ANNUAL REPORT DECEMBER 31 2017 Extensa Group NV Havenlaan/Avenue du Port 86C b316 ∙ 1000 Brussel/Bruxelles T +32 2 237.08.20 ∙ F +32 2 237 08 21 extensa.eu ∙ [email protected] LETTER OF THE CEO

FINANCIAL OVERVIEW 2017 Extensa Group realized an historically-unequalled net result of 75 M€ in 2017, which in turn exceeded the very good 2016 result of 40 M€.

Tour & Taxis realized a margin of 17 million euros, generated by the rental and management of properties (such as the Sheds, Hôtel de la Poste, car parks), the sale of apartments in the Gloria residence, and the last contribution of the VAC De Meander project (Herman Teirlinck office property), which was delivered to the tenant (Flemish Government) on a long-term lease basis and eventually sold to Bâloise Group.

In Luxembourg, Cloche d’Or realized a margin of 27 million euros, generated by two office projects under construction and the sale of apartments.

The balance sheet total decreased from 654 million euros at year-end 2016 to 412 million euros at year-end 2017, primarily due to the disposal of the shares in VAC De Meander and the payment of an exceptional dividend to its shareholder. The equity decreased from 248 million euros at year-end 2016 to 184 million euros. Extensa Group sold its 29.3% interest in Leasinvest Real Estate to Ackermans & van Haaren in 2017 and subsequently paid a dividend of 157 million euro, which explains the significant reduction in Extensa’s equity. OPERATIONAL OVERVIEW 2017 Urban development projects

The special zoning plan (BPA/PPAS) for the entire Tour & Taxis site in Brussels was approved in June 2017, creating a clear legal framework for the further development of the site.

The Herman Teirlinck office building (48,096 m² gross area) was delivered to the Flemish Government in August 2017. This energy-efficient building is fully operational as the new Flemish Administrative Centre in Brussels. In November 2017, Extensa Group finalized the sale of the project company to Bâloise Group. The gross contribution is recognized according to percentage of completion of the building (2015-2017) and amounted to 11 million euros in 2017. Extensa Group used the proceeds of this sale to repay the outstanding balance of the bridge loan of 75 million euros which it had taken out at the beginning of 2015 to increase its stake in Tour & Taxis by 50%.

The 115 apartments of the Gloria residence, the first apartment building on the Tour & Taxis site, was completed in the first quarter of 2017. By the end of 2017, all but one residential units were sold.

Planning permission for the rest of the residential quarter and for the ‘Gare Maritime’ is still pending and is expected in 2018. The renovation of the existing structure of the ‘Gare Maritime’ has started and will be completed in the second quarter of 2018. This former freight station (~ 40,000 m² floor area) will be the new focal point of the Tour & Taxis site, and combining work space, thematic retail stores and a food court. By the end of 2017, prospective tenants had signed letters of intent for approximately 40% of the office spaces.

Across the canal on the Willebroekkaai, Extensa Group launched construction works of the Riva project (139 apartments) benefiting from a direct view on the canal and the Royal Depot of Tour & Taxis.Reservations concluded with potential buyers will probably enable Extensa to fund the project without bank credits. The construction of the new Picard Bridge funded by Beliris will begin in the second quarter of 2018.

In the context of the Cloche d’Or project, Grossfeld PAP (Extensa Group has a share of 50%) has purchase options on very well-located sites in the south of Luxembourg city. The construction of the two new boulevards by the city of Luxembourg and the Luxembourg state is on schedule. Parts of the new roads are already open to the public.

Apartments presales began in October 2014. By the end of 2017, 803 housing units were sold (88% of the program), which definitely exceeded expectations set at project inception. Construction works for the last phase have been triggered so that the whole of the îlot A program should be entirely delivered by 2020. Development margins are being recognized according to percentage of completion.

Construction works related to the headquarters of Alter Domus (10,500 m²) and Deloitte Luxembourg (30,000 m²) are also on schedule. Their completion is foreseen for the second semester of 2018. In March 2018, an agreement regarding the sale of the Deloitte project has been signed with Ethias and L’Intégrale.

Developments and residential projects in Belgium

Several projects are currently going through building permit administrative procedures. In Flanders, the portfolio includes projects located in Edegem, Schilde, Wuustwezel, Kapellen, Brasschaat, Zoutleeuw, Roeselare and Leuven.

The land parceling permit related to the Groeningen project in Kontich (totaling 650 houses and/or apartments) was approved by the local city authorities, but is now under appeal by third parties. In Wallonia, planning procedures for the projects in Wavre, La Hulpe and Tubize continue.

All apartments of the inner-city project ‘De Munt’ in Roeselare (Extensa Group has a share of 50%) have been delivered. The sale of the last-phase apartments will probably continue throughout 2018.

Slovakia, Romania, Turkey

In Trnava, Slovakia, Top Development (Extensa Group has a share of 50%) continues to manage its retail park (7,730 m²) and is considering the sale of its energy network in 2018. Further sales or developments of the available sites are under investigation.

In December 2017, after years of litigation, Extensa Group became full owner of the land positions in Romania (which were previously held in a 50% joint venture), so that development can progress.

In Turkey, the building permission with respect to the construction of 250 apartments in the Topkapi (greater Istanbul) area is expected towards the end of 2018.

Real estate investments At year-end 2017, apart from the heritage buildings on the Tour & Taxis site, four other properties with a total carrying value of 11 million euros remained in the real estate investment portfolio. One of those other properties will be sold in the first half of 2018. The others remain fully let.

OUTLOOK 2018 The current projects on Tour & Taxis and Cloche d’Or will continue to support the results in 2018 and subsequent years. CONSOLIDATED FINANCIAL STATEMENTS OF EXTENSA GROUP NV DECEMBER 31 2017 CONSOLIDATEDX0A0T FINANCIAL STATEMENTS OF EXTENSA GROUP NV

Consolidated Statement of Financial Position Consolidated Statement of Profit & Loss Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows

INDEX TO THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 General information 2 Application of new and revised International Financial Reporting Standards 3 Summary of significant accounting policies 4 Critical accounting judgements and key sources of estimation uncertainty 5 IFRS 1 Equity reconciliation 6 Property, plant & equipment 7 Investment properties 8 Investments in associates and joint ventures 9 Finance lease receivable 10 Income taxes 11 Inventories 12 Amounts due from customers under construction contracts 13 Trade and other receivables 14 Cash and cash equivalents 15 Financial liabilities 16 Trade and Other payables 17 Provisions 18 Revenue 19 Property rental income 20 Other operating income 21 Property development expenses 22 Employee expenses 23 Other operating expenses 24 Finance income 25 Finance expenses 26 Financial instruments 27 Segment reporting 28 Related party transactions 29 Subsidiaries 30 Capital commitments 31 Earnings per share 32 Contingencies 33 Events after the reporting period

INDEPENDENT AUDITORS' REPORT X1A0T Consolidated Statement of Financial Position as at 31 December 2017 All figures in Euro Notes 31/12/2017 31/12/2016 1/01/2016 ASSETS Non-current assets 97.182.934 333.532.056 231.246.778 Intangible assets 468.196 23.564 28.828 Property,X1A1T plant & equipment 6 1.262.888 439.217 548.527 InvestmentX1A2T property 7 61.004.552 206.894.652 108.001.869 InvestmentsX1A3T in associates and joint ventures 8 28.204.146 120.275.313 116.270.081 Financial fixed assets 9.050 23.486 123.191 FinanceX1A4T lease receivable 9 4.895.752 5.466.834 6.014.282 DeferredX1A5T tax assets 10 1.338.350 408.990 260.000 Current assets 311.669.806 320.791.159 328.467.493 InventoriesX1A6T 11 180.026.737 152.578.601 156.248.442 AmountsX1A7T due from customers under construction contracts 12 20.358.855 54.012.334 81.475.378 TradeX1A8T and other receivables 13 81.109.511 80.133.776 51.172.986 Finance lease receivable 9 571.083 547.447 524.175 Current tax assets 10 634.719 475.321 666.800 Cash and cash equivalents 14 28.374.197 32.852.454 38.224.164 DeferredX1A9T charges and accrued income 594.704 191.226 155.548 Assets held for sale 7 3.500.000 - - TOTAL ASSETS 412.352.740 654.323.215 559.714.271

EQUITY 183.745.620 248.233.635 213.738.576 Equity Group Share 163.665.962 242.560.277 205.388.336 Issued capital 15.939.028 15.939.028 15.939.028 Consolidated reserves 144.851.277 226.486.238 186.288.132 Cash flow hedging reserve - - 13.014.879 - 10.000.795 Available for sale reserve - 11.225.866 12.155.687 Foreign currency translation reserve 2.875.657 1.924.024 1.006.284 Non-controlling interests 20.079.658 5.673.358 8.350.240

LIABILITIES Non-current liabilities 170.089.841 158.470.714 222.837.853 Provisions 8, 17 9.228.378 5.357.917 4.962.506 Deferred tax liabilities 10 31.284.665 49.206.722 40.044.830 FinancialX1A10T Liabilities 15 122.925.534 94.102.776 165.171.500 Non-current hedging instruments 362.892 589.021 682.699 TradeX1A11T and Other payables 16 6.000.000 8.883.150 11.606.179 Finance lease liability 288.372 331.129 370.138 Current liabilities 58.517.279 247.618.865 123.137.842 Financial Liabilities 15 5.800.795 198.883.370 100.918.672 Trade and Other payables 16 48.683.071 44.298.761 17.387.994 Current tax payables 10 2.072.436 2.072.911 3.532.373 AccruedX1A12T charges and deferred income 1.960.977 2.363.823 1.298.803 TOTAL EQUITY AND LIABILITIES 412.352.740 654.323.215 559.714.271 X2A0T Consolidated Statement of Profit and Loss for the year ending 31 December 2017 All figures in Euro Notes 2017 2016

OperatingX2A1T income 165.437.047 118.287.148 RevenueX2A2T 18 154.229.983 109.814.715 PropertyX2A3T rental income 19 6.825.036 6.167.236 Other operating income 20 4.382.028 2.305.197 OperatingX2A4T expenses - 148.252.472 - 111.189.111 X2A5T Property development expenses 21 - 130.501.422 - 91.372.878 Employee expenses 22 - 7.463.909 - 9.078.752 X2A6T Depreciation and impairment losses 6 - 158.926 - 341.605 Other operating expenses 23 - 10.128.216 - 10.395.876 Change in fair value of Investment Properties 7 11.577.667 40.861.707 Profit/(loss) on disposal of assets 8 43.374.554 23.425 Share in the net profit (loss) of equity accounted investments 8 12.937.887 14.643.144

Earnings before Interests & Taxes (EBIT) 85.074.683 62.626.313

X2A7T

FinanceX2A8T income 24 3.023.404 3.337.655 Finance expenses 25 - 3.596.670 - 1.849.831 Change in fair value of derivatives 226.098 93.678

Profit/(loss) before tax (PBT) 84.727.515 64.207.815

Income taxes 10 4.846.367 - 6.621.248

Profit/(loss) of the period 89.573.882 57.586.566

Non-controlling interest 14.406.300 17.388.460

Share of the group 75.167.582 40.198.106

Consolidated Statement of Comprehensive Income for the year ending 31 December 2017

Notes 2017 2016 Profit / (loss) of the period 89.573.882 57.586.566 Non-controlling interest 14.406.300 17.388.460 Share of the group 75.167.582 40.198.106

Other comprehensive income 951.633 - 3.026.165 Items that may be reclassified to profit or loss in subsequent periods (net of tax) Foreign currency translation reserve 951.633 917.740 Share of other comprehensive income of equity accounted investments 8 - - 3.943.905

Total comprehensive income 90.525.515 54.560.401 Non-controlling interest 14.406.300 17.388.460 Share of the group 76.119.215 37.171.941

Earnings per share 31/12/2017 31/12/2016 Basic and Diluted earnings per share from continuing operations 117 63 Basic and Diluted earnings per share from discontinued operations - - Total Basic and Diluted earnings per share 31 117 63 X3A0T Consolidated Statement of Changes in Equity for the year ending 31 December 2017 All figures in Euro Foreign Attributable to currency Cash flow Available for Consolidated Non-controlling Notes Issued Capital owners of the Total translation hedging reserve sale reserve reserves interest parent reserve

