TIDMSPDI
RNS Number : 4234N
Secure Property Dev & Inv PLC
30 September 2021
Secure Property Development & Investment PLC/ Index: AIM /
Epic: SPDI / Sector: Real Estate
30 September 2021
Secure Property Development & Investment PLC ('SPDI' or 'the
Company')
Half Year Report
Secure Property Development & Investment PLC, the AIM quoted
South Eastern European focused property company, is pleased to
announce its unaudited half year report for the period to 30 June
2021.
Financial Overview
o Net income from continuing operations increased by 64% during
H1 2021 to EUR657,443 (H1 2020: EUR399,986) due to increased
management services to third parties
o EBITDA of EUR145,928 (H1 2020: loss of EUR264,101) from
continuing operations
o EBITDA from total operations increased to EUR501,194 (H1 2020:
EUR196,915)
o Pre-tax profit of EUR287,631 (H1 2020: loss of EUR369,014)
Corporate Overview
The Company maintains its strategy to maximise value for
shareholders through continued discussions with Arcona on the
contribution of SDPI's property portfolio
Significant asset backing behind the Company:
o NAV per share stood at 15.7p a share as at 30 June 2021 - more
than 125% higher than the current share price
o Discussions continue with the Arcona Property Fund N.V
(Arcona) in relation to the conditional agreement for the
contribution of the Group's properties - Stage 2 agreements signed
in June 2021, with closing still expected to take place in H2
2021
Lambros G. Anagnostopoulos, Chief Executive Officer, said ,
"When set against a recovering market, impacted by the effects
of COVID-19, we are delighted to report a strong improvement in our
trading performance. The group continues to own and manage a
valuable property portfolio in South Eastern Europe which is
predominantly let to blue chip tenants on long and recently renewed
leases.
"With all our income generating properties now based in Romania
we are pleased to see a continued growing economy in the country.
Despite the recent uptick, we continue to remain frustrated at the
large discount SDPI shares trade at and look forward to updating
our shareholders on our progress with Arcona."
* *S * *
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014, which forms part of
United Kingdom domestic law by virtue of the European
Union(Withdrawal) Act 2018.
For further information please visit www.secure-property.eu or
contact:
Lambros Anagnostopoulos SPDI Tel: +357 22 030783
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409 3494
Ritchie Balmer
Charles Hammond
Jon Belliss Novum Securities Limited Tel: +44 (0) 207 399 9400
Catherine Leftley St Brides Partners Ltd Tel: +44 (0) 20 7236 1177
Isabelle Morris
Notes to Editors
Secure Property Development and Investment plc is an AIM listed
property development and investment company focused on the South
East European markets. The Company's strategy is focused on
generating healthy investment returns principally derived from: the
operation of income generating commercial properties and capital
appreciation through investment in high yield real estate assets.
The Company is focused primarily on commercial and industrial
property in populous locations with blue chip tenants on long term
rental contracts. The Company's senior management consists of a
team of executives that possess extensive experience in managing
real estate companies both in the private and the publicly listed
sector, in various European countries.
Management Report
1.1 Corporate Overview and Financial Performance
SPDI's core property asset portfolio consists of South Eastern
European prime commercial and industrial real estate, the majority
of which is let to blue chip tenants on long leases. During H1
2021, management, in line with the Company's strategy to maximise
value for shareholders, continued the discussions with Arcona
Property Fund N.V ('Arcona') in relation to the conditional
implementation agreement for the sale of the Company's property
portfolio, excluding its Greek logistics property (which has now
also separately been sold), in an all-share transaction to Arcona,
an Amsterdam and Prague listed company that invests in commercial
property in Central Europe. Arcona currently holds high yielding
real estate investments in the Czech Republic, Poland and Slovakia,
with the transaction valuing the SPDI assets NAV at c.EUR29m,
significantly higher than the current market value of the Company
as a whole.
The combination of two complementary asset portfolios is
expected to create a significant European property company,
benefiting both the Company's and Arcona's respective
shareholders.
Following the completion of Stage 1 of the transaction in 2019,
which involved the sale of two land plots in Ukraine and
residential and land assets in Bulgaria and resulted in the Company
receiving a total of 595,534 Arcona shares and 144,264 warrants
over Arcona shares, in June 2021 the two parties signed SPA
agreements for Stage 2 of the Arcona transaction. This stage
involves the transfer of the EOS and Delenco assets in Romania and
the Kiyanovskiy and Rozny land plots in Ukraine of a total net
value of EUR8,2 million, in exchange for approximately 605,000 new
ordinary shares in Arcona and approximately 145,000 warrants over
shares in Arcona, as well as EUR1m in cash, subject to, inter alia,
standard form adjustment and finalisation in accordance with the
relevant agreements. Stage 2 is likely to be dependent on
shareholder approval, and is expected to close in 2021 at which
point the Company will be issued the relevant shares in Arcona and
the warrants.
Net income from continuing and discontinued operations increased
by 30% during H1 2021, due to an increase in third party management
fees.
Overall, the administration expenses, adjusted by the one-off
costs associated with non-recurring tasks, decreased by 15,7%, and
as a result recurring EBITDA increased to EUR0,5m compared to
EUR0,2m in H1 2020. Finance costs remained at the same levels
leading to an overall increase in operating result after finance
and taxes to EUR0,25m as compared to losses of EUR0,06m in the
comparative period.
The table below represents the operating performance for H1 2021
compared to H1 2020.
EUR H1 2021 H1 2020
-------------------------------------------------------------- -------------------------------------------------------------
Continued Discontinued Total Continued Discontinued Total
Operations Operations Operations Operations
----------------- ------------------- --------------------- ------------------ ------------------- -------------------- ------------------
Rental,
Utilities,
Asset
Management
fees 657.443 530.033 1.187.476 399.986 513.533 913.519
Income from
Operations 657.443 530.033 1.187.476 399.986 513.533 913.519
Asset operating
expenses - (256.068) (256.068) - (193.889) (193.889)
Net Operating
Income 657.443 273.965 931.408 399.986 319.644 719.630
Share of
profits from
associates - 194.863 194.863 - 218.862 218.862
Net Operating
Income
from 65 657.443
Investments 7.443 468.828 1.126.271 399.986 538.506 938.492
Administration
expenses (511.515) (113.562) (625.077) (664.087) (77.490) (741.577)
Operating Result
(EBITDA) 145.928 355.266 501.194 (264.101) 461.016 196.915
Finance Cost,
net 148.316 (382.276) (233.960) 203.979 (441.396) (237.417)
Income tax
expense (124) (17.849) (17.973) (81) (23.452) (23.533)
Operating Result
after
Finance and Tax
Expenses 294.120 (44.859) 249.261 (60.203) (3.832) (64.035)
Other income /
(expenses),
net 3.524 (107.144) (103.620) 34.305 48 34.353
Oneoff costs
associated
with
non-recurring
tasks* (42.015) - (42.015) (16.750) - (16.750)
Fair value
adjustments
from
Investment
Properties - 250.201 250.201 - 996.297 996.297
Net gain/(loss)
on disposal
of investment
property - 294.514 294.514 - 1.199 1.199
Impairment of
financial
investments 79.284 - 79.284 (284.404) - (284.404)
Foreign
exchange
differences,
net (47.406) (157.942) (205.348) (42.043) (132.904) (174.947)
Result for the
year 287.507 234.770 522.277 (369.095) 860.808 491.713
Exchange
difference on
I/C loans to
foreign
holdings - - - - (42.638) (42.638)
Exchange
difference on
translation due
to presentation
currency - (565.479) (565.479) - (1.176.630) (1.176.630)
Total
Comprehensive
Income
for the year 287.507 (330.709) (43.202) (369.094) (358.460) (727.554)
----------------- ------------------- --------------------- ------------------ ------------------- -------------------- ------------------
* Arcona transaction, Change of share custody
position due to Brexit, Strike off companies
2. Regional Economic Developments
The Romanian economy is recovering faster than expected
following the 3,9% contraction in 2020 due to the impact of the
COVID-19 pandemic. GDP is now expected to grow in a 5-7% range on
an annual basis as estimated by both government and analysts.
