Annual Report (ESEF) • Mar 3, 2023
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Download Source File3157000YTVO4TN65UM142022-01-012022-12-31iso4217:EUR3157000YTVO4TN65UM142021-01-012021-12-31iso4217:EURxbrli:shares3157000YTVO4TN65UM142022-12-313157000YTVO4TN65UM142021-12-313157000YTVO4TN65UM142021-12-31ifrs-full:IssuedCapitalMember3157000YTVO4TN65UM142021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157000YTVO4TN65UM142021-12-31ifrs-full:SharePremiumMember3157000YTVO4TN65UM142021-12-31ifrs-full:RevaluationSurplusMember3157000YTVO4TN65UM142021-12-31ifrs-full:RetainedEarningsMember3157000YTVO4TN65UM142021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157000YTVO4TN65UM142022-01-012022-12-31ifrs-full:RetainedEarningsMember3157000YTVO4TN65UM142022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157000YTVO4TN65UM142022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember3157000YTVO4TN65UM142022-01-012022-12-31ifrs-full:RevaluationSurplusMember3157000YTVO4TN65UM142022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember3157000YTVO4TN65UM142022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157000YTVO4TN65UM142022-01-012022-12-31ifrs-full:IssuedCapitalMember3157000YTVO4TN65UM142022-01-012022-12-31ifrs-full:SharePremiumMember3157000YTVO4TN65UM142022-12-31ifrs-full:IssuedCapitalMember3157000YTVO4TN65UM142022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157000YTVO4TN65UM142022-12-31ifrs-full:SharePremiumMember3157000YTVO4TN65UM142022-12-31ifrs-full:ReserveOfCashFlowHedgesMember3157000YTVO4TN65UM142022-12-31ifrs-full:RevaluationSurplusMember3157000YTVO4TN65UM142022-12-31ifrs-full:RetainedEarningsMember3157000YTVO4TN65UM142022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157000YTVO4TN65UM142020-12-31ifrs-full:IssuedCapitalMember3157000YTVO4TN65UM142020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157000YTVO4TN65UM142020-12-31ifrs-full:SharePremiumMember3157000YTVO4TN65UM142020-12-31ifrs-full:RevaluationSurplusMember3157000YTVO4TN65UM142020-12-31ifrs-full:RetainedEarningsMember3157000YTVO4TN65UM142020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157000YTVO4TN65UM142020-12-31ifrs-full:NoncontrollingInterestsMember3157000YTVO4TN65UM142020-12-313157000YTVO4TN65UM142021-01-012021-12-31ifrs-full:RetainedEarningsMember3157000YTVO4TN65UM142021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember3157000YTVO4TN65UM142021-01-012021-12-31ifrs-full:RevaluationSurplusMember3157000YTVO4TN65UM142021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember3157000YTVO4TN65UM142021-01-012021-12-31ifrs-full:IssuedCapitalMember3157000YTVO4TN65UM142021-01-012021-12-31ifrs-full:SharePremiumMember3157000YTVO4TN65UM142021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember 1 Company Introduction 4 1.1 Business Model & Strategy 4 1.2 Company History and Milestones 6 1.3 Big Numbers 8 1.4 Quarterly Highlights 10 1.5 Letter from the CEO 12 1.6 Letter from the CFO 15 1.7 Letter from the Chairwoman 18 1.8 Investor Relations Q&A 20 2 CTP Strategy & Outlook 56 2.1 CTP’s Business: The Parkmaker “wheel of growth” 58 2.2 Growth Plan and Target 60 2.3 Outlook for 2023 62 3 2022 in Review 65 3.1 Business Environment and Trends 68 3.2 Operational Performance 74 3.3 Financial Performance 84 3.4 Funding & Hedging 87 3.5 Group-level Insights 96 3.6 Tenants 100 3.7 Five Building Types 104 3.8 Country Review 118 4 Sustainability 257 4.1 Highlights in 2022 258 4.2 Double Materiality Assessment 261 4.3 ESG Strategy 263 4.4 Company Culture and Employees 278 4.5 Leadership 282 4.6 EU Taxonomy 294 5 Corporate Governance 311 5.1 Governance Report (including the Remuneration Report) 316 5.2 Risk management and internal controls 336 5.3 Principal Risks 342 6 Financial Statements 348 Consolidated Financial Statements 349 Consolidated statement of profit and loss and comprehensive income 351 Consolidated statement of financial position 352 Consolidated statement of changes in equity 353 Consolidated statement of cash flows 354 Notes to the consolidated financial statements 355 Company Financial Statements 422 Company income statement 423 Company balance sheet 424 Notes to the Company financial statements 425 Other Information 445 Independent Auditor's Report 446 7 Appendices 463 7.1 Group Structure 464 7.2 EPRA Financial Performance Metrics 466 7.3 EPRA Sustainability Performance Mesures 470 7.4 EU Taxonomy 472 7.5 TCFD Index 475 7.6 GRI Index 476 7.7 Portfolio Property List 2022 480 7.8 Glossary 485 7.9 Disclaimer 488 This copy of the 2022 Annual Report of CTP N.V. is not in the European single electronic reporting format (ESEF) as specified in the RTS on ESEF (Regulation (EU) 2019/815).The ESEF version of the 2022 Annual Report is available at https:// www.ctp.eu/files/2023/03/ ctpnv-2022-12-31-en.zip. Mission CTP’s mission is to build long-term value—for the Company, its shareholders, tenants, and the communities where it operates. CTP pursues its mission through the creation of future-proof business parks in strategic locations across Europe, from the North Sea to the Black Sea. CTP is entrepreneurial, full-speed and forward-leaning, with 25 years of on-the-ground experience as a trusted partner to global business. Today, as Europe’s largest listed owner, developer and manager of logistics and industrial properties and long-term leader in the business-smart markets of Central and Eastern Europe (“CEE”), CTP is ambitious, innovative, and growing fast. 1 1.1 Company Introduction Business Model and Strategy In line with its strategy, CTP targets to own and operate a pan-European network of business parks with total gross leasable area (“GLA”) of 20 million sqm—nearly doubling its current portfolio of 10.5 million sqm—and to generate annual rental income of €1 billion before the end of the decade, while continuing to develop at an industry-leading Yield- on-Cost (“YoC”) of above 10%. CTP achieves its goals via its Parkmaker “wheel of growth” business model, which consists of two interconnected core business units—“the operator” and “the devel- oper”—integrated with the Company’s new energy business, which generates renewable energy for its CTParks and clients. The business units each have their own roles and objectives, leveraging the Group’s capital sources and unique in-house capabilities while positively impacting each other: the operator, by owning and operating a property portfolio to enhance its value, genearate cash flow, and maintain client relations; the developer, by generating industry leading YoC; and the energy business, by monetising solar and potentially wind turbine capacity. This expansion into renewable energy is an integral part of CTP’s Parkmaker concept and contributes to the Com- pany’s income and ESG objectives, while also providing green energy and energy security to its clients, supporting their ESG goals in the process. CTP has defined four pillars as the foundation of its strategy. They allow the Company to stay ahead of its competitors, provide best-in-class service to clients, and partner with public authorities and communities. These pillars enable CTP to capitalise on its strengths and competitive edge in the areas of occupier demand, ESG, capital, people, and land- bank and to further build on its existing Parkmaker philosophy. See Chapter 2 for more details. Company Introduction GRI 2-6 4 Energy Generating renewable energy onsite boosts revenues and sustainability. Parkmaker Concept The synergies of the three business lines come together in the Parkmaker “wheel of growth”. Operator Maximising value by providing the complete package of Parkmaking services. Developer Mobilising the landbank with in-house teams helps maintain industry-leading YoC. Business Model and Strategy 5 2 mil. sqm NL AT BG RS PL HU RO SK Company History and Milestones 1.2 Company Introduction Founded 10 mil. sqm IPO 5 mil. sqm DE 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 2022 2023 Pandemic Financial crisis CZ 6 1998 Construction begins at CTP’s headquarters and first business park in the Czech Republic – CTPark Humpolec. CTP established by Remon Vos. 2000 CTP completes its first building. 2007 CTP becomes the largest industrial developer in the Czech Republic, developing in, among other locations, Plzeň, Brno and Ostrava. 2008 CTP installs its first solar plant at its headquarters at CTPark Humpolec. 2010 CTP completes the installation of 6 MWp of solar capacity at various parks in the Czech Republic. 2011 CTP’s annual rental income exceeds €100 million. CTP averages nearly 8% growth per year in 2008–2011, during the financial crisis. 2013 CTP enters the Prague market. CTP’s portfolio reaches 2 million sqm of GLA. CTP delivers its first BREEAM Outstanding building—Tower I at Spielberk in Brno. 2014 CTP launches operations in Romania. 2015 CTP launches expansion plan of 3 million sqm of GLA by 2020. CTP acquires 380,000 sqm of GLA in Romania, becoming the market leader in the country. 2016 CTP Launches operations in Hungary. 2018 CTP’s portfolio reaches 5 million sqm of GLA across CEE. CTP sells a portfolio of three parks in the Czech Republic to DEKA for €410 million. CTP sets new target of 10 million sqm of GLA by 2023. 2019 Remon Vos consolidates 100% ownership of CTP. 2020 CTP B.V. bonds rated Baa3 (Stable) by Moody’s and BBB- (Stable) by S&P. CTP issues its inaugural green bond. CTP’s entire portfolio in Hungary is BREEAM certified. 2021 CTP launches its IPO on Euronext Amsterdam, the largest real estate IPO in Europe since 2014, and is included in the Euronext small cap index. CTP launches in Western Europe, opens offices in the Netherlands. CTP BREEAM certifies 100% of its standing portfolio. CTP receives a Low-Risk rating in Sustainalytics ESG Risk Ranking. CTP is Europe’s largest real estate issuer of green bonds for the year, with a total of €2.5 billion. 2022 CTP launches operations in Germany with its acquisition of the 1.6 sqm GLA portfolio of Deutsche Industry REIT; the CTPark Network now connects the North Sea to the Black Sea. CTP included in the Euronext midcap index and the AEX® ESG Index. CTP expands in Poland with a land acquisition that offers the potential for 1.2 million sqm of GLA. CTP expands in Western Europe by delivering its first development in Rotterdam in the Netherlands and launching its first project in Austria. CTP exceeds its 10 million sqm of GLA target with 10.5 million sqm of GLA at year-end and reaches 38 MWp of solar capacity. Company History and Milestones 7 2022 Big Numbers1.3 Company Introduction GLA 10.5 Landbank 20.3 million sqm million sqm Under Construction 1.7 million sqm 8 Big Numbers Note: 1. Including Germany, 95% excluding Germany. 2. Excluding Poland, where the Group has more speculative developments as part of its market entry. GLA Like-for-Like Rental Growth Reversionary Potential WAULT Average Loan Maturity Occupancy 94% 1 Pre-let (completion H1-2023) 46% 2 Interest Coverage 4.6X Tenant Retention 90% Estimated YoC (Projects Under Construction) 10.1% Average Cost of Debt 1.5% 4.5% 12.5% Leasing vs ERV +6.5% Portfolio Yield 6.5% 6.5 5.7 10.5 million sqm Leases Signed 1,883 '000s sqm NTA Company Specific Adjusted EPRA EPS €13.81 €0.61 per share per share Next 12-Months’ Contracted Revenues €589 million Liquidity Position €1.1 billion GAV €11.5 billion Landbank 20.3 million sqm years years 9 1.41.4 Q1 Q2 Quarterly Highlights CTP issues a €700 million four- year green bond with an annual coupon of 0.875%. The issue was accompanied by a successful €168 million tender offer of the October 2025 bond. CTP receives 98.17% Shareholder support for its transaction with Deutsche Industrie REIT AG (“DIR”). CTP launches operations in Germany with “last-mile” logistics development targets for the coming five years. CTP starts its first development in Austria with the launch of CTPark Vienna East for Toyota Logistics Services, with a “BREEAM Outstanding” certification. CTP commits €10 million to the UN Refugee Agency (“UNHCR”) in response to the humanitarian emergency in Ukraine and neigh- bouring countries. CTP acquires land and construc- tion projects across Poland from 7R, with the potential to develop 1.2 million sqm GLA of logistics and industrial real estate. CTP delivers its first project in the Netherlands with the hand- over of a 23,000 sqm distribu- tion centre to R&M Forwarding at CTPark Rotterdam. CTPark Bucharest North emerges as the leading Romanian e-commerce hub in CEE’s fastest-growing online market after a €160 million investment to increase GLA to over 200,000 sqm. Company Introduction 47,000 110,000 4.6% 6.0% Leasing above ERV (%) Deliveries (sqm) 10 Q3 Q4 CTP announces the comple- tion of the merger with DIR and squeeze-out of former DIR shareholders. CTP hosts its first Capital Market Days in Prague followed by an asset tour through the Czech Republic, Slovakia and Austria with analysts and investors. CTP announces its new growth target: 20 million sqm of GLA and €1 billion in annual rental income before the end of the decade. CTP delivers 0.3 million sqm of GLA in the third quarter, 96% leased and securing contracted rent of approximate- ly €17 million. CTP signs a nine-year, €400 million secured loan facility extension with a consortium of Czech banks for a fixed all-in cost of 4.7%. CTP initiates a multi-project in- vestment programme in Bulgaria following the acquisition of two logistics centres in the capital, Sofia. CTP receives BREEAM Out- standing certifications for build- ings at CTPark Prague West and CTPark Prague East and for its community Clubhaus at CTPark Bucharest West. CTP launches leasing for its multi-storage inner-city logistics park CTPark Amsterdam City. Cargus becomes the first tenant at CTPark Oradea Cargo Terminal in western Romania, CTP's first logistics centre inside an airport. CTP announces plans to build CEE’s most modern office build- ing at its Vlněna office park in Brno with a unique, technically challenging glass façade and rooftop drone delivery capability. CTP obtains a seven-year, €175 million secured loan facility with two Dutch banks for a fixed all-in cost of 4.3%. CTP delivers 0.6 million sqm across its portfolio during Q4, ending the year with 10.5 million sqm of owned GLA, exceeding the 10 million sqm target. Quarterly Highlights 330,000 553,000 6.2% 12.5% 11 Letter from the CEO1.5 Company Introduction / Letter from the CEO CTP achieved exceptional results in 2022. We have much to be proud of after our first full year as a publicly-traded company, with record GLA, income, and rental growth. The year 2022, with its macroeco- nomic headwinds, demonstrated the resiliency of our business mod- el and was a solid continuation of our 25-year history of consistent growth, with the potential for much more. CTP remains highly profitable, with a strong income-generat- ing portfolio and a high level of retention among our diverse inter- national client base, who pay on time and accounted for almost two- thirds of our leases signed in 2022. Operationally, 2022 was another robust year, as we experienced strong demand from our tenants with little vacancy across the port- folio. We ended the year with 10.5 million sqm of gross lettable area (“GLA”)—a landmark increase of the portfolio of 2.9 million sqm in one year—and high like-for-like rental growth, with 12-month con- tracted revenues of nearly €600 million, and increasing. With 25 years of growth and experience, CTP’s strengths are many and diverse. They include: our robust financial position, with rising rental income and a market-leading yield on cost (“YoC”) of above 10%; our Parkmaker strategy, which deepens our tenant re- lationships and helps build local ecosystems for business and com- munity growth; our large strategic landbank, primarily at existing CTPark locations; and our integrated development capabilities, in- cluding in-house design and construction teams, who help us to build on time and on budget. This unique combination of strengths, to- gether with our first-mover advantages in CEE, make us well placed to recognise and exploit emerging opportunities early. A year of achievements In 2022 we continued to bolster our market share in all markets— primarily by providing expansion facilities to our existing tenants, either at their current or at a new location in our expanding parks. We further solidified our position as market leader in Central and Eastern Europe (“CEE”), expanding our leadership in our core mar- kets and accelerating our expansion in Serbia and Bulgaria, where we are now market leaders. In Q2, CTP took the bold step to expand in Poland with the pur- chase of a strategically located 2.4 million sqm landbank portfolio, which will allow CTP to develop over 1.2 million sqm of GLA. The trader-developer model which prevailed in Poland is increasingly un- der pressure in the current economic environment. We felt the time was right to expand in this context, as CTP’s build-to-own business model has proven to be more sustainable and resilient. The prevailing market conditions allowed CTP to capitalise on the opportunity and rapidly expand its presence in Poland—CEE’s largest economy and an important logistics market in Europe. Another 2022 highlight was the launch of operations in Germany following the acquisition of Deutsche Industrie REIT-AG (“DIR”) and its portfolio of 1.6 million sqm of GLA. We also extended the CTPark Network to Austria with a series of strategic land pur- chases and the development of our first properties in Vienna, includ- ing a BREEAM-certified Outstanding warehouse and office facility for Toyota as the anchor tenant at our park near Vienna airport, with more projects under construction around the capital. Together with our recent significant investments in Amsterdam and Rotterdam in the Netherlands, the CTPark Network now provides seamless, A-class industrial and logistics property solutions to global business across ten countries, from the North Sea to the Black Sea. Key deals concluded during the year were many and include a cus- tom-built warehouse for retail giant Tesco (Hungary) and e-com- merce fulfilment centres for two fashion retailers including LPP (both in Romania). None of our successes in 2022 would have been possible without our team of dedicated professionals, which grew last year to nearly 700 people. On behalf of CTP’s Board of Directors and senior man- agement, I thank and congratulate all of them for the successes that we have achieved together. I would also like to recognise my person- al assistant, Radka Veletová, and Petr Svoboda for their nearly 20 years of dedication to CTP. Energy for the future As CTP grows, we continue to build upon our long-term owner- operator business model, which has been the foundation of our success since the beginning. That’s why I am excited by the new, forward-looking paradigm that we developed during the year based on our Parkmaker “wheel of growth” strategy, which encapsulates CTP’s two core activities—developer and operator—with our new, renewable energy business that we launched formally in 2022. We see strong synergies and growth opportunities in the overlay of these three spheres of activity, with the energy business further bolster- ing our ESG credentials while providing an important and sustainable third income stream for the Company going forward. Our energy business is straightforward. The size of our portfolio allows for the installation of large-scale photovoltaic (“PV”) systems on the rooftops of our buildings, which enables us to sell renewable energy to our tenants. Developing PV power stations at scale will create a profitable revenue stream for CTP while at the same time providing energy security to our tenants, reducing their overall cost of occupancy and furthering their own sustainability goals. We ended the year with 38MWp of installed PV capacity and are on target to add an additional 100MWp during 2023. The installation of rooftop solar panels is standard for all new building projects and is an inte- gral part of our strategy going forward. 12 13 Big plans built on solid fundamentals On the back of our record-breaking year of growth in 2022, we have set an ambitious target: to double the size of our portfolio to 20 mil- lion sqm of GLA before the end of the decade. We have confidence in our ability to reach this milestone, based on the strength of our busi- ness model, the favourable outlook for our core CEE markets, and secular growth drivers that remain entrenched across the CEE re- gion, which continues to be undersupplied and is the largest growth market in Europe, with rising barriers to entry. To date, changes to the global geopolitical landscape have ben- efitted CEE, as the importance and value of the region’s underlying business-smart proposition—strategic location, educated work- force, and lower labour costs—becomes increasingly apparent and critical for the resiliency of European supply chains. We continue to see the rise of nearshoring/friend-shoring to the CEE region in re- sponse to global uncertainties and the need to reduce the fragility and carbon footprint of extended global supply lines. In tandem with this trend, in 2022 we grew the portfolio to meet the on-going demand for e-commerce warehousing and logistics fa- cilities, particularly in CEE, where growth in online retailing is more robust than in western markets, as it comes from a lower base. While there is variation among markets, rising penetration levels across the CEE region are here to stay. CEE growth dynamics mean that our markets’ historic and pro- jected GDP growth outperforms the EU-27 and Western Europe- an average, with lower debt-to-GDP ratios. The region remains a generally low-tax, business-friendly environment, with strong gov- ernment support for infrastructure development and foreign direct investments. Company maturation While CTP retains the entrepreneurial, hands-on, can-do attitude that has made the Company what it is today, we continue to take steps each year to further professionalise and standardise all as- pects of Company operations. This is particularly important for us as a rapidly expanding publicly traded company. In 2022, we continued to focus on developing and retaining talent at all staff levels with strong local leadership. Our strong Parkmaker company culture and shared values unite our country teams across our markets and enables us to deliver seamless solutions to our clients. During the year, we continued to automate internal processes to improve efficiency, reduce redundancy, and make CTP leaner, better and more profitable. As ESG issues are increasingly important, we have expanded our ESG disclosure in 2022 and are working to embed ESG principles into all aspects of our operations. All governance and risk management issues are managed inter- nally and reviewed routinely by CTP’s Board of Directors, its Com- mittees, and by external accredited auditors in line with all applica- ble laws and regulations. Personal bests Last year was truly a milestone for CTP on many levels. We achieved high profitability and record levels of portfolio expansion. It was also a significant year for our people, many of whom achieved personal bests delivering value to the Company and its shareholders. Of course, while we work hard, we also took off time during the year to come together to enjoy our successes and plan for the future. Highlights included our Company-wide summer party, CTFest—King and Queen edition—where our smaller Slovak team showed their muscle by winning the coveted tug-of-war championship. Our end- of-year Company-wide CTGala marked the successful end of our first year as a publicly traded company. We are happy with our inves- tors and remain focused on our business strategy and objectives. Outside of work, we encourage our people to be active in sports, and I took the opportunity last year to compete in the New York City Marathon with several colleagues. I look forward to future races and faster times. I also look forward to expanding our technology parks, which we have developed successfully in the Czech Republic, across the portfolio where appropriate. We ended 2022 on a strong footing and have entered 2023 with our trademark “Full Speed” approach—always knowing that we can do more and that we can do better. Outlook We remain confident that CTP is uniquely positioned, even in the cur- rent uncertain environment. The continuation of structural market trends favours CTP’s vision. As our strategy broadens, its essence remains unchanged. Under our owner-operator model, we take a long-term, sustainable approach to our activities. We continue to grow with our tenants in existing locations and can expand with them quickly to new locations as required. As current geopolitical and macroeconomic trends benefit our core CEE markets, and as our business model proves to be more re- silient than alternatives, we are confident that we can achieve our ambitious goal to double our portfolio to 20 million sqm of GLA be- fore the end of the decade. We have the land, we have the clients, we have the talent and tools. Full speed to 20 million! Remon Vos, CEO Amsterdam, 3 March 2023 Company Introduction / Letter from the CEO 14 1.6 Letter from the CFO Strong financial performance in 2022 bolsters our investment case. We delivered on what we promised, and more. We ended the year with robust results across all key financial in- dicators, with profit for the period of €796.5 million and 12-month contracted rental revenues nearing €600 million. Rental income in- creased y-o-y by 44.9% to €485.0 million, and 4.5% on a like-for- like basis. Net Rental Income (“NRI”) grew y-o-y by 38.3% to €452.1 million. Company specific adjusted EPRA earnings per share came to €0.61 per share, outperforming guidance. During 2022 CTP’s portfolio again showed strong growth, crossed the 10 million sqm threshold and reached 10.5 million sqm of GLA at year end. The Group’s Gross Asset Value (“GAV”) increased 36% y-o-y to €11.5 billion, mainly driven by deliveries of development pro- jects and acquisitions. The revaluation of the standing portfolio remained positive for the year, thanks to the growth of the Estimated Rental Value (“ERV”), which more than offset the 39 bps reversionary yield wid- ening in the second half. As our CEE assets are higher yielding, the impact of yield widen- ing is less than that for many Western European assets, which were valued at significantly lower yields. We expect overall less yield wid- ening in CEE than in Western Europe, with the yield differential now back at the long-term historic average, as their lower absolute rent revels, low occupancy, and the expected continued strength in rental rates provides a good operational backdrop for CEE markets. We expect continued strong revaluation of deliveries, much ahead of our peers due to our larger pipeline and higher spread between our market-leading double-digit YoC and the standing portfolio yield. EPRA NTA increased 14.5% y-o-y to €13.81 per share, mainly driven by positive revaluation deliveries. Going forward, we expect continued ERV growth to support the valuation of our portfolio. Strong liquidity means strong growth potential going forward We ended 2022 with liquidity of €1.1 billion. Our strong cash position and revolving credit facility, combined with our access to bond mar- kets and bank financing, puts us in a prime position to act quickly and seize growth opportunities as they arise. Given the current market conditions and the strength of CTP’s build-to-own business model, we anticipate significant opportunities in the coming years. While we are currently relying more on bank lending, which we can secure at attractive rates, we remain ready to go back to the bond markets when pricing rationalises. In the meantime, we have built a pipeline of bank lending, thanks to our long-standing relationship with many banks active in the region. CTP’s financial position is further bolstered by strong under- lying fundamentals: our low average cost of debt of 1.5%, which is fully fixed or hedged until maturity, and our average debt maturity of 5.7 years. CTPs first material upcoming maturity is a €400 million bond in Q4 2023, after which our next significant maturity is not until mid-2025. The Company’s Loan-to-Value (“LTV”) ratio stood at 45% at end- 2022, in line with our 40–45% target range, which we deem appro- priate, as this reflects our above-market average portfolio yield. Our interest coverage ratio of 4.6x and normalised Net Debt to EBITDA of 9.6x reflect healthy cash-flow leverage. Capital allocation priorities – requirements for returns Based on the strength of our strong results in 2022 and robust oc- cupier demand, we continue to invest in our pipeline and have set a target to double the portfolio to 20 million sqm of GLA before the end of the decade. Our priority for 2023 is to mobilise the existing landbank, which is already paid for, enhancing our financial returns. On the back of decreasing construction costs and continued rental growth, we have confirmed our YoC target of over 10% for new projects. Letter from the CFO 15 Richard Wilkinson, CFO Amsterdam, 3 March 2023 Deepening our ESG goals and improving disclosure In line with CTP’s long-term business principles and strategy go- ing forward, sustainability and the principles of ESG are integral to our operations at all levels. CTP strives to be climate positive and is committed to reducing carbon emissions, increasing the production of renewable energy, and aligning operations with all relevant frame- works and regulations. CTP’s new energy business that launched in 2022 provides an im- portant third revenue stream for the Company while expanding our ESG credentials and offer for tenants, who increasingly require high levels of ESG compliance for their leased premises. During the year we continued our long-standing commitment to deliver state-of- the-art, energy efficient buildings that meet high BREEAM stand- ards across the portfolio for all property types. Embedding our parks into the communities where they are lo- cated has always been part of our strategy as long-term owners and operators. We seek engagement with local communities and munic- ipalities to improve infrastructure and quality of life. One important part of this is our Clubhaus concept, which we continued to develop at select CTPark locations in 2022. These create a focal point not only for the parks where they are located, but also for the surround- ing communities. Internally, CTP strengthened its diversity and inclusion commit- ment. During 2022 we continued to increase the number of women in leadership positions, with the goal to have 30% representation in senior management. Dividend We propose a final 2022 dividend of €0.23 per ordinary share, which will, subject to approval by the AGM, be paid in May 2023. This will bring the total 2022 dividend to €0.45 per ordinary share, which rep- resents a Company specific adjusted EPS pay-out of 74% and an im- pressive growth of 29% compared to 2021. Outlook We continue to closely monitor the market environment and have the flexibility to react to changes as they emerge. Despite the current global geopolitical uncertainties, we remain bullish on our prospects in 2023 and beyond. Our confidence is based on many factors, including: • our robust balance sheet and strong liquidity position; • the disciplined capital allocation and industry leading YoC of our profitable pipeline, with our existing tenants that continue to ex- pand with us; • our conservative debt repayment profile, high interest coverage and good access to credit markets; • our well-diversified tenant base with blue-chip multinationals; and • the strong cash-flow generation of our standing portfolio, which is supported by an increasing amount of leases linked to inflation and continued rental growth driven by the secular growth drivers in the CEE region. Company Introduction / Letter from the CFO 16 17 18 Dear Shareholders, 2022 was a year of unprecedented volatility. Just as the impact of the Covid-19 pandemic was fading, Russia invaded Ukraine. A previ- ously unimaginable war in Europe began, bringing part of our society to a new near-standstill. The war significantly intensified already existing supply bottlenecks and led to a shortage of goods, which were further exacerbated by public health restrictions in China. The increase in raw material and energy prices was followed by soaring inflation, and to combat this, central banks decided to raise interest rates for the first in over ten years. Despite geopolitical turmoil, the strong fundamentals of the logis- tics real estate sector remained intact. Tenant demand for new space remains high, driven by nearshoring and friend-shoring, as companies seek to enhance the resiliency of their supply chains following the dis- ruptions of the past years. The CEE region is the natural beneficiary of this trend in Europe, given its competitive labour rates, educated and motivated workforce, good infrastructure, and business-smart environment. While market transactions have slowed down significantly as price discovery is on-going, CTP benefited from its build-to-own strategy. In this volatile environment CTP achieved strong operational and financial results in 2022, continuing its strong growth path and de- livering on its promises. CTP’s portfolio grew to 10.5 million sqm of GLA with 1 million sqm of deliveries and 1.8 million sqm of stra- tegic acquisitions. During the year CTP signed leases for a record 1,883,000 sqm. The Company specific adjusted EPRA EPS amounted to €0.61, outperforming guidance, and the EPRA NTA increased by 14.5% to €13.81, mainly driven by the positive revaluation of development de- liveries and ERV growth. Based on this strong result, the Board will propose a final 2022 dividend of €0.23 per ordinary share to the AGM. This will bring the total 2022 dividend—subject to the AGM approval—to €0.45 per or- dinary share, which represents a growth of 29% compared to 2021. As part of the on-going strategy review, a new energy business unit next to the operator and developer business was created, as CTP is ramping up the roll-out of its solar photovoltaic systems, creating a new income stream. This new business unit will allow CTP to serve even better clients’ needs in a holistic way. Renewable energy im- proves the energy security of tenants and lowers their cost of occu- pancy, while contributing to their and CTP’s sustainability ambitions. CTP’s entrepreneurial culture allows the Company to act quickly. This is also illustrated by the recent market activities in Poland, where CTP is expanding, as well as the strategic market entry into Germany through the acquisition of Deutsche Industrie REIT-AG, which was accomplished within ten months—a record time for a German- listed company to be acquired and integrated into a new organisation. CTP’s dedicated client-centric approach makes the Company the partner of choice to existing and future tenants. This has enabled CTP to continuously increase market share and to become a leading European player in the listed real estate world. In the current volatile environment, the Board stayed close to the larger management team and met more frequently than in the pre- vious year to evaluate, discuss and ensure strong governance and to make sure that the long-term strategy adapts and works well in a changing market environment. The Board initiated its first self-evaluation since the listing of CTP in March 2021 to reflect on its functioning, in conjunction with an extensive discussion on succession planning of both the Executive as well as Non-Executive members of the Board of Directors. During 2022, CTP further bolstered its senior management, which is placed below the Executive Directors, thereby looking after the Group’s short- and medium-term succession. The Board approved the Company’s Suppliers’ Code of Conduct, which sets out the shared values of integrity and compliance with local and international laws; approved the unequivocal stand against bribery and corruption; and further broadened the scope of com- pliance by approving an anti-discrimination and harassment policy throughout CTP. Following the identification and quantification of Group risks and the creation of the Group’s Risk Policy and Inventory in 2021, CTP established in 2022 a Group-wide risk management system, which covers both financial as well as non-financial risks. The Board evalu- ated and approved the Group’s updated risk management policy and discussed the assessment of the effectiveness of the design and op- eration of the internal risk management and control systems. At CTP, people feel and experience that sustainability is incorpo- rated in all operational processes. To formalise these activities and strengthen innovation efforts, the Board decided to install a Sustain- ability Committee next to the Audit Committee and Nomination and Remuneration Committee. One of the priorities of the newly estab- lished Committee will be to advise on the publication of a Sustaina- bility Report for the year 2022 in which the long term ESG objectives will be set. 1.7 Letter from the Chairwoman Company Introduction / Letter from the Chairwoman 19 In 2022 CTP’s sustainability efforts were recognised by Sustainaly- tics, with an ESG Risk Rating of 10.2 and assessed as Low Risk; by Standard & Poor’s, with a Global Corporate Sustainability Assess- ment and ESG Evaluation score of 67; as well as by the Company’s inclusion in the AEX® ESG index, which includes the 25 companies within the AEX® and AMX® indices demonstrating best Environmen- tal, Social and Governance practices. Embedding CTP parks into the communities where they are lo- cated has always been part of the strategy as long-term owner and operator. In this context, CTP offered hotel rooms to Ukrainian refu- gees, donated €10 million to the United Nations High Commission for Refugees (UNHCR) and supported NGOs with shelter and financial contributions throughout all major CEE countries. The combination of a resilient business model, agility and the tre- mendous commitment of its teams across all countries allowed CTP to achieve an outstanding performance in 2022. Balanced growth across all countries demonstrates the relevance of the build-to-own business model: strategically centralised and operationally decen- tralised with a strong entrepreneurial mindset. This model has proven to be well suited for the current environment. CTP has emerged stronger from 2022 and reinforced its position as one of the leading listed real estate companies in Europe. Mindful of the current un- certainties, we remain ambitious for the future, optimistic about the outlook for the logistics real estate markets, and confident in our ability to keep outperforming the market and achieve in 2023 another year of strong profit and GLA growth. On behalf of all Non-Executive Directors, I would like to thank you, our valued shareholders, customers and partners, for your trust and support. Our thanks also go to all employees and the management across the countries for their commitment and significant efforts. CTP’s Annual General Meeting of Shareholders will be held on 25 April 2023. We very much look forward to meeting our sharehold- ers then! On behalf of the Board, Barbara Knoflach, Chairwoman of the Board of CTP N.V. Amsterdam, 3 March 2023 1.8 Investor Relations Q&A In 2022, we celebrated the one- year anniversary of CTP’s listing on Euronext Amsterdam, and since March CTP is included in the Mid-Cap Index (AMX). In September, we hosted our first Capital Market Day, welcoming over 40 investors and sell-side analysts in Prague, followed by a property tour of our Czech, Slovak and Austrian assets. All this while we continued to exceed the targets as set out during the IPO. How can you continue to develop at a YoC of above 10% in the current economic environment? Our construction costs are coming down. While in 2022, construction costs on average were around €550 / sqm, in 2023 we expect them to be below or around €500 / sqm, as the construction market is cooling down. As we act as our own general contractor, CTP is typically one of the first in the industry to notice these trends. In addition, mar- ket rents continue to increase due to strong demand and lower supply. These two effects combined allow us to continue to develop at a YoC of above 10%, while staying competitive. What is your expected like-for-like rental growth in 2023? As at year-end 2022, roughly 50% of our contracts had a double index- ation clause, with indexation being the higher of (i) a fixed escalator of between 1.5%–2.5% or (ii) the local or European Consumer Price Index (“CPI”). The remaining 50% of the contracts have only a fixed escala- tor. Based on this mix and the levels of the local and European CPI, we expect indexation to contribute around 6% to the like-for-like rental growth, on top of which we will have the reversion of expiring leases. The reversionary potential at year-end 2022 stood at 12.5%. How do you expect your pre-letting to evolve going forward? Based on continued strong demand, we expect to be able to deliver projects 80%–90% pre-let at completion. This is in line with our track record—for example the projects delivered in 2022 were around 80% let at delivery. Typically, CTP starts with a slightly lower pre-letting, however, 58% 1 of CTP’s projects that are currently under construction are at an existing park, where CTP has clear visibility on future tenant demand, as most new leases are signed with existing clients. Starting the construction in advance gives CTP a competitive advantage when tenants need space available within a short timeframe. What will happen to valuations? In the second half we saw valuations come down slightly on a like-for- like basis, due to 39 bps yield widening, which was almost fully offset by strong Estimated Rental Value (“ERV”) growth. Looking forward, we expect continued support for valuations by further ERV growth, as vacancies remain low and demand high. Furthermore, we foresee overall less yield widening in CEE than in Western Europe, where yields had tightened much more—resulting in an increased yield spread—due to the more active transaction market in Western Europe, while in CEE most investors developed assets for their own portfolio, leading to a lower number of transactions. We expect this increased yield spread to reverse, also given the higher growth prospects for CEE. How will you fund your ambitious development pipeline? The current bond markets are dislocated, so we expect to rely more on the bank lending market in 2023, where rates are more attractive. In September 2022, we obtained a nine-year €400 million secured facility from a consortium of Czech banks and in December 2022, a seven-year €175 million secured facility from two Dutch banks. We currently have several other facilities in the pipeline. In addition, we have a strong cash flow from operations, which is expected to be between €350–€400 million in 2023. With a dividend pay-out ratio of 70%–80% and on average roughly 50% cash and 50% scrip take-up during the last three dividend payments, this translates into a significant amount of retained earnings to fund the development pipeline. What makes CTP believe so strongly in the CEE region? The CEE region is “business-smart”, with competitive total labour costs that are one-third of what they are in Western Europe and com- parable with China, strong work ethics and high infrastructure invest- ments. There are several secular demand drivers: (i) nearshoring, as companies look to de-risk and shorten their supply chains, with CEE countries ranked high as likely destinations; (ii) continued e-commerce growth, which comes from a low base; and (iii) professionalisation of supply chains, with above-average GDP growth forecasts for the CEE region and the rise of the middle class supporting consumption. As CEE markets are still undersupplied in terms of GLA per capita and new supply barriers are rising, CTP is uniquely positioned, thanks to its first-mover advantage and strategically positioned landbank, to further bolster its dominant position. What are your capital allocation priorities? Investing in our pipeline is the priority, as we can do so at a very at- tractive YoC of above 10%. For this we plan to mobilise our existing landbank, which was valued at €763 million as at 31 December 2022, allowing us to optimise financial returns. New landbank acquisitions are preferably done through options—limiting capital outflows, while giving CTP maximum flexibility—which is feasible in the current mar- ket, as the market for land acquisition has slowed down. We will also look opportunistically to benefit from the current vola- tile macro-environment, which we expect will offer acquisition oppor- tunities. 1 Excluding Poland, where the Group has more speculative developments in new parks as part of its market entry. Company Introduction / Investor Relations Q&A 20 21 Maarten Otte HEAD OF INVESTOR RELATIONS 22 23 OPERATOR STORY: LONG-TERM PARTNER TO OUR CLIENTS Providing the full spectrum of in-house and onsite Parkmaking services to support our tenants’ growth strategies creates long-term value for CTP. Maintaining client intimacy helps drive repeat-business—a cornerstone of our successful strategy. 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 2 CTP Strategy & Outlook 2.1 CTP’s Business: The Parkmaker “wheel of growth” 58 Delivering sustainable growth via the “wheel of growth” model 58 Energy as a cross-cutting business 58 2.2 Growth Plan and Target 60 Four strategic pillars 60 Capitalising on market opportunities 61 2.3 Outlook for 2023 62 CTP Strategy & Outlook 56 2 CTP Strategy & Outlook CTP Strategy & Outlook CTP’s strategy has been the same since the Company’s start in 1998: to develop, own and operate state-of-the-art business parks in strategic locations that support long- term growth and value creation. The Company’s unprecedented success stems from its entrepreneurial spirit, market insight, and first-mover advantages in business-smart CEE markets. The same combination of forces that made CEE shine over the past quarter century—strategic location, developed transport infrastructure, lower costs, and well-educated workforce—are today even more valuable, as supply-chain security in Europe is now critical. CTP’s successful recent expansion into Western Europe and further entrenchment of its market-leader status in CEE enables it to provide seamless, value-driven property solutions across ten European markets. The outlook is for continued growth in 2023 and for the medium term on the back of increasing rental income streams, favourable market conditions and the Company’s ability to mobilise its existing strategic landbank to meet growing demand. CTP leadership is confident that secular growth drivers remain in place for its markets and industry and has targeted yield on cost (“YoC”) of 10.1% for new developments in 2023. 57 2.1 CTP’s Business: The Parkmaker “wheel of growth” CTP’s Parkmaker “wheel of growth” business model consists of two interconnected core business units that encompass the Group’s activities: as a developer, where CTP invests in developing cost- efficient, future-proof buildings suited for multi-generational leasing, leveraging its strategically located landbank; and as an operator, where CTP manages and operates its properties to service its international client base to maximise value. The Parkmaker “wheel of growth” demonstrates how these two core units of CTP’s activities come together, in conjunction with the Group’s new energy business. CTP’s strategy enables the Company to retain ownership and maintain long-term client relationships, thereby offering value attributes to clients far beyond four walls and a roof. DELIVERING SUSTAINABLE GROWTH VIA THE “WHEEL OF GROWTH” MODEL CTP’s successful property and client relationship management lead to satisfied clients by enabling them to focus on their core business activ- ities. CTP’s existing clients—the vast majority of which are large mul- tinationals—provide for future growth, both at their current location and at new locations, including in other countries. CTP’s park strat- egy—which is based on scaling up its parks by adding onsite services, improving infrastructure for its clients and allowing clients to expand in existing locations, together with the strategic use of its landbank and in-house capabilities—enables the Group to realise industry-lead- ing development returns. ENERGY AS A CROSS-CUTTING BUSINESS The Group’s new sustainable energy business is an additional source of income for CTP. The Group’s properties provide significant potential to install rooftop solar panels and wind turbines. CTP currently has 38 MWp of installed solar power capacity. Building on the momentum cre- ated by recent geopolitical developments, which emphasise the need for more self-reliant sourcing of energy, and increasing environmental pressure, CTP plans to monetise its energy-generating installations and provide tenant-friendly solutions. Offering energy solutions has a positive impact on a tenant’s total cost of occupancy, their carbon footprint, and their energy security. CTP has set an ambitious target for this fast-growing business unit: to add an additional 100 MWp of installed solar capacity in 2023, thereby moving the Company further towards meeting its ESG aspirations as well as growing additional in- come streams. CTP Strategy & Outlook 58 ORGANIC GROWTH CLIENT TE A M S PA R K MANAGEMENT BUSINESS CONTINUITY SCALING SERVICES IN-HOUSE CONSTRUCTION PA R K DEVELOPMENT QUALITY & MAINTENANCE YoC PERFORMANCE SATISFIED CLIENTS STAKEHOLDER & COMMUNITY CLIENT- L E D GROWTH V A L U E C R E A T I O N V A L U E C A P I T A L I S A T I O N E S G & E N E R G Y I N N O V A T O R F U T U R E - P R O O F P A R K M A K E R S OPERATOR DEVELOPER CTP PARKMAKERS CLIENTS SPACE CTP’s Business: The Parkmaker “wheel of growth” Strengthening Relationships Landbank Utilisation 59 2.2 Growth Plan and Target CTP targets to own and operate a pan-European network of business parks with total GLA of 20 million sqm before the end of the decade— almost doubling its current portfolio of 10.5 million sqm and generating annual rental income of €1 billion while continuing to develop at an industry-leading YoC of above 10%. CTP expects that the scale of its business, its flexibility in offering its clients scalable solutions and its ESG commitment will continue to position the Company ahead of its competitors. The Group’s strong liquidity position and capital structure enable it to act quickly to sieze opportunities. Key factors of CTP’s continued market leadership are its client intimacy and business ecosystem combined with its strategic landbank, especially in or adjacent to existing parks. This enables cli- ents to expand at existing locations. CTP's in-house capabilities allows for fast construction in strategic areas. In addition, the rooftop capac- ity of CTP’s buildings allows the Group to develop a sizable renewable energy business delivering attractive returns with a YoC above 15%. FOUR STRATEGIC PILLARS CTP’s strengths and competitive edge in the areas of occupier demand, ESG, capital, and landbank come together in its “wheel of growth” model and are expressed as four strategic pillars of the Company’s business strategy. 1. Profitable & Exponential Growth CTP’s in-house construction teams and centralised procurement capabilities, together with increasing market rents, enable the Company to continue to deliver at an industry-leading double-digit YoC. CTP plans to double its current GLA through the utilisation of CTP Strategy & Outlook x €1 billion rental income 20 million sqm GLA Between now and end of 2029 60 its existing landbank and the further development of current and future CTParks, leveraging its existing tenant base, with whom al- most two-thirds of new leases are signed. The Company expects ad- ditional revenue growth to be achieved by its new energy business. Since its start in 1998, CTP has assembled one of continental Europe’s largest industrial and logistics real estate portfolios. The Company actively evaluates and manages its CTParks and collab- orates with its clients to identify and execute asset management initiatives, which preserve and enhance the investment portfolio’s long-term performance. 2. Sustainable & Innovative CTP enhances its product offering by having ESG as an integral part of its Parkmaker concept, which enables the Group to have access to lower-cost funding. To continue meeting its ESG objectives, the Group has established a dedicated ESG function. CTP’s overall ESG strategy is based on four guiding principles: (i) striving to be climate positive; (ii) embedding parks in communities; (iii) stimulating so- cial impact & well-being; and (iv) conducting business with integ- rity. Focus areas have been adjusted based on the outcome of the materiality assessment and targets have been set up accordingly. These principles support ten of the 17 United Nations Sustainability Development Goals. To minimise its carbon footprint, CTP focuses on construction and operations. CTP’s long-term ambition is to become carbon neu- tral in line with the Paris Agreement. This would enable the Com- pany to derive all of the economic and employment benefits from its CTParks with no negative impact on the environment. CTP’s ESG strategy entails more than becoming climate positive—it implies a relationship with local communities, stimulating social impact and conducting business with integrity. 3. Entrepreneurial & Driven Integral to the achievement of CTP’s ambitious goals and targets is its team, which at-end 2022 consisted of 699 committed employ- ees. In 2022 CTP continued to have a healthy gender diversity ratio of 54% male and 46% female. The CTP team’s proven expertise and comprehensive market intelligence form the core of the Company’s competitive advantage and its ability to provide shareholders with superior and sustainable returns. Equally, the Group’s dynamic and agile culture—its committed “hands-on” and “can do” approach— combined with the team’s energy and passion, are essential for CTP to grow and successfully execute all elements of its strategy. CTP’s organisation is comprised of an international team and country teams. CTP country teams play a pivotal role in securing operational results. By establishing and managing local stake- holder relations, CTP can accelerate development and proactively take land positions at strategic locations. CTP’s international team provides central support by way of scalable systems and process- es, as well as funding for local development projects. CTP ensures best-in-class governance through the Compliance, Risk Manage- ment, Internal Audit and Corporate Secretary functions. 4. Engaged & Connected CTP’s relationships and reputation among those with whom the Company engages provide a significant competitive advantage. The Group leverages its relationships with stakeholders that are di- rectly or indirectly invested in its success as a strategic value driver. CTP’s teams connect and build relationships for the long term. CTP is aware that its activities impact the environment where the Company co-exists with surrounding communities. The Company’s partnership approach and proactive engagement with communities, local authorities and municipalities ensure that the value it delivers goes well beyond the financial returns for shareholders; it extends to delivering economic and social value to the wider ecosystem in the long run. In 2022, the Company increased the level of ESG compliance for all suppliers by introducing a Suppliers’ Code of Conduct (for mate- rials and services). CTP’s Compliance team verifies that all require- ments in the Suppliers’ Code of Conduct are met. CTP has a long-standing tradition of caring for communities and people. Increasingly, the Company’s ESG strategy is aimed at insti- tutionalising this and integrating charity and community develop- ment into operations. CAPITALISING ON MARKET OPPORTUNITIES The Industrial & Logistics (“I&L”) sector is transitioning from being a pure cost-centre to a driver of companies’ performance (see Section 3.1 for more details). This transition results in a holistic view of real es- tate in a client’s total operations, including labour, total supply-chain costs and ESG. CTP accommodates this by: • improving efficiency in networks, thanks to its strategically located CTParks and building lay-out, while optimising the total cost of oc- cupancy; • supporting increased ESG-requirements focused on “green” supply chains and providing amenities/services to attract and retain a local workforce; • preparing properties with sustainable energy sources and energy security, which is especially key when client operations are highly automated; • guaranteeing high transparency and ease of doing business with flexibility and speed via established business teams and scale to ex- pand at existing and/or new locations and markets. With its business model and strategy, CTP is well positioned to capi- talise on market opportunities, accommodate changing client require- ments and provide resiliency in years to come. This is reflected in the Company’s high repeat-business, with almost two-thirds of the leases signed in 2022 with existing clients. CTParks provide positive cluster- ing effects for all stakeholders: • for CTP—by enabling market leadership, efficiency, growth with ex- isting clients, and client intimacy, allowing for industry-leading re- turns; • for Clients—by providing the opportunity to expand at the same location, improved infrastructure, the exchange of expertise and services between clients, and scale to have access to services and amenities for their employees that are not feasible for stand-alone units; and • for Communities—by providing access to services offered at parks and green area development. Growth Plan and Target 61 2.3 Outlook for 2023 Markets are expected to remain volatile in 2023, and CTP continues to monitor events closely. However, as highlighted in Section 3.1, the I&L sector has proven to be resilient, as it is mainly driven by secular drivers of demand and rising barriers to new supply. At the same time, market turbulence can create opportunities, and CTP’s strong balance sheet allows for new opportunities. CTP continues to see a strong operational backdrop, with high tenant demand and vacancies close to record lows in many markets, allowing the Company to generate strong rental growth going forward. This growth, together with the impact of deliveries coming online, will drive CTP’s earnings. For 2023, CTP expects a Company Specific Adjusted EPRA earnings growth of 18%, from €0.61 per share in 2022 to €0.72 per share in 2023. CTP Strategy & Outlook 10 5 2 1 0 20 Mil. sqm Year End 2018 2013 2006 1998 2029 2028 2026 Year End Mil. sqm 2022 62 GROWTH TARGET Landbank allows CTP to reach 20 million GLA target 2.5 mil. sqm p.a. Increase by half current construction output 1.8 mil. sqm p.a. Improve current construction output 1.5 mil. sqm p.a. Maintain current construction output Outlook for 2023 63 3 2022 in Review 3.1 Business Environment and Trends 68 3.2 Operational Performance 74 Standing portfolio 74 Development 80 Energy 83 3.3 Financial Performance 84 3.4 Funding & Hedging 87 3.5 Group-level Insights 96 3.6 Tenants 100 3.7 Five Building Types 104 3.8 Country Review 118 2022 in Review 64 CTP reports strong financial and operational results for 2022 and is confident of further growth in 2023 and beyond, based on secular growth drivers that favour the Company’s industry and markets. The need to strengthen European supply-chain resiliency, the on-going growth of e-commerce, and nearshoring trends—particularly in the business-smart CEE markets where CTP is the market leader—helped CTP grow its portfolio by a record 2.9 million sqm of GLA during 2022, crossing the 10 million sqm threshold and reaching 10.5 million sqm at year-end. 2022 in Review 3 2022 in Review 65 1998 99 2000 01 02 03 04 2005 06 07 08 09 2010 11 12 13 14 2015 16 17 18 19 2020 2021 2022 1998 99 2000 01 02 03 04 2005 06 07 08 09 2010 11 12 13 14 2015 16 17 18 19 2020 2021 2022 Top 10 Parks Size of spheres represent current park GLA as of 31.12.2022 Location represents when a Park first registered GLA CTPark/Industrial location CTHub/Urban Mixed Use * Third party AUM ** Partly third party AUM Budapest East Budapest West Budapest South Tatabánya Arrabona Arrabona II Szombathely Komárom Székesfehérvár Budapest Campus Budapest North Budapest Vecses Budapest Ecser Kecskemét Mosonmagyaróvár Szombathely East HU Jihlava Okříšky Louny Lysá n. Labem Humpolec Hranice Prague East Divišov Brno Plzeň Bor Ostrava Kadaň Pardubice Pohořelice Žatec Liberec Teplice Ponávka Brno South Zone Ostrava Nový Jičín Modřice České Velenice CZ Spielberk IQ Ostrava Mladá Boleslav Prague Airport Hlubočky Přeštice Žatec II Zákupy Kvasiny Blučina Planá Ústi n. Labem Kutná Hora Chomutov Hradec Kraálové Most Lipník n. Bečvou Cerhovice Prague West Blatnice Nošovice Brno Líšeň Česká Lípa Aš Vlněna Karviná Ostrava Poruba Cheb Chrastava Mladá Boleslav II ** Prague North Hlohovec Bratislava Trnava Nitra Žilina Žilina Airport Prešov South Košice Voderady Nové Mesto Krásno n. Kysucou Námestovo SK Dunaj Acquisition of DIR portfolio DE AT St. Pölten North Vienna East NL Rotterdam Gorrinchem Soia Soia Airport Soia R.R Soia East Plovdiv Airport Plovdiv North BG PL Iłowa Warsaw East Warsaw South Opole Belgrade West Kragujevac Novi Sad Belgrade North RS Bucharest West Bucharest Chitila Ineu Salonta Sibiu Cluj Bucharest Timioara Timioara South Caransebe Arad West Bucharest North Bucharest South Bucharest Mogooaia Arad Turda Piteti Deva RO Arad North Braov West Bucharest South II Craiova Oradea Sibiu East Târgu Mure Growth of CTPark Network 1998-2022 66 1998 99 2000 01 02 03 04 2005 06 07 08 09 2010 11 12 13 14 2015 16 17 18 19 2020 2021 2022 1998 99 2000 01 02 03 04 2005 06 07 08 09 2010 11 12 13 14 2015 16 17 18 19 2020 2021 2022 Top 10 Parks Size of spheres represent current park GLA as of 31.12.2022 Location represents when a Park first registered GLA CTPark/Industrial location CTHub/Urban Mixed Use * Third party AUM ** Partly third party AUM Budapest East Budapest West Budapest South Tatabánya Arrabona Arrabona II Szombathely Komárom Székesfehérvár Budapest Campus Budapest North Budapest Vecses Budapest Ecser Kecskemét Mosonmagyaróvár Szombathely East HU Jihlava Okříšky Louny Lysá n. Labem Humpolec Hranice Prague East Divišov Brno Plzeň Bor Ostrava Kadaň Pardubice Pohořelice Žatec Liberec Teplice Ponávka Brno South Zone Ostrava Nový Jičín Modřice České Velenice CZ Spielberk IQ Ostrava Mladá Boleslav Prague Airport Hlubočky Přeštice Žatec II Zákupy Kvasiny Blučina Planá Ústi n. Labem Kutná Hora Chomutov Hradec Kraálové Most Lipník n. Bečvou Cerhovice Prague West Blatnice Nošovice Brno Líšeň Česká Lípa Aš Vlněna Karviná Ostrava Poruba Cheb Chrastava Mladá Boleslav II ** Prague North Hlohovec Bratislava Trnava Nitra Žilina Žilina Airport Prešov South Košice Voderady Nové Mesto Krásno n. Kysucou Námestovo SK Dunaj Acquisition of DIR portfolio DE AT St. Pölten North Vienna East NL Rotterdam Gorrinchem Soia Soia Airport Soia R.R Soia East Plovdiv Airport Plovdiv North BG PL Iłowa Warsaw East Warsaw South Opole Belgrade West Kragujevac Novi Sad Belgrade North RS Bucharest West Bucharest Chitila Ineu Salonta Sibiu Cluj Bucharest Timioara Timioara South Caransebe Arad West Bucharest North Bucharest South Bucharest Mogooaia Arad Turda Piteti Deva RO Arad North Braov West Bucharest South II Craiova Oradea Sibiu East Târgu Mure 67 3.1 Business Environment and Trends The resiliency of Europe’s Industrial & Logistics (“I&L”) sector is underpinned by multiple demand drivers and elevated barriers to new supply. Drivers of demand are diverse and include nearshoring, e-commerce and undersupplied markets. Elevated barriers include increased scarcity of land and a stricter regulatory environment. RESILIENCY SUPPORTED BY SECTOR DRIVERS AND BARRIERS Historically, the European I&L sector has outperformed the wider econ- omy. A comparison of GDP growth and the growth of occupied logistics stock supports this view. In 2009–2022, total GDP growth was 12%, while occupied grade-A logistics stock more than doubled, as markets are driven by multiple demand drivers and are undersupplied. A similar analysis of office space growth (+15%) reveals that the office sector is more aligned with the GDP trend and can therefore be considered as more cyclical. The proven resiliency of I&L supports a positive outlook, despite the current turbulent macro-economic conditions. I&L real estate has transitioned from being purely a cost centre to a driver of operational performance, as companies prioritise the effi- ciency, reliability, flexibility, and agility of their supply-chain networks. Grade A real estate can support these priorities. This transition to a driver of performance makes sense from a core supply-chain cost per- spective as well. According to CBRE Supply Chain Advisory, the highest share of logistics spend is on transportation (45%–70%). The share of fixed facility costs (including real estate) is relatively small, accounting for only 3%–6%. CBRE estimates that it takes roughly an 8% increase in fixed facility costs to equal the impact of just a 1% increase in trans- portation costs. This is particularly important in an environment of high transportation costs and the greening of supply chains. 2022 in Review 68 NEARSHORING IS A DURABLE SOLUTION FOR CLIENTS TO MITIGATE MARKET VOLATILITY An immediate response to mitigate the risks of supply chain disrup- tions is for companies to hold higher inventories. Risks of disruptive events seem here to stay, and companies are prioritising the more du- rable solution of decoupling global supply chains by nearshoring their operations closer to consumers. In addition to risk mitigation, an- other reason to prioritise nearshoring is the accelerated wage growth in traditionally low-cost Asian manufacturing markets. The trade-off be- tween low-cost production in Asia and longer supply chains is no longer as attractive. According to Economic Research Institute and Salaryex- pert.com, the average hourly rate for a forklift operator is at the same level in mainland China as in the Czech Republic. In CTP’s other CEE markets, rates are even lower. A third reason supporting nearshoring is its reduced environmental impact: a company can significantly lower its carbon footprint by reducing the intercontinental trans-shipment of goods and materials. Most of the demand driven by nearshoring is expected to be con- centrated in CEE – the “business smart” region of Europe. The region is well situated from a geographical perspective, delivering access to the whole of Europe from a cost-effective location, supported by mod- ern logistics infrastructure and connectivity and benefiting from major transportation hubs close to Europe’s largest markets with high pur- chasing power. Equally, in terms of industrial activity, the region boasts high-end manufacturing capabilities in locations close to university cit- ies with access to a highly skilled and motivated workforce. Favourable labour costs further contribute to cost-effective operations. Total la- bour costs in the transportation & storage and manufacturing indus- tries in CEE are approximately one-third less compared to Western Europe. For these reasons, the CEE region is attractive for companies seeking to take advantage of nearshoring, near-sourcing, and friend shoring. The CEE’s favourability is reflected in multiple surveys, includ- ing the sourcing strategy report by Maersk. For European companies, three of the top ten countries across the globe for nearshoring are in CEE. In addition to Poland, which heads the list, the ranking also in- cludes Romania and the Czech Republic. E-COMMERCE IS MATURING, RESULTING IN DIVERSE DEMAND AND CONTINUED LONG-TERM GROWTH Online retail sales in Western Europe have recently stabilised in the post-lockdown era. This comes after the acceleration of online sales growth during the Covid-19 pandemic. The main reasons of this tempo- rary pause are consumers returning to physical retail (“revenge shop- pers”) and increased caution on spending due to macro-economic con- ditions. However, penetration levels today and in the future remain well above the pre-pandemic trendline. Retail experts foresee sustained e-commerce growth over the medium term, as its benefits (price trans- parency, product availability and speed) are hard to replicate. Diversifying e-fulfilment demand is a result of more product cate- gories (e.g., groceries) moving online, particularly since the pandemic. There is a broad range of sectors and company sizes active in CTP’s markets. Demand is diverse but client requirements are focused on proximity to end-consumers, availability of labour, sufficient/reliable energy and the opportunity to expand. To successfully execute an on- line or omnichannel retail model, e-tailers require more flexible, well-lo- cated logistics properties that can accommodate their entire product range and enable them to deliver orders and manage returns quickly and cost effectively. All CEE countries where CTP is active are forecasted to see contin- ued growth, but maturity differs. This is reflected in the online sales penetration levels. Slovakia, Romania, Hungary and Bulgaria are ex- pected to reach a critical mass in years to come with average pen- etration levels at ~15% by 2026. Poland and the Czech Republic are expected to have one of the highest online sales ratios in Europe by 2026 and are benefitting from significant e-commerce related demand already. Despite buoyant growth projections for the next four years, CEE penetration levels (20%) are still well below the United Kingdom (33%), illustrating the future growth potential for the CEE region. LONG-TERM TREND OF DIVERSE DEMAND AND UNDERSUPPLIED MARKETS ISOLATES MARKET VOLATILITY Demand in Europe’s I&L sector is broad based and originates from a diverse pool of client categories. This is reflected in CTP’s portfolio, as the Group’s top 50 clients represented only 32.8% of total Gross Rental Income in 2022. This diversity across a wide range of categories isolates the risk of becoming too dependent on a single sector or cli- ent. CTP’s client base is diverse, particularly in CEE markets, given the higher share of final assembly and value-add services. This diverse demand is taking place in a market that is tight, as va- cancy across Europe is near record lows. I&L is undersupplied, as the sector is a relatively young asset class compared to other commercial real estate. The pan-European market only emerged following the es- tablishment of the Schengen visa-free trade zone. Undersupplied mar- kets create structural demand as clients continue to upgrade to mod- ern grade-A stock. Growth markets in CEE, such as Bulgaria, Romania and Serbia, have <0.35 sqm of grade-A stock per capita, which places them among the most undersupplied markets in Europe. These under- supplied markets are catching up, fuelling demand as they move closer to European averages. However, differences between markets remain, given differences in wealth and role in the pan-European supply chain. ELEVATED SUPPLY BARRIERS DUE TO LAND SCARCITY AND RISING REGULATORY REQUIREMENTS CREATE STRUCTURAL CONSTRAINTS Barriers to new supply are expected to rise in years to come. This mit- igates the risk of potential oversupply and is expected to keep market vacancy rates at low levels. Land is (extremely) scarce in more mature markets such as Germany, the Netherlands, Austria and the Czech Republic. Supply barriers are rising in other CEE markets as well, par- ticularly at sites close to key economic clusters. Business Environment and Trends 69 The second driver of constraints are rising regulatory requirements. Obtaining permits to (re)develop requires more time, delaying future new supply. Long and expanding regulatory requirements is a trend seen across Europe but is most visible in markets with the tightest supply, e.g., Germany and the Czech Republic. In Western European markets, acquiring a permit takes on average from one and a half to almost three years. Permitting timelines are expanding for multiple reasons, including lack of staff at public authorities and/or stricter requirements. In Western European countries, permitting timelines are five to ten months longer compared to the situation pre-pandemic (2019). Although the CEE countries CTP is active have also seen an increase in the time required to obtain a permit, the number of months remains much lower, reflecting the more business-friendly approach. As supply barriers are rising, today’s infill markets are expected to be- come ultra-infill in the future. Therefore, supply barriers are also a driver of future rent growth performance. THE INTERPLAY BETWEEN STRUCTURAL DEMAND AND SUPPLY TRENDS SHAPES MARKET FUNDAMENTALS In many of CTP’s markets, vacancy levels remain at historic lows due to structural demand drivers and rising barriers. In nine of the ten countries where CTP operates, market vacancy in Q4-2022 was lower compared to their three-year quarterly averages, which were already considered as low. Since the 2007–2009 global financial crisis ("GFC"), the I&L sector has matured and institutionalised. This has led to more disciplined supply and structurally lower vacancy levels compared to 2007, leading to I&L being better positioned than during the GFC. Low availability is a challenge for clients that need to expand, but it is a driver of rent growth. The second driver of rent growth is continued elevated demand. De- spite macro-economic turmoil, demand held up in 2022 and sentiment remained (cautiously) optimistic. After an all-time record net absorp- tion (change of occupied stock) in 2021, CBRE reports the second-high- est net absorption of over 20 million sqm for 2022 (EU-9 countries, as of Q4 2022). Completions have slowed in the second half of 2022, but remain high from a historic perspective (EU-9 countries, as of Q4 2022). Most new supply is built-to-suit, as demand is high and availa- bility low. For 2023, a further slowdown of completion levels is expect- ed, driven by rising supply barriers and increased financing challenging for some (trader) developers. The continued supply-demand imbalance fuels rent growth. Rising replacement costs—a combination of increasing land values and construction costs—have put upward pressure on rents as well. The war in Ukraine resulted in a strong spike of construction costs in the first half of 2022. In second half of the year construction costs de- clined but remained elevated. This clearly had an impact on the Polish market, where rents increased by over 30%, as developers needed to integrate spiking construction costs into rents. The combination of low vacancy, continued elevated demand, dis- ciplined new supply and rising replacement costs resulted in outsized rental growth in many markets in 2022. European average rent growth was over 10% in 2022, the highest level ever recorded. Two of the top- three fastest-growing markets are in CEE, due to a combination of supply-demand imbalance (particularly the Czech Republic) and rising replacement cost (particularly Poland). Germany and The Netherlands benefit of multiple demand drivers; including entry point to Europe, economic backbone of the Continent and large concentration of afflu- ent consumption centres. At same time, these markets are being faced with high regulatory barriers and low land supply, leading to a struc- tural demand and supply imbalance. A driver of rent growth today and expected in nearby future. CAPITAL MARKETS SHIFTED TO PRICE DISCOVERY AND UNCERTAINTY Commercial real estate, including I&L, saw a change from continued strong capital growth at the start of the year, to more uncertainty around capital values and a slowdown of growth at end-2022. CEE markets are differently positioned, as they have not seen the high de- gree of compression as in Western Europe. Given the macro-economic uncertainty, including rising interest rates, price discovery continues. Continued strong rent growth, partly driven by indexation, can have the ability to offset widening yields, as seen in CTP’s Q4-2022 valua- tions. 2022 in Review Note: Countries include BE, CZ, FR, DE, IT, NL, PL, ES, UK. Logistics and GDP is at the national level, occupied stock growth for offices is capital cities only. Source: CTP Research and Strategy, IMF, CBRE, Colliers Fig. 1 Growth comparison: GDP, office and logistics sectors in 2009–2022 (index 2009=100) 12 15 116 GPD Office: Occupied Stock Logistics: Occupied Stock 120 100 80 60 40 20 0 70 Source: CTP Research and Strategy, Eurostat 28% 17% -49% Netherlands Poland Romania Austria Germany Czech Republic Slovakia Hungary Bulgaria Serbia 48% 100% 50% 0 -50% -100% -55% -58% -60% -62% -73% -74% Fig. 2 Difference in labour costs (transportation and storage sector) compared to EU-27 avg. in 2021 (EU-27 avg.: €19.3/hr) (in %) Business Environment and Trends E-commerce penetration (%) Fig. 3 Source: CTP Research and Strategy, Oxford Economics, Eurostat, Statista 2010 2014 2018 2022 UK AT HU BG RO SK RS NL PL DE CZ 2011 2015 2019 2023F2012 2016 2020 2024F2013 2017 2021 2025F 2026F 35% 30% 25% 20% 15% 10% 5% 0 26.9% 4.3% 8.6% 9.8% 11.5% 11.8% 16.2% 16.8% 17.9% 16.1% 71 Zoning & permitting times / market (months) Fig. 5 Source: CTP Research and Strategy, CTP’s local construction leads 40 30 20 10 0 Growth Core Western Europe GLA per capita (in sqm) Fig. 4 Source: CTP Research and Strategy, CBRE, Colliers 2.5 2.0 1.5 1.0 0.5 0 2.22 1.25 1.15 1.01 Netherlands United Kingdom Poland France Austria Spain CTP Countries EU-19 Countries Italy Portugal Romania Belgium Germany Czech Republic Slovakia Sweden Hungary Bulgaria Serbia 0.70 0.97 0.69 0.69 0.68 0.67 0.65 0.44 0.43 0.42 0.40 0.32 0.26 0.64 0.22 CTP countries European countries 2022 in Review 72 Business Environment and Trends Note: vacancy level of Hungary, Romania, Serbia and Bulgaria is based on the capital city Source: CTP Research and Strategy, CBRE, JLL, Colliers Q4 2022 Three-Year Quarterly Average Absorption (L) million sqm Completions (L) million sqm Vacancy rate (R) % Market vacancy rates (in %) Fig. 6 6.8% 5.3% 2.0% 1.1% 0.3% 3.1% 2.4% 4.0% 4.0% 6.1% 3.8% 5.8% 5.4% Austria Slovakia Hungary Czech Republic Netherlands Germany Bulgaria Poland Romania Serbia 8% 6% 4% 2% 0 2.6% 3.6% 6.4% 6.8% 1.2% 2.1% 3.6% Note: Countries included: BE, CZ, FR, DE, IT, NL, PL, ES, UK Source: CTP Research and Strategy, CBRE, JLL, Colliers Fig. 7 Market fundamentals (sqm / %) 2010 2011 2019 2020 2021 2022 20182012 2013 2014 2015 2016 2017 25.0 20.0 15.0 10.0 5.0 0 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0 8.8% 2.6% 73 3.2 Operational Performance CTP continued its strong operational performance in 2022, as the Group capitalised on strong occupier demand as well as its unique in-house capabilities and strong cash-flow- generating portfolio. Delivering on its promises as set during its IPO in 2021, the Group is well positioned for its next growth phase, with the target to reach 20 million sqm before the end of the decade. STANDING PORTFOLIO Over the past 24 years, CTP has grown into Europe’s largest listed industrial and logistics landlord. The Group develops, owns and man- ages a high-quality portfolio of assets in over 200 locations spanning ten countries and serving over 1,000 clients. The scale and quality of its investment portfolio, with its highly diversified tenant base, un- derpins CTP’s ability to deliver resilient, growing cash flows and at- tractive capital appreciation over the longer term. In an increasingly competitive market, the Group’s “Parkmaking” expertise and vertically integrated operating platform are integral to its ability to execute its strategy and deliver growth and performance across its market-lead- ing portfolio situated throughout continental Europe. The Group increased the size of its investment portfolio to 10.5 mil- lion sqm of GLA at end-2022, from 7.6 million sqm at the end of 2021. CTP completed 1.0 million sqm of developments and acquired 1.8 mil- lion sqm of value-add and income-producing assets, which drove the growth in GLA. 2022 in Review GRI 201-1 74 The acquisition of assets is part of CTP’s strategy and will either be in response to a customer requirement, adjacent to existing CTP proper- ties, or to provide the Company with a foothold in a new country. The Group accelerated its acquisition programme in 2022 and purchased a total of 1.8 million sqm of assets. The acquisition of Deutsche Industry REIT AG (“DIR”), with a total of 1.6 million sqm, made up the largest part of the Company’s acquisitions in 2022 and secured an attractive entry point for the Group in the German market. The strength of the Company’s reputation and established network of relationships ena- bled it to make most of these acquisitions off-market. CTP benefits from first-mover advantage and established scale in its four Core Markets, which together represent 76% of the Group’s total GLA. It remains the largest owner of industrial and logistics real estate assets in the Czech Republic, Romania, Hungary, and Slovakia, with a combined market share in the four countries of 27.8% at year- end (31 December 2021: 27.5%) as measured by in-place GLA. The level of its market share illustrates that the Group has become partner of choice for industrial and logistics occupiers in key CEE markets. CTP continued to make strong progress in 2022 within its Growth Markets. In Poland it aims to secure a competitive market position within the next three to five years, while it already has a market-leading position in Serbia and Bulgaria. The Group’s next 12 months’ revenue increased to €589 million (31 December 2021: €437 million), an increase y-o-y of 35%. The main drivers of this increase were the integration of DIR into CTP (€65 mil- lion), 2022 deliveries (€32 million), income growth in the standing port- folio (€31 million), future developments (€13 million) and acquisitions (€11 million). An increasing proportion of the rental income stream generated by CTP’s investment portfolio benefits from contracted annual rental growth and inflation protection. Since end-2019, all of the Group’s new lease agreements include a double indexation clause, which calculates annual rental increases as the higher of: • a fixed increase of 1.5%–2.5% a year; or • the Consumer Price Index. As at 31 December 2022, 49% of income generated by the Group’s portfolio includes this double indexation clause, and the Group is on track to increase this to around 70% by the end of 2023. The remain- ing 51% of the portfolio has only a fixed increase of 1.5%–2.5% a year, and therefore more reversionary potential built-in. The indexation takes place on 1 January of each year in majority of the contracts. The Company’s occupancy stood at 94% at year-end (31 Decem- ber 2021: 95%), or 95% excluding Germany. CTP targets an occu- pancy rate of at least 95% with a few percentage points of vacancy, as this flexibility is key to optimise tenant relationships and drive rental growth. Therefore, CTP starts some developments before having secured pre-letting; however, this is concentrated in existing parks, where the Company has good visibility on future demand and knows the market well. This allows CTP to have a market-leading tenant re- tention rate of 90% (31 December 2021: 92%). The rental income generated by CTP’s portfolio is underpinned by a wide and diversified international tenant base of blue-chip companies from a broad range of industries. These include manufacturing, high- tech/IT, automotive, and e-commerce, retail, wholesale, and third-party logistics. This tenant base represents a solid balance between diver- sification and concentration for the Group, with no single tenant ac- counting for more than 2.5% of its annual rent roll. CTP’s top 50 occu- piers account for 32.8% of its rent roll. The rent collection level increased to 99.7% (31 December 2021: 99.4%). In total, the Company signed 1,883,000 sqm of leases (2021: 1,704,000 sqm), of which 142,000 sqm are future projects. The large amount of sqm signed for future projects is a clear illustration of continued strong occupier demand. In 2022, CTP realised a like-for-like growth of 4.5%, mainly driv- en by reversion and indexation. The weighted average unexpired lease term (“WAULT”) of CTP’s investment portfolio stood at 6.5 years at the period end (31 December 2021: 6.7 years), in line with the Compa- ny’s target of >6 years. The reversionary potential stands at 12.5% as at 31 December 2022, illustrating the future rental growth potential. Based on the ex- piry schedule, the Group is expected to be able to capture more than 50% in the coming five years. During 2022, leases were signed on average 6.5% above their Esti- mated Rental Value (“ERV”), supporting both the Group’s reversionary potential and valuations, with an increasing trend from 4.6% in Q1- 2022 to 12.5% in Q4-2022. Operational Performance 75 YE 2018 10,4672,850 782 1,735 500 4,600 2019 2020 2021 2022 YE 2022 12,000 10,000 8,000 6,000 4,000 2,000 0 Fig. 9Fig. 8 10,467 Growth of GLA by driver (in '000s sqm) 1,039 1,811 7,617 YE 2021 YE 2022 Deliveries Acquisitions, Divestments & GLA Adjustments 12,000 10,000 8,000 6,000 4,000 2,000 0 Fig. 10 CTP market share evolution of in-place GLA, Core Markets * (in %) Fig. 11 CTP market share of take-up, last four quarters, Core Markets * * (in %) Growth of GLA (in '000s sqm) 2022 in Review * CZ, RO, HU, SK Source: CBRE * CZ, RO, HU, SK Source: CBRE YE 2019 YE 2020 YE 2021 YE 2022 24.2% 27.5% 29% 28% 27% 26% 25% 24% 23% 22% 21% 23.9% 27.8% Q1 Q2 Q3 2022 Q4 33.4% 27.3% 40% 35% 30% 25% 20% 15% 10% 5% 0 25.1% 31.8% 76 Occupancy (in %) Fig. 12 Fig. 13 Tenant retention (in %) 94% 94% 2018 2019 2020 2021 2022 * 100% 90% 80% 70% 60% 50% 95% 95% 95% 92% 2018 2019 2020 2021 2022 86% 83% 92% 100% 90% 80% 70% 60% 50% Fig. 14 589 11 31 32 13 437 YE 2021 Future developments Acquisitions CTP Germany YE 2022 Standing assets Deliveries 2022 700 600 500 400 300 200 100 0 Next 12 months’ contracted revenue (€ million) Fig. 15 Collection rate * (in %) 2018 2019 2020 2021 2022 99.8% 99.7% 98.5% 100% 99% 98% 97% 96% 99.2% 99.4% * Germany included from 2022. Excluding Germany, occupancy stood at 95%. * Based on uncollected rent that was written off 90% 65 Operational Performance 77 Like-for-like rental growth * (in %) Fig. 17 WAULT to expiry (years) Fig. 18 6.5 2018 2019 2020 2021 2022 5.4 5.4 8 6 4 2 0 6.7 6.0 1,883 2018 2019 2020 2021 2022 727 1,143 2,000 1,500 1,000 500 0 1,704 1,175 Reversionary potential by market (%) Fig. 19 Growth Markets Group Core Markets Western Markets 30% 20% 10% 0% 12.1% 12.5% 8.9% 27.6% 2022 in Review * In 2022, CTP changed its reporting methodology to adhere to EPRA standards, 2021 is calculated for comparison purposes. Fig. 16 Leasing activity development ('000s sqm) 4.5% 1.5% 2018 2019 2020 2021 2022 1.5% 1.4% 1.6% 5.0% 4.0% 3.0% 2.0% 1.0% 0 3.8% 78 Q1 Q2 Q3 Q4 2022 Average 2022 4.6% 6.0% 6.2% 12.5% 2023 2024 2025 2026 2027 45 40 35 30 25 20 Annualized Rent ERV Reversion (%) 10.6% 11.4% 13.8% 11.1% 16.0% 12.0% 8.0% 4.0% 0 Fig . 