TIDMDUPD
RNS Number : 6811N
Dragon-Ukrainian Prop. & Dev. PLC
25 September 2019
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No. 596/2014.
25 September 2019
Dragon-Ukrainian Properties & Development plc
("DUPD" or the "Company")
Results for the period ended 30 June 2019
Dragon-Ukrainian Properties & Development plc, a leading
investor in the real estate sector in Ukraine, is pleased to
announce its results for the six month period ended 30 June
2019.
Highlights
Operational Highlights
-- The Company continues to follow its investing policy as approved by the EGM in February 2014.
-- The Ukrainian economy continues to recover. Real GDP advanced
by 4.6% y-o-y in 2Q19, speeding up from 2.5% in 1Q19, 3.3% in 2018
and 2.5% in 2017. Ukraine's currency, the hryvnia, appreciated by
1.4% y-o-y versus the U.S. dollar in 2018, to UAH 27.7:USD, and
rose another 12% to UAH 24.8:USD in mid-September 2019, becoming
the best YTD performer among emerging markets.
-- The Company's Green Hills project, a suburban gated
community, continues to capitalize on its high quality and leading
position in the market recording nine new sales of land plots in
1HY 2019.
-- Two new sales were recorded in the suburban club community
Riviera Villas and further improvements were made to the
infrastructure at this property.
-- Positive outlook for the operational results of Arricano Real
Estate for 1HY 2019 based on trends in the commercial real estate
market.
Financial Highlights
-- Total NAV of USD 36.1 million as of 30 June 2019 (marginally
down from USD 36.2 million as of 31 December 2018).
-- Cash balance of USD 5.5 million (up from USD 4.8 million as
of 31 December 2018). The Company has no debt.
-- DUPD recorded a USD 0.02 million loss from operating
activities for the period ending 30 June 2019 (2018: USD 0.7
million profit)
For further information, please contact:
Dragon - Ukrainian Properties & Development plc (www.dragon-upd.com)
Tomas Fiala +380 44 490 7120
DCM Limited (Investment Manager)
+ 380 44 490
Eugene Baranov / Volodymyr Tymochko 7120
Panmure Gordon (UK) Limited
+44 (0)20 7886
Atholl Tweedie 2500
Statement of financial position
Note 30 June 2019 31 December 2018
(in thousands of USD)
Assets
Non-current assets
Financial assets at fair value through profit or loss 4 31,137 32,016
Total non-current assets 31,137 32,016
Current assets
Other accounts receivable 5 66 70
Cash and cash equivalents 6 5,451 4,728
Total current assets 5,517 4,798
Total assets 36,654 36,814
Equity and Liabilities
Equity
Share capital 7 2,187 2,187
Share premium 261,408 261,408
Accumulated losses (227,451) (227,434)
Total equity 36,144 36,161
Current liabilities
Other accounts payable 8 510 653
Total current liabilities 510 653
Total liabilities 510 653
Total equity and liabilities 36,654 36,814
These financial statements were approved by the board of
Directors (the Board) on 24 September 2019 and were signed on its
behalf by:
Non-executive Chairman Mark Iwashko
Statement of comprehensive income for the 6 months ended 30
June
Note 6 months 2019 6 months 2018
(in thousands of USD)
Net gain from financial assets at fair value through profit or loss 10 529 1,976
Management fee 9 (400) (992)
Administrative expenses 11 (192) (243)
Other income 4 10
Other expenses (9) (54)
Total operating gain (loss) (68) 697
Finance income 54 57
Finance costs (3) (5)
Gain/(loss) for the year (17) 749
Net gain/(loss) and total comprehensive income (loss) for the year (17) 749
Gain/(Loss) per share
Basic gain/(loss) per share (in USD) 13 0.00 0.01
Diluted gain/(loss) per share (in USD) 13 0.00 0.01
The Directors believe that all results are derived from
continuing activities.
Statement of cash flows for the 6 months ended 30 June
Note 6 months 2019 6 months 2018
(in thousands of USD)
Cash flows from operating activities
Gain/(loss) for the 6 months (17) 749
Adjustments for:
Net gain from financial assets at fair value through profit or loss 10 (529) (1,976)
Finance cost - 2
Finance income (54) (57)
Loans granted (497) (192)
Loans repaid 1,905 3,080
Operating cash flows before changes in working capital 808 1,606
Change in other accounts receivable 4 29
Change in other accounts payable (143) (32)
Cash flows from operating activities 669 1,603
Cash flows from financing activities
Distribution to Shareholders 7 (9,843)
Proceed from assignment of outstanding loan due to the Company 3,999
Interest received 54 57
Cash flows used in financing activities 54 (5,787)
Net change in cash and cash equivalents 723 (4,184)
Cash and cash equivalents at 1 January 4,728 9,202
Cash and cash equivalents at 30 June 5,451 5,018
Statement of changes in equity
Share capital Share premium Accumulated losses Total
(in thousands of USD)
Balances at 1 January 2018 2,187 271,251 (230,605) 42,833
Total comprehensive income for the
year
Net gain - - 3,171 3,171
Transactions with owners of the
Company
Distribution to Shareholders (Note
7) - (9,843) - (9,843)
Total transactions with owners of
the Company - (9,843) - (9,843)
Balances at 31 December 2018 2,187 261,408 (227,434) 36,161
Total comprehensive loss for the 6
months
Net loss - - (17) (17)
Balances at 30 June 2019 2,187 261,408 (227,451) 36,144
Notes to the financial statements
1. Background
(a) Organisation and operations
Dragon - Ukrainian Properties & Development PLC (the
'Company') was incorporated in the Isle of Man on 23 February 2007.
The Company's registered office is 2nd Floor, St Mary's Court, 20
Hill Street, Douglas, Isle of Man, IM1 1EU and its principal place
of business is Ukraine.
On 1 June 2007 the Company raised USD 208 million through an
initial public offering on the AIM Market (AIM) of the London Stock
Exchange. On 29 November 2007, the Company completed a secondary
placing on AIM and raised USD 100 million.
The main activities of the Company are investing in the
development of its existing real estate properties in Ukraine. The
Company provides financing to its investees either through equity
or debt financing. On 17 February 2014 an Extraordinary Meeting of
Shareholders approved a new Investing Policy as defined by the AIM
Rules for Companies. Under this revised policy the Board will seek
to realise the Company's Properties in an orderly manner, such
realisations to be effected at such times, on such terms and in
such manner as the Board (in its absolute discretion) may
determine.
(b) Business environment
The Company's operations are primarily located in Ukraine. The
political and economic situation in Ukraine has been subject to
significant turbulence in recent years and demonstrates
characteristics of an emerging market. Consequently, operations in
the country involve risks that do not typically exist in other
markets.
The Ukrainian economy continues to recover following a
cumulative contraction of 16% in 2014-2015, which was brought about
by a military conflict in the east, loss of control over territory
and export-oriented production assets in this area, and economic
imbalances amassed before the early-2014 change of government. Real
GDP advanced by 4.6% y-o-y in 2Q19, speeding up from 2.5% in 1Q19,
3.3% in 2018 and 2.5% in 2017. Ukraine's economic recovery remains
driven by domestic consumption and investment demand, while
recovery in real exports remains sluggish. Household consumption
accelerated 11% y-o-y in 1Q19, after 8.9% in 2018, supported by
strong growth in nominal salaries, growing remittances from
short-term labor migrants and gradually slowing inflation.
Investment in fixed capital grew by 12.3% y-o-y in 1H19, after
16.4% in 2018 and solid double-digit growth in previous years.
Initially driven by agriculture, investment growth became
broad-based. Investment activity remains supported by the gradually
improving business environment, strengthening financial position of
private and selected state-owned companies, and higher state
investments, including from local budgets.
The National Bank moved to inflation targeting in 2016, setting
the goal of trimming headline inflation to 5.0% (+/-1.0pp) by the
end of 2019 and keeping it near this level going forward. The NBU
uses its discount rate as the main monetary policy instrument,
allowing a degree of flexibility to the UAH:USD exchange rate. But
due to a weak monetary transmission mechanism and a high share of
food items in the inflation basket, NBU attempts to pull inflation
into the targeted band were only partially successful. Headline
inflation initially settled at NBU's interim target of 12% y-o-y in
2016 but accelerated to 13.7% in 2017, due to a combination of
supply-side shocks (poor fruit and vegetable harvest), expanding
domestic demand and rising production costs. Tight monetary policy,
no new supply-side shocks and slowing remittances trimmed headline
inflation to 9.8% y-o-y by end-2018 and 8.8% y-o-y in August
2019.
Ukraine's currency, the hryvnia, appreciated by 1.4% y-o-y
versus the U.S. dollar in 2018, to UAH 27.7:USD, and rose another
12% to UAH 24.8:USD in mid-September, becoming the best YTD
performer among emerging markets. The central bank's international
reserves rose to $20.8bn by end-2018 and to $22.0bn by end-August,
the highest level since July 2013. Hryvnia's strong performance
reflects a combination of favourable dynamics of global commodity
prices, strong agricultural harvest and increased inflows of
foreign capital into domestic government bonds following improved
market access via Clearstream. Inflows of foreign investment into
domestic government bonds totaled $3.1bn in 8M19.