Retail sales and construction works drive such recovery with an
increase of c.14% and c.6% respectively. The unemployment rate has
not experienced significant changes during H1 2021, standing at
5,6%, although the progress of the domestic vaccination program, as
well as the relaxation of global mobility restrictions, are
expected to have a positive impact on unemployment. Nonetheless,
the public deficit is expected to continue to sense the effects of
the pandemic crisis, with an even higher deficit - forecast, at
minus 11,3%.
The Government continues to provide fiscal stimulus in response
to the COVID-19 crisis. The strength of the recovery will depend on
the success of the COVID-19 vaccine rollout and the policy response
to the health crisis, as well as on developments in the EU.
Regarding the expected economic boost through the national recovery
and resilience plan established by the European Commission, Romania
expects approval for almost EUR30 billion in the second half of the
year.
The Ukraine economy contracted 4% in 2020 due to the effects of
the pandemic, although improved macroeconomical management proved
an asset in the crisis, helping the country to maintain economic
stability. During H1 2021 the economy is set to return to growth
and relevant forecasts set GDP growth at 3,5%. Industrial
production was up 1,5% year-on-year and retail trade grew 14%
year-on-year, while exports and imports increased by 12% and 11%
respectively.
Inflation has been accelerating in 2021 on the back of rising
food prices, reaching 9,5% year-on-year. The increase in prices
prompted the National Bank of Ukraine to raise its key policy rate
twice, to 7,5%, in April 2021.
Major risks associated with the recovery of the Ukrainian
economy are the country's slow progress on the reform program which
was distrupted by the pandemic, when government policy was
re-directed from structural reforms to ad-hoc measures, as well as
the successful rollout of the ongoing vaccination program.
3. Real Estate Market Developments
3.1 Romania
In H1 2021 the total volume invested in real estate in Romania
reached c.EUR300 million, a 23% decrease compared to H1 2020, as
some important transactions have been postponed for the second half
of the year. The most active segment was the office sector
representing 65% of the total investment volume, with the
industrial segment representing 24% and the remaining 11% split
between the retail and hospitality sectors.
Romania still has some of the most attractive yields in the EU,
which are forecast to remain stable in 2021 for standard
properties, while a compression is expected with regard to premium
properties in prime locations which attract the interest of the
majority of investors.
Industrial and logistics prime stock in Romania reached
approximately 5,4 million m2 at the end of H1 2021, with almost
half a million square metres being new projects which entered the
market. Bucharest continues to be the largest industrial/logistics
hub in the country, gathering 2,7 million m2 and most of the
interest for future expansion. Prime yields are at 8% with a
decreasing trend, while the vacancy rate for the modern industrial/
logistics assets stands at c.5,5%.
During 2021 46,000 m2 of gross leasable area of office space was
delivered, so that at the end of the period the Bucharest modern
office stock has reached 3 million m2 of space, out of which more
than half, respectively 63%, being Class A. Average vacancy rates
stand at 12,2% which is slightly lower than at the end of 2020.
Prime yields stand at 7,15% with a stable trend, although the
market monitors closely developments related to the pandemic and
possible changes this might bring to general working
conditions.
Sales of residential units in Romania are expected to continue
to be strong in 2021 following the substantial increase in 2020 of
8,2%. Residential units in Bucharest cost around EUR1.480 per m2,
while prices of more than EUR1.000 per m2 are also achieved in
regional cities such as Timisoara, Brasov and Constanta. Despite
the devaluation of Romanian Ron against the Euro and the
introduction of the consumer credit reference Index (IRCC),
replacing ROBOR for consumer loans in Romania, demand has been
robust and is expected to continue to remain so. It is estimated
that the annual increase of sales volume will be at the same as
last year's levels.
3.2 Ukraine
Real estate investment in Ukraine continues in H1 2021 to be
weak, mainly due to the COVID-19 pandemic impact, and the lack of
financing which does not favour relevant investment activity. The
continued political uncertainty due to the tension with Russia
increases the associated risk, but despite this, the market
continues to operate. On the other hand, the recent change in the
legislation regarding the increase of support to large investors,
passed successfully during December 2020, is expected to
incentivise real estate investors once the pandemic retreats and
Ukraine returns to normality. The new law exempts large investors
from income tax, value-added tax, import duty on new equipment and
its components, and provides financial support in the construction
of infrastructure relevant to investment projects.
With regard to the Ukrainian land market, due to a lack of
finance, many potential investors are placing unfinished projects
in the market. However, particularly in Kiev, there is a scarcity
of undeveloped land plots near the city centre with access to
public transportation and especially to metro stations. On the
supply side, the sellers pool consists of development companies,
unable to develop due to the lack of finance, companies or
individuals having speculatively acquired land plots prior to the
crisis with the intention to sell on and banks possessing mortgaged
land upon default of previous owners. The demand for land plots has
started increasing since 2016, especially for ones suitable for
commercial development, a trend which stopped in 2020 mainly due to
the effects of the COVID-19 pandemic. Assuming continued economic
recovery in 2021, a gradual rebound in demand is anticipated by the
end of the year.
4. Property Assets
4.1 EOS Business Park - Danone Headquarters, Romania
The park consists of 5,000 m2 of land including a class "A"
office building of 3.386 m2 GLA and 90 parking places. It is
located next to the Danone factory, in the North-Eastern part of
Bucharest with access to the Colentina Road and the Fundeni Road.
The Park is very close to Bucharest's ring road and the DN 2
national road (E60 and E85) and is also served by public
transportation. The park is highly energy efficient.
The company acquired the office building in November 2014. The
complex is fully let to Danone Romania, the French multinational
food company, until 2025. The asset is part of Stage 2 of the
Arcona transaction and the relevant SPA for its disposal has
already been signed in June 2021 with closing expected to be within
H2 2021.
4.2 Delenco office building, Romania
The property is a 10.280 m2 office building, which consists of
two underground levels, a ground floor and ten above-ground floors.
The building is strategically located in the very centre of
Bucharest, close to three main squares of the City: Unirii, Alba
Iulia and Muncii, only 300m from the metro station.
The Company acquired 24,35% of the property in May 2015. As at
30 June 2021, the building is 99% let, with ANCOM (the Romanian
Telecommunications Regulator) being the anchor tenant (81% of GLA).
The asset is part of Stage 2 of the Arcona transaction and the
relevant SPA for its disposal has already been signed in June 2021
with closing to be expected within H2 2021.
4.3 Innovations Logistics Park, Romania
The park incorporates approximately 8,470 m2 of multipurpose
warehousing space, 6,395 m2 of cold storage and 1,705 m2 of office
space. It is located in the area of Clinceni, south west of
Bucharest centre, 200m from the city's ring road and 6km from the
Bucharest-Pitesti (A1) highway. Its construction was completed in
2008 and was tenant specific. It comprises four separate
warehouses, two of which offer cold storage.
In April 2017, the Company signed a lease agreement with Aquila
Srl, a large Romanian logistics operator, for 5,740 m2 of ambient
space in the warehouse which expired during April 2018 without
being extended. During Q1 2019, the Company signed a lease
agreement with Favorit Business Srl for 3,000 m2 of cold storage
space, 506 m2 of ambient storage space, and 440 m2 of office space.
In Q2 2019 the Company agreed with Favorit Business Srl a lease of
an extra 3,000 m2 of cold storage space, and an extra 210 m2 of
office space to accommodate their new business line which involves
Carrefour as its end user. Moreover, since 2019 the Company signed
short term lease agreements for 2,000-3,000 m2 of ambient storage
space with Chipita Romania Srl, one of the fastest growing regional
food companies. As at the end of the current period, the terminal
was 89% leased. The asset is planned to be part of Stage 3 of the
Arcona transaction.
4.4 Kindergarten, Romania
Situated on the GreenLake compound on the banks of Grivita Lake,
a standalone building on the ground and first floor is used as a
nursery by one of the Bucharest's leading private schools. The
building is erected on a 1,428.59 m2 plot with a total gross area
of 1,198 m2.