20 Expiring annualised rental income, ERV & reversionary potential (€ millions, %) Fig. 21 Leasing vs. ERV (%) 7.4% 14% 12% 10% 8% 6% 4% 2% 0 6.5% Operational Performance 79 DEVELOPMENT CTP continued its disciplined investment in its highly profitable pipe- line. In 2022 the Group completed 1.0 million sqm of developments (2021: 0.9 million sqm), which were approximately 80% let and which will generate an annualised contracted rental income of €45 million. Deliveries in 2022 were back-end loaded, as some projects were de- layed in order to benefit from the decreasing construction cost during the second half of the year, with the delivery of some projects also slip- ping into 2023. Main deliveries were: 60,000 sqm in CTPark Bor (leased to GXO Logistics), 40,000 sqm in CTPark Iłowa (leased to Hermes OTTO), 34,000 sqm in CTPark Bucharest North (leased to Mediplus). De- spite the overall higher construction cost during 2022, by capitalising on strong occupier demand, low vacancies and the growth of market rents, CTP was able to deliver projects in 2022 with a YoC of 10.1% (2021: 11.2%). For the 1.7 million sqm of projects under construction at the pe- riod end, the estimated YoC remained strong at 10.1%. Projects under construction—which are at a record high—have an annualised income potential of €115 million. Poland is the country with the highest amount of sqm under construction, where the Group is doing more speculative development as part of its market-entry strategy. CTP’s has a long track record of delivering sustainable growth through its tenant-led development in its existing parks. Fifty-eight percent of the Group’s projects under construction 1 and 62% of its landbank is in the vicinity of its existing parks, which typically provides the benefit of existing infrastructure and zoning. This allows the Group to mitigate development risk and respond swiftly to the expansion re- quirements of existing clients. In 2022 demand from existing clients, either expanding operations within their current location or signing a new lease for space elsewhere in the CTPark Network, represented 54% of leases by sqm, or 63% re- stated for the Tesco, international fashion retailer and LPP deals (the three largest deals signed during 2022). CTP’s landbank amounted to 20.3 million sqm at year-end (2021: 17.8 million sqm), which allows the Company to reach its target of 20 million sqm GLA before the end of the decade. The Group replenishes and grows its landbank on a continuous ba- sis. CTP focuses on acquiring development sites that are adjacent to existing parks or in sought-after locations with proximity to strong logistics hubs and transport corridors and large, densely populated cities. In 2022, the Group invested €279 million (2021: €193 million) to expand its landbank (excl. options), focusing particularly on acquiring sites within its Growth Markets. CTP’s landbank is either held directly in ownership or controlled by way of exclusive long-term option agreements. CTP can typically exer- cise such option agreements once the appropriate zoning is received, which is an effective risk management approach, as while they require typically a small down payment, it delays the Group’s capital deploy- ment until there is a clear development potential. As at 31 December 2022, 22% of the landbank was comprised of options, while the remaining 78% was owned and accordingly reflected on the balance sheet. The total landbank, which is part of the Group’s Investment Properties, was valued at €733 million (2021: €527 million). The revaluation in 2022 amounted to €3 million (2021: €43 million). YE 2021 Fig. 22 GLA delivery per quarter of own development ('000s sqm) 6,195 110 330 553 47 Q1 Q2 Q3 Q4 YE 2022 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2018 2019 2020 2021 2022 Fig. 23 Estimated yield on cost, projects under construction (in %) 16% 14% 12% 10% 8% 6% 4% 2% 0 11.0% 10.1% 11.6% 13.5% 10.8% 2022 in Review 5,155 1 Excluding Poland, where the Group has more speculative developments in new parks as part of its market entry. 80 Fig. 24 Under construction 2022 ('000s sqm) 1,726 YE 2022 1,807 -585 -454 958 New Projects Deliveries Deliveries started in 2022 YE 2021 2,000 1,500 1,000 500 0 Poland 500 Romania 237 Serbia 170 Netherlands 120 Hungary 206 Bulgaria 100 Austria 89 Slovakia 38 Czech 265 Fig. 25 GLA under construction by country ('000s sqm) Fig. 26 Projected annualised rental income per country, IPuD (%) €115 million Operational Performance Czech Republic 22% Netherlands 13% Hungary 10% Poland 22% Romania 10% Serbia 10% Slovakia 2% Austria 5% Bulgaria 6% 81 2022 in Review Fig. 29 Acquired landbank (excl. options) ('000s sqm) 6,913 2,962 1,493 1,567 Q1 Q2 Q3 Q4 YE 2022 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 891 Fig. 27 Landbank evolution ('000s sqm) 20,297 Disposal (incl. option expiries) YE 2022 11,075 -2,896 -3,039 -2,674 17,831 Transfer to IP/IPuD New acquisitions Transfer from land under option to land owneed YE 2021 35,00 30,000 25,000 20,000 15,000 10,000 5,000 0 Land owned Land Under Option Fig. 28 Value of current landbank by country (in %) Czech Republic 27% Serbia 7% Netherlands 8% Hungary 10% Poland 14% Romania 19% Slovakia 11% Austria 1% Other 1% Bulgaria 2% 82 Total installed capacity (in MWp) Fig. 31 Netherlands Group YE 2022 7.3 38.4 20 15 10 5 0 Czech Republic Romania Hungary Slovakia Poland Serbia Bulgaria Austria 6.1 6.4 10.9 Germany 3.6 1.9 0.3 0.3 14.4 Installed in 2022 Installed before 2022 Fig. 30 Income from the sale of solar electricity (€ '000s) 4,301 3,326 2018 2019 2020 2021 2022 3,185 3,254 3,236 5,000 4,000 3,000 2,000 1,000 0 Operational Performance ENERGY In line with its ESG ambitions CTP further accelerated its roll-out of solar photovoltaic (“PV”) systems in its parks, boosting the Company’s energy business. By year-end CTP had installed 38 MWp, and its tar- get is to add at least an additional 100 MWp over the course of 2023. The Group targets a YoC of 15% for these investments, based on nor- malised pricing assumptions. The Company’s largest PV installations currently in operation in- clude CTPark Amsterdam City, CTPark Rotterdam, CTPark Bor and CTPark Bucharest West. The income from its energy business in 2022 amounted to €4.3 mil- lion, up 33% compared 2021, on the back of higher energy prices and increased capacity. CTP expects to be able to triple the income of its energy business in 2023. To get a better understanding of tenant energy compensation on a real-time basis and help tenants to improve their energy efficiency and implement energy savings, in 2022 the Group started with the roll-out of smart metres. 83 3.3 Financial Performance In 2022, CTP continued to deliver on its promises with another year of strong financial performance, despite the macroeconomic and geopolitical volatility seen throughout 2022. CTP delivered a record high 1.0 million sqm of GLA (excluding acquisitions), which brough the total GLA of its investment portfolio at the end of the year to 10.5 million sqm, while keeping its robust balance sheet and sound financial policy. In € million 2018 2019 2020 2021 2022 Rental income 242.0 258.0 291.9 334.7 485.0 Net rental income 232.2 239.8 280.7 326.9 452.1 Operating profit (excl. valuation result) 243.0 211.1 239.7 276.3 360.3 Net valuation result on investment property 239.4 406.8 152.2 1,100.6 723.6 Profit/loss before finance costs 482.4 617.9 391.9 1,376.8 1,083.9 Profit for the period 361.5 392.2 252.5 1,025.9 796.5 2022 in Review GRI 201-1 84 Revenues CTP increased its Net Rental Income (“NRI”) by 38.3% to €452.1 mil- lion compared to €326.9 million in 2021, driven by new developments and like-for-like growth of 4.5% across the Group’s markets. The Company’s NRI in its Core Markets grew by 22.6% y-o-y to €385.4 mil- lion, while cumulative NRI in its Growth and Western European Mar- kets grew y-o-y by 438.8% to €66.7 million. The significant growth in Growth and Western European Markets is partly attributable to the acquisition of Deutsche Industrie REIT AG “DIR” on 3 February 2022, when CTP Acquired 80.9%, followed by a merger on 23 August 2022 through which CTP gained 100% ownership in DIR, which has been in- tegrated into CTP and is fully consolidated in the FY-2022 financial statements. Since end 2019, all of the Group’s new lease agreements include a double indexation clause which calculates annual rental increases as the higher of: • a fixed increase of 1.5%–2.5% a year; or • the Consumer Price Index. As at 31 December 2022, 49% of income generated by the Group’s portfolio includes this double indexation clause. The remaining 51% has only fixed increase of 1.5%-2.5% per year. By year-end 2023, CTP expects roughly 70% of its lease agreements to have the double index- ation clause. Indexation takes place on 1 January of each year, and therefore the growth in rental income relating to 2022 inflation will only be recorded in the 2023 like-for-like rental growth. Group NRI in 2022 was supported by high collection rates and rever- sion on expiring leases being captured. The NRI to rental income margin decreased y-o-y from 97.7% to 93.2%, mainly due to the acquisition of DIR, however, during the second half of the year the company made significant efficiency gains in its property operating expenses, bringing the Q4-2022 NRI to rental income margin back to 94.7% Net Operating Income (“NOI”) from hotel operations partially recovered from the negative impact of Covid-19 on global travel and increased to €3.7 million from a loss of €2.6 million in 2021. The Group’s NOI from development activities within its industrial and logistics portfolio de- creased slightly from €9.4 million in 2021 to €9.0 million in 2022. As at 31 December 2022, the Group had 38MWp of installed pho- tovoltaic capacity, much of which was rolled out towards the end of the year. Income attributable to energy generation was €4.3 million in 2022. Administrative and operating costs The Group’s administrative and operating costs increased from €58.3 million in 2021 to €103.3 million in 2022. The increase in operating costs reflects the growth of the Company in 2022 and is driven primar- ily by the increase of full-time employees (FTEs) from 520 to 699. CTP also donated €10 million to the UNHCR to help mitigate the migration crisis resulting from the war in Ukraine, which is a one-off expense and adjusted for in the Company specific adjusted EPRA earnings. The non-recurring costs related to the acquisition of DIR amounted to €4.5 million. Foreign currency CTP has minimum exposure to currency risk, as all of the portfolio’s lease agreements are denominated in euros. Net currency conversion risks noted on the balance sheet are also limited, as the valuations of the Group’s properties together with all interest-bearing debt are de- nominated in euros. In terms of transactional currency, a small amount of construction costs is denominated in local currencies. However, this brings limited exposure, as rents related to developments are set at levels that take such risks into account at the time of procurement. Taxation The Group’s effective tax rate decreased slightly from 19.6% in 2021 to 19.3% in 2022. 83.6% of the overall tax expense is a deferred tax expense connected to the net valuation result on Investment Property. The Group’s current tax expense increased from €28.4 million in 2021 to €31.3 million in 2022. Profit The profit after tax for the period decreased by 22.4% to €796.5 mil- lion compared to €1,025.9 million in 2021. This decrease is driven by the lower net valuation result. Company specific adjusted EPRA earnings increased from €186.1 million in 2021 to €265.5 million in 2022. The difference between EPRA earnings and IFRS profit is attributable to several one-off events of which the most significant were: i) Bond repayment costs of €10.4 mil- lion, ii) a donation of €10 million to the UNHCR, and iii) DIR acquisition cost of €4.5 million. The Company specific adjusted EPRA earnings per share increased to €0.61 compared from €0.49 in 2021, which represents a 26% in- crease and is ahead of the guidance that the Group gave. Dividends On 9 June 2022 the Group paid out the final 2021 dividend. Share- holders representing approximately 88% of the total number of out- standing ordinary shares chose to receive the dividend in cash, while shareholders representing approximately 12% of the total number of outstanding ordinary shares opted for payment in stock. On 5 September 2022, CTP paid out its interim dividend of €0.22 per ordinary share for the first half of 2022, which represents 75% of Company specific adjusted EPRA earnings, in line with the Group’s div- idend policy of paying out 70%–80% of its Company specific adjust- ed EPRA earnings. Shareholders were given the choice to receive the 2022 interim dividend in either cash or in shares. The number of divi- dend rights that equates to one new ordinary share was set at 62.5. A total of 41% of shareholders opted for payment of the interim dividend in stock. Following the pay-out, CTP’s total number of shares stood at 444 million shares at year end. CTP will propose a final 2022 dividend of €0.23 per ordinary share to the AGM on 25 April 2023. Subject to approval by the AGM, the total 2022 dividend will amount to €0.45 per ordinary share, representing a pay-out of 74% and growth of 29% compared to 2021. Financial Performance 85 Investment portfolio The value of the Group’s Investment Property increased by 33.7% from €7,575.1 million as at 31 December 2021 to €10,124.2 million as at 31 December 2022. This growth is partly driven by an increase in the Group’s GLA of 2.9 million sqm, comprising 1.0 million sqm of de- velopment completions and 1.8 million sqm of strategic acquisitions, of which 1.6 million sqm is related to the acquisition of DIR. The standing portfolio had a positive revaluation in the first half of the year due to the estimated rental value (“ERV”) growth. In the second half of the year, the portfolio was affected by a 39 bps rever- sionary yield widening from 6.4% to 6.8%, which was however almost fully offset by the continuing growth of the ERV resulting in a like-for- like valuation growth of -0.69% in H2-2022. The like-for-like valuation growth can be split between a yield impact of -4.90% and impact of increased ERVs and others of +4.21%. The gross portfolio yield was at 6.5% as at 31 December 2022, compared to 6.4% as at 31 December 2021. The Group’s Investment Property under Development (“IPuD”) increased to €1,193.3 million as at 31 December 2022, compared to €774.2 million as at 31 December 2021. This increase is mainly driven by the increased pipeline, with 1.7 million sqm of GLA under construc- tion (31 December 2021: 1.0 million sqm). The value of the Group’s landbank, which is part of its Investment Property, increased from €526.8 million to €762.9 million at end-2022, following an active year from a transaction perspective. The Group ac- quired 6.9 million sqm of land (excl. options) for €278.5 million during 2022. The 2022 revaluation can be broken down into: In € million H1-2022 H2-2022 FY-2022 Standing assets 370.3 -123.9 246.4 2022 acquisitions -9.9 35.5 25.6 2022 deliveries 6.9 135.1 142.0 IPuD 106.8 200.2 307.0 Landbank 24.9 -22.3 2.6 Total 499.0 224.6 723.6 EPRA NTA The Group’s EPRA Net Tangible Assets (“EPRA NTA”) increased from €12.06 per share as at 31 December 2021 to €13.81 per share as at 31 December 2022. This 14.5% increase is mainly attributable to the profit generated by the Group, offset by dividend distribution. 2022 in Review 86 3.4 Funding and Hedging GRI 201-1 The Group continued to take a prudent approach to financial pol- icy and credit metrics to navigate the uncertain market conditions witnessed in 2022. CTP ended the year with a solid liquidity profile and conservative repayment profile, with the first material bond repayment in Q4-2023, after which its next material maturity is not until mid- 2025. The Group’s Loan-to-Value (“LTV”) at end-2022 was 45% and its Interest Coverage Ratio (“ICR”) stood at 4.6 times. The Group’s average Cost of Debt increased from 1.2% as at 31 December 2021 to 1.5% as at 31 December 2022 due to the impact of rising interest rates throughout 2022. The impact of higher interest rates on the Company’s current debt is limited, as 100% of the debt is fixed / hedged. CTP pre-hedges upcoming and future funding requirements using derivatives to lock into advantageous interest rates. CTP constantly monitors the financial markets to identify optimum timing and relative value opportunities, and hedges are implemented with global invest- ment banks as soon as there is certainty about the funding needs. On 20 January 2022, CTP issued a €700 million four-year green bond under its Euro Medium Term Notes (“EMTN”) Programme. With this financing, the Group secured a large proportion of its financing needs early in the year, with the annual coupon fixed at 0.875%. To- gether with the issue of the new bond, €168.2 million of the October 2025 Series was tendered successfully. Following the acquisition of DIR, the Group decided to repay early a €118 million bond from DIR due in August 2022, which had an average interest rate of 4%. In addition, the Company leveraged its strong relationship with its banking partners and renegotiated in February one of its facilities, which resulted in a reduction of the margin and an extension of the maturity by an additional three years, until 15 February 2034. In September the Group signed an extension of its loan facility with a syndicate of Czech banks, obtaining €400 million with a fixed inter- est rate of 4.71% and a maturity of nine years. Financial Performance / Funding and Hedging 87 In December, the Group signed a loan facility with two Dutch banks, ob- taining €175 million with a fixed interest rate of 4.27% and a maturity of seven years. The Group’s available cash and cash equivalents as at the year-end stood at €660.6 million. Further to the dealerships with ten banks in its EMTN Programme, CTP holds strong relationships with some 15 internationally operating lending institutions. Ten of these participate in CTP’s €400 million three-year unsecured Revolving Credit Facil- ity (“RCF”), which was committed in July 2021 and serves the Group’s short-term liquidity needs. In addition, as described above, two differ- ent senior secured credit facilities have been granted by syndicates of lending institutions, each of which funds a portfolio of properties. Dur- ing 2022, CTP complied with all conditions that are applicable to these credit facilities. The EMTN Programme enables the Group to issue green bonds on the Dublin Euronext Exchange, the first of which was listed on 1 October 2020. To date, the Group has concluded the following bond issues: Commitment Series Issue Date Coupon Maturity €650 million* Oct2025 01/10/2020 2.125% 5 years €400 million Nov2023 27/11/2020 0.625% 3 years €500 million Feb2027 18/02/2021 0.75% 6 years €500 million Jun2025 21/06/2021 0.5% 4 years €500 million Jun2029 21/06/2021 1.25% 8 years €500 million Sept2026 27/09/2021 0.625% 6 years €500 million Sept2031 27/09/2021 1.50% 10 years €700 million Jan2026 20/1/2022 0.875% 4 years * outstanding balance as at 31 December 2022 was €331.8 million ** outstanding balance as at 31 December 2022 was €549.5 million In September 2022, CTP published its second Green Bond Report. This report includes an overview of the use of bond proceeds for funding eli- gible projects (i.e., green buildings) and features a second-party opinion by Sustainalytics, Inc. In September 2020, the Company received a long-term issuer rat- ing of BBB- (stable outlook) from S&P and a long-term issuer rating of Baa3 (stable outlook) from Moody’s. These ratings are applicable to the unsecured debt that CTP N.V. has issued. Both rating agencies have assigned a stable outlook to each of their respective ratings for the Group and reconfirmed the rating in 2022. Cash flow overview In € million 2022 2021 Cash at beginning of the year 892.8 419.1 Cash flow from operational activities 300.3 139.1 Cash flow from investing activities -1,364.8 -1,435.2 Cash flow from financing activities 837.2 1,768.7 Cash at the end of the period 660.6 892.8 Despite the increased operating costs in 2022, the increase in the Group’s rental income ensured that cash flow arising from operating activities remained strong, increasing from €139.1 million in 2021 to €292.0 million in 2022. The portfolio’s attractive WAULT of 6.5 years provides visibility of income security. EBITDA (excl. net valuation re- sult) grew from €284.7 million to €371.0 million with EBITDA margin, decreasing due to the one-off factors such as the gift to UNHCR and acquisition of DIR. The Group’s cash flow used for investment activities was reduced in 2022, as a result of record levels of constructions and associated capital expenditure as well as acquisitions made during the period. In- vestments in development increased from -€599.6 million in 2021 to -€870.7 million in 2022, with in total 1.0 million sqm delivered in 2022. The cash consideration for the acquisition of DIR amounted to €0.3 million. The cash flow from financing activities amounted to €837.2 million in 2022, following CTP’s €700 million bond issuance in January, the €400 million loan facility extension in September and the new €175 million loan facility in December. This enabled the Group to fund both its development activities during the year, as well as to pre-fund part of the pipeline of developments for 2023. The Group paid out €124.0 million in dividends during 2022 and repaid €391.2 million of bonds and loan facilities. Post-period events On 20 Feburary 2023, CTP announced that it successfully signed an extension of its RCF. The size of the RCF, which has a maturity of three years with two one year extension options, was increased from €400 million to €500 million. While initially a standard margin is applicable, there is the potential to make the facility sustainability-linked, with the margin depending on CTP’s achievement on certain defined sus- tainability KPI’s. 2022 in Review 88 Funding and Hedging Fig. 32 Gross Rental Income by country (€ '000s) Czech Republic 230,301 Romania 84,013 Germany 58,512 Slovakia 37,118 Serbia 12,706 Bulgaria 6,648 Others 6,740 Hungary 48,978 Fig. 33 Net Rental Income by country (€ '000s) Czech Republic 215,536 Romania 85,730 Germany 41,919 Slovakia 36,351 Serbia 12,264 Bulgaria 6,150 Others 5,956 Hungary 48,228 70% Q2 Q3 2022 Q4 2023E 45% 70% 60% 50% 40% 30% 20% 10% 0 49% Fig. 34 Projected % of leases linked to CPI 38% 89 Fig. 36 Fig. 37Value of Investment Property by country (incl. landbank) (%) Value of Investment Property under Development by country (%) Czech Republic 51% Hungary 9% Hungary 8% Romania 16% Romania 5% Germany 0% Bulgaria 3% Germany 9% Slovakia 7% Slovakia 6% Serbia 2% Others 3% Austria 6% Poland 3% Serbia 5% Czech Republic 16% Netherlands 25% Poland 26% 2022 in Review Fig. 35 Investment Property evolution (€ millions) 1 January 2021 Transfer from/to Investment Property Under Development Acquisitions Additions/ Disposals Net Valuation Result 1 January 2022 Transfer from/to Investment Property under Development 10,000 8,000 6,000 4,000 2,000 0 5,386 10,124 7,575 Acquisitions Additions/ Disposals Net Valuation Result 31 December 2022 90 Funding and Hedging Like-for-Like Revaluation Yield Impact ERV & Other Impact Fig. 38 Value of landbank by country (%) Fig. 39 H2-2022 like-for-like revaluation Poland 19% Czech Republic 31% Hungary 10% Romania 13% Slovakia 11% Netherlands 5% Austria 2% Serbia 4% Germany 2% Bulgaria 2% Other 1% 6.0% 4.0% 2.0% 0 -2.0% -4.0% -6.0% Fig. 40 Net valuation result on Investment Property by country (%) Poland 20% Czech Republic 55% Hungary 6% Romania 9% Slovakia 3% Netherlands 2% Austria 2% Serbia 3% Germany -1% Bulgaria 1% Fig. 41 EPRA NTA per share 2018 2019 2020 2021 2022 8.32 4.07 7.57 12.06 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0 13.81 91 0.61 0.44 2018 2019 2020 2021 2022 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0.32 0.38 0.49 Fig. 42 Company specific adjusted EPS (€) Cost of debt (in %) Fig. 43 1.5% 2.0% 2018 2019 2020 2021 2022 5.0% 4.0% 3.0% 2.0% 1.0% 0 2.5% 2.1% 1.2% 2022 in Review 2018 2019 2020 2021 2022 Fig. 44 LTV (in %) 45% 51% 80% 60% 40% 20% 47% 50% 43% 1.1 0.5 2018 2019 2020 2021 2022 1.2 1.0 0.8 0.6 0.4 0.2 0 0.1 1.1 Fig. 45 Available liquidity (€ billion) 0.1 92 Funding and Hedging Fig. 46 Unsecured debt (in % of total debt) 2018 2019 2020 2021 2022 31% 31% 80% 70% 60% 50% 40% 30% 20% 10% 0 4% 75% 68% Debt maturity profile (€ million) Q4 2022 Q4 2021 Fig. 47 427 Less than 1 Year <2 <10+<9<3 <4 <5 <6 <7 <8 23 29 23 1,065 524 516 79 512 325 1,045 425 904 1,235 524 146 708 24 1,488 418 2,000 1,500 1,000 500 0 93 CovenantsFig. 48 2020 73% 3.8 139% 2021 12% 5.0 194% 2022 15% 4.6 185% Covenant level max 40% min 1.5 min 125% Year Secured Debt Test Interest Cover Ratio Unecumbered Assets Test 2022 in Review / Funding and Hedging 94 P O L A N D C Z E C H I A S L O V A K I A H U N G A R Y S E R B I A B U L G A R I A R O M A N I A G E R M A N Y A U S T R I A N E T H E R L A N D S F R A N C E EYGPT T U R K E Y G R E E C E ALBANIA NORTH MACEDONIA MONTENEGRO C R O A T I A S L O V E N I A BOSNIA AND HERZEGOVINA S W I T Z E R L A N D I T A L Y B E L G I U M BASEL ZÜRICH SARAJEVO PODGORICA TIRANA SKOPJE BRUSSELS LUXEMBOURG THESSALONIKI ISTANBUL LILLE ANTWERP LIÈGE METZ STRASBOURG KÖLN MANNHEIM ZAGREB LJUBLJANA TRIESTE VENICE BOLZANO ŁÓDŹ KRAKÓW ROTTERDAM ROTTERDAM ROTTERDAM ROTTERDAM ROTTERDAM UTRECHT KOŠICE KATOWICE WROCŁAW POZNAŃ OSTRAVA BRNO PLZEŇ TIMIŞOARA ARAD DEBRECEN ORADEA TRNAVA ŽILINA GYŐR GRAZ LINZ SALZBURG INNSBRUCK CLUJ BRAŞOV NOVI SAD NIŠ PLOVDIV VARNA BURGAS CONSTANȚA GDAŃSK CRAIOVA MUNICH STUTTGART NÜRNBERG DRESDEN LEIPZIG FRANKFURT DÜSSELDORF DORTMUND BREMEN HAMBURG HANNOVER SZCZECIN ROSTOCK EINDHOVEN AACHEN BERLIN AMSTERDAM SOFIA BRATISLAVA VIENNA BUDAPEST BELGRADE BUCHAREST WARSAW PRAGUE GRONINGEN CTPark / Industrial location KEY CTHub/Urban Mixed Use Major city Capital city Major ports 3.5 Group-level Insights CTPark Network CTP’s unmatched industrial and logistics portfolio—the CTPark Network— is the cornerstone of a resilient European supply chain. The CTPark Network is the largest integrated network of premium business parks in continental Europe. With over 400 locations and a strategic landbank, the CTPark Network provides seamless property solutions for companies to grow, from the North Sea to the Black Sea. Core Markets CTP is the leading logistics player as measured by owned industrial GLA in each of its most established Core Markets: the Czech Republic, Romania, Hungary, and Slovakia. In these four markets combined, CTP further increased its market share to 27.8% as at end-2022. As of 31 December 2022, the Group owned the four-largest industrial parks in the CEE region, including CTPark Bucharest West and CTPark Bucharest in Romania and CTPark Brno and CTPark Bor in the Czech Republic. Growth Markets In recent years CTP has diversified its portfolio and successfully executed its tenant-led expansion into the three new key markets of Serbia, Bulgaria and Poland. They are referred to as “Growth Markets”, where CTP aims to become a prominent player in the medium term. Western European Markets CTP’s access to international capital markets has facilitated its mar- ket entry in Austria and the Netherlands, as well its strategic acquisi- tion to enter Germany. These Western European Markets now enable the Company to service its tenants from the North Sea to the Black Sea, along all main European transit routes, and to grow with them. GRI 201-1 2022 in Review 96 P O L A N D C Z E C H I A S L O V A K I A H U N G A R Y S E R B I A B U L G A R I A R O M A N I A G E R M A N Y A U S T R I A N E T H E R L A N D S F R A N C E EYGPT T U R K E Y G R E E C E ALBANIA NORTH MACEDONIA MONTENEGRO C R O A T I A S L O V E N I A BOSNIA AND HERZEGOVINA S W I T Z E R L A N D I T A L Y B E L G I U M BASEL ZÜRICH SARAJEVO PODGORICA TIRANA SKOPJE BRUSSELS LUXEMBOURG THESSALONIKI ISTANBUL LILLE ANTWERP LIÈGE METZ STRASBOURG KÖLN MANNHEIM ZAGREB LJUBLJANA TRIESTE VENICE BOLZANO ŁÓDŹ KRAKÓW UTRECHT KOŠICE KATOWICE WROCŁAW POZNAŃ OSTRAVA BRNO PLZEŇ TIMIŞOARA ARAD DEBRECEN ORADEA TRNAVA ŽILINA GYŐR GRAZ LINZ SALZBURG INNSBRUCK CLUJ BRAŞOV NOVI SAD NIŠ PLOVDIV VARNA BURGAS CONSTANȚA GDAŃSK CRAIOVA MUNICH STUTTGART NÜRNBERG DRESDEN LEIPZIG FRANKFURT DÜSSELDORF DORTMUND BREMEN HAMBURG HANNOVER SZCZECIN ROSTOCK EINDHOVEN AACHEN BERLIN AMSTERDAM SOFIA BRATISLAVA VIENNA BUDAPEST BELGRADE BUCHAREST WARSAW PRAGUE GRONINGEN CTPark / Industrial location KEY CTHub/Urban Mixed Use Major city Capital city Major ports Group-level Insights 97 Top 10 Parks 2022 The top 10 parks make up 36% of the GLA in CTP’s portfolio. The top 10 parks are home to roughly half of CTP’s 1,000+ clients; and have a development opportunity of more than 1.3 million sqm GLA. The top 10 parks represent the core of the CTPark Network. They are thriving business communities, with a dynamic mix of clients from a broad range of industries. Key Data: Top 10 Parks GLA ('000s sqm) 3,881 10,467 36% Under construction ('000s sqm) 154 1,726 9% Landbank ('000s sqm) 2,639 20,297 13% Tenants (#) 606 1,000+ n/a Buildings (#) 192 690 28% WAULT (years) 6.4 6.5 n/a Occupancy (%) 95% 94% n/a Top 10 as % of total portfolio Total portfolio Top 10 Top 10 Parks GLA 2021 (sqm) GLA 2022 (sqm) Share of GLA Total landbank (sqm) Under construction (sqm) Total properties Occupancy WAULT Tenants Year start Rank Park Country 1 CTPark Bucharest West RO 747,000 767,000 8% 1,333,000 94,000 17 96% 5.9 68 2015 2 CTPark Bor CZ 554,000 640,000 7% 134,000 - 15 96% 7.0 36 2006 3 CTPark Bucharest RO 544,000 547,000 6% 206,000 - 41 97% 4.0 151 2015 4 CTPark Brno CZ 502,000 504,000 5% 237,000 39,000 25 100% 6.9 68 2005 5 CTPark Ostrava CZ 388,000 390,000 4% 20,000 - 28 97% 10.1 120 2006 6 CTPark Budapest West HU 228,000 292,000 3% 188,000 8,000 15 97% 5.1 53 2016 7 CTPark Modřice CZ 207,000 205,000 2% 27,000 - 19 96% 4.6 49 2002 8 CTPark Bucharest North RO 63,000 198,000 2% 30,000 13,000 8 67% 7.5 15 2020 9 CTPark Budapest East HU 182,000 191,000 2% 3,000 - 6 95% 6.5 25 2015 10 CTPark Trnava SK 118,000 162,000 2% 452,000 - 15 100% 5.5 21 2015 Top 10 Deals Reported period 2022 Sqm signed Park Country Industry Existing client? Rank Tenant Short 1 TESCO Q2 99,000 CTPark Sziget HU Retail N 2 International fashion retailer Q3 88,000 CTPark Ploiesti RO Retail N 3 LPP Logistics Q4 66,000 CTPark Bucharest West RO Retail N 4 K&N Q3 52,000 CTPark Bucharest West RO 3PL Y 5 BJS Q1 47,000 CTPark Humpolec CZ Manufacturing Y 6 Lidl Q3 41,000 CTPark Sofia West BG Retail Y 7 Hermes Q2 40,000 CTPark Iłowa PL 3PL N 8 Jusda Q1 37,000 CTPark Pardubice CZ 3PL Y 9 Henniges Q3 37,000 CTPark Hranice CZ Manufacturing Y 10 Arctic Q3 36,000 CTPark Pitesti RO Manufacturing Y 2022 in Review 98 1. CTPark Bucharest West GLA 767 ,000 sqm (2015) 6. CTPark Budapest West GLA 292,000 sqm (2016) 3. CTPark Bucharest GLA 547,000 sqm (2015) 7. CTPark Modřice GLA 205,000 sqm (2002) 8. CTPark Bucharest North GLA 198,000 sqm (2020) 9. CTPark Budapest East GLA 191,000 sqm (2015) 10. CTPark Trnava GLA 162,000 sqm (2015) 4. CTPark Brno GLA 504,000 sqm (2005) 5. CTPark Ostrava GLA 390,000 sqm (2006) 2. CTPark Bor GLA 640,000 sqm (2006) Group-level Insights 99 3.6 Tenants CTP has a wide and diversified international tenant base of blue-chip companies with good credit ratings from a broad range of industries. These include manufacturing (high- tech/IT, automotive) and e-commerce, retail, wholesale, and third-party logistics. CTP’s tenant roster of over 1,000 companies represents a solid balance between diversification and concentration for the Group, with no single tenant accounting for more than 2.5% of its annual rent roll. A diversity of clients and industries are critical to build a resilient, future-proof portfolio: • Warehousing & logistics is a key sector for CTP, and 3PLs, who may serve one or more clients at a specific location. They are in par- ticular focused on strategic locations to optimise their operations. Many clients in this category are international players, which pro- vide opportunities to cross-sell across markets and countries. • Retail is a growing segment for CTP, due to the sector’s historical stronger presence in Western Europe (including the UK), where the retail industry, particularly non-food and e-commerce, has a high- er presence. However, retailers have started looking more to CEE markets, driven by an emerging middle class, higher growth of dis- posable income and outsized e-commerce growth in the region. • Manufacturing is strongly represented in CTP’s portfolio, with cli- ents generally signing longer leases, as relocating is costly and cap- ital intensive. CTP expects strong demand as a result of the near- shoring trend. • Automotive is also strongly represented in CTP’s portfolio due to the large clusters of manufacturers moving to the lower-cost but educated workforce that CEE offers. Automotive manu- facturers can be found in Poland, Romania, Slovakia, the Czech Republic, and Hungary, as well as in CTPs newer markets like Serbia. The growing trend to develop new EV innovations will gen- erate more demand in markets offering significant available work- force and technical education, government incentives and proximity to suppliers. 2022 in Review 100 Fig. 49 Client occupied GLA by industry (in %) Manufacturing 31% 3PL 27% Automotive 21% Wholesale Trade 7% Retail Trade 7% Services 3% Other 3% Finance, Insurance, Real Estate 1% Fig. 50 Occupancy by building size (in % GLA) 10,000—40,000 62% Less than 10,000 16% Over 40,000 22% Tenants 101 Fig. 51 Top 50 clients, industrial grouping as a share of GRI (%) 3PLs 11% Automotive 9% E-commerce, Retail, Wholesale & Distribution 6% Manufacturing 4% High Tech 4% 36.7% TOP 50 share of rented GLA 32.8% TOP 50 share of GRI 3PLs 1. DHL 2. Quehenberger 4. DSV 5. Loxxess 6. Raben 9. Schenker 10. Maersk 16. GXO 20. Kühne Nagel 31. Gebrüder Weiss 42. Dachser 49. Hermes Group Automotive 3. Yanfeng 11. Faurecia 17. Brembo 21. Bridgestone 26. International Automotive Components 27. Kohl Automotive 32. Adient 35. Grammer 41. Grupo Antolin 43. Autoneum 46. Aptiv 50. Lear Corporation E-commerce, Retail, Whoesale and Distribution 8. Primark 13. Schwarz Group 18. Profi Rom Food 24. METRO CASH & CARRY 25. Network One Distribution 28. Tech Data 34. Orbico 36. Versandhaus (babywalz) 37. Mediplus Exim 40. Rohlík 44. ALDI High Tech 14. Honeywell 19. Wistron InfoComm 22. Thermo Fisher Scientific 30. Lenovo Manufacturing 7. Deli Home 12. JV Europe 15. ZETOR Tractors 23. Kompan 29. Haupt Pharma (Aenova) 33. Linea Mexx (Mobexpert) 38. DSL 39. Fasana 45. BJS 48. Sihl 2022 in Review 102 Rank Clinets SQM Of Total rented GLA Buildings Parks Countries Industry Credit Ratings Moodys S&P Fitch 1 DHL 229,000 2.4% 22 14 4 3PL A2 BBB+ 2 Quehenberger 167,000 1.8% 15 7 4 3PL 3 Yanfeng 149,000 1.6% 7 3 3 Automotive 4 DSV 127,000 1.3% 10 5 3 3PL A3 A- 5 Loxxess 125,000 1.3% 4 1 1 3PL 6 Raben 107,000 1.1% 11 11 5 3PL 7 Deli Home 104,000 1.1% 20 1 1 Manufacturing 8 Primark 93,000 1.0% 1 1 1 E-commerce, Retail, Whoesale and Distribution A 9 Schenker 92,000 1.0% 11 8 4 3PL 10 Maersk 92,000 1.0% 3 1 1 3PL Baa2 BBB+ 11 Faurecia 91,000 1.0% 5 5 3 Automotive BB BB+ 12 JV Europe 83,000 0.9% 6 4 1 Manufacturing 13 Schwarz Group 80,000 0.8% 9 6 4 E-commerce, Retail, Whoesale and Distribution 14 Honeywell 80,000 0.8% 6 2 1 High Tech A2 A A 15 ZETOR Tractors 76,000 0.8% 4 1 1 Manufacturing 16 GXO 72,000 0.8% 4 1 1 3PL BBB- BBB 17 Brembo 67,000 0.7% 3 1 1 Automotive 18 Profi Rom Food 66,000 0.7% 2 1 1 E-commerce, Retail, Whoesale and Distribution 19 Wistron InfoComm 66,000 0.7% 2 1 1 High Tech 20 Kühne Nagel 65,000 0.7% 8 5 3 3PL 21 Bridgestone 62,000 0.7% 1 1 1 Automotive A2 A 22 Thermo Fisher Scientific 60,000 0.6% 1 1 1 High Tech A- BBB+ 23 Kompan Czech Republic 58,000 0.6% 4 1 1 Manufacturing 24 METRO CASH & CARRY 57,000 0.6% 2 2 1 E-commerce, Retail, Whoesale and Distribution BBB- 25 Network One Distribution 57,000 0.6% 4 1 1 E-commerce, Retail, Whoesale and Distribution 26 International Automotive Components 57,000 0.6% 4 2 2 Automotive BBB- BBB 27 Kohl Automotive 56,000 0.6% 1 1 1 Automotive 28 Tech Data 53,000 0.6% 1 1 1 E-commerce, Retail, Whoesale and Distribution 29 Haupt Pharma 53,000 0.6% 1 1 1 Manufacturing 30 Lenovo 50,000 0.5% 2 1 1 High Tech Baa2 BBB- BBB 31 Gebrüder Weiss 50,000 0.5% 9 6 4 3PL 32 Adient 49,000 0.5% 2 2 1 Automotive BB- 33 Linea Mexx 47,000 0.5% 3 2 1 Manufacturing 34 Orbico 47,000 0.5% 2 2 2 E-commerce, Retail, Whoesale and Distribution 35 Grammer 47,000 0.5% 2 1 1 Automotive 36 Versandhaus 46,000 0.5% 1 1 1 E-commerce, Retail, Whoesale and Distribution 37 Mediplus Exim 46,000 0.5% 3 3 1 E-commerce, Retail, Whoesale and Distribution 38 DSL 44,000 0.5% 1 1 1 Manufacturing 39 Fasana 44,000 0.5% 1 1 1 Manufacturing 40 Rohlík 43,000 0.5% 5 5 3 E-commerce, Retail, Whoesale and Distribution 41 Grupo Antolin 43,000 0.5% 3 3 3 Automotive 42 Dachser 43,000 0.5% 4 4 3 3PL 43 Autoneum 42,000 0.4% 3 2 2 Automotive 44 ALDI 41,000 0.4% 3 1 1 E-commerce, Retail, Whoesale and Distribution 45 BJS 41,000 0.4% 4 1 1 Manufacturing 46 Aptiv 41,000 0.4% 2 2 2 Automotive BBB BBB 47 Sihl 41,000 0.4% 1 1 1 Manufacturing 48 IRON Mountain 41,000 0.4% 3 2 2 High Tech 49 Hermes Group 40,000 0.4% 1 1 1 3PL 50 Lear Corporation 40,000 0.4% 5 4 3 Automotive BBB- BBB Top 50 Clients Tenants 103 To meet the requirements of global business, CTP has developed five bespoke building types ranging in size and functionality to support a broad spectrum of business activities. CTP’s property types have been designed to accommodate the full range of size requirements and cater to a broad spectrum of industries and sectors, including logistics, e-commerce, manufacturing and supply chains, as well as high-tech manufacturing, advanced R&D, and back-office operations. Each building type can be fully customised to the tenant’s exact requirements and is easily modernised to accommodate a new generation of clients. 2022 in Review 3.7 Five Building Types 104 ctBox From 400-850 sqm ctSpace from 3,000 sqm ctFlex 1,150-3,000 sqm ctLab from 195 sqm Five Building Types ctFit from 5,000 sqm 105 CTPark Ostrava demonstrates how successfully the five property types serve a wide variety of industries and company size and function. CTP has developed all property types in the park, providing long-term resilience and economic stability to the region with a range of companies, from large international blue-chip companies to local startups. ctBox ctFlex ctSpace ctFit Clubhaus ctLab 2022 in Review Property Types: One size does not fit all Planned 106 Five Building Types 107 ctBox Designed for local companies and startups. This simple and functional building provides three necessary areas for a smooth running business: showroom, office space and warehouse. As companies grow, it is easy for them to expand their retail, light manufacturing, or test facilities, etc. From 400-850 sqm 108 Typical Usage B2B retail, showrooms, warehousing / production Typical Size 400-850 sqm Standard Height 7 m Floor Loading 500 kg/sqm (Office), 4 tn/sqm (Warehouse) or 3.2 tn for rack support Standard Grid 15×24 m, office in-built reduced up to 5×6 m Tenants ABB AG Foods Ahifi AkzoNobel Amber Plasma Amtech Amtech Ascendum Hansgrohe Hecht SIEMENS Vekra Windows Vertiv Zenith 109 ctFlex Built with flexibility in mind for growing businesses, ctFlex offers a modifiable and expandable concept for small- and mid-sized companies with built-in offices and warehouses. CTFlex allows companies to focus on their business without being worried about having enough space for operations. 1,150-3,000 sqm 110 Typical Usage Production/warehousing in smaller units that can be merged as clients grow Typical Size 1,150–3,000 sqm Standard Height 10.5 m Floor Loading 5,000 kg/sqm or 3.2 tn for rack support Standard Grid 12×24 m Tenants Allogi Assa Abloy BJS BoBaek DHL Gebrüder Weiss Hella MAPO Medical PaletExpress PPL Rehau Polymer Toyota Logistics Wacker-Chemie Well Well Foods 111 ctSpace Top-quality buildings for global companies designed to accommodate warehousing and distribution needs. The CTSpace concept is ideal for logistics operations, distribution centres or supply -chain hubs. From 3,000 sqm 112 Typical Usage B2B retail, showrooms, warehousing / production Typical Size 400-850 sqm Standard Height 7 m Floor Loading 500 kg/sqm (Office), 4 tn/sqm (Warehouse) or 3.2 tn for rack support Standard Grid 15×24 m, office in-built reduced up to 5×6 m Tenants DB Schenker DHL DSV GXO Hermes LOXXESS MAERSK NOD PRIMARK Quehenberger Raben Wistron Kuhne & Nagel 113 ctFit Ideal for the activities of large enterprises with special technical parameters, such as distribution hubs, chilled warehousing, high- tech manufacturing and R&D laboratories. from 5,000 sqm 114 Typical Usage To meet client specifica- tions, but also suitable for new clients. Typical Size from 5,000 sqm Standard Height Clear height 10.5 m Floor Loading 500 kg/sqm (Office), 5 tn/sqm (Warehouse) or 3.2 tn for rack support Standard Grid 12×24 m, office inbuilt reduced up to 6×6 m Tenants Adient Brembo Faurecia Grammer Honeywell Iron Mountain JV Europe Kompan Metro Orbico Rohlik Sihl Tech Data Thermo Fisher Scientific Yanfeng 115 ctLab ctLab is a cost-effective facility ideal for service centres, software/equipment design, R&D and back-office operations of all types of companies. Flexible floor plans support customisation and future expansion. The concept also includes ground-floor business services and amenities. From 195 sqm 116 Typical Usage Supplementary offices in parks Typical Size from 195 sqm Standard Height 2.8 m Floor Loading 400 kg/sqm Standard Grid Variable, typically 6×6 m up to 7.5×7.5 m Tenants ABB Aeskulab Automators CityGolf Contin Dotykačka Easit Form Factory KPMG Lear LUMAX Lundegaard Madfinger Games mBank Synlab Zebra Technologies 117 120 Czech Republic David Chládek MANAGING DIRECTOR, CZECH REPUBLIC “Despite all the hurdles—Covid, inflation, a building materials market crisis, the overheated labour market—we still managed to hit all our targets, strengthen and grow our team and achieve top profitability in 2022. CTParks Prague North, Ostrava Poruba, Brno, Brno Líšeň, and Bor are a few of our crowning highlights that I’m very proud of, and we have a lot more ahead of us that I’m excited about.” Jakub Kodr MRICS, HEAD OF BUSINESS DEVELOPMENT, CZECH REPUBLIC “2022 handed us some unprecedented situations, but we learned and achieved a lot during the year. We ended 2022 with an outstanding four million sqm of leasable space in the Czech Republic, with an occupancy rate above 98%. Overall, I’m proud of our team, the high level of service we provide our tenants, and our results. We’re more than ready to take on 2023!” 121 MACROECONOMICS INDICATORS Population 10.5 mil. Credit rating Aa3 Hourly compensation in manufacturing €21.90 GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 10.8 mil. sqm Annual growth rate of stock 11.9% CTP market share 28.0% Net take-up 1.5 mil. sqm CTP share net take-up 17.0% Market vacancy rate 1.2% Prime rent (€/sqm/yr) €94.8 Prime yield 4.75% CTP INDICATORS Locations 56 GLA 3,805 thousand sqm Project under construction 265 thousand sqm Landbank 6,592 thousand sqm GAV (in € million) 5,515 LFL Rental Growth 4.5% Client Retention Rate 91% Next 12 m. revenue €271 mil. WAULT 7.1 9.5% 2.3% €10.80 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 122 JAKUB KODR, HEAD OF BUSINESS DEVELOPMENT CZ 123 DAVID CHLÁDEK, MANAGING DIRECTOR CZ CTPark Bor One of CEE’s most successful business parks, CTPark Bor is strategically located in western Bohemia, 50 km from Plzeň’s city centre, with excellent highway con- nectivity and only 15 km from the German border. GLA total: 640,000 sqm GLA growth 2022: 92,000 sqm Landbank: 134,000 sqm Clients: 36 Solar power: YES Community: Clubhaus, 800-bed affordable housing (400 Under Construction),exercise park 124 TOP 10 PARKS 126 CTPark Prague East Direct higway visibility, strategically situated on the major North-South highway and the Prague ring road, providing excel- lent connectivity to Prague's city centre, international airport and the major north- south European corridor. GLA total: 88,900 sqm Landbank: 54,900 sqm Clients: 25 Sustainability: EV charging stations Community: restaurant, exercise area, bike paths 127 CTPark Aš The Czech Republic's westernmost location, CTPark Aš is located only 3 km from the German border and with great excellent access to the main cross-border highways and the city centre of Aš, which has a strong manufacturing tradition. GLA total: 54,000 sqm GLA growth 2022: 18,000 sqm Landbank: 76,000 sqm Clients: 6 Sustainability: Solar plants (planned) 128 129 130 131 CTPark Ostrava-Poruba CTPark Ostrava-Poruba is situated on the western outskirts of Ostrava, with excellent connections to Prague and Brno, Poland, Slovakia and Austria. CTPark Ostrava-Poruba is CTP's second major park in Ostrava, the third-largest city in the country, with a strong industrial tradition. GLA total: 52,000 sqm GLA growth 2022: 12,000 sqm handed over Landbank: 83,000 sqm Clients: 9 132 133 134 135 136 137 138 Romania Ana Dumitrache MANAGING DIRECTOR, ROMANIA “The year 2022 was for us ‘Outstanding’—as in the highest level of BREEAM certification that we received for our Clubhaus at the largest logistic hub in CEE—CTPark Bucharest West. Our growth was supported mainly by Bucharest West developing as a regional hub, not only for the Balkans area, but also for Turkey and the Middle East. We continue to see an increase in nearshoring and also de-centralisation of distribution. Being used to turning hardship into opportunities, we can report that 2022 was a hard but also a very good year for us, with many occasions to prove our competence, professionalism and excellence of service, with an integrated team covering the whole value chain of real estate development.” 139 MACROECONOMICS INDICATORS Population 19 mil. Credit rating Baa3 Hourly compensation in manufacturing €21.90 GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 6.6 mil. sqm Annual growth rate of stock 17.1% CTP market share 37.0% Net take-up 0.9 mil. sqm CTP share net take-up 59.0% Market vacancy rate 4.6% Prime rent (€/sqm/yr) €49.20 Prime yield 7.35% CTP INDICATORS Locations 27 GLA 2,383 thousand sqm Project under construction 237 thousand sqm Landbank 3,221 thousand sqm GAV (in EUR million) 1,645 LFL Rental Growth 2.5% Client Retention Rate 91.0% Next 12 m. revenue €107 mil. WAULT 5.5 13.6% 2.9% €6.90 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 140 ANA DUMITRACHE, MANAGING DIRECTOR RO 141 ELEONORA AMARIUTEI, CFO RO CTPark Bucharest Mogoşoaia CTP developed a CTFit (built-to-suit) high tech warehoues in CTPark Mogosoaia for Dr. Max Group, who as a repeat customer, lease 45,000 sqm at two other locations in Sibiu and CTPark Bucharest. GLA total: 34,000 sqm GLA growth 2022: 33,600 sqm Clients: 1 142 CTPark Bucharest West CTPark Bucharest West is Europe’s largest industrial park with over 750,000 GLA and the highest quality of life at an industrial park in Romania due to its Clubhaus and well designed infrastructure and greenery. The park has transformed into a regional hub serving simultaneously the EU, SEE and Middle Eastern markets. 2022: Clubhaus certified BREEAM Outstanding. GLA total: 767,000 sqm GLA growth 2022: 25,700 sqm Landbank: 1.3 million sqm Under Construction: 94,000 Clients: 68 Sustainability: 1.5 MW PV plant (completed 01/2023) Community: Clubhaus, affordable housing (planned) TOP 10 PARKS 144 146 148 CTPark Bucharest North Positioned on Bucharest’s most important interchange, between the A3 highway and National Road 2 (DN2), the park gives access to the entire city through the ring-road connection. CTPark Bucharest North was one of CTP's fastest-growing parks in 2022 due to its strategic location. GLA total: 198,000 sqm GLA growth 2022: 136,000 sqm Landbank: 30,000 sqm Under Construction: 13,000 Clients: 15 TOP 10 PARKS 150 CTP Hungary Ferenc Gondi, MANAGING DIRECTOR, HUNGARY “For us, 2022 was definitely an outstanding year on many levels, and I am proud of our team’s accomplishments. Highlights include the construction of our first Clubhaus in Hungary, at CTPark Budapest West, where we also have our new office. During the year we maintained our market-leading position and reached the impressive milestone of one million sqm of GLA. We finished 2022 working with Tesco on the largest development in the Budapest area. This is what I call a rock-and-roll year.” 151 MACROECONOMICS INDICATORS Population 9.7 mil. Credit rating Baa2 Hourly compensation in manufacturing €21.90 GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 3.1 mil. sqm Annual growth rate of stock 14.8% CTP market share 21.0% Net take-up 0.5 mil. sqm CTP share net take-up 44.0% Market vacancy rate 3.8% Prime rent (€/sqm/yr) €66.0 Prime yield 6.25% CTP INDICATORS Locations 17 GLA 1,004 thousand sqm Project under construction 206 thousand sqm Landbank 2,712 thousand sqm GAV (in € million) 1,049 LFL Rental Growth 6.6% Client Retention Rate 91.0% Next 12 m. revenue €60 mil. WAULT 5.8 14.5% 2.3% €9.00 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 152 153 154 CTPark Budapest West CTPark Budapest West is CTP's landmark warehouse-distribution hub in Hungary. This is the ideal place for business activ- ities conducted in Hungary for warehousing, distribution, cross-docking and other value added operations for ambient, temperature controlled, chilled as well as the frozen goods. GLA total: 292,000 sqm GLA growth 2022: 53,000 Landbank: 188,000 sqm Under Construction: 8,000 sqm Clients: 53 Community: Clubhaus TOP 10 PARKS 156 CTPark Budapest Sziget CTPark Budapest Sziget is CTP's up and coming park, due to the signing in 2022 of an over 100,000 sqm developement project for Tesco—the largest deal in 2022 for CTP as well as on the Hungarian market. The planned, solar power rooftop EV plant plant will cover 100,000 sqm, with an installed capacity of 13 MWp of renewable energy, enough to cover Tesco’s energy needs and supply electric vehicle charging points. Landbank: 360,000 sqm Under Construction: 120,000 Sustainability: 13 MWp (planned), EV charging stations 158 159 CTPark Budapest Ecser CTPark Budapest Ecser is located east of Budapest in the immediate vicinity of the capital, Liszt Ferenc International Airport and the M4 motorway.The region, due to its outstanding location, is considered a major national and international hub. GLA growth 2022: 3,000 sqm Landbank: 1,125,000 sqm Under Construction: 43,000 160 161 162 Stanislav Pagáč MANAGING DIRECTOR, SLOVAKIA “We entered 2022 with focus and energy to build upon the growth we achieved in 2021, and I am happy to report that we succeeded. Definitely the highlight for us was reaching the number-one position on the Slovak industrial market, not only as the operator of the largest industrial portfolio in the country, but also in terms of total new construction as well. We wrapped up the year with 18% growth in GLA, to 776,000 sqm, and a 96% occupancy rate. During the year, support for local communities and people in need continued to play an important role in our activities. We continued our long-term cooperation with a local NGO helping children at risk and their families and expanded our activities to support education aimed at both university and high school students. Slovakia 163 MACROECONOMICS INDICATORS Population 5.4 mil. Credit rating A2 Hourly compensation in manufacturing €21.90 GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 3.6 mil. sqm Annual growth rate of stock 12.8% CTP market share 19.0% Net take-up 0.6 mil. sqm CTP share net take-up 13.0% Market vacancy rate 3.6% Prime rent (€/sqm/yr) €58.80 Prime yield 5.75% CTP INDICATORS Locations 13 GLA 776 thousand sqm Project under construction 38 thousand sqm Landbank 1,779 thousand sqm GAV (in € million) 740 LFL Rental Growth 7.4% Client Retention Rate 66.4% Next 12 m. revenue €46 mil. WAULT 5.6 11.3% 2.2% €10.7 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 164 165 166 CTPark Trnava CTPark Trnava is strategically located 5km from Trnava city centre, and directly adjacent to the PSA Peugeot Citroën production facility, 50km from the Slovak capital, Bratislava. GLA total: 162,000 sqm GLA growth 2022: 44,000 sqm Landbank: 452,000 sqm Clients: 21 TOP 10 PARKS CTPark Žilina Airport CTPark Žilina Airport is situated in the heart of Slovakia’s main automotive and high-tech cluster with the Kia Motors and VW plants just 30 km away. Strategically located on the E50/D1 motorway to Bratislava, the park offers excellent access to the Czech and Polish borders. GLA total: 45,000 sqm GLA growth 2022: 20,000 sqm Landbank: 278,000 sqm Clients: 6 168 CTPark Prešov South CTPark Prešov South is strategically located in Slovakia’s third-largest city, with ex- cellent motorway connection to Košice (40km) and the automotive cluster in Žilina /Martin (200km), with easy access to Poland (70km). With nearby technical universities and skilled, available labour, the park is ideal for logistics and high-tech production. GLA total: 29,000 sqm GLA growth 2022: 40,000 sqm Under Construction: 27,000 sqm Clients: 3 170 172 Dragana Djordjević HEAD OF FINANCE & ACCOUNTING, SERBIA “A lot of great things happened in Serbia in 2022! We wrapped up the year with 263,000 sqm of GLA and a very healthy occupancy rate of 96%. We continue to develop high- quality buildings and projects, keeping us on track to reach our one million sqm target. We have an amazing tenant network of local and international companies (such as Yanfeng, Nidec and Bosch) that continued to grow with us during the year. Beyond business, we expanded our collaboration with local communities supporting youth in need and educational programmess. I’m also very proud of our team of 24 young professionals—all motivated, enthusiastic and eager to accomplish each of the goals that we have set. We’re ready for more great things in 2023!” Serbia 173 MACROECONOMICS INDICATORS Population 6.8 mil. Credit rating BB+ Hourly compensation in manufacturing €21.90 GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 1.1 mil. sqm Annual growth rate of stock 16.0% CTP market share 18.0% Net take-up 0.1 mil. sqm CTP share net take-up 80.0% Market vacancy rate 5.4% Prime rent (€/sqm/yr) €54.00 Prime yield 7.75% CTP INDICATORS Locations 4 GLA 263 thousand sqm Project under construction 170 thousand sqm Landbank 1,080 thousand sqm GAV (in € million) 273 LFL Rental Growth 3.7% Client Retention Rate 100% Next 12 m. revenue €16 mil. WAULT 10.6 15.9% 3.5% €5.00 Sources: Eurostat S&P Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE, Colliers CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 174 175 CTPark Belgrade West CTPark Belgrade West is located in an es- tablished industrial zone near the town of Šimanovci close to the Belgrade-Zagreb E-701 motorway. The location is ideally situated close to the Nikola Tesla international airport, with excellent transport access to Zagreb, Belgrade and state borders. GLA total: 59,000 sqm GLA growth 2022: 35,000 sqm Landbank: 303,000 sqm Clients: 6 176 177 CTPark Belgrade North Prime location between two biggest cities in Serbia Belgrade and Novi Sad. CTPark Belgrade North is located near the town of Novi Banovci with perfect visibility from the adjacent A1 highway connecting Belgrade and Budapest. The location is 20 minutes away from the city centre, with excellent transport access to Zagreb, Budapest and Timisoara. GLA total: 101,000 sqm GLA growth 2022: 25,000 sqm Landbank: 239,000 sqm Under Construction: 17,000 sqm Clients: 8 178 179 180 CTPark Belgrade City CTPark Belgrade City will be the largest logistics hub in Serbia, with units starting from 2,500 sqm with showroom, office space and warehousing. The location is ideal for small- and medium-sized enterprises in the FMCG, pharmaceutical, and e-commerce sectors and for last-mile logistcs due to its inner city location, excellent connections to the highway and all main city traffic arteries. Under Construction: 100,000 sqm 182 Bogi Gabrovic DEPUTY COUNTRY HEAD, POLAND “Without a doubt 2022 was a breakthrough year for CTP’s presence and operations in Poland. The purchase of a 2.5 million sqm portfolio of land was a decisive step in our expansion process. We also grew our team significantly during the year, from 11 people in 2021 to currently over 60 professionals managing the construction of over 500,000 sqm of logistics and production space. We remain fully focused on the continued expansion of CTP’s footprint in Poland, to provide our tenants with CTP’s market- proven mix of property types at strategic locations throughout the country. CTP is making big things happen in the Polish market!” Poland 183 MACROECONOMICS INDICATORS Population 37.7 mil. Credit rating A2 Hourly compensation in manufacturing €21.90 GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 27.6 mil. sqm Annual growth rate of stock 16.3% CTP market share 1.0% Net take-up 4.1 mil. sqm CTP share net take-up 2.1% Market vacancy rate 4.0% Prime rent (€/sqm/yr) €68.40 Prime yield 5.25% CTP INDICATORS Locations 4 GLA 216 thousand sqm Project under construction 500 thousand sqm Landbank 2,371 thousand sqm GAV (in € million) 630 LFL Rental Growth 12.5% Client Retention Rate 100% Next 12 m. revenue €7 mil. WAULT 11.8 11.7% 2.4% €8.50 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 184 185 GLA total: 95,000 sqm GLA growth 2022: 95,000 sqm Landbank: 66,000 sqm Under Construction: 75,000 sqm Clients: 2 186 187 CTPark Opole GLA total: 59,000 sqm GLA growth 2022: 19,000 sqm Landbank: 71,000 sqm Under Construction: 18,000 sqm Clients: 8 188 189 190 CTPark Warsaw East CTPark Warsaw East offers a wide range of opportunities for manufacturing and ware- housing activities. The location directly by the S8 motorway, within the adminis- trative borders of Warsaw, provides good access to qualified employees. CTPark Warsaw East is located in zone II of Warsaw’s industrial market, providing easy access to the capital city. Landbank 417,000 sqm 191 192 193 194 195 196 Daniela Boytcheva BUSINESS DEVELOPMENT DIRECTOR, BULGARIA 2022 was a pioneering year for CTP in Bulgaria in many ways. From the development perspective, it marked the ground-breaking of 100,000 sqm in total at our two parks, CTPark Sofia West and CTPark Sofia East, of which 40% was leased during the early construction phase to a German retailer for a regional e-fulfilment centre. We completed the acquisition of a 75,000 sqm logistics facility consisting of warehouse and office space near Sofia, in addition to existing production assets with land to develop an additional 40,000 sqm of space in Plovdiv. CTP is currently active in seven locations in Bulgaria and is already a leader in the I&L segment in the country. Our team of experts is looking towards 2023 with an entrepreneurial spirit and motivation to deliver our first own developments into the portfolio, while also contributing to the development of high standards and practices in our segment on the local market. Bulgaria 197 MACROECONOMICS INDICATORS Population 6.8 mil. Credit rating Baa1 Hourly compensation in manufacturing €21.90 GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 1.6 mil. sqm Annual growth rate of stock 4.5% CTP market share 9.0% Net take-up n/a CTP share net take-up n/a Market vacancy rate 4.0% Prime rent (€/sqm/yr) €63.00 Prime yield 7.50% CTP INDICATORS Locations 6 GLA 159 thousand sqm Project under construction 100 thousand sqm Landbank 455 thousand sqm GAV (in € million) 163 LFL Rental Growth 1.7% Client Retention Rate 100% Next 12 m. revenue €10 mil. WAULT 8.6 14.1% 3.1% €4.90 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE, Colliers CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 198 199 CTPark Sofia West CTPark Sofia West is strategically located next to the east-west motorway, and the ring rood, within a major residential zone with convenient public transport connections to city centre. Landbank: 88,000 sqm Under Construction: 74,000 sqm 200 201 202 203 204 Timo Hielscher REGIONAL DEVELOPMENT DIRECTOR WEST, GERMANY “The year 2022 was very special for us. We had our debut in the German market. We have clear growth ambitions in Germany. However, to start actively managing a portfolio with more than 90 properties, there was a lot of groundwork to do. Our priority in 2022 was to attract talent and developing our local network among agents, local authorities, tenants, and other stakeholders. “In 2023 our goal is to drive rental and occupancy growth by providing top-notch services to our tenants across our German network. In a nutshell, we are perfectly positioned for growth.” Germany 205 MACROECONOMICS INDICATORS Population 83.2 mil. Credit rating Aaa Hourly compensation in manufacturing GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 97.6 mil. sqm Annual growth rate of stock 5.5% CTP market share 2.0% Net take-up 8.2 mil. sqm CTP share net take-up 1.2% Market vacancy rate 2.0% Prime rent (€/sqm/yr) €102.00 Prime yield 3.80% CTP INDICATORS Locations 90 GLA 1,624 thousand sqm Project under construction n/a Landbank 131 thousand sqm GAV (in € million) 924 LFL Rental Growth n/a Client Retention Rate 88.0% Next 12 m. revenue €66 mil. WAULT 4.9 9.7% 1.1% €32.70€21.90 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 206 207 208 209 “In the Netherlands, 2022 was a year of consolidation and activity following our entry into the market in 2021 with five acquisitions. We rolled out a state-of-the-art green energy ecosystem (wind and solar energy generation and charging stations for 200+ EVs and trucks) at CTPark Amsterdam City. Our first new warehouse, of 23,000 sqm, was completed at CTPark Rotterdam in June for our tenant R&M Forwarding. During the year we added more strategic land plots to our portfolio in Waalwijk in the south of the country, where we now own more than 90 hectares of land as well as near Schipol Airport, which we plan to develop in the coming years. We also created new grounds for cooperation with the municipalities in Waalwijk and nearby Gorinchem. These multifaceted successes give us a solid foundation for further growth.” 210 Netherlands Paul Dijkstra CFO, NETHERLANDS 211 MACROECONOMICS INDICATORS Population 17.6 mil. Credit rating Aaa Hourly compensation in manufacturing GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 40.8 mil. sqm Annual growth rate of stock 8.2% CTP market share n/a Net take-up 2.6 mil. sqm CTP share net take-up n/a Market vacancy rate 2.4% Prime rent (€/sqm/yr) €110.00 Prime yield 4.35% CTP INDICATORS Locations 2 GLA 127 thousand sqm Project under construction 120 thousand sqm Landbank 1,479 thousand sqm GAV (in € million) 448 LFL Rental Growth N/A% Client Retention Rate 100% Next 12 m. revenue €4 mil. WAULT 16.2 9.8% 0.9% €31.6€21.90 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 212 213 CTPark Amsterdam City The most innovative and very first XXL last-mile multi-storey logistic city hub in the Netherlands. CTPark Amster- dam City will comprise 120,000 sqm of GLA located right in the heart of the Amsterdam, with excellent infrastruc- ture and holds a pivotal location in one of the most densely populated areas in Europe. Under Construction: 120,000 sqm Sustainability: BREEAM Excellent, solar plant, wind power, truck & car EV charger points, emissions-free logistics, rooftop gardens 214 215 CTPark Rotterdam CTPark Rotterdam is located within the Nieuw Reijerwaard business park in the highly sustainable “Dutch Fresh Port” industrial area, which is positioned to become one of the most sustainable agro-logistics hubs in Europe. GLA total: 23,000 sqm GLA growth 2022: 23,000 sqm 216 217 218 Austria David Strobl CONSTRUCTION DIRECTOR, AUSTRIA “We closed 2022 with the completion of our very first building in CTPark Vienna East in Bruck an der Leitha, which is fully leased. This is an amazing milestone in our relatively short history in Austria, and we have a second project, CTPark St Pölten North, in the pipeline that will be started by the end of 2023. These two developments are the foundation of CTP’s targeted investment programme in Austria, to be carried out in the coming two to three years. I’m extremely proud of our small team and of what we have achieved in the last months. We will continue to grow our organisation, staff, and projects in 2023 to deliver more than 100,000 sqm of premium industrial space around Vienna, according to the demand of our long-term tenants.” 219 MACROECONOMICS INDICATORS Population 9 mil. Credit rating Aa1 Hourly compensation in manufacturing GDP per capita growth forecast CAGR 1.3% E-commerce forecast CAGR 9.9% MARKET INDICATORS Total stock 2.9 mil. sqm Annual growth rate of stock 1.8% CTP market share 1.0% Net take-up 0.2 mil. sqm CTP share net take-up 14.0% Market vacancy rate 0.3% Prime rent (€/sqm/yr) €78.00 Prime yield 4.4% CTP INDICATORS Locations 1 GLA 1 thousand sqm Project under construction 89 thousand sqm Landbank 398 thousand sqm GAV (in € million) 93 LFL Rental Growth 1.0% Client Retention Rate 100% Next 12 m. revenue €1 mil. WAULT 9.8 12.3% 0.9% €29.4€21.90 Sources: Eurostat Moody's Eurostat CAGR 22-27, IMF CAGR 22-27, Oxford Economics, Statista CBRE CTP, CBRE Notes CTP countries EU-27 average figures as comparison. COUNTRY DATA POINTS 220 CTPark Vienna East CTPark Vienna East enjoys an excellent lo- cation in Vienna’s Carnuntum neighborhood, near the A4 motorway at the intersection of the B10 and L163 regional roads. It is just 15 minutes from Austria’s largest airport, Vienna Schwechat, with several airport cargo suppliers in the area. New tenants: Toyota Logistics, DHL Under Construction: 55,000 sqm CTPark St. Pölten North The CTPark St. Pölten North benefits from an excellent location in the district of St. Pölten just north of the the major western A1 and S33 corridor connecting Vienna, Linz and Germany. Due to superior infrastructure in Austria and direct con- nection to the S33 road, the park is within easy reach of St. Poelten (12km) and the Vi- enna Schwechat Airport (96km) as well as the Czech Republic, Slovakia and Hungary. Landbank: 128,000 sqm Under Construction: 34,000 sqm 222 224 DEVELOPER STORY: LEVERAGING OUR IN-HOUSE TEAM FOR STRATEGIC GROWTH Mobilising the landbank with in-house permitting, design, construction and procurement teams helps us maintain our industry-leading yield on cost. Leveraging our CEE market dominance and first- mover advantage, we meet demand-driven growth with innovative solutions. 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 246 247 248 250 251 252 253 254 255 4 Sustainability 4.1 Highlights in 2022 258 4.2 Double Materiality Assessment 261 4.3 ESG Strategy 263 4.3.1 Striving to be Climate Positive 265 4.3.2 Embedding Parks in Communities 271 4.3.3 Stimulating Social Impact & Well-being 275 4.3.4 Conducting Business with Integrity 277 4.4 Company Culture and Employees 278 4.4.1 CTP’s culture 278 4.4.2 CTP’s values 279 4.4.3 CTP’s employees 279 4.4.4 CTP’s inclusive and safe work environment 281 4.5 Leadership 282 4.6 EU Taxonomy 294 4.6.1 KPIs (methodology of calculation) 295 4.6.2 Eligibility 295 4.6.3 Alignment 296 Sustainability 256 4 Sustainability Sustainability has been at the core of CTP’s activities since its inception. The Company’s long-term approach to property development is an inherent part of its build-to- own business model. CTP’s commitment to sustainability is multifaceted and encompasses the environmental, social and governance spectrum. A clear expression of CTP’s commitment is its BREEAM-certified high-quality portfolio of buildings, which are developed to meet not only the current but also the future needs of the Company’s tenants. CTP’s ambition is to have positive impact on the climate. This includes the Company’s commitment in line with the Paris Agreement to be carbon neutral in all Scopes as defined by the Greenhouse Gas (“GHG”) Protocol Corporate Standard—through the reduction of the Group’s GHG emissions and water consumption, the production of renewable energy and support for biodiversity. CTP’s long-term approach has always involved developing strong ties to the local communities where it operates. This includes financial support for local charities and educational initiatives, investments into infrastructure that benefit local communities, investments to support biodiversity, and investments to support quality of life and well-being at the workplace. CTP proactively contributes to community development to create a good environment to grow with clients. CTP’s broad-based commitment to sustainability has been codified in its ESG strategy. Sustainability 257 ESG strategy launch In 2022, CTP took several steps to formalise and institutionalise its ESG strategy across the Group. CTP developed a four-pillar approach to systemise topics that the Company considers material. The “pillars” are: striving to be climate positive; embedding parks in communities; stimulating social impact and well-being; and conducting business with integrity. These pillars capture focus areas and represent interlinked groups of activities. As CTP grows and evolves, so too does its ESG strategy. The Company ensures that it regularly updates its ESG strategy to focus on the most material topics and have the greatest possible impact. The materiality assessment carried out in 2022 has led to better understanding of material topics, an update of the strategy, and set up of the relevant KPIs. Ratings STANDARD & POOR’S GLOBAL CORPORATE SUSTAINABILITY ASSESSMENT The S&P Global Corporate Sustainability Assessment (“CSA”) and ESG Evaluation are annual assessments of the sustainability practices of over 10,000 companies from around the world. The CSA focuses on sus- tainability criteria that are both industry-specific and financially material. CTP participated in S&P’s CSA assessment for the first time in 2022 and obtained an evaluation result of 67, with no material impacts. SUSTAINALYTICS In January 2023, CTP received an ESG Risk Rating of 10.2 and was assessed by Morningstar Sustainalytics to be at Low Risk of experiencing material financial impacts from ESG factors. In no event shall these re- sults be construed as investment advice or expert opinion as defined by the applicable legislation. * CORPORATE RESPONSIBILITY Prepartion for GRESB Real Estate Assessment CTP continuously seeks to improve its ESG credentials. As such, in 2022 the Company did an internal trial run for the GRESB Assessment and is committed to participate and publish the results in 2023. Following the trail run, multiple actions have been taken to systemise CTP's approach to ESG. The GRESB Real Estate Assessment is a global standard for ESG benchmarking and reporting for companies that invest directly in real estate. Highlights in 20224.1 Severe 40+ Note: Updated Jan 17, 2023. ESG Risk Rating Neg. 0-10 Low Risk -0.9 Momentum Low 10-20 Medium 20-30 High 30-40 10.2 A higher score indicates better sustainability. Figures subject to rounding. 67 ESG Profile 67 ESG Evaluation 52 Preparedness No Impact Low Emerging Adequate Strong 9167 Best in class * Copyright © 2023 Morningstar Sustainalytics. All rights reserved. This section contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are the property of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics. com/legal-disclaimers Sustainability 258 SUSTAINABLE REAL ESTATE CORPORATE RESPONSIBILITY ESG Committee established To improve governance of ESG topics, including climate-related risks and opportunities within the Group and to enhance the Board oversight, in 2022 CTP established the ESG Committee. The ESG Committee consists of non-Executive Directors and guests, including Executive Directors and the Group Head of ESG. Committee meetings are held on a regular basis to ensure that ESG an integral part of CTP's strategy and that ESG and climate-related targets are followed up. Double materiality assessment During the second half of 2022, as part of refining the Company’s ESG strategy, CTP conducted its first double-materiality assessment. Double materiality assessments evaluate the impact of the Company on ESG matters and the potential financial impact of ESG matters on Company performance. To ensure objective- ness the process was led by an external consultant and consisted of desk research, industry review, and multiple interviews and surveys. The outcome of the assessment has been used to adjust strategy and define relevant KPIs. Science Based Target initiative (SBTi) CTP embraces alignment with the Paris Agreement and aims to achieve carbon neutrality in all Scopes in line with its assumptions. Based on data collected in 2022, CTP will develop a detailed climate roadmap to be approved by the Science Based Targets initiative (SBTi). Carbon data for 2022 went through independent limited assurance done by Arcadis. Operator Sustainable management of the Group’s portfolio is essential to ensure the best possible impact on the environment. In the Czech Republic, Romania and Slovakia, CTP has introduced ISO 140001 and ISO 50001 standards to improve environmental and energy management. Socially and environmentally focused activi- ties are described in Section 4.3.2. Developer CTP has developed lifecycle assessments of selected properties to select priority materials to reduce the embodied carbon footprint of its development activities. At the same time, the Company is developing its first projects utilising heat pumps as the only source of heating. This is an important step to develop proper- ties that do not use any fossil fuels at the operational stage. CTP continued certifying properties under the BREEAM scheme throughout 2022. Starting in 2023, BREEAM New Construction at the Very Good level or higher will be used for all new constructions to support the reduction of embodied carbon and alignment with EU Taxonomy requirements for activities related to the construction of buildings. To date, CTP has built seven buildings that were awarded the highest BREEAM Outstanding level. Other socially and environmentally focused activities are described in Section 4.2. Physical climate risk In 2022 CTP conducted a physical climate risk assessment to verify acute and chronic physical climate risks. The tool makes use of nine different climate scenarios, from REMIND (1.5 °C) to the IPCC (5 °C), looking towards the year 2100 and analysing climate risks considered potentially material for the Company, which include coastal flooding, extreme heat, extreme cold, fluvial flooding, tropical cyclones, water stress and wildfires. Based on the outcome of the analysis, material climate risks have been selected. Given the geographical distribution of its properties, collective adaptation measures being implemented in countries and the buildings’ robust design and construction, CTP does not foresee any analysed climate risk that can significantly affect its financial performance in the near future. Photovoltaics During 2022, CTP increased its installed photovoltaic (“PV”) capacity from 6MWp to 38MWp and estab- lished a dedicated energy function at the Group and country levels. The target for 2023 is to have at least an additional 100MWp installed. GRI 3-1 GRI 2-12 GRI 2-13 Highlights in 2022 259 EU Taxonomy Assessment CTP’s 2022 Annual Report presents the Company’s first EU Taxonomy alignment. Each year CTP expands its ESG disclosure. EU Taxonomy, among other disclosures, led to the development of internal Company processes and policies for ESG data collection and management during 2022. Disclosure on EU Taxonomy and the introduction of its technical criteria into operations is another step to make CTP operations more sustainable. CTP’s sustainability ambitions are aligned with EU Taxonomy requirements. EPRA reporting CTP uses EPRA best practice reporting (“BPR”) in its annual reporting. This includes sustainable BPR (“sBPR”). Sustainability KPIs can be found in Appendix 7.3 of this Annual Report. TCFD reporting CTP introduced Task Force on Climate-related Financial Disclosure (TCFD) recommendations in its 2022 reporting. Governance, strategy, risk management and metrics are disclosed in this Annual Report. Green bond reporting CTP has issued green bonds for a total amount of €4.25 billion. Green bonds are issued based on CTP’s Green Bond Framework, which is not related to the EU Taxonomy. Use of proceeds is reported annually in CTP’s Green Bond Report. Proceeds from green bonds are allocated to finance the development of sustainable buildings for CTP’s portfolio. Detailed EU Taxonomy disclosure presents KPIs not adjusted by proceeds from green bonds. Adjusted KPIs are presented in contextual information.. First sustainability reporting During 2022, CTP did the necessary preparatory work to publish its first stand-alone Sustainability Report, which will be available in 2023. The publishing of this separate report provides space to describe the Com- pany’s activities in the field of ESG in detail. The report is intended to be published in accordance with the GRI (Global Reporting Initiative) framework and will contain TCFD recommendations. Clubhaus To support the Company’s efforts to embed its parks into the communities where it operates [see Sec- tion 4.3.2 for details], CTP has introduced the Clubhaus mixed-use development concept to select park locations. As part of its park strategy, CTP develops common spaces that serve the employees of tenants and local communities. CTP’s Clubhaus offers space for meetings, educational activities, social gatherings, medical services, a cafeteria, convenience store and canteen as well as outdoor facilities and can be used free of charge by the park community. Advanced renewable energy management system introduced in Amsterdam In 2022 CTP introduced an advanced renewable energy a production and management system at CTPark Amsterdam City, a multi-story and multi-tenant 120,000 sqm development in the Western Docklands dis- trict of Amsterdam. It is equipped with approximately 6MWp of photovoltaics and ten wind turbines to sup- ply renewable energy to meet tenant needs as well as to serve over 200 EV charging points for cars, vans and trucks. A dedicated energy management system optimises energy production, storage (battery) and consumption. It is an important step for the Company to gain practical experience developing self-sufficient buildings and parks in the future. SUSTAINABILITY REPORTINGINNOVATION Sustainability 260 Double Materiality Assessment 4.2 Double Materiality Assessment Based on the assessment results, CTP has grouped topics into four areas that are material from the Group’s standpoint. Topics are se- lected based on the specific impact of CTP, and also their impact on CTP's business. The criteria for the group- ings is related to the possibility to manage the topic effectiveley: 1. Energy, carbon emissions, and climate neutrality A description of CTP actions can be found in Striving to be Climate Positive 2. Sustainable design, supply chain management, certification, and climate adaptation A description of CTP actions can be found in Striving to be Climate Positive 3. Health and safety, Employees, diversity, equity, and inclusion A description of CTP actions can be found in Stimulate Social Im- pact & Well-being 4. Ethical business conduct, Board oversight and human rights A description of CTP actions can be found in Conducting Business with Integrity Community involvement and corporate giving are not identified as a material topic in the materiality assessment, but due to their business importance for CTP are part of the Company's ESG strategy. A de- scription of CTP actions can be found in Embedding Parks in Commu- nities. CTP material topics The materiality assessment will be updated each year. The results of this materiality assessment confirm the effectiveness of the path that CTP chose when creating the pillars on which CTP’s ESG strategy was originally bassed. Under these pillars, the different goals, targets, and measures are defined and refined constantly. CTP also uses these pillars as a reference point when informing on the re- sults of decisions taken. GRI 3-2 261 Sustainability Fig. 52 CTP Double-Materiality Assessment Results Impact of CTP̛s Business Financial Impact of CTP̛s Business Waste generation Waste management Water management Sustainable materials Embodied GHG emissions and carbon neutrality Employee recruitment and development Privacy protection & cyber security Board oversight Supply chain management Climate adaptation and resilience Sustainable design and certification Diversity, equity and inclusion Health, safety & well-being Operational GHG emissions and carbon neutrality Ethical business conduct Energy efficiency and renewable energy Labour and human rights Community involvement and corporate giving Ecosystem and biodiversity 4.75 4.25 3.75 3.25 2.75 2.75 3.25 3.75 4.25 4.75 The results of the first CTP double materiality assessment can be seen below, rated on a scale from 1 to 5. 262 ESG Strategy ESG is a broad term. To efficiently act in line with its principles, a systematic approach is required. CTP has developed a four-pillar approach to systemise topics that the Company considers material. ESG Strategy4.3 The “pillars” are equally important, interdependent focus areas that will evolve over time. They are: 1 Striving to be Climate Positive 2 Embedding Parks in Communities 3 Stimulating Social Impact and Well-being 4 Conducting Business with Integrity GRI 3-3 263 1. STRIVING TO BE CLIMATE POSITIVE Sustainability 264 ESG Strategy CTP strives to be climate positive. The first step on this journey is the Company’s goal, in line with the Paris Agreement, to become carbon neutral covering all its activities, from corporate operations through development to asset management. CTP does this directly, by providing high-quality, utility-efficient spac- es to its tenants; and indirectly, as CTParks allow tenants to increase transport efficiency, thereby helping to reduce their overall carbon footprint. To make sure all specific negative project development im- pacts are addressed, an environmental impact assessment process is followed during building permitting, where potential negative impacts are identified. To ensure proper risk management at the stage of land acquisition, technical due diligence contains an environmental assess- ment of potential contamination. Operational energy use, use of construction materials and land use are among the activities with the most material direct climate and potential negative environmental impacts. A target to reduce the op- erational carbon footprint and procure renewable electricity has been set to promote this agenda. This includes the energy consumption of CTP tenants, embodied emissions, i.e., the emissions required for the creation of construction materials, and causing large surface areas to become impermeable due to building development. A target to reduce the embodied carbon footprint that involves sustainable design, cer- tification and responsible procurement has been set to follow up on progress in this field. Energy consumption and related energy costs have recently be- come an important topic for CTP’s tenants. Energy market volatility has made energy efficiency a priority for most of the Company’s ten- ants. While CTP does not use significant amounts of energy for its own purposes—and does not bear the costs of energy, due to its business model—the “build to own” concept ensures that the Company creates properties that are designed, built, and managed in the most energy -efficient manner. Lowering energy consumption limits the exposure of CTP’s clients to volatility on the energy markets. 4.3.1 STRIVING TO BE CLIMATE POSITIVE CTP’s targets for Striving to be Climate Positive Category Targets Baseline YE 2026 YE 2022 % of renewable electric energy of CTP’s and tenants’ electric energy mix 80% 24% % of GLA covered by leases containing a green lease clause 50% 19% MWp of installed PV capacity 400 38 % of parks with biodiversity efforts introduced /installed 80% Starting point Average embodied carbon footprint reduction (kgCO₂e/m²) * 10% Starting point Average operational carbon footprint reduction (kgCO₂e/m²) * 20% 33.12 Water intensity (use, utilisation) reduced (m³/m²) 15% 0.17 (based on availability for 7,279,377m²) Taxonomy alignment of construction and ownership of properties (lowest of all KPIs) 60% 4.8% Selective waste collection development activities (share of projects) 80% Starting point % of car fleet EV 25% Starting point * Subject to adjustment to be in line with Science Based Target initiative. 265 Additionally, to get closer to operational carbon neutrality and to in- crease energy security, CTP has intensified the installation of PV systems on its buildings, and all new buildings are constructed with solar-ready roofs. New projects are equipped with state-of-the-art LED lighting systems, remote metres, and the Company’s first projects using only heat-pump systems for heating have been completed. Mul- tiple steps are taken and will be taken to reach climate neutrality. The Company translates ESG targets into project requirements concern- ing the reduction of energy and water consumption and the promotion of low-carbon construction materials. CTP started in 2022 to require Environmental Product Declarations (“EPDs”) for selected materials from suppliers. This is the first step in supply chain management to reduce the Company’s embodied carbon footprint. CTP’s construction activities in ten European countries and its close relations with key sup- pliers place the Company in a good position to make progress in this area. Cooperation with manufacturers and rising expectations towards low-carbon materials are driving change in the construction materials sector. At the same time, CTP is introducing a green lease clause to its lease agreements, which already exceed 10% of managed area. This is an important step to enhance cooperation between CTP and its ten- ants to reduce negative environmental impacts. The pillar “Striving to be Climate Positive” is set up to tackle longer- term impacts that affect climate change: energy use, greenhouse gas emissions, materials and their related carbon emissions, water use, and biodiversity, and targets are set up accordingly. Greenhouse gases and disclosure of other environmental KPIs GRI 305 CTP increases the extent of its ESG disclosure in its 2022 Annual Report. Whereas in 2021 coverage was limited to Scope 1 and 2 emis- sions purely related to corporate operations, in 2022 the Company’s ESG disclosure includes areas at its parks and assets that fall under Group control. CTP’s new disclosure of Scope 3 emissions includes downstream leased assets, i.e., emissions from CTP’s tenants and business travel by the Company’s employees. Regarding downstream leased assets, more than 70% of the Company’s GLA is covered in the Scope 3 disclosure. Moreover, the Company completed its first embod- ied carbon analysis in 2022. Results of carbon lifecycle assessments of properties located in different countries allows for the prioritisation of activities leading to a reduction of the Company’s embodied carbon footprint, such as project monitoring and building material selection. Reduction of the use of fresh water is an important measure introduced to minimise the impact on the environment. At the same time, embrac- ing the idea of circular economy targets that lead to the promotion of low-carbon materials as well as proper infrastructure for waste han- dling are necessary steps to support circular economy activities. More data concerning CTP’s carbon emissions disclosure can be found in EPRA Sustainability Performance Measures in Appendix 7.3 and in CTP’s Sustainability Report that will be published in spring 2023. Following the recommendation of the European Securities and Mar- ket Authority (“ESMA”) on presenting the impact of the situation in Ukraine on carbon emissions in 2022, CTP did not experience any ma- terial impact in this regard. Sustainability Total certifications by scheme (in %) Fig. 53 Fig. 54 In Use 87% New Construction 13% 100% 75% 50% 25% 0 Sqm certified (in thousand sqm) Outstanding Very Good Excellent Good 6,000 5,000 4,000 3,000 2,000 1,000 0 266 Scope 1 Fuels Car fuel, aeroplane fuel, natural gas used in corporate offices and landlord-operated areas within the portfolio. Fugitive emissions Emissions related to leakage of refrigerants in CTP's porfolio. Scope 2 Electricity and district heating used by CTP in offices, parks, and landlord-controlled parts of portfolio buildings. Scope 3 Category 6 (Business travel) Category 13 (Downstream Leased Assets – tenant energy use) Carbon emissions in ScopesFig. 