Heimstaden Deutschland Holding II GmbH (vormals: aptus 1843. GmbH)

Berlin

Befreiender Konzernabschluss zum Geschäftsjahr vom 01.01.2021 bis zum 31.12.2021

Heimstaden Bostad AB

Malmö/Schweden

Financial Five-Year Summary

SEK million	2021	2020	2019	2018	2017
Comprehensive Income Statement
Rental income	8,608	6,332	4,135	3,046	1,585
Service income	639	389	-	-	-
Property expenses	-3,861	-2,828	-1,732	-1,295	-781
Net operating income	5,386	3,893	2,403	1,751	804
Corporate administrative expenses	-546	-345	-193	-140	-111
Other operating income and expenses	-2,005	41	53	1	13
Profit before inventory properties and fair value adjustments	2,835	3,589	2,263	1,611	706
Fair value adjustment of investment properties	21,363	7,934	4,834	2,562	1,776
Gains from sale of inventory properties	-2	188	0	0	0
Operating profit	24,195	11,711	7,097	4,173	2,482
Fair value adjustment of derivative financial instruments	819	-178	39	11	4
Financial income	297	737	41	26	4
Financial expenses	-1,288	-1,437	-1,324	-495	-367
Profit before tax	24,024	10,833	5,853	3,716	2,123
Income tax expense	-492	-386	-200	-135	-35
Deferred tax	-4,58	-1,774	-1,193	-557	-511
Profit for the year	18,952	8,673	4,46	3,023	1,577
Other comprehensive income	3,627	-4,479	279	-442	29
Total comprehensive income	22,580	4,194	4,740	2,581	1,606
Property-related key data
Lettable time-weighted area, sqm thousands	8,365	6,441	3,047	2,345	1,418
Net operating income, %	62.6	61.5	58.1	54.2	49.7

SEK million	2021	2020	2019	2018	2017
Balance Sheet
Investment properties	300,584	144,404	113,331	72,329	43,689
Other non-current assets	20,183	1,299	1,66	168	210
Current assets	28,299	11,223	6,573	3,786	928
Total assets	349,066	156,926	121,564	76,283	44,827
Equity	160,338	77,741	57,548	31,925	18,066
Deferred tax liabilities	21,904	4,212	2,526	1,356	1,025
Interest-bearing liabilities	158,380	71,39	59,564	41,593	24,828
Derivative financial instruments	6	447	65	0	31
Non-interest-bearing liabilities	8,438	3,136	2,679	1,409	877
Total liabilities	349,066	156,926	121,564	76,283	44,827
Financial key data
Cash flow	10,503	3,39	2,018	1,535	491
Interest coverage ratio (ICR), multiple	4.1	2.9	2.5	2.6	3.1
Net loan-to-value ratio (LVT), %	46.2	43.9	48.0	54.3	55.1
Average interest rate, %	1.0	1.7	1.9	1.8	1.7
Average loan tenor, number of years	8.9	10.5	10.5	8.1	7.3
Net asset value as of the balance sheet date	169,271	81,953	60,074	33,281	19,091
Data per share
Profit per ordinary share (basic and diluted), SEK	2,360	318	1,176	795	817
Equity per ordinary share, SEK	5,334	3,229	2,954	4,881	3,419
Equity per preference share A, SEK	2,220,304	1,432,552	972,342	1,365,663	318,444
Equity per preference share B, SEK	2,088	2,077	2,064	103,452	100,989
Number of ordinary shares outstanding	9,752,321	6,578,058	5,135,502	2,429,449	1,796,114
Number of preference shares A outstanding	200	200	200	100	100
Number of preference shares B outstanding	35,205,992	20,317,179	16,027,565	203,360	117,760
Number of preference shares C outstanding	327,379	-	-	-	-

Consolidated Comprehensive Income Statement

SEK million	Note	2021	2020
Rental income	2.1, 2.2	8,608	6,332
Service income	2.1, 2.2	639	389
Property expenses	2.1, 2.3, 2.6	-3,861	-2,828
Net operating income		5,386	3,893
Corporate administrative expenses	2.5, 2.6	-546	-345
Other operating income		5	48
Other operating expenses	2.4	-2,340	-39
Share of net profits of associates and joint ventures	3.4	329	32
Profit before inventory properties and fair value adjustments		2,834	3,589
Fair value adjustment of investment properties	2.1, 2.7, 3.1	21,363	7,934
Gains from sale of inventory properties	2.1, 4.1	-2	188
Operating profit		24,195	11,711
Interest income	2.9	152	81
Interest expenses on interest-bearing liabilities	2.9	-1,288	-1,269
Net currency translation gains/losses	2.9	76	656
Fair value adjustment of derivative financial instruments	2.8	819	-178
Other financial items		70	-168
Profit before tax		24,024	10,833
Income tax expense	2.10	-492	-385
Deferred tax expense	2.10	-4,580	-1,774
Profit for the period		18,952	8,674
Other comprehensive income that may be reclassified to profit or loss in subsequent periods	5	3,627	-4,480
Total comprehensive income		22,579	4,194
Profit for the period attributable to:
The Parent Company's shareholders		18,946	8,672
Non-controlling interests		5	1
Total comprehensive income for the period attributable to:
The Parent Company's shareholders		22,574	4,193
Non-controlling interests		5	1
Average number of shares outstanding	2.11	7,741,760	6,383,342
Earnings per ordinary share (basic and diluted)	2.11	2360	318

Consolidated Balance Sheet

ASSETS

SEK million	Note	31 December 2021	31 December 2020
Investment properties	2.1, 3.1	300,584	144,404
Goodwill	3.2	16,489	-
Intangible assets	3.2	8	7
Machinery and equipment	3.3, 7.1	76	50
Investments in associated companies and joint ventures	3.4	739	347
Quoted equity investments	6.1	5,765	-
Derivative financial instruments	6.1	440	-
Other non-current financial assets	3.5	2,431	895
Total non-current assets		326,532	145,703
Inventory properties	4.1	846	1,292
Rent and trade receivables	4.2	179	61
Other current financial assets	4.3	1,469	2,045
Prepayments	4.3	532	189
Cash and cash equivalents	4.4	19,508	7,636
Total current assets		22,534	11,223
TOTAL ASSETS		349,066	156,926
EQUITY AND LIABILITIES
SEK million	Note	31 December 2021	31 December 2020
Share capital		72	42
Other capital contributions		97,626	52,690
Hybrid bonds		33,666	13,635
Currency translation reserve		-2,060	-5,687
Retained earnings		30,969	17,001
Total equity attributable to Parent Company shareholders	5	160,273	77,681
Non-controlling interests	5	65	60
Total equity	5	160,338	77,741
Interest-bearing liabilities	6.1, 6.2, 6.3	134,895	64,066
Lease liabilities	7.1	729	606
Derivative financial instruments	6.1	-	433
Deferred tax liabilities	7.2	21,904	4,212
Other non-current financial liabilities		864	824
Total non-current liabilities		158,392	70,141
Interest-bearing liabilities	6.3	23,485	6,713
Lease liabilities	7.1	5	4
Trade payables		566	414
Other current liabilities	7.3	4,411	1,045
Derivative financial instruments	6.1	6	14
Accrued expenses		1,863	854
Total current liabilities		30,336	9,044
TOTAL EQUITY AND LIABILITIES		349,066	156,926

Consolidated Statement of Changes in Equity

SEK million	Share capital	Other capital contributions	Hybrid bonds	Currency translation reserve
Opening balance, 1 January 2020	33	39,847	8,514	-1,208
Profit for the period	-	-	69	-
Other comprehensive income	-	-	-	-4,480
Total comprehensive income	-	-	69	-4,480
New share issue	9	12,843	-	-
Dividends	-	-	-69	-
Issue of hybrid bonds	-	-	5,189	-
Costs of issuance	-	-	-68	-
Total transactions with the company's shareholders	9	12,843	5,052	-
Equity, 31 December 2020	42	52,690	13,635	-5,687
Opening balance, 1 January 2021	42	52,690	13,635	-5,687
Profit for the period	-	-	406	-
Other comprehensive income	-	-	-	3,627
Total comprehensive income	0	0	406	3,627
New share issue	29	44,936	-	-
Dividends	-	-	-406	-
Issue of hybrid bonds	-	-	20,235	-
Costs of issuance	-	-	-204	-
Total transactions with the company's shareholders	29	44,936	19,625	-
Equity, 31 December 2021	72	97,626	33,666	-2,060

SEK million	Retained earnings	Attributable to Parent Company shareholders	Non-controlling interests	Total equity
Opening balance, 1 January 2020	10,302	57,488	59	57,547
Profit for the period	8,604	8,673	1	8,674
Other comprehensive income	-	-4,480	-	-4,480
Total comprehensive income	8,604	4,193	1	4,194
New share issue	-	12,852	-	12,852
Dividends	-1,828	-1,897	-	-1,897
Issue of hybrid bonds	-	5,189	-	5,189
Costs of issuance	-77	-145	-	-145
Total transactions with the company's shareholders	-1,905	15,999	-	15,999
Equity, 31 December 2020	17,001	77,681	60	77,741
Opening balance, 1 January 2021	17,001	77,681	60	77,741
Profit for the period	18,541	18,947	5	18,952
Other comprehensive income	-	3,627	-	3,627
Total comprehensive income	18,541	22,574	5	22,579
New share issue	-	44,965	-	44,965
Dividends	-4,572	-4,978	-	-4,978
Issue of hybrid bonds	-	20,235	-	20,235
Costs of issuance	-	-204	-	-204
Total transactions with the company's shareholders	-4,572	60,018	-	60,019
Equity, 31 December 2021	30,969	160,273	65	160,338

Consolidated Cash Flow Statement

SEK million	Note	2021	2020
Operating activities
Profit before income tax		24,024	10,833
Adjustments to reconcile profit before tax to net cash flows:
Fair value adjustment of investment properties		-21,217	-8,122
Fair value adjustment of derivative financial instruments		-885	178
Finance expenses - net		1,656	1,351
Other adjustments	4.5	-939	-645
Working capital changes
Increase/decrease(+) in rent receivables		-480	-277
Increase/decrease(-) in trade and other payables		3,883	-201
Cash generated from operations		6,042	3,117
Interest paid		-1,884	-1,258
Interest received		41	81
Paid income tax		-659	-320
Net cash flows from operating activities		3,540	1,620

SEK million	Note	2021	2020
Investing activities
Acquisitions of businesses, net of cash	8.2	-79,449	-
Purchase of investment properties		-19,498	-12,705
Capital expenditure on completed investment properties		-5,428	-2,985
Disposals of investment properties		1,148	-
Deposits paid for signed acquisitions		-506	-1,024
Investments in associates and joint ventures		-262	-398
Settlement of derivative financial instruments		-61	113
Quoted equity investments	6.1	-5,188	-
Other cash flows from investing activities		-93	145
Net cash flows from investing activities		-109,337	-16,854
Financing activities
Proceeds from interest-bearing liabilities		72,880	8,024
Repayment of interest-bearing liabilities		-16,582	-5,398
Dividends paid		-4,572	-1,828
Proceeds from share issuances		44,965	-
Proceeds from shareholder contributions		-	12,851
Proceeds from issuance of hybrid bonds		20,235	5,121
Repayments on hybrid bonds		-406	-146
Other cash flows from financing activities		-219	-
Net cash flows from financing activities		116,301	18,624
Net change in cash and cash equivalents		10,503	3,39
Cash and cash equivalents at the beginning of the period		7,636	4,345
Net currency exchange effect in cash and cash equivalents		1,369	-98
Cash and cash equivalents at the end of the period		19,508	7,636

Notes to the Consolidated Financial Statements

1. Corporate information and general accounting policies

1.1 Corporate information

Heimstaden Bostad AB (publ), Corp. ID No. 556864-0873, is a Swedish limited liability company with its registered office in Malmö, at Östra promenaden 7A, SE-211 28. Heimstaden Bostad's operations consist of owning, developing, and managing residential properties.

1.2 General accounting policies

Basis of preparation

The Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and in accordance with Swedish law by applying the Swedish Financial Reporting Board's recommendation RFR 1 Supplementary accounting rules for groups. Significant accounting policies are reflected in respective note.

The Consolidated Financial Statements were approved by the Board of Directors on 28 February 2022 and will be laid before the Annual General Meeting for approval on 29 March 2022.

The Financial Statements are presented in SEK and rounded to the nearest million. Numbers and percentages presented in the financial statements may not add up precisely to the totals provided.

The Consolidated Financial Statements have been prepared on a going-concern basis, applying a historical cost convention except for the measurement of investment property and derivative financial instruments at fair value.

Heimstaden Bostad presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset is current when it is:

- Expected to be realised or intended to be sold or consumed in the normal operating cycle

- Held primarily for the purpose of trading

- Expected to be realised within 12 months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period

All other assets are classified as non-current. A liability is current when:

- It is expected to be settled in the normal operating cycle

- It is held primarily for the purpose of trading

- It is due to be settled within 12 months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Heimstaden Bostad classifies all other liabilities as non-current.

Consolidation

Subsidiaries are fully consolidated from the date on which control is transferred to Heimstaden Bostad and deconsolidated from the date that control ceases. All Heimstaden Bostad's companies are set to have 31 December as their year-end. Newly acquired companies that have a different financial year-end are changed to 31 December at the earliest opportunity. Accounting policies of subsidiaries are changed where necessary to ensure consistency.

Inter-company transactions, balances, and unrealised gains or losses on transactions between Group companies are eliminated.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

When Heimstaden Bostad ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in the carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture, or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if Heimstaden Bostad had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

Non-controlling interests of the results and equity of subsidiaries are shown separately in the Consolidated Comprehensive Income Statement, Statement of Changes in Equity and Balance Sheet, respectively.

Service income

As the group continues to enter new markets and grow in existing markets where service charges constitute a larger part of the total invoicing to tenants, the service income has been separated from the rental rental income and presented on a separate line item in the Comprehensive Income Statement in accordance with IFRS 15. The main purpose is to increase comparability and provide improved presentation disclosures of revenues earned.

Service income mainly comprises the invoicing of certain operating expenses, mainly utilities, without a margin. Service income is recognised in the period when the performance obligation in the contract with the tenant is satisfied. The performance obligations are generally satisfied over time when the service is performed by the company.

Rental income during 2021 decreased by SEK 639 million and service income correspondingly increased by SEK 639 million. Comparative numbers have been revised to conform to current presentation. As a result, during 2020, SEK 389 million was reclassified from rental income to service income. The revised presentation did not have any impact on the Group's profit for the year, the financial position, or equity.

Right of use assets

During 2021, the Company revised its classification of right of use assets related to land leases. These assets are classified as investment properties according to IAS 40. Comparative numbers have been revised to conform to the Group's current presentation. The revised presentation did not have any impact on the Group's profit for the year, the financial position, or equity. As a result, during 2020, SEK 598 million was reclassified from right of use to investment properties.

Forward purchase

Future purchase agreements of investment properties held in limited liability companies are accounted as a financial instrument under IFRS 9 at fair value through profit/loss. A fair value gain of 471 million relating to these derivatives has been included in the Consolidated Financial Statements for 2021, se note 2.8.

Asset acquisitions, business combinations, and goodwill Where properties are acquired, either through business combinations or otherwise, management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents a business combination or an asset acquisition. Companies may choose to perform a 'concentration test' and, should this prove that the acquisition is an asset acquisition, no further assessment is required. If the fair value of the gross assets acquired can substantially be attributed to an asset or a group of similar assets, the voluntary test shows the acquisition to constitute an asset acquisition. If the test is performed and it is not possible to determine acquisition to be an asset acquisition, further assessment must be made to determine whether or not the acquisition is a business combination.

Business combinations

Heimstaden Bostad determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that, together, significantly contribute to the ability to create outputs. The process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. If the acquisition lacks a labour force, it may nonetheless be the case that the acquired process is sufficiently unique or unusual, or costly, to replace to be able to generate returns, that the acquisition nonetheless constitutes a business.

When Heimstaden Bostad acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is more than the aggregate consideration transferred, Heimstaden Bostad reassesses whether it has correctly identified all the assets acquired and all the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, the gain is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of Heimstaden Bostad's cash-generating units (CGUs) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the CGU.

Asset acquisitions

For acquisition of a subsidiary that is not considered a business combination, Heimstaden Bostad allocates the cost between the individual identifiable assets and liabilities based on their relative fair values as at the date of acquisition. Such transactions or events do not give rise to goodwill.

The cost is allocated between the identifiable assets and liabilities of the entity based on their relative values at the acquisition date.

The Group recognises only the identifiable assets and liabilities. Any deferred tax is subject to the initial recognition exemption in accordance with IAS 12.

Judgements and estimates

Management makes judgements, estimates, and assumptions each reporting period that affect the Statement of Profit or Loss and Balance Sheet. These assumptions and assessments are based on historical experience and other factors that appear reasonable under the existing circumstances.

Estimation of fair value of investment properties and forward purchase contracts

All investment properties and forward purchase contracts to buy investment properties held in limited liability companies are measured at Fair Value with reference to realised transaction prices, adjusted if necessary for any difference in nature, location, or condition of the specific asset.

Current economic developments and uncertainties influence the valuation of our investment properties and our forward purchase contracts to buy investment properties held in limited liability companies. The methods and material assumptions applied in determining the Fair Value of our investment properties are mainly based on realised transaction prices.

The Fair Values are based on valuations by independent external valuation experts. The valuation is based on a market value principle upon which assets can be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arm's length transaction at the date of the valuation.

The investment property portfolio is appraised on a quarterly basis by independent external appraisers. See Note Note 3.1 for further information.

Impairment testing of goodwill

Each year, the Group tests goodwill for impairment in accordance with the accounting policy described in Note 3.2. Recoverable amounts for cash-generating units have been determined by calculating value in use. For these calculations certain estimates need to be made, see Note 3.2.

Recognition of property acquisition and business combinations

When determining whether the acquisition represent a business combination or an asset acquisition, management makes judgements with regards to the application of the optional concentration test and the substance of the assets and activities acquired.

If substantially all the fair value of the gross assets acquired is concentrated in a single asset (or a group of similar assets) the transaction is treated as an asset acquisition.

To determine whether the acquisition is a business combination or an asset acquisition, management makes judgements regarding inputs, processes, and output of the acquired assets, this year's acquisition of Akelius has been assessed according to the criteria above and is considered to meet the criteria for business combination, see Note 8.2.

Purchase price allocation

The Group prepares a purchase price allocation for accounting in accordance with the accounting policy described in Note 8.2.

Accounting for an acquisition involves a high degree of judgement and estimation, mainly with regard to the allocation of premiums and discounts to assets and liabilities (net assets) in the purchase price allocation, as well as adjusting entries for adaptation to the Group's accounting policies. Fair value adjustments and resultant goodwill are presented in Note 3.2.

Foreign currencies

The Group's Consolidated Financial Statements are presented in SEK, which is also the Parent Company's functional currency. For each entity, the Group uses the direct method of consolidation and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method except when the transactions constitute net investments, in which gains and losses are recognised in other comprehensive income.

Transactions in foreign currencies are converted to the functional currency at the exchange rate prevailing on the transaction date.

Monetary assets and liabilities in foreign currency are translated into the functional currency at the exchange rate prevailing at the end of the reporting period. Non-monetary assets and liabilities that are recognised at historical cost are translated at the exchange rate prevailing on the transaction date. Non-monetary assets and liabilities that are recognised at fair value are translated into the functional currency at the rate prevailing on the date of fair value measurement. Income and expenses in a foreign operation are translated into functional currency at an average rate that represents an approximation of the prevailing exchange rates at the date of each transaction.

The currency effect connected to cross currency swaps is recognised under Net currency translation gains. The currency effect on loans in foreign currency and the corresponding economic hedge is reported on the same line in the Statement of Profit and Loss. Translation differences arising on currency translation of foreign operations are recognised in other comprehensive income.

Cash Flow Statement

Cash Flow Statements have been prepared in accordance with the indirect method in accordance with IAS 7, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals, or accruals of past or future operating cash receipts or payments and items of income or expense associated with investing or financing cash flows.

1.3 New accounting standards

Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The amendments provide temporary reliefs that address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients:

- A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest.

- Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued.

- Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component.

These amendments had no impact on the Consolidated Financial Statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable.