Capitalizing on macroeconomic stability, the NBU has been
gradually unwinding the strict capital and exchange restrictions
imposed in 2014 and 2015. The pace of liberalization quickened in
February 2019, after the new law on currency took effect. Among its
latest actions, the NBU lifted restrictions on repatriating
dividends, abolished obligatory sales of F/X proceeds, removed
curbs on early repayment of external debt and extended settlements
of foreign trade transactions to 365 from 180 days.
Ukraine runs moderate current account deficit of 3.3% in 2018,
while fiscal deficit stays below 2.5% of GDP. Thanks to fiscal
prudency, public debt-to-GDP ratio declined to 61% in 2018, after
peaking at 81% in 2016. The banking sector was cleaned of
non-viable banks, and the country's largest private bank,
Privatbank, was nationalized in December 2016. As of end-1H19, 76
banks operated in Ukraine, more than halving from 180 at end-2013.
The banking sector reported record high net profit of UAH 21bn in
2018 following four years of losses.
The Ukrainian government progressed with structural reforms,
including those affecting the business environment. Ukraine's
ranking in the World Bank's Doing Business survey has improved by
41 spots over the past five years, to 71st (2019 ranking based on
2018 data). In particular, Ukraine leapt in the Paying Taxes
sub-index by 110 spots (vs. 2014 ranking) after almost halving the
rate of the unified social contribution to 22% in 2016,
implementing an electronic system for filing and paying labour
taxes and introducing an electronic system for refunding VAT to
exporters. Ukraine's Protecting Minority Investors score rose 56
spots over the period, as new regulations made it easier to monitor
and review related-party transactions. The government also
significantly reduced the number of permits and licensed
activities, abolished the obsolete system of mandatory
certification of products and eliminated stamps as a mandatory
attribute of the legal entity. Ukrainian authorities launched
reforms in many other areas, including public procurement,
decentralization, energy sector, healthcare and education.
Despite several years of macroeconomic stability, healthy
external and fiscal position, Ukraine needs a working IMF program
to anchor reforms and maintain access to budget financing amid
peaking external debt redemptions. Following the formation of the
new government in Sep. 2019, the IMF mission arrived in Kyiv to
discuss the new Extended Fund Facility (EFF) for Ukraine, which
would replace the current 14-month Stand-By Arrangement (SBA),
approved in Dec. 2018.
In September 2019, Fitch upgraded Ukraine's credit rating by one
notch, to B, and changed rating outlook to positive from stable.
The upgrade was caused by a brightened reform outlook following
Volodymyr Zelensky's victory in the presidential elections, his
party's triumph in the parliamentary elections, and the appointment
of a technocratic and reform-minded government. Ukraine is
currently rated B by Fitch (with a positive outlook), B- by S&P
and Caa1 by Moody's (both with a stable outlook).
Whilst the Directors believe they are taking appropriate
measures to support the sustainability of the Company's business in
the current circumstances, a continuation of the current unstable
business environment could negatively affect the Company's results
and financial position in a manner not currently determinable.
These financial statements reflect management's current assessment
of the impact of the Ukrainian business environment on the
operations and the financial position of the Company. The future
business environment may differ from management's assessment.
2. Basis of preparation
(a) Statement of compliance
These financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the EU.
(b) Basis of measurement
The financial statements are prepared under the historical cost
basis, except for the following material items:
Items Measurement basis
------------------------------------------------------------------------------------------------ -----------------
Financial assets at fair value through profit or loss (including equity investments and loans Fair value
receivable)
(c) Adoption of new and revised International Financial
Reporting standards and Interpretations as adopted by the European
Union (EU)
As from 1 January 2019, the Company adopted all changes to
International Financial Reporting Standards (IFRSs), which are
relevant to its operations. This adoption did not have a material
effect on the accounting policies of the Company.
The following new Standards, Amendments to Standards and
interpretations are not yet adopted by the EU:
-- IFRS 17 Insurance Contracts (affective for annual periods
beginning on or after 1 January 2021) ;
-- Amendments to References to the Conceptual Framework in IFRS
Standards (effective for annual periods beginning on or after 1
January 2020);
-- IFRS 3 (Amendments) "Business Combinations" (effective for
annual periods beginning on or after 1 January 2020);
-- Amendments to IAS 1 and IAS 8; Definition of Material
(effective for annual periods beginning on or after 1 January
2020).
The Board of Directors expects that the adoption of these
standards or interpretations in future periods will not have a
material effect on the financial statements of the Company.
Adoption of IFRS 9 "Financial Instruments"
The Company has initially applied IFRS 9 from 1 January
2018.
IFRS 9 sets out requirements for recognising and measuring
financial assets, financial liabilities and some contracts to buy
or sell non-financial items. This standard replaces IAS 39
"Financial Instruments: Recognition and Measurement".
Amendments to IAS 1 "Presentation of Financial
Statements"require impairment of financial assets to be presented
in a separate line item in the statement of profit or loss and
other comprehensive income. Impairment losses on financial assets
are presented under 'Other expenses', similar to the presentation
under IAS 39, and not presented separately in the statement of
profit or loss and other comprehensive income due to materiality
considerations.
Additionally, the Company has adopted consequential amendments
to IFRS 7 "Financial Instruments: Disclosures" that are applied to
disclosures about 2018 but have not been generally applied to
comparative information.
Adoption of this standard did not have significant impact on the
Company`s financial statements.
IFRS 9 contains three principal classification categories for
financial assets: measured at amortised cost, fair value through
other comprehensive income ('FVOCI') and fair value through profit
or loss ('FVTPL'). The classification of financial assets under
IFRS 9 is generally based on the business model in which a
financial asset is managed and its contractual cash flow
characteristics. The standard eliminates the existing IAS 39
categories of held-to-maturity, loans and receivables and
available-for-sale. Under IFRS 9, derivatives embedded in contracts
where the host is a financial asset in the scope of the standard
are never bifurcated. Instead, the whole hybrid instrument is
assessed for classification.
The following table below explains the original measurement
categories under IAS 39 and the new measurement categories under
IFRS 9 for each class of the Company's financial assets and
financial liabilities as at 1 January 2018:
(in thousands of USD) Original New classification Original carrying New carrying amount
classification under under IFRS 9 amount under IAS 39 under IFRS 9
IAS 39
Financial assets
Financial assets at
fair value through
profit or loss FVTPL FVTPL 30,258 30,258
Receivables from sale
of Obolon Residences
project Loans and receivables Amortised cost 3,999 3,999
Other accounts
receivable Loans and receivables Amortised cost 115 115
Cash and cash
equivalents Loans and receivables Amortised cost 9,202 9,202
Total financial assets 43,575 43,575
Financial liabilities
Other accounts Other financial Other financial
payable liabilities liabilities 712 712
Total financial liabilities 712 712
Impairment of financial assets
IFRS 9 replaces the 'incurred loss' model in IAS 39 with an
'expected credit loss' (ECL) model.
Impairment losses were evaluated as follows:
-- for bank deposits and cash and cash equivalents the expected
credit losses were calculated on the basis of external credit
ratings and statistical information on default and repayment for
similar financial instruments.
-- for receivables and other accounts receivable the Company
measured ECLs as a probability-weighted estimate of credit losses.
Credit losses were measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the
Company expected to receive). Impairment has been measured on a
12-month expected loss basis and reflected the short maturities of
the exposures, due to which no impairment allowance has been
recognized by the Company.
Under IFRS 9, credit losses are recognised earlier than under
IAS 39. For an explanation of how the Company applies the
impairment requirements of IFRS 9, see Note 3(h).
(d) Functional and presentation currency
These financial statements are presented in thousands of US
dollars (USD), which is the Company's functional currency. All
amounts have been rounded to the nearest thousand, unless otherwise
indicated.
(i) Determination of functional currency
Functional currency is the currency of the primary economic
environment in which the Company operates. If indicators of the
primary economic environment are mixed, then management uses its
judgement to determine the functional currency that most faithfully
represents the economic effect of the underlying transactions,
events and conditions. The majority of the Company's investments
and transactions are denominated in US dollars. The expenses
(including management and performance fees, administrative
expenses) are denominated and paid in US dollars. Accordingly,
management has determined that the functional currency of the
Company is US dollar. All information presented in US dollars is
rounded to the nearest thousand unless otherwise stated
therein.
(e) Use of judgments, estimates and assumptions
The preparation of financial statements in conformity with IFRS
as adopted by the EU requires the Directors to make judgments,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses and the disclosure of contingent assets and
liabilities. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
As stated in Note 1 (b) to these financial statements, the
political and business situation has deteriorated significantly.
This is a key factor in the estimation uncertainty and critical
judgements associated with applying the accounting policies in
these financial statements.
In particular, information about significant areas of estimation
uncertainty and critical judgments in applying accounting policies
that have the most significant effect on the amounts recognised in
the financial statements and could lead to significant adjustment
in the next financial year are included in the following notes:
-- Note 3 (a) - Determination of investment entity criteria;
-- Note 4 - Financial assets at fair value through profit or loss.