55 ESG Strategy Fig. 56 Fig. 57Location based CO 2 Emissions (in tCO 2 e) Market based CO 2 Emissions (in tCO 2 e) Scope 3 Scope 1 Fugitive Emissions Scope 2 Scope 1 Fuels 250,000 200,000 150,000 100,000 50,000 0 Scope 3 Scope 1 Fugitive Emissions Scope 2 Scope 1 Fuels 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Scope 2 2% Scope 1 Fuels 1% Scope 3 83% Scope 1 Fugitive Emissions 14% Scope 2 2% Scope 1 Fuels 2% Scope 3 78% Scope 1 Fugitive Emissions 18% 267 Climate change and climate risks GRI 201-2 Over the last years, CTP has taken steps towards addressing topics related to climate change and climate risk. CTP’s build-to-own business model requires a long-term approach to properties. Buildings designed and developed today must meet not only today’s requirements but also the requirements of the future. It is important to develop buildings that meet tenant needs but at the same time allow for the easy accommodation of users with different opera- tions. To this end, CTP develops high-quality buildings that are to some extent generic, which ensures efficient use over the years with low op- erational investments needed and reduced costs of refurbishment. The Company takes into consideration the anticipated long-term effects of climate change, including increases in average temperatures, strong wind episodes and flash flooding, to ensure that buildings will be oper- ational for decades with no need for significant adjustments. Building specifications are regularly updated to make sure that they reflect the most up-to-date climate knowledge. The ESG team reports directly to executive management, and the ESG Committee ensures that all cli- mate-related risks and opportunities are addressed in building specifi- cations and operational guidelines. In the Czech Republic, Romania and Slovakia, CTP has introduced ISO 140001 and ISO 50001 standards to improve environmental and energy management. In 2022 CTP conducted a physical climate risk assessment to veri- fy acute and chronic physical climate risks using a third-party climate modelling tool. This tool makes use of nine different scenarios, from REMIND (1.5 °C) to the IPCC (5 °C), with a time horizon up to the year 2100. Climate risks considered potentially material include coast- al flooding, extreme heat, extreme cold, fluvial flooding, tropical cy- clones, water stress and wildfires. Given the geographical distribution of its properties and their robust design and construction, CTP does not foresee any climate risk among those analysed that can significantly affect its business in the near fu- ture. Properties located in the Netherlands and in northern Germany are at risk due to potential sea-level rise. Bearing in mind the location of properties in the areas that are already protected by national water management programmes, CTP does not see it as material. Among other analysed risks there is no significant potential impact identified. At the same time, the Company’s design requirements to secure its long-term business performance targets, together with environmental impact as- sessments followed up by the implementation of recommendations con- ducted in potentially vulnerable areas, ensures that CTP properties are resilient with regards to analysed risks. CTP's development activities and design specifications include climate adaption measures that meet the requirements of Appendix A of the EU Delegated Act. The outcome of this assessment was used to analyse the climate vulnerability of Group properties and to assess physical and non-phys- ical adaptation solutions in line with EU Taxonomy requirements. We have assessed the impact of climate risk on the financial statements 2022. The majority of the assets in the balance sheet of CTP consist of investment property and investment property under development valued at fair value. Fair value reflects the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. We concluded the effect of climate-related risks do not have a material impact on accounts and disclosures, in- cluding judgments and estimates in the financial statements. To identify transition climate risks, a portion of CTP’s properties have been analysed using the CRREM (Carbon Risk Real Estate Moni- tor) tool. Based on the outcome, an SBTi pathway will be developed. FOREST REFURBISHMENT CTP owns approximately 560 hectares of forested land in the Czech Republic, which CTP manages and repairs by replanting with native trees to improve diversity and overall forest health. In the Group's surrounding communities, CTP holds forest cleaning days with its employees and clients, which are aimed at clearing polluted areas while providing a healthy fun weekend for all involved. Sustainability 268 ESG Strategy WATER RETENTION & REUSE CTP installs large- capacity water retention tanks, in various forms, to both manage runoff into local ecosystems but also to use as a repository for sprinkler systems used within the park. SOLAR & ENERGY USE REDUCTION CTP buildings are designed to support rooftop PV plants to provide clean energy to the Group's clients, or to sell back to the grid, depending on need. All buildings are built to high BREEAM standards—Very Good or better, providing assurance that they are energy efficient. 2022: 130,000 2023: 155,000 (planned) TREE PLANTING IN CZECH FORESTS 269 2. EMBEDDING PARKS IN COMMUNITIES Sustainability 270 CTP develops parks. This means that the Company is a long-term neighbour growing within its communities. It is CTP’s ambition to be a good neighbour. Cooperation with municipal- ities and local communities ensures possibilities for both the Company and its tenants to grow. CTP’s presence does not just provide space for workplace creation; the Company conducts multiple activities related to infrastructure development as well as community support. Although it has not been identified as most material in materiality assessment, it is part of CTP's ESG strategy due to its business importance. CTP does not recognise any negative impact from these activities; on the contrary, value can be created through these activities. One example of long-term involvement is CTP's ownership, re-forestation and man- agement of two forests totalling approximately 560 hectares in the Czech Republic. CTP’s activities not only ensure improvement of the quality of forests that are available to communities but also increase biodiversity and remove significant amounts of carbon dioxide from the atmosphere. 4.3.2 EMBEDDING PARKS IN COMMUNITIES Category Community engaging activities Top-50 CTParks verified whether feasible for access by public transport City locations are connected via bike lanes Parks offering charging facilities Targets YE 2026 20 annually 100% 80% 100% Baseline YE 2022 Starting point Starting point Starting point Starting point CTP’s targets for Embedding Parks in Communities ESG Strategy MAKING PARKS ACCESSIBLE & ENCOURGING A HEALTHY LIFESTYLE CTP installs bike racks that allow employees to bike to work, reducing car use, and builds bike paths that connect the Group's parks to local communities. ELECTRIC CHARGING STATIONS As EV adoption increases, CTP installs EV charging stations upon client requests. In parks with PV plants, CTP will be able to provide clean energy to the chargning stations. ACESSIBILTY AND SAFETY Clearly marked and lit bike and pedestrian paths are a major feature, allowing local communities to bike or run through the parks safely, out of the way of large lorries. CONNECTED & GREEN CTP works with local authorities to ensure public transport stops are located within the parks. Park grounds are lanscaped to ensure a healthy work environment, and where viable, CTP develops its Clubhaus to cater to the community at large in addition to park residents. 271 CLUBHAUS BUCHAREST COMMUNITY STORY First developed at CTPark Bor as a service centre in 2017, CTP formalised the concept and rolled out its Clubhaus concept in 2020 at the park. A Clubhaus functions as the focal point of a CTPark, fostering deeper community relations. Clubhaus is designed with shared meeting spaces, speakers’ corners, healthy food, doctors’ offices as well as a place to simply meet, talk or relax. They are often built with exercise areas outside, with common space for yoga, education, or safety instruction. Since launch, CTP has refined the Clubhaus concept further at CTPark Bucharest West and CTPark Budapest West and is currently developing another at CTPark Warsaw West, with more planned at various parks around the CTPark Network based on client interest or park size. 272 CLUBHAUS BUDAPEST CLUBCO BRNO 273 3. STIMULATING SOCIAL IMPACT AND WELL-BEING In 2022 CTP supported the UNHCR with a €10 million donation to respond to the humanitarian emergency in Ukraine and neighboring countries. In addition, CTP provided space in Hungary and Romania to support logistics for humanitarian aid and offered accommodation in hotels and residential apartments in the Czech Republic. Sustainability 274 Community investment and charity CTP has a long-standing tradition of engagement with the commu- nities where it operates and with global issues. The Company sup- ports the UN Sustainable Development Goals. CTP promotes socially responsible behaviour throughout the countries in which it operates, where it supports a wide range of community-based organisations mainly focused on support for children and adolescents (e.g., training for professional skills, study grants and equipment support), social well-being and local infrastructure development. The majority of the budget spent in this area supports long-term initiatives. Logistic properties are typically located in out-of-town locations. This creates limited opportunities for people working there to take care of their well-being. In 2018 CTP introduced its first multi-purpose Clubhaus concept building at CTPark Bor.. CTP’s Clubhaus offers space that serves communities, both the people living in the neighbourhood as well as the employees of CTP’s tenants. They provide space for ed- ucational purposes, healthy nutrition, medical care and other activities and create opportunities to take care of the well-being of thousands of people. Currently there are three operating Clubhaus locations. Category Framework for employee satisfaction monitoring in place Framework for clients satisfaction monitoring in place Targets In Place In Place CTP’s impact goes far beyond the parks and buildings that it creates. Both within the organisation and in the communities where the Company operates, CTP is in constant contact with people and places a value on supporting their well-being. CTP actively helps people in the wider community in many ways, including helping young people in their education, providing shelter and other types of assistance to Ukrainian refugees, and providing financial aid for palliative care. Health, safety and well-being CTP values the health and safety of its employees, especially as the Company operates at a fast pace and always wants its employees per- forming at their best. Needs are addressed locally, and the focus is placed on general health and physical well-being. Therefore, the Com- pany supports, depending on location, sports membership cards, pri- vate medical services, sports classes, group participation events and Company gatherings. Safety at the workplace is secured through risk identification and training of employees through online courses. CTP follows all local, na- tional, and international law and regulations and works hard and con- tinuously with service providers to ensure that it knows where risks are and to mitigate them in time. Health and safety related to development activities are managed locally, meeting all local requirements. In 2022 CTP recorded no fatalities among employees. A more systemised ap- proach towards health and safety management will be introduced in the following years. The safety of people working in CTP buildings is the responsibility of tenants. CTP supports tenants in selecting safe prem- ises and makes sure buildings are maintained properly to ensure safety. 4.3.3 STIMULATING SOCIAL IMPACT & WELL-BEING GRI 403-1 to 403-7 GRI 203-1 CTP’s targets for Stimulating Social Impact & Well-being ESG Strategy CONNECTING COMPANIES AND PEOPLE CTP helps organise "open door" days where clients introduce their company and jobs to local populations through tours or job fairs. MULTIFUNCTIONAL + MULTIGENERATIONAL Clubhaus is often used by CTP and tenants as a place for training, lectures as well as continuing education, in addition to providing sports / fitness facilities. 275 4. CONDUCTING BUSINESS WITH INTEGRITY Sustainability 276 To this extent, in 2022, CTP assessed 217 real estate counterparties, which reflects 100% of transactions; 682 suppliers, including poten- tial new suppliers; and 100% of the entities within the Group on top- ics such as risks to human rights, ethical behaviour, etc. Across these assessments, no issues were discovered either within, or outside CTP. Due diligence of counterparties is established to mitigate the potential negative impact of conducting business activities on human rights or ethical behaviour in supply chain. CTP is currently involved in one court case; no actions have been taken against the Company. The opposing party has appealed, and the case is pending. Anonymous intranet grievance channel: E-mail: [email protected] Phone: +420 607 287 287. Beyond the grievance channels, CTP has a whistleblower policy in place. As in its grievance channels, the Company encourages employ- ees to contact managers first. However, if for any reason this is not appropriate, the employee should raise his or her concern by using the whistleblowing channel. This channel can be anonymous if desired and offers all protection needed to the whistleblower. Diversity, equity, and inclusion GRI 405-1 CTP recruits employees based on talent, experience, and attitude. Be- cause of this, CTP employs a group of diverse, well-motivated, ambi- tious people. CTP believes that gender equality is a key value. Over the last years, the Company has been able to maintain a gender ratio close to 50:50 below the Board level. At the Board level, two of the six Board members are women, in line with the Company’s goal that gender representation at the Board level not fall below 30%. More information can be found in Section 4.4.3. CTP strives to conduct business with integrity and works consistently to build and nurture an ethical work environment. The tone for this is set at the top of the organisation actively spreading a culture where speaking up is promoted. This is partially done through training of management on these topics. CTP demonstrates its commitment through various policies related to the topic, such as, but not limited to its: • Code of Conduct, Suppliers’ Code of Conduct • Anti-Bribery and Corruption Policy • Insider Trading Policy • Donations, Community Investment and Sponsorship Policy Further policies can be found on CTP’s corporate website. All employees receive annual training on all topics related to compli- ance to ensure that they are aware of the Company’s policies and pro- cedures. With a large organisation and an expanded value chain, managing risks becomes complex and more important. Due diligence, both within the organisation and through its value chain, is of great importance to the Company. Targets are set to support this agenda through the train- ing of people. GRI 2-24 GRI 205-1 GRI 206-1 GRI 207 GRI 407-1 GRI 412-2 GRI 414 4.3.4 CONDUCTING BUSINESS WITH INTEGRITY Category Employees trained in Code of Conduct, anti-harassment policy each year Gender split 45-55% YE 2026 Recurring Annually Recurring Annually Targets Baseline 100% On Target CTP’s targets for Conducting Business with Integrity ESG Strategy 277 Sustainability Company Culture and Employees 4.4 4.4.1 CTP’S CULTURE The Group employs ambitious professionals who are continuously look- ing for new opportunities, new locations, new innovations and new mar- kets to better serve its clients. Their responsiveness—to market trends, new technologies, and the Group’s clients’ needs, which often change during the tenancy—has made CTP the market leader it is today. CTP’s employees have a real “can do” mentality. They are competi- tive, creative and have a clear sense of commitment to deliver the best possible product for tenants. It is their nature to operate from a long- term partner perspective for CTP’s tenants and the communities that the Company serves and where it operates. This is also reflected in the Group’s commitment to sustainability—with sustainability being an in- tegral part of all Company processes. CTP’s construction teams build energy-efficient buildings to minimise resource usage and reduce the size of the Company’s environmental footprint. They go the extra mile to ensure that the Group’s properties are not only business smart but also people friendly. CTP empowers its local teams, with local management having a great level of independence. The Group’s international corporate team is there to support the country teams, share best practices and imple- ment common processes. This allows CTP to provide a true interna- tional work environment. In total the Group’s employees represent 23 different nationalities. CTP has a unique entrepreneurial culture. Its flat management structure allows the Group to make decisions quickly, take calculated risks, and be at the vanguard among its peers in bringing in new innovations. This gives the Company a clear edge over many industry players. Company culture is also reflected in CTP’s “Full Speed” motto. 278 Company Culture and Employees 4.4.2 CTP’S VALUES CTP’s values drive its success, as the implementation of the Com- pany's business model demands excellence at each step of the process, allowing the Group to deliver on its promises. Recruitment is focused on selecting professionals who fit CTP’s culture and whose values align with the Company’s to ensure that teams are working towards common goals. The Group has five deeply rooted values, which inspire its teams to do what they do best: develop sustainable, innovative and high-quali- ty industrial and logistics buildings. As a long-term owner, CTP’s re- sponsibility towards its partners, clients, communities, employees and other stakeholders is preserved by its values. Commitment: We are committed to build buildings that are future proof and serve the needs of our clients. This is at the heart of what we do and what we are passionate about. We go the extra mile and beyond what is expected, as we are long-term owners and develop to hold. We use high-quality materials that last, reducing maintenance, operational and energy costs to lower the overall cost of occupancy for our tenants. We have a unique product range to provide our cli- ents with sustainable solutions. Entrepreneurial: We are an entrepreneurial company. We react quickly to both market changes and clients’ needs, take calculated risks and grab opportunities to enhance our leading market posi- tion. It is our nature to be competitive, innovative, and agile, while we always strive to do things better than they have been done be- fore, which has brought us this far. We take a hands-on and boots- on-the-ground approach, with local teams that have a high level of responsibility—allowing them to make decisions quickly and adapt to local market circumstances. Accountability: We are accountable towards our clients, investors, employees, and communities. We set ourselves clear goals, commu- nicate effectively, come up with solutions and pay attention to de- tails. As a long-term partner we take ownership, keep all points of contacts in-house and understand the strategies and needs of our stakeholders, in order to deliver on our promises and remain their partner of choice. Sustainability: Sustainability underscores our long-term commit- ment to growth and informs all that we do today. That’s why we build highly efficient buildings to reduce energy and water con- sumption, always to BREEAM standards, and with our entire built portfolio BREEAM In-Use certified, a first for any leading industrial developer. All of our sustainability efforts are part of our larger goal to become carbon neutral. Community: Our parks are full of people: our people, our clients, their employees and families. We encourage healthy networks be- tween all stakeholders and local communities, with the goal of im- proving the quality of life for all involved. We do this by investing in the surrounding communities, providing public relax/exercise fa- cilities, developing relationships with local schools and universities, and creating community centres in our parks and office buildings. 4.4.3 CTP’S EMPLOYEES CTP considers its employees essential to its success. Its high-per- forming team of business-smart professionals is experienced and has in-depth understanding of client needs and the markets where the Group operates. Learning & development CTP continues to invest in its professionals, providing them with the opportunities they need to develop both their professional and per- sonal skills. The Group provides support for its people to pursue MBAs and other professional qualifications, such as RICS, CFA, etc., and also holds in-house trainings and external seminars and conferences. Em- ployees are encouraged to set professional as well as personal objec- tives. To train the next generation of managers and educate its talent pool, CTP holds quarterly “Top 30” events, where the country manage- ment teams together with the Group’s leadership gather to exchange views on the markets, best practices, and to learn from both internal and external guests. It is CTP’s priority to ensure that all employees can always perform at their best. In this context employees are encouraged to offer contin- uous feedback and evaluate performance. Remuneration On top of their base salaries, the Company incentivises its employees through the achievement of both Company- and country-specific KPIs, creating a strong team culture and alignment with shareholders, as well as personal KPIs, which are agreed yearly with managers. Attracting talent Attracting the right talent is critical for CTP. As CTP’s profession- als are given a great deal of responsibilities from the day they join, the Group has always been committed to attracting the best talent by fostering professional development, promoting cross-functional and international opportunities, and offering exciting career opportunities at all levels. Continuously bringing in new sets of capabilities is a key success factor for the Group. Managers are actively engaged in the hiring process to ensure the right cultural and professional fit. Over the last years, CTP has experienced significant growth in the number of assets it operates and in revenue. The number of its employees has followed consequently and increased from an average 379 full-time employees (“FTE”) in 2020 to 553 FTE in 2021, to 634 FTE in 2022. In 2022, the Company hired 249 new colleagues, a year- on-year increase of 20%. 279 SustainabilitySustainability Employee category by gender (in %) Sustainability Turnover rate headcount (in %) Senior Management Middle Management Staff 600 500 400 300 200 100 0 Male 49%% Female 51% Under 30 30–50 50+ 600 500 400 300 200 100 0 Female Male Female Male Female Male Female 18.8% Male 17.7% Under 30 30–50 50+ 2022 30% 25% 20% 15% 10% 5% 0% Avg. number of employees / headcount (in %) GRI 2-7 GRI 401-1 Fig. 58 Fig. 59 Fig. 60 280 4.4.4 CTP’S INCLUSIVE AND SAFE WORK ENVIRONMENT The Group is committed to providing its employees a working environ- ment that fosters diversity and equal opportunities and to offer to each employee the experience needed to build an exciting career that creates value for the Company. CTP complies with labour standards as set by the relevant regula- tory bodies. Discrimination, sexual and any other form of harassment are not tolerated under any circumstances. CTP has implemented an Anti-Discrimination and Harassment Policy to foster safe, equal and inclusive working environments. Workplace safety is secured through in-depth risk identification and by training CTP’s professionals. CTP complies with all local, national, and international laws and regulations and works continuously to miti- gate any risk that might appear. The Group is actively stimulates a healthy lifestyle for its employees by organising regular sport activities, which foster team spirit. Diversity and inclusion GRI 405-1 Diversity and inclusion form a key part of CTP’s ESG strategy. The Group has shown a stable gender ratio of close to 50:50 over the past years, with the Group targeting at least 45% representing each gender. While CTP historically targeted to have at the Board level at least 30% of members representing each gender, the Group further ad- vanced its diversity policy in November 2022, setting three targets: 1. At least 30% of the Non-Executive Directors shall represent each gender; 2. At least 25% of the Executive Directors shall represent each gender; and 3. At least 30% of the senior management shall represent each gender. The Group is currently in compliance with the first and third target. Speak-up culture CTP, in addition to having a whistleblowing channel, has established a grievance procedure. Employees who believe that they or someone else may be experiencing discrimination or (sexual) harassment are encour- aged to contact the appropriate supervisor or Group AML & Compli- ance Officer. CTP promotes a speak-up culture, where people are not afraid to raise their concerns. The Board conducts a yearly assessment of the tone at the top and the relevance of the values and culture established in CTP’s policies and other documents. In 2022, the Board found that the Company acts in line with its values, codified in CTP’s Code of Conduct: compliance with applicable legal regulations; integrity; objectivity; quality; sus- tainability; and social responsibility. Company Culture and Employees Average FTE’s * Average FTE’s by Country * 400 300 200 100 0 Female Male Avg. FTE’s 700 600 500 400 300 200 100 0 2018 2019 2020 2021 2022 156 168 169 189 227 291 176 190 236 343 324 345 379 463 634 FTE * The FTE numbers reported below differ from those reported on previous page which are based on GRI standards, where FTEs and contractors are separated. * The FTE numbers reported below differ from those reported on previous page which are based on GRI standards, where FTEs and contractors are separated. CZ RO All Other Countries SK HU NL DE 700 600 500 400 300 200 100 0 2018 2019 2020 2021 2022 324 345 379 463 634 Avg. FTE’s Fig. 61 Fig. 61 281 Remon L. Vos EXECUTIVE DIRECTOR & CEO Born in the Netherlands in 1970, Remon Vos founded CTP in 1998 with two investors to develop A-class industrial properties in the Czech Republic. Over the next 20 years Remon grew the CTPark Network to become the largest integrated system of full-service business parks in Central and Eastern Europe (“CEE”). In July 2019, Remon took over 100% control of the CTP Group and continues to lead the company at full speed. He is personally involved at both the executive and operational levels in all CEE markets, growing the portfolio and strengthening relationships with long-term business partners. Richard Wilkinson EXECUTIVE DIRECTOR, DEPUTY CEO AND CFO Richard joined CTP in 2018 as CFO and is responsible for the inancing of the entire Group portfolio throughout CEE. With several others, Richard oversaw the irst sale of a portion of CTP’s portfolio to a third party, organised the largest industrial real estate reinancing in CEE history, and lead CTP’s debut green bond—the largest inaugural ofering in CEE real estate. After studying law at the London School of Economics, Richard moved to a career in inance. For nearly 30 years he has held various senior management positions in treasury, balance sheet management, corporate banking and real estate. CTP is guided by a team of highly experienced property professionals. With strong Group leadership at the executive level, CTP country teams, with deep local market knowledge, are provided autonomy to react quickly to market developments and client requests. Local CTP teams work together seamlessly sharing best practice to provide innovative solutions and build long-term growth. Sustainability Leadership4.5 282 Michal Felcman HEAD OF M&A Michal specialises in M&A, inancial manage- ment and restructuring. He is responsible for the acquisition and later integration of several companies into the fast-growing CTP world. Květa Vojtová GROUP HEAD OF M&A LEGAL Two decades of experience in corporate law and an ability to move things fast with- out missing a beat. This is why Květa leads CTP’s M&A legal team, which supports all acquisitions, divestments, and Group restructuring. Thomas Bergman GROUP DIRECTOR OF IT As a technical leader, Thomas brings more than ten years of experience in digital trans- formation and innovation through building reliable processes and empowering IT de- partments. Coming from the fast world of IT start-ups and scale-ups, he applies his ex- pertise at CTP to use technology and data to deliver a lasting business impact. Oliver Oros HEAD OF LEASING LEGAL Oliver leads CTP’s legal leasing department with more than 10 years of experience in real estate law and adjacent legal areas primarily involving commercial law, including corporate law matters and related litigation. Company Culture and Employees Bert Hesselink GROUP CLIENT RELATIONSHIP DIRECTOR Bert is a well-respected real estate profes- sional with almost 20 years of international experience in commercial real estate. He is responsible for translating rapidly changing tenant needs into business opportunities for developing better commercial spaces in sought-after locations in CEE. Bert lectures at the MBA real estate programme at the University of Economics in Prague. Patrick Zehetmayr GROUP CFO Patrick brings 30-plus years of banking and leadership experience to his new role as Group CFO. He joins CTP from Erste Group Bank in Vienna, where he served, most recently, as Head of their Commercial Real Estate division. As Group CFO, Patrick’s focus is on support- ing CTP’s growth, ensuring transparency, and driving strong inancial returns to its share- holders. 283 Dragana Djordjevic CFO, SERBIA Dragana oversees the accounting and inance operations for CTP’s Serbian portfolio, which holds the number-one position on this fast- developing and strategic market. Twenty years in inance has prepared her well for this task. Bogi Gabrovic DEPUTY COUNTRY HEAD, POLAND A seasoned and inspirational team leader, Bogi brings 25+ years’ experience from PwC and inance executive roles from multiple international organisations to her role as CFO for Poland, where she is developing a strong local team and expanding CTP’s presence in CEE’s largest economy. Ana Dumitrache MANAGING DIRECTOR, ROMANIA Under Ana’s dynamic leadership, Romania has grown to be CTP’s second-largest market with a portfolio of leasable property of over 2.1 million sqm. She has over 20 years of real estate experience in both the private and banking sectors and extensive experience helping international companies grow their business in Romania. Eleonora Amariutei CFO, ROMANIA Eleonora brings inance experience from both corporate and government perspectives, including as the CFO for Billa Romania for over ten years. In 2020, she joined CTP to deepen growth in the Romanian market. David Chládek MANAGING DIRECTOR, CZECH REPUBLIC David started with CTP in 2011 and has grown to play a vital role in orchestrating and leading all of CTP’s construction across the Czech Republic, the Company’s largest portfolio. He has an MBA focused in strategic management from Nottingham Trent University and over 20 years of experience in construction and real estate. Jakub Kodr HEAD OF BUSINESS DEVELOPMENT, CZECH REPUBLIC Jakub is always on the go traversing the Czech portfolio to make sure tenants are happy and that the Company’s parks are in tip-top order. With a decade of experience, an MBA in real estate investment and MRICS accreditation, he leads the BizDev team with his skill for tenant-park matchmaking and scouting new opportunities. Sustainability 284 Ivan Šimo CONSTRUCTION DIRECTOR, SLOVAKIA Ivan rose rapidly through the CTP ranks after joining CTP as a Junior Project Manager just over three years ago. Today, he plays a brick-and-mortar role in building the success of the Company’s portfolio in Slovakia, from overseeing construction to scouting new locations. He holds a master’s degree in engineering from the Slovak University of Technology in Bratislava. Stanislav Pagáč MANAGING DIRECTOR, SLOVAKIA Stano has grown the Slovak team from two to 30 in ive years as Country Head of Slovakia. He set a major goal for 2021—to drive CTP to the number-one position on the Slovak market, which he achieved in 2022, aided by his 18+ years of experience in Slovak real estate. Paul Dijkstra CFO, NETHERLANDS Paul Dijkstra joined CTP in 2021 and has 15 years of experience in the real estate business, working for Deloitte Real Estate Advisory as a management consultant, and later, the City of Amsterdam as CFO of the Real Estate department. Paul uses his deep experience in real estate and inance to expand CTP’s footprint in the Netherlands with a long-term investment focus. David Strobl CONSTRUCTION DIRECTOR, AUSTRIA David joined CTP in July 2021 to lead CTP’s construction team in Austria. With 30 years of experience in the construction ield, he has a wide range of expertise in overseeing construction projects from the initial phase to handover, including negotiating with local authorities and other stakeholders at all stages of project realisation and building long- term relationships with business partners, clients and suppliers. Ferenc Gondi MANAGING DIRECTOR, HUNGARY Ferenc brings extensive experience as the head of CTP’s Hungarian legal team to his new leadership role in Hungary. As in-house counsel his experience includes all legal aspects supporting expansion in Hungary, including acquisitions. Veronika Ladó CFO, HUNGARY Veronika joined CTP Hungary as Funding Manager, where she handled the inancing of projects across CTP’s Hungarian portfolio. After success in that role, she became CTP’s CFO in Hungary. She holds an MBA from the Budapest University of Technology and Economics and has nearly 20 years of experience working for several large banks in the country. Company Culture and Employees 285 Sustainability 286 Maarten Otte HEAD OF INVESTOR RELATIONS Maarten joined CTP in October 2022 to establish and further develop relationships with existing and future investors and sell- side analysts. He joins CTP from Unibail-Rodamco-Westield, one of the world’s leading developers and operators of shopping malls, where he was Group Director of Investor Relations and gained broad real estate experience. Ondřej Tupý GROUP ENERGY MANAGER Ondřej has many years of expe- rience in the energy industry. He joined CTP with responsibility for the construction of photovoltaic sources, battery storage and the development of electromobility. He worked most recently at Inno- gy, where he was responsible for the B2B business segment. Rohia Hakimová GROUP AML COMPLIANCE OFFICER Rohia joined CTP to help imple- ment legal requirements leading to CTP’s green bond issuances in the autumn of 2020, which were rolled out with market-record success. As CTP’s compliance leader, she continues to build CTP’s corporate culture and over- see compliance protocols. Jan Hübner CONSTRUCTION DIRECTOR FOR CZECH REPUBLIC Jan has extensive experience on construction and development projects in the Czech Republic, Slovakia, Poland and Hungary, in- cluding as designer, site manager, project manager, construction director and country CEO. He holds master degrees in civil engi- neering and economics. Patryk Statkiewicz GROUP HEAD OF MARKETING & PR Patryk joined CTP in 2022 after more than 11 years with FedEx Express in various roles regionally (Benelux, Germany) and globally. He brings expertise in marketing, brand strategy, demand gener- ation and customer experience to his new role managing CTP’s award-winning marketing team. Adam Targowski GROUP HEAD OF ESG MANAGEMENT Adam and his team are responsible for setting up the Group ESG strategy and its execution together with the country teams. Prior to joining CTP in 2022, he was responsible for sustainability at Skanska’s development business in CEE and ran a consultancy in the ield of sustainability. Dominika Duda—Sloma FINANCE DIRECTOR (POLAND) Dominika brings more than 15 years of inancial and account management experience to her role as Finance Director for CTP in Poland, with expertise in accounting, taxes, reporting, transaction planning, and inanc- ing. She worked for Immoinanz Group prior to joining CTP. Lukáš Svoboda PROCUREMENT MANAGER Lukáš joined CTP in 2022 after many years in procurement on various projects around the world. He works to achieve Group-wide savings, leveraging the scale of CTP’s operations through uniied purchasing. Based on his previous experience, he is also involved in CTP’s transformation towards a green-energy future. Ivana Ficzová CFO, CZECH REPUBLIC Ivana has more than 15 years of real estate inance experience. During her career, she has helped move a number of impressive real estate transactions. As CFO for the Czech Republic, she focuses on strategic inancial management and growth with the country's leadership team. Dirk Sosef HEAD OF RESEARCH AND STRATEGY Dirk joined CTP in 2022 to bolster the Company’s strategy with actionable insights that provide competitive advantages and growth opportunities over the long term. Prior to joining CTP he was head of the European Research & Strategy team at Prologis. Stefan De Goeij ESG & ENERGY LEAD As ESG and Energy Lead, Stefan helps drive CTP’s ambi- tious Group-wide sustainability agenda. He re-joined CTP in 2023 after two years as Head of Sustainability and Property Management Services at global real estate consultancy Avison Young in the Czech Republic. Prior to that, he was Group Head of Property Management and Group Sustainability Oicer at CTP for 10 years. He serves as Chairman of the Advisory Board of RICS in the Czech Republic and lectures on ethics at the MBA real estate programme of the University of Economics and Business in Prague. Chris Dekkers GROUP HEAD OF CONTROLLING AND PROCESS MANAGEMENT Chris is a professional inance leader with broad experience in diferent leadership roles within international organisations, most recently as Head of Control at Unibail-Rodamco-Westield. He joined CTP in 2022 to grow and develop the Group Controlling Team, bringing strategic insights to the organisation. Lukáš Moravčík GROUP HEAD OF PROCUREMENT Lukáš joined CTP as Group Head of Procurement in 2022 to help bring more structure and organ- isation to CTP’s procurement activities. He currently focuses on the Czech Republic, where he aims to create a more digital- ised, efective, and transparent procurement process that will help CTP achieve its ambitious goals. Before joining CTP, Lukáš held various senior procurement positions in Germany, Austria and Slovakia in real estate, as well as in other industries. Timo Hielscher REGIONAL DEVELOPMENT DIRECTOR WEST, GERMANY Timo started his real estate career as investment manager for Aurelis Real Estate in Duisburg and from 2020 was Head of Asset & Property Management & Transactions in western Germany. He joined CTP in 2022 to expand the portfolio further into western Germany. Fabian Kempchen REGIONAL DEVELOPMENT DIRECTOR EAST, GERMANY Fabian is responsible for as- set and property management throughout CTP’s portfolio in northern Germany. He was pre- viously responsible for managing the same portfolio prior to its acquisition by CTP in 2022. His focus is to modernise and further develop the existing portfolio and search for new acquisition opportunities (not pictured here). Company Culture and Employees 287 CTFEST CTFest was launched in 2017 to bring the whole Company together for a day of fun, relaxation, entertainment, and particularly to celebrate the achievements of long-term colleagues in an enjoyable summertime atmosphere. In 2022 we celebrated Petr Svoboda and Radka Veletová, who have been with CTP for nearly 20 years. The evening highlight—a tug-o-war competition between countries—keeps the CTP competitive spirit alive. Congratulations Team Slovakia who took home the trophy! Sustainability 288 DOKSY RACE CTP has been the main sponsor of the annual Doksy Race held in the Czech Repulbic. The half-triathlon was taken up by individuals and teams, with CTP teams getting on the podium in the Real Estate Cup. SLOVAKIA TEAM BUILDING All countries engage in employee team building outings during the year. Here, team Slovakia demonstrates their entreprenurial and competitive spirit in an outing in September. Company Culture and Employees 289 Sustainability TOP 30 CTP leaders take time out twice a year to meet, exchange experiences and review country and group KPIs. TOP 30 BRNO A key meeting was held in Brno at the end of the year in which the Company leadership oulined CTP's new strategy for the coming decade. 290 Company Culture and Employees CTP GALA At year end, CTP celebrated with the whole Company in formal style. The largest Gala to date welcomed over 500 CTP employees and guests. Featuring the annual CTP Awards, the teams took the opportunity to tout their successes as well as show their talent, while getting the opportunity to meet both new and old colleagues from across CTP's markets. 291 ZUZANA CZ, EXPO 292 293 EU Taxonomy4.6 EU Taxonomy is intended to reorient capital flows towards a more sustaina- ble economy. Article 8(2) of the Tax- onomy Regulation requires non-financial undertakings to disclose information on the proportion of the turnover, capital expenditure and operating expenditure of their activities related to assets or processes associated with environmentally sustainable economic activities. CTP discloses its eligibility and alignment in line with requirements. Sustainability Taxonomy eligible and aligned activities 46.4% 4.8% 13.7% Turnover Category CapEx OpEx 294 4.6.1 KPIs (METHODOLOGY OF CALCULATION) Turnover Turnover KPI is calculated based on the Group’s 2022 consolidated fi- nancial statements and on the notes to the financial statements. • Eligible turnover (numerator) = Rental Income + Service Charge in- come + Income from Development Activity + Hotel Rental Income • Total turnover (denominator) = Total Revenues (Consolidated profit and loss statement) • Aligned turnover (numerator) = Eligible turnover from econom- ic activities attributed to assets (properties) that meet technical screening criteria including Substantial Contribution Criteria, Do Not Significantly Harm Criteria and Minimum Social Safeguards To avoid double counting in the numerator, economic activities are at- tributed to the Company’s business activities that are presented sep- arately in the financial statements. Eligible turnover from economic activities that contribute to specific environmental objectives is pre- sented separately. Economic activities are verified against their con- tribution to climate adaptation. Capital expenditure (CapEx) CapEx KPI is calculated based on the notes to the financial statements. • Eligible CapEx (numerator) = Land acquisition (Note 17 Acquisitions – Landbank) + Costs related to design and project preparation and construction (Note 18 Additions IPUD) Restructuring and major renovations of standing buildings (Note 17 Additions – owned build- ing and land) + Investment in all renewable energy sources including photovoltaic systems on facades and roofs (Note 20 value described under the table) + Acquisition of existing buildings (Note 17 Acquisi- tions – Buildings, Note 18 Acquisitions – IPUD) • Total CapEx (denominator) = Total of additions and acquisitions in Note 17, 18, 20 (Consolidated Financial Statement) • Aligned CapEx (numerator) = Eligible CapEx from economic activi- ties attributed to assets (properties and photovoltaic systems) that meet technical screening criteria including Substantial Contribution Criteria, Do Not Significantly Harm Criteria and Minimum Social Safeguards To avoid double counting in the numerator, economic activities are attributed to the Company’s business activities that are presented separately in the financial statements. Eligible CapEx from economic activities that contribute to specific environmental objectives are pre- sented separately. Economic activities are verified against their con- tribution to climate adaptation. Operational expenditure (OpEx) The EU Delegated Act list items to be considered as OpEx as: research and development, building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment by the undertaking or a third party to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such assets. Due to this, the calculation is not based on the consol- idated financial statements. Instead, a bottom-up approach has been used. OpEx has been extracted from the breakdown of annual internal spendings. • Eligible OpEx = Maintenance, repair and management of parks • Total OpEx = Total property operating expenses • Aligned OpEx (numerator) = Eligible OpEx from economic activities attributed to assets (properties) that meet technical screening cri- teria including Substantial Contribution Criteria, Do Not Signifi- cantly Harm Criteria and Minimum Social Safeguards To avoid double counting in the numerator, economic activities are at- tributed to the Company’s business activities that are presented sep- arately in the financial statements. Eligible OpEx from economic activ- ities that contribute to specific environmental objectives is presented separately. Economic activities are verified against their contribution to climate adaptation. 4.6.2 ELIGIBILITY CTP’s business activities were screened based on EU Taxonomy defi- nitions, and four eligible economic activities have been identified: 7.1 Construction of new buildings; 7.2 Renovation of existing buildings; 7.6 Installation, maintenance, and repair of renewable energy technolo- gies; and 7.7 Acquisition and ownership of buildings. The EU Delegated Regulation defines 7.1 Construction of new build- ings as: Development of building projects for residential and non-residential buildings by bringing together financial, technical and physical means to realise the building projects for later sale as well as the construction of complete residential or non-residential buildings, on own account for sale or on a fee or contract basis. As CTP’s development activities are directly related to the above defi- nitions, the following tasks are considered relevant: 1. Land acquisition (CapEx); 2. Costs related to design and project preparation (CapEx); 3. Construction of new buildings (CapEx); 4. Extension of existing buildings (CapEx); 5. Income from development activity (Revenue). EU Taxonomy 295 The EU Delegated Regulation defines 7.2 Renovation of existing build- ings as: Construction and civil engineering works or preparation thereof. As CTP’s renovation activities are directly related to EU Taxonomy definitions, the following tasks are considered relevant: 1. Restructuring and major renovations of standing buildings (CapEx). The EU Delegated Regulation defines 7.6 Installation, maintenance, and repair of renewable energy technologies as: Installation, maintenance, and repair of renewable energy technologies, on-site. As CTP invests in the development of photovoltaic capacity, the fol- lowing tasks are considered relevant: 1. Investment in all renewable energy sources including photovoltaic systems on facades and roofs (CapEx); 2. Maintenance of existing renewable energy systems (OpEx). The EU Delegated Regulation defines 7.7 Acquisition and ownership of buildings as: Buying real estate and exercising ownership of that real estate. As CTP’s acquisition activities directly relate to the above definition, the following tasks are considered relevant: 1. Acquisition of existing buildings (CapEx); 2. Costs related to buildings maintenance and operations (OpEx); 3. Rental income (Turnover); 4. Service Charge Income (Turnover); 5. Hotel Rental Income (Turnover). 4.6.3 ALIGNMENT EU Taxonomy disclosure also requires reporting on the alignment of eligible activities with the Technical Screening criteria set out in Com- mission Delegated Regulation 2021/2139. Determination of taxonomy alignment requires that the eligible economic activity concerned makes a significant contribution to the attainment of one or more environmental objectives, does not signifi- cantly harm any other environmental objective, and the company com- plies with the minimum social safeguards in relation to among others, occupational health and safety, corruption, tax, fair competition and human rights. With respect to the verification of contributions to environmental ob- jectives and Do Not Significantly Harm Criteria, the technical screen- ing criteria for the individual climate objectives are defined in Annex I and Annex II of the Delegated Act. The six Taxonomy environmental objectives are: 1. Climate change mitigation; 2. Climate change adaptation; 3. The sustainable use and protection of water and marine resources; 4. The transition to a circular economy; 5. Pollution prevention and control; 6. The protection and restoration of biodiversity and ecosystems. Two published environmental objectives—Climate change mitigation and Climate change adaptation—are verified on an economic activity basis and documented in checklists. Verification of the Minimum Social Safeguard requirement has been done on a company level. It consists of embracing international conven- tions and regulations on health and safety, corruption, tax, fair com- petition and human rights, such as OECD Guidelines for Multinational Enterprises, UN Guiding Principles on Business and Human Rights (UN- GPs), ILO core conventions and the International Bill of Human Rights. CTP embraced relevant guidelines and processes to extent that allows to consider CTP compliant although there are areas for further devel- opment. Additionally verification of CTP’s liability in respect of breach of any of these aspects has been carried out. All Group assets that are under management and under construc- tion are screened based on technical screening criteria for specific activities (including Substantial Contribution Criteria, Do Not Signif- icantly Harm Criteria and Minimum Social Safeguards). Each asset is tested using appropriate checklists. A set of aligned and non-aligned assets is developed and used to report KPIs on alignment. All prop- erties considered aligned have climate adaptation solutions that sub- stantially reduce most important physical climate risks from list in Ap- pendix A of Delegated Act introduced. Eligible Turnover, CapEx and OpEx attributed to Activities related to assets that are aligned are recognised as aligned. Attribution to ac- tivities secure avoidance of double counting. CTP conducted an analysis of its eligibility and alignment with EU Taxonomy for the first time in 2022. CTP’s core business operations are focused on the construction of buildings and management of existing properties. Core operations are focused on economic activities that are considered eligible (7.1, 7.2, 7.6 and 7.7). These high-level eligibility results are for all KPIs (turnover: 100%, CapEx 96.8%, 81.4%). High values of eligibility are typical for real estate management and development companies. Alignment with EU Taxonomy means meeting multiple require- ments that apply to company governance, processes, specific project requirements and detailed reporting. CTP adapted the requirements stated in the Minimum Social Safe- guard requirements, adjusting its policies and processes. Meeting these requirements is a prerequisite to consider any activity aligned. In 2022, CTP analysed economic activities against respective technical screening criteria. In terms of Substantial Contribution criteria, cli- mate adaptation has been chosen for all activities. Alignment levels of 46.4% for Turnover, 4.8% for CapEx and 13.7% for OpEx have been achieved. CTP’s turnover comes mostly from managed properties. The share of properties that can ensure aligned turnover is a result of the quality of managed properties and the age and share of acquired buildings vs. self-developed. CTP-developed buildings are of high quality and ensure Sustainability 296 EU Taxonomy high energy efficiency. To increase the share of aligned properties, among others the further development of energy performance certifi- cates, further renovation activities are required. CTP CapEx is mostly spent on the construction of new buildings and the acquisition of existing properties. To increase the share of aligned CapEx, detailed requirements for the construction of new buildings (Activity 7.1) require some adjustments to CTP’s building and con- struction process specification. As CTP already certifies buildings in the BREEAM scheme, required adjustments are small. For building ac- quisitions, technical due diligence will be developed to cover Taxonomy aspects to make sure conscious decisions in this field are made. Aligned OpEx relates to aligned properties under management. These aligned properties however have a relatively low share of oper- ation and maintenance cost and therefore the reported aligned OpEx deviates from the aligned Turnover. CTP issued green bonds that are not directly related to the EU Tax- onomy. Presented KPIs are not adjusted. Adjusted KPIs based on the assumption that share of CTP assets is financed with proceeds from green bonds can be found below. Ad- justment has been calculated based on the assumption that Fair value of portfolio equals to €10,124,185 (Note 17) is financed by green bonds (Note 28 – €3,961,350, excluded €20,000 of non-green bonds). Non adjusted KPIs have been multiplied by the share of the portfolio that is not financed by green bonds (that equals to 60.9%). Adjusted KPIs are 28.3% for Turnover, 3.0% for CapEx. The breakdown of Taxonomy eligibility and alignment by activities can be found in Appendix 7.4. Table 2 Quantitative breakdown of aligned CapEx Activity Category € Activity 7.1 Construction activities € 82,245,669.56 Activity 7.6 Installation of photvoltaics € 24,923,000.00 Activity 7.7 Acquisitions € 4,708,500.00 Total aligned CapEx € 111,877,169.56 Table 3 Quantitative breakdown of aligned OpEx Activity Category € Activity 7.7 Maintenance and operations of existing building € 11,611,297.20 Total aligned OpEx € 11,611,297.20 Table 1 KPIs adjustment Note green bonds € 3,961,350,000.00 Note 28, excluding 20MEUR non-green bonds Investment property € 10,124,185,000.00 Note 17 Investment property funded by green bonds 39.1% Aligned Turnover, non-adjusted 46.4% KPI table in Appendix 7.4 Estimated to be funded with green bonds (based on 39.1%) 18.2% Aligned Turnover, adjusted 28.3% Aligned CapEx, non-adjusted 4.8% KPI table in Appendix 7.4 Estimated to be funded with green bonds (based on 39.1%) 1.9% Aligned CapEx, adjusted 2.9% 297 ENERGY STORY: FUTURE-PROOFING OUR BUSINESS MODEL Utilising the portfolio’s vast expanse of rooftop space to generate a secure, renewable, off-grid power supply for park and tenant operations. Creating a third income stream for the Company while boosting sustainability—for ourselves, our clients, and the planet. 298 299 300 301 302 303 304 305 306 307 308 ONDŘ EJ, ENERGY CZ 309 5 Corporate Governance Board of Directors 312 Biographies of directors of CTP’s Board 314 5.1 Governance Report 316 5.1.1 CTP’s goverance structure 316 5.1.2 General Meetings 316 5.1.3 Appointment and composition of the Board 317 5.1.4 Audit Committee report 319 5.1.5 Nomination and Remuneration Committee report 320 5.1.6 CTP N.V. 2022 remuneration report 320 5.1.7 Sustainability Committee report 329 5.1.8 Board Meetings 329 5.1.9 Post-2022 events 329 5.1.10 Board’s role in risk oversight 330 5.1.11 Diversity and inclusion 330 5.1.12 Compliance with the Code 330 5.1.13 Further information pursuant to the Decree Takeover Directive 331 5.1.14 CTP’s compliance function 333 5.1.15 Corporate governance statement 334 5.1.16 Responsibility statement made by the Executive Directors 334 5.2 Risk management and internal controls 336 5.2.1 CTP Group approach to Risk Management 336 5.2.2 Risk Management Policy 336 5.2.3 ERM framework 336 5.2.4 Implementation of the Risk Management Process 340 5.2.5 Risk Management System 340 5.2.6 Internal Controls 340 5.2.7 Responsibilities 340 5.2.8 Risk Appetite 340 5.2.9 Risk Control Framework 340 5.2.10 Update on CTP’s Principal Risks in 2022 341 5.3 Principal Risks 342 Corporate Governance 310 CTP is a public limited liability company under Dutch law, listed on Euronext Amsterdam N.V. (“Euronext Amsterdam”) since 25 March 2021 and included in the AMX index since 21 March 2022. CTP has designed its corporate governance structure to best support its business, to meet the needs of its (Non-) Executive Directors and stakeholders, and to comply with all applicable laws, the Dutch Corporate Governance Code (“the Code”) and other applicable regulations. Information the Company is required to disclose pursuant to the Decree on the content of the management report (in Dutch: Besluit inhoud bestuursverslag) is included in this Annual Report, including CTP's corporate governance statement (section 5.1.15). The corporate governance statement is also available on CTP's website. This chapter of the Annual Report addresses CTP’s overall corporate governance structure and states to what extent CTP adheres to the best practice provisions of the Code and where it deviates. Substantial changes to CTP’s corporate governance structure and in the Company's compliance with the Code will be submitted to the General Meeting for discussion under a separate agenda item. 5 Corporate Governance Corporate Governance 311 Corporate Governance Board of Directors Remon L. Vos EXECUTIVE DIRECTOR & CEO Born in the Netherlands in 1970, Remon Vos founded CTP in 1998 with two investors to develop A-class industrial properties in the Czech Republic. Over the next 20 years Remon grew the CTPark Network to become the largest integrated system of full-service business parks in Central and Eastern Europe (“CEE”). In July 2019, Remon took over 100% control of the CTP Group and continues to lead the company at full speed. He is personally involved at both the executive and operational levels in all CEE markets, growing the portfolio and strengthening relationships with long-term business partners. Richard Wilkinson EXECUTIVE DIRECTOR, DEPUTY CEO AND CFO Richard joined CTP in 2018 as CFO and is responsible for the inancing of the entire Group portfolio throughout CEE. With several others, Richard oversaw the irst sale of a portion of CTP’s portfolio to a third party, organised the largest industrial real estate reinancing in CEE history, and lead CTP’s debut green bond—the largest inaugural ofering in CEE real estate. After studying law at the London School of Economics, Richard moved to a career in inance. For nearly 30 years he has held various senior management positions in treasury, balance sheet management, corporate banking and real estate. Barbara Knoflach NON-EXECUTIVE DIRECTOR & CHAIRWOMAN Barbara’s career has taken her through banking and inance, real estate, and most recently to innovation and sustainability. Her career highlights include her positions as CEO of SEB Asset Management from 2005 to 2015, and later as Global CEO of BNP Paribas Real Estate Investment Management. She hones her ability to look at the bigger picture and shares her dynamic experience sitting on several committees and boards throughout her career, such as AFIRE, BVI, ULI, ZIA, and the Real Estate Academic Initiative at Harvard University. Most recently, she created LifeWorkSpace, a consulting and private investment company focused on spurring innovation and sustainability strategies in the real estate sector. She is a co-founder of TinyBE, a non-proit organisation engaged in innovative art projects. Susanne Eickermann-Riepe NON-EXECUTIVE DIRECTOR Susanne joined CTP’s Board following the end of her tenure as an active partner at PwC Germany, where she served as Head of Real Estate. With 30 years of experience in strategic and operational consulting in inancial services, real estate services, funds and companies, Susanne knows that the future of the industry will not happen without sustainability. Due to her professional background and leadership in innovation, Susanne was appointed as the chair of the board of the Royal Institution of Chartered Surveyors (RICS) Germany, where she drives several working groups on the implementation of the EU Green Deal. Susanne’s high professional rankings paired with her future- leaning environmental concerns have placed her on several real estate advisory positions. Her activities are spurred by her belief that the real estate sector must take more responsibility and action for an equitable future. 312 Corporate Governance Gerard van Kesteren NON-EXECUTIVE DIRECTOR Gerard is a inancial specialist in the global logistics sector and is a non-executive director of a number of companies, as well as a senior advisor with McKinsey & Company, and has extensive international experience and inancial management capabilities. Gerard worked with Kuehne + Nagel for a total of 25 years; from 1999 until 2014 as the Group Chief Financial Oicer and as a member of the Management Board, being highly inluential in the development of the K+N Group. During his career, he held leading positions in inance at Sara Lee Corporation; six years as Financial Director in the UK, two years in Spain, and two years as Director of Financial Planning and Analysis in the Netherlands. In addition, Gerard was named CFO of the Year in 2010 by CFO Forum Switzerland and served as Chairman of the CFO Circle (Switzerland) from 2014–2019. He is the founder and board member of the van Kesteren Foundation, which extends aid and youth programmes across developing countries. Pavel Trenka NON-EXECUTIVE DIRECTOR Pavel brings a wealth of international experience to the table. For over a decade at HB Reavis, he led their international expansion beyond the Czech Republic and Slovakia, both in Western Europe and CEE. He started out on the Board, then became the Group CEO for ive years and thereafter continued in a leadership position as a Non-Executive Director. He was previously was an Associate Partner at McKinsey & Company working in CEE, Russia and the USA. During his tenure there, he worked extensively with large international clients, primarily on revenue growth strategies and organisation transformations. He started his career with Bank Austria Investment Bank during the privatisations of the early 1990s. He holds an MBA in Finance and Economics from the University of Rochester (USA) and an undergraduate degree from the University of Economics in Bratislava. In Slovakia, he founded two non- proits, both geared to support youth skill development, where he is actively engaged. 313 Personal Information BIOGRAPHIES OF DIRECTORS OF CTP’S BOARD Corporate Governance POSITION NATIONALITY, YEAR OF BIRTH FIRST APPOINTED ON END OF CURRENT TERM OF APPOINTMENT PREVIOUS SIGNIFICANT POSITIONS ADDITIONAL POSITIONS INDEPENDENCE SHAREHOLDING Group CEO Dutch, 1970 1 July 2020 Indeinite CEO of CTP • None No 335,644,164 (held by CTP Holding B.V.) CFO British, 1964 28 December 2020 2025 Erste Group • Senior management positions, inter alia Head of Commercial Real Estate Business • None Yes 6,666 (not including LTIP conditional shares) Chairwoman, Non-Executive Director Austrian, 1965 29 March 2021 2024 BNP Paribas Real Estate • Deputy CEO and Global Head of Investment Management SEB Asset Management • CEO Swiss Prime Site (Switzerland) Real Estate company, listed • Board Member Aareal Bank AG Bank • Supervisory Board Member Landmarken AG Developer, family-owned company • Supervisory Board Member Yes 8,921 Remon Vos Richard Wilkinson Barbara Knoflach 314 Corporate Governance POSITION NATIONALITY, YEAR OF BIRTH FIRST APPOINTED ON END OF CURRENT TERM OF APPOINTMENT PREVIOUS SIGNIFICANT POSITIONS ADDITIONAL POSITIONS INDEPENDENCE SHAREHOLDING Non-Executive Director Dutch, 1949 29 March 2021 2024 Kuehne + Nagel International AG • CFO Deufol SE (Germany ) Packaging services and associated services • Member of the Board De Well (Hong Kong) Global logistics and forwarding enterprise founded in Shanghai • Member of the Board Raben Group (Netherlands) Logistics company • Member of the Supervisory Board Planzer Holding AG (Switzerland) Logistics/transportation company • Member of the Supervisory Board Janel Corporation (USA) Logistics company, listed • Chair of the Audit Committee, • Member of the Board, • Member of the Nomination and Compensation Committee Yes 31,185 Non-Executive Director German, 1960 29 March 2021 2024 PwC • Partner, Head of German Real Estate Business ARE Austrian Real Estate GmbH Real Estate company • Member of the Supervisory Board Engel & Völkers Venture Management AG Service company specialised in the brokerage of premium real estate, yachts and aircrafts • Deputy Chairperson of the Supervisory Board RICS Royal Institute of Chartered Surveyors • Chair of the European World Regional Board , • Chair of the Advisory Board of RICS Germany ICG Institute Association representing the general interests of the German real estate industry • Chair of the Board Yes 14,400 Non-Executive Director Slovak, 1973 29 March 2021 2024 HB Reavis Group • CEO Leaf Non-proit organisation • Board Member Duke of Edinburgh International Award Non-proit organisation • Board Member Yes 99,382 Gerard van Kesteren Susanne Eickermann-Riepe Pavel Trenka 315 5.1 Governance Report procedures of the Committees established by the Board, and other matters relating to the Board, the Chief Executive Officer of the Com- pany (“the CEO”) and the Non-Executive Directors. In accordance with the Board Rules, resolutions of the Board are adopted by a simple ma- jority of the votes cast at a meeting at which at least the majority of its members are present or represented. Each Director has the right to cast one vote. In a tied vote, the proposal will be rejected unless the CEO uses his right to exercise a casting vote. The Board Rules are available on CTP’s website. In addition to the Board Rules, the Board has adopted charters of its Committees, to which the Board, while retaining overall respon- sibility, has assigned certain tasks: the audit committee (“the Audit Committee”), the nomination and remuneration committee (“the Nom- ination and Remuneration Committee”), and the sustainability com- mittee (“the Sustainability Committee”). Each Committee reports to the Board. 5.1.2 GENERAL MEETINGS The Annual General Meeting (“AGM”) is held at least once a year, no later than 30 June. The agenda for the AGM includes, among other things, the adoption of the Group’s annual accounts, the appointment of the external auditor, the allocation of profits insofar as this is at the disposal of the AGM, and any other matters proposed by the Board or by the shareholders in accordance with the Company’s Articles and Dutch law. 5.1.1 CTP’S GOVERANCE STRUCTURE CTP has a one-tier board structure consisting of one or more executive directors (“the Executive Directors”) and independent non-executive directors (“the Non-Executive Directors”), who together constitute the Board of Directors (“the Board”). The Board currently consists of six Directors of whom two are Executive Directors and four are Non-Executive Directors. The Board serves as both the executive and supervisory body of the Company. Under CTP’s articles of association (“the Articles”) and Dutch law, the Board is collectively responsible for the Company’s management, general and financial affairs, policy as well as for its operations, taking into consideration the interests of the Group’s stakeholders. The Board determines how long-term value cre- ation is relevant for the Company and its business, maintains aware- ness of the impact that the actions of the Company and the business have on the value chain, and takes into account relevant stakeholder interests in this context. Within the Board, the Non-Executive Directors supervise and pro- vide advice on the performance of the duties of the Executive Direc- tors, the Company and its business. Furthermore, the Non-Executive Directors supervise the Executive Directors’ implementation of the Company’s strategy. The Non-Executive Directors also determine the targets and remuneration of the Executive Directors in accordance with the Group’s remuneration policy and any arrangements for re- muneration in the form of Company shares or rights to subscribe for shares (as approved by the Annual General Meeting). The Board has adopted written rules of procedure governing the internal proceedings of the Board (“the Board Rules”) that govern its performance, decision making, composition, the tasks and working Corporate Governance 316 ensures that Board decisions are made in accordance with the Articles and the Board Rules and supervises the implementation of adopted resolutions by the Board. The Senior Independent Director also acts on behalf of the Board as the main contact for shareholders and for General Meetings. A Director is appointed for a term lapsing ultimately at the end of the AGM held in the fourth year after the year of his/her appointment or reappointment, unless specified otherwise in the nomination for ap- pointment or re-appointment. The General Meeting may at any time suspend or dismiss a Director. CTP’s majority shareholder, Mr. Remon Vos, was appointed CEO and Executive Director after the Company’s initial public offering (or IPO) in March 2021 and may be unlimitedly re-appointed as a Director. The reason for this is that Mr. Vos has been instrumental to the building of the Group since its foundation in 1998 and has been its Chief Exec- utive Officer since 1999. He is personally involved in many aspects of the Group’s business, including formulation and implementation of its business strategy and relationships with key tenants. In addition to Mr. Vos, Mr. Richard Wilkinson is Chief Financial Officer (CFO”) and Executive Director. Mr. Wilkinson is appointed for a term ending at the end of the AGM to be held in 2025. The Non-Executive Directors are Ms. Barbara Knoflach (Senior In- dependent Director and Chairwoman of the Board), Mr. Gerard van Kes- teren (Vice-Chairman of the Board), Ms. Susanne Eickermann-Riepe and Mr. Pavel Trenka. The Non-Executive Directors were appointed on 16 March 2021 for a term ending at the end of the AGM to be held in 2024. All members are independent in conformity with the provisions of the Code. The retirement schedule of the Non-Executive Directors pro- vides for them to retire simultaneously. Upon appointing a new Non-Ex- ecutive Director or re-appointing a Non-Executive Director currently in function, CTP's retirement schedule will be amended to reflect more differentiation in the periods within which the Non-Executive Directors will retire. While there is no written succession plan in place, with the availabil- ity of dedicated senior management placed below the Executive Direc- tors, the Group’s short- and medium-term succession is looked after. Independence of Non-Executive Directors Conflict of interest situations are provided for in the Board Rules. The provisions are such that the Non-Executive Directors decide whether a Director has a conflict of interest without this Director being present. Upon this being the case, a decision can only be made if the proposed transaction is customary in the market and in compliance with the laws of the relevant jurisdiction and requires the consent of at least the majority of the Non-Executive Directors if the conflict of interest is of material significance to CTP or to the relevant Director. No loans or guarantees are given to a Director unless in the normal course of business and on terms applicable to CTP’s personnel. In the opinion of the Non-Executive Directors, in 2022 the inde- pendence requirements referred to in the Code were fulfilled. All four Non-Executive Directors own CTP shares. The Articles outline the procedures for convening and holding the AGM and the decision-making process. The draft minutes of the AGM must be published on CTP’s website no later than three months following the AGM. Shareholders are given three months to respond to the draft minutes. The minutes of the AGM are subsequently adopted and signed by the chair of the AGM and the Company Secretary. Contacts with shareholders are conducted in line with the bilateral contacts policy, published on CTP’s website. Annual General Meeting held in 2022 CTP’s 2022 AGM was held in Amsterdam on 26 April 2022. Meeting topics included, amongst others, the 2021 Annual Report, the author- isation to issue shares, amendments to the Articles, presentation of the remuneration report and the final 2021 dividend. Extraordinary General Meeting On 15 June 2022 an Extraordinary General Meeting was held online, requesting CTP’s shareholders to approve the merger and hive-down between CTP and DIR (previously named Deutsche Industrie REIT-AG), a public limited liability company under German law, with its registered seat in Rostock, Germany. The offer on all the shares in DIR was made on 7 December 2021. Of the total votes cast, almost all of CTP’s share- holders were in favour of the merger and hive-down (99.79%, repre- senting 89.19% of the Company’s share capital). The next AGM will be held on Tuesday 25 April 2023. Dividend The final dividend for the 2022 financial year will be paid following the AGM’s adoption of the 2022 annual accounts and approval of the pay- ment of the dividend. An interim dividend of €0.22 per share was made available in shares or in cash and paid out on 5 September 2022, bring- ing the total dividend over the 2022 financial year to €0.45 per share. 5.1.3 APPOINTMENT AND COMPOSITION OF THE BOARD GRI 2-15 GRI 2-17 The Board is authorised to determine the number of Executive Direc- tors and Non-Executive Directors, who are appointed by the General Meeting on a binding nomination of the Non-Executive Directors on behalf of the Board. The General Meeting may overrule a binding nom- ination for the appointment of a Director cast, representing more than one-third of the issued capital. The majority of the Directors must be Non-Executive Directors and one-third of the Non-Executive Directors must be female. The Board may grant titles to Directors as the Board deems appropriate, including the title of Chief Executive Officer, Chief Financial Officer and Senior Independent Director. The Chief Executive Officer acts as the Board's spokesperson and is primarily responsible for the Group’s strategic, risk and control is- sues. He is also responsible for convening General Meetings and calling Board meetings. The responsibilities of the Senior Independent Direc- tor include ensuring that the Board and its Committees are composed in a balanced way and function properly. The Senior Independent Di- rector chairs General Meetings of Shareholders and Board meetings, Goverance Report 317 Introduction programme for Non-Executive Directors There were no Non-Executive Directors appointed after March 2021. Therefore, no introduction programme was organised in 2022. On- boarding was provided to senior management joining in 2022. Permanent education and evaluation Education sessions are offered to the Non-Executive Directors throughout the year. In June 2022, CTP’s Group AML compliance of- ficer updated the Non-Executive Directors on compliance issues (core CTP values, anti-bribery, anti-corruption and ethical market conduct, information protection, fair competition, insider trading, anti-money laundering programme and whistleblowing). In August, CTP’s ESG officer updated the Non-Executive Directors on ESG developments within the Group. Throughout the year, various members of the Board attended several senior management offsite meetings in various CTP countries. Corporate Governance Director’s competency table Years in board Year of birth Gender General business management strategy Finance (balance & reporting Financial markets/ disclosure, communication Audit, risk, compliance, legal & governance Real estate M&A IT/Digital & Innovation Social employment ESG Remon Vos 2 1970 M X X X X X X X X Richard Wilkinson 2 1964 M X X X X X X X X X Barbara Knolach 1 1965 F X X X X X X X X X Susanne Eickermann-Riepe 1 1960 F X X X X X X X X X Gerard Van Kesteren 1 1949 M X X X X X Pavel Trenka 1 1973 M X X X X X X 318 At the 9 August meeting, the Audit Committee was presented with in- ternal control reports and discussed and approved amendments to the Group’s related-party transactions policy. KPMG presented their 2022 audit plan, and the Audit Committee discussed the Company’s interim 2022 dividend. The Committee also discussed non-financial data, the progress to embed an ESG/non-financial reporting structure within the Group, and the re-appointment of KPMG as external auditor for 2023. At the 8 November meeting, the Audit Committee discussed the Company’s tax policy; received an update on the application of ICT systems across the Company, including risks related to cybersecurity; and evaluated and proposed changes to the Audit Committee charter forming part of the Board Rules. The Committee also received non-fi- nancial data and ESG updates. At the 16 December meeting, the Audit Committee evaluated the Group’s risk management policy and was presented with and discussed the findings of an assessment of the effectiveness of the design and operation of the internal risk management and control systems, cov- ering strategic, operational, reporting and compliance risks, as well as an assessment of the effectiveness of the internal and external audit processes. The outcome of this evaluation was that no major failings in the internal risk management and control systems were observed during the reporting year. CTP continuously strengthens its internal risk management and control systems via various improvement initiatives; in 2022 no major improvements were identified. The Audit Committee took note of the roll-out of the new ERP management system (Dynamics 365) and the plan to assess the impact of the new ERP system on the Company’s control framework and implement improvements where possible. The Audit Committee also discussed the budget for 2023, the ef- fectiveness of and compliance with the Code of Conduct, the internal 2023 audit plan as well as material considerations regarding financial reporting, e.g., hedge accounting and valuation issues. The status of the best practice provisions of the Code was discussed as well as pro- posed amendments to the Group Insider Trading Policy. The Audit Committee met with the internal audit function and the CFO separately nine times during the year. At these meetings, inter alia, the progress of the internal audit plan was discussed, internal audit reports were shared, and deficiency reporting was tabled. The Audit Committee evaluated the functioning of the internal auditor and of KPMG as external auditor and advised the Board of the outcome thereof at the Board meeting on 2 March 2023. The Audit Committee met with KPMG outside of the presence of the Executive Directors on 8 March 2022. 5.1.4 AUDIT COMMITTEE REPORT The duties of the Audit Committee include supervising and monitoring as well as advising the Board and each Director regarding the integrity and quality of the Company's financial report and the effectiveness of the Company’s internal risk management and control systems. The Audit Committee advises the Board on the exercise of certain of its duties. It also supervises the submission of financial information by the Company, compliance with the recommendations of internal and exter- nal auditors , the Company’s policy on tax planning, and the Company’s financing arrangements. It assists the Board with the Company’s in- formation and communications technology and maintains regular con- tact with and supervises the external accountant, and it prepares the nomination of an external accountant for appointment by the AGM. The Audit Committee also issues preliminary advice to the Board re- garding the approval of the annual accounts, the annual budget and major capital expenditures. The charter of the Audit Committee is published on CTP’s website. The Audit Committee members are Mr. Van Kesteren (Chair) and Ms. Eickermann-Riepe. The information referred to in the Code is included in Section 5.1.12. Meetings in 2022 The Audit Committee met five times in 2022; both members attended all meetings. Standard on the agenda of the Committee are the finan- cial accounts of the period, the outlook and liquidity forecast (including funding and cash-flow forecast) and a review of the Company’s key performance indicators. The internal auditor updates the Committee on his own observations and on the status of control issues based on deficiencies identified by KPMG in the relevant yearly audit, presents the internal plan and gives regular updates on the status thereof. Heads of the Compliance department and Risk Management depart- ment provide updates (including a whistleblower analysis). In the event there are services performed by KPMG that are outside of the scope of the statutory audit, the Audit Committee approves these services on a separate note. The external auditor attended (part of) the meetings, amongst others to present its 2022 audit plan and findings. In addition to the above recurring items, other items discussed dur- ing the meetings are mentioned below. An additional meeting was held in January to finalise the Audit Committee report as part of the 2021 Annual Report and to discuss the draft 2021 Annual Report comments. At the 8 March meeting the Audit Committee extensively discussed the periodic and 2021 annual financial statements (including forecasts and outlook) as well as the draft letter of representation and the 2021 management letter and audit report by KPMG, in the presence of the Company’s CFO and internal auditor. The planning and control cycle was also discussed. At the 17 May meeting, the Audit Committee discussed Code of Conduct updates and the risk management control framework (includ- ing an evaluation of the risk management policy); the application of ICT systems, including risks related to cybersecurity; and the tender pro- cess for a new external auditor. The Audit Committee also evaluated the 2021 Annual Report. Goverance Report 319 At the 16 December meeting, the Committee discussed a (preliminary) proposal to the Non-Executive Directors for the 2023 targets of the CFO and the individual remuneration of the CEO and the CFO and the possible outcome of the 2022 targets based on preliminary numbers and data. Succession planning was tabled as well as self-evaluation in 2023. Training and education for 2023 were discussed. The Committee advised the Board to update the list of reference companies for the re- muneration peer group to no longer include Dutch companies that del- isted in 2022. Also, it advised to align the remuneration peer group for the Executive Directors and Non-Executive Directors (including AEX and AMX companies for both Executve Directors and Non-Executive Directors). 