The property is 100% leased to the International School for
Primary Education until 2032. The Company has signed a
pre-agreement for the sale of the asset to one of its partners in
the Green Lake project, honouring certain commitments made in the
past.
4.5 Residential Portfolio
-- Monaco Towers,. Bucharest, Romania
Monaco Towers is a residential complex located in South
Bucharest, Sector 4, enjoying good car access due to the large
boulevards, public transportation, and a shopping mall (Sun Plaza)
reachable within a short driving distance or easily accessible by
subway.
Following extended negotiations with the Company which acquired
Monaco's loan, the SPV holding the Monaco units entered insolvency
in 2019 in order to protect itself from its creditors. During 2019,
based on regulatory procedures for disposing of assets held by the
debtor, and upon agreement of all parties and the judicial
administrators approval, 5 units were sold. During 2020 another 12
units were sold and as a result the relevant loan has been fully
repaid. Currently, the SPV has exited insolvency status and the
Company is in the process of re-gaining full control. At the end of
the period, 3 apartments were available.
-- Blooming House, Bucharest, Romania
Blooming House is a residential development project located in
Bucharest, Sector 3, a residential area within the biggest
development and property value growth area in Bucharest, offering a
number of supporting facilities such as access to Vitan Mall,
kindergartens, cafés, schools and public transportation (both bus
and tram).
During H1 2021, the last available unit of the complex was
sold.
-- Greenlake, Bucharest, Romania
A residential compound of 40,500 m2 gross building area, which
consists of apartments and villas situated on the banks of Grivita
Lake in the northern part of the Romanian capital - the only
residential property in Bucharest with a 200 metre frontage to a
lake. The compound also includes facilities such as one of
Bucharest's leading private schools (International School for
Primary Education), outdoor sports courts and a mini-market.
Additionally GreenLake includes land plots totaling 40,360 m2. SPDI
owns c. 43% of this property asset portfolio.
During H1 2021, 12 apartments and villas were sold while at the
end of the period 15 units remained unsold. The asset is planned to
be part of Stage 3 of the Arcona transaction.
-- Romfelt Plaza (Doamna Ghica), Bucharest, Romania
Romfelt Plaza is a residential complex located in Bucharest,
Sector 2, relatively close to the city centre, easily accessible by
public transport and nearby supporting facilities and green
areas.
During 2020 the last unit was sold.
4.6 Land Assets
-- Kiyanovskiy Residence - Kiev, Ukraine
The property consists of 0,55 hectares of land located at
Kiyanovskiy Lane, near Kiev city centre. It is destined for the
development of businesses and luxury residences with beautiful
protected views overlooking the scenic Dnipro River, St. Michaels'
Spires and historic Podil.
The asset is part of Stage 2 of the Arcona transaction and the
relevant SPA for its disposal has already been signed in June 2021
with closing to be expected within H2 2021.
-- Tsymlyanskiy Residence - Kiev, Ukraine
The 0,36 hectare plot is located in the historic and rapidly
developing Podil District in Kiev.
The Company owns 55% of the plot, with a local co-investor
owning the remaining 45%.
-- Rozny Lane - Kiev Oblast, Kiev, Ukraine
The 42 hectare land plot located in Kiev Oblast is destined to
be developed as a residential complex.
Following a protracted legal battle, it has been registered
under the Company pursuant to a legal decision in July 2015.
The asset is part of Stage 2 of the Arcona transaction and the
relevant SPA for its disposal has already been signed in June 2021
with closing to be expected within H2 2021.
UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2021
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2021
Note 30 June 30 June
2021 2020
EUR EUR
Continued Operations
Income 10 657.443 399.986
Net Operating Income 657.443 399.986
Administration expenses 12 (553.530) (680.837)
Other operating income/(expenses),
net 15 3.524 34.305
Impairment of financial investments 26 79.284 (284.404)
Operating profit/(Loss) 186.721 (530.950)
Finance income 16 254.819 260.543
Finance costs 16 (106.503) (56.564)
Profit/ (Loss) before tax and foreign
exchange differences 335.037 (326.971)
Foreign exchange (loss), net 17a (47.406) (42.043)
Profit/ (Loss) before tax 287.631 (369.014)
Income tax expense 18 (124) (81)
Profit/ (Loss) for the period from
continuing operations 287.507 (369.095)
Profit/(Loss) from discontinued operations 9b 234.770 860.808
Profit/(Loss) for the period 522.277 491.713
Other comprehensive income
Exchange difference on I/C loans to
foreign holdings 17b - (42.638)
Exchange difference on translation
of foreign operations 29 (565.479) (1.176.630)
Total comprehensive income for the
period (43.202) (727.555)
Profit/ (Loss) for the period from
continued operations attributable to:
Owners of the parent 287.507 (369.095)
Non-controlling interests - -
287.507 (369.095)
Profit/(Loss) for the period from discontinued
operations attributable to:
Owners of the parent 146.385 962.448
Non-controlling interests 88.385 (101.640)
234.770 860.808
Profit/(Loss) for the period attributable
to:
Owners of the parent 433.892 593.353
Non-controlling interests 88.385 (101.640)
522.277 491.713
Total comprehensive income attributable
to:
Owners of the parent (189.974) (638.119)
Non-controlling interests 146.772 (89.436)
(43.202) (727.555)
Earnings/(losses) per share (Euro 37b,c
per share):
Basic earnings/(losses) for the period
attributable to ordinary equity owners
of the parent 0,002 (0,003)
Diluted earnings/(losses) for the
period attributable to ordinary equity
owners of the parent
Basic earningsfor the period from
discontinued operations attributable
to ordinary equity owners of the parent 0,002 (0,003)
Diluted earnings for the period from
discontinued operations 0,001 0,007
attributable to ordinary equity owners
of the parent 0,001 0,007
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the six months ended 30 June 2021
Note 30 June 31 December
2021 2020
EUR EUR
ASSETS
Non--current assets
Tangible and intangible assets 23 1.632 2.859
Financial Assets at FV through P&L 26 6.866.528 6.787.244
Long-term receivables and prepayments 24 826 836
------------- -------------------------
6.868.986 6.790.939
Current assets
Prepayments and other current assets 25 5.887.259 6.880.076
Cash and cash equivalents 27 74.294 129.859
------------- -------------------------
5.961.553 7. 009.935
Assets classified as held for sale 9d 40.201.063 41.791.409
Total assets 53.031.602 55.592.283
EQUITY AND LIABILITIES
Issued share capital 28 1.291.281 1.291.281
Share premium 72.107.265 72.107.265
Foreign currency translation reserve 29 8.330.560 8.954.426
Exchange difference on I/C loans to
foreign holdings 39.3 (211.199) (211.199)
Accumulated losses (57.994.908) ( 58.428.800
)
Equity attributable to equity holders 23.522.999 23.712.973
of the parent
Non-controlling interests 30 6.067.925 5.921.153
Total equity 29.590.924 29.634.126
Non--current liabilities
Borrowings 31 136.560 95.977
Bonds issued 32 1.033.842 1.033.842
Taxation 35 612.237 663.062
1.782.639 1.792.881
Current liabilities
Borrowings 31 1.577.500 2.054.400
Bonds issued 32 258.869 225.081
Trade and other payables 33 4.001.124 4.036.962
Tax payable and provisions 35 611.958 620.365
6.449.451 6.936.808
Liabilities directly associated with
assets classified as held for sale 9d 15.208.588 17.228.468
21.658.039 24.165.276
Total liabilities 23.440.678 25.958.157
Total equity and liabilities 53.031.602 55.592.283
Net Asset Value (NAV) EUR per share: 37d
Basic NAV attributable to equity holders
of the parent 0,18 0,18
Diluted NAV attributable to equity holders
of the parent 0,18 0,18
On 29 September 2021 the Board of Directors of SECURE PROPERTY
DEVELOPMENT & INVESTMENT PLC authorised these financial
statements for issue.
