collectively have the necessary relevant competence for the homebuilding sector.

Risk management and internal control

AEDAS Homes has established a risk management system that is reviewed by the Committee and reported to the Board of Directors on a quarterly basis.

The Committee monitors the risk indicators and the internal control system of the company through the risk and internal audit functions.

The Board of Directors is informed on a quarterly basis of the evolution of the different risk indicators identified on the company map, as well as the tolerance indexes for these risks.

The risk matrix is reviewed annually and the risks to be monitored more closely for the following year are reassessed.

External audit

The Committee has met on several occasions with the external auditor who has presented the planning of his work as well as his evaluation of the main risks of the audit, his preliminary conclusions, his reports to the annual accounts presented and the internal control weaknesses that have been revealed.

The Committee has proposed to the Board of Directors the appointment of EY as auditor of the company and the group for the next three years since the legal period of rotation had not concluded and the services provided by the auditor have reached the required level of quality.

Internal Audit

The fundamental role of internal auditing is to assist the Board of Directors and the company's management in protecting the assets, reputation and sustainability of the group.

The internal audit department has frequent direct contact with the Committee and direct access to the chair of the Committee, with whom it directly dispatches matters and incidents that arise in the course of its work.

During the financial year, the Internal Audit function of AEDAS Homes was certified after an external verification by the Institute of Internal Auditors of Spain of compliance with the regulations and code of ethics of said institute. AEDAS Homes is the first company in its industry to obtain this qualification.

Committee meetings

The following summary explains how the Committee's responsibilities relating to audit, risk, internal control and other matters were carried out over the period.

May 2020

In its first May meeting, the Committee reviewed the report on the Financial Information Internal Control System (SCIFF) for FY 2020 (1 January - 31 March 2020), with satisfactory results; the report on Internal Audit activities taking place during the same period; reports on both risk and compliance activity in FY 2020; a report from an independent anti-money laundering (AML) expert; the measures being adopted by the Company to improve customer satisfaction after handover; and the execution status and positive outcome of the Company's CSR activities in FY 2019.

In its second May meeting, three reports for submission to the Board, were presented: the Committee's Activities Report, the report on the independence of the external

auditor for the period, and the report of transactions with related parties, all for the period ended 31 March 2020. The Committee reviewed the individual and consolidated FY 2020 Annual Accounts and the individual and consolidated Management Report for the period, for subsequent approval by the Board, and the conclusions and draft report for the period were presented by the external auditor. The Committee proposed to the Board that Ernst & Young, S.L., be re-appointed as external auditor of the accounts for the Company and its group, through FY 2022-23, which was later approved.

June 2020

July 2020

The Committee reviewed the internal audit being carried out on a tool developed by the Company to monitor cost control and timing of its developments, as well as financial and commercial aspects. It presented the antimoney laundering report by an independent expert and the Company's AML Action Plan to the Board, both of which were approved and oversaw the update to the Company's Risk Matrix, which was revised to fully address risks related to the Covid-19 pandemic, as well as the regular quarterly review of the Map.

Internal Audit reported to the Committee that the Spanish Institute of Internal Auditors had favourably rated the Company's internal audit function, and that the Company was the first developer to have received the score. Internal Audit also presented the favourable results of the SCIIF assessment and reported on the progress on other audit tasks being performed. Risk and Compliance reported to the Committee on how it had followed up on recommendations made by an independent expert in the review of its AML system and on the benchmark carried out on the Company's post-Covid Risk Map, which was founded to be aligned with the sector. The CFO presented the ratification of the approval of EY's services; the approval of EY's auditing proposal for FY 2020-21; a proposal for requalifying certain reserves; a presentation on the tasks performed by different auditing companies working for the Company; and the report on Q1 2020-21 financial results.

October and November 2020

In October, the Company's external auditors presented how they would approach the FY 2020-21 Accounts.

In its first November meeting, key areas of focus for the Committee were (i) the presentation of results of the SCIFF review, which was deemed to be working very satisfactorily, (ii) the internal audits to be carried out on a sample of developments (finished and under construction), (iii) and an internal audit of the ICT Security Policy, which was deemed fit for purpose. An analysis on the impact of the new Corporate Governance Code, published by the CNMV in June 2020, was also presented and included the identification of key impacts on the Company, as well as an update on ongoing internal audit projects and the results of a verification carried out on compliance controls for the data protection policy, which was deemed acceptable.

In its second November meeting, the Committee reviewed the Company's Interim Condensed Consolidated Financial Statements for the half-year period ended 30 September 2020 and the accompanying Management Report, as well as the draft presentation by the external auditors on their limited review of those financial results. The Committee reported favourably on these statements and brought them to the Board for approval. The Committee also reviewed a compliance report on controls carried out to prevent criminal behaviour.

February 2021

The Committee reviewed the Company's nine-month intermediate management report, which had received no relevant comments from the external auditors. It also reviewed the Q2 2020-21 report on risk map indicators and findings from Internal Audit of their review of the SCIIF control set, with 97% effectiveness. Internal Audit presented its review of several developments, which focused on the twin parameters of product quality and customer experience, explaining the findings and areas for improvement. The Committee decided it would meet with internal teams to focus on how these two parameters could be improved. The Committee also reviewed the Business Continuity plan and the satisfactory results of the cybersecurity audit carried out by Internal Audit. The Q2 2020-21 risk report presented by Compliance included no relevant findings except for those related to product quality and customer experience, in line with the findings of Internal Audit.

March 2021

The Committee reviewed the Company's overheads budget for the 2021-22 fiscal year and the Chair presented his findings on the product quality review that had been carried out.

Internal Audit presented its audits of the Business Continuity Plan, the Company's prevention of money laundering and financing of terrorist activities in 2020-21, investments and developments, as well as an update on its 2020-21 Annual Plan for Internal Auditing, its declaration of independence and objectivity for 2020-21 and its 2021-22 Annual Plan for Internal Auditing.

Compliance presented an update on the recommendations made by the independent expert on anti-money laundering and the prevention of financing of terrorist activities, its Achievement Plan for 2021-22 and its Risk Management Plan for 2021-22.

Work plan for 2021-22

The Committee has a work plan that assigns the different tasks that it has planned during the year to the different meetings that it had initially planned. The work plan includes eight meetings for the year; this number may be increased depending on the needs that arise during the year.

Work plan for 2021-22

2.6 Technology, Innovation and Cybersecurity Committee

Statement from the Chair of the Technology, Innovation and Cybersecurity Committee

On behalf of the Board of Directors, I am pleased to present a summary of the key activities of the Technology, Innovation and Cybersecurity Committee ("CTIC") for the year ended 31 March 2021.

AEDAS Homes fosters a culture of innovation, viewing technology as an enabler and driver of its residential development business, with the power to transform the company's relationship with its customers and other key stakeholders and improve its competitive edge.

As you know, the Board of Directors has the duty to supervise cybersecurity and IT risks; the CTIC falls under the remit of the Board. The CTIC has the responsibility of reporting on, evaluating and creating proposals related to technology, innovation and cybersecurity, and likewise, it approves and revises the Strategic Technology Plan and supervises the alignment of the Plan with the Company and its operations.

The CTIC met three times during the 2020- 21 fiscal year; all meetings were held via videoconference to adhere to Covid-19 protocols. Throughout 2020-21, the CTIC provided the Company with guidance to help it achieve four aims: digitalise internal processes, extract value from data, connect with customers in new ways during the pandemic, and protect its stakeholders with a strong cybersecurity policy and management system. The following summary highlights the CTIC's key areas of focus during fiscal year 2020-21.

Strategic Digitalisation Plan

The CTIC's overarching focus for 2020- 21 was guiding the preparation of the Company's Strategic Digitalisation Plan, which will culminate in fiscal year 2021-22 and subsequent years. This plan will allow the Company to harness technology, data

and digital transformation to further its business objectives across every level of the organisation. This strategic plan is being co-led by the Technology area and the Innovation, Data and Digital Transformation area.

Technology

Over the course of the year, the CTIC supervised a wide range of technology projects that aimed to (i) improve employee productivity through the digitalisation and automation of processes and the creation/improvement of digital tools and databases used company-wide to manage

developments and business activity; (ii) drive sales; (iii) improve customer experience; (iv) take data-driven decisions; (v) ensure compliance excellence, especially regarding the prevention of money laundering; and (vi) provide the Company with a mature cybersecurity programme.

Innovation

LIVE Virtual Tours, a product of the Innovation department, which is guided by the CTIC, provides a clear example of the Company's success in fostering relationships with customers through digital channels during the pandemic. LIVE gave customers (both foreign and national) the opportunity to virtually visit developments during lockdown and served as a new way to market developments and improve sales in the Covid context. The total number of LIVE virtual tours of AEDAS Homes developments jumped 42% in 2020- 21 (vs April 2019 – March 2020), and the total number of sales reservations made

solely after a LIVE tour (without visiting a sales office) skyrocketed, from 14% to 70% - a clear example of how innovation made it possible for the Company to continue its strong connections with its customers during the pandemic.

Innovation initiatives serve as the foundation to rethink how the AEDAS Homes operating model can be reshaped using data and technology, opening new potential sources of revenue or efficiencies. Innovation is part of the AEDAS Homes culture and deeply embedded in its DNA.

Cybersecurity

Information is an extremely important asset to the Company, enabling it to carry out its commercial functions successfully and fulfil its obligations to stakeholders. To ensure the security and correct management of this vital asset in the business, facilities and digital resources of the entire AEDAS Homes organisation, the CTIC oversaw the revision and updating of the Company's ITC Security Policy in 2020-21, according to best market practices and technical recommendations that meet international standards, in line with ISO 27001/27002. After being submitted to the Board in November 2020, it was unanimously approved.

The Board ensures that strong governance structures are in place for cybersecurity management, and the CTIC's endeavours to ensure that cybersecurity procedures and processes are in place to monitor and respond to data breaches, cyberattacks and other threats as they involve. Under the framework of its cybersecurity management system, the Company conducts regular internal and external security audits and penetration testing to assess the vulnerability of its systems, products and practices affecting user data, in addition to ensuring that all employees receive cybersecurity training regularly. Educating and training employees is another one of the key pillars in the Company's cybersecurity strategy, and several courses were organised during the year.

As the fiscal year drew to a close, the CTIC determined that the Company had all the most relevant technological tools in production and in the coming year would be able to focus on maximising the potential of these powerful tools, managing all the KPIs and data coming from them as with any other operating process, keeping in mind that cybersecurity is a never-ending activity. Due to the increased number of ransomware events, this will be one of the key elements to monitor this new fiscal year.

In a short period of time, the Company has been able to develop a solid data-driven platform and generate good reporting, putting it in a strong position to become a truly data-driven company. The CTIC also determined at the end of the fiscal year that with regard to cybersecurity, all basic key elements were in place, and that it would continue to oversee how the Company responds to ever-growing and changing

threats, supervising the most relevant cybersecurity KPIs.

Going forward, the CTIC will continue to guide the Company in its strategic approach to how technology can support business objectives over the next three years, by revisiting processes, work methods, digital tools and customer interactions, with the goal of fully integrating the Strategic Digitalisation Plan across all areas of the business.

Cristina Álvarez Álvarez

Chair of the Technology, Innovation and Cybersecurity Committee

2.7 Management Committee

AEDAS Homes' Management Committee is made up of seven members, each with more than 20 years' experience in executive positions at a range companies.

The Management Committee meets monthly at the Company's head offices and its main mission is to oversee delivery of AEDAS Homes' strategic targets so as to enable its long-term continuity.

Its purpose is to:

Inform: The Management Committee must keep the CEO apprised of all relevant developments at the organisation and its various business areas.
Caution: The Management Committee must warn of any circumstances that could jeopardise the Company's ability to deliver its targets and/or budget, following up on such matters to stay ahead of potential deviations.
Propose: The Management Committee must propose and apply any corrective action deemed necessary.

The duties of the Management Committee include:

Ensuring compliance with the policies, processes and procedures established by the Company, guaranteeing that all decisions are aligned with AEDAS Homes' mission, vision and values.
Proposing an organisational structure that responds efficiently to the targets set.
Proposing corrective measures in the event that actual results deviate from the targets set.
Proposing ideas for enhancing processes and procedures to render them more efficient.
Coordinating and aligning strategies and initiatives across the various areas of the organisation.
Defining and bolstering the corporate culture.
Prioritising people and their development and nurturing a positive workplace climate in which talent is minded, leadership safeguarded and fairness guaranteed.

David Martínez - Chief Executive Officer

Complete profile in Board of Director page 53.

David Martínez Consejero Delegado

Alberto Delgado

Chief Operating Officer

Alberto coordinates, runs and controls the key business departments (the regional units and the sales and marketing, operations, customer relations and product quality departments) in his capacity as COO, framed by the Company's guidelines, objectives and policies, to ensure the medium- and long-term viability of the business, as set down in the business plan. He is also participates in Company decisionmaking about new investments and/or strategic positioning, again with the mission of ensuring business sustainability in the medium and long run.

Background

A civil engineering graduate from Madrid's Polytechnic University. Alberto has over 20 years' experience in the real estate sector.

He began his career in ACS's residential construction division. He was then hired by Vallehermoso, where he worked in Catalonia and Madrid for over a decade, initially on the business side and the last three years as the head of finance. He joined AEDAS Homes in 2016 and has been its COO since 2017.

Alberto Delgado Director General de Negocio

Sergio Gálvez

Managing Director of Strategy, Investment and Alternative Developments

Sergio is responsible for continually analysing market dynamics (demand, supply, price, competition, etc.), identifying opportunities and anticipating and mitigating potential threats over the medium- and long-term horizons. His duties include heading up the investment, land development, alternative development, growth, strategy and land sale departments and the alternative build-to-rent channel.

Background

An industrial engineering graduate from ICAI. Sergio has more than 20 years' experience in real estate in Spain, having worked at firms such as Hansa Urbana and Deloitte.

He began his career in strategic consulting, specifically in Arthur Andersen's real estate division. He joined AEDAS Homes as Director of Business Development in 2016 and in 2017 he was named Chief Investment Officer. In 2019, he was named Managing Director of Strategy, Investment and Alternative Developments.

