TAG Immobilien : ESG REPORT 2023 - Vantage Development Capital Group

ESG REPORT 2023

Vantage Development Capital Group

Table of contents

Letter from the Management Board	4
1.1 About us	6
1.2 Our management structure	8
1.2.1 Vantage Development S.A. Management Board	9
1.2.2 Vantage Development S.A. Supervisory Board	10
1.2.3 Structure of the Vantage Group	11
1.2.4 Organisational structure of the Vantage Group	12
1.2.5 Tax transparency	12
1.3 Synergy in operations within TAG Immobilien AG	13
1.4 Our portfolio in 2023	14
1.4.1 Rental apartments	15
1.4.2 Commercial units for rent	17
1.4.3 Apartments and commercial units for sale	17
1.4.4 Business goals	18
1.5 Our mission and values	18
1.6 Sustainable practices at Vantage Group	19
1.6.1 Our ESG-related goals	19
1.6.2 We support the UN Sustainable Development Goals	21
1.7 Membership in organisations and awards	22
2. Environmental sustainability	23
2.1 Emissions and energy	23
2.1.1 Energy consumption in Vantage	23
2.1.2 CO2 emissions from our portfolio	24
2.2 Vantage's balanced portfolio	27
2.2.1 Environmental Protection Policy	27
2.2.2 Energy efficiency of our portfolio	28
2.2.3 Our building standards as a tool for building a green portfolio	30
2.2.4 Biodiversity and water versus our portfolio	32
2.2.5 Waste management on estates	33
2.3 Construction process	34
2.3.1 Construction and sales	34
2.3.2 Energy efficiency in building process	34
2.3.3 Managing water and biodiversity in the construction process	35
2.3.4 Raw materials, waste and pollution on the construction sites	37

2.4 Development of local infrastructure and 15-minute settlements

39

3. Community involvement	41
3.1 Our team	41
3.1.1 Vantage Group team in figures	41
3.1.2 Management system in the Vantage Group	43
3.1.3 Support and professional development within the Vantage Group	43
3.1.4 Remuneration and benefits	48
3.1.5 Diversity in the Vantage Group	49
3.1.6 Security in the Vantage Group	51
3.1.7 Data Security	52
3.2 Our clients	54
3.2.1 Customised rental	55
3.2.2 Communication with tenants	56
3.2.3 Promoting environmental attitudes and integrating communities	59
3.3 Local communities	60
3.3.1 Investment in infrastructure development	60
3.3.2 Support for local communities	60
3.4 Our contractors	61
3.4.1 Selection of suppliers	61
3.4.2 Local cooperation	61
3.4.3 Responsibility in the value chain	61
4. Responsible corporate governance	63
4.1 ESG management	63
4.2 Consistent compliance system	64
4.2.1 Code of conduct	66
4.2.2 Human rights	67
4.2.3 Mechanisms for reporting concerns and violations	67
4.2.4 Anti-corruption policy	68
4.2.5 Conflicts of interest	69
4.2.6 Principles of cooperation with business partners	70
4.2.7 Procurement policy	70
4.3 Risk management	71
4.4 Our stakeholders	73
4.4.1 Identification of relevant topics	74
4.5 Reporting our activities	75
Restatements of information	75
Contact	76
GRI table	77

Eyal Keltsh

President of the Management Board

Letter from the Management Board

GRI [2-22]

Dear Sirs,

2023 will be another year of crises and turbulence, not only from a global perspective. Progressive climate change, accelerating technology and a reshuffling of the geopolitical scene are just some of the trends determining the conditions for doing busi- ness. We are experiencing a process of profound transformation, visible in almost every area of life, while at the same time, as a responsible company - we are creating and being the change our- selves, in line with the motto 'be the change you want to see in the world'.

As the Vantage Development Group, we comprehensively manage the rental product and co-create the rapidly growing PRS (Priva- te Rented Sector) - institutional rental in Poland. In line with our mission, we are changing the standards of the rental market so that everyone can live the way they want and "on their own terms",

in harmony with themselves and the world around them. In order to offer flats that meet current social needs, while maintaining freedom and flexibility of choice, we have focused on increasing our rental portfolio from 1,157 flats in 2022 to 2,417 (by more than 108%) and expanding our offer to new locations in 2023. Thus, we are currently operating in three different local markets, and we will also soon be visiting Gdańsk. We make sure that, regardless of the loca- tion, we maintain the high standard of the product itself, as well as of our service to tenants. We owe such dynamic growth to a consistently implemented development strategy, earlier capital decisions and integration between the Vantage Group and the ROBYG Group.