Lambros Anagnostopoulos Michael Beys Theofanis Antoniou
Director & Chief Executive Director & Chairman CFO
Officer of the Board
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2021
Attributable to owners of the Company
------------------------------------------------------------------------------------ ------------ ------------
Share Share Accumulated Exchange Foreign Total Non- Total
capital premium, losses, difference currency controlling
Net(1) net of on I/C translation interest
non-controlling loans to reserve
interest(2) foreign (4)
holdings
(3)
EUR EUR EUR EUR EUR EUR EUR EUR
Balance 1
January 2020 1.291.281 72.107.265 (54.088.934) (149.263) 10.232.119 29.392.468 7.446.255 36.838.723
Loss for the
year - - 775.943 - - 775.943 (101.640) 674.303
Exchange
difference
on
I/C loans
to foreign
holdings
(Note 17b ) - - - (42.640) - (42.640) - (42.640)
Foreign
currency
translation
reserve - - - - (1.087.654) (1.087.654) (88.976) (1.176.630)
Balance 30
June 2020 1.291.281 72.107.265 (53.312.991) (191.903) 9.144.465 29.038.117 7.255.639 36.293.756
Loss for the
year - - (5.115.809) - - (5.115.809) (1.309.000) (6.424.809)
Exchange
difference
on
I/C loans
to foreign
holdings
(Note 17b ) - - - (19.296) - (19.296) - (19.296)
Foreign
currency
translation
reserve - - - (190.039) (190.039) (25.486) (215.525)
Balance 31
December
2020 1.291.281 72.107.265 (58.428.800) (211.199) 8.954.426 23.712.973 5.921.153 29.634.126
Loss for the
year - - 433.892 - - 433.892 88.385 522.277
Foreign
currency
translation
reserve - - - - (623.866) (623.866) 58.387 (565.479)
Balance 30
June 2021 1.291.281 72.107.265 (57.994.908) (211.199) 8.330.560 23.522.999 6.067.925 29.590.924
(1) Share premium is not available for distribution.
(2) Companies, which do not distribute 70% of their profits
after tax, as defined by the Special Contribution for the Defence
of the Republic Law, within two years after the end of the relevant
tax year, will be deemed to have distributed this amount as
dividend on the 31 of December of the second year. The amount of
the deemed dividend distribution is reduced by any actual dividend
already distributed by 31 December of the second year for the year
the profits relate. The Company pays special defence contribution
on behalf of the shareholders over the amount of the deemed
dividend distribution at a rate of 17% (applicable since 2014) when
the entitled shareholders are natural persons tax residents of
Cyprus and have their domicile in Cyprus. In addition, from 2019
(deemed dividend distribution of year 2017 profits), the Company
pays on behalf of the shareholders General Healthcare System (GHS)
contribution at a rate of 2,65% (31.12.2019: 1,70%), when the
entitled shareholders are natural persons tax residents of Cyprus,
regardless of their domicile.
(3) Exchange differences on intercompany loans to foreign
holdings arose as a result of devaluation of the Ukrainian Hryvnia
during previous years. The Group treats the mentioned loans as a
part of the net investment in foreign operations (Note 39.3).
(4) Exchange differences related to the translation from the
functional currency of the Group's subsidiaries are accounted for
directly to the foreign currency translation reserve. The foreign
currency translation reserve represents unrealized profits or
losses related to the appreciation or depreciation of the local
currencies against the euro in the countries where the Group's
subsidiaries own property assets.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2021
30 June
Note 30 June 2021 2020
EUR EUR
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax and non-controlling interests-continued
operations 287.631 (369.014)
Profit/(Loss )before tax and non-controlling
interests-discontinued operations 9b 252.619 884.260
Profit/(Loss) before tax and non-controlling
interests 540.250 515.246
Adjustments for:
(Gains)/losses on revaluation of investment
property 13 (250.201) (996.297)
Net gain/loss on disposal of investment
properties 14 (294.514) (1.199)
Accounts payable written off 15 (5.464) (95)
Depreciation/ Amortisation charge 12 738 3.620
Finance income 16 (259.464) (265.213)
Interest expense 16 489.012 498.075
Share of profit from associates 21 (194.863) (218.862)
Fair value change on financial investment 26 (79.284) -
Effect of foreign exchange differences 17a 205.348 174.947
Cash flows from/(used in) operations before
working capital changes 151.558 (289.778)
Change in prepayments and other current
assets 25 318.743 (108.143)
Change in trade and other payables 33 (77.966) (112.182)
Change in VAT and other taxes receivable 25 8.471 (10.543)
Change in other taxes payables 35 55.785 22.346
Change in provisions 35 (337) 71.091
Change in deposits from tenants 34 - (898)
Cash generated from operations 456.254 (428.107)
Income tax paid (103.989) (83.149)
Net cash flows provided /(used) in operating
activities 352.265 (511.256)
CASH FLOWS FROM INVESTING ACTIVITIES
Sales proceeds from disposal of investment
property 14 2.126.423 744.052
Interest received 25 139.683 180.000
(Increase)/Decrease in long term receivable 23 (149.990) 15
Net cash flows from / (used in) investing
activities 2.116.116 924.067
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank and non-bank loans 31 - 550.000
Repayment of principle amount of borrowings (2.404.265) (459.567)
Interest and financial charges paid (108.521) (145.544)
Decrease in financial lease liabilities 36 (197.489) (286.995)
Net cash flows from / (used in) financing
activities (2.710.275) (342.106)
Net increase/(decrease) in cash at banks (241.894) 70.705
Cash:
At beginning of the period 841.868 771.163
At end of the period 27 599.974 841.868
------------ ---------
Notes to the Condensed Consolidated Interim Financial
Statements
For the six months ended 30 June 2021
1. General Information
Country of incorporation
SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC (the "Company")
was incorporated in Cyprus on 23 June 2005 and is a public limited
liability company, listed on the London Stock Exchange (AIM:SPDI)
with ISIN of CY0102102213. Its registered office is at Kyriakou
Matsi 16, Eagle House, 10th floor, Agioi Omologites, 1082 Nicosia,
Cyprus; while its principal place of business is 6 Nikiforou Foka
Street, 1060 Nicosia, Cyprus.
Principal activities
The principal activities of the Group are to invest directly or
indirectly in and/or manage real estate properties, as well as real
estate development projects in South East Europe (the "Region").
These include the acquisition, development, commercialising,
operating and selling of property assets in the Region.
The Group maintains offices in Nicosia, Cyprus, Bucharest,
Romania and Kiev, Ukraine.
As at the reporting date, the companies of the Group employed
and/or used the services of 15 full time equivalent people, (2020:
15 full time equivalent people).
2. Basis of preparation
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union (EU) and the requirements of the
Cyprus Companies Law, Cap.113. The consolidated financial
statements have been prepared under the historical cost as modified
by the revaluation of investment property and investment property
under construction, of financial assets at fair value through other
comprehensive income and of financial assets at fair value through
profit and loss.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates and
requires Management to exercise its judgment in the process of
applying the Company's accounting policies. It also requires the
use of assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these
estimates are based on Management's best knowledge of current
events and actions, actual results may ultimately differ from those
estimates.
Following a certain conditional agreement signed in December
2018 with Arcona Property Fund N.V for the sale of the Company's
non-Greek portfolio of assets, as well as plans and discussions
regarding the Greek asset, the Company has classified its assets in
2018 as discontinued operations (Note 4.3).
3. Adoption of new and revised Standards and Interpretations
During the current year the Company adopted all the new and
revised International Financial Reporting Standards (IFRS) that are
relevant to its operations and made effective for the accounting
period beginning on 1 January 2021. This adoption did not have a
material effect on the accounting policies of the Company.
4. Significant accounting policies
The principal accounting policies adopted in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all years presented in
these consolidated financial statements unless otherwise
stated.
