Financial Statements at 31.12.2018

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Financial Statements at 31.12.2018 Financial Statements at 31.12.2018 Financial Statements at 31.12.2018 1° Financial Year Contents 3 Company Profile page 5 01 Directors’ Report on Operations page 11 02 Financial Statements and Explanatory Notes of the Aedes Group page 97 03 Financial Statements and Explanatory Notes of Aedes SIIQ S.p.A. page 177 04 Company 01 Profile 1.1 Letter to Shareholders 6 1.2 Governance 8 1.3 Shareholder structure 9 6 FINANCIAL STATEMENTS 2018 1.1 Letter to Shareholders Shareholders, 2018 saw the completion, on 28 December, of a partial and proportional demerger, resulting in the transfer to this Company, today Aedes SIIQ S.p.A., of the SIIQ complex previously held by Aedes SIIQ S.p.A., renamed Restart SIIQ S.p.A.. Sedea SIIQ S.p.A., today Aedes SIIQ S.p.A., hence benefited from the SIIQ complex for only 4 days of its financial year. We should, therefore, focus on illustrating the main activities carried out in the context of this complex throughout 2018, although carried out by the demerged company Aedes SIIQ S.p.A., now Restart SIIQ S.p.A.. These activities, as far as the consolidated reporting formats are concerned, are presented in the following pro-forma consolidated statements. In 2018, we continued, in the context of the SIIQ complex, to move further ahead with our development projects to implement additional revenue assets in the short and medium term, and marginally to pursue purchases of revenue properties, in accordance with the property company model adopted in our capacity as a SIIQ. The main activities revolving around the SIIQ complex are summarized below: a) Preliminary activities continued on the development of the Caselle Open Mall project (114,000 sqm of GLA), namely: 1. completion of the administrative and town-planning process for the receipt of building permits in 2019; 2. execution of the works required for the lifting of the existing urban constraints in the area covered by the project (water systems); 3. execution of administrative activities for the last expropriations on the areas affected by future road works; 4. execution of pre-letting activities, assisted by leading consultants, ascertaining the tangible and prior interest of the market (expressions of interest and Head of Terms) to prepare an advanced business plan instrumental to the future financing of the works; b) development activities were completed on the Serravalle Retail Park (Phase C1), while letting activities continued on this complex, with occupancy of available space reaching approximately 90% at 31 December 2018. The new phase of the initiative was inaugurated on 14 June 2018; c) the lease contract with a primary Tenant was concluded on one of the two office towers in via Richard, Milan. Following completion of the refurbishment planning, the renovation work agreed with the Tenant and scheduled for delivery by fourth quarter 2019 is currently in progress; d) the sale of the property located in via Agnello, Milan, was completed on 29 June 2018. The office property, with a GLA of over 4,400 sqm, at 31 December 2017, had been valued € 48.5 million by the independent expert. The sale of the property generated a capital gain of € 2.25 million. The sale of a core property such as the one in via Agnello 12 falls into the strategy of focusing on income investments with returns above industry average in order to maximize the return for investors; e) at 31 December 2018, with regard to the investment agreement on “The Market San Marino” between Aedes SIIQ S.p.A. and BG Asset Management S.A. (Borletti Group) and other partners, for 1. COMPANY PROFILE 7 1.1 Letter to Shareholders the acquisition by Aedes of 40% of the company acting as General Partner of the initiative, the total investment of Aedes in this project amounts to € 17.8 million against a total commitment of € 23.6 million. The development of the first phase of the project is expected to be completed by spring 2020. The investment agreements concluded in 2017 include, inter alia, a call option granted to Aedes for the purchase of the entire project, exercisable in 2022. Mention should be made that, in light of the financial position and results of operations of the Parent Company at 31 December 2018, the first reference year for verifying the parameters set by the Special Regime of SIIQs, the asset and profit requirements have both been met. In 2018, Aedes SIIQ joined the EPRA - European Public Real Estate Association - conforming with the main international Reits on financial reporting which, given the demerger transaction, refers to pro-forma figures for 2018. The 2018 Annual Report contains the explanatory