Sergio Gálvez Director General de Estrategia, Inversiones y Desarrollos Alternativos

María José Leal

Chief Financial Officer

María José is responsible for securing and controlling the organisation's financial resources, running its corporate finance functions, in keeping with the applicable prevailing accounting, legal and tax frameworks, and ensuring that the Company's financial procedures are followed so as to consistently provide a fair view of the Company's financial strength. Investor relations also falls under her purview.

Background

A business administration graduate from CUNEF, María José has also completed IESE's executive management programme. She has extensive experience at fast-growing, listed multinational enterprises.

Most recently, she has worked as Deputy CFO at the high-profile listed companies AENA and PROSEGUR. She was named CFO of AEDAS Homes in November 2018.

María José Leal Directora Financiera

Esther Duarte

Chief Resources Officer

Esther is responsible for defining and overseeing the Company's resource management strategy by running the HR, health & safety, sustainability, process, quality, internal communication, general services, document management and infrastructure & communications departments. Her mission is ensure responsiveness to the Company's needs and demands and to help provide AEDAS Homes' professionals with the skills and capabilities needed to become more productive and so contribute to the creation of value.

Background

Esther's academic qualifications include a diploma in educational sciences, the Garrigues' executive programme in labour relations, ESADE's executive development programme in human resource management and IESE's executive management programme.

She boasts more than 20 years' experience in executive positions in human resource management at real estate and construction firms such as Ferrovial Inmobiliaria and Grupo Aldesa. Esther joined AEDAS Homes in 2017.

Esther Duarte Directora de Recursos Corporativos

Luis Vega

Director of Legal Advisory

Luis is responsible for heading up, running and controlling the activities of the legal advisory and risk and compliance departments to ensure that AEDAS Homes upholds all applicable laws and regulations in order to safeguard its reputation and business interests.

Background

A law graduate (specialised in business law) from IES CEU San Pablo, Luis also holds a Master's in Town Planning from the CEU San Pablo Business School and has completed IESE's management development programme.

Luis brings more than 23 years' experience and expertise in property and planning law, restructurings and business and finance law and as company counsel. Throughout his career, he has served as company counsel, executive committee member and board secretary at several companies in the property development, property management and energy and construction sectors, including Grupo Aldesa, GMP Sociedad de Inversiones Inmobiliarias, Grupo Empresarial Pinar, Ferrovial Inmobiliaria, Freshfields Bruckhaus Deringer and Iberforo. He has been the Vice-Secretary of AEDAS Homes' Board since he joined the Company in 2020.

Luis Vega Director de Asesoría Jurídica

Javier Sánchez

Director of Innovation and Branding

Javier spearheads the Company's efforts on the innovation, data management and digital transformation fronts, creating unique customer experiences, defining new product and service attributes, exploring new business models, fostering a digital culture and creating, from the data generated, an analytical and forecasting system at the service of business efficiency and intelligence. He is also responsible for brand development and strategic positioning and for the Company's corporate communication effort.

Background

Javier holds a dual degree in law and business studies from ICADE.

He began his career in strategic consulting in Spain and the US. After his stint in Silicon Valley, he gained a wide variety of professional experiences over two decades at big tech firms, internet players and television companies. In the real estate sector, Javier brings more than five years' experience in the new home development segment.

Javier Sánchez Director de Innovación y Marca

2.8 Regional branches

AEDAS Homes is present in the most dynamic new home developments markets in Spain. Its business model is decentralised and scalable, with all the key activities performed in-house.

In 2020, AEDAS Homes continued to expand its footprint to new areas of Spain, particularly in the north, where it acquired new land. The Company decided on that direction having identified specific markets that present healthy liquidity, pockets of demand in the mid-upper segment and solid economic fundamentals, which we believe could yield attractive returns for AEDAS Homes.

In those specific markets, the strategy is based on the acquisition of the best plots in locations that lend themselves to targeting potential buyers with mediumhigh purchasing power. AEDAS Homes has a competitive advantage in that segment, as there is less competition for those deals, giving the Company stronger price bargaining power. The Company is currently working on four transactions in Galicia, Navarre and Valladolid with a development potential of 250 new homes.

In light of the business volumes those new regions are expected to generate in the coming years, in order to manage them effectively, the Company redistributed its resources in 2020, a process that has culminated in the creation of a new regional unit dedicated northern Spain in 2021.

Last year, the Company also set up a branch in the Canaries, which is included within the Andalusia regional unit, from which all developments on those islands will be handled.

"AEDAS Homes is present in the most dynamic new home developments markets in Spain. Its business model is decentralised and scalable"

The Company currently conducts its business across the following regional units: Catalonia and Aragon (Barcelona, Tarragona and Zaragoza); the Central region (Madrid); Andalusia (Seville, Western Andalusia and the Canaries); Costa del Sol (Malaga); the Eastern region (Valencia, Alicante, Murcia and Mallorca); and the Northern region (Valladolid, Pontevedra and Navarre).

by AEDAS Homes to ensure delivery of the Company's earnings guidance and its quality and timing commitments. That decentralisation allows the Company to manage each project in accordance with local needs and criteria, which translates into better developments and, ultimately, more satisfied customers and happier shareholders.

AEDAS Homes regional branches

Pablo Alonso

Director of the Central region

A law graduate from León University, Pablo also holds an LLM in Business Law from Navarra University. He has been working in the sector for 23 years.

Before joining AEDAS Homes, he worked at sector players such as Testa, Vallehermoso and Grupo Sacyr.

Pablo Alonso Director of the Central region

David Gómez

Director of Catalonia and Aragon

A civil engineering graduate from the Catalan Polytechnic University, David also holds an MBA from ESADE.

He has been working in the real estate sector for more than 20 years. He has held executive positions in the residential development segment at different Spanish companies including Banco Sabadell, Solvia and Vallehermoso.

David Gómez Director of Catalonia and Aragon

José Ignacio Fernández

Director of Costa del Sol

A law graduate from Seville University. He holds an MBA from the San Telmo International Institute, a Master's in Town Planning and Management from Carlos III University and a Master's in Town Planning and Design from the Seville School of Architecture. He also has attained research proficiency for the PhD in Town Planning at Seville University's School of Architecture.

He brings 22 years' experience at firms such as Martinsa-Fadesa, Galia Grupo Inmobiliario and Guadalmina Golf and has also worked in the town planning department of Seville's City Hall.

José Ignacio Fernández Director of Costa del Sol

Juan López

Director of East and Balearics

A technical architect (Alicante University), Juan has also completed the the IESE executive development programme. Juan has extensive experience in real estate, having worked at Solvia and Hansa Urbana prior to joining AEDAS Homes.

Juan López Director of East and Balearics

Diego Chacón

Director of Andalusia

A civil engineering graduate from Granada University, Diego also holds an MBA from EOI and has completed the senior management programme at San Telmo Business School. He has been working in the sector for 19 years. Before joining AEDAS Homes, he worked at Hansa Urbana.

Diego Chacón Director of Andalusia

Higinio Fernández

Director of the Northern region

Higinio is a civil engineering graduate from Cantabria University. He brings ample sector experience thanks to a career built up at Ferrovial, Vallehermoso and CaixaBank.

Higinio Fernánez Director of the Northern region

2.9 Anti-money laundering and anti-corruption

AEDAS Homes has formulated a compliance programme with the aim of establishing a culture of ethics while guaranteeing respect for applicable legislation. The compliance programme covers the relevant areas of risk and emulates best practices in the field.

More specifically, AEDAS Homes' compliance programme encompasses measures designed to guarantee compliance with:

Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) legislation
Anti-corruption legislation, specifically addressed by the Corporate Crime Prevention Framework
Data protection regulations

"AEDAS Homes has formulated a compliance programme with the aim of establishing a culture of ethics while guaranteeing respect for applicable legislation"

Anti-money laundering

AEDAS Homes is a home developer and as such is bound by anti-money laundering and counter-terrorist financing legislation. To comply with that legislation the company has implemented the following measures:

Internal Control Body: AEDAS Homes has a designated internal control body which is tasked with supervising AML/CTF compliance at the Company
Risk and Compliance Department: the Company's risk and compliance function is responsible for managing the AML/CFT model
AML/CFT Manual: embodies the internal policies and procedures which need to be followed by all employees to comply with applicable legislation
Due diligence: AEDAS Homes' Technical Unit carries out due diligence procedures for every single customer that buys one of the Company's homes. Company procedures prohibit sales without that unit's clearance. If customers present higher risk profiles, the Company carries out more stringent due diligence.
External expert report: as required in applicable legislation, AEDAS Homes submits annually to a review by an external AML/CTF expert. That report is presented to the Board of Directors within three months of issuance.
Training: all employees receive AML/CFT training annually. That training was duly provided in 2020
Internal Audit review: the Internal Audit function analyses the effectiveness of the AML/CFT framework annually and reports its findings to the Audit and Control Committee
Analysis and reporting of suspicious transactions: suspicious transactions are duly analysed and reported to the AML watchdog as necessary

Corporate crime prevention

AEDAS Homes has a Corporate Crime Prevention Framework, which is articulated around the following structures:

Code of Conduct: the Company has a Code of Conduct which embodies its values and specifies the types of conduct it does not tolerate. It must be endorsed by all new hires
Code of Conduct for Third Parties: all essential suppliers that collaborate with AEDAS Homes have to sign the Code of Conduct for Third Parties before doing business with it. By doing so they commit to aligning their activities with AEDAS Homes' values and to not breaching the code rules.
Compliance Manual and Policy: the documents which establish the ground rules for the Corporate Crime Prevention Framework.
Anti-Corruption Policy: establishes the rules applicable to employees with respect to gifts and hospitality vis-a-vis the public and private sectors.
Compliance Committee: the body responsible for supervising regulatory compliance and coordinating the measures needed to that end.
Risk and Compliance Department: the Company has a risk and compliance function tasked specifically with managing the corporate crime prevention effort.
Criminal risk map: the map is used to identify and assess the criminal risks to which the Company is exposed, enabling it to identify the biggest risks and establish mitigating measures.
Risk and control matrix: the matrix encompasses all information related to the controls in place at the Company for monitoring criminal risks, including the risk of corruption. The Company currently has 125 controls in this respect.
Whistle-Blowing Channel: employees are obliged to report conduct that violates the Company's Code of Conduct or applicable legislation using the Whistle-Blowing Channel. They may do so anonymously.
Annual budget: the Risk and Compliance Department is assigned an annual budget for managing the crime prevention effort.
Annual controls: the model is reviewed annually to verify its effectiveness. As part of that exercise, the effectiveness of the anti-corruption controls is also assessed. The results of the controls and the action plans devised to remedy areas in need of improvement are reported to the Audit and Control Committee
Training: the Company provides its employees with the training needed to ensure they are sufficiently familiar with the core elements of the Corporate Crime Prevention Framework.

Data protection regulations

Policies and procedures: the Company has put in place the policies and procedures needed to ensure that the data it processes is handled in compliance with applicable regulations
Data protection clauses: AEDAS Homes has enabled data protection clauses in all the channels through which it receives personal data in order to comply with the disclosure and consent requirements established in applicable data protection regulations
Technical measures: AEDAS Homes has enabled the technical measures needed to keep evidence of its compliance with its data protection disclosure requirements and the consents obtained from the various data subjects
DPO: the Company has a Data Protection Officer whose job is to supervise compliance with data protection requirements
Data subject rights: AEDAS Homes has implemented the measures needed to enable data subjects to duly exercise their data protection rights
Security breaches: the Company has taken the measures required to ensure the due management and reporting of any security breaches
Annual controls: AEDAS Homes carries out annual checks to verify compliance with data protection regulations and enhance the control environment

2.10 Health & safety

AEDAS Homes is committed to providing a safe working environment for its employees; its ISO 45001-certified occupational health and safety management system has been in place since the Company's incorporation in 2017. The last management system certification audit, along with the legal audit required under Spanish Royal Decree 19/1997, was conducted - satisfactorily - in June 2020.

In light of the ongoing pandemic that emerged in 2020, one of the most important actions taken during the reporting period was to define and implement COVID-19 safety protocols at all AEDAS Homes workplaces. Among the measures deployed, the following stand out: the expansion of office space to enable social distancing; antibody and rapid surge testing on several occasions during the year; and, naturally, the provisions of the personal protective gear needed. The safety officers supervised implementation by the contractor firms of our safety protocols at active construction sites.

Although the level of construction activity increased with respect to 2019 (5.9 million hours worked) in 2020-21 (9.5 million hours), the injury frequency rate (no. of lost-time injuries/no. of hours worked x 1,000,000) declined from 14.75 to 12.07, a measure by which AEDAS Homes outperformed the construction sector average.

The improvement is attributable to the rollout of new workplace safety tools such as the AEDAS Manual of Best Practices in Health & Safety and improved accident prevention processes, whereby risks are analysed at the design phase for the purpose of mitigating or eliminating them at the execution phase.

The key health and safety performance indicators are presented regularly to the Company's senior management. The main tool used to control the safety management system is the performance of assessments at 30% and 70% of completion of building work. In 2020 a total of 60 such assessments were carried out, yielding an average score of 75.59%, which is above the target of 73%.

"AEDAS Homes is committed to providing a safe working environment for its employees with a health and safety management system"

Management of the COVID-19 crisis

The COVID-19 health crisis has changed the occupational health and safety paradigm. Against that backdrop, AEDAS Homes has adapted its everyday activities to address the new reality and prioritise the protection of all of its employees, customers and suppliers. As soon as it realised the gravity of the situation, the Company began to work intensely to keep its professionals healthy in a safe working environment, while enabling continued productivity, so as not to jeopardise delivery of the business and financial targets set for the year in the Business Plan.

Acting at all times upon the recommendations of the World Health Organization and Spain's health authorities, a functional action plan was designed for the entire Company. That plan included remote working and a specific training programme for all AEDAS Homes employees.

During the lockdown it was essential to keep the Company's employees safe, but also to preserve a team spirit and sense of proximity among professionals. To that end, the Company did the following:

CEO engagement: the Company's CEO sought to open up an internal communication channel - which materialised in an online forum through which any employee could pose questions or express concerns.
Follow-up by the Corporate Resources Department: to monitor how everyone was doing during the weeks of hard lockdown and find out whether they needed anything specific.
Employee Portal initiatives: photos of employees working from home; Father's Day celebration; home videos documenting life during lockdown, etc.
Charitable work: Participation in a charity run to raise proceeds for the Spanish Cancer Association and participation in special workshops organised by the Capacis Foundation.