We are pursuing our business objectives in line with sustainability, being equally ambitious to reduce our environmental impact, increase our positive social impact and raise our management standards.

Being aware of the important contribution of the construction sector to the EU's carbon footprint and the fact that an increase in the portfolio means a nominal increase in CO2 , in 2023 we have decided to use ROBYG Construction's experience and synergies in building and selling flats. By implementing the Green Standard, a range of proven low- -carbon solutions, we are expanding our portfolio of flats in buildings with a primary energy ratio (PE) .

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We are aware that it is the operation of buildings - not their construction - that generates the most CO2. Within the Group, we accurately analyse our carbon footprint and disclose emissions in our non-financial reports - in 2023, we expanded our Scope 3 and Scope 2 disclosures to include all heat extracted. At the same time, we have updated our compliance ecosystem in 2023, implementing regulations to manage ESG issues and the principles of responsible business conduct included in the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights and the International Bill of Human Rights, among others. In light of future value chain challenges, we have also begun the process of examining the dual materiality of the impact of our operations.

Nevertheless, the focus remains on our customers. It is the building of long-term relationships with tenants that remains a priority of particular importance, embedded in our Group's DNA. Using state-of-the-art technology and the possibility of face-to-face contact, we are constantly developing a palette of activities that build tenants' local communities, enriching them with educational activities and promoting healthy, sustainable lifestyles. Bearing in mind the importance of relationships in today's world, we organise stationary meetings with residents at our deve- lopments, as well as online meetings, taking advantage of the opportunity for face-to-face conversations that allow us to build and strengthen social ties. We interweave activities with educational activities, offering tenants access to tips to support a positive impact on the environment in their daily lives, on a dedicated eco-tab on the website and in the Electronic Customer Service Office. We are activating residents extensively - in 2023 we built the Vantage Club programme, offering a range of additional benefits, which we will work on developing over the next year.

Handing over another Vantage Group sustainability report to you, I hope you will appreciate our ever-growing contribution to the sustainable development of the real estate industry, especially the PRS sector in Poland. I believe that by acting together we can achieve ever more ambitious goals.

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1.1 About us

Vantage Development S.A. is a responsible and reliable developer, focusing its activities on the institutional rental sector - PRS (Private Rented Sector). Our aim is to become one of the key players in this property market sector in Poland. As of 2023, our portfolio's market share in relation to all units offered by the PRS industry ranked us second .

By the end of 2023, our Group, encompassing 13 com- panies, was fully involved in the holistic management of

GRI [2-1],[2-6],[201-1]

rental properties, consistently broadening our portfolio with new sites. Our growth strategy involves acquiring land, executing development projects, and outfitting properties for rental. Our primary operations span Wro- cław, Poznań, and Łódź, with expansions into Gdańsk.

Vantage Group also has extensive experience in the sale of residential and commercial units, having constructed and sold over 6,500 units.

Vantage Achievements

2 417	6 541	275,22 Mio PLN
units for rent	units sold	income
	since establishment

187,45Mio PLN	106,73 Mio PLN	20,57Mio PLN
sales costs	oparational income	remunaration costs,
	EBIT	incl. capitilised 6,07 Mio PLN

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Key figures for 2023

625

units in three rental projects that have been granted occupancy permits

1 264

units completed and made available to tenants

408

units sold

1 369

rental units under construction or being finished

359

units under construction for sale

PRS (Private Rented Sector) is the institutional rental sector. Institutional rental is one of the forms of residential rental where tenants enter into fixed-term agreements with business entities specialising in property rentals, as opposed to agreements made with private individuals.

In this report, we will use the term "Vantage Group" or "Vantage" interchangeably, referring to the Vantage Development Capital Group with the dominant unit being Vantage Development S.A.