Measurement of fair values
A number of the Company's accounting policies and disclosures
require the measurement of fair values, for both financial and
non-financial assets and liabilities.
The Directors are responsible for overseeing all significant
fair value measurements, including Level 3 fair values. They review
and approve significant unobservable inputs and valuation
adjustments before they are included in the Company's financial
statements. To assist with the estimation of fair values the
Directors, when appropriate, engage with a registered independent
appraiser, having a recognised professional qualification and
recent experience in the location and categories of the assets
being valued.
When measuring the fair value of an asset or a liability, the
Company uses market observable data as far as possible. Fair values
are categorised into different levels in a fair value hierarchy
based on the inputs used in the valuation techniques as
follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
-- Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
-- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a
liability might be categorised in different levels of the fair
value hierarchy, then the fair value measurement is categorised in
its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire
measurement.
The Company recognises transfers between levels of the fair
value hierarchy at the end of the reporting period during which the
change has occurred.
Further information about the assumptions made in measuring fair
values is included in the following notes:
-- Note 4 - Financial assets at fair value through profit or loss.
3. Significant accounting policies
The Company has consistently applied the following accounting
policies to all periods presented in these financial
statements.
(a) Investment entity
The Company is an investment entity as defined by IFRS and
measures all of its investments at fair value through profit or
loss.
In determining whether the Company meets the definition of an
investment entity, management considered the following:
-- The Company raised funds on AIM (through the first and second
issue of shares) only for the purpose of making investments in the
development of new properties and the redevelopment of existing
properties in Ukraine.
-- The Company has a clear exit strategy from its real estate
projects (either through sale of the properties, or through sale of
shareholding rights in the entities, which own the properties).
This is stated in the Company's new investing policy that was voted
and approved by the general meeting of shareholders in February
2014. The full text of the current investing policy could be found
on the Company's website
http://www.dragon-upd.com/investor-information/important-information/business-strategy-and-investing-policy.
-- The Company measures and evaluates the performance of
substantially all of its investments on a fair value basis.
-- The Company's Directors (acting on behalf of the Company)
take only strategic decisions and approve overall direction of
investing activity in order to maximise the returns to
shareholders. At the same time, the Directors chose and appointed
DCM Limited as the Company's investment manager (see Note 9). DCM
Limited's employees perform recurring management operating
activities in accordance with the Fourth Management Agreement and
within the strategic decisions of the Directors. There is no
separate substantial business activity beyond earning returns from
capital appreciation and investment income. The Directors seek to
return any surplus funds and net proceeds from property realisation
to shareholders when appropriate, in accordance with its investing
policy.
Considering the above, the Company's management determined that
the Company meets the definition of investment entity in accordance
with IFRS 10 Consolidated Financial Statements and, accordingly,
the Company has not consolidated its subsidiaries. The Company
measures its investments in subsidiaries at fair value through
profit and loss (Note 3(b)). Such approach provides a fair and
transparent view on the Company to the Company's shareholders and
stakeholders.
The Company also elected to measure its investments in
associates and loans receivable from its investees at fair value
through profit or loss (Notes 3(c) and 3(d)).
All these assets are presented within financial assets at fair
value through profit or loss in the Company's statement of
financial position.
(b) Subsidiaries
Subsidiaries are investees controlled by the Company. The
Company controls an investee when it is exposed to, or has right
to, variable returns from its involvement with the company and has
the ability to affect those returns through its power over the
investee.
Investments in subsidiaries are measured and accounted for at
fair value with gains or losses recognised in profit or loss (see
Note 3(a)).
Unconsolidated subsidiaries and their grouping by investment in
respective projects are as follows:
Name Country of incorporation Project % of ownership
30 June 2019 31 December 2018
Glangate LTD Cyprus Kremenchuk 100% 100%
New Region LLC Ukraine Kremenchuk 100% 100%
Blueberg Trading Limited British Virgin Islands Green Hills 100% 100%
Grand Development LLC Ukraine Green Hills 100% 100%
J Komfort Neruhomist LLC Ukraine Green Hills 100% 100%
Korona Development LLC Ukraine Green Hills 100% 100%
Linkrose LTD Cyprus Green Hills 100% 100%
Landzone LTD Cyprus None 100% 100%
Landshere LTD Cyprus Land Bank 90% 90%
Riverscope LTD Cyprus Land Bank 90% 90%
Z Development LLC Ukraine Land Bank 100% 100%
Z Neruhomist LLC Ukraine Land Bank 100% 100%
Development Invest LLC Ukraine Land Bank 100% 100%
K Zatyshna Domivka LLC Ukraine Land Bank 100% 100%
Bi Dolyna Development LLC Ukraine Riviera Villas 100% 100%
EF Nova Oselya LLC Ukraine Riviera Villas 100% 100%
Mountcrest LTD Cyprus None 100% 100%
Riviera Villas LLC Ukraine Riviera Villas 100% 100%
Stenfield Finance Limited British Virgin Islands Riviera Villas 100% 100%
Linkdell LTD Cyprus Sadok Vyshneviy 100% 100%
(c) Associates
Associates are those companies in which the Company has
significant influence, but not control, over the financial and
operating policies. Significant influence is presumed to exist when
the Company holds between 20% and 50% of the voting power of
another company. In certain cases when the Company has less than
20% of the voting power of another company, this company is still
accounted for as an associate on the basis of significant
influence.
Investments in associates are measured and accounted for at fair
value with gains or losses recognised in profit or loss (see Note
3(a)).
(d) Loans receivable from investees
In addition to equity financing to its investees, as a part of
structuring its investments the Company also provides debt
financing to its investees. As described in Note 3(a), the Company
accounts receivable from its investees at fair value through profit
or loss, as such that are managed, and whose performance is
evaluated, on a fair value basis.
The loans are denominated in USD and EUR, unsecured, interest
bearing (up to 11.0%) with variable terms of repayment and
represent an alternative to the equity way of financing
investments. The Company at its capacity of the shareholder may
amend any terms of the loans including modification to convert
loans in full or in part into equity.
(e) Foreign currency
Transactions in foreign currencies are translated into US
dollars at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies
at the reporting date are translated to the functional currency at
the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are translated into US
dollar at the exchange rate at the date that the fair value was
determined.
Foreign currency differences arising on retranslation are
recognised in profit or loss, except for those arising on financial
instruments at fair value through profit or loss, which are
recognised as a component of net gain/(loss) from investments at
fair value through profit or loss or net gain/(loss) from loans
receivable.
(f) Financial instruments
(i) Recognition and initial measurement
Trade receivables are initially recognized when they are
originated.
All other financial assets and financial liabilities are
initially recognized when the Company becomes a party to the
contractual provisions of the instrument. A financial asset (unless
it is a trade receivable without a significant financing component)
or financial liability is initially measured at fair value plus,
for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue. A trade receivable
without a significant financing component is initially measured at
the transaction price.
The Company derecognises a financial asset when the contractual
rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the
Company neither transfers nor retains substantially all of the
risks and rewards of ownership and it does not retain control of
the financial asset.
The Company derecognises a financial liability when its
contractual obligations are discharged or cancelled, or expire. The
Company also derecognises a financial liability when its terms are
modified and the cash flows of the modified liability are
substantially different, in which case a new financial liability
based on the modified terms is recognized at fair value.
On derecognition of a financial liability, the difference
between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed)
is recognized in profit or loss.
(ii) Classification and subsequent measurement of financial assets
On initial recognition, a financial asset is classified as
measured at: amortised cost; fair value through other comprehensive
income (FVOCI) - debt investment; FVOCI - equity investment; or
FVTPL.
Financial assets are not reclassified subsequent to their
initial recognition unless the Company changes its business model
for managing financial assets in which case all affected financial
assets are reclassified on the first day of the first reporting
period following the change in the business model.
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVTPL to
eliminate or significantly reduce an accounting mismatch:
-- it is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
-- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
All financial assets not classified as measured at amortised
cost as described above are measured at FVTPL. These assets are
subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognised in profit
or loss.
The Company's financial assets comprise finance assets at FVTPL,
trade and other receivables, cash and cash equivalents and
short-term deposits and are classified into the financial assets at
amortised cost category. These assets are subsequently measured at
amortised cost using the effective interest method. The amortised
cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognized in profit
or loss. Any gain or loss on derecognition is recognized in profit
or loss.
Cash and cash equivalents comprise cash balances, call deposits
and highly liquid investments with maturities of three months or
less from the acquisition date that were subject to insignificant
risk of changes in their fair value.