The first phase of restriction easing began in May 2020. A plan was designed to allow the very gradual resumption of in-person work. To implement it, the Company sent all of its employees a survey to learn about their specific circumstances and organise the safe and staggered return to the office. By then the Company had a dedicated COVID protocol, which has been updated continuously as more has been learned about the virus. That protocol remains in place and its application is mandatory across all workplaces. Compliance with its contents is overseen by the Corporate Resources Department. All of AEDAS Homes' workforce has been physically back at work since October.

Health and safety culture

With the aim of fostering a culture of health and safety, AEDAS Homes provides online health and safety induction training to all new hires, in keeping with article 19 of Spain's Workplace Health and Safety Act. It also has an Employee Portal onto which all of the Company's policies, processes, procedures, manuals and protocols have been uploaded to facilitate employee access to related health and safety related information.

In addition, to highlight the importance of health and safety for everything AEDAS Homes does, in 2020 the Company held the second edition of its health and safety prize, which is awarded to the most exemplary development during the past year. The region to which the winning development belongs gets to choose a charity to which to donate €3,000. Last year the winner was the East and Balearics regional unit, which made its donation to the Payasospital Foundation. That association visits girls and boys in hospital in the region of Valencia, offering them professional clown performances that are tailored for each child and coordinated carefully with the healthcare professionals.

"With the aim of fostering a culture of health and safety, AEDAS Homes provides health and safety induction training to all new hires"

AEDAS Homes has an enterprise risk management (ERM) system which is regulated by its Risk Management Policy.

The purpose of the ERM system is to create a corporate risk model that enables the Company to identify, evaluate, manage and report the risk factors that could jeopardise delivery of AEDAS Homes' strategic, business and financial objectives.

The risk management model comprises the following steps:

Identification: the risks of relevance to AEDAS Homes are duly identified by the Company's senior management. Risk prospecting is conducted annually with the aim of identifying potential new risk factors that are not already contemplated in the ERM model that could jeopardise the Company's ability to attain its strategic, business or financial objectives.
Assessment: the inherent probability, the inherent impact and the robustness of the control environment are assessed for each of the relevant risks. AEDAS Homes' risk map contemplates three categories of risk: "critical", "under surveillance" and "under monitoring".
Management: the risks classified as "critical" and "under surveillance" are included in the management mechanism, which implies:
- Identifying specific risk events
- Establishing monitoring indicators for each risk event and assigning risk tolerance thresholds
- Establishing action plans for any indicators that are above the tolerance thresholds established by the Company

Update: the model is reviewed and updated annually.

As stipulated in its Risk Management Policy, the following governing bodies are involved in the activities related with the risk management effort at AEDAS Homes S.A.:

Board of Directors: Its duty is to define, update and approve AEDAS Homes' Risk Control and Management Policy and establish prevailing risk tolerance levels.
Audit and Control Committee: Its task is to supervise the internal control and risk management systems, making sure that the key risks are identified, managed and maintained within the planned levels.
Management Committee: Its work involves allocating responsibilities for risk management, analysing the results of the risk assessments to determine their level of severity and approving attendant responses and initiatives.
Risk and Compliance Department: The Compliance Department helps the Audit and Control Committee and the Management Committee fulfil their mandates, mainly by coordinating the activities defined in the Risk Management and Control Policy, ensuring that the risk management system works correctly and compiling relevant reports.
Officers and other risk owners: They identify and assess the risks that fall within their purviews. In addition, they recommend and report indicators for monitoring, as well as proposing and implementing risk mitigation plans and reporting on their effectiveness.

AEDAS Homes' risk management model groups its risks into a number of specific categories. The reader should note that in FY 2020-21 the names of some of the risk

categories were changed to better reflect the nature of the underlying risks (those changes are indicated below).

Strategic risks

Fall in demand for new housing (formerly called "Real estate market")
Land bank
Customer satisfaction (formerly called "Expertise")
Availability of financing for AEDAS Homes
Reputation
Share price performance (formerly called "Securities markets")

Operational risks

Purchase of land
Transformation of land
Project execution (formerly called "Development")
Sales
Talent management
Technology
Cybersecurity
Health & safety
Property security

Financial risks

Interest rates
Liquidity
Availability of financing for customers (formerly called "Credit risk")
Asset valuations
Reliability of the financial information

Compliance risks

•	•
Anti-money laundering legislation	Securities market law
•	•
Criminal law (including risks related	Tax law
with the failure to comply with anti	•
corruption legislation)	Environmental regulations
In FY 2020-21, AEDAS Homes continued to monitor and manage the risks deemed	critical based on the assessment conducted by the members of its Management Committee.

The following risks are deemed critical:

Fall in demand for new housing
Share price performance
Land bank
Project execution
Customer satisfaction
Health & safety
Cybersecurity
Transformation of land
Availability of financing
Sales

The risks included on the above list were tracked quarterly and action plans were set in motion for those indicators in excess of the stipulated tolerance thresholds.

In terms of the risks that materialised during the year, it is important to highlight the significant downturn the various macroeconomic indicators due to the ramifications of the Covid-19 pandemic. For example, in 2020, housing prices corrected in some Spanish provinces and the number of foreign buyers declined.

In relation to the risks associated with Covid-19, the Company's directors and management are monitoring developments with respect to the global pandemic constantly with a view to assuredly mitigating any potential impacts, whether financial or non-financial. Those aspects played a key role in the risk management activities carried out by the Company during the reporting period.

The Company has been monitoring the status of the relevant risk factors with the aim of correctly assessing the potential impact of the pandemic on AEDAS Homes' financial performance and preparing the Company to take appropriate risk mitigation measures. Specifically, in FY 2020-21 it undertook an extraordinary review of its corporate risk map in order to identify potential areas of risk in need of reinforced supervision. Those risks relate essentially to sales and access to financing. The following risk categories have been deemed relevant from the Covid-19 perspective and located in the upper quadrant of the corporate risk map as a result of the assessment carried out by the Company's senior management team:

Fall in demand for new housing: volatility or external factors that could affect supply and demand in the housing market and could impede delivery of the growth forecasts contained in the Company's business plan. As already noted, the Covid-19 pandemic has had an adverse impact on Spain's key macroeconomic indicators, which could affect the Company's ability to deliver its business targets. However, that risk factor is mitigated by the type of product developed by AEDAS Homes and the fact that its developments boast strategic locations.
1. Availability of financing (customers): the risk that AEDAS Homes customers could find it hard to secure the financing needed to purchase the homes being developed by the Company, potentially impeding delivery of the Company's sales targets going forward and even triggering the cancellation of presales and private sales contracts by the customers faced with such difficulties.
1. Availability of financing for AEDAS Homes: a scarcity of financing opportunities or the existence unpalatable financing terms that would increase its borrowing cost and thereby erode the Company's profitability. More specifically, this risk factor could take the form of the banks imposing harsher terms on the developer loans they extend the Company, which in turn could have an adverse impact on its development margins. Nevertheless, the market is currently characterised by abundant liquidity and low borrowings costs.
1. Share price performance: adverse impacts on the Company's market value due to adverse trends in the securities markets or regulatory changes that make it harder to attract or retain investors. For example, the volatility that has taken hold of the financial markets at times since the onset of the health crisis in March 2020.
1. Liquidity: a shortfall in liquid funds such that it is hard for the Company to meet its payment obligations and commitments on the agreed-upon dates. During the reporting period, the Company took appropriate cash preservation measures so as to be able to continue to meet its financial obligations.
1. Sales: the introduction of misguided sales policies or inadequate sales management with an adverse impact on sales and the completion of contracts. More specifically, this risk factor could materialise as a result of changes in customer preferences and/or needs due to new habits or customs deriving from the pandemic, e.g., working from home.

"The Company has been monitoring the status of the relevant risk factors with the aim of correctly assessing the potential impact of the pandemic on AEDAS Homes' financial performance"

In FY 2020-21, the Company took the following measures with a view to monitoring and managing the risk factors itemised above:

Identification of the adequate monitoring indicators. The indicators currently being monitored by the Company include:
- Macroeconomic indicators (GDP, trend in unemployment, consumer sentiment, etc.)
- Customer satisfaction levels
- Sales levels
- Works delays
Pre-sales cancellations (%)
Level of pre-sales required by the banks in exchange for developer loans (%)
Cybersecurity indicators (password changes, number of insiders patching and updates, etc.)
Worksite accidents
Establishment of tolerance thresholds that reflect the Company's risk appetite in relation to each risk category
Regular monitoring of the status of the risk indicators so identified
Implementation and oversight of action plans designed to mitigate the risk factors

The Company plans to continue to take any and all measures deemed necessary to monitoring and managing the risks deriving from the Covid-19 pandemic with the aim of guaranteeing, to the best of its abilities, delivery of its business targets.

04Non-financial information

4.1 Introduction

AEDAS Homes is firmly convinced that society and large enterprises need to commit to the safeguarding the planet and that the home development industry should be a beacon for sustainability in the short and medium term, actively fostering the transformation of the built environment.

That is why, in 2020, AEDAS Homes formulated its first dedicated Strategic ESG Plan (2021-2023) to help it continue to spearhead the sector, framed by a professional framework of conduct. The ESG Plan sets down the Company's commitments, roadmap, initiatives, KPIs and strategic priorities in the sustainability arena. That roadmap is defined and structured around each of the three dimensions of ESG: environmental, social and governance.

The idea underpinning the plan is to help the Company transcend its purely financial performance by making a corporate commitment to having a positive impact on the communities it affects and raising the profile of all of the initiatives it undertakes and is planning to undertake vis-a-vis its various stakeholders.

In this section of the annual 2020-21 Integrated Report, AEDAS Homes provides, among other things, the information needed to understand the Company's performance, results and situation and the impact of its activities along the environmental, social and governance (ESG) dimensions. AEDAS Homes is committed to creating economic, social and environmental value for each of its stakeholders with the overriding aim of having a net positive impact on the environment and contributing to progress in society.

"AEDAS Homes is committed to creating economic, social and environmental value for each of its stakeholders"

Values

AEDAS Homes' mission is to create places to live in which its customers and their nearest and dearest can feel their happiest. To deliver that purpose of providing wellbeing in a broad sense, AEDAS Homes articulates its everyday activities around five core values or principles.

Excellence We strive unwaveringly to attain excellence by paying attention to the small details.

Integrity

Our conduct must be irreproachable, upstanding, flawless and respectful of our customers, partners, shareholders and employees.

Creativity

We draw on creativity, daring and positive thinking to resolve the challenges we face so as to deliver the best possible results.

Passion

We are passionate about homes and we love to make people happy, which is why we never settle.

Resilience We have the ability to overcome adverse circumstances and adapt to change.

Attributes

Thanks to a clear mission, a unique corporate culture and a solid set of values, AEDAS Homes is able to create a product with clearly recognised attributes. The homes built by AEDAS Homes are:

High quality: materials, structure, fittings, guarantees

Beautiful: exterior and interior design, timeless, durable

Sustainable: energy efficient, certified, industrialised, circular economy

Healthy: sport, leisure, neat and tidy, pure air, clean water

Safe: surveillance, sensors, alarms, access controls

Entertaining: location, common areas, games area, terraces

Accessible: walkways, lifts, ramps, garages

4.2 AEDAS Homes' ESG initiatives in 2020-21

A. Environmental dimension initiatives

In FY 2020-21 AEDAS Homes continued to work hard to become a benchmark for sustainability in home building. The key environmental performance indicators for AEDAS Homes' developments are:

30 Nº of BREEAM projects, 2020

82 Nº of Ecoliving Corners at sales outlets

140 Nº of Green Book projects, 2020

Nº of LCA reports

66 Nº of completed Ecoliving Guides

In order to continue to be a 100% sustainable developer, framed by the ultimate goal of fully decarbonising the sector, AEDAS Homes' initiatives along the environmental dimension in 2020-21 were inspired by the following goals:

AEDAS Homes aspires to be a 100% sustainable developer. To that end it is a World Green Building Council signatory. We are collaborating with that non-profit organisation on the roadmap for attaining two major milestones in 2030 and 2050:
- A reduction in CO2 emissions related with the production of materials (net embodied carbon) and in total emissions throughout a building's useful life (net operational carbon) of 40%. AEDAS Homes' specific commitment is even more ambitious: to cut those emissions by 50%.
- By 2050, the goal is to reduce net embodied carbon and net operational carbon to zero.
The Company is also pursuing measures specifically aimed at improving customer health and reducing its assets' environmental footprint, such as the installation of dual-flow ventilation systems, the use of VOC-free paint and other materials with eco-labels (EPDs) and energy efficiency certifications. The current status of the Company's developments in that respect is as follows:
- Developments completed with AA certification 38% (15 AA-rated developments out of the 40 completed).
- Developments designed with AA certification 40% (31 AA-rated developments out of the 78 in design/construction).
- Developments completed with A or B certification 48% (18 A or B-rated developments out of the 40 completed).
BREEAM (Building Research Establishment Environmental Assessment Methodology) has been the world's leading and most technically advanced method for assessing and certifying construction sustainability since its creation in 1990.

Developments completed with AA certification 38%

40%

Developments designed with AA certification

Developments completed with A or B 48%

certification

AEDAS Homes has had its quality and environmental management systems certified under ISO 9001 and ISO 14001, respectively, since 2017; those certifications cover its housing development activities (design management, building management and sales management). The Company renewed those certificates in 2020; the corresponding audits did not detect any system shortcomings. 2020-21 was additionally marked by the following initiatives: review of policies, processes and procedures and expansion of ISO 9001 and ISO 14001 certification to the work centres in Palma, Granada, Valencia and Zaragoza.

To integrate its environmental targets into the properties it develops, AEDAS Homes uses a variety of white books and manuals, which it updates continually to reflect emerging customer needs:

10-Point Environmental Sustainability Declaration (2020-21), to show by example - measures that are already being implemented in the Company's developments - how homes can be 100% environmentally-friendly.
The Green Book (2019), a crucial guide for the Company, sets down the minimum sustainability rules that AEDAS Homes follows at all its developments, while giving development managers the choice of taking additional measures. It is an open document, as the concept of sustainability is evolving all the time; it is flexible, as it lends itself to tailoring for regional customer preferences; and it is user-friendly.