section of the EPRA financial measures applied to the pro-forma figures for the same year. The Aedes Group is aware that business should not be restricted to merely producing financial results, but to developing a responsible industrial model aimed at achieving shared objectives, by adopting a transparent approach towards all its Stakeholders: investors, business partners, employees, clients and suppliers. The Aedes SIIQ S.p.A. Group ended 2018 with a loss of € 0.265 million, relating mainly to the 4 days of operation of the SIIQ complex, net of the net costs for the demerger and listing of approximately € 0.9 million, and with a pro-forma consolidated profit of € 9.01 million. Aedes SIIQ S.p.A. intends to continue on its growth path in the forthcoming years, consistent with its ability to finance the growth. The Chairman The Chief Executive Officer Carlo A. Puri Negri Giuseppe Roveda 8 FINANCIAL STATEMENTS 2018 1.2 Governance BOARD OF DIRECTORS Giuseppe Carlo A. Benedetto Roveda Puri Negri Ceglie Chief Executive Officer Chairman Vice-Chairman 4 Alessandro Giorgio Adriano Gandolfo Gabrielli Guarneri Director Director Director 1 Annamaria Rosanna Serenella Pontiggia Ricci Rossano Independent Director 1 2 3 Independent Director 2 3 Independent Director 2 3 BOARD OF STATUTORY AUDITORS Cristiano Fabrizio Sabrina Agogliati Capponi Navarra Chairman 5 Standing Auditor 5 Standing Auditor 5 INDEPENDENT AUDITORS Deloitte & Touche S.p.A. (1) Investment Committee (2) Control, Risk and Related Party Transactions Committee (3) Remuneration and Appointments Committee (4) Director in charge of the internal control and risk management system (5) Supervisory Body 1. COMPANY PROFILE 9 1.3 Shareholder structure At the date of approval of this Report, the share capital to increase its share capital to service the exercise of Aedes SIIQ S.p.A. amounts to € 210,000,000.00 and of the Warrants, in divisible form against payment, is divided into 32,030,344 ordinary shares with no par by a maximum amount (including share premium) value. of € 18,405,151.15, through issue of a maximum of 2,898,449 new ordinary shares, with no par value As a result of the partial and proportional demerger and with regular dividend entitlement, at the price pursuant to the project approved by the Board (including share premium) of € 6.35 each, in the of Directors of Aedes SIIQ S.p.A. (now Restart SIIQ ratio of no. 1 new ordinary share for each group S.p.A.) and Sedea SIIQ S.p.A. (now Aedes SIIQ of no. 30 Warrants held (the “Warrant Increase”), S.p.A.) on 8 August 2018 and by the Shareholders’ it being understood that, if not fully subscribed Meetings of the companies on 27 September 2018, by 7 July 2020, the Warrant Increase will remain the Company issued no. 86,953,470 warrants unchanged within the limits of the subscriptions named “Warrant Aedes SIIQ S.p.A. 2018-2020” (the collected by such date. “Warrants”), incorporating the right to subscribe to ordinary shares of the newly issued company, The table below shows the list of shareholders with no par value and with regular dividend holding over 5 (five) percent of the issued share entitlement, to be exercised by 7 July 2020, at the capital at 31 December 2018, based on Consob1 price (including share premium) of € 6.35 (six and communications and on the updated Shareholders’ (1) Received under art. 120 of Legislative thirty-five cents) for each new ordinary share, in the Register, as well as on other information available to Decree no. 58/1998 ratio of no. 1 (one) ordinary share for each group of the Company at that date2. (2) Taking account of the SME status of the Company, pursuant to art. 1, par. 1, lett. no. 30 (thirty) Warrants exercised, and also resolved w-quater.1, of Legislative Decree no. 58/1998 34% 51% Augusto S.p.A. Vi-Ba S.r.l. Aurelia S.r.l. per il tramite di Itinera Shareholder no. of shares % of share capital S.p.A. Mercato Augusto S.p.A. 16,425,242 * 51.280% Vi-Ba S.r.l. 3,170,000 9.897% 5% Aurelia S.r.l. through Itinera S.p.A. 1,693,55410% 5.287% Market 10,741,548 33.536% * of which 50,000 shares held through Restart SIIQ S.p.A. Total Shares Assetto32,030,344 azionario di riferimento100.00% Given the relevant shareholder structure, calculated 51% on the basis of 32,030,344 ordinary shares Augusto S.p.A. outstanding at 31 December 2018, the shareholder base is composed as shown in the chart. Mention should be made that at 31 December 34% 2018, 86,953,470 Warrants were still outstanding, Market entitling their holders to subscribe at a price of € 6.35 (including share premium), no. 1 new Aedes 10% ordinary share resulting from the Warrant Increase Vi-Ba S.r.l. for each group of no. 30 Warrants held.
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