Arima Real Estate Socimi S.A.

Audit Report / Information • Feb 24, 2022

Independent auditor´s report on the annual accounts for the yearended December 31, 2021

This version of our report is a free translation of the original, which was prepared in Spanish. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation

Independent auditor's report on the annual accounts

To the shareholders of Árima Real Estate SOCIMI, S.A.:

Report on the annual accounts

Opinion

We have audited the annual accounts of Árima Real Estate SOCIMI, S.A. (the Company), which comprise the balance sheet as at 31 December 2021, and the income statement, statement of changes in equity, cash flow statement and related notes for the year then ended.

In our opinion, the accompanying annual accounts present fairly, in all material respects, the equity and financial position of the Company as at 31 December 2021, as well as its financial performance and cash flows for the year then ended, in accordance with the applicable financial reporting framework (as identified in note 2.a of the notes to the annual accounts), and in particular, with the accounting principles and criteria included therein.

Basis for opinion

We conducted our audit in accordance with legislation governing the audit practice in Spain. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the annual accounts section of our report.

We are independent of the Company in accordance with the ethical requirements, including those relating to independence, that are relevant to our audit of the annual accounts in Spain, in accordance with legislation governing the audit practice. In this regard, we have not rendered services other than those relating to the audit of the accounts, and situations or circumstances have not arisen that, in accordance with the provisions of the aforementioned legislation, have affected our necessary independence such that it has been compromised.

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 annual accounts of the current period. These matters were addressed in the context of our audit of the annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400, www.pwc.es

Investment Properties

Investment properties make up 68% of the Company's assets. The Company values investment property at acquisition cost less the relevant depreciation and impairment losses, if any, as detailed in notes 3.2 and 6. Total investment properties recognised in non-current assets on the balance sheet amount to €248,626 thousand at 31 December 2021.

At the year end at least, the Company assesses whether there is any indication that any of its investment property may be impaired and specifically if there is any significant decrease in the asset's fair value or value in use. In 2021, the Company has reversed an impairment associated with its investment properties for an amount of 888 thousand euros.

In order to consider the fair value of investment property, the Company bases itself on the valuations carried out by independent experts. The valuations are performed in accordance with international standards, the methodology being described in notes 3.3 and 6 to the accompanying annual accounts.

Valuers consider specific variables such as the lease contracts signed and specifically its rents. Similarly, they apply certain key assumptions such as exit yields, estimated market rent and comparable transactions in order to arrive at a final valuation.

The Company recognises depreciation on investment property on a straight-line basis, based on the estimated useful life included in note 3.2.

The significance of the estimates and judgements involved in these valuations, coupled with a minor difference in percentage terms in the valuation of a property, could result in a material figure, meaning that the valuation of investment property is considered a key audit matter.

Key audit matters How our audit addressed the key audit matters

For acquisitions of investment property, we verified the key supporting documentation, such as contracts and sale-purchase deeds or other documents affecting the price.

We verified that the useful life taken into account for each asset is appropriate with respect to its nature and we carried out tests on the arithmetic calculation of the depreciation charge for the year.

With respect to potential impairment losses, we obtained the valuation of investment properties carried out by Management's independent expert, on which we performed the following procedures:

• x Verification of the expert's competence,capacity and independence by obtaining confirmation and corroborating its professional standing in the market.
• x Verification that the valuations were performed according to accepted methodology.
• x Discussion of the principal key assumptions of the valuation through sundry meetings with the expert valuer and management,assessing the consistency of the main assumptions used taking existing market conditions into account.
• x Performance of selective tests to corroborate the accuracy of the most relevant data provided by Management to the valuer and used by it in the valuations.

The results of the procedures performed allowed us to reasonably obtain the audit objectives for which these procedures were designed.

Other information: Management report

Other information comprises only the management report for the 2021 financial year, the formulation of which is the responsibility of the Company's directors and does not form an integral part of the annual accounts.

Our audit opinion on the annual accounts does not cover the management report. Our responsibility regarding the management report, in accordance with legislation governing the audit practice, is to:

• a) Verify only that the certain information included in the Annual Corporate Governance Report and the Annual Report on Directors' Remuneration, as referred to in the Auditing Act, has been provided in the manner required by applicable legislation and, if not, we are obliged to disclose that fact.
• b) Evaluate and report on the consistency between the rest of the information included in the management report and the annual accounts as a result of our knowledge of the Company obtained during the audit of the aforementioned financial statements, as well as to evaluate and report on whether the content and presentation of this part of the management report is in accordance with applicable regulations. If, based on the work we have performed, we conclude that material misstatements exist, we are required to report that fact.

On the basis of the work performed, as described above, we have verified that the information mentioned in section a) above has been provided in the manner required by applicable legislation and that the rest of the information contained in the management report is consistent with that contained in the annual accounts for the 2021 financial year, and its content and presentation are in accordance with applicable regulations.

Responsibility of the directors and the audit and control committee for the annual accounts

The directors are responsible for the preparation of the accompanying annual accounts, such that they fairly present the equity, financial position and financial performance of the Company, in accordance with the financial reporting framework applicable to the entity in Spain, and for such internal control as the aforementioned directors determine is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts, the directors are responsible for assessing the Company'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 Company or to cease operations, or have no realistic alternative but to do so.

The audit and control committee is responsible for overseeing the process of preparation and presentation of the annual accounts.

Auditor's responsibilities for the audit of the annual accounts

Our objectives are to obtain reasonable assurance about whether the annual accounts 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 legislation governing the audit practice 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 annual accounts.

As part of an audit in accordance with legislation governing the audit practice in Spain, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• x Identify and assess the risks of material misstatement of the annual accounts, 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.
• x 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 entity's internal control.
• x Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• x 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 Company'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 annual accounts 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 Company to cease to continue as a going concern.
• x Evaluate the overall presentation, structure and content of the annual accounts, including the disclosures, and whether the annual accounts represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the entity's audit and control committee 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 entity's audit and control committee with a statement that we have complied with relevant ethical requirements, including those relating to independence, and we communicate with the aforementioned those matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the entity's audit and control committee, we determine those matters that were of most significance in the audit of the annual accounts 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 file of the European single electronic format (ESEF) of Árima Real Estate SOCIMI, S.A. for the 2021 financial year that comprises an XHTML file of the annual accounts

for the financial year, which will form part of the annual financial report.

The directors of Árima Real Estate SOCIMI, S.A. are responsible for presenting the annual financial report for 2021 financial year in accordance with the formatting requirements established in the Delegated Regulation (EU) 2019/815 of 17 December 2018 of the European Commission (hereinafter the ESEF Regulation). In this regard, the Annual Corporate Governance Report and the Annual Director Remuneration Report have been included by reference in the management report.

Our responsibility is to examine the digital file prepared by the Company's directors, in accordance with legislation governing the audit practice in Spain. This legislation requires that we plan and execute our audit procedures in order to verify whether the content of the annual accounts included in the aforementioned file completely agrees with that of the annual accounts that we have audited, and whether the format of these accounts has been affected, in all material respects, in accordance with the requirements established in the ESEF Regulation.

In our opinion, the digital file examined completely agrees with the audited annual accounts, and these are presented, in all material respects, in accordance with the requirements established in the ESEF Regulation.

Report to the audit and control committee

The opinion expressed in this report is consistent with the content of our additional report to the audit and control committee of the Company dated 23 February 2022.

Appointment period

The General Ordinary Shareholders' Meeting held on 29 June 2021 appointed us as auditors for a period of one year, for the year ended 31 December 2021.

Previously, we were appointed by resolution of the General Ordinary Shareholders' Meeting for a period of three years and we have audited the accounts continuously since the year ended 31 December 2018.

Services provided

Services provided to the audited entity for services other than the audit of the accounts are disclosed in note 23 to the annual accounts.

PricewaterhouseCoopers Auditores, S.L. (S0242)

Original signed by

Rafael Pérez Guerra (20738)

23 February 2022

This version of the annual accounts is a free translation from the original, which is prepared in Spanish. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of the annual accounts takes precedence over this translation.

ÁRIMA REAL ESTATE SOCIMI, S.A.

Annual Accounts and Management Report for the financial year ended on 31 December 2021

CONTENTS OF THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

Note

• Balance sheet. Income statement. Statement of changes of equity. Cash flow statement. Notes to the annual accounts for the financial yearended on 31 December 2021.
• 1. Activities and general information.
• 2. Presentation basis.
• 3. Accounting criteria.
• 4. Financial risk management.
• 5. Property, plant and equipment.
• 6. Investment properties.
• 7. Analysis of financial instruments.
• 8. Long-term investments in group companies.
• 9. Financial assets at cost and amortized cost.
• 10. Cash and cash equivalents.
• 11. Share capital, share premium and treasury shares.
• 12. Reserves.
• 13. Profit (loss) for the period.
• 14. Financial liabilities.
• 15. Income and expenses.
• 16. Financial hedging derivatives.
• 17. Income tax and tax status.
• 18. Provisions and contingencies.
• 19. Commitments.
• 20. Board of Directors and other payments.
• 21. Related-party transactions.
• 22. Information requirements resulting from SOCIMI status, Act 11/2009, as amended by Act 16/2012 and Act 11/2021.
• 23. Auditor's fees.
• 24. Information on greenhouse gas emission rights.
• 25. Environmental Information.
• 26. Subsequent events.

Appendix

Appendix I - Information relating to Group Companies as at 31 December 2021

Management Report for the financial year 2021.

BALANCE SHEET AT 31 DECEMBER 2021 (Thousand euros)

		At 31	At 31
ASSETS		December	December
	Note	2021	2020
NON- CURRENT ASSETS
Property, plant and equipment	5	171	187
Investments properties	6	248,626	232,467
Long-term investments in group companies		22,562	503
Equity instruments	8	17,979	3
Loans to subsidiaries	21	4,583	500
Non-current investments		2,495	2,493
Loans to third parties	7, 8	1,578	1,556
Other non-current financial assets	7, 8	917	937
		273,854	235,650
CURRENT ASSETS
Trade receivables and other accounts receivable		4,330	6,494
Trade receivables for sales and services	7, 9	339	299
Other accounts receivable	7, 9	4	1,697
Personnel	7, 9	1	-
Other credits held with Public Authorities	9, 17	3,986	4,498
Other current financial assets	7	36	135
Prepayments for current assets	7	352	232
Cash and cash equivalents	10	88,676	128,725
Cash and banks		88,676	128,725
		93,394	135,586
		367,248	371,236

BALANCE SHEET AT 31 DECEMBER 2021 (Thousand euros)

EQUITY AND LIABILITIES		At 31 December	At 31 December
	Note	2021	2020
EQUITY
Equity capital		253,439	260,064
Share capital	11 a)	284,294	284,294
Share premium	11 a)	5,769	5,769
Reserves	12	(11,261)	(11,245)
Negative results from previous years	12	(13,672)	(8,448)
Profit (loss) for the period	13	(3,528)	(5,224)
Other equity instruments	20	-	-
Treasury shares	11 b)	(8,163)	(5,082)
Hedging transactions	12, 16	(700)	(1,486)
		252,739	258,578
NON CURRENT LIABILITIES
Bank loans and credits	14	103,977	104,039
Financial hedging derivatives	14, 16	700	1,486
Other non-current financial liabilities	14	1,186	960
		105,863	106,485
CURRENT LIABILITIES
Bank loans and credits		610	39
Other current financial liabilities	14	66	100
Trade and other payables		7,970	6,034
Commercial creditors and other payables	7, 14	6,661	2,189
Other current debts	14, 15	1,200	1,200
Other debts with Public Authorities	17	109	2,645
		8,646	6,173
		367,248	371,236

INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (Thousand euros)

		Financial year ended	Financial year ended
		on 31	on 31
		December	December
	Note	2021	2020
COTINUED OPERATIONS
Net turnover figure	15 a)	5,945	6,136
Rendering of services		5,945	6,136
Personnel expenses	15 b)	(4,163)	(4,424)
Wages, salaries and personnel costs		(3,941)	(4,219)
Welfare charges		(222)	(205)
Other operating expenses		(3,097)	(3,020)
External services	15 c)	(2,326)	(2,362)
Taxes		(771)	(658)
Impairment and losses of investment properties	6	888	(888)
Depreciation of property, plant and equipment and investment properties	5, 6	(1,952)	(1,986)
OPERATING RESULTS		(2,379)	(4,182)
Financial income		28	3
Financial expenses	15	(1,177)	(1,045)
FINANCIAL RESULT		(1,149)	(1,042)
PRE-TAX RESULT		(3,528)	(5,224)
Income tax	17	-	-
PROFIT (LOSS) FOR THE PERIOD		(3,528)	(5,224)

STATEMENT OF CHANGES TO EQUITY FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (Thousand euros)

A) STATEMENT OF RECOGNISED INCOME AND EXPENSES FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2020 (Thousand euros)

		Financial year ended on 31	Financial year ended on 31
	Note	December 2021	December 2020
Profit (loss) in the income statement	13	(3,528)	(5,224)
Total income and expenses attributed directly to equity		786	(751)
On cash-flow hedges transactions	13	786	(751)
TOTAL RECOGNISED INCOME AND EXPENSES		(2,742)	(5,975)

STATEMENT OF CHANGES TO EQUITY FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (Thousand euros)

B) STATEMENT OF CHANGES TO EQUITY FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (Thousand euros)

				Negative
		Share		results from			Treasury	Hedging
		Premium		previous	Accumulated	Other equity	Shares	Reserve
	Capital (Note	(Note	Reserves	years (Note	earnings	instruments	(Note	(Note 12
	11.a)	11.a)	(Note 12)	12)	(Note 13)	(Note 20)	11.b)	and 16)	TOTAL
BALANCE AT 1 JANUARY 2020	284,294	5,769	(11,048)	(503)	(7,945)	5,610	(625)	(735)	274,817
Profit /(loss) for the financial year	-	-	-	-	(5,224)	-	-	-	(5,224)
Other comprehensive results for the financial year	-	-	-	-	-	-	-	(751)	(751)
Total comprehensive income for the financial year	-	-	-	-	(5,224)	-	-	(751)	(5,975)
Other movements	-	-	-	(7,945)	7,945	(5,610)	-	-	(5,610)
Other results in treasury shares (Note 10)	-	-	(197)	-	-	-	(4,457)	-	(4,654)
Total transactions with owners, recognised directly in equity and other movements	-	-	(197)	(7,945)	7,945	(5,610)	(4,457)	-	(10,264)
BALANCE AT 31 DECEMBER 2020	284,294	5,769	(11,245)	(8,448)	(5,224)	-	(5,082)	(1,486)	258,578
BALANCE AT 1 JANUARY 2021	284,294	5,769	(11,245)	(8,448)	(5,224)	-	(5,082)	(1,486)	258,578
Profit /(loss) for the financial year	-	-	-	-	(3,528)	-	-	-	(3,528)
Other comprehensive results for the financial year	-	-	-	-	-	-	-	786	786
Total comprehensive income for the financial year	-	-	-	-	(3,528)	-	-	786	(2,742)
Other movements	-	-	(16)	(5,224)	5,224	-	-	-	(16)
Other results in treasury shares (Note 10)	-	-	-	-	-	-	(3,081)	-	(3,081)
Total transactions with owners, recognised directly in equity and other movements	-	-	(16)	(5,224)	5,224	-	(3,081)	-	(3,097)
BALANCE AT 31 DECEMBER 2021	284,294	5,769	(11,261)	(13,672)	(3,528)	-	(8,163)	(700)	252,739

CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (Thousand euros)

		Financial	Financial
		year ended	year ended
		on 31	on 31
		December	December
	Note	2021	2020
A) CASH FLOW FROM OPERATING ACTIVITIES
Pre-tax result for the period		(3,528)	(5,224)
Adjustments to profit/loss		3,413	3,832
Depreciation of property, plant and equipment	5	32	20
Depreciation of investment properties	6	1,920	1,966
Valuation corrections due to impairment	6	(888)	888
Financial income		(28)	(3)
Financial expenses	15	1,177	1,045
Other adjustments to profit/loss		1,200	(84)
Changes in working capital		230	(6,125)
Debtors and other receivables	9	1,652	(1,268)
Other current assets	9	491	(3,926)
Other current liabilities		192	(150)
Creditors and other payables	14	(2,883)	(1,404)
Other non-current assets and liabilities		778	623
Cash flow from operating activities		115	(7,517)
B) CASH FLOW FROM INVESTMENT ACTIVITIES
Payments on investments		(35,472)	(39,202)
Group companies Property, plant and equipment	8, 21 5	(10,481) (16)	(500) (71)
Investment properties	6	(24,975)	(38,631)
Cash flow from investment activities		(35,472)	(39,202)
C) CASH FLOW FROM FINANCING ACTIVITIES
Receivables and payments on equity instruments		(3,081)	(8,654)
Acquisition of treasury shares	11	(3,081)	(9,569)
Disposal of treasury shares	11	-	915
Receivables and payments on financial liabilities		(1,611)	30,134
Financial borrowings	14	-	31,793
Paid interest		(1,611)	(1,659)
Cash flow from financing activities		(4,692)	21,480
NET INCREASE/REDUCTION IN CASH AND CASH EQUIVALENTS		(40,049)	(25,239)
Cash and cash equivalents at beginning of financial year		128,725	153,964
Cash and cash equivalents at end of financial year	10	88,676	128,725

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

1. ACTIVITIES AND GENERAL INFORMATION

Árima Real Estate SOCIMI, S.A. (hereinafter, the "Company") was incorporated in Spain on 13 June 2018 under the Spanish Capital Companies Act. Its registered office is located at calle Serrano, 47 4º planta, 28001 Madrid.

Its corporate purpose is described in Article 2 of its articles of association and consists of:

• The acquisition and development of urban properties intended for lease.
• The ownership of interests in the share capital of other Spanish Real Estate Investment Trusts (Sociedad Anónima Cotizada de Inversión en el Mercado Inmobiliario, "SOCIMI") or other companies that are not resident in Spain, that have the same corporate purpose, and that are governed by rules similar to those governing SOCIMIs as regards the compulsory, legal or statutory policy on profit distribution.
• The ownership of interests in the share capital of other companies that are both resident and nonresident in Spain, whose corporate purpose is the acquisition of urban properties for lease, and which are governed by the same rules that govern SOCIMIs as regards the compulsory, legal or statutory policy on profit distribution, and which meet the investment requirements set out in Article 3 of the Spanish SOCIMI Act.
• The ownership of shares or holdings in Collective Investment Institutions governed by Spanish Collective Investment Institutions Act 35 of 4 November 2003.

The Company may also engage in other ancillary activities, this being understood to mean activities that generate income accounting for less than 20% of the Company's total income over a single tax period. The Company carries out its activity at calle Serrano, 47 4ª planta, 28001 Madrid.

Any activity that must by law meet special requirements that are not met by the Company are excluded.

The aforementioned business activities may also be fully or partially engaged in indirectly by the Company through the ownership of interests in another company or companies with a similar corporate purpose.

a) Regulatory regime

The Company is regulated under the Spanish Capital Companies Act.

In addition, on 27 September 2018 the Company informed the Tax Authorities that it wished to opt for application of the rules governing Spanish Real Estate Investment Trusts (SOCIMIs), and is therefore subject to Act 11 of 26 October, with the amendments introduced by Act 16 of 27 December, under which SOCIMIs are governed. Article 3 of Act 11 of 26 October, sets out certain requirements that must be met by this type of company, namely:

i) They must have invested at least 80% of the value of their assets in urban properties intended for lease, or in land for the development of properties that are to be used for the same purpose, provided that development begins within three years following its acquisition, or in equity investments in other companies, as set out in Article 2 section 1 of the aforementioned Act.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

ii) At least 80% of the income from the tax period corresponding to each year, excluding the income deriving from the transfer of ownership interests and real estate properties used by the Company to comply with its main corporate purpose, once the retention period referred to in the following paragraph has elapsed, must come from the lease of properties and from dividends or shares in profits associated with the aforementioned investments.

iii) The real estate properties that make up the Company's assets must remain leased for at least three years. Calculation of this term will include the time that the properties have been offered for lease, up to a maximum of one year.

The First Transitional Provision of the SOCIMI Act allows for application of the SOCIMI tax rules under the terms set out in Article 8 of the SOCIMI Act, even when the requirements it contains are not met on the date of incorporation, on the condition that these requirements are met during the two years following the date on which it is decided to opt for application of the said tax rules. In this regard, the Directors of the Company consider that the necessary requirements have alredy met within the established terms and periods, and they have therefore not entered any income or expense in respect of Corporate Income Tax.

The Company has been listed on the Spanish Stock Market since 23 October 2018, with its tax address at calle Serrano, 47 4ª planta, 28001 Madrid.

As indicated in Note 8, the Company is the parent of a Group of companies (hereinafter, the Group). The accompanying annual accounts have been prepared on a non-consolidated basis. On 22 February 2022, the Board of Directors of the Company prepared the consolidated financial statements of Árima Real Estate SOCIMI, S.A. and its subsidiaries at 31 December 2021, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS), and which at that date present consolidated equity and consolidated profit of Euros 325,665 thousand and Euros 26,125 thousand, respectively.

The figures contained in these annual accounts are expressed in thousands of euros, unless otherwise indicated.

The currency presented and with which society functions is the euro.

2. PRESENTATION BASIS

a) Fair presentations

The annual accounts for the financial year ended on 31 December 2021 were prepared by the Board of Directors on 22 February 2022, in accordance with the regulatory financial reporting framework applicable to the Company, comprising:

• a) The Spanish Code of Commerce and other corporate legislation applicable in Spain.
• b) The General Chart of Accounts approved by Royal Decree 1514/2007, of 16 November, as amended by Royal Decree 1159/2010, of 17 September, Royal Decree 602/2016, of 2 December, and Royal Decree 11/2021, of 12 January, described in sector e) of this Note, and, likewise, the sector adaptation for companies in the real estate sector.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

• c) The mandatory standards approved by the Spanish Institute of Auditors and Accountants in order to implement the General Chart of Accounts and significant secondary legislation.
• d) All other accounting legislation applicable in Spain.

The annual acounts for the financial year ended on 31 December 2021, obtained from the Company's accounting records, are presented in accordance with the regulatory financial reporting framework applicable to the Company and specifically, the accounting principles and standards contained therein and therefore present fairly the Company's equity, financial position, and financial performance and accurately reflect cash flows included in the cash flow statement for the financial year ended on 31 December 2021.

b) Non-compulsory accounting principles

Where an accounting principle is compulsory and has a significant effect on the preparation of the annual accounts, there is no instance in which it has not been applied.

c) Critical aspects relating to the valuation and assessment of uncertainty

The preparation of the annual accounts requires the Company to make certain estimates and judgements with regard to the future. These estimates and judgements are continually reassessed and are based on historical experience and other factors, including expectations of future events that are considered reasonable under the circumstances.

The resulting accounting estimates, by definition, will rarely match actual results. The estimates and judgements that entail a significant risk of giving rise to a substantial adjustment to the book values of assets and liabilities during the next financial year are discussed below.

Estimates made by the Board of Directors have been used in the preparation of the annual accounts for the financial year ended on 31 December 2021 to assess some of the assets, liabilities, income, expenses and commitments registered in them. This estimates are referred to:

Fair value of investment properties

The Administrators of the Company carry out an assessment of the fair value of each property taking into account the most recent independent valuations, and determine the value of a property within a range of acceptable fair value estimates.

The best evidence of the fair value of investment properties in an active market is the price of similar assets. The Company determines fair value using a range of fair values. When making such judgements, the Company uses a series of sources, including:

i. The current prices in an active marketplace of different kinds of properties in varying states of repair and different locations, adjusted to reflect differences with the Company's own assets.

ii. The recent prices paid for properties in other, less active marketplaces, adjusted to reflect changes in economic conditions since the transaction date.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

iii. The discounting of cash flows based on estimates resulting from the terms and conditions contained in current lease contracts and, where possible, evidence of the market prices of similar properties in the same location, through the use of discount rates that reflect the uncertainty of the time factor.

Useful life of investment properties

The Company Management establishes the estimated useful life of its investment properties, along with the corresponding charges for depreciation. The useful life of an investment property is estimated on the basis of the period in which each of the elements included under this heading will generate financial profits. At year end, the Company reviews the useful life of its investment properties, and if its estimates differ from the estimates made in the past, the effects of this change are entered prospectively from the financial year in which the change is made.

Cash flow hedges

The effective portion of changes in the fair value of a derivative designated as a cash flow hedge is entered under other comprehensive income. The profit or loss on the ineffective portion is entered immediately in the income statement under "other (losses)/gains - net".

Amounts accumulated in equity are reclassified to the income statement in the periods in which the hedged item affects profit or loss (for example, when the forecast sale that is hedged takes place). Gains or losses on the effective part of interest rate swaps used to hedge loans at variable rates are entered in the income statement under "financial income/expenses". However, when the forecast transaction that is being hedged results in the entry of a non-financial asset (for example, inventory or property, plant and equipment), the gains and losses previously deferred in equity are transferred from equity and included in the initial valuation of the cost of the asset. The deferred amounts are definitively entered as the cost of the assets sold, in the case of stocks, or as depreciation in the case of property, plant and equipment.

When a hedging instrument matures or is sold or when the requirements for the application of hedge accounting cease to be met, any gains or losses accumulated in equity to that date will remain in equity and will be entered when the forecast transaction is finally entered in the income statement. When it is expected that the scheduled transaction is not going to take place after all, the profit or loss accumulated in the equity is immediately transferred to the income statement under the heading "other net (losses)/profits".

Income Tax

The company applies the system provided for in Act 11 of 26 October 2009, which governs Spanish Real Estate Investment Trusts (SOCIMIs), which in practice means that, provided that it meets certain requirements, the Company is subject to a Corporate Income Tax rate of 0%. The amendment in Act 11/2021 taxes with 15% the profits not distributed through dividends, a circumstance that does not apply to the Company in te annual year ended on 31 December 2021.

The Directors monitor compliance with the requirements set out in the relevant legislation in order to secure the tax advantages offered. In this regard, the Directors consider that the necessary requirements will be met within the established terms and periods, and they have therefore not entered any income or expense in respect of Corporate Income Tax.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

While these estimates were developed on the basis of the best available information at the end of the 2021 financial year, future events may lead to a change in these estimates (up or down) in the future. Changes in accounting estimates will be applied prospectively.

d) Grouped entries

To facilitate understanding of the balance sheet and the income statement, the entries in these annual accounts are presented in grouped form, and the necessary analysis is set out in the relevant notes to the accounts.

e) Changes in accounting policies as a result of Royal Decree 1/2021

On 30 January 2021, Royal Decree 1/2021, of 12 January, was published in the Official State Gazette, amending the General Accounting Plan approved by Royal Decree 1514/2007, of 16 November; the General Accounting Plan for Small and Medium-sized Companies approved by Royal Decree 1515/2007, of 16 November; the Standards for the Preparation of Consolidated Financial Statements approved by Royal Decree 1159/2010, of 17 September; and the Standards for the Adaptation of the General Accounting Plan for Non-Profit Entities approved by Royal Decree 1159/2010, of 17 September; the Rules for the Preparation of Consolidated Annual Accounts approved by Royal Decree 1159/2010, of 17 September; and the Rules for the Adaptation of the General Accounting Plan to Non-Profit Entities approved by Royal Decree 1491/2011, of 24 October. Likewise, and as a consequence of RD 1/2021, on 13 February 2021, the resolution of the Spanish Accounting and Auditing Institute (ICAC) was published in the Official State Bulletin (Boletín Oficial del Estado) in which amendments were made to the standard for recording, valuation and preparation of annual accounts for the recognition of income from the delivery of goods and the provision of services (hereinafter "Income Resolution").

In accordance with section 1) of the First Transitional Provision of Royal Decree 1/2021, the Company has opted for the application of the new criteria, considering 1 January 2021 as the transition date, and the figures corresponding to the financial year 2020 are included for comparative purposes in the annual accounts for the financial year 2021, have not been adapted in accordance with the new criteria, without prejudice to the reclassification of the previous year's financial instrument items to the new presentation in application of Transitional Provision 2, section 6 e), as can be seen in note 7.

The content of the aforementioned Royal Decree and Resolution has been applied in the annual accounts for the year beginning on or after 1 January 2021.

The main changes introduced in the aforementioned regulations have an impact on the following items:

• a) Financial instruments.
• b) Revenue from sales and services .

The main differences between the accounting and classification criteria used in 2020 and those applied in 2021 that have affected the Company are as follows:

Financial instruments

Financial instruments are now classified on the basis of the Company's management or business model for managing financial assets and the contractual terms of the cash flows therefrom.

The classification of financial assets falls into the following main categories:

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

i. Amortized cost: This category includes the previous portfolios of "Loans and receivables" and "Held-to-maturity investments" to the extent that they are held for the purpose of receiving the cash flows arising from the performance of the contract, and the contractual terms of the financial assets give rise, on specific dates, to cash flows that are solely collections of principal and interest on the principal amount outstanding.

Also included in this category are trade and non-trade receivables.

ii. Cost: The remaining financial assets are included in this category, being the portfolios of "Investments in Group companies" and "Participating loans", long-term and short-term deposits and long-term deposits, both of which are included under "Other long-term financial assets" and "Other short-term financial assets".

Financial liabilities are classified into the following main categories:

• i. Amortized cost: All financial liabilities except those to be measured at fair value through profit or loss have been included in this category. It therefore includes the above portfolios of "Loans and payables" which include participating loans that have the characteristics of an ordinary or common loan, including those where interest is set below market, and "Trade and non-trade payables".
• ii. Derivatives and hedging activities: In application of TD 3ª of RD 1/2021, the Company has opted to continue applying the criteria established in section 6 - Accounting hedges of NRV 9ª - Financial instruments of RD 1514/2007, of 16 November. The Company describes its accounting hedging policy in note 3.15 of these annual accounts.

As indicated above, on the date of initial application of RD 1/2021, 1 January 2021, the Company opted to apply TD 2 and include comparative information without restating the items for 2020 in order to show the balances for that year adjusted to the new presentation criteria. Accordingly, the Company has applied the new financial instrument categories in accordance with RD 1/2021 for the year ended 31 December 2021, and has applied the new categories, for presentation purposes only, for the comparative year ended 31 December 2020. Accordingly, the main effects of this reclassification as at 1 January 2021 are as follows:

		Thousand euros
	Loans and	Investments in Group
Categories of RD 1514/2007	payables	companies
	Financial assets at
Categories of RD 1/2021	amortized cost	Financial assets at cost
Reclasification of Financial Assets
Final balance at 31 December 2020 - RD 1514/2007	5,356	3
Loans to subsidiaries	(500)	500
Other financial assets (guarantees)	(1,072)	1,072
Initial balance at 1 January 2021 - RD 1/2021	3,784	1,575

From the analysis performed and as we concluded in the accounting and valuation notes and in note 7, the changes derived from the new regulations have an impact on the classification of existing financial instruments, not on their valuation or rating, hence there has been no quantitative impact derived therefrom or movement in reserves.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

Revenue recognition: Changes in accounting policies as a result of the ICAC Resolution of 10 February 2021

The application as of 1 January 2021 of the ICAC's Resolution issuing standards for the recording, valuation and preparation of annual accounts for the recognition of revenue for the delivery of goods and services, and the latest amendment of the General Accounting Plan and its complementary provisions through RD 1/2021, has led to changes in the NRV 14 "Revenue from sales and services rendered", as well as in the information to be included in the notes to the financial statements on these transactions. The key changes to current practice are as follows:

(i) It establishes rules for the identification of the contract and the different goods and services included in the contract, as well as guidelines for the combination and modification of contracts.

(ii) It sets out requirements for determining when revenue accrues, in particular, whether revenue should be recognised at a single point in time or over time, depending on the percentage of completion of the activity.

As a result of the company's activity and the type of contracts entered into with the various customers, the Company's directors have concluded that the new standard does not entail a change in the existing revenue recognition model and, therefore, this standard does not have a quantitative impact on the amount of revenue.

f) Comparison of information

For comparative purposes, the balance sheet, income statement, cash flow statement, statement of changes in equity and notes to the financial statements for the year ended 31 December 2021 are presented comparatively with information relating to the year ended 31 December 2020, taking into account the amendments arising from the information included in note 2.e).

3. ACCOUNTING CRITERIA

The main accounting policies adopted in the preparation of the annual accounts are described below. These policies have been applied uniformly for the financial year presented, unless otherwise indicated.

3.1 Property, plant and equipment

Property, plant and equipment items are entered at their acquisition price or production cost, minus accumulated depreciation and the accumulated value of any recognised losses.

The costs of major repairs are activated and amortised over their estimated useful life, while recurring maintenance costs are charged to the income statement during the financial year in which they are incurred.

Depreciation of property, plant and equipment, with the exception of land, which is not depreciated, is calculated systematically using the straight-line method over the assets' estimated useful lives based on the actual decline in value brought about by operation, use and possession. Depreciatoin rate based on estimated useful lives are as follow:

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (Thousand euros)

Depreciation rate (%) Other facilities 10% Furnishing 10% Data processing equipment 25% Transport items 25% Other fixed assets 10%

3.2 Investment properties

Investment property comprises the values of land, office and logistics buildings for the purpose of either rental income or capital appreciation.

These assets are initially recognised at acquisition or production cost and are subsequently reduced by accumulated depreciation and recognised impairment losses.

Maintenance and upkeep costs of investment property are recognised in the statement of recognised income and expenses in the year in which they are incurred. However, the costs of improvements that result in increased capacity or efficiency or an extension of the useful lives of the assets are capitalised.

For non-current assets whose preparation for their intended use requires a period of more than twelve months, capitalised costs include borrowing costs that may have been incurred prior to the preparation of the assets and that are either expensed by the supplier or relate to borrowings or other borrowed funds on a general or specific basis and are directly attributable to the acquisition of assets.

The Company depreciates its investment property using the straight-line method at annual rates based on the years of estimated useful life of the assets as follows:

	Depreciation rate (%)
Buildings	2%
Technical installations	8%

Assets under construction intended for rental for purposes not yet determined are carried at cost less recognized impairment losses. Depreciation of these assets, as with other real estate assets, begins when the assets are ready for their intended use.

3.3 Losses due to the impairment of non-financial assets

Assets subject to depreciation are subjected to impairment reviews whenever some event or a change in circumstances indicates that the book value may not be recoverable.

A loss due to impairment is entered in the amount by which the book value of an asset exceeds its recoverable value, the latter being understood to mean the fair value of the asset minus sale costs, or its operational value, whichever is higher.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

In order to assess impairment losses, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash generating units). Non-financial assets, other than goodwill, in respect of which an impairment loss has been recognised, are reviewed at each balance sheet date in case the loss has reversed.