The Green Book evidences AEDAS Homes' respect for the environment and the planet's natural resources. Indeed, it is not merely a tool for implementing specific measures; it is also a forum through which the entire Company can reflect on how to approach the future of our planet. That is why the Green Book seeks to streamline the use of natural resources, promote innovation and energy efficiency using modern methods of construction (MMC) and foster the use of new technology in development design.

In short, the Green Book is the Company's flagship document and a driver of change in professional practices, with sustainability as its cornerstone. The key steps in the Green Book are: identification of the sustainability measures to be implemented in a given development; installation of the Ecoliving Corner at the point of sale; drafting of the Ecoliving Guide; assessment of the life cycle of the development; and the provision of the training to the development sales team.

Proprietary Ecoliving® sustainability seal (2020), with which the Company seeks to convey the sustainability initiatives embedded in its homes that are good for the environment and for customer health. The seal is the trademark AEDAS Homes uses to evidence compliance with the standards itemised in the Green Book and with minimum standards of sustainability in the following areas: energy; water; materials, waste; health and wellbeing; landscape integration; community, good practices; and economy.

AEDAS Homes' 10 Healthy Homes Principles

01 Functional, flexible spaces Efficient and flexible designs so that homes can evolve in line with their occupants' emerging needs.

02 Air quality. We make

continually ventilated homes to maximise indoor air quality by implementing dual cross-flow ventilation.

03 Water quality. We encourage the use of purification systems to increase the quality of drinking water and water pipes made from non-contaminating materials

04

Temperature comfort. We create humidity, temperature and air movement conditions that are pleasant and apt for the activities undertaken at home.

05 Noise comfort. We establish sound limits to reduce the intrusion of noise from outside and within the building, paying attention to building systems and their acoustic insulation.

06 Light comfort. We foster window designs that make the most of natural light, minimise glare and hot spots, all of which complemented by innovative

artificial lighting solutions.

07 Biophilia. We use natural materials inside our homes and we connect them with the outside world via ecological gardens, patios, porches and terraces, all of which designed to boost personal wellbeing.

08

Accessibility. We defend 'Design for All', and take measures to improve everyone's quality of living by designing around our customers' diversity.

09 Safety. Our homes are fitted with anti-intruder devices, smoke and fire alarms, CO² probes, safe lighting and gas installations and preventative maintenance measures.

10 Common areas. IWe encourage sports and social interaction as a means to physical and psychological wellbeing by providing common areas such as health clubs, pools, social clubs and pedestrian walkways.

The AEDAS Homes seal requires the installation of advanced renewable energy efficiency and production systems such as aerothermal heating; dedicated battery, oil and used clothing recycling points; ecolabel coverings that improve interior air quality; and electric vehicle charging facilities. AEDAS Homes reports on the benefits of the Ecoliving® seal in its socalled Sustainability Specifications Document, which emulates the trade's Building Specifications Document; the former itemises a development's specific sustainability measures and current and future customer advantages and cost savings.

The White Book of Industrialisation (2019), with which AEDAS Homes helps readers that are not property development experts understand the industrialisation of housing development, a building system that is still very nascent in Spain, in a detailed yet user-friendly and didactic manner. That sector-pioneering publication marks another milestone in the Company's efforts to help create traction for this construction system ever since in 2018 it became the first developer to back a large-scale offsite development.

The White Book contains a series of conclusions about industrialisation in the property development context, a ground-breaking movement destined to gain traction. It highlights how industrialised construction can improve quality, delivery times, sustainability, professionalism, responsibility and equality. The publication is the foundation stone on which the entire sector can help to create a new industrialised method of residential development that has the power to shorten execution times, while offering equivalent or higher standards of quality compared to traditional construction methods and the scope for substantial economies of scale in costs.

The White Book of Architecture: this book sets down the common rules for new AEDAS Homes developments. The general objectives this publication aims to attain are:
- Analysis and fine-tuning of the finished product.
- Systematisation of technical aspects, shortening execution times.
- Minimisation of errors, reducing the related costs.
- Generation of brand attributes associated with quality.
- Definition of energy and sustainability certification standards.

The White Book of Architecture is designed to provide a reference manual for general use in all of the Company's developments, albeit flexible enough to accommodate each development's specific sales or regulatory considerations.

B. Social dimension initiatives

Below is a list of the most important initiatives pursued by AEDAS Homes along the social dimension in 2020-21:

Vis-a-vis its employees:

Creation of a 'Talent attraction and management programme', thanks to which the Company reduced its employee turnover ratio to 9% in FY 2020-21.
Elsewhere, the Company ran a high-performer training programme dubbed 'Managers in Training'. That programme, which enters its fourth edition in 2021, provides new graduates with a well-rounded 3-year development plan that provides them with the knowledge needed to pursue careers as Development Managers. The goal is to select the top civil engineering, architecture, industrial engineering, economics and law graduates from the best universities with one to two years' experience in positions related with construction management in order to provide them with the end-to-end training they need to become AEDAS Homes Development Managers.
AEDAS Homes is committed to developing and promoting young talent and shoring up their job prospects. Young professionals are very important ambassadors for the Company: they provide an opportunity to spread its reputation and position itself as a different developer where you can build a career. To that the Company runs a number of initiatives in collaboration with leading universities and business schools. For example, it participated with UMP in Madrid on a work practice programme for university's real estate degree programme, in that way fostering youth and quality employment. For the second year in row, the Company took on one of the degree course students for a 6-month internship, giving her the opportunity to get to know the various departments comprising the Company. Note that two of the students who completed the previous internships have since been hired by AEDAS Homes.

The Company plans to step up its commitment to the next generations in 2021-2023 under the umbrella of its ESG Plan.

AEDAS Homes has already implemented a range of flexible remuneration schemes and company benefits for its employees. Work-life balance is another important aspect of the Company's human resource management effort, to which end it has been introducing specific flexibility measures from the outset. AEDAS Homes received special mention in the Madrid Flexible Company Awards, providing an endorsement for its engagement and practices in this field.
• The Company has also developed an 'Equality Plan' with the ambition of rolling out measures that further foster equal opportunities and boost diversity at the firm. The talent management programmes include an employee monitoring effort that involves regular meetings.
AEDAS Homes places great importance on the health of its employees. It therefore encourages healthy lifestyle values and habits, an effort that takes the form of a number of specific programmes and initiatives. For example, the firm organises a Health Week event every year during which it runs a number of workshops on ergonomics, nutrition and exercise. By upholding that commitment AEDAS Homes also ensures compliance with its requirements under the ISO 45001 occupational health and safety standard.

AEDAS Homes believes in the differentiating value of data as a source of in-depth business intelligence. That is behind the Company's decision to shore up its data area by hiring a director of data and digital transformation to spearhead the integration of artificial intelligence into its ERPs. That effort has translated into the performance of five innovative projects created inhouse:
- Data Warehouse
- Live Mini Tours for PoS salespeople
- Automated videos that rely on AI
- Living House Tours
- Online customer events when major construction milestones are met

Respect for society as a whole:

Signature of the United Nations Global Compact (since 2019) formalises AEDAS Homes' support for the Compact's 10 key human rights, labour rights, environmental protection and anti-corruption commitments. The Company thereby undertakes to respect and enforce those principles and to contribute to delivery of the Sustainable Development Goals (SDGs). Those principles have been embedded into AEDAS Homes' strategy, culture and everyday activities. The Company also gets involved in corporate projects that help contribute to delivery of those objectives.
AEDAS Homes encourages philanthropy on the part of its employees, framed by its corporate principles and values, thereby further contributing to their rounded development. More specifically it organises an Annual Volunteering Plan, which is aligned with its Community Work Plan, under which a range of activities are carried out.
• Collaboration with NGOs, donations and sponsorships. Among other initiatives in 2020, AEDAS Homes collaborated with the makeshift pandemic hospital

put together at the IFEMA Conference Centre to help manage the health crisis caused by COVID-19; the Capacis Foundation; the Prodis Foundation; the AECC Charity Run to raise funds for cancer research; the Business Charity Day (specifically the 'I Have a Message for You' event); it made donations to Payasospital; participated in Charity Webinars with the Madrid Down's Syndrome Association; and sponsored charity events such as the Rainbow Run.

AEDAS Homes promotes, by means of a very intensive sponsorship strategy, health-related activities in the communities on which it has an impact and encourages young people to live healthily. The Central regional unit engaged actively in 2020- 21 with DogPoint, the Majadahonda International Tennis Club, Pozuelo Swimming Club, Pozuelo Basketball Club, Pozuelo Rugby Club, Pozuelo Hockey Club, Valladolid Rugby Club and the Madrid Boadilla International Club. The Eastern/Balearics unit collaborated with the Mallorca Royal Sports Club; the Costa del Sol unit reached out to the Malaga Unicaja Basketball Club and the Marbella Rugby School and sponsored the Rainbow Run; the Andalusian unit sponsors Seville Football Club the Real Betis basketball team and the CB Granada Foundation; Lastly, the Catalonia/Aragon unit supports Ocata Padel Masnou and the Vilanova Sailing Club.

AEDAS Homes' sponsorships by unit

White Book on Accessibility. This is a Manual of safety, comfort and accessibility parameters put together with AEDAS Homes.
Select and Benefits programmes:
- The Select service lets customers personalise multiple aspects of their new homes and make them more comfortable by adding technological devices or enhancing their lighting features.
- • Benefits is another AEDAS Homes customer programme that offers voice-activated control solutions (temperature control, entertainment and cleaning), among other services.

In an attempt to help mitigate the adverse economic consequences the pandemic may have been having on some of its customers, AEDAS Homes offered those so wishing the possibility of deferring their monthly instalments in April and May. Eighteen per cent of the total took the Company up on that offer.

C. Governance dimension initiatives

As for AEDAS Homes' key initiatives along the governance dimension in 2020:

In 2020-21 AEDAS Homes began to integrate sustainability considerations into the Company's various communication plans. That effort is enabling the Company to reinforce its positioning on ESG matters vis-a-vis its various stakeholders, underpinned by targeted communication initiatives. Work began on its ESG Plan commitment in 2020-21.
Communication with shareholders and other stakeholders, 2020-2021 totalled 123 events in relation to the three dimensions addressed in this section:

The key matters addressed last year by dimension included:

Environmental: sustainability initiatives and characteristics of some of the developments (dual-flow ventilation, etc.)
Social: helping young people get on the housing ladder
Governance: appointment of directors, Company earnings, agreements with third parties (BTR), speeches and interviews with the CEO and other executives and, in general, the main developments affecting the Company

All of which was communicated mainly by press releases, participation in conferences and written responses to media enquiries.

Risk management (a detailed account of which is provided in chapter 2 of this report), which includes training on AML matters, the Code of Conduct and other employee-related activities.
AEDAS Homes publishes the universe of corporate policies that define how it conducts its everyday activities, along with the key governing principles. Those policies are:
- Corporate policies and regulations
- Director Remuneration Policy
- Code of Conduct
- Anti-Corruption Policy
- Shareholder and Investor Communication Policy
- Code of Conduct for Third Parties
- Corporate Social Responsibility Policy
- Internal Securities Markets Code of Conduct
- Quality and Environmental Management Policy
- Health and Safety Policy
- Shareholder Remuneration Policy
- Tax Policy
- Board Regulations
- Appointments and Remuneration Committee Regulations
- General Meeting Regulations

All the policies are part of the Entity's Good Governance Code, which has been detailed in the IAGC and the IARC, both forming parts of the Management Report and which can be consulted at www.aedashomes.com

In 2020, AEDAS Homes drew up a piece of in-house analysis on the 'Profile of the AEDAS Homes new home buyer in 2020', which revealed, on the basis of a sample of the more than 2,300 new buyers of an AEDAS Homes product in 2020, some interesting facts:
- The developer's average sales price between January and December 2020 was €338,000, which is exactly the same as in 2019.
- The snapshot of the Company's new customers in 2020: an average age of 43.4 (almost 75% aged 35 or more); they mainly buy as part of a couple (81.8%); and nine out of 10 are Spaniards, thanks to the Company's growing national footprint, with Madridbased customers the most important single category, accounting for 37% of total national demand.

Average sales price

43,4
Client's

average age

Online channel Offline channel

Who buys our homes?

1.1%

5.4%

13,4%

22.7%

Where are they from?

90.9% Spaniards

Overseas buyers 9.1%

Nationality

Under the age of 24 25-34 35-44 45-54 55-64 65 or older Average age: 43/4

Age ¿Cómo compra?

Alone

18.2%

81.8%

As a couple

By country

By region

3.2% 2.5% 2.5% 1.8% 1.1% 0.2% 0.9%

Other France Belgium Austria Russia Italy Germany Venezuela Netherlands Sweden UK

Other Galicia Castilla-La Mancha Navarre Castilla & Leon Balearics Aragon Valencia Catalonia Andalusia Madrid

15,8% 9,3% 6,4% 5,2% 4,7% 4,1% 3,5% 3,5% 3,5%

0 5 10 15 20 25 30 35 40

17.6% 15.8%

16.9%

0 5 10 15 20 25 30 35 40 50

37%

37.5%

24.6%

32.8%

What kind of home are you looking for?

Profile of AEDAS Homes' new home buyers in 2020. Source: AEDAS Homes

50.4%

20.7%

# of bedrooms

# of visits to PoS before pre-sale

18.4%

20%

4 or more

floor with garden

6.4%

Type

Ground Attic

Single family home

10.7% 11%

1.7%

What kind of home are you looking for?

50.1%

93.4

Average usable floor space (m2)

Average terrace/ garden area (m2)

21.8%

Apartment with terrace

Use

56% 44%

Inbound channel

Online channel Offline channel

Apartment

Regular abode

First-time home

Second home Investment

Moving on

6.9%

14.2%

34.1%

44.8%

78.9%

23.5%

3.7%

Decision-making process

31.3%

30.3%

4.3 Strategic thinking: cornerstones of the new ESG Plan

The construction sector is currently responsible for 36% of global energy consumption and 39% of worldwide CO2 emissions, according to the World Green Building Council. For that reason, AEDAS Homes believes that the development sector must reduce its consumption of natural resources and pare its environmental footprint back to zero.

Due to its growing importance in the Spanish development sector, AEDAS Homes has had to reckon with its duty to stakeholders, this marking a milestone in its successful financial track record.