Covid-19-Related Rent Concessions beyond 30 June 2021 Amendments to IFRS 16

On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases. The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19-related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19-related rent concession in the same way it would account for the change under IFRS 16, if the change were not a lease modification.

The amendment is extended to 30 June 2022 and applies to annual reporting periods beginning on or after 1 April 2021. However, the Group has not received Covid-19-related rent concessions, but plans to apply the practical expedient if it becomes applicable within the allowed period of application.

Amendments to IAS 1: Classification of Liabilities

IASB has issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify what is meant by a right to defer settlement and that a right to defer must exist at the end of the reporting period. Further, the amendments clarify that the classification is unaffected by the likelihood that an entity will exercise its deferral right and that only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively. However, IASB published an exposure draft which included a proposal to defer the effective date to no earlier than 1 January 2024. Heimstaden Bostad is monitoring the developments and is assessing the impact the amendments will have on its current accounting policies.

Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets

IASB has published an amendment to IAS 37, where it is clarified which costs are to be included in assessing whether a contract is onerous or loss-making. IASB has evaluated two options, "Incremental cost approach", costs that would not occur if one did not have the contract, and "directly related cost approach" which includes both incremental costs and allocation of other costs for activities required to fulfill the contract. While IASB has chosen the latter, the amendment shall apply for financial years beginning on or after 1 January 2022, and is approved by the EU.

Amendments to IFRS 3: Business Combinations - reference to the Conceptual Framework

IASB has implemented three amendments to IFRS 3 that have their basis in the updated "Conceptual Framework". Furthermore, a supplement is introduced in IFRS 3, meaning that liabilities and contingent liabilities, which are covered by IAS 37 and IFRIC 21, shall be reported in accordance with IAS 37 and IFRIC 21 instead of the "Conceptual Framework". IFRS 3 does not allow contingent assets to be recognised, which is stated in the Basis for Conclusion to IFRS 3. To avoid confusion related to the "Conceptual Framework", IFRS 3 is supplemented so that the standard explicitly states that an acquirer is not to recognise contingent assets in a business combination. The changes shall apply for financial years beginning on 1 January 2022 or later, amendments are approved by the EU.

Amendments to IAS 8: Definition of Accounting Estimates

IASB issued an amendment to IAS 8 that clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. IASB also clarifies use of measurement techniques and inputs to develop accounting estimates. The amendment shall apply for financial years beginning on or after 1 January 2023, with earlier adoption permitted. Heimstaden Bostad is currently assessing the impact the amendments will have on its current accounting policies.

IAS 1 Presentation of financial statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Since 1 January 2020, Heimstaden Bostad has applied the clarification, in IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, regarding what information is material in the preparation of the financial statements. In February 2021, IASB issued an amendment to IAS 1 that provides guidance to help companies understand what makes an accounting policy disclosure material; information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. As Heimstaden Bostad's information is considered to be adequate, the changes do not affect the accounting principles.

Amendments to IFRS 9: Financial Instruments - Fees in the '10 per cent' test for derecognition of financial liabilities

IASB issued an amendment to IFRS 9 and clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. The amendment is effective for annual reporting periods beginning on or after 1 January 2022, with earlier adoption permitted. The Group must apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendments are not adopted early and are not expected to have a material impact on Heimstaden Bostad.

2. Income and expenses

2.1 Segment reporting

Accounting policies

The Group organises and governs its activities based on geographical areas where the investment properties are located, and these geographical areas form the basis of the definition of segments. Senior management is the chief operating decision maker and monitors net operating income and changes in the value of managed properties in the identified segments; other Statement of Profit and Loss items are not distributed per segment. Additionally, management monitors the value of investment properties and interest-bearing liabilities in each segment. Other items are not distributed per segment in the segments' profits, assets, and liabilities. The segment statements include only directly attributable items and items that can be allocated to the segments in a reasonable and reliable manner. See also note 3.1 for fair value of investment properties per segment. Heimstaden Bostad identified seven reportable segments: Sweden, Germany, Denmark, Netherlands, Norway, and Czech Republic. Finland, Poland, and United Kingdom are included under Other.

2021 SEK million	Sweden	Germany	Denmark	Netherlands	Norway
COMPREHENSIVE INCOME STATEMENT
Rental income	2,784	550	2,523	1,137	677
Service income	41	176	2	-	17
Property expenses	-1,481	-345	-786	-454	-248
Net operating income	1,344	380	1,738	683	446
Net operating margin %	48.3	69.1	68.9	60.1	65.9
Corporate administrative expenses, unallocated	-	-	-	-	-
Other income and expenses, unallocated	-	-	-	-	-
Profit before inventory properties and fair value adjustments	1,344	380	1,738	683	446
Fair value adjustment of investment properties	8,068	1,754	6,033	2,831	408
Gains from sale of inventory properties	-	-	-	-	-2
Operating profit	9,412	2,134	7,772	3,514	853
Financial income and expenses	-589	39	-474	-171	-232
Fair value adjustment of derivative financial instruments	582	-	112	47	78
Profit before tax	9,405	2,173	7,409	3,390	698
BALANCE SHEET
Investment properties	97,056	70,651	66,636	27,324	18,951
Inventory properties	-	-	-	-	846
Assets, unallocated	-	-	-	-	-
Total assets	97,056	70,651	66,636	27,324	19,797
Equity, unallocated	-	-	-	-	-
Interest-bearing liabilities	102,679	16,660	31,766	6,766	508
Other liabilities, unallocated	-	-	-	-	-
Total equity and liabilities	102,679	16,660	31,766	6,766	508
Capital expenditures in investment properties	2,528	188	917	644	315

2021 SEK million	Czech Republic	Other	Adjustments	Total
COMPREHENSIVE INCOME STATEMENT
Rental income	1,127	17	-207	8,608
Service income	419	-	-16	639
Property expenses	-773	-12	238	-3,861
Net operating income	773	5	15	5,386
Net operating margin %	68.6	-	-	62.6
Corporate administrative expenses, unallocated	-	-	-	-546
Other income and expenses, unallocated	-	-	-	-2,005
Profit before inventory properties and fair value adjustments	773	5	15	2,834
Fair value adjustment of investment properties	2,182	87	-	21,363
Gains from sale of inventory properties	-	-	-	-2
Operating profit	2,955	92	15	24,195
Financial income and expenses	392	45	-	-991
Fair value adjustment of derivative financial instruments	-	-	-	819
Profit before tax	3,348	137	15	24,024
BALANCE SHEET
Investment properties	17,932	2,033	0	300,584
Inventory properties	-	-	-	846
Assets, unallocated	-	-	-	47,636
Total assets	17,932	2,033	0	349,066
Equity, unallocated	-	-	-	160,338
Interest-bearing liabilities	-	0	0	158,380
Other liabilities, unallocated	-	-	-	30,348
Total equity and liabilities	0	0	0	349,066
Capital expenditures in investment properties	503	261	-	5,356

2020 SEK million	Sweden	Germany	Denmark	Netherlands	Norway
COMPREHENSIVE INCOME STATEMENT
Rental income	2,429	74	1,485	1,029	649
Service income	14	27	-	0	16
Property expenses	-1,190	-69	-523	-460	-233
Net operating income	1,254	32	962	569	432
Net operating margin %	51.6	42.9	64.8	55.3	66.5
Corporate administrative expenses, unallocated	-	-	-	-	-
Other income and expenses, unallocated	-	-	-	-	-
Profit before inventory properties and fair value adjustments	1,254	32	962	569	432
Fair value adjustment of investment properties	2,368	265	1,092	1,044	1,299
Gains from sale of inventory properties	-	-	-	-	188
Operating profit	3,622	297	2,054	1,613	1,919
Financial income and expenses	785	-129	-246	-335	-38
Fair value adjustment of derivative financial instruments	-74	-	21	-44	-81
Profit before tax	4,333	168	1,829	1,233	1,799
BALANCE SHEET
Investment properties	49,757	3,716	36,199	23,366	17,538
Inventory properties	-	-	-8	-	1,164
Assets, unallocated	-	-	-	-	-
Total assets	49,757	3,716	36,191	23,366	18,702
Equity, unallocated	-	-	-	-	-
Interest-bearing liabilities	34,470	580	19,015	16,237	479
Other liabilities, unallocated	-	-	-	-	-
Total equity and liabilities	34,470	580	19,015	16,237	479
Capital expenditures in investment properties	1,651	27	538	199	20

2020 SEK million	Czech Republic	Other	Adjustments	Total
COMPREHENSIVE INCOME STATEMENT
Rental income	876	-	-210	6,332
Service income	333	-	-	389
Property expenses	-563	-	210	-2,828
Net operating income	645	-	0	3,893
Net operating margin %	73.7	-	-	61.3
Corporate administrative expenses, unallocated	-	-	-	-345
Other income and expenses, unallocated	-	-	-	76
Profit before inventory properties and fair value adjustments	645	-	-	3,624
Fair value adjustment of investment properties	1,866	-	-	7,934
Gains from sale of inventory properties	-	-	-	188
Operating profit	2,511	-	-	11,746
Financial income and expenses	-773	-	-	-735
Fair value adjustment of derivative financial instruments	-	-	-	-178
Profit before tax	1,738	-	-	10,833
BALANCE SHEET
Investment properties	13,827	-	-	144,404
Inventory properties	-	-	127	1,283
Assets, unallocated	-	-	-	11,239
Total assets	13,827	-	127	156,926
Equity, unallocated	-	-	-	77,741
Interest-bearing liabilities	-	-	-	70,780
Other liabilities, unallocated	-	-	-	8,405
Total equity and liabilities	-	-	-	156,926
Capital expenditures in investment properties	309	-	-	2,743

2.2 Rental income and service income

Accounting policies

Heimstaden Bostad leases out its investment properties to third parties with contracted non-cancellable lease terms and a normal term of notice for the customer of three months. The Group classifies these leases as operating because they do not transfer substantially all the risks and rewards, or control, incidental to ownership of the properties to the counterparties. For investment property leases the rental income is largely fixed under the contracts, however, it is subject to an annual index adjustment.

To mitigate any risks regarding the leased properties, Heimstaden Bostad assesses the creditworthiness of its counterparties, receives rent deposits, and receives guaranties from its lessees.

The rental income is accounted for on a straight-line basis over the lease term and is included in revenue in the Statement of Profit and Loss due to its operating nature, except for contingent rental income, which is recognised when it arises. Initial direct costs incurred in negotiating and arranging an operating lease are recognised as an expense over the lease term on the same basis as the lease income. Lease incentives that are paid or payable to the lessee are deducted from lease payments. Accordingly, tenant lease incentives are recognised as a reduction of rental revenue on a straight-line basis over the term of the lease. The initial direct costs and tenant lease incentives are presented as current assets in the line item 'Prepayments' in the Balance Sheet. Amounts received from tenants to terminate leases or to compensate for dilapidations are recognised in the Statement of Profit or Loss when the right to receive them arises.

Service charges to tenants mainly comprise utility cost and other operating costs that can be recharged. The services charged are separately invoiced to tenants and includes fees charged based on a percentage of the rental income and reimbursement of certain expenses incurred. The Group arranges for third parties to provide certain of these services to its tenants. The Group acts as a principal in relation to these services as it controls the specified services before transferring them to the customer. Therefore, the Group records revenue on a gross basis.

No single customer accounts for more than 1% of total revenues. For rental income and service income by geographic market, see Note 2.1.

Rental income and service income

SEK million	2021	2020
Rental income	8,673	6,362
Straight-lining of lease	-65	-31
Rental income	8,608	6,332
Services to tenants	639	389
Service income	639	389
Total revenues	9,247	6,721

Rental income distributed by property category

SEK million	2021	2020
Residential	7,991	5,930
Commercial premises	520	326
Garages and parking spaces	98	76
Total rental income	8,608	6,332

Service income distributed by property category

SEK million	2021	2020
Residential	600	370
Commercial premises	38	20
Total service income	639	389

Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:

2021 Maturity on lease contracts

SEK million	Residential	Commercial premises	Garages and parking spaces
Within one year	5,339	292	86
1-5 years	25	31	0
> 5 years	2,627	197	12
Total lease contracts	7,991	520	98

2020 Maturity on lease contracts

SEK million	Residential	Commercial premises	Garages and parking spaces
Within one year	3,725	326	76
1-5 years	630	-	-
> 5 years	1,575	-	-
Total lease contracts	5,93	326	76

2.3 Property expenses

Accounting policies

Property expenses include costs for electricity, heating, water, property management, cleaning, and insurance. Maintenance costs consist of both periodic and ongoing measures to maintain the properties' standard. Property management refers to rental costs, financial ser- vices, and certain overarching property management services. Subsequent expenditure is capitalised to the asset's carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. The group has no operating expenses that do not generate rental income.

Property expenses

SEK million	2021	2020
Utilities	1,113	764
Repairs and maintenance	673	519
Property tax	346	278
Property management	1,315	298
Other	414	969
Total property expenses	3,861	2,828

2.4 Other operating expenses

Other operating expenses include SEK 2,202 million in Real Estate Transfer Tax (RETT) in Germany from the acquisition of the Akelius' property portfolio.

During 2021, SEK 49 million were expensed as donations to SOS Children's Villages. See page 19 for more information regarding the partnership A Home for a Home.

2.5 Audit fee

The audit engagement refers to the audit of the Consolidated Financial Statements, the annual financial statements for the Group companies. Other assurance services provided by the auditors include services related to review procedures on interim reports and other attestation services. The fees are summarised in the table below:

EY

SEK million	2021	2020
Audit assignment	21	11
Other assurance services	5	2
Tax advisory services	-	0
Other services	-	0
Total	26	13

Moore

SEK million	2021	2020
Audit assignment	3	2
Other assurance services	0	0
Tax advisory services	-	0
Other services	-	0
Total	3	2

Total

SEK million	2021	2020
Audit assignment	24	13
Other assurance services	5	2
Tax advisory services	-	0
Other services	-	0
Total	29	15

2.6 Employee benefit expenses and senior executive compensation

Accounting policies

Employee benefits in the form of salaries, paid vacation, paid absence due to illness, etc., are recognised as employees perform services in exchange for compensation. Pensions and other post-employment benefits may be classified as defined contribution plans or defined benefit plans. All Heimstaden Bostad's pension obligations consist of defined contribution plans, which are met through ongoing payments to the independent authorities or organisations that administer the plans. Obligations regarding defined contribution plans are expensed in profit or loss as they are incurred.

Average number of employees	2021			2020
	Men	Women	Total	Men	Women	Total
Sweden	4	4	8	-	-	-
Germany	8	5	13	-	-	-
Denmark	1	1	2	-	-	-
Czech Republic	331	379	710	277	299	576
Total	343	390	733	277	299	576

Remunerations

No other remuneration was paid to the members of the Board except decided Board fees below. The CEO, Deputy CEO and senior executives receives remuneration from Heimstaden AB and these costs are included in the administrative services from Heimstaden AB. For other employees in Czech Republic, the customary pension commitments within the framework of general pension plans apply.

The Board of Directors and company management are presented on pages 35-38.

Board Member remunerations SEK	2021	2020
Casper von Koskull	960,000	500,000
Ivar Tollefsen	-	-
Stefan Attefall	-	-
Vibeke Krag	-	-
John Giverholt	-	-
Eldbjørg Sture	300,000	-
Frans Heijbel	-	-
Birgitta Stenmark	-	-
Axel Brändström	-	-
Christer Franzén	-	-
Bente A Landsnes	300,000	-
Total Board remunerations	1,560,000	500,000

Salaries, remuneration, social security, and pension cost 2021

Position	Board Members	Other employees	Total
SEK million
Base salary	-	145	145
Benefits	-	7	7
Social security costs	-	46	46
Pension costs	-	1	1
Board remunerations	2	-	2
Total salaries, remuneration, social security, and pension costs	2	198	200
Women in %	36	47

2020
Position	Board Members	Other employees	Total
SEK million
Base salary	-	106	106
Benefits	-	6	6
Social security costs	-	34	34
Pension costs	-	0	0
Board remunerations	1	-	1
Total salaries, remuneration, social security, and pension costs	1	146	147
Women in %	36	48

2.7 Fair value adjustment of investment properties

Investment properties are measured at fair value. Gains and losses arising from changes in the Fair Value of the investment property are included in Comprehensive Income Statement in the period in which they arise. The corresponding tax effect is included in the gain(s) or loss(es). For more information regarding Fair Value assessments see Note 3.1.

Fair Value adjustment of investment properties

	2021 %	SEK million	2020 %	SEK million
Sweden	9.0	8,038	4.8	2,368
Germany	2.5	1,754	5.0	265
Denmark	10.0	6,033	3.0	1,092
Netherlands	11.6	2,831	4.5	1,044
Norway	2.3	438	7.6	1,299
Czech Republic	13.9	2,182	15.6	1,866
Finland	7.6	72	-	-
United Kingdom	1.5	15	-	-
Total / Average in %	7.6	21,363	5.5	7,934

2.8 Fair Value adjustment of derivative financial instruments

Derivative financial instruments includes interest rate derivatives and forward purchase contracts and are measured at Fair Value. Gains and losses arising from changes in the Fair Value of the derivative financial instruments are included in Comprehensive Income Statement in the period in which they arise. The corresponding tax effect is included in the gain(s) or loss(es). For more information regarding fair value assessments see Note 6.1.

SEK million	2021	2020
Value change	819	-278
Currency translation	-	100
Total Fair Value adjustment of derivative financial instruments	819	-178

2.9 Financial income and expenses

Accounting policies

Interest income on bank balances, and interest and other borrowing costs, are recognised as income and expenses, respectively. Payments in accordance with interest-rate derivative agreements are included in this item and are expensed in the period to which they relate. Changes in the Fair Value of interest-rate derivatives are presented in a separate line in the Statement of Profit and Loss. Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalised to the cost of those assets, until such time as the assets is substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period they incur.

Financial income and expenses reported in Comprehensive Income Statement

SEK million	2021	2020
Assets and liabilities measured at amortised cost:
Interest income, promissory notes	116	48
Interest income, other financial assets	36	33
Total interest income in accordance with the effective interest method	152	81
Interest expenses, loans	-1,340	-1,269
Total interest expenses in accordance with the effective interest method	-1,340	-1,269
Finance expenses capitalised within investment property	52	26
Total finance cost capitalised	52	26
Currency translation losses	-1,368	-
Currency translation gain	1,444	-656
Total currency gains/losses	76	656
Net financial items	-1,060	-506

2.10 Income tax expenses

Accounting policies

Tax is recognised in profit or loss except where the underlying transaction is recognised directly in equity, upon which the associated tax effect is recognised in other comprehensive income or directly in equity.

The current income tax charge is calculated based on the tax laws enacted or substantively enacted at the date of the Consolidated Balance Sheet in the countries where Heimstaden Bostad operates. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation, and establishes provisions where appropriate based on amounts expected to be paid to the tax authorities

Comprehensive Income Statement

SEK million	2021	2020
Income tax expense	-492	-386
Deferred tax	-4,58	-1,774
Income tax expenses reported in the Comprehensive Income Statement	-5,072	-2,160

Reconciliation of effective tax rate

SEK million	2021	2020
Reported profit before tax	24,024	10,833
Tax according to current rate	-5,491	-2,280
Tax effect of:
Non-taxable income	18	15
Non-deductible costs	-20	-15
Non-taxable profit on disposal of participations	10	-
Non-deductible interest net	-274	-306
Tax effect of Hybrid bonds	137	-79
Transactions in Other Comprehensive Income	-	417
Tax on share in earnings from associated companies	-	6
Negative value change in properties acquired during the year	115	-
Revaluations, deferred tax	326	-
Tax attributable to previous years	73	-44
Other	34	126
Income tax expenses reported in the Comprehensive Income Statement	-5,072	-2,160

2.11 Earnings per share

Basic and diluted earnings per share are calculated by dividing earnings attributable to shareholders of the Parent Company by an average number of outstanding ordinary shares during the period.

SEK million	2021	2020
Average number of ordinary shares outstanding	7,741,760	6,383,342
Profit for the period attributable to ordinary shareholders	18,267	2,030
Earnings per ordinary share (basic and diluted)	2,360	318

3. Non-current assets

3.1 Investment properties

Total property value per segment

The total property value, measured at Fair Value, was SEK 300,584 million (144,404). This value included value increase for 2021 of SEK 21,219 million (7,934). In percentage, the increase in value was 7.6% (5.8) of the total property value before changes in value. The total property value per operating segment is shown below.