The Company engages independent expert CBRE Valuation Advisory, S.A. to calculate the value of all of its investment properties at least twice a year. These valuations are made in accordance with the valuation standards issued by the Royal Institute of Chartered Surveyors (RICS) in the United Kingdom and by International Valuation Standards (IVS) prepared by International Valuation Standards Committee (IVSC).

When calculating the value of investment properties, consideration is given to the amount that the Company expects to recover as a result of their lease. To this end, projections are made in respect of the cash flows that will be generated, based on the best estimate of leasing rates and on expectations for each individual asset, taking account of any uncertainty that may be caused by a reduction in cash flows or discount rates. The operational value of a real estate property will not necessarily be the same as its fair value, insofar as the former will be based on factors that are specific to the organisation, mainly the capacity to ask prices that are above or below market levels, due to the assumption of certain risks or the assumption of costs (construction or marketing in respect of investment properties under development; refurbishment; maintenance; etc.) other than those that are generally associated with companies in the sector, while the latter is the value at which two independent parties would be willing to complete a transaction.

The estimated yields depend on the type and age of the properties and their location. The properties have been valued individually, taking account of the lease agreements in place at the end of the financial year and, where applicable, the forecast value.

The book value of the Company's investment properties is corrected at the end of each financial year with the entry of the relevant loss due to impairment, in order to bring this figure into line with the recoverable value when the fair value is lower than the book value.

When a loss due to impairment is subsequently reversed, the book value of the asset is increased to reflect the corrected estimate of its recoverable amount, though the increased book value may not exceed the book value that would have been allocated of the loss due to impairment had not been entered in previous financial years. Reversals of losses due to impairment are entered in the income statement.

3.4 Financial assets

Financial assets at amortized cost

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. They are included under current assets unless they mature more than 12 months after the balance sheet date, in which case they are entered under non-current assets. Loans and receivables are entered on the balance sheet under "Trade receivables and other accouns receivable", "Non-current investments" and "Loans to subsidiaries" in the balance sheet.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

These financial assets are initially valued at fair value, including directly attributable transaction costs, and are subsequently valued at amortised cost. Accrued interest is entered at the effective interest rate, this being understood to be the updated rate that brings the instrument's book value into line with all estimated cash flows through to maturity. Notwithstanding the foregoing, trade receivables that are due within less than one year are valued at their par value, both when initially entered and on subsequent valuation, provided that the effect of not updating flows is not significant.

At least at the end of each financial year, the necessary value adjustments are made to account for impairment when there is objective evidence that all receivables will not be collected.

Losses due to impairment are calculated as the difference between book value of the asset in question and the current value of estimated future cash flows, discounted at the effective interest rate at the time of initial entry. Value adjustments, as well as any applicable reversions, are accounted for in the income statement.

Financial assets at cost

Financial assets are measured at cost less any accumulated impairment losses. If there is objective evidence that the carrying amount is not recoverable, the appropriate valuation adjustments are made for the difference between the carrying amount and the recoverable amount, the latter being the higher of fair value less costs to sell and the present value of the cash flows arising from the investment.

Financial assets at cost are included in "Loans and advances to companies", "Investments in equity instruments of Group companies" and "Other long-term financial assets" under non-current assets on the balance sheet and "Other short-term financial assets" under current assets on the balance sheet.

Unless there is better evidence of the recoverable amount, the estimate of the impairment of these investments takes into account the equity of the investee company adjusted by the unrealised gains existing at the valuation date. The impairment loss and any reversal thereof is recognised in the income statement for the year in which it occurs.

3.5 Equity

The share capital is made up of ordinary shares.

The costs of issuing new shares or options are entered directly in equity as a reduction in reserves.

In the event that the Company acquires treasury shares, the consideration paid including any incremental cost that is directly attributable, is deducted from equity until the shares are redeemed, issued again or otherwise disposed of. When treasury shares are subsequently sold or reissued, any amount received is moved to equity, net of any directly attributable incremental costs.

Distribution of the result and compulsory payment of dividends

SOCIMIs are governed by the special tax rules established under Act 11 of 26 October 2009, with the amendments introduced by Act 16 of 27 December 2012, under which SOCIMIs (Spanish Real Estate Investment Trusts) are governed. They are required to distribute the profits they obtain over the course of the year to their shareholders in the form of dividends, after complying with the relevant corporate obligations. Distribution must be approved within the six months following the year end, in the following way:

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

• a) 100% of the profits resulting from dividends or profit shares received from the companies referred to in Article 2.1 of this Act.
• b) At least 50% of the profits earned from the transfer of the property, shares or ownership interests referred to in Article 2.1. of the Act, where this occurs after the deadlines referred to in Article 3.3 of the Act have expired, when the property, shares or interests are used to comply with the Company's primary corporate purpose. The remainder of these profits must be reinvested in other property or investments related to the performance of this corporate purpose within three years of the transfer date. Otherwise, these profits must be distributed in full together with any profit earned, where applicable, in the year in which the reinvestment period expires. If the items in which the reinvestment has been made are transferred prior to the end of the holding period, profits must be distributed in full, together, where applicable, with the part of the profits attributable to the years in which the Company was not taxed under the special tax scheme provided for in the aforementioned Act.
• c) At least 80% of the remaining profits obtained.

The dividend must be paid within one month of the distribution agreement. When dividends are distributed with a charge to reserves originating from profits for a year in which the special tax rules were applied, the distribution must compulsorily be approved by means of the resolution referred to above.

The Company is required to allocate 10% of its profits for the year to the legal reserve until the balance held in this reserve amounts to 20% of its share capital. The balance of this reserve is not available for distribution to the shareholders until it exceeds the 20% limit. The articles of association of these companies may not establish any restricted reserve other than the foregoing.

3.6 Financial liabilities

Debts and payables

This category includes trade and non-trade payables. These third-party resources are classified as current liabilities unless the Company has an unconditional right to defer settlement for at least 12 months after the balance sheet date.

These payables are initially entered at their fair value, adjusted for directly attributable transaction costs, and subsequently entered at amortised cost using the effective interest rate method. The effective interest rate is the updated rate which brings the instrument's book value into line with expected future payment flows until maturity of the liability.

Nonetheless, trade payables that are due within less than one year and do not have a contractually agreed interest rate are valued at their nominal value, both when initially entered and on subsequent valuation, provided that the effect of not updating cash flows is not significant.

On the other hand, it includes financial liabilities, which are initially recognised at fair value less transaction costs incurred. Subsequently, financial debts are measured at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the life of the debt using the effective interest rate method.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

3.7 Current and deferred income tax

In accordance with the SOCIMI tax rules, the Company is subject to a Corporate Income Tax rate of 0%.

As established in Article 9.2 of Act 11 of 26 October 2009, with the amendments incorporated via Act 16 of 27 December 2012, the Company shall be subject to a special rate of 19% on the overall sum of the dividends or profit distributions received by shareholders whose stake in the share capital of the Company is equal to or greater than 5%, when those dividends, in the possession of its shareholders, are exempt from or have a tax rate of less than 10% (to this effect, the tax due will be taken into consideration under the Non-Resident Income Tax Act).

However, that special rate will not apply when the dividends or profit shares are received by entities whose purpose is the ownership of interests in the share capital of other SOCIMIs or other companies that are not resident in Spain, that have the same corporate purpose, and that are governed by rules similar to those governing SOCIMIs as regards the compulsory, legal or statutory policy on profit distribution, with respect to companies that have a share that is equal to or greater than 5% of the share capital of the SOCIMIs and that pay tax on those dividends or profit shares at a rate of at least 10%.

Likewise, as detailed in the amendments incorporated in Act 11/2021, of 9 July, the entity will be subject to a special tax of 15% on the amount of profits obtained in the year that is not subject to distribution, in the part that comes from income that has not been taxed at the general rate of Corporate Tax or is income covered by the reinvestment period regulated in the Article 6 (1) (b) of ths Act. This tax will be considered as a share of Corporation Tax.

The Board of Directors monitor compliance with the requirements set out in the legislation in order to save the tax advantages established therein. In this sense, the administrator's estimation is that these requirements are being met within the terms and deadlines set, not proceeding to record any kind of result derived from corporation tax.

3.8 Provisions and contingent liabilities

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events; it is likely that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Provisions are valued at the current value of the payments that are expected to be required to settle the obligation, using a pre-tax rate that reflects the current market assessment of the time value of money and the specific risks of the obligation. The adjustments to provisions as the result of their restatement are entered as a financial expense as they accrue.

Provisions that mature in one year or less and have non-significant financial effects are not discounted.

When it is expected that a portion of the payment necessary to cancel the provision will be reimbursed by a third party, this reimbursement is entered as an independent asset, provided that its receipt is practically certain.

Contingent liabilities are considered to be potential liabilities deriving from past events, the existence of which is subject to the occurrence of one or more future events that lie outside the control of the Company. These contingent liabilities are not recorded in the accounts but are described in the notes (Note 18).

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

3.9 Revenue Recognition

Revenue is recognised at the fair value of the consideration receivable and represents the amounts receivable for services rendered in the ordinary course of the Company's business, less returns, rebates, discounts and value added tax.

Provision of services

The new standard is based on the principle that revenue is recognised when control of a good or service is transferred to the customer in an amount that reflects the consideration to which the entity expects to be entitled - thus the concept of control, as a fundamental principle, replaces the current concept of risks and rewards.

In order to apply the above fundamental principle, the following successive steps must be followed:

• identify the contracts with customers;
• identify the obligations to be fulfilled;
• determine the transaction price or consideration for the contract transaction;
• allocating the transaction price among the obligations to be performed, and
• recognising revenue when (or as) the entity satisfies each committed obligation.

The Company provides rental services. Based on management's analysis, all revenue is generated from the rental of properties which are recorded under the heading "Investment property" under the operating lease classification. These revenues are recognised on an accruals basis and the fulfilment of the obligation of use, with incentive income and the initial costs of the lease contracts being allocated on a straight-line basis.

The costs related to each lease instalment, including impairment charges, are recognised as an expense.

3.10 Leases

a) When the Company is the lessee - Operating lease

Leases in which the lessor maintains a significant part of the risks and benefits arising from ownership are classified as operating leases. Operating lease payments (net of any incentive received by the lessor) are charged to the income statement for the year in which they accrue on a straight-line basis over the lease period.

b) When the Company is the lessor

Properties let out under operating lease are included with investment property on the balance sheet. Income earned from the leasing of property is entered on a straight-line basis over the lease period.

3.11 Operational currency and currency in which the accounts are presented

The figures in these annual accounts are presented in euro thousand, the euro is the currency that the Company uses for both accounting and operational purposes.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

3.12 Transactions between related parties

Generally speaking, transactions performed between related parties are initially entered in the accounts at their fair value. Where applicable, if the agreed price differs from the fair value, this difference will be entered, taking account of the real financial conditions of the transaction. It will subsequently be valued in accordance with the provisions set out in the relevant standards.

3.13 Employee benefits

a) Share based payments

On 26 September 2018, the Annual General Shareholders Meeting approved a new remuneration plan based on the Company's own shares, granted to the Árima Real Estate team. This plan was corroborated in the Annual General Shareholders Meeting on 5 November 2019 and modified and subsequently corroborated at the General Shareholder's Meeting on 29 June 2021. That plan will be in effect for 6 years and the right to receive shares as an incentive will accrue when the conditions set out in the plan are met for each calculation period (a period of one year, between July and June of the following year), the conditions established in the plan are met (Note 11.b).

b) Short term obligations and bonus

Wage and wage liabilities, which are expected to be settled within twelve months of the end of the financial year in which employees provide the corresponding services, are recognized in the reporting financial year and valued at the amounts expected to be paid when liabilities are settled. Liabilities are presented on the balance sheet as current obligations for employee benefits.

3.14 Cash and cash equivalents

Cash and cash equivalents include cash holdings, instantly accessible deposits with credit institutions, other short-term highly liquid investments with original maturities of three months or less.

3.15 Financial derivatives and hedging financial instruments

For those contracts in force at 1 January 2021 and which met the requirements for hedge accounting in accordance with the previous wording of PGC 2007 and which also meet the requirements set out in RD 1/2021, after taking into account any new rebalancing of the hedging relationship at 1 January 2021, the Company has considered these contracts as a continuation of the hedging relationships already existing at the transition date.

Cash flow hedges

The effective amount of changes in the fair value of derivatives that are designated and qualified as cash flow hedges are transiently recognized in equity. Its allocation to the profit and loss account is made in the years in which the planned covered transaction affects the result, unless the coverage corresponds to a planned transaction that ends in the recognition of a non-financial asset or liability, in which case the amounts recorded in the equity are included in the cost of the asset when it is acquired or the liability when it is assumed. Loss or gain relative to the ineffective part is immediately recognized in the profit and loss account.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

4. FINANCIAL RISK MANAGEMENT

The Company's activities are exposed to various financial risks: market risk (including interest rate risk), credit risk, liquidity risk, tax risk and other risks. The Company's risk management programme focuses on uncertainty in financial markets and seeks to minimise any potential adverse impact on its financial profitability.

Risk management is overseen by the Company's Finance Department, which identifies, evaluates and hedges financial risks in accordance with the policies approved by the Board of Directors of the Company. The Board provides policies for overall risk management and policies covering specific areas such as interest rate risk, liquidity risk, the use of derivatives and non-derivatives and investing excess liquidity.

a) Market risk

The Company's interest rate risk arises from the financial debt. Loans issued at variable rates expose the Company to interest rate risk of cash flows. During the financial year ended at 31 December 2021, the Company has signed long-term financing agreements with prestigious financial institutions at a variable market interest rate with mortgage guarantee. The loans are remunerated at an interest rate referenced to EURIBOR plus a spread between 1.40% and 1.70%. As of 31 December 2021 and 2020, the amount drawn down in nominal terms from this variable rates financial agreements amounts to 63,644 thousand euros.

The Company analyzes exposure to interest rate risk dynamically. Several scenarios are simulated taking into account the alternatives of financing and coverage. Based on these scenarios, the Company calculates the impact on the result for a given change in the interest rate (scenarios are used only for liabilities that represent the most significant positions subject to interest rates).

These analyzes take into account:

• Economic environment in which it carries out its activity: design of different economic scenarios modifying the key variables that may affect the company (interest rates, share price,% occupancy of real estate investments, etc.).
• Identification of those interdependent variables and their level of linkage.
• Temporary framework in which the evaluation is being carried out: the time frame for the analysis and its possible deviations will be taken into account.

Based on the simulation carried out, the Company manages the cash flow interest rate risk through variable to fixed interest rate swap. These interest rate swaps have the economic effect of converting loans at variable interest rates into loans at fixed interest rates. Generally, the Company obtains foreign long-term resources with variable interest and exchanges them for a fixed interest rate lower than those that would be available if the Company had obtained the external resources directly at fixed interest rates. Under interest rate swaps, the Company undertakes with third parties to exchange, on a regular basis, the difference between the fixed interest and the variable interest based on the principal notionals contracted.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

b) Credit risk

Credit risk originates, mainly from customers for sales and services, as well as from other debtors. The Company defines the credit risk management and analysis policy of its new clients before proceeding to offer them the usual payment terms and conditions. The Company´s risk control establishes the credit quality that the client must possess, taking into account its financial position, past experience and other factors. The Company considers that it does not have significant concentrations of credit risk, this being understood to refer to the possible impact that a default on receivables could have on the income statement. The Company maintains its cash and other equivalent liquid assets in entities with the best credit quality.

c) Liquidity risk

Cash flow forecasting is carried out by the Company's Finance Department. It monitors the Company's liquidity needs in order to ensure that it has sufficient cash to meet operational requirements while maintaining sufficient availability of liquidity at all times so that the Company does not default on its financial obligations.

d) Tax risk

As mentioned in Note 1, the Company is subject to the special tax regime of the rules governing Spanish Real Estate Investment Trusts (SOCIMIs). It is therefore subject to Act 11 of 26 October 2009, with the amendments introduced by Act 16 of 27 December 2012, under which SOCIMIs are governed. Article 3 of Act 11 of 26 October 2009 sets out certain requirements that must be met by this type of company. The companies that have opted for said regime are obliged to distribute dividends to its shareholders, once the pertinent mercantile obligations have been fulfilled, the benefit obtained in the year, having to arrange their distribution within the six months following the end of each year and be paid within the month following the date of the agreement of distribution.

In the event that the Shareholders' Meeting of such companies does not approve the distribution of dividends proposed by the Board of Directors, which has been calculated in accordance with the requirements set forth in the aforementioned law, they would not be complying with it, and therefore they should be taxed under the general tax regime and not the one applicable to the SOCIMI.

e) Other risk

The appearance of the Coronavirus COVID-19 in China on January of 2020 and its recent global expansion to a large number of countries, has led to the viral outbreak being classified as a pandemic by the World Health Organization since 11 March 2020.

This situation is significantly affecting the global economy, and most sectors of the economy are facing challenges due to the economic situation. While the vaccination processes of the population have made significant progress in recent months, the economic outlook is still difficult to predict.

In this context, the Company's Management and the Board of Directors have carried out an evaluation of the current situation, according to the best information available, in these financial statements which describes as follows:

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

• Operational and business Risk:

In general terms, although at the moment of this financial statements approval, the coronavirus crisis has not significantly affected the Company activity, it could observed a trend towards some stabilization of rents in the areas where the Company has investments properties, which could have impacted in their fair value. Real estate investments have remained open and accessible to tenants during this financial year, with all available services and enhanced measures for cleaning, disinfection and air filtration; and the evolution of the business has followed a favorable path, without significant impacts that have led to the adoption of extraordinary measures. On the other hand, rehabilitation projects have run their course without significant delays and without altering the Company's strategy. In addition, the Company has a high quality tenant base that has not altered the rental collection periods. The Board of Directors continue to monitor the possible impacts that the pandemic may have on the course of the ongoing works of certain real estate investments and the rental contracts of current and future tenants.

• Liquidity risk:

The Board of Directors monitors liquidity needs to ensure that it has the necessary financial resources to meet its needs. The Company is in a very robust position as it has cash and cash equivalents in the amount of 88,676 thousand euros, the level of leverage is not high and the maneuvering fund amounts to 84,748 thousand euros. In addition, 95% of the debt service facing the Company will take place in 2025 and subsequent years.

• Risk of valuation of assets and liabilities of the consolidated balance sheet:

There have been no significant increases in risks from default or deterioration in the tenants' financial position. In addition, the Company counts at fair value real estate investments based on valuations made by the independent expert whose assumptions already reflect potential impacts of COVID-19. With respect to the remaining assets and liabilities of the balance sheet, no significant value changes related to the potential effects of the pandemic have been detected.

With regard to the preparation of these Financial Statements, the Board of Directors have assessed and concluded that the Company's financial resources continue to allow the implementation of the going concern basis.

Due to the rapid and frequency of changes in the events and the potential evolution of the pandemic in the coming months (potential mitigating impacts and actions), significant estimates and judgments from the Board of Directos could be affected.

Finally, emphasize that the Administrators and the Board of Directors are constantly monitoring developments, in order to successfully address any financial and non-financial impacts that may occur.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

5. PROPERTY, PLANT AND EQUIPMENT

The following table contains a breakdown of the entries shown for "Property, plant and equipment" and the relevant movements:

		Thousand euros
	Property, plant and equipment	Total
Balance at 1 January 2020	136	136
Cost	149	149
Accumulated depreciation	(13)	(13)
Net Book value	136	136
Added	90	90
Sales	(22)	(22)
Allocation to depreciation	(20)	(20)
Reduction of depreciation charge	3	3
Balance at 31 December 2020	187	187
Cost	217	217
Accumulated depreciation	(30)	(30)
Net book value	187	187
Added	16	16
Allocation to depreciation	(32)	(32)
Balance at 31 December 2021	171	171
Cost	233	233
Accumulated depreciation	(62)	(62)
Net book value	171	171

a) Losses due to impairment

No entries were made or reversed in respect of value correction for impairment in relation to any property, plant and equipment item at 31 December 2021 and 31 December 2020.

b) Fully depreciated property, plant and equipment

No item had been fully depreciated at 31 December 2021 and 31 December 2020.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

6. INVESTMENT PROPERTIES

Investment properties include land, office buildings and other items owned by the Company that are held to obtain long-term rental income or capital revaluation and are not occupied by the Company.

Movement and breakdown of investment properties are shown below:

					Thousand
	Land	Building	Technical Installations	Investment Properties in progress	euros Total
Balance at 1 January
2020	100,545	75,578	18,951	1,615	196,689
Added	24,708	3,120	380	10,424	38,632
Transfers	-	1,968	1,318	(3,286)	-
Allocation to depreciation	-	(751)	(1,215)	-	(1,966)
Impairment of investment properties	-	(888)	-	-	(888)
Balance at 31 December 2020	125,253	79,027	19,434	8,753	232,467
Cost	125,253	81,319	21,747	8,753	232,072
Accumulated depreciation	-	(1,404)	(2,313)	-	(3,717)
Accumulated impairment	-	(888)	-	-	(888)
Book value at 31	125,253	79,027	19,434	8,753	232,467
December 2020
Added	-	18	717	28,034	28,769
Departures by transfers	(8,474)	(2,926)	(220)	(19)	(11,639)
Allocation to depreciation	-	(729)	(1,191)	-	(1,920)
Depreciation cancellations	-	43	18	-	61
Reversed impairment	-	888	-	-	888
Balance at 31 December 2021	116,779	76,321	18,758	36,768	248,626
Cost	116,779	78,411	22,244	36,768	254,202
Accumulated depreciation	-	(2,090)	(3,486)	-	(5,576)
Accumulated impairment	-	-	-	-	-
Book value at 31 December 2021	116,779	76,321	18,758	36,768	248,626

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

In 2020, the Company made disbursements worth 28,207 thousand euros for the acquisition of two real estate assets in Madrid: an office building located in the district of Chamartin with a buildability of 6,535 m² , and the signing of a turnkey contract for the acquisition of 12,000 m² of offices in Manoteras street, 28.

In 2021, the Company subscribed a non-monetary contribution transferring ownership of a property that did not generate rental income, located in the Chamartín district, to the Group company Árima Investments, S.L. with a carrying amount of Euros 11,578 thousand (Note 21). Likewise, additional disbursements worth 4,050 thousand euros have been made for the acquisition of a property on Calle Manoteras, 28 and that will have a total cost of 38,950 thousand euros.

It has also continued with its refurbishment and improvement projects, which have entailed an investment of Euros 24,719 thousand. All of the above is part of its corporate strategy of value creation and in accordance with the established deadlines.

Under the heading "Investment properties in progress", is included the cost of those improvements made to the assets whose implementation has not been completed.

As at 31 December 2021, no new mortgage guarantees have been provided on properties. During the financial year 2020 a mortgage guarantee was provided for the Guadalix and Cadenza properties.

a) Reversed impairment of investment properties

At December 31, 2021, the Company has under the heading "Impa Impairment of investment property" a reversion of impairment amounting to 888 thousand euros as a result of the application of the valuation process described in section g) of this note, cancelling the initial accumulated impairment (888 thousand euros at December 31, 2020).

b) Fully depreciated assets

No items had fully depreciated at 31 December 2021 and 31 December 2020.

c) Income and expenses on investment properties

The following income and expenses on investment properties have been detailed in the income statement:

	Thousand euros
	31.12.2021	31.12.2020
Rental income (Note 13)	5,945	6,136
Expenses for the operations resulting from investment properties that generate rental income	(1,416)	(1,204)
Expenses for the operations resulting from investment properties that do not generate rental income	-	(223)
	4,529	4,709

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

d) Operating leases

The total amount of future minimum receivables from non-cancellable operating leases is as follows:

		Thousand euros
	31.12.2021	31.12.2020
Less than one year	4,383	4,791
Between one and five years	7,516	7,063
More than five years	-	-
	11,899	11,854

e) Insurances

The Company signs the insurance policies necessary to cover any possible risk that might affect any aspect of its investment properties. The coverage in these policies is deemed to be sufficient.

f) Liabilities

At the close of the period, the Company does not have contractual obligations for the acquisition, construction or development of real estate investments, or for repairs, maintenance or insurance, in addition to those already included in the Note.

g) Valuation process

Information on the cost and fair value of real estate investments at 31 December 2021 and 31 December 2020:

				Thousand euros
	31 December 2021		31 December 2020
	Net book value	Fair value	Net book value	Fair value
Investment properties	248,626	307,700	232,467	275,750

The valuations of these real estate assets have been carried out using "market value" hypothesis, these valuations being made in accordance with the Professional Standards of assesment by the Royal Institution of Chartered Surveyors of July 2017 – 'Red Book'. The market value of the Company's properties has been determined on the basis of evaluation carried out by independent expert valuers (CBRE Valuation Advisory, S.A.).

The "Market Value" is defined as the estimated amount for which an asset should be able to be exchanged at the valuation date, between a willing seller and a willing buyer, after a reasonable sales marketing period, and in which both parties have acted with knowledge, prudence and without any coercion.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

The valuation methodology adopted by the independent appraisers in relation to the determination of fair value was basically the 10-year discount cash flow method and the income capitalization method (reflecting net income, capitalized expenses, etc.), besides comparing the information with comparables. The residual amount at the end of year 10 is calculated by applying a rate of return ("Exit yield" or "cap rate") of the projections of net income for year 11. Cash flows are discounted at an internal rate of return for reach the current net value. This internal rate of return is adjusted to reflect the risk associated with the investment and the assumptions adopted. The key variables are, therefore, the income and the exit yield.

The estimated yields depends on the type and age of the properties and their location. The properties have been valued individually, considering each one of the lease agreements in force at the end of the year and, if applicable, the foreseeable ones, based on the current market rents for the different areas, supported by comparables and transactions carried out for your calculations.

7. ANALYSIS OF FINANCIAL INSTRUMENTS

a) Analysis by category

						Thousand euros
			Non-current financial assets
		Equity instruments		Debts values		Credits, Derivatives and Others
	31.12.2021	31.12.2020	31.12.2021	31.12.2020	31.12.2021	31.12.2020
Financial assets at amortized cost	-	-	-	-	1,578	1,556
Financial assets at cost	17,979	3	-	-	5,500	1,437
Total long-term financial assets	17,979	3	-	-	7,078	2,993
						Thousand euros
			Current financial assets
		Equity instruments		Debts values		Credits, Derivatives and Others
	31.12.2021	31.12.2020	31.12.2021	31.12.2020	31.12.2021	31.12.2020
Financial assets at amortized cost	-	-	-	-	696	2,228
Financial assets at cost	-	-	-	-	36	135
Total short-term financial assets	-	-	-	-	732	2,363

The book value of each of the categories of financial instruments, excluding investments in the equity of group companies (Note 8) and cash and cash equivalents, is as follows:

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (Thousand euros)

						Thousand euros
			Non-current financial liabilities
	Bank loans and credits			Bonds and other negociable securities		Derivatives and others
	31.12.2021	31.12.2020	31.12.2021	31.12.2020	31.12.2021	31.12.2020
Financial liabilities at amortized cost
or cost	103,977	104,039	-	-	1,186	960
Hedging derivatives	-	-	-	-	700	1,486
Total non current financial liabilities	103,977	104,039	-	-	1,886	2,446
			Current financial liabilities
				Bonds and other
	Bank loans and credits 31.12.2021	31.12.2020	31.12.2021	negociable securities 31.12.2020	Derivatives and others 31.12.2021	31.12.2020
Financial liabilities at amortized cost or cost	610	39	-	-	7,927	3,489
Hedging derivatives	-	-	-	-	-	-
Total current financial liabilities	610	39	-	-	7,927	3,489

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

b) Analysis by maturity date

At 31 December 2021 and 31 December 2020, the value of financial instruments, excluding investments in the equity of group companies (Note 8) and cash and cash equivalents, with a specific maturity date or with a maturity date falling withing a specific year was as follows:

At 31 December 2021

						Thousand euros
				Financial assets
	2022	2023	2024	2025	2026	Subsequent years	Total
Financial assets at amortized cost
- Trade receivables	344	-	-	-	-	-	344
- Loans and advances to third parties	-	-	1,578	-	-	-	1,578
Financial assets at cost:
- Participating loans	-	-	-	500	4,083	-	4,583
- Other financial assets	389	302	-	358	-	257	1,305
	733	302	1,578	858	4,083	257	7,810

	Financial liabilities
	2022	Subsequent
		2023	2024	2025	2026	years	Total
Financial liabilities at
amortized cost or cost:
- Debts with credit entities	610	376	4,693	13,891	66,979	19,479	106,028
- Creditors and other	7,861	-	-	-	-	-	7,861
accounts payable
- Other financial liabilities	66	259	145	407	132	243	1,252
Hedging derivatives:
- Hedging derivatives	-	-	204	-	496	-	700
	8,537	635	5,042	14,298	67,607	19,722	115,841

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

At 31 December 2020

							Thousand euros
				Financial assets
	2021	2022	2023	2024	2025	Subsequent years	Total
Financial assets at amortized cost
- Trade receivables - Loans and advances to	1,996	-	-	-	-	-	1,996
third parties	-	-	-	1,556	-	-	1,556
Financial assets at cost:
- Participating loans	-	-	-	-	500	-	500
- Participating loans	367	561	29	-	337	10	1,304
	2,363	561	29	1,556	837	10	5,356

	Financial liabilities
	2021	2022	2023	2024	2025	Subsequent	Total
						years
Financial liabilities at
amortized cost or cost:
- Debts with credit entities	39	376	376	4,693	13,891	86,458	105,883
- Creditors and other
accounts payable	3,389	-	-	-	-	-	3,389
- Other financial liabilities	100	520	31	-	397	12	1,060
Hedging derivatives:
- Hedging derivatives	-	-	-	352	-	1,134	1,486
	3,528	896	407	5,045	14,288	87,604	111,768

The debts shown in the previous break downs are expressed at their nominal value.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

8. LONG TERM INVESTMENTS IN GROUP COMPANIES

The following table shows a breakdown of long-term investments in group companies at 31 December 2021 and 31 December 2020:

31 December 2021			Share capital percentage		Voting rights
Name	Address	Activity	Direct %	Indirect %	Direct %	Indirect %
Árima Investigación, Desarrollo e Innovación, S.L.U.	Serrano, 47 4º planta, 28001 Madrid	Real Estate activity Sustainability projects Exploitation of industrial property rights	100	-	100	-
Árima Investment, S.L.	Serrano, 47 4º planta, 28001 Madrid	Acquisition and development of urban properties intended for lease	100	-	100	-
31 December 2020			Share capital percentage		Voting rights
			Direct	Indirect	Direct	Indirect
Name	Address	Activity	%	%	%	%
Árima Investigación, Desarrollo e Innovación, S.L.U.	Serrano, 47 4º planta, 28001 Madrid	Real estate activity Sustainability projects Exploitation of industrial property rights	100	-	100	-

Details of movements in holdings in group companies are as follows:

		Miles de euros
	2021	2020
Balance at 1 January	3	3
Additions to equity investments	6,398	-
Additions arising from non-cash contributions	11,578	-
Balance at 31 December	17,979	3

Árima Investigación, Desarrollo e Innovación, S.L.U. was incorporated on 10 December 2018 under the name Árima Real Estate Investments, S.L.U. Its name was changed on 7 November 2019 to its current name. At the time of its incorporation, Árima Real Estate SOCIMI, S.A. becomes the parent company of a group of companies over which it has control, forming a group at that time. This subsidiary is not listed on the stock exchange.

On 28 September 2021, the Company acquired 100% of the shares of Inmopra, S.L., a real estate investment company, for an amount of Euros 6,398 thousand. At the time of acquisition, this Company owned a rented office building located at calle Pradillo, 58 (Madrid). On 4 October 2021, its corporate name was changed to Árima Investments, S.L. This company benefited from the special regime of SOCIMIs on 29 September 2021. Subsequently, on 26 October 2021, a capital increase was carried out through a non-monetary contribution whereby Arima Real Estate Socimi, S.A. contributed an asset (Note 6), increasing the investment in this company by Euros 11,578 thousand.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

9. FINANCIAL ASSETS AT COST AND AMORTIZED COST

	Thousand euros
	31	31
	December	December
	2021	2020
Long-term financial assets:
At amortized cost:
- Loans and advances to third parties	1,578	1,556
At cost:
- Participating loan (Note 21)	4,083	500
- Guarantees ("Other long-term financial assets")	917	937
Short-term financial assets
At amortized cost:
- Trade receivables for sales and services	339	299
- Other receivables	4	1,697
- Remuneration advances	1	-
- Other receivables from public authorities (Note 17)	3,986	4,491
At cost:
- Guarantees ("Other short-term financial assets")	36	135
	11,444	9,622

The financial assets at cost related to long term investments in Group companies (equity instruments) have been detailed in Note 8.

Long-term loans to third parties relate to loans granted to Company personnel (including executive directors) at market interest rates on the same terms as at December 31, 2020.

The carrying amount of the loans and receivables approximates their fair value, given that the effect of the discount is not significant.

Under the heading of customers there is an amount of 339 thousand euros relating to invoices pending issuance (181 thousand euros at 31 December 2020).

The following table contains a breakdown of the age of receivables for sales and services:

		Thousand euros
		At 31 December
	At 31 December 2021	2020
Up to 3 months	-	85
Between 3 and 6 months	-	33
More than 6 months	-	-
	-	118

The book value of loans and receivables is denominated in euros.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

10. CASH AND CASH EQUIVALENTS

		Thousand euros
	31 December 2021	31 December 2020
Cash and banks	88,676	128,725
	88,676	128,725

The current accounts are denominated in euros.

Due to the liquidity contract entered into with JB Capital Markets, Sociedad de Valores, S.A.U., detailed in Note 11.b, at 31 December 2021 the Company holds 303 thousand euros of total cash destined for the cash account under that contract (at 31 December 2020 held 303 thousand euros).

11. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES

a) Share capital and share premium

The Company was incorporated on 13 June 2018 with the issue of 300 registered shares, each with a par value of 10 euros.On the date of its incorporation, Rodex Asset Management, S.L. held 299 shares representing 99.99% of the Company's issued share capital, and Inmodesarrollos Integrados, S.L. held 1 ordinary share representing 0.01% of the Company's issued share capital.

On 25 July 2018 the Company changed its legal form from a private limited company to a public limited company and increased capital by 60 thousand euros. At that date, following the increase, Rodex Asset Management, S.L. held 6,279 registered shares, representing 99.99% of the Company's issued capital while Inmodesarrollos Integrados, S.L. held 21 registered shares, representing 0.01% of the Company's issued capital.

On 1 October 2018 an Universal General Shareholders' Meeting was held during which it was resolved to increase capital by 350,000 thousand euros maximum (the shareholders' waiving their preferential subscription right), through an offer for the subscription of the Company's shares.