5.1.6 CTP N.V. 2022 REMUNERATION REPORT GRI 2-19 GRI 2-20 In compliance with Article 2:135b of the Dutch Civil Code, the European shareholder rights directive (SRD II) and the Code, this report is split into two separate sections, containing: • the Remuneration Policy section describing the overall approach to remuneration, and in particular, setting out the fixed and variable pay components of the Executive Directors and the fixed pay com- ponents of the Non-Executive Directors, including the background reflecting on the internal and external context surrounding remu- neration outcomes for the reporting year; and • a section on the implementation of the Remuneration Policy during the reporting year. A copy of the report shall be available on CTP’s website for 10 years. Overview of CTP's Remuneration Policy The Remuneration Policy for the Executive Directors and the Non-Ex- ecutive Directors of CTP N.V. was adopted by the AGM on 25 March 2021 (the ‘Remuneration Policy’). Remuneration reports are drafted annually from 29 March 2021 when CTP became a listed company. Consequently, this report provides for comparable figures available as from 29 March 2021. The design and implementation of CTP’s Remuneration Policy have been drafted to follow all applicable laws and corporate governance re- quirements. Decisions related to remuneration are made in the context of CTP’s values, purpose and strategy. Remuneration Policy changes are subject to shareholder approval. Furthermore, for voting rights exercised on remuneration related items, CTP undertakes to actively engage with dissenting sharehold- ers in order to address all legitimate and reasonable objections and/or concerns. CTP invites its shareholders to engage with us regarding the Remuneration Policy and reporting. Based on the feedback received relating to the annual general meeting on 26 April 2022, the transpar- ency of this remuneration report was further increased. Philosophy and principles CTP’s remuneration philosophy aligns with the way the Company operates, and that is helping CTP to grow the business and to grow the businesses of its clients. CTP is outcome focused, performance driven and rewards fairly and competitively with a focus on long-term value creation while supporting the ownership mentality and spirit of 5.1.5 NOMINATION AND REMUNERATION COMMITTEE REPORT The duties of the Nomination and Remuneration Committee include proposing appointments and reappointments of Directors, preparing selection criteria and appointment procedures for Directors, and pro- posing and updating the composition profile for the Non-Executive Di- rectors. It also periodically assesses the scope and composition of the Board and the functioning of the individual Directors. It supervises the Board’s policy on selection criteria and appointment procedures for Directors and senior management. Furthermore, the duties of the Nomination and Remuneration Com- mittee include the preparation of proposals of the Board on the remu- neration policy for the Executive Directors to be adopted by the AGM and on the remuneration of the individual Executive Directors to be de- termined by the Non-Executive Directors. The Nomination and Remu- neration Committee prepares a remuneration report on the execution of the remuneration policy for the Board during the respective year. Depending on the nature of the amendments, the AGM has an annual advisory vote on the remuneration report. The charter for the Nomina- tion and Remuneration Committee is published on CTP’s website. The Nomination and Remuneration Committee members are Mr. Trenka (Chair) and Ms. Knoflach. Meetings in 2022 The Nomination and Remuneration Committee met seven times during 2022. One of the two members did not attend one meeting; all other meetings were attended by both members. At its first meetings in January and February, the Committee discussed the achievement of the 2021 targets by the CFO. At the meeting on 8 March, the subjects of discussion were the level of the 2022 base salaries of the Execu- tive Directors; defining and agreeing on the financial and non-financial 2022 targets; evaluation of the remuneration policy; and self-evalua- tion of the functioning of Non-Executive Directors, Executive Direc- tors and the Board as a whole. In addition to the above recurring items, other items discussed dur- ing the meetings are mentioned below. At the 17 May meeting, the Nomination and Remuneration Commit- tee discussed the voting behaviour of the shareholders during the AGM. The Board had a workshop relating to the self-evaluation process and discussed the profile of the Board and succession planning. Discussions on selection criteria for Directors, succession planning and an assess- ment of the size, composition and functioning of the Directors took place in the second half of 2022. The evaluation of the functioning of the Directors in April and May kick-started discussions on succession planning of the Directors as well as on selection criteria for becoming a Director. Entrepreneurial qualities as well as a background with a more regional spread were defined as being a good addition to the current composition. On 9 August, the Committee discussed the size and composition of the Board; received an update on the Group’s internal organisation and governance; and discussed a mid-year update on the fulfilment of the 2022 Executive Directors targets. On 8 November, the Committee evaluated the Company’s diversity policy and discussed succession planning and remuneration. The Com- mittee evaluated its charter and proposed amendments, discussed benchmarking and marketing trends relating to remuneration, and evaluated the Group's remuneration policy. When deemed necessary, the committee consulted outside experts for advice. Corporate Governance 320 Next to TSR the Company also measures achievements against sus- tainability KPI’s. CTP feels this is appropriate as it takes a hands-on approach to protecting the environment. With smart buildings, circular parks and solar-ready building plans, the aim is not only carbon-neu- trality but to positively impact the communities in which CTP operates. CTP takes the environmental impact of its activities seriously. Equality, consistency, and transparency are embedded in CTP’s re- muneration practices, as CTP believes that this is an imperative foun- dation towards building a thriving and inclusive workplace. Engaging with stakeholders CTP engages openly and often with its shareholders and institutional investors on their input regarding CTP’s Remuneration Policy and the implementation thereof. Taking this input into account and alongside the input from CTP’s other stakeholders allows the Company to make informed decisions going forward and to remain impactful on all fronts. Remuneration of the Executive Directors total direct remuneration The total direct remuneration of the Executive Directors consists of four components: • fixed annual base salary; • benefits; • an annual cash incentive; and • a long-term share-based incentives. The total direct remuneration mix at target and maximum perfor- mance for the CEO and CFO is as follows: entrepreneurship in its teams in all its operating locations. CTP places an emphasis on variable remuneration to reflect its highly perfor- mance-orientated and entrepreneurial culture, its growth ambitions, and to ensure alignment with the expectations of shareholders. The six principles that guide CTP’s approach to remuneration are: 1. remuneration should focus on long-term value creation for and be clearly linked to the delivery of superior and sustainable corporate results in line with CTP’s strategy; 2. remuneration outcomes should mirror the shareholder and wider stakeholder experience over the long term and be aligned with CTP’s long-term strategy and established risk appetite; 3. remuneration should be fair and competitive against companies of a similar size, scope and complexity with a strong emphasis on vari- able pay to reflect CTP’s high-performance culture but at the same time not paying more than necessary; 4. remuneration should be simple and transparent in terms of design and communication to internal and external stakeholders; 5. remuneration should adhere to principles of good corporate govern- ance practice in line with the Dutch Corporate Governance Code and Dutch law; 6. remuneration frameworks should be sufficiently flexible to take into account changing business priorities over time. In line with CTP’s remuneration philosophy and principles, its Remu- neration Policy is to target base salary levels around the lower quartile of the peer group and total direct compensation levels (the sum of base salary, annual bonus and long-term incentive) around the upper quar- tile of Dutch listed companies. Again, this positioning policy reflects CTP’s performance-based culture with highly competitive levels of re- ward only being earned if outstanding performance is delivered. Benchmarking and peer group CTP’s remuneration should be fair and competitive against companies of a similar size, scope, and complexity. The reference points used to de- fine market peers in terms of remuneration are Dutch listed companies that are of a similar size and complexity to CTP and where appropriate, sector comparisons, i.e., European real estate and logistics businesses. To ensure a balanced approach to benchmarking, remuneration levels of Dutch listed companies within a reasonable range of CTP’s market capitalization will be considered. This may comprise both Euronext AEX and AMX companies. CTP continuously reviews the market reference points used for benchmarking purposes as the Company grows. Looking back The Russian invasion of Ukraine in February 2022 created a significant disruption globally and in the industry. This also resulted in construc- tion processes and prices being impacted. While this disruption pro- vided challenges, CTP was able to respond quickly to these external circumstances and continued to perform well, as set out in the “2022 Year in Review” section of this report. Looking ahead Creating sustainable long-term value for CTP’s shareholders and other key stakeholders are the core of CTP’s business. Hence, the core per- formance measure which was assessed under the long-term incentive plan is Total Shareholder Return (“TSR”). TSR reflects the return re- ceived by a shareholder and captures both the change in share price and the value of dividend income, assuming dividends are reinvested. TSR is an appropriate measure, as it objectively measures CTP’s financial performance and assesses long-term value creation for shareholders. Goverance Report CEO: Targets and Maximum Performance (in %) Fig. 62 Fixed Remuneration 100% 321 Note that CTP’s CEO, Mr. Vos, has a substantial shareholding in the Company, meaning there is already a clear and direct link between his reward and the Company’s performance. Therefore, there are ele- ments of the Remuneration Policy in which Mr. Vos currently does not participate, namely variable remuneration. While not receiving variable remuneration, the short- and long-term target setting of the Com- pany including CTP’s strategy is applicable to the Executive Board, and this target setting is therefore also applicable to CTP’s CEO. Scenario analyses under different performance outcomes are car- ried out annually. Fixed annual base salary The fixed annual base salary is based on seniority and experience, re- flecting the nature of the role and responsibilities, while considering relevant benchmarks. The base salary of the Executive Directors is currently set around the lower quartile of the Dutch listed peer group. Salaries are reviewed and approved by the Non-Executive Directors on an annual basis, or when there is a change in role and responsibility. Benefits Executive Directors do not participate in a pension plan, however, they are entitled to receive market standard benefits that could in- clude: health insurance, life insurance, housing/car allowance, use of a company car, travel allowance, and workers’ compensation for illness. Additional benefits may be considered based as required, subject to business needs. Annual cash incentive The purpose of the annual cash incentive is to drive the achievement of annual performance targets supporting CTP’s shorter-term strategic goals. The Executive Directors are eligible for an “at target” annual bonus of 150% of the base salary and the maximum bonus for out- standing performance is capped at two times the target amount equal to 300% of base salary. Performance measures are based on key performance indicators that relate to CTP’s strategy and business priorities for the year ahead: • Financial measures could include cashflow, EBITDA, profit, gross lettable area, gross rental income, occupancy rate, rental collection, weighted average unexpired lease term (WAULT) and other similar financial measures; • Non-financial measures could relate to environmental, social and governance targets, sustainability targets, corporate social re- sponsibility targets and specific strategic milestones as considered appropriate by the Non-Executive Directors. For the annual cash incentive, 70% of the performance measures are financial in nature and 30% are non-financial. The chosen perfor- mance measures have challenging yet realistic targets to encourage achievement in a sustainable manner. At the Non-Executive Directors’ discretion, a portion of the annual cash incentive could be deferred into shares using the deferred incentive plan. Further information is con- tained beneath the heading “Deferred Incentive Plan”. Corporate Governance CFO: Targets Performance (in %) CFO: Maximum Performance (in %) Variable Remuneration 71% Fixed Remuneration 18% Fixed Remuneration 29% Variable Remuneration 82% Fig. 63 Fig. 64 322 Deferred incentive plan The deferred incentive plan (“DIP”) is a discretionary plan that may operate with one or more incentive plans operated by CTP and pro- vides a mechanism for the deferral of part of a participant’s incentive into a deferred award of cash and/or a deferred award of shares (“DIP award”). The Non-Executive Directors, in circumstances they consider appropriate, may determine that Executive Directors are eligible for selection to participate in the DIP. The Non-Executive Directors re- serve the right to defer a part of the annual cash bonus into shares in circumstances they consider appropriate. Deferral of shares would be under the terms of the DIP and therefore Executive Directors may receive DIP awards which are granted over shares. DIP awards that are granted over shares may be granted as nil cost awards and may take the form of options to acquire shares, conditional rights to ac- quire shares or an immediate award of shares subject to restrictions. In line with the Code and unless the Non-Executive Directors deter- mine otherwise, DIP awards over shares will be subject to a five-year holding period following the award date. During this period, sale of the shares is restricted, although shares may be sold to cover taxes due because of vesting. DIP awards are forfeited by Executive Directors who leave CTP unless and to the extent the Non-Executive Directors otherwise de- termine. DIP awards may vest early on certain corporate events and may be varied on variations of the Company’s share capital and certain corporate events. DIP awards may also entitle participants to dividend equivalents paid in cash or shares. The total number of shares that may be newly issued or trans- ferred from treasury in satisfaction of awards under the LTIP and the DIP may in aggregate not exceed 5% of the Company’s issued and outstanding share capital from time to time. To mitigate dilution, the Company may repurchase shares to cover DIP Awards granted in the form of shares. Minimum shareholding requirements Executive Directors are encouraged to build or maintain (as appropriate) a minimum shareholding equivalent to 250% of their base salary over five years. Shares included in this calculation are any shares beneficially owned and any vested shares under the LTIP. Given Mr. Vos’ substan- tial shareholding in the Company, he already meets this requirement. The Non-Executive Directors may use their discretionary judgement to allow for a temporary deviation of this guideline in circumstances they consider to be appropriate, for example, in the case of new joiners. For the avoidance of doubt, in case of any shortfall under the share owner- ship requirement, Executive Directors will not be required to purchase shares from their own funds to satisfy the requirement. Risk mitigation Based on predefined trigger events, malus and claw back provisions may be applied to paid out annual cash incentive as well as the long- term share-based incentive. Malus The Non-Executive Directors, acting fairly and responsibly, may deter- mine that the value of variable remuneration as granted would produce an unfair result due to extraordinary circumstances during the period in which the predetermined performance criteria have been or should have been applied. In such circumstances and prior to vesting, variable remuneration can be cancelled or reduced. Long-term incentives plan The purpose of the long-term incentive plan (“LTIP”) is to incentivise the achievement of long-term sustainable shareholder returns and the delivery of CTP’s long-term strategy. Under the LTIP, the Executive Directors may receive an annual award for shares, which shall normally vest after a three-year performance period, subject to the achievement of certain pre-determined corpo- rate performance conditions including financial and shareholder re- turn-based measures set by the Non-Executive Directors and remain- ing in service. LTIP awards may be granted as nil cost awards and may take the form of options to acquire shares, conditional rights to acquire shares or an immediate award of shares subject to restrictions. No pay- ment is required for the grant of an LTIP award (unless the Non-Execu- tive Directors determine otherwise). LTIP awards in the form of options that have vested will normally remain exercisable for a period deter- mined at grant, which shall not exceed ten years from grant. The LTIP award opportunity is set at 100% of the base salary for delivering “at target” performance. The maximum number of shares that can be delivered under the LTIP award for delivering outstanding performance is 1.5 times the number of shares granted (i.e., 150% of the LTIP award shares granted). Therefore, the maximum LTIP award opportunity is equal to 150% of base salary at grant and no vesting will occur for below-threshold performance. The LTIP award level reflects CTP’s high-performance culture and is in line with the principle that a greater portion of total remuneration should be based on variable remuneration. In line with the Code and unless the Non-Executive Di- rectors determine otherwise, LTIP awards granted to Executive Direc- tors will be subject to a holding period of at least two years following vesting. During this period, sale of the shares is restricted, although shares may be sold to cover taxes due because of vesting. Each financial year the Non-Executive Directors will determine the most appropriate performance conditions for the LTIP award. Perfor- mance measures will be selected considering CTP’s long-term business strategy and will relate to pre-determined corporate performance conditions including financial and shareholder return-based measures. The performance measures and targets for the LTIP award were approved by the Non-Executive Directors. The core performance measure that was assessed under the LTIP is Total Shareholder Re- turn (“TSR”). TSR reflects the return received by a shareholder and captures both the change in share price and the value of dividend in- come, assuming dividends are reinvested. TSR is an appropriate meas- ure, as it objectively measures CTP’s financial performance and as- sesses long-term value creation for shareholders. LTIP awards will be subject to relative TSR and absolute TSR measures (both equally weighted at 50% each): • A relative measure allows an assessment of the outperformance delivered by CTP compared to other companies. For this purpose, relative performance would be measured against an appropriate European real estate index. • Absolute TSR will ensure that Executive Directors remain focused on CTP’s own performance by requiring growth in TSR over the measurement period, irrespective of market performance. During the period of the Remuneration Policy and in the context of CTP’s long-term business strategy, the Non-Executive Directors will re- view performance conditions for each grant under the LTIP, in terms of the measures themselves, the ranges of targets and weightings applied to each element of the LTIP. Goverance Report 323 Claw back Upon discovery that variable remuneration has been awarded based on incorrect financial or other data (“trigger event”), the Non-Exec- utive Directors, acting fairly and responsibly, may recover such varia- ble remuneration in part or in full. The claw back period is three years following the discovery of such a trigger event and applies during the holding period. Executive service agreements Executive service agreements are either for a permanent and indef- inite period or a fixed-term period. Either way, a three-month notice period applies to executive service agreements. Severance provisions In the event of termination of employment, compensation is provided for the loss of income of up to six months of gross base salary in addi- tion to a three-months’ notice period. Loans At the end of 2022, no loans, advances, or guarantees were outstand- ing to the Executive Directors. REMUNERATION OF THE NON-EXECUTIVE DIRECTORS Fee structure of the Non-Executive Directors Non-Executive Directors receive an annual fixed base fee independent of the share price and performance of the Company and delivered in cash. The base fee is based on the ongoing nature of the responsibili- ties of the Non-Executive Directors as an independent body for effec- tive control of the Company. In addition to a base fee, the Non-Executive Directors also receive committee fees and reimbursement of reasonable expenses contingent upon their activities and responsibilities (see Table 1). All remuneration is denominated and delivered in euros. Currency conversion risks are not covered by the Company. Non-Executive Directors do not qualify or receive any equity in terms of the Company’s variable pay incentive schemes, and they do not qualify to participate in any benefit programme, e.g., pension ben- efits or arrangements, loan programmes, etc. Reimbursements Non-Executive Directors are eligible to receive reimbursement of rea- sonable expenses incurred undertaking their duties. Non-Executive Directors are not entitled to any other compensation in relation to their duties. In particular, Non-Executive Directors do not accrue any pension benefits nor receive any pension compensation. The Company does not operate a stock option scheme. Tenure All Non-Executive Directors are subject to retirement and re-elec- tion by shareholders every three years, and the re-appointment of Non-Executive Directors is not automatic. During the tenure, annual self-evaluations are done by the Non-Executive Directors and their sub-committees. Loans At the end of 2022, no loans, advances, or guarantees were outstand- ing to the Non-Executive Directors. Table 1 Remuneration of Non-Executive Directors Name of Non-Executive Director Annual ixed fees received (in euro) Committee role Annual ixed fees received (in euro) Total 2022 2021 1 2022 2021 1 2022 2021 1 Barbara Knolach, Senior Independent Director 150,000 114,247 Member of the nomination and remuneration committee 10,000 7,616 160,000 121,863 Gerard van Kesteren 75,000 57,123 Chairperson of the audit committee 20,000 15,233 95,000 72,356 Pavel Trenka 75,000 57,123 Chairperson of the nomination and remuneration committee 15,000 11,425 90,000 68,548 Susanne Eickermann-Riepe 75,000 57,123 Member of the audit committee 15,000 11,425 90,000 68,548 Total 375,000 285,616 60,000 45,699 435,000 331,315 1 Recognised by the Company for remuneration to Non-Executive Directors as from 29 March 2021. Corporate Governance 324 2022 REMUNERATION OUTCOMES Remuneration at a glance The remuneration of the Executive Directors is determined by the Board, following a recommendation from the Nomination and Remu- neration Committee with due observance of the Remuneration Policy. It comprises the following elements: • fixed annual base salary (see Table 2); • benefits; • an annual cash incentive; and • long-term share-based incentives. The implementation of the Remuneration Policy provides for a struc- ture that aligns the compensation of the Executive Directors with the successful delivery of CTP’s long-term strategy and shareholder value growth. When designing the Remuneration Policy, the Board considered amongst others the pay ratio between the Executive Directors pay and average employee pay. When implementing the Remuneration Policy, and in particular in assessing the outcomes of variable remuneration components, scenario analyses have been taken into consideration by the Non-Executive Directors. Given the Company’s performance, external circumstances and the developments surrounding the invasion of Ukraine, the Non-Ex- ecutive Directors considered it was appropriate that the underlying performance targets set for the 2022 short-term incentive awarded to Mr. Wilkinson had to be normalised (see also below under Annual Cash Incentive). When approving these payments, the Non-Executive Directors considered whether they represented a fair reflection of the underlying performance of the business and were satisfied that they did. As determined for the prior performance year 2021, the Non-Ex- ecutive Directors took into consideration that Mr. Wilkinson agreed— in advance of the calculation of the performance conditions—that 50% of his 2021 annual cash incentive is contingent on and conditionally de- ferred until CTP Group achieves an additional GLA target. Base salary In 2022, the annual base salary of Mr. Vos and Mr. Wilkinson was as shown in Table 2. Table 2 Base salary Board Role Annual Fixed Fees CEO 500,000 CFO 380,000 Benefits Executive Directors receive market standard benefits that can in- clude: health insurance, life insurance, a housing/car allowance, use of a company car, travel allowance, laptop, iPad and mobile phone devices, and workers’ compensation for illness. Additional benefits may be con- sidered as required, subject to business needs. Mr. Wilkinson receives a housing allowance of (the local currency equiva- lent of) €1,500 per month. The details of the Executive Directors’ emol- uments accrued or paid for in the 2022 reporting year are set out below. For the avoidance of doubt, no sign-on bonuses or allowances for pension were paid to the Executive Directors. Mr. Vos holds a substantial shareholding in the Company, mean- ing there is already a clear and direct link between his reward and the Company’s performance. Therefore, Mr. Vos currently does not partic- ipate in the variable remuneration components described below. While not receiving variable remuneration, please note that the short- and long-term target setting of the Company based on CTP's strategy is applicable to the Executive Directors and this includes and is therefore also applicable to Mr. Vos. Annual cash incentive In 2022, the annual cash incentive payout for the Executive Directors was dependent on the performance against the following pre-deter- mined performance measures: • Growth in completed new GLA • EPRA earnings • Loan-to-value • ESG environmental index The Non-Executive Directors have reviewed the actual performance of the Executive Directors against the set of performance targets to determine the extent to which the targets have been achieved. The an- nual cash incentive payout is 150% of the base salary based on an “at target” achievement of the performance conditions and the maximum bonus for outstanding performance is capped at two times the target amount equal to 300% of the base salary. The Loan-to-value and the ESG environmental index performance measures have downside impact on the cash bonus calculation in the form of a percentage reduction being 15% for each KPI. The actual STI performance was assessed by the Nomination and Remuneration Committee in good faith in a reasonable manner. In this assessment external circumstances and the impact to the Company due to the Russian invasion of Ukraine have been specifically consid- ered to determine the overall performance realised and whether the targets have been achieved. Considering the external circumstances, the impact to CTP due to the significant disruption in the construction processes and ability of the Company to react to and adopt these cir- cumstances within the business, it was decided to apply a test of rea- sonableness in determining the 2022 STI performance achieved. In the application of this test of reasonableness, the initial targets, which did not include the impact of the Ukraine invasion, have been normalised. Based on this assessment made by the Nomination and Remuneration Committee including the consideration and assessment of the EPRA earnings per share (“EPRA EPS") development, it was unanimously de- cided by the Non-Executive Directors that Mr. Wilkinson will be enti- tled to receive over the financial year 2022 a STI payout in cash of one- third (33%) of the maximum bonus opportunity set and representing an amount of EUR 380,000 based on the achievements realised during 2022. Mr. Vos was during 2022 not entitled to receive a STI bonus. Goverance Report 325 Corporate Governance The total annual cash incentive determined based on the actual per- formance assessment may be adjusted downwards based on the actual performance on the loan-to-value and the ESG environmental index performance measures. The Non-Executive Directors have reviewed and considered the actual performance on these targets and deter- mined that a downward adjustment will not be imposed on the calcu- lated annual incentive for 2022 (see Table 3). Long-term incentive plan The conditional share award made under the LTIP to Mr. Wilkinson on 15 January 2023 with an award date of 29 April 2022 may vest on 29 April 2025 and is subject to continuous services and meeting the predetermined performance targets. Outstanding conditional share awards will automatically lapse upon termination of services before the end of the vesting period. The shares must be held for a minimum of two years after vesting. Mr. Vos was during 2022 not entitled to receive a LTIP award. The performance target for the LTIP award is divided into two ele- ments: • 50% of the award may vest depending on the Company’s absolute Total Shareholder Return (TSR) performance; and • 50% of the award may vest depending on the Company’s relative TSR performance versus the FTSE EPRA/NAREIT Developed Europe Index (see Table 4). Table 3 Performance measure 2021 Weight Vesting levels (% of base salary) Actual performance Vested (% of base salary) Payout amounts Remon Vos, CEO Richard Wilkinson, CFO EPRA Earnings 35% 21% - 105% Above target 105% - 399,000 Growth in completed new GLA 65% 39% - 195% Between target and maximum 130% - 495,300 Total 100% 60% - 300% 235% - 894,300 Deferred 1 - 447,150 Bonus Payable - 447,150 1 50% of the annual cash incentive for Mr. Wilkinson is deferred and subject to CTP Group achieving 10 million sqm growth in completed new GLA (owned properties) no later than 31 December 2023. Performance measure 2022 Weight Vesting levels (% of base salary) Actual performance Vested (% of base salary) Payout amounts Remon Vos, CEO Richard Wilkinson, CFO EPRA Earnings 35% 21% - 105% Below minimum target 0% - 0 Growth in completed new GLA 65% 39% - 195% Below minimum target 0% - 0 Total 100% 60% - 300% 0% - 0 Deferred - 0 Bonus Payable 2 - 380,000 2 As discussed above, it has been unanimously decided by the Non-Executive Directors that Mr. Wilkinson will be entitled to receive a STI payout of 33% of the maximum bonus opportunity for 2022 based on the achievements realised during 2022. 326 Adjustments to remuneration In 2022, no application of the use to reclaim variable remuneration by means of either a claw back or malus within the meaning of article 2:135 (8) of the Dutch Civil Code was applied on any kind of variable payments for any Executive Director. Minimum shareholding requirements The minimum shareholding requirements amounts to 250% of the base salary, built up over five years. Given Mr. Vos’ substantial shareholding in the Company, he already exceeds the minimum shareholding require- ment. Mr. Wilkinson did not meet the minimum shareholding require- ment in 2022. Goverance Report Table 5 Remuneration and company performance Name of Executive Director, position 2022 % change 2021 Remon Vos, CEO 500,000 0% 500,000 Richard Wilkinson, CFO 1,085,050 2% 1,061,200 Annual remuneration of all full-time employees (excluding CEO and CFO) 41,919,532 38% 30,418,320 Average FTE’s of employees (excluding CEO and CFO) 632 37% 461 Average total annual remuneration 66,328 0.5% 65,983 Pay ratio CEO 7.5 -0.5% 7.6 Pay ratio CFO 16.4 2% 1 16.1 EPRA earnings per share in EUR 0.61 26% 0.49 Gross lettable area in million SQM 10.5 22% 7.6 1 The 2% increase in pay ratio for the CFO is calculated based on the remuneration as recognized by CTP under IFRS, which represents higher remuneration elements compared to the actual remuneration payable for the year 2022. This is caused by the fact that the amounts recognised contain expenses for conditional 2021 and 2022 LTIP awards, which are still subject to a three-year performance period. Table 4 Share awards 2022 based on at target award levels (100%) Name of Director, position The main conditions of share award plans Opening balance During the year Closing balance Performance period Award date 1 Vesting date End of holding period Shares outstanding 1 January 2022 Number of shares awarded Shares vested Shares subject to a performance condition Shares awarded and unvested at year end Remon Vos, CEO N/A -------- Richard Wilkinson, CFO 2021-2023 30 Apr 2021 30 Apr 2024 30 Apr 2026 27,142 - - 27,142 27,142 Richard Wilkinson, CFO 2022-2024 29 Apr 2022 29 Apr 2025 29 Apr 2027 27,130 - - 27,130 27,130 54,272 54,272 54,272 1 The Company granted the 2022 Award to the CFO on 15 January 2023 with an Award Date of 29 April 2022. Pay ratio GRI 405-2 Pay differentials and the Executive Directors’ position within the Company have also been considered. In this respect, the internal pay ratio was also considered and discussed. Since the CEO only receives a fixed annual base salary, the pay ratio includes the CEO and the CFO (including expenses recognised by the Company in 2022 related to the annual bonus plan and the LTI plan). The average total annual remuneration for the reference group does not include the total an- nual remuneration of either the CEO or the CFO. Based on the above, in 2022 the internal pay ratio was 7.5 (7.6 for 2021) for the CEO and 16.4 (16.1 for 2021) for the CFO as articulated in Table 5. The increase of the internal pay ratio for the CFO compared to 2021 is mainly ex- plained by higher share-based payment expenses recognised in 2022 for the conditional share awards made under the LTIP. 327 Non-Executive Directors’ Remuneration In 2022, the Non-Executive Director’s remuneration for participating in the Board and committees is presented in Table 6. Compliance CTP did not deviate from the Remuneration Policy for either the Execu- tive or Non-Executive Directors. The Company has not granted any loans, advance payments or guarantees to Executive Directors or Non-Executive Directors. Corporate Governance Table 6 Remuneration of Non-Executive Directors Name of Non-Executive Director Annual ixed fees received (in euro) Committee role Annual ixed fees received (in euro) Total 2022 2021 1 2022 2021 1 2022 2021 1 Barbara Knolach, Senior Independent Director 150,000 114,247 Member of the nomination and remuneration committee 10,000 7,616 160,000 121,863 Gerard van Kesteren 75,000 57,123 Chairperson of the audit committee 20,000 15,233 95,000 72,356 Pavel Trenka 75,000 57,123 Chairperson of the nomination and remuneration committee 15,000 11,425 90,000 68,548 Susanne Eickermann-Riepe 75,000 57,123 Member of the audit committee 15,000 11,425 90,000 68,548 Total 375,000 285,616 60,000 45,699 435,000 331,315 1 Recognised by the Company for remuneration to Non-Executive Directors as from 29 March 2021. Table 7 Remuneration Executive Directors Fixed remuneration Variable remuneration Extraordinary items Total remuneration Proportion of ixed and variable remuneration STI LTIP Fixed Variable Remon Vos, CEO 500,000 15,111 - - - 515,111 100% 0% Richard Wilkinson, CFO 380,000 26,703 380,000 - - 786,703 52% 48% Table 8 Remuneration of Executive Directors – IFRS Name of Executive Director, position Base salary Social security contributions STI LTIP Other beneits Total Remon Vos, CEO 500,000 83,930 - - 15,111 599,041 Richard Wilkinson, CFO 380,000 75,674 529,050 176,000 26,703 1,187,427 Total 2022 1 880,000 159,604 529,050 176,000 41,814 1,786,468 Remon Vos, CEO 380,822 51,556 - - 10,971 443,349 Richard Wilkinson, CFO 289,425 30,884 596,200 85,000 19,822 1,021,331 Total 2021 670,247 82,440 596,200 85,000 30,793 1,464,680 1 Recognised by the Company under IFRS for remuneration to Executive Directors as of 29 March 2021. The 2022 STI amount recognised for CFO Richard Wilkinson (EUR 529,050) includes the deferred part of the STI for the financial year 2021 (see also under Remuneration at a Glance). Total remuneration The actual cash remuneration paid and the value of the vested equity remuneration of the Executive Directors by the Company for the fi- nancial year ending 31 December 2022, is presented in Table 7. Table 8 presents the Remuneration of the Executive Directors as recognised under IFRS by the Company for the financial year ending on 31 December 2022. 328 5.1.7 SUSTAINABILITY COMMITTEE REPORT The duties of the Sustainability Committee include amongst others ad- vising the Board on a sustainable long-term vision, strategy and tar- gets, monitoring of the sustainability initiatives and targets, overseeing of the overall climate risks and their consideration in the internal control system and all matters of corporate responsibility in general. The mem- bers are Ms. Eickermann-Riepe (Chair) and Ms. Knoflach (member). Meetings in 2022 The Sustainability Committee was established on 8 November 2002 and met once in 2022. Discussed were household matters, agenda setting for 2023 and key items to focus on for the Committee. The Sustaina- bility Committee members will receive a remuneration as of the date of the AGM on 25 April 2023, equal to the remuneration structure of the Nomination and Remuneration Committee. 5.1.8 BOARD MEETINGS GRI 2-18 The Board meets at least once every quarter, principally at CTP’s headquarters in Amsterdam. The Board met five times in 2022, and all Board members attended all Board meetings. Recurring topics of discussion were, amongst others, acquisition projects and the devel- opment pipeline, leasing activities and financial performance. Man- agement reporting and financial reporting versus the budget were discussed, cash-flow forecasts and investor relations updates were provided, and risk management and compliance reports were dis- cussed. When deemed necessary, the Board consulted outside experts for advice and training purposes. At its 8 March meeting, the Board discussed the logistics market and business developments; the 2021 CEO report; the 2021 audit re- port and management letter and approved the internal audit plan; the 2021 annual accounts; the FY–2021 dividend distribution; an amend- ment to the Company’s Articles of Association; the AGM and EGM agendas; 2022 targets; and the base salary of the Executive Direc- tors. The process of self-evaluation of its functioning as a Board, of the functioning of the Non-Executive Directors and of the Executive Directors was discussed and it was decided to engage an external ex- pert. The Group's strategy was revised with the aim that it adapts and works well in the changing market environment. At the 17 May meeting, an update was provided on the strategy. The merger between CTP and DIG and the first quarter results were approved and an ESG update was given. The Board evaluated its own functioning, that of its Committees and of its individual Non-Executive members in April and May. The eval- uation was carried out with the assistance of an external expert, by first holding one-on-one interviews with the Executive Directors, the Non-Executive Directors and with two other (non-Board) employees. Discussion statements were gathered from the respective interviews and discussed during a plenary workshop, consisting of two parts—the first attended by all the members of the Board of Directors, and the second only by the Non-Executive Directors. The areas for further im- provement relate to management development, succession planning and retirement of the Non-Executive Directors. Action was taken on all these points for improvement. At the 9 August meeting, a non-financial data update was given. The first half-year financials, the interim dividend and the amended relat- ed-party transaction policy were approved. A half-year update of the CFO’s targets, evaluation of the profile of the Non-Executive Board members and the size and composition of the Board were discussed. An internal organisation and governance status update was given. At its 8 November meeting, in view of the expected amendments in the provisions of the Dutch corporate governance code, the Board adopted amended Board Rules, including an amended Audit Committee charter and Nomination and Remuneration Committee Charter, and es- tablished a Sustainability Committee and its Charter. The Group’s bilat- eral contact policy and the diversity policy were amended and approved, a new rotation schedule for the Non-Executive Directors was adopted as well as a new profile. CTP’s energy business, non-financial data and ESG performance, including the GRESB report, were discussed. At its 16 December meeting, the Board discussed with the Audit Committee the effectiveness of the design and operation of the inter- nal risk management and control systems. The outcome of the assess- ment was that no major failings in the internal risk management and control systems were observed in the reporting year, and that no signif- icant changes had to be made to these systems. The Board also discussed an update to CTP's strategy, the 2023 budget, the culture and values within CTP, the internal audit plan 2023, the effectiveness of and compliance with the Code of Conduct, and the assessment of the fulfilment of the responsibilities of the internal and external auditor. In relation to ESG, climate risks were discussed. The amendments to the Group Insider Trading Policy were accepted and the additional positions of the Non-Executive Directors were discussed. The list of reference companies for the remuneration peer group was updated to no longer include Dutch companies that delisted in 2022. Also, the remuneration peer group for the Executive Directors and Non-Executive Directors was aligned, reflecting both AEX and AMX companies for both groups. The CFO and the Non-Executive Directors had seven update calls, the purpose of which is to inform the Non-Executive Directors of the business (including acquisitions) and financial position of the Group. 5.1.9 POST-2022 EVENTS The Executive Directors submitted the 2022 financial statements, the Letter of the CEO and the Letter of the CFO and the responsibility statement to the Non-Executive Directors with the recommendation to CTP's shareholders to adopt the 2022 financial statements on 25 April 2023. The financial statements were audited by KPMG, which issued an unqualified auditor’s opinion. The Board approved the ac- counts and signed the 2022 financial statements on 2 March 2023. Goverance Report 329 Corporate Governance 5.1.10 BOARD’S ROLE IN RISK OVERSIGHT The Board is of the opinion that its current structure provides robust and highly effective oversight based on, among other factors: • all four Non-Executive Directors and one of the Executive Directors are independent (the sole Board member who is not independent is the Chief Executive Officer); • robust corporate governance principles are in place and are re- viewed throughout the year; • the Chief Executive Officer and Senior Independent Director both have deep experience and knowledge of CTP’s business and indus- try and a demonstrated unique and successful strategic vision. Both of them continue to be actively focused on their role of providing the overall strategic leadership for CTP, consistent with Dutch law and the Company’s organisational documents and its one-tier board structure—a role that the Board believes remains critically impor- tant, as the industrial and logistics real estate sector continues to experience significant changes at a rapid rate; • the Audit Committee, the Remuneration and Nomination Commit- tee and the Sustainability Committee are all entirely composed of independent Directors (within the meaning of the Code); • approval of any appointment of members to the Audit Committee, Remuneration and Nomination Committee and Sustainability Com- mittee must include at least a majority of the independent Directors; • all Board Committees operate pursuant to written charters; • the independent Directors of the Board and its Committees engage in detailed discussion and analysis regarding matters put before them and consistently and actively engage in the development and approval of significant corporate strategies. 5.1.11 DIVERSITY AND INCLUSION CTP is committed to an inclusive culture and aims for an increase of diversity in nationality and age as well as creating and maintaining a variation in education and experience. CTP continues to strive for an adequate and balanced composition of the Board in its future appoint- ments by considering relevant selection criteria such as executive and industry experience, skills and knowledge, personal capabilities, age, gender identity, nationality, cultural and other background qualities. As of 1 January 2022, Dutch companies listed at Euronext Amster- dam must comply with quotas for supervisory boards and “large” com- panies (in accordance with section 2: 166 of the Dutch Civil Code) must formulate targets to achieve gender balanced boards and senior man- agement. A company’s gender balance targets must be reported to the Dutch Social and Economic Council (SER) annually and will be included in the management report for transparency purposes. CTP amended its diversity policy in November 2022, renaming it the Diversity and Inclusion Policy and including gender balance targets for the Executive Directors that are ambitious but also—given the en- vironment CTP is operating in—realistic. The targets are formulated as follows: at least 25% of the Executive Directors jointly consist of men and at least 25% of the Executive Directors jointly consist of women. Of the Non-Executive Directors, at least 30% jointly consist of men and at least 30% jointly consist of women. In addition to CTP’s new targets mentioned above, additional tar- gets were set for the senior management: at least 30% of the senior management jointly consist of men and at least 30% jointly consist of women. With respect to nationality, cultural and other background the target is that a maximum of 50% of one nationality and/or cultural background will be represented in the Board. CTP will put in place a plan to achieve at least two of the three tar- gets referred to above each year (two out the three are met at year- end 2022). In 2022, the Board consisted of four male and two female mem- bers. The current composition of the Board therefore meets the gender target of having at least 30% female and 30% male Board members, which was CTP's diversity target for the Board until 7 November 2022. The current composition of the Executive Director seats is not evenly distributed amongst male and female persons, as the current two Executive Directors are male. Measures are being taken to address this divergence from CTP’s objectives relating to the senior manage- ment; the diversity within the ten jurisdictions in which CTP is active shows a more balanced distribution of seats. Of the total number of 20 senior management employees, six are female. Of the current four Non-Executive Directors, two are female and two are male. This is a balanced distribution of seats, but CTP stays alert on this distribution. CTP’s employees come from the Czech Republic, Greece, Germany, Hungary, UK, Romania, Slovakia, Poland, Serbia, Bulgaria, Austria, the US and the Netherlands. The number of female and male employees throughout the year and within all functions in the Company, the age differences and other relevant information on gender can be found in Section 4.4. Age brackets (%) 20 – 39 13 30 – 39 40 40 – 49 32 50 – 59 13 60 and older 2 5.1.12 COMPLIANCE WITH THE CODE The Board, which is responsible for the corporate governance struc- ture of CTP, is of the opinion that the principles and best-practice provisions of the Code are applied. Already before its start as a listed company in March 2021, CTP worked on improving its risk manage- ment and internal control systems, its compliance and governance, and its internal audit. In 2022 improvements were made in evaluating the functioning of the Board and its Directors, succession planning, rotation schedules, the profiles of Board members and senior manage- ment, and discussions on culture and values. This led to the success- ful implementation of 11 best practice provisions, which means at year end 2022 CTP deviates from five best practice provisions of the Code. Considering the Company’s specific shareholding structure, the Board remains committed to and continues to endeavour to comply with more provisions than it complies with today, but it also acknowledges that some best practice provisions will not be complied with in the current structure. 330 Goverance Report Deviations from the best-practice provisions are explained herein- after. The headings refer to the Code; the explanation relates to the CTP-specific situation. Best-practice provision 2.2.1 Appointment and re-appointment peri- ods–management board members This provision prescribes that a managing director is appointed for a maximum period of four years. The CEO has been appointed as Execu- tive Director and may be unlimitedly re-appointed considering his de- sire to continue an active role in the Board as long as possible in order to safeguard CTP’s long-term value creation strategy. Best-practice provision 2.2.2 Appointment and re-appointment peri- ods supervisory board members Non-Executive Directors have been appointed for three years, which is formally not in conformity with the four years stipulated by this pro- vision. The Board feels it is important to relate the period for re-ap- pointment to international standards and to be able to get new views and ideas on a more regular basis, but on the other hand realises that staggered terms are helpful to safeguard specific knowledge, skills, and expertise within CTP. Subject to AGM approval, for future ap- pointments the Board has decided to appoint Non-Executive Directors for either two, three or four years (including different second terms of office for possible re-appointment of Non-Executive Directors cur- rently in office). Best-practice provision 2.2.4 Succession The Non-Executive Directors discussed the succession of Executive Directors and Non-Executive Directors extensively in 2022, thereby taking into account the profile of the Non-Executive Directors. There is, however, no written plan for succession of members of the Board. CTP currently has a retirement schedule where all four members retire simultaneously, which will change upon the introduction of staggering, once (re-)appointments will be tabled at the AGM. . Best-practice provision 2.2.5 Duties of the selection and appointment committee The Nomination and Remuneration Committee has not drawn up a plan for the succession of members of the Board. However, the succession of Executive Directors and Non-Executive Directors was discussed nu- merous times by the Committee as well as by the Board during the year, whereby staggering and diversity requirements, expertise and expansion of resources, especially for the Audit Committee due to the increasing complexity of the business, were tabled. The policy of the Executive Directors on the selection criteria and appointment proce- dures for senior management was not discussed by the Non-Executive Directors. Such a policy has not been formulated in writing within CTP . Best-practice provision 4.3.3 Cancelling the binding nature of a nomination or dismissal The general meeting of a company not having the large company re- gime (in Dutch: structuurregime) may pass a resolution to nominate or dismiss a member of its managing board or its supervisory board by an absolute majority of the votes cast. It may be provided that this majority should represent a given proportion of the issued capital, the proportion of which may not exceed one-third. CTP deviates from this provision to the extent that in the Articles and Board Rules it is stated that if a dismissal was not proposed by the Non-Executive Directors, the General Meeting can only dismiss a Di- rector with a two-thirds majority of the votes cast, representing more than half of the issued share capital. 5.1.13 FURTHER INFORMATION PURSUANT TO THE DECREE TAKEOVER DIRECTIVE Further to the Decree implementing section 10 of the Directive on takeover bids (in Dutch: Besluit artikel 10 overnamerichtlijn) (“Decree Takeover Directive”), CTP is required to report on, among other things: the Company’s capital structure; restrictions on voting rights and the transfer of securities; significant shareholding in CTP; the rules gov- erning the appointment and dismissal of Directors and amendments to the Company's Articles; the powers of the Executive Directors (in particular the power to issue shares or to repurchase shares, together with the Non-Executive Directors); significant agreements to which CTP is a party and which are put into effect, changed or dissolved upon a change of control of CTP following a takeover bid; and any agree- ments between CTP and the Executive Directors or associates provid- ing for compensation if their employment agreement ceases because of a takeover bid. The information required by the Decree Takeover Di- rective is included in this chapter as well as in the subsequent events as part of the disclosure notes of the consolidated Financial Statements.. Capital structure CTP has one class of shares: ordinary shares with a nominal value of €0.16 each. The shares are listed on Euronext Amsterdam and the is- sued share capital consists of 444,100,549 shares on 31 December 2022. The rights attached to the shares into which CTP’s capital is divided follow from the Articles and the Dutch Civil Code. Limits on the transfer of shares There are no limits on the transfer of CTP shares. Substantial interests Pursuant to the Dutch Financial Markets Supervision Act (“FMSA”) and the the Decree on disclosure of major holdings and capital inter- ests in issuing institutions (in Dutch: Besluit melding zeggenschap en kapitaalbelang in uitgevende instellingen Wft) (“Decree Disclosure Ma- jor Holdings Issuing Institutions”), the Netherlands Authority for the Financial Markets (“AFM”) must be notified of substantial sharehold- ings (i.e., a threshold of 3% or more). 331 On 31 December 2022, CTP Holding BV held 75.58% of the shares in CTP, Multivest BV held 100% of the shares in CTP Holding BV and Stichting Administratiekantoor Multivest held 100% of the shares in Multivest BV. In Stichting Administratiekantoor Multivest the person with controlling interest is Mr. Vos. Based on the information in the AFM register on 31 December 2022, Capital Research and Management Company has a shareholding of at least 3% of the shares in CTP. Special control rights The shares into which CTP’s equity is divided are not subject to any special control rights. Share plans CTP has a long-term incentive plan and a deferred incentive plan for Executive Directors and key employees of the Group. Voting limitations There are no voting limitations on CTP’s shares. Agreements with shareholders that can limit the transfer of shares or voting rights There are no agreements with shareholders that can limit the transfer of shares or voting rights. Appointment and dismissal of directors, amendments to the Articles The provisions regarding the appointment and dismissal of Directors are available on CTP’s website. The General Meeting may resolve to amend the Articles with an absolute majority of the votes cast, further to a proposal of the Board approved by a majority of the Non-Executive Directors. A proposal to amend the Articles must be stated in the no- tice of the AGM. A copy of the proposal, containing the verbatim text of the proposed amendment, must be made available to all shareholders. Acquisition of own shares The General Meeting may authorise the Board (i) to purchase shares in CTP’s own capital, and (ii) to issue and grant rights to subscribe for shares and to limit or exclude pre-emptive rights of shareholders in the event of issuing and granting rights to subscribe for shares. Further information can be found in the Articles. Issue of shares At the AGM on 26 April 2022, the General Meeting authorised the Board, until 26 October 2023, (i) to issue shares or to grant rights to acquire those shares up to a maximum of 15% of the Company’s share capital as per 26 April 2022, (ii) to issue shares up to the amount of shares reflected on by shareholders pursuant to an interim scrip div- idend regarding the 2022 financial year, (iii) to exclude pre-emptive rights accruing to shareholders in connection with the aforementioned issuances, and (iv) to cause the Company to acquire shares in its share capital at a price of up to 110% of the opening price of the shares on Euronext Amsterdam stock exchange during five trading days prior to the date of the acquisition, provided that the Company and its subsidi- aries will not at any time hold more than 10% of the issued capital of the Company as per 26 April 2022. Change of control arrangements The Company is not a party to material agreements that are in any way subject to or affected by a change of control over the Company follow- ing a public offer as referred to in section 5:70 of the FMSA. There are no agreements under which CTP is liable to make any payment to di- rectors on resignation following a public offer as referred to in section 5:70 of the FMSA. Special rights of control CTP does not have any potential or existing takeover measures. Agreements with Executive Directors or employees The severance payments for the Executive Directors have been set at a maximum of 100% of their annual pay. Conflict of interest and related party transactions Under the Board Rules and the Related Party Transactions Policy, con- flicts of interest must be reported to the Senior Independent Director. The Senior Independent Director must report any (potential) relat- ed-party transaction related to him/her to the vice-chair. In addition, a Director must report any related-party transaction to the (other) Directors and the Company Secretary. No such related-party transac- tions were reported. The Non-Executive Directors shall determine the consequences of a (potential) conflict of interest, if any. In case of a conflict of interest, the Director concerned is not allowed to participate in discussions or vote on such matter. If one or more Directors have a conflict of inter- est, the resolution concerned will be voted on if (i) the transaction is entered into on terms that are customary in the market and in compli- ance with the laws of the relevant jurisdiction, and (ii) the resolution is taken with the consent of at least the majority of the Non-Executive Directors, if the conflict of interest is of material significance to the Company or the relevant Director.. Mr. Vos serves as Chief Executive Officer and Executive Director, while he is also an (indirect) majority shareholder. Accordingly, Mr. Vos may through his (indirect) vote at General Meetings of sharehold- ers support strategies and directions that are in his best interests, which may conflict with the interests of the Company and the other shareholders. Mr. Vos uses means of transportation provided by the Company for private purposes for which he pays a user fee. The Group is carefully monitoring and assessing related-party transactions that are disclosed in detail in note 34 of the Notes to the Financial Statements. Personal loans Personal loans, guarantees, or the like may not be granted to the Ex- ecutive Directors or to the Non-Executive Directors unless they are provided (i) as part of the normal course of the Company’s business (i.e., if CTP would qualify as a financial institution), (ii) on terms appli- cable to all Company personnel as a whole, and (iii) after approval of the Non-Executive Directors. No personal loans, guarantees or the like were granted by the Company in 2022. Corporate Governance 332 5.1.14 CTP’S COMPLIANCE FUNCTION Aiming to protect CTP against financial and other sanctions, criminal liability of legal entities, reputational risk and other negative impacts on the operation and business, CTP continued institutionalising the compliance function in 2022. The compliance function is within the competence of a designated Group AML compliance officer. Among the main responsibilities of the compliance function are to build and manage compliance and AML pro- grammes; maintain the necessary conditions for the Group’s corpo- rate compliance policies to be effective; train and help the business understand the Group’s compliance policies and procedures; perform AML due diligence and compliance checks of third parties (business partners); act as Group whistleblowing and grievance contact; main- tain the Company’s Gifts Register and provide guidance to Company staff; investigate incidents when required; implement new legisla- tive requirements; provide information/evidence for internal/external analyses (e.g., evaluation by rating agencies); and prepare CTP’s An- nual Compliance Report. As an integral part of good governance, com- pliance has its role within the three lines of defence as explained in Section 5.2. Code of Conduct CTP has always carried out its business ethically, with zero tolerance towards fraudulent behaviour. Prior to its IPO on Euronext Amster- dam, the Company took further steps to institutionalise its approach to compliance issues, not only by establishing the compliance role, but also by updating its Code of Conduct. CTP’s aim is to operate with 100% integrity, and the Company applies best practices in all coun- tries of operation. CTP adheres to fairness, honesty and truthfulness in its relations with third parties and with CTP staff. CTP strives to be “a good neighbour” and engages in and supports activities that help positively impact communities and society. CTP’s Code of Conduct is reviewed and updated every year. Everyone at CTP is responsible for the Company’s successful jour- ney to integrity. CTP has established adequate controls and proce- dures to monitor compliance with the Code of Conduct among its em- ployees. To ensure compliance with the rules, all CTP staff certify their knowledge of and commitment to comply with the Code of Conduct and related compliance polices and associated documents, practices, and regulations on an annual basis. No to corruption CTP has zero tolerance for corruption or bribery in whatever form. Accordingly, compliance with the Group’s anti-bribery and corruption policy is required from all CTP staff. In the course of its business, CTP complies with the applicable laws, acts fairly and ethically, and expects the same conduct from all CTP staff and the parties with whom CTP does business. The Company identified an increased risk related to third parties in 2022 and implemented new controls and monitoring of potential conflicts of interest. Trustworthy partners As an integral part of its strategy, CTP has worked hard over many years to become a trusted, long-term partner for its clients. Fulfilment of this mission would be impossible without CTP’s suppliers and other partners, who play an essential role in CTP’s activities. CTP has had great success developing strong working—and ethical—relationships with its partners and suppliers, based on a shared set of values. As CTP is now a publicly listed company, the Company has taken steps to codify its values, as they underpin its commitment to environmental, social and governance efforts. CTP expects its suppliers and partners to act with care and in line with CTP’s values through the provision of materials, products, or services. Supply-chain responsibility CTP strives for environmentally and socially sustainable supply chains that act in line with its values. CTP has implemented for this purpose the CTP Suppliers’ Code of Conduct, based on the Group Code of Con- duct, as well as other governance policies. The Suppliers’ Code of Con- duct is available on CTP’s website. Each new supplier is checked by the Group AML compliance officer. CTP insists on an environmentally and socially sustainable supply chain that is safe and fair. CTP does not tolerate corruption, bribery, or any other kind of unethical behaviour, and that includes breaches of human rights, including forced labour. CTP invites its suppliers to join its journey to sustainability, as their full commitment and support is necessary. Know your counterparties As an AML-obliged entity, CTP applies the requirements set by an- ti-money laundering/combatting the financing of terrorism (“AML/ CFT”) regulations. CTP conducts customer due diligence (“CDD”) procedures with the aim to detect and assess risks related to its cus- tomers or transactions and to apply appropriate measures in relation to possible detected risks to mitigate these. Initial CDD procedures in respect of every new customer before the conclusion of a business relationship and execution of the first transaction is done by the Group AML compliance officer. This includes risk rating of customers in ac- cordance with the AML/CFT risk assessment of the respective CTP Group entity. Whistleblowing CTP believes whistleblowing is an effective tool to detect fraudulent behaviour. The Company has in place all possible means of whistleblow- ing and grievance. As part of CTP´s effort to secure a safe tool for raising concerns, the Company also uses an external, independent, se- cure, and easy to use whistleblowing solution called FaceUp. The solu- tion is GDPR compliant, ISO 27001-certified and available in all CTP languages. CTP also promotes a Speak-Up culture internally and en- sures the protection of whistleblowers. This is codified in CTP’s Whis- tleblower Policy. Prevention of insider trading and market abuse As a publicly listed company, CTP is subject to requirements of the Market Abuse Regulation and other securities laws. CTP has imple- mented mechanisms and rules to prevent insider trading or any other market abuse, such as no dealing in closed periods, keeping a list of persons who have or may have access to inside information (insider list), or additional rules for persons discharging managerial responsi- bilities. All this is codified in CTP’s Group Insider Trading Policy. Goverance Report 333 Conflicts of interest CTP expects its staff to adopt the highest standards of professional ethics and condemns any form of bias, conflict of interest or inap- propriate favouritism that could discredit the objectivity of any CTP staff, as stated in the Company’s Code of Conduct. CTP staff are thus prohibited from conducting any role or participating in decisions that might be considered a conflict of interest. Each conflict of interest must be reported and approved (or rejected) in writing by the Group AML compliance officer. The Group AML compliance officer regularly verifies the potential conflict of interest. Adequate safeguards for the protection of the interests of CTP and its shareholders are also in fo- cus and the rules related to the Directors are set in the Related-Party Transactions Policy. Tone at the top CTP’s integrity efforts have the full support of CTP’s senior man- agement, who demonstrate zero tolerance to non-ethical approaches and insist on a sustainable conduct of CTP’s business. The tone at the top is a critically important and integral part of CTP’s compliance programme. 100% of CTP Staff is trained on the Group's Code of Conduct, which is held annually. 5.1.15 CORPORATE GOVERNANCE STATEMENT The Code requires Dutch companies to publish a statement concern- ing their approach to corporate governance and compliance with the Code. This is referred to in article 2a of the Decree Management Re- port. The information required to be included in this corporate govern- ance statement as described in section 3 of the Decree Management Report, which is incorporated and repeated here by reference, can be found in the following sections of the Annual Report: • The information regarding CTP’s risk management and control framework relating to the financial reporting process, as required by article 3a sub a of the Decree Management Report, is in Section 5.3. • The information regarding the functioning of CTP’s General Meet- ing and the authority and rights of its shareholders, as required by article 3a sub b of the Decree Management Report, can be found in Section 5.1.2. • The information regarding the composition and functioning of a (two-tier) management board, supervisory board and its commit- tees, as required by article 3a sub c of the Decree Management Re- port, has been rephrased to fit a one-tier governance structure and can be found in Section 5.1.3. • The information regarding CTP’s diversity & inclusion policy, as re- quired by article 3a sub d of the Decree Management Report, can be found in Section 5.1.11. • The information regarding the number of men and women on the Board and in the management positions below the Board, goals and plan to achieve these goals, as required by article 3d of the Decree Management Report, can be found in Section 5.1.11. • The information concerning the inclusion of the information re- quired by the Decree Takeover Directive, as required by article 3b of the Decree Management Report, can be found in Section 5.1.13. The Board discusses annually with the Audit Committee the effec- tiveness of the design and operation of the internal risk management and control systems, the effectiveness of internal and external audit processes and the way material risks and uncertainties referred to in best-practice provision 1.4.3 of the Code are analysed. The head of risk management in co-operation with the head of in- ternal audit carried out an assessment of the design and effective- ness of the internal risk management and control systems covering strategic, operations, reporting and compliance risks. The result was presented to the Audit Committee and to the Board, and the outcome of this assessment was that no major failings were observed in the in- ternal risk management and control systems in the year under review, that ongoing improvements are needed, and that these will be imple- mented going forward. 5.1.16 RESPONSIBILITY STATEMENT MADE BY THE EXECUTIVE DIRECTORS CTP has identified the main risks it faces, including financial reporting risks. These risks can be found in the Section 5.3. In line with the Code and the FMSA, CTP has identified and documented its principal risks and has put in place a system to identify new risks as they emerge. CTP has not provided an exhaustive list of all possible risks. Furthermore, developments that are currently unknown to the Executive Directors or considered to be unlikely may change the future risk profile of CTP. The design of CTP’s internal risk management and control systems is described in Section 5.2. The objective of these systems is to manage, rather than eliminate, the risk of failure to achieve business objectives and the risk of material errors to the financial reporting. Accordingly, these systems can only provide reasonable, but not absolute, assur- ance against material losses or material errors. CTP’s Executive Directors reviewed and analysed the main strate- gic, operational, financial and reporting, and compliance risks to which CTP is exposed and assessed the design and operating effectiveness of CTP’s risk management and internal control systems in 2022. The outcome of this review and analysis was that no major failings in the internal risk management and control systems were observed during the reporting year. The outcome of this assessment was shared with the Audit Committee and the Non-Executive Directors and was dis- cussed with CTP’s internal and external auditors. As required by best-practice provision 1.4.3 of the Code and section 5:25c(2)(c) of the FMSA and based on the foregoing and explanations contained in Section 5.2, the Executive Directors confirm that to their knowledge: • The Annual Report provides sufficient insights into any failings in the effectiveness of the internal risk management and control sys- tems in general; • These systems provide reasonable assurance that the financial re- porting does not contain any material inaccuracies; • Based on the current situation, it is justified that the financial re- porting is prepared on a going-concern basis; • The Annual Report states those material risks and uncertainties that are relevant to the expectation of CTP’s continuity for the period of twelve months after the preparation of the Annual Report; Corporate Governance 334 • The financial statements for 2022 provide, in accordance with IFRS as adopted by the European Union, a true and fair view of the con- solidated assets, liabilities, the financial position and the profit or loss of the Company and its consolidated assets/companies as at 31 December 2022, and of the 2022 consolidated income statement and cash flows of CTP; • The Annual Report presents a true and fair view of the situation as of 31 December 2022, the state of affairs during the 2022 financial year and the related entities included in its financial statements, together with a description of the main risks faced by the Group. Remon L. Vos (CEO) Richard J. Wilkinson (CFO) Amsterdam, 3 March 2023 Goverance Report 335 Risk Management and Internal Controls 5.2 5.2.3 ERM FRAMEWORK CTP Group’s ERM framework is an integrated, risk-based system of functions, processes and methodologies and is constructed based on three pillars: 5.2.1 CTP GROUP APPROACH TO RISK MANAGEMENT Exposure to risk arises in the normal course of the Company’s business. The CTP Group approach to risk management focuses on the principles of identification, understanding, quantification and control of the rele- vant sources of risk and on supporting senior management in the steering of the business and the investment portfolio. The Group’s Enterprise Risk Management (“ERM”) framework was designed to reflect these princi- ples. For CTP’s exposure to credit risk, market risk, capital risk and liquid- ity risk, along with the possible impact on the Group's result and/or fi- nancial position in case of changes in assumptions, please refer to the sensitivity analysis in note [35] in the financial statements. Addressing climate risks is important part of CTP's ESG strategy. It concerns physical and transitional climate risks. The description can be found in Section 4.3.1. 5.2.2 RISK MANAGEMENT POLICY CTP Group’s ERM framework is documented in the Group’s Risk Man- agement Policy. This document evolves continuously and is reviewed annually by CTP’s Audit Committee, in line with the Dutch Corporate Governance Code. If necessary, it is updated by the CFO in conjunction with the Group Head of Risk Management. The policy is mandatory and applies to all CTP Group entities. The approach and principles described must be followed with respect to all approvals and controls by the Exec- utive Directors and their delegated risk owners. Corporate Governance Pillar 3 TAXONOMY OF RISKS Pillar 1 THREE LINES OF DEFENCE Pillar 2 LIFECYCLE OF RISK FUNCTIONS 336 Risk Management and Internal Controls Pillar 1 THREE LINES OF DEFENCE To achieve clarity of responsibilities and accountabilities, the Group has adopted the “three lines of defence” model (3LoD), considered regulatory best practice. The three lines are business, risk management, and internal audit (with the supervisory functions of the Audit Committee and the Board of Directors). They work independently and sequentially to provide assurance that activities take place in line with business objectives and procedures. Business and operating units are accountable for all risk-taking decisions within the Group. They manage and mitigate risks in compliance with CTP’s risk policy re- quirements while operating within the risk appetite boundaries set and approved by CTP’s Board of Directors. The Risk Management department (together with Compliance) provides oversight of the risk management process and supports the Board of Directors to implement and operate the risk management process. Its role is not to manage risk, but to act as an enabler to the first line so that they can effectively manage risk. The Internal Audit department supports the Board of Directors in providing inde- pendent, objective assurance and advice about the quality, completeness and effec- tiveness of the Group's risk management framework. Third Line of Defence INTERNAL AUDIT Second Line of Defence RISK MANAGEMENT First Line of Defence BUSINESS AND OPERATING UNITS Board Executive Directors Board Audit Committee 337 Pillar 2 LIFECYCLE OF RISK FUNCTIONS The Group has formulated a seven-step process that defines what actions need to be performed and when to ensure effectiveness and completeness in managing risks. • Risk Identification – a systematic process to identify and document the Group’s principal risks. • Risk Analysis – identified risks are analysed, and an assessment is formed regarding their nature, impact and frequency of occurrence. • Risk Appetite – the amount of risk the Group is willing to accept in pursuit of its strategic objectives. • Risk Mitigation – the Group may choose to avoid, limit, transfer, hedge or insure its risk. • Risk Control – the design, implementation and maintenance of a Risk Control framework. • Risk Reporting and Monitoring – the Board of Directors monitors the Group’s exposures as part of the reporting process. • Assessment of Effectiveness – the lifecycle that is formed will be repeated as new risks emerge and the effectiveness of the existing controls may require improvement. Corporate Governance 6. Risk Reporting and Monitoring 3. Risk Appetite 5. Risk Control 2. Risk Analysis 7. Assessment of Effectiveness 4. Risk Mitigation 1. Risk Identification 338 Pillar 3 TAXONOMY OF RISKS The risk universe was scanned to identify the unique risks that could materially impact the Group’s business strategy and objectives. The various risks that the Group has identi- fied and analysed have been organised in three layers: risk areas, risk groups and unique risks. The 49 unique risks (Level 3) have been organised into 19 risk groups (Level 2) based on their similarity and ownership by different func- tions, and ultimately into four risk areas (Level 1). • Strategic Risks are often risks that the Group may have to take to expand and thrive in the long term. • Investment Risks are the Group’s main business risks, which are related to the management of the port- folio of the Group’s assets. • Financial Risks capture the risk of having inadequate access to capital, funding and liquidity along with market, credit and tax risks. • Operational Risks are the risks that actual losses, incurred for inadequate or failed internal processes, people and systems, or from external events, differ from expected losses. Each risk area has been allocated to a different Executive Director (or to both Executive Directors) who is (are) the owner(s) of that risk and responsible for managing it. The responsibility for the management of each risk group has been allocated downstream to a different head of department. The reason for overlay- ing the risk taxonomy across the Company management structure is to ensure that integration and control happens naturally. Risk Management and Internal Controls INVESTMENT RISKS Risk Areas LEVEL 1 Risk Groups LEVEL 2 Property Sector Portfolio Single Properties STRATEGIC RISKS Business Model Organisation Macroeconomic Geopolitical ESG FINANCIAL RISKS Capital, Funding, Liquidity Market Credit Tax OPERATIONAL RISKS HR IT Legal Compliance Insurance Climate Change Model 339 5.2.4 IMPLEMENTATION OF THE RISK MANAGEMENT PROCESS In 2022, CTP established its Group-wide risk management system, fol- lowing on from the identification and quantification of Group risks and the creation of the Group’s Risk Policy and Inventory in 2021. CTP’s risk management system combines data from various sources on a single platform that enables monitoring and reporting of risks and identification of early warning signals. During 2022, CTP’s Risk Man- agement department was further integrated within the Company with the responsibility of managing regular risk monitoring meetings with various risk owners and senior management. 5.2.5 RISK MANAGEMENT SYSTEM CTP’s risk management system is a single platform that enables mon- itoring the Group’s risk exposure and provides early warning signals through online dashboards. The use of the same financial data that is used for reporting provides an additional layer of control. The main components of CTP’s new risk management system are: • financial and non-financial data; • risk sensitivities; • expected losses; • comprehensive stress testing. 5.2.6 INTERNAL CONTROLS The Company has created a controlled environment with: • centralised approvals by the Executive Directors of investments, budgets and payments, which then flow into systems with controlled access rights; • a risk management system that is integrated into the Company’s re- porting ecosystem and uses the same financial data; • consolidated financial statements that go through three levels of re- view; • integration of the Risk Management department within the Com- pany, with active participation in hedging, modelling, funding and li- quidity management, and climate risk; • Risk Management receives the same controlling information that senior management uses; • regular risk monitoring meetings with various risk owners. • major digitisation and automation projects are on-going. 5.2.7 RESPONSIBILITIES • The Executive Directors, as a general principle, determine the Com- pany’s risk appetite. They approve and verify the design of the con- trols, approve and review the implementation of the controls as well as the maintenance thereof, and manage and mitigate the risks. • The Risk Management department identifies the risks, assesses the risk analysis and quantification, advises on the risk appetite, imple- ments the controls, and monitors and reports on the risks. • Country Heads, the business and operating unit leaders and all other risk owners manage, mitigate and inform about the relevant risks. • Internal Audit reviews each step of the process to provide independ- ent assurance. They report to the chair of the Audit Committee and the CFO. • The Audit Committee reviews the risk identification, provides input about the design of the control mechanisms and supervision of their maintenance, and judges and advises the Board of Directors thereon. • The Board of Directors reviews the risk identification, approves the risk appetite, supervises the implementation and maintenance of the controls, and approves the management and mitigation of the risks as well as risk reporting. 5.2.8 RISK APPETITE Risk appetite is the amount of risk the Group is willing to accept in pursuit of its strategic objectives. The three levels of risk appetite cur- rently used are: • Manage – these are risks that the Group is taking to meet its in- vestment objectives. They are mainly strategic and investment/ property risks as appropriate for a real estate investment company. In this category valuation risk, capital risk and funding risk are also included as being integral to the investment process and the prop- erty market itself. The Group has the expertise to manage these risks to maximise its profit potential. • Avoid – these are risks that the Group tries to avoid. • Minimise – The Group’s tolerance for these risks is zero but some minimal risk is unavoidable. All operational risks are included in this category 5.2.9 RISK CONTROL FRAMEWORK The Group’s risk control function is based on a centralised framework of approvals, systems and data. It starts with central approvals of in- vestments and budgets by the Executive Directors, which then flow into systems, and then again with the central approval of payments by the Executive Directors, creating a closed “sandbox” environment out- side of which no investment or payment can be approved. The control workflow has two components: ex-ante, controls are incorporated in periodic reporting and approval documentation for the risk owners to Corporate Governance 340 inform the Risk Management department and the Audit Committee/ Board of Directors about the risks that are perceived to be most sig- nificant and the mitigation strategies that are used against them; and ex-post control, Risk Management independently aggregates all data to calculate risk measures from internal systems. This data is sourced from the same internal controlling and accounting systems that are used for financial reporting. The Risk Management department is responsible for periodic risk reporting to the Audit Committee and the Board of Directors, thereby incorporating information from the risk owners. An online dashboard is delivered quarterly for all the risks, with ad hoc updates in cases of bigger perceived macroeconomic risks. 5.2.10 UPDATE ON CTP’S PRINCIPAL RISKS IN 2022 • War in Ukraine CTP was largely unaffected by the war in Ukraine in 2022, as it has no assets with direct exposure in Ukraine or in Russia. • Inflation An indirect effect of the war in Ukraine was a temporary price in- crease of construction materials at the beginning of the year due to supply disruptions. CTP acts as general contractor, with in-house teams taking full responsibility and control over the construction process. This, in combination with the central procurement of sup- plies directly from multiple sources, often by-passing distributors, protected the target YoC, which remained above 10%, also thanks to significant rental increases. Prices and delivery times decreased from their peaks but remained above 2021 levels throughout the year. CTP mitigates risk associated with high inflation via the use of double indexation clauses in 49% of its lease agreements, which de- fines that indexation is the higher of the Consumer Price Index or a fixed increase of 1.5%–2.5%. CTP expects the percentage of indexed lease agreements to increase over time, as new contracts have by default this double indexation clause included. The remaining part of the Group’s lease agreements have a fixed increase of 1.5%–2.5%; however, with market rents increasing sig- nificantly, these lease agreements have a significant built-in rever- sionary potential. • Energy The increase in energy prices in 2022 had minimal direct effect on CTP, as its operations are not energy intensive. Going forward, CTP has ambitious plans to produce solar energy using photovoltaic pan- els installed on the rooftops of the Group’s properties. At year-end 2022, CTP had an installed capacity of 38 MWp and the Group plans to add an additional 100 MWp in 2023. • Interest rates All financing for standing properties is fixed, so financing cost in- crease is to a certain extent limited by the Company’s average debt profile. During 2022, following developments on capital markets, CTP leadership decided that bank financing was significantly more attractive than bond financing. In February, the Company renegoti- ated one of its loan facilities, resulting in a reduction of the margin and extension of the maturity by an additional three years, until 15 February 2034. The Company was able to leverage its strong rela- tionship with its banking partners and in September extended an ex- isting loan facility with a syndicate of Czech banks, attracting €400 million of new financing, with a fixed interest rate of 4.71% and a maturity of nine years. In December, CTP signed a seven-year loan facility with two Dutch banks, obtaining €175 million for a fixed all-in cost of 4.27%. This funding, together with the Group’s 2023 cash flow, will be used to refinance the bond that is maturing in November 2023. Funding costs for the Group’s developments in 2023 have been fixed to a high degree through hedging of future needs. • Macroeconomic slowdown Various leading indicators observed during 2022 point at the pos- sibility of a recession in some European economies in 2023. At the same time, the market outlook is very supportive of CEE Logistic Real Estate, with very low vacancies, strong rental growth, expect- ed doubling of e-commerce penetration, nearshoring and barriers to supply. At CTP, new projects start as a response to demand from existing tenants, which represents around two-thirds of new pro- jects. If demand drops due to an economic slowdown, the Company can balance or adjust completions in line with demand. Risk Management and Internal Controls 341 Principal Risks5.3 #1 #2 #3 LEVEL 3 Valuation Risks LEVEL 2 Market Risks LEVEL 1 Financial Risks DESCRIPTION: The Group’s inancial statements may be afected by luctuation in the fair market value of its property portfolio as a result of revaluations, or the Group may be unable to dispose of its properties proitably. The Group may hold excess land for future development, which may not ultimately be beneicial to the Group. RISK OWNER: CFO ESTIMATED IMPACT: Material ESTIMATED PROBABILITY: Likely RISK APPETITE: Manage MANAGEMENT & MITIGATION STRATEGIES: • Appointment of leading international valuation experts (Cushman & Wakeield) using standardised valuation methods (RICS Red Book); • Use of market studies, analyses and forecasts; • Geographical diversiication of the portfolio across all major CEE markets, with close ties to Western European markets; • Signiicant land bank at strategic locations in proximity to the Group's investment properties complementing the existing network and supporting tenant demand; • Investment strategy oriented to high-quality properties that generate stable, long-term income located at strategic locations with growth potential; • Continuous maintenance and improvement of properties; • Quality of the tenant portfolio, compromising mainly large national and international companies with low annual credit provisions. LEVEL 3 Interest Rate Risks LEVEL 2 Market Risks LEVEL 1 Financial Risks DESCRIPTION: The Group is exposed to interest rate luctuations. RISK OWNER: CFO ESTIMATED IMPACT: Signiicant ESTIMATED PROBABILITY: Likely RISK APPETITE: Avoid MANAGEMENT & MITIGATION STRATEGIES: • All interest rate debt is ixed; • High degree of pre-hedging future funding requirements; • Constant monitoring of interest rate market movements. LEVEL 3 Inlation Risks LEVEL 2 Market Risks LEVEL 1 Financial Risks DESCRIPTION: The Group’s business could be negatively afected by rising inlation, as some of the lease agreements the Group has entered into with its tenants still contain a ixed adjustment of rent clause. RISK OWNER: CFO ESTIMATED IMPACT: Signiicant ESTIMATED PROBABILITY: Likely RISK APPETITE: Minimise MANAGEMENT & MITIGATION STRATEGIES: • The Group's biggest cost is inancing, which is ixed; • Operational costs constitute less than 20% of cash income and are thus considered manageable even in times of prolonged high inlation; • Increased construction costs are covered by the double indexation clauses (inlation adjustment with a minimum 1.5% in 49% of contracts by year-end 2022) as well as the higher rents of the new properties. Corporate Governance 342 #5#4 LEVEL 3 Funding – Issuance Risks LEVEL 2 Capital, Funding & Liquidity Risks LEVEL 1 Financial Risks DESCRIPTION: Any additional debt or equity inancing the Group may need may not be available on terms favourable to the Group or at all, which could adversely afect the Group’s future plans. RISK OWNER: CFO ESTIMATED IMPACT: Signiicant ESTIMATED PROBABILITY: Possible RISK APPETITE: Manage MANAGEMENT & MITIGATION STRATEGIES: • The Group’s senior management has extensive capital markets experience. • The Group has longstanding relationships with a diversiied group of international investment banking partners • Regular monitoring of risks that could negatively afect the Group’s inancial partners. LEVEL 3 Macroeconomic Environment Risks LEVEL 2 Macroeconomic Environment Risks LEVEL 1 Strategic Risks DESCRIPTION: The Group is exposed to macroeconomic conditions and business-cycle risks that afect the markets in which the Group operates. RISK OWNER: CFO ESTIMATED IMPACT: Material ESTIMATED PROBABILITY: Possible RISK APPETITE: Manage MANAGEMENT & MITIGATION STRATEGIES: • The Group negotiates long lease terms; • Portfolio diversiication across industries and single names; • Contracts with parent company guarantees; • Portfolio consists of high credit quality tenants, mainly large national and international companies; • Excellent location of properties, near major cities and transport arteries; • Constant monitoring of macro- economic trends and developments in major industries across the Group’s countries of operation; • Implemented inancial hedging programme; • Experienced in-house research department supported by independent research; • The Group receives market intelligence from investment banks; • Experienced local presence and an extensive network of market contacts, advisors and consultants; • New projects start as a response to demand from existing tenants with whom CTP does almost two-thirds of new projects; • If demand drops because of a slowdown, the Company can balance or adjust the completion schedule. Principal Risks 343 344 345 Financial Statements 346 6 Financial Statements CTP N.V. Consolidated financial statements for the year ended 31 December 2022 CTP N.V. Apollolaan 151 1077 AR Amsterdam The Netherlands Financial Statements 347 Consolidated Financial Statements Consolidated Financial Statements 349 Consolidated statement of profit and loss and comprehensive income 351 Consolidated statement of financial position 352 Consolidated statement of changes in equity 353 Consolidated statement of cash flows 354 Notes to the consolidated financial statements 355 1. General information 355 2. Going concern 356 3. Basis of preparation of consolidated financial statements 357 4. Significant accounting policies 358 5. Segment reporting 367 6. Changes in Group structure 372 7. Gross rental income 375 8. Revenues from contracts with customers 376 9. Property operating expenses 376 10. Other income 377 11. Employee benefits 377 12. Other expenses (including administrative expenses) 378 14. Other financial expenses 379 15. Other financial gains/(losses) 379 16. Income tax expenses 379 17. Investment property 380 18. Investment property under development 385 19. Net valuation result 387 20. Property, plant and equipment 387 21. Trade and other receivables 388 22. Cash and cash equivalents 390 23. Equity 390 24. Share-based payments 392 25. Earnings per share 392 26. Non-controlling interest 393 27. Interest-bearing loans and borrowings from financial institutions 394 28. Bonds 397 29. Trade and other payables 398 30. Leases 399 31. Derivative financial instruments 400 32. Income taxes 401 33. Subsidiaries 403 34. Related parties 409 35. Financial instruments risk management objectives and policies 410 36. Contingent liabilities 419 37. Pledges 420 38. Subsequent events 421 Company Financial Statements 422 Other information 445 Independent Auditor's Report 446 349 Financial Statements Consolidated statement of profit and loss and comprehensive income In EUR thousand Note 1.1.2022 - 31.12.2022 1.1.2021 - 31.12.2021 Revenues Attributable external expenses Revenues Attributable external expenses Rental income 7 485,017 334,651 Service charge income 7 51,875 31,112 Property operating expenses 9 -84,758 -38,910 Net rental income 452,134 326,853 Hotel operating revenue 8 16,021 8,779 Hotel operating expenses 8 -12,280 -11,334 Net operating income from hotel operations 3,741 -2,555 Income from development activities 8 36,200 32,824 Expenses from development activities 8 -27,158 -23,459 Net income from development activities 9,042 9,365 Total revenues 589,113 407,366 Total attributable external expenses -124,196 -73,703 Gross profit 464,917 333,663 Net valuation result on investment property 19 723,580 1,100,571 Other income 10 8,182 10,445 Amortisation and depreciation 20 -10,729 -8,447 Employee benefits 11 -43,706 -31,883 Impairment of financial assets 1,225 -1,078 Other expenses 12 -59,584 -26,463 Net other income/expenses -104,612 -57,426 Profit/loss before finance costs 1,083,885 1,376,808 Interest income 4,235 1,993 Interest expense 13 -84,944 -70,883 Other financial expenses 14 -17,939 -38,120 Other financial gains/losses 15 2,031 6,892 Net finance costs -96,617 -100,118 Profit/loss before income tax 987,268 1,276,690 Income tax expense 16 -190,743 -250,754 Profit for the period 796,525 1,025,936 Other comprehensive income Items that will never be reclassified to profit and loss Revaluation of PPE net of tax -813 7,554 Items that are or may be reclassified to profit and loss Cash flow hedge - effective portion of changes in fair value net of tax 23 23,727 -- Foreign currency translation differences net of tax -6,169 -3,742 Total other comprehensive income net of tax 16,745 3,812 Total comprehensive income for the year 813,270 1,029,748 Profit attributable to: Non-controlling interests 26 1,876 -- Equity holders of the Company 794,649 1,025,936 Total comprehensive income attributable to: Non-controlling interests 26 1,876 -- Equity holders of the Company 811,394 1,029,748 Earnings per share Basic earnings per share 25 1.83 2.68 Diluted earnings per share 25 1.83 2.68 The notes herein are an integral part of these consolidated financial statements. 