Valuation gain or loss investment properties	Total	Sweden	Germany	Denmark	Netherlands
SEK million
Fair value of investment properties, 31 December 2019	113,331	41,241	2,292	34,645	17,781
Acquisitions during the period	25,445	4,430	1,272	1,278	5,480
Disposals	-65	-	-	-	-65
Land leases	598	67	-	-	-
Capital expenditure on completed investment properties	1,656	935	27	256	199
Capital expenditure on investment properties under construction	1,088	716	-	282	-
Currency translation	-5,583	-	-140	-1,354	-1,073
Fair Value after transactions	136,469	47,389	3,451	35,107	22,322
Value change	7,934	2,368	265	1,092	1,044
Fair Value of investment properties, 31 December 2020	144,404	49,757	3,716	36,200	23,366
Acquisitions during the period	36,119	3,523	12,473	18,272	0
Business combinations	89,534	33,139	52,232	4,163	-
Disposals	-683	0	-114	-63	-55
Land leases	117	71	4	-	-
Capital expenditure on completed investment properties	2,836	881	146	563	644
Capital expenditure on investment properties under construction	2,520	1,647	42	354	-
Currency translation	4,518	0	399	1,113	539
Fair Value after transactions	279,365	89,018	68,898	60,601	24,494
Value change ¹	21,219	8,038	1,754	6,033	2,831
Fair Value of investment properties, 31 December 2021	300,584	97,057	70,651	66,635	27,324

Valuation gain or loss investment properties	Norway	Czech Republic	Finland	United Kingdom
SEK million
Fair value of investment properties, 31 December 2019	17,372	-	-	-
Acquisitions during the period	-	12,985	-	-
Disposals	-	-	-	-
Land leases	531	-	-	-
Capital expenditure on completed investment properties	20	219	-	-
Capital expenditure on investment properties under construction	-	90	-	-
Currency translation	-1,684	-1,333	-	-
Fair Value after transactions	16,239	11,961	-	-
Value change	1,299	1,866	-	-
Fair Value of investment properties, 31 December 2020	17,538	13,827	-	-
Acquisitions during the period	0	213	918	721
Business combinations	-	-	-	-
Disposals	-451	0	0	0
Land leases	42	-	-	-
Capital expenditure on completed investment properties	295	296	10	-
Capital expenditure on investment properties under construction	20	207	-	251
Currency translation	1,211	1,208	15	33
Fair Value after transactions	18,657	15,75	942	1,005
Value change ¹	294	2,182	72	15
Fair Value of investment properties, 31 December 2021	18,951	17,932	1,014	1,019

¹ Fair value adjustment of investment properties in the income statement also includes realised change and is not reflected in the table above, see note 2.1 and note 2.7.

Breakdown by category, 31 December 2021

SEK million	Total	Sweden	Germany	Denmark	Netherlands
Completed investment properties	292,673	91,788	70,647	65,600	27,324
Investment properties under construction	6,848	5,106	0	895	0
Land and building rights	347	25	0	141	0
Land leases	716	137	4	-	-
Total	300,584	97,057	70,651	66,635	27,324

SEK million	Norway	Czech Republic	Finland	United Kingdom
Completed investment properties	18,378	17,750	1,014	172
Investment properties under construction	0	0	0	847
Land and building rights	0	181	0	0
Land leases	574	-	-	-
Total	18,951	17,932	1,014	1,019

The Company's contracts in Poland are structured as forward purchases (contracts under the condition precedent of the completion of the works) and the transfer of ownership occurs only after provisional acceptance. A parallel financing agreement has been entered with the developers. The outstanding balances, SEK 1,776 million, with the developers are recognised as other non-current financial assets.

Breakdown by category, 31 December 2020

SEK million	Total	Sweden	Germany	Denmark	Netherlands
Completed investment properties	140,917	47,233	3,716	35,938	23,366
Investment properties under construction	2,680	2,457	-	223	-
Land and building rights	209	-	-	40	-
Land leases	598	67	-	-	-
Total	144,404	49,757	3,716	36,200	23,366

SEK million	Norway	Czech Republic	Finland	United Kingdom
Completed investment properties	17,007	13,658	-	-
Investment properties under construction	-	-	-	-
Land and building rights	-	169	-	-
Land leases	531	-	-	-
Total	17,538	13,827	-	-

The Company's contracts in Poland summarises to SEK 127 million.

Accounting policies

Investment properties comprise completed properties, properties under construction, and land and building rights that are held, or to be held, to earn rentals or for capital appreciation or both. A property held under a lease is classified as investment property when it is held to earn rental income or for capital appreciation, or both, and land leases. Contracts related to land leases are accounted for as perpetual contracts.

Investment properties are measured initially at cost, including transaction costs. Transaction costs include transfer taxes, brokers' fees, and professional fees for legal services. Borrowing costs that are directly attributable to the construction or re-development of assets that take a substantial period of time to get ready for their intended use are capitalised.

Subsequent recognitions are at Fair Value, which reflects market conditions at the reporting date. Gains or losses are recognised in profit or loss in the period in which they arise, including the corresponding tax effect. Subsequent expenditure is capitalised when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the cost of the replacement is included in the carrying amount of the property, and the Fair Value is reassessed. Investment property under construction is measured at Fair Value if the Fair Value is reliably determinable. Investment properties under construction for which the Fair Value cannot be determined reliably, but for which the Company expects the Fair Value to be reliably determinable when construction is completed, are measured at cost less impairment until the Fair Value becomes reliably determinable or construction is completed.

Management considers the following factors when evaluating whether the Fair Value of property under construction can be measured reliably:

- Provisions of the construction contract.

- Stage of construction.

- Custom or standard project/property.

- Reliability of cash inflows after completion.

- Risks specific to the property.

- Experience with similar construction.

- Status of construction permits.

Management has determined that investment properties under construction are eligible for Fair Value measurements once all three following criteria are fulfilled:

- Administrative authorisations are obtained.

- Ongoing construction and costs are committed toward the constructor.

- Uncertainty in future rental income has been assumed low.

Transfers are made to (or from) investment property when there is evidence of a change in use. For a transfer from investment property to inventories, the deemed cost for subsequent accounting is the Fair Value at the date of change in use. If an inventory property becomes an investment property, the difference between the Fair Value of the property at the date of transfer and its previous carrying amount is recognised in profit or loss.

An investment property is derecognised either when it has been disposed of or when it is permanently withdrawn from use and no future economic benefit is expected from its disposal or use. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss.

External valuation

All investment properties are valued quarterly by external acknowledged real-estate advisory companies, whose employees are professionally qualified, and have the appropriate competence to carry out the valuation in accordance with the required international valuation standards. The Company has a dedicated in-house valuation team ensuring quality assurance of all external valuations.

Country	Valuer
Sweden	CBRE
Germany	CBRE
Denmark	CBRE
Netherlands	Cushman Wakefield
Norway	Cushman Wakefield, Nyverdi, Eie, Aktiv
Czech Republic	JLL
Finland	CBRE
United Kingdom	Savills
Poland	CBRE

Valuation assumptions

The valuation methodology follows market practice in each respective country and is in general based on 'highest-and-best use' meaning both a reletting and a divestment scenario. The market value in the two scenarios is based on cash flow generated by:

- Reletting scenario: Reletting the units at market rent upon tenant fluctuation.

- Divestment scenario: Successively divesting the units as owner-occupied units upon tenant fluctuation.

- There were no material changes to the valuation techniques during the year.

In most markets, properties are valued according to the discounted cash flow (DCF) method using operating and market inputs.

- Estimated rental income based on the location, type, and quality of the properties and supported by any existing leases, other contracts or external evidence such as current market rents for similar units;

- Estimated sales prices of vacant units (only divestment scenario): income based on sales prices supported by external evidence such as sales prices for similar units;

- Estimated vacancy rates based on current and expected future market conditions after expiry of any current leases;

- Property costs and capital expenditures including maintenance and necessary investments to maintain functionality of the property for expected useful life as well as fixed cost like property taxes, insurance etc.;

- Capitalisation rates based on location and quality of the properties and taking into account market data at the valuation date; and

- Terminal value taking into account assumptions regarding maintenance costs, vacancy rates, and market rents on a stabilised basis.

For Norwegian residential assets with a total carrying amount of SEK 18,378 million (17,007), the valuation is determined using the sales comparison approach by consider similar comparable properties adjusted for differences in key attributes such as unit size and quality of interior fittings.

For properties under construction or redevelopment, the DCF model also take into account cost to complete including developers margin and completion date based on internal forecasts and management's experience and knowledge of market conditions.

Additionally, properties under construction require approval or permits from regulatory bodies at various points in the development process. Based on management's experience with similar developments, all relevant permits and approvals are expected to be obtained.

Valuation hierarchy

The majority of the property portfolio is deemed to be at Level 3 in the Fair Value hierarchy according to IFRS 13 Fair Value Measurement, with the exception of the Norwegian residential assets which are based on Level 2. For Level 3, the estimated future cash flows are based on existing rental income and operating and maintenance costs, adjusted for expected changes herein. The Fair Value of the properties is the sum of the discounted cash flows during the calculation period and the terminal value.

Valuation process

Valuations are based on appraisals from independent external valuers.

The policies and procedures for property valuations are assessed by the Company's in-house valuation team, which has aligned methods with the external valuers. The valuation team holds relevant professional qualifications and are experienced in valuing the types of property in the applicable locations.

At each reporting date, the valuation team analyses the development in property value including verifying major inputs applied and agreeing the information in the valuation computation to rent rolls, market reports, and other relevant documents. The internal team also compares each property's change in Fair Value with relevant external benchmarks to determine whether the change in Fair Value is reasonable.

A quantitative sensitivity analysis regarding return requirements and net operating income in accordance with the present value method is shown in the below table.

Property valuations are estimates that build on accepted policies and assumptions. The actual Fair Value of a property can only be determined when it is sold. Accordingly, the valuation, uncertainty intervals, and sensitivity analysis, include unobservable inputs and a degree of uncertainty in the inputs and assumptions made. However, uncertainty related to the valuation and its assumptions are reduced by obtaining external assurance from independent third parties in addition to management's internal review, which amongst other includes evaluating values to recent comparable transactions in the market.

The table on the next page presents the following information for investment properties in each of our markets:

1. The Fair Value measurements at the end of the reporting period.

2. The level of the Fair Value hierarchy (e.g., Level 2 or Level 3) within which the fair value measurements are categorised in their entirety.

3. Valuation technique applied.

4. The inputs used in the Fair Value measurement.

5. Quantitative information about the significant unobservable inputs used in the Fair Value measurement.

6. Uncertainty interval and sensitivity analysis.

2021	Valuation	Valuation technique	Fair Value hierarchy level	Net operating income	Of which regulated, %
Market
Sweden	97,056	DCF	Level 3	2,792	100
Germany	70,651	DCF	Level 3	1,877	100
Denmark	66,636	DCF	Level 3	2,326	12
Netherlands	27,324	DCF	Level 3	789	67
Norway	18,952	Sales Comparison	Level 2	537	0
Czech Republic	17,931	DCF	Level 3	871	34
Finland	1,014	DCF	Level 3	59	0
United Kingdom	1,019	DCF	Level 3	46	0
	300,583			9,298	62

2021	Running yield %	Sensitivity	Lower impact	Higher impact
Market
Sweden	2.88	-	-	-
Germany	2.66	-	-	-
Denmark	3.49	-	-	-
Netherlands	2.89	-	-	-
Norway	2.84	Sales price pr. sqm +/- 10%	-1,895.2	-1,895.2
Czech Republic	4.86	-	-	-
Finland	5.80	-	-	-
United Kingdom	4.48	-	-	-
	3.09

2021	Sensitivities in running yield, change in percentage point
Market
	0,75 %	0,50 %	0,25 %
Sweden	-20,069	-14,370	-7,759
Germany	-15,554	-11,191	-6,077
Denmark	-11,787	-8,350	-4,454
Netherlands	-5,633	-4,032	-2,177
Norway	-3,964	-2,841	-1,535
Czech Republic	-2,397	-1,673	-877
Finland	-116	-80	-42
United Kingdom	-146	-102	-54

2021	Sensitivities in running yield, change in percentage point
Market
	-0,25 %	-0.50 %	-0.75 %
Sweden	9,236	20,415	34,221
Germany	7,339	16,379	27,790
Denmark	5,141	11,143	18,239
Netherlands	2,589	5,721	9,585
Norway	1,832	4,057	6,814
Czech Republic	972	2,056	3,272
Finland	46	96	150
United Kingdom	60	128	205

2021	Sensitivities in NOI
Market
	-2,00 %	-1,50 %	-1,00 %
Sweden	-1,941	-1,456	-971
Germany	-1,413	-1,060	-707
Denmark	-1,333	-1,000	-666
Netherlands	-546	-410	-273
Norway	-379	-284	-190
Czech Republic	-359	-269	-179
Finland	-20	-15	-10
United Kingdom	-20	-15	-10

2021	Sensitivities in NOI
Market
	1,00 %	1,50 %	2,00 %
Sweden	971	1,456	1,941
Germany	707	1,06	1,413
Denmark	666	1,000	1,333
Netherlands	273	410	546
Norway	190	284	379
Czech Republic	179	269	359
Finland	10	15	20
United Kingdom	10	15	20

2020	Valuation	Valuation technique	Fair Value hierarchy level	Net operating income	Of which income regulated, %
Markets
Sweden	49,757	DCF	Level 3	1,786	100
Germany	3,716	DCF	Level 3	70	100
Denmark	36,200	DCF	Level 3	1,317	16
Netherlands	23,366	DCF	Level 3	831	60
Norway	17,538	Sales comparison	Level 2	517	0
Czech Republic	13,827	DCF	Level 3	731	38
	144,404			5,252	82

2020	Running yield, %	Sensitivity	Lower impact	Higher impact
Markets
Sweden	3.59	-	-	-
Germany	1.90	-	-	-
Denmark	3.64	-	-	-
Netherlands	3.56	-	-	-
Norway	3.04	Sales price pr. sqm +/-10%	-1,701	1,701
Czech Republic	5.29	-	-	-
	5.65

2020	Sensitivities in running yield, change in percentage point
Markets
	0.75%	0.50%	0.25%
Sweden	-8,579	-6,068	-3,231
Germany	-1,053	-775	-433
Denmark	-6,185	-4,373	-2,327
Netherlands	-4,070	-2,881	-1,535
Norway	-	-	-
Czech Republic	-1,718	-1,195	-624

2020	Sensitivities in running yield, change in percentage point
Markets
	-0.25%	-0.50%	-0.75%
Sweden	3,715	8,029	13,103
Germany	564	1,331	2,431
Denmark	2,670	5,765	9,396
Netherlands	1,767	3,823	6,246
Norway	-	-	-
Czech Republic	686	1,444	2,286

2020	Sensitivities in NOI
Markets
	-2.00%	-1.50%	-1.00%
Sweden	-994	-745	-497
Germany	-74	-56	-37
Denmark	-724	-543	-362
Netherlands	-467	-350	-234
Norway	-	-	-
Czech Republic	-277	-207	-138

2020	Sensitivities in NOI
Markets
	1.00%	1.50%	2.00%
Sweden	497	745	994
Germany	37	56	74
Denmark	362	543	724
Netherlands	234	350	467
Norway	-	-	-
Czech Republic	138	207	277

Acquisitions after the Balance Sheet date

Heimstaden Bostad has agreed to acquire properties with closing dates after the Balance Sheet date.

SEK million	Anticipated date of acquisition	Agreed purchase price
Sweden	Q1,2022	1,743
Germany	Q1,2022	784
Denmark	Q1,2022	197
Netherlands	Q2,2022	176
Total		2,900

3.2 Intangible assets

Goodwill is mainly derived from the business combination of Akelius Lägenheter Aktiebolag, Akelius Bolig Holding ApS, and Akelius GmbH, which was completed in December 2021.

SEK million	Goodwill	Licences	Total
Opening balance, 1 January 2020	-	-	-
Investments for the year	-	39	39
Changes in value from foreign currency	-	-1	-1
Closing balance, 31 December 2020	-	38	38
Opening balance accumulated depreciation, 1 January 2020	-	-	-
Depreciation for the year	-	-33	-33
Disposals	-	-	1
Closing balance accumulated depreciation, 31 December 2020	-	-31	-31
Carrying amount, 31 December 2020	-	7	7
Opening balance, 1 January 2021	-	38	38
Business combinations	16,466	-	16,466
Investments for the year	-	-5	-5
Changes in value from foreign currency	22	3	25
Closing balance, 31 December 2021	16,489	35	16,524
Opening balance accumulated depreciation, 1 January 2021	-	-31	-31
Business combinations	-	-	-
Depreciation for the year	-	6	6
Disposals	-	-2	-2
Closing balance accumulated depreciation, 31 December 2021	-	-28	-28
Carrying amount, 31 December 2021	16,489	8	16,497

Accounting policies

Goodwill

Goodwill acquired in a business combination is recognised at Fair Value at the acquisition date. Goodwill has an infinite useful life and is subsequently carried at cost less accumulated impairment.

Impairment

Goodwill identified in a business combination is allocated to the groups cash generating units (CGU's) and tested for impairment. Heimstaden Bostad's operating segments are expected to benefit from the synergies derived by combining the Akelius and Heimstaden Bostad asset base. The operating segments is the lowest level where cash flows are identified and is therefore identified as the group's CGU's. To identify the CGU's recoverable amount, the management calculated the CGU's "value in use" by discounting the estimated future cash flows of the operating segment. The economic benefits derived from the combined asset base is higher than the operating segments carrying amount. This means that no impairment is necessary.

Assumptions

The value in use was calculated based on discounted cash flows, which are based on assumptions regarding sales growth and the cost trend. Cash flows have been determined using a growth rate corresponding to 2%. This growth is based on reasonable prudence and does not exceed long-term growth for the industry. An average discount rate of 4.3% before tax was applied when calculating the value in use of our eight CGU's. With the assumptions described above, recoverable amount exceeds the carrying amount for all CGU's.

Sensitivity analysis

In connection with the impairment test, sensitivity analyses have been performed on changes in growth and discount rates. The sensitivity analyses indicated that an increase in the average discount rate before tax of 0.5% or a decrease in the growth rate of 0.5% would lead to an impairment of the core goodwill.

3.3 Machinery and equipment

Accounting policies

Machinery and equipment mainly comprises machinery, office and computer equipment. Machinery and equipment is recognised at cost less accumulated depreciation and impairment. Cost includes expenses directly attributable to the acquisition of the asset. Additional expenses are capitalised to the asset's carrying amount or recognised as a separate asset only if it is likely that future economic benefits associated with the asset will be received by the Group and when the cost of the asset can be reliably calculated.

The useful life of computer equipment and of other machinery and equipment has been calculated at three years and five years, respectively. Depreciation is applied on a straight-line basis over the useful life and is recognised in profit or loss. The residual value of the assets and their useful life is reviewed at every closing and adjusted when necessary.

SEK million	Equipment
Opening balance, 1 January 2020	-
Investments for the year	42
Closing balance, 31 December 2020	42
Opening balance accumulated depreciation, 1 January 2020	-
Depreciation for the year	-23
Closing balance accumulated depreciation, 31 December 2020	-23
Carrying amount, 31 December 2020	19
Opening balance, 1 January 2021	42
Business combinations	53
Investments for the year	20
Changes in value from foreign currency	5
Closing balance, 31 December 2021	120
Opening balance accumulated depreciation, 1 January 2021	-23
Business combinations	-38
Depreciation for the year	-4
Disposals	6
Change in value from foreign currency	-2
Closing balance accumulated depreciation, 31 December 2021	-61
Carrying amount, 31 December 2021	59

3.4 Investments in associated companies and joint ventures

Accounting policies

Associated companies and joint ventures are all entities over which Heimstaden Bostad has significant influence but not control or joint control. This is generally the case where Heimstaden Bostad holds between 20% and 50% of the voting rights. Investments in associated companies and joint ventures are accounted for using the equity method of accounting, after initially being recognised at cost. The carrying amount of the investment is adjusted to recognise changes in Heimstaden Bostad's share of net assets of the joint venture since the acquisition date. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.