On 8 October 2018 the Board of Directors approved the resolutions concerning the capital increase and the approval of the Share Subscription Prospectus for the admission of the trading on the stock exchange of the Company's shares. On 19 October 2018 the Board of Directors approved the capital increase amounting to 100,000 thousand euros which was entered in the Madrid Commercial Register and began trading of 10,000,000 new shares with a par value of 10 euros each on 23 October 2018.

In 2019, the Universal General Shareholders' Meeting, at its meeting of March 21, approved a new capital increase, waiving the right of preferential subscription, and delegated to the Board of Directors the necessary powers to carry it out. This capital increase was approved by the CNMV on April 8, 2019, becoming effective through the issuance and circulation of 4 million new ordinary shares of 10 euros each as face value, resulting in an increase in the share capital of 40,000 thousand euros.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

Subsequently, as part of a new capital increase, the Company sign a subscription agreement with Ivanhoé Cambridge Holdings UK LTD, which compels it to subscribe and disburse 60.000 thousand euros for the new shares, with a maximum issue price of 10.40 euros each share. On 5 November 2019, the Universal General Shareholder's Meeting approved the resolutions concerning the capital increase, waiving the right of preferential subscription, and delegated to the Board of Directors the necessary powers to carry it out. This capital increase was approved by the CNMV on 15 November 2019, becoming effective through the issuance and circulartion of 14.423.076 new ordinary shares of 10 euros each as face value and 0.40 euros each as share premium, resulting in an increase in the share capital of 150.000 thousand euros.

As of 31 December 2021 and 31 December 2020 the breakdown of share capital and share premium is as follows:

		Thousand euros
	31 December 2021	31 December 2020
Share capital	284,294	284,294
Share premium	5,769	5,769
	290,063	290,063

As at 31 December 2021 and 31 December 2020, the Company's share capital amounts to Euros 284,294 thousand and is represented by 28,429,376 shares with a par value of Euros 10 each, all belonging to the same class and fully subscribed and paid up. All shares have the same voting and dividend rights.

The share premium is a freely distributable reserve.

All the Company's shares are listed on the Spanish Stock Market.

At 31 December 2021, the companies that held a share of 3% or more in the share capital are as follows:

	% voting rights	% voting rights held through financial
Entity	allocated to shares	instruments	Total %
Fidelity Select Portfolios	3.548	-	3.548
Ivanhoe Cambridge, INC.	20.293	-	20.293
Rodex Asset Management, S.L.	3.839	-	3.839
Morgan Stanley	5.060	0.077	5.137
Thames River Capital LLP	9.984	-	9.984
Pelham Long/Short Small Cap Master Fund Ltd.	-	9.984	9.984
Total	42.724	10.061	52.785

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

At 31 December 2020, the companies that held a share of 3% or more in the share capital were as follows:

	% voting rights allocated to	% voting rights held through financial
Entity	shares	instruments	Total %
Bank of Montreal	8.400	-	8.400
Ivanhoe Cambridge, INC.	20.293	-	20.293
Fundiogic SAS	3.087	-	3.087
Rodex Asset Management, S.L.	3.839	-	3.839
Pelham Long/Short small CAP Master	-	9.984	9.984
Total	35.619	9.984	45.603

b) Treasury shares

Movements in treasury shares over the year have been as follows:

	31 December 2021		31 December 2020
	Number of treasury shares	Thousand euros	Number of treasury shares	Thousand euros
At the beginning of the
financial year	578,513	5,082	55,842	625
Additions / purchases	347,554	3,081	1,040,123	9,569
Reductions	-	-	(517,452)	(5,112)
At the end of the financial year	926,067	8,163	578,513	5,082

The General Shareholders' Meeting of the Company agreed on 28 May 2020 to authorize, for a period of 5 years, the derivative acquisition of shares of Árima Real Estate SOCIMI, S.A. by the Company itself, under the provisions of articles 146 and concordant of the Capital Companies Act, complying with the requirements and limitations established in current legislation at all times, in the following terms: (i) the acquisitions may be made directly by the Company or indirectly through companies of its group, and they may be formalized, once or several times, through purchase, barter or any other legal transaction valid in Law. Acquisitions may also be made through an intermediary that acquires the shares on behalf of the Company under a liquidity contract subscribed between the Company and the intermediary; (ii) the nominal value of the shares to be acquired, added, where appropriate, to those already held, directly or indirectly, shall not exceed the maximum percentage legally permitted at any time; and (iii) the acquisition price per share will be at least the nominal value and, at most, the market price on the date of acquisition.

On 6 November 2021, Árima Real Estate SOCIMI, S.A. renovated into a 12 month liquidity contract with JB Capital Markets, Sociedad de Valores, S.A.U. in order to increase liquidity and favour the regular trading of the Company's shares. However, this liquidity contract is temporarily suspended since the buyback program of treasury shares is in force since 25 March 2020.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

In addition, there is a compensation plan based on the delivery of shares or cash at the Company's discretion, which was initiated with its IPO, the beneficiary of which is the Company's team (Note 3.13). This plan accrues annually when, for each calculation period (between 1 July and 30 June of the following year), certain value creation conditions are met. In relation thereto, the General Shareholders' Meeting of 29 June 2021 resolved, at the request of the Company's Board of Directors, to adapt the calculation conditions from which the plan accrues, in order to adapt them to the current economic environment and the Company's situation (size and future growth profile), all with the aim of continuing to create value for shareholders.

The first period in which these adaptations took effect is from 1 July 2020 to 30 June 2021, and mainly concerned the total shareholder return - the threshold of which is 8% - and the delivery terms. This return is measured as the revaluation of the Net Asset Value plus the total dividends distributed, excluding certain capital increases, whether cash or non-cash, and weighted by the period of time during which they occurred during the calculation period. Thus, this remuneration continues to be focused on generating shareholder return, obtained through active management. As of December 31, 2020, the shareholder return threshold established in the current compensation plan was 10%. This return was measured as the total dividends distributed plus the revaluation of the Net Asset Value, excluding any capital increase that had occurred in each calculation period.

When the vesting conditions are met, the Company will deliver one third of the shares to the beneficiaries 12 months after the end of the calculation period, one third of the shares 18 months after the end of the calculation period and one third of the shares 24 months after the end of the calculation period.

The Company's shares held by the Company as at 31 December 2021 represent 3.26% of the Company's share capital and total 926,067 shares (as at 31 December 2020 they represented 2.03% and totaled 578,513 shares). The average price of treasury shares was 8.81 euros per share (8.96 euros per share in 2020).

These shares are recorded as a reduction of the Company's equity at 31 December 2021 in the amount of 8,163 thousand euros (at 31 December 2020 it was 5,082 thousand euros).

The Company has complied with the obligations deriving from article 509 of the Capital Companies Act which establishes, in relation to shares listed on an official secondary market, that the nominal value of the shares acquired, added to those already held by the parent company and its subsidiaries, must not exceed 10% of the share capital. Subsidiaries do not hold either their own shares or those of the parent company.

12. RESERVES

Reserves

		Thousand euros
	At 31 December of 2021	At 31 December of 2020
Others reserves:
- Voluntary reserve	(11,261)	(11,244)
- Legal reserve	-	-
- Hedging transactions reserve	(700)	(1,486)
- Net losses obtained from prior financial years	(13,672)	(8,449)
	(25,633)	(21,179)

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

Legal reserve

Appropriations to the legal reserve should be made in compliance with Article 274 of the Spanish Companies which stipulates that 10% of the profits for each year must be transferred to this reserve until it represents at least 20% of share capital.

The legal reserve is not available for distribution. Should it be used to offset losses in the event of no other reserves being available, it must be replenished out of future profits.

13. PROFIT (LOSS) FOR THE FINANCIAL YEAR

Distribution of the profit and loss for the financial year

The proposed distribution for the profit and loss for the financial year ended on 31 December 2021 obtained by the Company and the reserve amount to be submitted to the General Shareholders Meeting, is as follows:

	Thousand euros
	2021	2020
Base for distribution:
Profit and los for the financial year	(3,528)	(5,224)
Application:
Legal reserve	-	-
Net losses obtained from prior financial years	(3,528)	(5,224)
Dividends	-	-
	(3,528)	(5,224)

On 29 June 2021, the General Shareholders' Meeting approved, without modification, the proposal to distribute the 2020 result.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

14. FINANCIAL LIABILITIES

	Thousand euros
	31 December	31 December
	2021	2020
Long-term financial liabilities
At amortized cost or cost:
- Debts with credit entities	103,977	104,039
- Guarantees	1,186	960
Hedging derivatives:
-Financial hedging instruments (Note 16)	700	1,486
	105,863	106,485
Short-term financial liabilities
At amortized cost or cost:
- Debts with credit entities	610	39
- Other payables (Note 7)	6,661	2,189
- Outstanding remuneration	1,200	1,200
- Other debts with Public Authorities (Note 17)	109	2,645
- Guarantees	66	100
	8,646	6,173

The book amounts of debts and payables approximate their fair values, since the effect of discounting is not significant.

The heading "Guarantees" in the balance sheet includes the guarantees granted by the tenants of real estate registered in real estate investments (Note 6).

The book value of loans and receivables to be paid by the Company is denominated in euros.

The Company has not entered into any financing transactions in the financial year 2021 in addition to those existing as at 31 December 2020.

As of 31 December 2021 and 2020, 100% of the financing obtained by the Company has been classified as 'green' by financial institutions, given the sustainable characteristics of the financed real estate properties.

During the financial year 2020, the Company signed two financing transactions with prestigious financial institutions: a financing contract with a mortgage guarantee at a fixed interest rate in the first year and a variable interest rate in the following years for an amount of 9 million euros, and a financing contract with a mortgage guarantee at a fixed interest rate for a maximum amount of 27 million euros.

The long-term debt of the Group is recorded at amortized cost in the long-term liabilities under the heading "Debts with credit entities". As of 31 December 2021, the amount of the amortized cost is 1,440 thousand euros (1,755 thousand euros at 31 December 2020). Their nominal maturities have been included in Note 7. The real estate assets that guarantee the aforementioned loans through mortgage commitment have a market value of 276,700 thousand euros at 31 December 2021 (232,300 thousand euros at 31 December 2020).

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

Short-term bank borrowings" includes the amount of unpaid accrued interest and principal repayments of 234 thousand euros and 376 thousand euros, respectively, at 31 December 2021 (at 31 December 2020 it was 39 thousand euros).

These loans are subject to compliance with certain financial ratios, which are customary in the industry in which the Company operates and are calculated annually at year-end. This financial ratios are successfully fulfilled at 31 December 2021, with the exception of ratios on the financing property under reform, for which financial institutions have granted a temporary exemption to their compliance.

Additionally, in 2019, the Company contracted two interest rate swaps. The amount registered in the "Financial hedging derivatices" correspond to the valuation of the derivative financial instruments as of 31 December 2021. The effective part of the changes in the fair value of derivatives that are designated and classified as hedges is recognized in the hedge reserve within equity (Note 16).

Deferred payments to suppliers

Payments on business operations carried out during the financial year which are outstanding at the year end, with respect to the maximum terms allowed by Law 15/2010, amended by Law 31/2014, are as follows:

	2021	2020
	Days	Days
Average payment period to suppliers	27	45
Ratio of transactions paid	26	48
Ratio of transactions pending payment	38	42

	Amount (thousand euros)	Amount (thousand euros)
Total payments made	27,535	10,335
Total payments pending	1,043	703

The calculation of the figures in the table above agrees with that established in the ICAC resolution of 4 February 2016. For the purposes of this Note, trade payables include sundry suppliers and creditors for debts with suppliers of goods and services included in the scope of the regulation with respect to the legal payment periods.

15. INCOME AND EXPENSES

a) Net turnover figure

The net turnover figure corresponding to the Company's ordinary business activities broke down in geographical terms as follows:

				Thousand euros
Market	Percentage 2021	Percentage 2020	2021	2020
National	100%	100%	5,945	6,136
	100%	100%	5,945	6,136

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

The net turnover figure breaks down as follows:

		Thousand euros
	2021	2020
Revenue
Rents	5,125	5,116
Reinvoicing of costs	820	1,020
	5,945	6,136

The lease agreements signed by the Company are in normal market conditions in terms of their duration, maturity dates and rent.

b) Customer contracts

The contracts that the Company has signed with customers are rental contracts with standard clauses where a price per m2 of use is set, and they have an average duration of 3 years. As described in Note 6, the properties subject to rent comprise assets for offices and logistic, all of them are located in the Community of Madrid. The total amount fon non-cancellable future minimum charges has been described in Note 6. Customers mostly comprise large and medium-sized companies and logistic operators.

c) Personnel costs

		Thousand euros
	Financial year	Financial year
	ended on 31	ended on 31
	December 2021	December 2020
Wages, salaries and associated costes	(3,941)	(4,219)
Welfare charges: - Other welfare charges	(222)	(205)
	(4,163)	(4,424)

Under personnel expenses, there has been recorded the remuneration to the Company's team, both fixed and prospective.

At 31 December 2021 and 31 December 2020 there was no compensation for dismissals.

A provision for bonuses of Euros 1,200 thousand as at 31 December 2021 (at 31 December 2020 it was 1,200 thousand) has been recognised under wages and salaries.

The average number of employees during the financial year ended on 31 December 2021 is 14 people. In 2020 it was 12 people.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021 (Thousand euros)

The average number of employees in 2021 and 2020, by category, is as follows:

	Financial year	Financial year
Categories	ended on 31	ended on 31
	December 2021	December 2020
Management	8	8
Employees with degrees	4	3
Administrative personnel and others	2	1
	14	12

The number of employees at 31 December 2021 and 31 December 2020, shown by professional grade, was as follows:

	At 31 December	At 31 December
Categories	2020	2020
Management	8	8
Employees with degrees	4	3
Administrative personnel and others	2	2
	14	13

In addition, at 31 December 2021, Company personnel details broken down by gender are as follows:

			At 31 December 2021
Categories	Men	Women	Tota
Management	6	2	8
Employee with degrees	2	2	4
Administrative personnel and others	1	1	2
	9	5	14

In addition, at 31 December 2020, Company personnel details broken down by gender were as follows:

			At 31 December 2020
Categories	Men	Women	Total
Management / Directors	6	2	8
Employee with degrees	2	1	3
Administrative personnel and others	-	2	2
	8	5	13

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

d) External services

The following table gives a breakdown of the external services:

		Thousand euros
	Financial year ended on 31 December 2021	Financial year ended on 31 December 2020
External services directly attributable to real estates assets	(1,417)	(1,427)
Other external services	(1,680)	(1,593)
	(3,097)	(3,020)

e) Financial expenses

Financial expenses accrued in the financial year ended on 31 December 2021 are associated with the financing obtained in the period (Note 14).

16. FINANCIAL HEDGING DERIVATIVES

						Thousand euros
				2021
			Non current		Current
	Covered principal	Maturity	Asset	Liability(*)	Asset	Liability
Interest rate swap	22,700	2026	-	496	-	-
Interest rate swap	21,626	2024	-	204	-	-
			-	700	-	-
						Thousand euros

				2020
			Non current		Current
	Covered
	principal	Maturity	Asset	Liability(*)	Asset	Liability
Interest rate swap	22,700	2026	-	1,134	-	-
Interest rate swap	21,626	2024	-	352	-	-
				1,486	-	-

(*) See Note 7.b

The fair value of financial hedgings derivatives is registered as a non current asset or non current liability if its maturity is beyond 12 months, and as a current asset or current liability if its maturity is prior to 12 months.

The interest rate swap derivative (financial swap) allows to change a variable interest rate to a fixed interest rate in bank loans signed by the Company. The cashflow covered is the foreseen future payments of interests related to the financial debts. Changes in fair value of the interest rate swap are registered in "Hedging transactions" in Equity (Note 12).

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

17. INCOME TAX AND TAX POSITION

The reconciliation between the net amount of income and expenses for the year and the income tax base is as follows:

						Thousand euros
31 December 2021	Income and expenses attributed
		Income statement			directly to Equity
	Increases	Reductions	Total	Increases	Reductions	Total
Income and expenses balance for the period	-	(3,528)	(3,528)	-	-	-
Income tax	-	-	-	-	-	-
Permanent differences	69	(905)	(836)	-	-	-
Temporary differences (*)	-	-	-	786	-	786
Taxable base	69	(4,433)	(4,364)	786	-	786

						Thousand euros
31 December 2020					Income and expenses attributed
		Income statement			directly to Equity
	Increases	Reductions	Total	Increases	Reductions	Total
Income and expenses balance for the period	-	(5,224)	(5,224)	-	(751)	(751)
Income tax	-	-	-	-	-	-
Permanent differences	1,222	-	1,222	-	(196)	196
Temporary differences (*)	1,200	(5,610)	(4,410)	751	-	751
Taxable base	2,422	(10,834)	(8,412)	751	(947)	(196)

(*) Note 16 and 20.

When reading this Note, it should be born in mind that the Company is covered by the special SOCIMI scheme and has not recognised any deferred tax assets as it considers that they will not be recoverable.

At 31 December 2021 tax profits are calculated as accounting losses for the year plus expenses resulting from the Company's incorporation and capital increases which are recognised directly in equity. At the year end date the Company has not recognised deferred tax assets. There were no payments on account of corporate income tax during the financial year 2021 neither 2020.

In accordance with Law 11/2009, of 26 October, as amended by Law 16/2012, of 27 December, and Lay 11/2021, of 30 June, regulating REITs (SOCIMIs), current corporate income tax is the result of applying 0% to the tax base. Withholdings and payments on account amount to 0 thousand euros.

Tax inspections

Under current law, taxes cannot be understood to have been effectively settled until the tax authorities have reviewed the tax returns submitted or until the time-bar period of four years has elapsed. All the Company's taxes are open to inspection.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

As a result, among other things, of the different interpretations to which Spanish tax legislation lends itself, additional tax assessments may be raised in the event of a tax inspection. In any case, the Directors believe that any such liabilities, in the event that they arise, will not have any significant effect on the balance sheet or the income statement neither for the financial year ended on 31 December 2021 nor the financial year ended on 31 December 2020.

At 31 December 2021 and 31 December 2020, the amounts receivable and the amounts payable by the Company in respect of the Public Authorities broke down as follows:

		Thousand euros
	At 31 December	At 31 December
	2021	2020
Accounts receivable
Receivables from Spanish Tax Authorities (VAT)	3,986	4,498
	3,986	4,498
Payment commitments
Payables to Spanish Tax Authorities (withholdings collected)	(88)	(2,177)
Payables to Social Security Bodies	(21)	(21)
Stamp duty on the operations of the Company (Note 6)	-	(447)
	(109)	(2,645)

18. PROVISIONS, CONTINGENCIES AND BANK GUARANTEES

Contingent liabilities

Neither at 31 December 2021 nor 31 December 2020 has the Company contingent liabilities.

Bank Guarantees

At 31 December 2021 and 31 December 2020, the Company has contracted a bank guarantee in the amount of 122 thousand euros with a prestigious financial institution.

19. COMMITMENTS

Operational leasing commitments

The Company leases its office premises under an irrevocable operating lease. This contract is for two years and four months an may be renewed on maturity for another additional three years following the relevant notification by the Company. Minimum total future payments fon non-cancellable leases are 576 thousand euros at 31 December 2021 (224 thousand euros at 31 December 2020).

20. BOARD OF DIRECTORS AND OTHER PAYMENTS

Shareholdings, positions and activities of the members of the Board of Directors

In the duty to avoid situations of conflict with the interest of the Company, during the year the directors who have held positions in the administrative body have complied with the obligations provided for in Article 228 of the Spanish Capital Companies Act.

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

Likewise, both they and the persons related to them have refrained from incurring in the cases of conflict of interest provided for in Article 229 of said Act, except in cases where the corresponding authorization has been obtained.

Remuneration of members of the Board of Directors

During the financial year ended on 31 December 2021, the remuneration of the members of the Board of Directors of the Company has amounted to:

		Thousand euros
	Financial year ended	Financial year ended
	on 31 December	on 31 December
	2021	2020
Remuneration of executive directors	1,228	1,476
Per diems of executive directors	-	-
Non-executive directors' fees	425	378
	1,653	1,854

In addition, the Company has paid during the year ended 31 December 2021 the amount of 66 thousand euros for liability insurance premiums covering the members of the Board of Directors of the Company for the performance of their duties (26 thousand euros in 2020).

The members of the Board of Directors of the Company do not have any pension funds or similar obligations for their benefit. During the years ended on 31 December 2021 and 31 December 2020, there are no senior management personnel who do not belong to the Board of Directors of the Company.

In addition, there is a compensation plan based on the delivery of shares whose beneficiary is the Company's team (Note 2.17). This plan, which is in force, accrues annually when, for each calculation period (between 1 June and 30 June of the following year), certain value creation conditions are met. For the second period of the plan, which ended on 30 June 2021, the Company's management assessed compliance with these conditions and, as a result, no cost associated with the plan has been recognised at 31 December 2021.

The third calculation period of the plan started on 1 July 2021, with 30 June 2022 as the date for completion and assessment of compliance with the thresholds. At the date of preparation of these financial statements, 22 February 2022, it is not possible to estimate compliance with the thresholds. Therefore, no amount has accrued at year-end.

As of December 31, 2020, as a result of the first calculation period of the compensation plan ending on June 30, 2020, 271,227 shares were delivered to the Company's executive directors (2,197 thousand euros) and 262,773 shares were delivered to the management team (2,128 thousand euros).

21. RELATED-PARTY TRANSACTIONS

At 31 December 2021, the long-term financial assets held by the Company with Group companies relate to long-term loans granted under the heading "Loans to Group companies". The distribution of these loans is as follows:

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

The Group company Árima Investments, S.L. has been granted a participating loan up to Euros 4,500 thousand dated 30 September 2021, which accrues interest based on the achievement of positive net results. In compliance with this condition, the annual interest rate is variable and corresponds to 12-month EURIBOR + 2%. There are also loans granted to this subsidiary for other items amounting to Euros 183 thousand related to the costs of corporate transactions carried out during the year.

The loan granted in previous years to the Group company Árima Investigación, Desarrollo e Innovación, S.L.U., amounting 500 thousand euros, at an interest rate of EURIBOR 12 months + 2% and maturing in five years, is maintained.

At 31 December 2020, there is a balance under the heading "Investment in subsidiaries", amounting 500 thousand euros, corresponding to a credit granted to the group company Árima Investigación, Desarrollo e Innovación, S.L.U. at an interest rate of EURIBOR 12 months + 2% and a maturity of 5 years.

During the year ended 31 December 2020 there have been no transactions with related parties.

22. INFORMATION REQUIREMENTS RESULTING FROM SOCIMI STATUS, ACT 11/2009, AS AMENDED BY ACT 16/2012 AND ACT 11/2021

a) Reserves from years prior to the application of the tax regime established in this Law.

Not applicable.

b) Reserves arising from years in which the tax regime established in this Law has been applied, differentiating the part that comes from income subject to a tax rate of 0%, 15% or 19%, with respect to those that, where applicable, have been taxed at the general tax rate.

Not applicable

c) Dividends distributed against profits each year in which the tax rules contained in this Act applied, with differentiation between the portion originating from income subject to tax at a rate of 0%, 15%, or 19%, and the portion originating from income subject to tax at the general rate.

Not applicable

d) In the case of distribution against reserves, identifying the year from which the reserves applied originate, and whether they were taxed at 0%,15%, or 19% or the general rate.

Not applicable

e) Date of the agreement for the distribution of dividends referred to in c) and d) above.

Not applicable

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

f) Date of acquisition of properties intended for rent. The Company has shares in the capital of an entity referred to in Article 2 (1) of the SOCIMIs Act. This participation refers to the company of the Group Árima Investments, S.L., which was acquired on 28 September 2021.

Property	Localization	Date acquired	Segment
María de Molina	Calle María de Molina, esquina con la calle Príncipe Vergara, Madrid	21 December 2018	Offices
Paseo de la Habana	Confluencia de Paseo de la Habana y Avenida de Alfonso XIII, Madrid	21 December 2018	Offices
Edificio Botanic	Calle Josefa Valcárcel, 42, Madrid	29 January 2019	Offices
Edificio Play	Vía de los Poblados, 3 -Parque Empresarial Cristalia, Edificio 4B, Madrid	29 January 2019	Offices
María de Molina	Calle María de Molina, esquina con la calle Príncipe Vergara, Madrid	28 February 2019	Offices
Nave Guadalix	Barranco Hondo, San Agustín de Guadalix	12 April 2019	Logistic
Ramírez de Arellano, 21	Calle Ramírez de Arellano, 21, Madrid	28 June 2019	Offices
Cadenza	Vía de los Poblados, 7, Madrid	30 December 2019	Offices
Manoteras, 28	Calle Manoteras, 28, Madrid	11 June 2020	Offices

g) Identification of assets taken into account when calculating the 80% referred to in Article 3.1 of this Act.

The assets taken into account when calculating the 80% referred to in Article 3.1 of the SOCIMI Act are the ones listed in the above table.

h) Reserves from years in which the tax system provided for under the Act was applicable and which have been made use of (not for distribution or offsetting losses) during the tax period, with identification of the year from which the reserves originate.

Not applicable

NOTES TO THE ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

(Thousand euros)

23. AUDITOR'S FEES

The fees accrued during the financial years ended on 31 December 2021 and 31 December 2020 by PricewaterhouseCoopers Auditores, S.L. and its network are as follows:

	Thousand euros
	2021	2020
Services related to account auditing	91	55
Services other than auditing(*)	30	27
	121	82

(*) There are no tax services or services required by other legal regulations.

24. INFORMATION ON GREENHOUSE GAS EMISSION RIGHTS

The Company has not disposed of greenhouse gas emission allowances in either the financial year 2021 or 2020.

25. ENVIRONMENTAL INFORMATION

The Company's operations do not have negative environmental impacts and therefore it does not incur significant costs or make significant investments the aim of which is to mitigate possible impacts.

26. SUBSEQUENT EVENTS

From December 31, 2021 until the date of formulation of these annual accounts there have been no subsequent events of relevance that need to be broken down.

Appendix I – Information relating to Group companies as at 31 December 2021.

							Thousand Euros
				2021
				EQUITY
Social nomination	Country	Capital	Reserves	Other expenditures	Result	Total
Árima Investigación,
Desarrollo e	España	3	-	(9)	(34)		(40)
Innovación, S.L.U.
Árima Investments, S.L.	España	2,066	17	18,090	62		20,235

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

1. ORGANIZATION STRUCTURE AND FUNCTIONING

Árima Real Estate SOCIMI, S.A. (hereinafter Árima, or the Company or the dominant Company) was incorporated as a public limited company, opting for the application of the special regime of Public Limited Investment Companies Listed on the Property Market (SOCIMI in Spanish).

Árima is the Parent Company of a Group whose main objective is the creation of a real estate portfolio focused mainly on the office and logistics sector in Madrid, with the aim of obtaining income from rents through an active management of the portfolio.

The Group's strategy is based on generating real value in its portfolio through renovations that maximize operational, environmental and technological efficiency to address the shortage of quality sustainable buildings in the markets. In this way, our assets have a positive impact on the environment in which they are located while generating growth and attractive returns for our investors.

These objectives become a reality thanks to Árima's team, which is the main pillar of the Company. Árima's professionals have a deep knowledge of the sector and the local market and a long track record and joint experience. They share values such as transparency, excellence, sustainable profitability, and tangible revaluation. Árima's management team has worked successfully in the past in different projects and maintains a strong alignment with the interests of its shareholders thanks to its significant shareholding.

The Group's shareholding includes major national and international funds that are very interested in the opportunities in the Spanish real estate market and in the management team's ability to maximise and optimise the performance and value of the portfolio.

The dominant Company is supervised by the Board of Directors, a body with authority over matters such as the approval of the Group's general policies and strategies, such as the Corporate Social Responsibility Policy, the Risk Control and Management Policy, as well as compliance with the requirements necessary to maintain SOCIMI status.

The Board of Directors carries out its activities in accordance with the rules of corporate governance contained mainly in the Company's Bylaws, the Regulations of the Shareholders' Meeting and the Regulations of the Board of Directors, also following the recommendations of the Good Governance Code with the maximum commitment to compliance. It also has two fundamental committees, whose essential function is to support this body in its tasks of supervision and control of the ordinary management of the Group: the Audit and Control Committee and, on the other hand, the Appointments and Remuneration Committee.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

2. EVOLUTION AND RESULTS OF BUSINESS

The Group, since its launch on the stock market in October 2018, has carried out various real estate asset acquisition transactions. The management of this portfolio has resulted in a positive consolidated result of 26,125 thousand euros in the year 2021.

Árima has a solid strategy and a defensive portfolio with no exposure to vulnerable sectors. In addition, during the year, leasing contracts have been signed and renewed, contributing to maintain a solid and highly stable position in the climate of economic recovery after the pandemic.

From an operational point of view, all of the Company's operative assets in operation have remained open and accessible, complying with all sanitary measures and ensuring a safe and healthy return to the office for all tenants. These practices have allowed the business to follow a positive path, without significant impacts that have required the adoption of extraordinary actions.

Árima has continued to reinforce its commitment with its stakeholders, especially with shareholders and investors, strengthening communication and continuous contact. In addition, it has paid special attention to ensure the health of its employees and tenants and to look after the welfare of the communities in which its assets are located.

The investments made by the Group result in the composition of a portfolio consisting of 9 assets with a defensive profile and high growth potential. As of December 31, 2021, the Group has 5 renovations initiated and in progress, which will allow for significant increases in value and rent in the contracts signed once the work is completed.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

Although the consequences of COVID-19 have spread throughout the year and continue to mark the economic recovery, Árima's portfolio continues its positive growth, and its value amounts to €343.6M as of December 31, 2021. The revaluation of the portfolio reflects disciplined investment, focused on healthy buildings, sustainable works and projects whose philosophy fits perfectly with what the post-COVID world demands, as well as the good progress of refurbishments, with deliveries expected throughout 2022 and 2023.

During 2021, the Group has acquired two office buildings for an amount of 10,250 thousand euros (excluding acquisition costs). The properties are located in Madrid, Chamartín district, and have a surface area of 3,860 m2. Likewise, additional disbursements have been made amounting to 4,050 thousand euros for the acquisition of a 12,000 m2 property at Calle Manoteras, 28 which will have a total cost of 38,950 thousand euros.

Following these transactions, the Group's portfolio totals more than 99,000 leasable sqm and 1,292 parking spaces. The properties are in line with the listed company's investment model. They make up a balanced portfolio of rental assets and buildings with great potential for revaluation for the SOCIMI's shareholders, always seeking a product with great potential for generating value in highly consolidated areas of the metropolitan area and the outskirts of Madrid, as shown in the following map.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

The assets comprising the Group's portfolio are as follows:

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

The revenue derived from the lease of real estate assets amounted to 6,012 thousand euros during the year 2021 (31 December 2020: 6,136 thousand euros). EBITDA - earnings before interest, taxes, depreciation and amortisation - amounted to 27,334 thousand euros.

The market value of the Group's assets at 31 December 2021 amounts to 343,600 thousand euros (31 December 2020: 275,750 thousand euros) representing an increase of 50% over the purchase price.

The following chart breaks down the current portfolio, grouping the value according to the different active management strategies. With this approach, the Group achieves maximum performance, with a balanced portfolio combining income assets with repositioning projects with high appreciation potential.

Value Creation	GAV (€m)	GAV (%)
Repositioning and Improvement	238,800	69.5%
Re-gearing and re-leasing	62,700	18.2%
Leasing vacant	42,100	12.3%
Total	343,600	100%

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

3. EPRA INFORMATION

The European Public Real Estate Association (EPRA) defines three different metrics for calculating the Net Asset Value (NAV) in its Best Practices guide: Net Reinstatement Value, Net Tangible Assets and Net Disposal Value. Considering its activity, the metric that best represents the nature of the Company is Net Tangible Asset:

EPRA Net Asset Value Metric: Net Tangible Assets

		Thousand euros
	31/12/2021	31/12/2020
NAV	325,665	301,853
Effect of options, convertibles bonds and other interest	-	-
Diluted NAV	325,665	301,853
Excluded:
Fair value of financial instruments	(700)	(1,486)
Intangible assets	218	69
EPRA NTA	326,147	303,270
Number of issued shares (without treasury shares)	27,503,309	27,850,863
EPRA NAV per share (euros)	11.9	10.9

During fiscal 2021, the Net Tangible Asset grew by 9%, as a result of successful portfolio management and strategic acquisitions during the year.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

4. EVOLUTION OF THE SHARES

The share price at December 31, 2021 was 9.18 euros per share, reflecting a revaluation of 11% during the year. The share price at December 31, 2020 was 8.28 euros per share. ¹

5. TREASURY SHARES

At December 31, 2021, the Company holds shares representing 3.26% of the dominant Company's share capital and totalling 926,067 shares (at 31 December 2020 they represented 2.03% and totalled 578,513 shares). The average cost of treasury shares was EUR 8.81 per share in 2021 (EUR 8.96 per share in the same period of 2020), which translated into an attractive discount on the Net Tangible Asset.

These shares are registered, thus reducing the value of the Group equity on 31 December 2021 by EUR 8,163 thousand euros (at 31 December 2020 by EUR 5,082 thousand euros).

The movement of treasury shares in the year is as follows:

		31 December 2021	31 December 2020
	Number of treasury shares	Thousand euros	Number of treasury shares	Thousand euros
At the beginning of the period/year	578,513	5,082	55,842	625
Additions/purchases	347,554	3,081	1,040,123	6,569
Reductions	-	-	(517,452)	(5,112)
At the end of the period/year	926,067	8,163	578,513	5,082

¹ Data rebased for graphical representation (base at 01.01.2021 = Árima's share price)

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

The dominant Company has complied with its obligations under Article 509 of the Spanish Capital Companies Act, which establishes that the par value of acquired shares that are listed on official secondary markets, added to the value of those that are already held by the dominant Company and its subsidiaries, must not exceed 10% of the share capital. The subsidiary does not hold either treasury shares or shares in the dominant Company.