Balance at 1 January 2016 15.939.028 1.006.284 - 10.000.795 12.155.687 186.288.132 205.388.336 8.350.240 213.738.576 Profit for the year 40.198.106 40.198.106 17.388.460 57.586.566 Other comprehensive income for the year, net of income tax 917.740 - 3.014.084 - 929.821 - 3.026.165 - - 3.026.165 Total comprehensive income for the year - 917.740 - 3.014.084 - 929.821 40.198.106 37.171.941 17.388.460 54.560.401 Paid in capital by non-controlling interest 734.996 734.996 Acquisition of non-controlling interest 29 - 20.800.338 - 20.800.338 Balance at 31 December 2016 15.939.028 1.924.024 - 13.014.879 11.225.866 226.486.238 242.560.277 5.673.358 248.233.635

Profit for the year 75.167.582 75.167.582 14.406.300 89.573.882 Other comprehensive income for the year, net of income tax 951.633 - - 951.633 - 951.633 Total comprehensive income for the year - 951.633 - - 75.167.582 76.119.215 14.406.300 90.525.515 Dividend 28 - 156.802.543 - 156.802.543 - - 156.802.543 Disposal of LRE 8 13.014.879 - 11.225.866 1.789.013 1.789.013 Balance at 31 December 2017 15.939.028 2.875.657 - - 144.851.277 163.665.962 20.079.658 183.745.620

Issued share capital comprises 642,979 fully paid shares, which have a par value of EUR 25 per share. This did not change since 1 January 2016. X4A0T Consolidated Statement of Cash Flows for the year ending 31 December 2017 All figures in Euro Notes 31/12/2017 31/12/2016 Cash flows from operating activities Profit before tax 84.727.515 64.207.815 Adjustments for: Share in the net profit of equity accounted investments 8 - 12.937.887 - 14.643.144 Finance expense 25 3.596.670 1.849.831 Finance income 24- 3.023.404 - 3.337.655 Change in fair value of Investment Properties 7 - 11.577.667 - 40.861.707 Profit/(loss) on disposal of assets 8 - 43.374.554 - 23.425 Depreciation and impairment losses 158.926 341.605 Change in fair value of derivatives - 226.098 - 93.678 Changes in provisions 5.026.669 306.370 22.370.170 7.746.012 Movements in working capital: Decrease / (Increase) in Inventory 11- 22.648.136 3.669.841 Decrease / (Increase) in Trade and other receivables 13- 16.810.041 - 19.716.511 Decrease / (Increase) in Amounts due from customers under construction 12 33.653.479 27.463.044 contracts Decrease / (Increase) in Deferred charges and accrued income - 490.866 - 35.678 (Decrease) / Increase in Provisions 17 6.500.000 - (Decrease) / Increase in Trade and other payables 16 7.047.287 22.910.767 (Decrease) / Increase in Accrued charges and deferred income 721.719 1.065.020

Movement in financial fixed assets 14.436 99.705 Income tax paid 10- 1.872.349 - 2.694.110 Dividends received - 6.790.344 Net cash flow from operating activities 28.485.698 47.298.434 Cash flows from Investing activities Capital expenditure on investment properties 7 - 4.561.120 - 58.093.429 Purchase of property, plant & equipment 6 - 482.749 - 167.672 Purchase of intangible assets - 464.004 - 4.630 Receipt of finance lease receivables 9 547.447 524.176 Net cash inflow on disposal of subsidiary 29 61.604.543 29.294 Paid in capital - 734.996 Acquisition of additional participation in joint ventures - - 12.500 Proceeds from the disposal of property, plant & equipment 6 85.527 61.829 Net cash outflow on financial assets - - 9.350 Interest received 24 261.827 50.498 Net cash flow used in investing activities 56.991.471 - 56.886.788 Cash flows from financing activities Acquisition of additional participation in subsidiaries 29- 4.000.000 - 22.500.000 Proceeds from borrowings 15 88.925.534 64.292.181 Repayment of borrowings 15- 170.164.146 - 37.573.179 Net cash flow in other long term payables 16- 2.883.150 - Repayment of finance lease liabilities - 42.757 - 39.009 Interest paid 25- 831.027 538.980 Financing related expense paid 25- 959.881 - 502.328 Net cash flow from financing activities - 89.955.427 4.216.644 Net decrease in cash and cash equivalents - 4.478.257 - 5.371.710 Cash and cash equivalents at the beginning of the year 32.852.454 38.224.164 Cash and cash equivalents at the end of the year 14 28.374.197 32.852.454 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General information

Extensa Group NV (the “Company”) is a limited liability company governed by Belgian law. The address of its registered office is Avenue du Port 86c, 1000 Brussels, Belgium.

The Company and its affiliates (together referred as the “Group”) are active in the real estate development industry. The Group is ultimately controlled by its parent, Ackermans & Van Haaren.

2. Application of new and revised International Financial Reporting Standards (IFRSs)

2.1 Standards and interpretations applicable for the annual period beginning on 1 January 2017

• Annual improvements to IFRS Standards 2014-2016 Cycle: Amendments to IFRS 12 (applicable for annual periods beginning on or after 1 January 2017, but not yet endorsed by the EU).

• Amendments to IAS 7 Statement of Cash Flows – Disclosure Initiative (applicable for annual periods beginning on or after 1 January 2017). Refer to Note 15.1 for Reconciliation of liabilities arising from financing activities.

• Amendments to IAS 12 Income Taxes – Recognition of Deferred Tax Assets for Unrealised Losses (applicable for annual periods beginning on or after 1 January 2017).

2.2 Standards and interpretations (applicable to the Group) published, but not yet applicable for the annual period beginning on 1 January 2017

• Annual improvements to IFRS Standards 2014-2016 Cycle: Amendments to IFRS 1 and IAS 28 (applicable for annual periods beginning on or after 1 January 2018, but not yet endorsed in the EU) • IFRS 9 Financial Instruments and subsequent amendments (applicable for annual periods beginning on or after 1 January 2018) • IFRS 15 Revenue from Contracts with Customers (applicable for annual periods beginning on or after 1 January 2018) • IFRS 16 Leases (applicable for annual periods beginning on or after 1 January 2019) • Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (the effective date has been deferred indefinitely, and therefore the endorsement in the EU has been postponed) • Amendments to IAS 40 Transfers of Investment Property (applicable for annual periods beginning on or after 1 January 2018, but not yet endorsed in the EU) • IFRIC 22 Foreign Currency Transactions and Advance Consideration (applicable for annual periods beginning on or after 1 January 2018, but not yet endorsed in the EU) • IFRIC 23 Uncertainty over Income Tax Treatments (applicable for annual periods beginning on or after 1 January 2019, but not yet endorsed in the EU)

The potential impacts of these standards and interpretations on the consolidated accounts of the Group are being determined. The Group does not expect these changes to have a significant impact on the Group’s financial statements. The Group specifically considered the potential impact of IFRS 15. The IASB published a new standard, IFRS 15 Revenue from contracts with customers. IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. IFRS 15 will supersede the current revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the related interpretations when it becomes effective.

The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The standard introduces a 5-step approach to revenue recognition.

The sale of the Group’s investment properties does not fall within the scope of IFRS 15 therefore, there is no impact on this revenue stream.

The sale of properties classified as inventories and amounts due from customers under construction contracts, does fall within the scope of IFRS 15. However, the Group’s current revenue recognition practice is in line with the requirements of IFRS 15. As such, the Group does not foresee any material impact on the financial statements on application of IFRS 15.

3. Summary of significant accounting policies

The principal accounting policies applied in the preparation of the consolidated financial statements are set out below.

3.1 Statement of compliance

The Group’s consolidated financial statements for the year ended 31 December 2017 have been prepared for the first time in accordance with International Financial Reporting Standards as endorsed by the European Union (“IFRS”).

The impacts of the transition from the Group’s previous GAAP to IFRS on the Group’s reported financial position and financial performance are detailed in note 5 below in accordance with IFRS 1 – First-time Adoption of IFRS.

The Group has consistently applied the accounting policies used in the preparation of its opening IFRS statement of financial position on 1 January 2016 throughout all periods presented, unless stated otherwise.

3.2 Basis of preparation

The consolidated financial statements are presented in euros, unless otherwise stated. Euro is also the functional currency of Group. The functional currency is the currency of the economic environment in which an entity operates. The consolidated financial statements have been prepared on a historical basis, unless otherwise stated. The following items are measured at fair value: • Investment property • Derivatives Separate notes have been included for the abovementioned fair value balances only where these are material.

3.3 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-- controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries .Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or 1oss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

3.4 Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture, the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an associate or a joint venture.

The requirements of IAS 39 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint venture, or when the investment is classified as held for sale. When the Group retains an interest in the former associate or joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with IAS 39.

When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group's consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group.

3.5 Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, unless the standards require otherwise.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non- controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non- controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.

When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination.

When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date.

3.6 Goodwill Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business (see note 3.4 above) less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

3.7 Property, plant and equipment

Furniture, machinery and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Property, plant & equipment are depreciated on a straight-line basis over their useful lives as follows: • Buildings: 25 to 35 years • Furniture: 3 to 10 years • Machinery: 10 to 20 years • Equipment: 3 to 10 years

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

3.8 Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives (generally 5 years). The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

3.9 Investment Property

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value. All of the Group's property interests held under operating leases to earn rentals or for capital appreciation purposes are accounted for as investment properties and are measured using the fair value model.

Investment Property (Under Construction) is carried at fair value. Fair value is determined by external appraisers or by management. In the former case, renowned external appraisers carry out an external inspection of the property and they are provided with the necessary supporting documentation (regarding property title over the involved property, copies of (building) permits, architectural plans, renderings, copies of (preliminary) lease contracts), based on which they prepare their valuation reports. Gains and losses arising from changes in the fair value of investment properties are included in profit or loss in the period in which they arise.

Fair values are calculated based on the capitalisation of (rental) income, discounted cash flow of rental income (adjusted for land market value if applicable) or capitalised construction costs.

The capitalisation of income is a valuation technique that converts future income (often rental income) to a single current (ie discounted) amount. This fair value measurement is determined on the basis of the value indicated by current market expectations about those future amounts. The key inputs for this valuation technique are future income and the capitalisation rate.

The discounted cash flow of income is a valuation technique that converts future income (often rental income) to a single current (ie discounted) amount. This fair value measurement is determined on the basis of the value indicated by current market expectations about those future amounts. This technique is chosen if the future income is limited in time. This value can be adjusted for the land market value in specific situations. The key inputs for this valuation technique are future income and the capitalisation rate.

The capitalised construction costs is a valuation technique that reflects the amount of incurred construction costs that have been capitalised. The key input for this valuation technique are the incurred costs.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognised.

3.10 Inventories Land and premises acquired and held for future development as well as in-process development projects (other than Investment Properties) are classified as Inventories. Inventories mainly comprise residential properties.

Inventories are measured at the lower of cost and net realizable value at the financial reporting date.

The cost of in-process development projects comprises architectural design, engineering studies, raw materials, other production materials, direct labour, other direct and external borrowing costs directly attributable to the acquisition or construction of the qualifying inventories.

Net realizable value is 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. A write-down is necessary when the net realizable value at the financial reporting date is lower than the carrying value. The Group performs regular reviews of the net realizable value of its inventories.

3.11 Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

3.12 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

3.13 Financial instruments

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

3.14 Financial assets

Financial assets are classified into the following specified categories: financial assets 'at fair value through profit or loss' (FVTPL), 'held-to-maturity' investments, 'available-for-sale' (AFS) financial assets and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

3.14.1 Effective interest method The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.

3.14.2 Financial assets at FVTPL Financial assets are classified as at FVTPL when the financial asset is (i) contingent consideration that may be paid by an acquirer as part of a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the 'other gains and losses' line item.

3.14.3 Held to maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity elates that the Group has the positive intent and ability to hold to maturity. Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment.

3.14.4 Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (including trade and other receivables, bank balances and cash) are measured at amortised cost using the effective interest method, less any impairment.

Interest income is recognised by applying the effective interest rate except for short-term receivables when the effect of discounting is immaterial.

