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External verification
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Statutory auditor’s report to the shareholders’ meeting of Warehouses De Pauw NV/SA for the year ended 31 December 2020 - Consolidated financial statements
In the context of the statutory audit of the consolidated financial statements of Warehouses De Pauw NV/SA (“the company”) and its subsidiaries (jointly “the group”), we hereby submit our statutory audit report. This report includes our report on the consolidated financial statements and the other legal and regulatory requirements. These parts should be considered as integral to the report.
We were appointed in our capacity as statutory auditor by the shareholders’ meeting of 29 April 2020, in accordance with the proposal of the board of directors (“bestuursorgaan” / “organe d’administration”) issued upon recommendation of the audit committee. Our mandate will expire on the date of the shareholders’ meeting deliberating on the financial statements for the year ending 31 December 2022. We have performed the statutory audit of the consolidated financial statements of Warehouses De Pauw NV/SA for 14 consecutive periods.
Report on the consolidated financial statements
Unqualified opinion We have audited the consolidated financial statements of the group, which comprise the consolidated balance sheet as at 31 December 2020, the consolidated profit and loss account, the consolidated statement of overall result, the consolidated statement of changes in equity and the consolidated statement of cash flow for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The consolidated balance sheet shows total assets of 4.790.405 (000) EUR and the consolidated statement of overall result shows a profit for the year then ended of 328.601 (000) EUR. In our opinion, the consolidated financial statements give a true and fair view of the group’s net equity and financial position as of 31 December 2020 and of its consolidated results and its consolidated cash flow for the year then ended, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium.
Basis for the unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in Belgium. In addition, we have applied the International Standards on Auditing approved by the IAASB applicable to the current financial year, but not yet approved at national level. Our responsibilities under those standards are further described in the “Responsibilities of the statutory auditor for the audit of the consolidated financial statements” section of our report. We have complied with all ethical requirements relevant to the statutory audit of consolidated financial statements in Belgium, including those regarding independence.
We have obtained from the board of directors and the company’s officials the explanations and information necessary for performing our audit.
We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key audit matter
Valuation of investment properties
♦ Investment properties measured at fair value (4 566 601 (000) EUR)) represent 95 per cent of the consolidated balance sheet total as at 31 December 2020. Changes in the fair value of the investment properties have a significant impact on the consolidated net result for the period and equity. ♦ The portfolio includes completed investments and properties under construction.
Acquisitions and divestments of investment properties are individually significant transactions. ♦ The Group uses professionally qualified external valuers to fair value the Group’s portfolio at three-monthly intervals. The valuers are engaged by the Directors and they perform their work in accordance with the International Valuation Standards issued by the ‘IVSC’.
The valuers used by the Group have considerable experience in the markets in which the
Group operates. ♦ The portfolio is valued based on a discounted cash flow model, or income capitalisation model and / or based on comparative market transactions. Development properties are valued by the same methodology with a deduction for all costs necessary to complete the development together with a remaining allowance for risk. The key inputs into the valuation exercise are yields and current market rent, which are influenced by prevailing market forces, comparable transactions and the specific characteristics of each property in the portfolio. ♦ Therefore, the audit risk relates to the assumptions and critical judgments linked to those key inputs. ♦ We considered the internal control implemented by management and we tested the design and implementation of controls over investment properties. ♦ We assessed the competence, independence and integrity of the external valuers. ♦ We analysed and challenged the valuation process, performance of the portfolio and significant assumptions and critical judgement areas, including yields and estimated rental values. ♦ We benchmarked and challenged the key assumptions that were used in the valuation to external industry data and comparable property transactions, in particular the yield. ♦ We performed audit procedures to assess the integrity and completeness of information provided to the independent valuers relating to rental income, key rent contract characteristics and occupancy. ♦ We agreed the amounts per the valuation reports to the accounting records and from there we agreed the related balances through to the financial statements. ♦ As part of our audit procedures performed on the acquisitions and divestments of investment properties, we examined the most significant contracts and documentation on the accounting treatment applied to these transactions. ♦ For development properties, we also confirmed that the supporting information for construction contracts and budgets was consistent with the cost to complete deducted from the valuation of development properties. Capitalized expenditure was tested on a sample basis to invoices, and budgeted costs to complete were compared to supporting evidence (for example by inspecting original construction contracts). ♦ Furthermore, we assessed the appropriateness of the disclosures provided on the fair values of investment properties.
Reference to disclosures We refer to the Financial Statements, including notes to the Financial Statements: Note III. Valuation rules and Note XII. Investment properties. How the matter was addressed?
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Responsibilities of the board of directors for the preparation of the consolidated financial statements The board of directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the board of directors is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters to be considered for going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the group or to cease operations, or has no other realistic alternative but to do so.