6. DIVIDEND POLICY

The Company is governed by the special tax rules established under Act 11 of 26 October 2009, with the amendments introduced by Act 16 of 27 December 2012, under which SOCIMIs are governed. They are required to distribute the profits they obtain over the course of the year to their shareholders in the form of dividends, after complying with the relevant corporate obligations. Distribution must be approved within the six months following the year end, in the following way:

• a) 100% of the profits resulting from dividends or profit shares received form the companies referred to in Article 2.1 of this Act.
• b) At least 50% of the profits earned from the transfer of the property, shares or ownership interests referred to in Article 2.1 of the Act, where this occurs after the deadlines referred to in Article 3.3 of the Act have expired, when the property, shares or interests are used to comply with the Company's primary corporate purpose. The remainder of these profits must be reinvested in other property or investments related to the performance of this corporate purpose within three years of the transfer date. Otherwise, these profits must be distributed in full together with any profit earned, where applicable, in the year in which the reinvestment period expires. If the items in which the reinvestment has been made are transferred prior to the end of the holding period, profits must be distributed in full, together, where applicable, with the part of the profits attributable to the years in which the Company was not taxed under the special tax scheme provided for in the aforementioned Act.
• c) At least 80% of the remaining profits obtained.

The dividend must be paid within one month of the distribution agreement. When dividends are distributed with a charge to reserves originating from profits for a year in which the special tax rules were applied, the distribution must compulsorily be approved by means of the resolution referred to above. Additionally, the amendment to Law 11/2021 imposes a 15% tax on undistributed profits through dividends.

The Company is required to allocate 10% of its profits for the year to the legal reserve until the balance held in this reserve amounts to 20% of its share capital. The balance of this reserve is not available for distribution to the shareholders until it exceeds the 20% limit. The articles of association of these companies may not establish any restricted reserve other than the foregoing.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

The following table shows a reconciliation between the result under Spanish Gaap and the result under IFRS:

	Thousand euros
	31/12/2021	31/12/2020
Result of the period - Spanish GAAP	(3,528)	(5,224)
Adjustments:
(I) Consolidation	1,055	2,846
(II) Revaluation of investment property	28,598	15,469
Result for period - IFRS	26,125	13,091

7. THE TEAM

Árima Real Estate is a real estate investment group that bases its activity on professional solvency, deep knowledge of the sector and the high level of connection of its management team with the market. The management team has an individual average of 20 years of experience in the sector and a long history of working together as a team. This background, experience and knowledge give the Company access to differentiated investment opportunities in the Spanish real estate market.

For all these reasons, Árima's professionals are one of the main strengths of the Group. They are in charge of all the economic-financial, real estate, regulatory compliance and sustainability responsibilities and carry out their work committed to the Company's strategy and in order to achieve the established objectives, both in terms of business and ESG (Environmental, Social, Governance) issues.

All of them work exclusively and with full dedication to the creation of shareholder value, and with proximity and rigor as constants. They are able to tackle highly complex investment operations in short periods of time, and to carry out the entire value creation process from the identification of the properties, through a very disciplined investment strategy, to their active management, their adaptation to meet all the Group's requirements in terms of sustainability and their potential rotation.

Below, the evolution of the average workforce is shown:

	Financial year	Financial year
Categories	ended on 31	ended on 31
	December 2021	December 2020
Management	8	8
Employees with degrees	4	3
Administrative personnel and others	2	1
	14	12

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

In addition, at 31 December 2021, Company personnel details broken down by gender were as follows:

			31 December 2021
Categories	Men	Women	Total
Management	6	2	8
Employees with degrees	2	2	4
Administrative personnel and others	1	1	2
	9	5	14

8. ALTERNATIVE PERFORMANCE MEASURES

On 5 October 2015, the European Securities and Markets Authority (ESMA) published a set of Guidelines (2015/1415) on Alternative Performance Measures (APM). Compliance with these guidelines is mandatory for all issuers whose securities are admitted for trading on a regulated market and who are required to publish regulatory information under Directive 2004/109/EC on transparency.

Árima's financial information contains figures and measures that have been prepared in accordance with the applicable accounting regulations, together with a further series of measures prepared in accordance with the reporting standards that the company has established and developed internally ("Medidas Alternativas de Rendimiento – MAR").

Alternative performance measures relating to the income statement

• EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization): this is an indicator that measures the Company's operating margin before interest, taxes, depreciation, and amortization have been deducted. Given that this figure does not include financial and tax costs or the accounting costs that do not involve any cash outflows, it is used by the Management to assess results over the long term and allows these results to be compared with other companies in the real estate sector. See Note 2 of this Management Report.

Alternative performance measures relating to the balance sheet

• Gross Asset Value (GAV): this is the value of the portfolio according to its most recent external valuation by an independent expert. This figure is used to determine the value generated as a result of the Group's management of its asset portfolio. See Note 2 of this Management Report and Note 6 of the Consolidated Annual Accounts as of December 31, 2021.

• Financial leveraging ratio: calculated as financial debt / (financial debt plus equity). This figure allows the Management to assess levels of borrowing at the Group, given that the Group's main capital management objectives are to ensure long and short-term financial stability, the positive performance of Árima Real Estate SOCIMI, S.A.'s share and the appropriate financing of investments. See Note 3.2 of the Consolidated Annual Accounts as of December 31, 2021.

At 31 December 2021, 100% of the financing obtained by the Company is classified as "green" by the financial institutions given the sustainable characteristics of the properties financed.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

Alternative performance measures related to COVID-19

The Group's administration and management continue to assess the main risks that the pandemic has on these Annual Accounts. It is concluded that the application of the going concern principle continues to be allowed and that constant monitoring of the situation will be maintained to address potential impacts that may occur. See note 3.1.e) to these Annual Accounts.

9. USE OF DERIVATIVES

The coverage of cash flows through interest rate swaps (financial swap) allows to exchange debt at variable interest rate for fixed-rate debt, where future cash flows to be covered are future interest payments on contracted loans. Changes in the fair value of derivatives are reflected in "Hedging Reserve" in equity. See Note 14 of these Annual Accounts.

10. RISK MANAGEMENT

Árima is subject to a wide range of regulations and good practices in compliance and reporting. In response to these requirements, the Group has carried out an analysis and adaptation of the following Risk Management Systems:

• Risk Management System, defined and developed through the Risk Management Policy and Manual, in order to establish the basic principles, key risk factors and the general framework of action for the control and management of all types of risks faced by the Company (Compliance, Environment, Sustainability, Strategic, Financial and Operational).
• Criminal Compliance Policy, which defines the main guidelines of the Crime Prevention and Detection Model (CPDM), which are developed in the Management Manual issued for this purpose.
• Management Manual of the Internal Control over Financial Reporting System (ICFRS) with the objective of establishing the basis for the maintenance, review, reporting and supervision of the ICFR, ensuring that risks due to errors, omissions or fraud in financial information are adequately controlled, either by prevention, detection, mitigation, compensation or correction, providing assurance that internal controls operate effectively and contribute to ensuring the reliability of the Company's financial information.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

In order to:

• Comply with applicable regulations.
• Benefit from models adapted to Árima's specific characteristics.
• Aid decision-making internally and with third parties through the reporting of these areas.

The Board of Directors considers risk management and internal control to be essential factors for the achievement of the Company's objectives. In order to implement these measures, the Company benefits from an Audit and Control Committee which, in turn, relies on the Risk Control and Management Function. Árima has therefore established a risk management model based on the Risk Management and Control Policy, which is detailed in greater detail in the Risk Management and Control Manual. This management model includes, in line with its commitment to integrate sustainability at all levels of the Company, an ESG risk analysis (Environmental, Social, Governance).

The Group's objective is to establish systematic and preventative procedures, aligned with renowned international risk management standards (COSO² ERM 2017 - Business Risk Management Framework) and led by management, to forecast, prevent and detect risks.

Risk management and control is an ongoing process based on (i) the identification and assessment of potential Company risks based on strategic and business objectives, (ii) the determination of critical risk action plans and controls, (iii) monitoring the effectiveness of the controls and residual risk developments put in place, to report to the Company's governing bodies.

In addition, the Risk Management System operates in a comprehensive, continuous, and cross-cutting way, and serves the management of all priority risks, both internal and external.

Note 3 of the Annual Accounts gives details of the Group's risk management activities.

² The "Committee of Sponsoring Organizations" (COSO) is a voluntary private sector organization founded in 1985 whose mission is to provide intellectual leadership in relation to three interrelated issues: corporate risk management, internal control and fraud deterrence.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

11. PRINCIPAL RISKS AND UNCERTAINTY

The Group's activity is subject to various risks inherent to the sector, such as changes in tax regulations, the evolution of the real estate market, defaults, environmental risks, the search for potential acquisitions of new prime assets in the domestic market and the availability of financing and resources to undertake these acquisitions.

Therefore, the Group carries out its work with committed risk management, as described in the previous section, with the aim of acquiring real estate investments that are in line with its strategy and that provide maximum value to its shareholders in the medium and long term. Árima has investment resources that result from its cash flows associated with the ability to finance assets, which will enable it to continue with its investment strategy focused on real estate assets in Spain.

Additionally, following the emergence and worldwide spread of the COVID-19 coronavirus pandemic, Spanish economic activity, like all major economies, contracted significantly due to restrictions on mobility and one of the strictest lockdowns affecting all sectors. The last few months have seen the beginning of a recovery and some regions, such as Madrid, are growing faster than the national average. This has improved the outlook and allowed us to approach the future with a renewed spirit.

From a financial point of view, Árima has a solid balance sheet to overcome this challenging period, with a reduced leverage (31% LTV) and a cash position and equivalents of EUR 89 million at 31 December 2021, which translates into a positive working capital of EUR 85 million and a net debt amount (positive) of EUR 15.7 million at that date. In addition, 95% of the debt service facing the dominant Company will take place in 2025 and subsequent years, minimising the Group's liquidity risk. In addition, Árima has a high-quality tenant base, which has allowed rent collection periods to remain unchanged. In addition, the refurbishment projects continue without disrupting the Group's strategy.

12. DEFERRED PAYMENTS TO SUPPLIERS

Payments on business operations carried out during the financial year which are outstanding at the year end, with respect to the maximum terms allowed by Act 15/2010, amended by Act 31/2014, are as follows:

	2021	2020
	Days	Days
Average payment period to suppliers	27	45
Ratio of transactions paid	26	48
Ratio de transactions pending payment	38	42
		Amount
		(thousand euros)
Total payments made	27,535	10,335
Total payments pending	1,043	703

The calculation of the figures in the table above agrees with that established in the ICAC resolution of 4 February 2016. For the purposes of this Note, trade payables include sundry suppliers and creditors for debts with suppliers of goods and services included in the scope of the regulation with respect to the legal payment periods.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

13. TECHNOLOGY, SUSTAINABILITY & HEALTH

Árima is positioned at the forefront of quality in its buildings, creating sustainable and innovative, attractive and healthy spaces, inspiring creativity and talent retention.

The Group continues to focus on innovation as a driving force to achieve efficient asset management and offer cutting-edge solutions to tenants. During the year Árima has consolidated its relationship with companies such as Wallbox, to electrify a large part of the parking spaces. Facilitating and promoting electric mobility in the assets is part of the strategy to provide the assets with the highest levels of sustainability, wellbeing, health, and technology in order to generate the greatest wellbeing for its tenants and to create avant-garde and attractive workspaces, which favour the retention of labour talent and set a trend in the design of office spaces in the post-Covid world.

Árima is committed to obtaining the certifications that guarantee the highest standards of sustainability and health safety in the portfolio. Thus, the team works to achieve the highest LEED, WELL and BREEAM ratings for its assets, reaching a percentage of offices with sustainable certifications four times higher than the market average.

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

Árima's excellent track record in sustainability has been recognized during the 2021 fiscal year by GRESB (Global Real Estate Sustainability Benchmark) and EPRA (European Public Real Estate Association). On the one hand, GRESB awards Árima four stars out of a maximum of five in its benchmark index, which places the Company above the average of European office companies with an average size of EUR 4.7 bn in record time. On the other hand, EPRA has awarded the EPRA sBPR Gold and Most Improved awards in recognition of compliance with sustainability best practice recommendations and score increase respectively.

14. SUBSEQUENT EVENTS

From 31 December 2021 to the date of preparation of these Annual Accounts there have been no material subsequent events requiring disclosure.

ANNEX: Annual Corporate Governance Report and Annual Report on the Remuneration of Directors.

ISSUER'S IDENTIFICATION DATA

Financial year end date	31/12/2021
Company Tax ID No. (CIF):	A88130471
Company name:
ARIMA REAL ESTATE SOCIMI, S.A.

Registered office:

TOREE SERRANO. C/SERRANO, 47 - 4ª PL. 28001 MADRID

A. OWNERSHIP STRUCTURE

A.1. Complete the following table on the company's share capital and voting rights attributed, including, if applicable, those corresponding to loyalty voting shares, as of the closing date of the fiscal year:

Indicate whether the Company's bylaws contain a provision for double voting for loyalty:

• [ ] Yes
• [ √ ] No

Date of last	Share capital (€)	Number of	Number of
modification		shares	voting rights
15/11/2019	284,293,760.00	28,429,376	28,429,376

Indicate whether there are different types of shares with different associated rights:

• [ ] Yes [ √ ] No
• A.2. List the direct and indirect holders of significant ownership interests at year-end, including board members with a significant ownership:

Personal or corporate name of shareholder	% voting rights allocated to shares		% voting rights held through financial instruments		% of total
	Direct	Indirect	Direct	Indirect	voting rights
FIDELITY SELECT PORTFOLIOS	3.55	0.00	0.00	0.00	3.55
FMR LLC	0.00	3.55	0.00	0.00	3.55
IVANHOÉ CAMBRIDGE, INC.	0.00	20.29	0.00	0.00	20.29
RODEX ASSET MANAGEMENT, S.L.	3.84	0.00	0.00	0.00	3.84
MORGAN STANLEY	3.84	0.00	0.00	0.00	3.84
PELHAM LONG/ SHORT SMALL CAP MASTER FUND LTD.	0.00	0.00	9.98	0.00	9.98
THAMES RIVER CAPITAL LLC	0.00	9.98	0.00	0.00	9.98
TR PROPERTY INVESTMENT TRUST PLC	0.00	9.98	0.00	0.00	9.98
MR. ROSS TURNER	0.00	0.00	9.98	0.00	9.98

Personal or corporate name of indirect holder	Personal or corporate name of direct holder	% voting rights allocated to shares	% voting rights held through financial instruments	% of total voting rights
No data available

Please indicate the most significant movements in shareholding structure during the year:

Most significant movements
No data

A.3. List, regardless of the percentage, the shareholding at year-end of the members of the Board of Directors who hold voting rights attributed to shares of the Company or through financial instruments, excluding the Board Members identified in section A.2 above:

Personal or corporate name of board member	allocated shares	% voting rights to		% voting rights held through financial instruments	% of total voting rights	can be transmitted instruments	% voting rights that through financial
	Direct	Indirect	Direct	Indirect		Direct	Indirect
MR. LUIS ALFONSO LÓPEZ HERRERA-ORIA	0.00	3.84	0.00	0.00	3.84	0.00	3.84

% of total voting rights held by members of the board of directors 3.84

Breakdown of indirect holdings:

Personal or corporate name of board member	Personal or corporate name of direct holder	% voting rights allocated to shares	% voting rights held through financial instruments	% of total voting rights	% voting rights that can be transmitted through financial instruments
No data

Please indicate the total percentage of voting rights represented by the Board of Directors:

% of total voting rights represented by the board of directors	0.00
----------------------------------------------------------------	------

A.4. Indicate, where applicable, any family, commercial, contractual or corporate relationships between owners of significant shareholdings, insofar as these are known by the company, unless they are insignificant or arise from ordinary trading or exchange activities, and excluding those reported in section A.6:

Related-party name or corporate name	Type of relationship	Brief description
No data available

A.5. Indicate, where applicable, any commercial, contractual or corporate relationships between owners of significant shareholdings, and the company and/or its group, unless they are insignificant or arise from ordinary trading or exchange activities:

Related-party name or corporate name	Type of relationship	Brief description
No data available

A.6. Describe the relationships (unless insignificant for both parties) that exist between significant shareholders or shareholders represented on the Board, and directors, or their representatives in the case of proprietary directors.

Explain, where applicable, how significant shareholders are represented. Specifically, name the directors who have been appointed to represent significant shareholders, those whose appointment was proposed by significant shareholders or who are linked to significant shareholders and/or companies in their group, specifying the nature of such relationships or links. In particular, and where applicable, mention the existence, identity and position of directors of the listed company, or their representatives, who are in turn members of the board of directors or the representatives of companies that hold significant shareholdings in the listed company or in group companies of these significant shareholders:

Personal or corporate name	Name or corporate name of	Name of the significant
of linked board member	linked significant shareholder	shareholder's group	Description
or representative		company	relationship/position
Mr. STANISLAS HENRY	IVANHOÉ CAMBRIDGE, INC.	IVANHOÉ CAMBRIDGE, INC.	Proprietary Director
Mr. LUIS ALFONSO LÓPEZ HERRERA-ORIA	RODEX ASSET MANAGEMENT, S.L.	RODEX ASSET MANAGEMENT, S.L.	Chief Executive Officer

• A.7. Indicate whether the company has been notified of any shareholders' agreements pursuant to articles 530 and 531 of the Spanish Capital Companies Act. Provide a brief description and list of the shareholders bound by the agreement, as applicable:
• [ ] Yes [ √ ] No

Indicate whether the company is aware of the existence of any concerted actions among its shareholders. If so, give a brief description:

[ ] Yes [ √ ] No

Expressly indicate any amendments to or termination of such agreements or concerted actions during the year, where applicable:

A.8. Indicate whether any individuals or legal entity currently exercises control or could exercise control over the company in accordance with article 5 of the Spanish Securities' Market Act. If so, give details:

[ ]	Yes
[ √ ]	No

A.9. Complete the following tables on the company's treasury stock:

At year-end:

Number of shares	Number of shares held	% of total share
held directly	indirectly (*)	capital
926.067		3.26

(*) Held through:

Personal or corporate name of direct shareholder	Number of shares held directly
No data available

Please indicate the most significant movements in shareholding structure during the year:

Pursuant to resolutions adopted by the Board of Directors of the Company, on 26 March 2020, a share buy-back programme of the Company (the "Buyback Programme") was launched under the provisions of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (the "Regulation 596/2014"), and Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council as regards regulatory technical standards on conditions for buy-back programmes and stabilisation measures (the "Delegated Regulation 2016/1052").

A.10. Give details of the applicable conditions and time periods governing any resolutions by the general shareholders' meeting allowing the board of directors to issue, buy back and/or transfer treasury stock:

The Ordinary General Shareholders' Meeting held on 29 June 2021 agreed to authorise the acquisition of treasury stock by the Company over a period of 5 years, leaving the authorization dated 28 May 2020 without effect.

A.11. Estimated free float:

A.12. Give details of any restriction (statutory, legislative or of any other kind) on the transfer of securities and/or any restriction on voting rights. In particular, state whether there is any type of restriction that may make it difficult to take over control of the company through the acquisition of its shares on the market, or any rules governing prior authorisation or notification that may be applicable, under sector regulations, to acquisitions or transfers of the company's financial instruments.

[ ]	Yes
[ √ ]	No

• A.13. Indicate whether the General Shareholders' Meeting has agreed to take neutralisation measures to prevent a public takeover bid under the terms of Act 6/2007.
• [ ] Yes [ √ ] No

If applicable, explain the measures adopted and the terms under which these restrictions may be lifted:

A.14. Indicate whether the company has issued securities that are not traded in a regulated European Union market.

[ ]	Yes
[ √ ]	No

If so, identify the various classes of shares and, for each class of shares, the rights and obligations they confer:

B. GENERAL SHAREHOLDERS' MEETING

B.1. Indicate and detail the differences, if any, between the required quorum for convening the General Shareholders' Meeting and the quorum required in the Spanish Capital Companies Act (LSC):

[ ] Yes [ √ ] No

B.2. Indicate and, where applicable, describe any differences between the company's system of adopting corporate resolutions and the framework established in the Spanish Capital Companies Act (LSC):

[ ]	Yes
[ √ ]	No

B.3. Indicate the rules governing amendments to the company's Bylaws. In particular, indicate the majorities required to amend the articles of association and, if applicable, the rules for protecting shareholders' rights when changing the articles of association.

The system for the adoption of resolutions refers to the LSC.

B.4. Indicate the attendance figures for the general shareholders' meetings held during the year to which this report relates and during the preceding two years:

			Attendance Data
				% remote voting
Date of General Meeting	% attending in	% attending by	Electronic vote	Others	Total
	person	proxy
26/09/2018	100.00	0.00	0.00	0.00	100.00
Of which, free float	0.00	0.00	0.00	0.00	0.00
01/10/2018	100.00	0.00	0.00	0.00	100.00
Of which, free float	0.00	0.00	0.00	0.00	0.00
18/10/2018	100.00	0.00	0.00	0.00	100.00
Of which, free float	0.00	0.00	0.00	0.00	0.00
21/03/2019	10.91	47.54	0.00	0.00	58.45
Of which, free float	0.00	45.80	0.00	0.00	45.80
05/11/2019	8.76	51.58	0.00	0.00	60.34
Of which, free float	0.96	49.96	0.00	0.00	50.92
28/05/2020	4.77	63.77	0.00	0.00	68.54
Of which, free float	0.93	34.95	0.00	0.00	35.88
29/06/2021	77.45	67.15	0.00	0.00	78.60
Of which, free float	7.61	32.99	0.00	0.00	40.60

B.5. State whether any point on the agenda of the general shareholders' meetings during the year has not been approved by the shareholders for any reason:

[ ] Yes [ √ ] No

B.6. State whether the articles of association impose any minimum requirement on the number of shares required to attend the general shareholders' meetings or to vote remotely:

[ ]	Yes
[ √ ]	No

B.7. State whether it has been established that certain decisions (other than those established by law) that entail an acquisition, disposal, the contribution of essential assets to another company or other similar corporate transactions, must be subject to the approval of the general shareholders' meeting:

[ ] Yes [ √ ] No

B.8. Indicate the address of your company's website and the way in which corporate governance content may be accessed, along with any other information on general meetings which must be made available to shareholders on the Company website.

www.arimainmo.com

C. COMPANY MANAGEMENT STRUCTURE

C.1. Board of Directors

C.1.1 Maximum and minimum number of directors established in the articles of association and the number set by the general meeting:

Maximum number of Directors	7
Minimum number of Directors	5
Number of directors set by the general meeting	7

C.1.2 Complete the following table with board members' details:

Personal or corporate name of board member	Representative	Category of board member	Position on the board	Date of first appointment	Date of last appointment	Election procedure
MR. STANISLAS HENRY		Proprietary	DIRECTOR	12/11/2019	12/11/2019	RESOLUTION OF BOARD OF DIRECTORS
MR. LUIS ALFONSO LÓPEZ HERRERA ORIA		Executive	CHIEF EXECUTIVE OFFICER	26/09/2018	29/06/2021	RESOLUTION OF GENERAL SHAREHOLDERS' MEETING
MR. FERNANDO BAUTISTA SAGÜÉS		Independent	DIRECTOR	26/09/2018	29/06/2021	RESOLUTION OF GENERAL SHAREHOLDERS' MEETING
MR. DAVID JIMÉNEZ BLANCO CARRILLO DE ALBORNOZ		Independent	DIRECTOR	26/09/2018	29/06/2021	RESOLUTION OF GENERAL SHAREHOLDERS' MEETING
MR. LUIS MARÍA ARREDONDO MALO		Independent	CHAIRMAN	26/09/2018	29/06/2021	RESOLUTION OF GENERAL SHAREHOLDERS' MEETING
MRS. CHONY MARTÍN-VICENTE MAZARIEGOS		Executive	DIRECTOR	28/05/2020	28/05/2020	RESOLUTION OF GENERAL SHAREHOLDERS' MEETING
MR. CATO HENNING STONEX		Independent	DIRECTOR	26/09/2018	29/06/2021	RESOLUTION OF GENERAL SHAREHOLDERS' MEETING

Total number of board members 7

State if any directors have left the board of directors during the period forming the subject of this report, whether through resignation, dismissal or for any other reason:

Personal or corporate name of board member	Category of director at the time of leaving	Date of last appointment	Leaving date	Specialist committees of which he/she was a member	Indicate whether the director left before the end of their term
No data available

C.1.3 Complete the following tables on the members of the board and their specific category:

	EXECUTIVE DIRECTORS
Personal or corporate name of board member	Position in company's organisational structure	Profile
MR. LUIS ALFONSO LÓPEZ HERRERA ORIA	CHIEF EXECUTIVE OFFICER	Mr. Luis Alfonso López de Herrera-Oria has been the CEO of the Company since its inception and boast more than 30 years of experience in the real estate sector. He was CEO of Axiare from 2014 to 2018 and Executive Director of Prima from 1986 to 2002. During that period, Prima was listed on the Madrid Stock Exchange (1988) and, in 1990 became the largest real estate company in Spain. In 2002, he founded Rodex Asset Management with a small team of former Prima members. In 2007, Rodex's core business was transferred to Alza Real Estate, SA, where he served as CEO and independent Director. Luis Alfonso López de Herrera-Oria has also been an independent advisor to funds such as Falcon II Real Estate, founded by Morgan Stanley and CBRE, and former advisor to iAdvise Partners, EAFI, SL. He has a degree in Economics and is a member of the Royal Institution of Chartered Surveyors (FRICS).
MRS. CHONY MARTÍN-VICENTE MAZARIEGOS	EXECUTIVE DIRECTOR	Ms. Chony Martín Vicente-Mazariegos has been the CFO of the Company since its incorporation and Board member. She has more than 20 years of experience in Finance, Corporate development and ESG. She was CFO of Axiare from 2014 to 2018, in addition to Director of Investor Relations of Axiare till 2016. From 1998 to 2002, she worked in Prima as part of Luis Alfonso López de Herrera-Oria´s team. Subsequently, she joined Redevco as Financial Director with responsibility in Spain, Portugal and Italy. Redevco Spain is a subsidiary of Redevco, BV, a Dutch company that manages a European portfolio of 7.5 billion euros, specializing in business premises. She has a degree in Business Administration and Management and Economic Sciences from the Complutense University of Madrid and has also participated in various management and management programs at IESE, ESADE and IMD, with special attention to Management, ESG and Board of Directors. Currently, she is a professor at the IE Business School and a member of the Royal Institution of Chartered Surveyors (MRICS).

Total number of Executive Directors	2
% of the Board	28.57

	EXTERNAL PROPRIETARY DIRECTORS
Personal or corporate name of board member	Individual or corporate name of the significant shareholder that he/she represents or that proposed his/her appointment	Profile
MR. STANISLAS HENRY	IVANHOÉ CAMBRIDGE, INC.	Mr. Stanislas Henry is an independent non-executive director of the Company. He is a French citizen and resident and holds an MBA from INSEAD (1996). He is presently principal vice president at Invanhoé Cambridge Europe, where he heads up all Operations and Strategic Partnerships in Europe. He began his career in Corporate Finance at Paribas Group from 1988 to 1995, holding positions in branches of the group in Paris (Project and media financing), London (LBO financing) and New York (European Corporate Desk). He then spent five years with GE Capital and GE Real Estate in London and Paris in business development roles, contributing to GE's increased presence in the European real estate markets (in France, the UK, Spain and Italy). After a year in the M&A and Treasury functions at Allianz France (formerly AGF), he joined Credit Agricole Group where he led the M&A activities in the real estate sectors from 2002 to 2008 within CA CIB. He finally joined Amundi Real Estate, the Asset Management branch of Credit Agricole Group, where he created the institutional real estate funds department, developing this activity up to 12Bn € of real estate AUM across Europe. He joined Ivanhoé Cambridge in May 2019.

Total number of proprietary directors	1
% of the Board	14.29

	INDEPENDENT EXTERNAL DIRECTORS
Personal or corporate name of board member	Profile
MR. FERNANDO BAUTISTA SAGÜÉS	Mr. Fernando Bautista Sagüés is an independent non-executive director. He holds a degree in law from the University of Deusto and a degree in economics and business studies from the Catholic Institute of Business Administration (ICADE) and has been a member of the Madrid Bar Association since 1981. He became a partner in the law firm J&A Garrigues in 1989 and, following its merger with Arthur Andersen, a partner in Arthur Andersen Worldwide in 1996. Two years later, in 1998, he was appointed partner at Freshfields. Between 2014 and 2018 he was an independent non-executive director of Axiare Patrimonio. Fernando currently advises as an independent lawyer in corporate and financial law. He is an independent director of Abante Asesores, S.A. and secretary of Iberdrola S.A.'s Commission of Sustainable Development.
MR. DAVID JIMENEZ-BLANCO CARRILLO DE ALBORNOZ	Mr. David Jiménez-Blanco Carrillo de Albornoz is an independent non-executive Director. He holds a degree in Economics and Business Studies from CUNEF. David worked at Goldman Sachs International from 1995 to 2006, where he was responsible for the European Industrial Clients Group and the investment banking teams in Spain and Portugal. Between 2006 and 2009, he served as Chairman of Merrill Lynch Capital Markets España, S.A., Sociedad de Valores, and was Head of Investment Banking and Global Markets in Spain and Portugal of the firm, and a member of the EMEA Investment Banking Operating Committee. Between 2010 and 2013, he was a partner at BK Partners, a company focused on direct investment in Mexico; between 2013 and 2016 he was CFO of World Duty Free Group SpA, a company listed in Milan, and between 2016 and 2020 he was Director of Restructuring at Abengoa. Between 2011 and 2012 he was a Director at Atento (a subsidiary of Telefónica), and between 2014 and 2018, he was an independent Director of Axiare Patrimonio. Currently and from 2020 he is the Chairman of the Madrid Stock Exchange, Vicechairman of Bolsas y Mercados Españoles and an independent director of SIX Group. He is also Chairman of Gawa Capital, an asset manager focused on the management of impact funds.

% of the Board 57.14

	INDEPENDENT EXTERNAL DIRECTORS
Personal or corporate name of board member	Profile
MR. LUIS MARÍA ARREDONDO MALO	Mr. Luis Maria Arredondo Malo is a civil engineer and holds the Medal of Professional Merit by the Spanish Association of Civil Engineers (I.C.C.P). He has also completed the Senior Management Programme in Business Administration (PADE) at the IESE Business School (University of Navarra). From 1969 to 1975 he worked in the Spanish Ministry of Public Works as a project engineer, and from 1975 to 1978 he was General Manager of the construction company S.A.C.R.A., a subsidiary of the Belgian Group C.F.E. In 1980 and until 1988 he was General Manager of the Hispamer Real Estate Corporation (CIH) and General Manager of the Sociedad de Edificaciones de Madrid y Provincia, S.A. (EMPSA). In 1988 and until 1994 he was Managing Director (CEO) of Inmobiliaria Zabálburu, S.A., a company listed on the Spanish stock market. During that period, the real estate company became a company with a rapid and constant growth. Between 1994 and 2006 he was Managing Director of Inmobiliaria Urbis, a position he held simultaneously with that of Chairman during 2006, a company which, during that period, reached a market value of 3,400 million euros. Between 2006 and 2013, he was Chairman and CEO of Santander Global Property, the asset company of Banco Santander, with large international projects in cities such as Madrid, Sao Paulo, Mexico City, Monterrey, Miami and Berlin. Between 2014 and 2018, he was Chairman of the Board of Directors of Axiare Patrimonio, one of the largest listed companies in the Spanish stock market, recently acquired by Inmobiliaria Colonial.
MR. CATO HENNING STONEX	Mr. Cato Henning Stonex is an independent non-executive director of the Company. He holds a BSC (Econ) from the London School of Economics and Political Science. From 2006 to 2016 he was a governor and in 2016 was appointed governor emeritus. Cato Henning Stonex is Director of LSE Ideas (think tank) and a member of its Investments Committee. Mr. Cato Henning Stonex joined Morgan Grenfell & Co in 1986, where he became a trader in European government bonds. In 1989 he joined J. Rothschild Administration as a fund manager. In 1996 he was a founding partner at Taube Hodson Stonex. In 2016, Taube Hodson Stonex merged with Global Asset Management. Cato Henning Stonex is currently a Principal at both WMC Capital Ltd and Stonex Capital Partners Ltd, focusing on international small and mid cap investments. He was an independent non executive director of Axiare Patrimonio from 2017 to 2018.
	Total number of independent directors 4

List any Independent Directors who receive any amount or payment from the company or its corporate group other than standard director remuneration, or who maintain or have maintained during the last financial year a business relationship with the company or any group company, either in their own name or as a significant shareholder, director or senior officer of an entity, which maintains or has maintained such a relationship.

Where applicable, include a reasoned statement from the Board detailing why it believes that the said director will be able to perform his/her duties as an independent director.

Personal or corporate name of board member	Description of the relationship	Reasoned statement
No data available

OTHER EXTERNAL DIRECTORS
Give details of any other external directors and list the reasons why they cannot be considered proprietary or independent directors. Give details of their relationships with the company, its executives or shareholders:
Personal or corporate name of board member	Reasons		Company, manager or shareholder to whom he/she is linked	Profile
No data available
Total number of other external directors N.A.

List any changes in the category of each director that have occurred during the period reported:

% of the Board N.A.

Personal or corporate name of board member	Date of change	Previous category	Current category
No data available

C.1.4 Complete the following table with information on the number of female board members at the close of the last 4 financial years and their category:

	Number of female board members					% of the total number of directors of each type
	FY 2021	FY 2020	FY 2019	FY 2018	FY 2021	FY 2020	FY 2019	FY 2018
Executive	1	1			100.00	100.00	0.00	0.00
Proprietary					0.00	0.00	0.00	0.00
Independent					0.00	0.00	0.00	0.00
Others					0.00	0.00	0.00	0.00
Total	1	1			14.29	14.29	0.00	0.00

• C.1.5 State whether the company has diversity policies that apply to its board of directors on such questions as age, gender, disability and professional training and experience. Small and medium-sized enterprises, as these are defined in the Accounts Audit Act, must at least report the policy they have implemented in relation to gender diversity.
• [ √ ] Yes
• [ ] No
• [ ] Partial policies

Should this be the case, describe these diversity policies, their objectives, the measures and way in which they have been applied and their results over the year. Also describe the specific measures adopted by the board of directors and the appointments and remuneration committee to achieve a balanced and diverse group of directors.

In the event that the company does not apply a diversity policy, explain the reasons why.

Description of policies, objectives, measures and how they have been implemented, including results achieved.

The Board of Directors has approved a director selection policy which ensures that the procedures used to select directors favour diversity in respect of gender, experience and knowledge and that they are free from any implicit bias that might involve some form of discrimination. It also ensures that candidates for the position of non-executive director have sufficient time available to properly perform their duties.

C.1.6 Explain the measures agreed by the appointments committee, where applicable, to ensure that selection processes are not subject to any implicit bias that would make it difficult to select female directors, and to ensure that the company makes a conscious effort to search for and include female candidates who have the required professional profile, thus allowing for a balanced presence between men and women.