3.14.5 Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For certain categories of financial assets, such as trade receivables, assets are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of receivables could include the Group's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 30 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

For financial assets that are carried at cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

3.14.6 Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

3.15 Financial liabilities and equity instruments

3.15.1 Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.

3.15.2 Financial liabilities

Financial liabilities are classified as either financial liabilities 'at FVTPL' or 'other financial liabilities'.

3.15.2.1 Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration that may be paid by an acquirer as part of a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

3.15.2.2 Other financial liabilities

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method (see note 3.13.1).

3.15.2.3 Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

3.16 Hedge accounting

The Group designates certain hedging instruments, which include derivatives, embedded derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.

3.16.1 Fair value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The change in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged risk are recognised in profit or loss in the line item relating to the hedged item.

Hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date.

3.16.2 Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included in the 'other gains and losses' line item.

Hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss.

3.16.3 Hedge of a net investment in a foreign operation

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated under the heading of foreign currency translation reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the foreign currency translation reserve are reclassified to profit or loss on the disposal of the foreign operation.

3.17 Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

3.17.1 The Group as lessor

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group's net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

3.17.2 The Group as lessee

Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group's general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

3.18 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

3.19 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

3.19.1 Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from 'profit before tax' as reported in the consolidated statement of profit or loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period

3.19.2 Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities, often based on industry practices.

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

3.20 Construction contracts

When the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion .Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

When contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is shown as the amounts due to customers for contract work. Amounts received before the related work is performed are included in the consolidated statement of financial position, as a liability, as advances received. Amounts billed for work performed but not yet paid by the customer are included in the consolidated statement of financial position under trade and other receivables.

3.21 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

3.21.1 Sale of properties

Revenue from the sale of properties is recognised when all the following conditions are satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the Group; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Where property is under development and an agreement has been reached to sell such property when construction is complete, the directors consider whether the contract comprises: • A contract to construct a property; or • A contract for the sale of a completed property.

Where a contract is judged to be for the construction of a property, revenue is recognised using the percentage of completion method as construction progresses.

Where the contract is judged to be for the sale of a completed property, revenue is recognised when the significant risks and rewards of ownership of the real estate have been transferred to the buyer. If, however, the legal terms of the contract are such that the construction represents the continuous transfer of work in progress to the purchaser, the percentage of completion method of revenue recognition is applied and revenue is recognised as work progresses. Continuous transfer of work in progress is applied when: • The buyer controls the work in progress, typically when the land on which the development takes place is owned by the final customer, and • All significant risks and rewards of ownership of the work in progress in its present state are transferred to the buyer as construction progresses, typically, when the buyer cannot put the incomplete property back to the Group. In such situations, the percentage of work completed is measured based on the costs incurred up until the end of the reporting period as a proportion of total costs expected to be incurred.

The property disposals might be structured as an asset deal or a sale of shares in a legal entity that holds the property. The sales of real estate projects structured as a sale of shares are presented in these financial statements in accordance with the substance and economic reality of the transactions and not merely with their legal form. The amount of properties recognized as an expense during the period referred to as “Property Development Expenses” comprises costs directly related to the property development projects sold during the year. The revenue from sales of properties reflects the market value of the properties sold.

3.21.2 Property Rental income Rental income from Investment Properties leased is recognized on a straight-line basis over the lease term. Lease incentives granted are recognized as an integral part of the total rental income (i.e. are spread over the lease term).

3.21.3 Dividend and interest income

Dividend income from investments is recognised when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably).

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

3.22 Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into Euros using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.

The principal exchange rates versus EUR that have been used are as follows: 2017 2016 Closing rate at 31 Average rate for 12 Closing rate at 31 Average rate for 12 December months December months Turkish Lira 4.5464 4.1206 3.7072 3.3433 Romanian Lei 4.6585 4.5688 4.5390 4.4904

3.23 Fair value measurements The group measures derivatives and investment properties at fair value at each reporting date. Fair value related disclosures for items measured at fair value or where fair values are disclosed are summarised in the individual notes, in particular Note 7 for Investment Properties.

3.24 Assets held for sale Assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale. When the Group is committed to a sale plan involving disposal of an investment, or a portion of an investment, in an associate or joint venture, the investment or the portion of the investment that will be disposed of is classified as held for sale when the criteria described above are met, and the Group discontinues the use of the equity method in relation to the portion that is classified a held for sale. Any retained portion of an investment in an associate or a joint venture that has not been classified as held for sale continues to be accounted for using the equity method. The Group discontinues the use of the equity method at the time of disposal when the disposal results in the Group losing significant influence over the associate or joint venture.

After the disposal takes place, the Group accounts for any retained interest in the associate or joint venture in accordance with IAS 39 unless the retained interest continues to be an associate or a joint venture, in which case the Group uses the equity method (see the accounting policy regarding investments in associates or joint ventures above).

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

4. Critical accounting judgements and key sources of estimation uncertainty In the application of the Group’s accounting policies, which are described in note 3, the directors of the Group are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing 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.

4.1 Critical judgements in applying accounting policies The following are the critical judgements, apart from those involving estimations (see note 4.2 below), that the directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements.

Revenue recognition When a contract for the sale of a property upon completion of construction is judged to be a construction contract, revenue is recognised using the percentage of completion method as construction progresses. The Group considers the terms and conditions of the contract, including how the contract was negotiated and the structural elements that the customer specifies when identifying individual projects as construction contracts. The percentage of completion is estimated by reference to the stage of the projects and contracts determined based on the proportion of contract costs incurred to date and the estimated costs to complete. Furthermore, the proportion of units sold to the total units of the project are taken into account for the estimation of the percentage of completion.

Classification of property The Group determines whether a property is classified as investment property, inventory or construction in progress: • Investment property comprises buildings (principally non-residential properties) that are not occupied substantially for use by, or in the operations of, the Group, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation. These buildings are substantially rented to tenants. Investment property comprises property for which a valid permit is obtained and construction has commenced. • Inventory comprises land and buildings that is held for sale in the ordinary course of business for which no building permit is obtained, construction has not started and, in case of a residential project, no sales contract has yet been signed. • Construction in progress comprises residential property for which a valid permit is obtained, construction has commenced and a sales contract is signed.

4.2 Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material misstatement to the carrying amounts of assets and liabilities within the next financial year.

Estimation of net realisable value for inventory Inventory is stated at the lower of cost and net realisable value (NRV).

NRV for completed inventory is assessed by reference to market conditions and prices existing at the reporting date and is determined by the Group, based on comparable transactions identified by the Group for properties in the same geographical market serving the same real estate segment.

NRV in respect of inventory under construction is assessed with reference to market prices at the reporting date for similar completed property, less estimated costs to complete construction and an estimate of the time value of money to the date of completion.

Valuation of investment property The fair value of investment property is determined by real estate valuation experts using recognised valuation techniques and the principles of IFRS 13 Fair Value Measurement.

Investment property under construction is measured based on estimates prepared by independent real estate valuation experts, except where such values cannot be reliably determined, in which case the properties are measured at cost. The significant methods and assumptions used by valuation experts in estimating the fair value of investment property are set out in Note 7.

X5A0T 5 IFRS 1 Transition note

The consolidated financial statements for the period ended 31 December 2017 of the Company are prepared for the first time in accordance with International Financial Reporting Standards as endorsed in the European Union (‘IFRS’). The first consolidated IFRS financial statements include comparative information for the period ended 31 December 2016. Therefore, an audited opening IFRS statement of financial position has been prepared as per 1 January 2016, which is the date of transition to IFRS. On this date, the impacts of changes in accounting policies from previous GAAP to IFRS are recognised against equity (consolidated reserves) in accordance with IFRS 1 – First-time Adoption of IFRS. The objective of this note is to provide: - A reconciliation of the consolidated equity under previous GAAP at 1 January 2016 (i.e. date of transition to IFRS) and 31 December 2016 to the consolidated equity under IFRS at the same dates; and - A reconciliation of the consolidated result under previous GAAP to the consolidated result under IFRS for the year 2016. The source of each adjustment is explained in the note below.

Ref Equity at 01/01/2016 Result 2016 (incl NCI) OCI 2016 Other movements 2016 Equity at 31/12/2016

Consolidated AvH reporting package 213.594.239 57.616.282 - 3.026.165 - 20.065.343 248.119.013 Brucargo 748 - Zaventem lease A 144.337 - 72.900 - 71.437 PP&E classification B - 43.185 - - 43.185 Total IFRS adjustments 144.337 - 29.715 - - 114.622

Consolidated IFRS 213.738.576 57.586.566 - 3.026.165 - 20.065.343 248.233.635

The application of IFRS on the consolidated financial statements resulted in an increase of equity for an amount EUR 144,337 as per 1 January 2016 and EUR 114,622 as per 31 December 2016, whereas the result of the year 2016 decreased by EUR 29,715.

The estimates at 1 January 2016 and at 31 December, 2016 are consistent with those made for the same dates in accordance with those made under previous GAAP.

Notes to the reconciliation of equity as at 1 January 2016 and 31 December 2016 and total comprehensive income for the year ended 31 December 2016 For the preparation of the opening consolidated statement of financial position as per 1 January 2016 the Company did not retain any specific exemptions that are available to first-time adopters of IFRS in accordance with IFRS 1, except for the exemption related to subsidiaries who become first-time adopters later than the parent.

The exemption states that if a subsidiary becomes a first-time adopter later than its parent, the subsidiary can opt, in its financial statements, to measure its assets and liabilities at the carrying amounts that would be included in the parent’s consolidated financial statements, based on the parent’s date of transition to IFRSs, if no adjustments were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary. The parent of Extensa, Ackermans & van Haaren (AvH), adopted IFRS for the first time in 2005. As such, Extensa is adopting IFRS later than its parent but has been required to submit an IFRS reporting package to AvH since 2005. Therefore, opting for the IFRS 1 exemption results in Extensa's previous GAAP for the purpose of its first time adoption of IFRS to be the IFRS figures as reported to AvH. The consolidated statement of financial position prepared under previous GAAP as per 1 January 2016 has been adjusted for the preparation of the opening statement of financial position in accordance with IFRS effective on 31 December 2017, which is the closing date of the first IFRS financial statements. In accordance with IFRS, the impacts resulting from the application of the new accounting framework have been recognized against the opening equity (consolidated reserves) as per 1 January 2016. However, certain adjustments did not have an impact on equity. These are also disclosed below. A Brucargo 748 - Zaventem lease Prior to adopting IFRS, Extensa classified this leased land & building as a PP&E item in accordance with IAS 16 Property, Plant & Equipment. The balance was not material at AvH level and therefore not examined further. However, on transition, the balance was re-examined and it was noted that the land & building should be classified as Investment Property as it is leased out under short-term operating leases. Upon reclassification, the land & building was measured at fair value in accordance with Extensa's Investment Property accounting policy. Furthermore, since Extensa leases the land & building from a third party, the lease classification was determined as being a finance lease and as such a finance lease liability was recognised, with the associated finance expense impacting the 2016 result.

B PP&E classification Under previous GAAP, Extensa had classified two buildings (one of which consisted of specific floors within a building) as PP&E in accordance with IAS 16 Property, Plant & Equipment.The balance was not material at AvH level and therefore not examined further.