Local statutory accounting principles and procedures differ from
those generally accepted under IFRS. Accordingly, the consolidated
financial information, which has been prepared from the local
statutory accounting records for the entities of the Group
domiciled in Cyprus, Romania, and Ukraine, reflects adjustments
necessary for such consolidated financial information to be
presented in accordance with IFRS.
4.1 Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities (including special purpose
entities) controlled by the Company (its subsidiaries).
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired,
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of acquiree's identifiable net
assets.
If the business combination is achieved in stages, the
acquisition date carrying value of the acquirer's previously held
equity interest in the acquiree is re-measured to fair value at the
acquisition date; any gains or losses arising from such
re-measurement are recognized in profit or loss.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IAS 39, either in profit or loss or as a change to other
comprehensive income. Contingent consideration that is classified
as equity is not re-measured and its subsequent settlement is
accounted for within equity.
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the
items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period (see above), or
additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed at
the acquisition date that, if known, would have affected the
amounts recognised at that date.
Business combinations that took place prior to 1 January 2010
were accounted for in accordance with the previous version of IFRS
3.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated. When necessary, amounts reported by
subsidiaries have been adjusted to conform with the Group's
accounting policies.
Changes in ownership interests in subsidiaries without change of
control and Disposal of Subsidiaries
Transactions with non-controlling interests that do not result
in loss of control are accounted for as equity transactions - that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals of
non-controlling interests are also recorded in equity.
When the Group ceases to have control, any retained interest in
the entity is re-measured to its fair value at the date when
control is lost, with the change in carrying amount recognised in
profit or loss. The fair value is the initial carrying amount for
the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
4.2 Functional and presentation currency
Items included in the Group's financial statements are measured
applying the currency of the primary economic environment in which
the entities operate ("the functional currency"). The national
currency of Ukraine, the Ukrainian Hryvnia, is the functional
currency for all the Group's entities located in Ukraine, the
Romanian leu is the functional currency for all Group's entities
located in Romania, and the Euro is the functional currency for all
the Cypriot subsidiaries.
The consolidated financial statements are presented in Euro,
which is the Group's presentation currency.
As Management records the consolidated financial information of
the entities domiciled in Cyprus, Romania, Ukraine, Greece and
Bulgaria in their functional currencies, in translating financial
information of the entities domiciled in these countries into Euro
for inclusion in the consolidated financial statements, the Group
follows a translation policy in accordance with IAS 21, "The
Effects of Changes in Foreign Exchange Rates", and the following
procedures are performed:
-- All assets and liabilities are translated at closing rate;
-- Equity of the Group has been translated using the historical rates;
-- Income and expense items are translated using exchange rates
at the dates of the transactions, or where this is not practicable
the average rate has been used;
-- All resulting exchange differences are recognized as a separate component of equity;
-- When a foreign operation is disposed of through sale,
liquidation, repayment of share capital or abandonment of all, or
part of that entity, the exchange differences deferred in equity
are reclassified to the consolidated statement of comprehensive
income as part of the gain or loss on sale;
-- Monetary items receivable from foreign operations for which
settlement is neither planned nor likely to occur in the
foreseeable future and in substance are part of the Group's net
investment in those foreign operations are recognised initially in
other comprehensive income and reclassified from equity to profit
or loss on disposal of the foreign operation.
The relevant exchange rates of the European and local central
banks used in translating the financial information of the entities
from the functional currencies into Euro are as follows:
Average for the period Closing as at
Currency 1 Jan 2021 - 30 1 Jan 2020 - 31 1 Jan 2020 - 30 30 June 2021 31 December 2020 30 June 2020
June 2021 Dec 2020 June 2020
----------------- ------------------ ------------------ ------------- ----------------- -------------
USD 1,2053 1,1422 1,1020 1,1884 1,2270 1,1198
----------------- ------------------ ------------------ ------------- ----------------- -------------
UAH 33,4936 30,8013 28,6031 32,3018 34,7396 29,9500
----------------- ------------------ ------------------ ------------- ----------------- -------------
RON 4,900 4,8371 4,8163 4,9267 4,8694 4,8423
----------------- ------------------ ------------------ ------------- ----------------- -------------
4.3 Discontinued operations
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which:
-- represents a separate major line of business or geographic area of operations;
-- is part of a single coordinated plan to dispose of a separate
major line of business or geographic area of operations; or
-- is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier
of disposal or when the operation meets the criteria to be
classified as held-for-sale.
When an operation is classified as a discontinued operation, the
comparative statement of profit or loss and OCI is re-presented as
if the operation had been discontinued from the start of the
comparative year.
4.4 Investment Property at fair value
Investment property, comprising freehold and leasehold land,
investment properties held for future development, warehouse and
office properties, as well as the residential property units , is
held for long term rental yields and/or for capital appreciation
and is not occupied by the Group. Investment property and
investment property under construction are carried at fair value,
representing open market value determined annually by external
valuers. Changes in fair values are recorded in the statement of
comprehensive income and are included in other operating
income.
A number of the land leases (all in Ukraine) are held for
relatively short terms and place an obligation upon the lessee to
complete development by a prescribed date. It is important to note
that the rights to complete a development may be lost or at least
delayed if the lessee fails to complete a permitted development
within the timescale set out by the ground lease.
In addition, in the event that a development has not commenced
upon the expiry of a lease then the City Authorities are entitled
to decline the granting of a new lease on the basis that the land
is not used in accordance with the designation. Furthermore, where
all necessary permissions and consents for the development are not
in place, this may provide the City Authorities with grounds for
rescinding or non-renewal of the ground lease. However Management
believes that the possibility of such action is remote and was made
only under limited circumstances in the past.
Management believes that rescinding or non-renewal of the ground
lease is remote if a project is on the final stage of development
or on the operating cycle. In undertaking the valuations reported
herein, the valuer of Ukrainian properties CBRE has made the
assumption that no such circumstances will arise to permit the City
Authorities to rescind the land lease or not to grant a
renewal.
Land held under operating lease is classified and accounted for
as investment property when the rest of the definition is met.
Investment property under development or construction initially
is measured at cost, including related transaction costs.
The property is classified in accordance with the intention of
the management for its future use. Intention to use is determined
by the Board of Directors after reviewing market conditions,
profitability of the projects, ability to finance the project and
obtaining required construction permits.
The time point, when the intention of the management is
finalized is the date of start of construction. At the moment of
start of construction, freehold land, leasehold land and investment
properties held for a future redevelopment are reclassified into
investment property under development or inventory in accordance to
the final decision of management.
Initial measurement and recognition
Investment property is measured initially at cost, including
related transaction costs. Investment properties are derecognised
when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic
benefit is expected from its disposal. Any gains or losses on the
retirement or disposal of an investment property are recognised in
the consolidated statement of comprehensive income in the period of
retirement or disposal.
Transfers are made to investment property when, and only when,
there is a change in use, evidenced by the end of owner occupation,
or the commencement of an operating lease to third party. Transfers
are made from investment property when, and only when, there is a
change in use, evidenced by commencement of owner occupation or
commencement of development with a view to sale.
If an investment property becomes owner occupied, it is
reclassified as property, plant and equipment, and its fair value
at the date of reclassification becomes its cost for accounting
purposes. Property that is being constructed or developed for
future use as investment property is classified as investment
property under construction until construction or development is
complete. At that time, it is reclassified and subsequently
accounted for as investment property.
Subsequent measurement
Subsequent to initial recognition, investment property is stated
at fair value. Gains or losses arising from changes in the fair
value of investment property are included in the statement of
comprehensive income in the period in which they arise.
If a valuation obtained for an investment property held under a
lease is net of all payments expected to be made, any related
liabilities/assets recognized separately in the statement of
financial position are added back/reduced to arrive at the carrying
value of the investment property for accounting purposes.
Subsequent expenditure is charged to the asset's carrying amount
only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance costs are
charged to the statement of comprehensive income during the
financial period in which they are incurred.
Basis of valuation
The fair values reflect market conditions at the financial
position date. These valuations are prepared annually by chartered
surveyors (hereafter "appraisers"). The Group appointed valuers in
2014, which remain the same the period ending 30 June 2021:
-- CBRE Ukraine, for all its Ukrainian properties,
-- NAI Real Act for all its Romanian properties.