Responsibilities of the statutory auditor for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
During the performance of our audit, we comply with the legal, regulatory and normative framework as applicable to the audit of consolidated financial statements in Belgium. The scope of the audit does not comprise any assurance regarding the future viability of the company nor regarding the efficiency or effectiveness demonstrated by the board of directors in the way that the company’s business has been conducted or will be conducted. As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
♦ identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from an error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; ♦ obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control; ♦ evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors; ♦ conclude on the appropriateness of the use of the going concern basis of accounting by the board of directors and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor’s report.
However, future events or conditions may cause the group to cease to continue as a going concern; ♦ evaluate the overall presentation, structure and content of the consolidated financial statements, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. ♦ obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
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We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and we communicate with them about all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes any public disclosure about the matter.
Other legal and regulatory requirements
Responsibilities of the board of directors The board of directors is responsible for the preparation and the content of the directors’ report on the consolidated financial statements and other matters disclosed in the annual report on the consolidated financial statements.
Responsibilities of the statutory auditor As part of our mandate and in accordance with the Belgian standard complementary to the International Standards on Auditing (ISA) as applicable in Belgium, our responsibility is to verify, in all material respects, the director’s report on the consolidated financial statements and other matters disclosed in the annual report on the consolidated financial statements, as well as to report on these matters.
Aspects regarding the directors’ report on the consolidated financial statements In our opinion, after performing the specific procedures on the directors’ report on the consolidated financial statements, this report is consistent with the consolidated financial statements for that same year and has been established in accordance with the requirements of article 3:32 of the Code of companies and associations. In the context of our statutory audit of the consolidated financial statements we are responsible to consider, in particular based on information that we became aware of during the audit, if the directors’ report on the consolidated financial statements and other information disclosed in the annual report on the consolidated financial statements, i.e.:
♦ 3. Strategy and value creation, 5. Transactions and realisations, 7. Financial results and property report, 8. Corporate Governance Statement, 9. Risk factors and 11.
Financial statements are free of material misstatements, either by information that is incorrectly stated or otherwise misleading. In the context of the procedures performed, we are not aware of such a material misstatement.
Statements regarding independence ♦ Our audit firm and our network have not performed any prohibited services and our audit firm has remained independent from the group during the performance of our mandate. ♦ The fees for the additional non-audit services compatible with the statutory audit, as defined in article 3:65 of the Code of companies and associations, have been properly disclosed and disaggregated in the notes to the consolidated financial statements.
Other statements ♦ This report is consistent with our additional report to the audit committee referred to in article 11 of Regulation (EU) No 537/2014.
Signed at Zaventem. The statutory auditor
Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises CVBA/SCRL Represented by Rik Neckebroeck
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The board of directors on behalf of Warehouses De Pauw NV/SA Blakebergen 15 B-1861 Wolvertem
Dear Ladies and Gentlemen
Warehouses De Pauw NV/SA
We report on the forecasted EPRA earnings (as defined in August 2011 (and amended in November 2016) in the report “Best Practices Recommendations Guidelines“ of the European Public Real Estate Association) of Warehouses De Pauw NV/SA (“WDP”, “the Company”) and its subsidiaries (together “the Group”) for the 12 months period ending 31 December 2021 (the “Profit Forecast”). The Profit Forecast, and the material assumptions upon which it is based are set out in chapter 7 Financial results and property report, paragraph Outlook of the 2020 annual report of the WDP Group (“the 2020 Annual Report”) issued by the Company. We do not report on the other elements of the net result nor on the EPRA earnings per share, the projected dividend or the projected balance sheet.
This report is voluntarily required upon request by the board of directors of the Company for the purpose to confirm the Profit Forecast has been compiled and prepared in accordance with elements (a) and (b) as defined under item 11.2 of Annex 1 of the Commission Delegated Regulation (EU) 2019/980 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and repealing Commission Regulation (EC) No 809/2004 (the “Commission Delegated Regulation”) and for no other purpose. Responsibilities
It is the responsibility of the directors of the Company (the “Directors”) to prepare the Profit Forecast in accordance with Annex 1 section 11 of the Commission Delegated Regulation.
It is our responsibility to form an opinion as to the proper compilation of the Profit Forecast and to report that opinion to you.
Save for any responsibility arising under art. 26 of the Law of 11 July 2018 to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in accordance with this report or our statement, required by and given solely for the purposes of complying with Annex 1 item 1.3 of the Commission Delated Regulation, consenting to its inclusion in the Universal Registration document.
Basis of Preparation of the Profit Forecast
The Profit Forecast has been prepared on the basis stated in chapter 7. Financial results and property report, paragraph Outlook of the 2020 annual report and is based on a forecast for the 12 months to 31 December 2020. The Profit Forecast is required to be presented on a basis consistent with the accounting policies of the Group.