351 Financial Statements Consolidated statement of financial position In EUR thousand Note 31 December 2022 31 December 2021 Assets Investment property 17 10,124,185 7,575,107 Investment property under development 18 1,193,343 774,203 Property, plant and equipment 20 168,905 110,967 Intangible assets 3,492 2,111 Trade and other receivables 21 18,014 100,739 Derivative financial instruments 31 9,165 126 Financial investments 459 445 Long-term receivables from related parties 34 45,245 47,124 Deferred tax assets 32 17,851 24,052 Total non-current assets 11,580,659 8,634,874 Trade and other receivables 21 235,584 144,082 Short-term receivables from related parties 34 332 528 Derivative financial instruments 31 41,881 46 Contract assets 3,404 7,039 Current income tax receivable 32 6,175 7,260 Cash and cash equivalents 22 660,631 892,816 Total current assets 948,007 1,051,771 Total assets 12,528,666 9,686,645 Issued capital 23 71,052 64,063 Translation reserve 23 4,547 10,716 Share premium 23 3,024,521 2,661,979 Cash flow hedge reserve 23 23,727 -- Retained earnings 2,142,267 1,350,856 Revaluation reserve 18,403 19,216 Total equity attributable to owners of the Company 5,284,517 4,106,830 Non-controlling interest 26 -- -- Total equity 5,284,517 4,106,830 Liabilities Interest-bearing loans and borrowings from financial institutions 27 1,868,129 1,110,471 Bonds issued 28 3,563,788 3,368,202 Trade and other payables 29 103,952 64,591 Long-term payables to related parties 34 3 18 Derivative financial instruments 31 2,018 -- Deferred tax liabilities 32 913,855 746,773 Total non-current liabilities 6,451,745 5,290,055 Interest-bearing loans and borrowings from financial institutions 27 24,730 20,833 Bonds issued 28 417,562 13,490 Trade and other payables 29 320,917 237,148 Derivative financial instruments 31 12,677 -- Current income tax payables 32 16,518 18,289 Total current liabilities 792,404 289,760 Total liabilities 7,244,149 5,579,815 Total equity and liabilities 12,528,666 9,686,645 The notes herein are an integral part of these consolidated financial statements. 352 Financial Statements Consolidated statement of changes in equity Over the year In EUR thousand Note Issued capital Translation reserve Share premium Cash flow hedge reserve Revaluation reserve Retained earnings Total equity attributable to parent Non- controlling interest Total equity 1.1.2022 - 31.12.2022 Balance at 1 January 2022 64,063 10,716 2,661,979 -- 19,216 1,350,856 4,106,830 -- 4,106,830 Comprehensive income for the period Profit for period -- -- -- -- -- 794,649 794,649 1,876 796,525 Other comprehensive income Revaluation of Property, plant and equipment -- -- -- -- -813 -- -813 -- -813 Cash-flow hedge 23 -- -- -- 23,727 -- -- 23,727 -- 23,727 Foreign currency translation differences -- -6,169 -- -- -- -- -6,169 -- -6,169 Comprehensive income for the period -- -6,169 -- 23,727 -813 794,649 811,394 1,876 813,270 Other movements Issuance of shares related to acquisition of subsidiary with NCI 23 5,187 -- 391,030 -- -- -- 396,217 -- 396,217 Acquisition of NCI without change in control 26 -- -- -- -- -- -- -- 95,943 95,943 Issue of shares related to merger 23 1,226 -- 96,593 -- -- -- 97,819 -97,819 -- Treasury shares 23 -4 -- -541 -- -- -- -545 -- -545 Dividends 23 580 -- -124,540 -- -- -- -123,960 -- -123,960 Change of share without change of control 26 -- -- -- -- -- -2,247 -2,247 -- -2,247 Common control transactions 6 -- -- -- -- -- -1,082 -1,082 -- -1,082 Share based payment -- -- -- -- -- 91 91 -- 91 Total other movements 6,989 -- 362,542 -- -- -3,238 366,293 -1,876 364,417 Balance at 31 December 2022 71,052 4,547 3,024,521 23,727 18,403 2,142,267 5,284,517 -- 5,284,517 1.1.2021 - 31.12.2021 Note Issued capital Translation reserve Share premium Cash flow hedge reserve Revaluation reserve Retained earnings Total equity attributable to parent Non- controlling interest Total equity Balance at 1 January 2021 53,760 14,458 1,858,460 -- 11,662 324,862 2,263,202 1,031 2,264,233 Comprehensive income for the period Profit for period -- -- -- -- -- 1,025,936 1,025,936 -- 1,025,936 Other comprehensive income Revaluation of Property, plant and equipment -- -- -- -- 7,554 -- 7,554 -- 7,554 Foreign currency translation differences -- -3,742 -- -- -- -- -3,742 -- -3,742 Comprehensive income for the period -- -3,742 -- -- 7,554 1,025,936 1,029,748 -- 1,029,748 Other movements Share issuance 23 9,763 -- 809,572 -- -- -- 819,335 -- 819,335 Dividends 23 540 -- -6,053 -- -- -- -5,513 -- -5,513 Share based payment 24 -- -- -- -- -- 85 85 -- 85 Increase of shares without change of control -- -- -- -- -- -27 -27 -1,031 -1,058 Total other movements 10,303 -- 803,519 -- -- 58 813,880 -1,031 812,849 Balance at 31 December 2021 64,063 10,716 2,661,979 -- 19,216 1,350,856 4,106,830 -- 4,106,830 The notes herein are an integral part of these consolidated financial statements. 353 Financial Statements Consolidated statement of cash flows Over the year In EUR thousand Note 1.1.2022 - 31.12.2022 1.1.2021-31.12.2021 Operating activities Net result for the year 796,525 1,025,936 Adjustments for: Net valuation result on investment property 19 -723,580 -1,100,571 Amortisation and depreciation 20 12,405 10,121 Net interest expense 13 80,709 68,890 Change in fair value of derivatives and associated closeout costs 31 -4,052 -12,127 Other changes -12,527 1,262 Change in foreign currency rates 17,617 20,055 Income tax expense 16 190,743 250,754 357,840 264,320 Decrease/(increase) in trade and other receivables and other items -47,801 -56,442 Increase/(decrease) in trade and other payables and other items 78,372 3,349 Decrease/(increase) in contract assets 3,635 5,839 Cash generated from operations 34,206 -47,254 Interest paid 27 -64,697 -45,165 Interest received 3,785 223 Income taxes paid -30,819 -33,066 Cash flows from operating activities 300,315 139,058 Investment activities Acquisition of investment property -228,433 -174,392 Acquisition of PPE and intangible assets -43,909 -13,969 Advances paid for IP and PPE -6,353 -96,526 Proceeds from disposal of investment property and PPE 11,146 4,312 Acquisition of subsidiaries, net of cash acquired 6 -112,522 -297,217 Pre-acquisition loans and borrowings provided to acquired subsidiaries 6 -194,843 -255,351 Loans and borrowings provided to related parties -1,790 -15,000 Proceeds from loans and borrowings provided to related parties 2,398 3,512 Proceeds from loans and borrowings provided to third parties 80,184 -- Proceeds from disposal of subsidiaries, net of cash disposed 6 -- 8,950 Development of investment property -870,674 -599,566 Cash flows used in investing activities -1,364,796 -1,435,247 Financing activities Bonds issued 27 733,368 2,479,615 Repayment of interest-bearing loans and borrowings/bonds 27 -391,201 -2,119,968 Proceeds from interest-bearing loans and borrowings 27 628,987 677,468 Repayment of loans/liabilities to related companies 27 -- -35,968 Transaction costs related to loans and borrowings/bonds 27 -4,754 -45,344 Proceeds from the issue of share capital 23 -- 854,238 Repayment of share premium 23 -- -34,904 Acquisition of NCI 26 -2,247 -- Dividends paid 27 -123,960 -5,513 Payment of lease liabilities 27 -3,010 -974 Cash flows from/used in financing activities 837,183 1,768,650 Cash and cash equivalents at 1 January 892,816 419,141 Net increase in cash and cash equivalents -227,298 472,461 Change in foreign currency rates -4,887 1,214 Cash and cash equivalents at 31 December 22 660,631 892,816 The notes herein are an integral part of these consolidated financial statements. 354 Financial Statements Notes to the consolidated financial statements GRI 2-1 1. GENERAL INFORMATION Company CTP N.V. (the Company) is a Dutch-based real estate investor and developer, which develops and leases a portfolio of properties in Western Europe and Central and Eastern Europe (CEE). Reporting entity These consolidated financial statements comprise the Company and its subsidiaries (collectively referred to as the “Group”, “CTP Group”, “CTP” and individually as “Group companies”). Refer to Notes 6 and 33 of the consolidated financial statements for a list of significant Group entities and changes to the Group in 2022 and in 2021. Principal activities CTP is a full-service commercial real estate developer managing and delivering custom-built, high-tech business parks mainly in CEE, the Netherlands, Austria and Germany. Registered office The visiting address of CTP N.V. is Apollolaan 151, 1077 AR Amsterdam, the Netherlands. The corporate seat of the Company was approved on Annual general meeting held on 26 April 2022 and changed from Utrecht to Amsterdam, the Netherlands. RSIN number: 860528091 Registration number: 76158233 CTP N.V. was incorporated on 21 October 2019 for an unlimited period. In March 2021, the Company’s shares were issued on the Amsterdam Stock Exchange (EURONEXT) and CTP has changed its legal form from B.V. to N.V. Owner of the Company at 31 December 2022: Shareholders Number of shares Share in registered capital Share in voting rights CTP Holding B.V. 335,644,164 75.58% 75.58% Individual shareholders 108,456,385 24.42% 24.42% 444,100,549 100.00% 100.00% The Group’s ultimate parent company is Multivest B.V. (the Netherlands). Board of Directors at 31 December 2022: Executive directors: Non-executive directors: Remon L. Vos Susanne Eickermann-Riepe Richard J. Wilkinson Barbara Knoflach Gerard van Kesteren Pavel Trenka 355 Financial Statements 2. GOING CONCERN CTP’s properties are leased to a wide range of tenants and there is no significant focus on a group or company. CTP closely monitors the financial stability of its tenants and believes that, in light of the current economic climate, its rental projections for the coming 12 months are realistic. CTP expects to settle its current liabilities as at 31 December 2022, during the financial year 2023, as follows: In EUR thousand 2022 Current liabilities as at 31 December 2022 792,404 Current assets excluding cash and cash equivalents as at 31 December 2022 287,376 Funds required in 2022 to cover the short-term liquidity need 505,028 Available cash as at 31 December 2022 660,631 Expected net rental income available for repayment current Interest-bearing loans and borrowings to be received in 2023 533,646 Expected drawdowns of loans and borrowings from financial institutions under existing loan facilities 95,000 Revolving facility * -- Expected funds to be received in 2023 to cover the short-term liquidity need 1,289,277 * The Company has a EUR 400 million revolving credit facility (2021: EUR 400 million) for a three-year period. The Company does not expect a partial or full drawdown under this facility in 2023. Based on cash-flow projections prepared for 2023, other development up to the date of approval of these consolidated financial statements, and the management assessment results (described above), the Direc- tors and management of the Group have not identified significant going concern risks. They believe it is appropriate to prepare the consolidated financial statements on a going concern basis as at 31 December 2022, and no material uncertainty existed with respect to the going concern of the Group as at 31 December 2022. 356 Financial Statements 3. BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS a) Statement of compliance These consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU-IFRSs) and with Section 2:362(9) of the Dutch Civil Code. The changes to significant accounting policies are described in Note 3d. The consolidated financial statements were authorised for issue by the Board on 3 March 2023. b) Financial reporting and comparative period CTP N.V. has a 12-month financial year ended on the balance sheet date of 31 December 2022 and 31 December 2021, respectively. c) Common control transactions There were no significant common control transactions in 2022 or in 2021. Please, refer to Note 6. d) CTP considered the following new and amended standards in 2022 For the preparation of the consolidated financial statements of the Group, the following new or amended standards and interpretations were considered for the first time for the financial year beginning 1 January 2022. The nature and the effect of these changes are dis- closed below, however the impact on Consolidated financial state- ments is immaterial: • Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37): The amendments specify what costs an entity includes in determining the cost of fulfilling a contract, to assess whether the contract is onerous. The amendments apply for annual reporting periods beginning on or after 1 January 2022 to contracts existing when the amendments are first applied. • Annual Improvements to IFRS Standards 2018–2020: Amendments to IFRS1, IFRS9, IFRS 16 and IAS41. • Property, Plant and Equipment: Proceeds before Intended use (Amendment to IAS 16): Under the amendments, proceeds from selling items before the related item of PPE is available for use should be recognised in profit or loss, together with the costs of producing those items. IAS 2 Inventories should be applied in identi- fying and measuring these production costs. • Reference to the Conceptual Framework (Amendments to IFRS3). e) Standards issued but not yet effective A number of new standards took effect from the financial years begin- ning after 1 January 2022, although earlier application was permitted. The Group did not adopt the new or amended standards in preparing these consolidated financial statements. The following amended standards and interpretations are not expect- ed to have a significant impact on the Group’s consolidated financial statements: • Classification of Liabilities as Current and Non-current (Amend- ment to IAS 1): To clarify the requirements on determining if a liability is current or non-current, the International Accounting Standards Board (the Board) has amended IAS 1. • Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2): The Board has issued amendments on the application of materiality to the disclosure of accounting policies. • Definition of Accounting Estimates (Amendments to IAS 8): The amendment clarifies how companies should distinguish changes in accounting policies from changes in accounting estimates, focusing on the definition of and clarifications on accounting estimates. • Deferred Tax related to Assets and Liabilities arising from single transaction (Amendment to IAS 12): The amendment clarifies how companies should account for deferred tax on certain transactions, e.g., leases and decommissioning provisions. • IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts: IFRS 17 introduces a new measurement model for insur- ance contracts. f) Functional and presentation currency The presentation currency of the Group is euro (EUR), as the owners of the Company base their economic decisions on information expressed in this currency. All financial information presented in EUR is rounded to the nearest thousand. The Group analysed each entity level based on primary, secondary and other indicators, and concluded: • Group entities focused on investing and development activities in specific countries (“development companies”) have a functional currency in the local currency: o where competitive forces and regulations mainly determine the sales prices of its goods and services rendered to other compa- nies operating in the same country; o that primarily influences labour, material and other costs of pro- viding goods and services; o in which receipts from operating activities are usually retained; • other Group entities that operate industrial parks or dormant en- tities with future industrial parks development potential have EUR functional currency, as: o sales prices of services rendered to the tenants are in EUR; o funds from financing activities are generated in EUR; o activities of these companies are conducted as an extension of the reporting entity, with no significant degree of autonomy. CTP Group’s development companies are: - CTP Invest, spol. s r.o. — functional currency Czech koruna (CZK) - CTP Invest Poland Sp. z o.o. — functional currency Polish zloty (PLN) - CTP Invest d.o.o. Beograd-Novi Beograd — functional currency Ser- bian dinar (RSD) - CTP Management Hungary Kft. — functional currency Hungarian forint (HUF) - CTP Invest Bucharest SRL — functional currency Romanian leu (RON) - CTP Invest SK, spol. s r.o. — functional currency euro (EUR) - CTP Invest EOOD — functional currency Bulgarian lev (BGN) 357 Financial Statements - CTP Invest Immobilien GmbH – functional currency euro (EUR) - CTP Invest B.V. – functional currency euro (EUR) - CTP Invest Germany GmbH – functional currency euro (EUR) All other Group companies have EUR as their functional currency. g) Basis of measurement The Group’s consolidated financial statements are prepared on a his- torical cost basis, except for the following items, which are measured on an alternative basis on each reporting date: - derivative financial instruments are measured at fair value; - investment property is measured at fair value; - solar plants within property, plant and equipment are measured at fair value; - hotels within property, plant and equipment are measured at fair value. h) Use of estimates and judgments The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated as- sumptions are based on historical experience and various other factors that the management believes reasonable under the circumstances. The results of these form the basis of judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results may differ from these estimates. The estimates and assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. Information about significant areas of estimates, uncertainty and crit- ical judgments in applying accounting policies that have the most sig- nificant effect on the amount recognised in the financial statements, are described in the following Notes: - 4b) Investment property - 4c) Investment property under development - 4d) Property, plant and equipment - 4i) Impairment - 4g) Financial instruments i) Measurement of fair values Some of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. When measuring the fair value of an asset or a liability, the Group uses market data as far as possible. Fair values are categorised into dif- ferent levels in a fair value hierarchy based on the following valuation techniques: • Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities; • Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); • Level 3: inputs for the asset or liability that are not based on ob- servable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hi- erarchy at the end of the reporting period during which the change has occurred. Further information about the assumption made in measuring fair values is included in the following notes: - Note 17. Investment property - Note 18. Investment property under development - Note 20. Property, plant and equipment - Note 31. Derivative financial instruments 4. SIGNIFICANT ACCOUNTING POLICIES The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements. a) Basis of consolidation i. Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity to obtain benefits from its activi- ties. In assessing control, potential voting rights that are exercisable or convertible are considered. The financial statements of subsidiaries are included in these consolidated financial statements from the date that control commences until the date that control ceases. If neces- sary, subsidiary accounting policies are changed to align with policies adopted by the Group. The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination under IFRS 3, when an integrated set of activities is acquired in addition to the prop- erty. More specifically, consideration is made to the extent to which significant processes are acquired and the extent of services provided by the subsidiary. When the acquisition of subsidiaries does not represent a business, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill and deferred tax is recognised. 358 Financial Statements ii. Acquisition of business from companies under common control A business combination involving entities or businesses under common control is when all combining entities or businesses are ultimately con- trolled by the same party or parties both before and after the business combination, and that control is not transitory. The assets and liabilities acquired under common control are recog- nised at the carrying amounts in the financial statements of the enti- ties acquired. Any difference between consideration paid and the net book value of assets and liabilities acquired is recognised directly in the equity. In the absence of more specific guidance, the Group consist- ently applies the book value method to account for all common control transactions. The assets and liabilities of the entities, and their income and expenses, for the period in which the common control transaction has occurred and for the comparative period disclosed, are included in the Group’s financial statements as if the common control transaction took place at the beginning of the comparative period. iii. Business combinations Business combinations, excluding those commenced between parties under common control, are accounted for by applying the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. The Group measures goodwill at the acquisition date as: • the fair value of the consideration transferred; plus • the recognised amount of any non-controlling interests in the ac- quiree; plus • if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less • the net amount of the identifiable assets acquired, and liabilities stated at fair value. Goodwill is tested for impairment if events or changes in circumstances indicate that it might be impaired, and at least annually, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. When the excess is negative (bargain purchase), it is recognised imme- diately in the consolidated statement of comprehensive income. The Group applies recognition exemption of deferred tax that arises from the initial recognition of an asset or liability in a transaction that is not a business combination. Deferred tax from subsequent asset revaluation is recognised in the consolidated financial statements. iv. Acquisition of assets via share-based payment Transaction, where the Group acquires assets in exchange for its shares, is in scope of standard IFRS 2 Share-based payments. Assets received, and the corresponding increase in equity, are measured at the fair value of assets received. That fair value is measured at the date the entity obtains the assets. v. Non-controlling interest Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisi- tion. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. vi. Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any re- sulting gain or loss is recognised in profit or loss. If the Group retains any interest in the former subsidiary, such interest is measured at fair value at the date that control is lost. vii. Changes in the ownership interests in existing subsidiaries Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. viii. Asset acquisition Asset acquisitions are the acquisitions of an asset or a group of assets (and liabilities) that do not constitute a business. The Group identifies and recognises individual identifiable assets acquired and liabilities as- sumed and allocates the cost of the group of the individual identifiable assets and liabilities, based on their relative fair values at the date of the acquisition. ix. Transactions eliminated on consolidation level Intra-Group balances, and any gains and losses or income and expens- es arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements of the Group. b) Investment property Investment properties are those held to earn rental income, capital appreciation, or both. Investment property is initially measured at cost and subsequently at fair value, with any change recognised in profit or loss. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the car- rying amount of the item) is recognised in profit or loss. An external, independent professional valuer values the investment property port- folio at least annually. The independent valuation report was obtained as at 31 December 2022 and was incorporated into the Group’s IFRS consolidated fi- nancial statements. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. The fair value measurement for all the Group’s investment properties is categorised as Level 3 fair value. 359 Financial Statements c) Investment property under development Property being constructed or developed for future use as investment property is classified as investment property under development. This is initially measured at cost and subsequently at fair value, with any change recognised in profit or loss. When construction or development is completed, property is reclassified and subsequently accounted for as investment property. The independent valuation report was obtained as at 31 December 2022. The value of investment property under development was deter- mined by an external, independent professional property valuer. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Borrowing costs are not capitalised to the value of investment proper- ty under development, as almost all development projects are finished within 12 months. The fair value measurement for all investment properties under devel- opment is categorised as Level 3 fair value. d) Property, plant and equipment (i) Revaluation model Solar plants, which are completed solar plants that are generating income, and hotels, which represent a minority of the Group’s property portfolio, are classified under property, plant and equipment at reval- ued amounts, being the fair value at the reporting date. Any gain or loss arising on re-measurement of the Group’s solar plants and hotels is treated as a revaluation, with any gain recorded as part of other comprehensive income, except to the extent that it reverses a previous impairment on the same property, in which case it is recorded in profit or loss. A loss is an expense in profit or loss to the extent to which it is higher than previously recognised revaluation surplus. An external, independent valuer with appropriately recognised profes- sional qualifications and recent experience in the location and category of the solar plant and hotel being valued, values the portfolio of solar plants and hotels at least annually. Depreciation of the solar plants is recognised into profit or loss on a straight-line basis over the estimated useful life of 20 years. Depreciation of the hotels is recognised into profit or loss on a straight- line basis over the estimated useful life of 40 years. (ii) Cost model All other buildings, property, plant and equipment are measured at cost less accumulated depreciation and impairment losses (see Note 4i). Cost includes expenditure that is directly attributable to the ac- quisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the initial estimate, where relevant, of the costs of dismantling and removing building items and restoring the building site at which they are located, and an appropriate proportion of production overheads. Subsequent costs are included in the asset’s carrying amount or rec- ognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance expenses are charged to the income state- ment during the financial period in which they are incurred. Where parts of an item of property, plant and equipment have differ- ent useful lives, they are accounted for as separate items of property, plant and equipment. The Group recognises in the carrying amount of an item of property, plant and equipment, the cost of replacing part of such an item when that cost is incurred, and it is probable that the future economic ben- efits embodied with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replace item is derecognised. All other costs are in the statement of comprehensive income as incurred. Depreciation is recognised into profit or loss on a straight-line basis over the estimated useful life of the equipment. The estimated useful life for equipment varies from 3 years to 8 years, and for property and plant between 10 years and 20 years. The Group recognises as part of Property, plant and equipment ac- quired forests. Forests are considered as bearing plant and are initially measured at cost. Subsequently they are measured at cost less im- pairment losses. (iii) Reclassification to Investment property When the use of a property changes from owner-occupied to invest- ment property, the property is remeasured to fair value and reclassified accordingly. Any gain arising from this remeasurement is recognised in profit or loss to the extent that it reverses a previous impairment loss on the specific property, with any remaining gain recognised in Other Comprehensive Income (“OCI”) and presented in the revaluation reserve. A loss is an expense in profit or loss to the extent to which it is higher than previously recognised revaluation surplus. e) Assets held for sale Non-current assets, or disposal groups comprising assets and liabili- ties, are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets, or disposal groups, are generally measured at the lower level of their carrying amount and fair value less costs to sell. Any im- pairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, or investment property, which continue to be measured in accordance with the Group’s other accounting policies. Impairment losses on initial classification as held for sale or held for distribution and subsequent gains and losses on remeasurement are recognised in profit or loss. Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity accounted investee is no longer equity accounted. 360 Financial Statements f) Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a defined period, in exchange for consideration. • As a lessee At the start of a contract, or when a contract change contains a lease component, the Group allocates the consideration in the contract to each lease component based on its relative stand-alone prices. Howev- er, for property leases, the Group has elected not to separate non-lease components and accounts for the lease and non-lease components as a single lease component. The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially meas- ured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the under- lying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight- line method from the commencement date to the end of lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term, or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In such a case, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is peri- odically reduced by the impairment losses, if any. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes cer- tain adjustments to reflect the terms of the lease and type of an asset leased. Lease payments included in the measurement of the lease liability comprise the following: - fixed payments, including in-substance fixed payments; - variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; - the exercise price under a purchase option that the Group is reason- ably certain to exercise; - lease payments in an optional renewal period if the Group is reason- ably certain to exercise an extension option, and - penalties for early termination of a lease unless the Group is rea- sonably certain not to terminate early. Subsequently, the lease liability is measured at amortised cost using an effective interest method. It is remeasured when there is a change in any of above-mentioned lease liability components. In such case, the corresponding adjustment is made to the carrying amount of the right- of-use asset or is posted in profit or loss, if the carrying amount of the right-of-use asset is reduced to zero. The Group presents right-of-use assets that do not meet the defini- tion of investment property in the property, plant and equipment and lease liabilities in trade and other payables in the statement of finan- cial position. The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. • As a lessor At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all risks and rewards inci- dental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators, such as whether the lease is for a major part of the economic life of the asset. The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of rental income. Property held under finance leases and leased out under operating leases was classified as investment property and stated at fair value (as described in Note 4b). g) Financial instruments (i) Financial assets Initial recognition and measurement The financial assets are classified at initial recognition at amortised cost, fair value through other comprehensive income, or fair value through profit or loss. The Group measures financial assets at amortised cost if both condi- tions below are met, and the financial asset is not designated at fair value through profit and loss: - the financial asset is held within a business model with the objective to hold it to collect contractual cash flows; and - the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and inter- est on the principal amount outstanding. All financial assets not classified as measured at amortised cost as described above are measured at fair value through profit or loss. On initial recognition, the Group may irrevocably designate a financial as- set, that otherwise meets the requirements to be classified and meas- ured at amortised cost or at fair value through other comprehensive income, to be classified and measured at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mis- match that would otherwise arise . 361 Financial Statements Subsequent measurement For purpose of subsequent measurement, the Group’s financial assets are classified in two categories: - Financial assets at amortised cost (debt instruments) This category is most relevant to the Group and includes trade receivables and loans provided that are subsequently measured at amortised cost using the effective interest method, less any credit losses. - Financial assets at fair value through profit and loss This category includes derivatives. Financial assets are classified as held for trading if they are acquired for the purposes of selling or repurchasing in the future. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value being recognised in the statement of profit or loss. (ii) Non-derivative financial assets The Group initially recognises loans and receivables when they are originated. All other financial assets are recognised initially on the trade date upon which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transac- tion in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a sep- arate asset. Financial assets and liabilities are offset, and the net amount present- ed in the statement of financial position, when the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Loans provided Loans are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Loans provided are subsequently measured at amortised cost using the ef- fective interest method, less any impairment losses. The Group classifies as a current portion any part of long-term loans due within one year from the reporting date. Trade and other receivables Trade and other receivables and receivables due from related parties are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value, plus any directly attributable transaction costs. Receivables are subsequently measured at amortised cost using the effective interest method, less any impairment losses. Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank accounts and call de- posits that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the cash-flow statement. The Group treats cash deposited as a security in accordance with bank loan covenants as cash and cash equivalents for cash flow purposes. The Group’s cash flow statement is prepared based on the indirect method from the statement of financial position and statement of comprehensive income. (iii) Financial liabilities Financial liabilities are classified as measured at amortised cost or fair value through profit and loss. A financial liability is classified as at fair value through profit and loss if it is classified as held-for trading, it is a derivative, or it is designed as such on initial recognition. Financial liabilities at fair value through profit and loss are measured at fair value, and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. In- terest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss. (iv) Non-derivative financial liabilities The Group initially recognises debt securities issued and subordinat- ed liabilities on the date they originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes par- ty to the contractual provisions of the instrument. The Group derecog- nises financial liability when its contractual obligations are discharged, cancelled or expire. Non-derivative financial liabilities comprise loans and borrowings, bonds, bank overdrafts, and trade and other payables. Such financial liabilities are recognised initially at fair value less any directly at- tributable transaction costs. After initial recognition, these financial liabilities are measured at amortised cost using the effective interest method. Financial assets and liabilities are offset and the net amount present- ed in the statement of financial position when the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group classifies as a current portion any part of long-term loans that is due within one year from the reporting date. (v) Derivative financial instruments A derivative is a financial instrument or other contract that fulfils the following conditions: a) its value changes in response to a change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract; b) it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and c) it is settled at a future date. 362 Financial Statements Derivative financial instruments are initially recognised at fair value; attributable transaction costs are recognised in profit or loss as in- curred. Following initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit and loss. Fair values are obtained from quoted market prices or discounted cash flow models, as appropriate. The derivatives are carried as cur- rent (those that are expected to be settled in less than 12 months) or non-current assets when their fair value is positive, and as current (those that are expected to be settled in less than 12 months) or non-current liabilities when their fair value is negative . The principal types of derivative instruments used by the Group are interest rate swaps. Swaps are agreements between the Group and other parties to exchange future cashflows, based upon agreed notion- al amounts. Under interest rate swaps, the Group agrees with other parties to exchange, at specific intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed notional amount. (vi) Cash flow hedge The Group designates certain derivatives as hedging instruments to hedge variability in cash flows associated with highly probable forecast transaction arising from changes in interest rates. At inception of designated hedging relationships, the Group docu- ments the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship be- tween the hedged item and hedging instruments, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is rec- ognised in Other comprehensive income accumulated in the Cash flow hedge reserve. The effective portion of changes in the fair value of the derivative that is recognised in Other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present values basis, from inception of the hedge. Any ineffective portion of changes in the fair values of the derivative is recognised immediately in profit or loss. If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumu- lated in the Cash flow hedge reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item’s cost on its initial recognition or, for the cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affects profit or loss. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the Cash flow hedge re- serve are immediately reclassified to profit or loss. h) Contract assets Contract assets represent work in progress, which relates to the cost of development extras and specific fit-outs for tenants. Contract assets are stated at the lower of cost and net realisable value (being the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale). Where the net realisable value is below cost, con- tract assets are written down to the lower value and the impairment loss is recorded in the income statement. Costs of contract assets include the purchase price and related costs of acquisition (transport, customs duties, and insurance). i) Impairment (i) Non-financial assets The carrying amounts of the Group’s assets, other than investment property, investment property under development and deferred tax as- sets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. In respect of goodwill, the recovera- ble amount is estimated at each reporting date. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. Impairment losses are recognised in profit or loss. An impairment loss in respect of a prop- erty, plant and equipment measured at fair value is reversed through profit and loss to the extent that it reverses an impairment loss on the same asset that was previously recognised in profit and loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocat- ed to cash-generating units (groups of units) and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro-rata basis. (ii) Financial assets A financial asset not carried at fair value through profit or loss, in- cluding an interest in an equity accounted investee, is assessed at each reporting date to determine whether there is objective evidence that it is credit impaired. Objective evidence that financial assets are impaired can include de- fault or delinquency by a debtor; restructuring of an amount due to the Group on terms that the Group would not consider otherwise; in- dications that a debtor will enter bankruptcy; the disappearance of an active market for a security; and observable data indicating that there is a measurable decrease in the expected cash flows from a group of financial assets. The Group considers evidence of impairment for financial assets at both the specific asset and collective level. All individually significant fi- nancial assets are assessed for specific impairment. Those found not to be impaired are then collectively assessed for any impairment incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment, by grouping together receivables with similar risk characteristics. 363 Financial Statements The Group uses the expected credit loss model (ECLs) for the recogni- tion and measurement of impairment losses. The Group measures loss allowance at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs: • provided loans and bank balances for which credit risk (i.e., the risk of default occurring over the expected life of the financial instru- ment) has not increased significantly since initial recognition; • debt securities that are determined to have low credit risk at the reporting date; and • other debt securities and bank balances for which credit risk (i.e., the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition. Loss allowances for trade receivables are always measured at an amount equal to the lifetime ECLs. At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. Financial assets are cred- it impaired when one or more events have occurred that have a detri- mental impact on the estimated future cash flows of the financial asset. Evidence that a financial asset is credit impaired includes the following observable data: • significant financial difficulty of the borrower or issuer; • a breach of contract such as a default or being more than 90 days past due; • the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise; • it is probable that the borrower will enter bankruptcy or other finan- cial reorganisation; or • the disappearance of an active market for a security because of fi- nancial difficulties. The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individ- ually significant. If the Group determines that no objective evidence of credit impairment exists for an individually assessed financial assets, whether significant or not, it includes the assets in a group of financial assets with similar risk characteristics and collectively assesses them for credit impairment. Financial assets that are individually assessed for impairment, and for which an impairment loss is or continues to be recognised, are not included in a collective assessment of impairment. A significant increase in credit risk represents a significant increase in the risk of default in respect of financial asset as at the reporting date, compared with the risk as at the date of initial recognition. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information. The Group considers a financial asset to be in default when: - the borrower is unlikely to pay their credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or - the trade or other receivable is more than 365 days past due. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. Twelve-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of cash shortfalls (i.e., the difference between the cash flows due to the entity in accordance with the con- tract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset. In some cases, the observable data required to estimate the amount of an impairment loss on a financial asset may be limited or no longer fully relevant to current circumstances. This may be the case when a borrow- er is in financial difficulties and there is little available historical data re- lating to similar borrowers. In such cases, the Group uses its experience and judgement to estimate the amount of any credit impairment loss. All impairment losses in respect of financial assets are recognised in profit or loss and are only reversed if a subsequent increase in a recov- erable amount can be related objectively to an event occurring after the impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount of the asset that would have been determined, net of amortisation, if no impairment loss was recognised. The write-off pol- icy of the Group requires that the outstanding amount of a loan shall be written off if there is any instalment overdue for 730 or more days. However, the loan shall remain in the Group’s statement of financial po- sition even after 730 days of non-payment if it is probable that the loan will be sold in the near future, or significant recoveries are expected. In such case, the outstanding loan amount shall be derecognised at sale, or later, as soon as no significant recoveries are expected. The Group allocates each financial asset’s exposure to a credit risk stage based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and cash flow projections and avail- able press information about customers) and by applying experienced credit judgement. j) Reversals of impairment An impairment loss of non-financial assets is reversed if there is an indication that the loss has decreased or no longer exists and there is a change in the estimates used to determine the recoverable amount. An impairment loss is only reversed to the extent that the carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, had no impairment losses been rec- ognised. Reversal of an impairment loss for goodwill is prohibited. 364 Financial Statements k) Equity Issued capital Issued capital represents the amount of capital registered in the Shareholders Register and is classified as equity. External costs di- rectly attributable to the issuance of share capital, other than upon a business combination, are shown as a deduction from the proceeds, net of tax, in equity. Share premium The share premium concerns income from the issuing of shares in so far as it exceeds the nominal value of the shares (above par income). Share premium is presented net of IPO costs incurred in the process of shares emission. Translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements from the func- tional to the presentation currency (refer to Note 3f). Revaluation reserve Revaluation reserve comprise revaluation of solar plants and hotels, which are classified under property, plant and equipment at revaluated amounts, being the fair value at the reporting date (refer to Note 4d). Cash flow hedge reserve The Group has designated certain derivatives as hedging instruments in cash flow hedge relationships. These derivatives are recognised initially at fair value and reported subsequently at fair value in the consolidated statement of financial position. To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow hedges are recognised in other comprehensive income net of tax and included within the cash flow hedge reserve in equity. Retained earnings Consolidated retained earnings arise from accumulation of profits and losses of the consolidated activities. Treasury shares Treasury shares are deducted from Equity. Gains or losses from pur- chase, sale, issue or cancellation are recognised in Equity and do not affect profit or loss. The par value of treasury shares purchases is debited to Share capital. When treasury shares are sold or reissued, the par value of instruments is credited to Share capital. Any premium or discount to par value is shown as an adjustment to Share premium. l) Earnings per share Earnings per share (EPS) is an important financial indicator that meas- ures the Group’s profitability. Basic EPS is calculated by dividing the net profit for the period attrib- utable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the net profit for the period attrib- utable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the period, plus the weighted average number of shares that would be issued if all dilutive potential ordinary shares were converted into ordinary shares. The denominator in the calculation of basic EPS for each period pre- sented is the weighted average number of shares as at 31 December of the respective year. m) Share-based payment Under the CTP N.V. Long Term Incentive Plan (“LTIP”), CTP N.V. pro- vides share-based benefits to Company Directors in the form of condi- tional share awards over the Company’s ordinary shares. The fair value of the awards granted under the LTIP is recognised as an employee benefits expense, with a corresponding increase in equity (retained earnings). The total amount to be expensed is determined by reference to the fair value of the awards granted, including the impact of any market performance conditions and non-vesting conditions. Service conditions and any non-market performance vesting condi- tions are considered when estimating the number of awards expected to vest. The total expense is recognised over the vesting period, which is the period over which all specified vesting conditions are to be satisfied. At the end of each period, the Company revises its estimates of the number of awards that are expected to vest, based on the service conditions and the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. n) Government Grants The Group recognises government grants related to acquisition of so- lar plants. Grants are presented in the statement of financial position by deducting the grant in arriving at the carrying amount of the asset. The grant is recognised in profit and loss over the life of a depreciable assets as a reduced depreciation expense. o) Provisions A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation because of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre- tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. p) Rental income and service charge income Rental income from leases is recognised as income in the statement of comprehensive income on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income. Park management income (service charge) is an integral, but sepa- rately identifiable, part of rental contracts. The Group has identified that park management services are distinct from rentals and are therefore accounted separately. The service charge is priced and con- tracted based on market prices relevant for the region of operation. The service charge income is recognised evenly over time of the service 365 Financial Statements rendered as the customer simultaneously receives and consumes the benefits from the provided service. Service and management charges are included in net rental income gross of the related costs. The Group determined that it controls the services before they are transferred to tenants and therefore that the Group acts as a principal in these arrangements. q) Income from development activities Revenues from customer specific fit-outs of rented facilities (devel- opment extras) are presented separately in the Statement of compre- hensive income. Income from development activities includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and can be measured reliably. Income from development activities is recognised at point in time. r) Revenues from sale of properties Revenue from sale of properties is recognised when the control has passed to the buyer at the amount to which the Group expects to be entitled, recovery of the consideration is probable, the associat- ed costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods and the amount of revenue can be measured reliably, i.e., on the date on which the application is submitted to the Land Registry for the trans- fer of legal ownership title. Revenue is measured net of returns, trade discounts and volume rebates. When appropriate, revenue from such sales is deferred until the property is completed and the properties are ready for sale, including the necessary regulatory permissions. s) Hotel revenues Revenues from hotel operations represent room rental and sale of food and beverages. Hotel revenues are recognised in profit and loss at the moment, when the customer obtains control over the services provided. t) Expenses (i) Attributable external expenses Attributable external expenses consist of property operating expenses (including service expenses), hotel operating expenses and expenses from development activities. (ii) Property operating expenses Property operating expenses (including service expenses) are expensed as incurred. (iii) Finance income / finance expenses The Group’s finance income and finance costs include: • interest income; • interest expense; • dividend income; • the net gain or loss on financial assets at fair value through profit or loss (other than investment property and investment property under development); • the foreign currency gain or loss on financial assets and financial liabilities; • the fair value loss on contingent consideration classified as a finan- cial liability; • impairment losses recognised on financial assets (other than trade receivables); • the net gain or loss on hedging instruments that are recognised in profit or loss; and • the reclassification of net gains previously recognised in Other Comprehensive Income. Interest income or expense is recognised using the effective interest method. u) Income tax Income tax comprises current and deferred tax. Income tax is recog- nised in profit or loss, except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity or other comprehensive income. Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous years. Deferred tax Deferred tax is provided using the liability method on temporary dif- ferences arising between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and lia- bilities. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rate enacted or substantially enacted at the reporting date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Corporate income tax rates for 2022 and 2021 were as follows: Country 2022 2021 Austria 25.00% 25.00% Czech Republic 19.00% 19.00% Germany 15.83%; 29.48% 29.48% Hungary 9.00% 9.00% Netherlands 25.80% 25.00% Poland 19.00% 19.00% Romania 16.00% 16.00% Serbia 15.00% 15.00% Slovakia 21.00% 21.00% Bulgaria 10.00% 10.00% Slovenia 19.00% 19.00% 366 Financial Statements Deferred tax is not recognised from temporary differences on the ini- tial recognition of assets and/or liabilities in a transaction that is not a business combination under IFRS 3 (asset deal). Deferred tax assets and liabilities are offset only if certain criteria are met. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes of one entity relate to the same fiscal authority. v) Foreign currency transactions Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate of local na- tional banks at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated into the functional currency at the exchange rate when the fair value was determined. Foreign currency differences are generally recognised in profit or loss. Non-monetary items that are measured based on historical cost in a foreign currency are not translated. Foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into euro at exchange rates at the reporting date. The income and expenses of foreign operations are translated into euros at the exchange rates at the dates of the transactions. Foreign currency differences are recognised in Other Comprehensive Income and accumulated in the translation reserve, except to the extent that the translation difference is allocated to non-controlling interest (“NCI”). When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture, while retaining significant influence or joint control, the rel- evant proportion of the cumulative amount is reclassified to profit or loss. w) Segment reporting The Group has applied IFRS 8, “Operating Segments” to determine the number and type of operating segments. According to this standard, an operating segment is a component carrying out business operations whose operating income is evaluated regularly by the Group’s highest executive decision maker, and about which separate financial informa- tion is available. The results of the Group are reviewed by the CEO regularly on a weekly basis, by analysing KPIs of geographical segments where the Group operates. The Group’s operating segments were determined in connection with the nature of the business and how the operations are managed by the Group’s operating decision maker. The Group reports operating seg- ments based on geographical segmentation: the Czech Republic, Roma- nia, Hungary, Slovakia, the Netherlands, Germany and other areas. The hotel segment in the Czech Republic is presented separately. Segment results reported to the Board include items directly attributable to a segment. The operating segments are determined based on the Group’s man- agement and internal reporting structure. As required by IFRS 8, the Group provides information on the business activities in which it engag- es, including revenue and investment property split. 5. SEGMENT REPORTING The principal operation of the Group is the lease of investment proper- ty in Western, Central and Eastern Europe, and development in these countries. The Group manages its activities based on geographical segmentation, as business activities are the same in each region where the Group operates. The Group’s principal activities are in the following operating segments: the Czech Republic, Romania, Hungary, Slovakia, the Netherlands, Ger- many, Other geographical segments and Hotel segment. The Group operates three hotels under the “Courtyard by Marriott” brand in the Czech Republic (Prague Airport, Pilsen and Brno), with management agreements with a third party, and presented in the Hotel segment. Segment Segment description Czech Republic Industrial property, offices, retail, other Romania Industrial property Hungary Industrial property, offices Slovakia Industrial property, offices Netherlands Industrial property Germany Industrial property, offices Other segments Other segments which do not meet criteria for segment reporting recognition Hotel segment Operation of three hotels in the Czech Republic 367 Financial Statements Segment results for the 12-month period ended 31 December 2022 are as follows: In EUR thousand Czech Republic Hungary Romania Slovakia Netherlands Germany Other Hotel segment Total Segments Intersegment eliminations Total Rental income 230,301 48,978 84,013 37,118 2,990 58,512 23,105 -- 485,017 -- 485,017 Service charge income 17,816 6,400 10,747 4,407 -- 11,121 1,384 -- 51,875 -- 51,875 Property operating expenses -32,581 -7,150 -9,030 -5,174 -229 -27,714 -2,448 -432 -84,758 -- -84,758 Net rental income 215,536 48,228 85,730 36,351 2,761 41,919 22,041 -432 452,134 -- 452,134 Hotel operating revenue -- -- -- -- -- -- -- 16,021 16,021 -- 16,021 Hotel operating expenses -- -- -- -- -- -- -- -12,280 -12,280 -- -12,280 Net operating income from hotel operations -- -- -- -- -- -- -- 3,741 3,741 -- 3,741 Income from development activities 19,393 1,931 6,297 316 -- -- 8,263 -- 36,200 -- 36,200 Expenses from development activities -14,198 -1,680 -4,388 -175 -- -- -6,717 -- -27,158 -- -27,158 Net income from development activities 5,195 251 1,909 141 -- -- 1,546 -- 9,042 -- 9,042 Total revenues 267,510 57,309 101,057 41,841 2,990 69,633 32,752 16,021 589,113 -- 589,113 Total attributable external expenses -46,779 -8,830 -13,418 -5,349 -229 -27,714 -9,165 -12,712 -124,196 -- -124,196 Gross profit 220,731 48,479 87,639 36,492 2,761 41,919 23,587 3,309 464,917 -- 464,917 Net valuation result on investment property 394,372 46,434 67,238 18,412 14,761 -3,687 186,050 -- 723,580 -- 723,580 Other income 16,704 16 206 484 3,959 381 482 -- 22,232 -14,050 8,182 Amortisation and depreciation -9,010 -272 -413 -168 -52 -298 -516 -- -10,729 -- -10,729 Employee benefits -21,010 -3,385 -5,803 -2,807 -4,561 -1,238 -4,902 -- -43,706 -- -43,706 Impairment of financial assets 314 -- -- 19 875 59 -42 -- 1,225 -- 1,225 Other expenses -23,135 -4,807 -9,138 -3,324 -14,353 -10,141 -8,703 -33 -73,634 14,050 -59,584 Net other income/expenses -36,137 -8,448 -15,148 -5,796 -14,132 -11,237 -13,681 -33 -104,612 -- -104,612 Net profit/loss before finance costs 578,966 86,465 139,729 49,108 3,390 26,995 195,956 3,276 1,083,885 -- 1,083,885 Interest income 1,351 196 -- 166 90,718 733 112 42 93,318 -89,083 4,235 Interest expense -36,092 -15,078 -29,967 -6,771 -56,074 -10,645 -18,531 -869 -174,027 89,083 -84,944 Other financial expenses -54 -66 -75 -208 -16,098 -1,010 -274 -154 -17,939 -- -17,939 Other financial gains/losses 30,686 40,848 -183 -- -35,251 -899 -284 56 34,973 -32,942 2,031 Net finance costs -4,109 25,900 -30,225 -6,813 -16,705 -11,821 -18,977 -925 -63,675 -32,942 -96,617 Profit/loss before income tax 574,857 112,365 109,504 42,295 -13,315 15,174 176,979 2,351 1,020,210 -32,942 987,268 Income tax expense -115,700 -8,387 -20,549 -9,428 1,966 -5,841 -32,540 -264 -190,743 -- -190,743 Profit for the period 459,157 103,978 88,955 32,867 -11,349 9,333 144,439 2,087 829,467 -32,942 796,525 Profit attributable to: Non-controlling interests -- -- -- -- -- 1,876 -- -- 1,876 -- 1,876 Equity holders of the Company 459,157 103,978 88,955 32,867 -11,349 7,457 144,439 2,087 827,591 -32,942 794,649 368 Financial Statements Segment assets and liabilities as at 31 December 2022 are as follows: In EUR thousand Czech Republic Hungary Romania Slovakia Netherlands Germany Other Hotel segment Total Segments Intersegment eliminations Total Assets Investment property 5,181,043 946,437 1,577,581 660,873 148,430 918,110 691,711 -- 10,124,185 -- 10,124,185 Investment property under development 187,330 98,371 58,250 76,636 298,798 2,097 471,861 -- 1,193,343 -- 1,193,343 Property, plant and equipment 87,252 4,653 8,782 2,135 1,273 3,347 1,950 59,513 168,905 -- 168,905 Intangible assets 3,274 -- 4 -- 199 -- 8 7 3,492 -- 3,492 Trade and other receivables 5,762 6,644 1,532 1,921 40 175 1,940 -- 18,014 -- 18,014 Derivative financial instruments -- 3,277 -- -- 4,315 1,573 -- -- 9,165 -- 9,165 Financial investments 578,205 7 -- -- 2,503,939 -- -- -- 3,082,151 -3,081,692 459 Long-term receivables from related parties 4,046 -- -- -- 3,841,866 -- -- -- 3,845,912 -3,800,667 45,245 Deferred tax assets 8,151 2,116 13 -- 4,874 -- 2,473 224 17,851 -- 17,851 Total non-current assets 6,055,063 1,061,505 1,646,162 741,565 6,803,734 925,302 1,169,943 59,744 18,463,018 -6,882,359 11,580,659 Trade and other receivables 52,897 23,327 40,509 9,954 6,268 13,952 86,789 1,888 235,584 -- 235,584 Short-term receivables from related parties 1,001,384 64,765 -- -- 42,286 -- -- -- 1,108,435 -1,108,103 332 Derivative financial instruments -- 1,872 -- -- 39,773 236 -- -- 41,881 -- 41,881 Contract assets 2,487 -- 530 -- -- -- 340 47 3,404 -- 3,404 Current income tax receivable 4,510 239 653 -- 23 88 662 -- 6,175 -- 6,175 Cash and cash equivalents 56,742 38,290 17,279 7,128 476,532 33,877 24,802 5,981 660,631 -- 660,631 Total current assets 1,118,020 128,493 58,971 17,082 564,882 48,153 112,593 7,916 2,056,110 -1,108,103 948,007 Total assets 7,173,083 1,189,998 1,705,133 758,647 7,368,616 973,455 1,282,536 67,660 20,519,128 -7,990,462 12,528,666 Total equity 4,260,790 524,178 537,735 329,425 1,773,588 580,045 321,945 38,503 8,366,209 -3,081,692 5,284,517 Liabilities Interest-bearing loans and borrowings from financial institutions 977,442 55,594 -- 109,519 563,920 161,654 -- -- 1,868,129 -- 1,868,129 Bond issued -- -- -- -- 3,544,077 19,711 -- -- 3,563,788 -- 3,563,788 Trade and other payables 35,917 12,064 10,579 1,453 11,413 26,288 3,057 3,181 103,952 -- 103,952 Long-term payables to related parties 1,074,646 540,371 1,018,690 237,486 -- 113,950 798,720 16,807 3,800,670 -3,800,667 3 Derivative financial instruments -- -- -- -- -- 2,018 -- -- 2,018 -- 2,018 Deferred tax liabilities 684,746 36,586 80,402 55,852 6,303 3,991 43,649 2,326 913,855 -- 913,855 Total non-current liabilities 2,772,751 644,615 1,109,671 404,310 4,125,713 327,612 845,426 22,314 10,252,412 -3,800,667 6,451,745 Interest-bearing loans and borrowings from financial institutions 9,453 2,794 -- -- 148 12,335 -- -- 24,730 -- 24,730 Bonds issued -- -- -- -- 417,191 371 -- -- 417,562 -- 417,562 Trade and other payables 116,120 15,198 35,014 20,982 9,808 47,755 72,929 3,111 320,917 -- 320,917 Short-term payables to related parties 10,574 1,857 21,292 3,153 1,028,052 1,701 37,787 3,687 1,108,103 -1,108,103 -- Derivative financial instruments -- -- -- -- 12,112 565 -- -- 12,667 -- 12,667 Current income tax payables 3,395 1,356 1,421 777 2,004 3,071 4,449 45 16,518 -- 16,518 Total current liabilities 139,542 21,205 57,727 24,912 1,469,315 65,798 115,165 6,843 1,900,507 -1,108,103 792,404 Total liabilities 2,912,293 665,820 1,167,398 429,222 5,595,028 393,410 960,591 29,157 12,152,919 -4,908,770 7,244,149 Total equity and liabilities 7,173,083 1,189,998 1,705,133 758,647 7,368,616 973,455 1,282,536 67,660 20,519,128 -7,990,462 12,528,666 369 Financial Statements Segment results for the 12-month period ended 31 December 2021 are as follows: In EUR thousand Czech Republic Hungary Romania Slovakia Netherlands Germany Other Hotel segment Total Segments Intersegment eliminations Total Rental income 204,345 31,110 60,491 25,821 -- 708 12,176 -- 334,651 -- 334,651 Service charge income 15,691 3,888 7,957 2,802 -- -- 774 -- 31,112 -- 31,112 Property operating expenses -20,563 -5,955 -6,679 -4,240 -115 -49 -1,110 -199 -38,910 -- -38,910 Net rental income 199,473 29,043 61,769 24,383 -115 659 11,840 -199 326,853 -- 326,853 Hotel operating revenue -- -- -- -- -- -- -- 8,779 8,779 -- 8,779 Hotel operating expenses -- -- -- -- -- -- -- -11,334 -11,334 -- -11,334 Net operating income from hotel operations -- -- -- -- -- -- -- -2,555 -2,555 -- -2,555 Income from development activities 22,250 1,104 -- 720 -- -- 8,750 -- 32,824 -- 32,824 Expenses from development activities -15,733 -738 -- -386 -- -- -6,602 -- -23,459 -- -23,459 Net income from development activities 6,517 366 -- 334 -- -- 2,148 -- 9,365 -- 9,365 Total revenues 242,286 36,102 68,448 29,343 -- 708 21,700 8,779 407,366 -- 407,366 Total attributable external expenses -36,296 -6,693 -6,679 -4,626 -115 -49 -7,712 -11,533 -73,703 -- -73,703 Gross profit 205,990 29,409 61,769 24,717 -115 659 13,988 -2,754 333,663 -- 333,663 Net valuation result on investment property 733,943 123,310 110,458 100,271 -8,360 -2,886 43,835 -- 1,100,571 -- 1,100,571 Other income 16,836 120 440 264 1,560 27 333 21 19,601 -9,156 10,445 Amortisation and depreciation -7,622 -160 -329 -62 -18 -- -256 -- -8,447 -- -8,447 Employee benefits -13,415 -3,335 -4,529 -1,955 -6,083 -- -2,566 -- -31,883 -- -31,883 Impairment of financial assets -466 -- -691 79 -- -- -- -- -1,078 -- -1,078 Other expenses -13,732 -3,858 -5,681 -1,761 -3,272 -2,064 -5,234 -17 -35,619 9,156 -26,463 Net other income/expenses -18,399 -7,233 -10,790 -3,435 -7,813 -2,037 -7,723 4 -57,426 -- -57,426 Net profit/loss before finance costs 921,534 145,486 161,437 121,553 -16,288 -4,264 50,100 -2,750 1,376,808 -- 1,376,808 Interest income 36 3 -- -- 63,513 -- -- 78 63,630 -61,637 1,993 Interest expense -46,528 -8,400 -25,623 -5,897 -39,260 -32 -6,082 -698 -132,520 61,637 -70,883 Other financial expenses -14,082 -2,451 -3,924 -229 -17,220 -12 -128 -74 -38,120 -- -38,120 Other financial gains/losses -2,142 12,410 1,065 -8 -3,592 -- -936 95 6,892 -- 6,892 Net finance costs -62,716 1,562 -28,482 -6,134 3,441 -44 -7,146 -599 -100,118 -- -100,118 Profit/loss before income tax 858,818 147,048 132,955 115,419 -12,847 -4,308 42,954 -3,349 1,276,690 -- 1,276,690 Income tax expense -183,169 -13,743 -21,868 -24,636 5,692 105 -13,661 526 -250,754 -- -250,754 Profit for the period 675,649 133,305 111,087 90,783 -7,155 -4,203 29,293 -2,823 1,025,936 -- 1,025,936 Profit attributable to: Non-controlling interests -- -- -- -- -- -- -- -- -- -- -- Equity holders of the Company 675,649 133,305 111,087 90,783 -7,155 -4,203 29,293 -2,823 1,025,936 -- 1,025,936 370 Financial Statements Segment assets and liabilities as at 31 December 2021 are as follows: In EUR thousand Czech Republic Hungary Romania Slovakia Netherlands Germany Other Hotel segment Total Segments Intersegment eliminations Total Assets Investment property 4,517,045 758,453 1,326,691 595,995 62,091 8,813 306,019 -- 7,575,107 -- 7,575,107 Investment property under development 201,175 89,334 62,950 48,621 285,095 -- 87,028 -- 774,203 -- 774,203 Property, plant and equipment 46,280 662 659 223 219 2,725 944 59,255 110,967 -- 110,967 Intangible assets 2,038 -- 1 -- 41 -- 27 4 2,111 -- 2,111 Trade and other receivables 51,494 10,745 1,123 2,763 242 -- 34,372 -- 100,739 -- 100,739 Derivative financial instruments -- 126 -- -- -- -- -- -- 126 -- 126 Financial investments 373,742 -- -- -- 1,487,691 -- -- -- 1,861,433 -1,860,988 445 Long-term receivables from related parties 4,458 -- -- -- 3,523,976 -- -- -- 3,528,434 -3,481,310 47,124 Deferred tax assets 10,709 71 2,008 1,368 7,595 -- 1,858 443 24,052 -- 24,052 Total non-current assets 5,206,941 859,391 1,393,432 648,970 5,366,950 11,538 430,248 59,702 13,977,172 -5,342,298 8,634,874 Trade and other receivables 44,137 19,631 24,680 12,282 17,701 485 24,053 1,113 144,082 -- 144,082 Short-term receivables from related parties 7,337 -- -- 1,881 24,535 -- -- -- 33,753 -33,225 528 Derivative financial instruments -- 46 -- -- -- -- -- -- 46 -- 46 Contract assets 7,011 -- -- -- -- -- -- 28 7,039 -- 7,039 Current income tax receivable 5,732 73 1,046 159 10 -- 240 -- 7,260 -- 7,260 Assets held for sale -- -- -- -- -- -- -- -- -- -- -- Cash and cash equivalents 30,721 59,545 6,302 5,386 772,807 2,061 11,665 4,329 892,816 -- 892,816 Total current assets 94,938 79,295 32,028 19,708 815,053 2,546 35,958 5,470 1,084,996 -33,225 1,051,771 Total assets 5,301,879 938,686 1,425,460 668,678 6,182,003 14,084 466,206 65,172 15,062,168 -5,375,523 9,686,645 Total equity 2,379,119 350,842 473,608 275,803 2,383,634 671 69,435 34,706 5,967,818 -1,860,988 4,106,830 Liabilities Interest-bearing loans and borrowings from financial institutions 587,663 58,380 -- 89,385 373,077 1,966 -- -- 1,110,471 -- 1,110,471 Bond issued -- -- -- -- 3,368,202 -- -- -- 3,368,202 -- 3,368,202 Trade and other payables 24,047 10,462 11,829 1,169 10,762 -- 2,941 3,381 64,591 -- 64,591 Long-term payables to related parties 1,566,880 467,679 841,305 232,174 15 7,786 346,677 18,812 3,481,328 -3,481,310 18 Derivative financial instruments -- -- -- -- -- -- -- -- -- -- -- Deferred tax liabilities 579,754 29,526 65,597 50,329 2,581 899 15,820 2,267 746,773 -- 746,773 Total non-current liabilities 2,758,344 566,047 918,731 373,057 3,754,637 10,651 365,438 24,460 8,771,365 -3,481,310 5,290,055 Interest-bearing loans and borrowings from financial institutions 3,587 2,780 -- 3,926 10,088 452 -- -- 20,833 -- 20,833 Bonds issued -- -- -- -- 13,490 -- -- -- 13,490 -- 13,490 Trade and other payables 152,248 13,853 25,078 14,237 16,707 594 12,691 1,740 237,148 -- 237,148 Short-term payables to related parties -- 4,152 7,450 787 -- 505 16,139 4,192 33,225 -33,225 -- Derivative financial instruments -- -- -- -- -- -- -- -- -- -- -- Current income tax payables 8,581 1,012 593 868 3,447 1,211 2,503 74 18,289 -- 18,289 Provisions -- -- -- -- -- -- -- -- -- -- -- Total current liabilities 164,416 21,797 33,121 19,818 43,732 2,762 31,333 6,006 322,985 -33,225 289,760 Total liabilities 2,922,760 587,844 951,852 392,875 3,798,369 13,413 396,771 30,466 9,094,350 -3,514,535 5,579,815 Total equity and liabilities 5,301,879 938,686 1,425,460 668,678 6,182,003 14,084 466,206 65,172 15,062,168 -5,375,523 9,686,645 371 Financial Statements 6. CHANGES IN GROUP STRUCTURE Current financial year Acquisitions In 2022, the Group acquired the following subsidiaries: Subsidiary Country Acquisition date Deutsche Industrie Grundbesitz AG Germany 3 February 2022 KONČINY SPV, s.r.o. Czech Republic 14 March 2022 CTP Tau Poland sp. z o.o. (formerly Dafne 23 sp. z o.o) Poland 9 May 2022 CTP Chi Poland sp. z o.o. (formerly 7R Projekt 37 sp. z o.o.) Poland 9 May 2022 CTP Omega Poland sp. z o.o. (formerly 7R Projekt 31 sp. z o.o.) Poland 9 May 2022 CTP Property Alpha Poland sp. z o.o. (formerly 7R Projekt 68 sp. z o.o.) Poland 9 May 2022 CTP Property Beta Poland sp. z o.o. (formerly 7R Projekt 64 Sp. z o.o.) Poland 9 May 2022 CTP Property Gamma Poland sp. z o.o. (formerly 7R Projekt 30 sp. z o.o.) Poland 9 May 2022 CTPARK CHITILA SRL (formerly Eglast Investment SRL) Romania 20 May 2022 CTPARK PITESTI SRL (formerly Dani Global Development SRL) Romania 20 May 2022 CTP Property Delta Poland sp. z o.o. (formerly 7R Projekt 41 sp. z o.o.) Poland 7 June 2022 CTP Property Epsilon Poland sp. z o.o. (formerly 7R Projekt 44 sp. z o.o.) Poland 14 June 2022 Banovac projekat d.o.o. Beograd-Novi Beograd Serbia 5 July 2022 CTPark Sofia Ring Road EOOD (formerly Transcapital Ring Road EOOD) Bulgaria 17 August 2022 CTPark Sofia EOOD (formerly Transcapital Airport EOOD) Bulgaria 17 August 2022 LEVANTE LOGISTICS DRUŠTVO SA OGRANIČENOM ODGOVORNŠĆU BEOGRAD Serbia 31 August 2022 KRMELÍNSKÁ I, s.r.o. Czech Republic 30 September 2022 CTP Property Eta Poland sp. z o.o. (formerly 7R Projekt 56 sp. z o.o.) Poland 20 October 2022 CTP Property Zeta Poland sp. z o.o. (formerly 7R Projekt 24 sp. z o.o.) Poland 20 October 2022 These acquisitions impacted Group financial statements as follows: In EUR thousand Deutsche Industrie Grundbesitz AG Germany Czech Republic Poland Romania Serbia Bulgaria Total Investment property 850,291 8,754 111,604 12,416 1,056 62,004 1,046,125 Investment property under development -- -- 42,427 18 -- 696 43,141 Property, plant & equipment 245 -- 22 -- -- -- 267 Intangible assets 3 -- -- -- -- 1 4 Cash and cash equivalents 11,031 17 2,828 554 57 1,090 15,577 Deferred tax asset -- -- -- -- -- 59 59 Financial derivatives 125 -- -- -- -- -- 125 Asset held for sale 7,300 -- -- -- -- -- 7,300 Trade and other receivables 104,131 30 13,580 71 2 232 118,046 Total assets 973,126 8,801 170,461 13,059 1,115 64,082 1,230,644 Interest-bearing loans and borrowings from financial institutions -232,991 -- -- -- -- -- -232,991 Bond issued -140,026 -- -- -- -- -- -140,026 Financial derivatives -36 -- -- -- -- -- -36 Trade and other liabilities -30,300 -310 -8,628 -299 -13 -926 -40,476 Total liabilities -403,353 -310 -8,628 -299 -13 -926 -413,529 Non-controlling interest -95,943 -- -- -- -- -- -95,943 Net assets acquired 473,830 8,491 161,833 12,760 1,102 63,156 721,172 Consideration paid * -77,612 -8,491 -159,820 -12,760 -1,102 -63,156 -322,941 Consideration not settled till period end -- -- -2,013 -- -- -- -2,013 Consideration settled by shares of CTP N.V. -396,217 -- -- -- -- -- -396,217 Net cash outflow -66,581 -8,474 -156,992 -12,206 -1,045 -62,066 -307,364 * Consideration paid includes also the loans and borrowings provided to acquired subsidiaries of EUR 194,843 thousand. The acquisitions were recognised as a property asset acquisition, as acquired companies do not represent a business as defined by IFRS 3 . 372 Financial Statements In 2022, the only significant acquisition was acquisition of Deutsche Industrie REIT-AG in Germany, described in detail below. Acquisition of Deutsche Industrie REIT-AG (subsequently renamed to Deutsche Industrie Grundbesitz AG) On 28 January 2022, the Group received 98.17% shareholder support for its voluntary public takeover and delisting offer (the “Offer”) for and contemplated merger with Deutsche Industrie REIT-AG (currently CTP Gemany B.V.) (“DIR”). The total number of DIR Shares tendered in the Offer was in aggre- gate 25,951,833 DIR Shares, corresponding to approximately 80.90% of the outstanding share capital in DIR. Closing and settlement of the Offer, in which CTP offered either a cash consideration of EUR 17.12 or a share consideration of 1.25 shares in the share capital of CTP (the “CTP Shares”) for each tendered DIR Share (the “Share Consideration”), took place on 3 February 2022. During the acceptance period, a total of 25,937,060 tendered DIR Shares were settled in form of the Share Consideration. Accordingly, a total of 32,421,325 CTP Shares were issued. Acquisition of DIR is not considered to be a business combination, but acquisition of assets in exchange for shares of CTP N.V. and therefore, this transaction is in scope of IFRS 2. Assets and liabilities acquired are measured at fair value and are equal to the related increase in eq- uity. On 23 August 2022, CTP N.V. and Deutsche Industrie Grundbesitz AG entered into a transaction for a cross-border merger. Assets and lia- bilities of Deutsche Industrie Grundbesitz AG were transferred to CTP N.V. under universal succession of title, and Deutsche Industrie Grund- besitz AG ceased to exist without liquidation. In accordance with the agreed exchange ratio, CTP allotted for each issued and outstanding DIR share, 1.25 shares in CTP’s share capital to each holder of shares, resulting in the allotment of 7,659,590 new shares. Shares of DIR in ownership of non-controlling interest, were trans- ferred into shares of CTP N.V. For detail refer to Note 23. On 1 November 2022, all assets and liabilities of former Deutsche In- dustrie Grundbesitz AG were transferred through a hive down by way of legal partial division from CTP N.V. to a new subsidiary, CTP Ger- many B.V. Changes within the Group On 1 January 2022, the entities CTPark Bor II, spol. s r.o. and CTPark Bor III, spol. s r.o. were incorporated by spin-off from CTP Alpha, spol. s r.o. Part of the assets were transferred from CTP Alpha, spol, s r.o., to these entities according to the project prepared on 16 November 2021. CTPark Bor III, spol. s r.o. was transferred from CTP Industrial Property, spol. s r.o., to CTPark Bor, spol. s r.o. on 21 February 2022. Subsequently CTPark Bor III, spol. s r.o. was merged into CTPark Bor, spol. s r.o. on 23 September 2022. RENWON a.s. was transferred from CTP Bohemia North, spol. s r.o. to CTP Property B.V. and was renamed to CTPark Chrastava a.s. on 22 August 2022. In 2022, the Group wound up subsidiaries CTP Property Serbia, spol. s.r.o., CTP Beta, spol. s r.o. v likvidaci and CTP I, spol. s r.o. v likvidaci. In September 2022, assets and liabilities of CTP Germany III GmbH and CTP Germany IV GmbH & Co. KG were transferred to CTP Germa- ny II GmbH via a merger transaction, and both entities ceased to exist without liquidation. The transaction was common control transaction with impact on Equity of EUR 1,082 thousand. In November 2022, newly acquired entity Banovac projekat d.o.o. Be- ograd-Novi Beograd was merged into CTP Omicron d.o.o. Beograd-No- vi Beograd. In December 2022, newly acquired entity LEVANTE LOGISTICS DRUŠTVO SA OGRANIČENOM ODGOVORNŠĆU BEOGRAD was merged into CTP Tau d.o.o. Beograd-Novi Beograd. All above changes within the Group does not have material impact on consolidated financial statements. Prior financial year In 2021, the Group acquired the following subsidiaries: Subsidiary Country Acquisition date Amsterdam Logistic Cityhub B.V. Netherlands 12 August 2021 CTP Mu B.V. Netherlands 29 December 2021 CTPark Námestovo, spol. s r.o. Slovakia 22 December 2021 Office Campus Real Estate Kft. Hungary 23 June 2021 CTPark Twenty Three Kft. Hungary 25 November 2021 CTPark Twenty Five Kft. Hungary 23 December 2021 CTPark Twenty Six Kft. Hungary 23 December 2021 CTPark Twenty Seven Kft. Hungary 23 December 2021 CTPark Twenty Four Kft. Hungary 31 December 2021 CTPark Oradea North SRL Romania 9 September 2021 CTPark Arad North SRL Romania 9 September 2021 CTPark Sibiu East SRL Romania 9 September 2021 CTPark Craiova East SRL Romania 9 September 2021 CTPark Bucharest South II SRL Romania 30 September 2021 CTPark Brasov West SRL Romania 30 September 2021 CTPark Timisoara East SRL Romania 30 September 2021 CTPark Brasov SRL Romania 30 September 2021 Project Vrajdebna EOOD Bulgaria 2 August 2021 CTPark Kappa EOOD Bulgaria 9 August 2021 CTPark Lambda EOOD Bulgaria 30 September 2021 PŘÍDÁNKY SPV, s.r.o. Czech Republic 29 June 2021 RENWON a.s. Czech Republic 16 August 2021 CTP Property Alpha d.o.o. Beograd-Novi Beograd Serbia 3 March 202 1 373 Financial Statements These acquisitions impacted Group financial statements as follows: In EUR thousand Netherlands Slovakia Romania Hungary Bulgaria Czech Republic Serbia Total Investment property 37,285 80,795 147,120 111,949 38,046 25,257 20,031 460,483 Investment property under development 213,131 1,130 10,522 19,255 -- -- -- 244,038 Property, plant & equipment -- -- 1 -- -- -- -- 1 Intangible assets 12 -- -- -- -- -- -- 12 Cash and cash equivalents 1,422 906 57,422 5,935 880 467 11 67,043 Deferred tax asset 12 1,368 -- -- 24 -- -- 1,404 Trade and other receivables 64 4,358 5,978 2,649 226 326 2 13,603 Total assets 251,926 88,557 221,043 139,788 39,176 26,050 20,044 786,584 Interest-bearing loans and borrowings from financial institutions -- -26,292 -39,575 -- -- -- -- -65,867 Deferred tax liability -2,121 -- -- -- -- -- -- -2,121 Trade and other liabilities -9,684 -1,531 -20,282 -2,471 -67 -170 -22 -34,227 Total liabilities -11,805 -27,823 -59,857 -2,471 -67 -170 -22 -102,215 Net assets acquired 240,121 60,734 161,186 137,317 39,109 25,880 20,022 684,369 Consideration paid * -199,107 -60,734 -138,582 -137,317 -39,109 -24,740 -20,022 -619,611 Consideration not settled till period end -41,014 -- -22,604 -- -- -1,140 -- -64,758 Net cash outflow -197,685 -59,828 -81,160 -131,382 -38,229 -24,273 -20,011 -552,568 * Consideration paid includes also the loans and borrowings provided to acquired subsidiaries of EUR 255,351 thousand. The following significant transactions took place in 2021: In EUR thousand Amsterdam Logistic Cityhub B.V. (NL) CTP Mu B.V. (NL) CTPark Námestovo, spol. s r.o. (SK) Investment property -- 37,285 80,795 Investment property under development 213,131 -- 1,130 Property, plant & equipment -- -- -- Intangible assets 12 -- -- Cash and cash equivalents 1,422 -- 906 Deferred tax asset 12 -- 1,368 Trade and other receivables 65 -- 4,358 Total assets 214,641 37,285 88,556 Interest-bearing loans and borrowings from financial institutions -- -- -26,292 Deferred tax liability -- -2,121 -- Trade and other liabilities -9,521 -163 -1,530 Total liabilities -9,521 -2,284 -27,822 Net assets acquired 205,120 35,001 60,734 Consideration paid -164,106 -35,001 -60,734 Consideration not settled till period end -41,014 -- -- Net cash outflow -162,685 -35,001 -59,827 The acquisitions were recognised as a property asset acquisition, as acquired companies do not represent a business as defined by IFRS 3. During 2021, the subsidiaries CTPark České Budějovice, spol. s r.o. and CTPark České Budějovice II, spol. s r.o. were disposed of for a EUR 8,950 thousand consideration. 374 Financial Statements 7. GROSS RENTAL INCOME In EUR thousand 2022 2021 Industrial 424,727 287,328 Office 32,923 32,531 Retail 1,062 568 Other 26,305 14,224 Total rental income 485,017 334,651 Service charge income 51,875 31,112 Total gross rental income 536,892 365,763 CTP leases out its investment property under operating leases. The operating leases are generally for 5 to 15 years. Other gross rental income represents termination fees, rental income from rent of parking slots, garages, yards, porches and cloakrooms. Service charge income represents fixed contractual income receivable from tenants for maintenance, clean- ing, security, garbage management and usage of infrastructure. Revenues were generated in the following countries where CTP operates: In EUR thousand 2022 2021 Czech Republic 248,117 220,036 Romania 94,760 68,448 Germany 69,633 708 Hungary 55,378 34,998 Slovakia 41,525 28,623 Serbia 13,064 8,560 Bulgaria 7,117 1,729 Poland 4,122 2,510 Netherlands 2,990 -- Austria 152 151 Slovenia 34 -- Total gross rental income 536,892 365,763 375 Financial Statements 8. REVENUES FROM CONTRACTS WITH CUSTOMERS According to IFRS 15 requirements, revenues related to contracts with customers are as follows: In EUR thousand 2022 2021 Revenues Attributable external expenses Revenues Attributable external expenses Hotel operating revenue 16,021 8,779 Hotel operating expenses -12,280 -11,334 Net operating income from hotel operations 3,741 -2,555 Income from development activities 36,200 32,824 Expenses from development activities -27,158 -23,459 Net income from development activities 9,042 9,365 Total revenues from contract with customers 52,221 41,603 Total external expenses related to contract with customers -39,438 -34,793 Net income from contract with customers 12,783 6,810 Net operating income from hotel operations Net operating income from hotel operations is represented by revenues and expenses from the operation of three hotels in the Czech Republic. All hotels are operated under the “Courtyard by Marriott” brand. Revenues from hotel operations are represented by very short-term contracts with customers. The hospi- tality services are invoiced nearly at the same time as the respective service is provided. Net income from development activities Net income from development activities represents income from construction projects provided by CTP to third-party companies; the main part of construction represents extras and fit-outs for tenants. 9. PROPERTY OPERATING EXPENSES In EUR thousand 2022 2021 Maintenance and repairs -41,314 -21,383 Park Management expenses -27,673 -8,424 Real estate tax -10,450 -6,143 Insurance -5,064 -2,342 Other -257 -618 Total property operating expenses -84,758 -38,910 Park management expenses represent expenses for utilities, park maintenance, cleaning, security and gar- bage management provided by external suppliers. These expenses are covered by service charges charged to the tenants . 