Accounting policies

Associated companies and joint ventures are all entities over which Heimstaden Bostad has significant influence but not control or joint control. This is generally the case where Heimstaden Bostad holds between 20% and 50% of the voting rights. Investments in associated companies and joint ventures are accounted for using the equity method of accounting, after initially being recognised at cost. The carrying amount of the investment is adjusted to recognise changes in Heimstaden Bostad's share of net assets of the joint venture since the acquisition date. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.

The Statement of Profit and Loss reflects Heimstaden Bostad's share of the results of operations of the joint ventures. Any change in other comprehensive income (OCI) of those investees is presented as part of Heimstaden Bostad's OCI. In addition, when there has been a change recognised directly in the equity of the joint ventures, Heimstaden Bostad recognises its share of any changes, when applicable, in the Statement of Changes in Equity. Unrealised gains and losses resulting from transactions between Heimstaden Bostad and the joint ventures are eliminated to the extent of the interest in the joint ventures.

Where Heimstaden Bostad's share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, Heimstaden Bostad does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity. Unrealised gains on transactions between Heimstaden Bostad and its associates and joint ventures are eliminated to the extent of Heimstaden Bostad's interest in these entities.

At each reporting date, Heimstaden Bostad determines whether there is objective evidence that the investment in each joint venture and associated companies is impaired. If there is such evidence, Heimstaden Bostad calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value, and then recognises the loss as 'Share of profit of joint ventures' in the Statement of Profit or Loss.

When Heimstaden Bostad ceases equity accounting for an investment because of a loss of joint control or significant influence, any retained interest in the entity is remeasured to its Fair Value, with the change in carrying amount recognised in profit or loss.

This Fair Value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as a financial asset.

Investments in associated companies

SEK million	31 December 2021	31 December 2020
Opening balance Investment for the year Share of profit	347	301
Investment of the year	63	14
Share of profit	329	32
Closing balance	739	347

Investments are reported in accordance with the equity method.

Specifications of the Group's investments in associated companies

Company	Corp. ID No	Reg. office	No. of shares	Share in %	Share of equity
Rosengård Fastighets AB	559085-4708	Malmö	25,000	25	279
Byggrätt Norr AB	559207-4859	Skellefteå	94	19	0
Total					279

Specifications of the Group's investments in joint ventures

Company	Corp. ID No	Reg. office	No. of shares	Share in %	Share of equity
A Place To A/S	39754134	Charlottenlund	5,000	50	0
Gamlebro AB	556791-3990	Norrköping	500	50	13
Upplands Bro Brogårds Etapp 2 AB	559175-4915	Stockholm	500	50	117
Magnolia Projekt 5222 AB	559175-4907	Stockholm	500	50	236
Kiinteistö Oy Hiihtomäentie 14	0819867-2	Helsingfors	13,327	53	46
Total					410

2021 Financial Statements

SEK million	A Place To A/S	Gamlebro AB	Brogårds Etapp 2 AB Upplands Bro	Magnolia Projekt 5222 AB
Rental income	7	17	0	0
Property expenses	-7	-16	-1	0
Net operating income	0	0	-1	0
Corporate administrative expenses	0	0	-2	0
Financial items, net	-2	-5	-25	0
Unrealised value change	0	0	44	471
Tax expenses	0	0	-8	0
Profit for the year	-1	-4	10	471
Group's share of profit	-1	-2	5	236
Balance Sheet
Investment properties	-	470	748	471
Assets except investment properties	819	63	106	0
Equity	-1	25	234	471
Liabilities	819	507	620	0
Carrying amount of the invest- ment as of 31 December 2021	0	13	117	236

SEK million	Kiinteistö OY Hiihtomäentie 14	Rosengård Fastighets AB	Byggrätt Norr AB
Rental income	3	150	-
Property expenses	-1	-108	-
Net operating income	1	43	-
Corporate administrative expenses	0	0	-
Financial items, net	0	-10	-
Unrealised value change	23	385	-
Tax expenses	-6	-87	-
Profit for the year	19	330	-
Group's share of profit	9	83	-
Balance Sheet
Investment properties	99	2,086	-
Assets except investment properties	0	44	-
Equity	86	1,117	-
Liabilities	13	1,012	-
Carrying amount of the investment as of 31 December 2021	46	279	-

2020 Financial Statements

SEK million	A Place To A/S	Gamlebro AB	Upplands Bro Brogårds Etapp 2 AB	Magnolia Projekt 5222 AB
Rental income	0	16	0	-
Property expenses	0	-6	0	-
Net operating income	0	10	0	-
Corporate administrative expenses	-1	-9	-2	-
Finacial items, net	-1	-5	-22	-
Unrealised value change	0	0	25	-
Tax expenses	0	-1	-5	-
Profit for the year	-2	-5	-4	-
Group´s share of profit	-1	-3	-2	-
Balance Sheet
Investment properties	-	396	563	-
Assets except investment properties	347	31	43	-
Equity	2	25	194	-
Liabilities	345	402	412	-
Carrying amount of the investment as of 31 December 2020	1	12	97	-

SEK million	Kiinteistö OY Hiihtomäentie 14	Rosengård Fastighets AB	Byggrätt Norr AB
Rental income	-	147	-
Property expenses	-	-78	-
Net operating income	-	69	-
Corporate administrative expenses	-	-20	-
Financial items, net	-	-11	-
Unrealised value change	-	148	-
Tax expenses	-	-40	-
Profit for the year	-	146	-
Group´s share of profit	-	37	-
Balance Sheet
Investment properties	-	1,439	-
Assets except investment properties	-	36	-
Equity	-	671	-
Liabilities	-	804	-
Carrying amount of the investment as of 31 December 2020	-	168	-

3.5 Other non-current financial receivables

SEK million	31 December 2021	31 December 2020
Opening balance	895	542
Loans granted	1,403	-
Loans granted to associated companies and joint ventures	132	423
Repayment on loans	-	-70
Closing balance	2,430	895

The balance mainly relates to loans in connection with new production.

4. Current assets

4.1 Inventory properties

Accounting policies

Property acquired or being constructed or redeveloped for sale, rather than to be held for rental or capital appreciation, is held as inventory property and measured at the lower of cost and net realisable value. Principally, this is residential property that Heimstaden Bostad develops and intends to sell before, or on completion of, development. Inventory property is stated at the lower of cost and net realisable value (NRV). NRV for completed inventory property 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 property in the same geographical market serving the same segment. NRV in respect of inventory property under development is assessed with reference to market prices at the reporting date for similar completed property, less estimated costs to complete the development and the estimated costs necessary to make the sale, considering the time value of money, if material.

Inventory properties are primarily related to certain projects in Oslo, Norway.

SEK million	31 December 2021	31 December 2020
Opening balance	1,292	865
Capital expenditures	62	325
Currency translation	85	-86
Reclassification to non-current assets	-127	-
Disposals of inventory properties	-464	-
Reversed impairment / Impairment	-2	188
Closing balance	846	1,292

4.2 Rent and trade receivables

Accounting policies

Heimstaden Bostad holds trade receivables with the objective to collect contractual cash flows. Trade receivables are recognised initially at transaction price and subsequently at amortised cost using the effective interest method, a provision for expected credit losses.

Heimstaden Bostad applies the simplified method for reserving expected loan losses for leases and trade receivables. This means that expected credit losses are reserved for the remaining term, which is expected to be less than one year for all receivables. Rent is invoiced in advance, meaning that all reported rent receivables and trade receivables have fallen due for payment. Heimstaden Bostad makes provisions for expected credit losses based on historical credit losses and forward-looking information. Heimstaden Bostad's customers have similar risk profiles, which is why the credit risk is initially assessed collectively. Any major individual receivables are assessed per counterparty. Heimstaden Bostad writes off a receivable when there is no longer any expectation of receiving payment and when active measures to obtain payment have been discontinued.

SEK million	31 December 2021	31 December 2020
Rent receivables	179	61
Total rent and trade receivables	179	61

Age distribution of rent and trade receivables

SEK million	31 December 2021	30 December2020
-30 days	137	36
31-60 days	9	12
61-90 days	5	29
91 days +	75	0
Total	226	77
Credit loss provision	-47	-16
Rent and trade receivables, net	179	61

4.3 Other current receivables

SEK million	31 December 2020	31 December 2020
Prepaid tax	131	17
Deposits related to acquisitions	313	1,506
Prepaid insurance premium	45	42
Prepaid interest	311	19
Other receivables	1,202	650
Total	2,002	2,234

4.4 Cash and cash equivalents

Cash and cash equivalents mainly include bank deposits. There are unutilised credit commitments of SEK 24,474 million (14,627), which are not included in cash and cash equivalents.

4.5 Other adjustments in Cash Flow Statement

SEK million	2021	2020
Depreciation	4	14
Rental losses	38	28
Exchange rate difference	-76	-655
Share of profit of an associate and a joint venture	-905	-32
Total	-939	-645

5. Equity

At the end of the financial year there were 9,725,321 (6,578,058) ordinary shares, 200 (200) Series A preference shares, 35,205,992 (20,317,179) Series B preference shares and, 327,379 (0) Series C preference shares. The voting value of an ordinary share is one half vote per share and the voting value for Series A and B preference shares is one tenth of a vote per share and the voting value for Series C preference shares is one vote per share.

Event	Type	Date of registration	Change in number of shares	Total number of shares
Opening balance, 1 January 2020
New share issue	Ordinary, Pref B	07.01.2020	3,103,013	24,446,280
New share issue	Ordinary, Pref B	13.05.2020	2,449,157	26,895,437
Closing balance, 31 December 2020				26,895,437
Opening balance, 1 January 2021
New share issue	Ordinary, Pref B	12.01.2021	1,671,996	28,567,433
New share issue	Ordinary, Pref B	18.03.2021	3,721,074	32,288,507
New share issue	Ordinary, Pref B, Pref C	17.11.2021	12,637,892	44,926,399
New share issue	Ordinary, Pref B, Pref C	15.12.2021	332,493	45,258,892
Closing balance, 31 December 2021				45,258,892

Event	Type	Date of registration	Change in share capital	Total share capital	Par value
Opening balance, 1 January 2020
New share issue	Ordinary, Pref B	07.01.2020	4,908,650	38,672,150	1.58
New share issue	Ordinary, Pref B	13.05.2020	3,874,316	42,546,466	1.58
Closing balance, 31 December 2020				42,546,466
Opening balance, 1 January 2021
New share issue	Ordinary, Pref B	12.01.2021	2,644,927	45,191,393	1.58
New share issue	Ordinary, Pref B	18.03.2021	5,886,359	51,077,753	1.58
New share issue	Ordinary, Pref B, Pref C	17.11.2021	19,991,855	71,069,608	1.58
New share issue	Ordinary, Pref B, Pref C	15.12.2021	525,970	71,595,578	1.58
Closing balance, 31 December 2021				71,595,578

Other capital contributions

Other contributed capital refers to equity contributed by the owners, as well as share premiums for issues of ordinary shares and preference shares.

Hybrid bonds

Heimstaden Bostad has issued hybrid bonds amounting to SEK 33.7 (13.6) billion. These have a perpetual maturity with a variable coupon rate. Heimstaden has the opportunity to redeem outstanding hybrid bonds as of first possible redemption day, which is 5-7 years from the issue date.

At the first reporting date, the hybrid bonds are classified as an equity instrument. The classification is based on non-explicit contractual obligation to settle the agreement by paying cash or another financial asset. Nor are there any other circumstances indicating the agreement will be settled in cash or other financial assets. Heimstaden Bostad is entitled to postpone interest payments for an indefinite period in so far as hybrid bond holders are notified within the agreed period and the hybrid bond is subordinated to all other creditors.

Currency translation difference

Currency translation differences arise as a result of translation of foreign operations that have prepared their financial statements in a currency other than the currency in which the Group's financial statements are presented.

Loans to subsidiaries that comply with IAS 21 paragraphs 15 and 32 for increased net investment in foreign subsidiaries, the translation effect for lending in foreign currencies has affected other comprehensive income by SEK 1,328 million as December 31, 2021.

Retained earnings

Retained earnings refer to earned profits in the Group. This item also includes previous allocations to the reserve fund.

Non-controlling interests

Non-controlling interests consist of external ownership interests in subsidiaries and their subsidiaries. The majority of the Group's businesses are wholly owned.

Non-controlling interests' share of comprehensive income for the period

SEK million	2021	2020
Comprehensive income for the period	5	1

Specification of other comprehensive income

Other comprehensive income are related to foreign currency translation differences that may be reclassified to profit or loss in subsequent periods.

SEK million	Country Code	2021	2020
Country
Czech Republic	CZK	1,179	-1,343
Denmark	DKK	506	-594
Netherlands, Germany, and Finland	EUR	660	-790
Norway	NOK	1,264	-1,746
Poland	PLN	6	-6
United Kingdom	GBP	14	-
Total		3,627	-4,479

6. Capital structure and financial items

6.1 Financial instruments

Accounting policies

Financial assets

The Group's financial assets include trade receivables, other receivables, publicly traded shares, derivative financial instruments, and cash and cash equivalents.

Classification at initial recognition depends on the financial asset's contractual cash flow characteristics and Heimstaden Bostad's business model for managing them. Except for trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value.

For a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income, it needs to give rise to cash flows that are 'solely payments of a principal and interest (SPPI) on the principal amount outstanding'. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that do not qualify as SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. Heimstaden Bostad's business model for managing financial assets refers to how it manages its financial assets to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets to collect contractual cash flows.

For purposes of subsequent measurement, Heimstaden Bostad's financial assets are classified in two categories:

- Financial assets at fair value through profit or loss (derivative financial instruments, publicly traded shares etc.)

- Financial assets at amortised cost (rent and other trade receivables, other receivables, cash, and short-term deposits)

Financial assets at fair value through profit or loss are carried in the Statement of Financial Position at fair value with net changes in fair value recognised in the Statement of Profit and Loss. This category includes publicly quoted shares and derivative instruments, which are further described below.

For purposes of subsequent measurement, Heimstaden Bostad measures financial assets at amortised cost if both of the following conditions are met:

- The financial asset is held within a business model with the objective to hold financial assets to collect contractual cash flows, and

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets, except for financial assets that do not contain a significant financing component, at amortised cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified, or impaired. Rent and other trade receivables, other receivables, cash, and short-term deposits, meet these conditions and are subsequently measured at amortised cost. A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired or when Heimstaden Bostad has transferred its rights to receive cash flows from the asset and either transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

Impairment of financial assets

Heimstaden Bostad recognises an allowance for expected credit losses for all debt instruments except those held at fair value through profit or loss.

Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that Heimstaden Bostad expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. The valuation of expected credit losses is based on various methods. Other receivables and assets that are not under the scope of the simplified method (see Note 4.2 Rent and trade receivables), are impaired in accordance with a rating-based method using external credit rating. In accordance with the general method, the financial assets covered by provisions for expected credit losses are cash and cash equivalents, other non-current receivables, and other receivables.

Expected credit losses are valued at the product of probability of default, loss given default, and the exposure in the event of default. Heimstaden Bostad has defined default as when payment of the claim is overdue by 90 days or more, or if other factors indicate that payment is in default. For assets and receivables with deteriorated credit exposure, an individual assessment is made, considering historical, current, and forward-looking data. The assessment of whether there is a significant increase in credit risk at the balance sheet date for a receivable or asset is based on whether payment is overdue by 30 days or more, or if significant deterioration of rating occurs, entailing a rating below investment grade. In cases where the amounts are not deemed insignificant, a provision is made for expected credit losses for these financial instruments as well. The valuation of expected credit losses considers any collateral and other credit enhancements in the form of guarantees.

Heimstaden Bostad considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, Heimstaden Bostad may also consider a financial asset to be in default when internal or external information indicates that Heimstaden Bostad is unlikely to receive the outstanding contractual amounts in full before considering any credit enhancements held by Heimstaden Bostad. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Financial liabilities

Heimstaden Bostad's financial liabilities comprise interest-bearing loans and borrowings, corporate bonds, lease liabilities, derivative financial instruments, and trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations. All financial liabilities are recognised initially at fair value and, except for derivative financial instruments, net of directly attributable transaction costs. For the purposes of subsequent measurement, all financial liabilities, except derivative financial instruments, are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the effective interest rate amortisation process. Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the Statement of Profit and Loss.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

Derivative financial instruments

Heimstaden Bostad does not apply hedge accounting in accordance with IFRS 9. Derivative financial assets and liabilities are classified as financial assets or liabilities at fair value through profit and loss. Derivative financial assets and liabilities comprise mainly interest rate swaps, forward foreign exchange contracts for economic hedging purposes, and forward purchase contracts for investment properties held in limited liability companies. Recognition of the derivative financial instruments takes place when the economic hedging contracts are entered. They are measured initially and subsequently at fair value; transaction costs are included directly in finance costs. Gains or losses on derivatives are recognised in profit or loss in net valuation gain or loss financial instruments at fair value through profit and loss. When forward contracts for investment properties held in limited liability companies are settled and the Company takes control of the new subsidiary, the fair value of the forward contract is transferred to the fair value of the investment property.

Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Fair Value Measurements of Financial Instruments

Below is a comparison of the carrying amounts and fair values of financial assets and financial liabilities:

SEK million	31 December 2021		31 December 2020
	Carrying amount	Fair value	Carrying amount	Fair value
Financial assets
Derivative financial instruments	440	440	-	-
Quoted equity investments	5,765	5,765	-	-
Other financial non-current assets	2,431	2,431	896	896
Trade receivables	179	179	61	61
Other financial receivables	1,469	1,469	2,045	2,045
Cash and cash equivalents	19,508	19,508	7,636	7,636
Total	29,791	29,791	10,638	10,638
Financial liabilities
Derivative financial instruments	6	6	447	447
Long-term interest-bearing liabilities	134,895	135,229	64,066	65,387
Current interest-bearing liabilities	23,485	23,485	6,713	6,713
Lease liabilities	734	734	531	531
Trade payables	566	566	414	414
Other liabilities	4,411	4,411	1,045	1,045
Total	164,096	163,838	73,216	74,537

The following tables provide the fair value measurement hierarchy of the Group's financial assets and financial liabilities:

As at 31 December 2021

		Fair value measurement using:
SEK million	Total	Quoted prices in active markets (Level 1)	Significant observable inputs (Level 2)	Significant unobservable input (Level 3)
Financial assets measured at fair value:	6,401	5,765	165	471
Derivative financial assets
Cross currency swaps - NOK	165	-	165	-
Forward purchase contracts	471	-	-	471
Quoted equity investments	5,765	5,765	-	-
Financial liabilities measured at fair value:	-202	-	-202	-
Derivative financial liabilities
Cross currency swaps - SEK	-173	-	-173	-
Interest rate swaps	-28	-	-28	-

There were no changes in the Group's valuation processes, valuation techniques, or types of inputs used in the fair value measurements during the period. Derivative financial instruments are classified net in the balance sheet and under current liabilities if they are due to be settled within 12 months after the reporting period. All other liabilities are classified as non-current. There were no transfers between Level 1 and Level 2 fair value measurements during 2021, and no transfers into or out of Level 3 fair value measurements during 2021.

As at 31 December 2020

		Fair value measurement using:
SEK million	Total	Quoted prices in active markets (Level 1)	Significant observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Financial assets measured at fair value:	261	-	261	-
Derivative financial assets
Cross currency swaps - NOK	261	-	261	-
Financial liabilities measured at fair value:	-708	-	-708	-
Derivative financial liabilities
Cross currency swaps - SEK	-328	-	-328	-
Interest rate swaps	-380	-	-380	-

Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, based on the lowest-level input that is significant to the fair value measurement as a whole, as follows:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - Valuation techniques for which the lowest-level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 - Valuation techniques for which the lowest-level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest-level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were no changes in the Group's valuation processes, valuation techniques, and types of inputs used in the fair value measurements during the period. For more information regarding fair value hierarchy see Note 3.1.