In an effort to transcend its purely financial performance, AEDAS Homes is looking to give shape to, measure and fine-tune the corporate commitment it was already pursuing before setting it down formally in this ESG Plan. The resulting roadmap, which involves taking up the more challenging goal of having an increasingly positive effect in its areas of influence, injects visibility into all of the initiatives already underway at the organisation, while generating certain new stakeholder engagement proposals for implementation in the near future.

The 2021-2023 ESG Plan put together by AEDAS Homes takes the initiatives related with the environmental, social and governance dimensions that the Company was already carrying out and turns them into a more ambitious logbook by aligning them with the United Nations Sustainable Development Goals for 2030.

AEDAS Homes' unique corporate vision is crystallised in the new ESG Plan, which is articulated around eight lines of initiative associated with the environmental, social and governance dimensions. Those lines of initiative in turn translate into 27 specific actions that will enable it to deliver its three clearcut commitments for 2030.

"AEDAS Homes' unique corporate vision is crystallised in the new ESG Plan, which is articulated around eight lines of initiative associated with the environmental, social and governance dimensions"

4.4 2021-2023 ESG Plan

AEDAS Homes' 2021-2023 ESG Plan lends continuity to the numerous initiatives the Company has been championing since its creation. It is designed to provide the formal framework for those efforts. The ESG Plan establishes a series of strategic priorities along the environmental, social and governance dimensions that will enable the Company to respond, by leveraging best practices, to the multiple challenges that need to be embraced by AEDAS Homes and the sector in general in the years to come.

4.4.1 The governance model enshrined in the 2021-2023 ESG Plan

It is important to note that the ESG Plan is being spearheaded, supervised and implemented by AEDAS Homes' Management Committee. To ensure correct implementation and oversight of the Plan, an ESG Committee has been set up; it is made up of the Company's CEO, CFO, Director of Brand and Innovation and Director of Corporate Resources, who in turn is taking on the role of ESG Coordinator.

The ESG Committee will be tasked with reviewing the ESG Plan dashboard. It is also in charge of compiling and analysing a weekly report on milestones and indicators associated with the ESG Plan and for driving and supporting the emanating initiatives, led by the ESG Coordinator.

4.4.2 The 2021-2023 ESG Plan at a glance

The idea underpinning the ESG Plan is to bring together a series of aspects of great importance to AEDAS Homes. Those are:

Making the Company's stakeholders more keenly aware of AEDAS Homes' commitment to sustainability
Assuming the Company's commitments along ESG dimensions, transcending mere financial metrics
Defining the Company's strategic priorities in the ESG arena: the lines of initiative
Setting clear targets and translating them into specific actions to be executed in the long, medium and short term
Establishing an ESG governance model and setting KPIs for the various initiatives

As already noted above, AEDAS Homes' ESG Plan is articulated around the core environmental, social and governance dimensions and is in turn made up of eight lines of initiative and 27 specific action items, as outlined below:

ESG Strategic Plan 2021-2023

Dimensions: Environmental, Social, Governance 3

Lines of initiative 8

specific actions items 27

Governance dimension

Lines of initiative ESG governance and value generation

Action items

1. 1. Defining and approving an ESG policy, including the governance model and stakeholder map.
1. Establishing a specific ESG performance metric for inclusion in the 3-year incentive plan for senior management and key employees.
1. Updating the risk map to integrate ESG risks.
1. Certifying the compliance system under UNE 19601

Lines of initiative Transparency and brand

Action items

1. Preparing an Integrated Annual Report that includes an account of the Company's performance along ESG dimensions from FY 2020-21.
1. Securing and maintaining an ESG rating for the Company that positions it among the top three Spanish developers.
1. Formulating and implementing an internal ESG reporting system.
1. Incorporating the ESG targets and milestones into the Company's various communication plans (external and internal).

Environmental dimension

Lines of initiative Climate change

Action items

Defining a climate change policy that sets specific targets (LCAs completed at 100% of developments).

8 action items

Lines of initiative Healthy and sustainable property developments

Action items

1. Including a section devoted to housing sustainability, efficiency and health matters in the Building Specifications Book.
1. Obtaining an 'A' energy rating for at least 60% of the Company's developments.
1. Following Green Book rules (or those of an equivalent prestigious green building seal) at 100% of the Company's developments.
1. Incorporating waste recycling points and sustainable draining systems at all developments where it is technically and legally feasible.
1. Planting a tree for every home delivered every year The plantation of 1,963 trees is currently being organised.

Lines of initiative Ecoefficient operations

Action items

25% of the units delivered by AEDAS Homes should be fully or partially industrialised.

Social dimension

Lines of initiative Stakeholder engagement excellence and innovation

Action items

1. Adding questions about sustainability perceptions to customer satisfaction surveys (Target: generating responses that evidence that 50% of all customers view AEDAS Homes as a sustainable developer).
1. Fostering and establishing strategic alliances to explore innovation at AEDAS Homes developments.
1. Developing a culture of innovation among employees: innovation competitions with a target participation rate of 20%; and creation of an Innovation Newsletter to be distributed quarterly.

3 lines of initiative, 12 action items

Lines of initiative Commitment to human capital

Action items

1. Developing an ESG training plan for all employees and board members.
1. Positioning AEDAS as a Great Place To Work in the real estate sector.
1. Facilitating the development and job prospects of young talent (already implemented in 2020).
1. Updating the annual variable remuneration scheme applicable to all employees to add an ESG target.
1. Approving a remote working policy (remote working has been a reality at the Company for over two years already).
1. Developing a physical and mental wellbeing programme for employees (already implemented in 2020.

Lines of initiative Social footprint and impact

Action items

1. Designing an annual Community Work Plan to support groups or communities in need.
1. Developing an annual Corporate Volunteering Programme to promote a culture of philanthropy on the part of employees (2 initiatives per year) (already implemented in 2020).
1. Developing a programme for the promotion of and support for local artists in our business communities.

AEDAS Homes' ESG Plan helps deliver the following Sustainable Development Goals (SDGs): Objetivos de Desarrollo Sostenible (ODS):

4.4.3 Non-financial KPIs: measuring the impact of the ESG commitment

Performance indicators are a key aspect which any ESG plan must contemplate if it is to measure the progress made and ensure the integration of the lessons learned along the way. As with the lines of initiative and specific action items, the key performance indicators (KPIs) are similarly structured around the three core dimensions of the 2021-2023 ESG Plan.

4.4.4 Long-term targets: 2030

AEDAS Homes has assumed three ambitious commitments for 2030, one for each ESG dimension, which it believes it can deliver by executing the various action plans contemplated in the 2021-2023 ESG Plan:

Governance dimension: 75% of the Company's stakeholders should view AEDAS Homes as a benchmark developer in the ESG arena.
Environmental dimension: Neutralisation of 50% of greenhouse gas emissions.
Social dimension: A noteworthy position on the Great Place to Work ranking of real estate players in Spain.

5.1 Business performance

The number of developments on the market, coupled with the portfolio of pre-sales, lends strong visibility into the Company's ability to meet its deliveries guidance for FY 2021-22, FY 2022-23 and FY 2023-24. In FY 2020-21, AEDAS Homes topped its guidance for the delivery of 1,925 units, handing over the keys to 1,963 homes.

For FY 2021-22, AEDAS Homes has already sold 72% of the delivery target, with 70% of those homes under construction and more than 70% complete and 30% already finished. As for the deliveries targeted for FY 2022- 23, the Company has 75% under construction and 3% are already finished. 40% of the FY 2022-23 target has already been sold: 23% are under sale agreement (€202m) and 16% are pre-sales (€169m). Lastly, with respect to FY 2023-24, 14% of the targeted deliveries are under construction and 13% have been sold.

Pre-sales during the year, meanwhile, amounted to 3,428 units, putting the total sold since the start of operations at 7,586 homes.

Based on that sales volume, and deducting the units delivered by 31 March 2021, the pipeline at the reporting date stood at 2,480 homes worth €693m, implying very healthy visibility into revenue for the coming years.

Launches

Sales

Construction

Homes under development

Homes are considered under development from when they enter the design phase until their delivery.

At 31 March 2021, of the 15,484 homes comprising its land bank, the Company had a total of 9,746 homes under development, year-on-year growth of 2%.

The breakdown of that development pipeline of 9,746 homes by phase of development is as follows: 28% at the design stage; 17% in the marketing phase; 47% under construction; 2% finished and pending occupancy permits and 6% completed with occupancy permits. Note that 44% of the homes on the market have already been sold.

The reduction in the number of units at the design phase is attributable to the conservative decision-making approach taken at the start of the year due to the uncertainty created by the pandemic.

Active units classification

Launches

Housing units are considered launched once marketing is underway, i.e., they are classified as 'launched' subsequent to the design phase, once they are put up for sale.

In FY 2020-21, the Company launched 46 developments encompassing a total of 3,031 homes, a figure it deems to be its long-term run rate. Deducting the units delivered to date, the Company has a total of 9,746 homes on the market. That marks growth of 31% in number of projects and of 30% in units launched with respect to the respective prior-year figures.

That performance came about despite the postponement of new launches as a result of the lockdown measures taken to halt transmission of Covid-19, triggering the temporary closure of the Company's sales offices from mid-March until 6 May 2020.

In the wake of those postponements, launches recovered steadily throughout the remainder of the year, with momentum gathering pace. Current forecasts point for the launch of 1,155 units in the first quarter of FY 2021-22.

The GDV of the 3,031 units launched in FY 2020-21 is €824m, implying an average sales price per unit of €272,000.

As for the breakdown of those 3,031 launches by region, 1,178 units (39% of the total) were launched in the Central/ Northern region; 525 units (17%) were launched in Catalonia/Aragon; 958 units (32%) were launched in the Eastern/ Balearics region; 346 units (11%) were launched in Andalusia/Canaries; and 24 homes (1%) were launched on the Costa del Sol.

At 31 March 2021, the number of homes on the market (a figure that excludes the homes already delivered) totalled 6,693, 51% of which have been pre-sold.

As for the trend in other key business metrics, the number of leads sustained considerable growth (+174%), with conversion of those leads into in-person visits registering even stronger momentum (+249%), topping the levels recorded by the Company pre-COVID. In the current scenario, it is worth highlighting the significant benefits afforded by the Live Virtual Tours platform, which has facilitated the growth in the number of leads and visits and contributed to the delivery of very positive conversion ratios. At the lead conversion rate being observed in recent months, the Company feels it has hit its annual sales run rate of around 3,000 units.

Geographic breakdown of houses on the market

Sales

The sale of a unit begins with execution of a presale agreement. Once the Company has a building permit for a pre-sold house, the buyer is asked to execute a sale contract and provide a down payment of 10% of the total price; buyers continue to pay instalments of 10% at regular intervals until the building work is complete. Lastly, when the building work is complete and the certificate of occupancy has been obtained, the customer is asked to sign the deed of purchase, upon which keys to the house are delivered immediately.

Over the course of FY 2020-21 the Company pre-sold 3,428 homes in total, year-on-year growth of 101% (vs. April 2019 - March 2020), when pre-sales amounted to 1,703 units. The value of the units pre-sold in FY 2020-21 is €989.6m, implying an average sales price of €288,681 per unit. That average price was below the level the Company tends to report due to the significant contribution to sales of build-to-rent transactions, for which the

average price is well below that obtained in the core build-to-sell business, due to the specifications of the developments earmarked to the rental market (higher number of homes and lower average units size; smaller floor area devoted to shared facilities and amenities, etc.).

The monthly sales breakdown shows that the Company posted record sales volumes in February and March and highlights the remarkable momentum built up during the reporting period. The significant growth experienced in recent months is attributable to sales in the build-to-rent segment, although the build-to-sell segment has also sustained exceptional growth. Note that on account of the lockdown, no new large-scale developments took place until October, which is when sales began to recover with intensity.

Monthly sales breakdown

In FY 2020-21, the Company delivered a total of 1,963 homes worth €667.5m, implying an average sales price of €340,000/unit.

As of 31 March 2021, the Company had sold an accumulated (in 2017, 2018, 2019, FY20 {1 January to 31 March} and FY 2020-21) 6,638 units representing sales revenue of €2.09bn. Of that total, 3,210 units worth €1.1bn, had been delivered to their buyers. As a result, the pre-sales pipeline at 31 March 2021 amounted to 3,428 units worth €989.6m, 63% of which already under sale agreement.

"The pre-sales pipeline at at the end of the period FY/202020-21 amounted to 3,428 units worth €989.6m"

Building permits

Building permits are awarded by the municipal authorities. Permit applications include the architectural plans which must necessarily comply with municipal planning and zoning requirements. Municipal authorities are obliged to grant building permits to the extent the plans meet those requirements. The permitting period depends on each authority's responsiveness.

In FY 2020-21, the Company obtained a total of 2,265 building permits, down 16% from the 2,697 obtained the comparable previous year. That means that the Company has so far obtained building permits for 9,249 homes in total, with a further 2,579 in process. Generally speaking, the authorities have continued to work at a reasonable pace in light of the circumstances, although approval lag times have lengthened in some municipalities.

Ebuilding permits granting evolution

Permits request maturity

Construction

The Company began to build 2,599 homes in FY 2020-21 and obtained work completion certificates for 2,640 homes. The fact that new starts lagged work completion certifications a little reflects the capital preservation policy put in place by the Company in response to the pandemic, specifically the decision not to start any works without external financing having been put in place, as a result of which the launch of construction work at some developments was delayed. However,

following the improvement observed during the second half of the year, the Company stepped up the launch process and the start of new works and has since reiterated all of its Business Plan targets and medium and long-term guidance. At 31 March 2021, the Company had a total of 4,586 units under construction, down 1% from the 4,627 homes that were under construction 12 months earlier.

As for the deliveries guidance for FY 2021-22, framed by the above-mentioned principle of prudence, the start of construction work at certain developments was delayed until this year; at present 70% of target deliveries are under construction and more than 70% complete and 30% are already finished. In terms of the guidance for FY 2022-23, 75% of the targeted houses are under construction (and at least 38% complete) and 3% are complete.

Units under construction end of period

Investments

AEDAS Homes remains one of the most active purchasers of land in Spain. The investments made in FY 2020-21 are designed to enable the Company to meet the targets set in its 2017-2023 Business Plan with respect to new development launches. Following an initial pause in investments during the COVID-induced lockdown, the pace of investing recovered sharply throughout the year.