376 Financial Statements In 2022, the increase in Park management expenses represents mainly increase in utilities, facility manage- ment and other external services, such as cleaning, security services and other. In 2022, the significant increase in repairs and maintenance is connected mainly with the German and Czech portfolios. 10. OTHER INCOME In EUR thousand 2022 2021 Gains from sale of assets 881 2,963 Income from sale of electricity 4,301 3,236 Other income 3,000 4,246 Total other income 8,182 10,445 Other income was mainly from reverse charge from property insurance and income from assigned receiva- bles. 11. EMPLOYEE BENEFITS In EUR thousand 2022 2021 Wages and salaries -32,395 -24,140 Social security contributions -5,878 -4,604 Other personnel expenses -5,433 -3,139 Total employee benefits -43,706 -31,883 The average full-time equivalent of employees in 2022 was 634 (2021 – 463); all except 15 (2021 – 7) are working outside the Netherlands. Weighted average number of employees per segments 2022 2021 Czech Republic 298 258 Romania 95 75 Hungary 66 55 Slovakia 70 36 Netherlands 15 7 Germany 11 -- Other 79 32 Total employee number 634 463 The number of full-time equivalent employees as at 31 December 2022 was 699 (2021 – 520). 377 Financial Statements 12. OTHER EXPENSES (INCLUDING ADMINISTRATIVE EXPENSES) In EUR thousand 2022 2021 Legal, tax and audit -13,081 -7,788 Donations -11,196 -1,842 Travel expenses -6,826 -3,938 Advertising and promotion expenses -5,394 -2,454 Fee for real estate consultants and brokers -4,719 -1,872 Telecommunication expenses -3,023 -2,008 Taxes and charges -2,831 -582 Energy and material consumption -2,439 -1,642 Loss from sale of Property, plant and equipment -2,259 -217 Receivables written off -1,659 -1,133 Rent -1,336 -379 Penalties -474 -516 Loss from sale of Investment property -11 -730 Other -4,336 -1,362 Total other expenses -59,584 -26,463 The Group donated EUR 10,000 thousand to the UN refugee agency UNHCR (United Nations High Commis- sioner for Refugees) to provide humanitarian support for the more than one million people, who have fled the war in Ukraine into neighboring countries. In 2022, Legal, tax and audit services includes advisory fees related to DIR transactions of EUR 4,511 thou- sand. 13. INTEREST EXPENSES In EUR thousand 2022 2021 Bank interest expense -31,245 -25,386 Interest expense from liabilities due from related parties -- -385 Interest expense from financial derivative instruments -288 -5,469 Arrangement fees -3,956 -13,523 Interest expense from bonds issued -49,455 -26,120 Interest expense -84,944 -70,883 In 2022, arrangement fees include one off release of arrangement fee related to repaid bank loans of EUR 2,691 thousand (2021 – EUR 12,385 thousand). 378 Financial Statements 14. OTHER FINANCIAL EXPENSES in EUR thousand 2022 2021 Bank fees -2,808 -4,563 Financing fees -15,022 -33,061 Other financial expenses -109 -496 Other financial expenses -17,939 -38,120 In 2022, financing fees include prepayment fee of EUR 1,465 thousand (2021 – EUR 16,629 thousand) for premature loan repayments and fee for early repayment of bonds of EUR 10,381 thousand (2021 - EUR 12,080 thousand), (refer to Note 28). 15. OTHER FINANCIAL GAINS/(LOSSES) In EUR thousand 2022 2021 Change in FMV of derivatives 4,052 12,127 Foreign exchange gains/(losses) -2,208 -5,306 Other financial gains/ (losses) 187 71 Other financial gains/(losses) 2,031 6,892 In 2021, premature terminated derivatives connected with the refinancing of interest-bearing loans and borrowings from financial institutions with money raised from the issuing of bonds were settled in form of cash and amounted to EUR 22,599 thousand. 16. INCOME TAX EXPENSES In EUR thousand 2022 2021 Current tax income/(expense) related to Current year -30,211 -25,735 Prior period -1,121 -2,669 Total -31,332 -28,404 Deferred tax expense Deferred tax expense -159,411 -222,350 Total -159,411 -222,350 Total income tax expense in statement of profit and loss and other comprehensive income -190,743 -250,754 The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its as- sessment of many factors, including interpretations of tax law and prior experience. The income tax rate is valid for 2022 and is as well valid for future periods when the Group expects to utilise the tax impacts from previous years. 379 Financial Statements Reconciliation of effective tax rate In EUR thousand 2022 2021 Tax base Tax Tax base Tax Profit / Loss before income tax 987,268 254,715 1,276,690 319,172 Company's domestic tax rate 25.8% 25.0% Tax non-deductible expenses 45,478 11,733 26,701 6,675 Tax exempt income -2,444 -630 -9,439 -2,360 Income tax adjustment for prior years 4,345 1,121 10,676 2,669 Effect of unrecognised deferred tax asset related to tax losses (including current year losses) -2,108 -544 123 31 Effect of tax rates in foreign jurisdictions -- -83,351 -- -98,410 Other items 29,842 7,699 91,905 22,977 Tax base 1,062,381 190,743 1,396,656 250,754 Effective income tax rate 19.3% 19.6% Tax non-deductible expenses represent receivables written off, representation expenses, tax non-deducti- ble accruals (legal, advisory), financial expenses, penalties and gifts provided. Other items result mainly from the translation of transactions in foreign currencies to the functional cur- rency of the Group’s entities. 17. INVESTMENT PROPERTY In EUR thousand 2022 2021 Buildings and related land and Right-of-use assets 9,361,260 7,048,269 industrial 8,764,194 6,445,781 office 549,520 549,300 retail and other 47,546 53,188 Landbank and related Right-of-use assets 762,925 526,838 Total 10,124,185 7,575,107 In EUR thousand Owned buildings and land Landbank Right-of-use assets Land and buildings Right-of-use assets Landbank Total Investment Property Balance at 1 January 2021 5,058,268 325,945 2,017 -- 5,386,230 Transfer from/to investment property under development 655,601 -13,144 -- -- 642,457 Transfer from/to owned buildings and land 22,548 -22,548 -- -- -- Acquisitions 495,376 87,625 -- -- 583,001 Additions / Disposals 48,793 105,536 -- -- 154,329 Net valuation result 765,666 43,424 -- -- 809,090 Balance at 31 December 2021 7,046,252 526,838 2,017 -- 7,575,107 Balance at 1 January 2022 7,046,252 526,838 2,017 -- 7,575,107 Transfer from/to investment property under development 814,394 -74,955 501 -- 739,940 Transfer from/to owned buildings and land 18,395 -18,395 -- -- -- Acquisitions 976,436 322,111 25,615 4,746 1,328,908 Additions / Disposals 63,658 -- -- -- 63,658 Net valuation result 413,992 2,580 -- -- 416,572 Balance at 31 December 2022 9,333,127 758,179 28,133 4,746 10,124,185 380 Financial Statements Owned buildings and land represent assets in CTP’s legal ownership. The landbank comprises the plots of land in CTP’s ownership available for development of new projects. Right-of-use assets comprise leased land in Germany under the buildings acquired as a part of DIR acquisi- tion of EUR 25,615 thousand; landbank in the Czech Republic of EUR 4,746 thousand (2021 – EUR 0 thou- sand); land in the Czech Republic of EUR 2,017 thousand (2021 – EUR 2,017 thousand); and land in Romania of EUR 501 thousand (transferred from investment property under development in 2022). Investment property comprises a number of commercial properties that are leased to third parties. Part of owned buildings and land are subject to bank collateral (refer to Note 27). Acquisitions represent asset deals under the acquisition of subsidiaries (refer to Note 6) and acquisitions of properties under asset deal agreements. The most significant changes in investment property in 2022 relate to completed construction of industrial properties in Bor, Brno and Ostrava in the Czech Republic; in Budapest in Hungary; in Beograd in Serbia; in Bucharest in Romania; and in Illowa in Poland. In 2022, the Group also made landbank acquisitions, mainly in the Czech Republic, Poland, Romania, Austria, the Netherlands, Serbia and Slovakia. Investment property disposal in 2022 relates to the sale of properties in the Czech Republic to external partners. The most significant changes in investment property in 2021 relate to the completed construction of in- dustrial properties in Plzeň, Žatec, Ostrov u Tachova and Nošovice in the Czech Republic; Trnava, Nitra and Košice in Slovakia; and in Turda and Sibiu in Romania; office premises in Brno in the Czech Republic and in Bucharest in Romania; and industrial premises in Budapest and Vecses in Hungary and in Kragujevac in Serbia. Investment property disposal in 2021 relates to the sale of properties in the Czech Republic to external partners. Fair value hierarchy The fair value measurement for investment property is categorised as Level 3 recurring fair value based on the inputs to the valuation technique used in accordance with IFRS 13. There were no transfers between Levels during the year. Management’s adjustments made in respect of valuations appraisals CTP management did not make any adjustments to valuation prepared by an independent external valuer as at 31 December 2022 and 31 December 2021. The table below presents the portion of the investment property portfolio as at 31 December 2022 and 2021, valued by an independent external valuer: In EUR thousand 2022 2021 Investment property portfolio valued by external valuer 10,025,620 7,364,990 Investment property portfolio at acquisition value 98,565 210,117 Total 10,124,185 7,575,107 381 Financial Statements Valuation Building valuation To value investment property, external valuers adopt a traditional valuation method, specifically the hard- core method. Within the hardcore method, income considered sustainable (e.g., all income at or below mar- ket levels) is capitalised at a certain level, and any over-rented elements are capitalised at a separate rate until lease expiry. This enables a separate risk profile to be attached to the “riskier” over-rented element, as appropriate. The capitalisation rates applied are implicit in terms of rental growth and most other risks, although external valuers are explicit in their calculations in terms of voids and costs. Valuations reflect, where appropriate: the type of tenants in occupation; those responsible for meeting the lease commitments; those likely to be in occupation after letting vacant accommodation; the market’s gen- eral perception of tenants’ creditworthiness; the allocation of maintenance and insurance responsibilities between lessor and lessee; and the remaining economic life of the property. It is assumed that whenever rent reviews or lease renewals are pending with anticipated reversionary increases, all notices and, where appropriate, counter notices, have been served validly and within the appropriate time. Assumptions by the independent valuer for the year ended 31 December 2022 and 31 December 2021 were as follows: Core yield 2022 2021 Country Average Lower Upper Average Lower Upper Czech Republic 5.52% 4.05% 10.70% 5.09% 3.75% 10.70% Hungary 6.23% 5.50% 8.00% 6.32% 5.50% 7.75% Romania 7.25% 6.85% 8.25% 7.45% 7.00% 8.50% Slovakia 6.07% 5.50% 9.25% 5.85% 3.50% 9.00% Germany 7.11% 2.46% 14.39% -- -- -- Other 6.93% 3.50% 9.50% 7.81% 5.20% 9.40% All 6.13% 2.46% 14.39% 5.76% 3.50% 10.70% Core yield 2022 2021 Sector Average Lower Upper Average Lower Upper Offices 6.71% 4.45% 9.70% 6.19% 5.75% 9.70% Industrial/other 6.10% 2.46% 14.39% 5.73% 3.50% 10.70% Average ERV per sqm and month (EUR) 2022 2021 Country Czech Republic 6.7 5.6 Hungary 4.9 4.6 Romania 4.0 3.9 Slovakia 4.2 4.1 Germany 3.8 -- Other 4.5 5.0 All 5.1 4.9 Average ERV per sqm and month (EUR) 2022 2021 Sector Offices 13.1 13.3 Industrial/other 4.9 4.6 Structural vacancy was applied in few cases, mainly to office and ancillary areas. 382 Financial Statements Landbank valuation The landbank comprises the plots of land in CTP’s ownership, on which development projects are to be carried out. The landbank was valued by a registered independent valuer with an appropriately recognised professional qualification and with up–to–date knowledge and understanding of the location and category of the property. For land assets, the valuer applied the residual or the market comparison method or both, as appropriate. The residual method assumes the property’s value equates to the end value of the property once developed, less the costs of realisation, which may include site assembly and purchase, demolition, build costs, pro- fessional fees, planning, finance and marketing costs and developer’s profit. The market comparison uses sales information from sites of a similar type, size and in a similar location, where a similar development is possible. Sale prices of the properties that are judged to be most comparable tend to indicate a range in which the value indication for the subject property will fall. The valuer estimated the degree of similarity or difference between the subject property and the comparable sales by considering various elements of comparison. Independent valuer assumptions for the year ended 31 December were based on analysis of comparable ev- idence and adopted the following average market values per square meter: In EUR 2022 2021 Czech Republic 55 48 Slovakia 49 42 Hungary 49 76 Serbia 38 57 Romania 33 32 Poland 62 39 Bulgaria 50 42 Slovenia 78 78 Germany 123 -- Netherlands 31 26 Austria 86 -- Investment property is in the following countries where CTP operates: In EUR thousand 2022 2021 Czech Republic 5,181,043 4,517,045 Romania 1,577,581 1,326,691 Hungary 946,437 758,453 Germany 918,110 8,813 Slovakia 660,873 595,995 Poland 320,326 83,103 Serbia 212,060 155,916 Netherlands 148,430 62,091 Bulgaria 132,865 57,620 Austria 20,260 3,180 Slovenia 6,200 6,200 Total 10,124,185 7,575,107 383 Financial Statements Sensitivity analysis on changes in assumptions of investment property valuation CTP performed a sensitivity analysis on changes in investment property valuations, except for landbank in- vestment property as it is valued by a comparable method. The table below presents the sensitivity of profit and loss before tax as at 31 December 2022 and 31 December 2021 due to changes in assumptions: Completed investment properties as at 31 December 2022 in EUR thousand Current average initial yield Current market value Increased yield by 25bp FMV based upon increased yield Effect of increase in yield by 25bp Increase of 25bp in yield 6.45% 9,328,340 6.70% 8,980,367 -347,973 Current average initial yield Current market value Decreased yield by 25bp FMV based upon decreased yield Effect of decrease in yield by 25bp Decrease of 25bp in yield 6.45% 9,328,340 6.20% 9,704,366 376,026 Current rental income including ERV from vacant space Changed rental income FMV based upon changed rental income Change in FMV Increase of 500bp in estimated rental income 601,858 631,950 9,794,757 466,417 Decrease of 500bp in estimated rental income 601,858 571,765 8,861,923 -466,417 Completed investment properties as at 31 December 2021 in EUR thousand Current average initial yield Current market value * Increased yield by 25bp FMV based upon increased yield Effect of increase in yield by 25bp Increase of 25bp in yield 6.36% 6,866,252 6.61% 6,606,673 -259,578 Current average initial yield Current market value * Decreased yield by 25bp FMV based upon decreased yield Effect of decrease in yield by 25bp Decrease of 25bp in yield 6.36% 6,866,252 6.11% 7,147,062 280,811 * In 2021, sensitivity analysis is calculated on standing portfolio of the Group excluding fair market values of commercial element of hotels operated in the Czech Republic of EUR 20,140 thousand. Current rental income including ERV from vacant space Changed rental income FMV based upon changed rental income Change in FMV Increase of 500bp in estimated rental income 436,892 458,737 6,522,939 -343,313 Decrease of 500bp in estimated rental income 436,892 415,047 6,522,942 -343,310 384 Financial Statements 18. INVESTMENT PROPERTY UNDER DEVELOPMENT In EUR thousand IPUD Right-of-use assets Total Balance at 1 January 2021 387,347 -- 387,347 Additions/disposals 433,795 1,251 435,046 Acquisitions 285,796 16,990 302,786 Transfer from/to Investment property -642,457 -- -642,457 Net valuation result 291,481 -- 291,481 Balance at 31 December 2021 755,962 18,241 774,203 Balance at 1 January 2022 755,962 18,241 774,203 Additions/disposals 807,016 -- 807,016 Acquisitions 45,056 -- 45,056 Transfer from/to Investment property -739,439 -501 -739,940 Net valuation result 307,008 -- 307,008 Balance at 31 December 2022 1,175,603 17,740 1,193,343 The investment property under development (IPUD) comprises pipeline projects in several stages of comple- tion and of land with planning permits in place, which are still to be constructed but where pre-agreements with future tenants are available. The management estimates that a significant majority of the pipeline projects will be completed within 12 months. Right-of-use assets in investment property under development comprise leased land in the Netherlands under the acquired project CTP ALC B.V. of EUR 16,990 thousand (2021 – EUR 16,990 thousand), and land in Romania of EUR 750 thousand (2021 – EUR 1,251 thousand) in CTPARK IOTA SRL (leased land of EUR 501 thousand was transferred to investment property). Investment property under development is located in the following countries where CTP operates: In EUR thousand 2022 2021 Poland 308,217 37,735 Netherlands 298,798 285,095 Czech Republic 187,330 201,175 Hungary 98,371 89,334 Slovakia 76,636 48,621 Austria 72,752 31,714 Serbia 60,980 10,727 Romania 58,250 62,950 Bulgaria 29,912 6,852 Germany 2,097 -- Total 1,193,343 774,203 Fair value hierarchy The fair value measurement for investment property under development is categorised as Level 3 recurring fair value based on the inputs to the valuation technique used in accordance with IFRS 13. There were no transfers between Levels during the year. Valuation Development assets are valued through a combination of traditional and residual methods. The tradition- al method is applied to determine a gross development value (GDV), which is a component of the residu- al method that is ultimately applied to determine fair value. This approach assumes the property’s value equates to the end value of the property once developed, less the costs of realisation, which may include site assembly and purchase, demolition, build costs, professional fees, planning, finance and marketing costs and developer’s profit. 385 Financial Statements In assessing the GDV, the independent valuer adopted a market approach by estimating the market rental values for the accommodation to be developed and the appropriate capitalisation rate which a potential investor would require to arrive at the fair value of the completed and leased building. The assumptions used by the independent valuer for the year ended 31 December were as follows: 2022 2021 Average Lower Upper Average Lower Upper Capitalisation rates 6.01% 4.25% 9.10% 5.64% 4.25% 9.00% Monthly ERV per vacant sqm (EUR) – Industrial premises 5.96 3.50 10.98 5.21 3.50 8.33 – Office properties 17.16 16.66 18.69 15.18 15.00 15.50 Soft costs 5.14% 2.50% 15.00% 6.76% 3.00% 15.00% Finance costs 4.58% 3.00% 6.00% 3.51% 3.50% 5.00% Profit allowance 14.56% 5.00% 25.00% 15.59% 5.00% 30.00% Structural vacancy was applied in a very few cases, and mainly to office and ancillary areas. Sensitivity analysis on changes in assumptions of investment property under development valuation CTP performed a sensitivity analysis on changes in investment property under development valuation. The table below presents the sensitivity of profit and loss before tax as at 31 December 2022 and 31 December 2021: Investment properties under development as at 31 December 2022 in EUR thousand Current average yield Current market value at completion Increased yield by 25bp FMV based upon increased yield Effect of increase in yield by 25bp Increase of 25bp in yield 6.38% 1,921,913 6.63% 1,849,395 -72,518 Current average yield Current market value at completion Decreased yield by 25bp FMV based upon decreased yield Effect of decrease in yield by 25bp Decrease of 25bp in yield 6.38% 1,921,913 6.13% 2,000,349 78,436 Current rental income including ERV from vacant space Changed rental income FMV based upon changed rental income Effect of change in rental income Increase of 500bp in estimated rental income 122,535 128,662 2,018,008 96,095 Decrease of 500bp in estimated rental income 122,535 116,408 1,825,817 -96,096 Investment properties under development as at 31 December 2021 in EUR thousand Current average yield Current market value at completion Increased yield by 25bp FMV based upon increased yield Effect of increase in yield by 25bp Increase of 25bp in yield 6.14% 1,102,406 6.39% 1,059,289 -43,117 Current average yield Current market value at completion Decreased yield by 25bp FMV based upon decreased yield Effect of decrease in yield by 25bp Decrease of 25bp in yield 6.14% 1,102,406 5.89% 1,145,523 43,117 Current rental income including ERV from vacant space Changed rental income FMV based upon changed rental income Effect of change in rental income Increase of 500bp in estimated rental income 67,710 71,096 1,157,526 55,120 Decrease of 500bp in estimated rental income 67,710 64,324 1,047,286 -55,120 An increase of developers’ profit mark-up by 2% in valuers’ assumptions will increase the developers’ profit and as a consequence will decrease the valuation as at 31 December 2022 by EUR 12,202 thousand (31 De- cember 2021 – EUR 7,591 thousand) provided all other variables remain constant. 386 Financial Statements 19. NET VALUATION RESULT Reconciliation of valuation gains/losses recognised in statement of comprehensive income: In EUR thousand 2022 2021 Valuation gains 906,194 1,189,211 out of which: Investment Property 571,638 885,510 Investment Property under development 334,556 303,701 Valuation losses -182,614 -88,640 out of which: Investment Property -155,066 -76,420 Investment Property under development -27,548 -12,220 Net valuation gains (losses) on investment property 723,580 1,100,571 20. PROPERTY, PLANT AND EQUIPMENT In EUR thousand Hotels Leased Property Plant Plant under construction Forests Equipment 2022 Balance at 1 January 55,254 4,436 25,054 -- 4,332 21,891 110,967 Acquisitions -- -- -- -- -- 162 162 Additions/Disposals -- 5,277 2,077 13,776 -- 46,882 68,012 Valuation gain/loss on solar plants and hotels -- -- -1,004 -- -- -- -1,004 Depreciation -1,579 -877 -1,204 -- -- -7,397 -11,057 Reversal of impairment loss 1,825 -- -- -- -- -- 1,825 Balance at 31 December 55,500 8,836 24,923 13,776 4,332 61,538 168,905 In EUR thousand Hotels Leased Property Plant Forests Equipment 2021 Balance at 1 January 55,400 3,814 17,761 717 21,192 98,884 Acquisitions -- -- -- -- 6 6 Additions/Disposals 3,248 1,296 -- 3,615 5,768 13,927 Valuation gain/loss on solar plants and hotels 378 -- 8,462 -- -- 8,840 Depreciation -1,539 -674 -1,169 -- -5,075 -8,457 Impairment loss -2,233 -- -- -- -- -2,233 Balance at 31 December 55,254 4,436 25,054 4,332 21,891 110,967 Under “Plant” are the solar plants installed on the roofs of several buildings. The value of EUR 24,923 thousand represents the fair value of the solar panels based upon the independent valuation report of EUR 22,881 thousand (2021 – EUR 25,054 thousand) and solar panels of EUR 2,042 thousand valued at costs. The value of EUR 55,500 thousand (2021 – EUR 55,254 thousand) represents revalued amount in accord- ance with IAS 16 based upon the independent valuation report. The valuation is prepared on the basis of fair value in accordance with IFRS 13 and is primarily derived using the discounted cashflow methodology, as well as an income capitalisation approach, and comparable recent market transactions on arm’s length terms. Forests are considered as bearing plant and are included in Property, plant and equipment of EUR 4,332 thousand (2021- EUR 4,332 thousand). 387 Financial Statements Valuation In view of the nature of the solar plants and the bases of valuation, the valuer adopted the income approach based on the discounted cash flow technique for a 20-year period. The cash flow is based on the income receivable under the license provided by the government. For the calculation of the market value of solar energy power panels, the valuer capitalised solar revenues at a yield of 10% for a fixed period of 20 years (2021 - 9%). In view of the nature of the hotels and the bases of valuation, the valuer adopted the discounted cash flow method. Under this method the projected adjusted net operating income for the hotel over 10 years is dis- counted back to present day using an appropriate discount rate. The value of the hotel derived from the capitalised earnings in the 10th year is also brought back to present values. Capital expenditure is built into the cash flow if appropriate. Capitalisation rates used in hotel valuations range from 7.5% to 9.0% (2021 - from 6.75% to 7.25%). Sensitivity analysis on changes in assumptions of hotel valuation CTP performed a sensitivity analysis on changes in fair value to changes in revenues per available room. The table below presents the sensitivity of fair value as at 31 December 2022, due to changes in assumptions: In EUR thousand Current FV Effect of decrease in RevPAR by 5 % Effect of increase in RevPAR by 5 % 5% Change in RevPAR 55,500 -10,131 10,131 CTP performed a sensitivity analysis on changes in fair value to changes in revenues per available room. The table below presents the sensitivity of fair value as at 31 December 2021, due to changes in assumptions: In EUR thousand Current FV Effect of decrease in RevPAR by 5 % Effect of increase in RevPAR by 5 % 5% Change in RevPAR 55,254 -11,609 11,609 Real estate infrastructure (such as roads, greenery and energy transformers), including related equipment and means of transport, of EUR 61,538 thousand (2021 – EUR 21,891 thousand) is presented under Equip- ment. Property, plant and equipment include also right-of-use assets of EUR 8,836 thousand (2021 – EUR 4,436 thousand) relating to leased properties that do not meet CTP’s definition of investment property (refer to Note 30). 21. TRADE AND OTHER RECEIVABLES Non-current In EUR thousand 2022 2021 Long term advances paid 14,674 97,014 Restricted cash 1,341 1,086 Other assets 1,999 2,639 Total trade and other receivables 18,014 100,739 Non-current trade and other receivables consist primarily of long-term advances paid for land and tangible assets. 388 Financial Statements CTP paid in 2021 an advance payment of EUR 1.9 million for assistance and advisory services related to potential future land acquisitions in Hungary from a third party. CTP conducted standard compliance check including an AML check, due diligence and evaluated risks of this potential transaction (including all risks for the case of involvement of former / current government official in relation to the third party), in order to conclude whether the commission fee is according to CTP’s standards and agreed transaction price for the land is at arm’s length and to have sufficiently evaluated risks in accordance with CTP internal policies. Current In EUR thousand 2022 2021 Trade receivables 54,537 36,417 Other assets 113,201 61,771 Other tax receivables 67,846 45,894 Total trade and other receivables 235,584 144,082 Trade receivables consist primarily of receivables from rent and rent related income. Other assets consist primarily of deferrals of EUR 10,067 thousand (2021 – EUR 5,110 thousand), advance payments and accrued income of EUR 69,173 thousand (2021 – EUR 35,182 thousand) and prepayments of EUR 33,961 thousand (2021 – EUR 21,479 thousand). Short-term receivables overdue more than six months total EUR 5,245 thousand (2021 –EUR 3,143 thou- sand). Total expected credit losses are EUR 5,580 thousand (2021 – EUR 4,137 thousand). Other tax receivables consist primarily of value added tax receivables of EUR 67,023 thousand (2021 – EUR 45,692 thousand). Trade receivables can be analysed as follows, whereas the weighted average loss rate is determined as ac- tual credit losses over the past two years. as at 31 December 2022 In EUR thousand Weighted average loss rate Gross carrying amount Loss allowance Net carrying amount Credit- impaired Current (not past due) 0.83% 39,610 -331 39,279 No 1 - 30 days past due 1.84% 10,559 -194 10,365 No 31 - 60 days past due 7.30% 1,651 -120 1,531 No 61 - 90 days past due 10.33% 1,597 -165 1,432 No 91 - 182 days past due 36.36% 1,455 -529 926 No 184 - 365 days past due 65.06% 2,874 -1,870 1,004 Yes Paid in more than 365 days past due 100.00% 2,371 -2,371 -- Yes Balance at 31 December 2022 60,117 -5,580 54,537 as at 31 December 2021 In EUR thousand Weighted average loss rate Gross carrying amount Loss allowance Net carrying amount Credit- impaired Current (not past due) 0.93% 27,034 -252 26,782 No 1 - 30 days past due 3.22% 8,140 -262 7,878 No 31 - 60 days past due 17.92% 904 -162 742 No 61 - 90 days past due 38.85% 592 -230 362 No 91 - 182 days past due 46.83% 741 -347 394 No 184 - 365 days past due 73.71% 985 -726 259 Yes Paid in more than 365 days past due 100.00% 2,158 -2,158 -- Yes Balance at 31 December 2021 40,554 -4,137 36,417 389 Financial Statements 22. CASH AND CASH EQUIVALENTS Cash and cash equivalents of EUR 660,631 thousand (2021 – EUR 892,816 thousand) consist primarily of short-term deposits of EUR 221,224 thousand (2021 – EUR 700,000 thousand) and cash at bank accounts of EUR 439,292 thousand (2021 – EUR 192,682 thousand). Restricted cash amounts to EUR 1,341 thousand (2021 – EUR 1,086 thousand) and is presented under non-current trade and other receivables. Restricted cash represents balances on debt service reserve ac- counts . 23. EQUITY Issued capital and Share premium As at 31 December 2022, the issued capital comprised of the following: Type of shares No. of shares Nominal value of share Issued capital in EUR Ordinary shares 444,100,549 EUR 0.16 71,056,088 Movements in Issued capital and Share premium Nr. of shares Issued capital Share premium In thousands of EUR In thousands of EUR Balance at 1 January 2022 400,392,810 64,063 2,661,979 3 February 2022 Share issuance connected with DIR acquisition 32,421,325 5,187 391,030 9 June 2022 Dividends paid in form of shares 763,581 122 -68,064 23 August 2022 Share issuance connected with merger of DIR and CTP N.V. 7,659,590 1,226 96,593 5 September 2022 Dividends paid in form of shares 2,863,243 458 -56,476 Balance at 31 December 2022 444,100,549 71,056 3,025,062 Treasury shares -27,976 -4 -541 Total balance at 31 December 2022 444,072,573 71,052 3,024,521 On 3 February 2022, the Group acquired Deutsche Industrie REIT-AG (currently CTP Germany B.V.). CTP of- fered either a cash consideration of EUR 17.12 or a share consideration of 1.25 shares in the share capital of CTP (the “CTP Shares”) for each tendered DIR Share (the “Share Consideration”). The transaction resulted in the issuance of 32,421,325 new shares of CTP N.V. For details refer to Note 6. Following its Annual General Meeting on 26 April 2022, CTP N.V. announced a final 2021 dividend of EUR 0.18 per ordinary share. Shareholders were given the choice to receive the final dividend either in cash or in shares, with the stock fraction for the dividend based on the volume-weighted average price (VWAP) of the Company’s shares on Euronext Amsterdam of the last three trading days of the election period, ending on 18 May 2022. The number of dividend rights that entitles to one new ordinary share was set at 72.5. Shareholders representing approximately 88% of the total number of outstanding ordinary shares chose to receive the dividend in cash, while shareholders representing 12% of the total number of outstanding ordi- nary shares opted for payment in stock. Based on the conversion ratio and after delivery of the ordinary shares due to the conversion of dividend rights, the total number of issued and outstanding ordinary shares increased by 763,581 to a total of 433,577,716 ordinary shares. The payment date for the dividend payment in cash and delivery of the ordi- nary shares was 9 June 2022. 390 Financial Statements On 23 August 2022 CTP N.V. completed the merger with Deutsche Industrie Grundbesitz AG (acquired on 3 February 2022). As a result of the merger, CTP N.V. acquired shares from former shareholders of Deutsche Industrie Grundbesitz AG. CTP offered a share consideration of 1.25 shares in the share capital of CTP (the “CTP Shares”) for each tendered DIR Share. The transaction resulted in issuance of 7,659,590 new shares of CTP N.V. On 10 August 2022, an interim dividend of EUR 0.22 per share for the first half of 2022 was announced. Shareholders were given the choice to receive the final dividend either in cash or in shares, with the stock fraction for the dividend based on the volume-weighted average price (VWAP) of the Company’s shares on Euronext Amsterdam of the last three trading days of the election period, ending on 29 August 2022. The number of dividend rights that entitles to one new ordinary share was set at 62.5. Shareholders represent- ing approximately 59% of the total number of outstanding ordinary shares chose to receive the interim dividend in cash, while shareholders representing approximately 41% of the total number of outstanding ordinary shares opted for payment in stock. Based on the conversion ratio and after delivery of the ordinary shares due to the conversion of dividend rights, the total number of issued and outstanding ordinary shares increased by 2,863,243 to a total of 444,100,549 ordinary shares. The payment date for the dividend pay- ment in cash and delivery of the ordinary shares was 5 September 2022. As at 31 December 2021, the issued capital comprised of the following: Type of shares No. of shares Nominal value of share Issued capital in EUR Ordinary shares 400,392,810 EUR 0.16 64,062,850 Movements in Issued capital and Share premium Nr. of shares Issued capital Share premium In thousands of EUR In thousands of EUR Balance at 1 January 2021 336,000,000 53,760 1,858,460 29 March 2021 Share issuance connected with IPO 61,017,000 9,763 809,572 9 June 2021 Dividends paid in form of shares 3,375,810 540 -6,053 Balance at 31 December 2021 444,100,549 71,056 3,025,062 As at 29 March 2021, an additional 61,017,000 shares were issued, with nominal value of EUR 0.16 per share. On 29 March 2021, the Company issued new shares on Amsterdam’s stock exchange. On 17 August 2021, CTP N.V. announced an H1 2021 interim dividend of EUR 0. 17 per share. Shareholders were given the choice to receive the interim dividend either in cash or shares. The number of dividend rights that entitles to one new ordinary CTP share was set at 108. The conversion ratio was based on the volume-weighted average price of the CTP share during the period from 26 August 2021 up to and including 30 August 2021. Shareholders representing 92% of the total number of outstanding ordinary shares chose to receive the dividend in stock, while shareholders representing 8% of the total number of outstanding ordinary shares opted for payment in cash. Based on the conversion ratio and after delivery of the ordinary shares, due to the conversion of dividend rights, the total number of outstanding ordinary shares increased by 3,375,810 to a total of 400,392,810 shares. The payment date for the dividend payment in cash and delivery of the ordinary shares was 22 Sep- tember 2021. Cash flow hedge reserve Changes in the fair value of derivatives designated as hedging instruments and recognised in the cash flow hedge reserve in equity reached EUR 23,727 thousand net of tax as at 31 December 2022 (2021 – EUR 0 thousand). 391 Financial Statements Translation reserve The translation reserve of EUR 4,547 thousand (2021 – EUR 10,716 thousand) comprises all foreign ex- change differences arising from the translation of the financial statements from the functional to the pres- entation currency (refer to Note 3f). Profit distribution In June 2022, the Group paid final dividends for the year 2021 of EUR 77,907 thousand, out of which EUR 67,942 thousand were paid in cash and the rest of dividends were paid in form of new shares. In September 2022, the Group has paid interim dividends for the year 2022 of EUR 95,387 thousand, out of which EUR 56,018 thousand were paid in cash and the rest of dividends were paid in form of new shares. In 2021, the Group paid dividends of EUR 67,492 thousand, of which EUR 5,513 thousand were paid in cash and the rest in new shares. 24. SHARE-BASED PAYMENTS On 30 April 2021 and 30 April 2022, the Company granted a conditional share award under the LTIP to a Director. This award has a vesting period of three years, and vesting is subject to continued services up to vesting and depends on the Company’s total shareholder return (“TSR”). Vesting of 50% of the number of awards granted is subject to an Absolute TSR condition, and 50% is subject to a Relative TSR condition. The number of awards that will vest is between 0% and 150% of the target number of awards granted. The vesting percentage is allocated linearly between the threshold level and the maximum level. The fair value of the awards is expensed on a straight-line basis over the three-year vesting period. In 2022, the total share-based payment expense recognised for the equity-settled awards was EUR 176 thousand (2021 – EUR 85 thousand). 25. EARNINGS PER SHARE Basic earnings per share (“EPS”) Basic EPS calculations are based on the following profit attributable to ordinary shareholders and weight- ed-average number of ordinary shares outstanding. In EUR thousand 1.1.2022 - 31.12.2022 1.1.2021 - 31.12.2021 Profit/(loss) attributable to Equity holders of the Company 794,649 1,025,936 Dividends on non-redeemable preference shares -- -- Profit/(loss) attributable to ordinary shareholders 794,649 1,025,936 1.1.2022 - 31.12.2022 1.1.2021 - 31.12.2021 Issued ordinary shares at 1 January 400,392,810 336,000,000 Effect of shares issued related to a business combination -- -- Effects of shares issued in 2022/2021 33,588,692 47,407,350 Weighted-average number of ordinary shares at 31 December 433,981,502 383,407,350 Earnings per share 1.83 2.68 392 Financial Statements The denominator in the calculation of basic EPS for the years 2022 and 2021 is the weighted average num- ber of ordinary shares less treasury shares as at 31 December 2022 and 31 December 2021, respectively. Diluted earnings per share The calculation of diluted EPS is based on the following profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares. In EUR thousand 1.1.2022 - 31.12.2022 1.1.2021 - 31.12.2021 Profit (loss) attributable to Equity holders of the Company (basic) 794,649 1,025,936 Interest expense on convertible notes, net of tax -- -- Profit/(loss) attributable to ordinary shareholders 794,649 1,025,936 2022 2021 Weighted-average number of ordinary shares (basic) 433,981,502 383,407,350 Effect of conversion of convertible notes -- -- Effect of share options on issue -- -- Long-term incentive plan 28,913 10,202 Weighted-average number of ordinary shares (diluted) at 31 December 434,010,416 383,417,553 Earnings per share (diluted) 1.83 2.68 26. NON-CONTROLLING INTEREST On 3 February 2022, the Group acquired 80.9 % ownership interest in Deutsche Industrie REIT-AG (current- ly CTP Germany B.V.). For details refer to Note 6. Share of non-controlling interest as at date of acquisition corresponds to 19.1% of the outstanding share capital in Deutsche Industrie Grundbesitz AG. In EUR thousand 3 February 2022 NCI percentage 19.10% Non-current assets 850,539 Current assets 122,587 Non-current liabilities * -373,054 Current liabilities -97,757 Net assets 502,315 Net assets attributable to NCI 95,943 * Non-current liabilities also include the pre-acquisition loan of EUR 67,458 thousand provided by CTP N.V. to DIR. On 23 August 2022, CTP N.V. completed the merger with Deutsche Industrie Grundbesitz AG. As a result of the merger, the legal integration of Deutsche Industrie Grundbesitz AG into the CTP group was completed. CTP acquired 100% ownership of Deutsche Industrie Grundbesitz AG and the entity ceased to exist without liquidation. For details refer to Note 6. 393 Financial Statements As at date of cross border merger and acquisition of additional 19.1% of ownership interest in DIR, the infor- mation related to acquired share are as follows: Net assets attributable to NCI as at date of acquisition 95,943 Revenue 35,763 Profit 9,822 Other comprehensive income -- Total comprehensive income 9,822 Other Adjustment in profit loss allocated to NCI -- Profit/(loss) allocated to NCI 1,876 OCI allocated to NCI -- Net assets attributable to NCI as at date of merger/demerger 97,819 In 2022, the Group acquired additional 9.9% ownership interest in CTP Delta B.V. with impact on Equity of EUR 2,247 thousand. As at 31 December 2021 non-controlling interest (NCI) in the consolidated companies of the Group was EUR 0 thousand. In 2021, the Group has acquired additional 10% ownership interest in its subsidiary from CTP Holding B.V. In 2021, the Group has acquired 90.1% ownership interest in CTP Delta B.V. Net asset value as at 31 Decem- ber 2021 was of EUR 2 thousand and non-controlling interest was EUR 0 thousand. 27. INTEREST-BEARING LOANS AND BORROWINGS FROM FINANCIAL INSTITUTIONS In EUR thousand 2022 2021 Non-current liabilities Interest-bearing loans and borrowings from financial institutions 1,874,481 1,115,412 Accrued arrangement fees -6,352 -4,941 Balance at 31 December 1,868,129 1,110,471 Current liabilities Interest-bearing loans and borrowings from financial institutions 24,672 23,186 Accrued interest 640 -- Accrued arrangement fees -582 -2,353 Balance at 31 December 24,730 20,833 Total balance at 31 December 1,892,859 1,131,304 In EUR thousand 2022 2021 Nominal value Fair value Nominal value Fair value Interest-bearing loans and borrowings from financial institutions 1,899,153 1,545,444 1,138,598 1,138,598 The valuation model of fair value of bank loans considers the present value of expected payments, discounted using risk adjusted discount rate. The Group has determined that all of its Interest-bearing loans and borrowings from financial institutions are classified within Level 2 of the fair value hierarchy. To determine the fair value of such instruments, management used a valuation technique in which all signif- icant inputs were based on observable market data. All of the Group’s interest-bearing loans and borrowings from financial institutions have loan-to-value and debt service coverage ratio covenants. As at 31 December 2022, there was no breach of covenant conditions. 394 Financial Statements All interest-bearing loans and borrowings from financial institutions are secured for 2022 and 2021. Bank loans are secured over investment property with a carrying amount of EUR 4,332,358 thousand (2021 – 2,492,295 EUR thousand) and investment property under development with a carrying amount of EUR 295,307 thousand (2021 – EUR 19,970 thousand). Bank loans are secured also by pledges of shares, receivables, future receivables and other assets in some of the subsidiaries. Share pledges related to interest-bearing loans are described in Note 37. Residual maturity of loans and borrowings from financial institutions as at 31 December 2022 and 31 De- cember 2021 was as follows: In EUR thousand Balance as at 31 December 2022 Due within Due in follow. years Total 1 year 2 years 3-5 years Interest-bearing loans and borrowings from financial institutions 24,671 29,170 130,681 1,714,631 1,899,153 In EUR thousand Balance as at 31 December 2021 Due within Due in follow. years Total 1 year 2 years 3-5 years Interest-bearing loans and borrowings from financial institutions 23,186 26,710 111,998 976,704 1,138,598 Bank loans with nominal value of EUR 267,207 thousand have interest rate based on EURIBOR, plus margin that vary from 0.623% to 2.174% (2021 – EUR 29,659 thousand, interest rate from 0.53% to 1.60%). The rest of bank loans have fixed interest rates from 0.75% to 4.71% (2021 – from 1.1% - 1.90%). In September 2022, the Group received a syndicated bank loan of EUR 445,000 thousand, with fixed inter- est rate of 4.71%, due in 2029. In December 2022, the Group received bank loan of EUR 175,000 thousand, with variable interest rate of 3M EURIBOR with margin 1.80%, due in 2031. Bank loans of EUR 1,971,259 thousand were repaid in 2021 from bonds issued in the years 2020 and 2021. In September 2021, the Group received a syndicated bank loan of EUR 600,000 thousand, with fixed inter- est rate of 1.55%, due in 2031. In 2021, the Company replaced a revolving credit facility from the year 2020 with a new revolving credit fa- cility of EUR 400,000 thousand for a three-year period. The Company does not expect a drawdown, either partial or for the full amount, under this facility in 2023. No significant changes to estimation techniques or assumptions were made during the reporting period. 395 Financial Statements Reconciliation of movements of assets, liabilities and equity to cash flows arising from financing activities: In EUR thousand Bank loans Related party loans Bonds Lease liabilities IRS - assets IRS - liabilities Issued capital Share premium Retained earnings Non-controlling interest Total Balance as at 1 January 2022 1,131,304 18 3,381,692 13,833 -172 -- 64,063 2,661,979 1,350,856 -- 8,603,573 Changes from financing cash flows Proceeds from bonds -- -- 733,368 -- -- -- -- -- -- -- 733,368 Proceeds from loans and borrowings 628,987 -- -- -- -- -- -- -- -- -- 628,987 Transaction costs related to loans and borrowings, bonds and issue of shar capital -2,554 -- -2,200 -- -- -- -- -- -- -- -4,754 Acquisition of NCI -- -- -- -- -- -- 1,226 96,593 -2,247 -97,819 -2,247 Repayment of the loans and borrow-ings and bonds -101,637 -- -289,564 -- -- -- -- -- -- -- -391,201 Dividend in cash -- -- -- -- -- -- 580 -124,540 -- -- -123,960 Payment of lease liabilities -- -- -- -3,010 -- -- -- -- -- -- -3,010 Total changes in financing cash flows 524,796 -- 441,604 -3,010 -- -- 1,806 -27,947 -2,247 -97,819 837,183 Change in fair value -- -- -- -- -6,600 2,548 -- -- -- -- -4,052 Other adjustment -1,002 -16 2,552 12,084 -44,149 12,111 -- -- -991 -- 19,411 Share issuance related to DIR -- -- -- -- -- -- 5,183 390,489 395,671 Acquisition of subsidiaries 232,991 -- 140,026 25,623 -125 36 -- -- -- 95,943 494,494 Profit for the period -- -- -- -- -- -- -- -- 794,649 1,876 796,525 Interest expense incl. arrangement fee 35,200 1 49,455 -- -- 288 -- -- -- -- 84,944 Interest paid -30,430 -- -33,979 -- -- -288 -- -- -- -- -64,697 Other liability related changes 236,759 -15 158,054 37,707 -44,274 12,147 5,183 390,489 793,658 97,819 1,687,527 Balance at 31 December 2022 1,892,859 3 3,981,350 48,530 -51,046 14,695 71,052 3,024,521 2,142,267 -- 11,124,231 In EUR thousand Bank loans Related party loans Bonds Lease liabilities IRS - assets IRS - liabilities Issued capital Share premium Retained earnings Total Balance as at 1 January 2021 2,352,287 37,172 1,041,971 5,235 -- 34,066 53,760 1,858,460 324,862 5,707,813 Changes from financing cash flows Proceeds from bonds -- -- 2,479,615 -- -- -- -- -- -- 2,479,615 Proceeds from loans and borrowings 677,468 -- -- -- -- -- -- -- -- 677,468 Transaction costs related to loans and borrowings, bonds and issue of share capital -4,669 -- -18,076 -- -- -22,599 -- -34,904 -- -80,248 Repayment of the loans and borrowings and bonds -1,971,259 -35,968 -148,709 -- -- -- -- -- -- -2,155,936 Proceeds from the issue of share capital -- -- -- -- -- -- 9,763 844,475 -- 854,238 Dividend in cash -- -- -- -- -- -- -- -5,513 -- -5,513 Payment of lease liabilities -- -- -- -974 -- -- -- -- -- -974 Total changes in financing cash flows -1,298,460 -35,968 2,312,830 -974 -- -22,599 9,763 804,058 -- 1,768,650 Change in fair value -- -- -- -- -172 -11,955 -- -- -- -12,127 Other adjustment -5,322 -164 17,084 2,425 -- 488 -- 1 58 14,570 Acquisition of subsidiaries 65,867 -- -- 7,147 -- -- -- -- -- 73,014 Dividend in stock -- -- -- -- -- -- 540 -540 -- -- Profit for the period -- -- -- -- -- -- -- -- 1,025,936 1,025,936 Interest expense 38,911 383 26,120 -- -- 5,469 -- -- -- 70,883 Interest paid -21,979 -1,405 -16,313 -- -- -5,469 -- -- -- -45,166 Other liability related changes 77,477 -1,186 26,891 9,572 -- 488 540 -539 1,025,994 1,139,237 Balance at 31 December 2021 1,131,304 18 3,381,692 13,833 -172 -- 64,063 2,661,979 1,350,856 8,603,573 396 Financial Statements 28. BONDS In EUR thousand 2022 2021 Non-current bonds 3,563,788 3,368,202 Current bonds 417,562 13,490 Total 3,981,350 3,381,692 Current period Bonds issued by CTP N.V. Bond Issuance Date ISIN Nominal value of total bonds issued in EUR Nominal value of each bond in EUR Currency Type Fix in-terest rate per annum ("p.a") Maturity date Fair value of bonds (In TEUR ) 1 July 2022 XS2390546849 49,500,000 100,000 EUR senior unsecured 1.500% 27 Sept 2031 29,991 20 Jan 2022 XS2434791690 700,000,000 100,000 EUR senior unsecured 0.875% 20 Jan 2026 571,942 27 Sept 2021 XS2390530330 500,000,000 100,000 EUR senior unsecured 0.625% 27 Sept 2026 382,910 27 Sept 2021 XS2390546849 500,000,000 100,000 EUR senior unsecured 1.500% 27 Sept 2031 302,935 21 June 2021 XS2356029541 500,000,000 100,000 EUR senior unsecured 0.500% 21 June 2025 419,930 21 June 2021 XS2356030556 500,000,000 100,000 EUR senior unsecured 1.250% 21 June 2029 330,200 18 Feb 2021 XS2303052695 500,000,000 100,000 EUR senior unsecured 0.750% 18 Feb 2027 374,595 27 Nov 2020 XS2264194205 400,000,000 100,000 EUR senior unsecured 0.625% 27 Nov 2023 379,784 1 Oct 2020 XS2238342484 331,813,000 100,000 EUR senior unsecured 2.125% 1 Oct 2025 286,813 Total 3,981,313,000 3,079,100 Bonds acquired 9 June 2021 DE000A3E5L07 20,000,000 100,000 EUR senior unsecured 3.300% 9 June 2031 14,240 Total Bonds 4,001,313,000 3,093,340 On 1 July 2022, the CTP N.V. issued EUR 49.5 million unsecured bonds with a nominal value of EUR 100,000 each under emission from 27 September 2021 with ISIN number XS2390546849. The bonds are issued as subordinated, with a fixed interest rate of 1.5% per annum (“p.a.”), and the bonds are due on 27 September 2031. There are no covenants related to the bonds. On 24 January 2022, the Group repaid bonds from the emission with ISIN XS2238342484 in a nominal value of EUR 168,189 thousand. On 20 January 2022, the Group has issued new bond with the emission ISIN XS2434791690 in the nominal value of EUR 700,000 thousand. On 3 February 2022, the Group acquired the subsidiary Deutsche Industrie Grundbesitz AG, where bonds with a nominal value of EUR 138,000 thousand were acquired as follows: ISIN Nominal value of total bonds issued (In EUR) Currency Fix interest rate per annum ("p.a") Maturity date DE000A3E5L07 20,000,000 EUR 3.300% 9 June 2031 DE000A2GS3T9 118,000,000 EUR 4.000% 30 August 2022 138,000,000 On 17 May 2022, the Group repaid bonds from the emission with ISIN DE000A2GS3T9 (acquired within Deutsche Industrie Grundbesitz AG) with a nominal value of EUR 118,000 thousand. 397 Financial Statements Prior period Bond Issuance Date ISIN Nominal value of total bonds issued Nominal value of each bond Currency Type Fix in-terest rate per annum ("p.a") Maturity date Fair value of bonds (In TEUR) 27 Sept 2021 XS2390530330 500,000,000 100,000 EUR senior unsecured 0.625% 27 Sept 2026 494,545 27 Sept 2021 XS2390546849 500,000,000 100,000 EUR senior unsecured 1.500% 27 Sept 2031 485,270 21 June 2021 XS2356029541 500,000,000 100,000 EUR senior unsecured 0.500% 21 June 2025 498,545 21 June 2021 XS2356030556 500,000,000 100,000 EUR senior unsecured 1.250% 21 June 2029 490,725 18 Feb 2021 XS2303052695 500,000,000 100,000 EUR senior unsecured 0.750% 18 Feb 2027 486,940 27 Nov 2020 XS2264194205 400,000,000 100,000 EUR senior unsecured 0.625% 27 Nov 2023 404,296 1 Oct 2020 XS2238342484 500,002,000 100,000 EUR senior unsecured 2.125% 1 Oct 2025 524,842 Total 3,400,002,000 3,385,163 On 29 September 2021, the Group repaid bonds from the first issuance that occurred in October 2020 with a nominal value of EUR 149,998 thousand. In EUR thousand 2022 2021 Non-current liabilities Bonds issued - nominal value 4,299,500 3,550,000 Repayment of bonds – nominal value -318,187 -149,998 Nominal value after repayment 3,981,313 3,400,002 Bonds acquired 140,026 -- Repayment of bonds acquired -120,026 -- Interest liability 18,957 13,490 Discount applied -43,206 -27,878 Amortisation of applied discount 10,163 3,796 Bond issuance costs -8,869 -9,200 Amortisation of bond issuance costs 2,992 1,482 Total 3,981,350 3,381,692 Transaction costs paid in cash as at 31 December 2022 was EUR 2,200 thousand (2021 – EUR 18,076 thou- sand). There are no financial covenants related to the bonds. 29. TRADE AND OTHER PAYABLES Non-current In EUR thousand 2022 2021 Non-current trade payables and other liabilities 57,907 51,525 Liabilities from operating leases 46,045 13,066 Balance at 31 December 103,952 64,591 Current In EUR thousand 2022 2021 Trade payables and other liabilities 318,432 236,331 Liabilities from operating leases 2,485 817 Balance at 31 December 320,917 237,148 In 2022, trade payables and other liabilities consist primarily of liabilities for constructions works. In 2021, trade payables and other liabilities consisted primarily of liabilities for constructions works and liabilities from the acquisition of subsidiaries (refer to Note 6). 398 Financial Statements 30. LEASES Leases as lessee The Group leases various types of assets: offices, parking places, plots of land and other small assets. For short-term leases and leases of low-value items, the Group has elected not to recognise right-of-use assets and related lease liabilities. The leasing period of the offices varies significantly, from one to 17 years. Some leases provide for additional rent payments that are based on changes in local price indices, with an option to terminate the contract within less than twelve months. Parking places are leased for a period of several months up to an indefinite period, with an option to termi- nate the leasing within several days up to three months. Plots of land to operate Group premises are leased from a nineteen-year period to indefinitely. Information about leases for which the Group is a lessee is presented below. Right-of-use assets related to leased assets that do not meet the definition of investment property are presented as property, plant and equipment (refer to Note 20). In EUR thousand Property, plant and equipment Investment property Investment property under develop- ment Total Balance at 1 January 2022 4,436 2,017 18,241 24,694 Acquisitions -- 30,361 -- 30,361 Additions 5,277 -- -- 5,277 Transfer from investment property under development -- -- -501 -501 Transfer to owned buildings and land -- 501 -- 501 Depreciation -877 -- -- -877 Balance at 31 December 2022 8,836 32,879 17,740 59,455 In EUR thousand Property, plant and equipment Investment property Investment property under develop- ment Total Balance at 1 January 2021 3,814 2,017 -- 5,831 Additions 1,296 -- 18,241 19,537 Depreciation -674 -- -- -674 Balance at 31 December 2021 4,436 2,017 18,241 24,694 Amounts recognised in profit or loss In EUR thousand 2022 2021 Interest on lease liabilities 1,832 103 Expenses relating to short-term leases 167 160 Expenses relating to leases of low-value assets 13 10 Balance at 31 December 2,012 273 Amounts recognised in profit or loss In EUR thousand 2022 2021 Total cash outflows for leases 3,000 974 399 Financial Statements The remaining performance obligations as at 31 December 2022 are as follows: In EUR thousand < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years Total Lease payments 2,397 1,383 1,294 1,254 1,168 41,034 48,530 The remaining performance obligations as at 31 December 2021 are as follows: In EUR thousand < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years Total Lease payments 942 1,652 227 222 195 10,645 13,883 Leases as lessor The Group leases out its own investment property. All leases are classified as operating leases from a lessor perspective because they do not transfer substantially all the risks and rewards incidental to the ownership of the assets. Rental income recognised by the Group during 2022 was EUR 485,017 thousand (2021 – EUR 334,651 thou- sand). The following table sets out a maturity analysis of lease payments, showing the undiscounted lease pay- ments to be received after the reporting period. In EUR thousand < 1 year 2-5 years > 5 years Total Lease payments 588,915 1,802,345 1,812,739 4,203,999 31. DERIVATIVE FINANCIAL INSTRUMENTS In EUR thousand 2022 2021 Fair value of derivatives - non-current asset 9,165 126 Fair value of derivatives - current asset 41,881 46 Fair value of derivatives - assets 51,046 172 Fair value of derivatives - non-current liability -2,018 -- Fair value of derivatives - current liability -12,677 -- Fair value of derivatives - liabilities -14,695 -- Total 36,351 172 Accrued interest on derivatives -- -- Total derivatives 36,351 172 All financial derivatives were stated at fair value as at 31 December 2022 and 31 December 2021, respec- tively, and classified to Level 2 in the fair value hierarchy. A market comparison technique was used to de- termine fair value. The Group has designated certain derivatives as hedging instruments in cash flow hedge relationships. These derivatives are recognised initially at fair value and reported subsequently at fair value in the consol- idated statement of financial position. To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow hedges are recognised in other comprehensive income and included within the cash flow hedge reserve in equity (refer to Note 23). 400 Financial Statements As at 31 December 2022 CTP held the following derivative financial instruments: Derivative financial instruments - assets Due within maturity date Mandatory break Receiving leg Paying leg Currency Nominal amount Fair value (in EUR thousand) Interest rate swaps – cash flow hedge 2028 –2053 2023 3M Euribor – 6M Euribor From 2.1265% to 2.5975% EUR 725,000 EUR 44,088 Interest rate swaps 2025 –2030 -- 3M Euribor from -0.295% to 0.21% EUR 69,990 EUR 6,958 Total receivables from derivatives 51,046 Derivative financial instruments - liabilities Due within maturity date Mandatory break Receiving leg Paying leg Currency Nominal amount Fair value (in EUR thousand) Interest rate swaps – cash flow hedge 2030 – 2053 2023 6M Euribor from 2.609% to 2.652% EUR 375,000 EUR -12,112 Interest rate swaps 2025 – 2028 -- 3M Euribor from 04% to 0.2% EUR 23,476 EUR -2,583 Total liabilities from derivatives -14,695 As at 31 December 2021 CTP held the following derivative financial instruments: Derivative financial instruments Due within maturity date Receiving leg Paying leg Currency Nominal amount Fair value (in EUR thousand) Interest rate swaps 2025 – 2026 3M Euribor from -0.295% to -0.11% EUR 61,303 EUR 172 Total receivables from derivatives 172 32. INCOME TAXES Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset cur- rent income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. Deferred tax assets and liabilities The recognised deferred tax assets and liabilities are attributable to the following: In EUR thousand 2022 2021 Assets Liability Net Assets Liability Net Investment property 11,688 -892,612 -880,924 8,722 -734,501 -725,779 Tax losses 10,987 -- 10,987 9,510 -- 9,510 Property, plant and equipment 35 -- 35 1,153 -- 1,153 Other (receivables, hedge accounting etc.) 16,599 -42,701 -26,102 16,913 -24,518 -7,605 Tax asset/(liabilities) 39,309 -935,313 -896,004 36,298 -759,019 -722,721 Set- off of tax -21,458 21,458 -- -12,246 12,246 -- Net tax assets/ (liabilities) 17,851 -913,855 -896,004 24,052 -746,773 -722,721 Movement in Deferred tax during the year recognised in profit and loss, in equity and in OCI In EUR thousand Balance as at 1 January 2022 Change in temporary differences Change through business combination Deferred tax recognised in OCI Effect of changes in FX rates Balance as at 31 December 2022 Investment property -725,779 -149,348 99 -- -5,896 -880,924 401 Financial Statements Tax losses 9,510 1,400 -- -- 77 10,987 Property, plant and equipment 1,153 -1,318 -- 191 9 35 Other (receivables, hedge accounting etc.) -7,605 -10,145 -40 -8,250 -62 -26,102 Total -722,721 -159,411 59 -8,059 -5,872 -896,004 In EUR thousand Balance as at 1 January 2021 Change in temporary differences Change through business combination Deferred tax recognised in OCI Effect of changes in FX rates Balance as at 31 December 2021 Investment property -500,129 -217,223 -753 -- -7,674 -725,779 Tax losses 10,321 -1,005 36 -- 158 9,510 Property, plant and equipment -2,189 5,148 -- -1,772 -34 1,153 Other (receivables, hedge accounting etc.) 1,640 -9,270 -- -- 25 -7,605 Total -490,357 -222,350 -717 -1,772 -7,525 -722,721 Unrecognised deferred tax assets Deferred tax assets were not recognised in respect of the following items, as it is improbable that future taxable profit will be available against which the Group can use the benefits. In EUR thousand 2022 2021 Gross amount Tax effect Gross amount Tax effect Tax losses 24,319 4,222 26,427 4,257 Total 24,319 4,222 26,427 4,257 Tax losses carried forward Tax losses for which no deferred tax asset was recognised expire as follows. In EUR thousand 2022 Expiry date 2021 Expiry date Expire 24,319 2023-2028 26,427 2022 - 2027 Never expire -- -- Total 24,319 26,427 Amounts recognised in OCI In EUR thousand 2022 2021 Items that will not be reclassified to profit or loss Gross amount Tax effect Net of tax Gross amount Tax effect Net of tax Revaluation of PPE -1,004 191 -813 9,326 -1,772 7,554 Items that are or may be reclassified to profit or loss Change in Cash flow hedge reserve 31,977 -8,250 23,727 -- -- --- Change in Translation reserve -7,465 1,296 -6,169 -4,524 782 -3,742 402 Financial Statements Current income tax assets and payables The current income tax asset of EUR 6,175 thousand (2021 – EUR 7,260 thousand) represents the amount of income tax recoverable in respect of current and prior periods (i.e., the amount by which the advance pay- ments made exceed income tax payable). The current income tax liabilities of EUR 16,518 thousand (2021 – EUR 18,289 thousand) represent payables in respect of current or prior periods (i.e., the amount by which the income tax payable exceeds advance payments made). 33. SUBSIDIARIES The Company had the following investments in subsidiaries as at 31 December 2022 and 31 December 2021 respectively: Subsidiaries Country 2022 2021 Note CTP Alpha GmbH Austria 100% 100% CTP Beta GmbH Austria 100% 100% CTP Delta GmbH Austria 100% 100% CTP Epsilon GmbH Austria 100% 100% CTP Eta GmbH Austria 100% 0% 2/ CTP Gamma GmbH Austria 100% 100% CTP Invest Immobilien GmbH Austria 100% 100% CTP Iota GmbH Austria 100% 0% 2/ CTP Theta GmbH Austria 100% 0% 2/ CTP Zeta GmbH Austria 100% 100% CTP Invest EOOD Bulgaria 100% 100% CTPark Beta EOOD Bulgaria 100% 100% CTPark Delta EOOD Bulgaria 100% 100% CTPark Epsilon EOOD Bulgaria 100% 100% CTPark Eta EOOD Bulgaria 100% 100% CTPark Gamma EOOD Bulgaria 100% 100% CTPark Iota EOOD Bulgaria 100% 100% CTPark Kappa EOOD Bulgaria 100% 100% CTPark Lambda EOOD Bulgaria 100% 100% CTPark Sofia EOOD (formerly Transcapital Airport EOOD) Bulgaria 100% 0% 1/ CTPark Sofia Ring Road EOOD (formerly Transcapital Ring Road EOOD) Bulgaria 100% 0% 1/ CTPark Theta EOOD Bulgaria 100% 100% CTPark Zeta EOOD Bulgaria 100% 100% Project Vrajdebna EOOD Bulgaria 100% 100% Clubco, spol. s r.o. Czech Republic 100% 100% CTP Alpha, spol. s r.o. Czech Republic 100% 100% CTP Barrandov, spol. s r.o. Czech Republic 100% 100% CTP Beta, spol. s r.o. v likvidaci Czech Republic 0% 100% 3/ CTP Bohemia North, spol. s r.o Czech Republic 100% 100% CTP Bohemia South, spol. s r.o. Czech Republic 100% 100% CTP Bohemia West, spol. s r.o. Czech Republic 100% 100% CTP Borská Pole, spol. s r.o. Czech Republic 100% 100% CTP CEE Properties, spol. s r.o. Czech Republic 100% 100% CTP CEE Sub Holding, spol. s r.o. Czech Republic 100% 100% CTP Domeq Brno, spol. s r.o. Czech Republic 100% 100% CTP Energy CZ, spol. s r.o. (formerly CTP VII, spol. s r.o.) Czech Republic 100% 100% CTP Forest, spol. s r.o. Czech Republic 100% 100% CTP Hotel Operations Brno, spol. s r.o. Czech Republic 100% 100% CTP Hotel Operations Pilsen, spol. s r.o. Czech Republic 100% 100% CTP Hotel Operations Prague spol. s r.o. Czech Republic 100% 100% CTP Hotel Pilsen, spol. s r.o. Czech Republic 100% 100% CTP Hotel Prague, spol. s r.o. Czech Republic 100% 100% CTP I, spol. s r.o. v likvidaci Czech Republic 0% 100% 3/ 403 Financial Statements Subsidiaries Country 2022 2021 Note CTP II, spol. s r.o. Czech Republic 100% 100% CTP III, spol. s r.o. Czech Republic 100% 100% CTP Industrial Property CZ, spol. s.r.o. Czech Republic 100% 100% CTP Invest, spol. s r.o. Czech Republic 100% 100% CTP IQ Ostrava, spol. s r.o. Czech Republic 100% 100% CTP IV, spol. s r.o. Czech Republic 100% 100% CTP Moravia North, spol. s r.o. Czech Republic 100% 100% CTP Moravia South, spol. s r.o. Czech Republic 100% 100% CTP Pilsen Region, spol. s r.o. Czech Republic 100% 100% CTP Ponávka Business Park, spol. s r.o. Czech Republic 100% 100% CTP Portfolio Finance CZ, spol. s r.o. Czech Republic 100% 100% CTP Property Czech, spol. s r.o Czech Republic 100% 100% CTP Property Romania, spol. s r.o. v likvidaci Czech Republic 0% 100% 3/ CTP Property Serbia, spol. s r.o. v likvidaci Czech Republic 0% 100% 3/ CTP Solar I, a. s. Czech Republic 100% 100% CTP Solar II, a. s. Czech Republic 100% 100% CTP Solar III, spol. s r.o. Czech Republic 100% 100% CTP Solar, a.s. v likvidaci Czech Republic 0% 100% 3/ CTP V, spol. s r.o. Czech Republic 100% 100% CTP VI, spol. s r.o. Czech Republic 100% 100% CTP VIII, spol. s r.o. Czech Republic 100% 100% CTP Vlněna Business Park, spol. s r.o. Czech Republic 100% 100% CTP Vysočina, spol. s r.o. Czech Republic 100% 100% CTP X, spol. s r.o. Czech Republic 100% 100% CTP XI, spol. s r.o. Czech Republic 100% 100% CTP XII, spol. s r.o. Czech Republic 100% 100% CTP XIII, spol. s r.o. Czech Republic 100% 100% CTP XIV, spol. s r.o. Czech Republic 100% 100% CTP XV, spol. s r.o. Czech Republic 100% 100% CTP XVI, spol. s r.o. Czech Republic 100% 100% CTP XVII, spol. s r.o. Czech Republic 100% 100% CTP XVIII, spol. s r.o. Czech Republic 100% 100% CTP XXII, spol. s r.o. Czech Republic 100% 100% CTP XXIII, spol. s r.o. Czech Republic 100% 100% CTP XXIV, spol. s r.o. Czech Republic 100% 100% CTPark Aš II, spol. s r.o. Czech Republic 100% 100% CTPark Blučina, spol. s r.o. (formerly CTP XXI, spol. s r.o.) Czech Republic 100% 100% CTPark Bor II, spol. s r.o. Czech Republic 100% 0% 2/ CTPark Bor III, spol. s r.o. Czech Republic 0% 0% 6/ CTPark Bor, spol. s r.o. Czech Republic 100% 100% CTPark Brno I, spol. s r.o. Czech Republic 100% 100% CTPark Brno II, spol. s r.o. Czech Republic 100% 100% CTPark Brno III, spol. s r.o. Czech Republic 100% 100% CTPark Brno Líšeň East, spol. s r.o. Czech Republic 100% 100% CTPark Brno Líšeň II, spol. s r.o. Czech Republic 100% 100% CTPark Brno Líšeň West, spol. s r.o. Czech Republic 100% 100% CTPark Brno Retail, spol. s r.o. Czech Republic 100% 100% CTPark České Velenice, spol. s r.o. Czech Republic 100% 100% CTPark Hranice, spol. s r.o. Czech Republic 100% 100% CTPark Chrastava a.s. (formerly RENWON a.s.) Czech Republic 100% 100% CTPark Lysá nad Labem, spol. s r.o. Czech Republic 100% 100% CTPark Mladá Boleslav, spol. s r.o. Czech Republic 100% 100% CTPark Modřice, spol. s r.o. Czech Republic 100% 100% CTPark Ostrava Poruba, spol. s r.o. Czech Republic 100% 100% CTPark Ostrava, spol. s r.o. Czech Republic 100% 100% CTPark Plzeň, spol. s r.o. Czech Republic 100% 100% CTPark Prague Airport, spol. s r.o. Czech Republic 100% 100% CTPark Prague East, spol. s r.o. Czech Republic 100% 100% CTPark Prague North II, spol. s r.o. Czech Republic 100% 100% CTPark Prague North III, spol. s r.o. Czech Republic 100% 100% CTPark Prague West, spol. s r.o. Czech Republic 100% 100% CTPark Stříbro, spol. s r. o. Czech Republic 100% 100% 404 Financial Statements Subsidiaries Country 2022 2021 Note CTPersonnel Bor, spol. s r.o. v likvidaci Czech Republic 0% 100% 3/ CTZone Ostrava, spol. s r.o. Czech Republic 100% 100% KONČINY SPV, s.r.o. Czech Republic 0% 0% 6/ KRMELÍNSKÁ I s.r.o. Czech Republic 100% 0% 1/ Multidisplay s.r.o. v likvidaci Czech Republic 0% 100% 3/ PŘÍDANKY SPV, s.r.o. Czech Republic 0% 100% 7/ Spielberk Business Park II, spol. s r.o. Czech Republic 100% 100% Spielberk Business Park, spol. s r.o. Czech Republic 100% 100% CTP Invest Egypt 100% 100% 5/ CTP Real Estate Egypt 100% 100% 5/ CTP Real Estate Development Egypt 100% 100% 5/ Samesova OÜ Estonia 100% 100% 5/ Vojtova OÜ Estonia 100% 100% 5/ Zemankova OÜ Estonia 100% 100% 5/ CTP Alpha France France 100% 100% 5/ CTP Beta France France 100% 100% 5/ CTP France France 100% 100% 5/ CTP Germany GmbH Germany 100% 100% CTP Germany GmbH B.V. (formerly Deutsche Industrie Grundbesitz AG) Germany 100% 0% 1/ CTP Germany II GmbH Germany 100% 100% CTP Germany IV GmbH & Co. KG Germany 0% 100% 7/ CTP Germany III GmbH Germany 0% 100% 7/ CTP Germany IX GmbH Germany 100% 100% CTP Germany V GmbH Germany 100% 100% CTP Germany VI GmbH Germany 100% 100% CTP Germany VII GmbH Germany 100% 100% CTP Germany VIII GmbH Germany 100% 100% CTP Germany X GmbH Germany 100% 100% CTP Invest Germany GmbH Germany 100% 100% CTP Energy Hungary Kft (formerly CTP Solar Hungary Kft) Hungary 100% 100% CTP Management Hungary Kft. Hungary 100% 100% CTPark Alpha Kft. Hungary 100% 100% CTPark Arrabona Kft. Hungary 100% 100% CTPark Beta Kft. Hungary 100% 100% CTPark Biatorbágy Kft. Hungary 100% 100% CTPark Delta Kft. Hungary 100% 100% CTPark Eight Kft. Hungary 100% 100% CTPark Eighteen Kft. Hungary 100% 100% CTPark Eleven Kft. Hungary 100% 100% CTPark Fifteen Kft. Hungary 100% 100% CTPark Fourteen Kft Hungary 100% 100% CTPark Gamma Kft. Hungary 100% 100% CTPark Nine Kft. Hungary 100% 100% CTPark Nineteen Kft. Hungary 100% 100% CTPark Seven Kft. Hungary 100% 100% CTPark Seventeen kft. Hungary 100% 100% CTPark Sixteen Kft. Hungary 100% 100% CTPark Ten Kft. Hungary 100% 100% CTPark Thirteen Kft Hungary 100% 100% CTPark Thirty Kft. Hungary 100% 0% 4/ CTPark Thirty One Kft. Hungary 100% 0% 4/ CTPark Twelve Kft. Hungary 100% 100% CTPark Twenty Eight Kft. Hungary 100% 0% 4/ CTPark Twenty Five Kft. Hungary 100% 100% CTPark Twenty Four Kft. Hungary 100% 100% CTPark Twenty Kft. Hungary 100% 100% CTPark Twenty Nine Kft. Hungary 100% 0% 4/ CTPark Twenty One Kft. Hungary 100% 100% CTPark Twenty Seven Kft. Hungary 100% 100% CTPark Twenty Six Kft. Hungary 100% 100% CTPark Twenty Three Kft. Hungary 100% 100% CTPark Twenty Two Kft. Hungary 100% 100% 405 Financial Statements Subsidiaries Country 2022 2021 Note Office Campus Real Estate Kft. Hungary 100% 100% CTP Alpha S.r.l. Italy 100% 100% 5/ CTP Beta S.r.l. Italy 100% 100% 5/ CTP Italy S.r.l. Italy 100% 100% 5/ Samesova SIA Latvia 100% 100% 5/ Vojtova SIA Latvia 100% 100% 5/ Zemankova SIA Latvia 100% 100% 5/ UAB Samesova Lithuania 100% 100% 5/ UAB Vojtova Lithuania 100% 100% 5/ UAB Zemankova Lithuania 100% 100% 5/ CTP ALC B.V. (formerly Amsterdam Logistic Cityhub B.V.) Netherlands 100% 100% CTP Alpha B.V. Netherlands 100% 100% CTP Baltic Holding B.V. Netherlands 100% 100% CTP Beta B.V. Netherlands 100% 100% CTP Energy B.V. (formerly CTP Iota B.V.) Netherlands 100% 100% CTP Epsilon B.V. Netherlands 100% 100% CTP Eta B.V. Netherlands 100% 100% CTP Gamma B.V. Netherlands 100% 100% CTP Invest B.V. Netherlands 100% 100% CTP Kappa B.V. Netherlands 100% 100% CTP Lambda B.V. Netherlands 100% 100% CTP Mediterranean Holding B.V. Netherlands 100% 100% CTP Mu BV. Netherlands 100% 100% CTP Portfolio Finance Czech B.V. Netherlands 100% 100% CTP Property B.V. Netherlands 100% 100% CTP Theta B.V. Netherlands 100% 100% CTP Turkish Holding B.V. Netherlands 100% 100% CTP Zeta B.V. Netherlands 100% 100% CTPark Bremen B.V. (formerly CTP Delta B.V.) Netherlands 100% 100% Multifin B.V. Netherlands 100% 100% CTP Beta Poland Sp. z o.o. Poland 100% 100% CTP Delta Poland Sp. z o.o. Poland 100% 100% CTP Energy Poland Sp. z o.o. (formerly CTP Omicron Poland Sp. z o.o.) Poland 100% 100% CTP Epsilon Poland Sp. z o.o. Poland 100% 100% CTP Eta Poland Sp. z o.o. Poland 100% 100% CTP Gamma Poland Sp. z o.o. Poland 100% 100% CTP Chi Poland Sp. z o.o. (formerly 7R Projekt 37 Sp. z o.o.) Poland 100% 0% 1/ CTP Invest Poland Sp. z o.o. Poland 100% 100% CTP Iota Poland Sp. z o.o. Poland 100% 100% CTP Kappa Poland Sp. z o.o. Poland 100% 100% CTP Lambda Poland Sp. z o.o. Poland 100% 100% CTP Mu Poland Sp. z o.o. Poland 100% 100% CTP Nu Poland Sp. z o.o. Poland 100% 100% CTP Omega Poland Sp. z o.o. (formerly 7R Projekt 31 Sp. z o.o.) Poland 100% 0% 1/ CTP Pi Poland Sp. z o.o. Poland 100% 100% CTP Property Alpha Poland Sp. z o.o. (formerly 7R Projekt 68 Sp. z o.o.) Poland 100% 0% 1/ CTP Property Beta Poland Sp. z o.o. (formerly 7R Projekt 64 Sp. z o.o.) Poland 100% 0% 1/ CTP Property Delta Poland Sp. z o.o. (formerly 7R projekt 41 Sp. z o.o.) Poland 100% 0% 1/ CTP Property Epsilon Poland Sp. z o.o. (formerly 7R projekt 44 Sp. z o.o.) Poland 100% 0% 1/ CTP Property Eta Poland Sp. z o.o. (formerly 7R Projekt 56 Sp. z o.o.) Poland 100% 0% 1/ CTP Property Gamma Poland Sp. z o.o. (formerly 7R Projekt 30 Sp. z o.o.) Poland 100% 0% 1/ CTP Property Zeta Poland Sp. z o.o. (formerly 7R Projekt 24 Sp. z o.o.) Poland 100% 0% 1/ CTP Rho Poland Sp. z o.o. Poland 100% 100% CTP Sigma Poland Sp. z o.o. Poland 100% 100% CTP Tau Poland Sp. z o.o. (formerly Dafne 23 Sp. z o.o.) Poland 100% 0% 1/ CTP Theta Poland Sp. z o.o. w likwidacji Poland 100% 100% CTP Xi Poland Sp. z o.o. Poland 100% 100% CTP Zeta Poland Sp. z o.o. Poland 100% 100% CTPark Iłowa Sp. z o.o. Poland 100% 100% CTPark Opole Sp. z o.o. Poland 100% 100% CTPark Zabrze Sp. z o.o. Poland 100% 100% CTP CONTRACTORS SRL Romania 100% 100% 406 Financial Statements Subsidiaries Country 2022 2021 Note CTP INVEST BUCHAREST SRL Romania 100% 100% CTP SOLAR SRL Romania 100% 100% CTPARK ALPHA SRL Romania 100% 100% CTPARK ARAD NORTH SRL Romania 100% 100% CTPARK BETA SRL Romania 100% 100% CTPARK BRASOV SRL Romania 100% 100% CTPARK BRASOV WEST SRL Romania 100% 100% CTPARK BUCHAREST A1 SRL Romania 100% 100% CTPARK BUCHAREST II SRL Romania 100% 100% CTPARK BUCHAREST SOUTH II SRL Romania 100% 100% CTPARK BUCHAREST SRL Romania 100% 100% CTPARK BUCHAREST UPSILON SRL Romania 100% 100% CTPARK BUCHAREST WEST I SRL Romania 100% 100% CTPARK BUCHAREST WEST II SRL Romania 100% 100% CTPARK CRAIOVA EAST SRL Romania 100% 100% CTPARK DELTA SRL Romania 100% 100% CTPARK DEVA II SRL Romania 100% 100% CTPARK EPSILON SRL Romania 100% 100% CTPARK ETA SRL Romania 100% 100% CTPARK GAMMA SRL Romania 100% 100% CTPARK CHITILA SRL (formerly Eglast Investment SRL) Romania 100% 0% 1/ CTPARK IOTA SRL Romania 100% 100% CTPARK KAPPA SRL Romania 100% 100% CTPARK KM23 NORTH SRL Romania 100% 100% CTPARK LAMBDA SRL Romania 100% 100% CTPARK MANAGEMENT AFUMATI SRL Romania 100% 100% CTPARK MANAGEMENT TURDA SRL Romania 100% 100% CTPARK MIU SRL Romania 100% 100% CTPARK OMEGA SRL Romania 100% 100% CTPARK OMICRON SRL Romania 100% 100% CTPARK ORADEA NORTH SRL Romania 100% 100% CTPARK PHI SRL Romania 100% 100% CTPARK PITESTI SRL (formerly Dani Global Development SRL) Romania 100% 0% 1/ CTPARK PSI SRL Romania 100% 100% CTPARK RHO SRL Romania 100% 100% CTPARK SIBIU EAST SRL Romania 100% 100% CTPARK SIGMA SRL Romania 100% 100% CTPARK TAU SRL Romania 100% 100% CTPARK THETA SRL Romania 100% 100% CTPARK TIMISOARA EAST SRL Romania 100% 100% CTPARK ZETA SRL Romania 100% 100% FOREST PROPERTY INVEST SRL Romania 100% 100% Universal Management SRL Romania 100% 100% Banovac projekat d.o.o. Beograd-Novi Beograd Serbia 0% 0% 6/ CTP Alpha d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Beta d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Delta d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Energy d.o.o. Beograd-Novi Beograd (formerly CTP Iota d.o.o. Beograd-Novi Beograd) Serbia 100% 100% CTP Epsilon d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Gamma d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Invest d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Kappa d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Lambda d.o.o. Beograd Serbia 100% 100% CTP Omega d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Omicron d.o.o. Beograd- Novi Beograd Serbia 100% 100% CTP Phi d.o.o. Beograd- Novi Beograd Serbia 100% 100% CTP Property Alpha d.o.o. Beograd-Novi Beograd Serbia 100% 100% CTP Property Beta d.o.o. Beograd-Novi Beograd Serbia 100% 0% 2/ CTP Property Delta d.o.o. Beograd-Novi Beograd Serbia 100% 0% 2/ CTP Property Gamma d.o.o. Beograd-Novi Beograd Serbia 100% 0% 2/ CTP Rho d.o.o. Beograd- Novi Beograd Serbia 100% 100% CTP Sigma d.o.o. Beograd- Novi Beograd Serbia 100% 100% 407 Financial Statements Subsidiaries Country 2022 2021 Note CTP Tau d.o.o. Beograd- Novi Beograd Serbia 100% 100% CTP Zeta d.o.o. Beograd-Novi Beograd Serbia 100% 100% Levante Logistics d.o.o. Beograd Serbia 0% 0% 6/ CTP Alpha SK, spol. s r.o. Slovakia 100% 100% CTP Dunaj s.r.o. Slovakia 100% 100% CTP Invest SK, spol. s r.o. Slovakia 100% 100% CTP Slovakia, s.r.o. Slovakia 100% 100% CTP Solar SK, spol. s r.o. Slovakia 100% 100% CTPark Banská Bystrica, spol. s r.o. Slovakia 100% 100% CTPark Bratislava East, spol. s r.o. Slovakia 100% 100% CTPark Bratislava, spol. s r.o. Slovakia 100% 100% CTPark Čierny Les, spol. s r.o. Slovakia 100% 100% CTPark Hlohovec, spol. s r.o. Slovakia 100% 100% CTPark Košice, spol. s r. o. Slovakia 100% 100% CTPark Krásno nad Kysucou, spol. s r.o. Slovakia 100% 100% CTPark Land SK 1, spol. s r.o. Slovakia 100% 100% CTPark Land SK 2, spol. s r.o. Slovakia 100% 100% CTPark Námestovo, spol. s r.o. Slovakia 100% 100% CTPark Nitra, spol. s r. o. Slovakia 100% 100% CTPark Nove Mesto, spol. s.r.o. Slovakia 100% 100% CTPark Prešov North, spol. s r.o. (formerly CTP Gama s. r. o.) Slovakia 100% 100% CTPark Prešov s. r. o. Slovakia 100% 100% CTPark Trnava II, spol. s r.o. Slovakia 100% 100% CTPark Žilina Airport II, spol. s r.o. Slovakia 100% 100% CTPark Žilina Airport, spol. s r. o. Slovakia 100% 100% CTP Ljubljana d.o.o. Slovenia 100% 100% CTPark Alpha, d.o.o. Slovenia 100% 100% Global Guanaco, S.L.U. Spain 100% 100% 5/ CTP ALPHA GAYRİMENKUL VE İN AAT LİMİTED İRKETİ Turkey 100% 100% 5/ CTP BETA GAYRİMENKUL VE İN AAT LİMİTED İRKETİ Turkey 100% 100% 5/ CTP GAMMA GAYRİMENKUL VE İN AAT LİMİTED İRKETİ Turkey 100% 100% 5/ CTP Alpha Ltd United Kingdom 100% 100% 5/ CTP Beta Ltd United Kingdom 100% 100% 5/ CTP Invest Ltd United Kingdom 100% 100% 5/ 1/ Newly acquired/consolidated subsidiaries in 2022 2/ Newly established subsidiaries in 2022 3/ Disposed subsidiaries in 2022 4/ Newly established subsidiaries in 2022 not consolidated due to their limited size/activities 5/ Not consolidated subsidiaries 6) Newly acquired/established subsidiaries, subsequently merged with existing company in the Group during 2022 7) Subsidiaries merged with existing subsidiary in 2022 408 Financial Statements 34. RELATED PARTIES CTP has a related party relationship with its Directors, Executives and other companies of which Multivest B.V. is an equity holder. This entity is the ultimate parent of CTP. In 2022 and 2021, CTP had the following interest income and interest expense with related parties: In EUR thousand 2022 2021 Revenues Expenses Revenues Expenses CTP Holding B.V. 1,712 -- 1,707 -- CTP Germany IV GmbH 23 -- -- -- CTP Germany II GmbH -- -- 234 -- CTP Germany III GmbH -- -- 35 -- Multivest B.V. 601 -- 500 -383 CTP Solar, a.s. -- -- 9 -2 Other 5 -- 5 -- Total 2,341 -- 2,490 -385 As at 31 December 2022 and 2021, CTP had the following short-term receivables/payables from/to related parties: In EUR thousand 2022 2021 Receivables Payables Receivables Payables Remon Vos 322 -- -- -- CTP Invest Ltd. 7 -- -- -- Multivest B.V. 3 -- 515 -- CTP Holding B.V. -- -- 13 -- Total 332 -- 528 -- As at 31 December 2022 and 2021, CTP had the following long-term receivables/payables from/to related parties: In EUR thousand 2022 2021 Receivables Payables Receivables Payables CTP Holding B.V. 44,853 -3 46,776 -3 CTP Invest Ltd. 292 -- -- -- CTP Alpha Ltd. 60 -- -- -- CTP Germany III GmbH -- -- 348 -- CTP Germany IV GmbH -- -- -- -15 Other 40 -- -- -- Total 45,245 -3 47,124 -18 Other non-current non-trade receivables from related parties and non-trade liabilities to related parties are interest-bearing and bear an arm’s length interest in the range of 1.2% to 5.6%, depending on maturity, collateralisation, subordination, country risk and other specifics. Key management personnel compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any director. Average headcount per year of key management is 7 for 2022 (2021 – 5). 409 Financial Statements Key management personnel compensation comprises the following: In EUR thousand Personnel compensation 2022 2021 Short-term employee benefits 3,175 1,365 Total 3,175 1,365 The Company granted for 2022 and 2021 a conditional share award under LTIP to a Director (refer to Note 24). As at 31 December, Board Directors held shares in CTP N.V. as follows (directly or through other entities): Nr. of shares Price per 1 share Value in EUR thousand 2022 335,804,718 11.04 3,707,284 2021 332,911,079 18.70 6,225,437 In the Number of shares held by Board of Directors are included also shares held by CTP Holding B.V. 35. FINANCIAL INSTRUMENTS RISK MANAGEMENT OBJECTIVES AND POLICIES Exposure to various risks arises in the normal course of CTP’s business. These risks include credit risk, cap- ital risk, operational risk, market risk including foreign currency risk, interest rate and liquidity risk. Credit risk Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a financial loss to CTP. The Group has a credit policy in place and the exposure to credit risk is monitored on an on-going basis. Credit evaluations are performed for all customers requiring credit over a certain amount. CTP usually does not require collateral from its tenants. For most of the tenants, a parent company guar- antee, or a solvent tenant group company guarantee is in place. Investments can be made only in liquid securities and only with counterparties that have a credit rating equal to or better than CTP. Given their high credit ratings, the management does not expect any counter- party to fail to meet its obligations. As at the reporting date there were no significant concentrations of credit risk towards third parties. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the state- ment of financial position. CTP has bank accounts with prestigious banking institutions, where no risk is expected. CTP monitors regularly the financial position of the related parties and the related credit risk. Credit risk concentration: In EUR thousand 2022 2021 Amounts due from banks 661,972 893,902 Amounts due from financial derivatives 51,046 172 Amounts due from related parties 45,577 47,652 Amounts due from third parties 54,537 36,417 Amounts due from tax institutions 74,021 53,154 Total 887,153 1,031,297 410 Financial Statements Amounts due from banks include cash and cash equivalents, including restricted cash reported under non-current trade and other receivables, as at 31 December of the respective year. CTP discloses significant amounts of receivables to related parties. Receivables towards related parties are partly covered by the liabilities to related parties and assets held by the related parties. If the related par- ties breach the repayment of CTP receivables, and CTP is not able to set off receivables against liabilities, CTP will be exposed to significant credit risk. CTP does not expect breach of repayment. Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers. The carrying amounts of financial assets and contract assets represent the maximum credit exposure. Impairment losses on financial assets recognised in profit or loss were as follows: In EUR thousand 2022 2021 Impairment to trade receivables 5,580 4,137 Total 5,580 4,137 The movement in the allowance for impairment in respect of trade receivables during the year was as fol- lows: In EUR thousand 2022 2021 Balance as at 1 January 4,137 3,257 Net remeasurement of loss allowance 1,443 880 Balance at 31 December 5,580 4,137 The following table provides information about the exposure to credit risk and ECLs for financial assets as at 31 December 2022 and 2021 respectively: In EUR thousand for the year 2022 Stage Weighted average loss rate Gross amount Impairment loss allowance Net amount Cash and cash equivalents Low risk 0% 660,631 -- 660,631 Restricted cash Low risk 0% 1,341 -- 1,341 Receivables due from related parties Low risk 0% 45,577 -- 45,577 Trade receivables * Low to Fair risk 9% 60,117 -5,580 54,537 Total 767,666 -5,580 762,086 In EUR thousand for the year 2021 Stage Weighted average loss rate Gross amount Impairment loss allowance Net amount Cash and cash equivalents Low risk 0% 892,816 -- 892,816 Restricted cash Low risk 0% 1,086 -- 1,086 Receivables due from related parties Low risk 0% 47,652 -- 47,652 Trade receivables * Low to Fair risk 10% 40,554 -4,137 36,417 Total 982,108 -4,137 977,971 * Weighted average loss rate related to Trade receivables is calculated in Note 21. 411 Financial Statements Capital risk CTP’s policy is to maintain a strong capital base, to maintain creditor and market confidence and to sustain future development of the business. CTP manages its capital to ensure that entities in CTP will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. CTP’s overall strategy remains unchanged compared to 2021. CTP as property investor is mainly influenced by the fact that it leverages its project financing by using bank debts or bonds. There is no real seasonality impact on its financial position, but the volatility of financial markets might positively or negatively influence CTP’s financial position. The capital structure of CTP consists of a debt, which includes the borrowings disclosed in Note 27 and bonds disclosed in Note 28. The Group has secured bank loans that contain loan covenants. Under the agreements, the covenants are monitored on a regular basis to ensure compliance with these agreements. Net gearing ratio The gearing ratio calculated below compares debt to equity, where a debt is defined to be the sum of long- term and short-term liabilities, and equity includes all capital and reserves of the Group excluding non-con- trolling interests. In EUR thousand 2022 2021 Debt 7,244,149 5,579,815 Equity 5,284,517 4,106,830 Gearing ratio 137% 136% The net loan to value (value is the fair value of the properties) ratio of CTP properties (calculated as a share of interest-bearing loans from financial institutions and bonds issued adjusted for cash and cash equiva- lents available as at 31 December of the respective year on investment property, investment property under construction and plant and equipment) is approximately 45% at 31 December 2022 (2021 – 43%), which is seen as appropriate within CTP’s financial markets. As the properties are leased for a long period and CTP agrees long-term financing with its financial institu- tions. CTP expects to fulfill financial covenants in the future. Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect CTP’s income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising returns. Foreign currency risk Currency risk is managed mainly by making, when possible, investments in the same currency as the financ- ing sources used. The currency risk during the period of repayment of liabilities to third parties is usually offset by generating revenues denominated in the same underlying currency. CTP pays for construction of buildings in local currency and therefore has foreign currency risk during the construction period. As at 31 December 2022, CTP analysed the impact of the foreign exchange rate variances on its assets and liabilities and on its statement of comprehensive income. The impact was judged insignificant, as most financial instruments are denominated in EUR. Foreign currency exchange risk is limited and arises from recognised monetary assets and liabilities. Curren- cy risk disclosed is based on the functional currency (EUR) of the Group’s operating subsidiaries. 