Maturity, interest rate derivatives

		31 December 2021
SEK million	Type	Nominal amount	Share, %	Average interest, % ¹
Maturity, year
Within 1 year of the Balance Sheet date	Paying fixed	5,314	15	0.15
Within 1-5 years of the Balance Sheet date	Paying fixed	28,845	81	0.12
Later than 5 years from the Balance Sheet
date	Paying fixed	1,542	4	0.10
Total interest rate derivatives		35,701	100	0.12

		31 December 2020
SEK million	Type	Nominal amount	Share, %	Average interest, % ¹
Maturity, year
Within 1 year of the Balance Sheet date	Paying fixed	5,733	16	0.10
Within 1-5 years of the Balance Sheet date	Paying fixed	24,934	71	0.18
Later than 5 years from the Balance Sheet
date	Paying fixed	4,646	13	0.22
Total interest rate derivatives		35,313	100	0.17

¹ The interest rate indicates the agreed average interest in the contracts. A negative interest rate indicates that we receive fixed interest.

Maturity, cross currency swaps

		31 December 2021
SEK million	Type	Nominal amount	Share, %	Average interest, % ¹
Within 1 year of the Balance Sheet date	Receives variable	-	-	-
Within 1-5 years of the Balance Sheet date	Receives variable	-5,624	100	2.36
Later than 5 years from the Balance Sheet	Receives variable	-	-	-
Total cross currency swaps		5,624	100	2.36

		31 December 2020
SEK million	Type	Nominal amount	Share, %	Average interest, % ¹
Within 1 year of the Balance Sheet date	Receives variable	5,167	51	1.90
Within 1-5 years of the Balance Sheet date	Receives variable	5,017	49	2.13
Later than 5 years from the Balance Sheet	Receives variable	-	-	-
Total cross currency swaps		10,184	100	2.01

¹ The interest rate indicates the variable agreed interest rate on the balance sheet date.

6.2 Financial risks

Refinancing risk

To minimise refinancing risk, the Company uses various reliable funding sources with a diversified maturity structure. The Company's financial policy stipulates the level of key credit ratios, as well as a minimum average loan tenor in the debt portfolio of 8.9 years. To mitigate refinancing risk, The Company also maintains ample liquidity reserves and unutilised sources of credit.

Liquidity risk

Liquidity risk is the risk that Heimstaden Bostad cannot fulfil its financial or operational obligations due to surplus liquidity, or that the Group cannot pay for acquisitions, capital expenditures, or other signed obligations. To mitigate this risk, Heimstaden Bostad has unutilised credit facilities of 24,474 SEK million, a financial policy stating that there can never be more than 25% of debt maturing in a single year, as well as a policy stipulating that the estimated liquidity ratio always has to exceed 125%.

Maturity 31 December, 2021, SEK million	0-1 years	1-5 years	>5 years
Interest-bearing liabilities	22,772	53,910	82,251
Leasing liabilities	62	100	476
Financial derivative instruments	5,314	28,845	1,542
Trade payables	566	-	-
Other liabilities	6,274	-	-
Total	34,988	82,855	84,269

See Note 8.5 for repayment of the bridge facility of SEK 17,714 million in January 2022.

Maturity 31 December, 2020, SEK million	0-1 years	1-5 years	>5 Years
Interest-bearing liabilities	6,321	24,244	40,485
Leasing liabilities	21	58	436
Financial derivative instruments	5,733	24,934	4,646
Trade payables	414	0	0
Other liabilities	1,19	0	0
Total	13,679	49,237	45,567

Financial obligations

The Company's debt agreements include financial covenants, the breach of which could lead to the termination of loans, immediate repayment requirements, or a claim on secured assets. The Company's financial policy stipulates levels of key credit ratios to ensure that no covenants are breached. Continuous internal and external auditing assures accurate reporting and information.

Credit risk

If counterparties cannot meet their obligations towards the Company or if a substantial number of customers fail to pay rent, it would lead to reduced liquidity and losses. To counter this, the Company regularly assesses the creditworthiness of its counterparties. For the majority of rental contracts rent is paid in advance and risk is further reduced through a large and diversified customer base.

Interest rate risk

Rising interest rates may increase the financing cost for the Com- pany and negatively impact profitability. According to the financial policy, the Company shall maintain at least 75% of its loan portfolio at a fixed rate, which is managed with loans and bonds with fixed interest rates and interest rate swaps.

Currency risk

The Company owns assets in other currencies than the reporting currency, which leads to a risk of negative impact on cash flows or asset values in the case of fluctuating currency exchange rates.

The Company to a large extent utilises match funding to match cash flows with asset and debt value fluctuations.

Changes in values of derivatives

The value of currency derivatives may be affected by changes in base rates or foreign currency exchange rates. The Company's financial policy dictates which derivative instruments may be used for hedging strategies, stating that only marketable instruments for which prices can be obtained may be utilised. The Company also continuously monitors market movements and obtains external and internal derivative valuations.

Interest rate sensitivity

The following table include the sensitivity of a change in interest rates on loans and borrowings, possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Group's profit before tax is affected through the impact on floating rate borrowings, as follows:

2021	Increase/decrease in basis points	Effect on profit before tax (+)	Effect on profit before tax (-)
Interest expenses	1%	427	-526
2020	Increase/decrease in basis points	Effect on profit before tax (+)	Effect on profit before tax (-)
Interest expenses	1%	41	-148

Sensitivity analysis for exchange rate fluctuation

2021	Net assets	Effects on net assets of a 10% stronger SEK	Effects on net assets of a 10% weaker SEK
SEK million
CZK	17,401	-1,740	1,740
DKK	32,271	-3,227	3,227
EUR	23,565	-2,356	2,356
NOK	19,339	-1,934	1,934
GBP	1,083	-108	108
PLN	2,103	-210	210
Total	95,761	-9,576	9,576
10%	-9,576
-10%	9,576

2020	Net assets	Effect on net assets of a 10% stronger SEK	Effect on net assets of a 10% weaker SEK
SEK million
CZK	9,131	-913	913
DKK	5,622	-562	562
EUR	10,951	-1,095	1,095
NOK	7,555	-756	756
Total	33,259	-3,326	3,326
10%	-3,326
-10%	3,326

6.3 Interest-bearing loans and borrowings

	2021
SEK million	Interest- bearing liabilities	Secured loans, %	Share, %	Unutilised credit commitment
Corporate bonds	75,282	0	47	-
Mortgages	34,599	100	22	-
Bank loans	49,052	62	31	24,474
Total	158,933	41	100	24,474
Deferred charges	-553
Total incl. deferred charges	158,380

	2020
SEK million	Interest- bearing liabilities	Secured loans, %	Share, %	Unutilised credit commitment
Corporate bonds	30,317	0	43	-
Mortgages	21,359	100	30	-
Bank loans	19,375	100	27	14,744
Total	71,051	57	100	14,744
Deferred charges	-271
Total incl. deferred charges	70,780

Interest-bearing liabilities per currency

	2021		2020
Currency	SEK million	Local currencies	SEK million	Local currencies
SEK	22,143	-	17,037	-
NOK	3,694	3,600	1,725	1,800
EUR	101,254	9,878	33,274	3,316
DKK	31,842	23,103	19,015	14,101
Total	158,933		71,051
Deferred charges	-553		-271
Total incl. deferred charges	158,380		70,780

Quoted bonds

Nominal value (millions)	Currency	Fair value ²	Maturity	Rating
Interest-bearing liabilities
1,000	SEK	313	2022-09-07	BBB
500	NOK	520	2024-06-07	BBB
700	EUR	465	2023-09-05	BBB
500	EUR	510	2026-01-21	BBB
50	EUR	56	2035-05-04	BBB
50	EUR	59	2035-05-04	N/A
500	SEK	310	2022-12-29	N/A
700	EUR	718	2027-03-03	BBB
800	SEK	812	2025-02-25	N/A
400	SEK	401	2025-02-25	N/A
400	NOK	394	2025-02-25	N/A
400	NOK	406	2025-02-25	N/A
500	EUR	501	2023-01-12	N/A
750	SEK	750	2025-04-07	N/A
500	SEK	500	2024-04-08	N/A
200	NOK	200	2024-04-22	N/A
1,250	NOK	1,247	2026-04-22	N/A
350	NOK	349	2028-04-24	N/A
750	EUR	718	2029-09-06	BBB
1,250	EUR	1,253	2024-10-13	BBB
750	EUR	747	2028-04-13	BBB
750	EUR	752	2031-10-13	BBB
1,050	SEK	1,050	2023-11-23	N/A
2,800	SEK	2,803	2023-11-23	N/A
650	SEK	651	2026-11-23	N/A
850	SEK	849	2024-01-22	N/A
Hybrid bonds ¹
800	EUR	807	2025-02-19	BB+
500	EUR	499	2026-04-15	BB+
800	EUR	760	2027-05-01	BB+
600	EUR	577	2028-01-29	BB+
600	EUR	600	2027-01-13	BB+

Nominal value (millions)	Annual coupon	Identification number	Exchange
Interest-bearing liabilities
1,000	FLOATING 1.902%	XS1918010833	Euronext Dublin
500	FLOATING 3.190%	NO0010938899	Oslo börs
700	FIXED 2.125%	XS1958655745	Euronext Dublin
500	FIXED 1.125 %	XS2105772201	Euronext Dublin
50	FIXED 2.800%	XS21680487087	Euronext Dublin
50	FIXED 2.800%	XS2161838276	Euronext Dublin
500	FLOATING 1.207%	XS2194280736	Euronext Dublin
700	FIXED 1.375%	XS2225207468	Euronext Dublin
800	FLOATING 1.880%	XS2259800121	Euronext Dublin
400	FIXED 1.368%	XS2259781230	Euronext Dublin
400	FIXED 2.019%	NO0010906951	Oslo börs
400	FLOATING 0%	NO0010906944	Oslo börs
500	FLOATING 0.052%	XS2284258345	Euronext Dublin
500	FLOATING 0.764%	XS2327990649	Euronext Dublin
750	FLOATING 0.640%	XS2327839580	Euronext Dublin
500	FLOATING 1.490%	NO0010976319	Oslo börs
200	FLOATING 1.690%	NO001976327	Oslo börs
1,250	FLOATING 1.880%	NO0010976335	Oslo börs
350	FIXED 0.750%	XS2384269366	Euronext Dublin
750	FIXED 0.250%	XS2397239000	Euronext Dublin
750	FIXED 0.750%	XS2397252102	Euronext Dublin
750	FIXED 1.625%	XS2397252011	Euronext Dublin
1,050	FLOATING 0.495%	XS2412109105	Euronext Dublin
2,800	FIXED 0.933%	XS2412106002	Euronext Dublin
650	FLOATING 0.995%	XS2412106853	Euronext Dublin
850	FIXED 0.875%	XS2420346517	Euronext Dublin
Hybrid bonds ¹
800	VARIABLE 3.248%	XS2010037765	Euronext Dublin
500	VARIABLE 3.375%	XS2125121769	Euronext Dublin
800	VARIABLE 2.625%	XS2294155739	Euronext Dublin
600	VARAIBLE 3.000%	XS2357357768	Euronext Dublin
600	VARIABLE 3.265%	XS2397251807	Euronext Dublin

¹ Hybrid bonds are classified as equity in the statement of balance sheet.

² Based on quoted market prices as of the balance sheet date.

Maturity structure interest-bearing liabilities

	Average loan tenor, 31 December 2020
SEK million	Loans and borrowings,	Corporate bonds, unsecured	Total loans and borrowings
Loan maturity
Within 1 year of the Balance Sheet date	1,218	5,104	6,321
Within 1-5 years of the Balance Sheet date	12,075	12,169	24,244
Later than 5 years from the Balance Sheet date	27,441	13,044	40,485
Total	40,734	30,317	71,051

	Average loan tenor, 31 December 2020
SEK million	Share, %	Lines of credit	Share, %
Loan maturity
Within 1 year of the Balance Sheet date	9	0	0
Within 1-5 years of the Balance Sheet date	34	14,744	100
Later than 5 years from the Balance Sheet date	57	0	0
Total	100	14,744	100

SEK million	Fixed interest rates, 31 December 2020
Interest maturity	Secured borrowing	Unsecured borrowing	Total borrowing	Average interest rate,% incl. margin	Share, %
Within 1 year of the Balance Sheet date	35,189	14,985	50,174	1.22	71
Within 1-5 years of the Balance Sheet date	3,367	7,807	11,174	2.25	16
Later than 5 years from the Balance Sheet date	2,178	7,525	9,704	1.49	14
Total	40,734	30,317	71,051	1.42	100

Average remaining term of fixed interest in the loan portfolio as of 31 December 2021 was: 1.83 years (1.80)

Average remaining term of fixed interest in the loan portfolio, including derivatives, as of 31 December 2021 was: 2.19 years (3.06) Average remaining loan tenor as of 31 December 2021 was: 8.86 years (10.54)

Reconciliation of liabilities attributable to financing activities
SEK million	Corporate bonds	Mortgages/ bank loans	Deferred charges	Lease liabilities	Total
Opening balance, 1 January 2020	18,066	40,951	-271	818	59,564
Loan repayments	-	-	-	-3	-3
New borrowings/assumed debt in connection with acquisitions	13,374	974	-	-	14,348
Currency exchange effect on loans	-1,123	-1,191	-	-55	-2,369
Other changes	-	-	-	-229	-229
Closing balance, 31 December 2020	30,317	40,734	-271	531	71,311
Opening balance, 1 January 2021	30,317	40,734	-271	531	71,311
Loan repayments	-8,070	-8,512	-	-12	-16,594
New borrowings/assumed debt in connection with acquisitions	52,016	50,328	-	86	102,430
Currency exchange effect on loans	1,019	1,102	-	40	2,160
Capitalisation of debt issuance cost, net of amortisation	-	-	-282	9	-273
Closing balance, 31 December 2021	75,282	83,652	-553	733	159,114

6.4 Capital management

The access to long-term capital is important for Heimstaden Bostad to acquire, develop, and manage our property portfolio. Changes in the capital structure affect the operations' financial risk and earnings capacity and we are monitoring the capital structure to ensure it is aligned with the Company's financial policy.

Financial Policy

		Policy	2021	2020
Interest coverage ratio, rolling 12 months, S&P	Multiple	≥ 2.4	2.9	2.5
Net debt / net debt + equity, S&P method	%	< 55	52.2	49.8
Average loan tenor	Years	≥ 4	8.9	10.5
Loan maturity in individual year	%	≤ 25	14 (2022)	13
Loans from individual lender	%	≤ 20	11	12
Interest rate hedge ratio	%	≥ 75	77	80
Quick ratio	%	≥ 1.25	2.90	1.49

7. Other liabilities

7.1 Leases

Accounting policies

Heimstaden Bostad has a lease commitment for leasehold rights, premises, and vehicles. The commitment is classified as a lease liability in the Balance Sheet and the right to use the underlying asset during the lease term is classified as an asset. Amortisation of the asset is reported in profit or loss. Lease payments are reported partly as payment of interest and partly as amortisation of the lease liability. Lease payments are renegotiated at the end of the agreements to reflect market rents. The agreements mainly fall due for renegotiation in more than 5 years. Premises and vehicles are reported at discounted values in the Balance Sheet as a right-of-use asset and a lease liability. In profit or loss, the right-of-use asset is depreciated over the term of the agreement and payment made to the landlord / lessor is reported partly as amortisation of the lease liability and partly as interest expense in profit or loss.

The table below shows the rights of use per category:

SEK million	Premises	Vehicles	Other	Total
Opening balance, 1 January 2020	184	3	1	188
Changes to contracts	17	2	-	19
Reclassifications	-169	-1	-	-170
Depreciation	-2	-1	-1	-4
Currency translation	-1	-1	-	-2
Closing balance, 31 December 2020	29	2	-	31
Changes to contracts	-13	2	-	-11
Depreciation	-3	-2	-	-5
Currency translation	2	-	-	2
Closing balance, 31 December 2021	15	2	-	17

Below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and the movements during the period:

SEK million	2021	2020
As at 1 January	610	818
Additions	86	-
Accretions of interest	5	1
Payments	-12	-1
Reclassification	4	-174
Currency translation	40	-34
As at 31 December	733	610
Current	5	4
Non-current	728	606

The following amounts are recognised in profit or loss:

SEK million	2021	2020
Depreciation expense of right-of-use assets	-5	-5
Interest expense on lease liabilities	-5	-5
Expense relating to short-term leases (included in cost of sales)	-2	-
Expense relating to leases of low-value assets (included in administrative expenses)	-2	-
Variable lease payments (included in cost of sales)	0	-
Total amount recognised in profit or loss	-14	-9

Breakdown of undiscounted lease debt:

SEK million	2021	2020
Within one year	62	21
1-5 years	100	58
> 5 years	476	436
Total	638	515

The Group's lease income from operating leases is presented in rental income in profit or loss. For more information see Note 2.2.

7.2 Deferred tax

Accounting policies

Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred income tax is determined using tax rates that have been enacted or substantively enacted by the date of the Consolidated Balance Sheet and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. The carrying value of Heimstaden Bostad's investment property is assumed to be realised by sale at the end of use.

The capital gains tax rate is based on the applicable rate of a direct sale of the property recorded in the Balance Sheet regardless of whether Heimstaden Bostad would structure the sale via the disposal of the subsidiary holding the asset, to which a different tax rate may apply. The deferred tax is then calculated based on the respective temporary differences and tax consequences arising from recovery through sale. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by Heimstaden Bostad and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

Deferred tax

	2021		2020
SEK million	Basis	Tax	Basis	Tax
Deferred tax asset loss carryforwards
Opening balance	-667	-147	-896	-197
Change for the year	-418	-89	228	50
Closing balance	-1,085	-236	-667	-147
Deferred tax liabilities investment properties
Opening balance	20,923	4,453	12,865	2,738
Business combinations	48,916	12,877	-	-
Depreciation for the year	187	39	139	31
Value change for investment properties	21,217	4,528	8,122	1,713
Reversal for the year due to sale	-79	-17	-	-
Changed tax rate	-	-	-203	-29
Closing balance	91,163	21,880	20,923	4,453
Derivative financial instruments
Opening balance	-447	-95	-65	-15
Change for the year	881	186	-382	-80
Closing balance	434	91	-447	-95
Temporary differences	629	169	-	-
Net deferred tax
Opening balance	19,809	4,212	11,904	2,526
Business combinations	48,916	12,877	-	-
Exchange rate difference	-	235	-	-87
Change for the year	22,416	4,580	7,905	1,774
Closing balance	91,141	21,904	19,809	4,212

Capitalised tax loss carryforward relates to tax loss of SEK 1,085 million (667).

7.3 Other current liabilities

SEK million	31 December 2021	31 December 2020
Current tax liabilities	450	291
Real-estate transfer tax	2,414	26
Liabilities related to real estate transactions	645	524
VAT construction project	-	105
Other liabilities	902	99
Total	4,411	1,045

8. Other disclosures

8.1 Related-party disclosures

Transactions with related parties carried out at arm's length terms.

The following are defined as related parties:

- All companies within the Heimstaden Group

- Board Members and Company management

- Close family Members of Board Members or Company management

- Companies controlled by Board Members or Company management

- Shareholders in control of more than 10% of the shares or votes in the company

Summary of transactions with related parties

In addition to the related-party relationships specified for the Group, the Parent Company has a controlling influence over subsidiaries in accordance with Note 7.

In 2021, Heimstaden Bostad acquired administrative services from Heimstaden AB and its subsidiaries for SEK 1,437 million (964).

In 2021, Heimstaden Bostad AB acquired properties from Group companies for SEK 0 million (0).

In 2021, Ivar Tollefsen and his family received SEK 15 million in total fees for ground rent (SEK 13 million).

Transactions with key individuals in leading positions

The CEO and Deputy CEO hold shares in Heimstaden Bostad AB, and accordingly received dividends in 2021 and 2020 and participated in the new share issue.

Transactions with associated companies and joint ventures

SEK million	2021	2020
Interest revenue from investments in associated companies and joint ventures	22	63
Receivables from investments in associated companies and joint ventures	161	82
Liabilities to investments in associated companies and joint ventures	-	284
Capital contributions to investments in associated companies and joint ventures	-	25

In addition to the related parties presented above see also Note 3.4, Associated companies and joint ventures.

8.2 Business combinations

On 1 December 2021, Heimstaden Bostad acquired 100% of the voting shares in Akelius Lägenheter Aktiebolag, Akelius Bolig Holding ApS, and Akelius GmbH for SEK 92.5 billion. The portfolio comprised 28,776 homes across Sweden, Germany, and Denmark.