Business model assessment
The Company makes an assessment of the objective of the business
model in which a financial asset is held at a portfolio level
because this best reflects the way the business is managed and
information is provided to management. The information considered
includes:
-- the stated policies and objectives for the portfolio and the
operation of those policies in practice. These include whether
management's strategy focuses on earning contractual interest
income, maintaining a particular interest rate profile, matching
the duration of the financial assets to the duration of any related
liabilities or expected cash outflows or realising cash flows
through the sale of the assets;
-- how the performance of the portfolio is evaluated and reported to the Company's management;
-- the risks that affect the performance of the business model
(and the financial assets held within that business model) and how
those risks are managed;
-- how managers of the business are compensated - e.g. whether
compensation is based on the fair value of the assets managed or
the contractual cash flows collected; and
-- the frequency, volume and timing of sales in prior periods,
the reasons for such sales and its expectations about future sales
activity. However, information about sales activity is not
considered in isolation, but as part of an overall assessment of
how the Company's stated objective for managing the financial
assets is achieved and how cash flows are realised.
Financial assets that are held for trading or managed and whose
performance is evaluated on a fair value basis are measured at
FVTPL because they are neither held to collect contractual cash
flows nor held both to collect contractual cash flows and to sell
financial assets.
Assessment whether contractual cash flows are solely payments of
principal and interest
For the purposes of this assessment, 'principal' is defined as
the fair value of the financial asset on initial recognition.
'Interest' is defined as consideration for the time value of money
and for the credit risk associated with the principal amount
outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative
costs), as well as profit margin.
In assessing whether the contractual cash flows are solely
payments of principal and interest, the Company considers the
contractual terms of the instrument. This includes assessing
whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it
would not meet this condition. In making this assessment, the
Company considers:
-- contingent events that would change the amount or timing of cash flows;
-- leverage features;
-- prepayment and extension terms;
-- terms that limit the Company's claim to cash flows from
specified assets - e.g. non-recourse asset arrangements; and
-- features that modify consideration of the time value of money
- e.g. periodical reset of interest rates.
(iii) Classification and subsequent measurement of financial liabilities
Financial liabilities are classified as measured at amortized
cost or FVTPL. A financial liability is classified as at FVTPL if
it meets the definition of held-for-trading or it is designated as
such on initial recognition.
Other financial liabilities are subsequently measured at
amortized cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognized in
profit or loss. Any gain or loss on derecognition is also
recognized in profit or loss.
The Company measures all of its financial liabilities at
amortized cost.
(iv) Offsetting
Financial assets and liabilities are offset and the net amount
presented in the statements of financial position when, and only
when, the Company currently has a legally enforceable right to set
off and intends either to settle on a net basis or to realise the
asset and settle the liability simultaneously. The Company
currently has a legally enforceable right to set off if that right
is not contingent on a future event and enforceable both in the
normal course of business and in the event of default, insolvency
or bankruptcy of the Company and all counterparties.
(g) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax
effects.
Share premium
Share premium reserves include amounts that were created due to
the issue of share capital at a value price greater than the
nominal.
Repurchase, disposal and reissue of share capital (treasury
shares)
When share capital recognised as equity is repurchased, the
amount of the consideration paid, which includes directly
attributable costs, net of any tax effects, is recognised as a
deduction from equity. Repurchased shares are immediately cancelled
and the total number of issued shares reduced by the purchase.
(h) Impairment
The Company uses 'expected credit loss' (ECL) model. This
impairment model applies to financial assets measured at amortised
cost, contract assets and debt investments at FVOCI, but not to
investments in equity instruments.
The financial assets at amortised cost consist of trade and
other receivables and cash and cash equivalents.
Loss allowances are measured on either of the following
bases:
-- 12-month ECLs: these are ECLs that result from possible
default events within the 12 months after the reporting date;
and
-- lifetime ECLs: these are ECLs that result from all possible
default events over the expected life of a financial
instrument.
The Company has elected to measure loss allowances for trade
receivables and receivables on internal settlements at an amount
equal to lifetime ECLs.
Impairment on cash and cash equivalents is measured on a
12-month expected loss basis and reflects the short maturities of
the exposures.
The Company assumes that the credit risk on a financial asset
has increased significantly if it is more than 30 days past
due.
The Company considers a financial asset to be in default
when:
-- the borrower is unlikely to pay its credit obligations to the
Company in full, without recourse by the Company to actions such as
realising security (if any is held); or
-- the financial asset is more than 90 days past due.
The maximum period considered when estimating ECLs is the
maximum contractual period over which the Company is exposed to
credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the
Company expects to receive).
ECLs are discounted at the effective interest rate of the
financial asset.
Credit-impaired financial assets
At each reporting date, the Company assesses whether financial
assets carried at amortised cost are credit-impaired. A financial
asset is 'credit-impaired' when one or more events that have a
detrimental impact on the estimated future cash flows of the
financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the
following observable data:
-- significant financial difficulty of the borrower or issuer;
-- a breach of contract such as a default or past due event;
-- the restructuring of a debt or advance by the Company on
terms that the Company would not consider otherwise;
-- it is becoming probable that the borrower will enter
bankruptcy or other financial reorganisation; or
-- the disappearance of an active market for a security because of financial difficulties.
In making an assessment of whether cash and cash equivalents are
credit-impaired, the Company considers the following factors:
-- significant financial difficulty of the bank;
-- a breach of contract such as a default or a contractual
payment being more than a couple of days past due;
-- it is becoming probable that the bank will enter bankruptcy
or other financial reorganisation.
Presentation of impairment
Loss allowances for financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets.
Impairment losses on financial assets are presented under 'other
expenses' and not presented separately in the statement of profit
or loss and OCI due to materiality considerations.
(9) Provisions
A provision is recognised if, as a result of a past event, the
Company has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. Provisions are
determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The
unwinding of the discount is recognised as finance cost.
(f) Finance income and costs
Finance income comprises interest income on financial assets,
calculated using the effective interest rate, and currency exchange
gains. Finance costs comprise currency exchange losses.
The effective interest rate is the rate that exactly discounts
estimated future cash payments or receipts through the expected
life of the financial instrument to:
-- the gross carrying amount of the financial asset; or
-- the amortised cost of the financial liability.
In calculating the effective interest rate, the effective
interest rate is applied to the gross carrying amount of the asset
(when the asset is not credit-impaired). However, for financial
assets that have become credit-impaired subsequent to initial
recognition, interest income is calculated by applying the
effective interest rate to the amortised cost of the financial
asset. If the asset is no longer credit-impaired, then the
calculation of interest income is made on a gross basis again.
Dividend income
Dividend income is recognised in profit or loss on the date on
which the right to receive payment is established. For quoted
equity securities, this is usually the ex-dividend date. For
unquoted equity securities, this is usually the date on which the
shareholders approve the payment of a dividend. Dividend income
from equity securities designated at fair value through profit or
loss is recognised in profit or loss in separate line item.
(g) Net gain/(loss) from financial assets at fair value through profit or loss
Net gain/(loss) from financial assets at fair value through
profit or loss includes all realised and unrealised fair value
changes, interest income and foreign exchange differences, but
excludes dividend income.
(h) Fees and administrative expenses
Fees and administrative expenses are recognised in profit or
loss as the related services are performed or expenses are
incurred.
(i) Segment reporting
An operating segment is a component of the Company that engages
in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Company's other components.
The Directors determined that the sole segment in which the
Company operates is investing in property development in
Ukraine.
(j) Tax
Under the current tax legislation in the Isle of Man, the
applicable tax rate is 0% for the Company.
However, some dividend and interest income received by the
Company may be subject to withholding tax imposed in certain
countries of origin. Income that is subject to such tax is
recognised gross of the taxes and the corresponding withholding tax
is recognised as tax expense.
Further, as stated in Note 12(b), the Company's investees
perform most of their operations in Ukraine and are therefore
within the jurisdiction of the Ukrainian tax authorities.
(k) Earnings per share
The Company presents basic and diluted earnings per share (EPS)
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted
EPS is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary
shares outstanding, adjusted for own shares held, for the effects
of all dilutive potential ordinary shares, which comprise warrants
and share options.
4. Financial assets at fair value through profit or loss
The Company has the following financial assets at fair value
through profit or loss :
Project 30 June 2019 31 December 2018
(in thousands of USD)
Equity investments at fair value through
profit or loss
Other equity investments
Arricano Real Estate plc
(Note 4(a)) Arricano 11,445 10,645
11,445 10,645
Loans receivable at fair value through
profit or loss
Riverscope Ltd Land Bank 5,268 5,259
Linkdell Ltd* Financing company 3,986 4,978
Landshere Ltd Land Bank 3,972 3,962
Linkrose Ltd Green Hills 4,480 4,910
Stenfield Finance Limited Riviera Villas 897 1,161
Glangate Ltd Kremenchuk 344 342
Blueberg Trading Limited Green Hills 745 759
19,692 21,371
31,137 32,016
* Linkdell Ltd provides financing through issued loans on the
following projects:
30 June 2019 31 December
2018
(in thousands of USD)
Riviera Villas 1,862 2,247
Sadok Vyshneviy 1,459 1,810
Green Hills 595 854
Kremenchuk 69 67
3,986 4,978
(a) Investment in Arricano Real Estate PLC
The Company acquired a shareholding in Arricano Real Estate PLC
(Arricano) in 2010.
In September 2013 the shares of Arricano were admitted to
trading on the AIM market of the London Stock Exchange.