We operate in a sustainable manner throughout the entire value chain. Therefore, we extend our liability to the activities of subcontractors and suppliers and the use of apartments by tenants.

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Value chain of Vantage Group

UPSTREAM

OWN ACTIONS

DOWNSTREAM

Internal departments:	1
•	Economic and
	Administrative Department
•	Lease Operations
	Department	2

3

4

5

6 Start of construction and investor supervision.

Analysis and purchase of land.

Designing the building and preparing a development plan for the area around it.

Administrative procedures and obtaining necessary permits.

Creating an investment budget.

Selection of the general contractor (including Robyg Construction).

Internal departments:

• Management Office
• Economic and Administrative Department
• HR Department
• Real Estate Service Department
• Lease Operations Department
• IT Department

• Economic and Administrative
• Real Estate Service Department
• Management Office
• Lease Operations Department
• IT Department
• Sales Department

Products:

• Handed over premises
  (Wrocław)
• Premises in operation
  (Wrocław, Poznań, Łódź)

Built-in infrastructure, e.g. roads, sidewalks, playgrounds

Waste from construction sites, renovation works and municipal waste

Work contractors:

• General Contracting
• Subcontractors and

Suppliers

• Finishing works

Utilities providers:	Suppliers related:
•	Electricity	to property
maintenance.
•	Water
•	Gas	•	Cleaning
•	Fuels	•	Renovations
		•	24/7 service

Upstream:

• general contractor
• subcontractors and suppliers
• local government
• utility providers
• suppliers incl. with property maintenance

1. Completion of construction, finishing and furnishing of apartments.
   Taking over the care of the building
2. and apartments for rent by the Real Estate Service Department Team.
3. Acquiring tenants.

1. Introducing tenants to apartments and servicing them.
2. Building management and maintenance.

KEY EXTERNAL STAKEHOLDERS

Own activities:	Downstream:
•	tenants	•	Customers
•	external legal advisors and consultants	•	Tenant communities
•	design and architectural offices	•	Competition
•	local and state administration	•	Non-governmental
•	financial institutions (banks, investment funds,		organizations
	shareholders)	•	Media
•	local communities

1.2 Our management structure

Compared to 2022, there have been no significant changes in the ownership and management structure of the Vantage Group. Since 2020, TAG Beteiligungs und Immobilienverwaltungs GmbH, a part of TAG Immo- bilien AG - a company listed on the German stock exchange focusing on long-term rental sector activities, has owned 100% of the shares of Vantage Development

GRI [2-9],[2-10],[2-11],[2-18],[2-19],[207-1]

S.A. (headquartered in Wrocław at ul. Jaworska 11). The change in ownership has led to a shift in our business strategy - the main focus of our operations has become the development of a residential property portfolio for rent, which has replaced the construction and sale of residential real estate.

In February 2023, Vantage Development S.A. and other

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companies in the Group changed their headquarters - the office was moved from ul. Dąbrowskiego 44 to ul.

Jaworska 11 in Wrocław, into one of the office buildings of the CU Office complex.

1.2.1 Vantage Development S.A. Management Board

Pursuant to the articles of association, the Management Board of the parent unit in our Group, Vantage Development S.A., consists of one to six members. The exact number for each three-year term is determined by the Supervisory Board, which also appoints and dismisses the CEO and other Management Board mem- bers. Suspension of duties for individual or all board members can occur for material reasons by resolution of the Supervisory Board.

Within the Vantage Group, there are no internal regulations or recommendations for the Supervisory

Board regarding the selection of Management Board members. In selecting the Management Board, the Supervisory Board members prioritise the protection of the company's interests, and those appointed to the Management Board are chosen based on their competencies and extensive experience in their respective management areas. Every member of the Management Board fulfils the criteria for independence. There were no changes to the Management Board in 2023.