Basis of opinion
We conducted our work in accordance with the International Standard on Assurance Engagement 3400 “The Examination of Prospective Financial Information” (“ISAE 3400”) issued by the International Auditing and Assurance Standards Board (“IAASB”). Our work included evaluating the basis on which the historical financial information included in the Profit Forecast has been prepared and considering whether the Profit Forecast has been accurately computed based upon the disclosed assumptions and the accounting policies of the Group. Whilst the assumptions upon which the Profit
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Forecast are based are solely the responsibility of the Directors, we considered whether anything came to our attention to indicate that any of the assumptions adopted by the Directors which, in our opinion, are necessary for a proper understanding of the Profit Forecast have not been disclosed or if any material assumption made by the Directors appears to us to be unrealistic.
We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Profit Forecast has been properly compiled on the basis stated.
Since the Profit Forecast and the assumptions on which it is based relate to the future and may therefore be affected by unforeseen events, we can express no opinion as to whether the actual results reported will correspond to those shown in the Profit Forecast and differences may be material.
Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside Belgium, including the United States of America, and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.
Opinion
In our opinion, the Profit Forecast has been properly compiled on the basis stated which is comparable with the historical financial information and is consistent with the accounting policies of the Group.
Declaration
For the purposes of art. 26 of the Law of 11 July 2018 we are responsible for this report as part of the Universal Registration document and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Universal Registration document in compliance with Annex 1 item 1.2 of the Commission Delegated Regulation.
Signed at Zaventem. The statutory auditor
Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises CVBA/SCRL Represented by Rik Neckebroeck
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Statutory auditor’s report on the limited review performed on selected environmental, social and governance performance indicators published in the document “Annual report” of Warehouses De Pauw NV/SA for the year ended 31 December 2020
To the board of directors
As statutory auditors we have been engaged to perform review procedures to express a limited assurance on selected environmental, social and governance performance indicators (“the CSR Data”) published in the document “Annual report” of Warehouses De Pauw NV/SA for the year ended 31 December 2020 (“the Document”). The CSR Data have been defined following the Best Practices Recommendations of the “European Public Real Estate Association” (EPRA) regarding sustainable development reporting (EPRA BPR on Sustainability Reporting, 3rd version). The CSR Data are identified with the symbol in the Document.
The scope of our work has been limited to the CSR Data covering the year 2020 and includes only the environmental performance indicators of the buildings, the social and governance indicators retained within the reporting scope defined by Warehouses De Pauw NV/SA.
As indicated in the Annual Report “EPRA sustainability performance measures”, the scope of reporting for environmental performance indicators for Warehouses De Pauw NV’s property portfolio is 53% for fuel and 80% for electricity (in m²). The scope of the reporting relating to the social and administrative performance indicators covers the entire Warehouses De Pauw NV organisation.
The limited review was performed on the data gathered and retained in the reporting scope by Warehouses De Pauw NV/SA. Our conclusion as formulated below covers therefore only these CSR Data and not all information included in the Document. Responsibility of the board of directors
The board of directors of Warehouses De Pauw NV/SA is responsible for the CSR Data and the references made to it presented in the Document as well as for the declaration that its reporting meets the requirements of the “EPRA BPR on Sustainability Reporting”.
This responsibility includes the selection and application of appropriate methods for the preparation of the CSR Data, for ensuring the reliability of the underlying information and for the use of assumptions and reasonable estimations. Furthermore, the board of directors is also responsible for the design, implementation and maintenance of systems and procedures relevant for the preparation of the CSR Data.
Nature and scope of work
Our responsibility is to express an independent conclusion on the CSR Data based on our limited review. Our assurance report has been made in accordance with the terms of our engagement letter.
We conducted our work in accordance with the international standard ISAE (International Standard on Assurance Engagements) 3000 (Revised).
Applying these standards, our procedures are aimed at obtaining limited assurance on the fact that the CSR Data do not contain material misstatements. These procedures are less profound than the procedures of a reasonable assurance engagement.
The scope of our work included, amongst others the following procedures: ♦ Assessing and testing the design of the systems and procedures used for datagathering, processing, classification, consolidation and validation, and that for the methods used for calculating and estimating the 2020 CSR Data identified with the symbol in the table as mentioned in the Document; ♦ Conducting interviews with responsible officers; ♦ Examining, on a sample basis, internal and external supporting evidence and performing consistency checks on the consolidation of these CSR Data.
EXTERNAL VERIFICATION
Conclusion
Based on our limited review, as described in this report, nothing has come to our attention that causes us to believe that the CSR Data related to Warehouses De Pauw NV/SA identified with the symbol in the Document, has not been prepared, in all material respects, in accordance with EPRA Best Practices Recommendations on Sustainability Reporting (3rd version).
Signed at Zaventem on 24 March 2021 The statutory auditor
Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises CVBA/SCRL Represented by Rik Neckebroeck