As a result of the business combination and the preliminary analysis of the purchase price allocation, SEK 16,466 million in goodwill was recognised. The goodwill arose from the purchase price exceeding the fair value of acquired net assets. The goodwill amount is related to deferred tax liabilities of SEK 12,949 million and SEK 3,518 million from synergies attributable to economies of scale (core goodwill). The acquisition has been analysed in accordance with IFRS3 and is deemed to meet criteria for business combinations, see also Note 3.2 for additional information.

The acquired businesses have from the date of acquisition to 31 December 2021 contributed to the Group's revenues and profit before taxes with SEK 244 million. If the acquisition had occurred at the beginning of 2021, revenues and profit before taxes for 2021 would have increased by SEK 2,442 million and SEK 16,413 million, respectively.

Acquisition of Akelius properties in Germany, Sweden, and Denmark

Balance Sheet, 1 December 2021

SEK million	Fair value recognised on acquisition
NET ASSETS
Investment properties	89,069
Machinery and equipment	10
Other non-current financial assets	68
Inventory properties	467
Other current assets	246
Cash and cash equivalents	288
Long-term interest-bearing liabilities	-13,067
Non-current liabilities, financial leasing	-68
Deferred tax liability	-12,949
Other long-term liabilities	-70
Other current liabilities	-723
Net identifiable assets at fair value	63,271
Goodwill	16,466
Total net assets	79,737
CASH FLOW EFFECT
Consideration paid	79,737
cash and cash equivalents in acquired companies	288
Total cash flow effect	79,449

8.3 Pledged assets

SEK million	31 December 2021	31 December 2020
Mortgages ¹	62,526	52,386
Pledged shares in subsidiaries ¹	7,622	7,790
Total	70,148	60,176

¹ The collateral has been pledged with regard to interest-bearing loans from credit institutions.

8.4 Contingencies and commitments

Pre-emptive rights

In 2018, Heimstaden Bostad received a guarantee from its Parent Company, Fredensborg AS, for any losses related to the municipality's potential use of pre-emptive right to buy nine properties from Heimstaden Bostad Invest 10 AS. Fredensborg AS disputed the fact that the municipality was entitled to use the pre-emptive rights in a lawsuit brought before the court regarding five of the properties, but in 2020 the district court in Oslo ruled in favour of the municipality. Subsequently, the parties entered into a settlement agreement, and the five proper- ties were sold to the municipality on 31 December 2021. Fredensborg AS has guaranteed for the difference of sales price and fair value of the properties as of the date of the sale. Therefore no losses were recognised from the sale.

Investment obligations

Heimstaden Bostad has entered into contracts with sellers of investment property placed in a corporate wrapper. The corporate wrap- per holds an existing investment property and rental agreements with tenants. Heimstaden Bostad will acquire 100% of the outstanding shares in the corporate wrapper at a future date. The contract is either for a fixed price or at a variable price based on the equity in the corporate wrapper, where the investment property is measured at fair value. The arrangements are recognised as financial instruments under IFRS 9 at fair value through profit/loss. For more information see Note 6.1.

Heimstaden Bostad has signed agreements to buy turnkey investment properties under construction after the balance sheet date. As at 31 December 2021, Heimstaden Bostad had total investment obligations of SEK 12 069 billion between 2022 and 2027, see table below.

2021 SEK million	2022	2023	2024	2025
Investment obligations	3,871	1,643	3,303	2,273
2020 SEK million	2021	2022	2023	2024
Investment obligations	26,968	392	4,783	5,604

2021 SEK million	2026	2027	2028	Total
Investment obligations	378	601	-	12,069
2020 SEK million	2025	2026	2027	Total
Investment obligations	758	319	872	39,696

Capital expenditures

As at 31 December, Heimstaden Bostad had agreed forward funding contracts with third parties and is consequently committed to future capital expenditure in respect of investment properties under construction of SEK 5,040 million.

Disputes

As of the balance sheet date, Heimstaden Bostad is not a part in any ongoing process which is expected to have a significant impact on the financial statement.

8.5 Events after the reporting period

On January 19, 2022, Allianz Real Estate, on behalf of Allianz companies, invested SEK 7.9 billion in Heimstaden Bostad's portfolio in Sweden with properties recently bought from Akelius, forming a joint venture (JV) on the SEK 30.4 billion portfolio centrally located in Malmö and Stockholm. The 99 properties are part of the portfolio acquired by Heimstaden Bostad from Akelius with 3,377 homes in Malmö and 5,932 in Stockholm, making the JV one of the largest private residential owners in the Swedish capital. The JV was funded with equity, including Allianz' SEK 7.9 billion investment, as well as a debt facility from Heimstaden Bostad. The shareholders hold a combination of preference and common shares with different rights to dividends and voting. Heimstaden Bostad holds a higher ratio of common shares, and the JV will be fully consolidated into Heimstaden Bostad.

On 5 January 2022, Heimstaden Bostad priced EUR 500 million floating rate notes under its EMTN programme. The notes have a maturity of two years with a call option at par after approximately 1 year and carry a floating rate to maturity of 3 months EURIBOR plus 55 bps. The issuance was completed through a club deal with European money market funds. The proceeds were used to refinance the EUR 500 million floating rate notes due January 2023, which were redeemed on 21 January 2022 in accordance with the notice given by Heimstaden Bostad on 21 December 2021.

On 17 January 2022, Heimstaden Bostad priced EUR 1,200 million senior unsecured fixed rate notes with 3.5- and 6.5- year tenors under its EMTN programme. The EUR 700 million 3.5 years note, and EUR 500 million 6.5 years note carries an annual coupon of 0.625% and 1.375%, respectively. The notes were rated `BBB' by S&P. The net proceeds, together with cash at hand, was used to repay the entirety of the loan outstanding under Heimstaden Bostad's bridge financing facility related to the acquisition of Akelius's portfolios in Sweden, Denmark, and Germany, and for general corporate purposes.

On the 25 January 2022. Heimstaden Bostad priced EUR 200 million in a tap issue of our existing floating rate note issued on the 5 of January 2022. Bringing the total outstanding amount of the floating rate note to EUR 700 million. The tap issue was done at the same exact terms as the original trade, carrying a floating rate coupon of 3 months Euribor plus 55 bps to maturity and the same call option date.

On February 2022, Heimstaden Bostad strengthened its presence in Sweden through the SEK 1.7 billion acquisition of Vätterbygdens Byggnads AB. The portfolio consists of 806 residential units, and 21 new attic apartments under construction, mainly located in attractive micro locations in the central parts of Jönköping.

The financial statements form part of the Annual Report and were approved by the Board of Directors and the CEO on 28 February 2022.

Parent Company Financial Statements and Notes

Income Statement

SEK million	Note	YTD 2021	YTD 2020
Management service revenues	2.1, 2.2, 7.2	1	4
Other operating expenses		-15	-
Administrative expenses		-603	-385
Operating profit/loss		-617	-381
Interest income	2.3	655	543
Interest expenses	2.3	-668	-680
Other financial items	2.3	331	-245
Fair value adjustment of derivative financial instruments	5.2	306	-260
Profit/loss after financial items		7	-1,022
Appropriations	2.4	-	716
Profit/loss before tax		7	-306
Income tax expense	2.5	-104	50
Profit for the period		-97	-256

Comprehensive Income Statement

SEK million	Note	YTD 2021	YTD 2020
Profit for the year according to the Income Statement		-97	-256
Other comprehensive income		-	-
Total comprehensive income		-97	-256

Balance Sheet

SEK million	Note	31 December 2021	31 December 2020
ASSETS
Shares and participations	7.4	62,021	38,867
Quoted equity investments		5,188	-
Deferred tax assets	3.1	41	93
Non-current receivables, subsidiaries	3.2, 7.2	100,209	19,343
Total non-current assets		167,459	58,304
Current receivables, subsidiaries	3.3, 7.2	40,369	33,721
Other financial assets		86	100
Cash and cash equivalents	3.4	16,555	5,916
Total current assets		57,010	39,737
TOTAL ASSETS		224,469	98,041

SEK million	Note	31 December 2021	31 December 2020
EQUITY AND LIABILITIES
Share capital		71	43
Restricted equity		71	43
Share premium reserve		95,176	50,240
Hybrid bonds		33,652	13,621
Retained earnings		-4,625	450
Unrestricted equity		124,203	64,310
Total equity	4.1	124,274	64,353
Interest-bearing liabilities	5.1	45,303	23,210
Derivative financial instruments	5.2	198	453
Non-current liabilities, subsidiaries	6.1, 7.2	54,242	9,729
Total non-current liabilities		99,743	33,392
Trade payables		3	8
Current tax liabilities		51	26
Accrued expenses and prepaid income	6.2	398	260
Total current liabilities		452	295
TOTAL EQUITY AND LIABILITIES		224,469	98,041

Statement of Changes in Equity

SEK million	Share capital	Share premium reserve	Hybrid bonds	Retained earnings	Total Equity
Equity, 31 December 2019	34	37,397	8,514	2,665	48,610
Profit for the period	-	-	69	-325	-256
Total profit	-	-	69	-325	-256
Share issue	9	12,843	-	-	12,851
Dividends	-	-	-69	-1,828	-1,897
Hybrid bonds issue	-	-	5,189	-	5,189
Costs of issuance	-	-	-82	-63	-145
Total transactions with the Company's shareholders	9	12,843	5,038	-1,891	15,998
Equity, 31 December 2020	43	50,240	13,621	450	64,353
Opening balance, 1 January 2021	43	50,240	13,621	450	64,353
Profit for the period	-	-	406	-502	-97
Total profit	0	0	406	-502	-97
Share issue	29	44,936	-	-	44,965
Dividends	-	-	-406	-4,572	-4,978
Hybrid bonds issue	-	-	20,235	-	20,235
Costs of issuance	-	-	-204	-	-204
Total transactions with the Company's shareholders	29	44,936	19,625	-4,572	60,018
Equity, 31 December 2021	71	95,176	33,652	-4,625	124,274

Cash Flow Statement

SEK million	Note	2021	2020
Cash flows from operating activities
Profit before income tax		7	-1,023
Adjustments to reconcile profit before tax to net cash flows:
Other adjustments	7.3	-995	448
Working capital changes
Increase/decrease(+) in trade receivables		-57	678
Increase/decrease(-) in trade and other payables		158	174
Cash generated from operations		-887	277
Paid income tax		-26	-
Net cash generated from operating activities		-913	277

SEK million	Note	2021	2020
Cash flows from investing activities
Acquisitions of businesses, net of cash	8.2	-2,347	-
Acquisition of other long-term securities		-5,118	-
Settlement of derivative financial instruments		51	-113
Net cash used in investing activities		-7,414	113
Cash flows from financing activities
Proceeds from loan and borrowings	5.1	29,838	8,709
Repayment of loan and borrowings	5.1	-8,070	-2,757
Dividends paid		-4,572	-1,897
Proceeds from share issuances		44,965	12,851
Proceeds to subsidiaries		-64,095	-19,579
Proceeds from issuance of hybrid bonds		20,235	5,189
Coupon payments on hybrid bonds		-610	-145
Net cash used in financing activities		17,691	2,371
Cash and cash equivalents at the beginning of the period		5,916	2,811
Net change in cash and cash equivalents		9,364	2,761
Change rate adjustments of cash and cash equivalents		1,257	344
Cash and cash equivalents at the end of the period		16,555	5,916

Notes to the Parent Company Financial Statements

1. Accounting policies

1.1 Accounting Policies

The Parent Company applies the same accounting policies as the Group (see Note 1.2, Significant accounting policies), with the following differences:

Investments in subsidiaries

Investments in subsidiaries are recognised at historical cost less deductions for any impairments. Acquisition-related costs and any contingent consideration are capitalised if there are indications that participations in Group companies have decreased in value. The recoverable amount is calculated and if this is lower than the carrying amount, the investment is impaired. Impairment is recognised under the item 'Impairment of investments in subsidiaries'.

Financial instruments

The guidance for financial instruments under IFRS 9 is not applied by the Parent Company. The Parent Company applies the lower of cost or market method in accordance with the Swedish Annual Accounts Act. Accordingly, financial non-current assets are valued at cost and financial current assets at the lower of cost or market. The Parent Company applies the expected credit loss method under IFRS 9 for assets that are debt instruments. For other financial assets, impairment is based on market value.

The Parent Company applies the exemption not to value financial guarantee agreements benefiting subsidiaries, associated companies, and joint ventures in accordance with IFRS 9, applying instead the valuation policies under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

Impairment of financial assets

The Parent Company applies the same impairment method as the Group for expected credit losses. The Parent Company considers the subsidiaries to have similar risk profiles and assessments are performed on a collective basis for similar transactions. At the Balance Sheet date, no material increase in credit risk has been deemed to prevail for any intra-Group receivables. The Parent Company's receivables from its subsidiaries are subordinated external lenders' claims. The Parent Company's expected loss in the event of default takes into account the average of the subsidiaries' loan-to-value ratios and their expected market value in the event of a forced sale. Based on the Parent Company's assessments, it is estimated that expected loan losses will not be significant and no provision has been reported.

Group contributions and shareholder contributions Group contributions are deductible, unlike shareholder contributions. Group contributions paid and received are reported in the Comprehensive Income Statement. Shareholder contributions are reported as an increase of participations in Group companies and tested for impairment.

Credit risk

The Parent Company's maximum credit risk is the net amount of the financial assets. The Parent Company has no collateral for its net financial assets.

Based on our assessment there has been no significant increase in credit risk of the Parent Company's financial assets.

Leases as a lessee

When the Parent Company is the lessee, lease payments are expensed on a straight-line basis over the term of the lease. The cost of leases attributable to leaseholds and the cost for other leases are recognised in operating profit. The right-of-use asset and the lease liability are therefore not recognised in the Balance Sheet.

Presentation

For the Parent Company, the Income Statement and other comprehensive Income are presented in two reports. For the Parent Company, the Statement of Comprehensive Income and Balance Sheet are prepared in accordance with the Annual Accounts Act's schedule while the Statement of Changes in Equity and the Cash Flow Statement are based on IAS 1, Presentation of Financial Statements, and IAS 7 Statement of Cash Flows.

2. Income and expenses

2.1 Audit fee

The audit engagement refers to the audit of the financial statements. Other assurance services provided by the auditors include services related to review procedures on interim reports and other attestation services. The fees are summarised in the table below:

EY

SEK million	2021	2020
Audit assignment	3	2
Other assurance services	2	1
Tax advisory services	-	-
Other services	-	-
Total	5	3

Moore

SEK million	2021	2020
Audit assignment	2	2
Other assurance services	0	0
Tax advisory services	-	-
Other services	-	-
Total	2	2

Total

SEK million	2021	2020
Audit assignment	5	4
Other assurance services	2	1
Tax advisory services	-	-
Other services	-	-
Total	7	5

2.2 Personnel and senior executives

The remuneration to the Chairman of the Board amounts to SEK 0.96 million (0.5). No other remuneration was paid to the Members of the Board except board fees presented in Group Note 2.6. The CEO receives remuneration from Heimstaden AB and these costs are included in the administrative services from Heimstaden AB.

During the year, the Board of Directors consisted of 11 (11) Members, of whom 7 (8) were men. There was 1 (1) other senior executive, of whom 1 (1) are men.

2.3 Financial income and expenses

SEK million	2021	2020
Assets and liabilities measured at amortised cost:
Interest income, subsidiaries	649	535
Interest income, other financial assets	7	8
Total interest income in accordance with the effective interest method	656	543
Interest costs, loans	-481	-633
Interest costs Group companies	-187	-31
Interest costs, other financial liabilities	-	-16
Total interest costs in accordance with the effective interest method	-668	-680

Other financial items, net	2021	2020
Foreign currency, financial items	740	-188
Other financial expenses	-409	-57
Total	331	-245
Total income/loss from financial items	318	-382

2.4 Appropriations

SEK million	2021	2020
Group contributions received	-	716
Total	-	716

2.5 Income tax expense

SEK million	2021	2020
Income tax expense	-51	-26
Deferred tax	-53	77
Total income tax expense reported in Comprehensive Income Statement	-104	51
Profit before tax	7	-307
Tax according to current rate	-1	68
Tax effect of:
Non-taxable income	-	9
Non-deductible costs	-	-6
Non-deductible interest, net	-189	-26
Tax effects hybrid bonds	137	32
Tax attributable to previous years	-51	-26
Total from Comprehensive Income Statement	-104	51

3. Assets

3.1 Deferred tax assets

SEK million	31 December 2021	31 December 2020
Opening balance	93	16
Change for the year	-52	77
Closing balance	41	93

3.2 Non-current receivables, subsidiaries

SEK million	31 December 2021	31 December 2020
Opening balance	19,343	20,308
Change for the year	80,866	-965
Closing balance	100,209	19,343

Receivables from Group companies are attributable to transactions between the Parent Company and the subsidiaries. Intragroup loans are subject to market terms and are without collateral

3.3 Current receivables, subsidiaries

SEK million	31 December 2021	31 December 2020
Opening balance	33,721	12,849
Change for the year	6,648	20,872
Closing balance	40,369	33,721

Receivables from Group companies are attributable to transactions between the Parent Company and the subsidiaries. Intragroup loans are subject to market terms and are without collateral.

3.4 Cash and cash equivalents

Cash and cash equivalents mainly include bank deposits. The change in cash and cash equivalents is shown in the Consolidated Statement of Cash Flows.

4. Equity

4.1 Equity

Event	Type	Date of registration	Change in number of shares	Total number of shares
Opening balance at 1 January 2020
New share issue	Ordinary, Pref B	07.01.2020	3,103,013	24,446,280
New share issue	Ordinary, Pref B	13.05.2020	2,449,157	26,895,437
Closing balance at 31 December 2020				26,895,437
Opening balance at 1 January 2021
New share issue	Ordinary, Pref B	2021-01-12	1,671,996	28,567,433
New share issue	Ordinary, Pref B	2021-03-18	3,721,074	32,288,507
New share issue	Ordinary, Pref B, Pref C	2021-11-17	12,637,892	44,926,399
New share issue	Ordinary, Pref B, Pref C	2021-11-17	332,493	45,258,892
Closing balance at 31 December 2021				45,258,892

Event	Change in share capital	Total share capital	Quota value
Opening balance at 1 January 2020
New share issue	4,908,650	38,672,150	1.58
New share issue	3,874,316	42,546,466	1.58
Closing balance at 31 December 2020		42,546,466
Opening balance at 1 January 2021
New share issue	2,644,927	45,191,393	1.58
New share issue	5,886,359	51,077,752	1.58
New share issue	19,991,855	71,069,607	1.58
New share issue	525,970	71,595,577	1.58
Closing balance at 31 December 2021		71,595,577

At 31 December 2021, there were 9,725,321 (6,578,058) ordinary shares, 200 (200) Series A preference shares, 35,205,992 (20,317,179) Series B preference shares, and 327,379 (0) Series C preference shares. The voting value of an ordinary share is one-half vote per share and the voting value for Series A and B preference shares is one-tenth of a vote per share and the voting value for Series C preference shares is one vote per share.

Proposed appropriation of accumulated profit, SEK
Share premium reserve	95,176,170,400
Hybrid bonds	33,652,042,962
Retained earnings	-4,528,478,211
Profit/loss for the year	-96,675,144
Total	124,203,060,007

Proposed appropriation of accumulated profit, SEK
Dividend to shareholders	6,621,384,882
Share premium reserve	95,176,170,400
Hybrid bonds	35,652,042,962
Retained earnings	-11,246,538,237
Total	124,203,060,007

It is proposed that the funds at the disposal of the Annual General Meeting, SEK 124,203,060,007 be appropriated such that, a dividend amounting to SEK 318.103844592893 per ordinary share, totalling SEK 3,093,662,000. The Board further proposes distribution of a dividend to the holders of Series A preference shares in accordance with the Company's Articles of Association in the amount of SEK 2,170,304.40878072 per Series A preference share, totaling SEK 434,060,881.756143. The Board further proposes distribution of a dividend to the holders of Series B1, B2, B3 and B4 preference shares in accordance with the Company's Articles of Association in the amount of SEK 122.431059573938 per Series B1, B2, B3 and B4 preference shares, totaling SEK 2,487,453,752.52336 for Series B1, B2, B3 and B4 shares. The Board further proposes distribution of a dividend to the holders of Series B5 preference shares in accordance with the Company's Articles of Association in the amount of SEK 118.751152486954 per Series B5 preference share, totaling SEK 154,376,260.730735 for Series B5 shares. The Board further proposes distribution of a dividend to the holders of Series B6 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 97.0062469729574 per Series B6 prefer- ence share, totaling SEK 293,571,460.307966 for Series B6 shares. The Board further proposes distribution of a dividend to the holders of Series B7 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 15.2079480117159 per Series B7 preference share, totaling SEK 156,927,013.545894 for Series B7 shares. The Board further proposes distribution of a dividend to the holders of Series B8 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 5.4708221212137 per Series B8 preference share, totaling SEK 1,333,512.89204584 for Series B8 share. Accordingly, a total of SEK 6,621,384,881.75615 is to be paid out in dividends. The remaining amount, SEK 117,581,675,125 is to be carried forward to a new account. The dividend shall be paid in immediate connection with the resolution of the Annual General Meeting on 29 March 2022. No dividend shall, in accordance with the Company's articles of Association, be paid on the Series C preference shares.