412 Financial Statements In EUR thousand 2022 CZK RON PLN HUF RSD BGN Total Trade and other receivables 38,419 42,774 43,490 21,184 19,145 17,273 182,285 Cash and cash equivalents 10,766 14,302 16,379 7,894 4,471 3,270 57,082 Loans provided to third parties -- -- -- -- 69 -- 69 Trade and other receivables from related parties 322 -- -- -- -- -- 322 Total financial assets 49,507 57,076 59,869 29,078 23,685 20,543 239,758 Trade and other payables -86,996 -44,723 -13,176 -13,968 -12,918 -8,543 -180,324 Total financial liabilities -86,996 -44,723 -13,176 -13,968 -12,918 -8,543 -180,324 Net position -37,489 12,353 46,693 15,110 10,767 12,000 59,434 FX hedge -- -- -- -- -- -- -- Net position after FX hedge -37,489 12,353 46,693 15,110 10,767 12,000 59,434 In EUR thousand 2021 CZK RON PLN HUF USD Total Trade and other receivables 33,981 24,934 12,901 13,455 33,900 119,171 Cash and cash equivalents 12,940 5,385 240 7,205 -- 25,770 Financial derivatives -- -- -- 129 -- 129 Total financial assets 46,921 30,319 13,141 20,789 33,900 145,070 Trade and other payables -76,842 -38,471 -1,928 -7,845 -- -125,086 Total financial liabilities -76,842 -38,471 -1,928 -7,845 -- -125,086 Net position -29,921 -8,152 11,213 12,944 33,900 19,984 FX hedge -- -- -- -- -- -- Net position after FX hedge -29,921 -8,152 11,213 12,944 33,900 19,984 Sensitivity analysis A strengthening/(weakening) of EUR, as indicated below, against other currencies at the reporting date would have increased/(decreased) the equity by the amounts shown in the following table. This analysis is based on foreign currency exchange rate variances that the Group considers reasonably likely at the end of the reporting period. The analysis assumes that all other variables remain constant, including interest rates. 2022 2021 Net position on financial assets and liabilities denominated in EUR 59,434 19,984 Effect on profit or loss and on equity of: CZK weakening by 5% -1,874 -1,496 CZK strengthening by 5% 1,874 1,496 RON weakening by 5% 618 -408 RON strengthening by 5% -618 408 PLN weakening by 5% 2,335 561 PLN strengthening by 5% -2,335 -561 HUF weakening by 5% 756 647 HUF strengthening by 5% -756 -647 RSD weakening by 5% 538 -- RSD strengthening by 5% -538 -- BGN weakening by 5% 600 -- BGN strengthening by 5% -600 -- USD weakening by 5% -- 1,695 USD strengthening by 5% -- -1,695 413 Financial Statements Interest rate risk The interest rate risk arises mainly from the floating interest rates applicable to debt financing. Bank loans usually have flexible interest rates based on EURIBOR rates for the reference period from one month to six months increased by a fixed margin. In 2022 and 2021, CTP entered transactions with financial institutions to hedge the interest rate risk (refer to Note 31). CTP mitigated the interest rate risk by holding interest rate swaps in 2022 and 2021. The interest rate profile of the Group’s interest-bearing financial instruments is as follows. Fixed-rate instruments 2022 2021 Receivables due from related parties 45,577 47,652 Loans owed to related parties -3 -18 Bonds issued -3,981,350 -3,381,692 Bank loans with fixed interest rate -1,631,946 -1,047,636 Bank loans covered by IRS -267,207 -61,303 Variable-rate instruments 2022 2021 Loans not covered by IRS -- -29,659 Sensitivity analysis A reasonably possible change of 0.25% in the interest rates at the reporting date would have increased (decreased) profit by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. 1.1.2022 - 31.12.2022 Interest rate sensitivity analysis of bank loans and borrowings In EUR thousand Bank loans Covered by interest rate swaps and fixed rate % hedge Loans with variable interest Effect on result in case of interest rate increase by 25bp Effect on result in case of interest rate decrease by 25bp Interest-bearing loans and borrowings 1,899,153 1,899,153 100% -- -- - Total 1,899,153 1,899,153 100% -- -- - 1.1.2021 - 31.12.2021 Interest rate sensitivity analysis of bank loans and borrowings In EUR thousand Bank loans Covered by interest rate swaps and fixed rate % hedge Loans with variable interest Effect on result in case of interest rate increase by 25bp Effect on result in case of interest rate decrease by 25bp Interest-bearing loans and borrowings 1,138,598 1,108,939 97.4% 29,659 -74 74 Total 1,138,598 1,108,939 97.4% 29,659 -74 74 414 Financial Statements Cash flow hedges At 31 December 2022, the Group held the following instruments to hedge exposures to changes in interest rates. 2022 1-6 months 6 - 12 months More than one year Interest rate swaps Net exposure (in EUR thousand) -- 750,000 -- Average fixed interest rate -- 2.322% -- At 31 December 2021, the Group did not hold any hedging instruments. The amounts at the reporting date relating to items designated as hedged items were as follows. 31 December 2022 Change in value used for calculating hedge ineffectiveness Cash flow hedge reserve Costs of hedging hedge reserve Balances remaining in the cash flow hedge reserve from hedging relationships for which hedge accounting is no longer applied Interest rate risk Variable-rate instruments -- 23,727 -- -- The amounts relating to items designated as hedging instruments and hedge ineffectiveness were as follows. 2022 Nominal amount Carrying amount Change in the value of the hedging instrument recognised in OCI Hedge ineffective- ness recognised in profit or loss Cost of hedging recognised in OCI Amount reclassified from hedging reserve to profit or loss Amount reclassified from costs of hedging reserve to profit or loss Assets Liabilities In EUR thousand Interest rate risk Interest rate swaps 1,100,000 44,088 -12,111 31,977 -- -- -- -- The following table provides the reconciliation by risk category of components of equity and analysis of OCI items, net of tax, resulting from cash flow hedge accounting. In EUR thousand 2022 Hedging reserve Cost of hedging reserve Cash flow hedges – interest rate risk Balance at 1 January 2022 -- -- Changes in fair value 31,977 -- Amount reclassified to profit or loss -- -- Tax on movements on reserves during the year -8,250 -- Balance at 31 December 2022 23,727 -- Hedged risk The Company’s risk management strategy is to hedge variability in interest payments due to changes in EURIBOR resulting from future issuance of series of consecutive bonds/loans expected to be issued in the period defined per individual hedging relationship. Credit margin on the bonds is not subject to this hedge. 415 Financial Statements Hedge effectiveness measurement Cumulative change in fair value of the hedged item will be measured by a so-called hypothetical derivative. This hypothetical derivative has a zero fair value at the hedge inception and represents hedged risk with- in the hedged item. In case of a perfect hedge when all parameters of the hedging instrument match the parameters of the hedged item and the hedging instrument’s fair value is zero at the hedge inception, the hypothetical derivative is a mirror to the hedging instrument. At the hedge inception, a hypothetical derivative is a forward starting swap with start date equal to the first expected issuance date and maturity date 5-30 years later. This hypothetical derivative will be adjusted at any time the hedged cash flows change. Potential sources of ineffectiveness - Difference in timing of hedged cash flows compared to timing of payments on the swaps’ floating leg. - The hedged interest expenses are no more highly probable. Liquidity risk Liquidity risk is the risk that CTP will not be able to meet its financial obligations as they fall due. With re- spect to the nature of its business and its assets, CTP is naturally exposed to a certain amount of liquidity risk. CTP manages liquidity risk by constantly monitoring forecast and actual cash flow, financing its in- vestment property portfolio by long-term financing, refinancing where appropriate, and using rent income to settle short-term liabilities. The table below shows liabilities at 31 December 2022 and 31 December 2021 by their remaining contractual maturity. The amounts are gross and undiscounted and include contractual interest payments and exclude the impact of netting agreements. 2022 Contractual cash flows In EUR thousand Until 3 months 3 - 12 Months Between 1 -5 years Over 5 years Total Interest-bearing loans and borrowings 18,075 54,174 339,132 1,897,205 2,308,586 Bonds issued 9,875 429,669 2,612,954 1,102,436 4,154,934 Loans to related parties -- -- 3 -- 3 Derivative financial liabilities 489 12,305 1,821 309 14,924 Lease liabilities 1,524 4,476 21,725 47,103 74,828 Trade and other payables incl. corporate income tax liability 324,325 9,915 58,638 -- 392,878 Total 354,288 510,539 3,034,273 3,047,053 6,946,153 2021 Contractual cash flows In EUR thousand Until 3 months 3 - 12 Months Between 1 -5 years Over 5 years Total Interest-bearing loans and borrowings 10,398 31,105 205,759 1,045,668 1,292,930 Bonds issued 3,750 32,500 1,994,359 1,547,978 3,578,587 Loans to related parties -- 1 19 -- 20 Derivative financial liabilities -- -- -- -- -- Lease liabilities 299 801 2,842 11,277 15,219 Trade and other payables incl. corporate income tax liability 245,513 7,911 52,721 -- 306,145 Total 259,960 72,318 2,255,700 2,604,923 5,192,901 Fair value 416 Financial Statements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values are obtained, as appropriate, from quoted market prices, discounted cash-flow projections and other valuation models. To estimate the fair value of individual classes of financial instruments, the following methods and assump- tions are used: Cash and cash equivalents, short-term investments The book value of cash and other short-term investments approximates their fair value, as these financial instruments have a relatively short maturity. Receivables and payables The book value of short-term receivables and payables approximates their fair value, as these financial instruments have a short maturity. Short-term loans The book value approximates their fair value, as these instruments have a floating interest rate and a short maturity. Long-term loans The fair value of long term loans as at 31 December 2022 is EUR 1,545,444 thousand (2021 – EUR 1,138,598 thousand). For details refer to Note 27. Bonds The fair value of bonds issued as at 31 December 2022 is EUR 3,093,340 thousand (2021 – EUR 3,385,163 thousand). For details refer to Note 28. Derivatives The fair value of derivatives is based on fair value quotes from counterparties which are compared to the results of the internal valuation model using market data from an independent recognized market data agency. Investment property and investment property under development Investment property and investment property under development are stated at fair value (refer to Note 17 and Note 18). Impact of war conflict in Ukraine CTP group was largely unaffected by the war in Ukraine in 2022, as it has no assets with direct exposure in Ukraine or in Russia and the Group’s expansion plans are for properties distant from these conflict areas. Nevertheless, the Group monitors development to mitigate any actual or potential undirect impacts of the conflict, such as geopolitical risk, inflation or energy prices. As part of appropriate risk management measures, and identifying and managing risk, the Directors have considered possible events and conditions for the purpose of identifying whether these events and condi- tions affect or may affect the future performance of the Group. In making this assessment, the following periods were considered: - the period up to 12 months after the end of the reporting period; - the period up to 12 months after the date of this report. The following risks were assessed: • Increased geopolitical risk as a result of Russia’s invasion of Ukraine, have forced occupiers to review where and how they manufacture the goods they produce, as well as the ability of their supply chains to maintain efficiency whilst withstanding disruption and supply side shocks. This enduring occupational demand from a wide range of occupiers, is coupled with the constrained supply of appropriate assets situated in sought after locations. With fewer vacant buildings that meet the needs of modern occupiers, the limited availability of land suitable for the development of urban assets in densely populated areas, together with the increasing resistance from municipalities and local communities to consent to large, ad hoc big box assets result in persistent barriers to entry in terms of developing new stock. 417 Financial Statements • The increase in energy prices in 2022 had minimal direct effect on CTP, as its operations are not energy intensive. Going forward, CTP has ambitious plans to produce solar energy using photovoltaic panels installed on the rooftops of the Group’s properties. They are much more strongly embedding ESG con- siderations into real estate decisions with regards to every aspect of the property, from building certifi- cation to work conditions and from CSR to governance. Following the war in Ukraine and the exponential energy price increases, energy security and efficiency is an increasing consideration with 76% of occupi- ers confirming that they are willing to pay rent premium to switch to green sources of energy in current locations. This in turn continues to support growing demand for modern, highly sustainable and energy efficient warehouse space, with green building certifications along with surrounding green space and employee amenities all well integrated into surrounding landscapes. • Signals of deterioration of credit risk and debtor payment behaviour CTP experienced no material delays in rental collection. Majority of receivables were paid within the con- tracted payment period + 2 weeks. tenant payment discipline kept its normal pattern, no sign of deterio- ration. • Disruptions in the Company’s core processes (such as construction/property management/offices/ work force) An indirect effect of the war in Ukraine was a temporary price increase of construction materials at the beginning of the year due to supply disruptions. CTP acts as general contractor, with in-house teams taking full responsibility and control over the construction process. This, in combination with the central procurement of supplies directly from multiple sources, often by-passing distributors, protected the tar- get YoC, also thanks to significant rental increases. Prices and delivery times decreased from their peaks but remained above 2021 levels throughout the year. CTP mitigates risk associated with high inflation via the use of indexation clauses in roughly 50% of its lease agreements. CTP expects the percentage of indexed lease agreements to increase over time, as new contracts have by default this double indexation clause included. Apart from initial minor delays in construction activities due to temporarily increased costs, construction resumed to normal pace quickly. When reviewing its full effect, no material disrup- tions were recorded. • Issues with providers of financing, loan covenants and credit facilities CTP Group continuously and successfully renegotiates matured loans and bonds. This provided another indicator of CTP’s sound financial position and trust by investors. CTP’s business profile is resilient, as it benefits from a diversified portfolio (in terms of geographical lo- cation and tenants) and does not depend on any single individual tenant or location in isolation. The inde- pendent valuers of the industrial portfolio did not include a material valuation uncertainty statement in the valuations as at 31 December 2022, which confirms that the appraiser has sufficient market evidence and the estimation uncertainty is comparable to the period before the war in Ukraine. As at the date of publication of these financial results, CTP has not experienced any material operational or financial impact on its business. The Group will continue to monitor the situation and revise its approach to minimise any negative effects as events unfold. Management is convinced that current uncertainties related to war in Ukraine do not impact the presented consolidated financial statements as at 31 December 2022. 418 Financial Statements 36. CONTINGENT LIABILITIES Contracted work As at 31 December 2022, the Group had contracted work with external suppliers relating to realising a con- struction project, which was not performed as at the year end, with a value of EUR 398,794 thousand (2021 – EUR 314,240 thousand). Guarantee provided Under Guarantee agreements concluded following the sale of a portfolio A, CTP Invest, spol. s r.o. and CTP CEE Properties, spol. s r.o. provided specific guarantees to the buyer of the entities being the companies established by Deka Immobilien Investment GmbH and WestInvest Gesellschaft für Investmentfonds GmbH. The specific guarantees include (i) Rental Guarantee (Vacant Premises, Rent Shortfall, Outstanding Tenant Incentives) and (ii) Tenant Guarantees (Default, Break Options, Non-Solicitation). The duration of the guar- antees is until 15 November 2028, unless they terminate earlier pursuant to the agreement. In 2022, CTP N.V. issued guarantee in favor of Coöperatieve Rabobank U.A. connected with financing of development activities of CTP ALC B.V. Guaranteed obligations represents: - any amount due by the CTP ALC B.V. under and in connection with the Finance Documents for a max- imum amount of the Commitment minus the Reserve Amount, - any interest, fees (including for the avoidance of doubt any default interest) and any amount paya- ble under any Hedging Agreement due by the CTP ALC B.V. under and in connection with the Facility Agreement. Facility agreement is agreed of EUR 175,000,000 between ABN AMRO Bank N.V., Coöperatieve Rabobank U.A. and CTP ALC B.V. In 2021, the Company had no off-balance sheet assets, nor liabilities to be presented in these financial statements. 419 Financial Statements 37. PLEDGES Shares, receivables, future receivables and other assets in some of the subsidiaries are pledged in favour of the financing institutions for securing the bank loans received by them (refer to Note 27). As at the date of these financial statements, the assets in the following companies are pledged: Company Pledge in favour of CTP ALC B.V. COOPERATIEVE RABOBANK U.A. (as agent) + others CTP Bohemia North, spol. s r.o. Komerční banka, a.s. (as agent) + others CTP Bohemia West, spol. s r.o. Komerční banka, a.s. (as agent) + others CTP Germany II GmbH Volksbank Jever eG CTP Moravia South, spol. s r.o. Komerční banka, a.s. (as agent) + others CTP Slovakia, s. r. o. Tatra banka, a.s. CTP Vysočina, spol. s r.o. Komerční banka, a.s. (as agent) + others CTPark Alpha Kft. Unicredit Bank Hungary Zrt. CTPark Arrabona Kft. Unicredit Bank Hungary Zrt. CTPark Bor, spol. s r.o. Aareal Bank AG CTPark Brno I, spol. s r.o. Komerční banka, a.s. (as agent) + others CTPark Brno II, spol. s r.o. Komerční banka, a.s. (as agent) + others CTPark Modřice, spol. s r.o. Aareal Bank AG CTPark Námestovo spol. s r.o. Tatra banka, a.s. CTPark Ostrava, spol. s r.o. Komerční banka, a.s. (as agent) + others CTPark Prague East, spol. s r.o. Komerční banka, a.s. (as agent) + others CTPark Seven Kft. Unicredit Bank Hungary Zrt. Deutsche Industrie Grundbesitz AG Austrian Anadi Bank AG Deutsche Industrie Grundbesitz AG Berliner Sparkasse Deutsche Industrie Grundbesitz AG Berliner Volksbank Deutsche Industrie Grundbesitz AG Hypo Vorarlberg Bank AG Deutsche Industrie Grundbesitz AG Kreissparkasse Ostalb Deutsche Industrie Grundbesitz AG Kreissparkasse St. Wendel Deutsche Industrie Grundbesitz AG Landessparkasse zu Oldenburg Deutsche Industrie Grundbesitz AG Sparkasse Düren Deutsche Industrie Grundbesitz AG Sparkasse Esslingen-Nürtingen Deutsche Industrie Grundbesitz AG Sparkasse Hildesheim Goslar Peine Deutsche Industrie Grundbesitz AG Sparkasse Ingolstadt Eichstätt Deutsche Industrie Grundbesitz AG Sparkasse Neubrandenburg-Demmin Deutsche Industrie Grundbesitz AG Sparkasse UnnaKamen Deutsche Industrie Grundbesitz AG Stadtsparkasse Düsseldorf Deutsche Industrie Grundbesitz AG VerbundVolksbank OWL eg Deutsche Industrie Grundbesitz AG Volksbank Main-Tauber Deutsche Industrie Grundbesitz AG Volksbank Mittweida eG Deutsche Industrie Grundbesitz AG Volksbank Thüringen Mitte eG Deutsche Industrie Grundbesitz AG VR Bank eG Region Aachen Deutsche Industrie Grundbesitz AG VR Bank eG Rosenheim Deutsche Industrie Grundbesitz AG VR Bank Mecklenburg 420 Financial Statements 38. SUBSEQUENT EVENTS In February, CTP N.V. increased agreed revolving credit facility to EUR 500,000 thousand. The Company does not expect a partial or full drawdown under this facility in 2023. In February, the Group received bank loans of EUR 95,000 thousand with due date in 2023 and variable in- terest rate 3 M EURIBOR + 1,95% margin. CTP is not aware of any other events that have occurred since the statement of financial position date that would have a material impact on these financial statements as at 31 December 2022. Amsterdam, 3 March 2023 Remon L. Vos Richard J. Wilkinson Barbara Knoflach Gerard van Kesteren Susanne Eickermann-Riepe Pavel Trenka 421 Company Financial Statements Company Financial Statements 422 Company income statement 423 Company balance sheet 424 Notes to the Company financial statements 425 1. General information 425 2. Principles for measurement of assets and liabilities and determination of result 425 3. Financial reporting period and comparative figures 426 4. Investments in Group companies 427 5. Shareholders’ equity 429 6. Bonds issued 432 7. Financial instruments 433 8. Off-balance sheet assets and liabilities 435 9. Trade and other payables 435 10. Cash and cash equivalents 435 11. Other income 435 12. Operational expenses 435 13. Net finance income/expense 436 14. Income taxes 437 15. Related parties 437 16. Personnel 443 17. Emoluments of Directors 444 18. Subsequent events 444 19. Subsidiaries 444 Financial Statements 422 Financial Statements Company income statement Over the year In EUR thousand Note 2022 2021 Other income 11 22,560 15,681 Administration costs 12 -34,808 -21,164 Net other income/expenses -12,248 -5,483 Net loss before financing costs -12,248 -5,483 Interest income 91,617 53,463 Interest expense -55,224 -32,198 Other financial expense -51,406 -20,016 Net finance income/expenses 13 -15,013 1,249 Result from participating interest 4 817,679 1,025,147 Result before income tax 790,418 1,020,913 Income tax expense 14 4,231 5,023 Result for the year 794,649 1,025,936 423 Financial Statements Company balance sheet As at 31 December In EUR thousand Note 31 December 2022 31 December 2021 Assets Property, plant & equipment 32 35 Intangible assets 28 30 Investments in group companies 4 5,011,518 3,424,436 Derivative financial instruments 7 -- -- Long-term receivables due from related parties 15 4,036,942 3,281,737 Deferred tax assets 14 9,279 5,049 Total non-current assets 9,057,799 6,711,287 Trade and other receivables 4,810 2,777 Derivative financial instruments 7 39,049 -- Trade and other receivables from related parties 15 17,899 28,059 Cash and cash equivalents 10 466,410 766,674 Total current assets 528,168 797,510 Total assets 9,585,967 7,508,797 Issued capital 5 71,052 64,063 Share premium reserve 5 3,024,521 2,661,979 Cash flow hedge reserve 5 19,988 -- Legal reserve on participating interest 5 3,166,406 2,488,095 Translation reserve 5 4,547 10,716 Retained earnings 5 -1,796,646 -2,143,959 Result for the year 5 794,649 1,025,936 Total Equity 5 5,284,517 4,106,830 Liabilities Long-term payable due from related parties 15 207,949 -- Long-term payables 2,035 3,615 Bonds issued 6 3,544,292 3,368,202 Derivative financial instruments 7 -- -- Deferred tax liabilities 14 6,950 -- Total non-current liabilities 3,761,226 3,371,817 Bonds issued 6 416,976 13,490 Derivative financial instruments 7 12,112 -- Trade and other payables to related parties 15 109,597 15,280 Trade and other payables 9 1,539 1,380 Total current liabilities 540,224 30,150 Total liabilities 4,301,450 3,401,967 Total equity and liabilities 9,585,967 7,508,797 424 Financial Statements Notes to the Company financial statements 1. GENERAL INFORMATION The Company financial statements are part of the 2022 financial statements of CTP N.V. (the Company). CTP N.V. (the Company) is a Dutch-based real estate developer, which develops and leases a portfolio of properties in Western, Central and Eastern Europe (CEE). 2. PRINCIPLES FOR MEASUREMENT OF ASSETS AND LIABILITIES AND DETERMINATION OF RESULT The Company financial statements are prepared in accordance with Title 9, Book 2 of the Dutch Civil Code. For setting the principles for the recognition and measurement of assets and liabilities and determination of results for the Company financial statements, the Company makes use of the option provided in section 2:362(8) of the Dutch Civil Code. This means that the principles for the recognition and measurement of assets and liabilities and determination of the result (hereinafter referred to as principles for recognition and measurement) of the Company financial statements are the same as those applied for the consolidated EU-IFRS financial statements. These principles also include the classification and presentation of financial instruments, being equity instruments or financial liabilities. In case no other principles are mentioned, refer to the accounting principles as described in the consolidated financial statements. For an appropriate inter- pretation of these financial statements, the separate financial statements should be read in conjunction with the consolidated financial statements. All amounts in the Company financial statements are presented in EUR thousand, unless stated otherwise. Participating interests in Group companies Participating interests in Group companies are accounted for in the Company financial statements accord- ing to the equity method. Refer to the basis of consolidation accounting policy in the consolidated financial statements. Result of participating interests The share in the result of participating interests consists of the share of the Company in the result of these participating interests. Results on transactions, where the transfer of assets and liabilities between the Company and its participating interests and mutually between participating interests themselves, are not incorporated insofar as they can be deemed to be unrealised. Impairment The Company applies an ECL (expected credit loss) model. Under this approach, all financial assets in the scope of the impairment model of the Company generally carry a loss allowance – even those that are newly originated or acquired. Under the general approach, the measurement basis of Company’s assets, other than investment property, investment property under development and deferred tax assets, depends on whether is a significant in- crease in credit risk since initial recognition. 425 Financial Statements The Company bases the impairment calculation on its historical, observed default rates, and considers ad- justments of forward-looking estimates that include the probability of a worsening economic environment within the next years. At each reporting date, the Company updates the observed default history and for- ward-looking estimates. Loans provided Loans are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Loans provided are subsequently measured at amortised cost using the effective interest method, less any impair- ment losses. The Company classifies as a current portion any part of long-term loans that is due within one year from the reporting date. Derivate financial instruments The Company designates certain derivatives as hedging instrument to hedge variability in cash flows asso- ciated with highly probable forecast transaction arising from changes interest rates. At inception of designated hedging relationships, the Company documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and hedging instruments, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in Other comprehensive income accumulated in the Cash flow hedge reserve. The effective portion of changes in the fair value of the derivative that is recognised in Other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present values basis, from inception of the hedge. Any ineffective portion of changes in the fair values of the derivative is recognised immediately in profit or loss. If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the Cash flow hedge reserve re- mains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is in- cluded in the non-financial item’s cost on its initial recognition or, for the cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedge expected future cash flows affects profit or loss. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumu- lated in the Cash flow hedge reserve are immediately reclassified to profit or loss. 3. FINANCIAL REPORTING PERIOD AND COMPARATIVE FIGURES CTP N.V. was incorporated on 21 October 2019 for an unlimited period. CTP N.V. has a 12 month financial year ended on the balance sheet date of 31 December 2022 and 31 Decem- ber 2021, respectively. 426 Financial Statements 4. INVESTMENTS IN GROUP COMPANIES As at 31 December, the Company has the following financial interests in Group companies: In EUR thousand Share in issued capital in % Amount 31 December 2022 31 December 2021 31 December 2022 31 December 2021 Participating interests 100.0% 100.0% 5,011,518 3,424,436 The company holds 100% ownership interests in the following subsidiaries: CTP Invest spol. s r.o., with statutory seat in the Czech Republic, CTP Property B.V. and CTP Germany B.V., with their statutory seats in the Netherlands. Acquisition of Deutsche Industrie REIT-AG (subsequently renamed to Deutsche Industrie Grundbesitz AG) On 3 February 2022, the Group has received 98.17% shareholder support for its voluntary public takeover and delisting offer (the “Offer”) for and contemplated merger with Deutsche Industrie REIT-AG (currently CTP Germany B.V.) (“DIR”). The total number of DIR shares tendered in the Offer was in aggregate 25,951,833 DIR Shares, correspond- ing to approximately 80.90% of the outstanding share capital in DIR. Closing and settlement of the Offer, in which CTP offered either a cash consideration of EUR 17.12 or a share consideration of 1.25 shares in the share capital of CTP (the “CTP Shares”) for each tendered DIR Share (the “Share Consideration”), has taken place on 3 February 2022. During the acceptance period, a total of 25,937,060 tendered DIR Shares opted for the Share Considera- tion. Accordingly, a total of 32,421,325 CTP Shares were issued. Acquisition of DIR is not considered to be a business combination, but acquisition of assets in exchange for shares of CTP N.V and therefore, this transaction is in scope of IFRS 2. Assets acquired and corresponding increase in equity are measured at fair value. On 23 August 2022, CTP N.V. and Deutsche Industrie Grundbesitz AG entered transaction of cross-border merger. Assets and liabilities of Deutsche Industrie Grundbesitz AG were transferred to CTP N.V. under universal succession of title and Deutsche Industrie Grundbesitz AG ceased to exist without liquidation. In accordance with agreed exchange ratio, CTP allotted for each issued and outstanding DIR share, 1.25 shares in CTP’s share capital to each holder of shares, resulting in the allotment of 7,659,590 new shares. Shares of DIR in ownership of non-controlling interest, were transferred into shares of CTP N.V. On 1 November 2022, all assets and liabilities of former Deutsche Industrie Grundbesitz AG were transferred through a hive down by way of legal partial division from CTP N.V. to a new subsidiary CTP Germany B.V. Transaction of the merger and the demerger have been intended to perform simultaneously from initial start of the acquisition of Deutsche Industrie Grundbesitz AG. In accordance with legal requirements of Dutch Law on the processing of a (legal) merger and demerger and Company’s intentions we prepared these standalone financial statements under the assumption that merger and hive down of DIR is processed in one moment on 23 August 2022. 427 Financial Statements The movements of the investment in Group companies are as follows: In EUR thousand Participating interests in Group companies 2022 Participating interests in Group companies 2021 Balance at 1 January 3,424,436 2,262,021 Acquisitions 572,871 -- Increase in investment - capital contribution 203,105 133,483 Share in result of participating interest - OCI -6,573 3,785 Share in result of participating interest 817,679 1,025,147 Balance at 31 December 5,011,518 3,424,436 The most significant impact of merger and hive down of DIR on the Company’s financial statements is the following: Investment property In EUR thousand Investment property Balance at 1 January 2022 -- Impact of merger of DIR 892,055 Impact of demerger of DIR -892,055 Balance at 31 December 2022 -- Interest bearing loans and borrowings Movement in Interest bearing loans and borrowings In EUR thousand Bank loan Balance at 1 January 2022 -- Impact of merger of DIR 188,744 Impact of demerger of DIR -188,744 Balance at 31 December 2022 -- 428 Financial Statements 5. SHAREHOLDERS’ EQUITY In EUR thousand Issued capital Share premi- um reserve Cash flow hedge reserve Legal reserve for participat- ing interest Translation reserve Retained earnings Net profit for the period Total equity Balance at 1 January 2022 64,063 2,661,979 -- 2,488,095 10,716 -2,143,959 1,025,936 4,106,830 Issue of shares / acquisition 5,187 391,030 -- -- -- -- -- 396,217 Issue of shares / merger 1,226 96,593 -- -- -- -- -- 97,819 Dividends 580 -124,540 -- -- -- -- -- -123,960 Increase of other legal reserve -- -- -- 678,311 -- -679,125 -- -814 Cash-flow hedge -- -- 19,988 -- -- -- -- 19,988 Other -- -- -- -- -- 502 -- 502 Treasury shares -4 -541 -- -- -- -- -- -545 Translation reserve -- -- -- -- -6,169 -- -- -6,169 Appropriation of profit -- -- -- -- -- 1,025,936 -1,025,936 -- Net result for the year -- -- -- -- -- -- 794,649 794,649 Balance at 31 December 2022 71,052 3,024,521 19,988 3,166,406 4,547 -1,796,646 794,649 5,284,517 In EUR thousand Issued capital Share premium reserve Legal re- serve for participating interest Translation reserve Retained earnings Net profit for the period Total equity Balance as at 1 January 2021 53,760 1,858,460 1,586,323 14,458 -1,676,396 426,597 2,263,202 Increase of share capital 9,763 809,572 -- -- -- -- 819,335 Dividends 540 -6,053 -- -- -- -- -5,513 Increase of other legal reserve -- -- 901,772 -- -894,218 -- 7,554 Other -- -- -- -- 85 -- 85 Increase in share without change in control -- -- -- -- -27 -- -27 Translation reserve -- -- -- -3,742 -- -- -3,742 Appropriation of profit -- -- -- -- 426,597 -426,597 -- Net result for the year -- -- -- -- -- 1,025,936 1,025,936 Balance as at 31 December 2021 64,063 2,661,979 2,488,095 10,716 -2,143,959 1,025,936 4,106,830 Issued capital Issued capital and Share premium As at 31 December 2022, the issued capital comprised of the following: Type of shares No. of shares Nominal value of share Issued capital in EUR Ordinary shares 444,100,549 EUR 0.16 71,056,088 429 Financial Statements Movements in Issued capital and Share premium Nr. of shares Issued capital In thousands of EUR Share premium In thousands of EUR Balance at 1 January 2022 400,392,810 64,063 2,661,979 3 February 2022 Share issuance connected with DIR acquisition 32,421,325 5,187 391,030 9 June 2022 Dividends paid in form of shares 763,581 122 -68,064 23 August 2022 Share issuance connected with merger of DIR and CTP N.V. 7,659,590 1,226 96,593 5 September 2022 Dividends paid in form of shares 2,863,243 458 -56,476 Balance at 31 December 2022 444,100,549 71,056 3,025,062 Treasury shares -27,976 -4 -541 Total balance at 31 December 2022 444,072,573 71,052 3,024,521 On 3 February 2022, the Group acquired Deutsche Industrie REIT-AG (currently CTP Germany B.V. ). CTP offered either a cash consideration of EUR 17.12 or a share consideration of 1.25 shares in the share capital of CTP (the “CTP Shares”) for each tendered DIR Share (the “Share Consideration”). The transaction re- sulted in issuance of 32,421,325 new shares of CTP N.V. For details refer to Note 4. Following its Annual General Meeting on 26 April 2022, CTP N.V. announced a final 2021 dividend of EUR 0.18 per ordinary share. Shareholders were given the choice to receive the final dividend either in cash or in shares, with the stock fraction for the dividend based on the volume-weighted average price (VWAP) of the Company’s shares on Euronext Amsterdam of the last three trading days of the election period, ending on 18 May 2022. The number of dividend rights that entitles to one new ordinary share was set at 72.5. Shareholders representing approximately 88% of the total number of outstanding ordinary shares chose to receive the dividend in cash, while shareholders representing 12% of the total number of outstanding ordi- nary shares opted for payment in stock. Based on the conversion ratio and after delivery of the ordinary shares due to the conversion of dividend rights, the total number of issued and outstanding ordinary shares increased by 763,581 to a total of 433,577,716 ordinary shares. The payment date for the dividend payment in cash and delivery of the ordi- nary shares was 9 June 2022. On 23 August 2022 CTP N.V. completed the merger with Deutsche Industrie Grundbesitz AG (acquired on 3 February 2022). As a result of the merger, CTP N.V. acquired shares from former shareholders of Deutsche Industrie Grundbesitz AG. CTP offered a share consideration of 1.25 shares in the share capital of CTP (the “CTP Shares”) for each tendered DIR Share. The transaction resulted in issuance of 7,659,590 new shares of CTP N.V. On 10 August 2022, an interim dividend of EUR 0.22 per share for the first half of 2022 was announced. Shareholders were given the choice to receive the final dividend either in cash or in shares, with the stock fraction for the dividend based on the volume-weighted average price (VWAP) of the Company’s shares on Euronext Amsterdam of the last three trading days of the election period, ending on 29 August 2022. The number of dividend rights that entitles to one new ordinary share was set at 62.5. Shareholders representing approximately 59% of the total number of outstanding ordinary shares chose to receive the interim dividend in cash, while shareholders representing approximately 41% of the total number of outstanding ordinary shares opted for payment in stock. Based on the conversion ratio and after delivery of the ordinary shares due to the conversion of dividend rights, the total number of issued and outstanding ordinary shares increased by 2,863,243 to a total of 444,100,549 ordinary shares. The payment date for the dividend payment in cash and delivery of the ordi- nary shares was 5 September 2022. 430 Financial Statements As at 31 December 2021, the Issued capital and Share premium comprised of the following: Type of shares No. of shares Nominal value of share Issued capital in EUR Ordinary shares 400,392,810 EUR 0.16 64,062,850 Movements in Issued capital and Share premium Nr. of shares Issued capital In thousands of EUR Share premium In thousands of EUR Balance at 1 January 2021 336,000,000 53,760 1,858,460 29 March 2021 Share issuance connected with IPO 61,017,000 9,763 809,572 9 June 2021 Dividends paid in form of shares 3,375,810 540 -6,053 Balance at 31 December 2021 400,392,810 64,063 2,661,979 As at 29 March 2021, an additional 61,017,000 shares were issued, with nominal value of EUR 0.16 per share. On 29 March 2021, the Company issued its new shares on Amsterdam’s stock exchange. On 17 August 2021, CTP N.V. announced a H1 2021 interim dividend of EUR 0.17 per share. Shareholders were given the choice to receive the interim dividend either in cash or shares. The number of dividend rights for one new ordinary CTP share was set at 108. The conversion ratio was based on the volume-weighted average price of the CTP share during the period from 26 August up to and including 30 August 2021. Shareholders representing 92% of the total number of outstanding ordinary shares chose to receive the dividend in stock, while shareholders representing 8% of the total number of outstanding ordinary shares opted for payment in cash. Based on the conversion ratio and after delivery of the ordinary shares due to the conversion of dividend rights, the total number of outstanding ordinary shares increased by 3,375,810 to a total of 400,392,810 shares. The payment date for the dividend payment in cash and delivery of the ordinary shares was 22 Sep- tember 2021. Legal reserves for participating interests Other legal reserves for participating interests of EUR 3,166,406 thousand (2021 – EUR 2,488,095 thou- sand) existed at 31 December 2022, accounted for according to the equity accounting method. The reserves represented the difference between the participating interests’ retained profit and direct changes in equity, as determined on the basis of the Company’s accounting policies, and the share thereof that the Company may distribute. The shares the Company may distribute take into account any profits that may not be distributable by participating interests of Dutch limited companies based on the distribution tests to be performed by the management of those companies. The legal reserves are determined on an individual basis. Net result for the year The net result for the year consists of share as a result of participating interest, administration cost and net finance expense. At the 2023 Annual General Meeting, the following appropriation of the 2022 result will be proposed: EUR 794,649 thousand addition to retained earnings. 431 Financial Statements 6. BONDS ISSUED Current period Bond Issuance Date ISIN Nominal value of total bonds issued (In EUR) Nominal value of each bond Currency Type Fix interest rate per annum ("p.a") Maturity date Fair value of bonds (In TEUR) 1 Jul 2022 XS2390546849 49,500,000 100,000 EUR senior unsecured 1.500% 27 Sept 2031 29,991 20 Jan 2022 XS2434791690 700,000,000 100,000 EUR senior unsecured 0.875% 20 Jan 2026 571,942 27 Sept 2021 XS2390530330 500,000,000 100,000 EUR senior unsecured 0.625% 27 Sept 2026 382,910 27 Sept 2021 XS2390546849 500,000,000 100,000 EUR senior unsecured 1.500% 27 Sept 2031 302,935 21 June 2021 XS2356029541 500,000,000 100,000 EUR senior unsecured 0.500% 21 June 2025 419,930 21 June 2021 XS2356030556 500,000,000 100,000 EUR senior unsecured 1.250% 21 June 2029 330,200 18 Feb 2021 XS2303052695 500,000,000 100,000 EUR senior unsecured 0.750% 18 Feb 2027 374,595 27 Nov 2020 XS2264194205 400,000,000 100,000 EUR senior unsecured 0.625% 27 Nov 2023 379,784 1 Oct 2020 XS2238342484 331,813,000 100,000 EUR senior unsecured 2.125% 1 Oct 2025 286,813 Total 3,981,313,000 3,079,100 On 20 January 2022, the Group has issued new bond with the emission ISIN XS2434791690 in the nominal value of EUR 700,000 thousand. On 24 January 2022, the Group has repaid bonds from the emission with ISIN XS2238342484 in the nom- inal value of EUR 168,189 thousand. On 1 July 2022, the Company CTP N.V. issued EUR 49.5 million unsecured bonds with a nominal value of EUR 100,000 each under emission from 27 September 2021 with ISIN number XS2390546849. The bonds are issued as subordinated, with fix interest rate 1.5% per annum (“p.a.”), and bonds are due on 27 September 2031. There are no covenants related to the bonds. Prior period Bond Issuance Date ISIN Nominal value of total bonds issued (In EUR) Nominal value of each bond Currency Type Fix interest rate per annum ("p.a") Maturity date Fair value of bonds (In TEUR) 27 Sept 2021 XS2390530330 500,000,000 100,000 EUR senior unsecured 0.625% 27 Sept 2026 494,545 27 Sept 2021 XS2390546849 500,000,000 100,000 EUR senior unsecured 1.500% 27 Sept 2031 485,270 21 June 2021 XS2356029541 500,000,000 100,000 EUR senior unsecured 0.500% 21 June 2025 498,545 21 June 2021 XS2356030556 500,000,000 100,000 EUR senior unsecured 1.250% 21 June 2029 490,725 18 Feb 2021 XS2303052695 500,000,000 100,000 EUR senior unsecured 0.750% 18 Feb 2027 486,940 27 Nov 2020 XS2264194205 400,000,000 100,000 EUR senior unsecured 0.625% 27 Nov 2023 404,296 1 Oct 2020 XS2238342484 500,002,000 100,000 EUR senior unsecured 2.125% 1 Oct 2025 524,842 Total 3,400,002,000 3,385,163 On 29 September 2021, the Group repaid bonds from the first issuance in October 2020 in the nominal value of EUR 149,998 thousand. 432 Financial Statements In EUR thousand 31 December 2022 31 December 2021 Non-current and current liabilities Bonds issued - nominal value 4,299,500 3,550,000 Repayment of bonds - nominal value -318,187 -149,998 Nominal value after payment 3,981,313 3,400,002 Impact of merger of DIR 19,851 -- Impact of demerger of DIR -19,851 -- Interest expense 18,586 13,490 Discount applied -42,766 -27,878 Amortisation of applied discount 10,012 3,796 Bond issuance costs -8,870 -9,200 Amortisation of bond issuance costs 2,993 1,482 Balance at 31 December 3,961,268 3,381,692 In 2021, the Company replaced a revolving credit facility from the year 2020, with a new revolving credit facility of EUR 400,000 thousand for a three-year period. The Company does not expect a drawdown either partial or for the full amount under this facility in 2023. 7. FINANCIAL INSTRUMENTS Derivative financial instruments In EUR thousand 2022 2021 Fair value of derivatives - non-current asset -- -- Fair value of derivatives - current asset 39,049 -- Fair value of derivatives - assets 39,049 -- Fair value of derivatives - non-current liability -- -- Fair value of derivatives - current liability -12,112 -- Fair value of derivatives - liabilities -12,112 -- Total 26,937 -- The Group has designated certain derivatives as hedging instruments in cash flow hedge relationships. These derivatives are recognised initially at fair value and reported subsequently at fair value in the consol- idated statement of financial position. To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow hedges are recognised in other comprehensive income and included within the cash flow hedge reserve in equity. Derivate financial instruments Due within maturity date Mandatory break Receiving leg Paying leg Currency Nominal value (In thousand EUR) Fair Value (In thousand EUR) Interest rate swaps – cash flow hedge 2028 –2053 2023 6M Euribor From 2.1265% to 2.4385% EUR 550,000 39,049 Total assets from derivates 39,049 Derivate financial instruments Due within maturity date Mandatory break Receiving leg Paying leg Currency Nominal value (In thousand EUR) Fair Value (In thousand EUR) Interest rate swaps – cash flow hedge 2030 – 2053 2023 6M Euribor from 2.609% to 2.652% EUR 375,000 -12,112 Total liabilities from derivates -12,112 433 Financial Statements General The Group has exposure to the following risks from its use of financial instruments: Credit risk Credit risk refers to the risk that the counterparty will default on its contractual obligations, resulting in a financial loss to CTP. Credit risk concentration: In EUR thousand 2022 2021 Amounts due from banks 466,410 766,674 Amounts due from related parties 4,054,841 3,309,796 Amounts due from third parties 4,810 2,777 Total 4,526,061 4,079,247 Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. With respect to the nature of its business and its assets, the Company is naturally exposed to a certain amount of liquidity risk. 2022 Contractual cash flows In EUR thousand Until 3 months 3 - 12 Months Between 1 -5 years Over 5 years Total Bonds issued 9,875 429,669 2,612,954 1,102,436 4,154,934 Derivative financial instruments -- 12,430 -- -- 12,430 Trade and other payables incl. corporate income tax liability 111,136 -- 251,574 -- 362,710 Total 121,011 442,099 2,864,528 1,102,436 4,530,074 2021 Contractual cash flows In EUR thousand Until 3 months 3 - 12 Months Between 1 -5 years Over 5 years Total Bonds issued 3,750 32,500 1,994,359 1,547,978 3,578,587 Trade and other payables incl. corporate income tax liability 16,660 -- 3,615 -- 20,275 Total 20,410 32,500 1,994,674 1,547,978 3,598,862 Market risk Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect CTP’s income or the value of its holding of financial instruments. Market risk management aims to manage and control market risk exposure within acceptable parameters, while optimising the return. CTP N.V. is not subject to interest rate risk, nor foreign currency risks, as all loans provided are with fixed inter- est rate and in functional currency of the Group – EUR. In the Notes to the consolidated financial statements information is included about the Group’s exposure to the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. 434 Financial Statements 8. OFF-BALANCE SHEET ASSETS AND LIABILITIES In 2022, CTP N.V. issued guarantee in favor of Coöperatieve Rabobank U.A. connected with financing of de- velopment activities of CTP ALC B.V. Guaranteed obligations represents: - any amount due by the CTP ALC B.V. under and in connection with the Finance Documents for a maximum amount of the Commitment minus the Reserve Amount, - any interest, fees (including for the avoidance of doubt any default interest) and any amount payable under any Hedging Agreement due by the CTP ALC B.V. under and in connection with the Facility Agreement. Facility agreement is agreed of EUR 175,000,000 between ABN AMRO Bank N.V., Coöperatieve Rabobank U.A. and CTP ALC B.V. In 2021, the Company had no off-balance sheet assets, nor liabilities to be presented in these financial statements. 9. TRADE AND OTHER PAYABLES Trade and other payables consist of arrangement fees, accruals for legal, tax and audit services. 10. CASH AND CASH EQUIVALENTS Cash and cash equivalents of EUR 446,410 thousand (2021 – EUR 766,674 thousand) consist of petty cash, cash at bank balances, including cash acquired from bond issuance, and cash on deposit account. 11. OTHER INCOME Other income of EUR 22,560 thousand represents the management fee and license fee invoiced to the com- panies in the Group. 12. OPERATIONAL EXPENSES In EUR thousand 31 December 2022 31 December 2021 Management fee 18,094 13,743 Donations 10,000 -- Consultancy fees 2,151 1,571 Wages 2,684 5,266 Other 1,879 584 Total 34,808 21,164 435 Financial Statements For details related to audit fees, refer to the audit fee table below. Only audit services were provided to the Group. The Company donated EUR 10,000 thousand to the UN refugee agency UNHCR (United Nations High Commissioner for Refugees) to provide humanitarian support for the more than one million people, who have fled the war in Ukraine into neighboring countries. Audit fees The following fees were charged by KPMG Accountants N.V. to the Company, its subsidiaries and other con- solidated companies, as referred to in Section 2:382a of (1) and (2) of the Dutch Civil Code: In EUR thousand for 2022 KPMG Accountants N.V. Other KPMG Network Total KPMG Audit fees 644 964 1,608 Other services 123 -- 123 Total 767 964 1,731 In EUR thousand for 2021 KPMG Accountants N.V. Other KPMG Network Total KPMG Audit fees 198 778 976 IPO costs 413 -- 413 Other services 94 -- 94 Total 705 778 1,483 13. NET FINANCE INCOME/EXPENSE In EUR thousand 31 December 2022 31 December 2021 Interest income from related parties 91,617 53,463 Finance income 91,617 53,463 Bond interest expenses -39,075 -26,120 Bond issuance costs amortization -8,337 -3,954 Interest expense to related parties -5,575 -- Bank interest expense -2,237 -2,124 Other financial expenses -51,406 -20,016 Finance costs -106,630 -52,214 Net finance income/expense -15,013 1,249 Other financial expenses consist of bank fees of EUR 1,946 thousand (2021 – EUR 1,732 thousand), financing fees of EUR 13,578 thousand (2021 – EUR 14,777 thousand) and exchange rate differences of EUR 35,881 thousand (2021 – EUR 3,507 thousand). 436 Financial Statements 14. INCOME TAXES Income tax In 2022, the Company recognized deferred tax asset of EUR 9,279 thousand (2021 – EUR 5,049 thousand) and deferred tax liabilities of EUR 6,950 thousand arisen from cash flow hedge and recognized in Equity (2021 – EUR 0 thousand). In EUR thousand 2022 2021 Deferred tax Deferred tax expense/income 4,231 5,049 Total 4,231 5,049 Withholding tax In 2022, the Company paid withholding dividend tax of EUR 2,832 thousand paid in respect of final dividend 2021 and interim dividend 2022. Impact if reflected in Share premium, please refer to Note 5. 15. RELATED PARTIES As of 31 December 2022 and 31 December 2021, the Group had the following interest income and interest expense with related parties: In EUR thousand 2022 2021 Revenues Expenses Revenues Expenses CTP Industrial Property CZ, spol. s r.o. 8,660 -- 6,880 -- CTP Invest, spol. s r.o. 6,390 -- 2,577 -- CTPark Eighteen Kft 3,818 -- 212 -- Spielberk Business Park, spol. s r.o. (formerly Spielberk Office Center, spol. s.r.o.) 2,645 -- 2,875 -- CTPARK ETA SRL 2,598 -- 1,850 -- CTP Germany B.V. 2,385 -- -- -- CTPARK GAMMA SRL 2,280 -- 1,329 -- CTPARK ZETA SRL 2,192 -- 1,149 -- CTPARK BUCHAREST WEST I SRL 2,063 -- 2,215 -- CTPARK BUCHAREST SRL 1,870 -- 1,669 -- CTPARK MIU SRL 1,738 -- 240 -- CTPark Bucharest A1 SRL 1,734 -- 1,483 -- CTPark Twelve Kft. 1,732 -- 545 -- CTP Vlněna Business Park, spol. s r.o. (formerly CTP Property XVII, spol. s.r.o.) 1,709 -- 1,147 -- CTPark Eleven Kft. 1,645 -- 694 -- CTP Holding B.V. 1,614 -- 1,588 -- CTPARK PHI SRL 1,464 -- 1,156 -- CTPARK PSI SRL 1,428 -- 568 -- CTPark Bratislava, spol. s r.o. 1,393 -- 1,385 -- CTPARK BETA SRL 1,277 -- 1,215 -- CTP CONTRACTORS SRL 1,222 -- 724 -- CTP Beta B.V. 1,083 -- 510 -- CTPARK THETA SRL 1,048 -- 347 -- CTP ALC B.V. 1,024 -- 103 -- CTP Invest Poland Sp. z o.o. 1,012 -- 157 -- CTPARK ALPHA SRL 984 -- 729 -- CTPark Košice, spol. s r. o. 936 -- 808 -- Spielberk Business Park II, spol. s r.o. (formerly CTP INVEST V, spol. s.r.o.) 926 -- 1,094 -- 437 Financial Statements In EUR thousand 2022 2021 Revenues Expenses Revenues Expenses CTPark Nine Kft. 908 -- 803 -- CTPark Brno Líšeň East, spol. s r.o. 897 -- 213 -- CTPARK BUCHAREST WEST II SRL (formerly H.E.E. (MERCURY) PRO-PRIETATI SRL) 854 -- 875 -- CTPark Fourteen Kft 822 -- 519 -- CTPARK TAU SRL 811 -- 514 -- CTP Property B.V. (formerly CTP Invest B.V.) 795 -- 675 -- CTPARK OMEGA SRL 793 -- 438 -- CTP Alpha SK, spol. s r.o. 760 -- 582 -- CTPark Nineteen Kft 715 -- 38 -- CTPARK BUCHAREST UPSILON SRL 694 -- 563 -- CTPark Žilina Airport, spol. s r. o. 656 -- 717 -- CTPark Sixteen Kft 622 -- 118 -- CTPark Delta Kft. 607 -- 467 -- CTPark Eta EOOD 591 -- 219 -- CTP Zeta d.o.o. Beograd-Novi Beograd 583 -- 575 -- CTPark Biatorbágy Kft. 581 -- 735 -- CTP LAMBDA POLAND SP Z O.O. 545 -- -- -- CTP IQ Ostrava, spol. s r.o. 536 -- -- -- CTPark Opole Sp. Z o.o. (formerly CTP Alpha Poland Sp. Z.o.o. ) 535 -- -- -- CTP Alpha B.V. 508 -- -- -- CTPARK IOTA SRL 506 -- -- -- CTPark Delta EOOD 506 -- -- -- CTP Slovakia, s.r.o. 485 -- -- -- CTPARK KAPPA SRL 473 -- -- -- CTPark Prague North III, spol. s r.o. (formerly DUNSTAR a.s.) 471 -- 543 -- CTP Bohemia North, spol. s r.o -- -1,186 -- -- CTP Vysočina, spol. s r.o. -- -1,157 -- -- CTPark Ostrava, spol. s r.o. -- -730 -- -- CTPark Brno I, spol. s r.o. -- -525 -- -- CTPark Brno II, spol. s r.o. -- -455 -- -- CTP Moravia South, spol. s r.o. -- -455 -- -- CTPark Prague East, spol. s r.o. -- -413 -- -- CTPark Námestovo -- -371 -- -- CTP Bohemia West, spol. s r.o. -- -275 -- -- CTP Mu BV. -- -8 -- -- Other 16,493 -- 9,621 -- Total 91,617 -5,575 53,463 -- The revenues comprise interest on loan and borrowings provided to the subsidiaries. 438 Financial Statements As at 31 December 2022 and 31 December 2021, the Group had the following long-term receivables due from related parties: In EUR thousand 2022 2021 CTP Property B.V. (formerly CTP Invest B.V.) 299,087 34,502 CTP Invest, spol. s r.o. 158,903 144,285 CTPark Eighteen Kft. 136,121 133,266 CTP Industrial Property CZ, spol. s r.o. 94,004 824,173 CTP Invest Poland sp. Z o.o. 93,236 25,304 CTP Germany B.V. 87,890 -- CTPARK ETA SRL 87,662 89,685 CTP Vlněna Business Park, spol. s r.o. (formerly CTP Property XVII, spol. s r.o.) 83,539 57,480 Spielberk Business Park, spol. s.r.o. (formerly Spielberk Office Center, spol. s.r.o.) 79,653 81,847 CTPark Bratislava, spol. s r.o. 74,421 64,488 CTP Pilsen Region, spol. s r.o. 67,685 -- CTPARK BUCHAREST WEST I SRL 67,124 70,251 CTPark Miu SRL 64,554 10,826 CTPARK THETA SRL 64,140 43,881 CTP Moravia North, spol. s r.o. 59,986 -- CTPark Eleven Kft. 56,801 57,180 CTPARK GAMMA SRL 55,382 56,042 CTPARK BUCHAREST SRL 55,143 58,224 CTPark Twelve Kft. 55,069 44,600 CTPARK ZETA SRL 54,872 49,460 CTP CONTRACTORS SRL 52,101 49,099 CTP Beta B.V. 50,788 54,560 CTPark Košice, spol. s r. o. 49,195 45,730 CTP Ponávka Business Park, spol. s r.o. 49,067 -- CTPark Bucharest A1 SRL 46,775 46,721 CTPARK PHI SRL 42,404 43,671 CTPark Mladá Boleslav, spol. s r.o. 42,181 -- CTP Property Beta Poland Sp. z o.o. 41,016 -- CTP Holding B.V. 40,807 42,318 CTP LAMBDA POLAND SP Z O.O. 39,578 23,848 CTPARK PSI SRL 38,496 31,142 CTPARK ALPHA SRL 38,443 42,289 CTP Alpha SK, spol. s r.o. 38,116 35,005 CTPark Sixteen Kft. 37,050 13,718 CTP Alpha B.V. 36,410 18,222 CTPark Brno Líšeň East, spol. s r.o. (formerly CTP Invest XX, spol. s r.o.) 36,228 44,841 CTPark Hranice, spol. s r.o. 35,937 -- CTPARK BETA SRL 33,230 35,033 CTP Alpha GmbH 32,708 8,474 CTPark Nine Kft. 30,383 35,855 CTPark Iłowa Sp. z o.o. 28,679 101 CTPark Eta EOOD 28,638 31,219 CTPark Fourteen Kft 28,513 31,184 Olympian East Bucharest SA 28,211 -- CTP Property Alpha d.o.o. Beograd-Novi Beograd 27,774 202 CTPARK IOTA SRL 27,318 82 CTPark Opole Sp. Z o.o. (formerly CTP Alpha Poland Sp. Z.o.o. ) 27,291 26,597 CTPark Nineteen Kft. 27,179 19,036 Spielberk Business Park II, spol. s r.o. (formerly CTP INVEST V, spol. s r.o.) 27,018 28,791 CTP Tau Poland sp. z o.o. 26,968 -- CTPARK KM23 NORTH SRL 25,871 12,502 CTPark Craiova East SRL 24,929 -- CTPark Gamma EOOD 24,250 7,617 CTP Gamma Poland Sp. z o.o. 23,497 9,057 CTPark Seventeen kft. 23,287 7,067 CTPark Biatorbágy Kft. 22,914 22,808 CTP IQ Ostrava, spol. s r.o. 22,751 24,319 CTP Property Delta Poland Sp. z o.o. 22,652 -- NETWORK WIDE LOGISTICS SRL 22,213 -- CTPark Prague Airport, spol. s r.o. 22,065 -- 439 Financial Statements In EUR thousand 2022 2021 CTPARK BUCHAREST WEST II SRL (formerly H.E.E. (MERCURY) PROPRIETATI SRL) 21,848 21,034 CTPark Delta Kft. 21,333 23,178 CTP Zeta doo Beograd-Novi Beograd 21,141 19,228 CTPARK TAU SRL 21,022 19,111 CTPark Twenty Four Kft. 21,004 -- CTPark Prešov s.r.o. (formerly ABL Slovakia s.r.o.) 20,951 8,039 CTPark Čierny Les, spol. s r.o. (formerly CTPark Žilina, spol. s.r.o.) 20,569 8,406 CTPARK OMEGA SRL 20,480 19,987 CTP Sigma doo Beograd-Novi Beograd 19,716 3,959 CTPARK DELTA SRL 18,929 12,339 CTPARK KAPPA SRL 18,555 14,062 CTP Slovakia, s.r.o. 18,495 17,564 CTPARK BUCHAREST UPSILON SRL 18,006 19,072 CTPark Bremen B.V. 17,280 -- CTPark Žilina Airport, spol. s r. o. 17,273 31,017 CTPark Delta EOOD 17,009 10,643 CTP Rho doo Beograd-Novi Beograd 16,875 380 CTP Management Hungary Kft. 15,853 4,786 CTPARK ZABRZE SPÓŁKA Z OGRANICZONA ODPOWIEDZIALNOSCIA 15,800 5,590 CTP Delta Poland Sp. z o.o. 15,675 15,779 CTPark Brno III, spol. s r.o. (formerly Bor Logistics, spol. s.r.o.) 15,262 15,023 CTPark Thirteen Kft 15,078 18,115 CTP Property Beta d.o.o. Beograd-Novi Beograd 14,424 -- CTPark Beta EOOD 13,605 8,517 CTPark Timisoara East SRL 13,103 -- CTP Omega Poland Sp. z o.o. 12,910 -- CTP Zeta GmbH 12,636 9,109 CTP Property Alpha Poland Sp. z o.o. 12,549 -- CTPARK SIGMA SRL 12,547 12,323 CTP Bohemia South, spol. s r.o. 11,892 -- CTP Delta doo Beograd-Novi Beograd 11,777 11,678 CTPark Hlohovec, spol. s r.o. (formerly CTPark Nitra, s.r.o.) 11,635 12,743 CTP XXI, spol. s r.o. (formerly CTP Invest XXVIII, spol. s.r.o.) 11,484 18,445 CTPark Prague North III, spol. s r.o. (formerly CTPark Prague North III, a.s.) 11,137 8,495 CTPark Eight Kft. 11,016 2,703 CTPark Brno Líšeň West, spol. s r.o. 10,949 -- CTPARK RHO SRL 10,374 6,837 CTP Eta Poland Sp. z o.o. 10,349 1,792 Olympian Brasov Logistic SRL 10,156 -- CTP Invest doo Beograd-Novi Beograd 10,033 9,743 CTP Mu Poland Sp. z o.o. 9,874 7,069 Olympian Brasov SA 9,469 -- CTPark Gamma Kft. 9,455 11,598 CTPark Plzeň, spol. s r.o. (formerly CTP Invest XIX, spol. s.r.o.) 8,871 8,392 CTP Property Epsilon Poland sp. z o.o. 8,721 -- CTPark Arrabona Kft. 8,640 9,566 CTPARK EPSILON SRL 8,484 4,996 CTP Borská Pole, spol. s r.o. 8,460 -- CTP Hotel Prague, spol. s r.o. 8,320 8,128 CTPark Beta Kft. 8,035 10,649 CTP Property Gamma Poland sp. z o.o. 7,867 -- CTP Delta GmbH 7,443 7,189 CTP Gamma doo Beograd-Novi Beograd 7,356 7,793 CTP Chi Poland sp. z o.o. 7,339 -- CTP Property Czech, spol. s r.o 7,256 6,083 CTPark Sofia EOOD 6,988 -- CTPARK Zeta EOOD 6,690 6,573 CTPARK LAMBDA SRL 6,639 7,234 CTP Invest SK, spol. s r.o. 6,638 1,956 CTPark Prague West, spol. s r.o. 6,520 -- CTP VIII, spol. s r.o. (formerly CTP Property XXXII, spol. s.r.o.) 6,309 11,751 CTP Omicron doo Beograd-Novi Beograd 6,039 10 440 Financial Statements In EUR thousand 2022 2021 CTP Zeta Poland 5,897 -- CTPark Trnava II, spol. s r.o. (formerly CTP Land SK, spol. s.r.o.) 5,818 3,844 CTPark Aš II, spol. s r.o. (formerly CTP XIX, spol. s r.o.) 5,754 4,437 CTPark Ostrava Poruba, spol. s r.o. 5,704 -- CTP Phi doo Beograd-Novi Beograd 5,625 3,915 CTP Gamma B.V. 5,568 5,558 CTP Hotel Pilsen, spol. s r.o. (formerly 2P , s.r.o.) 5,345 5,938 CTPark Nove Mesto, spol. s.r.o. 4,940 5,647 CTPark Iota EOOD 4,772 -- CTPark Krásno nad Kysucou, spol. s r.o. (formerly CTP Beta SK, spol. s r.o.) 4,465 4,971 CTP Invest B.V. 4,293 4,888 CTP Invest Immobilien GmbH 4,160 -- CTPark Alpha Kft. 4,100 8,359 CTPark Seven Kft. 4,055 9,884 CTPARK BUCHAREST II SRL (formerly CENTURA PROPERTY HOLDINGS S.A.) 3,980 4,305 CTP Solar SRL 3,783 -- CTP Alpha doo Beograd-Novi Beograd 3,699 3,885 CTPark Oradea North SRL 3,647 -- CTPark Ten Kft. 3,410 4,887 CTP Forest, spol. s r.o. (formerly CTP Invest XXVI, spol. s.r.o.) 3,331 3,812 CTPark Sofia Ring Road EOOD 3,207 -- CTP Beta doo Beograd-Novi Beograd 2,755 3,067 CTPark Theta EOOD 2,612 -- CTP XVII, spol. s r.o. (formerly CTP Invest XXII, spol. s.r.o.) 2,420 2,162 CTPark Banská Bystrica, spol. s r.o. 2,094 2,350 CTPark Brno Líšeň II, spol. s r.o. (formerly CTP Invest XXIV, spol. s r.o.) 2,093 2,244 CTP XXIII, spol. s r.o. 1,821 -- CTPark Fifteen Kft 1,690 1,918 CTP Gamma GmbH 1,600 20,819 CTP Omega doo Beograd-Novi Beograd 1,502 -- CTP Invest EOOD 1,404 -- CTP Beta Poland Sp. z o.o. 1,383 1,341 CTP XXII, spol. s r.o. 1,366 1,355 Border Logistics SRL 1,143 -- CTPark Nitra, spol. s r. o. 1,094 -- CTPARK DEVA II SRL (formerly DEVA LOGISTIC CENTER S.A.) 938 2,065 CTP ALC B.V. -- 24,793 CTPark Epsilon EOOD -- 2,213 Valkenburg s.r.o. -- 1,924 Other 5,128 5,869 Total 4,036,942 3,281,737 Interest rate on long-term receivables due from related parties is 1.25% - 8% p.a., depending on purpose and country-specific conditions. 441 Financial Statements Movement schedule of the loans provided to related parties: In EUR thousand 2022 2021 Balance of the loans provided as at 1 January 3,281,737 737,922 Loans granted to the related parties 2,320,660 4,149,928 Repayment of loans -1,456,102 -1,471,669 Settlement of loans with the Increase in Equity of subsidiaries -136,873 -143,411 Impact of merger DIR AG 4,114 -- Impact of demerger of DIR AG -4,114 -- Interest accrued 93,883 53,463 Interest received -65,858 -41,955 Other -505 -2,541 Balance at 31 December 4,036,942 3,281,737 As at 31 December 2022 and 31 December 2021, the Group had the following long-term payables due to re- lated parties: In EUR thousand 2022 2021 CTPark Ostrava, spol. s r.o. -37,006 -- CTPark Námestovo -35,511 -- CTPark Brno I, spol. s r.o. -30,223 -- CTPark Brno II, spol. s r.o. -28,723 -- CTP Moravia South, spol. s r.o. -26,570 -- CTPark Prague East, spol. s r.o. -24,167 -- CTP Vysočina, spol. s r.o. -18,804 -- CTP Bohemia West, spol. s r.o. -5,987 -- CTP Mu BV. -958 -- Total -207,949 -- Interest rate on long-term payables due to related parties is 2% - 5.2% p.a., depending on purpose and country-specific conditions. In EUR thousand Total Balance of the loans provided as at 1 January 2022 -- Loans granted to the related parties -205,498 Repayment of loans 290 Interest accrued -2,745 Interest received 4 Balance at 31 December 2022 -207,949 442 Financial Statements As at 31 December 2022 and 31 December 2021, the Group had the following trade and other receivables due from related parties, and trade and other payables to related parties: In EUR thousand 2022 2021 Receivables Payables Receivables Payables CTP INVEST BUCHAREST SRL 7,818 -- 3,033 -- CTP Management Hungary Kft. 2,125 -- 1,030 -- CTP Invest doo Beograd-Novi Beograd 1,449 -- 522 -- CTP Invest Poland Sp. z o.o. 828 -- 392 -- CTP Invest EOOD (formerly CTPark Alpha, EOOD) 332 -- 488 -- CTP Invest Immobilien GmbH 134 -- 213 -- CTP Invest B.V. 232 -48 374 -1 CTPark Brno II, spol. s r.o. 22 -184 -- -- CTPark Prague East, spol. s r.o. 7 -206 -- -- CTPark Brno I, spol. s r.o. 28 -239 -- -- CTP Bohemia West, spol. s r.o. 4 -303 -- -- CTP Solar I, a. s. -- -472 -- -- CTP Industrial Property CZ, spol. s r.o. -- -529 -- -- Amsterdam Logistic Cityhub B.V. -- -843 -- -- CTP Bohemia North, spol. s r.o 19 -1,183 -- -- CTP Vysočina, spol. s r.o. 19 -1,375 -- -- CTP Invest, spol. s r.o. 3,861 -10,097 21,491 -14,981 CTP Moravia South, spol. s r.o. 17 -26,519 -- -- CTPark Ostrava, spol. s r.o. 35 -67,599 -- -- Other 969 -- 516 -298 Total 17,899 -109,597 28,059 -15,280 16. PERSONNEL The Company employed 12 employees in 2022 (2021 – 9 employees). 17. EMOLUMENTS OF DIRECTORS In 2022, the emoluments, as defined in Section 2:383(1) of the Dutch Civil Code, charged in the financial year to the Company, its subsidiaries and consolidated other companies amounted to EUR 2,959 thousand (2021 – EUR 1,365 thousand), out of which EUR 2,490 thousand (2021 – EUR 1,025 thousand) relates to emolument of Executive Directors and EUR 469 thousand (2021 – EUR 340 thousand) to Non-Executive Directors. Share based payment In 2021 and 2022, the Company granted a conditional share award under the LTIP to a Director. This award has a vesting period of three years, subject to continued services up to vesting, and depends on the Compa- ny’s total shareholder return (TSR). Vesting of 50% of the number of awards granted is subject to an ab- solute TSR condition and 50% is subject to a relative TSR condition. The number of awards that will vest is between 0% and 150% of the target number of awards granted. The vesting percentage is allocated linearly between the threshold level and the maximum level. 443 Financial Statements The fair value of the awards is expensed on a straight-line basis over the three-year vesting period. In 2022, the total share-based payment expense recognized for the equity-settled awards amounted to EUR 176 thousand (2021 – EUR 85 thousand). 18. SUBSEQUENT EVENTS For subsequent events, see Note 38 of the consolidated financial statements. 19. SUBSIDIARIES The Company has 100% ownership interest in CTP Property B.V., CTP Invest, spol. s r.o. and CTP Germany B.V., which owns subsidiaries with operational activities in the Czech Republic, Hungary, Romania, Poland, Slovakia, Austria, Germany, Serbia, the Netherlands and Bulgaria. For the structure of the Group as at 31 December 2022, refer to Appendix 1 – Group Structure. Amsterdam, 3 March 2023 The Board of Directors Remon L. Vos Richard J. Wilkinson Barbara Knoflach Gerard van Kesteren Susanne Eickermann-Riepe Pavel Trenka 444 Other information Provisions in the Articles of Association governing the appropriation of profit: According to Article 22 of the Company’s Articles of Association, the profit is at the disposal of the General Meeting of Shareholders, which can allocate the profit wholly or partly to the general or specific reserve funds. The Board must approve the appropriation of profit before the decision of the General Meeting takes effect. The Company can only make payments to shareholders and other parties entitled to the distributable profit if the amount the shareholders’ equity is greater than the paid- up and called-up part of the capital plus the legally required reserves. Other information 445 Financial Statements Independent Auditor's Report Financial Statements 446 Independent Auditor's Report KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number 33263683, is a member firm of the global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Independent auditor's report To: the General Meeting of Shareholders of CTP N.V. Report on the audit of the financial statements 2022 included in the annual report Our opinion In our opinion: • the accompanying consolidated financial statements give a true and fair view of the financial position of CTP N.V. as at 31 December 2022 and of its result and its cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code. • the accompanying company financial statements give a true and fair view of the financial position of CTP N.V. as at 31 December 2022 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code. What we have audited We have audited the financial statements 2022 of CTP N.V. (‘the Company’) based in Amsterdam. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise: 1 the consolidated statement of financial position as at 31 December 2022; 2 the following consolidated statements over the year 1 January 2022 up to and including 31 December 2022: the statements of profit and loss and comprehensive income, changes in equity and cash flows; and 3 the notes comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise: 1 the company income statement for the year ended 31 December 2022; 2 the company balance sheet as 31 December 2022; and 3 the notes comprising a summary of the accounting policies and other explanatory information. KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number 33263683, is a member firm of the global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Independent auditor's report To: the General Meeting of Shareholders of CTP N.V. Report on the audit of the financial statements 2022 included in the annual report Our opinion In our opinion: • the accompanying consolidated financial statements give a true and fair view of the financial position of CTP N.V. as at 31 December 2022 and of its result and its cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code. • the accompanying company financial statements give a true and fair view of the financial position of CTP N.V. as at 31 December 2022 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code. What we have audited We have audited the financial statements 2022 of CTP N.V. (‘the Company’) based in Amsterdam. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise: 1 the consolidated statement of financial position as at 31 December 2022; 2 the following consolidated statements over the year 1 January 2022 up to and including 31 December 2022: the statements of profit and loss and comprehensive income, changes in equity and cash flows; and 3 the notes comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise: 1 the company income statement for the year ended 31 December 2022; 2 the company balance sheet as 31 December 2022; and 3 the notes comprising a summary of the accounting policies and other explanatory information. 447 Financial Statements 2 Basis for our opinion We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report. We are independent of CTP N.V. in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics). We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The information in respect of going concern, fraud and non-compliance with laws and regulations, climate related risks and the key audit matters were addressed in this context, and we do not provide a separate opinion or conclusion on these matters. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Information in support of our opinion Summary Materiality • Materiality of EUR 90 million • 0.72% of Total Assets Group audit • Audit coverage of 98% of investment property and investment property under development • Audit coverage of 96% of total assets • Audit coverage of 71% of rental income Fraud/Noclar, Going concern and climate related risks • Fraud & Non-compliance with laws and regulations (Noclar) related risks: the presumed fraud risk on management override of controls and a fraud risk related to possible conflict of interest in real estate transactions. • Going concern related risks: no significant going concern risks identified. • Climate related risks: the response of the Board of Directors to possible future effects of climate change and their anticipated outcomes have been disclosed in chapter 4.3.1 of the annual report. We have considered the impact of climate-related risks on the financial 448 Independent Auditor's Report 3 statements and described our approach and observations in the section ‘Audit response to climate-related risks’. Key audit matters • Valuation of investment property and investment property under development • Real estate transactions • Application of hedge accounting Opinion Unqualified Materiality Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR 90 million (2021: EUR 82 million). The materiality is determined with reference to total assets 0.72% (2021: 0.85%). We consider total assets as the most appropriate benchmark because of the nature of the business, the level of activities and asset value is likely the primary focus of the users of the financial statements evaluating CTP N.V.’s financial performance. Materiality significantly changed compared to last year due to increase of total assets. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons. We agreed with the Board of Directors that misstatements identified during our audit in excess of EUR 4.5 million would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds. Scope of the group audit CTP N.V. is at the head of a group of components. The financial information of this group is included in the financial statements of CTP N.V. Our group audit scoping was mainly based on the accounts investment property and investment property under development. We determined the significant components based on the relative size and risk profile of the accounts investment property and investment property under development where we assigned a full scope audit (audit of the complete reporting package). Additionally, we included certain components in the scope of our group audit where specified audit procedures are performed on the valuation of investment property and investment property under development in order to obtain sufficient audit coverage. Because we are ultimately responsible for the audit opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for operating companies and issued audit instructions to local auditors. As group auditor we were involved in the full-scope audits performed by local auditors. 449 Financial Statements 4 Our involvement included, amongst others the following: • issuing audit instructions to component auditors prescribing the scope of the audit procedures to be performed, our risk assessment, materiality to be applied and reporting requirements; • participation in planning discussions with component auditors; • attending meetings with the local auditors to discuss the results of local audits and discussions on the valuation of investment property with independent appraisers engaged by the company; • follow up on reported audit findings; • review of the component audit files and verification that the audit work had been carried out in accordance with our instructions. For the residual population not in scope we performed analytical procedures in order to corroborate that our scoping remained appropriate throughout the audit. By performing the procedures mentioned above at group components, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion about the financial statements. The audit coverage as stated in the section summary can be further specified as follows: Investment property and investment property under development 62% 36% Audit of the complete reporting package Specified audit procedures Total Assets 63% 33% Audit of the complete reporting package Specified audit procedures 450 Independent Auditor's Report 5 Rental income 71% Audit of the complete reporting package Audit response to the risk of fraud and non-compliance with laws and regulations In the chapter Risk management, internal controls and compliance of the annual report, the Board of Directors describes its procedures in respect of the risk of fraud and non-compliance with laws and regulations. As part of our audit, we have gained insights into the Company and its business environment, and assessed the design and implementation of the Company’s risk management in relation to fraud and non-compliance. Our procedures included, among other things, assessing the Company’s code of conduct, whistleblowing policy, KYC & AML screening policy, anti-bribery policy, anti-fraud policy, incidents register and its procedures to investigate indications of possible fraud and non-compliance. Furthermore, we performed relevant inquiries with the Board of Directors and other relevant functions, such as Internal Audit and Compliance. As part of our audit procedures, we: • assessed other positions held by the Board of Directors and other employees and paid special attention to procedures and compliance in view of possible conflicts of interest; • evaluated correspondence with regulators (e.g. the AFM) as well as legal confirmation letters. In addition, we performed procedures to obtain an understanding of the legal and regulatory frameworks that are applicable to the Company and identified the following areas as those most likely to have a material effect on the financial statements: • anti-money laundering laws and regulations; and • anti-bribery and corruption laws and regulations. We evaluated the fraud and non-compliance risk factors to consider whether those factors indicate a risk of material misstatement in the financial statements. Further, we assessed the presumed fraud risk on revenue recognition as irrelevant, because the Company’s main form of revenue relates to rental income which involves limited judgement as the revenue related to rental income is contractually agreed and with various individual tenants. 451 Financial Statements 6 Based on the above and on the auditing standards, we identified the following two fraud risks that are relevant to our audit, including the relevant presumed risk laid down in the auditing standards, and responded as follows: • Management override of controls (a presumed risk) Risk: - Management is in a unique position to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively Responses: - We evaluated the design and the implementation of internal controls that mitigate fraud and non-compliance risks, such as processes related to journal entries and estimates. - We performed a data analysis of high-risk journal entries (adjustments to initially recorded changes in fair value of investment property and investment property under development above a threshold) which were subject of the examination and evaluated the key estimates valuation of investment property and investment property under development and judgments for bias by the Board of Directors including retrospective reviews of prior years’ estimates. Where we identified instances of unexpected journal entries or other risks through our data analytics, we performed additional audit procedures to address each identified risk, including testing of transactions back to source information. - We incorporated elements of unpredictability in our audit, including performing procedures on an early-stage development project and review the tender process related to selection of a construction company (e.g., multiple quotes obtained, documentation around selection of the party) and selection of advisory fees paid in the period just before a construction permit is obtained and to perform procedures on whether the services are in accordance with the fees paid. • Fraud risk related to conflict of interest in the real estate transactions Risk: - A fraud risk is identified in relation to corruption in the context of the use of agents and/or business partners as part of the acquisition of investment property and investment property under development and related potential conflicts of interest. • Responses: We refer to our key audit matter. Our evaluation of procedures performed related to fraud did not result in an additional key audit matter. We communicated our risk assessment, audit responses and results to the Board of Directors. 452 Independent Auditor's Report 7 Our audit procedures did not reveal actual indications or reasonable suspicion of fraud and non- compliance that are considered material for our audit. Audit response to going concern As explained in note 2 to the financial statements, the Board of Directors has performed its going concern assessment and has not identified any going concern risks. To assess the Board of Directors’ assessment, we have performed, inter alia, the following procedures: - We considered whether the assessment of the going concern risks performed by the Board of Directors included all relevant information of which we are aware of as a result of our audit; - We considered whether the developments in share prices indicate a significant going concern risk; - We analysed the financial position of the Group as at year end and compared it to the previous financial year in terms of indicators that could identify significant going concern risks. The outcome of our risk assessment procedures did not give reason to perform additional audit procedures on management’s going concern assessment. Audit response to climate-related risks The Company has set out its ambitions relating to climate change in chapter 4.3.1. “Striving to be Climate Positive” of the Annual Report 2022. The Company’s ambition is in line with the Paris Agreement to become carbon neutral by 2050 in all scopes as defined by the Greenhouse Gas Protocol Corporate Standard through the reduction of the Group’s GHG emissions and water consumption, the production of renewable energy and support for biodiversity. The Board of Directors has assessed, against the background of the Company’s business and operations, how climate-related risks and the company’s own ambitions could have a significant impact on its business or could impose the need to adapt its strategy and operations. The Board of Directors has considered the impact of physical risks extensively and transition risks high level on the financial statements under the requirements of EU-IFRS. The Board of Directors particularly considered the implications on the valuation of investment property, as described in chapter 4.3.1. of the Annual Report 2022. The Board of Directors prepared the financial statements, including considering whether the implications from climate-related risks and ambitions have been appropriately accounted for and disclosed. As part of our audit we performed a risk assessment of the impact of climate-related risk on the financial statements and our audit approach. We performed the following procedures: • Understanding the Company’s processes: we held inquiries with the Board of Directors, the Group Head of ESG and other relevant employees for Environmental, Social, and Governance who are responsible for climate risk assessment within the Company. The purpose is to understand the client’s risk assessment and the climate roadmap to become carbon neutral in all scopes by 2050. The Company has performed a physical climate risk assessment including scenario analysis, but a climate roadmap is still in progress. Further, 453 Financial Statements 8 we inquired how this ambition was translated into investment decisions and the related potential impact of climate-related risks and ambitions on the company’s annual report and financial statements. • We evaluated climate-risk related fraud risk factors such as pressure from remuneration and expectations from external stakeholders to meet ESG/climate risk related targets. We concluded that the factors do not result in an event or condition that would indicate a risk of material misstatement in the financial statements. • We have inquired with the external appraiser on how climate-risk factors are considered in the external appraisal process and inspected the external valuation reports on potential climate related impact on fair value of investment property. • We involved KPMG climate change subject matter experts, to assist in understanding how climate-related risks and ambitions may affect the entity and its accounting in the current year’s financial statements. Based on the procedures performed above we found that climate related risks have no material impact on the 2022 financial statements under the requirements of EU-IFRS and no material impact on our key audit matters. Furthermore, we have read the ‘Other information’ with respect to climate-related risks as included in the annual report and considered the material consistency with the financial statements, our knowledge obtained through the audit, in particular as described above and our knowledge obtained otherwise. Our key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Board of Directors. The key audit matters are not a comprehensive reflection of all matters discussed. Compared to last year the key audit matter with respect to application of hedge accounting has been added. Valuation of investment property and investment property under development Description Investment property and investment property under development (hereafter ‘investment property’) amounts to EUR 11.3 billion and represent 90% of the Group’s total assets as at 31 December 2022. Investment property is valued at fair value; therefore, the Group has to make estimates and use assumptions to determine those fair values. The fair value is, as explained in notes 17 and 18 to the financial statements, determined by the Board of Directors based on 454 Independent Auditor's Report 9 appraisal reports by an independent appraiser (98%) or on the acquisition price of investment property as a proxy for the fair value when acquired close to the reporting date (2%). Because the valuation of investment property and investment properties under development is complex and highly dependent on estimates and significant assumptions (such as estimated rental value and yield/discount rate, and specifically for investment property under development the development margin) and the availability of comparable transactions, we consider the valuation of investment property as a key audit matter in our audit. Our response We have evaluated the competence, capabilities and objectivity of the external appraiser. We have evaluated the appropriateness of the information and assumptions used in the valuations. This includes the estimates made by the Board of Directors supported by the external appraisal firms. We focused on the significant assumptions, such as: estimated rental value, yield/discount rate and specifically for investment property under development the development margin. We analysed the results of the valuation process and discussed the abovementioned factors that determine the valuations with the Board of Directors and the external appraiser. For that purpose we used the expertise of our own internal property valuation specialists. These specialists have supported us with our assessment of the (significant) assumptions, methods and developments in the valuations. Finally, we verified whether the disclosures in notes 17 and 18 to the financial statements in respect of investment property are in conformity with EU-IFRS. Our observation Overall, we assess that the assumptions and methodologies used, and related estimates resulted in a valuation of investment property which is deemed reasonable and concur with the related disclosures in the financial statements Real estate transactions Description As part of the normal course of business real estate transactions take place. Acquisitions of investment property and investment property under development are significant transactions which are subject to error due to the nature of these transactions. Transactions often involve a variable consideration (earn outs, rental guarantees, etc.) and are structured as asset deals or share deals (depending on tax considerations). The risk of error has been specifically allocated to the acquisition of Deutsche Industrie Grundbesitz AG (hereafter ‘CTP Germany’) in February 2022 due to the significance and complexity of the transaction due to the acquisition in exchange for shares of CTP N.V. 455 Financial Statements 10 The acquisition is recorded as acquisition of assets and liabilities as the Board of Directors concluded that CTP Germany does not represent a business as defined by IFRS 3. Therefore IFRS 2 Share-based payments is applied as disclosed in note 6 of the financial statements. In addition to the risk of error, a fraud risk is identified in relation to corruption in the context of the use of agents and/or business partners as part of the acquisition of investment property and investment property under development and related potential conflicts of interest. The fraud risk has been allocated to specific transactions/properties (i.e. entities within the group that are involved in acquisition of real estate) mainly to screen whether fraud risk factors in transactions are present. Our response We performed audit procedures in respect of the acquisition of CTP Germany to ensure the transaction is accurately accounted for. These procedures included obtaining an understanding of the transaction agreement and testing of the accounting entries to record the initial purchase. Further we verified whether the disclosure in note 6 to the financial statements is in conformity with EU-IFRS. In respect of fraud risks related to transactions with investment property and investment property under development, we obtained an understanding of management’s anti-fraud controls (for example, counterparty due diligence, four-eyes principle, procurement procedures for development/construction contracts). Further we selected specific transactions to verify whether any fraud risk factors are present especially in the view of a possible of conflict of interest. At group level, we also inspected minutes of Board meetings in which these transactions are discussed to verify that the governance around the transactions is appropriate, and the required approvals are obtained. Our observation Overall, we assess that the acquisition of CTP Germany is adequately accounted for and disclosed in the financial statements. Furthermore, based on our procedures on specific real estate transactions, we have not found any fraud risk factors that would lead to a potential fraud risk and/or conflict of interest. Application of hedge accounting Description During 2022 CTP has entered into new hedging relationships and designated certain derivatives as hedging instruments to hedge variability in cashflows associated with interest rates. At inception of the designated hedging relationships the Company prepared hedge documentation. 