Specifically, in FY 2020-21, the Company acquired sites for 24 new housing developments. That land presents scope for the development of 1,945 housing units.

FY 2020-21 investments amounted to €132.3m, which includes the cost of acquiring the properties, including the inherent transaction costs, and the capital expenditure needed to bring all of the sites to RTB status. In sum, the average acquisition cost per housing unit once all of the land is brought to RTB permitting status is estimated at €68,020/unit.

In addition, under the scope of the Project Land agreement, the Company acquired land in Madrid for the development of 52 homes for €2.4m, i.e., an average acquisition cost of €46,000/unit. The acquisition of sites under the Project Land agreement takes the form of minority equity investments (of between 10% and 25%) in holding companies whose core assets are sites that require varying degrees of zoning until they are ready for development.

The Company also sold one site, with development potential of 135 units, for €4.3m during the reporting period.

The Company's GAV stood at €1.91bn at 31 March 2021, down 11% from the last appraisal, dated September 2020. The Group's property portfolio was appraised by Savills Aguirre Newman Valoraciones y Tasaciones, S.A.

Trend in land bank

5.2 Statement of profit or loss

The FY 2020-21 statement of profit or loss clearly evidences the ramp-up phase in which the Company is immersed: revenue increased to €671.9m; €667.6m came from home sales and €4.3m from land sales. The gross margin narrowed by 29 basis points compared to the previous financial year (January - March 2020).

Direct expenses amounted to €28.8m, shaped notably by the postponement of new launches as a result of the lockdown measures taken to halt transmission of COVID-19. It is important to note that this heading recognises the marketing costs associated with all of the developments launched by the year-end close irrespective of whether or not they were actually delivered during the reporting period.

General expenses totalled €29.4m, shaped by the recognition of the third cycle of the LTIP and consultancy services.

Other income (net) increased to €2.5m, due mainly to income recognised upon the termination of private sale agreements and the reimbursement of costs related with build-to-rent projects. The EBITDA margin widened a considerable 870 basis points by comparison with FY 2020.

The net finance cost increased by 223% to €14.2m, reflecting the cost of AEDAS Homes' corporate financing and the financial cost of finished developments.

As a result of the impact of the health crisis, the Company recognised inventory impairment losses of €2.8m.

In all, the Company reported a net profit of €85.1m in FY 2020-21.

"The EBITDA margin widened a considerable 870 basis points by comparison with FY 2020"

Statement of profit or loss:

				Change
	FY 2020-21	Jan-Mar 20208 20204	€	%
Revenue - property development	667.6	667.6	597.6	854%
Revenue - land	4.3		4.3	-
Revenue	671.9	70.0	601.9	860%
Cost of goods sold	(482.9)	(50.1)	(432.8)	864%
Gross profit	188.9	597.6	169	849%
Gross margin, %	28.1%	28.4%	-	(29bp)
Sales and marketing costs	(20.4)	854%	(15.9)	353%
Other operating expenses	(8.4)	(0.9)	(7.5)	833%
Net Margin	160.2	14.5	145.7	1,005%
Net Margin, %	23.8%	20.7%	-	330bp
Overhead	(29.4)	(6.8)	(22.6)	332%
Other income and expenses	2.5	0.3	2.2	733%
EBITDA	133.2	7.9	125.3	1,586%
EBITDA margin, %	19.8%	11.3%	-	870bp
Depreciation and impairment charges	(5.4)	(0.6)	(4.8)	800%
Net finance cost	(14.2)	(4.4)	(9.8)	223%
Profit before tax	113.5	3.0	110.5	3,683%
Income tax	(28.5)	0.3	(28.8)	-9,600%
Profit for the period	85.1	3.3	81.8	2,479%
Net profit margin, %	12.7%	4.7%	-	800bp
Non-controlling interests	(0)	0.2	(0.2)	-100%
Profit attributable to equity holders of the parent	85.1	3.2	81.9	2,559%

8 The three-month financial year ended 31 March 2020

5.3 Balance sheet and cash flow statement

Balance sheet

At 31 March 2021, the health of the Company's capital structure stands out: the LTV ratio stood at 12% while cash and cash equivalents amounted to €186.1m.

It is also worth highlighting the growth of 7% in current assets in FY 2020-21 to €1.65bn, driven mainly by growth in inventories of €50.6m (+4%), reflecting the trend in finished developments since 31 March 2020 (year-end 2020), to €1.4bn.

The growth in inventories, of €50.6m, was financed primarily by the following balance sheet items, among others:

Liabilities that mature in the long term:

€85.9m was financed by noncurrent borrowings, which increased from €2.5m at year-end 2020 to €88.4m.

€30.1m came from developer loans, the drawdown of which increased to €165m due to construction milestones (€49m corresponds to finished product pending delivery).

Liabilities that mature in the short term:

€111.8m related to the reclassification of borrowings from non-current to current.

€41.9m originated from trade and other accounts payable, which increased from €118.2m at 31 March 2020 to €160.2m at 31 March 2021.

€29.8m originated from customer down payments, which decreased from €161.7m at year-end 2020 to €131.8m, due to the growth in sales and launches.

On the asset side

In terms of the breakdown in inventories: the overall increase is the net result of a decline in land of 6% to €582.4m due to the transfer of sites to construction in progress, reflecting newly started construction work, net of new land purchases; a decrease in construction in progress of 7% to €581.0m shaped by the start of new construction work net of the completion of other projects; an increase in finished product of 166% to €213.7m due to deliveries during the period net of the recognition of newly completed housing units (174 units pending occupancy permits and 636 already with such permits); and a decrease of 11% in advances to suppliers to €17.3m, a heading which recognises the amounts paid for land purchase rights and prepayments made in the course of the execution of certain developments.

The inventories balance does not reflect unrealised gains of €512m implied by the most recent asset appraisal conducted by Savills Aguirre Newman Valoraciones y Tasaciones, S.A. That appraisal implied the recognition of additional impairment losses of €2.8m to put the accumulated balance at €4.4m.

As a result, at 31 March 2021, inventories amounted to €1.4bn, broken down between land (42%); construction in progress (42%); finished product (15%); and advances to suppliers (1%).

The biggest movement was an increase in trade accounts receivable of €6.4m from 31 March 2020 to €46m at 31 March 2021.

It is worth highlighting the Company's liquidity position, which stood at €186.1m at the end of FY 2020-21, of which €123.5m was unrestricted, up 46% from 31 March 2020, providing another good indication of the Company's healthy financial performance.

Equity accounts

At 31 March 2021, the Company carried own shares representing 6.93% of the total at €65m. The directors plan to submit a motion for the cancellation of shares representing 2.42% of the total at the upcoming Annual General Meeting.

On 7 May 2021, the Board of Directors resolved to submit a motion for the payment of a dividend of €1.40 per share from FY 2020/2021 earnings:

o an ordinary dividend of €0.90 per share; and
o a special dividend of €0.50 per share.

Balance sheet

			Change
(€m)	31 March 2021	31 March 2020	€	%
Other fixed assets	18.9	15.2	3.7	24.3%
Deferred tax assets	13.8	23.0	(9.2)	-40.0%
Non-current assets	32.8	38.2	(5.4)	-14.1%
Inventories	1,394.5	1,343.9	50.6	3.8%
Trade receivables	46.0	39.6	6.4	16.2%
Other current assets	27.6	27.1	0.5	1.8%
Unrestricted cash	123.5	86.1	37.4	43.4%
Restricted cash	62.6	50.1	12.5	25.0%
Current assets	1,654.2	1,546.8	107.4	6.9%
Total assets	1,687.0	1,585.0	102.0	6.4%
Equity	994.3	936	58.3	6.2%
Of which: own shares	(65.1)	(36.9)	(28.2)	76.4%
Non-current borrowings	88.4	2.5	85.9	3.436.0%
Other non-current liabilities	1.1	1.4	(0.3)	-21.4%
Non-current liabilities	89.5	4.0	85.5	2.137.5%
Developer loans due in the long term	165	134.9	30.1	22.3%
Current borrowings	99.5	209.0	(109.5)	-52.4%
Trade payables	160.2	118.2	42.0	35.5%
Customer prepayments	131.8	161.7	(29.9)	-18.5%
Other current liabilities	46.7	21.3	25.4	119.2%
Current liabilities	603.1	645.1	(42.0)	-6.5%
Total equity and liabilities	1.687.0	1,585.0	102.0	6.4%

Statement of cash flows

Cash and cash equivalents increased by €50m from €136.1m at 31 March 2020 to €186.1m at 31 March 2021.

That movement is attributable to net cash outflows from operating activities of €54.5m, net cash outflows from investing activities of €4.3m and net proceeds from financing activities of €108.9m.

The net cash used in operating activities was mainly driven by the movement in inventories. The €50.6m increase in inventories comprised a 6% decrease in land to €582.4m due to the transfer of sites to construction in progress, reflecting the start-up of new building work, which more than offset new site purchases; an increase in construction in progress of 7% to €581.0m, shaped by the start of new construction work net of the completion of other projects; an increase in finished product of 166% to €213.7m, due to deliveries during the reporting period, more than offset by the recognition of newly completed housing units; a decrease of 11% in advances to suppliers - the heading which recognises the amounts paid for land purchase rights and prepayments made in the course of the execution of certain developments - to €17.3m. In addition, trade and other receivables increased by €6.5m, while trade and other payables increased by €42.0m. The net cash used in investing activities amounted to €4.3m.

As for the cash inflows from corporate financing activities, it is worth highlighting the issuance by AEDAS Homes of €58.8m of new commercial paper in FY 2020-21, of which €34.1m was secured by the Spanish state under the Covid guarantee scheme. As a result of increased issuance under the Company's listed commercial paper programme, the total outstanding increased by €9.8m over the course of the year to end March 2021 at €56.7m. In addition, the Company arranged four bilateral loans with differing structures totalling €38m, three of which availing of the state loan guarantee scheme. Lastly, note that the Company refinanced its €150m syndicated loan during the year, extending it by two years on similar terms as the refinanced facility, and with all of the initial banks renewing. By 31 March 2021, the Company had repaid €50m of that facility, leaving €100m outstanding.

As for its mortgaged developer loans, at 31 March 2021, the Company had arranged 75 loans with a total limit of €540.2m. Of that limit, the Company had drawn down (face value) €168.1m by the reporting date, up €39.8m from year-end 2020 (€129.6m).

As regards financing cash outflows, note that the Company invested €24.3m to buy back own shares in the course of FY 2020-21.

(€m)	FY 2020-21	Jan - Mar 20209	Change
Group profit before tax	113.5	3.0	110.5
Adjustments for finance income/costs	14.2	4.3	9.9
Net finance cost	27.1	(4.5)	31.6
Borrowing costs capitalised in inventories	(12.5)	(1.6)	(10.9)
Change in fair value of financial instruments and exchange differences	(0.4)	1.4	(1.8)
Share of profit/(loss) of associates	0.4	0.0	0.4
Assets impairment losses (net)	2.9	-	2.9
EBIT	128.2	7.4	120.8
Depreciation/amortisation and impairment charges	4.9	0.5	4.4
EBITDA	133.2	7.9	125.3
Other adjustments to profit	(22.5)	0.3	(22.8)
Other cash from/used in operating activities	(13.7)	(2.2)	(11.5)
Change in working capital excluding land purchases/sales	(88.4)	(49.4)	(39.0)
Change in working capital derived from land purchases/sales	(63.2)	(15.3)	(47.9)
(A) Net cash used in operating activities	(54.5)	(58.6)	4.1
Investment in group companies and associates	(3.2)	(0.0)	(3.2)
Investment in other PP&E and intangible assets	(1.1)	(0.1)	(1.0)
(B) Net cash used in investing activities	(4.3)	(0.2)	(4.1)
Repurchase/(sale) of own shares	(24.3)	(6.3)	(18.0)
Issuance and repayment of borrowings	133.1	52.5	80.6
(C) Net cash from financing activities	108.9	46.2	62.7
Net increase/(decrease) in cash and cash equivalents (A+B+C)	50.1	(12.6)	62.7

9 The three-month financial year ended 31 March 2020

5.4 Borrowings, liquidity and capital resources

At 31 March 2021, the Company's gross borrowings stood at €352m: €169.4m of bank loans (mortgages used to finance work in progress; note that €49m finances developments that are ready for delivery); €186.1m of corporate debt (€100m from the syndicated loan; €54.7m of commercial paper; and €31.5m of other corporate debt). Gross borrowings increased by 2% between 31 March 2020 and 31 March 2021.

Net debt decreased by €36m from 31 March 2020 to €229m (down 14%), due mainly due to the €30.5m reduction of corporate debt (as developer loans increased by €39.8m). As a result, the Company's LTV ratio stood at 12% and its LTC ratio stood at 12% at year-end.

On 1 July 2020, the Company arranged a new €150m corporate financing facility, which refinanced that arranged on 6 August 2018. The new financing has been structured into three agreements: a syndicated loan in the amount of €134.2m and two secured loans totalling €15.8m (secured by the state, specifically, the official credit institute, or ICO). The new loans are repayable in five instalments

between 31 December 2020 and 6 August 2022; €50m had already been repaid by 31 March 2021, leaving the balance drawn down at €100m.

In addition, in FY 2020-21, the Company arranged four credit lines to complement its developer loans. Three of the loans, arranged with different banks that have already provided developer loans, have state-backed (ICO) guarantees. The total drawn down at year-end stood at €31.5m. They all have grace periods of at least 6 months and terms of maturity of between 15 and 36 months.

In terms of the debt maturity profile, it is worth noting that the Company's current liabilities are made up of €165m of developer loans that mature in the long term and €99.5m of loans that mature in the short term, while non-current liabilities amount to €88.4m. As a result, 72% of the Company's total borrowings fall due in the long term.

The face value of the limit on the borrowings arranged by the Company stands at €680.6m, €492.4m of which consists of developer loans. It is worth highlighting AEDAS Homes' financial muscle: the limit on the tranche of the Company's developer loans associated with its land bank increased during the year.

As a result, the Company's net debt at 31 March 2021 stood at €229m, down 14% from 31 March 2020 (€260m).

The snapshot of AEDAS Homes' borrowings reveals a diversified mix of sources of financing and lenders, so that its financial risk is not concentrated.