Explanation of measures

The Board of Directors has approved the policy for the selection of directors, through which it ensures that the procedures for the selection of directors favour diversity of gender, experience and knowledge, and do not suffer from implicit biases that could imply any discrimination. In keeping with this commitment, the General Shareholders' Meeting of the previous year approved, at the proposal of the Appointments and Remuneration Committee, the appointment of a female board member, setting the number of board members at seven.

When, in spite of the measures taken (where applicable), there are few or no female directors, please give the reasons why this is the case:

Explanation of reasons

As indicated in the previous section, it is the Company's objective to continue to ensure gender diversity, evaluating all applications on a case-by-case basis.

C.1.7 Explain the conclusions of the appointments committee regarding verification of compliance verification of compliance with the policy aimed at favouring an appropriate composition of the board of directors.

The Company has established a policy of selecting board members based on an analysis of the Company's needs. Candidates for Board Members shall be persons of recognized prestige, solvency, competence, qualification, training, availability and commitment to the function. Furthermore, they must be professionals of integrity whose conduct and professional trajectory are in line with the mission, vision and values of the Company. Likewise, it is the Company's will to achieve the diversity policies and the fulfilment of the objectives set with regard to the participation of women on the Boards of Directors. In this sense, the General Shareholders' Meeting of the previous year approved, at the proposal of the Appointments and Remuneration Committee, the appointment of a female director, setting the number of directors at seven.

C.1.8 Explain, where applicable, the reasons why proprietary directors have been appointed at the request of shareholders who hold less than 3% of the share capital:

Personal or corporate name of shareholder	Reasons
No data available

Provide details of any rejections of formal requests for board representation from shareholders whose shareholding interest is equal to or greater than that of other shareholders who have successfully requested the appointment of proprietary directors. Where applicable, explain the reasons why they were rejected.

[ ] Yes

[ √ ] No

C.1.9 Where applicable, give details of the powers and duties delegated by the board of directors to directors or board committees, including those related to the possibility of issuing or repurchasing shares:

Personal or corporate name of board member or committee	Brief description
MR. LUIS ALFONSO LÓPEZ	Each and every one of the powers accorded to the Board of Directors which may be
HERRERA-ORIA	subject to delegation under Law, Bylaws and the Board of Directors' Regulations

C.1.10 List the directors, if any, who hold office as directors, directors' representatives or executives in other companies belonging to the listed company's group:

Personal or corporate name of board member	Name of the group company	Position	Does he/she have executive powers?
MR. LUIS ALFONSO LÓPEZ HERRERA-ORIA	Árima Investigación, Desarrollo e Innovación, S.L.U.	Representative of the Sole Director	YES
MR. LUIS ALFONSO LÓPEZ HERRERA-ORIA	Árima Investments, S.L.	Representative of the Sole Director	YES

C.1.11 Where applicable, list any directors or directors' representatives that are legal entities and are members of the board of directors or the representatives of members of the board of directors of other companies listed on official securities markets other than group companies, and have communicated that status to the Company:

Personal or corporate name of board member	Name of the listed company	Position
MR. LUIS MARÍA ARREDONDO MALO	Nieve de Andalucía. S.L.	PRESIDENT
MR. LUIS MARÍA ARREDONDO MALO	Castellar Ingenieros S.L.U.	DIRECTOR
MR. LUIS MARÍA ARREDONDO MALO	Aljaral S.A.U.	PRESIDENT
MR. LUIS MARÍA ARREDONDO MALO	Rústica Consolación S.L.	PRESIDENT
MR. FERNANDO BAUTISTA SAGÜÉS	Abante Asesores S.A.	DIRECTOR
MR. STANISLAS HENRY	IC Logistics Netherlands I B.V.	DIRECTOR
MR. STANISLAS HENRY	IC Logistics Netherlands II B.V.	DIRECTOR
MR. STANISLAS HENRY	IC Logistics Netherlands III B.V.	DIRECTOR
MR. STANISLAS HENRY	IC Logistics Netherlands IV B.V.	DIRECTOR
MR. STANISLAS HENRY	IC PL Properties GmbH	DIRECTOR
MR. STANISLAS HENRY	ICAMAP Investimento S.àr.l.	DIRECTOR
MR. STANISLAS HENRY	Peel Logistics Management Limited	DIRECTOR
MR. STANISLAS HENRY	Stonecutter JV Limited	DIRECTOR
MR. STANISLAS HENRY	Wilmersdorfer Arcaden Verwaltings GmbH	DIRECTOR
MR. LUIS ALFONSO LÓPEZ HERRERA-ORIA Rodex Asset Management, S.L.		SOLE DIRECTOR
MR. LUIS ALFONSO LÓPEZ HERRERA-ORIA Agrodesarrollos Integrados, S.L.		SOLE DIRECTOR
MR. LUIS ALFONSO LÓPEZ HERRERA-ORIA Inmodesarrollos Integrados, S.L.		SOLE DIRECTOR
MR. LUIS ALFONSO LÓPEZ HERRERA-ORIA Puerto Feliz, S.A.		SOLE DIRECTOR
MR. LUIS ALFONSO LÓPEZ HERRERA-ORIA Heracles Proyectos y Promociones	Inmobiliarias, S.A.	SOLE DIRECTOR
MR. DAVID JIMÉNEZ-BLANCO CARRILLO DE ALBORNOZ	BME Holding (Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros), S.A.	DIRECTOR
MR. DAVID JIMÉNEZ-BLANCO CARRILLO DE ALBORNOZ	Sociedad Rectora De La Bolsa De Valores De Madrid S.A.	PRESIDENT
MR. DAVID JIMÉNEZ-BLANCO CARRILLO DE ALBORNOZ	Gawa Capital Partners, SGEIC, S.A.	PRESIDENT
MR. DAVID JIMÉNEZ-BLANCO CARRILLO DE ALBORNOZ	SIX-Group AG	DIRECTOR
MR. CATO HENNING STONEX	AXCENT PARTNERS LLP	DIRECTOR
MR. CATO HENNING STONEX	BUCK´S CLUB LIMITED	DIRECTOR
MR. CATO HENNING STONEX	CATO STONEX LIMITED	DIRECTOR
MR. CATO HENNING STONEX	CHS VENTURES LIMITED	DIRECTOR
MR. CATO HENNING STONEX	C STONEX LIMITED	DIRECTOR

MR. CATO HENNING STONEX	CS VENTURES LIMITED	DIRECTOR
MR. CATO HENNING STONEX	JOHN CHAPMAN LIMITED	DIRECTOR
MR. CATO HENNING STONEX	PARTNERS INVESTMENT COMPANY (2017) LIMITED	DIRECTOR
MR. CATO HENNING STONEX	PARTNERS INVESTMENT COMPANY LLP	DIRECTOR
MR. CATO HENNING STONEX	PETWORTH ART LLP	DIRECTOR
MR. CATO HENNING STONEX	ROUNDWOOD PARTNERS LLP	DIRECTOR
MR. CATO HENNING STONEX	SLOANE RESIDENTS LIMITED	DIRECTOR
MR. CATO HENNING STONEX	STONEX CAPITAL PARTNERS LTD	DIRECTOR
MR. CATO HENNING STONEX	UNION JACQUES LIMITED	DIRECTOR
MR. CATO HENNING STONEX	WESTMORLAND SPIRITS LIMITED	DIRECTOR
MR. CATO HENNING STONEX	OBOTRITIA CAPITAL KGaA	DIRECTOR
MR. CATO HENNING STONEX	The Latitude Hotels Group LTD	DIRECTOR

Indicate, if applicable, any other remunerated activities of the directors or representatives of the directors, whatever their nature, other than those indicated in the table above.

Personal or corporate name of board member	Other remunerated activities
MR. FERNANDO BAUTISTA SAGÜÉS	Secretary of the Sustainable Development Commission of Iberdrola, S.A.
MR. CATO HENNING STONEX	Member of Vicama Capital's Advisory Committee

C.1.12 State and, where applicable, explain whether the company has established rules on the maximum number of company boards on which its directors may hold seats, identifying, where appropriate, where this is regulated:

[ √ ]	Yes
[ ]	No

Explanation of the rules and identification of the document where this is regulated.

In accordance with Article 21, section 2.a of the Board of Directors Regulations, under no circumstances may a director be a member of more than 5 Boards of Directors.

C.1.13 Give details of the following amounts paid in relation to the overall remuneration received by the board of directors:

Amount of remuneration accrued by the board (thousands of euros)
Value of rights accumulated by current board members in respect of pensions with vested economic rights (thousands of euros)
Value of rights accumulated by current board members in respect of pensions with non-consolidated economic rights (thousands of euros)
Value of rights accumulated by former board members in respect of pensions (thousands of euros)

C.1.14 List any members of senior management who are not executive directors and indicate the total remuneration paid to them during the financial year:

Name or corporate name	Position/s
No data available

C.1.15 Indicate whether any changes have been made to the board regulations during the year:

[ ]	Yes
[ √ ]	No

C.1.16 Give details of the procedures for selecting, appointing, re-electing and removing Directors. List the competent bodies and the processes and criteria used for each procedure.

The selection policy for candidates for the position of director establishes that candidates for the Company's Board of Directors will be selected on the basis of the following principles:

1. The aim will be to ensure that the Board of Directors comprises a balanced membership with the majority being Non-Executive Directors and with a reasonable ratio of Proprietary and Independent Directors.

2. The Board of Directors shall ensure that the procedures for the selection of Directors favour diversity of gender, experience and knowledge and are free from any implicit bias that might lead to discrimination. It will also ensure that candidates for Non-Executive Directors have sufficient time available to properly perform their duties.

3. Additionally, the process of selecting candidates for the position of Director will begin with a preliminary analysis of the needs of the Company and its Group. This analysis will be carried out by the Company's Board of Directors, with advice and a mandatory prior supporting report from the Appointments and Remuneration Committee.

4. The supporting report from the Appointments and Remuneration Committee shall be published when convening the General Shareholders' Meeting to which the ratification, appointment or re-election of each Director is to be submitted.

5. The Appointments and Remuneration Committee will annually verify compliance with the Board Member Selection Policy and will detail its findings in the Annual Corporate Governance Report.

C.1.17 Explain the extent to which the annual appraisal of the Board has given rise to significant changes in its internal organisation and the procedures applicable to its activities:

Description of changes

No data available

Describe the appraisal process and the areas assessed by the Board of Directors with the help, where required, of external advisors, regarding the function and composition of the board and its committees and any other area or aspect that has been subject to appraisal.

Description of the appraisal process and areas assessed

The Board of Directors shall conduct an annual self-assessment of its operation and of its Commissions and Committees, in particular the diversity in the composition and competence of the Board of Directors, as well as the performance of the Chairman of the Board of Directors, the Chief Executive Officer of the Company and of the different Directors, paying special attention to the heads of the different Board Commissions and Committees, and it shall take the appropriate measures for their improvement.

The result of this assessment shall be recorded in the minutes of the meeting or attached to this report as an appendix.

The assessment of the various Board Commissions and Committees should start from the reports they send the Board of Directors, while that of the Board itself should start from the report drafted by the Appointments and Remunerations Committee.

Every three years, the Board of Directors shall be assisted in carrying out the assessment by an External Consultant, whose independence shall be verified by the Appointments and Remuneration Committee.

Any business relationships that the consultant (or any company from its group) maintains with the Company (or any company within the Group) must be listed in the Annual Corporate Governance Report. The process and the areas assessed will be described in the aforementioned Annual Corporate Governance Report.

In accordance with the above, which is reflected in the Board Regulations (published on the Company's website since its issuance), the highest administrative body and its committees are currently immersed in an evaluation process led by an external consultant.

C.1.18 For financial years in which the assessment has been assisted by an external advisor, give details of the business relationships that the external advisor or any company in its group maintains with the company or any company in its group.

The consultant who is assisting the Company in the evaluation of the Board of Directors provides general legal advisory services to the Company and its Group on commercial, corporate, tax, labour, real estate, industrial and intellectual property and any other aspects related to the operation of a listed real estate company. The total fees obtained by said consultant and by companies of its group, as a consequence of the services rendered during the fiscal year 2021, amount to 145 thousand euros, representing 0.5% of the total invoicing of the Company during said fiscal year, corresponding to services rendered by external suppliers.

C.1.19 Indicate the cases in which Directors are obliged to resign.

Article 12 of the Board of Directors' Regulations regulates the dismissal and removal of Directors:

1. Directors must relinquish their post and formalise their resignation whenever any of the grounds set out in law for incompatibility or disqualification from holding the position of director become apparent, and also in the following cases:

a) In the case of proprietary directors, when the shareholder at whose request they were appointed transfers the entire holding that it had in the Company or reduces it to such a level that this requires a reduction in the number of its proprietary directors.

b) When the Board itself requests this by a majority of at least two thirds (2/3) of its members, due to the director having infringed his/her obligations, following a proposal or report from the Appointment and Remuneration Committee, or when his/her remaining on the Board could endanger the Company's credit and reputation.

1. In the event that a private individual representing a legal entity that holds a position of the board becomes affected by any of the grounds set out in law for incompatibility or disqualification from office, the legal entity that holds the position on the board must immediately replace that person.

2. The Board of Directors may not propose the removal of any independent director prior to the end of the statutory period for which he/she was appointed, unless there are fair grounds as assessed by the Board following a report from the Appointments and Remuneration Committee. In particular, it shall be understood that just cause exists when the director has failed to comply with the duties inherent in his/her post, has failed to comply with any applicable recommendation on the subject of corporate governance or has become bound by any of the circumstances preventing his/her appointment as an independent director. Notwithstanding the foregoing, the Board may also propose the removal of independent directors resulting from takeover bids, mergers or other similar corporate operations that imply a change in the Company's capital structure, when such changes in the structure of the Board are supported by the criterion for proportionality set out in article 9, section 3, above.

3. When a director leaves his/her post before the end of his/her term, whether through resignation or due to any other cause, he/she shall explain their reasons in a letter sent to all members of the Board, notwithstanding the resignation being notified as a significant event and the reason for the resignation being noted in the Annual Corporate Governance Report. In particular, in the event that the resignation of the Director is due to the Board having adopted significant or repeated resolutions regarding which the director has set down on record his/her reservations and as a consequence of this has decided to resign, this circumstance shall be expressly stated in his/her resignation letter. This provision also applies to the secretary of the Board, even if he/she is not a director. 5. Notwithstanding the above, the removal of directors may be approved by the General Shareholders' Meeting at any moment, even when not provided for in the meeting's agenda.

C.1.20 Are enhanced majorities required for any type of decision, other than those that are stipulated in law?

[ √ ] [ ] Yes No

Where applicable, describe the differences.

Description of differences

Article 31 of the Regulations of the Board of Directors establishes in section 6 that the favourable vote of a qualified majority of directors will be necessary for (i) the approval of the report necessary for the General Meeting to approve the establishment of the compensation system for directors and management of the Company, consisting of the delivery of shares or rights over them, for (ii) the modifications with respect to the Company's business and for (iii) the modification of article 31.6 itself.

Likewise, article 4.3. of the Board Regulations establishes a 2/3 majority of the Board to be able to modify the Regulation itself, and 12.1. b) of the Board Regulations establishes a 2/3 majority of the Board in order to request termination or resignation of the Directors.

C.1.21 Indicate whether there are any specific requirements, other than those that apply to directors, to be appointed chairman of the board of directors:

[ ] Yes

[ √ ] No

C.1.22 Indicate whether the articles of association or the board regulations set any age limit for directors:

[ ] Yes

[ √ ] No

C.1.23 State whether the articles of association or the board regulations establish any term limits or other stricter requirements for independent directors in addition to those that are required by law:

[ ] Yes

[ √ ] No

C.1.24 Indicate whether the articles of association or the board regulations stipulate specific rules for delegating voting rights on the board of directors, how this is done and, in particular, the maximum number of times that voting rights may be delegated to a board member, as well as whether there is any limitation on the categories of director to whom proxies can be delegated, beyond the restrictions imposed by law. Where applicable, detail these briefly.

Article 31.2 of the Board of Directors' Regulations states that directors must attend board meetings in person, notwithstanding the contents of paragraph 8 of Article 30. However, directors may be represented by another director in accordance with the legislation in force from time to time. The power of representation shall be granted especially for the board meeting in question, and it may be notified using any of the means provided for in paragraph 5 of Article 30 of the Regulations.

C.1.25 Indicate the number of board meetings held during the year. Indicate how many times the board has met without the chairman in attendance. Attendance will also include proxies appointed with specific instructions.

Number of board meetings	5
Number of board meetings held	0
without the chairman's attendance

State the number of meetings held by the coordinating director with the other directors when no executive director was present either in person or by proxy:

Indicate the number of meetings held of the various board committees during the year:

Number of meetings of the AUDIT COMMITTEE	4
Number of meetings of the APPOINTMENTS AND REMUNERATION COMMITTEE	4

C.1.26 State the number of meetings held by the board of directors during the year and details of the number of members in attendance:

Number of meetings held with at least 80% of board members present in person
% of personal attendance over total votes during the year	0.00
Number of meetings at which all board members were present in person or represented by proxy with specific instructions
% of votes issued at meetings in person or by proxy with specific instructions over total votes during the	0.00
year

• C.1.27 State whether the consolidated and individual financial statements submitted for authorisation by the board are previously certified:
• [ ] Yes

No

[ √ ]

Identify, where applicable, the person(s) who certified the company's individual and consolidated annual accounts prior to their authorisation for issue by the board:

C.1.28 Explain the mechanisms, if any, put in place by the board of directors to ensure that the individual and consolidated financial statements prepared by the board are not presented at the general shareholders' meeting with a qualified audit report.

Article 40 of the Board of Directors' Regulations governs relations with the external auditors in the following terms: 1. Relations between the Board of Directors and the Company's external auditors shall be channelled via the Audit and Compliance Committee.

1. The Board of Directors shall refrain from contracting audit firms in which the fees which the company and the companies in its group are expected to pay for all items are greater than five percent (5%) of the income of the audit firm in Spain during the immediately preceding financial year.

2. The Board of Directors shall aim to formulate the annual accounts definitively in such a way that there are no provisos or reservations in the audit report, and in the exceptional case that these exist, both the chairman of the Audit and Control Committee and the auditors shall clearly explain to the shareholders the content and scope of those provisos or reservations.

In accordance with the above, the Audit Committee supervises both the conclusions and the financial statements obtained by the financial department once the financial closing process has been executed, as well as the conclusions obtained by the external auditor after its auditing process, both verifying the application of the accounting regulations in force at any given time. This supervision work is carried out prior to the meeting of the Board of Directors at which the annual financial statements are prepared by the Board of Directors so that the level of assurance on the financial statements issued is total.

• C.1.29 Is the board secretary also a member of the board?
• [ ] Yes
• [ √ ] No

If the Secretary does not have the status of director, please complete the following table:

Personal or corporate name of board secretary	Representative
MR. IVÁN AZINOVIC GAMO

C.1.30 Give details of the specific measures established by the company to ensure the independence of its external auditors and, where applicable the mechanisms implemented to maintain the independence of financial analysts, investment banks, and rating agencies, including how the provisions set out in law have been implemented in practice.

Section five of Article 35 of the Board of Directors' Regulations establishes the following duties for the Audit and Control Committee in relation to the external auditor:

⁽i) to bring before the Board of Directors proposals for the selection, appointment, re-election and replacement of the external auditor (which must be international firms of acknowledged standing), along with the terms of their engagement;

⁽ii) to receive information from the external auditor on a regular basis regarding the audit plan and the results of its execution, and to check that the management takes its recommendations into account;

⁽iii) to ensure the independence of the external auditor and, to that end, ensure that the Company informs the CNMV (Spanish Securities Market Commission) of the change of auditor as a significant event, enclosing a declaration on the possible existence of disagreements with the outgoing auditor and their content, where applicable; and in the event that the external auditor resigns, to examine the circumstances that caused its resignation. The Audit and Control Committee must establish the appropriate relations with the account's auditors or auditing companies in order to receive information on those questions that could endanger their independence, so that these can be examined by the Audit and Control Committee, along with any other questions relating to the process of conducting the accounts audits and any other communications provided for in the legislation on accounts audits and auditing standards. In all cases, they must receive written confirmation each year from the account's auditors or the auditing companies regarding their independence from the company and any companies directly or indirectly related to it, along with information on additional services of any kind that have been provided to these companies by the said auditors or companies or parties related to them, in accordance with the provisions of Spanish Accounts Auditing Act 22 of 20 July 2015;

• (iv) to aid the Company's auditor so that it can accept responsibility for the audits of the companies belonging to the group, where applicable;
• (v) in the event of the external auditor's resignation, to examine the circumstances that have caused it; (vi) to ensure that the payment of the external auditor does not compromise its quality or independence;
• (vii) to ensure that the external auditor has a yearly meeting with the Board of Directors in full session to inform it of the work undertaken and

developments in the Company's risk and accounting positions;

(viii) to ensure that the Company and its external auditor respect the regulations in force on the provision of services other than auditing, the limits on the concentration of the auditor's business and, in general, all other regulations governing the independence of auditors.

In addition, prior to the issue of the accounts audit report, the Audit and Control Committee must produce an annual report in which it gives an opinion on the independence of the account's auditors or auditing companies. This report must, in all cases, include a statement regarding the provision of the additional services referred to in section b), point (iii), above.

• C.1.31 State whether the Company has changed its external auditor during the year. If so, identify the incoming and outgoing auditors:
• [ ] Yes
• [ √ ]
  • No

If there have been disagreements with the outgoing auditor, explain the reasons:

• [ ] [ √ ] Yes No
• C.1.32 Indicate whether the auditing firm performs non-audit work for the company and/or its group. If so, state the amount of fees paid for such work and the percentage they represent of all fees invoiced to the company and/or its group:
• [ √ ] Yes
• [ ] No

	Company	Group companies	Total
Fees for non-audit work (thousands of euros)	30	0	30
Amount invoiced for non auditing work / Amount for auditing work (as a %)	32.82	0.00	32.82

C.1.33 Indicate whether the audit report on the previous year's annual accounts is qualified or includes reservations. If so, please explain the reasons given by the chairman of the audit committee to shareholders at the General Shareholders' Meeting to explain the content and extent of these qualified opinions or reservations.

• [ ] Yes
• [ √ ] No

C.1.34 Indicate the number of consecutive years during which the current audit firm has been auditing the company's individual and/or consolidated annual financial statements. Likewise, indicate for how many years the current firm has been auditing the financial statements as a percentage of the total number of years over which the annual accounts have been audited:

	Individual	Consolidated
Number of consecutive years	4	4
	Individual	Consolidated
Number of years audited by the current audit firm / number of years the company or its group have been audited (as a %)	100.00	100.00

C.1.35 Indicate whether there are procedures for directors to receive the information they need in sufficient time to prepare for meetings of the governing bodies and, where applicable, give details:

[ √ ]	Yes
[ ]	No

Details of the procedure

Section 5 of Article 30 of the Board of Directors' Regulations establishes the following:

Meetings of the Board of Directors will be notified by letter, fax, telegram, email or any other means that provides proof of receipt, and notification will be authorised with the signature of the chairman, or with the signature of the secretary or deputy secretary, by order of the chairman. Such notifications shall be sent sufficiently in advance so that they are received by board members no later than the third day before the date set for the meeting, except in the case of urgent meetings, which may even be convened and held immediately. This shall exclude those cases in which the Regulations require a specific period of advance notice. Notifications shall always include the place, date and time at which the meeting is to be held and, unless duly justified, the meeting's agenda, and they shall be accompanied by any information deemed necessary in order to debate and adopt resolutions on the items to be discussed, unless the Board of Directors has been constituted or exceptionally convened for reasons of urgency.

In this regard, the company's usual practice is to make all information available to board members a week before the meeting is to be held.

C.1.36 Indicate and, where applicable, give details of whether the company has established regulations obliging directors to inform the board of any circumstances that might harm the organisation's name or reputation, resigning as the case may be:

[ √ ] Yes [ ] No

Details of the regulations

Article 21 of the Board of Directors' Regulations governs the duty of notification on the part of directors:

1. Directors shall inform the Company of any stake that they or their Related Parties hold in the capital of any company with the same or a similar or complementary kind of business activity to the one forming the corporate purpose, giving details of any positions held or duties performed at the company in question. They shall also inform the Company of any activity that they engage in, either for themselves or for others, that is complementary to the one forming the Company's the corporate purpose. All such information shall be included in the notes to the annual accounts and in the Annual Corporate Governance Report, in accordance with legal requirements.

2. Directors must also notify the Company:

a) of all the posts held and the activities carried out in other companies or organisations, along with any other professional obligations. In particular, and prior to accepting any appointment as a director or executive in another company or organisation, directors must consult the Appointments and Remuneration Committee. No Director may, under any circumstances, sit on more than five (5) Boards of Directors;

b) of any material change in their professional situation that may affect the nature or condition by virtue of which they had been appointed as directors;

c) of any judicial, administrative or other proceedings that they may be involved in and that, due to their characteristics or importance, could have a serious impact on the Company's reputation. In particular, all directors must inform the Company, through its Chairman, of any cases in which they are arraigned, or if a court decides to hold a trial involving them in connection with any of the crimes listed in Article 213 of the Spanish Capital Companies Act. In such cases, the Board of Directors shall examine the matter as promptly as possible and adopt any resolutions it deems appropriate in the Company's best interests; d) of any holding taken directly or indirectly in the Company's share capital by the director or any of his/her Related Parties, and of any change to that holding, and of any transaction that is engaged in directly or indirectly by the director or any of his/her Related Parties in relation to the Company's share capital. For these purposes, the term "Related Parties" shall be understood to include any other persons who are deemed to have close ties with directors, pursuant to the terms of Article 3 of Regulation (EU) 596/2014 of the European Parliament and Council of 16 April 2014 on market abuse (market abuse regulation); and

e) in general, of any fact or situation that may be of relevance to their actions as a director of the Company.

• C.1.37 Indicate, unless there have been special circumstances that have been recorded in the minutes, whether the board has been informed or has otherwise become aware of any situation affecting a director, whether or not related to his or her performance in the company, which could damage the credit and reputation of the company:
• [ ] Yes
• [ √ ] No
• C.1.38 List any significant agreements entered into by the company which come into force, will be amended or will be terminated in the event of a change of control of the company due to a takeover bid, and the effects thereof.

Árima Real Estate Socimi, S.A. has an incentive scheme for the Company's team. This plan was approved at the General Shareholders' Meeting of 26 September 2018 and amended at the General Shareholders' Meeting of June 29, 2021, can be found in the information prospectuses for the Company's IPO and share capital increases, which have been registered with the Spanish Securities Market Commission (CNMV). As set out for information purposes in the prospectus, if there is a change of control as a consequence of a public share offering, in accordance with the terms of Royal Decree 1066 of 27 July 2007 on public tenders for the acquisition of securities, this event shall be classified as a liquidation event, as this is defined in the incentive scheme. This plan may be settled both in shares or in cash, at the Board of Directors discretion.

C.1.39 Identify and provide detailed information, individually in respect of directors and in aggregate form in all other cases, regarding any agreements between the company and its administrative officers, executives and employees that offer compensation, guarantees or protection clauses in the event of their resignation or unfair dismissal, or that provide for their contractual termination as a result of a takeover bid or other kinds of operations.

Number of beneficiaries	8
Type of beneficiary	Description of the agreement
CHIEF EXECUTIVE OFFICER AND MANAGERS	The services contract entered by the company and the CEO establishes that if the company terminates the contract without just cause (i.e., unfair dismissal as defined by the Spanish Workers' Statute), the Managing Director will be entitled to receive compensation in cash equivalent to two (2) years' total annual remuneration at the most recent rate. In addition, six of the Company's managers, excluding the managing director, have clauses that offer them compensation in the event of the termination of their employment contracts on any grounds other than a disciplinary action deemed lawful or the voluntary resignation of the manager him/herself. Managers would receive the same compensation in other cases, such as a change of control. In the event that managers are entitled to receive compensation, this will be two years' total annual remuneration at the most recent rate.

Indicate whether, beyond the cases provided for in law, these contracts have been notified to and/or approved by the company's or the group's management bodies. If they have, specify the procedures and events provided for and the nature of the bodies responsible for their approval or for making this notification:

	Board of directors	General Shareholders' Meeting
Body that authorises clauses	√
	Yes	No
Is the General Shareholders' Meeting informed of such clauses?		√

C.2. Board committees

C.2.1 Give details of all of the fees paid to the board of directors, its members, and the proportion of executive, proprietary, independent and other external directors that they represent:

AUDIT COMMITTEE
Name	Position	Category
MR. STANISLAS HENRY	MEMBER	Proprietary
MR. CATO HENNING STONEX	MEMBER	Independent
MR. FERNANDO BAUTISTA SAGÜÉS	CHAIRMAN	Independent

% of executive directors	0.00
% of proprietary directors	33.33
% of independent directors	66.67
% of other external directors	0.00

Explain the duties exercised by this committee, including, where applicable, any duties that are additional to those set out in law, and describe the rules and procedures it follows for its organisation and function. For each of these duties, briefly describe the most important actions taken during the year and how, in practice, the committee has performed each of the duties attributed to it, either by law or pursuant to the articles of association or other corporate resolutions.

The primary function of the Audit and Control Committee is to support the Board of Directors in its oversight role by regularly reviewing the process for the preparation of economic and financial information, its internal controls and the independence of the external auditor.

Identify the board members who are members of the audit committee and have been appointed considering their knowledge and experience of accounting or auditing or both and state the date that the Chairman of this committee was appointed.

Names of directors with experience	MR. STANISLAS HENRY / MR. CATO HENNING STONEX / MR. FERNANDO BAUTISTA SAGÜÉS
Date of appointment of the Chairman	10/11/2021

APPOINTMENTS AND REMUNERATION COMMITTEE
Name			Position	Category
MR. STANISLAS HENRY			MEMBER	Proprietary
MR. CATO HENNING STONEX			MEMBER	Independent
MR. DAVID JIMÉNEZ-BLANCO CARRILLO DE ALBORNOZ			CHAIRMAN	Independent
% of executive directors	0.00
% of proprietary directors	33.33
% of independent directors	66.67
% of other external directors	0.00

Explain the duties exercised by this committee, including, where applicable, any duties that are additional to those set out in law, and describe the rules and procedures it follows for its organisation and function. For each of these duties, briefly describe the most important actions taken during the year and how, in practice, the committee has performed each of the duties attributed to it, either by law or pursuant to the articles of association or other corporate resolutions.

The main duty of this committee is essentially to provide the Board of Directors with support and assistance in relation to the proposed appointment, re-election, approval and dismissal of board members, the setting-up and overseeing of payment policy for the Company's board members and directors, the monitoring of directors' compliance with their duties, particularly as regards conflicts of interest and related-party transactions, and the supervision of compliance with the Internal Codes of Conduct and Corporate Governance regulations.

C.2.2 Complete the following table with information on the number of female board members sitting on the board's committees at the close of the last four financial years:

		Number of female board members
	FY 2020		FY 2019		FY 2018		FY 2017
	Number	%	Number	%	Number	%	Number	%
AUDIT COMMITTEE	0	0.00	0	0.00	0	0.00	N.A.	N.A.
APPOINTMENTS AND REMUNERATION COMMITTEE	0	0.00	0	0.00	N.A.	N.A.	N.A.	N.A.

C.2.3 Indicate, where appropriate, whether the board committees are subject to regulations, the place where they are available for consultation and any amendments made during the financial year. Also, indicate whether an annual report on the activities of each committee has been prepared voluntarily.

The rules of organization and operation of the Board Committees are set forth in Articles 34, 35 and 36 of the Regulations of the Board of Directors. The Regulations of the Board of Directors are available for consultation on the Company's website. Voluntary annual reports on the activities of each committee have been prepared.

D. RELATED PARTY AND INTRA-GROUP TRANSACTIONS

D.1. Explain, where applicable, the procedures for approving related party or inter-group transactions and the bodies with the competence to grant this approval. Explain, if applicable, the procedure and competent bodies for the approval of transactions with related-parties and intra-group transactions, indicating the criteria and general internal rules of the company that regulate the abstention obligations of the affected directors or shareholders and detailing the internal reporting and periodic control procedures established by the company in relation to those related-party transactions whose approval has been delegated by the board of directors.

Sections 3, 4 and 5 of Article 22 of the Board of Directors Regulations establish the following procedure for the approval of related party transactions: 1. Any transactions carried out by the Company with directors, significant shareholders or shareholders that are represented on the Board, or with Managers or persons related to any of the parties mentioned, including transactions that could give rise to a conflict of interest and any transaction with third parties pursuant to which any director, significant shareholder or shareholder that is represented on the Board, Manager or related person is entitled to receive any compensation, remuneration or commission, are subject to authorisation from the Board of Directors, following a favourable report from the Audit and Control Committee. 2. Prior to authorising the Company's engagement in transactions of this nature, the Audit and Control Committee and the Board of Directors shall evaluate the transaction from the perspective of the equal treatment of all shareholders and current market conditions.

1. In the event that the related party transaction affects a director, he or she will not be provided with any additional information about the operation or transaction in question and, if the director in question is present at the meeting of the Board of Directors or the Audit and Control Committee then, in addition to being unable to exercise or delegate their voting rights, they must withdraw from the meeting room during any deliberation and, where applicable, vote on the transaction at sessions of both the Board and the Audit and Control Committee.

2. The prior authorisation of the Board provided for in Section 1 of this Article shall not be required when the following three conditions are simultaneously met:

a) when the transactions in question are carried out pursuant to standard contracts with pre-established conditions that are applied en masse to many customers; b) when the transactions in question are carried out at prices or rates established at a general level with the party acting as the supplier of the good or service involved;

and c) when their value does not exceed 1% of the Company's annual turnover.

1. Where these are transactions that fall within the Company's ordinary business and involve usual or recurring activities, a general authorisation from the Board of Directors shall be sufficient.