The valuations have been carried out by the appraisers on the
basis of Market Value in accordance with the appropriate sections
of the current Practice Statements contained within the Royal
Institution of Chartered Surveyors ("RICS") Valuation - Global
Standards (2018) (the "Red Book") and is also compliant with the
International Valuation Standards (IVS).
"Market Value" is defined as: "The estimated amount for which a
property should be exchanged on the date of valuation between a
willing buyer and a willing seller in an arms length transaction
after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion".
In expressing opinions on Market Value, in certain cases the
appraisers have estimated net annual rentals/income from sale.
These are assessed on the assumption that they are the best
rent/sale prices at which a new letting/sale of an interest in
property would have been completed at the date of valuation
assuming: a willing landlord/buyer; that prior to the date of
valuation there had been a reasonable period (having regard to the
nature of the property and the state of the market) for the proper
marketing of the interest, for the agreement of the price and terms
and for the completion of the letting/sale; that the state of the
market, levels of value and other circumstances were, on any
earlier assumed date of entering into an agreement for lease/sale,
the same as on the valuation date; that no account is taken of any
additional bid by a prospective tenant/buyer with a special
interest; that the principal deal conditions assumed to apply are
the same as in the market at the time of valuation; that both
parties to the transaction had acted knowledgeably, prudently and
without compulsion.
A number of properties are held by way of ground leasehold
interests granted by the City Authorities. The ground rental
payments of such interests may be reviewed on an annual basis, in
either an upwards or downwards direction, by reference to an
established formula. Within the terms of the lease, there is a
right to extend the term of the lease upon expiry in line with the
existing terms and conditions thereof. In arriving at opinions of
Market Value, the appraisers assumed that the respective ground
leases are capable of extension in accordance with the terms of
each lease. In addition, given that such interests are not
assignable, it was assumed that each leasehold interest is held by
way of a special purpose vehicle ("SPV"), and that the shares in
the respective SPVs are transferable.
With regard to each of the properties considered, in those
instances where project documentation has been agreed with the
respective local authorities, opinions of the appraisers of value
have been based on such agreements.
In those instances where the properties are held in part
ownership, the valuations assume that these interests are saleable
in the open market without any restriction from the co-owner and
that there are no encumbrances within the share agreements which
would impact the sale ability of the properties concerned.
The valuation is exclusive of VAT and no allowances have been
made for any expenses of realization or for taxation which might
arise in the event of a disposal of any property.
In some instances the appraisers constructed a Discounted Cash
Flow (DCF) model. DCF analysis is a financial modeling technique
based on explicit assumptions regarding the prospective income and
expenses of a property or business. The analysis is a forecast of
receipts and disbursements during the period concerned. The
forecast is based on the assessment of market prices for comparable
premises, build rates, cost levels etc. from the point of view of a
probable developer.
To these projected cash flows, an appropriate, market-derived
discount rate is applied to establish an indication of the present
value of the income stream associated with the property. In this
case, it is a development property and thus estimates of capital
outlays, development costs, and anticipated sales income are used
to produce net cash flows that are then discounted over the
projected development and marketing periods. The Net Present Value
(NPV) of such cash flows could represent what someone might be
willing to pay for the site and is therefore an indicator of market
value. All the payments are projected in nominal US Dollar/Euro
amounts and thus incorporate relevant inflation measures.
Valuation Approach
In addition to the above general valuation methodology, the
appraisers have taken into account in arriving at Market Value the
following:
Pre Development
In those instances where the nature of the 'Project' has been
defined, it was assumed that the subject property will be developed
in accordance with this blueprint. The final outcome of the
development of the property is determined by the Board of Directors
decision, which is based on existing market conditions,
profitability of the project, ability to finance the project and
obtaining required construction permits.
Development
In terms of construction costs, the budgeted costs have been
taken into account in considering opinions of value. However, the
appraisers have also had regard to current construction rates
prevailing in the market which a prospective purchaser may deem
appropriate to adopt in constructing each individual scheme.
Although in some instances the appraisers have adopted the budgeted
costs provided, in some cases the appraisers' own opinions of costs
were used.
Post Development
Rental values have been assessed as at the date of valuation but
having regard to the existing occupational markets taking into
account the likely supply and demand dynamics during the
anticipated development period. The standard letting fees were
assumed within the valuations. In arriving at their estimates of
gross development value ("GDV"), the appraisers have capitalised
their opinion of net operating income, having deducted any
anticipated non-recoverable expenses, such as land payments, and
permanent void allowance, which has then been capitalised into
perpetuity.
The capitalisation rates adopted in arriving at the opinions of
GDV reflect the appraisers' opinions of the rates at which the
properties could be sold as at the date of valuation.
In terms of residential developments, the sales prices per sq.
m. again reflect current market conditions and represent those
levels the appraisers consider to be achievable at present. It was
assumed that there are no irrecoverable operating expenses and that
all costs will be recovered from the occupiers/owners by way of a
service charge.
The valuations take into account the requirement to pay ground
rental payments and these are assumed not to be recoverable from
the occupiers. In terms of ground rent payments, the appraisers
have assessed these on the basis of information available, and if
not available they have calculated these payments based on current
legislation defining the basis of these assessments. Property tax
is not presently payable in the Ukraine.
4.5 Goodwill
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of acquisition of the business less
accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to
each of the Group's cash-generating units (or Groups of
cash-generating units) that is expected to benefit from the
synergies of the combination.
A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is
indication that the unit may be impaired. If the recoverable amount
of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of
the unit pro rata based on the carrying amount of each asset in the
unit. Any impairment loss for goodwill is recognized directly in
profit or loss in the consolidated statement of comprehensive
income. An impairment loss recognised for goodwill is not reversed
in subsequent periods.
On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
4.6 Property, Plant and equipment and intangible assets
Property, plant and equipment and intangible non-current assets
are stated at historical cost less accumulated depreciation and
amortisation and any accumulated impairment losses.
Properties in the course of construction for production, rental
or administrative purposes, or for purposes not yet determined and
intangibles not inputted into exploitation, are carried at cost,
less any recognized impairment loss. Cost includes professional
fees and, for qualifying assets, borrowing costs capitalised in
accordance with the Group's accounting policy. Depreciation of
these assets, on the same basis as other property assets, commences
when the assets are ready for their intended use.
Depreciation and amortisation are calculated on the
straight--line basis so as to write off the cost of each asset to
its residual value over its estimated useful life. The annual
depreciation rates are as follows:
Type %
Leasehold 20
IT hardware 33
Motor vehicles 25
Furniture, fixtures and office equipment 20
Machinery and equipment 15
Software and Licenses 33
No depreciation is charged on land.
Assets held under leases are depreciated over their expected
useful lives on the same basis as owned assets or, where shorter,
the term of the relevant lease.
The assets residual values and useful lives are reviewed, and
adjusted, if appropriate, at each reporting date.
Where the carrying amount of an asset is greater than its
estimated recoverable amount, the asset is written down immediately
to its recoverable amount.
Expenditure for repairs and maintenance of tangible and
intangible assets is charged to the statement of comprehensive
income of the year in which it is incurred. The cost of major
renovations and other subsequent expenditure are included in the
carrying amount of the asset when it is probable that future
economic benefits in excess of the originally assessed standard of
performance of the existing asset will flow to the Group. Major
renovations are depreciated over the remaining useful life of the
related asset.
An item of tangible and intangible assets is derecognised upon
disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on
the disposal or retirement of an item of property, plant and
equipment is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognised in
the statement of comprehensive income.
4.7 Cash and Cash equivalents
Cash and cash equivalents include cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose of the
statement of cash flows.
4.8 Assets held for sale
Non-current assets, or disposal groups comprising assets and
liabilities, are classified as held-for-sale if it is highly
probable that they will be recovered primarily through sale rather
than through continuing use.
Such assets, or disposal groups, are generally measured at the
lower of their carrying amount and fair value less costs to sell.