However, on transition, these buildings were re-examined and it was noted that they should be classified as Investment Property as it is held for an undetermined use and is not owner-occupied. Upon reclassification, the buildings were measured at fair value in accordance with Extensa's Investment Property accounting policy. X6A0T 6 Property, plant & equipment All figures in Euro

Machinery & Buildings Furniture Other Total equipment

Cost Balance at 1 January 2016 383.709 - 1.450.764 251.045 2.085.518 Additions 10.882 - 124.953 31.837 167.672 Additions through business combinations - - - - - Disposals - - - 143.646 - 622 - 144.268 Foreign exchange differences - - - 6.983 - - 6.983 Balance at 31 December 2016 394.591 - 1.425.088 282.260 2.101.939 Additions 99.113 641.309 189.371 194.265 1.124.058 Additions through business combinations - - - - - Disposals - 111.742 - - 637.254 - 31.000 - 779.996 Foreign exchange differences - - 60.059 - 9.394 - - 69.453 Balance at 31 December 2017 381.962 581.250 967.811 445.525 2.376.548

Accumulated depreciation and impairment Balance at 1 January 2016 - 242.563 - - 1.134.310 - 160.118 - 1.536.991 Depreciation expense - 30.349 - - 139.476 - 22.039 - 191.864 Impairment losses recognised in profit and loss - - - - - Eliminated on disposal of assets - - 59.420 - 59.420 Foreign exchange differences - - 6.713 - 6.713 Balance at 31 December 2016 - 272.912 - - 1.207.653 - 182.157 - 1.662.722 Depreciation expense - 19.993 - 21.377 - 93.622 - 14.298 - 149.290 Impairment losses recognised in profit and loss - - - - - Eliminated on disposal of assets 106.401 - 582.239 - 688.640 Foreign exchange differences - 2.002 7.710 - 9.712 Balance at 31 December 2017 - 186.504 - 19.375 - 711.326 - 196.455 - 1.113.660

Carrying amounts @ 01/01/2016 141.146 - 316.454 90.927 548.527 Carrying amounts @ 31/12/2016 121.679 - 217.435 100.103 439.217 Carrying amounts @ 31/12/2017 195.458 561.875 256.485 249.070 1.262.888

There are no items of Property, Plant & Equipment pledged as security for liabilities. The additions in Buildings during 2017 relate to an office building. The disposals during 2017 relate mainly to the sale of the Group's investment in Leasinvest Real Estate Management ("LREM") on 31 March 2017. Refer to Subsidiaries note. X7A0T 7 Investment Properties All figures in Euro

31/12/2017 31/12/2016 Balance at beginning of year 206.894.652 108.001.869 Additions 43.478.924 58.031.076 Disposals - 197.446.691 - Gain/(loss) on property revaluations 11.577.667 40.861.707 Property reclassified as held for sale - 3.500.000 - Balance at end of year 61.004.552 206.894.652

Fair value Commercial name Country Valuation method 31/12/2017 31/12/2016 hierarchy level Capitalisation of Events (Hôtel de la Poste, Openbaar Pakhuis, rental income / Belgium 3 27.687.601 25.744.856 Solar panels) Capitalised construction cost

Parking lot (Outside parking lot, Underground Capitalisation of Belgium 3 21.800.000 20.730.000 parking lot) rental income

Capitalisation of Development (Hôtel des Douanes, Herman rental income / Belgium 3 8.668.822 153.771.655 Teirlinck) Capitalised construction cost

Capitalisation of rental income / Semi-industrial & other properties Belgium 3 2.848.129 6.648.141 Discounted cash flow of income 61.004.552 206.894.652

All investment properties were valued by an independent valuator, CBRE Valuation Services, with the exception of those properties that were sold in 2017 as well as the following: - Kapittelhoeve - Hôtel des Douanes - Hôtel de la Poste (upper floors)

Investment properties comprise commercial buildings and as such the buy-and-sell transactions in the same market for similar properties are infrequent. Consequently, the Group engages an independent valuer who uses a valuation technique requiring the estimation of future rental income and yield for the properties. As such, the fair value of these properties are classified as Level 3 in accordance with the requirements of IFRS 13 Fair Value Measurement, due to the use of significant unobservable inputs in estimating the fair values. The Herman Teirlinck property was held by a subsidiary of the Group, VAC De Meander. During 2016, the Group acquired all of the non-controlling interest in VAC De Meander (49%) for EUR 32,500,000. The purchase price is due in several phases: (i) EUR 22,500,000 was paid in cash at the closing date in December 2016, (ii) EUR 4,000,000 was paid in cash during 2017, and (iii) EUR 6,000,000 is to be paid on 31 December 20201.

During 2017, the Group sold 100% of VAC De Meander for EUR 74,704,128, of which EUR 61,704,128 was received in cash and EUR 13,000,000 placed in Escrow. The sale closed on 22 November 2017. The sales price reflected the fair value of the VAC De Meander entity at the date of sale, therefore there is no net gain or loss on the sale. Immediately prior to the sale of VAC De Meander, the fair market value of the Herman Teirlinck property was updated to EUR 197,446,691 and this fair value adjustment of EUR 11,207,721 was recorded in the "Change in fair value of investment properties" line item in the Consolidated Statement of Profit and Loss. The exit price was based on a total value of EUR 215,659,000 of which the remaining part was accounted for in Other receivables.

The Paul Gilsonlaan investment property is an office building and warehouse that was leased out under operating lease agreements. During 2017, the property was classified as held for sale. A sales agreement was signed on 30 June 2017. The sale will close once a soil certificate is obtained from the relevant authorities. The Group expects the certificate to be received in 2018. The fair value of the property was adjusted to reflect the sales price in the agreement of EUR 3,500,000. The resulting fair value gain of EUR 30,000 has been recorded in the "Change in fair value of investment properties" line item in the Consolidated Statement of Profit and Loss. This held for sale asset is reported in the "Other" segment of Note 27 Segment Reporting.

For the investment property categorised into Level 3 of the fair value hierarchy, the following information is relevant: Valuation technique Significant unobservable inputs Sensitivity

Future income (often rental income), An increase in the income would result taking into account the differences in in an increase in fair value, and vice location and individual factors between versa. the comparables and the property. Capitalisation of income Capitalisation rate, taking into account An increase in the capitalisation rate the capitalisation of income potential, would result in a significant decrease in nature of the property and prevailing fair value, and vice versa. market condition.

Future income (often rental income), An increase in the income would result taking into account the differences in in an increase in fair value, and vice location and individual factors between versa. the comparables and the property. Discounted cash flow of income Capitalisation rate, taking into account An increase in the capitalisation rate the capitalisation of income potential, would result in a significant decrease in nature of the property and prevailing fair value, and vice versa. market condition.

No range or average is disclosed because it would not give a fair representation of the inputs.

The table outlines the sensitivity of three key investment properties to changes in the yield. Rental income is not considered to have a material impact on the fair value of these investment properties. Investment property FV at 31/12/2017 + 50 basis points - 50 basis points Hôtel de la Poste (ground floor) 3.140.000 2.940.000 3.380.000 Openbaar Pakhuis 20.520.000 18.720.000 21.500.000 Underground parking lot 20.430.000 18.750.000 22.420.000

All other investment properties have fair values that are either based on fixed lease agreements and/or detailed construction plans and are therefore not subject to significant changes in inputs to the fair value calculation.

Investment properties pledged as security for financial liabilities amounts to EUR 26,399,500 (2016 and 2015: EUR 164,368,940).

[1] Article 3.3.1.b of the SPA with PMV stipulates, as a general rule, that the payment is to be made at the latest on 31 December 2020. However, in the event of a dispute, such as set out in that clause, it foresees alternative mechanisms, albeit with 31 December 2025 as cut-off date. X8A0T 8 Investments in Associates and Joint Ventures All figures in Euro

Investment in Associates Proportion of ownership interest and voting rights held

Country of Name Principal activity 31/12/2017 31/12/2016 incorporation Property Leasinvest Real Estate Belgium 0% 29,25% management

31/12/2017 31/12/2016 Fair value of investment (stock exchange) - 152.421.547

31/12/2017 31/12/2016 Balance at 1 January 104.342.008 106.096.725 Net income from associates (per 31/03/2017) 1.020.394 8.979.532 Other Comprehensive Income from associates - 3.943.905 (per 31/03/2017) Dividend received from associates - - 6.790.344 Disposal of investment - 105.362.402 - Balance at 31 December - 104.342.008 Goodwill included in carrying amount of investments - - in associates

Summarised financial information of Leasinvest Real Estate

31/03/2017 31/12/2016 Revenue and other operating revenues 14.824.685 62.494.763 Profit (loss) before interest and taxation 10.076.250 40.869.916 Taxation - 199.701 - 2.588.989 Profit (loss) for the year 3.488.526 30.699.254 Profit (loss) attributable to the owners of the 1.020.394 8.979.532 company

31/12/2017 31/12/2016 Cash flow hedge reserve movement (net of tax) - 10.304.561 Available for sale reserve movement (net of tax) - 3.178.875 Total Other comprehensive income (net of tax) - 13.483.436 Total Other comprehensive income (net of tax) - 3.943.905 attributable to the owners of the company

31/12/2017 31/12/2016 1/01/2016 Non-current assets 0 896.179.445 954.242.832 Current Assets 0 92.261.107 22.059.234 Total Assets 0 988.440.552 976.302.066 Non-current liabilities 0 444.361.928 395.901.090 Current liabilities 0 187.353.810 217.677.131 Total Liabilities 0 631.715.738 613.578.220 Net assets 0 356.724.814 362.723.846 Group's share of net assets - 104.342.008 106.096.725

The Group sold its investment in LRE on 31 March 2017 for EUR 151,391,179 to its parent company, Ackermans & van Haaren ("AvH"). The sales price is composed of EUR 150,239,344 sales price and EUR 1,151,835 interests. In August 2017, the Group distributed a dividend to its shareholders (AvH holds more than 99% of the shares). AvH then netted this dividend receivable against the outstanding payable toward the Group for the purchase consideration of LRE. The Group realised a net gain on disposal of LRE of EUR 44,240,064. Investments in Joint Ventures

Proportion of ownership interest and voting rights held

Country of Name Principal activity 31/12/2017 31/12/2016 incorporation Real estate CBS Development NV Belgium 50,00% 50,00% development Real estate CBS-Invest NV Belgium 50,00% 50,00% development Real estate CR Arcade SRL Romania Deconsolidated 50,00% development * Real estate DPI NV Belgium 50,00% 50,00% development ** Exparom I BV Netherlands Holding Deconsolidated 50,00% * Exparom II BV Netherlands Holding Deconsolidated 50,00% * Grossfeld PAP SA Luxembourg Real estate 50,00% 50,00% Real estate Delo 1 SARL Luxembourg 50,00% 50,00% development Real estate Alto 1 SARL Luxembourg 50,00% 50,00% development Real estate Les Jardins de Oisquercq NV Belgium 50,00% 50,00% development ** Real estate Immobilière du Cerf NV Belgium 33,33% 33,33% development ** Real estate SC Axor Europe SRL Romania Deconsolidated 50,00% development * Property TMT Energy SRO Slovakia 50,00% 50,00% management ** Property TMT RWP SRO Slovakia 50,00% 50,00% management ** Top Development AS Slovakia Real estate 50,00% 50,00%

* No summarised financial information provided for these entities as these are all in bankruptcy proceedings and not material to the annual financial statements. These entities have been deconsolidated as per 31/12/2017. ** No summarised financial information provided for these entities as they are not material to the annual financial statements.