D.2. List individually those transactions that are significant due to their amount or relevant due to their subject matter carried out between the company or its subsidiaries and shareholders holding 10% or more of the voting rights or represented on the board of directors of the company, indicating which body was competent for their approval and whether any shareholder or director affected abstained. In the event that the competence has been that of the board, indicate whether the proposed resolution has been approved by the board without the vote against of the majority of the independent directors:

Significant shareholder' s name or corporate name	% of participation	Name or corporate name of the group company or dependent entity	Amount (thousan ds of euros)	Approving body	Identification of the significant shareholder or director who abstained from voting.	The proposal to the board, if any, has been approved by the board without a majority of independent directors voting against it.
No data available

Name or corporate name of administrators or directors	Nature of the relationship	Nature of the operation and other information necessary for its evaluation
No data available

D.3. List individually the significant operations due to their amount or subject matter carried out by the company or its dependent entities with the administrators or directors of the company, including those carried out with entities that the administrator or director directs individually or jointly, indicating which body was competent to approve them and whether any director or executive concerned abstained from voting. In the event that the competence has been that of the board, indicate whether the proposed resolution has been approved by the board without the vote against of the majority of the independent directors:

Name or corporate name of administrators or directors or of their controlled entities or jointly controlled entities	Name or corporate name of the related party	Relationship	Amount (thousands of euros)	Approving body	Identification of the significant shareholder or director who abstained from voting.	The proposal to the board, if any, has been approved by the board without a majority of independent directors voting against it.
No data available

Name or corporate name of administrators or directors or of their controlled entities or jointly controlled entities	Nature of the operation and other information necessary for its evaluation
No data available

D.4. List any intra-group operations significant due to their amount or relevant due to their subject matter carried out by the company with its parent company or with other entities belonging to the parent's group, including the entities dependent on the listed company, except that no other related party of the listed company has interests in said dependent entities or they are wholly owned, directly or indirectly, by the listed company.

In any case, information shall be given regarding any intra-group transactions carried out with entities established in countries or territories that have the status of tax haven:

Name of the group company	Brief description of the operation and other information necessary for its evaluation	Amount (thousands of euros)
Árima Investments, S.L.	In 2021, the Company subscribed a non-cash contribution, transferring the ownership of a property located in Madrid, Chamartín district, to the Group company Árima Investments, S.L. with a book value of 11,578 thousand euros.	11,578

D.5. Detail individually the significant operations due to their amount or relevant due to their subject matter carried out by the company or its subsidiaries with other related parties that are related in accordance with the International Accounting Standards adopted by the EU, which have not been reported in the previous headings.

Name or corporate name of the related party	Brief description of the operation	Amount (thousands of euros)
No data available

D.6. List the mechanisms established to detect, determine and resolve any possible conflicts of interest between the company and/or its group, and its directors, management or significant shareholders.

Article 17 of the Board of Directors' Regulations governs conflicts of interest in the following terms:

1. A conflict of interest will be deemed to exist in situations in which the interests of the Company or companies in its group collide, directly or indirectly, with the personal interests of the director. Directors will be deemed to have personal interest whenever the matter in question affects the director personally or a Related Party (as defined below).

2. For the purposes of the present Regulations, "Related Parties" shall be defined as follows:

a) with regard to an individual, the following:

(i) the spouse or a person who is spousal equivalent;

(ii) forebears, descendants and siblings of the person subject to these Regulations or of the spouse (or spousal equivalent) of the person subject to these Regulations;

(iii) the spouses of all forebears, descendants and siblings of the person subject to these Regulations;

(iv) companies in which the person subject to these Regulations, in their own name or through an intermediary, holds or could hold control,

either directly or indirectly, in accordance with the scenarios contemplated in Article 42 of the Spanish Commercial Code;

b) with regard to a body corporate, the following:

(i) partners or shareholders who hold or could hold control, either directly or indirectly, over the body corporate subject to these Regulations, in accordance with the scenarios contemplated in Article 42 of the Spanish Commercial Code;

(ii) companies which form part of the same business group, as defined in Article 42 of the Spanish Commercial Code, and the partners or shareholders thereof;

(iii) the personal representative, the managers, whether de jure or de facto, the liquidators, and the attorneys with general powers to act on behalf of the body corporate subject to these Regulations;

(iv) any persons who, with regard to the representative of the body corporate subject to these Regulations, are deemed to be related persons, in accordance with the terms set out in the previous section for directors who are natural persons.

1. All conflict of interest situations will be governed by the following rules:

a) notification: directors must inform the Board of Directors, through its chairman or secretary, of any situation affecting them that entails a conflict of interest;

b) abstention: directors must refrain from attending and participating in any deliberation or votes on those matters in which a conflict of interest may exist and, as a consequence, their presence will not be taken into account in such cases for the calculation of the quorum. In the case of proprietary directors, these must refrain from participating in any voting on matters which might imply a conflict of interest between the shareholders who have proposed their appointment and the Company;

c) transparency: the Company's Annual Corporate Governance Report will give details of any conflict of interest situation involving directors that is known to the Company as a result of notification by the person concerned or by any other means.

1. The provisions contained in this present Article may be developed further through the corresponding rules issued by the Company's Board of Directors, including an Internal Code of Conduct.

D.7. Indicate whether the company is controlled by another entity within the meaning of Article 42 of the Commercial Code, listed or unlisted, and has, directly or through its subsidiaries, business dealings with that entity or any of its subsidiaries (other than those of the listed company) or engages in activities related to those of any of them.

• [ ] Yes
• [ √ ] No

E. RISK CONTROL AND MANAGEMENT SYSTEMS

E.1. Explain the scope of the Company's Risk Control and Management System, including measures relating to tax risk:

The Board of Directors is the body responsible for determining the risk control and management policy, identifying the Company's main risks, implementing the appropriate internal control and information systems, and carrying out regular monitoring of the main risks to which the Company is exposed. By virtue of the above, the Board of Directors of the Company has approved the Risk Control and Management Policy and the Risk Management Manual. This establishes a systematic and preventive procedure, in line with international standards of reference in risk management to address risks by anticipating, preventing and detecting them. The risk management system considers both the company's own characteristics and those of the economic, geographical and regulatory environments in which it operates. The risk management policy and strategy is the responsibility of the Board of Directors. However, all members of the organisation are involved and responsible for ensuring the success of the risk management system.

E.2. Identify the company bodies responsible for preparing and implementing the Risk Management System, including measures relating to tax risk.

The Board of Directors is the body responsible for approving the Company's strategy and the organisation required to put it into practice, as well as for supervising and ensuring that the Management meets the stated targets. In addition, the Board is responsible for ensuring that, in relations with all the parties that have a direct or indirect interest in the Company, the laws and regulations are duly complied with, obligations and contracts are fulfilled in good faith, the actions and best practices of the sectors and areas in which the company carries out its activities are respected, and any other principles of social responsibility that the company has accepted voluntarily are duly observed. Article 43 of the Company's Articles of Association establishes that the Board of Directors must create and maintain an Audit and Control Committee on a permanent and internal basis / Article 44 of the Company's Bylaws entrusts the Audit and Control Committee with the fundamental duty of acting as support to the Board of Directors in its supervisory work by carrying out a periodic review of the process for the preparation of economic and financial information, the Company's internal controls and the independence of the external auditor.

E.3. State the primary risks, including tax compliance risk and, where significant, risk arising from corruption (this being understood in the terms set out in Royal Legislative Decree 18/2017), where such risks may affect the achievement of business objectives:

The following is a list of some of the main kinds of risk that may be encountered as a result of the Company's real estate and assets management activity, all of which are covered by the risk monitoring system.

1. Financial risk

a) Market risk

Interest rate risk. The Company's interest rate risk arises from its financial debt. The Company occasionally engages in interest rate swaps to cover this risk.

b) Credit risk

The Company is not exposed to significant levels of credit risk, this being understood to mean the impact that the non-payment of receivables could have on its income statement. The company has policies that ensure that both sales and lettings are made to clients with an appropriate credit history.

c) Liquidity risk

The Company's Finance Department is responsible for managing liquidity risk in order to cover any existing payment obligations and/or any undertakings arising from new investments. To this end it analyses the expected cash flows.

2. Market risk

The Company minimises this type of risk through its own strategy and business model. Árima invests in prime properties, with strong upside potential in the office, logistics and retail sectors, in the most consolidated areas. The Company has implemented a long-term business plan that focuses on value creation through active management and repositioning of the portfolio, with special attention to environmental sustainability.

3. Economic risk

Risks in acquisitions is managed by completing a meticulous analysis of transactions, examining and foreseeing any problems that might arise in the future, and considering the possible solutions to such problems. In disposals, the main risk resides in the failure to collect the amounts agreed in the contracts as a result of the buyers' non-compliance. These risks are minimised through the establishment of all kinds of guarantees that will, if necessary, allow the total price to be received or the property forming the object of disposal to be recovered.

4. Risks of a legal and fiscal nature

The Company's activities are subject to legal and fiscal provisions and to the requirements of urban development. Local, regional, national and European authorities can impose sanctions for breaches of these regulations and requirements. Any changes to this legal and fiscal environment could affect general planning of the Company activities which, through the corresponding internal departments, with assistance from legal and tax advisors, will monitor, analyse and, where appropriate take the necessary measures in this regard.

The risks associated with complying with the specific legislation, would be the following:

a) Judicial and extrajudicial claims. The Company's business activities may lead to legal action being taken in relation to properties being let, even if these may result from the actions of third parties contracted by the Company (architects, engineers, construction contractors and subcontractors). The Company has taken out various civil liability and damage insurance policies in order to mitigate this type of risk.

b) Company responsibilities resulting from its classification as a SOCIMI. All of the Company's activities must comply with Act 11/2009, which sets out the regulations for SOCIMIs. As a result, the Company constantly monitors its own activities and checks that they are in line with the legislation currently in force in this regard.

1. Risks regarding the prevention of money laundering and monetary infringements

This category of risk is controlled through the prevention and monitoring of transactions carried out by the Company, in accordance with the legislation in force.

6. Risks relating to personal data protection.

These risks are controlled by means of special and standardised clauses to be included in contracts in different situations, which in accordance with the rules regulating this area, allow any kind of liability that may affect the Company to be limited and even eliminated.

1. Risks relating to the Protection of Consumers and End Users

The Company complies with the requirements of the different state and regional rules regarding consumers and end users. The Company also has an Internal Code of Conduct focused on matters relating to stock markets.

Sections IV and V of the Internal Code of Conduct establish the behaviour and action criteria that recipients of the Code must comply with in relation to the relevant securities and instruments, any privileged and relevant information, and confidential documents, in order to aid transparency in the performance of the Company's activities and provide adequate information and protection for investors.

E.4. Indicate whether the company has a risk tolerance level, including against tax risk:

Árima's risk tolerance is defined as the level of Risk that the Company is prepared to accept in order to achieve its established strategic objectives. Risk tolerance is shaped by the Company's strategy and is agreed by the Board of Directors. Risk tolerance is defined as the level of variation that the Company accepts in achieving an objective. It is, therefore, the acceptable threshold for each risk and objective. Risk tolerance must be updated regularly by the people from each department who are responsible for reporting to and properly informing the compliance supervisor.

E.5. Identify any risks, including tax risk, which have emerged during the year:

No risk of the type described above has emerged during the year.

E.6. Explain the plans for responding to and monitoring the main risks facing the company, including tax risk, and the procedures put in place by the company to ensure that the board of directors is able to respond to any new challenges that may arise:

The Risk Management System operates in a comprehensive, continuous and cross-cutting manner and addresses the management of all priority risks, both internal and external. To this end, the approach adopted for risk management considers the following basic elements in an aligned manner: control environment, objectives, risk identification and management, and control activities. Once a risk has been assessed and the control activities carried out have been carried out for its mitigation, if the risk level is not in the comfort zone, an additional action (Action Plan) is required to reduce the level of risk to the desired level. Risk Managers are responsible for designing, implementing and updating the corresponding Action Plans, considering at all times the views and comments of the Head of Risk Management and Control Function and the Audit and Control Committee. The objective of these Action Plans is to provide the response that best places the risk within the previously established objectives, complementing the control activities already in place. Once the Action Plans have been defined, the Risk Managers communicate them to the Head of the Risk Control and Management Function who, if considered necessary, after a prior analysis, submits them to the Audit and Control Committee for its knowledge and approval and, ultimately, to the Board of Directors.

F. INTERNAL RISK MONITORING AND MANAGEMENT SYSTEMS RELATING TO THE FINANCIAL REPORTING (ICFR) PROCESS

Describe the mechanisms that comprise the risk monitoring and management systems associated with the company's financial reporting process (ICFR).

F.1. The company's monitoring environment.

Specify at least the following components with a description of their main characteristics:

F.1.1 The bodies and/or officers that are responsible for: (i) the existence and regular updating of a suitable, effective ICFR, (ii) its implementation; and (iii) its monitoring.

Continuing with the development of a rigorous internal control system, Árima has drawn up a Management Manual for the Internal Control over Financial Reporting System (ICFR), which has been approved by the Board of Directors.

The SCIIF is a set of processes that affect all levels of the organisation and all the Company's personnel.

Mainly:

1. Board of Directors

With reference to the ICFR, the Regulations of the Board of Directors establish the following functions of the Board:

• To prepare the annual accounts and their presentation to the General Meeting.

• To determine the risk control and management policy.

• To monitor the internal control and information systems.
• To approve the financial information which, as a listed company, the Company must periodically publish.

As the body ultimately responsible for supervising the ICFR, the Board of Directors has established the necessary organisational structure to enable it to monitor the ICFR system, with the support of the Audit and Compliance Committee.

1. Audit and Control Committee

In order to ensure the reliability of financial information, the Audit and Control Committee has been assigned the following functions:

• To ensure the proper functioning of the information and internal control systems, in particular with regard to the preparation and integrity of the financial information.

• To be aware of and periodically review the process of preparation and presentation of financial information and the internal risk control and management systems associated with the risks associated with the Company's significant risks.

• Submit recommendations or proposals to the Board of Directors aimed at safeguarding the integrity of the information and control systems.

control systems.

In the performance of these duties, the Audit and Compliance Committee must ensure the following aspects relating to the company's ICFR:

• Compliance with regulatory requirements.
• Adequate delimitation of the scope of consolidation.
• The correct application of accounting criteria.

In terms of the organisation of the ICFR work, the Audit and Compliance Committee is responsible for approving what and when to supervise and how to assess ICFR supervision (approval of the ICFR work and supervision plan).

1. Financial management

Árima's CFO has the following responsibilities in the framework of the ICFR:

• Design, implement, evaluate, and provide overall monitoring of the ICFR, for which he/she shall validate the design of the SCIIF Work and Monitoring Plan.

• Report on the effective functioning of the ICFR to the Audit and Control Committee.

• Ensure that appropriate ICFR training programmes are implemented.
• 1. ICFR Responsible

The ICFR Responsible is part of the Company's Finance Department and is assigned the following duties within the ICFR framework.

of the ICFR system:

• Identify the risks of error, omission, or fraud in financial reporting through the ICFR scoping matrix and documenting the design of controls.

• F.1.2 Where applicable, and particularly as regards the process for the preparation of the financial information, the following items:

• · The departments and/or mechanisms responsible for: (i) designing and revising the organisational structure; (ii) clearly defining the lines of responsibility and authority, with an appropriate distribution of duties and tasks; and (iii) ensuring the existence of sufficient procedures for their correct reporting throughout the company:

Ultimate responsibility for the design and review of the Company's organisational structure lies with the CEO, under the delegation of the Board of Directors. As regards the process for the preparation of the financial information, in addition to the organisational charts, all of the people involved in the process also have a clear knowledge of the specific guidelines, responsibilities and periods that apply to each closure.

· Code of conduct, approval body, level of dissemination and instruction, principles and values included (indicating whether there is specific mention of the recording of transactions and the preparation of financial information), the body in charge of analysing breaches and of proposing corrective actions and sanctions:

The Company has a Code of Conduct, compliance with which is mandatory, and which is approved by the Board of Directors. The aim of this code of conduct is to establish the basic principles and rules that will govern the behaviour of everyone who acts on behalf of Árima and its subsidiary companies. The Code is applicable to all companies that make up the Árima Group and it is binding on the members of the Board of Directors and all company personnel, irrespective of the position they occupy and the duties they perform. This Code of Conduct is supplementary to the Securities Market Internal Code of Conduct, company regulations, the Articles of Association and any other legislation that applies to Árima's activities, and compliance is mandatory for both Árima and all of the companies with which a significant contractual relationship is in place. Non-compliance with the terms of this Code shall be deemed infringement and may result in the adoption of disciplinary measures.

· Whistle-blowing channel, which allows reporting to the audit committee of irregularities of a financial and accounting nature, in addition to possible breaches of the code of conduct and irregular activities in the organization, informing, where appropriate, whether it is confidential in nature and whether it allows anonymous communications, respecting the rights of the whistle-blower and the reported party.

The Company has implemented a whistle-blowing channel for matters related to the internal regulations of the Company and a procedure for reporting potentially significant financial and accounting incidents. In addition, the Whistleblowing Channel also includes the creation of an Ethics Committee whose functions are: reception and classification of complaints received, co-ordination of the investigation work for each of the complaints received, and the of investigation for each of the complaints, imposition of the corresponding disciplinary sanctions, and preparation of periodic reports on the functioning of the Channel.

• · Training and regular refresher courses for personnel involved in preparing and reviewing financial information and evaluating
• ICFR, which address, at least, accounting regulations, auditing, internal monitoring and risk management:

The Finance Department, and specifically the staff involved in the preparation and review of financial information, receives the necessary training on financial and internal control aspects, as well as on regulatory changes affecting the periodic financial information issued by the Company. This training is organised internally and is advised by independent experts in each area.

F.2. Financial reporting risk assessment.

Provide details of at least the following:

• F.2.1 The main characteristics of the risk identification process, including risks of error or fraud, in respect of:
• · Whether there is an existing documented process:

The Board of Directors has approved an Internal Financial Reporting Control System Management Manual. This system identifies risks of error, omission or fraud in financial reporting through the ICFR scoping matrix. This matrix identifies which accounts and disclosures have a significant risk associated with them and whose potential impact on financial reporting may be material. The ultimate aim is to establish a control system that contributes to the mitigation of risks to the achievement of financial objectives. In addition, the financial information issued is reviewed by the Company's auditors.

· Whether the process covers all financial reporting objectives (existence and occurrence; integrity; evaluation; presentation, breakdown and comparability; and rights and obligations), whether it is updated and how frequently:

As With the ultimate aim of providing assurance as to the reliability of the financial information provided to the market, Árima's System of Internal Control over Financial Reporting pursues the following control objectives.

• Existence and occurrence: transactions, facts and other events included in the financial information exist and have been recorded at the right time.

• Completeness: the information reflects all transactions, facts and other events to which the entity is a party.

• Adequate valuation: transactions, facts and other events are recorded and valued in accordance with applicable standards.

• Fair presentation, disclosure and comparability: transactions, facts and other events are classified, presented and reflected in the financial information in accordance with applicable standards.

• Timing of transactions: transactions and events have been recorded in the correct period.

• Adequate reflection of rights and obligations: the financial information reflects, at the relevant date, the rights and obligations through corresponding assets and liabilities, in accordance with the applicable regulations.

The scope of the Internal Control over Financial Reporting System shall be reviewed at least annually before setting the reporting schedule for the following year. reporting schedule for the following financial year.

· The existence of a process for identifying the consolidation perimeter, taking account, among other things, of the potential existence of complex corporate structures, vehicle companies or special purpose entities:

Árima's organisational structure is simple, comprising Árima Real Estate SOCIMI, S.A. and two dependent companies (100%) Árima Investigación, Desarrollo e Innovación, S.L.U. and Árima Investments, S.L.

· Whether the process takes account of the effects of other types of risk (operational, technological, financial, legal, fiscal, reputational, environmental, etc.) in the manner in which they affect the financial statements:

Any analysis will include all regulatory, technological and reputational risk, risk of fraud, human resource-related risk, operational risk, etc. that are relevant for the financial statements.

· The corporate governance body that supervises the process:

The ICFR is a set of processes that affect all levels of the organisation and all Company personnel. Mainly:

1. Board of Directors

With reference to the ICFR, the Regulations of the Board of Directors establish the following functions of the Board:

• To prepare the annual accounts and their presentation to the General Meeting.
• Determine the risk management and control policy.
• To monitor the internal control and information systems.
• Approve the financial information which, as a listed company, the Company must periodically publish.

As the body ultimately responsible for supervising the ICFR, the Board of Directors has established the necessary organisational structure to monitor the ICFR system, with the support of the Audit and Compliance Committee.

1. Audit and Compliance Committee

In order to ensure the reliability of financial information, the Audit and Compliance Committee has been assigned the following functions:

• To ensure the proper functioning of the information and internal control systems, in particular with regard to the preparation and integrity of the financial information.

• To be aware of and periodically review the process of preparation and presentation of financial information and the internal risk control and management systems associated with the risks associated with the Company's significant risks.

• Submit recommendations or proposals to the Board of Directors aimed at safeguarding the integrity of the information and control systems.

In the performance of these duties, the Audit and Compliance Committee must ensure the following aspects relating to the company's ICFR:

• Compliance with regulatory requirements.

• Adequate delimitation of the scope of consolidation.

• The correct application of accounting criteria.

In terms of the organisation of the ICFR work, the Audit and Compliance Committee is responsible for approving what and when to supervise and how to assess ICFR supervision (approval of the ICFR work and supervision Plan).

1. Financial Management

Árima's CFO has the following responsibilities in the framework of the ICFR:

• Design, implement, evaluate and provide overall monitoring of the ICFR, for which he/she shall validate the design of the ICFR Work and Monitoring Plan.

• Report on the effective functioning of the ICFR to the Audit and Control Committee.

• Ensure that appropriate ICFR training programmes are implemented.

• ICFR Responsible

The ICFR Responsible is part of the Company's Finance Department and is assigned the following duties within the ICFR framework:

• Identify the risks of error, omission or fraud in financial reporting through the ICFR scoping matrix and document the design of controls.
• Ensure the correct functioning of the ICFR, for which purpose those responsible for each process/sub-process and associated controls must monitor them and report such information to the ICFR Responsible at Árima.
• Prepare reports for the Financial Management, considering the results of the reports received.
• Alert on changes in regulatory and financial information risk scenarios.
• Identify new risks in the processes.
• Collaborate in the proposal of improvement actions and resolution of incidents.

F.3. Monitoring activities.

State whether at least the following items are in place and specify their main characteristics:

F.3.1 Procedures for reviewing and authorising the financial information and the description of ICFR to be disclosed to the securities markets, stating who is responsible in each case, along with the documentation showing flow charts of activities and controls (including those that address the risk of fraud) for each type of transaction that may materially affect the financial statements, including procedures for the closing of accounts and for the specific review of critical judgements, estimates, evaluations and projections.

The Company has an internal procedure for reviewing financial information (including annual accounts, financial statements for interim periods, the Management Report and the Annual Corporate Governance Report), which oversees the process from the moment that information is generated in the Administration and Finances Department up to its approval by the Audit and Control Committee and, finally, by the Board of Directors prior to publication. This process is reflected in the Monitoring Manual for the Internal Control over Financial Reporting System approved by the Board of Directors, which establishes both the responsibilities and the flows of the control activities on the material sub-processes that give rise to the issuance of financial information.

F.3.2 Internal control policies and procedures for IT systems (including secure access, tracking changes, system operation, continuity and segregation of duties) giving support to key company processes relating to the preparation and publication of financial information.

The internal control policies and procedures associated with the IT systems are defined by the Company Management. The main risks considered by the Company, to which it provides a response, concern physical security (security copies, maintenance and access to servers, etc.), logic security (access controls, procedures for registrations and removals, protection against viruses and other malware, etc.), sufficient segregation of functions, registration and traceability of information, privacy (LOPD - the Spanish Data Protection Act), systems development and systems maintenance. The Company is advised by a third-party expert in systems which carries out regular security audits that cover, among others, all these aspects. On the other hand, the Board of Directors has approved a Business Continuity Plan to minimize the risk of interruption of the activity for any reason.

F.3.3 Internal control policies and procedures for overseeing the management of activities outsourced to third parties, and the appraisal, calculation or valuation services commissioned from independent experts, when these may materially affect the financial statements.

The activity subcontracted to third parties that has a greater impact on the financial statements corresponds to the valuation of assets by an independent expert. The procedure in this regard implemented by the Company basically includes the recommendations of the CNMV to listed valuation and real estate companies in relation to the valuation of real estate assets. Moreover, the results obtained are always contrasted with the estimates of Árima's internal experts, who supervise the valuation process. Likewise, the conclusions obtained are always reviewed by the Company's Auditors. On the other hand, the Company, for the services it subcontracts, works with companies of recognized prestige in the sector.

F.4. Information and communications.

State whether at least the following items are in place and specify their main characteristics:

F.4.1 A specific office which is in charge of defining and maintaining accounting policies (accounting policies area or department) and settling queries or disputes over their interpretation, and which is in regular communication with the team in charge of company operations, and an up-to-date manual of accounting policies that has been sent to all the company's operational units.

The Company's Administration and Finance Department is responsible for defining and updating accounting policies and for responding to queries and consultations in this regard.

F.4.2 Mechanisms for collecting and preparing financial information with standardised formats, which are to be applied and used by all the company or group units and which support the main financial statements and notes to the accounts, along with the detailed information on the ICFR.

The accounting policies defined by the Management form the basis for the preparation of the financial information of both the Company and its subsidiaries. These accounting policies guarantee the application of the same criteria during the preparation of information and consistency in its presentation.

F.5. Supervising the operation of the system.

Indicate, pointing out its main characteristics:

F.5.1 The activities of the audit committee in overseeing ICFR, and whether there is an internal auditing office whose duties include supporting the committee in the task of supervising the internal control system, including ICFR. Describe the scope of the ICFR assessment carried out over the course of the year and the procedure by which the person responsible for making this assessment can communicate his/her findings. State also whether the company has an action plan detailing the potential corrective measures, and whether it has taken account of their impact on its financial information.

As indicated in article 44 of the Company's Articles of Association, the Audit and Compliance Committee's duties include, among others, the following periodic review of the process of preparing the economic and financial information, its internal controls and the independence of the external auditor. Specifically, the ICFR Manual approved by the Board of Directors assigns it the following responsibilities:

• Ensuring the proper functioning of the information and internal control systems, in particular with regard to the preparation and integrity of the financial information.

• To be familiar with and periodically review the process of preparation and presentation of financial information and the internal risk control and management systems associated with the Company's significant risks.

• Submit recommendations or proposals to the Board of Directors aimed at safeguarding the integrity of the information and control systems.

In the performance of these duties, the Audit and Compliance Committee must ensure the following aspects relating to the company's ICFR:

• Compliance with regulatory requirements.

• Adequate delimitation of the scope of consolidation.

• The correct application of accounting criteria.

In terms of the organisation of the ICFR work, the Audit and Compliance Committee is responsible for approving what and when to supervise and how to assess ICFR supervision (approval of the ICFR Work and Monitoring Plan).

The Audit and Control Committee is also supported by the Financial Management and the ICFR Responsible, who prepares a report on the status of compliance and effectiveness of the ICFR, which is reported to the Finance Department. The latter, in turn, reports the results obtained to the Audit and Control Committee (which will submit them to the Board of Directors when it considers it necessary). The scope of the Internal Control over Financial Reporting System must be reviewed at least once a year before setting the reporting calendar for the following year.

Furthermore, the conclusion of the Company's auditors on the financial information provided has been satisfactory.

F.5.2 Whether the Company has a procedure by which the accounts auditor (in accordance with the contents of the Auditing Standards ("NTA")), the internal auditing department and other experts may communicate with senior management and the audit committee or senior managers of the company regarding any significant internal control weaknesses identified during their review of the annual accounts or any others they have been assigned. State also whether the Company has an action plan to correct or mitigate the weaknesses found.

The Audit and Control Committee meets in order to perform its prime function, which is to act as support for the Board of Directors in its supervisory work, by carrying out a regular review of the process for the preparation of the economic and financial information, the internal auditing department and the independence of the external auditor. In addition to other potential actions, it also carries out the following duties:

Discussions with External Auditors (with particular significance when they have acted on any specific matter: Audit reports, limited reviews, etc.) in order to: - Obtain information on the planning, scope and conclusions of the work carried out.

• Obtain information on internal control weaknesses detected during the course of their work.

• Inform the external auditor about any matters that could affect their work.

• Talk to the external auditor regarding the expected contents of its reports.

• Obtain the necessary information for ensuring the independence of the External Auditor in compliance with the duties of the Audit and Control Committee. In addition, the Audit and Control Committee may demand additional information or the participation of experts when it comes to analysing topics relating to compliance with their duties.

F.6. Other relevant information

F.7. External auditor's report.

State whether:

F.7.1 The ICFR information supplied to the markets has been reviewed by the external auditor, in which case the corresponding report should be attached. Otherwise, explain the reasons for the absence of this review.

The Company has reviewed the Internal Control System for Financial Information. The external auditor holds regular meetings with the Financial Department, both to review the financial information and to evaluate the internal control in the development of the Company's activity. It is considered that the established controls are adequate for the volume and complexity of the Company, having gone through numerous financial information review and audit processes since its incorporation. The conclusion of the external auditor has been satisfactory in all cases.

G. DEGREE OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS

Indicate the degree to which the company complies with the Code of Corporate Governance recommendations for listed companies.

In the event that the Company does not comply with any of the recommendations or complies only in part, include a detailed explanation of the reasons so that shareholders, investors and the market in general have enough information to assess the company's behaviour. General explanations will not be acceptable.

1. The articles of association of listed companies should not place an upper limit on the votes that can be cast by a single shareholder, or impose other obstacles on the takeover of the company through the purchase of shares on the market.

Compliant [ X ] Explain [ ]

• 1. When the listed company is controlled, within the meaning of article 42 of the Commercial Code, by another entity, whether listed or not, and has, directly or through its subsidiaries, business relations with that entity or any of its subsidiaries (other than those of the listed company) or carries out activities related to those of any of them, it should publicly disclose precisely the following:
• a) The type of activity they respectively engage in, and any potential business dealings between them, as well as between the subsidiary and other group companies.
• b) The mechanisms in place to resolve any potential conflicts of interest that may arise.

Compliant [	Partially compliant [	Explain [	N.A. [ X ]
]	]	]

• 1. During the general shareholders' meeting, as a supplement to the written information circulated in the annual corporate governance report, the chairman of the board should verbally inform shareholders in sufficient detail of the most relevant aspects of the company's corporate governance, in particular:
• a) Any changes that have taken place since the previous general shareholders' meeting.
• b) The specific reasons for the company not following a given Good Governance Code recommendation, and any alternative procedures followed in its stead, where applicable.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. The company should define and promote a policy regarding communication and contacts with shareholders and institutional investors in the context of their involvement in the company, as well as with proxy advisors, that fully respects the rules against market abuse and treats shareholders in the same position in the same way. The company should make this policy public on its website, including information on how it has been put into practice and identifying the interlocutors or persons responsible for carrying it out.

And, without prejudice to legal obligations regarding the dissemination of inside information and other types of regulated information, the company should also have a general policy regarding the communication of economic-financial, non-financial and corporate information through the channels it deems appropriate (media, social networks or other channels) which contributes to maximising the dissemination and quality of the information available to the market, investors and other stakeholders. The company should draw up and implement a policy for communicating with and contacting shareholders, institutional investors and proxy advisors that complies in full with market abuse regulations and accords equitable treatment to shareholders in the same position.

1. The board of directors should not make a proposal to the general meeting for the delegation of powers to issue shares or convertible securities without pre-emptive subscription rights for an amount exceeding 20% of capital at the time of such delegation.

When the Board approves an issue of shares or convertible securities without pre-emptive subscription rights, the company should immediately post a report on its website explaining the exclusion as envisaged in company legislation.

Compliant [	]	Partially compliant [ X ]	Explain [ ]
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The General Shareholders' Meeting held on 29 June 2021 agreed to authorise the Board of Directors to increase the share capital, as provided for in Article 297.1.b) of the Spanish Capital Companies Act, over a maximum period of five years, through monetary contributions and up to a maximum amount equal to half (50%) of the share capital, with the attribution of powers to exclude the pre-emptive right only in those increases up to a maximum amount equal to 20% of the capital stock.

• 1. Listed companies drawing up the following reports on a voluntary or compulsory basis should publish them on their website well in advance of the general shareholders' meeting, even if their distribution is not compulsory:
• a) Report on auditor independence.
• b) Reports on the operation of the audit committee and the appointments and remuneration committee.
• c) Report by the audit committee report on related party transactions.
  • Compliant [ ] Partially compliant [ X ] Explain [ ]

The referenced documentation has been partially disclosed on the company's website.The company should broadcast its general shareholders' meetings live via its website.

And that the company has mechanisms that enable proxy voting and voting by telematic means and even, in the case of large cap companies and to the extent proportionate, attendance and active participation in the General Meeting.

Compliant [ ] Partially compliant [ ] Explain [ X ]

This recommendation will be analysed on an annual basis, though it is not envisaged at present.

1. The Audit Committee should ensure that the annual accounts submitted by the Board of Directors to the General Meeting of shareholders are drawn up in accordance with accounting regulations. In the event that the auditor has included a qualification in its audit report, the chairman of the audit committee should clearly explain to the general meeting the audit committee's opinion on its content and scope, making available to shareholders at the time of publication of the notice of call to the meeting, together with the rest of the proposals and reports of the board, a summary of said opinion.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. The company should disclose its conditions and procedures for admitting share ownership, the right to attend General Shareholders' Meetings and the exercise or delegation of voting rights and display them permanently on its website.

Such conditions and procedures should encourage shareholders to attend and exercise their rights and be applied in a nondiscriminatory manner.

• 1. When an accredited shareholder exercises the right to supplement the agenda or submit new proposals for agreement prior to the general shareholders' meeting, the company should:
• a) Immediately circulate the supplementary items and new proposals for agreement.
• b) Publish the standard form of attendance card or proxy appointment or remote voting form with the necessary modifications so that new items on the agenda and alternative proposals for agreement can be voted on in the same terms as those submitted by the board of directors.
• c) Put all these items or alternative proposals to the vote, applying the same voting rules as for those submitted by the board of directors, with particular regard for presumptions or deductions about the direction of votes.
• d) After the general shareholders' meeting, disclose the breakdown of votes on these supplementary items or alternative proposals.

	Compliant [ ]	Partially compliant [ ]	Explain [ ]	N.A [ X ]
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1. In the event that a company plans to pay for attendance at the general shareholders' meeting, it should first establish a general, long-term policy in this respect.

Compliant [	Partially compliant [	Explain [	N.A [ X ]
]	]	]

1. The Board of Directors should perform its duties with a unity of purpose and independent judgement, according the same treatment to all shareholders in the same position. It should be guided at all times by the company's best interests, understood as the creation of a profitable and sustainable business over the long term which ensures its continuity and maximises the company's economic value.

In pursuing the corporate interest, it should not only abide by laws and regulations and conduct itself according to the principles of good faith, ethics and respect for commonly accepted customs and good practices, but should also strive to reconcile its own interests with the legitimate interests of its employees, suppliers, clients and any other stakeholders who could be affected, as well as reconciling the impact of its activities on the broader community and the natural environment.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. The board of directors should have the appropriate size to achieve maximum effectiveness and participation, which means it should ideally have between five and fifteen members.