At the March 2021 close, the Company's average borrowing cost was 2.8%. If the Company were to draw down the entire limit, its borrowing cost would be 3.1% and the average cost of its developer loans would be 2.5%.

Trend in net debt

(€m)	April 20 - Mar 21	Jan - Mar 20	Change
(A) Secured debt	169.4	139.1	30.3
(B) Corporate debt	186.2	216.4	(30.2)
Syndicated loan	100.0	150.0	(50.0)
Commercial paper (MARF-listed)	54.7	62.1	(7.4)
Other corporate debt	31.5	4.3	27.2
(C) Amortised cost effect	(3.2)	(4.7)	1.5
Gross debt (A + B + C)	352.3	350.8	1.5
(D) Total cash	123.5	86.1	37.5
Net debt before prepayments (A + B - C)	228.8	264.7	(35.9)
(E) Cash tied to development prepayments	62.6	50.1	12.6
TOTAL CASH (C + D)	186.1	136.1	50.1

Lender bank	Arranged	Drawn
	Developer mortgage loans
Cajasur	9.40	1.45
Sabadell	47.27	14.38
BBVA	71.82	25.19
Abanca	49.60	5.62
La Caixa	144.60	65.52
Santander	122.33	28.42
Kutxabank	16	9.87
Targobank	36.10	10.75
Bankinter	8.02	2.63
Ibercaja	35.10	4.32
Total	540.24	168.15

Dividend policy

AEDAS Homes has articulated its shareholder remuneration policy around four cornerstones: (i) net profit; (ii) visibility into cash generation; (iii) leverage metrics and the liquidity needed to fund organic growth; and (iv) any other strategic transactions that could come along in the future. The Company plans to give shareholders the choice of receiving their dividends in cash or shares.

The dividend payment motions submitted by the Board of Directors for approval at the Annual General Meeting are framed by applicable legislation and corporate governance practices, including benchmark international corporate governance recommendations on shareholder remuneration.

Against that backdrop, on 07 May 2021, the Company's Board of Directors agreed to:

Submit a motion at each Annual General Meeting for the distribution of an ordinary dividend equivalent to 50% of net profit until FY 2023-24, inclusive.
Contemplate special dividend payments to be approved ad hoc as a function of the cash generated by land sales and the Company's sales performance during the year.
Cap the distribution of dividends at a leverage ratio of 20% of LTV (net debt over gross asset value).
Submit a motion for the payment of a dividend of €1.40 per share from 2020/2021 earnings:
- an ordinary dividend of €0.90 share and;
- special dividend of €0.50 per share.

The Board of Directors reserves the right to modify its shareholder remuneration policy in the event of material developments that could affect the Company's earnings performance or financing needs, making it necessary to discontinue it; those events could include significant changes in macroeconomic conditions or a decision to undertake a significant transaction or acquisition that could impact the capacity for remuneration.

Own shares

The number of shares bought back between the start of the repurchasing effort on 7 August 2019 and 31 March 2021 totals 3,325,249, which is equivalent to 6.93% of the company's capital; those shares were bought back for €65,153,274.8010, i.e., at an average price of €19.59/share.

The number of shares bought back in 2020- 21 was 1,504,578, which is equivalent to 3.14% of capital; those shares were bought

for €28,237,271 , i.e., at an average price of €18.76/share. Thirty per cent of the shares were bought back under the scope of the Repurchase Programme and the remaining 70% pursuant to block trades.

The breakdown of the Company's treasury stock at 31 March 2021:

10 Includes fees and commissions.

Total shares bought back in 2020-21	Shares	% of capital
Discretionary Programme	148,724	0.31%
Block trades	2,016,475	4.20%
Repurchase Programme	1,160,050	2.42%
TOTAL	3,325,249	6.93%

Note that the Company had two equity swap agreements with Goldman Sachs during the reporting period: one covering 236,406 shares (settled on 5 October 2020) and the other covering 115,829 shares (settled on 15 December 2020).

Breakdown of own shares by type of acquisition

Average supplier payment term

Suppliers were paid at 61 days on average in 2020-21. That balance exceeds the legal limit by one day and is primarily attributable to a one-off delay in receiving progress billings and, by extension, a delay in administrative dealings with the banks. Normalisation of business activities will naturally drive the Company's payment period back under the 60 day threshold.

Average supplier payment term	2020-21	2020 (1 Jan - 31 Mar)	2019	2018
Days
Average supplier payment term	61.45	46.39	56.01	43.77
Paid transactions ratio	63.28	57.46	58.64	46.38
Outstanding transactions ratio	48.71	32.18	39.06	22.04

Events after the reporting period

At April 14, 2021, the Company had made early repayment of corporate credit facilities for a nominal amount of EUR 10 million.
On April 20, 2021, the AEDAS Homes Board of Directors approved the strategic sustainability plan. The ESG Strategic Plan for 2021- 2023 prepared by AEDAS Homes continues the path of previous CSR Plans, becoming a more ambitious roadmap by aligning with the Sustainable Development Goals set by the United Nations (UN) for 2030.

On April 26, 2021, the company SPV Reoco 1, S.L.U. changed its name to Aedas Homes Opco, S.L.U. in a notarised document.
During the month of April 2021, the Company has amortized developer loans for an amount of 11.4 million euros, of which 5.1 million euros correspond to subrogations and the rest to cancellations. These cancelations represent a risk reduction of 18 million euros.
At May 4, 2021, the total treasury stock held by AEDAS Homes at close of market was 3,360,253 securities representing 7.01% of the capital acquired at an average price of 19.60 €/share. The total number of securities acquired through Discretionary Management was 148,724 securities representing 0.31% of the capital at an average price of 20.31€/share; the total number of securities acquired through the Buyback Programme was 1,195,054 securities representing 2.49% of the capital at an average price of 19.92€/share and the total number of securities acquired in the block market was 2,016,475 securities, representing 4.20% of the capital at an average price of 19.36 €/share.
On May 7, 2021, the Board of Directors of AEDAS Homes proposed a policy of remunerating its shareholders based on four pillars: (i) volume of net income generated; (ii) visibility on cash generation; (iii) debt ratios and the liquidity necessary to maintain organic growth; and (iv) any other strategic operation that may be considered in the future.

On this basis, the Parent Company's Board of Directors, at its meeting held on May 7, 2021, resolved to:

Submit an annual proposal to the General Meeting of Shareholders that ordinary dividends equivalent to 50% of the net profit should be distributed up to and including the 2023/24 financial year.
Consider the possibility of supplementing ordinary dividends with extraordinary dividends that can be approved on the basis of the cash generated by sales of land during the year and the level of the Company's commercial performance.
Limit dividend distributions to an indebtedness of 20% LTV (loan-to-value of assets).
Propose the distribution of a dividend of €1.40 per share payable from the profit for the 2020/2021 financial year:
- ordinary dividend of €0.90 per share; and
- extraordinary dividend of €0.50 per share.

The Parent Company envisages a form of payment that can consist either of a cash payment or treasury shares.

6.1 Share price performance

AEDAS Homes' share price started 2020 at €17.50. Its share price peaked at €23 on 5 January 2020 and recorded its low for the year - of €12.12 - on 20 May. At the end of its fiscal year - 31 March 2021 - its shares were trading at €22.4, implying a discount to the NAV reported as of that same date (€33.68 per share) of 33.5%. As a result, the share price gained 28% in FY 2020-21, albeit fluctuating significantly.

Trading liquidity increased considerably during the second half of FY 2021-22 compared to the first half, with the equivalent of 10% of total outstanding shares trading hands during the reporting period. The drop in liquidity is attributable to the reduction in the size of the free float due to the buyback of own shares and the higher interest taken by the Company's core shareholder, Castlelake.

6.2 CNMV filings

Publication date	Price-sensitive information (PSI) Financial/corp. information	Type	Summary content	Registration NO
6/04/2020	ORI	Buy-back programmes, stabilisation and treasury stock	31 March - 6 April 2020 buy back programme report	1418
13/04/2020	ORI	Buy-back programmes, stabilisation and treasury stock	7-13 April 2020 buy back programme report	1531
20/04/2020	ORI	Buy-back programmes, stabilisation and treasury stock	14-20 April 2020 buy back programme report	1654
27/04/2020	ORI	Buy-back programmes, stabilisation and treasury stock	21-27 April 2020 buy back programme report	1784
04/05/2020	ORI	Buy-back programmes, stabilisation and treasury stock	28 April - 4 May 2020 buy back programme report	1974
11/05/2020	ORI	Buy-back programmes, stabilisation and treasury stock	5-11 May 2020 buy back programme report	2162
14/05/2020	ORI	Other relevant information	2020 Results for the three months ended 31 March 2020, webcast announcement	2251
18/05/2020	ORI	Buy-back programmes, stabilisation and treasury stock	12-18 May 2020 buy back programme report	2290
20/05/2020	ORI	On business and financial situation	2020 (1 Jan-31 Mar) Results Presentation	2333
20/05/2020	ORI	Announcement of general shareholders' meeting	Second 2020 Ordinary General Shareholders Meeting announcement	2334

Publication date	Price-sensitive information (PSI) Financial/corp. information	Type	Summary content	Registration NO
21/05/2020	Interim financial information for listed companies	Half-yearly financial reports and audit reports/limited audit review	Submission of financial information for fiscal 2020 (1 Jan. - 31 Mar.)	2348
21/05/2020	Annual Corp. Gov. report	Annual Corp. Gov. report	Annual Corporate Governance Report for the year ended 31 March 2020	2020023511
21/05/2020	Director remuneration report	Director remuneration report	Annual Report on Director Remuneration for the year ended 31 March 2020	2020023510
25/05/2020	ORI	Buy-back programmes, stabilisation and treasury stock	19-25 May 2020 buy back programme report	2414
01/06/2020	ORI	Buy-back programmes, stabilisation and treasury stock	26 May - 1 June 2020 buy back programme report	2516
08/06/2020	ORI	Buy-back programmes, stabilisation and treasury stock	2-8 June 2020 buy back programme report	2617
15/06/2020	ORI	On financial instruments	2020 AEDAS Homes commercial paper programme	2749
16/06/2020	ORI	Buy-back programmes, stabilisation and treasury stock	9-15 June 2020 buy back programme report	2814
22/06/2020	ORI	Buy-back programmes, stabilisation and treasury stock	16-22 June 2020 buy back programme report	2940
23/06/2020	ORI	Announcement of general shareholders' meeting	Resolutions adopted Second 2020 General Shareholders' Meeting	2966
29/06/2020	ORI	Buy-back programmes, stabilisation and treasury stock	23-29 June 2020 buy back programme report	3068
06/07/2020	ORI	Other relevant information	€150m new term loan facility agreement	3209
06/07/2020	ORI	Buy-back programmes, stabilisation and treasury stock	30 June - 6 July 2020 buy back programme report	3242

Publication date	Price-sensitive information (PSI) Financial/corp. information	Type	Summary content	Registration NO
13/07/2020	ORI	Buy-back programmes, stabilisation and treasury stock	7-13 July 2020 buy back programme repor	3382
20/07/2020	ORI	Buy-back programmes, stabilisation and treasury stock	14-20 July 2020 buy back programme report	3493
22/07/2020	ORI	Announcements of public presentations or meetings	Q1 2020-21 Results webcast announcement	3549
27/07/2020	ORI	Buy-back programmes, stabilisation and treasury stock	21-27 July 2020 buy back programme report	3642
29/07/2020	Interim financial information for listed companies	Interim financial reports	Submission of interim management report for the first quarterof fiscal 2021	3703
29/07/2020	ORI	On business and financial situation	1Q 2020-21 Results presentation	3704
03/08/2020	ORI	Buy-back programmes, stabilisation and treasury stock	28 July - 3 August 2020 buy back programme report	3940
03/08/2020	ORI	Other relevant information	PKF Incorporation	3941
04/08/2020	ORI	Other relevant information	Subscription of the framework agreement to join the MARF ICO COVID commercial paper guarantee programme	3956
10/08/2020	ORI	Buy-back programmes, stabilisation and treasury stock	4-10 August 2020 buy back programme report	4041

Publication date	Price-sensitive information (PSI) Financial/corp. information	Type	Summary content	Registration NO
17/08/2020	ORI	Buy-back programmes, stabilisation and treasury stock	11 - 17 August buy back programme and block trade report	4088
24/08/2020	ORI	Buy-back programmes, stabilisation and treasury stock	18-24 August 2020 buy back programme report	4114
31/08/2020	ORI	Buy-back programmes, stabilisation and treasury stock	25-31 August 2020 buy back programme report	4159
07/09/2020	ORI	On financial instruments	BBB rating State-guaranteed commercial paper note program	4257
07/09/2020	ORI	Buy-back programmes, stabilisation and treasury stock	1-7 September 2020 buy back programme report	4260
11/09/2020	ORI	General	Submission of the general meeting regulations	4368
14/09/2020	ORI	Buy-back programmes, stabilisation and treasury stock	8-14 September 2020 buy back programme report	4416
21/09/2020	ORI	Buy-back programmes, stabilisation and treasury stock	15-21 September 2020 buy back programme and block trade report	4548
22/09/2020	Major holdings and own shares	Own share notices filed	New additional 1% threshold	2020099013
28/09/2020	ORI	Buy-back programmes, stabilisation and treasury stock	22-28 September 2020 buy back programme and block trade report	4670

CNMV filings

Publication date	Price-sensitive information (PSI) Financial/corp. information	Type	Summary content	Registration NO
05/10/2020	ORI	Buy-back programmes, stabilisation and treasury stock	29 September - 5 October 2020 buy back programme report	4858
12/10/2020	ORI	Buy-back programmes, stabilisation and treasury stock	6-12 October 2020 buy back report and equity swap cancellation	4962
19/10/2020	ORI	Buy-back programmes, stabilisation and treasury stock	13-19 October 2020 buy back programme report	5087
22/10/2020	ORI	Other relevant information	2020-21 dividend information	5140
22/10/2020	ORI	On corporate governance	Director	5141
26/10/2020	ORI	Buy-back programmes, stabilisation and treasury stock	20-26 October 2020 buy back programme report	5223
02/11/2020	ORI	Buy-back programmes, stabilisation and treasury stock	3-9 November 2020 buy back programme report	5637
16/11/2020	ORI	Buy-back programmes, stabilisation and treasury stock	10-16 November 2020 buy back programme report	5773
18/11/2020	ORI	Other relevant information	1H 2020-21 Results webcast announcement	5792
23/11/2020	ORI	Buy-back	17-23 November 2020 buy back programme report	5841
25/11/2020	ORI	Half-yearly financial reports and audit reports/limited audit review	Submission of financial information for H1 2020-21	5860
25/11/2020	ORI	On business and financial situation	H1 2020-21 Results presentation	5861
30/11/2020	ORI	Buy-back programmes, stabilisation and treasury stock	24-30 November 2020 buy back programme report and block trade	5952
07/12/2020	ORI	Buy-back programmes, stabilisation and treasury stock	1-7 December 2020 buy back programme report	6067