There was no active market trading in Arricano shares during 6
months 2019 and 2018. Therefore, management used the adjusted net
assets method to estimate the fair value of investment in Arricano.
The Company's management considers this to be the most appropriate
method to estimate the fair value of the Company's investment in
Arricano.
Although management believes that its estimates of fair value
are appropriate, the use of different methodologies or assumptions
could lead to different measurements of fair value. Arricano Real
Estate PLC's net assets value according to the audited financial
statements as at 31 December 2018 amounted to USD 94,032 thousand
(31 December 2017: USD 52,182 thousand).
The Company's share in Arricano Real Estate PLC is 12.51% as at
30 June 2019 and
31 December 2018.
(b) Investment in subsidiaries and associates (investees)
(i) Valuation technique and significant unobservable inputs
For the estimation of fair values of the Company's investments
the Company's management used the adjusted net assets method.
Management performed a detailed review of the investees' assets
and liabilities for the purpose of their fair value assessment:
-- Assets are mainly represented by real estate properties and
prepayments for properties (land). The fair value of these
properties and prepayments for properties was assessed by the
independent appraiser, CBRE Ukraine.
-- Liabilities are mainly represented by long-term loans payable due to the Company.
-- Trade receivables balance is mainly represented by long-term
receivables. Fair value of long-term receivables that carry no
interest is measured at present value of all future cash receipts
discounted using the prevailing market rate(s) of interest for a
similar instrument, with a similar credit rating.
Other assets and liabilities are short-term by nature and their
fair value approximates the carrying amount. Thus, no additional
adjustment is required.
Summary of fair values of respective investment projects is as
follows as at 30 June 2019:
Riviera Villas Green Hills Sadok Vyshneviy Land Bank Kremenchuk Total
(in thousands
of USD)
Assets
Investment
properties 2,323 3,558 - 1,410 400 7,691
Prepayments for
land - - - 7,990 - 7,990
Property and
equipment 76 214 - - - 290
Intangible
assets 5 2 - - - 7
Inventories 19 70 620 - - 709
Trade and other
receivables 1,091 1,751 351 - - 3,193
VAT recoverable 160 811 - 2 - 973
Prepaid income
tax 2 - 24 - - 26
Cash and cash
equivalents 137 573 547 22 22 1,301
Total assets 3,813 6,979 1,542 9,424 422 22,180
Deferred tax
liabilities - - - 47 - 47
Intercompany
loans 23,415 34,294 15,699 259,046 13,786 346,240
Trade and other
liabilities 1,054 1,159 83 137 8 2,441
Total
liabilities 24,469 35,453 15,782 259,230 13,794 348,728
Net
identifiable
assets and
liabilities (20,656) (28,474) (14,240) (249,806) (13,372) (326,548)
Ownership 100% 100% 100% 90% 100%
Fair value of
equity
investment - - - - - -
Nominal amount
of loans
receivable 23,415 34,294 15,699 259,046 13,786 346,240
Fair value of
loans
receivable 2,759 5,820 1,459 9,240 414 19,692
Summary of fair values of respective investment projects as at
31 December 2018 is as follows:
Riviera Villas Green Hills Sadok Vyshneviy Land Bank Kremenchuk Total
(in thousands
of USD)
Assets
Investment
properties 2,799 3,907 - 1,410 400 8,516
Prepayments for
land - - - 7,990 - 7,990
Property and
equipment 80 285 - - - 365
Intangible
assets 1 1 - - - 2
Inventories 19 73 830 - - 922
Trade and other
receivables 1,181 2,047 649 - - 3,877
VAT recoverable 88 729 - 2 - 819
Prepaid income
tax 1 - 24 - - 25
Cash and cash
equivalents 226 387 384 12 13 1,022
Total assets 4,395 7,429 1,887 9,414 413 23,538
Deferred tax
liabilities - - - 58 - 58
Intercompany
loans 23,417 34,263 16,306 253,303 13,490 340,779
Trade and other
liabilities 987 906 77 135 4 2,109
Total
liabilities 24,404 35,169 16,383 253,496 13,494 342,946
Net
identifiable
assets and
liabilities (20,009) (27,740) (14,496) (244,082) (13,081) (319,408)
Ownership 100% 100% 100% 90% 100%
Fair value of
equity
investment - - - - - -
Nominal amount
of loans
receivable 23,417 34,263 16,306 253,303 13,490 340,779
Fair value of
loans
receivable 3,408 6,523 1,810 9,221 409 21,371
To assist with the estimation of fair value of investment
properties, prepayments for land and inventories (together ' the
real estate projects') as at 30 June 2019 and 31 December 2018 the
Directors engaged independent appraiser CBRE Ukraine, having a
recognised professional qualification and recent experience in the
location and categories of the projects being valued.
The fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The valuation
is prepared in accordance with practice standards contained in the
Appraisal and Valuation Standards published by the Royal
Institution of Chartered Surveyors (RICS) or in accordance with
International Valuation Standards published by the International
Valuations Standards Council.
The fair value measurement, developed for determination of fair
value of the properties, is categorised within Level 3 of the fair
value hierarchy, due to the significance of unobservable inputs to
the measurement.
Investment properties
As at 30 June 2019 investment properties were represented by
Green Hills, Riviera Villas, Kremenchuk Retail Centre projects and
Land bank (82 ha).
In the absence of current prices in an active market, the
valuations are prepared under the income approach by converting
estimated future cash flows to a single current capital value.
As at 30 June 2019 the respective assumptions, which represent
key unobservable inputs for determination of fair value, were as
follows:
-- monthly rental rates - which were based on estimated rental
rates ranging from USD 4 to USD 22 per sq. m.
-- development costs based on current construction prices
-- for Green Hills project average sales price of land amounts to USD 135 per sq. m.
-- for Riviera Villas project average cottage sales price amounts to USD 1,397 per sq. m.
-- discount rate ranging from 12 to 22%
-- sales period - from 1 to 6.5 years
-- all relevant licenses and permits, to the extent not yet
received, will be obtained, in accordance with the timetables as
set out in the investment project plans
The estimation of fair value was made using a net present value
calculation based on certain assumptions, which represent key
unobservable inputs, the most important of which as at 31 December
2018 are as follows:
-- monthly average rental rates - which were based on estimated
rental rates ranging from USD 4 to USD 8 per sq. m.
-- development costs based on current construction prices
-- for Green Hills project average sales price of land plot amounts to USD 125 per sq. m.
-- For Riviera Villas project average cottage sales price amounts to USD 1,433 per sq. m.
-- discount rate ranging from 18% to 22%
-- sales period - from 1 to 7 years
-- all relevant licenses and permits, to the extent not yet
received, will be obtained, in accordance with the timetables as
set out in the investment project plans.
Prepayments for land
Land plots for the land bank project with a total area of 481 ha
are currently registered for agricultural use, and the rezoning
process to change the purpose of the land plots to construction use
was in progress as at 30 June 2019 and 31 December 2018. Land plots
with a total area of 19.9 ha had been rezoned for construction use
by the end of 2012. The fair value of the land bank was determined
using agricultural and residential property comparatives according
to actual land plot zoning and discounting for the time period
likely to be required to sell the land plots.
However, the Ukrainian market for land plots zoned for
agricultural use is characterized by low liquidity and restrictions
related to disposal of such land. Therefore, although management of
the Company exercised the generally acceptable valuation approach
in such circumstances taking into account all available
information, significant uncertainties with regards to low
liquidity and legislation restrictions still exist as at 30 June
2019 and 31 December 2018.
As at 30 June 2019 the respective assumptions were as
follows:
-- average market prices ranging from USD 45 thousand to USD 131 thousand per ha
-- discount rate of 23%
-- sales period - from 1 to 7 years
The estimation of fair value of the underlying assets (the land
plots) was made based on certain assumptions, which represent key
unobservable inputs, the most important of which as at
31 December 2018 are as follows:
-- average market prices ranging from USD 41 thousand to USD 125 thousand per ha
-- discount rate of 23%
-- sales period - from 1 to 7 years
Inventory
As at 30 June 2019 inventory was represented by the gated
community Sadok Vyshnevyi (10 constructed flats in townhouses and
relevant land plots).
As at 30 June 2019 the respective assumptions were as
follows:
-- average market price USD 375 per sq. m.
-- discount rate 18%
-- sales period - from 1 to 1.5 years
The estimation of fair value was made using a net present value
calculation based on certain assumptions, which represent key
unobservable inputs, the most important of which as at
31 December 2018 are as follows:
-- average market price USD 395 per sq. m.
-- discount rate 20%
-- sales period - from 1 to 3 years
Other assets and liabilities
Liabilities are mainly represented by the long-term loans
payable to the Company.
Trade receivables balance is mainly represented by long-term
receivables. Fair value of long-term receivables that carry no
interest is measured at present value of all estimated future cash
receipts discounted using the prevailing market rate(s) of interest
for a similar instrument, with a similar credit rating.
The financial instruments not measured at fair value comprise
other accounts receivable, cash and cash equivalents and other
accounts payable. The carrying amount of such instruments
approximates their fair value due to their short-term nature
(except for loans payable).