456 Independent Auditor's Report 11 As at the 31 December 2022 the Company has recognized derivative financial instruments at fair value with a debit amount of EUR 51.0 million and a credit amount of EUR 14.7 million. The fair value is, as explained in note 31 and 35 to the financial statements, based on fair value quotes from counterparties which are compared to the results of the internal valuation model using market data from an independent recognized market data agency. As the requirements for hedge accounting under IFRS 9 are complex and the Company entered into new hedging relationships in 2022 this topic has been considered a key audit matter in our audit. Our response We have inspected the hedge documentation at inception and the hedge effectiveness test to ensure that the accounting requirements of IFRS 9 have been applied. For that purpose we used the expertise of our hedge accounting specialist. We also used our valuation specialists to independently calculate the fair value of the derivatives and compared the outcome to the values calculated by the Company and evaluated the assessment of counterparty non-performance risk (or credit valuation adjustment / debit valuation adjustment). Finally, we verified whether the disclosure in notes 31 and 35 to the financial statements in respect of hedge accounting are in conformity with EU-IFRS. Our observation Overall, we assess that the requirements for application of hedge accounting are adequately applied, and the valuation of derivatives resulted in a neutral valuation when compared with our own valuations. Furthermore we determined that the related disclosures are in accordance with EU-IFRS. Report on the other information included in the annual report In addition to the financial statements and our auditor’s report thereon, the annual report contains other information. Based on the following procedures performed, we conclude that the other information: • is consistent with the financial statements and does not contain material misstatements; and • contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and other information. We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. 457 Financial Statements 12 By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements. The Board of Directors is responsible for the preparation of the other information, including the information as required by Part 9 of Book 2 of the Dutch Civil Code. Report on other legal and regulatory requirements and ESEF Engagement We were engaged by the General Meeting of Shareholders as auditor of CTP N.V. on 16 March 2021 as of the audit for the year 2021 and have operated as statutory auditor ever since that financial year. No prohibited non-audit services We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audits of public-interest entities. European Single Electronic Format (ESEF) CTP N.V. has prepared its annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF). In our opinion the annual report prepared in XHTML format, including the (partly) marked-up consolidated financial statements as included in the reporting package by CTP N.V., complies in all material respects with the RTS on ESEF. The Board of Directors is responsible for preparing the annual report including the financial statements in accordance with the RTS on ESEF, whereby the Board of Directors combines the various components into one single reporting package. Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS on ESEF. We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ’Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting). Our examination included among others: • Obtaining an understanding of the entity's financial reporting process, including the preparation of the reporting package; • Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including: 458 Independent Auditor's Report 13 • Obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance document and the XBRL extension taxonomy files have been prepared in accordance with the technical specifications as included in the RTS on ESEF; • Examining the information related to the consolidated financial statements in the reporting package to determine whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF. Description of responsibilities regarding the financial statements Responsibilities of the Board of Directors for the financial statements The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Board of Directors is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. In that respect the Board of Directors is responsible for the prevention and detection of fraud and non-compliance with laws and regulations, including determining measures to resolve the consequences of it and to prevent recurrence. As part of the preparation of the financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the Board of Directors should prepare the financial statements using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements. Our responsibilities for the audit of the financial statements Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit. 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 financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion. A further description of our responsibilities for the audit of the financial statements is included in appendix of this auditor's report. This description forms part of our auditor’s report. 459 Financial Statements 14 Amstelveen, 3 March 2023 KPMG Accountants N.V. H.D. Grönloh RA Appendix: Description of our responsibilities for the audit of the financial statements 460 Independent Auditor's Report 15 Appendix Description of our responsibilities for the audit of the financial statements We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others: • identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining 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 the risk resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtaining 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 Company’s internal control; • evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors; • concluding on the appropriateness of the Board of 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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern; • evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and • evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We are solely responsible for the opinion and therefore responsible to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the financial statements. In this respect we are also responsible for directing, supervising and performing the group audit. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. In this respect we also submit an additional report to the audit committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audits of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report. 461 Financial Statements 16 We provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine the key audit matters: those matters that were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest. 462 7 Appendices 7.1 Group Structure 464 7.2 EPRA Financial Performance Metrics 466 7.3 EPRA Sustainability Performance Mesures 470 7.4 EU Taxonomy 472 7.5 TCFD Index 475 7.6 GRI Index 476 7.7 Portfolio Property List 2022 480 7.8 Glossary 485 7.7 Disclaimer 488 463 Remon LeonardVos Stichting Administratiekantoor Multivest CTPInvest,spol.sr.o. Personwith significantcontrol 100% 100% 100% Czech Republic CTP Property Czech, spol. s r.o. 100% CTP X, spol. s r.o. 100% CTPark Brno Retail, spol. s r.o. 100% CTPark Brno III, spol. s r.o. 100% CTPark Prague North II, spol. s r.o. 100% CTP XIII, spol. s r.o. 100% CTP XIV, spol. s r.o. 100% CTP Vlněna Business Park, spol. s r.o. 100% CTPark Plzeň, spol. s r.o. 100% CTP II, spol. s r.o. 100% CTPark Prague North III, spol. s r.o. 100% CTP III, spol. s r.o. 100% CTPark Stříbro, spol. s r.o. 100% CTP XV, spol. s r.o. 100% CTP XVI, spol. s r.o. 100% Serbia ➜ CTP Lambda d.o.o. Beograd 100% CTP XVIII, spol. s r.o. 100% CTPark Brno Líšeň II, spol. s r.o. 100% CTP Forest, spol. s r.o. 100% Clubco, spol. s r.o. 100% CTPark Blučina, spol. s r.o. 100% CTP Barrandov, spol. s r.o. 100% CTP XXII, spol. s r.o. 100% CTPark Lysá nad Labem, spol. s r.o. 100% CTP Domeq Brno, spol. s r.o. 100% CTP XII, spol. s r.o. 100% CTP XXIV, spol. s r.o. 100% CTP Hotel Pilsen, spol. s r.o. 100% ➜ CTP Hotel Operations Pilsen, spol. s r.o. 90%, 10% CTP Invest, spol. s r.o. Czech Republic CTP Hotel Prague, spol. s r.o. 100% ➜ CTP Hotel Operations Prague, spol. s r.o. 90%, 10% CTP Invest, spol. s.r.o. CTP CEE Properties, spol. s r.o. 100% CTP V, spol. s r.o. 100% CTP IQ Ostrava, spol. s r.o. 100% CTP XI, spol. s r.o. 100% CTP IV, spol. s r.o. 100% CTP VI, spol. s r.o. 100% Spielberk Business Park, spol. s r.o. 100% CTZone Ostrava, spol. s r.o. 100% CTP Energy CZ, spol. s r.o. 100% CTP VIII, spol. s r.o. 100% KRMELÍNSKÁ I, s.r.o. 100% Spielberk Business Park II, spol. s r.o. 100% ➜ CTP Hotel Operations Brno, spol. s r.o. 100% Romania CTP INVEST BUCHAREST SRL 100% ➜ Universal Management SRL 100% ➜ CTPARK MANAGEMENT TURDA SRL 100% ➜ CTPARK MANAGEMENT AFUMATI SRL, 100% CTPARK THETA SRL 100% CTPARK PSI SRL 100% CTPARK ZETA SRL 100% CTPARK EPSILON SRL 100% CTPARK IOTA SRL 100% CTPARK MIU SRL 100% CTPARK OMICRON SRL 100% CTPARK RHO SRL 100% CTPARK KM23 NORTH SRL 100% FOREST PROPERTY INVEST SRL 100% Romania CTP SOLAR SRL 100% CTPARK ARAD NORTH SRL 100% CTPARK SIBIU EAST SRL 100% CTPARK CRAIOVA EAST SRL 100% CTPARK ORADEA NORTH SRL 100% CTPARK TIMISOARA EAST SRL 100% CTPARK BRASOV SRL 100% CTPARK BRASOV WEST SRL 100% CTPARK BUCHAREST SOUTH II SRL 100% CTPARK CHITILA SRL 100% CTPARK PITESTI SRL 100% Poland CTP Invest Poland Sp. z o.o. 100% CTP Eta Poland Sp. z o.o. 100% CTP Theta Poland Sp. z o.o. w likwidacji 100% CTPark Iłowa Sp. z o.o. 100% CTPark Zabrze Sp. z o.o. 100% CTP Beta Poland Sp. z o.o. 100% CTP Delta Poland Sp. z o.o. 100% CTP Gamma Poland Sp. z o.o. 100% CTP Zeta Poland Sp. z o.o. 100% CTP Epsilon Poland Sp. z o.o. 100% CTP Iota Poland Sp. z o.o. 100% CTP Kappa Poland Sp. z o.o. 100% CTP Lambda Poland Sp. z o.o. 100% CTP Mu Poland Sp. z o.o. 100% CTP Nu Poland Sp. z o.o. 100% CTP Xi Poland Sp. z o.o. 100% CTP Energy Poland Sp. z o.o. 100% Poland CTP Pi Poland Sp. z o.o. 100% CTP Rho Poland Sp. z o.o. 100% CTP Omega Poland Sp. z o.o. 100% CTP Chi Poland Sp. z o.o. 100% CTP Property Beta Poland Sp. z o.o. 100% CTP Property Alpha Poland Sp. z o.o. 100% CTP Tau Poland Sp. z o.o. 100% CTP Property Gamma Poland Sp. z o.o. 100% CTP Property Delta Poland Sp. z o.o. 100% CTP Property Epsilon Poland Sp. z o.o. 100% CTP Property Eta Poland sp. z o.o. 100% CTP Property Zeta Poland sp. z o.o. 100% Hungary CTP Management Hungary Kft. 100% CTPark Eleven Kft. 100% CTPark Twelve Kft. 100% CTPark Thirteen Kft. 100% CTPark Fourteen Kft. 100% CTPark Fifteen Kft. 100% CTPark Sixteen Kft. 100% CTPark Seventeen Kft. 100% Offi ce Campus Real Estate Kft. 100% CTP Energy Hungary Kft. 100% CTPark Eighteen Kft. 100% CTPark Nineteen Kft. 100% CTPark Twenty Kft. 100% CTPark Twenty One Kft. 100% CTPark Twenty Two Kft. 100% Hungary CTPark Twenty Three Kft. 100% CTPark Twenty Four Kft. 100% CTPark Twenty Five Kft. 100% CTPark Twenty Six Kft. 100% CTPark Twenty Seven Kft. 100% CTPark Twenty Eight Kft. 100% CTPark Twenty Nine Kft. 100% CTPark Thirty Kft. 100% CTPark Thirty One Kft. 100% Slovakia CTPark Čierny Les, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Prešov s.r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTP Prešov North, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Trnava II, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTP Dunaj s.r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Žilina Airport II, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTP Solar SK, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Bratislava East, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTP Invest SK, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Banská Bystrica, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Land SK 1, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Land SK 2, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Námestovo, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. Netherlands Multifi n B.V. 100% Germany ➜ CTP Germany II GmbH 100% CTP Baltic Holding B.V. 100% Latvia ➜ Samesova SIA 100% ➜ Vojtova SIA 100% ➜ Zemankova SIA 100% Lithuania ➜ UAB Samesova 100% ➜ UAB Vojtova 100% ➜ UAB Zemankova 100% Estonia ➜ Samesova OŰ 100% ➜ Vojtova OŰ 100% ➜ Zemankova OŰ 100% CTP Turkish Holding B.V. 100% Turkey ➜ CTP ALPHA GAYRİMENKUL VE İNŞAAT LİMİTED ŞİRKETİ, 100% ➜ CTP BETA GAYRİMENKUL VE İNŞAAT LİMİTED ŞİRKETİ, 100% ➜ CTP GAMMA GAYRİMENKUL VE İNŞAAT LİMİTED ŞİRKETİ 100% CTP Mediterranean Holding B.V. 100% Egypt ➜ CTP Real Estate 90%, 10% CTP Baltic Holding B.V. ➜ CTP Real Estate Development 90%, 10% CTP Baltic Holding B.V. ➜ CTP Invest 90%, 10% CTP Baltic Holding B.V. CTP Invest B.V. 100% CTP Alpha B.V. 100% CTP Beta B.V. 100% CTP Gamma B.V. 100% CTPark Bremen B.V. 100% CTP Epsilon B.V. 100% CTP Germany B.V. Multivest B.V. CTP Holding B.V. CTP N.V. 100% >75% 100% CTPPropertyB.V. 100% Netherlands CTP Theta B.V. 100% CTP Eta B.V. 100% CTP Zeta B.V. 100% CTP Energy B.V. 100% CTP Kappa B.V. 100% CTP Lambda B.V. 100% CTP ALC B.V. 100% CTP Mu B.V. 100% Serbia CTP Invest d.o.o. Beograd‐Novi Beograd, 100% CTP Zeta d.o.o. Beograd‐Novi Beograd, 100% ➜ CTP Property Alpha d.o.o. Beograd‐Novi Beograd, 100% CTP Energy d.o.o. Beograd-Novi Beograd 100% CTP Sigma d.o.o. Beograd‐Novi Beograd 100% CTP Omicron d.o.o. Beograd‐Novi Beograd 100% CTP Phi d.o.o. Beograd‐Novi Beograd 100% CTP Rho d.o.o. Beograd‐Novi Beograd 100% CTP Tau d.o.o. Beograd‐Novi Beograd 100% CTP Property Beta d.o.o.Beograd‐Novi Beograd 100% CTP Property Gamma d.o.o. Beograd‐ Novi Beograd 100% CTP Property Delta d.o.o. Beograd‐Novi Beograd 100% Bulgaria CTP Invest EOOD 100% CTPark Beta EOOD 100% CTPark Gamma EOOD 100% CTPark Delta EOOD 100% CTPark Epsilon EOOD 100% ➜ Project Vrajdebna EOOD 100% CTPark Zeta EOOD 100% ➜ CTPark Kappa EOOD 100% CTPark Eta EOOD 100% ➜ CTPark Lambda EOOD 100% CTPark Theta EOOD 100% CTPark Iota EOOD 100% CTPark Sofi a Ring Road EOOD 100% CTPark Sofi a EOOD 100% Austria CTP Invest Immobilien GmbH 100% CTP Alpha GmbH 100% CTP Beta GmbH 100% CTP Gamma GmbH 100% CTP Delta GmbH 100% CTP Epsilon GmbH 100% CTP Zeta GmbH 100% CTP Eta GmbH 100% CTP Theta GmbH 100% CTP Iota GmbH 100% Germany CTP Invest Germany GmbH 100% CTP Germany GmbH 100% ➜ CTP Germany V GmbH 90%, 10% CTP Invest, spol. s r.o. ➜ CTP Germany VI GmbH 90%, 10% CTP Invest, spol. s r.o. CTP Germany VII GmbH 100% CTP Germany VIII GmbH 100% CTP Germany IX GmbH 100% CTP Germany X GmbH 100% Slovenia CTP Ljubljana, d.o.o. 100% CTPark Alpha, d.o.o. 100% Spain Global Guanaco, S.L.U. 100% France CTP France 100% CTP Alpha France 100% CTP Beta France 100% Italy CTP Italy S.r.l. 100% CTP Alpha S.r.l. 100% CTP Beta S.r.l. 100% United Kingdom CTP Invest Ltd 100% CTP Alpha Ltd 100% CTP Beta Ltd 100% Czech Republic CTP CEE Sub Holding, spol. s r.o. 100% CTPark České Velenice, spol. s r.o. 100% CTPark Aš II, spol. s r.o. 100% CTPark Chrastava, a.s. 100% CTPark Prague West, spol. s r.o. 100% CTP Borská Pole, spol. s r.o. 100% CTP Vysočina, spol. s r.o. 100% CTPark Ostrava, spol. s r.o. 100% CTP Moravia South, spol. s r.o. 100% CTPark Mladá Boleslav, spol. s r.o. 100% CTP Bohemia North, spol. s r.o. 100% CTPark Brno Líšeň West, spol. s r.o. 100% CTP Moravia North, spol. s r.o. 100% CTP Pilsen Region, spol. s r.o. 100% CTP Bohemia West, spol. s r.o. 100% CTPark Ostrava Poruba, spol. s r.o. 100% CTPark Hranice, spol. s r.o. 100% CTP XXIII, spol. s r.o. 100% CTPark Prague Airport, spol. s r.o. 100% CTPark Prague East, spol. s r.o. 100% CTP Ponávka Business Park, spol. s r.o. 100% CTP Solar I, a.s. 100% CTP Bohemia South, spol. s r.o. 100% CTP Alpha, spol. s r.o. 100% CTP Solar II, a.s. 100% CTP Solar III, spol. s r.o. 100% CTPark Brno Líšeň East, spol. s r.o. 100% CTP XVII, spol. s r.o. 100% CTP Portfolio Finance CZ, spol. s r.o. 100% ➜ CTP Industrial Property CZ, spol. s r.o. 100% ➜ CTPark Brno I, spol. s r.o. 100% ➜ CTPark Brno I, spol. s r.o. 100% Romania CTP CONTRACTORS SRL 100% CTPARK ALPHA SRL 100% CTPARK BETA SRL 100% CTPARK GAMMA SRL 100% CTPARK DELTA SRL 100% CTPARK BUCHAREST SRL 100% CTPARK BUCHAREST WEST I SRL 100% CTPARK DEVA II SRL 100% CTPARK BUCHAREST WEST II SRL 100% CTPARK KAPPA SRL 100% CTPARK BUCHAREST II SRL 100% CTPARK LAMBDA SRL 100% CTPARK OMEGA SRL 100% CTPARK PHI SRL 100% CTPARK SIGMA SRL 100% CTPARK TAU SRL 100% CTPARK ETA SRL 100% CTPARK BUCHAREST A1 SRL 100% CTPARK BUCHAREST UPSILON SRL 100% Hungary CTPark Alpha Kft. 100% CTPark Beta Kft. 100% CTPark Gamma Kft. 100% CTPark Delta Kft. 100% CTPark Biatorbágy Kft. 100% CTPark Arrabona Kft. 100% CTPark Seven Kft. 100% CTPark Eight Kft. 100% CTPark Ten Kft. 100% CTPark Nine Kft. 100% Slovakia CTP Alpha SK, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Krásno nad Kysucou, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTP Slovakia, s. r. o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Bratislava, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Hlohovec, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Nitra, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Nove Mesto, spol. s.r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Košice, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Žilina Airport, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. Serbia CTP Alpha d.o.o. Beograd‐Novi Beograd 100% CTP Beta d.o.o. Beograd‐Novi Beograd 100% CTP Gamma d.o.o. Beograd‐Novi Beograd, 100% CTP Delta d.o.o. Beograd‐Novi Beograd, 100% CTP Epsilon d.o.o. Beograd‐Novi Beograd, 100% ➜ CTP Omega d.o.o. Beograd‐Novi Beograd, 100% CTP Kappa d.o.o. Beograd‐Novi Beograd 100% Poland CTPark Opole Sp. z o.o. 100% CTP Sigma Poland Sp. z o.o. 100% Netherlands CTP Portfolio Finance Czech B.V. 100% Czech Republic ➜ CTPark Modřice, spol. s r.o. 100% ➜ CTPark Bor, spol. s r.o. 100% ➜ CTPark Bor II, spol. s r.o. 100% 7.1 Group Structure as at 31 DEcember 2022 Appendices GRI 2-2 464 Remon LeonardVos Stichting Administratiekantoor Multivest CTPInvest,spol.sr.o. Personwith significantcontrol 100% 100% 100% Czech Republic CTP Property Czech, spol. s r.o. 100% CTP X, spol. s r.o. 100% CTPark Brno Retail, spol. s r.o. 100% CTPark Brno III, spol. s r.o. 100% CTPark Prague North II, spol. s r.o. 100% CTP XIII, spol. s r.o. 100% CTP XIV, spol. s r.o. 100% CTP Vlněna Business Park, spol. s r.o. 100% CTPark Plzeň, spol. s r.o. 100% CTP II, spol. s r.o. 100% CTPark Prague North III, spol. s r.o. 100% CTP III, spol. s r.o. 100% CTPark Stříbro, spol. s r.o. 100% CTP XV, spol. s r.o. 100% CTP XVI, spol. s r.o. 100% Serbia ➜ CTP Lambda d.o.o. Beograd 100% CTP XVIII, spol. s r.o. 100% CTPark Brno Líšeň II, spol. s r.o. 100% CTP Forest, spol. s r.o. 100% Clubco, spol. s r.o. 100% CTPark Blučina, spol. s r.o. 100% CTP Barrandov, spol. s r.o. 100% CTP XXII, spol. s r.o. 100% CTPark Lysá nad Labem, spol. s r.o. 100% CTP Domeq Brno, spol. s r.o. 100% CTP XII, spol. s r.o. 100% CTP XXIV, spol. s r.o. 100% CTP Hotel Pilsen, spol. s r.o. 100% ➜ CTP Hotel Operations Pilsen, spol. s r.o. 90%, 10% CTP Invest, spol. s r.o. Czech Republic CTP Hotel Prague, spol. s r.o. 100% ➜ CTP Hotel Operations Prague, spol. s r.o. 90%, 10% CTP Invest, spol. s.r.o. CTP CEE Properties, spol. s r.o. 100% CTP V, spol. s r.o. 100% CTP IQ Ostrava, spol. s r.o. 100% CTP XI, spol. s r.o. 100% CTP IV, spol. s r.o. 100% CTP VI, spol. s r.o. 100% Spielberk Business Park, spol. s r.o. 100% CTZone Ostrava, spol. s r.o. 100% CTP Energy CZ, spol. s r.o. 100% CTP VIII, spol. s r.o. 100% KRMELÍNSKÁ I, s.r.o. 100% Spielberk Business Park II, spol. s r.o. 100% ➜ CTP Hotel Operations Brno, spol. s r.o. 100% Romania CTP INVEST BUCHAREST SRL 100% ➜ Universal Management SRL 100% ➜ CTPARK MANAGEMENT TURDA SRL 100% ➜ CTPARK MANAGEMENT AFUMATI SRL, 100% CTPARK THETA SRL 100% CTPARK PSI SRL 100% CTPARK ZETA SRL 100% CTPARK EPSILON SRL 100% CTPARK IOTA SRL 100% CTPARK MIU SRL 100% CTPARK OMICRON SRL 100% CTPARK RHO SRL 100% CTPARK KM23 NORTH SRL 100% FOREST PROPERTY INVEST SRL 100% Romania CTP SOLAR SRL 100% CTPARK ARAD NORTH SRL 100% CTPARK SIBIU EAST SRL 100% CTPARK CRAIOVA EAST SRL 100% CTPARK ORADEA NORTH SRL 100% CTPARK TIMISOARA EAST SRL 100% CTPARK BRASOV SRL 100% CTPARK BRASOV WEST SRL 100% CTPARK BUCHAREST SOUTH II SRL 100% CTPARK CHITILA SRL 100% CTPARK PITESTI SRL 100% Poland CTP Invest Poland Sp. z o.o. 100% CTP Eta Poland Sp. z o.o. 100% CTP Theta Poland Sp. z o.o. w likwidacji 100% CTPark Iłowa Sp. z o.o. 100% CTPark Zabrze Sp. z o.o. 100% CTP Beta Poland Sp. z o.o. 100% CTP Delta Poland Sp. z o.o. 100% CTP Gamma Poland Sp. z o.o. 100% CTP Zeta Poland Sp. z o.o. 100% CTP Epsilon Poland Sp. z o.o. 100% CTP Iota Poland Sp. z o.o. 100% CTP Kappa Poland Sp. z o.o. 100% CTP Lambda Poland Sp. z o.o. 100% CTP Mu Poland Sp. z o.o. 100% CTP Nu Poland Sp. z o.o. 100% CTP Xi Poland Sp. z o.o. 100% CTP Energy Poland Sp. z o.o. 100% Poland CTP Pi Poland Sp. z o.o. 100% CTP Rho Poland Sp. z o.o. 100% CTP Omega Poland Sp. z o.o. 100% CTP Chi Poland Sp. z o.o. 100% CTP Property Beta Poland Sp. z o.o. 100% CTP Property Alpha Poland Sp. z o.o. 100% CTP Tau Poland Sp. z o.o. 100% CTP Property Gamma Poland Sp. z o.o. 100% CTP Property Delta Poland Sp. z o.o. 100% CTP Property Epsilon Poland Sp. z o.o. 100% CTP Property Eta Poland sp. z o.o. 100% CTP Property Zeta Poland sp. z o.o. 100% Hungary CTP Management Hungary Kft. 100% CTPark Eleven Kft. 100% CTPark Twelve Kft. 100% CTPark Thirteen Kft. 100% CTPark Fourteen Kft. 100% CTPark Fifteen Kft. 100% CTPark Sixteen Kft. 100% CTPark Seventeen Kft. 100% Offi ce Campus Real Estate Kft. 100% CTP Energy Hungary Kft. 100% CTPark Eighteen Kft. 100% CTPark Nineteen Kft. 100% CTPark Twenty Kft. 100% CTPark Twenty One Kft. 100% CTPark Twenty Two Kft. 100% Hungary CTPark Twenty Three Kft. 100% CTPark Twenty Four Kft. 100% CTPark Twenty Five Kft. 100% CTPark Twenty Six Kft. 100% CTPark Twenty Seven Kft. 100% CTPark Twenty Eight Kft. 100% CTPark Twenty Nine Kft. 100% CTPark Thirty Kft. 100% CTPark Thirty One Kft. 100% Slovakia CTPark Čierny Les, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Prešov s.r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTP Prešov North, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Trnava II, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTP Dunaj s.r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Žilina Airport II, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTP Solar SK, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Bratislava East, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTP Invest SK, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Banská Bystrica, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Land SK 1, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Land SK 2, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. CTPark Námestovo, spol. s r.o. 90%, 10% CTP Property Czech, spol. s r.o. Netherlands Multifi n B.V. 100% Germany ➜ CTP Germany II GmbH 100% CTP Baltic Holding B.V. 100% Latvia ➜ Samesova SIA 100% ➜ Vojtova SIA 100% ➜ Zemankova SIA 100% Lithuania ➜ UAB Samesova 100% ➜ UAB Vojtova 100% ➜ UAB Zemankova 100% Estonia ➜ Samesova OŰ 100% ➜ Vojtova OŰ 100% ➜ Zemankova OŰ 100% CTP Turkish Holding B.V. 100% Turkey ➜ CTP ALPHA GAYRİMENKUL VE İNŞAAT LİMİTED ŞİRKETİ, 100% ➜ CTP BETA GAYRİMENKUL VE İNŞAAT LİMİTED ŞİRKETİ, 100% ➜ CTP GAMMA GAYRİMENKUL VE İNŞAAT LİMİTED ŞİRKETİ 100% CTP Mediterranean Holding B.V. 100% Egypt ➜ CTP Real Estate 90%, 10% CTP Baltic Holding B.V. ➜ CTP Real Estate Development 90%, 10% CTP Baltic Holding B.V. ➜ CTP Invest 90%, 10% CTP Baltic Holding B.V. CTP Invest B.V. 100% CTP Alpha B.V. 100% CTP Beta B.V. 100% CTP Gamma B.V. 100% CTPark Bremen B.V. 100% CTP Epsilon B.V. 100% CTP Germany B.V. Multivest B.V. CTP Holding B.V. CTP N.V. 100% >75% 100% CTPPropertyB.V. 100% Netherlands CTP Theta B.V. 100% CTP Eta B.V. 100% CTP Zeta B.V. 100% CTP Energy B.V. 100% CTP Kappa B.V. 100% CTP Lambda B.V. 100% CTP ALC B.V. 100% CTP Mu B.V. 100% Serbia CTP Invest d.o.o. Beograd‐Novi Beograd, 100% CTP Zeta d.o.o. Beograd‐Novi Beograd, 100% ➜ CTP Property Alpha d.o.o. Beograd‐Novi Beograd, 100% CTP Energy d.o.o. Beograd-Novi Beograd 100% CTP Sigma d.o.o. Beograd‐Novi Beograd 100% CTP Omicron d.o.o. Beograd‐Novi Beograd 100% CTP Phi d.o.o. Beograd‐Novi Beograd 100% CTP Rho d.o.o. Beograd‐Novi Beograd 100% CTP Tau d.o.o. Beograd‐Novi Beograd 100% CTP Property Beta d.o.o.Beograd‐Novi Beograd 100% CTP Property Gamma d.o.o. Beograd‐ Novi Beograd 100% CTP Property Delta d.o.o. Beograd‐Novi Beograd 100% Bulgaria CTP Invest EOOD 100% CTPark Beta EOOD 100% CTPark Gamma EOOD 100% CTPark Delta EOOD 100% CTPark Epsilon EOOD 100% ➜ Project Vrajdebna EOOD 100% CTPark Zeta EOOD 100% ➜ CTPark Kappa EOOD 100% CTPark Eta EOOD 100% ➜ CTPark Lambda EOOD 100% CTPark Theta EOOD 100% CTPark Iota EOOD 100% CTPark Sofi a Ring Road EOOD 100% CTPark Sofi a EOOD 100% Austria CTP Invest Immobilien GmbH 100% CTP Alpha GmbH 100% CTP Beta GmbH 100% CTP Gamma GmbH 100% CTP Delta GmbH 100% CTP Epsilon GmbH 100% CTP Zeta GmbH 100% CTP Eta GmbH 100% CTP Theta GmbH 100% CTP Iota GmbH 100% Germany CTP Invest Germany GmbH 100% CTP Germany GmbH 100% ➜ CTP Germany V GmbH 90%, 10% CTP Invest, spol. s r.o. ➜ CTP Germany VI GmbH 90%, 10% CTP Invest, spol. s r.o. CTP Germany VII GmbH 100% CTP Germany VIII GmbH 100% CTP Germany IX GmbH 100% CTP Germany X GmbH 100% Slovenia CTP Ljubljana, d.o.o. 100% CTPark Alpha, d.o.o. 100% Spain Global Guanaco, S.L.U. 100% France CTP France 100% CTP Alpha France 100% CTP Beta France 100% Italy CTP Italy S.r.l. 100% CTP Alpha S.r.l. 100% CTP Beta S.r.l. 100% United Kingdom CTP Invest Ltd 100% CTP Alpha Ltd 100% CTP Beta Ltd 100% Czech Republic CTP CEE Sub Holding, spol. s r.o. 100% CTPark České Velenice, spol. s r.o. 100% CTPark Aš II, spol. s r.o. 100% CTPark Chrastava, a.s. 100% CTPark Prague West, spol. s r.o. 100% CTP Borská Pole, spol. s r.o. 100% CTP Vysočina, spol. s r.o. 100% CTPark Ostrava, spol. s r.o. 100% CTP Moravia South, spol. s r.o. 100% CTPark Mladá Boleslav, spol. s r.o. 100% CTP Bohemia North, spol. s r.o. 100% CTPark Brno Líšeň West, spol. s r.o. 100% CTP Moravia North, spol. s r.o. 100% CTP Pilsen Region, spol. s r.o. 100% CTP Bohemia West, spol. s r.o. 100% CTPark Ostrava Poruba, spol. s r.o. 100% CTPark Hranice, spol. s r.o. 100% CTP XXIII, spol. s r.o. 100% CTPark Prague Airport, spol. s r.o. 100% CTPark Prague East, spol. s r.o. 100% CTP Ponávka Business Park, spol. s r.o. 100% CTP Solar I, a.s. 100% CTP Bohemia South, spol. s r.o. 100% CTP Alpha, spol. s r.o. 100% CTP Solar II, a.s. 100% CTP Solar III, spol. s r.o. 100% CTPark Brno Líšeň East, spol. s r.o. 100% CTP XVII, spol. s r.o. 100% CTP Portfolio Finance CZ, spol. s r.o. 100% ➜ CTP Industrial Property CZ, spol. s r.o. 100% ➜ CTPark Brno I, spol. s r.o. 100% ➜ CTPark Brno I, spol. s r.o. 100% Romania CTP CONTRACTORS SRL 100% CTPARK ALPHA SRL 100% CTPARK BETA SRL 100% CTPARK GAMMA SRL 100% CTPARK DELTA SRL 100% CTPARK BUCHAREST SRL 100% CTPARK BUCHAREST WEST I SRL 100% CTPARK DEVA II SRL 100% CTPARK BUCHAREST WEST II SRL 100% CTPARK KAPPA SRL 100% CTPARK BUCHAREST II SRL 100% CTPARK LAMBDA SRL 100% CTPARK OMEGA SRL 100% CTPARK PHI SRL 100% CTPARK SIGMA SRL 100% CTPARK TAU SRL 100% CTPARK ETA SRL 100% CTPARK BUCHAREST A1 SRL 100% CTPARK BUCHAREST UPSILON SRL 100% Hungary CTPark Alpha Kft. 100% CTPark Beta Kft. 100% CTPark Gamma Kft. 100% CTPark Delta Kft. 100% CTPark Biatorbágy Kft. 100% CTPark Arrabona Kft. 100% CTPark Seven Kft. 100% CTPark Eight Kft. 100% CTPark Ten Kft. 100% CTPark Nine Kft. 100% Slovakia CTP Alpha SK, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Krásno nad Kysucou, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTP Slovakia, s. r. o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Bratislava, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Hlohovec, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Nitra, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Nove Mesto, spol. s.r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Košice, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. CTPark Žilina Airport, spol. s r.o. 90%, 10% CTP CEE Sub Holding, spol. s r.o. Serbia CTP Alpha d.o.o. Beograd‐Novi Beograd 100% CTP Beta d.o.o. Beograd‐Novi Beograd 100% CTP Gamma d.o.o. Beograd‐Novi Beograd, 100% CTP Delta d.o.o. Beograd‐Novi Beograd, 100% CTP Epsilon d.o.o. Beograd‐Novi Beograd, 100% ➜ CTP Omega d.o.o. Beograd‐Novi Beograd, 100% CTP Kappa d.o.o. Beograd‐Novi Beograd 100% Poland CTPark Opole Sp. z o.o. 100% CTP Sigma Poland Sp. z o.o. 100% Netherlands CTP Portfolio Finance Czech B.V. 100% Czech Republic ➜ CTPark Modřice, spol. s r.o. 100% ➜ CTPark Bor, spol. s r.o. 100% ➜ CTPark Bor II, spol. s r.o. 100% Group Structure 465 Appendices EPRA Financial Pearformance Metrics The purpose of these indicators, as recommended by the European Public Real Estate Association (EPRA), is to enable easier comparison with similar real estate businesses. EPRA performance indicators are calculated in accordance with the EPRA Best Practices Recommendations (BPR) Guidelines. Indicator Definition 2022 2021 1. Company specific Adjusted EPS A key measure of a company’s underlying operating results and an indication of the extent to which current dividend payments are supported by earnings. €0.61 €0.49 2. EPRA NAV Metrics EPRA NAV metrics makes adjustments to the NAV per IFRS financial statements to provide stakeholders with the most relevant information on the fair value of the assets and liabilities of a real estate investment company, under different scenarios. a. EPRA Net Tangible Assets Assumes that company buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax. €13.81 €12.06 b. EPRA Net Reinstatement Value Assumes that company never sell assets and aims to represent the value required to rebuild the company. €13.94 €12.09 c. EPRA Net Disposal Value Represents the shareholders’ value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax. €14.60 €10.25 3. EPRA Yield Metrics A comparable measure for portfolio Valuations. a. EPRA Net Initial Yield (NIY) Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers’ costs. 5.5% 5.2% b. EPRA ‘topped-up’ NIY This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents). 5.6% 5.6% 7.2 EPRA 466 EPRA Financial Pearformance Metrics EPRA Earnings Amounts in € '000 2022 2021 Earnings per IFRS income statement 794,649 1,025,936 Adjustments to calculate EPRA Earnings, exclude: (i) Changes in value of investment properties, development properties held for investment and other interests 723,580 1,100,571 (ii) Profits or losses on disposal of investment properties, development properties held for investment and other interests 870 2,233 (iii) Profits or losses on sales of trading properties including impairment charges in respect of trading properties. (iv) Tax on profits or losses on disposals -168 -146 (v) Negative goodwill / goodwill impairment (vi) Changes in fair value of financial instruments and associated close-out costs 4,052 12,126 (vii) Acquisition costs on share deals and non-controlling joint venture interests -1,648 (viii) Deferred tax in respect of EPRA adjustments -161,385 -227,903 (ix) Adjustments (i) to (viii) above in respect of joint ventures (unless already included under proportional consolidation) (x) Non-controlling interests in respect of the above -1,301 EPRA Earnings 229,001 140,703 Average number of shares 433,982 383,407 EPRA Earnings per Share (EPS) 0.53 € 0.37 € Company specific adjustments: (a) Impairment/depreciation on property, plant and equipment -5,657 (b) FX related to company restructuring, intra-group transfer of SPV's -2,208 -5,306 (c) Costs associated with establishment of capital market and financing structure -16,125 -41,094 (d) Non recurring items unrelated to operational performance (gifts, transaction advisory,…) -24,512 (e) Deferred tax in respect of Company specific adjustments 6,339 6,654 Company specific Adjusted Earnings 265,507 186,106 Company specific Adjusted EPS €0.61 €0.49 467 Appendices EPRA NAV Metrics Amounts in € '000 31 December 2022 31 December 2022 31 December 2022 31 December 2021 31 December 2021 31 December 2021 EPRA Net Asset Value Metrics EPRA NTA EPRA NRV EPRA NDV EPRA NTA EPRA NRV EPRA NDV IFRS Equity attributable to shareholders 5,284,517 5,284,517 5,284,517 4,106,830 4,106,830 4,106,830 Include / Exclude: i) Hybrid instruments Diluted NAV 5,284,517 5,284,517 5,284,517 4,106,830 4,106,830 4,106,830 Include: ii. a) Revaluation of IP (if IAS 40 cost option is used) ii. b) Revaluation of IPUD (if IAS 40 cost option is used) ii. c) Revaluation of other non-current investments iii) Revaluation of tenant leases held as finance leases iv) Revaluation of trading properties Diluted NAV at Fair Value 5,284,517 5,284,517 5,284,517 4,106,830 4,106,830 4,106,830 Exclude: v) Deferred tax in relation to fair value gains of IP -880,924 -880,924 -725,779 -725,779 vi) Fair value of financial instruments 27,516 27,516 172 172 vii) Goodwill as a result of deferred tax viii. a) Goodwill as per the IFRS balance sheet 3,492 2,111 viii. b) Intangibles as per the IFRS balance sheet Include: 1,199,594 -3,471 ix) Fair value of fixed interest rate debt x) Revaluation of intangibles to fair value xi) Real estate transfer tax 50,864 6,595 NAV 6,134,433 6,188,789 6,484,111 4,830,326 4,839,032 4,103,359 Fully diluted number of shares 444,093 444,093 444,093 400,408 400,408 400,408 NAV per share 13.81 13.94 14.60 13.81 13.94 14.60 468 EPRA Financial Pearformance Metrics EPRA Yield Metrics EPRA NIY and topped-up’ NIY Amounts in € '000 December 2022 December 2021 Investment property – wholly owned 10,554,602 7,822,472 Investment property – share of JVs/Funds Trading property (including share of JVs) Less: developments 1,193,343 774,204 Completed property portfolio 9,361,259 7,048,268 Allowance for estimated purchasers’ costs - Gross up completed property portfolio valuation 9,361,259 7,048,268 Annualised cash passing rental income 527,395 379,001 Property outgoings 16,399 9,103 Annualised net rents 510,996 369,898 Add: notional rent expiration of rent free periods or other lease incentives 2, 3 15,783 21,435 Topped-up net annualised rent 526,779 391,333 EPRA NIY 5.5% 5.2% EPRA “topped-up” NIY 5.6% 5.6% 469 Appendices EPRA Performance Measures7.3 EPRA Sustainability Performance Measures – Environment 11,313,112.10 185,746.50 5,228.78 3,807,430.70 2,448,729.72 1,899 39,882,714.20 5,389,510.64 4,794.17 8.0 384 289,000.00 248,000.00 5,592.00 No District Heating reported 270,000.00 No data shared 2,345,000.00 Data was combined with GHG-Dir-Abs 1,543.00 No data shared No data shared 2022 Scope 2 only, corporate and landlord controlled parts of parks and portfolio 2021 data was only for corporate offices of 4 core countries Both numbers in kWh Both numbers in kWh Both years in MWh 2022 Scope 2 only, corporate and landlord controlled parts of parks and portfolio 2021 data was only for corporate offices of 4 core countries 2022 numbers in kWh 2022 Scope 1 only, buildings in corporate and landlord controlled parts of parks and portfolio 2021 data was only for corporate offices of 4 core countries Both numbers in kWh Only energy used in offices, kWh per FTE as a weighted average 2022 Scope 1, includes all fuel consumed: Offices, portolio, company cars, company aeroplanes 2021 data was only for corporate offices of 4 core countries, and was scope 1 and 2 together Numbers are in kgCO 2 e 2022 Scope 2, this includes all energy from offices and landlord controlled parts of parks and portfolio Numbers are in kgCO 2 e 2022 numbers: Water consumption in offices only, German and Serbia did not provide data, Poland left out one office. 2021 data was only for corporate offices of 4 core countries Both numbers are in m 3 Only water used in offices, per FTE as a weighted average: Corporate water consumption devided by 598 FTE The total amount of electricity consumed. It includes electricity from renewable and non-renewable sources, whether imported or generated on site. Of which renewable On-site solar energy generation: The total amount of indirect energy consumed from district heating or cooling systems. In this instance, ‘indirect’ means energy generated off site and typically bought from an external energy supplier. The total amount of fuel used from direct (renewable and non-renewable) sources (‘direct’ meaning that the fuel is combusted on site). The total amount of direct and indirect energy used by renewable and non-renewable sources in a building, normalised by number of employees. The total amount of direct greenhouse gas emissions generated (‘direct’ meaning that GHG emissions are generated on site through combustion of the energy source/ fuel). In this calculation, CTP includes use of natural gas in the offices, car fuel, as well as jet fuel. The total amount of indirect greenhouse gas emissions generated (‘indirect’ meaning that GHG emissions are generated off site during combustion of the energy source). The total amount of water consumed within the corporate offices over the full reporting year. The total amount of water consumption within our buildings, normalised by number of employees. Total number of assets that have formally obtained sustainability certification, rating, or labelling at the end of the reporting year. Elec-Abs: DH&C-Abs: Fuels-Abs: Energy-Int: GHG-Dir-Abs: GHG-Indir-Abs: Water-Abs: Water-Int: Cert-Tot: 2022Definition 2021 Notes 470 EPRA Performance Measures EPRA Sustainability Performance Measures – Social 2022Definition 2021 Notes BODs gender: Female member: 33% Male members: 66% Total organisation: Female employees: 306.41 Male employees: 360.55 Under 30 Female employees: 76.03 Male employees: 37.75 30-50 Female employees: 198.87 Male employees: 268.8 50 and over Female employees: 31.51 Male employees: 54 Total organisation: 69% Under 30: 70% 30-50: 75% 50 and over: 60% 3 hours per employees on average No data available New hires: 248.8 Dismissals: 47.48 Voluntary leave: 61.45 Turnover rate: 18.22% Absentee rate: 6.4% Number of Executive members: 2. Number of Non-executive member: 4 BODs gender: Female member: 33% Male members: 66% Employees: Total organisation: Female employees: 271 (49%) Male Employees: 282 (51%) Under 30: Female employees: 76 (67%) Male Employees: 38 (33%) 30-50 Female employees: 167 (46%) Male Employees: 199 (54%) 50 and over Female employees: 28 (38%) Total organisation: 67% Under 30: 70% 30-50: 78% 50 and over: 42% No data available No data available New hires: 105 Dismissals: 23 Voluntary leave: 82 Turnover rate: 20.2% Absentee rate: 2.6% Number of Executive members: 2. Number of Non-executive member: 4 2021 was given in average headcount, whereare 2022 is share in Year End FTEs 2021 numbers were revised to add up correctly Total culcate this rate, we assumed an average of 230 work days per FTE in the year. Last year's number was incorrectly indicated at lost day rate, it is actually the absentee rate. the Group's absentee rate is relatively high, due to a high rate in SK, where eomployees bound to leave the company went on sick leave. The percentage of male and female employees in the organisation’s governance bodies and other significant employee categories. The ratio of the basic salary and/or remuneration of men to women. The number shown gives women’s basic salary compared men’s The average hours of training for the organisation's employees The percentage of total employees who received regular performance and career development reviews during the reporting period. The total number and rate of new employee hires and employee turnover. The occupational health and safety performance with relation to the Group's direct employees. The composition of the highest governance body. Diversity-Emp: Diversity-Pay: Emp-Training: Emp-Dev: Emp-Turnover: H&S-Emp: Gov-Board: 471 Appendices EU Taxonomy7.4 EU Taxonomy eligibility and alignment – Proportion of Turnover Substantial contribution criteria Significantly Harm) DSNH criteria (Do Not Economic activity (1) Code(s) (2) Absolute turnover (3) Proportion of turnover (4) Climate change mitigation (5) Climate change adaptation (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion 2022 (18) Taxonomy aligned proportion 2021 (19) Category (enabling activity) (20) Category (transitional activity (21) (kEUR) [%] [%] [%] [%] [%] [%] [%] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [%] [%] [E] [T] A. Taxonomy eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) Acquisition and ownership of buildings 7.7 273,424 46.4% 46.4% Y Y 46.4% Turnover of environmentally sustainable activities (Taxonomy aligned) (A.1) 273,424 46.4% 46.4% 46.4% A.2 Taxonomy eligible but not environmentally sustainable activities (not Taxonomy aligned activities) Construction of new buildings 7.1 36,200 6.1% Acquisition and ownership of buildings 7.7 279,489 47.4% Turnover of Taxonomy eligible but not environmentally sustainable activities (not Taxonomy aligned activities (A.2) 315,689 53.6% Total (A.1 + A.2) 589,113 100% B. Taxonomy-non eligible activities Turnover of Taxonomy non- eligible activities (B) 00% Total (A+B) 589,113 100% 472 EU Taxonomy EU Taxonomy eligibility and alignment – Proportion of CapEx Substantial contribution criteria Significantly Harm) DSNH criteria (Do Not Economic activity (1) Code(s) (2) Absolute CapEx (3) Proportion of CapEx (4) Climate change mitigation (5) Climate change adaptation (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversityand ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion 2022 (18) Taxonomy aligned proportion 2021 (19) Category (enabling activity) (20) Category (transitional activity (21) (kEUR) [%] [%] [%] [%] [%] [%] [%] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [%] [%] [E] [T] A. Taxonomy eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) Construction of new buildings 7.1 82,246 3.6% 3.6% Y YYYYY3.6% Installation, main- tenance, and repair of renewable energy technologies 7.6 24,923 1.1% 1.1% Y Y 1.1% Acquisition and ownership of buildings 7.7 4,708 0.2% 0.2% Y Y 0.2% CapEx of environmentally sustainable activities (Taxonomy aligned) (A.1) 111,877 4.8% 4.8% 4.8% A.2 Taxonomy eligible but not environmentally sustainable activities (not Taxonomy aligned activities) Activity 7.1 Construction of new buildings 7.1 1,046881 45.3% Activity 7.2 Renovation of existing buildings 7.2 63,658 2.8% 7.7 Acquisition and ownership of buildings 7.7 1,016,784 44.0% CapEx of Taxonomy eligible but not environmentally sustainable activities (not Taxonomy aligned activities (A.2) 2,127,323 92.0% Total (A.1 + A.2) 2,239,200 96.8% B. Taxonomy-non eligible activities CapEx of Taxonomy non-eligible activities (B) 73,612 3.2% Total (A+B) 2,312,812 100% Appendices EU Taxonomy eligibility and alignment – Proportion of OpEx Substantial contribution criteria Significantly Harm) DSNH criteria (Do Not Economic activity (1) Code(s) (2) Absolute OpEx (3) Proportion of OpEx (4) Climate change mitigation (5) Climate change adaptation (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion 2022 (18) Taxonomy aligned proportion 2021 (19) Category (enabling activity) (20) Category (transitional activity (21) (kEUR) [%] [%] [%] [%] [%] [%] [%] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [Y/N] [%] [%] [E] [T] A. Taxonomy eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) Acquisition and ownership of buildings 7.7 11,611 13.7% 13.7% Y Y 13.7% OpEx of environ- mentally sustainable activities (Taxonomy aligned) (A.1) 11,611 13.7% A.2 Taxonomy eligible but not environmentally sustainable activities (not Taxonomy aligned activities) Acquisition and ownership of buildings 7.7 57,376 67.7% OpEx of Taxonomy eligible but not envi- ronmentally sustain- able activities (not Taxonomy aligned activities (A.2) Total (A.1 + A.2) 68,987 81.4% B. Taxonomy-non eligible activities OpEx of Taxonomy non-eligible activities (B) 15,771 18.6% Total (A+B) 84,758 100% 474 EU Taxonomy / TCFD Index TCFD Index7.5 Theme Recommendations Section Governance Disclose the organisation’s governance around climate-related risks and opportunities. A. Describe the board’s oversight of climate related risks and opportunities 4.1 B. Describe management’s role in assessing and managing climate- related risks and opportunities. 4.1, 4.3.1 Strategy Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation's businesses, strategy, and financial planning where such information is material. A. Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long-term. 4.3.1 B. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. 4.3.1 C. Describe the resilience of the organisation’s strategy, taking into consideration different climate related scenarios, including a 2˚C or lower scenario. 4.3.1 Risk management Disclose how the organisation identifies, assesses, and manages climate-related risks. A. Describe the organisation’s process for identifying and assessing climate-related risks 4.3.1 B. Describe the organisation’s process for managing climate-related risks. 4.3.1 C. Describe how processes for identifying, assessing, and managing climate- related risks are integrated into the organisation’s overall risk management. 4.3.1, 5.2.9 Metrics and targets Disclose the metrics and targets used to assess and manage relevant climate- related risks and opportunities where such information is material. A. Disclose the metrics used by the organisation to assess climate related risks and opportunities in line with its strategy and risk management process 4.3.1, 4.6 B. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks. 4.3.1, sBPR EPRA C. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. 4.3.1 475 Appendices GRI Index7.6 GRI Standard Location Comments/Other references 2 General Disclosures 1. The organisation and its reporting practices 2-1 Organisational details 3.5 Group Level Insights, p. 96 Notes to the consolidated financial statements, p. 355 2-2 Entities included in the organisation’s sustainability reporting Chapter 7.1 Appendix (group chart) p. 464 2-3 Reporting period, frequency, and contact point Sustainability Report 2-4 Restatement of information Sustainability Report 2-5 External assurance Sustainability Report 2. Activities and workers 2-6 Activities, value chain, and other business relationships 1.1 Business decription; model and strategy, p. 4 2-7 Employees 4.4 Company Culture and employees, p. 278; Sustainability Report 2-8 Workers who are not employees Sustainability Report 3. Governance 2-9 Governance structure and composition 5.1.1 CTP´s governance struture, 5.1.3 Appointment and composition of the board, p.317 2-10 Nomination and selection of the highest governance body 5.1.3 Appointment and composition of the board , p. 317 2-11 Chair of the highest governance body 5.1.3 Appointment and composition of the board, p. 317 2-12 Role of the highest governance body in overseeing the management of impacts 4.1 Highlights of 222, p. 258; Sustainability report 2-13 Delegation of responsibility for managing impacts 4.1 Highlights of 2022, p. 258, Sustainability report 2-14 Role of the highest governance body in sustainability reporting Sustainability Report 2-15 Conflicts of interest 5.1.3 Appointment and composition of the board, p. 317 2-16 Communication of critical concerns Sustainability Report 2-17 Collective knowledge of the highest governance body 5.1.3 Appointment and the composition of the board (Directors competency table), p. 318 2-18 Evaluation of the performance of the highest governance body 5.1.8 Board meetings, p. 329 2-19 Remuneration policies 5.1.6 CTP N.V. Remuneration report, p. 320 2-20 Process to determine remuneration 5.1.6 CTP N.V. Remuneration report, p. 320, 321 2-21 Annual total compensation ratio Sustainability Report 4. Strategy, policies, and practices 2-22 Statement on sustainable development strategy Sustainability Report 2-23 Policy commitments 4.3.4 Conducting Business with Integrity, p. 277 2-24 Embedding policy commitments Sustainability Report, 4.3.4 Conducting Business with Integrity, p. 277 2-25 Processes to remediate negative impacts Sustainability Report 2-26 Mechanisms for seeking advice and raising concerns Sustainability Report 2-27 Compliance with laws and regulations Sustainability Report 2-28 Membership associations Sustainability Report 5. Stakeholder engagement 2-29 Approach to stakeholder engagement Sustainability Report 2-30 Collective bargaining agreements CTP has no employees covered by collective bargaining agreements 476 GRI Index GRI Standard Location Comments/Other references Material Topics 3-1 Process to determine material topics Sustainability Report, 4.1 Highlights on 2022, p. 258 3-2 List of material topics Sustainability Report, 4.2 Double Materiality Assessment, p. 261 3-3 Management of material topics 4.3 ESG Strategy, p. 263 GRI Material Topic Standards 201: Economic Performance2016 201-1 Direct economic value generated and distributed 3.2 Operational performance, p. 74; 3.3 Financial performance, p.84; 3.4 Funding and hedging, p.87 201-2 Financial implication and other risks and opportunities due to climate change Sustainability Report, 4.3.1 Striving to be climate positive, p. 265 201-4 Financial assistance received from government Sustainability Report 202: Market Presence 2016 202-1 Ratios and standard entry level wage by gender compared to local minimum wage Sustainability Report 202-2 Proportion of senior management hired from local community Data not available 203: Indirect Economic Impact 203-1 Infrastructure investments and services supported Sustainability Report, 4.3.3 Stimulating Social Impact and Wellbeing, p. 275 203-2 Significant indirect economic impacts Data not available 204: Procurement practices - 2016 204-1 Proportion of spending on local providers Sustainability Report 205: Anti-Corruption – 2016 205-1 Operations assessed for risks related to corruption Sustainability Report, 4.3.4 Conducting Business with Integrity, p. 277 205-2 Communication and training about anticorruption policies and procedures Sustainability Report 205-3 Confirmed incidents of corruption and actions taken Sustainability Report 206: Anti-competitive behaviour – 2016 206-1 Legal actions for anticompetitive behaviour, anti-trust, and monopoly practices Sustainability Report, 4.3.4 Conducting Business with Integrity, p. 277 207: Tax - 2019 207-1 Approach to tax Sustainability Report, 4.3.4 Conducting Business with Integrity, p. 277 207-2 Tax Governance, control, and risk management Sustainability Report, 4.3.4 Conducting Business with Integrity, p. 277 207-3 Stakeholder engagement and management of concerns related to tax Sustainability Report, 4.3.4 Conducting Business with Integrity, p. 277 207-4 Country-by-Country reporting 301: Materials - 2016 301-1 Materials used by weight or volume Data not available 301-2 Recycled input materials used Data not available 301-3 Reclaimed products and their packaging materials Data not available 302: Energy 2016 3-3 Management of Material Topics Sustainability report, 4.3.1 Striving to be climate positive, p. 265 302-1 Energy consumption within the organisation Sustainability Report 302-2 Energy consumption outside of the organisation Sustainability Report 302-3 Energy Intensity Sustainability Report 303: Water and Effluents 2018 303-1 Interactions with water as a shared resource Sustainability Report 477 Appendices GRI Standard Location Comments/Other references 303-2 Management of water discharge-related impact Sustainability Report 303-3 Water Withdrawal Sustainability Report GRI 305: Emissions – 2016 3-3 Management of Material Topics Sustainability report, 4.3.1 Striving to be climate positive, p. 265 305-1 Direct (Scope 1) GHG emissions Sustainability report, 4.3.1 Striving to be climate positive, p. 265 305-2 Energy indirect (Scope 2) GHG emissions Sustainability report, 4.3.1 Striving to be climate positive, p. 265 305-3 Other indirect (Scope 3) GHG emissions Sustainability report, 4.3.1 Striving to be climate positive, p. 265 305-4 GHG emissions intensity Sustainability report, 4.3.1 Striving to be climate positive, p. 265 306: Waste - 2020 306-1 Waste generation and significant waste-related impacts Sustainability Report 306-2 Management of significant waste-related impacts Sustainability Report 306-3 Waste generated Sustainability Report 306-4 Waste diverted from disposal Sustainability Report 306-5 Waste directed to disposal Sustainability Report 308: Supplier environmental assessment – 2016 308-1 New suppliers/providers that were screened using environmental criteria Sustainability Report 308-2 Negative environmental impacts in the supply chain and actions taken Sustainability Report 401: Employment - 2016 3-3 Management of Material Topics 401-1 New Employee hires and employee turnover 4.4 Company culture and employees, p. 278, Sustainability report 3.4.3 CTPs employees 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees Full-time and part-time employees receive the same benifits 402: Labour/Management Relations - 2016 402-1 Minimum notice periods regarding operational changes Data not available 403: Occupational Health and Safety 2018 3-3 Management of Material Topics Sustainability Report 403-1 Occupational health and safety system Sustainability Report, 4.3.3 Stimulating social impact and wellbeing, p. 275 403-2 Hazard Identification, risk assessment, and incident investigation Sustainability Report, 4.3.3 Stimulating social impact and wellbeing, p. 275 403-3 Occupational health services Sustainability Report, 4.3.3 Stimulating social impact and wellbeing, p. 275 403-4 Worker participation, consultation, and communication on occupational health and safety Sustainability Report, 4.3.3 Stimulating social impact and wellbeing, p. 275 403-5 Worker training on occupational health and safety Sustainability Report, 4.3.3 Stimulating social impact and wellbeing, p. 275 403-6 Promotion of worker health Sustainability Report, 4.3.3 Stimulating social impact and wellbeing, p. 275 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Sustainability Report, 4.3.3 Stimulating social impact and wellbeing, p. 275 403-8 Worker covered by an occupational health and safety management system Sustainability Report 403-9 Work-related injuries Sustainability Report 403-10 Work-related ill health Sustainability Report 404: Training and education - 2016 478 GRI Index GRI Standard Location Comments/Other references 404-1 Average hours of training per year per employee Sustainability Report 404-2 Programs for upgrading employee skills and transition assistance programs Sustainability Report 404-3 Percentage of employees receiving regular performance and career development reviews Data not available 405: Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees 4.4 Company culture and employees, p. 278, 4.3.4 Conducting Business with Integrity, p. 277, Sustainability report 405-2 Ratio of basic salary and remuneration of women to men 5.1.6 CTP N.V. 2022 Remuneration report (Pay Ratio) p. 327, Sustainability Report 406: Non-discrimination – 2016 406-1 Incidents of discrimination and corrective actions taken No incidents were reported 407: Freedom of association and collective bargaining - 2016 407-1 Operations and providers in which the right to freedom of association and collective bargaining may be at risk 4.3.4 Conducting business with integrity, p. 277, Sustainability Report 410-1 Security personnel trained in human rights policies or procedures Not Applicable. CTP does not hire security staff 412: Human rights assessment - 2016 412-1 Operations that have been subject to human rights reviews or impact assessments Sustainability Report 412-2 Employee training on human rights policies or procedures 4.3.4 Conducting business with integrity, p. 277, Sustainability report 412-3 Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening Sustainability Report 413: Local communities - 2016 413-1 Operations with local community engagement, impact assessments, and development programs Sustainability Report 413-2 Operations with significant actual and potential negative impacts on local communities Sustainability Report 414: Supplier social assessment - 2016 414-1 New suppliers that were screened using social criteria 4.3.4 Conducting business with integrity, p. 277, Sustainability report 414-2 Negative social impacts in the supply chain and actions taken 4.3.4 Conducting business with integrity, p. 277, Sustainability report 415: Public Policy - 2016 Sustainability Report 418: Customer privacy - 2016 418-1 Substantiated complaints concerning breaches of customer privacy and losses of data CTP did not identify any issues, also during cybersecurity tests, nor was such a breach announced to the Company. 479 Appendices Rank Country Park GLA Type Ownership 1 Romania CTPark Bucharest West 767 Industrial Own 2 Czech CTPark Bor 640 Industrial Own 3 Romania CTPark Bucharest 547 Industrial Own 4 Czech CTPark Brno 504 Industrial Own 5 Czech CTPark Ostrava 390 Industrial Own 6 Hungary CTPark Budapest West 292 Industrial Own 7 Czech CTPark Plzeň 250 Industrial Mixed 8 Czech CTPark Modřice 205 Industrial/Office Own 9 Romania CTPark Bucharest North 198 Industrial Own 10 Hungary CTPark Budapest East 191 Industrial Own 11 Slovakia CTPark Trnava 162 Industrial Own 12 Slovakia CTPark Námestovo 144 Industrial Own 13 Romania CTPark Timisoara 144 Industrial Own 14 Czech CTPark Hranice 134 Industrial Own 15 Slovakia CTPark Bratislava 130 Industrial Own 16 Germany Wilhelmshaven West 124 Industrial Own 17 Czech CTPark Brno Líšeň 121 Industrial Own 18 Czech CTPark Pohořelice 119 Industrial Own 19 Netherlands CTPark Gorinchem 104 Industrial Own 20 Czech CTPark Prague North 102 Industrial Third party AUM 21 Serbia CTPark Belgrade North 101 Industrial Own 22 Czech CTPark Teplice 96 Industrial Third party AUM 23 Poland CTPark Ilowa 95 Industrial Own 24 Czech Spielberk 92 Office/Hotel Own 25 Czech CTPark Žatec 92 Industrial Own 26 Czech CTPark Prague East 89 Industrial Own 27 Hungary CTPark Budapest Vecsés 86 Industrial Own 28 Czech Ponávka 85 Industrial/Office Own 29 Hungary CTPark Komárom 80 Industrial Own 30 Slovakia CTPark Košice 80 Industrial Own 31 Czech CTPark Kadaň 76 Industrial Own 32 Czech CTPark Mladá Boleslav 74 Industrial Own 33 Romania CTPark Pitesti 72 Industrial Own 34 Germany Hannover North 72 Industrial Own 35 Czech CTPark Nový Jičín 69 Industrial Own 36 Czech CTPark Humpolec 68 Industrial Own 37 Czech Vlněna 66 Office Own 38 Bulgaria CTPark Sofia 64 Industrial Own 39 Hungary CTPark Budapest South 64 Industrial Own 40 Serbia CTPark Belgrade West 59 Industrial Own 41 Poland CTPark Opole 59 Industrial Own 42 Czech CTPark Prague Airport 59 Industrial Own 43 Romania CTPark Brasov West 57 Industrial Own 44 Romania CTPark Craiova 54 Industrial Own 45 Czech CTPark Aš 54 Industrial Own 46 Czech CTPark Brno South 53 Industrial Own 47 Slovakia CTPark Žilina 53 Industrial Own 48 Romania CTPark Bucharest South II 53 Industrial Own 49 Hungary CTPark Tatabánya 52 Industrial Own 50 Serbia CTPark Kragujevac 51 Industrial Own 51 Serbia CTPark Novi Sad 51 Industrial Own 52 Germany Munchen North 49 Industrial Own 53 Hungary CTPark Budapest North 48 Industrial Own 54 Czech CTPark Mladá Boleslav II 47 Industrial Own 55 Germany Lohne 47 Industrial Own Portfolio Property List 2022 7.7 480 Portfolio Property List 2022 Rank Country Park GLA Type Ownership 56 Romania CTPark Bucharest Chitila 47 Industrial Own 57 Germany Bad Waldsee 46 Industrial Own 58 Romania CTPark Arad 46 Industrial Own 59 Germany Bad Salzdetfurth 46 Industrial Own 60 Slovakia CTPark Žilina Airport 45 Industrial Own 61 Germany Freisen 44 Industrial Own 62 Germany Euskirchen 44 Industrial Own 63 Romania CTPark Sibiu East 43 Industrial Own 64 Czech CTPark Hlubočky 43 Industrial Own 65 Czech CTPark Divišov 43 Industrial Own 66 Germany Emden 42 Industrial Own 67 Czech CTPark Karviná 42 Industrial Own 68 Hungary CTPark Arrabona II 41 Industrial Own 69 Czech CTPark Cerhovice 41 Industrial Own 70 Germany Duren 41 Industrial Own 71 Slovakia CTPark Prešov South 40 Industrial Own 72 Czech CTPark Ostrava Poruba 40 Industrial Own 73 Romania CTPark Sibiu 39 Industrial Own 74 Germany Rostock 38 Industrial Own 75 Czech CTPark Pardubice 37 Industrial Own 76 Czech CTPark Přeštice 37 Industrial Own 77 Germany Remscheid West 36 Industrial Own 78 Czech Europort Airport Center 36 Hotel Own 79 Czech CTPark Cheb 36 Industrial Own 80 Bulgaria CTPark Sofia East 35 Industrial Own 81 Germany Neubrandenburg 35 Industrial Own 82 Slovakia CTPark Nitra 35 Industrial Own 83 Romania CTPark Bucharest Mogosoia 34 Industrial Own 84 Germany Gevelsberg South 32 Industrial Own 85 Czech CTPark Planá 32 Industrial Own 86 Poland CTPark Kobyłka 31 Industrial Own 87 Germany Treuenbrietzen 31 Industrial Own 88 Czech CTPark Jihlava 31 Industrial Own 89 Germany Munchen South 30 Industrial Own 90 Poland CTPark Warsaw South (Mszczonów) 30 Industrial Own 91 Germany Wiesmoor, Germany 30 Industrial Own 92 Bulgaria CTPark Sofia Airport 30 Industrial Own 93 Slovakia CTPark Hlohovec 29 Industrial Own 94 Romania CTPark Cluj 29 Industrial Own 95 Germany Hannover West 28 Industrial Own 96 Czech CTPark Blatnice 28 Industrial Own 97 Czech CTPark Česká Lípa 28 Industrial Own 98 Germany Dortmund East 27 Industrial Own 99 Germany Solingen 27 Industrial Own 100 Hungary CTPark Szombathely East 26 Industrial Own 101 Hungary CTPark Székesfehérvár 26 Industrial Own 102 Slovakia CTPark Voderady 26 Industrial Own 103 Romania CTPark Deva II 26 Industrial Own 104 Romania CTPark Oradea Airport 26 Industrial Own 105 Romania CTPark Timisoara South 25 Industrial Own 106 Romania CTPark Targu Mures 25 Industrial Own 107 Germany Villingen-Schwenningen 25 Industrial Own 108 Germany Eisenach 25 Industrial Own 109 Czech CTPark Nošovice 25 Industrial Own 110 Germany Siegen South 24 Industrial Own 481 Appendices Rank Country Park GLA Type Ownership 111 Czech IQ Ostrava 24 Office Own 112 Germany Drei Gleichen 24 Industrial Own 113 Germany Gevelsberg East 24 Industrial Own 114 Germany Duisburg North 23 Industrial Own 115 Romania CTPark Salonta 23 Industrial Own 116 Netherlands CTPark Rotterdam 23 Industrial Own 117 Romania CTPark Turda 23 Industrial Own 118 Germany Goslar East 22 Industrial Own 119 Romania CTPark Ineu 22 Industrial Own 120 Romania CTPark Oradea North 22 Industrial Own 121 Germany Ingolstadt North 21 Industrial Own 122 Hungary CTPark Budapest Ullő 21 Industrial Own 123 Romania CTPark Deva 21 Industrial Own 124 Czech CTPark Okříšky 21 Industrial Own 125 Germany Wittingen 21 Industrial Own 126 Hungary CTPark Szombathely 21 Industrial Own 127 Germany Simmern/Hunsruck 21 Industrial Own 128 Czech CTPark Kvasiny 21 Industrial Own 129 Germany Schwabisch Hall South 20 Industrial Own 130 Czech CTPark Prague West 20 Industrial Own 131 Czech CTPark Chrastava 20 Industrial Own 132 Germany Regensburg 20 Industrial Own 133 Germany Aalen West 19 Industrial Own 134 Germany Schwerin South 19 Industrial Own 135 Czech CTPark Zákupy 19 Industrial Own 136 Czech CTPark Lipník nad Bečvou 19 Industrial Own 137 Germany Zella-Mehlis East 19 Industrial Own 138 Hungary CTPark Mosonmagyaróvár 18 Industrial Own 139 Czech Hotel Plzeň 18 Hotel Own 140 Czech CTPark Blučina 18 Industrial Own 141 Germany Bremen North 17 Industrial Own 142 Romania CTPark Bucharest South 17 Industrial Own 143 Germany Lichtenfels 16 Industrial Own 144 Germany Remscheid North 16 Industrial Own 145 Germany Duisburg West 16 Industrial Own 146 Germany Aalen East 16 Industrial Own 147 Czech CTPark Most 15 Industrial Own 148 Germany Numbrecht 15 Industrial Own 149 Germany Magdeburg West 15 Industrial Own 150 Germany Berlin South 14 Industrial Own 151 Slovakia CTPark Nové Mesto 14 Industrial Own 152 Germany Dusseldorf West 13 Industrial Own 153 Germany Kloster Lehnin 13 Industrial Own 154 Czech CTZone Ostrava 13 Industrial Own 155 Germany Bocholt 13 Industrial Own 156 Germany Reutlingen North 13 Industrial Own 157 Czech CTPark Chomutov 13 Industrial Own 158 Germany Bad Oeynhausen 13 Industrial Own 159 Hungary CTPArk Budapest Campus 13 Industrial Own 160 Germany Wolfsburg East 13 Industrial Own 161 Germany Bielefeld South 12 Industrial Own 162 Germany Magdeburg East 12 Industrial Own 163 Germany Sonneberg 12 Industrial Own 164 Germany Bremen West 12 Industrial Own 165 Czech CTPark Ostrava - Poruba 12 Industrial Own 482 Portfolio Property List 2022 Rank Country Park GLA Type Ownership 166 Czech CTPark Louny 12 Industrial Own 167 Germany Wismar 12 Industrial Own 168 Germany Zella-Mehlis Süd 12 Industrial Own 169 Bulgaria CTPark Plovdiv Airport 12 Industrial Own 170 Hungary CTPark Arrabona 11 Industrial Own 171 Germany Neustadt-Glewe 11 Industrial Own 172 Hungary CTPark Kecskemét 11 Industrial Own 173 Slovakia CTPark Krásno nad Kysucou 11 Industrial Own 174 Germany Magdeburg North 10 Industrial Own 175 Germany Kaiserslautern North 10 Industrial Own 176 Romania CTPark Arad North 10 Industrial Own 177 Germany Linthe 10 Industrial Own 178 Czech CTPark Kutná Hora 10 Industrial Own 179 Germany Wittenberg 10 Industrial Own 180 Germany Wuppertal 10 Industrial Own 181 Germany Aalen South 10 Industrial Own 182 Czech CTPark Ústí nad Labem 10 Industrial Own 183 Bulgaria CTPark Plovdiv North 10 Industrial Own 184 Germany Bonn North 9 Industrial Own 185 Germany Nurtingen South 9 Industrial Own 186 Germany Gera East 9 Industrial Own 187 Romania CTPark Caransebes 9 Industrial Own 188 Bulgaria CTPark Sofia Ring Road 9 Industrial Own 189 Czech CTPark Liberec 8 Industrial Own 190 Germany Bochum South 8 Industrial Own 191 Germany Berlin East 8 Industrial Own 192 Germany Schleiz 8 Industrial Own 193 Slovakia Dunaj 8 Office Own 194 Germany Gustrow 7 Industrial Own 195 Germany Rosenheim 7 Industrial Own 196 Germany Meschede 7 Industrial Own 197 Germany Eschenbach in der Oberpfalz 7 Industrial Own 198 Romania CTPark Arad West 6 Industrial Own 199 Czech CTPark Hradec Králové 6 Industrial Own 200 Czech CTPark Lysá nad Labem 5 Industrial Own 201 Germany Bielefeld East 4 Industrial Own 202 Germany Dortmund West 4 Industrial Own 203 Germany Bochum West 3 Industrial Own 204 Czech CTPark České Velenice 3 Industrial Own 205 Germany Ulm East 3 Industrial Own 206 Germany Würzburg South 3 Industrial Own 207 Czech CTPark Žatec II 3 Industrial Own 208 Hungary CTPark Ecser 3 Industrial Own 209 Germany Munster 3 Industrial Own 210 Germany Erfurt-Nord, Germany 3 Industrial Own 211 Germany Syke, Germany 3 Industrial Own 212 Germany Schwerin North 3 Industrial Own 213 Germany Hattingen 3 Industrial Own 214 Germany Müllrose, Germany 3 Industrial Own 215 Germany Kulmbach 2 Industrial Own 216 Germany Halberstadt 2 Industrial Own 217 Austria Deuchendorf, Austria 1 Industrial Own 218 Germany Weimar, Germany 1 Industrial Own 219 Germany Fehrbellin 0 Industrial Own 220 Germany Lauda-Konigshofen 0 Industrial Own 483 Appendices Rank Country Park GLA Type Ownership 221 Germany Schenkendöbern, Germany - Industrial Own 222 Germany Karith, Germany - Industrial Own 223 Germany Bernau, Germany - Industrial Own 224 Germany Untermaßfeld, Germany - Industrial Own Total 10,867 Owned 10,467 Third Party AUM 400 484 7.8 Glossary 2021 Annual Report The Company’s annual report that was published over the financial year 2021 Adjusted EBITDA EBITDA adjusted for items that are not indicative of the Group’s on-going operating performance, such as net valuation result on investment property, other financial expens- es, other financial gains and losses, profit (loss) on disposal of investment properties and the net result from the turn-key development project in Stříbro in the Czech Republic Administrative and operating costs Employee benefits and Other expenses AFM The Netherlands Authority for the Financial Markets AMX Index The stock market index composed of Dutch midcap companies that trade on Euronext Amsterdam Annual General Meeting or AGM The meeting in which the shareholders and all other persons with meeting rights annually assemble no later than 30 June of a specific year Annualised Rental Income Rent roll as per the end of period, including service-charge income (base rent plus other rental income plus extras for above-standard technical improvement plus services minus rent fees) Articles Articles of association of CTP N.V. Audit Committee The audit committee of the Company Average Cost of Debt The total of bank interest expense, interest expense from financial deriva- tives and interest expense from bonds issued for the reporting period divided by the average total balance of inter- est-bearing loans and borrowings from financial institutions and bonds issued for that same period Board The Board of Directors of the Company Board of Directors or Board The Company’s board of directors Board Rules The rules of procedure governing the internal proceedings of the Board BREEAM Building research establishment environmental assessment method Business The Company’s business and the busi- ness of its affiliates BW Dutch civil code (Burgerlijk Wetboek) CAGR Compound annual growth rate CDD Customer due diligence CEE The Central and Eastern Europe region CET Central European Time Chief Executive Officer or CEO The chief executive officer of the Company Chief Financial Officer or CFO The chief financial officer of the Company CITA The Dutch Corporate Income Tax Act 1969 (Wet op de vennootschapsbelast- ing 1969) Code The Dutch Corporate Governance Code (as amended from time to time) Code of Conduct The code of conduct of the Company Company CTP N.V. Company specific Adjusted Earnings EPRA Earnings adjusted for the after (deferred) tax effect from the adjustment for rental income for sold portfolio, impairment/depreciation on hotel portfolio and acquisitions, foreign exchange gains/losses related to company restructuring and associ- ated costs with establishment capital market structure Company specific Adjusted Earnings per Share Company specific Adjusted Earnings based upon the number of shares as of end of period Core markets Czech Republic, Hungary, Romania, Slovakia Corporations Act Corporations Act 2001 of the Commonwealth of Australia COVID-19 Strain of a coronavirus disease SARS-CoV-2 CPI Consumer Price Index CSA S&P Global Corporate Sustainability Assessment CTP Invest CTP Invest, spol. s.r.o. CTP Invest Sub-Group CTP Invest with its consolidated subsidiaries as the development and property management arm CTP or Company CTP N.V. CTP Property Sub-Group CTP Property B.V. with its consolidat- ed subsidiaries as the holding entities of the income producing property portfolio of the Group CTP staff All CTP employees, including execu- tives and external staff (contractors). CW Cushman & Wakefield DCC The Dutch Civil Code (Burgerlijk Wetboek) Decree Disclosure Major Holdings Issuing Institutions The Decree on disclosure of major holdings and capital interests in issuing institutions (Besluit melding zeggenschap en kapitaalbelang in uitgevende instellingen Wft) Decree Management Report The Decree on the content of the management report (Besluit inhoud bestuursverslag) Decree Takeover Directive The Decree implementing Section 10 of the Directive on takeover bids (Besluit artikel 10 overnamerichtlijn) Deed of Amendment A notarial deed of conversion and amendment of the articles of associ- ation of the Company in accordance with an adopted resolution of the General Meeting in matter of conversion of the Company to a public limited liability company (naamloze vennootschap) DEKA Guarantees Specific guarantees to Deka Immobilien and Westinvest provided by the Group including (i) a rental guarantee regarding vacant premises, rent shortfall and outstanding tenant incentives, (ii) tenant guarantees regarding defaults, break options and non-solicitation, and (iii) a techni- cal guarantee for the repairs of the buildings Portfolio Property List 2022 / Glossary 485 Appendices Deka Immobilien DEKA Immobilien Investment GmbH Delegated Regulation Commission Delegated Regulation (EU) No. 2019/980 DIP A discretionary plan which may oper- ate with one or more incentive p lans operated by CTP and providing a mechanism for the deferral of part of a participant’s incentive to a deferred award of cash and/or a deferred amount of shares DIP Award A deferred award of cash and/or a deferred award of Shares DIR or DIG Deutsche Industrie REIT AG Director An Executive Director or a Non-Executive Director Dutch Resident Corporate Entities Entities or enterprises that are subject to the CITA and are resident or deemed to be resident in the Nether- lands Dutch Resident Individuals Individuals who are resident or deemed to be resident in the Netherlands Dutch SRD Act The Dutch act to implement the Shareholder Rights Directive II (bevordering van de langetermijnbe- trokkenheid van aandeelhouders) DWTA Dutch Dividend Withholding Tax Act EBITDA Profit or loss for the period attribut- able to parent excluding Income tax expenses, interest income, interest expense and depreciation and amor- tisation EEA European Economic Area EGM The meeting in which the shareholders and all other persons with meeting rights assemble for a specific agenda item EMTN Programme EUR 8,000,000,000 Euro Medium Term Note Programme established by the Company in September 2020 with the latest supplement from January 2022. Morgan Stanley & Co. International plc acted as arranger, Erste Group Bank AG, J.P. Morgan Securities plc, Morgan Stanley & Co. International plc, Raiffeisen Bank International AG, Société Générale and UniCredit Bank AG as dealers, Citicorp Trustee Company Limited as trustee, Citibank, N.A., London Branch as principal paying agent and transfer agent and Citigroup Global Markets Europe AG as registrar EPRA BPR EPRA best practice reporting EPRA Earnings The profit for the period adjusted for the after (deferred) tax effect from the exclusion of the net valuation result, the change in the fair value of financial instruments and associated close-out costs, result from disposals of investment properties and other interests and foreign currency trans- lation result EPRA Earnings per Share EPRA Earnings based upon the weighted average number of shares as of end of period EPRA Net Initial Yield Annualised rental income based upon the cash passing rent at balance sheet date less non recoverable property operating expenses divided by the market value of income generating investment property EPRA NTA or EPRA Net Tangible Assets Total equity attributable to owners of the Company excluding deferred tax in relation to net valuation result of investment property and investment property under development with in- tention to hold and not sell in the long run, excluding fair value of financial instruments and excluding of goodwill as a result of deferred tax EPRA Topped-up Net Initial Yield Annualised rental income based upon the cash passing rent at balance sheet date less non-recoverable property operating expenses adjusted notional rent expiration of for rent free periods and other lease incentives divided by the market value of income generating investment property ERM Enterprise Risk Management, an integrated risk-based system of functions, processes and methodol- ogies of identifying and addressing methodically the potential events that represent risks to the achievement of strategic objectives, or to opportuni- ties to gain competitive advantage ERP Enterprise Resource Planning, a business process management software that manages and integrates a company's financials, supply chain, operations, commerce, reporting, manufacturing, and human resource activities ERV Estimated Rental Value ESG Environmental, Social, and Corporate Governance; an evaluation of a firm’s collective conscientiousness for social and environmental factors ESMA European Securities and Market Authority EU European Union EU Taxonomy European Union classification system that allows to classify business activ- ities as sustainable – https://finance. ec.europa.eu/sustainable-finance/ tools-and-standards/eu-taxono- my-sustainable-activities_en EUR or euro or € The lawful currency of the European Economic and Monetary Union Euroclear Nederland Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V. Euronext Amsterdam Euronext Amsterdam N.V. Exchange Act US Securities Exchange Act of 1934, as amended Executive Committee Executive Committee of the Company constituted of The Executive Direc- tors and other certain appointed key officers Executive Committee Members The members of the Executive Committee who are not also Executive Directors Executive Director a director of the Company appointed as executive director Expansion or growth markets Poland, Serbia, Bulgaria Financial Statements Audited consolidated financial state- ments of the Company for the period from 1 January 2022 to 31 December 2022, which comprise the consolidated statements of financial position as of 31 December 2022 and 2021 and the related consolidated state- ments of profit and loss and compre- hensive income, changes in equity, and cash flows for the period 1 January 2022 to 31 December 2022 and the year ended 31 December 2021, and the related notes to the consol- idated financial statements. These financial statements are a reproduc- tion of the statutory financial state- ments of the Company and have been provided with an audit opinion by the external auditor. FMSA Dutch Financial Markets Supervision Act (Wet op het financieel toezicht) Founder Mr. Remon Vos FTEs Full time equivalent personnel GAV The gross asset value calculated as the aggregate of investment property, in- vestment property under development and property, plant and equipment as presented in the financial statements in accordance with IFRS GDP Gross domestic product General Meeting The corporate body that consists of shareholders and all other persons with voting rights, or the meeting in which the shareholders and all other persons with meeting rights assemble GFC Global Financial Crisis GHG Greenhouse Gases. Gases which emissions contribute to greenhouse effect. Systemized approach is described by Greenhouse Gas Protocol – https://ghgprotocol.org/ GLA Gross lettable area Green Asset Pool The selected pool of new and existing assets that promote the transition to low-carbon and climate resilient growth and which meet the criteria in the Green Bond Framework Green Bond Framework The Group’s framework developed according to the Green Bond Principles 2018, administrated by the Interna- tional Capital Market Association GRI Global Reporting Initiative – framework for transparent disclosure of non-financial data – https://www. globalreporting.org/ Gross Development Value Has the meaning given to it in “Important Information” Gross Rental Income or GRI Rental income for the relevant period Gross Yield Percentage of annual rental income not reflecting any expenses (i.e. prop- erty operating expenses, maintenance costs, stamp duty) divided by market value of investment property Group The Company and all entities included in the group (groep, within the meaning of article 2:24 b DCC) headed by it Group Companies The Company’s subsidiaries within the meaning of article 2:24b DCC Group Insider Trading Policy The insider trading policy of the Group I&L Industrial & Logistics IAS International Accounting Standards ICR The ratio of the Group’s total interest expense to Adjusted EBITDA IFRS The International Financial Reporting Standards as adopted by the European Union 486 Indebtedness Interest-bearing loans and borrowings from financial institutions ISIN International securities identification number JLL Jones Lang LaSalle, s.r.o. KPI Key performance indicator KPMG KPMG Accountants N.V. Leasing Activity Sum of new contracts or amendments for either newly leased or prolonged premises in given period. LEI Legal Entity Identifier Like-for-Like Rental Income Growth The like-for-like gross rental growth compares the growth of the gross rental income of the portfolio that has been consistently in operation (not under development) during the two preceding 12-month periods that are described LTIP A long-term incentive plan to incentiv- ize the achievement of long-term sustainable shareholder returns and the delivery of CTP’s long-term strategy LTIP Awards Awards of shares granted by Non-Executive Directors or Executive Directors as appropriate Market Abuse Regulation Regulation (EU) No 596/2014 on market abuse, as amended Multivest Multivest B.V., the parent company of the Group MWp Megawatt peak NET Debt Aggregate amount of interest-bearing loans and borrowings from financial institutions plus bonds issued after deduction of cash and cash equivalents Net LTV Net loan-to-value ratio, which is the aggregate amount of interest-bearing loans and borrowings from financial institutions plus bonds issued after deduction of cash and cash equivalents as a percentage of GAV NOI Net Operating Income Nomination and Remuneration Committee The nomination and remuneration committee of the Company Non-Dutch Resident Corporate Entities Entities that are not resident and not deemed to be resident in the Nether- lands Non-Dutch Resident Individuals Individuals who are not resident and not deemed to be resident in the Netherlands Non-Executive Directors The Company’s non-executive directors NRI Margin Net Rental Income Margin is the rental income plus service charge income minus property operating expenses, divided by the total rental income Occupancy Rate Proportion of the aggregate GLA of the properties (whether or not capable of being let) which is subject to tenancies at that point in time. For the avoidance of doubt, the aggre- gate GLA includes areas designated as structurally vacant or under refur- bishment. Any development to create new lettable area at any property shall only be included when the rele- vant space or development is complete and available to generate income Operating profit (excl. valuation results) Profit for the period less Net valuation result on investment property PV Photovoltaic Red Book The Royal Institute of Chartered Surveyors Valuation – (incorporating the International Valuation Standards) – January 2020 Related Party Transactions Policy The related-party transactions policy of the Group Relevant Member State Each member state of the EEA Remuneration Policy A remuneration policy for CTP adopted by the AGM on 25 March 2021 applying to the Executive Directors and the Non-Executive Directors Rental Collection Trade receivable more than 15 days overdue as a percentage of the last 12 month’s billings including rent, service charges, extra’s and tenant direct re-charges Restructuring The CTP Property Sub-Group trans- ferred to the Company on 31 October 2019 and the CTP Invest Sub-Group transferred to the Company on 27 January 2020 in order to form the Group as it exists as of the date of the Prospectus Retention Rate The part of total rental income that expires in one year and is prolonged with existing clients, as part of the total rental income of leases which expire in the same year. Revolving Credit Facility Agreement Revolving Credit Facility Agreement dated 18 December 2020 between the Company as borrower and a syn- dicate of banks including Raiffeisen Bank International AG, Československá obchodní banka, a.s., Erste Group Bank AG, ING Bank N.V., Komerční Banka, a.s., and Unicredit Bank Czech Republic and Slovakia, a.s which provides for an unsecured revolving credit facility in the aggregate amount of EUR 400 million (as at 31 December 2022) Senior Independent Director The Non-Executive Director with the title Senior Independent Director, in accordance with the Board Rules Senior Management Employees of CTP in a managerial position as referred to in article 2:166 DCC Shareholder(s) A holder of shares Sustainability Committee The sustainability committee of the Company TCFD Task Force on Climate related Finan- cial Disclosures – non-public initiative that developed guidance of disclosure of impact of climate changes on financial performance of companies – https://www.fsb-tcfd.org/ The Netherlands The part of the Kingdom of the Netherlands located in Europe TSR Total Shareholder Return UNHCR UN Refugee Agency US dollars or US$ or USD or $ The US Dollar, the lawful currency in the US Valuation Yield Annualised rental income as a percent- age of investment property owned by the Group, excluding the value of the Group’s land bank WAULT Weighted average unexpired lease term Western European or Start-up markets Austria, Netherlands, Germany Westinvest Westinvest Gesellschaft fur Investmentfonds mbH Yield on Cost Average contracted rental value divided by development cost including land and excluding financing, marketing, rent free periods and project management costs Glossary 487 Appendices / Disclaimer 7.9 Disclaimer Forward-looking Statements To the extent that this annual report contains forward-looking statements, such statements do not repre- sent facts and are characterised by the words “expect”, “believe”, “estimate”, “intend”, “aim”, “assume” or similar expressions. The forward-looking statements contained herein speak only as of the date they are made and CTP does not assume any obligation to update such statements, except as required by law. For- ward-looking statements express the intentions, opinions or current expectations and assumptions of CTP and the persons acting in conjunction with CTP, for example with regard to the the Outlook section of the “CEO and CFO letter”, or the Outlook and Priorities for 2022 section in the “2021 in Review.” Such forward-looking statements are based on current plans, estimates and forecasts which CTP and the persons acting in conjunction with CTP have made to the best of their knowledge, but which may not be correct in the future. Forward-looking statements are subject to risks and uncertainties that are difficult to predict and usually cannot be influenced by CTP or the persons acting in conjunction with CTP. Please see in this respect chapter Risk Management. It should be kept in mind that the actual events or consequences may differ materially from those contained in or expressed by such forward-looking statements. Market Data Statements regarding market share, market data, industry statistics and industry forecasts, contained in this annual report are based on publicly available sources such as research institutes and analyst coverage in combination with CTP’s own management estimates. 488 Colophon CTP Yearbook 2022 Prepared by CTP Published by CTP March 2023 Content CTP Graphic design Simon Gray, Jan Svoboda Three-dimensional artwork Marek Slovák Dtp Monika Vojáčková Photography Goran Tačevski, Kryštof Antůšek, Lukáš Pelech, Oldřich Hrb, Tomáš Slavík, Wim Beelen and CTP Archive Print production KFG, s.r.o. CTP CTPark Humpolec 1571 396 01 Humpolec Czech Republic +420 565 535 565 Czech Republic CTP Invest spol. s r.o. Národní 135/14 110 00 Prague 1 Czech Republic +420 220 511 444 Romania CTP Invest Bucharest SRL 5A Ion Raiu Street Bolintin Deal Commune Giurgiu County 077096 Romania +40 21 9149 Hungary CTP Management Hungary Kft Verebély László utca 2 2051 Biatorbágy Hungary +36 30 164 3414 Slovakia CTP Invest SK, spol. s r.o. Laurinská 18 811 01 Bratislava Slovakia +421 904 174 157 Serbia CTP Invest doo Starine Novaka 23 11000 Belgrade Serbia +381 66 8772 860 CTP Regional Offices Poland CTP Invest Poland Sp. z o.o. Rondo ONZ 1 00-124 Warsaw Poland +48 600 037 740 Bulgaria CTP Invest EOOD 247, Botevgradsko shosse Blvd. Administrative building, loor 7 1517 Soia Bulgaria +359 884 65 22 38 Netherlands CTP Invest BV Apollolaan 151 1077 AR Amsterdam The Netherlands +31 85 27 31 294 Germany CTP Deutschland B.V. Lietzenburger Strasse 75 107 19 Berlin Germany +49 (0) 331 74 00 76 -529 Austria CTP Invest Immobilien GmbH Donaustadtstraße 1/3 1220 Vienna Austria +43 664 3483608
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