Publication date	Price-sensitive information (PSI) Financial/corp. information	Type	Summary content	Registration NO
14/12/2020	ORI	Buy-back programmes, stabilisation and treasury stock	8-14 December 2020 buy back programme report	6193
22/12/2020	ORI	Buy-back programmes, stabilisation and treasury stock	15-21 December 2020 buy back programme report	6333
29/12/2020	ORI	Buy-back programmes, stabilisation and treasury stock	22 to 28 December 2020 share buy-back report	6394
04/01/2021	ORI	Buy-back programmes, stabilisation and treasury stock	29 Dec 2020 to 4 Jan 2021 Share Buy Back report	6479
08/01/2021	ORI	On business and financial situation	Agreement between AEDAS Homes and joint venture formed by Grupo Lar and Primonial to develop 655 units for the rental market	6354
11/01/2021	ORI	Buy-back programmes, stabilisation and treasury stock	5 to 11 January 2021 share buy back report	6561
18/01/2021	ORI	Buy-back programmes, stabilisation and treasury stock	12-18 January 2021 share buy back report	6700
26/12/2021	ORI	Buy-back programmes, stabilisation and treasury stock	19-25 January 2021 share buy back report	6766
26/01/2020	ORI	Buy-back programmes, stabilisation and treasury stock	19-25 January 2021 share buy back report	6767
28/01/2021	ORI	Other relevant information	9M 2020-21 webcast and conference call announcement	6822
01/12/2021	ORI	Buy-back programmes, stabilisation and treasury stock	26 January to 1 February share buy-back report	6888
04/02/2021	ORI	On business and financial situation	9M 2020-21 results presentation	6948
08/02/2021	ORI	Buy-back programmes, stabilisation and treasury stock	2-8 February 2021 share buy-back report	7036

Publication date	Price-sensitive information (PSI) Financial/corp. information	Type	Summary content	Registration NO
15/02/2021	ORI	Buy-back programmes, stabilisation and treasury stock	9-15 February 2021 share buy-back report	7108
22/02/2021	ORI	Buy-back programmes, stabilisation and treasury stock	16-22 February 2021 share buy back report	7199
01/03/2021	ORI	Buy-back programmes, stabilisation and treasury stock	23 February to 1 March 2021 share buy-back report	7676
09/03/2021	ORI	Buy-back programmes, stabilisation and treasury stock	2-8 March 2021 share buy-back report	7850
16/03/2021	ORI	Buy-back programmes, stabilisation and treasury stock	9-15 March 2021 share buy-back report	7998
22/03/2021	ORI	Buy-back programmes, stabilisation and treasury stock	16-22 March 2021 share buy-back report	8094
25/03/2021	ORI	On business and financial situation	Agreement between AEDAS Homes and Lazora to develop 288 units for the rental market	8175
29/03/2021	ORI	Buy-back programmes, stabilisation and treasury stock	23-29 March 2021 share buy-back report	8267

Legal Note

By attending this presentation and/or by accepting this presentation you will be taken to have represented, warranted and undertaken that you have read and agree to comply with the contents of this disclaimer. This presentation (the "Presentation") has been prepared by AEDAS Homes, S.A. (the "Company") and comprises slides for a corporate presentation to the market of the Company and its subsidiaries (the "Group").

For the purposes of this disclaimer, "Presentation" means this document, its contents or any part of it. This Presentation may not be copied, distributed, reproduced or passed on, directly or indirectly, in whole or in part, or disclosed by any recipient to any other person, for any purpose other than the aforementioned. This Presentation has not been independently verified and will not be updated.

No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein and nothing in this Presentation is, or shall be relied upon as, a promise or representation.

None of the Company nor any of its employees, officers, directors, advisers, representatives, agents or affiliates shall have any liability whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection with this Presentation.

This Presentation is for informational purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the Company's publicly available information and, if applicable, the oral briefing provided by the Company. The information and opinions contained in this Presentation are provided as at the date of the Presentation and are subject to verification, correction, completion and change without notice. In giving this Presentation, no obligation is undertaken to amend, correct or update this Presentation or to provide access to any additional information that may arise in connection with it is undertaken.

Likewise, it is not the intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company's financial or trading position or prospects.

This Presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice and does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and for making your own independent assessment of the Company and the Group. You are solely responsible for seeking independent professional advice in relation to the Company and the Group. No responsibility or liability is accepted by any person for any of the information or for any action taken by you or any of your officers, employees, agents or associates based on such information.

This Presentation contains financial information regarding the businesses and assets of the Company and the Group. Such financial information may not have been audited, reviewed or verified by any independent accounting firm. The inclusion of such financial information in this Presentation or any related presentation should not be regarded as a representation or warranty by the Company, its affiliates, advisors or representatives or any other person as to the accuracy or completeness of such information's portrayal of the financial condition or results of operations by the Company and the Group and should not be relied upon when making an investment decision. Certain financial and statistical information in this document has been subject to rounding off adjustments. Accordingly, the sum of certain data may not conform to the expressed total.

Certain statements in this Presentation may be forward-looking. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These include, among other factors, changing economic, business or other market conditions, changing political conditions and the prospects for growth anticipated by the Company's management. Also, the COVID-19 (Coronavirus) pandemic is an ongoing, rapidly developing situation. The company is following the state and local health and safety guidance and government mandates, but, as there is yet much to learn about COVID-19, please be advised that the consequences of said pandemic could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Any forward-looking statements contained in this Presentation and based upon past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No undue reliance should be placed in such forward-looking statements. The market and industry data and forecasts that may be included in this Presentation were obtained from internal surveys, estimates, experts and studies, where appropriate as well as external market research, publicly available information and industry publications. The Company, its affiliates, directors, officers, advisors and employees have not independently verified the accuracy of any such market and industry data and forecasts and make no representations or warranties in relation thereto. Such data and forecasts are included herein for informational purposes only. Accordingly, undue reliance should not be placed on any of the industry or market data contained in this Presentation.

The distribution of this Presentation in other jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about and observe any such restrictions.

Neither this document nor any of the information contained herein constitutes or forms part of, and should not be construed as, an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange of securities, or any advice or recommendation with respect to such securities of the Company in any jurisdiction, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. Any purchase of or subscription for securities of the Company should be based solely on each investor's own analysis of all public information, the assessment of risk involved and its own determination of the suitability of any such investment. No reliance should be placed, and no decision should be based on this Presentation. This document is a translation of a report originally issued in Spanish. In case of any discrepancy, the Spanish-language version will prevail.

Paseo de las Castellana, 42 planta 8ª 28046 - Madrid T. +34 917 88 00 00

DECLARACIÓN DE RESPONSABILIDAD DE AEDAS HOMES, S.A.

Conforme a lo establecido en el artículo 8.1(b) del Real Decreto 1362/2007, de 19 de octubre, los miembros del Consejo de Administración de Aedas Homes, S.A. abajo firmantes realizan la siguiente declaración de responsabilidad:

Que, hasta donde alcanza su conocimiento, las Cuentas Anuales consolidadas de Aedas Homes, S.A. y sus sociedades dependientes, correspondientes al ejercicio anual terminado el 31 de marzo de 2021 han sido elaboradas con arreglo a los principios de contabilidad aplicables; ofrecen, tomadas en su conjunto, la imagen fiel del patrimonio, de la situación financiera y de los resultados de Aedas Homes, S.A. y sus sociedades dependientes; y el Informe de Gestión consolidado incluye un análisis fiel de la evolución y los resultados empresariales y de la posición de Aedas Homes, S.A. y sus sociedades dependientes, junto con la descripción de los principales riesgos e incertidumbres a que se enfrentan.

Los consejeros, en prueba de conformidad, firman esta hoja:

DECLARATION OF LIABILITY OF AEDAS HOMES, S.A.

In accordance with the provisions of article 8.1 (b) of Royal Decree 1362/2007, of October 19, the members of the Board of Directors of Aedas Homes, S.A. below signatories make the following declaration of liability:

That, to the best of its knowledge, the consolidated Annual Accounts of Aedas Homes, S.A. and its subsidiaries, corresponding to financial year ended March 31, 2021, have been prepared in accordance with applicable accounting principles; offer, taken as a whole, the true image of the Equity, the financial situation and the results of Aedas Homes, S.A. and its subsidiaries companies; and the Consolidated Management Report includes a faithful analysis of the evolution and business results and the position of Aedas Homes, S.A. and its dependent companies, together with the description of the main risks and uncertainties that they face.

The Members of the Board, in proof of compliance, sign this sheet:

____________________________ D. Santiago Fernández Valbuena Presidente

Mr. Santiago Fernández Valbuena Chairmain

____________________________

_______________________ D. David Martínez Montero Consejero Delegado

Mr. David Martínez Montero Chief Executive Officer

________________________

D. Eduardo D'Alessandro Cishek Consejero

____________________________

____________________________ Mr. Eduardo D'Alessandro Cishek Board Member

_______________________ D. Evan Andrew Carruthers Consejero ______________________ D. Evan Andrew Carruthers Board Member

D. Javier Lapastora Turpín Consejero

__________________________

Mr. Javier Lapastora Turpín Board Member

__________________________

_________________________ D. Miguel Temboury Redondo Consejero

Mr. Miguel Temboury Redondo Board Member

_______________________

Dña. Milagros Méndez Ureña Consejera

__________________________

Mrs. Milagros Méndez Ureña Consejera

__________________________

_______________________ Dña. Cristina Álvarez Álvarez Consejera

Mrs. Cristina Álvarez Álvarez Board Member

____________________________

D. Francisco Javier Martinez-Piqueras Barceló

Consejero

Mr. Francisco Javier Martinez-Piqueras Barceló Board Member

__________________________________

07 de mayo de 2021 Madrid

May 07th, 2021 Madrid

Yo, Alfonso Benavides Grases, Secretario no consejero del Consejo de Administración, certifico la autenticidad de las firmas que anteceden de las personas cuyo nombre figura en la parte inferior de la firma correspondiente, siendo todos ellos miembros del Consejo de Administración de Aedas Homes, S.A.

I, Alfonso Benavides Grases, Non-Board Secretary of the Board of Directors, certify the authenticity of the foregoing signatures of the persons whose name appears in the lower part of the corresponding signature, all of whom are members of the Board of Directors of Aedas Homes, S.A.

Madrid 07 de mayo de 2021

Madrid May 07 th , 2021

_________________________________ D. Alfonso Benavides Grases Secretario del Consejo de Administración

D. Alfonso Benavides Grases Secretary of the Board of Directors

_________________________________

AI Terminal

AEDAS Homes S.A.

1781_10-k_2021-05-10_0fbaddab-86de-42e0-be94-4e2690325bf8.pdf

AUDIT REPORT ON CONSOLIDATED FINANCIAL STATEMENTS ISSUED BY AN INDEPENDENT AUDITOR

Audit report on the consolidated financial statements

Opinion

Basis for opinion

Key audit matters

Measurement of inventories

Report on other legal and regulatory requirements

European single electronic format

Aedas Homes, S.A. and subsidiaries

AEDAS HOMES, S.A. and subsidiaries CONSOLIDATED BALANCE SHEET AT MARCH 31, 2021 AND MARCH 31, 2020

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED MARCH 31, 2021 AND THE THREE MONTHS ENDED MARCH

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED MARCH 31, 2020 AND THE THREE MONTHS ENDED MARCH 31, 2020

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED MARCH 31, 2021 AND THE THREE MONTHS ENDED MARCH 31, 2020

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2021 AND THE THREE MONTHS ENDED MARCH 31, 2020

Aedas Homes, S.A. and subsidiaries

1. The Aedas Homes Group's business

2. Basis of presentation of the consolidated financial statements

a) Basis of presentation

b) Adoption of the International Financial Reporting Standards

a) Standards and interpretations approved by the European Union and applied for the first time during the current reporting period

b) Standards and interpretations issued by the IASB not yet applicable in the current reporting period

Mandatory Implementation: effective for periods beginning on or after January 1, 2021

Mandatory Implementation: effective for periods beginning on or after January 1, 2022

Mandatory Implementation: effective for periods beginning on or after January 1, 2023

- IFRS 17 Insurance Contracts

c) Functional and presentation currency

d) Responsibility for the information presented and estimates made

e) Basis of consolidation

Subsidiaries

Investments in associates and joint ventures

f) First-time consolidation differences

g) Comparative information

3. Distribution of profit/(loss)

4. Recognition and measurement standards

4.1 Intangible assets

a) Software

4.2 Property, plant and equipment

Impairment of intangible assets and property, plant and equipment

4.3 Investment property

4.4 Inventories

4.5 Trade receivables

4.6 Customer prepayments

4.7 Financial instruments by category

4.7.1 Financial assets

4.7.2 Financial liabilities and equity

4.7.3 Equity instruments

4.7.4 Bank loans

4.7.5 Trade payables

4.7.6 Derivatives

4.8 Own shares of the Parent Company

4.9 Provisions and contingent liabilities

Provisions for completion of construction project

4.10 Income tax

However:

4.11 Revenue and expenses

4.12 Borrowing costs

4.13 Operating profit/(loss)

4.14 Redundancy payments

4.15 Director and key management personnel remuneration

4.16 Environmental assets and liabilities

4.17 Related-party transactions

4.18 Distinction between current and non-current

4.19 Business combinations

4.20 Share-based payments

4.21 Leases

4.22 Segment information

4.23 Investments in associates

5, Earnings/(loss) per share

a) Basic earnings/(loss) per share

b) Diluted earnings/(loss) per share

6. Changes in the Group's composition

7. Intangible assets

8. Property, plant and equipment

9. Investment property

10. Current and non-current financial assets and liabilities

March 31, 2021