5. Capital structure and financial items

5.1 Interest-bearing liabilities

SEK million	31 December 2021	31 December 2020
Loan maturity, year
Within 1 year of the Balance Sheet date	22,641	5,104
Within 2-5 years of the Balance Sheet date	20,360	12,169
Later than 5 years from the Balance Sheet date	2,684	6,020
Total	45,685	23,293
Deferred charges	-381	-83
Total	45,303	23,210

	2021		2020
SEK million	Loan amount	Average interest, % incl. margin	Loan amount	Average interest, % incl. margin
Interest maturity, year
Within 1 year of the Balance Sheet date	39,749	0.7	14,984	1.4
Within 2-5 years of the Balance Sheet date	5,423	2.1	7,807	2.1
Later than 5 years from the Balance Sheet date	513	2.8	502	1.5
Total	45,685	0.9	23,293	1.6
Deferred charges	-381	-	-83	-
Total	45,303	-	23,210	-

Reconciliation of liabilities attributable to financing activities

SEK million	Corporate bonds	Mortgages/ bank loans	Deferred charges	Total
Opening balance, 1 January 2020	18,066	-	-	18,066
New borrowings/assumed debt in connection with acquisitions	4,262	1,690	-	5,952
Currency exchange effect on loans	-808	-	-	-808
Closing balance, 31 December 2020	21,520	1,690	-	23,210
Opening balance, 1 January 2021	21,520	1,690	-	23,210
Loan repayments	-5,870	-2,200	-	-8,070
New borrowings/assumed debt in connection with acquisitions	24,377	5,460	-302	29,535
Currency exchange effect on loans	628	-	-	628
Closing balance, 31 December 2021	40,655	4,950	-302	45,303

5.2 Interest-rate derivatives

SEK million	2021	2020
Gains or losses on disposal of hedge instruments	51	113
Value change	255	-373
Total	306	-260

		2021
SEK million	Type	Nominal amount	Share, %	Average interest, %
Interest maturity, year
Within 1 year of the Balance Sheet date	Paying fixed	3,470	17	0.1
Within 1-5 years of the Balance Sheet date	Paying fixed	16,639	80	0.0
Later than 5 years from the Balance Sheet date	Paying fixed	750	4	0.3
Total purchased swaps		20,859	100	0.0
Within 1 year of the Balance Sheet date	Paying variable	3,610	100	0.8
Within 1-5 years of the Balance Sheet date	Paying variable	-	-	-
Later than 5 years from the Balance Sheet date	Paying variable	-	-	-
Total sold swaps		3,610	100%	0.8

	2020
SEK million	Nominal amount	Share, %	Average interest, %
Interest maturity, year
Within 1 year of the Balance Sheet date	2,091	10	0.1
Within 1-5 years of the Balance Sheet date	15,638	77	0.0
Later than 5 years from the Balance Sheet date	2,600	13	0.5
Total purchased swaps	20,328	100	0.0
Within 1 year of the Balance Sheet date	5,167	51	1.9
Within 1-5 years of the Balance Sheet date	5,017	49	2.1
Later than 5 years from the Balance Sheet date	-	-	-
Total sold swaps	10,184	100	2.0

6. Other liabilities

6.1 Non-current liabilities, subsidiaries

SEK million	31 December 2021	31 December 2020
Opening balance	9,729	2,358
Change for the year	44,513	7,371
Closing balance	54,242	9,729

6.2 Accrued expenses and prepaid income

SEK million	31 December 2021	31 december 2020
Accrued interest expenses	203	163
Other accrued expenses	195	97
Total	398	260

7. Other disclosures

7.1 Contingencies and commitments

SEK million	31 December 2021	31 December 2020
Issued financial guarantees for the benefit of subsidiaries	83,585	51,250
Total	83,585	51,250

There are no pledged assets as of 31 December 2021 (0).

7.2 Related-party disclosures

Heimstaden Bostad has bought asset management services from Heimstaden AB of SEK 545 million in 2021 (385).

Transactions with subsidiaries

SEK million	2021	2020
Interest income to subsidiaries	649	535
Interest costs to subsidiaries	-187	-31
Receivables from subsidiaries	140,578	53,064
Liabilities to subsidiaries	54,242	9,729
Capital contributions to subsidiaries	21,598	6,109
Issued financial guarantees for the benefit of subsidiaries	83,585	51,250

Executive management

For information of remuneration to the Board of Directors and the CEO, see Note PC 2.2.

7.3 Other adjustments in Cash Flow Statement

SEK million	2021	2020
Fair value adjustment of derivative financial instruments	-255	-260
Exchange rate difference	-740	-188
Total	-995	-448

7.4 Group companies

Shareholdings in subsidiaries

	Recognised value in Parent Company, SEK million
Company	Corp.ID.nr	Registered office	Number of shares
Heimstaden Bostad Invest 1 AB	556867-8444	Malmö	1000
Heimstaden Bostad Invest 2 AB	556867-8451	Malmö	1000
Heimstaden Bostad Invest 3 AB	556871-1153	Malmö	1000
Heimstaden Bostad Invest 4 AB	556871-1104	Malmö	1000
Heimstaden Bostad Invest 5 AB	556910-3467	Malmö	500
Heimstaden Bostad Invest 6 AB	556989-5690	Malmö	500
Heimstaden Bostad Invest 7 AB	559106-1584	Malmö	500
Heimstaden Bostad Invest 8 AB	551906-1550	Malmö	500
Heimstaden Bostad Invest 9 A/S	38714953	Oslo	500
Heimstaden Bostad Invest 10 AS	819330492	Kopenhagen	500
Heimstaden Kronan AB	559111-6107	Malmö	500
Heimstaden Bostad Invest 12 AB	559228-5260	Malmö	500
Heimstaden Bostad Invest 13 AB	559276-3345	Malmö	500
Heimstaden Bostad Invest 14 AB	559295-8168	Malmö	500
Heimstaden Bostad Invest 15 AB	559298-5260	Malmö	500
Heimstaden Bostad Invest 16 AB	559326-5225	Malmö	500
Heimstaden Eagle AB	559326-5233	Malmö	500
Heimstaden Bostad Invest AB	559085-1607	Malmö	500
Heimstaden Bostad Bostadsfinansiering AB	559112-2105	Malmö	500
Heimstaden Bostads Portalen AB	559085-2264	Malmö	500
Heimstaden Satelliten AB	559163-3457	Malmö	500
Heimstaden Bostad Skrinet AB	559177-3436	Malmö	500
Heimstaden Bostad Skrinet 2 AB	559322-6771	Malmö	500
Heimstaden Bostad Portalen 2 AB	559177-3451	Malmö	500
Heimstaden Bostad Parkering AB	559001-2414	Malmö	500
Heimstaden Burlöv AB	559147-4067	Malmö	500
Heimstaden Castor AB	559101-4963	Malmö	500
Heimstaden A Kronprinsen 1 AB	556954-1396	Malmö	1000
Heimstaden A Sweden AB	559160-4334	Malmö	1000
Heimstaden Berlin Residential 001 GmbH	HR200836	Berlin	25000
Heimstaden Bostad Treasury B.V.	78619610	Amsterdam	100

	Recognised value in Parent Company, SEK million
Company	Share in % ¹ ٬ ²	2021	2020
Heimstaden Bostad Invest 1 AB	100	1,039	1,039
Heimstaden Bostad Invest 2 AB	100	249	249
Heimstaden Bostad Invest 3 AB	100	608	608
Heimstaden Bostad Invest 4 AB	100	889	889
Heimstaden Bostad Invest 5 AB	100	1,086	1,086
Heimstaden Bostad Invest 6 AB	100	427	427
Heimstaden Bostad Invest 7 AB	100	917	917
Heimstaden Bostad Invest 8 AB	100	2,329	74
Heimstaden Bostad Invest 9 A/S	100	10,356	10,356
Heimstaden Bostad Invest 10 AS	100	10,095	10,095
Heimstaden Kronan AB	100	0	791
Heimstaden Bostad Invest 12 AB	100	4,592	4,500
Heimstaden Bostad Invest 13 AB	100	1,303	152
Heimstaden Bostad Invest 14 AB	100	0	-
Heimstaden Bostad Invest 15 AB	100	312	-
Heimstaden Bostad Invest 16 AB	100	0	-
Heimstaden Eagle AB	100	17,445	-
Heimstaden Bostad Invest AB	100	0	0
Heimstaden Bostad Bostadsfinansiering AB	100	0	0
Heimstaden Bostads Portalen AB	100	0	0
Heimstaden Satelliten AB	100	66	0
Heimstaden Bostad Skrinet AB	100	0	0
Heimstaden Bostad Skrinet 2 AB	100	0	-
Heimstaden Bostad Portalen 2 AB	100	0	0
Heimstaden Bostad Parkering AB	100	0	-
Heimstaden Burlöv AB	100	0	0
Heimstaden Castor AB	100	7,919	7,662
Heimstaden A Kronprinsen 1 AB	100	2,312	-
Heimstaden A Sweden AB	100	35	-
Heimstaden Berlin Residential 001 GmbH	100	0	0
Heimstaden Bostad Treasury B.V.	100	41	21
Total		62,021	38,867

¹ The share of capital corresponds to the share of votes.

² Except for the Group companies acquired in 2021 the share of capital in 2021 corresponds to the share of capital in 2020

SEK million	31 December 2021	31 December 2020
Opening balance	38,867	32,758
Acquisitions	2,347	-
Disposal	-791	-
Shareholder contributions	21,598	6,109
Closing balance	62,021	38,867

Proposed Appropriation of Accumulated Profit

According to the Parent Company's Balance Sheet, the following earnings are at the disposal of the Annual General Meeting:

SEK
Share premium reserve	95,176,170,400
Hybrid bonds	33,652,042,962
Retained earnings	-4,528,478,211
Profit (loss) for the year	-96,675,144
Total	124,203,060,007

The Board of Directors proposes that dividends be paid to shareholders as follows:

SEK
Dividends to shareholders	6,621,384,882
Share premium reserve	95,176,170,400
Hybrid bonds	33,652,042,962
Retained earnings	-11,246,538,237
Total	124,203,060,007

It is proposed that the funds at the disposal of the Annual General Meeting, SEK 124,203,060,007 be appropriated such that, a dividend amounting to SEK 318.103844592893 per ordinary share, totalling SEK 3,093,662,000. The Board further proposes distribution of a dividend to the holders of Series A preference shares in accordance with the Company's Articles of Association in the amount of SEK 2,170,304.40878072 per Series A preference share, totaling SEK 434,060,881.756143. The Board further proposes distribution of a dividend to the holders of Series B1, B2, B3 and B4 preference shares in accordance with the Company's Articles of Association in the amount of SEK 122.431059573938 per Series B1, B2, B3 and B4 preference shares, totaling SEK 2,487,453,752.52336 for Series B1, B2, B3 and B4 shares. The Board further proposes distribution of a dividend to the holders of Series B5 preference shares in accordance with the Company's Articles of Association in the amount of SEK 118.751152486954 per Series B5 preference share, totaling SEK 154,376,260.730735 for Series B5 shares. The Board further proposes distribution of a dividend to the holders of Series B6 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 97.0062469729574 per Series B6 preference share, totaling SEK 293,571,460.307966 for Series B6 shares. The Board further proposes distribution of a dividend to the holders of Series B7 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 15.2079480117159 per Series B7 preference share, totaling SEK 156,927,013.545894 for Series B7 shares. The Board further proposes distribution of a dividend to the holders of Series B8 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 5.4708221212137 per Series B8 preference share, totaling SEK 1,333,512.89204584 for Series B8 share. Accordingly, a total of SEK 6,621,384,881.75615 is to be paid out in dividends. The remaining amount, SEK 117,581,675,125 is to be carried forward to a new account. The dividend shall be paid in immediate connection with the resolution of the Annual General Meeting on 29 March 2022. No dividend shall, in accordance with the Company's articles of Association, be paid on the Series C preference shares.

The Board of Directors' statement in accordance with Chapter 18, Section 4, of the Swedish Companies Act.

This statement has been prepared in accordance with Chapter 18, Section 4, of the Swedish Companies Act and constitutes the Board of Directors' assessment of whether the proposed dividend is justified according to Chapter 17, Section 3, second and third paragraph, of the Swedish Companies Act.

The Board of Directors proposes distribution of a dividend amounting to SEK 318.103844592893 per ordinary share, totalling SEK 3,093,662,000. The Board further proposes distribution of a dividend to the holders of Series A preference shares in accordance with the Company's Articles of Association in the amount of SEK 2,170,304.40878072 per preference share, totalling SEK 434,060,881.756143. The Board further proposes distribution of a dividend to the holders of Series B1, B2, B3 and B4 preference shares in accordance with the Company's Articles of Association in the amount of SEK 122.431059573938 per Series B1, B2, B3 and B4 preference shares, totalling SEK 2,487,453,752.52336 for Series B1, B2, B3 and B4 shares. The Board further proposes distribution of a dividend to the holders of Series B5 preference shares in accordance with the Company's Articles of Association in the amount of SEK 118.751152486954 per Series B5 preference share, totalling SEK 154,376,260.730735 for Series B5 shares. The Board further proposes distribution of a dividend to the holders of Series B6 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 97.0062469729574 per Series B6 preference share, totalling SEK 293,571,460.307966 for Series B6 shares. The Board further proposes distribution of a dividend to the holders of Series B7 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 15.2079480117159 per Series B7 preference share, totalling SEK 156,927,013.545894 for Series B7 shares. The Board further proposes distribution of a dividend to the holders of Series B8 preference shares in accordance with the Company's Articles of Association, that is, in the amount of SEK 5.4708221212137 per Series B8 preference share, totalling SEK 1,333,512.89204584 for Series B8 shares.

The dividend in total amounts to SEK 6,621,384,881.75615, which is circa 34.9% of the Group's result for the financial year of 2021. The proposed dividend reduces the company's equity ratio from circa 55.4% to circa 54% and the group's equity ratio from circa 45.9% to circa 44.9%. The equity ratio is satisfactory both in short and long term.

The Company's and the Group's financial positions as of 31 December 2021 are stated in the 2021 annual report. As of 31 December 2021 the unrestricted equity of the Company amounted to SEK 124,203,060,007. No assets or liabilities have been valued at fair value in accordance with Chapter 4: Section 14 a, of the Swedish Annual Accounts Act (1995:1554).

The operations conducted by the Company and the Group do not pose any risks beyond what is occurring or what can be presumed to occur in the industry or the risks associated with the course of business operations. The Board of Directors has taken into account the Company's and the Group's need for consolidation through a comprehensive assessment of the Company's and Group's financial position, as well as the Company's and the Group's capability to comply with its undertakings in the long run. The Company's and Group's financial position does not indicate anything other than that the Company and the Group will be able to continue their operations and are expected to be able to comply with all of their obligations in the short and long term and to be able to make necessary investments. The Board assessment is that the amount of the Company's equity, even after the proposed dividends, is in a reasonable proportion to the extent of the operations conducted by the Company and the Group, as well as the risks associated with the course of the business' operations.

In light of, and taking the above into account, it is the Board assessment that the proposed dividends are justified according to Chapter 17, Section 3, second and third paragraph, of the Swedish Companies Act regarding the requirements on the Company's equity, the company's and Group's need for consolidation, liquidity, and position in general as determined by the nature of business, scope, and risk.

Signatures

The undersigned provide their assurance that the Consolidated Financial Statements have been prepared in accordance with the International Accounting Standards (IFRS), as adopted by the EU, as well as the Swedish Financial Reporting Board's recommendation RFR 1, and that the Annual Report has been prepared in accordance with the Annual Accounts Act and the recommendation RFR2 of the Swedish Financial Reporting Board. The Consolidated and Annual Financial Statements have been prepared in accordance with good accounting practices, and provide a fair view of the Group's and the Parent Company's financial position and profit, and that the Administration Report provides a fair overview of the development of the operations, position, and results of the Group and the Company, as well as describing significant risks and uncertainty factors facing the companies within the Group.

Malmö, 28 February 2022

Patrik Hall, CEO

Casper von Koskull, Chairman of the Board

Ivar Tollefsen, Board Member

Stefan Attefall, Board Member

Vibeke Krag, Board Member

John Giverholt, Board Member

Eldbjørg Sture, Board Member

Frans Heijbel, Board Member

Birgitta Stenmark, Board Member

Axel Brändström, Board Member

Christer Franzén, Board Member

Bente A. Landsnes, Board Member

Our Audit Report was submitted on 28 February 2022 Ernst & Young AB

Peter von Knorring, Authorised Public Accountant

Auditor's Report

To the general meeting of the shareholders of Heimstaden Bostad AB (publ), corporate identity number 556864-0873

Report on the annual accounts and consolidated accounts

Opinions

We have audited the annual accounts and consolidated accounts of Heimstaden Bostad AB (publ) except for the corporate governance statement on pages 30-38 and 41 and the statutory sustainability report on pages 107-143 for the year 2021. The annual accounts and consolidated accounts of the company are included on pages 1-2, 6, 22-26, 39-40, 43-102 in this document.

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31st of December 2021 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31st of December 2021 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act.

Our opinions do not cover the corporate governance statement on pages 30-38 and 41 and the statutory sustainability report on pages 107-143. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the consolidated comprehensive income statement and the consolidated balance sheet for the group.

Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit committee in accordance with the Audit Regulation (537/2014) Article 11.

Basis for Opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Key Audit Matters

Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Property Valuations

Description

The fair value of the Group's investment properties reported in the Statement of Financial Position at 31 December 2021 amount to SEK 300 584 million. The valuations are made through a combination of local price analyses and market simulations of future cash flows. The properties were valued externally at year-end. The properties' direct return requirements are assessed on the basis of each property's unique risk and transactions made in the market for objects of a similar nature.

In view of the many assumptions and assessments made in connection with the valuation of investment properties, we believe that this area is to be considered of particular importance in our audit. A description of the valuation of the property holdings is shown in the Annual Report under Note 3.1.

How our audit addressed this key audit matter

In our audit of the fair value of the Group´s investment properties we have evaluated and examined the external property valuation process by, among other things, evaluating the valuation method. With the support of our internal property valuation specialists, we have examined a sample of the external property valuations and assessed the reasonableness of assumptions made, such as direct return requirements, vacancy rates, rental income and operating costs. We have made comparisons with available market data. For a selection of investment properties, we have examined inputs on revenue and operating expenses and calculations in the external valuations at the property level. We have evaluated the external valuers' competence and objectivity.

We have reviewed supplementary disclosures made in the Annual Report.

Goodwill

Description

At 31 December 2021 the Group's consolidated statements of financial position includes goodwill amounting to SEK 16 489 million.

Break-down of goodwill is found in note 8.2 in the Annual Report.

The Group has assessed goodwill for impairment at 31 December 2021. As disclosed within Note 3.2 of the Annual Report, the assessment of the impairment of the Group's goodwill and other intangible assets incorporated significant judgments and estimates, specifically concerning factors such as forecast cashflows, discounts rates and terminal growth rates.

These estimates and assumptions incorporate future performance, market and economic conditions. Minor changes in certain assumptions can lead to significant changes in the recoverable amount of these assets.

Accordingly, we considered this to be a key audit matter due to the judgements required in the impairment testing of goodwill.