(c) Loans receivable at fair value through profit or loss
The loans are denominated in USD, unsecured, interest free or
interest bearing (up to 11%) and represent an alternative to the
equity way of financing investments.
Loans are accounted at fair value through profit or loss in
accordance with IFRS 9 Financial Instruments: Recognition and
Measurement and measured at fair value in accordance with IFRS 13
Fair value measurement as the present value of the expected future
cash flows, discounted using a market-related rate (see notes 3(a)
and 3(d)). Expected future cash flows are represented by cash flows
generated from the underlying assets for the loans (the real estate
projects).
5. Other accounts receivable
Other accounts receivable are as follows:
30 June 2019 31 December 2018
(in thousands of USD)
Other receivables 58 58
Prepayments made 8 12
____________ ____________
Total other accounts receivable 66 70
6. Cash and cash equivalents
Cash and cash equivalents are as follows:
30 June 2019 31 December 2018
(in thousands of USD)
Bank balances 501 90
Call deposits 4,950 4,638
Total cash and cash equivalents 5,451 4,728
The following table represents an analysis of cash and cash
equivalents based on Fitch ratings :
30 June 31 December
2019 2018
(in thousands of USD)
Bank balances
AA- 2 1
A 499 89
501 90
30 June 31 December
2019 2018
Call deposits
A - 950 938
4,000 3,700
4,950 4,638
Total 5,451 4,728
7. Equity
Movements in share capital and share premium are as follows:
Ordinary shares Amount
Number of shares Thousands of USD
Issued as at 31 December 2007, fully paid 140,630,300 2,813
Issued during 2008 1,698,416 34
Own shares repurchased and cancelled during 2008 (8,943,000) (179)
Outstanding as at 31 December 2008, fully paid 133,385,716 2,668
Own shares repurchased and cancelled during 2009 (15,669,201) (314)
Outstanding as at 31 December 2009, fully paid 117,716,515 2,354
Outstanding as at 31 December 2010, fully paid 117,716,515 2,354
Own shares repurchased and cancelled during 2011 (8,355,000) (167)
Outstanding as at 31 December 2011, fully paid 109,361,515 2,187
Outstanding as at 31 December 2012, fully paid 109,361,515 2,187
Outstanding as at 31 December 2013, fully paid 109,361,515 2,187
Outstanding as at 31 December 2014, fully paid 109,361,515 2,187
Outstanding as at 31 December 2015, fully paid 109,361,515 2,187
Outstanding as at 31 December 2016, fully paid 109,361,515 2,187
Outstanding as at 31 December 2017, fully paid 109,361,515 2,187
Outstanding as at 31 December 2018, fully paid 109,361,515 2,187
Outstanding as at 30 June 2019, fully paid 109,361,515 2,187
The share capital of the Company consists of an unlimited number
of ordinary shares of GBP0.01 each. All ordinary shares rank
equally with regard to the Company's residual assets.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company.
As part of an initial public offering on 1 June 2007 104,000,000
ordinary shares were sold to certain institutional investors at a
price of USD 2.00 per ordinary share, raising gross proceeds of USD
208,000 thousand. In addition 36,630,100 ordinary shares were sold
on 29 November 2007 at a price of USD 2.73 per ordinary share,
raising gross proceeds of USD 100,000 thousand. The difference
between net proceeds per share and par value is recognised as share
premium.
During 2008 the Company issued 1,698,416 new ordinary shares at
a price of USD 2.60 per ordinary share to settle 70 % of the
manager's performance fee for 2007 in the amount of USD 4,432
thousand.
Following the extraordinary general meetings of members of the
Company on 31 July 2008 and 1 December 2008, 11,948,000 of its own
shares were authorised for repurchase by the Company and were
annulled. The purchase price of repurchased shares ranged from USD
0.50 to USD 1.47 per share. The difference between the total price
paid and par value is recognised as a share premium decrease.
Following the extraordinary general meeting of members of the
Company on 29 May 2009, 12,664,201 of its own shares were
authorised for repurchase by the Company and were annulled. The
purchase price of repurchased shares ranged from USD 0.53 to USD
0.68 per share. The difference between the total price paid and par
value is recognised as share premium decrease.
Following the extraordinary general meetings of members of the
Company on 9 November 2011 and
12 December 2011, 8,355,000 of its own shares were repurchased
by the Company and were cancelled. The purchase price of
repurchased shares ranged from USD 0.48 to USD 0.63 per share. The
difference between the total price paid and par value is recognised
as share premium decrease.
Distributions to Shareholders
On 24 December 2014 following the adoption of the new investing
policy in early 2014 and an assessment of the Company's working
capital requirements, the Board of Directors decided to declare a
dividend of USD 0.055 per Ordinary Share, which is in accordance
with its investing policy of distributing surplus funds to the
Company's shareholders.
On 29 January 2016 following review of the Company's performance
in 2015 and the re-assessment of the Company's working capital
needs, the Board of Directors of the Company decided to make
distribution of USD 6,014 thousand, or USD 0.055 per ordinary
share, to its shareholders.
On 22 March 2018 having reviewed the Company's performance in
2017, including the sale of the remaining interest in the Obolon
Residences project, the Board of Directors of the Company has
decided to make a distribution of USD 7,656 thousand, or USD 0.07
per Ordinary Share, to its shareholders. This decision is in
accordance with Company's Investing Policy, which states that
surplus capital will be returned to shareholders, and is made under
Article 127 of Company's Articles of Association.
The relevant record date for the distribution was 3 April 2018,
the corresponding ex-distribution date was 29 March 2018, and the
distribution was paid to shareholders on 17 April 2018.
On 27 April 2018 the Board of Directors of the Company has
decided to make additional distribution of USD 2,187 thousand, or
USD 0.02 per Ordinary Share, to its shareholders. This decision is
in accordance with Company's Investing Policy, which states that
surplus capital will be returned to shareholders and is made under
Article 127 of Company's Articles of Association.
The relevant record date for the distribution was 11 May 2018,
the corresponding ex-distribution date was 10 May 2018, and the
distribution was paid to shareholders on 16 May 2018.
8. Other accounts payable
Other accounts payable are as follows:
(in thousands of USD) 30 June 2019 31 December 2018
Management fees (Note 9) 400 500
Other payables and accrued expenses 80 123
Advances received 30 30
Total other accounts payable 510 653
9. Management and performance fees
Management and performance fees for the 6 months ended 30 June
are as follows:
6 months ended 30 June 2019 6 months ended 30 June 2018
(in thousands of USD)
Management fee 400 500
Performance fee - 492
Total management and performance fees 400 992
Unpaid management and performance fees as at 30 June 2019
amounted to USD 400 thousand ( as at 31 December 2018: USD 500
thousand) (Note 8).
Initial Management Agreement
The Company entered into a management agreement dated 16 May
2007 (the Management Agreement) with Dragon Capital Partners Ltd
(the Investment Manager) pursuant to which the latter has agreed to
provide advisory, management and monitoring services to the
Company. The Company may terminate the Investment Manager's
appointment on at least 6 months written notice expiring on or
after the fifth anniversary of admission to AIM, or without written
notice subject to certain criteria.
In consideration for its services thereunder, the Investment
Manager was entitled to be paid an annual management fee of 1.5% of
the gross asset value of the Company at the end of the relevant
accounting period or part thereof plus value added tax or similar
taxes which may be applicable. In addition, the Investment Manager
was entitled to performance fees based on the net asset value (NAV)
growth.
Second Revised Management Agreement
On 23 April 2010 the Board approved changes to the Management
Agreement between the Investment Manager and the Company effective
as at 31 December 2009 (Second Revised Management Agreement). The
performance fee was divided into two parts. One is based on NAV
growth, and the second on share price growth. Therefore, prior to
the Second Revised Management Agreement the Investment Manager was
entitled to an annual performance fee of 20% of the amount of such
increase in NAV growth in excess of 10%, and under the Second
Revised Management Agreement the Investment Manager is entitled to
10% of the amount of such increase in NAV growth in excess of 10%.
The other performance fee of 10% is calculated based on the amount
by which the final share price growth exceeds 10% from the base
share price set at GBP 1.085 per share.
Since 1 December 2011 the Second Revised Management Agreement
was subject to termination with six months' notice by either
party.
Third Management Agreement and Fourth Revised Management
Agreement
On 17 February 2014 an Extraordinary General Meeting of the
shareholders approved a revision of the Management Agreement (Third
Management Agreement) and accordingly the Company entered into a
new management agreement with DCM Limited (the company which
replaced Dragon Capital Partners Limited as the Investment
Manager).
On 16 November 2016 the Board announced certain modifications to
the existing management arrangement (the Fourth Revised Management
agreement). The Fourth Revised Management Agreement became
effective on 01 January 2017 and will expire on 31 December
2018.