Any impairment loss on a disposal group is allocated first to
goodwill, and then to the remaining assets and liabilities on a pro
rata basis, except that no loss is allocated to inventories,
financial assets or investment property, which continue to be
measured in accordance with the Group's other accounting policies.
Impairment losses on initial classification as held-for-sale or
held-for-distribution and subsequent gains and losses on
remeasurement are recognised in profit or loss.
4.9 Financial Instruments
4.9.1 Recognition and initial measurement
Trade receivables and debt securities issued are initially
recognised when they are originated. All other financial assets and
financial liabilities are initially recognised when the Group
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.
4.9.2 Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as
measured at: amortised cost; FVOCI - debt investment; FVOCI -
equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their
initial recognition unless the Group 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:
- 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 .
A debt investment is measured at FVOCI if it meets both of the
following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is achieved
by both collecting contractual cash flows and selling financial
assets; 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.
On initial recognition of an equity investment that is not held
for trading, the Group may irrevocably elect to present subsequent
changes in the investment's fair value in OCI. This election is
made on an investment-by-investment basis.
Financial assets - Business model assessment:
The Group 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 Group'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 of financial assets in
prior periods, the reasons for such sales and expectations about
future sales activity.
Transfers of financial assets to third parties in transactions
that do not qualify for derecognition are not considered sales for
this purpose, consistent with the Group's continuing recognition of
the assets.
Financial assets that are held for trading or are managed and
whose performance is evaluated on a fair value basis are measured
at FVTPL.
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 a profit margin.
In assessing whether the contractual cash flows are solely
payments of principal and interest, the Group 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 Group
considers:
- contingent events that would change the amount or timing of cash flows;
- terms that may adjust the contractual coupon rate, including variable-rate features;
- prepayment and extension features; and
- terms that limit the Group's claim to cash flows from
specified assets (e.g. non-recourse features).
A prepayment feature is consistent with the solely payments of
principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest
on the principal amount outstanding, which may include reasonable
additional compensation for early termination of the contract.
Additionally, for a financial asset acquired at a discount or
premium to its contractual par amount, a feature that permits or
requires prepayment at an amount that substantially represents the
contractual par amount plus accrued (but unpaid) contractual
interest (which may also include reasonable additional compensation
for early termination) is treated as consistent with this criterion
if the fair value of the prepayment feature is insignificant at
initial recognition.
Financial assets - Subsequent measurement and gains and
losses:
These assets are subsequently measured at fair value. Net gains
and losses, including any interest or dividend income, are
recognised in profit or loss. However for derivatives designated as
hedging instruments.
Financial assets at amortised cost
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 recognised in profit or loss. Any gain or
loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest
income calculated using the effective interest method, foreign
exchange gains and losses and impairment are recognised in profit
or loss. Other net gains and losses are recognised in OCI. On
derecognition, gains and losses accumulated in OCI are reclassified
to profit or loss.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends
are recognised as income in profit or loss unless the dividend
clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and
are never reclassified to profit or loss.
4.9.3 Derecognition
Financial assets
The Group 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
Group neither transfers nor retains substantially all of the risks
and rewards of ownership and it does not retain control of the
financial asset.
The Group enters into transactions whereby it transfers assets
recognised in its statement of financial position, but retains
either all or substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred assets are not
derecognised.
Financial liabilities
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled, or expire. The
Group 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 recognised 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 recognised in profit or loss.
4 .9.4 Offsetting
Financial assets and financial liabilities are offset and the
net amount presented in the statement of financial position when,
and only when, the Group currently has a legally enforceable right
to set off the amounts and it intends either to settle them on a
net basis or to realise the asset and settle the liability
simultaneously.
4 .9.5 Derivative financial instruments and hedge accounting
Derivative financial instruments and hedge accounting -
When the Group holds derivative financial instruments to hedge
its foreign currency and interest rate risk exposures, embedded
derivatives are separated from the host contract and accounted for
separately if the host contract is not a financial asset and
certain criteria are met.
Derivatives are initially measured at fair value. Subsequent to
initial recognition, derivatives are measured at fair value, and
changes therein are generally recognised in profit or loss.
The Group designates certain derivatives as hedging instruments
to hedge the variability in cash flows associated with highly
probable forecast transactions arising from changes in foreign
exchange rates and interest rates and certain derivatives and
non-derivative financial liabilities as hedges of foreign exchange
risk on a net investment in a foreign operation.
At inception of designated hedging relationships, the Group
documents the risk management objective and strategy for
undertaking the hedge. The Group also documents the economic
relationship between the hedged item and the hedging instrument,
including whether the changes in cash flows of the hedged item and
hedging instrument are expected to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow hedging
instrument, the effective portion of changes in the fair value of
the derivative is recognised in OCI and accumulated in the hedging
reserve. The effective portion of changes in the fair value of the
derivative that is recognised in OCI is limited to the cumulative
change in fair value of the hedged item, determined on a present
value basis, from inception of the hedge. Any ineffective portion
of changes in the fair value of the derivative is recognised
immediately in profit or loss.
The Group designates only the change in fair value of the spot
element of forward exchange contracts as the hedging instrument in
cash flow hedging relationships. The change in fair value of the
forward element of forward exchange contracts ('forward points') is
separately accounted for as a cost of hedging and recognised in a
costs of hedging reserve within equity.
When the hedged forecast transaction subsequently results in the
recognition of a non-financial item such as inventory, the amount
accumulated in the hedging reserve and the cost of hedging reserve
is included directly in the initial cost of the non-financial item
when it is recognised.
For all other hedged forecast transactions, the amount
accumulated in the hedging reserve and the cost of hedging reserve
is reclassified to profit or loss in the same period or periods
during which the hedged expected future cash flows affect profit or
loss.
If the hedge no longer meets the criteria for hedge accounting
or the hedging instrument is sold, expires, is terminated or is
exercised, then hedge accounting is discontinued prospectively.
When hedge accounting for cash flow hedges is discontinued, the
amount that has been accumulated in the hedging reserve remains in
equity until, for a hedge of a transaction resulting in the
recognition of a non-financial item, it is included in the
non-financial item's cost on its initial recognition or, for other
cash flow hedges, it is reclassified to profit or loss in the same
period or periods as the hedged expected future cash flows affect
profit or loss.
If the hedged future cash flows are no longer expected to occur,
then the amounts that have been accumulated in the hedging reserve
and the cost of hedging reserve are immediately reclassified to
profit or loss.
Net investment hedges
When a derivative instrument or a non-derivative financial
liability is designated as the hedging instrument in a hedge of a
net investment in a foreign operation, the effective portion of,
for a derivative, changes in the fair value of the hedging
instrument or, for a non-derivative, foreign exchange gains and
losses is recognised in OCI and presented in the translation
reserve within equity. Any ineffective portion of the changes in
the fair value of the derivative or foreign exchange gains and
losses on the non-derivative is recognised immediately in profit or
loss. The amount recognised in OCI is reclassified to profit or
loss as a reclassification adjustment on disposal of the foreign
operation.
4.10 Leases
At inception of a contract, the Company assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Company assesses
whether:
- the contract involves the use of an identified asset this may
be specified explicitly or implicitly, and should be physically
distinct or represent substantially all of the capacity of a
physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
- the Company has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of
use; and
- the Company has the right to direct the use of the asset. The
Company has this right when it has the decision making rights that
are most relevant to changing how and for what purpose the asset is
used. In rare cases where the decision about how and for what
purpose the asset is used is predetermined, the Company has the
right to direct the use of the asset if either:
- the Company has the right to operate the asset; or
- the Company designed the asset in a way that predetermines how
and for what purpose it will be used.
At inception or on reassessment of a contract that contains a
lease component, the Company allocates the consideration in the
contract to each lease component on the basis of their relative
stand alone prices. However, for the leases of land and buildings
in which it is a lessee, the Company has elected not to separate
non lease components and account for the lease and non lease
components as a single lease component.