Compliant [ X ] Explain [ ]

• 1. The Board of Directors should approve a Director selection policy that:
• a) Is specific and verifiable.
• b) Ensures that appointment or re-election proposals are based on a prior analysis of the board of directors' own needs.
• c) Favours a diversity of know-how, experience and gender. For these purposes, measures that encourage the company to have a significant number of female senior managers are considered to be conducive to gender diversity.

The results of the prior analysis of the Board's needs should be written up in the appointments committee's explanatory report, to be published when the general meeting is convened to ratify the appointment and re-election of each director.

The appointments Committee should run an annual check on compliance with the director selection policy and set out its findings in the annual corporate governance report.

1. Proprietary and independent directors should occupy a broad majority of seats on the board, while the number of executive directors should be the minimum necessary, bearing in mind the complexity of the corporate group and the percentage of the company's share capital held by the executive directors.

And that the number of female directors should account for at least 40% of the members of the board of directors by the end of 2022 and thereafter, but no earlier than 30%.

Compliant [ ] Partially compliant [ X ] Explain [ ]

The proprietary and independent directors constitute a large majority of the Board, the number of executive directors being significantly lower. It is important to highlight that the composition of the Board is enriched by the different profiles that comprise it in terms of age, nationality and professional career. Currently, the percentage relative to female directors is equivalent to 14% of the Board.

1. The number of proprietary directors as a percentage of the total number of non-executive directors should not exceed the proportion between the company share capital represented by these directors and the remainder of this share capital.

This criterion can be attenuated:

• a) In companies with a high level of market capitalisation in which few equity stakes attain the legal threshold to be considered a significant shareholding.
• b) In companies in which a plurality of shareholders is represented on the board of directors and they are not related to one another.

Compliant [ X ] Explain [ ]

1. The number of Independent Directors should represent at least one half of all board members.

However, when the company does not have a large market capitalisation, or when a large cap company has shareholders individually or concertedly controlling over 30% of share capital, independent directors should occupy, at least, a third of all Board places.

Compliant [ X ] Explain [ ]

• 1. Companies should post the following information on directors on their websites, and keep this information permanently updated:
• a) Background and professional experience.
• b) Directorships held at other companies, listed or otherwise, and any other paid activities that they may engage in, of whatever nature.
• c) Information on the director category to which they belong and, in the case of proprietary directors, information on the shareholder they represent or have links with.
• d) The date of their first appointment as board member and the dates of any subsequent re-elections.

• e) Shares that they hold in the company, and any options thereover.

• The annual corporate governance report, following verification by the appointments committee, should explain the reasons for the appointment of proprietary directors at the behest of shareholders controlling less than 3% of capital; it should also explain, where applicable, any rejection of a formal request for a seat on the board from shareholders whose equity stake is equal to or greater than that of others that have successfully applied for a proprietary directorship.

Compliant [ ]	Partially compliant [	]	Explain [ ]	N.A. [ X ]

1. Proprietary directors should resign when the shareholders they represent dispose of their ownership interest in its entirety. If such shareholders reduce their stakes, thereby losing some of their entitlement to proprietary directors, the latter's number should be reduced accordingly.

Compliant [ X ] Partially compliant [ ] Explain [ ] N.A. [ ]

1. The Board of Directors should not propose the removal of any independent directors before the expiry of their tenure as mandated by the articles of association, except where just cause is found by the board of directors, based on a report by the appointments committee. In particular, just cause shall be presumed when directors take up new posts or responsibilities that prevent them from allocating sufficient time to the performance of their duties as board member, or are in breach of the duties inherent in their position, or are affected by one of the grounds that disqualifies them from classification as independent, as set out in the applicable legislation.

The removal of independent directors may also be proposed as a consequence of a takeover bid, merger or similar corporate operation which involves changes to the company's capital structure, when the changes to the structure of the board of directors are triggered by the proportionality criterion set out in recommendation 16.

Compliant [ X ] Explain [ ]

1. Companies should establish rules obliging directors to inform and, where applicable, resign in any circumstances that might harm the organisation's name or reputation, and directors should particularly be obliged to inform the Board of Directors of any criminal charges brought against them and of any subsequent court proceedings.

The Board, having been informed of or otherwise having knowledge of any of the situations mentioned in the preceding paragraph, should examine the matter as promptly as possible and, in view of the particular circumstances, decide, after a report from the Nomination and Remuneration Committee, whether or not to adopt any measure, such as the opening of an internal investigation, request the resignation of the director or propose his or her removal. And that a report be included in the annual corporate governance report, unless there are special circumstances justifying this, which should be recorded in the minutes. This is without prejudice to the information that the company must disclose, if appropriate, when the corresponding measures are adopted.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. All directors should express clear opposition when they feel a proposal submitted for the board of directors' approval might damage the corporate interest. In particular, independents and other directors unaffected by a potential conflict of interest should challenge any decision that could go against the interests of shareholders lacking representation on the board of directors.

When the board takes significant or reiterated decisions about which a director has expressed serious reservations, then he or she must draw the pertinent conclusions. Directors resigning for such causes should set out their reasons in the letter referred to in the next recommendation.

The terms of this recommendation should also apply to the secretary of the board, even if he/she is not a director.

1. When, either by resignation or by resolution of the general meeting, a director retires from office before the end of his term of office, he should sufficiently explain the reasons for his resignation or, in the case of non-executive directors, his opinion on the reasons for the removal by the board, in a letter to be sent to all members of the board of directors.

And, without prejudice to the disclosure thereof in the annual corporate governance report, the company should, to the extent relevant for investors, publish the resignation as soon as possible, including sufficient reference to the reasons or circumstances provided by the director.

Compliant [ X ]	Partially compliant [ ]	Explain [ ]	N.A. [ ]
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1. The appointments committee should ensure that non-executive directors have sufficient time available to perform their responsibilities effectively.

The board's regulations should establish rules for the maximum number of company directorships that board members may hold.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. The Board should meet with the necessary frequency to properly perform its functions properly, at least eight times a year, in accordance with a calendar and agendas set at the beginning of the year, and each director may individually propose the addition of other items to the agenda.

Compliant [ ]	Partially compliant [X ]	Explain [ ]
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The Board of Directors met five times during the year, providing broad and precise coverage of the Company's activities, without prejudice to the fluid contact and communication between the directors during the periods between meetings.

1. Director absences should be kept to the bare minimum and quantified in the annual corporate governance report. In the event that their absence is unavoidable, directors should grant a proxy with the appropriate instructions.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. When directors or the secretary express concerns about a proposal or, in the case of directors, about the company's performance, and such concerns are not resolved at the board meeting, the person expressing them can request that they be recorded in the minutes.

Compliant [ X ] Partially compliant [ ] Explain [ ] N.A. [ ]

1. The company should provide suitable channels for directors to obtain the advice they need to carry out their duties, and this should extend, if the circumstances make this necessary, to external assistance at the company's expense.

Compliant [ X ]	Partially compliant [ ]	Explain [ ]
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1. Regardless of the knowledge directors must possess in order to perform their duties, companies should also offer them refresher programmes when the circumstances make this advisable.

Compliant [ X ] Explain [ ] N.A. [ ]

1. The agendas of meetings should clearly indicate the points on which the board of directors must arrive at a decision or adopt a resolution, so that directors may study or gather the necessary information beforehand.

When, exceptionally and for reasons of urgency, the chairman wishes to present decisions or resolutions for board approval that were not on the meeting agenda, their inclusion shall require the express prior consent, duly recorded in the minutes, of the majority of directors present.

Compliant [ X ]	Partially compliant [ ]	Explain [ ]
-----------------	----------------------------	-------------

1. Directors should be regularly informed of movements in share ownership and of the views of major shareholders, investors and rating agencies on the company and its group.

Compliant [ X ] Partially compliant [ ] Explain [ ]

• 1. In addition to the duties assigned to him by law and the company's articles of association, the chairman, as the person responsible for the efficient functioning of the board of directors, should: prepare and submit a schedule of meeting dates and agendas to the board; organise and coordinate regular evaluations of the board and, where appropriate, the company's chief executive officer; take responsibility for managing the board and its proper functioning; ensure that sufficient time is devoted to the discussion of strategic issues, and approve and review refresher courses for each director, when the circumstances make this advisable.

• Compliant [ X ] Partially compliant [ ] Explain [ ]

• When a coordinating director has been appointed, the articles of association or board of directors' regulations should grant him or her the following powers over and above those conferred by law: chairing the board of directors in the absence of the chairman a vice chairmen, where applicable; giving voice to the concerns of non-executive directors; maintaining contacts with investors and shareholders to hear their views and developing a balanced understanding of their concerns, especially those to do with the company's corporate governance; and coordinating the plan for the chairman's succession.

Compliant [	Partially compliant [	Explain [	N.A. [ X ]
]	]	]

1. The Board secretary should particularly strive to ensure that the board's actions and decisions are informed by the governance recommendations set out in this good governance code, to the extent that they apply to the company.

Compliant [ X ] Explain [ ]

• 1. The Board of Directors sitting in full session should conduct an annual evaluation, adopting, where necessary, an action plan to correct weakness detected in:
• a) The quality and efficiency of the board's own actions.
• b) The performance and membership of its committees.
• c) The diversity of board membership and skills.
• d) The performance of the chairman of the board of directors and the company's chief executive.
• e) The performance and contribution of individual directors, with particular attention to the chairs of board committees.

The evaluation of the various board committees should start from the reports they submit to the board of directors, while the evaluation of the board itself should start from the report submitted by the appointments committee.

Every three years, the board of directors should engage an external consultant to aid in the evaluation process. This consultant's independence should be verified by the appointments committee.

Any business dealings that the consultant or any member of its corporate group maintains with the company or members of its corporate group should be detailed in the annual corporate governance report.

The process followed and areas evaluated should be detailed in the annual corporate governance report.

Compliant [ X ]	Partially compliant [	]	Explain [ ]

1. When the company has an Executive committee, the breakdown of its members by director category should be similar to that of the board itself. The secretary of the board should also act as secretary to the executive committee.

Compliant [ ] Partially compliant [ ] Explain [ ] N.A. [ X ]

1. The Board of Directors should be kept fully informed of the matters debated and the decisions adopted by the executive committee, and all board members should receive a copy of the executive committee's minutes.

Compliant [ ] Partially compliant [ ] Explain [ ] N.A. [ X ]

1. The members of the audit committee as a whole, and especially its chairman, should be appointed taking into account their knowledge and experience in accounting, auditing and risk management, both financial and non-financial.

Compliant [ X ]	Partially compliant [ ]	Explain [ ]
-----------------	----------------------------	-------------

1. Companies should have a unit in charge of internal auditing duties, under the supervision of the audit committee, to monitor the effectiveness of internal reporting and control systems. This unit should report functionally to the board's non-executive chairman or the chairman of the audit committee.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. The head of the unit in charge of the internal audit function should present its annual work plan to the audit committee for approval by the latter or by the board, report directly to it on its execution, including any incidents and limitations on scope that may arise in its development, the results and follow-up of its recommendations, and submit an activity report at the end of each fiscal year.

2. 1. The audit committee should have the following duties, over and above those set out in law:
3. 1. With regard to internal reporting and monitoring systems:
   2. a) Monitoring and assessing the preparation and integrity of financial and non-financial information, as well as the systems for controlling and managing financial and non-financial risks relating to the company and, where appropriate, the group including operational, technological, legal, social, environmental, political, reputational and corruption-related risks reviewing compliance with regulatory requirements, the appropriate scope of consolidation and the correct application of accounting criteria.
   3. b) Monitoring the independence of the unit responsible for internal auditing duties; proposing the selection, appointment, reelection and removal of the head of the internal auditing service; proposing the service's budget; approving its priorities and work programmes, ensuring that it focuses primarily on the main risks the company is exposed to; receiving regular information on its activities; and verifying that senior management take account of the findings and recommendations contained in its reports.
   4. c) Establish and supervise a mechanism that allows employees and other persons related to the company, such as directors, shareholders, suppliers, contractors or subcontractors, to report potentially significant irregularities, including

financial and accounting irregularities, or of any other nature related to the company that they become aware of within the company or its group. This mechanism should guarantee confidentiality and, in any event, provide for cases in which communications may be made anonymously, respecting the rights of both the complainant and the reported.

• d) Overall, to ensure that the established internal control policies and systems are effectively implemented in practice.
• 1. With regard to the external auditor:
• a) In the event of the external auditor's resignation, examining the circumstances that have caused it.
• b) Ensuring that the payment of the external auditor does not compromise its quality or independence.
• c) Ensuring that the company notifies any change of auditor to the CNMV as a significant event, accompanied by a statement detailing any potential disagreements arising with the outgoing auditor, where applicable, and the reasons for these disagreements.
• d) Ensuring that the external auditor has a yearly meeting with the board of directors in full session to inform it of the work undertaken and developments in the company's risk and accounting positions.
• e) Ensuring that the company and the external auditor adhere to current regulations on the provision of non-auditing services, limits on the concentration of the auditor's business and other requirements concerning auditor independence.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. The Audit Committee should be empowered to meet with any company employee or manager, even in the absence of other senior officers.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. The Audit Committee should be informed of any structural changes or corporate transactions the company is planning, so the committee can analyse the operation and report to the board beforehand on its economic conditions and accounting impact and, where applicable, the exchange ratio proposed.

Compliant [ X ] Partially compliant [ ] Explain [ ] N.A. [ ]

• 1. Control and risk management policy should at least identify:
• a) The different types of financial and non-financial risk the company is exposed to (including operational, technological, financial, legal, social, environmental, political and reputational risk), with the inclusion under financial or economic risk of contingent liabilities and other off-balance sheet risk.
• b) A risk management and control model based in different levels, including a specialised risk committee when sectoral rules so provide or where the company deems it appropriate.
• c) The determination of the risk level the company sees as acceptable.
• d) The measures in place to mitigate the impact of identified risk events should they occur.

• e) The internal control and reporting systems to be used to control and manage the above risks, including contingent liabilities and off-balance sheet risk.

• 1. The Company should establish an internal risk monitoring and management office within one of the company's own internal departments or units, with direct supervision from the audit committee or some other specialist board committee. This office should be expressly charged with the following duties:
• a) Ensuring that risk control and management systems are functioning correctly and, specifically, that any major risks the company is exposed to are correctly identified, managed and quantified.
• b) Participating actively in the preparation of risk strategies and in key decisions about their management.
• c) Ensuring that risk control and management systems are mitigating risk effectively within the framework of the policy drawn up by the board of directors.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. Appointees to the appointments and remuneration committee (or the appointments committee and the remuneration committee, if separately constituted) should have the right balance of knowledge, skills and experience for the duties they are called on to perform, and the majority of their members should be independent directors.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. Companies with high levels of capitalisation should have a separate appointments committee and remuneration committee.

Compliant [X ]	Explain [ ]	N.A. [ ]
----------------	----------------	----------

1. The appointments committee should consult with chairman of the board of directors and the company's chief executive, especially on matters relating to executive directors.

Any board member should be able to suggest directorship candidates for consideration by the appointments committee, in order to cover vacant director positions.

Compliant [ X ] Partially compliant [ ] Explain [ ]

• 1. The remuneration committee should operate independently and have the following functions in addition to those assigned by law:
• a) Proposing standard conditions for senior officer contracts to the Board of Directors.
• b) Monitoring compliance with the remuneration policy set by the Company.
• c) Periodically reviewing the remuneration policy for directors and senior officers, including share-based remuneration systems and their application, and ensuring that their individual remuneration is proportionate to the amounts paid to other directors and senior officers in the company.
• d) Ensuring that potential conflicts of interest do not undermine the independence of any external advice provided to the committee.

• e) Verifying the information on directors' and senior officers' pay contained in the various corporate documents, including the annual report on directors' pay.

• The remuneration committee should consult with the company's chairman and chief executive, especially where matters relating to executive directors and senior officers are concerned.

Compliant [ X ] Partially compliant [ ] Explain [ ]

• 1. The rules governing the composition and operation of the supervision and control committees should be set out in the board of directors' regulations and they should be consistent with the rules that govern legally mandatory board committees, as specified in the foregoing recommendations, including:
• a) Committees should be formed exclusively by non-executive directors, with a majority of independent directors.
• b) They should be chaired by independent directors.
• c) The board of directors should appoint the members of such committees in consideration of the knowledge, skills and experience of its directors and the duties to be performed by each committee, and it should discuss their proposals and reports. Committees should submit an account to the first full meeting of the board after the committee in question has met, and the board should respond to the work carried out.
• d) Committees may engage external advice, when they feel it necessary for the performance of their duties.
• e) Meetings should be minuted and a copy made available to all board members.

Compliant [ X ]	Partially compliant [ ]	Explain [ ]	N.A. [ ]
-----------------	----------------------------	----------------	----------

• 1. Supervision of compliance with the company's environmental, social and corporate governance policies and rules, as well as internal codes of conduct, should be entrusted to one or more committees of the Board of Directors, which may be the Audit Committee, the nomination committee, a committee specialising in sustainability or corporate social responsibility or another committee that the board of directors, in the exercise of its powers of self-organisation, has decided to create. Such a committee should be composed solely of non-executive directors, the majority of whom should be independent, and should be attributed with the following powers and be specifically attributed the minimum functions indicated in the following recommendation.
• Compliant [ X ] Partially compliant [ ] Explain [ ]
• 1. The minimum functions referred to in the above recommendation are as follows:
• a) Supervision of compliance with the company's corporate governance rules and internal codes of conduct, also ensuring that the corporate culture is aligned with its purpose and values.
• b) Supervision of the application of the general policy regarding the communication of economic-financial, non-financial and corporate information as well as communication with shareholders and investors, proxy advisors and other stakeholders. The way in which the entity communicates and relates to small and medium-sized shareholders shall also be monitored.
• c) Evaluating and periodically reviewing the corporate governance system and the company's environmental and social policy to ensure that they fulfil their mission of promoting the corporate welfare and take into account, as appropriate, the legitimate interests of other stakeholders.
• d) overseeing that the company's environmental and social practices are in line with the company's strategy and policy. strategy and policy.

• e) Supervision and evaluation of the processes of relations with the different stakeholders.

• Sustainability policies on environmental and social issues should identify and include at least:

a) The principles, commitments, objectives and strategy with regard to shareholders, employees, customers, suppliers, social issues, the environment, diversity, fiscal responsibility, respect for human rights and the prevention of corruption and other illegal conduct

b) methods or systems for monitoring compliance with policies, associated risks and their management.

c) mechanisms for monitoring non-financial risk, including those related to ethical and business conduct issues.

d) Channels of communication, participation and dialogue with stakeholders.

e) Responsible communication practices that avoid manipulation of information and protect integrity and honour. integrity and honour.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. Director remuneration should be sufficient to attract and retain directors with the desired profile and compensate the commitment, abilities and responsibility that the post demands, but not so high as to compromise the independent judgement of non-executive directors.

Compliant [ X ] Explain [ ]

1. Variable remuneration linked to the company's and the director's individual performance, remuneration via the awarding of shares, options or any other right over shares, or the right to be remunerated on the basis of share price movements should be confined to executive directors, along with membership of long-term savings schemes, such as pension plans, retirements schemes or other social welfare programmes.

The company may consider the payment of non-executive directors through the handover of shares, provided that they retain such shares until the end of their mandate. The above condition shall not apply to any shares that the director must dispose of to settle costs related to their acquisition, where applicable.

Compliant [ X ] Partially compliant [ ] Explain [ ]

1. In the case of variable payments, remuneration policies should include the necessary limits and technical safeguards to ensure that such payments reflect the professional performance of the beneficiaries and not simply the general progress of the markets or the company's business sector or other similar circumstances.

In particular, variable payment items should meet the following conditions:

• a) They should be linked to predetermined and measurable performance criteria that factor in the risk assumed in order to obtain a given outcome.
• b) They should promote the sustainability of the company and include non-financial criteria that are relevant to the creation of long-term value, such as compliance with the company's internal rules and procedures and its risk control and management policies.
• c) They should be designed to achieve a balance between the delivery of short, medium and long-term objectives, in such a way that performance-related pay rewards ongoing achievement, maintained over sufficient time to appreciate its contribution to sustainable value creation. This will ensure that performance measurement is not based solely on oneoff, occasional or extraordinary events.

Compliant [ ] Partially compliant [ ] Explain [ X ] N.A. [ ]

Currently under analysis is the establishment of predetermined and measurable criteria in accordance with their volume and activity that will serve as the basis for determining variable remuneration.

1. The payment of variable components of remuneration should be subject to sufficient verification that performance or other preestablished conditions have been effectively met. Institutions should include in the annual directors' remuneration report the criteria for the time required and methods for such verification, depending on the nature and characteristics of each variable component.

In addition, entities should consider the establishment of a reduction clause based on the deferral for a sufficient period of time of the payment of a part of the variable components that entails their total or partial loss in the event that some event occurs prior to the time of payment that makes it advisable to do so.

	Compliant [ X ]	Partially compliant [	]	Explain [ ]	N.A. [ ]
--	-----------------	-----------------------	---	----------------	----------

1. In the case of remuneration linked to company earnings, any qualifications stated in the external auditor's report should be considered and the said earnings reduced accordingly.

Compliant [ X ] Partially compliant [	]	Explain [ ]	N.A. [ ]
------------------------------------------	---	----------------	----------

1. A significant percentage of executive directors' variable remuneration should be linked to the handover of shares or financial instruments linked to their value.

	Compliant [ X ]	Partially compliant [ ]	Explain [ ]	N.A. [ ]
--	-----------------	----------------------------	----------------	----------

1. When the shares or options or rights in shares corresponding to remuneration systems have been allocated, directors should not be able to transfer ownership of a number of shares equivalent to twice their fixed annual remuneration, nor should they be able to exercise the options or rights granted to them until a term of at least three years has elapsed since their allocation.

An exception is made in the case where the director maintains, at the time of transfer or exercise, a net economic exposure to share price variation of a market value equivalent to an amount of at least twice his annual fixed remuneration through the ownership of shares, options or other financial instruments.

The foregoing shall not apply to shares that the director needs to dispose of in order to meet the costs related to their acquisition or, subject to the favourable opinion of the nomination and remuneration committee, in order to deal with extraordinary situations that so require.

Compliant [ ] Partially compliant [ ] Explain [ X ] N.A. [ ]

With regard to variable payments made in the form of shares, a twelve-month lock-up period has been established and approved for a third of the shares handed over, a eighteen months' lock-up for a further third and a twenty-four months for the final third.

1. Contractual arrangements should include provisions that permit the company to reclaim variable payment amounts when payment is found to be out of step with the director's actual performance or based on data subsequently found to be incorrect.

Compliant [ ] Partially compliant [ ] Explain [ X ] N.A. [ ]

No similar clause has been included in the provision of services contract signed between the Company and the executive directors.

1. Contract termination payments should not exceed a fixed amount equivalent to two years of the director's total annual remuneration and should not be paid until the company confirms that the director in question has met the predetermined performance criteria.

For the purposes of this recommendation, termination or contractual termination payments include any payments whose accrual or payment obligation arises as a result of or in connection with the termination of the director's contractual relationship with the company, including amounts not previously vested in long-term savings schemes and amounts paid under post-contractual noncompetition agreements.

Compliant [ X ]	Partially compliant [ ]	Explain [ ]	N.A. [ ]
-----------------	----------------------------	----------------	----------

H. OTHER INFORMATION OF INTEREST

• 1. If there is any material aspect or principle relating to the corporate governance practices followed by the company or the companies in its group that has not been addressed in this report and which should be included in order to provide a more comprehensive and reasoned view of the corporate governance structure and practices at the company or group, explain briefly.
• 1. In this section, you may include any other information, clarification or observation related to the above sections of this report, insofar as they are relevant and do not repeat information already provided.

Specifically indicate whether the company is subject to corporate governance legislation from a country other than Spain and, if so, include the compulsory information to be provided when it differs from the information required by this report.

1. The company may also indicate whether it voluntarily subscribes to other international, industry specific or other ethical principles or standard practices. Where appropriate, the code in question shall be identified along with the date of affiliation. In particular, state whether the company has signed up to the Good Tax Practices Code of 20 July 2010:

To complete the information provided in section C.2 of this report, the Company has an Investment Committee that analyses and approves investments. The reason why its composition has not been detailed together with the Audit and Control Committee and the Appointments and Remuneration Committee is that some of its members are not members of the Board of Directors.

Its composition is as follows:

• Mr. Luis Alfonso López de Herrera-Oria (CEO).
• Mr. Stanislas Henry (Proprietary Director).
• Mrs. Chony Martín Vicente-Mazariegos (CFO).
• Mrs. Carmen Boyero-Klossner (Strategy Director).
• Mr. Guillermo Fernández-Cuesta Laborde (Real Estate Director).
• Mr. Fernando Arenas Liñán (Real Estate Director).
• Mr. Stuart William McDonald (Real Estate Director). Mr. Fabio Alen Viani (Real Estate Director).
• Mr. Pablo de Castro Cardo (Real Estate Director).

This annual corporate governance report was adopted by the company's Board of Directors at its meeting held on:

22/02/2022

Indicate whether any director abstained or voted against the approval of this Report.

• [ ] Yes
• [ √ ] No

ISSUER'S IDENTIFICATION DATA

Financial year closing date:	31/12/2021
Company Tax ID No. (CIF):	A88130471
Company name: ARIMA REAL ESTATE SOCIMI, S.A.
Registered office:
SERRANO, 47 - 4ª PLANTA, 28001 MADRID

A. COMPANY REMUNERATION POLICY FOR THE CURRENT YEAR

A.1.1 Explain the director remuneration policy currently applicable to the year in course. To the extent that it is relevant, certain information may be included in relation to the remuneration policy approved by the General Shareholders' Meeting, provided that the information is clear, specific and concrete.

The specific conditions for the year in course should be described, both as regards the directors' remuneration in their capacity as such and as a result of the executive duties they have performed for the board, pursuant to the contracts signed with executive directors and the remuneration policy approved by the General Shareholders' Meeting.

In any case, the following aspects should be reported:

• a) Description of the procedures and company bodies involved in determining and approving remuneration policy and its terms and conditions.
• b) Indicate and, where applicable, explain whether comparable companies have been taken into account in order to establish the company's remuneration policy.
• c) Information on whether any external advisors took part in this process and, if so, their identity.
• d) Procedures contemplated in the current directors' remuneration policy for applying temporary exceptions to the policy, conditions under which such exceptions may be used, and components that may be subject to exception under the policy.

The Company's remunerations policy is regulated under Article 37 of the Articles of Association, to which we refer here and which is published on the Company website (www.arimainmo.com), and has been amended for fiscal years 2021, 2022 and 2023 at the General Shareholders' Meeting held on June 29, 2021.

At the General Shareholders' Meeting held on 18 October 2018, it was agreed that independent directors would be paid fees for attending meetings of the Board of Directors and the board committees on which they sit from time to time. The said fees consist of a fixed annual sum set at the General Shareholders' Meeting.

In addition, it was agreed that the executive directors (there is only one in this case, the Managing Director) would be paid in accordance with the terms of their contract with the Company. All of the information related to this point is duly indicated in Article 25 of the board of directors' regulations, which are duly published on the Company's website (www.arimainmo.com).

The Managing Director's remuneration consists of a fixed portion, a variable portion or "bonus", and participation in the Share Incentive Scheme. The Managing Director may be entitled to receive an annual bonus corresponding to a percentage of his fixed remuneration, provided that the targets fixed and approved annually by the Board of Directors are achieved and that payment of this bonus is also approved by the Board of Directors. Remuneration in kind is also offered, such as use of company vehicles and health and life insurance policies, all pursuant to the terms and conditions contained in the contracts signed by the said directors with the company and approved by the General Shareholders' Meeting, pursuant to the requirements of the Spanish Capital Companies Act (LSC).

The Incentive Plan for executives consists of the handover of shares or payment in cash, at the Company's discretion. For information purposes, a summary of the terms and conditions can be found in the 2018 share listing prospectus. The Plan lasts for 6 years and benefits are accrued year on year until it ends. The aforementioned scheme will give the right to receive shares as an incentive when the terms and conditions detailed in the scheme are met for a specifically calculated period of time. These terms and conditions require the total return for shareholders to be in excess of a specific percentage, primarily measured via the value uplift in the assets acquired. Entitlement to this incentive accrues and is calculated on an annual basis for the period between July 1 and June 30 of the following year, and it is settled with an award of company shares once this period has ended.

In addition, under the terms of the services contract entered into with the Company, in the event of the said contract's termination without just cause, the Managing Director shall have the right to receive either compensation in cash equal to twice the last total annual remuneration received. Furthermore, it is stated that the contract signed between the company and the Managing Director does not contain any post-contractual non-compete clause and no compensation is therefore provided for in this regard.

The general policy terms and principles are summarised for information purposes in the share listing prospectus registered by the Company and approved by the Spanish Securities Markets Commission (CNMV) in 2018. The said summary outlines the governing criteria contained in Articles 25 and 36 of the Board of Directors' Regulations, which analyse the key aspects and duties of the Appointments and remuneration committee. The Appointments and remuneration committee's duties notably include the formulation and proposal of the Company's remuneration policy and oversight of its implementation; by extension, the said committee establishes the key aspects of that policy. Since its approval, the governing principle of the policy has been to establish a mix between fixed and variable or incentive-based remuneration that aligns shareholders' primary interests with the optimum performance and professionalism of the executive director, in this case the Managing Director.

The company plans to approve a new remuneration policy for which it has had the advice of Ernst & Young Abogados, SL as external advisors.

As of 31 December 2021, the Company has not had any employees classified as Senior Management personnel. The Company's key planning, management and monitoring decisions are taken by the Managing Director and the Board of Directors, together with any decisions affecting economic and strategic policy.

A.1.2 Relative importance of variable payment items vis-à-vis fixed salary (remuneration mix) and the criteria and objectives taken into consideration in their calculation in order to guarantee a suitable balance between the fixed and variable components of the remuneration offered. In particular, describe the actions adopted by the company in relation to its remuneration system in order to reduce exposure to excessive risks and adapt it to the company's long-term objectives, values and interests. Include, where applicable, mention of the measures taken to guarantee that the company's long-term results are taken into account in its remuneration policy, the measures taken in relation to those categories of staff whose professional activities have a material impact on the risk profile of the company, and the measures intended to avoid conflicts of interest, as applicable.

In addition, state whether the company has established any period for the accrual or consolidation of certain variable payment items, in cash, shares or other financial instruments, or any period for the deferral of the payment of amounts or the handover of accrued and consolidated financial instruments, or whether there is any clause that provides for the reduction of this deferred payment or that obliges the director to return the payments received when such payments have been based on certain figures that have clearly been shown to be inaccurate.

Remuneration Policy has been designed to reflect the Company's size and financial situation, market standards for comparable companies and the amount of time devoted by the Company's directors. The remuneration outlined below is considered proportionate and conducive to the Company's profitability and sustainability in the long run. It includes the precautions required to prevent an excessive assumption of risk or the rewarding of poor results, and it ensures the alignment of the interests of the directors with those of the Company and its shareholders without compromising the directors' independence.

A.1.3 Amount and nature of fixed payment items that are due to be accrued during the year by directors in their capacity as such.

During the 2022 fiscal year, non-executive directors are expected to accrue 425 thousand euros in attendance fees for attending the Board of Directors and the Committees in which they participate.

A.1.4 Amount and nature of fixed payment items that are due to be accrued during the year for the performance by executive directors of senior management duties.

During the 2022 fiscal year, non-executive directors are expected to accrue 850 thousand euros as fixed compensation.

A.1.5 Amount and nature of any payment in kind that will accrue during the year, including, but not limited to, insurance premiums paid in favour of the director.

During the 2022 fiscal year, non-executive directors are expected to accrue 44 thousand euros in compensation in kind.

A.1.6 Amount and nature of variable payment items, differentiating between those established in the short and long term. The financial and non-financial parameters, including social, environmental and climate change parameters, selected to determine variable remuneration during the year in course, with an explanation of the extent to which these parameters are related to both the director's and the company's performance, together with the associated risk profile and the methodology, required deadlines and techniques established to determine the degree of compliance with the parameters used in the design of variable remuneration at the end of the year.

State the range, in monetary terms, of the different variable payment items on the basis of the degree of compliance with the objectives and parameters established, and whether any maximum monetary amounts apply in absolute terms.

Executive directors are contractually entitled to a bonus of up to 150% of gross annual salary as short-term variable compensation.

The evaluation system for this variable compensation is linked to predetermined and measurable performance criteria linked to the achievement of a result that promotes the sustainability of the company, including, in turn, non-financial criteria that are appropriate to the creation of value, compliance with the company's internal rules and procedures and its policies for the control and management of risks and is based on three fundamental pillars that encompass the Company's performance from different approaches, but in an integral and comprehensive manner:

• The first of these is the Portfolio, which assesses excellence in the performance of the Company's asset portfolio and is linked to measures that encompass the management of the stabilized portfolio and the portfolio undergoing remodeling.

ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS OF LISTED PUBLIC LIMITED COMPANIES

• The second one, establishes as fundamental the Environmental, Social and Governance (ESG) parameter to collect in a measurable and objective way, Árima's behavior in its eagerness to be a Company that promotes sustainability in its actions, being aware of the transcendence of these in its investors, customers, suppliers, employees and in the surrounding environment.

• Finally, the Company's performance against its competitors is included as a fundamental parameter, valuing the share price and its discount on Net Asset Value (NAV) in a measurable way.

On the other hand, as of the date of issuance of this report, it is not possible to estimate the degree of compliance with the company's value creation conditions for issuing a range of the long-term variable component consisting of the delivery of shares under the company's Incentive Plan.

A.1.7 Main characteristics of long-term savings systems. Among other information, state the contingencies covered by the system, whether it is a defined contributions or benefits system, the annual contribution that needs to be made under the defined contribution system, the benefits to which directors are entitled in the case of defined benefit systems, the conditions under which economic rights are consolidated for directors and their compatibility with any other type of payment or compensation for the early termination of their contractual relationship, or payments arising from termination of the contractual relationship in the terms agreed between the company and the director.

State whether the accrual or consolidation of any of the long-term savings plans is linked to the achievement of certain objectives or parameters relating to the director's short- or long-term performance.

During the 2022 fiscal year, the company is studying the possibility of establishing a long-term savings system for the benefit of executive directors.

A.1.8 Any type of payment or compensation for the director's early termination or dismissal, or payments arising from termination of the contractual relationship in the terms agreed between the company and the director, whether this entails the director's voluntary resignation or the director's dismissal by the company, as well as any type of agreement reached, such as exclusivity, postcontractual no-compete clauses, permanence or loyalty, which entitle the director to any type of remuneration.

Not applicable.