The Directors (excluding Tomas Fiala who is a related party as
explained in detail in the Note 15) believe that the proposed
changes incorporated into the Fourth Management Agreement will
continue to incentivise the Investment Manager to:
-- maximise the disposal proceeds of the Company's properties; and
-- achieve the best possible sales value for each property in
order to maximise the cash returns to shareholders that would
result in the Investment Manager maximising the proposed
performance fee payable under the Third and Fourth Management
Agreements.
The Fourth Management Agreement has changed certain provisions
on management fee of the Third Management Agreement and summary of
those changes is presented below:
Management fee
The management fee under the Third Management Agreement changed
from a fee of 1.5 per cent of Gross Asset Value to a fixed amount
as follows and Fourth Management Agreement modified the fees for
2017 and 2018:
-- 1 January 2013 - 30 June 2013: USD 1.25 million
-- 1 July 2013 - 31 December 2013: USD 1.25 million
-- 1 January 2014 - 31 December 2014: USD 2.5 million
-- 1 January 2015 - 31 December 2015: USD 2.1 million
-- 1 January 2016 - 31 December 2016: USD 1.7 million
-- 1 January 2017 - 31 December 2017: USD 1.25 million under the
terms of Fourth Management Agreement (reduced from USD 1.5 million
under the Third Revised Management Agreement).
-- 1 January 2018 - 31 December 2018: USD 1.0 million under the
terms of Fourth Management Agreement (reduced from USD 1.4 million
under the Third Revised Management Agreement).
Included as a part of the terms of the Fourth Revised Management
Agreement, due to the fact that the Company sold the right to the
development of the third phase of the Obolon Residences in 2017,
the management fee was reduced to USD 1.0 million in the year of
such sale.
The management fee under the Fourth Management Agreements is
payable in cash, semi-annually in July and January of each year,
within 10 business days after the end of the relevant period.
On 10 December 2018 the Fifth Management Agreement was signed
extending the term of the agreement until 31 December 2020. The
Fifth Management Agreement modified the terms for the management
fee as following
for the year ending 31 December 2019 - USD 800,000
for the year ending 31 December 2020 - USD 800,000
Also a cap on the management fee was introduced which should not
exceed 3% of the net asset value of the Company as per officially
published financial statements going forward.
Performance fee
The performance fee under the Third Management Agreement changed
from one which is calculated in two parts, being an increase in NAV
and also an increase in share price performance, to the following,
based on distributions to shareholders:
-- in relation to distributions up to threshold 1, a fee of 3.5
percent of such distributions;
-- in relation to distributions from threshold 1 to threshold 2,
a fee of 7 percent of such distributions; and
-- in relation to distributions in excess of threshold 2, a fee
of 10 percent of such distributions.
Thresholds 1 and 2 are equal to USD 50 million and USD 75
million respectively.
The Performance Fee in the Fourth Revised Management Agreement
cancelled all references to the threshold 1 and 2 and replaced it
with a fixed performance fee of 5 percent of all distributions to
Company's shareholders. Distributions will continue to include cash
dividends, share buy backs and other returns of capital, and also
in-specie distributions.
The performance fee under the Third and Fourth Management
Agreements is payable in cash (or in the case of a distribution
that is a distribution in specie, payable by the transfer to the
Investment Manager of the appropriate proportion of the financial
instrument that is the subject of the distribution), simultaneously
with the distributions to which they relate.
The Fifth Management Agreement did not modify the terms for the
performance fee which is 5 percent of all distributions to
Company's shareholders.
The total management fee for the 6 months ended 30 June 2019 is
USD 400 thousand
(6 months ended 30 June 2018: USD 500 thousand). There was no
performance fee for the 6 months ended 30 June 2019 (6 months ended
30 June 2018: USD 492 thousand).
10. Net gain/(loss) from financial assets at fair value through profit or loss
Net gain/(loss) from financial assets at fair value through
profit or loss for the 6 months ended 30 June is as follows:
6 months ended 30 June 2019 6 months ended 30 June 2018
(in thousands of USD)
Interest income 6,865 6,933
Loss from loans receivable at fair value through profit
or loss (7,135) (7,154)
Net loss from loans receivable at fair value through
profit or loss (270) (221)
Gain on equity investments at fair value through profit
or loss 799 2197
Net gain/(loss) from financial assets at fair value
through profit or loss 529 (1,976)
11. Administrative expenses
Administrative expenses for the 6 months ended 30 June are as
follows:
6 months ended 30 June 2019 6 months ended 30 June 2018
(in thousands of USD)
Professional services 109 136
Directors' fees (Note 15(a)) 49 49
Audit fees 7 -
Insurance 10 24
Advertising 10 22
Bank charges 2 2
Travel expenses 2 -
Other 3 10
Total administrative expenses 192 243
12. Contingencies
(a) Litigation
The Company is involved in various legal proceedings in the
ordinary course of business but Directors consider that none of
them require provisions or could result in material losses for the
Company.
(b) Taxation contingencies
The Company is not subject to any tax charges within Isle of Man
jurisdiction, however the Company's investees perform most of their
operations in Ukraine and are therefore within the jurisdiction of
the Ukrainian tax authorities. The Ukrainian tax system can be
characterised by numerous taxes and frequently changing
legislation, which may be applied retrospectively, be open to wide
interpretation and in some cases conflict with other legislative
requirements. Instances of inconsistent opinions between local,
regional, and national tax authorities and the Ukrainian Ministry
of Finance are not unusual. Tax declarations are subject to review
and investigation by a number of authorities that are empowered by
law to impose severe fines, penalties and interest charges. A tax
year remains open for review by the tax authorities during the
three subsequent calendar years, however under certain
circumstances a tax year may remain open longer. These facts create
tax risks substantially more significant than typically found in
countries with more developed systems.
The Directors believe that the Company has adequately assessed
tax liabilities based on its interpretation of tax legislation,
official pronouncements and court decisions for the purpose of
assessment of the Company's assets fair value. However, the
interpretations of the relevant authorities could differ and the
effect on the financial statements, if the authorities were
successful in enforcing their interpretations, could be
significant.
(c) Insurance
The Company and its investees do not have full coverage for the
property, business interruption, or third party liability in
respect of property or environmental damage arising from accidents
on property or relating to the operations of the Company and its
investees. For the real estate projects, the Company uses
subcontractors who are responsible for insuring those risks until
the time the property is commissioned. Until the Company and its
investees obtain adequate insurance coverage, there is a risk that
the loss or destruction of certain assets could have a material
adverse effect on the Company's operations and financial
position.
13. Earnings per share
Basic earnings per share
The calculation of basic earnings per share for the financial
statements is based upon the net loss for the 6 months ended 30
June 2019 attributable to the ordinary shareholders of the Company
of
USD 17 thousand (6 months ended 30 June 2018: net gain of USD
749 thousand) and the weighted average number of ordinary shares
outstanding, calculated as follows:
6 months ended 30 June 2019 6 months ended 30 June 2018
(number of shares weighted during the period outstanding)
Shares issued on incorporation on 23 February 2007 2 2
Sub-division of GBP 1 shares into GBP 0.01 shares on 16
May 2007 198 198
Shares issued on 1 June 2007 104,000,000 104,000,000
Shares issued on 29 November 2007 36,630,100 36,630,100
Shares issued on 24 April 2008 1,698,416 1,698,416
Own shares buyback in 2008 (8,943,000) (8,943,000)
Own shares buyback in 2009 (15,669,201) (15,669,201)
Own shares buyback in 2011 (8,355,000) (8,355,000)
Weighted average number of shares for the year 109,361,515 109,361,515
Diluted earnings per share
As at 30 June 2019 and 2018 there were no options or warrants in
issue. Therefore, there was no dilution on the Company's basic
earnings per share.
14. Fair values and financial risk management
(a) Accounting classifications and fair values
The following table shows the carrying amounts and fair values
of financial assets and financial liabilities, including their
levels in the fair value hierarchy. It does not include fair value
information for financial assets and financial liabilities not
measured at fair value if the carrying amount is a reasonable
approximation of fair value. Management believes that fair value of
cash and cash equivalents, other accounts receivable and other
accounts payable approximates their carrying amount.
Carrying amount Fair value
Financial
assets Other
(in thousands Note at amortised financial Level Level
of USD) FVTPL cost liabilities Total 1 2 Level 3 Total
30 June 2019
Financial assets
measured
at fair value
Financial assets
at fair
value through
profit or loss 4 31,137 - - 31,137 - - 31,137 31,137
31,137 - - 31,137 - - 31,137 31,137
Financial assets
not measured
at fair value
Cash and cash
equivalents 6 - 5,451 - 5,451
Other accounts
receivable 5 - 66 - 66
- 5,517 - 5,517
Financial
liabilities not
measured at fair
value
Other accounts
payable 8 - - 510 510
- - 510 510
Carrying amount Fair value
Financial
assets Other
(in thousands Note at amortised financial Level Level
of USD) FVTPL cost liabilities Total 1 2 Level 3 Total
31 December 2018
Financial assets
measured
at fair value
Financial assets
at fair
value through
profit or loss 4 32,016 - - 32,016 - - 32,016 32,016
32,016 - - 32,016 - - 32,016 32,016
Financial assets
not measured
at fair value
Cash and cash
equivalents 6 - 4,728 - 4,728
Other accounts
receivable 5 - 58 - 58
- 4,786 - 4,786
Financial
liabilities not
measured at fair
value
Other accounts
payable 8 - - 623 623
- - 623 623
(b) Measurement of fair values
(i) Valuation techniques and significant unobservable inputs
The valuation techniques used in measuring Level 3 fair values,
as well as the significant unobservable inputs used for Level 3
fair values, are disclosed in the following relevant notes:
-- Note 4 - Financial assets at fair value through profit and loss
Reconciliation of Level 3 fair values
The following table shows a reconciliation from the opening
balances to the closing balances for Level 3 fair values.