31/12/2017 31/12/2016 Balance at 1 January 15.933.305 10.173.356 Acquisition of investment - 12.500 Capital increase/decrease - - Net income from joint ventures 11.917.493 5.663.612 Provision for negative equity 353.348 83.837 Balance at 31 December 28.204.146 15.933.305 Goodwill included in carrying amount of investments 532.304 3.658.324 in joint ventures

Summarised financial information of Grossfeld PAP

31/12/2017 31/12/2016 Revenue and other operating revenues 5.342.350 20.098.200 Profit (loss) before interest and taxation - 384.907 907.834 Taxation - 48.415 - 32.100 Profit (loss) for the year - 433.322 875.734 Profit (loss) attributable to owners of the company - 216.661 437.867

31/12/2017 31/12/2016 1/01/2016 Non-current assets 31.756 29.683 49.175 Current Assets 58.412.979 52.311.121 55.369.866 Total Assets 58.444.735 52.340.804 55.419.042 Non-current liabilities 56.075.223 48.642.045 951.405 Current liabilities 4.111.094 5.007.018 56.651.629 Total Liabilities 60.186.316 53.649.063 57.603.034 Net assets - 1.741.581 - 1.308.259 - 2.183.993 Group's share of net assets - 870.791 - 654.130 - 1.091.996 Summarised financial information of Delo 1

31/12/2017 31/12/2016 Revenue and other operating revenues - - Profit (loss) before interest and taxation 25.772.117 13.009.935 Taxation - 2.378.749 - 2.721.868 Profit (loss) for the year 23.393.368 10.288.067 Profit (loss) attributable to the owners of the 11.696.684 5.144.034 company

31/12/2017 31/12/2016 1/01/2016 Non-current assets 130.767.080 73.668.263 - Current Assets 3.479.433 24.458 - Total Assets 134.246.512 73.692.721 - Non-current liabilities 84.533.315 62.410.938 - Current liabilities 16.019.262 981.216 - Total Liabilities 100.552.577 63.392.155 - Net assets 33.693.935 10.300.566 - Group's share of net assets 16.846.968 5.150.283 -

Summarised financial information of Alto 1

31/12/2017 31/12/2016 Revenue and other operating revenues - - Profit (loss) before interest and taxation 5.913.576 2.885.422 Taxation - 574.500 - 607.753 Profit (loss) for the year 5.339.254 2.277.669 Profit (loss) attributable to the owners of the 2.669.627 1.138.835 company

31/12/2017 31/12/2016 1/01/2016 Non-current assets 40.464.616 22.365.782 - Current Assets 39.038 128.200 - Total Assets 40.503.655 22.493.982 - Non-current liabilities 25.319.646 19.497.393 - Current liabilities 7.554.586 706.420 - Total Liabilities 32.874.232 20.203.813 - Net assets 7.629.423 2.290.169 - Group's share of net assets 3.814.711 1.145.085 -

Summarised financial information of CBS Development

31/12/2017 31/12/2016 Revenue and other operating revenues - - Profit (loss) before interest and taxation - 1.824.839 - 314.539 Taxation 944.420 - 33.097 Profit (loss) for the year - 1.048.208 - 539.889 Profit (loss) attributable to the owners of the - 524.104 - 269.944 company

31/12/2017 31/12/2016 1/01/2016 Non-current assets 10.343.258 12.161.290 12.161.289 Current Assets 10.754.737 16.972.247 15.641.323 Total Assets 21.097.995 29.133.536 27.802.612 Non-current liabilities 415.929 1.390.171 1.357.074 Current liabilities 18.895.042 24.908.134 23.070.418 Total Liabilities 19.310.971 26.298.305 24.427.492 Net assets 1.787.024 2.835.232 3.375.120 Group's share of net assets 893.512 1.417.616 1.687.560 Summarised financial information of CBS Invest

31/12/2017 31/12/2016 Revenue and other operating revenues 1.417.000 - Profit (loss) before interest and taxation - 485.381 - 198.048 Taxation 276.477 - 34.565 Profit (loss) for the year - 283.379 113.781 Profit (loss) attributable to the owners of the - 141.690 56.891 company

31/12/2017 31/12/2016 1/01/2016 Non-current assets 5.216.050 5.928.711 7.345.317 Current Assets 13.484.903 14.075.063 14.280.471 Total Assets 18.700.953 20.003.775 21.625.788 Non-current liabilities 1.955.955 3.009.288 5.777.931 Current liabilities 9.668.288 9.634.397 8.601.550 Total Liabilities 11.624.243 12.643.685 14.379.481 Net assets 7.076.710 7.360.089 7.246.307 Group's share of net assets 3.538.355 3.680.045 3.623.154

Summarised financial information of Top Development

31/12/2017 31/12/2016 Revenue and other operating revenues 1.843.396 2.017.785 Profit (loss) before interest and taxation - 2.813.180 - 208.541 Taxation 584.884 101.469 Profit (loss) for the year - 2.277.432 - 168.387 Profit (loss) attributable to the owners of the - 1.138.716 - 84.194 company

31/12/2017 31/12/2016 1/01/2016 Non-current assets 388.173 371.690 401.642 Current Assets 6.105.048 9.050.596 9.395.402 Total Assets 6.493.221 9.422.286 9.797.044 Non-current liabilities 13.253 569.604 1.440.717 Current liabilities 1.948.165 2.043.446 1.378.704 Total Liabilities 1.961.418 2.613.050 2.819.421 Net assets 4.531.803 6.809.236 6.977.623 Group's share of net assets 2.265.901 3.404.618 3.488.812

Extensa Group granted a corporate guarantee of 10 M€ in favor of the BIL (Banque Internationale à Luxembourg) to cover the risk of a bank facility granted to the joint venture vehicle Grossfeld PAP SA. Since the business outlook of its underlying projects is seemingly positive, the recourse on this guarantee risk is deemed as remote. The Group has no other contingent liabilities or commitments towards its joint ventures. The Group recognises its share of losses of an investee (because the losses exceed the carrying amount of its investment) to the extent that the Group is liable to carry these losses. This information is disclosed below: Recognised share of losses Country of Name of Joint venture incorporation and 31/12/2017 31/12/2016 operation Grossfeld PAP Luxembourg 870.791 654.130 Les Jardins de Oisquercq Belgium 446.055 309.372 SC Axor Europe Romania - 803.511 Exparom I Netherlands - 1.891.705 Exparom II Netherlands - 283.908 1.316.846 3.942.626 X9A0T 9 Finance lease receivable All figures in Euro

Minimum lease payments Present value of minimum lease payments 31/12/2017 31/12/2016 1/01/2016 31/12/2017 31/12/2016 1/01/2016 Within one year 668.069 654.970 642.127 571.083 547.447 524.175 After one year but not later than five 2.808.591 2.753.520 2.699.530 2.535.023 2.433.155 2.334.257 years Later than five years 2.418.835 3.141.975 3.850.936 2.360.728 3.033.679 3.680.024 5.895.495 6.550.465 7.192.593 5.466.834 6.014.282 6.538.456 Less: Unearned finance income - 428.661 - 536.184 - 654.136 N/A N/A N/A Present value of minimum lease 5.466.834 6.014.282 6.538.456 5.466.834 6.014.282 6.538.456 payments receivable

The finance lease receivable relates to the lease of a building with a remaining lease term of 7 years (total lease term from commencement is 25 years).

The interest rate inherent in the lease is 1.9% and is fixed for the remaining lease term. The finance lease receivable at the end of the reporting period is neither past due nor impaired. X10A0T 10 Income taxes All figures in Euro 31/12/2017 31/12/2016 Current tax In respect of the current year - 1.695.569 - 965.174 In respect of prior years - - - 1.695.569 - 965.174 Deferred tax In respect of the current year - 1.725.952 - 5.656.074 Adjustments to deferred tax attributable to changes in tax rates and laws 8.267.888 - 6.541.936 - 5.656.074

Total income tax expense 4.846.367 - 6.621.248

The income tax expense for the year can be reconciled to the accounting profit as follows:

31/12/2017 31/12/2016 Profit before tax 84.727.515 64.207.815 Share in the net profit (loss) of equity accounted investments - 12.937.887 - 14.643.144 Adjusted profit before tax 71.789.628 49.564.671 Income tax expense calculated at 33,99% - 24.401.295 - 16.847.032 Adjusted for: Non-taxable income 22.632.129 1.253.555 Non-deductible expenses - 67.933 - 505.785 Utilisation and recognition of previously unrecognised tax losses - 1.779.220 9.048.863 Effect of different tax rates of subsidiaries operating in other jurisdictions 572.574 703.977 Change in tax rate 8.267.888 - Other - 377.776 - 274.827 4.846.367 - 6.621.248 Adjustments recognised in the current year in relation to the current tax of prior years - - Income tax expense recognised in profit and loss 4.846.367 - 6.621.248 Effective tax rate of the year * 5% 13% * For the purposes of the effective tax rate calculation the positive effect of the change in tax rate has been excluded in 2017. Tax reforms have been enacted in December 2017 in Belgium and December 2016 in Luxembourg based on which the tax rates will be reduced as follows: - In Belgium, a reduction of the tax rate from 33,99% in 2017 to 29,58% in 2018 and 2019 and a further reduction of the tax rate to 25% in 2020.

- In Luxembourg, a reduction of the tax rate from 29% in 2016 to 27,08% in 2017 and will further decrease to 26,01% in 2018.

Deferred taxes Deferred taxes on the consolidated statement of financial position refers to the following temporary differences: Deferred tax assets 31/12/2017 31/12/2016 1/01/2016 Tax losses 1.338.350 408.990 260.000

Deferred tax liabilities 31/12/2017 31/12/2016 1/01/2016 Remeasurement on land position 17.844.559 24.390.128 25.521.242 Investment property 4.111.477 19.023.672 13.001.901 Amounts due from customers under construction contracts 4.527.625 4.075.803 1.312.098 Inventories 3.832.277 86.320 - Other 968.727 1.630.799 209.589 Total 31.284.665 49.206.722 40.044.830

The following deferred tax assets have not been recognised at the reporting date: 31/12/2017 31/12/2016 1/01/2016 DTA on unused tax losses 9.197.000 7.885.000 3.801.000 There is no expiry date for the deferred tax assets that have not been recognised at the reporting date.

Deferred taxes in the consolidated statement of profit and loss refers to the following temporary differences: (Positive amounts indicating a positive impact on the Profit & Loss statement and vice versa.)

Deferred tax assets 31/12/2017 31/12/2016 Tax losses 929.360 148.990

Deferred tax liabilities 31/12/2017 31/12/2016 Remeasurement on land position 6.545.569 1.131.114 Investment property 3.643.105 - 3.247.667 Amounts due from customers under construction contracts - 812.168 - 1.186.894 Inventories - 3.777.268 - 86.320 Other 13.338 - 2.415.297 Total 5.612.576 - 5.805.064 X11A0T 11 Inventories All figures in Euros

31/12/2017 31/12/2016 1/01/2016 Land portfolio 146.798.610 134.244.126 156.248.442 Construction in progress 33.228.127 18.334.475 - 180.026.737 152.578.601 156.248.442

The construction in progress included in inventories relates to residential projects in progress for which the Group does not yet have a signed sales agreement. The construction in progress relates to two key development projects - Gare Maritime (2017: EUR 18,810,758; 2016: EUR 5,281,675) and Riva (2017: EUR 14,066,009; 2016: EUR 13,052,800). Construction on project Riva commenced in the last quarter of 2017 and is scheduled to be completed in 2019. The value associated to this project prior to the commencement of construction relates to the land. Restoration of the Gare Maritime project commenced in June 2016.

In 2017, the land portfolio included a historical write down of EUR 2,393,401. The amount of inventories recognised as an expense in 2017 is nil (2016: EUR 910,126 thanks to sale of land plots). Inventories pledged as security for financial liabilities in 2017 is EUR 43,523,315 (2016: EUR 75,398,758; 2015: EUR 76,348,801). 12 Amounts due from customers under construction contracts All figures in Euros 31/12/2017 31/12/2016 1/01/2016 Construction costs incurred plus recognised profits less 309.339.192 241.425.694 130.501.748 recognised losses to date Less: Progress billings - 288.980.337 - 187.413.360 - 49.026.370 20.358.855 54.012.334 81.475.378

Amounts due from customers under construction contracts mainly relates to the following key residential real estate developments: The Bomonti residential development located in Istanbul was completed in 2015. As at the end of 2017, all 52 apartments except two have been sold. During 2017, seven units were sold for EUR 1,808,804 (2016: no units sold). Construction on project Gloria, located at Tour & Taxis (Belgium), commenced in 2016 and was completed in the first quarter of 2017. Of the 115 residential units, 113 have been sold between 2016 and 2017 for EUR 23,174,637.

The Cloche d'Or project, located in Luxembourg, consists of 909 residential units. As at the end of 2017, 699 units (notary deeds) in total have been sold for EUR 325,761,179. Construction, which commenced in 2015, has been segregated into four phases and is scheduled to be completed in 2020. Phases 1 and 2 are scheduled to be completed in 2018, phase 3 commenced in 2017 and phase 4 will commence in 2018. X13A0T 13 Trade and other receivables All figures in Euro 31/12/2017 31/12/2016 1/01/2016 Trade receivables 22.465.545 10.810.633 4.890.161 Advances to related parties 43.066.451 50.234.550 30.928.775 Less: Allowance for doubtful debts - 650.645 - 5.056.413 - 5.149.499 64.881.351 55.988.770 30.669.437 VAT receivable 2.145.893 831.837 3.030.277 Other receivables 14.082.267 23.313.169 17.473.272 81.109.511 80.133.776 51.172.986

The amortised cost balances of Trade and other receivables also reflect their fair market values. The average credit period is 60 days. There are no receivables that are past due but not impaired. All remaining receivables are not overdue.

