Independent auditor’s report

To: The Fund Manager of the Amvest Residential Core Fund

Report on the audit of the accompanying financial statements

Our opinion

We have audited the financial statements 2023 of Amvest Residential Core Fund, based in Amsterdam. The financial statements comprise the consolidated financial statements and the company financial statements.

In our opinion:

• the accompanying consolidated financial statements give a true and fair view of the financial position of Amvest Residential Core Fund (“the Fund”) as at 31 December 2023 and of its result and its cash flows for the year 2023 in accordance with IFRS Accounting Standards as endorsed by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code;

• the accompanying company financial statements give a true and fair view of the financial position of Amvest Residential Core Fund as at 31 December 2023 and of its result for the year 2023 in accordance with Part 9 of Book 2 of the Dutch Civil Code.

The consolidated financial statements comprise:

1. the consolidated statement of financial position as at 31 December 2023;

2. the following statements for the year 2023: the consolidated statement of profit and loss and other comprehensive income, the consolidated statement changes in equity and the consolidated cash flow statement; and

3. the notes comprising a summary of the accounting policies and other explanatory information.

The company financial statements comprise:

1. the company statement of financial position as at 31 December 2023;

2. the summarized company statement of profit and loss account for the year 2023; and

3. the notes comprising a summary of the accounting policies and other explanatory information

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the 'Our responsibilities for the audit of the financial statements' section of our report.

We are independent of Amvest Residential Core Fund in accordance with the ‘Wet toezicht accountantsorganisaties’ (Wta, Audit firms supervision act), the 'Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten' (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the 'Verordening gedrags- en beroepsregels accountants' (VGBA, Dutch Code of Ethics).

We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The information in respect of fraud and non-compliance with laws and regulations and going concern was addressed in this context, and we do not provide a separate opinion or conclusion on these matters.

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

Information in support of our opinion

Audit response to the risk of fraud and non-compliance with laws and regulations

In chapters ‘Risk management’ and ‘Compliance’ of the report of the Fund Manager, the Fund Manager describes its procedures in respect of the risk of fraud and non-compliance with laws and regulations.

As part of our audit, we have gained insights into the Fund and its business environment and assessed the design and implementation of the Fund’s risk management in relation to fraud and non-compliance. Our procedures included, among others, assessing the code of conduct, incident reporting and procedures to investigate indications of possible fraud and non-compliance applicable to the Fund. Furthermore, we performed inquiries with management and other relevant functions, such as the Risk and Compliance Officer and included correspondence with relevant supervisory authorities and regulators in our evaluation. We have also incorporated elements of unpredictability in our audit, by testing a selection of recharges from related parties to the Fund that have lower amounts and would otherwise not be tested, implemented new high-risk criteria in our journal entry testing procedures, changed our audit approach of rental income, and involved forensic specialists in our audit procedures.

As a result from our risk assessment we identified the following laws and regulations as those most likely to have a material effect on the financial statements in case of non-compliance:

• Financial supervision act;

• Anti-money laundering and anti-terrorist financing law;

• Trade sanctions law; and

• Data protection law.

Further, we assessed the presumed fraud risk on revenue recognition, relating to rental income, as not significant, because:

• There is limited opportunity to commit fraud as rental income for existing rental agreements is fixed (except annual indexation), no individual material transactions and no judgement involved to determine the rental income for the period.

Based on the above and on the auditing standards, we identified the following fraud risk that is relevant to our audit, and responded as follows:

Management override of controls (a presumed risk)

Risk: 

Management is in a unique position to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively, such as estimates related to the fair value of investment property.

Responses:

• We evaluated the design and the implementation of internal controls that mitigate fraud and non-compliance risks, such as processes related to journal entries and estimates.

• We performed data analytics procedures to identify high-risk journal entries (e.g. description) related to fraudulent reporting and evaluated key estimates and judgments for bias by the Fund’s management. Our procedures included retrospective reviews of prior years’ estimate regarding the valuation of investment property, in which we compared realised sales results to the appraised values in prior year. Where we identified instances of high-risk journal entries or other risks through our data analytics procedures, we performed additional audit procedures to address each risk, including testing transactions based on source information.

We communicated our risk assessment, audit responses and results to the Fund Manager.

Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-compliance that are considered material for our audit.

Audit response to going concern

The Fund Manager has performed a going concern assessment and has not identified any going concern risks. To assess the Fund Manager’s assessment, we have performed, inter alia, the following procedures:

• We considered whether the Fund Manager’s assessment of the going concern risks includes all relevant information of which we are aware as a result of our audit;

• We inspected the terms of conditions in the financing agreement that could lead to going concern risks, including the terms of the agreement and any covenants;

• We analysed the Fund’s financial position as at year-end and compared it to the previous financial year in terms of indicators that could identify going concern risks.

The outcome of our risk assessment procedures did not give reason to perform additional audit procedures on management’s going concern assessment.

Report on the other information included in the annual report

In addition to the financial statements and our auditor's report thereon, the annual report contains other information that consists of:

• About the Amvest Residential Core Fund

• Key highlights 2023

• Key figures 2023

• Report of the Fund Manager

• Residents’ stories

• Other information pursuant to Part 9 of Book 2 of the Dutch Civil Code; and

• Annexes

Based on the following procedures performed, we conclude that the other information:

• is consistent with the financial statements and does not contain material misstatements;

• contains all the information regarding the report of the Fund Manager and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements.

The Fund Manager is responsible for the preparation of the other information, including the report of the Fund Manager, in accordance with Part 9 of Book 2 of the Dutch Civil Code, and other information as required by Part 9 of Book 2 of the Dutch Civil Code.

Description of the responsibilities for the financial statements

Responsibilities of the Fund Manager for the financial statements

The Fund Manager is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Fund Manager is responsible for such internal control as the Fund Manager determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, the Fund Manager is responsible for assessing the Fund’s ability to continue as a going concern. Based on the financial reporting framework mentioned, the Fund Manager should prepare the financial statements using the going concern basis of accounting unless the Fund Manager either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so. The Fund Manager should disclose events and circumstances that may cast significant doubt on the Fund’s ability to continue as a going concern in the financial statements.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected all material errors and fraud during our audit.

Misstatements can arise from fraud or errors 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 the financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:

• identifying and assessing the risks of material misstatement of the financial statements, whether due to errors or fraud, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from errors, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control;

• evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Fund Manager;

• concluding on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund'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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Fund ceasing to continue as a going concern;

• evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and

• evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We are solely responsible for the opinion and therefore responsible to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the financial statements. In this respect we are also responsible for directing, supervising and performing the group audit.

We communicate with the Fund Manager and Advisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit.

Rotterdam, 19 April 2024

KPMG Accountants N.V.

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