A.1.9 Detail the conditions that must be respected in the contracts of people performing senior management duties as executive directors. Include information regarding, inter alia, the contract's term, limits on compensation amounts, permanence clauses, prior notice periods and payment in lieu of the said prior notice periods, and any other clauses relating to hiring bonuses and compensation or golden parachutes due to early termination of the contractual relationship between the company and the executive director. Include, inter alia, any clauses or agreements on not competing, exclusivity, permanence and loyalty, and postcontractual no-compete clauses, unless these have been explained in the previous section.

Term: The service provision agreement signed between the company and Managing Director Luis Alfonso López de Herrera-Oria on 18 October 2018 is openended, although it would be automatically terminated in the event that he ceased to hold the position of the company's Managing Director.

Permanence undertaking: The Managing Director has undertaken not to terminate his contract for a period of five years from its entry into force (the Minimum Permanence Term). In the event that Luis Alfonso López de Herrera-Oria terminates his contract with the Company without just cause prior to the end of the Minimum Permanence Term, the Company will have the right to claim compensation in an amount equivalent to the fixed remuneration that the Managing Director would have been entitled to receive during the rest of the Minimum Permanence Term. In the event that Luis Alfonso López de Herrera-Oria is dismissed as the Company's Managing Director before the end of the Minimum Permanence Term, or his appointment as Managing Director is not renewed, or his Contract is terminated by the company, Luis Alfonso López de Herrera-Oria will have the right to receive compensation equal to the fixed salary to which he would have been entitled during the remainder of the Minimum Permanence Term, with a minimum of twice the last total annual remuneration received, an amount that will be subject to the applicable tax withholdings. This amount will reduce any compensation for termination on a euro for euro basis.

Termination: Either of the parties may terminate this Contract by sending written notification to the other party at least 3 months in advance. If the company terminates the contract without just cause (i.e. unfair dismissal as this term is defined in the Spanish Workers' Statute), the Managing Director shall have the right to receive a cash compensation payment equal to twice the last total annual remuneration received, or the compensation amount payable in the event of unfair dismissal under the Spanish Workers' Statute in force from time to time, if the latter amount is greater. Such compensation payments will be subject to the applicable tax withholdings. If the Contract is terminated by the company with just cause, the Managing Director shall not have the right to any compensation. For the purposes of severance payments, Luis Alfonso López de Herrera-Oria is deemed to have four years' seniority. Furthermore, if the Company decides to terminate this Contract and Luis Alfonso López de Herrera-Oria is denied unemployment benefits by the competent public authorities, the company shall compensate the Managing Director in an amount equivalent to the unemployment benefits to which he would have been entitled if he had been legally classified as unemployed on the date on which his commercial relationship with the company ended, for a maximum period of two years. This amount shall be paid to Luis Alfonso López de Herrera-Oria as a lump sum upon termination of his Contract and shall be subject to the applicable tax withholdings.

Exclusivity: During the term of the contract, the Managing Director shall work exclusively for the company and shall not render services to any parties other than the company unless the company gives its express consent. The contract enables the Managing Director to continue in his role as non-executive director of various companies and to continue as executive director of his own holding companies, performing the relevant duties at those companies, provided that this

ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS OF LISTED PUBLIC LIMITED COMPANIES

does not interfere with the Managing Director's duties to the company or contravene his undertaking not to compete with the company.

No competition: During the term of the contract, the CEO may not directly or indirectly compete (including, without limitation, as shareholder, controlling person, employee, agent, consultant, officer, partner or director of any company) with the business and activities engaged in now or in the future by the Company, with the sole exception of the existing delegated execution and marketing agreements that have already been signed with certain companies and have been declared to the company, provided that these do not interfere with Luis Alfonso López de Herrera-Oria's obligations as Managing Director.

No recruitment of employees: Throughout the term of the agreement and for two years following its termination, the Managing Director shall not, without the prior written consent of the company, directly or indirectly (through any person, company, association or business of any other kind): (i) solicit, induce or in any other way attempt to persuade any current or prospective customer of the company to cease doing business with the company; or (ii) hire, solicit, recruit, induce, persuade, influence or encourage any employee to leave the company.

A.1.10 The nature and estimated amount of any other additional payments accrued by directors in return for services rendered during the year in course, other than those inherent in their position.

Not applicable.

A.1.11 Other payment items, such as (where applicable) the grant to the director by the company of advance payments, loans, guarantees or any other remuneration.

Not applicable.

A.1.12 The nature and estimated amount of any other planned additional payments that will be accrued by directors during the year in course and that are not included in the previous sections, whether payment is made by the company or another group company

Not applicable.

• A.2. Explain any significant change in the remuneration policy applicable in the current year resulting from:
• a) A new policy or a modification to the policy already approved by the General Shareholders' Meeting.
• b) Significant changes to the specific conditions established by the board in respect of remuneration policy in force for the current year, as compared with those applied in the previous year.
• c) Proposals that the board of directors has agreed to submit to the General Shareholders' Meeting to which this annual report will be submitted and which are proposed for application to the current year.

The modification of the remuneration policy approved by the Board on June 29, 2021 mainly affects the long-term incentive plan in the following terms:

• i. Modification of the minimum thresholds for compliance with the long-term incentive plan.
• ii. Modification of the procedure for calculation and delivery of shares accrued under the long-term incentive plan.
• iii. Substitution of the lock-up provisions applicable to shares delivered under the long-term incentive plan for a system of deferral in their delivery.

iv. Modification of the calculation and the liquidity events of the long-term incentive plan.

In addition, other modifications are introduced to clarify the calculation of the termination indemnity in the section relating to the main terms and conditions of the contracts of the executive directors of the Remuneration Policy and not to reduce the annual salary taken as a basis for the calculation of this indemnity by certain salary reductions in accordance with criteria of fairness and alignment with best practices in compensation matters.

A.3. Give details of the direct link to the document where the company's current remuneration policy is posted, which must be available on the company's website.

https://arimainmo.com/wp-content/uploads/2019/11/190926-Política-de-remuneraciones-CA_EN.pdf

A.4. Explain, bearing in mind the data provided in Section B.4, how the company has taken account of the way that shareholders voted on the annual report on remuneration for the previous year, when this was submitted to a consultative vote at the General Shareholders' Meeting.

No particular measures have been taken in this regard.

B. OVERALL SUMMARY OF HOW THE REMUNERATION POLICY WAS APPLIED DURING THE LAST FINANCIAL YEAR

B.1.1 Explain the process followed to apply the remuneration policy and give details of the individual payments mentioned in Section C of this report. This information will include the role played by the remuneration committee, the decisions taken by the board of directors and, where applicable, the identity and the role of the external advisors whose services were used in the process to apply remuneration policy in the year ended.

The preparatory work and the decision-making process for determining the remuneration policy can be summarized as follows: the drafting of the remuneration policy by the Appointments and Remuneration Committee, its approval by the Board of Directors and its submission to the General Shareholders' Meeting.

The Appointments and Remuneration Committee is composed of three independent directors: Mr. David Jiménez-Blanco Carrillo de Albornoz, who chairs it, Mr. Cato Henning Stonex and Mr. Stanislas Marie Luc Henry. Their term of office may not exceed their term of office as directors, which is three years. The Secretary of the Board of Directors, Mr. Iván Azinovic Gamo, acts as Secretary of the Appointments and Compensation Committee, assisting the Chairman and reflecting in the minutes the development of the meetings, the content of the deliberations and the resolutions adopted.

The directors who are members of the Nomination and Compensation Committee and who have participated in the definition of the compensation policy are independent directors, with the exception of Mr. Stanislas Marie Luc Henry, who is a proprietary director.

B.1.2 Explain any deviations from the procedure established for the application of the remuneration policy that have occurred during the year. policy that has occurred during the fiscal year.

Not applicable.

B.1.3 Indicate whether any temporary exceptions to the remuneration policy have been applied and, if so, explain the exceptional circumstances that have led to the application of these exceptions, the specific components of the remuneration policy affected and the reasons why the company considers that these exceptions have been necessary to serve the long-term interests and sustainability of the company as a whole or to ensure its viability. Also quantify the impact that the application of these exceptions has had on the remuneration of each director during the year.

Not applicable.

B.2. Explain the different actions taken by the company in relation to the remuneration system and how they have contributed to reducing exposure to excessive risks and adapting the system to the company's long-term objectives, values and interests. Include a reference to the measures that have been adopted to guarantee that the company's long-term results have been taken into consideration in the remuneration accrued and that a suitable balance has been achieved between the fixed and variable components of the payments made, the measures adopted in relation to those categories of staff whose professional activities have a material repercussion on the company's risk profile, and the measures adopted to avoid conflicts of interest, where appropriate.

In addition to the Bonus, whose accrual and payment is decided by the Board of Directors based on compliance with certain criteria analysed in the Supplementary Report, the only variable compensation plan is the Incentive Scheme, which, following the modification of the compensation policy, is designed for the period from July 1, 2020 to June 30, 2024 and is fully aligned with shareholders' interests, in such a way that the right to receive the incentive only accrues if added value is created for shareholders.

The main value for the shareholder is the revaluation of the company's assets in accordance with the Net Tangible Asset Value according to EPRA. Based on their active management through repositioning and leasing in the marketplace, an intrinsic value is obtained which becomes a greater value of the underlying assets of the Company, which in turn translates into a higher share price on the stock markets.

The long-term undertaking is determined by the fact that the variable remuneration scheme consists of handing over shares that are subject to a blocking period or prohibition on their disposal, with the Scheme's beneficiaries committing to the future of the Company.

In the event that the Net Book Value of the assets drops in successive years for reasons unrelated to their management, new incentives will not accrue until this value recovers to a level higher than the last maximum obtained. In other words, any possible rebound effect cannot be taken advantage of by beneficiaries of the Scheme.

The Incentive Scheme itself does not provide specific measures in the event that the figures used to determine its application have been fraudulently obtained. It is the legal system, the Spanish Capital Companies Act and the Spanish Criminal Code that lay down the rules that would be applicable in the event that the Board of Directors or the Managing Director have overstepped their duties in any way.

However, to guarantee the company's processes, the value of the properties is calculated by companies of known repute in the sector, and PriceWaterhouseCoopers has been commissioned to carry out a report of agreed procedures for correctly determining the amount accruing every year in the Incentive Scheme.

B.3. Explain how the remuneration accrued and consolidated over the year meets the provisions in the current remuneration policy and, in particular, how it contributes to the sustainable and long-term performance of the company.

Furthermore, report on the relationship between the payments received by directors and the company's results or other performance indicators in the short and long term, explaining, where applicable, how any variations in the company's performance may have influenced changes in the payments made to directors, including amounts that have accrued and have been deferred, and how these contribute to the company's short- and long-term results.

The remuneration accrued in the financial year 2021 corresponds to the current remuneration policy approved at the Annual General Meeting of Shareholders on 29 June 2021.

B.4. Report the results of the consultative vote at the General Shareholders' Meeting regarding remuneration paid during the preceding year, indicating the number of votes against, if any:

	Number	% of total
Votes cast	22,343,370	78.59
	Number	% of votes cast
Votes against	3,800,620	17.01
Votes in favour	15,396,701	68.91
Blank ballot		0.00
Abstentions	3,146,049	14.08

B.5. Explain how the fixed amounts accrued during the year by the directors in their capacity as such have been determined and how they have changed with respect to the previous year.

The fixed components accrued during the year were set by the company's Annual General Meeting of Shareholders held on June 29, 2021 and have changed compared to the previous year since in 2020 and due to the COVID-19 pandemic, the members of the Board of Directors reduced their compensation.

B.6. Explain how the salaries accrued by each of the executive directors for the performance of their management duties over the past financial year were determined, and how they changed with respect to the previous year.

The salaries earned by the executive directors have been determined by the application of the contracts signed between the parties. Subsequently, at the general meetings held on 21 March and 5 November 2019, they have been modified by those currently in force, which in turn coincide with those contained in the new remuneration policy in force.

The remuneration of the executive directors has changed with respect to the previous year, since in 2020 and due to the COVID-19 disease pandemic, their remuneration was reduced.

B.7. Explain the nature and the main characteristics of the variable components accrued under the remuneration systems during the year ended.

In particular:

• a) Identify each of the remuneration plans that have determined the different variable payments accrued by each of the directors during the year ended, including information on their scope, their date of approval, their date of implementation, the periods of accrual and validity, the criteria used to evaluate performance and how this has affected the establishment of the variable amount accrued, as well as the measurement criteria used and the period necessary to be in a position to suitably measure all the conditions and criteria stipulated.
• b) In the case of share options and other financial instruments, the general characteristics of each plan will include information on both the conditions necessary both to acquire unconditional ownership (consolidation) and to exercise these options or

ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS OF LISTED PUBLIC LIMITED COMPANIES

financial instruments, including the price and term in which they can be exercised.

• c) Each of the directors, together with their category (executive directors, proprietary external directors, independent external directors and other external directors), who are beneficiaries of remunerations systems or plans that include variable remuneration.
• d) Where applicable, information is to be provided on the periods for the accrual or deferral of payment that have been applied, and/or the periods for withholding/unavailability of shares or other financial instruments, where they exist.

Explain the short-term variable components of the remuneration systems:

The variable remuneration of the executive directors during the financial year 2020 was approved by the Appointments and Remuneration Committee on 18 February 2021 and is within the limits established in the commercial contracts signed between the directors and the company. No other variable payments were made during the 2021 financial year.

Explain the long-term variable components of the remuneration systems

Not applicable.

B.8. Indicate whether certain variable components have been reduced or clawed back when, in the case of the former, payment has been consolidated and deferred or, in the case of the latter, consolidated and paid, on the basis of data that have subsequently proved to be inaccurate. Describe the amounts reduced or clawed back through the application of reduction or clawback clauses, why they were implemented and the years to which they refer.

Not applicable.

B.9. Explain the main characteristics of the long-term saving schemes whose amount or equivalent annual cost is shown in the tables contained in Section C, including retirement and any other survival benefit, where these are wholly or partially financed by the company, whether funded internally or externally, stating the type of scheme, whether it is a defined contribution or benefit scheme, the conditions for the consolidation of economic rights in favour of the directors and the compatibility thereof with any kind of indemnity for early termination of the contractual relationship between the company and the director.

Not applicable.

B.10. Explain, where applicable, the severance pay or any other type of payment that has accrued and/or been received by directors during the year ended as the result of a director's early dismissal or resignation or as the result of the termination of the contract in the terms provided for therein.

Not applicable.

B.11. Indicate whether there have been any significant changes in the contracts of persons performing senior management duties, such as executive directors, and, where applicable, explain such changes. In addition, explain the main conditions set out in any new contracts signed with executive directors during the year, unless these have already been explained in Section A.1.

Not applicable.

B.12. Explain any supplementary remuneration accrued by directors in consideration of services provided other than those inherent in their position.

Not applicable.

B.13. Explain any remuneration resulting from the grant of advances, loans and guarantees, with details of the interest rate, main features and amounts potentially repaid, as well as the obligations assumed on their behalf by way of security.

B.14. Give details of the remuneration in kind accrued by the directors over the year, briefly explaining the nature of the different salary items.

Remuneration in kind paid to executive directors during 2021 amounted to 38 thousand euros and consisted of being beneficiaries of medical and life insurance and the provision of vehicles.

B.15. Indicate the remuneration accrued by the director by virtue of the payments made by the listed company to a third party organisation to which the director provides services, when these payments are allocated to the remuneration of the director's services at the company.

Not applicable.

B.16. Explain and detail the amounts accrued during the year in relation to any other remuneration item other than the above, regardless of its nature or the group entity that pays it, including all benefits in any form, such as when it is considered a related-party transaction or, especially, when it significantly affects the true and fair view of the total remuneration accrued by the director, explaining the amount granted or pending payment, the nature of the consideration received and the reasons why it would have been considered, as the case may be, that it does not constitute remuneration to the director in his capacity as such or in consideration for the performance of his executive duties, and whether or not it has been considered appropriate to include it among the amounts accrued in the "other items" section of section C.

Not applicable.

C.DETAILS OF THE INDIVIDUAL REMUNERATION PAID TO EACH DIRECTOR

Nam e	Typ e	Acc l pe riod 20 20 rua
ÉS Ü FER NA ND O B AU TIS TA SAG	Ind nde Dir nt ect epe or	Fro m 0 1/ 01/ 202 1 to 31 / 12/ 202 1
DAV ID JIM EN EZ- BLA NC O C AR RIL LO DE ALB OR NO Z	Ind nde nt Dir ect epe or	1/ 01/ / 12/ Fro m 0 202 1 to 31 202 1
LUI S A RR ED ON DO MA LO	Ind nde Dir nt ect epe or	Fro m 0 1/ 01/ 202 1 to 31 / 12/ 202 1
CAT O H G S TO EN NIN NEX	Ind nde nt Dir ect epe or	m 0 1/ 01/ 202 31 / 12/ 202 Fro 1 to 1
STA NIS LAS MA RIE LU C H EN RY	Pro ieta Dir ect pr or ry	1/ 01/ / 12/ Fro m 0 202 1 to 31 202 1
LUI S L OP EZ DE HE RR ERA -OR IA	Ma ing Di tor nag rec	Fro m 0 1/ 01/ 202 1 to 31 / 12/ 202 1
CH ON Y M AR TIN VI CE NT E-M AZA RIE GO S	Exe ive Dir cut ect or	Fro m 0 1/ 01/ 202 1 to 31 / 12/ 202 1

• C.1. Complete the following tables in relation to the individual remuneration accrued by each of the directors (including remuneration for the performance of executive duties) during the financial year.
• a) Company payments forming the subject of this report:
  • i)Cash payments accrued (thousands of €)

Nam e	Fixe d P ent aym	Allo wa nce s	nt f for Pay me or mb hip of me ers boa rd mit tee com s	Sal ary	Sho rt-t erm iab le var nt pay me	Lon ter g- m iab le var nt pay me	Com ion sat pen	Oth er item s	Tot al f or 202 1	Tot al f or 202 0
ÉS Ü FER NA ND O B AU TIS TA SAG		100							100	92
DAV ID JIM EN EZ- BLA NC O C AR RIL LO DE ALB OR NO Z		100							100	92
LUI S A RR ED ON DO MA LO		125							125	114
CAT O H EN NIN G S TO NEX		100							100	80
STA NIS LAS MA RIE LU C H EN RY
LUI S L OP EZ DE HE RR ERA -OR IA				600	240			26	866	2.8 71
CH ON CE GO S Y M AR TIN VI NT E-M AZA RIE				250	100			12	326	802

ii)Table of changes to payments based on shares and gross profit from consolidated shares or financial instruments

		ial Fin inst anc of beg inn ing	t th ent rum s a e 202 0	ial Fin inst ent anc rum s ard ed dur ing 20 20 aw		Fin ial inst olid d d urin the ent ate anc rum s c ons g ye ar				Ins tru nts me ed but tur ma ised not ex erc	ial t th Fin inst ent anc rum s a e of end 202 1
Nam e	f P lan Nam e o	. of No inst ent rum s	. of No iva len t equ sha res	. of No inst ent rum s	. of No iva len t equ sha res	. of No inst ent rum s	of No iva len t/co equ n sol ida ted sha res	f Pric e o sol ida ted con sha res	ofit fro Net pr m sha res or sol ida ted con fina ncia l inst ent rum s of ( tho nds €) usa	. of No inst ent rum s	. of No inst ent rum s	. of No iva len t equ sha res
O FER NA ND ÉS Ü BAU TIS TA SAG	Pla n							0.0 0
DAV ID JIM EN EZ- BLA NC O CA O D RR ILL E ALB OR NO Z	Pla n							0.0 0
LUI S A RR ED ON DO MA LO	Pla n							0.0 0
CAT O H EN NIN G S TO NEX	Pla n							0.0 0
STA NIS LAS MA RIE LUC HE NR Y	Pla n							0.0 0
LUI S L OP EZ DE -OR HE RR ERA IA	Pla n							0.0 0
CH ON Y M AR TIN VIC ENT E-M AZA RIE GO S	Pla n							0.0 0

iii)Long-term savings plans.

Nam e	Rem ion fro olid atio f rat une m c ons n o hts rig to ing ste sav s sy m
ÉS Ü FER NA ND O B AU TIS TA SAG
NC O C LO OR NO DAV ID JIM EN EZ- BLA AR RIL DE ALB Z
LUI S A RR ED ON DO MA LO
CAT O H EN NIN G S TO NEX
STA NIS LAS C H MA RIE LU EN RY
LUI S L OP EZ DE HE RR ERA -OR IA
CH ON Y M AR TIN VI CE NT E-M AZA RIE GO S

	Con	trib utio th fro m t n o ver e y ear	he ( tho nds com pan y usa	of €)	Am t of ula ted fu nds ( tho nds of €) oun ac cum usa
Nam e	th sol ida ted Sav ing ste wi s sy ms con hts ic r ig eco nom		th olid d Sav ing ste wi ate s sy ms unc ons hts ic r ig eco nom		Sav ing ste wi s sy ms ic r ig eco nom	th sol ida ted con hts	th olid d Sav ing ste wi ate s sy ms unc ons hts ic r ig eco nom
	FY 202 1		FY 202 1 FY 202 0		FY 202 1	FY 202 0		FY 202 0
ÉS Ü FER NA ND O B AU TIS TA SAG
DAV ID JIM EN EZ- BLA NC O CA RR ILL O D E A LBO RN OZ
LUI S A RR ED ON DO MA LO
CAT O H EN NIN G S TO NEX

	Con	trib utio th fro m t n o ver e y ear	he ( tho nds com pan y usa	of €)	Am t of ula ted fu nds ( tho nds of €) oun ac cum usa
Nam e	Sav th sol ida ted ing ste wi s sy ms con ic r ig hts eco nom		Sav th olid d ing ste wi ate s sy ms unc ons ic r ig hts eco nom		Sav ing ste wi s sy ms ic r ig eco nom	th sol ida ted con hts	Sav th olid d ing ste wi ate s sy ms unc ons ic r ig hts eco nom
	202 FY 1	202 0 FY	202 FY 1	202 0 FY	202 FY 1	202 0 FY	202 FY 1	202 0 FY
STA NIS LAS MA RIE LU C H EN RY
LUI S L OP EZ DE HE RR ERA -OR IA
CH ON Y M AR TIN VIC ENT E-M AZA RIE GO S

iv)Details of other items

Nam e	Ite m	aid Am t p oun
ÉS Ü FER NA ND O B AU TIS TA SAG	Ite m
O C LO OR NO DAV ID JIM EN EZ- BLA NC AR RIL DE ALB Z	Ite m
LUI S A RR ED ON DO MA LO	Ite m
CAT O H EN NIN G S TO NEX	Ite m
STA NIS LAS C H MA RIE LU EN RY	Ite m
LUI S L OP EZ DE HE RR ERA -OR IA	HEA LTH AN D L IFE IN SU RA NC E, VE HIC LE.	26
CH ON Y M AR TIN VI CE NT E-M AZA RIE GO S	HEA LTH AN D L IFE IN SU RA NC E, VE HIC LE.	12

b)Remuneration of the company's directors for their membership of the boards of other group companies:

i)Cash payments accrued (thousands of €)

Nam e	Fixe d P ent aym	Allo wa nce s	nt f Pay me or mb hip of me ers boa rd mit tee com s	Sal ary	Sho rt-t erm iab le var nt pay me	Lon ter g- m iab le var nt pay me	Com sat ion pen	Oth er item s	Tot al f or 202 1	Tot al f or 202 0
ÉS Ü FER NA ND O B AU TIS TA SAG
DAV ID JIM EN EZ- BLA NC O C AR RIL LO DE ALB OR NO Z
S A ON DO LO LUI RR ED MA
CAT O H EN NIN G S TO NEX
STA NIS LAS MA RIE LU C H EN RY
LUI S L OP EZ DE HE RR ERA -OR IA
ON GO CH Y M AR TIN VI CE NT E-M AZA RIE S

Remarks

ii)Table of changes to payments based on shares and gross profit from consolidated shares or financial instruments

		Fin ial inst anc beg inn ing of	ent t th rum s a e 202 0	ial Fin inst ent anc rum s ard ed dur 20 20 ing aw		ial olid d d the Fin inst ent ate urin anc rum s c ons g ye ar				Ins tru nts me ed but tur ma ised not ex erc	Fin ial inst ent t th anc rum s a e end of 202 1
Nam e	f P lan Nam e o	No . of inst ent rum s	No . of len iva t equ sha res	No . of inst ent rum s	No . of len iva t equ sha res	No . of inst ent rum s	No of iva len t/co equ n sol ida ted sha res	Pric f e o sol ida ted con sha res	ofit fro Net pr m sha res or sol ida ted con fina ncia l inst ent rum s ( tho nds of €) usa	No . of inst ent rum s	No . of inst ent rum s	No . of len iva t equ sha res
FER NA ND O ÉS Ü BAU TIS TA SAG	Pla n							0.0 0
DAV ID JIM EN EZ- BLA NC O CA RR ILL O D E ALB OR NO Z	Pla n							0.0 0
LUI S A RR ED ON DO MA LO	Pla n							0.0 0
CAT O H G S TO EN NIN NEX	Pla n							0.0 0
STA NIS LAS MA RIE LUC HE NR Y	Pla n							0.0 0
LUI S L OP EZ DE -OR HE RR ERA IA	Pla n							0.0 0
CH ON Y M AR TIN VIC GO S ENT E-M AZA RIE	Pla n							0.0 0

iii)Long-term savings plans.

Nam e	fro olid f Rem rat ion atio une m c ons n o rig hts ing to ste sav s sy m
ÉS Ü O B TIS SAG FER NA ND AU TA
DAV ID JIM EN EZ- BLA NC O C AR RIL LO DE ALB OR NO Z
LUI S A RR ED ON DO MA LO
CAT O H EN NIN G S TO NEX
STA NIS LAS MA RIE LU C H EN RY
S L OP -OR LUI EZ DE HE RR ERA IA
CH ON CE GO S Y M AR TIN VI NT E-M AZA RIE

	Con	trib utio th fro m t n o ver e y ear	he ( tho nds com pan y usa	of €)	Am t of ula ted fu nds ( tho nds of €) oun ac cum usa
Nam e	th sol ida ted Sav ing ste wi s sy ms con ic r ig hts eco nom		th olid d Sav ing ste wi ate s sy ms unc ons ic r ig hts eco nom		th sol ida ted Sav ing ste wi s sy ms con ic r ig hts eco nom		th olid d Sav ing ste wi ate s sy ms unc ons ic r ig hts eco nom
	FY 202 1	FY 202 0	FY 202 1 FY 202 0		FY 202 1	FY 202 0	FY 202 1	FY 202 0
ÉS Ü FER NA ND O B AU TIS TA SAG
DAV ID JIM EN EZ- BLA NC O CA RR ILL O D E A LBO RN OZ
ÍA LUI S M AR AR RED ON DO MA LO
CAT O H EN NIN G S TO NEX

	Con	fro trib utio th m t n o ver e y ear	he ( tho nds com pan y usa	of €)	t of fu of Am ula ted nds ( tho nds €) oun ac cum usa
Nam e	Sav ing wi th sol ida ted ste s sy ms con ic r ig hts eco nom		Sav ing wi th olid d ste ate s sy ms unc ons ic r ig hts eco nom		Sav ing wi ste s sy ms ic r ig eco nom	th sol ida ted con hts	Sav ing wi th olid d ste ate s sy ms unc ons ic r ig hts eco nom
	FY 202 1	FY 202 0 FY 202 1 FY 202 0			FY 202 1	FY 202 0	FY 202 1	FY 202 0
STA NIS LAS MA RIE LU C H EN RY
LUI S L OP EZ DE HE RR ERA -OR IA
CH ON Y M AR TIN VIC ENT E-M AZA RIE GO S

iv)Details of other items

Nam e	Ite m	aid Am t p oun
ÉS Ü FER NA ND O B AU TIS TA SAG	Ite m
O C LO OR NO DAV ID JIM EN EZ- BLA NC AR RIL DE ALB Z	Ite m
LUI S A RR ED ON DO MA LO	Ite m
CAT O H EN NIN G S TO NEX	Ite m
STA NIS LAS C H MA RIE LU EN RY	Ite m
LUI S L OP EZ DE HE RR ERA -OR IA	Ite m
CH ON Y M AR TIN VI CE NT E-M AZA RIE GO S	Ite m

c)Summary of payments (thousands of €):

This summary should include the amounts corresponding to all payment items, including those indicated in this report which the director has accrued, shown in thousands of euros.

	ed hin th ed hin Pay nts wit e C Pay nts wit me ac cru om pan me ac cru gr y						oup co	ani mp es
Nam e	Tot al c ash nt pay me	Net ofit fro pr m sha res or sol ida ted con fina l ncia inst ent rum s	Pay nts me fro avi m s ngs sch em es	Pay nts fro me m oth item er s	Com pan y al 2 tot 021	Tot al c ash nt pay me	Net ofit fro pr m sha res or sol ida ted con fina l ncia inst ent rum s	Pay nts fro me m ing sav s sch em es	Pay nts fro me m oth item er s	Gro al tot up 202 1	Com Gr y + pan oup tot al 2 021
ÉS Ü FER NA ND O B AU TIS TA SAG	100				100						100
DAV ID JIM EN EZ- BLA NC O C AR RIL LO DE ALB OR NO Z	100				100						100
S A ON DO LO LUI RR ED MA	125				125						125
CAT O H G S TO EN NIN NEX	100				100						100
STA NIS LAS MA RIE LU C H EN RY
LUI S L OP EZ DE HE RR ERA -OR IA	866				866						866
CH ON CE GO S Y M AR TIN VI NT E-M AZA RIE	362				362						362
TO TA L	653 1,				653 1,						1, 653

C.2. Indicate the evolution over the last 5 years of the amount and percentage variation of the remuneration accrued by each of the listed company's directors who have been directors during the year, of the consolidated results of the company and of the average remuneration on a full-time equivalent basis of the employees of the company and its subsidiaries who are not directors of the listed company.

	Tot al a ued d % l va riat ion unt mo s a ccr an an nua
Nam e	FY 202 1	% Var iati on 202 1/ 202 0	FY 202 0	% Var iati on 202 0/ 201 9	FY 201 9	% Var iati on 201 9/ 201 8	FY 201 8	% Var iati on 201 8/ 201 7	FY 201 7
ive Di Exe cut tor rec
CH ON CE GO S Y M AR TIN VI NT E-M AZA RIE	362	.86 -54	802	-	0	-	0	-	0
LUI S L OP EZ DE HE RR ERA -OR IA	866	-69 .84	2, 871	303 .80	711	n.s	62	-	0
Ind de Dir nt ect ep en or
CAT O H G S TO EN NIN NEX	100	25. 00	80	21. 21	66	560 .00	10	-	0
DAV ID JIM EN EZ- BLA NC O C AR RIL LO DE ALB OR NO Z	100	8.7 0	92	39. 39	66	560 .00	10	-	0
ÉS Ü FER NA ND O B AU TIS TA SAG	100	8.7 0	92	39. 39	66	560 .00	10	-	0
ÍA LUI S M AR AR RED ON DO MA LO	125	9.6 5	114	37. 35	83	591 .67	12	-	0
lid d r lts of the Co ate nso esu co mp an y
	26, 125	99. 56	13, 091	-14 .93	15, 389	N.S	1, 124	-	0
Av loy tio era ge em p ee com pe nsa n
	192	-58 .71	465	159 .78	179	752 .38	21	-	0

Remarks

The company was incorporated in 2018 and accrued compensations began on October 23, 2018.

D. OTHER INFORMATION OF INTEREST

If there are any significant aspects of directors' remuneration which have not been mentioned in the previous sections of this report, but which should be included in the interests of providing comprehensive and reasoned information on the remunerative structure and practices of the company regarding its directors, please provide details in brief.

Not applicable.

This annual report on remuneration was approved by the company's board of directors at its meeting held on:

Indicate whether any director abstained or voted against the approval of this Report.

[ ] Yes

[ √ ] No

PREPARATION OF THE ANNUAL ACCOUNTS AND THE MANAGEMENT REPORT FOR FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

The Board of Directors of the company Árima Real Estate SOCIMI, S.A. on 22 February 2022, and in compliance with the requirements established in article 253 of LSC and article 37 of Commercial Code proceeds to prepare the Annual Accounts and the Management Report for the financial year ended on 31 December 2021, which are constituted by the attached documents that precede this writing.

Mr. Luis María Arredondo Malo Mr. Luis Alfonso López de Herrera-Oria President Vice-president and CEO Mr. David Jiménez-Blanco Carrillo de Albornoz Mr. Cato Henning Stonex Board Member Board Member Mr. Fernando Bautista Sagüés Mr. Stanislas Henry

Board Member Board Member

Mrs. Chony Martín Vicente-Mazariegos Board Member

In the minutes drawn up by the Secretary of the Board, to record that, following the preparation by the members of the Board of Directors of the Annual Accounts and Directors' Report of Árima Real Estate SOCIMI, S.A. for the year ended 31 December 2021 at the meeting held on 22 February 2022, all the directors have signed this document by affixing their signatures on this last page, to which I hereby attest, in Madrid on 22 February 2022. I also certify that these Annual Accounts are the same as those approved by the aforementioned Board of Directors, and I therefore sign all pages.

Mr. Iván Azinovic Gamo

PREPARATION OF THE ANNUAL ACCOUNTS AND THE MANAGEMENT REPORT FOR FINANCIAL YEAR ENDED ON 31 DECEMBER 2021

For the purposes of the provisions of Art. 8.1 b) of Royal Decree 1362/2007, of 19 October 2007, the members of the Board of Directors of Árima Real Estate SOCIMI, S.A.

Declare:

That to the best of their knowledge, the annual accounts of Árima Real Estate SOCIMI, S.A. (balance sheet, income statement, statement of changes in equity, cash flow statement and notes) for the year ended 31 December 2021, prepared by the Board of Directors at its meeting of 22 February 2022 and drawn up in accordance with the applicable accounting principles, give a true and fair view of the net worth, financial position and results of Árima Real Estate SOCIMI, S.A.

They also declare that the management report supplementary to the annual accounts includes a faithful analysis of the evolution of the business results and position of Árima Real Estate SOCIMI, S.A., as well as a description of the main risks and uncertainties it faces.

In Madrid, 22 February 2022

President Vice-president and CEO

Mr. Luis María Arredondo Malo Mr. Luis Alfonso López de Herrera-Oria

Mr. David Jiménez-Blanco Carrillo de Albornoz Mr. Cato Henning Stonex Board Member Board Member

Mr. Fernando Bautista Sagües Mr. Stanislas Henry Board Member Board Member

Mrs. Chony Martín Vicente-Mazariegos Board Member