Movement in the allowance for doubtful debts 31/12/2017 31/12/2016 Balance at beginning of the year - 5.056.413 - 5.149.499 Impairment losses recognised on receivables - 594.232 - 2.029 Amounts written off during the year as uncollectible - - Allowances utilised during the year 5.000.000 - Impairment losses reversed - 95.115 Balance at end of the year - 650.645 - 5.056.413 - - The Group had an outstanding receivable of EUR 14,190,886 from Exparom I and Exparom II, which are the holding companies for the project entities, CR Arcade and SC Axor Europe, respectively. During 2017, the Group acquired the land positions held by these project entities as partial settlement of the outstanding receivable subsequent to bankruptcy proceedings. The Group had previously recognised a loss allowance of EUR 5,000,000 with respect to this receivable and it was utilised in 2017. The fair value of the land, as determined in the framework of the acquisition procedure, was EUR 9,144,500. X14A0T 14 Cash & cash equivalents All figures in Euro 31/12/2017 31/12/2016 1/01/2016 Cash and bank balances 28.374.197 32.852.454 38.224.164

There are no restricted cash balances. 15 Financial liabilities Effective interest All figures in Euro 31/12/2017 31/12/2016 1/01/2016 rate Maturity Pledges % Non-current borrowings Tour & Taxis 49.000.000 71.500.000 105.770.000 Property & EUR 75 million bank loan 2,5% 16/01/2018 - 37.500.000 37.500.000 shares Property & EUR 10.5 million bank loan 1,00% 31/05/2020 9.000.000 - - shares Property & EUR 6 million bank loan 1,00% 31/05/2020 6.000.000 - - shares Property & EUR 129 million bank loan 0,95% 31/10/2017 - - 34.750.000 shares Property & EUR 34 million bank loan 1,6% 31/01/2020 34.000.000 34.000.000 33.520.000 shares Cloche d'Or - 21.367.776 57.339.000 Property & EUR 52.5 million bank loan 2,5% 30/06/2019 - 13.667.776 49.639.000 shares Property & EUR 7.7 million bank loan 2,5% 30/06/2020 - 7.700.000 7.700.000 shares EMTN program 73.925.534 - - 3 year bonds 2,5% 29/06/2020 Unsecured 29.589.933 - - 5 year bonds 3% 29/06/2022 Unsecured 44.335.601 - - Other credit lines - 1.235.000 2.062.500 EUR 3 million bank loan 2,5% 30/06/2022 Property - 1.235.000 2.062.500 122.925.534 94.102.776 165.171.500

Effective interest rate Maturity Pledges 31/12/2017 31/12/2016 1/01/2016 % Current borrowings Tour & Taxis - 97.542.600 14.792.200 Property & EUR 129 million bank loan 0,95% 31/10/2017 - 82.450.000 - shares Property & EUR 6.56 million bank loan 1,00% 31/05/2020 - 6.092.600 6.117.200 shares Property & EUR 3 million bank loan 1,05% 31/05/2017 - 3.000.000 3.000.000 shares Property & EUR 6 million bank loan 1,40% 31/05/2017 - 6.000.000 5.675.000 shares CP program 1.984.430 76.378.200 60.591.019 Commercial papers N/A N/A Unsecured 1.984.430 28.878.200 26.591.019 CP backup line EUR 20 million 1,5% 31/05/2020 Unsecured - 2.500.000 - CP backup line EUR 75 million 1,4% / 1,9% 15/10/2020 Investment - 45.000.000 34.000.000 Other credit lines 3.816.365 24.962.570 25.535.453 EUR 3 million bank loan 2,5% 30/06/2022 Property - 375.000 375.000 EUR 25 million bank loan 1,25% 18/10/2017 Land - 20.200.000 20.949.855 USD 4.6 million bank loan 1,1% 5/05/2019 EUR collateral 3.816.365 4.387.570 4.210.598 5.800.795 198.883.370 100.918.672

During 2017, the Group incurred transaction costs of EUR 1,225,000 related to the EMTN bond program. These transaction costs were included in the initial recognition of the liability. Interest is paid at a minimum on an annual basis. All capital repayments are made at maturity. The balances of the Financial liabilities also reflect their fair market values.

Existing loan covenants are detailed below: Loan to value ratio Interest coverage ratio Tour & Taxis Required 31/12/2017 31/12/2016 Required 31/12/2017 31/12/2016 EUR 10.5 million bank loan < 70% 44% 49% > 2,25 9,9 11,3 EUR 6 million bank loan < 70% 29% 31% > 2,25 22,5 19,6 EUR 34 million bank loan < 40% 22% 22% N/A N/A N/A

Net worth (i) Net worth to Total liabilities EMTN program Required 31/12/2017 31/12/2016 Required 31/12/2017 31/12/2016 3 year bonds > 100.000.000 183.277.424 N/A > 30% 44% N/A 5 year bonds > 100.000.000 183.277.424 N/A > 30% 44% N/A

Net worth (i) Net worth to Total liabilities CP program Required 31/12/2017 31/12/2016 Required 31/12/2017 31/12/2016 Backup to commercial papers > 120.000.000 183.277.424 248.210.071 > 30% 44% 38%

(i) Net worth includes equity, excluding intangible assets as required by the loan agreements. The Group is not in breach of any of its loan covenants. 15.1 Reconciliation of liabilities arising from financing activities All figures in Euro

The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group's consolidated statement of cash flows as cash flows from financing activities.

Cash changes Non-cash changes Financing Disposal of Foreign Finance 1/01/2017 cash flows Participation fee subsidiary exchange expense 31/12/2017 Bank loans 190.410.376 - 58.960.376 - - 82.450.000 - - 49.000.000 Bonds - 73.768.350 157.184 - - - 73.925.534 Commercial papers 76.378.200 - 74.393.770 - - - - 1.984.430 Other credit lines 26.197.570 - 21.810.200 - - - 571.005 - 3.816.365 Long-term payables 8.883.150 - 2.883.150 - - - - 6.000.000 Finance lease liability 331.129 - 64.943 - - - 22.186 288.372 302.200.425 - 84.344.089 157.184 - 82.450.000 - 571.005 22.186 135.014.701 X17A0T 16 Trade and Other Payables All figures in Euro 31/12/2017 31/12/2016 1/01/2016 Current payables Trade payables 46.915.995 35.653.241 12.356.617 Other payables 916.100 5.925.771 813.173 Advances from associates and joint ventures - - 852.310 VAT payable 850.976 1.059.337 116.607 Levies - 1.660.412 3.249.287 48.683.071 44.298.761 17.387.994

The increase in Trade Payables between transition date and end of 2016 is mainly related to an increase in construction costs on the Cloche d'Or project (EUR 15,067,150) and the Herman Teirlinck investment property (EUR 6,029,623).

The increase in Trade Payables between 2016 and 2017 is mainly related to an increase in construction costs on the Cloche d'Or project (EUR 7,458,038), Herman Teirlinck (EUR 1,867,396), Gare Maritime (EUR 1,426,721).

Trade payables have payment terms between 30 and 60 days in general and are non-interest bearing. The balances of the Trade and Other Payables also reflect their fair market values.

Non-current payables 31/12/2017 31/12/2016 1/01/2016 Other payables 6.000.000 8.883.150 11.606.179

Non-current payables relate to the acquisition of the non-controlling interest in VAC De Meander. Please refer to the Subsidiaries note for a detailed description. 17 Provisions All figures in Euro 31/12/2017 31/12/2016 1/01/2016 Contractual obligations - 7.911.532 - 1.415.291 - 1.108.920 Recognised share of losses in joint ventures - 1.316.846 - 3.942.626 - 3.853.586

- 9.228.378 - 5.357.917 - 4.962.506

The increase in contractual obligations relates to the Herman Teirlinck property that was sold as part of the sale of VAC De Meander.

Please refer to the Investments in Associates and Joint Ventures note for details on the recognised share of losses in joint ventures. X19A0T 18 Revenue All figures in Euro Year ended Year ended 31/12/2017 31/12/2016 Revenue from real estate services 801.525 1.064.466 Revenue from the sale of land - 1.595.425 Construction contract revenue 153.253.458 103.121.591 Management fees received 175.000 4.033.233 154.229.983 109.814.715

The Group currently has an ongoing residential development located in Luxembourg. During 2017, the Group sold additional apartments in this residential development. The additional sales combined with the progress in the construction works for which customers were invoiced, resulted in the overall increase in revenue. Please see note 11 for details on this project.

Management fees received have declined in 2017 as a result of the sale of the subsidiary, Leasinvest Real Estate Management, which had been providing real estate management services to third parties for the Group. Please see note 29 for the details of the sale of this subsidiary. No land was sold in the 2017 financial year.

19 Property rental income All figures in Euro Year ended Year ended 31/12/2017 31/12/2016 Property rental income 6.825.036 6.167.236

The Group derives its key rental income from the following key real estate properties:

31/12/2017 31/12/2016 Openbaar Pakhuis 2.862.895 2.826.926 Parking lots at Tour & Taxis 1.756.372 1.681.453 Hotel de la Poste 498.714 751.090 Douanehotel 506.516 - Paul Gilsonlaan 436.451 442.373 Remaining property rental income 764.088 465.394

The below table discloses the non-cancellable operating lease receivable mainly related to the Paul Gilsonlaan real estate property. Other real estate properties concern short term contracts and are no operating leases:

31/12/2017 31/12/2016 1/01/2016 Within 1 year 106.806 523.243 562.602 After 1 year but not later than 5 years 162.996 269.802 793.045 Later than 5 years - - - Total 269.802 793.045 1.355.647

20 Other operating income All figures in Euro Year ended Year ended 31/12/2017 31/12/2016 Other operating income 4.382.028 2.305.197

Other operating income relates mainly to two real estate development projects on the Cloche d'Or site in Luxembourg. 21 Property Development expenses All figures in Euro Year ended Year ended 31/12/2017 31/12/2016 Expenses associated to real estate services - 952.535 - 1.031.190 Expenses related to sold land - - 910.126 Construction contract expenditure - 129.548.887 - 89.431.562 - 130.501.422 - 91.372.878

Please refer to the Revenue note for details on the projects. X21A0T 22 Employee expenses All figures in Euro Year ended Year ended 31/12/2017 31/12/2016 Salaried employees - 2.023.922 - 2.476.022 Consultants - 5.439.987 - 6.602.730 - 7.463.909 - 9.078.752

Year ended Year ended 31/12/2017 31/12/2016 Short-term employee benefits - 7.426.819 - 8.857.786 Pension costs - 37.090 - 220.966 - 7.463.909 - 9.078.752

The consultants expense mainly comprises remuneration paid to the Group's management committee as well as fees paid to the project managers on the Tour & Taxis real estate project.

Pension costs relate to the contribution to the group insurance plan. There is no material underfunding. X22A0T 23 Other operating expenses All figures in Euro Year ended Year ended 31/12/2017 31/12/2016 Other operating expenses comprises: External consulting fees 3.960.902 3.849.897 Marketing expenses 2.791.107 3.073.271 Rent & maintenance expenses 1.100.822 1.139.582 Expenses to be reinvoiced to tenants 999.680 774.921 Utilities 456.830 519.041 Operational taxes 571.358 479.969 Interim personnel 192.515 281.814 Other expenses 55.002 277.382 Total 10.128.216 10.395.876

Rent & maintenance expenses includes expenses of EUR 382,049 (2016: EUR 286,744) arising from investment properties that generated rental income during the period. X23A0T 24 Finance income All figures in Euro Year ended Year ended 31/12/2017 31/12/2016 Interest income from investments 165.362 1.129.592 Interest on loans to related parties 2.398.640 1.610.620 Interest on cash balances 96.465 50.498 Foreign exchange gains 362.937 546.945 3.023.404 3.337.655

Interest income from investments relates mainly to interest income on loans provided to development partners, that are non-related parties.