How our audit addressed this key audit matter

Our audit procedures included the following:

- Assessed the cash flow forecasts, assumptions and estimates used by the Group, by considering the reliability of the Group's historical cash flow forecasts, our knowledge of the business and corroborating data with external information and other internal data sources where possible;

- Involved our valuation specialists to assess whether the methodology applied was in accordance with International Financial Reporting Standards and to evaluate the key assumptions applied in the impairment models. These included the discount rates, growth rates and terminal value assumptions;

- Tested the mathematical accuracy of the impairment testing models including the consistency of relevant data with latest approved forecasts;

- Performed sensitivity analysis on key assumptions including discount rates, terminal growth rates and forecast cashflows; and

- Assessed the adequacy of the disclosure in the financial report.

Business Combinations

Description

The Group acquired properties in Sweden, Germany and Denmark from Akelius Residential Property AB for a total purchase consideration of SEK 79 737 million as disclosed in Note 8.2 of the Annual Report.

Accounting for this transaction involves a series of complex judgements requiring the Group to:

- determine if the transaction meet the criteria to be accounted for as a business combination, as described on page 50.

- determine the fair value of the acquired assets and liabilities; and

- allocate the purchase consideration to goodwill and separately identifiable intangible assets.

This was considered a key audit matter due to the size of the acquisition and the judgment involved in accounting for this transaction.

How our audit addressed this key audit matter

Our audit procedures included among others the following:

- We read the underlying contract.

- We assessed whether the transaction meet the criteria to be accounted for as a business combination.

- We assessed the Group's accounting for the transaction including:

- Assessed the determination of fair values of identifiable assets and liabilities acquired;

- Assessed the identification of intangible assets acquired as part of the transaction as performed by management ;

- Assessed the allocation of the purchase price to all assets and liabilities including the calculation of the resulting goodwill.

We have considered the financial report disclosures in relation to the business combination on page 50 and in Note 8.2.

Other Information than the annual accounts and consolidated accounts This document also contains other information than the annual accounts and consolidated accounts and is found on pages 3-5, 7-21, 27-38, 41-42 samt 103-143 . The Board of Directors and the Managing Director are responsible for this other information.

Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.

In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to the Board of Director's responsibilities and tasks in general, among other things oversee the company's financial reporting process.

Auditor's responsibility

Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden 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 annual accounts and consolidated accounts.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the annual accounts and consolidated accounts, 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 opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of the company's internal control relevant to our audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors and the Managing Director.

- Conclude on the appropriateness of the Board of Directors' and the Managing Director's use of the going concern basis of accounting in preparing the annual accounts and consolidated accounts. We also draw a conclusion, based on the audit evidence obtained, as to whether any material uncertainty exists related to events or conditions that may cast significant doubt on the company's and 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 auditor's report to the related disclosures in the annual accounts and consolidated accounts or, if such disclosures are inadequate, to modify our opinion about the annual accounts and consolidated accounts.

Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause a company and a group to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the annual accounts and consolidated accounts, including the disclosures, and whether the annual accounts and consolidated accounts represent the underlying transactions and events in a manner that achieves fair presentation.

- Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated accounts. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinions.

We must inform the Board of Directors of, among other matters, the planned scope and timing of the audit. We must also inform of significant audit findings during our audit, including any significant deficiencies in internal control that we identified.

We must also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or related safeguards applied.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the annual accounts and consolidated accounts, including the most important assessed risks for material misstatement, and are therefore the key audit matters. We describe these matters in the auditor's report unless law or regulation precludes disclosure about the matter.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Heimstaden Bostad AB (publ) for the year 2021 and the proposed appropriations of the company's profit or loss.

We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfill the company's accounting in accordance with law and handle the management of assets in a reassuring manner.

Auditor's responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:

- has undertaken any action or been guilty of any omission which can give rise to liability to the company, or

- in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.

As part of an audit in accordance with generally accepted auditing standards in Sweden, we exercise professional judgment and maintain professional skepticism throughout the audit. The examination of the administration and the proposed appropriations of the company's profit or loss is based primarily on the audit of the accounts. Additional audit procedures performed are based on our professional judgment with starting point in risk and materiality. This means that we focus the examination on such actions, areas and relationships that are material for the operations and where deviations and violations would have particular importance for the company's situation. We examine and test decisions undertaken, support for decisions, actions taken and other circumstances that are relevant to our opinion concerning discharge from liability. As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss we examined the Board of Directors' reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act..

The auditor's examination of the corporate governance statement The Board of Directors is responsible for that the corporate governance statement on pages 30-38 and 41 has been prepared in accordance with the Annual Accounts Act.

Our examination of the corporate governance statement is conducted in accordance with FAR´s standard RevR 16 The auditor´s examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.

A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act.

The auditor´s opinion regarding the statutory sustainability report The Board of Directors is responsible for the statutory sustainability report on pages 107-143, and that it is prepared in accordance with the Annual Accounts Act.

Our examination has been conducted in accordance with FAR's auditing standard RevR 12 The auditor´s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.

A statutory sustainability report has been prepared.

Ernst & Young AB, P.O Box 7850, 103 99 Stockholm, was appointed auditor of Heimstaden Bostad AB (publ) by the general meeting of the shareholders on the 18th of March 2021 has been the company's auditor since the 16th of April 2018.

Norrköping the 28th of February 2022

Ernst & Young AB

Peter von Knorring, Authorized Public Accountant

Alternative Performance Measures

For more information, definitions, and methodology please refer to www.heimstadenbostad.com

Net Loan-to-Value (LTV)

SEK million	2021	2020
Interest-bearing secured liabilities	65,072	40,463
Interest-bearing unsecured liabilities	93,307	30,317
Cash and cash equivalents	19,508	7,636
Net interest-bearing liabilities	138,872	63,143
Fair value of investment properties	300,584	144,404
Net LTV, %	46.2	43.7

Net Debt / Total Assets

SEK million	2021	2020
Net interest-bearing liabilities	138,872	63,143
Total assets	349,066	156,926
Net Debt / Total Assets, %	39.8	40.2

Interest Coverage Ratio (ICR)

SEK million	2021	2020
Profit before financial items	2,834	3,589
Transaction costs from business combination	2,232	-
Financial income	152	81
Profit before financial items plus financial income	5,219	3,670
Financial costs - interest-bearing liabilities	1,288	1,269
ICR	4.1	2.9

Net debt / (Net debt + Equity) (S&P method)

SEK million	2021	2020
Equity	160,338	77,741
50% hybrid	16,833	6,818
Equity adjusted	143,505	70,923
Total interest-bearing liabilities	158,380	70,780
Right-of-use-liabilities	734	531
Less: Cash and cash equivalents	-19,508	-7,636
50% of hybrid bonds as debt (S&P adjusted)	16,833	6,818
Net interest-bearing liabilities, adjusted (Net debt)	156,439	70,492
Net debt + Equity	299,944	141,415
Net debt / (Net debt + Equity), %	52.2	49.8

ICR (S&P method)

SEK million	2021	2020
Operating profit before inventory properties and fair value adjustments	2,834	3,589
Depreciation and amortisation	2	11
SOS Partnership	49	-
Transaction costs from business combination	2,232	-
Share of net profits of associates and joint ventures	-329	-32
EBITDA, adjusted	4,789	3,567
Interest expenses	1,288	1,269
50% of hybrid bonds dividend (S&P adjusted)	389	157
Interest expense, adjusted	1,677	1,425
ICR incl. hybrid bonds as 50% debt	2.9	2.5

Regulated income

SEK million	2021	2020
Regulated residential income	4,271	3,202
Residential income	8,120	6,053
Regulated income, %	52.6	52.9

Residential

SEK million	2021	2020
Fair value residential properties	270,589	131,053
Fair value investment properties	292,673	140,917
Residential, %	92.5	93.0

Like-for-like rental income growth

SEK million	2021	2020
Rental income current year	5,553	3,865
Rental income last year	5,417	3,732
Like-for-like rental income growth, %	2.5	3.6

¹ 2021: only properties owned as of 2019-12-31 are included.

² 2020: only properties owned as of 2018-12-31 are included.

Net operating income margin

SEK million	2021	2020
Rental income	8,608	6,332
Net operating income	5,386	3,893
Net operating income, %	62.6	61.5

Economic occupancy, residential

SEK million	2021	2020
Theoretical rental income on residential units	8,425	6,322
Economic vacancy	-305	-269
Rental income on residential units	8,120	6,053
Economic occupancy, %	96.4	95.8

Real economic occupancy, residential

SEK million	2021	2020
Theoretical rental income on residential units	8,425	6,322
Adjusted for non-market vacancy	-175	-161
Adjusted theoretical rental income	8,250	6,161
Real economic occupancy, %	97.9	97.5

Equity ratio

SEK million	2021	2020
Equity	160,338	77,741
Assets	349,066	156,926
Equity ratio, %	45.9	49.5

Solvency

SEK million	2021	2020
Equity	160,338	77,741
Liabilities	188,728	79,185
Solvency ratio, %	45.9	49.5

Net Asset Value (NAV)

SEK million	2021	2020
Equity	160,338	77,741
Deferred tax liability not attributable to goodwill	8,934	4,212
NAV	169,271	81,953

EBITDA

SEK million	2021	2020
Profit before inventory properties and fair value adjustments	2,834	3,589
Transaction costs from business combination	2,232	0
Amortisation and depreciation	2	11
EBITDA	5,068	3,599

Debt/EBITDA

SEK million, rolling 12 months	2021	2020
Interest-bearing liabilities	106,976	69,954
EBITDA adj	5,068	3,599
Debt/EBITDA just	21.1	19.4

NAV per ordinary share

SEK million, rolling 12 months	2021	2020
Equity	160,338	77,741
Preference capital A	444	287
Preference capital B	73,506	42,208
Hybrid bonds & minority	34,510	14,008
Deferred tax not attributable to goodwill	8,934	4,212
Equity excluding preference capital	60,811	25,450
Number of ordinary shares	9,725,321	6,578,058
NAV per ordinary share	6,253	3,869

Secured loan-to-value

SEK million	2021	2020
Interest-bearing secured liabilities	65,072	40,463
Total assets	349,066	156,926
Net Loan-to-Value, %	18.6	25.8

Quarterly Financial Information

Consolidated Key figures

SEK million	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020
Financials
Rental income	2,391	2,150	2,053	2,014	1,679
Growth year-on-year, %	42.4	32.3	28.4	40.9	35.0
Net operating income	1,397	1,428	1,328	1,232	958
Net operating income margin, %	58.4	66.4	64.7	61.2	57.1
Profit for the period	5,861	4,757	4,642	3,691	2,648
Capital expenditures	1,594	1,373	1,407	981	1,062
Portfolio Metrics
Fair value of investment properties	300,584	198,543	186,068	179,558	144,404
Homes	148,295	118,614	116,083	114,041	103,345
Real economic occupancy, residential	98.3	97.6	97.6	97.6	97.3
Like-for-like rental income growth, year-on-year	3.3	3.0	2.1	1.6	2.2
Credit metrics
Net Loan-to-Value (LTV)	46.2	42.9	39.6	41.1	43.9
Net debt / (Net debt + Equity), (S&P method)	52.2	49.8	48.1	48.9	49.8
Net debt / Total assets	39.8	37.7	36.4	37.3	40.2
Interest Coverage Ratio (ICR)	4.1	3.9	3.5	3.2	2.9
Interest Coverage Ratio, S&P method	2.9	3.0	2.8	2.7	2.5

Earnings capacity

Earnings capacity represents annualised earnings calculated on the basis of the contracted rental income, current property expenses and administrative expenses of the property portfolio as of 31 December 2021. Announced property acquisitions that closed after the balance sheet date are not included in the calculation. Earnings capacity does not include any adjustment for development trends in rent levels, vacancy rates, property expenses or interest rates, nor does the earnings capacity provide any adjustment for expected changes in the fair value of properties, foreign exchange rates, acquisitions or disposals. Earnings capacity should not be considered a forecast for the current year or for the next 12-month period.

Key figures per market

SEK million	Denmark	Sweden	Netherlands	Norway	Germany
Q4
Like-for-like rental income growth	4.9	2.2	3.0	3.7	18.8 ¹
Real Economic occupancy	99.2	99.4	99.6	96.6	98.1
Economic occupancy	99.2	98.2	97.3	94.7	96.3
Full year 2021
Like-for-like rental income growth	2.6	2.5	3.2	1.3	3. 2
Real Economic occupancy	98.2	99.2	99.6	94.5	98.2
Economic occupancy	96.9	98.0	97.2	93.1	96.8
Expenses for repair and maintenance ²	116	301	119	99	61
Capitalised repair and maintenance	469	529	386	145	142
Tenant improvements	94	352	258	150	5
Investment properties under construction	354	1,647	0	20	42

SEK million	Czech Republic	Finland	United Kingdom	Group in total
Q4
Like-for-like rental income growth	N/A	N/A	N/A	3.3
Real Economic occupancy	95.5	98.2	N/A	98.3
Economic occupancy	93.3	98.1	N/A	97.1
Full year 2021
Like-for-like rental income growth	N/A	N/A	N/A	2.5
Real Economic occupancy	95.3	97.9	N/A	97.9
Economic occupancy	92.6	95.9	N/A	96.4
Expenses for repair and maintenance ²	129	1	0	828
Capitalised repair and maintenance	142	10	-	1,823
Tenant improvements	154	-	-	1,013
Investment properties under construction	207	0	251	2,520

¹ The like-for-like rental income growth in Germany was positively impacted by removal of the temporary rent freeze in Berlin in 2021. The comparable portfolio comprised only 2% of total rental income.

² Excluding group adjustments, see Note 2.1

Earnings capacity per Q4 2021

SEK million

Rental income	11,876
Service income	1,041
Property expenses	-5,079
Net operating income	7,838
Corporate administrative expenses	-751
Profit before financial items	7,086
Financial costs - interest-bearing liabilities	-1,688
Profit	5,399
Net operating income margin, %	66.0
Interest cover ratio	4.2

Consolidated Comprehensive Income Statement

SEK million	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020
Rental income	2,391	2,150	2,053	2,014	1,679
Service income	229	104	120	185	155
Property expenses	-1,224	-826	-844	-967	-875
Net operating income	1,397	1,428	1,328	1,232	958
Corporate administrative expenses	-190	-125	-118	-113	-85
Other operating income	1	1	2	1	21
Other operating expenses	-2,268	-40	-11	-21	-13
Share of net profits of associates and joint ventures	330	1	0	-3	53
Profit before inventory properties and fair value adjustments	-729	1,265	1,202	1,096	934
Fair value adjustment of investment properties	7,034	5,330	4,609	4,389	2,015
Gains/losses from sale of inventory properties	-23	-19	-8	48	64
Operating profit	6,281	6,576	5,803	5,534	3,012
Interest income	107	17	10	18	23
Interest expenses on interest-bearing liabilities	-401	-292	-289	-306	-275
Net currency translation gains/losses	515	-75	225	-590	184
Fair value adjustment of derivative financial instruments	518	37	142	123	157
Other financial items	503	-210	-161	-64	-39
Profit before tax	7,522	6,054	5,732	4,716	3,062
Income tax expense	-47	-143	-154	-148	34
Deferred tax expense	-1,614	-1,153	-936	-877	-447
Profit for the period	5,861	4,757	4,642	3,691	2,648
Other comprehensive income	1,652	488	-1,024	2,511	-1,814
Total comprehensive income	7,513	5,245	3,618	6,202	834
Profit for the period attributable to:
The Parent Company's shareholders	5,860	4,756	4,641	3,690	2,647
Non-controlling interests	1	1	1	1	1
Comprehensive income for the period attributable to:
The Parent Company's shareholders	7,512	5,245	3,617	6,201	833
Non-controlling interests	1	1	1	2	1
Average number of shares outstanding	8,647,842	7,644,815	7,330,485	7,012,663	6,383,342
Earnings per ordinary share (basic and diluted)	688	547	370	735	39

Consolidated Balance Sheet

SEK million	31 December 2021	30 September 2021	30 June 2021	31 March 2021	31 December 2020
ASSETS
Investment properties	300,584	198,543	186,068	178,897	144,404
Intangible assets	16,497	7	6	6	7
Machinery and equipment	76	61	102	727	50
Other non-current financial assets	3,610	3,025	2,798	1,238	1,243
Total non-current assets	320,767	201,636	188,974	180,868	145,703
Inventory properties	846	786	1,054	1,344	1,292
Rent and trade receivables	179	164	98	98	61
Other current financial assets	7,233	8,354	2,853	586	2,045
Prepayments	533	395	195	258	188
Cash and cash equivalents	19,508	14,276	9,244	13,702	7,636
Total current assets	28,299	23,975	13,444	15,989	11,223
TOTAL ASSETS	349,066	225,611	202,417	196,857	156,926

SEK million	31 December 2021	30 September 2021	30 June 2021	31 March 2021	31 December 2020
EQUITY AND LIABILITIES
Equity	160,338	114,325	109,084	99,597	77,741
Interest-bearing liabilities	134,895	90,459	78,754	80,364	64,066
Lease liabilities	729	649	637	594	527
Derivative financial instruments	0	204	268	343	433
Deferred tax liabilities	21,904	7,238	6,078	5,163	4,212
Other non-current financial liabilities	865	883	842	834	903
Total non-current liabilities	158,392	99,433	86,580	87,297	70,141
Interest-bearing liabilities	23,485	8,934	4,195	6,819	6,713
Lease liabilities	5	5	9	9	4
Trade payables	566	430	384	499	414
Other current payables	4,411	1,372	1,484	1,813	1,045
Derivative financial instruments	6	6	9	10	14
Accrued expenses	1,863	1,106	671	812	853
Total current liabilities	30,336	11,853	6,753	9,963	9,044
TOTAL EQUITY AND LIABILITIES	349,066	225,611	202,417	196,857	156,926

Consolidated Cash Flow Statement

SEK million	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020
Operating activities
Profit before income tax	7,522	6,054	5,731	4,716	3,061
Adjustments to reconcile profit before tax to net cash flows:
Value adjustment on investment properties	-6,867	-5,311	-4,605	-4,434	-2,078
Net valuation gain or loss derivative financial instruments	-517	-102	-142	-123	-157
Finance expenses, net	381	390	533	352	293
Other adjustments	-1,472	217	-293	730	-211
Working capital changes
Increase/decrease(+) in rent receivables	-159	79	-182	-218	-171
Increase/decrease(-) in trade and other payables	3,862	-418	-26	345	-170
Cash generated from operations	2,750	909	1,016	1,368	567
Interest paid	-507	-389	-546	-442	-330
Interest received	34	7	0	0	45
Paid income tax	-226	-134	-170	-130	-75
Net cash flows from operating activities	2,051	393	300	796	-360

SEK million	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020
Investing activities
Acquisitions of businesses, net of cash	-79,449	-	-	-	-
Purchase of investment properties	-2,210	-2,854	-781	-13,653	-3,775
Capital expenditure on completed investment properties	-1,610	-1,471	-992	-1,355	-1,204
Disposals of investment properties	417	423	308	0	-
Deposits paid for signed acquisitions	5,205	-5,402	-1,804	1,495	-468
Investments in associates and joint ventures	-132	-85	-69	24	-56
Settlement of derivative financial instruments	4	0	-65	0	113
Other cash flows from investing activities	-3,216	-154	-1,788	-123	150
Net cash flows from investing activities	-80,991	-9,544	-5,191	-13,612	-5,240
Financing activities
Proceeds from interest-bearing liabilities	49,649	14,308	5,019	4,734	1,982
Repayment of interest-bearing liabilities	-5,230	-184	-10,165	-1,834	-1,866
Dividends paid	-	0	-276	-4,296	-
Proceeds from share issuances	32,500	0	0	12,465	-
Proceeds from issuance of hybrid bonds	6,072	0	6,090	8,073	5,121
Repayments on hybrid bonds	-8	0	-137	-261	-77
Other cash flows from financing activities	-82	-3	-84	-50	77
Redemption of interest rate derivatives	-	-	-	-	-44
Net cash flows from financing activities	82,902	14,120	448	18,831	5,193
Cash and cash equivalents at the beginning of the period	14,276	9,245	13,702	7,636	7,524
Net change in cash and cash equivalents	3,961	4,970	-4,443	6,015	160
Net currency exchange effect in cash and cash equivalents	1,271	61	-14	51	-47
Cash and cash equivalents at the end of the period	19,508	14,276	9,245	13,702	7,637