Eyal Keltsh

President of the Management Board, CEO,

a graduate of the Economics and Accounting Faculty at the University of Haifa, has over 25 years of experience

in the development market in Central and Eastern Europe. Scope of responsibility at Vantage Development S.A.:

• Overall management and company development
• Sales and marketing
• Project execution
• Legal matters
• Post-saleproperty management

Marta Hejak

Vice-President of the Management Board,

Chief Financial Officer, a graduate in

Finance and Accounting from the Warsaw

School of Economics, has experience in the financial sector and has worked as a chartered auditor for many years. Scope of responsibility at Vantage Development S.A.:

• Accounting
• Finance
• Controlling
• Administration
• IT

Dariusz Pawlukowicz

Vice-President of the Management Board, a graduate of the Wrocław University of Economics and the International

Management Centre of the University of Warsaw, where he completed Executive MBA studies in cooperation with the University of Illinois, an expert in finance, accounting, and taxation. Associated with Vantage Development SA since

2009. Scope of responsibility:

• Real estate rental and management segment
• HR
• ESG

Members of the Management Board of Vantage Development S.A. simultaneously hold corresponding positions on the Management Board of ROBYG S.A.

ESG Report Vantage Development 2023

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Our remuneration policy for the Management Board and directors is based on a monthly salary complemented by bonuses for meeting operational objectives. These objectives, aligned with the Group's business strategy and incorporating the ESG (Environmental, Social, and Governance) framework, are determined and reviewed by the Supervisory Board. The Supervisory Board sets both short-term goals with an annual perspective and medium-term goals in a three-year horizon. Additional- ly, it outlines objectives concerning the Group's sustainable operations, which are tied to the Management Board's compensation (see more).

Directors in our Group work towards annual goals established by the Management Board, which reflect the impact that external and internal stakeholders have on different departments. The Management Board conducts an annual review to assess the achievement of these objectives.

During the reporting period, the Management Board did not receive any additional bonuses, pension con- tributions, or severance packages associated with the conclusion of cooperation.

1.2.2 Vantage Development S.A. Supervisory Board

In accordance with the articles of association, the Supervisory Board of Vantage Development S.A. is composed of three to eight members, including the Chairman of the Supervisory Board. Within these limits, the General Meeting determines the number of Supervisory Board members for each term. The members of the Supervisory Board are appointed and dismissed by the General Meeting, which also designates the Chairman and the Vice-Chairman of the Supervisory Board. The members of the Supervisory Board are appointed for a joint three-year term.

No internal regulations or recommendations for shareholders regarding the selection of Supervisory Board Members have been implemented within the Group. The

Supervisory Board includes two independent members.

In 2023, the composition of our Group's Supervisory Board remained unchanged. There were five men and one woman in the Supervisory Board. The chairman of the highest supervisory body is not a member of the senior management team in our Group.

The term of the Supervisory Board lasts 3 years, and its members are appointed by the General Meeting.

The current members of the Supervisory Board of Vantage Development S.A. also serve on the Supervisory Board of ROBYG S.A.

Since 2020, the Investment Committee has been functioning within Vantage Development.

Oscar Kazanelson

President of the Supervisory Board

Graduate of the Givaataim Engineering School in Israel. Oscar Kazanelson has over 40 years of experience in the development market in Israel and Central and Eastern European countries. From 1992 to 2012, he was associated with Olimpia Real Estate and Olimpia Holding Ltd., a publicly traded company engaged in development activities in Israel and Central and Eastern Europe. During this time, Olimpia constructed and delivered several thousand apartments and over 100,000 square meters of commercial and office space. As a shareholder, Managing Director, and later Chairman of the Supervisory Board, Oscar Kazanelson was responsible for all investment activities - development, marketing, sales, construc- tion, and financing. In 2000, he founded Nanette Group, which has been listed on the London AIM since 2006, where he served as CEO. Since 17 October 2007, he has been the Chairman of the Supervisory Board of ROBYG S.A. On 19 January 2023, the General Meeting appointed him as Chairman of the Supervisory Board of Vantage Development S.A.

Martin Thiel

Deputy Chairman of the Supervisory Board

Member of the Management Board of TAG Immobilien AG since 1 April 2014, serving as the company's Chief Financial Officer. He is an expert with over 15 years of experience working as an auditor and tax consultant. At TAG Immobilien, he oversees controlling, accounting, finance, taxes, and IR&PR.

He is a business studies graduate from Regensburg and holds American CPA (Certified Public Accountant) and CVA (Cer- tified Valuation Analyst) certifications in corporate value building.

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