25 Finance expenses All figures in Euro Year ended Year ended 31/12/2017 31/12/2016 Interest on third party loans - 4.886.883 - 6.045.727 Interest on obligations under finance leases - 22.186 - 24.799 Foreign exchange losses - 695.537 - 1.107.169 Other interest expense - 959.881 - 502.328 - 6.564.487 - 7.680.023 Less: capitalised interests 2.967.817 5.830.192 - 3.596.670 - 1.849.831

The decrease in the capitalised interests is related to the Cloche d'Or project. X24A0T 26 Financial Instruments All figures in Euro

26.1 Capital management The Group's objectives when managing capital are to insure its ability to continue as a going concern and to support its strategic growth plans. To optimize the capital structure, the Group may decide to issue bonds or similar instruments in financial markets. Management closely monitors solvency, liquidity, equity returns and profitability levels. The Group monitors the capital and statement of financial position structure primarily based on the total equity to total assets ratio.

26.1.1 Total equity/total assets ratio The ratio at the end of the reporting period was as follows: 31/12/2017 31/12/2016 1/01/2016 Corrected equity (i) 183.277.424 248.210.071 213.709.748 Total assets 412.352.740 654.323.215 559.714.271 Total equity/Total assets 44% 38% 38%

(i) Corrected equity includes equity, excluding intangible assets as required by the loan agreements.

26.2 Categories of financial instruments 31/12/2017 31/12/2016 1/01/2016 Financial assets Cash and cash equivalents 28.374.197 32.852.454 38.224.164 Loans and receivables 106.935.201 140.160.391 139.186.821

Financial liabilities Amortised cost 183.697.772 346.499.186 295.454.483 Designated at fair value through profit and loss 362.892 589.021 682.699

The financial debts designated at fair value through profit and loss concern interest rate hedges.

26.3 Financial risk management objectives Due to its activities, the Group is exposed to a variety of financial risks: market risk (including exchange rate risk, price risk and cash flow interest rate risk), credit risk and liquidity risk. Financial risks usually relate to the following financial instruments: trade receivables, cash and cash equivalents, trade and other payables and borrowings. The Group uses derivative financial instruments on an ad hoc basis to hedge against the exposures arising from specific transactions and strives to hedge at least 50% of bank credit lines at Group level. Financial risks are managed by the Chief Financial Officer (CFO) and his team. The CFO identifies, evaluates and mitigates financial risks in accordance with the objectives set by the Chief Executive Officer (CEO).

26.4 Foreign currency risk management The Group operates internationally and enters into transactions in foreign currencies (Romanian Leu and Turkish Lira). The major part of the Group’s financial assets and financial liabilities are however denominated in Euro, which is the Group's functional currency. The Group concludes most of its engineering and architectural contracts, main construction contracts and the main part of its financing contracts in Euro. The Group mitigates its currency risk exposure by matching as much as possible the currency of the income with that of the expenditure. As at 31 December 2017, there were no outstanding amounts covered by hedging contracts. Despite these closely monitored initiatives and as a consequence of its international activity, foreign exchange risks may still affect the Group’s financial position and results.

The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

Liabilities Assets 31/12/2017 31/12/2016 1/01/2016 31/12/2017 31/12/2016 1/01/2016 Extensa Istanbul 3.992.400 5.394.808 5.016.589 2.309.560 2.133.721 3.860.509 Extensa Romania 83.514 8.037 13.171 - - -

The following table details the Group's sensitivity to a 10% increase and decrease in the foreign exchange rates. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonable possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The balances below indicate the result of a 10% weakening in the foreign currency against the Euro. A positive number below indicates an increase in profit and a negative balance below indicates a decrease in profit. A 10% strengthening of the foreign currency against the Euro would have a comparable but opposite effect on the profit.

Impact on profit 31/12/2017 31/12/2016 1/01/2016 Turkish Lira 168.284 326.109 115.608 Romania RON 8.351 804 1.317 Net impact 176.635 326.912 116.925

The above impact on profit is mainly attributable to the exposure outstanding on the receivables and payables in Extensa Istanbul and Extensa Romania at the end of the reporting period. A USD denominated borrowing (USD 4,6 million) is held by Extensa Istanbul and the foreign exchange sensitivity of this loan is encompassed in the Turkish Lira sensitivities. This is due to the fact that the loan balance is translated first from USD to Turkish Lira before being translated to the Group's functional currency, Euro. 26.5 Interest rate risk management The Group actively uses external and internal borrowings to finance its real estate development projects in Belgium, Luxembourg, Turkey, Slovakia and Romania. A project’s external financing is usually in the form of a bank loan denominated in Euro. Except for some ad-hoc interest rate hedging in the past, the Group did not enter into significant external interest rate hedging transactions to eliminate exposure arising from the long-term investment loans over the last 5 years. The Group’s management closely monitors the short-term floating rate borrowings and medium term fixed interest rates.

The financing structure reflects major project investment phases (i.e. acquisition of land, construction and holding of the properties) as follows: • Land acquisition loans (usually provided for a term of two years). The interest is payable at market floating rates (from 1 up to 6 months) increased by a margin. • Construction loans provided until completion of construction and obtaining of the exploitation permit (usually for a term of about two years). The interest is calculated at market floating rates (from 1 up to 6 months) increased by a margin and mostly capitalized in the construction loan. The land acquisition loan is at this stage integrated into the construction loan. • Once the property is completed, leased and meets all ongoing covenants, the construction financing is swapped into an investment loan repayable gradually with rental income or fully upon sale of the property.

The group issued two EMTN bonds in 2017: • 30 M€ due 27 June 2020, bearing an interest of 2.75% • 45 M€ due 27 June 2022, bearing an interest of 3.00%

26.5.1 Interest rate sensitivity The sensitivity analyses below have been determined based on the exposure to interest rate for floating rate non-derivative instruments at the end of the reporting period. The analysis excludes loans that are capitalised to fixed assets in accordance with IAS 23 Borrowing costs, as interest rate changes in these loans would not directly impact the profit. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible changes in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group's profit for the year ended 31 December 2017 would decrease/increase by EUR 79,083.

26.6 Operational risk Price risk Raw materials, supplies, labour and other costs directly related to the construction process constitute a major part of the property development assets capitalized in the accounts of the Group’s project companies. Although construction prices may vary during each accounting year, the Group generally limits its operational risk by entering into fixed price contracts.

Market risk Before starting an investment, the Group’s management teams perform market research, which comprises of the following: • Status of the project’s current zoning (eventual timing for rezoning necessary) • Attitude of the local authorities towards the project • Comparable projects being launched (timing and location) • Profile of potential buyers/tenants • Reasonable delivery date of the project • Projected sale/lease prices at the date of delivery • Yield expectations at that time Permit risk A detailed advance study of the existing master plan or zoning plans substantially reduces the risks on obtaining building permits. On this issue, it is the Group’s policy to closely monitor new construction regulations and respect the interests of the city authorities. One should of course differentiate between the type of projects, their location and specific country principles.

Construction risk Construction risks are monitored by in-house project managers. They estimate construction cost as from the date of the initial feasibility study and account for material discrepancies. The tracking of detailed budgets, the choice of materials / techniques and the monitoring of construction prices constitute therefore a continuous process to avoid cost overruns and delivery delays.

Financing risk The Group continues to have strong commercial relationships with all major banking partners present in its operating countries. In 2017, the Group has also proved to be able to call upon alternative financing through the issue of EMTN bonds in Belgium (total of EUR 75 million).

Commercial risk Certain major projects require (internal) pre-lease levels, depending on the project scale, location, market environment or project typology. Smaller projects are started up without pre-leases. This set-up immediately triggers the involvement of both internal sales staff and/or external brokers. The Group’s track record shows at least a 50% (or more) leasing level before the end of construction works. 26.7 Credit risk Credit risk may arise from credit exposures with respect to tenants (mostly renowned international companies) and residential buyers. However, credit risk is limited due to the nature of the Group's business. No significant allowances for non-payment were necessary in the current or previous year. Refer to note 13.

26.8 Liquidity risk A prudent management of liquidity risks implies maintaining the availability of funding through an adequate amount of committed credit facilities. Due to the nature of the underlying business activities, the Group actively uses external and internal funds to ensure that timely resources are always available to cover capital needs. The liquidity position is monitored by management based on forecasts encompassing 24 to 36 months.

The total amount in the tables below includes nominal amount and interest component, whereas the carrying amount only includes the nominal outstanding amount. Average Less than 3 months More than 31/12/2017 effective 1 to 3 months 1 to 5 years Total amount Carrying amount 1 month to 1 year 5 years rate Variable interest rate 1,12% 62.820 125.640 2.549.810 54.246.345 - 56.984.615 54.800.795 instruments Fixed interest rate 2,75% 175.000 350.000 1.575.000 81.900.000 - 84.000.000 73.925.534 instruments 237.820 475.640 4.124.810 136.146.345 - 140.984.615 128.726.329

Average Less than 3 months More than 31/12/2016 effective 1 to 3 months 1 to 5 years Total amount Carrying amount 1 month to 1 year 5 years rate Variable interest rate 1,12% 35.256.514 52.552.730 169.570.148 40.118.305 - 297.497.697 292.986.146 instruments 35.256.514 52.552.730 169.570.148 40.118.305 - 297.497.697 292.986.146

26.9 Foreign political and economic risk Minor operations and/or projects are located in Turkey and Romania. As a result, the development of these projects and the upstreaming of related revenues are subject to certain inherent risks to these countries which may include, but are not limited to unfavourable political, regulatory and tax conditions. X25A0T 27 Segment reporting All figures in Euro

A segment is a distinguishable component of the Group, which generates revenues and incurs expenditures. The segment reporting is presented in respect of geographical segments. The operating results are regularly reviewed by the Management Committee in order to monitor the performance of the various segments in terms of strategic goals, plans and budgets. Segments of the Group that do not meet the IFRS 8 criteria to be reportable, have been aggregated and disclosed as "Other".

The results and asset and liability items of the segment include items that can be attributed to a segment, either directly, or allocated on an allocation formula.

2017 Belgium Luxembourg LRE/LREM * Other Total Revenue 7.650.812 143.895.092 954.000 1.730.079 154.229.983 Property rental income 6.825.036 - - - 6.825.036 Other operating income 4.376.489 5.230 - 309 4.382.028 Operating expenses Property development expenses - 11.018.855 - 114.071.226 - - 5.411.341 - 130.501.422 Employee expenses - 6.768.732 - - 325.000 - 370.177 - 7.463.909 Depreciation and impairment losses - 131.231 - - - 27.695 - 158.926 Other operating expenses - 5.197.458 - 3.570.624 - 629.000 - 731.134 - 10.128.216 Change in fair value of Investment Properties 11.565.739 29.782 - - 17.854 11.577.667 Profit/(loss) on disposal of assets 31.605 - 43.342.949 - 43.374.554 Share in the net profit (loss) of equity accounted investments - 821.014 14.149.649 1.958.679 - 2.349.427 12.937.887

Earnings before Interests & Taxes (EBIT) 6.512.391 40.437.903 45.301.628 - 7.177.239 85.074.683

Finance income 3.023.404 Finance expenses - 3.596.670 Change in fair value of derivatives 226.098

Profit/(loss) before tax (PBT) 84.727.515

Income taxes 4.846.367

Profit/(loss) of the period 89.573.882

Non-controlling interest 14.406.300

Share of the group 75.167.582

Segment assets 328.916.982 87.071.180 - - 3.635.422 412.352.740 Equity accounted investments included in 5.549.716 19.790.888 - 2.863.542 28.204.146 segment assets Segment liabilities 194.579.125 29.908.921 - 4.119.074 228.607.120

* LRE / LREM is the abbreviation for Leasinvest Real Estate and Leasinvest Real Estate Management 2016 Belgium Luxembourg LRE/LREM * Other Total Revenue 23.051.701 82.827.935 3.834.233 100.846 109.814.715 Property rental income 6.167.236 - - - 6.167.236 Other operating income 2.228.726 615 69.741 6.115 2.305.197 Operating expenses Property development expenses - 19.945.200 - 71.350.832 - - 76.846 - 91.372.878 Employee expenses - 6.969.645 - 477.840 - 1.271.708 - 359.559 - 9.078.752 Depreciation and impairment losses - 170.782 79.058 - 83.018 - 166.863 - 341.605 Other operating expenses - 5.642.791 - 2.929.141 - 1.275.414 - 548.530 - 10.395.876 Change in fair value of Investment Properties 39.834.359 1.027.348 - - 40.861.707 Profit/(loss) on disposal of assets 4.246 2.299 - 16.880 23.425 Share in the net profit (loss) of equity accounted investments - 333.539 6.720.735 8.979.532 - 723.584 14.643.144