Financial assets at
fair value through
Note profit or loss
(in thousands of USD)
Balance at 1 January 2018 30,258
Loss included in profit or loss
-------------------
Interest income 10 13,936
Gain on investments at fair value through
profit or loss 10 4,117
Loss from loans receivable at fair value
through profit or loss 10 (12,958)
Loans repaid (3,337)
Balance at 31 December 2018 32,016
Loss included in profit or loss
Interest income 10 6,865
Gain on investments at fair value through
profit or loss 10 799
Loss from loans receivable at fair value
through profit or loss 10 (7,135)
Loans repaid, net (1,408)
Balance at 30 June 2019 31,137
(c) Financial risk management
Exposure to credit, interest rate and currency risk arises in
the normal course of the Company's business. The Company does not
hedge its exposure to such risks. The political and economic
situation is described in Note 1(b) of these financial statements.
The deterioration of political and economic situation could
negatively impact the results and financial position in a manner
not currently determinable.
(i) Risk management policy
The Board has assessed major risks and grouped them in a
register of significant risks. This register is reviewed by the
Board at least twice per year or more often if there are
circumstances requiring such a review.
(ii) Credit risk
Cash and cash equivalents
The Company held cash and cash equivalents of USD 5,451 thousand
at 30 June 2019
(2018: USD 4,728 thousand). USD 4,499 thousand of the cash and
cash equivalents are held with banks, which are rated A, based on
Fitch rating.
Impairment on cash and cash equivalents has been measured on a
12-month expected loss basis and reflects the short maturities of
the exposures. The Company considers that its cash and cash
equivalents have low credit risk based on the external credit
ratings of the counterparties, so no expected credit losses were
recognised on initial application of IFRS 9 as at 1 January 2019
and as at 30 June 2019.
Other accounts receivable
The Company's exposure to credit risk is influenced mainly by
the individual characteristics of each counterparty.
The exposure to credit risk is approved and monitored on an
ongoing basis individually for all significant counterparties.
The Company does not require collateral in respect of other
accounts receivable.
The Company establishes an allowance for impairment that
represents its expected credit losses in respect of other accounts
receivable. The main components of this allowance are a specific
loss component that relates to individually significant exposures,
and a collective loss component established for groups of similar
assets in respect of losses that have been incurred but not yet
identified. The collective loss allowance is determined based on
historical data of payment statistics for similar financial assets
and the Company's view of economic conditions over the expected
lives of the receivables.
Exposure to credit risk
As at 30 June 2019 and 31 December 2018, the expected credit
losses were insignificant and were not accounted for. No financial
assets were impaired at the above stated dates.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk is as
follows:
30 June 2019 31 December 2018
(in thousands of USD)
Cash and cash equivalents 5,451 4,728
Other accounts receivable 66 70
5,517 4,798
(iii) Liquidity risk
Liquidity risk is the risk that the Company will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Company's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Company's reputation.
The following are the contractual maturities of financial
liabilities as at 30 June 2019:
Contractual cash flows
Carrying Within More than
amount Total one year 2-5 years 5 years
(in thousands of USD)
Other accounts payable 510 510 510 - -
510 510 510 - -
The following are the contractual maturities of financial
liabilities as of 31 December 2018:
Contractual cash flows
----------------------------------------------
Carrying Within More than
amount Total one year 2-5 years 5 years
(in thousands of USD)
Other accounts payable 523 523 523 - -
523 523 523 - -
(iv) Market risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Company's income or the value of its holdings of
financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable
parameters, while optimising the return.
Interest rate risk
Fair value of loans receivable at fair value through profit or
loss depends on fair values of underlying real estate projects (see
Note 4(b)), therefore fair values are not directly impacted by
change in interest rates.
Foreign currency risk
The majority of the Company's income, expenses, assets and
liabilities are denominated in US dollars. However, the underlying
cash flows of the Company's investees are denominated in Ukrainian
hryvnias. Though the Company attempts to peg its revenues to US
dollar in the depressed economy it is not always possible to
recover in full the effect of Ukrainian hryvnia devaluation.
Weakening of the Ukrainian hryvnia would have resulted in decrease
in fair value of loans receivable.
(d) Capital management
The Directors seek to maintain a sufficient capital base for
meeting the Company's operational and strategic needs, and to
maintain confidence of market participants. This is achieved by
efficient cash management and constant monitoring of investment
projects.
From time to time the Company purchases its own shares on the
market; the timing of these purchases depends on market prices. Buy
decisions are made on a specific transaction basis by the Board
within the limits approved by the Company's shareholders. The
Company does not have a defined share buy-back plan.
There were no changes in the Company's approach to capital
management during the 6 months ended 2019.
The Company is not subject to externally imposed capital
requirements.
15. Related party transactions
(a) Transactions with management and close family members
(i) Directors' remuneration
Directors' compensation included in the statement of
comprehensive income for the 6 months ended 30 June is as
follows:
6 months 6 months
ended 30 ended 30
June 2019 June 2018
(in thousands of USD)
Directors' fees 49 49
Reimbursement of travel expense 2 -
Total management remuneration 51 49
(ii) Key management personnel and director transactions
The Directors' interests in shares in the Company are as
follows:
30 June 2019 31 December 2018
Number of Ownership, Number of Ownership,
shares % shares %
Dragon Capital Group
(with Tomas Fiala as
principal shareholder
and managing director)* 66,902,154 61.17 66,607,334 60.91
66,902,154 61.17 66,607,334 60.91
* Dragon Capital Group holds its shares in the Company through
nominal shareholder, Euroclear Nominees Limited as at 30 June 2019
and 31 December 2018.
Mr Tomas Fiala, one of the Company's directors, is the principal
shareholder and managing director of Dragon Capital Group which
acquired 6,831,500 shares (6.25%) of the Company during the first
(June 2007) and second (November 2007) share issues. Also Mr Tomas
Fiala is a director in Dragon Capital Partners which received
1,698,416 (1.55%) ordinary shares at a price of USD 2.60 per
ordinary share to settle 70% of the Investment Manager's
performance fee for 2007 in the amount of USD 4,432 thousand.
Through a series of market purchases in 2011 (totalling
1,274,153 ordinary shares) and 2012 (totalling 6,281,158 ordinary
shares) the holding of Dragon Capital Group in the Company has
increased to 16,085,227 ordinary shares or 14.71% of the Company's
issued shares as at 31 December 2012.
During 2013 the Dragon Capital Group made additional market
purchases of 2,842,595 shares in the Company, which resulted in a
total shareholding of 18,927,822 ordinary shares, or 17.31% of the
Company's issued share capital being the Dragon Capital Group
shareholding at the reporting date.
In 2016 Dragon Capital Group sold 71,251 and purchased 576,558
ordinary shares bringing its shareholding to 19,433,129 or 17.77%
of the issued share capital.
During 2017, as the result of series of market share purchases
Dragon Capital Group has acquired in total 47,174,205 ordinary
shares of the Company, which resulted in a total shareholding of
66,607,334 shares representing 60.91% of the issued share capital
of the Company.
On January 10, 2019 Dragon Capital Group has bought 294,820
ordinary shares bringing its shareholding to 66,902,154 or 61.17%
of the issued share capital.
(b) Transactions with subsidiaries
Outstanding balances with subsidiaries are as follows:
30 June 31 December
2019 2018
(in thousands of USD)
Loans receivable 19,692 21,371
Other accounts receivable 213 213
Allowance for impairment of other accounts
receivable (213) (213)
19,692 21,371
Profit or loss transactions with subsidiaries during the 6months
ended 30 June are as follows:
6 months 6 months
ended 30 ended 30
June 2019 June 2018
(in thousands of USD)
Interest income 6,865 6,933
Loss from loans receivable at fair value
through profit or loss (7,135) (7,154)
(270) (221)
(c) Other related parties transactions
Other related parties are represented by the Company's
Investment Manager, DCM Limited (see Note 9). Outstanding balances
with DCM Limited are as follows:
30 June 31 December
2019 2018
(in thousands of USD)
Management fee 400 500
400 500
Expenses incurred in transactions with DCM Limited for the 6
months ended 30 June are as follows:
6 months 6 months
ended 30 ended 30
June 2019 June 2018
(in thousands of USD)
Management fee 400 500
Performance fee - 492
400 992
16. Events subsequent to the reporting date
There have been no other subsequent events that could have had a
significant impact on the Company's financial statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR UVOSRKBAKUAR
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