Earnings before Interests & Taxes (EBIT) 38.224.311 15.900.177 10.253.366 - 1.751.541 62.626.313

Finance income 3.337.655 Finance expenses - 1.849.831 Change in fair value of derivatives 93.678

Profit/(loss) before tax (PBT) 64.207.814

Income taxes - 6.621.248

Profit/(loss) of the period 57.586.566

Non-controlling interest 17.388.460

Share of the group 40.198.106

Segment assets 443.101.624 99.382.284 110.383.791 1.455.516 654.323.215 Equity accounted investments included in 5.363.254 9.274.492 104.342.008 1.295.559 120.275.313 segment assets Segment liabilities 351.431.951 48.517.369 672.131 5.468.128 406.089.579

Segment revenue reported above represents revenue generated from external customers. No single customer accounted for more than 10% of the Group's revenue. The accounting policies of the reportable segments are the same as the Group's accounting policies described in Note 3. * LRE / LREM is the abbreviation for Leasinvest Real Estate and Leasinvest Real Estate Management X26A0T 28 Related party transactions All figures in Euro

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Transactions mentioned here below are those performed with all related parties (exception made of the consolidated related parties) including: - Majority shareholders and all companies directly or indirectly owned by them; - Shareholders with a significant influence; - Associates or joints arrangements; - Group's key personnel - Other significant related parties

Management fees and finance income Loans to related parties Loans from related parties Type of related 31/12/2017 31/12/2016 31/12/2017 31/12/2016 1/01/2016 31/12/2017 31/12/2016 1/01/2016 Name of related party party CBS Development Joint ventures 80.000 80.000 ------CBS-Invest Joint ventures 42.248 41.752 891.691 869.443 847.691 - - - CR Arcade Joint ventures - - 24.257 663.193 595.023 - - - DPI Joint ventures 10.559 5.863 468.994 408.434 102.572 - - - Exparom I Joint ventures - - - 5.713.989 5.685.603 - - - Exparom II Joint ventures - - - 2.227.067 2.200.860 - - - Grossfeld PAP Joint ventures 561.342 1.259.798 16.014.969 16.982.650 14.372.356 - - 84.341 Delo 1 Joint ventures 1.196.606 128.017 16.341.790 11.728.017 - - - - Alto 1 Joint ventures 440.215 42.234 5.773.181 4.256.734 - - - - Les Jardins de Oisquercq Joint ventures 202.101 186.562 1.805.106 1.598.005 1.336.443 - - - SC Axor Europe Joint ventures - - 1.200.000 256.097 253.801 - - - Top Development Joint ventures 40.569 65.394 496.490 530.920 563.326 - - - Leasinvest Real Estate Associate - 3.834.233 - 2.479.562 1.713.046 - - 852.310

Total 2.573.640 5.643.853 43.016.478 47.714.111 27.670.721 - - 936.651

The Group has provided loans to its related parties at rates taking into account the creditworthiness of each specific entity. The loans to related parties are unsecured except for the loans provided to Exparom I and Exparom II.

Compensation of key management personnel

The remuneration of directors and other member of key management personnel during the period was as follows:

31/12/2017 31/12/2016 Short-term benefits 3.788.152 2.702.775 Total 3.788.152 2.702.775

Other related party transactions

During the 2017 financial year, Extensa Group NV provided a loan to its parent, Ackermans & Van Haaren, to finance the purchase of the shares of Leasinvest Real Estate and Leasinvest Real Estate Management. The loan amounted to EUR 156.8 million and was settled via a dividend distribution in August 2017. X27A0T 29 Subsidiaries All figures in Euro

Details of the Company's subsidiaries at December 31, 2017 are included in the table below:

Country of Principal place Name of subsidiary Principal activity Proportion of interest/voting rights incorporation of business

31/12/2017 31/12/2016 Extensa Belgium Belgium Real estate development 100,00% 100,00%

Extensa Development Belgium Belgium Real estate development 100,00% 100,00% Extensa Group Belgium Belgium Holding 100,00% 100,00% Implant Belgium Belgium Real estate development 100,00% 100,00% Service provider to Leasinvest Real Estate Belgium Belgium property management 0,00% 100,00% Management companies (3) Project T&T Belgium Belgium Real estate development 100,00% 100,00% RFD Belgium Belgium Inactive 100,00% 100,00% T&T Douanehotel Belgium Belgium Real estate development 100,00% 100,00% T&T Openbaar Pakhuis Belgium Belgium Property management 100,00% 100,00% T&T Parking Belgium Belgium Property management 100,00% 100,00% T&T Tréfonds Belgium Belgium Real estate development 100,00% 100,00% Service provider to Tour & Taxis Services Belgium Belgium property management 100,00% 100,00% companies UPO Invest Belgium Belgium Property management 100,00% 100,00% VAC De Meander Belgium Belgium Real estate development 0,00% 100,00% (4) Vilvolease Belgium Belgium Property management 100,00% 100,00% Beekbaarimo Luxembourg Luxembourg Real estate 100,00% 100,00% Extensa Luxembourg Luxembourg Luxembourg Holding 0,00% 100,00% (1) Extensa Participations I Luxembourg Luxembourg Holding 0,00% 100,00% (1) Extensa Participations II Luxembourg Luxembourg Holding 0,00% 100,00% (1) Extensa Participations III Luxembourg Luxembourg Holding 0,00% 100,00% (1) Grossfeld Developments Luxembourg Luxembourg Real estate development 100,00% 100,00% Grossfeld Immobilière Luxembourg Luxembourg Inactive 100,00% 100,00% Grossfeld Participations Luxembourg Luxembourg Holding 0,00% 100,00% (1) RFD CEE Venture Capital Netherlands Netherlands Holding 100,00% 100,00% Extensa Romania Romania Romania Real estate development 100,00% 100,00% Extensa Slovakia Slovakia Slovakia Inactive 0,00% 100,00% (2) Extensa Istanbul Turkey Turkey Real estate development 100,00% 100,00%

(1) These entities were merged into Extensa Group NV as at 27 June 2017 with retrospective application of the merger as from 1 January 2017. Following this merger, Extensa Group NV formed a permanent establishment in Luxembourg - Extensa Group NV, succursale luxembourgeoise. All the activities of the merged entities are now within this permanent establishment.

(2) This entity was sold as at 30 June 2017. A gain of EUR 40,000 is recognised in Profit/(loss) on disposal of assets in the Statement of Profit and Loss.

(3) The Group sold its investment in Leasinvest Real Estate Management ("LREM") on 31 March 2017 for EUR 5,411,120 to its parent company, Ackermans & van Haaren ("AvH"). In August 2017, the Group distributed a dividend to its shareholders, including AvH. AvH then netted this dividend receivable against the outstanding payable toward the Group for the purchase consideration of LREM. The Group realised a net gain on disposal of LREM of EUR 41,170. (4) The Herman Teirlinck property was held by a subsidiary of the Group, VAC De Meander. During 2016, the Group acquired all of the non-controlling interest in VAC De Meander (49%) for EUR 32,500,000. The purchase price is due in several phases: (i) EUR 22,500,000 was paid in cash at the closing date in December 2016, (ii) EUR 4,000,000 was paid in cash during 2017, and (iii) EUR 6,000,000 is to be paid on 31 December 20201.

During 2017, the Group sold 100% of VAC De Meander for EUR 74,704,128, of which EUR 61,704,128 was received in cash and EUR 13,000,000 placed in Escrow. The sale closed on 22 November 2017. The sales price reflected the fair value of the VAC De Meander entity at the date of sale, therefore there is no net gain or loss on the sale.

Below is the detail of the statutory situation of assets and liabilities of VAC De Meander at the date that control was lost:

Assets EUR Investment property 142.347.937 Cash and cash equivalents 98.873 Trade and other receivables 968.853 Liabilities EUR Bank loan - 122.500.000 Trade and Other payables - 5.790.567 Accrued charges and deferred income - 1.124.565

Summarised financial information in respect of each of the Group's subsidiaries that has material non-controlling interests is set out below. The summarised financial information below represents amounts after intragroup eliminations.

Summarised financial information of Grossfeld Developments

31/12/2017 31/12/2016 Revenue and other operating revenues 143.900.092 71.350.832 Profit (loss) before interest and taxation 26.288.636 7.228.646 Taxation - 2.239.596 - 2.173.499 Profit (loss) for the year 24.049.040 5.055.147

Profit (loss) attributable to the owners of the company 9.642.740 1.690.603

Profit (loss) attributable to the non-controlling interests 14.406.300 3.364.544

31/12/2017 31/12/2016 1/01/2016 Non-current assets - - - Current Assets 61.484.388 53.883.960 75.964.951 Total Assets 61.484.388 53.883.960 75.964.951 Non-current liabilities 4.466.546 26.509.976 69.066.040 Current liabilities 24.996.026 19.401.208 3.981.282 Total Liabilities 29.462.572 45.911.184 73.047.322 Net assets 32.021.816 7.972.776 2.917.629 Group's share of net assets 11.942.158 2.299.418 608.815 Non-controllings share of net assets 20.079.658 5.673.358 2.308.814

[1] Article 3.3.1.b of the SPA with PMV stipulates, as a general rule, that the payment is to be made at the latest on 31 December 2020. However, in the event of a dispute, such as set out in that clause, it foresees alternative mechanisms, albeit with 31 December 2025 as cut-off date. 30 Capital commitments All figures in Euros

Capital and other expenditure contracted for at the reporting date but not yet incurred is as follows:

31/12/2017 31/12/2016 Cloche d'Or * 123.552.893 60.529.729 Gare Maritime 8.079.587 16.529.016 Gloria - 1.260.911 Riva * 24.431.643 324.377 Herman Teirlinck 5.030.427 33.845.338 Total 156.064.122 78.644.033

* The financing need for the commitments for the residential real estate developments Cloche d'Or and Riva will mainly be fulfilled thanks to the proceeds of clients. Rental guarantees in 2017 amounted to EUR 3,329,742 (2016: EUR 4,435,156).

31 Earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of Basic and Diluted earnings per share are as follows: 2017 2016 Profit / (loss) of the period attributable to the owners of the 75.167.582 40.198.106 Company Dividends paid - - Earnings used in the calculation of Basic and Diluted 75.167.582 40.198.106 earnings per share

Profit / (loss) of the period from discontinued operations used - - in the calculation of Basic and Diluted earnings per share from discontinued operations Earnings used in the calculation of Basic and Diluted 75.167.582 40.198.106 earnings per share from continuing operations Number of ordinary shares for the purposes of Basic and Diluted earnings per share (see Note Consolidated 642.979 642.979 Statement of Changes in Equity)

32 Contingencies

Correction of sale price for shares in FDC Targu Mures owned by RFD CEE Venture Capital BV In 2007, the shareholders of FDC Targu Mures, including RFD CEE Venture Capital BV (previously Extensa Nederland BV) (“Venture Capital”) owning 30% of the shares, sold their shares to PBW II Real Estate SA (“PBW II”), a Luxembourg fund. Following a disagreement between the sellers and the purchaser in relation to the purchase price, PBW II initiated arbitration proceedings which resulted in a condemnation of the sellers, including Venture Capital (without joint liability in respect of Venture Capital), to pay PBW II an additional sum of approximately EUR 26 million. Venture Capital is responsible for the payment of EUR 7.8 million (excluding interest). The Amsterdam court declared the arbitral award enforceable on the assets of Venture Capital in The Netherlands (exequatur) and PBW II subsequently requested Venture Capital to pay the amount awarded to it by the arbitral award. As at the date of the approval of the IFRS Statements, Venture Capital has no significant assets and the Group has not provided any guarantees in relation to any debt of Venture Capital.

33 Events after the reporting period

On 28 March 2018, the shareholders of the Group's Joint Venture Delo 1 sarl signed an agreement regarding the sale of its shares in the entity Delo 1 sarl. The agreement confirms the results recognised in prior years relating to this joint venture. The financial impact of the sale agreement is still being determined.