The Company as lessor
When the Company acts as a lessor, it determines at lease
inception whether each lease is a finance lease or an operating
lease. To classify each lease, the Company makes an overall
assessment of whether the lease transfers substantially all of the
risks and rewards incidental to ownership of the underlying asset.
If this is the case, then the lease is a finance lease; if not,
then it is an operating lease. As part of this assessment, the
Company considers certain indicators such as whether the lease is
for the major part of the economic life of the asset.
When the Company is an intermediate lessor, it accounts for its
interests in the head lease and the sub lease separately. It
assesses the lease classification of a sub lease with reference to
the right of use asset arising from the head lease, not with
reference to the underlying asset. If a head lease is a short term
lease to which the Company applies the exemption described above,
then it classifies the sub lease as an operating lease.
If an arrangement contains lease and non lease components, the
Company applies IFRS 15 to allocate the consideration in the
contract.
The accounting policies applicable to the Company as a lessor in
the comparative period were not different from IFRS 16. However,
when the Company was an intermediate lessor the sub leases were
classified with reference to the underlying asset.
The Company as lessee
The Company recognises a right of use asset and a lease
liability at the lease commencement date. The right of use asset is
initially measured at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The right of use asset is subsequently depreciated using the
straight line method from the commencement date to the earlier of
the end of the useful life of the right of use asset or the end of
the lease term. The estimated useful lives of the right of use
assets are determined on the same basis as those of property and
equipment. In addition, the right of use asset is periodically
reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Company's incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability comprise the following:
- fixed payments, including in substance fixed payments;
- variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement
date;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Company is
reasonably certain to exercise, lease payments in an optional
renewal period if the Company is reasonably certain to exercise an
extension option, and penalties for early termination of a lease
unless the Company is reasonably certain not to terminate
early.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate,
if there is a change in the Company's estimate of the amount
expected to be payable under a residual value guarantee, or if the
Company changes its assessment of whether it will exercise a
purchase, extension or termination option.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the
right of use asset, or is recorded in profit or loss if the
carrying amount of the right of use asset has been reduced to
zero.
The Company presents its right of use assets that do not meet
the definition of investment property in 'Property, plant and
equipment' in the statement of financial position.
The lease liabilities are presented in 'loans and borrowings' in
the statement of financial position.
Short term leases and leases of low value assets
The Company has elected not to recognise the right of use assets
and lease liabilities for short term leases that have a lease term
of 12 months or less and leases of low value assets (i.e. IT
equipment, office equipment etc.). The Company recognises the lease
payments associated with these leases as an expense on a straight
line basis over the lease term.
4.11 Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently stated at
amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
profit or loss over the period of the borrowings, using the
effective interest method, unless they are directly attributable to
the acquisition, construction or production of a qualifying asset,
in which case they are capitalised as part of the cost of that
asset.
Fees paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case,
the fee is deferred until the draw-down occurs. To the extent there
is no evidence that it is probable that some or all of the facility
will be drawn down, the fee is capitalised as a prepayment and
amortised over the period of the facility to which it relates.
Borrowing costs are interest and other costs that the Group
incurs in connection with the borrowing of funds, including
interest on borrowings, amortisation of discounts or premium
relating to borrowings, amortisation of ancillary costs incurred in
connection with the arrangement of borrowings, finance lease
charges and exchange differences arising from foreign currency
borrowings to the extent that they are regarded as an adjustment to
interest costs.
Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset,
being an asset that necessarily takes a substantial period of time
to get ready for its intended use or sale, are capitalised as part
of the cost of that asset, when it is probable that they will
result in future economic benefits to the Group and the costs can
be measured reliably.
Borrowings are classified as current liabilities, unless the
Group has an unconditional right to defer settlement of the
liability for at least twelve months after the reporting date.
4.12 Tenant security deposits
Tenant security deposits represent financial advances made by
lessees as guarantees during the lease and are repayable by the
Group upon termination of the contracts. Tenant security deposits
are recognised at nominal value.
4.13 Impairment of tangible and intangible assets other than
goodwill
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs. Where a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated
to individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units for which
a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment loss
annually, and whenever there is an indication that the asset may be
impaired.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre--tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash--generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash--generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
the profit or loss account, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash--generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash--generating unit) in prior years. A reversal of
an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
4.14 Share Capital
Ordinary shares are classified as equity.
4.15 Share premium
The difference between the fair value of the consideration
received by the shareholders and the nominal value of the share
capital being issued is taken to the share premium account.
4.16 Share-based compensation
The Group had in the past and intends in the future to operate a
number of equity-settled, share-based compensation plans, under
which the Group receives services from Directors and/or employees
as consideration for equity instruments (options) of the Group. The
fair value of the Director and employee cost related to services
received in exchange for the grant of the options is recognised as
an expense. The total amount to be expensed is determined by
reference to the fair value of the options granted, excluding the
impact of any non-market service and performance vesting
conditions. The total amount expensed is recognised over the
vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At each financial position
date, the Group revises its estimates on the number of options that
are expected to vest based on the non-marketing vesting conditions.
It recognises the impact of the revision to original estimates, if
any, in the statement of comprehensive income, with a corresponding
adjustment to equity. The proceeds received net of any directly
attributable transaction costs are credited to share capital and
share premium when the options are exercised.
4.17 Provisions
Provisions are recognised when the Group has a present
obligation (legal, tax or constructive) as a result of a past
event, it is probable that the Group will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. As at the reporting date the Group has settled all its
construction liabilities.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash
flows (where the effect of the time value of money is
material).
When some or all of the economic benefits required to settle a
provision are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
4.18 Non--current liabilities
Non--current liabilities represent amounts that are due in more
than twelve months from the reporting date.
4.19 Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is reduced for estimated customer
returns, rebates and other similar allowances. It is recognised to
the extent that it is probable that the economic benefits
associated with the transaction will flow to the Group and the
revenue can be measured reliably. Revenue earned by the Group is
recognised on the following bases:
4.19.1 Income from investing activities
Income from investing activities includes profit received from
the disposal of investments in the Company's subsidiaries and
associates and income accrued on advances for investments
outstanding as at the year end.
4.19.2 Dividend income
Dividend income from investments is recognised when the
shareholders' right to receive payment has been established
(provided that it is probable that the economic benefits will flow
to the Group and the amount of income can be measured
reliably).
4.19.3 Interest income
Interest income is recognised on a time-proportion (accrual)
basis, using the effective interest rate method.
4.19.4 Rental income
Rental income arising from operating leases on investment
property is recognised on an accrual basis in accordance with the
substance of the relevant agreements.
4.20 Service charges and expenses recoverable from tenants
Income arising from expenses recharged to tenants is recognised
on an accrual basis.
4.21 Other property expenses
Irrecoverable running costs directly attributable to specific
properties within the Group's portfolio are charged to the
statement of comprehensive income. Costs incurred in the
improvement of the assets which, in the opinion of the directors,
are not of a capital nature are written off to the statement of
comprehensive income as incurred.
4.22 Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their
intended use or sale.
Investment income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in the statement of
comprehensive income in the period in which they are incurred as
interest costs which are calculated using the effective interest
rate method, net result from transactions with securities, foreign
exchange gains and losses, and bank charges and commission.
4.23 Asset Acquisition Related Transaction Expenses
Expenses incurred by the Group for acquiring a subsidiary or
associate company as part of an Investment Property and are
directly attributable to such acquisition are recognised within the
cost of the Investment Property and are subsequently accounted as
per the Group's accounting Policy for Investment Property
subsequent measurement.
4.24 Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
4.24.1 Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit as reported in the
consolidated statement of comprehensive income because of items of
income or expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Group's liability
for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting
period.
4. 24.2 Deferred tax
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Currently enacted tax rates are used in the determination of
deferred tax.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profit will be available against which
the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when the deferred taxes relate to the
same fiscal authority.
4.24.3 Current and deferred tax for the year
Current and deferred tax are recognised in the statement of
comprehensive income, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in
which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity respectively.
Where current tax or deferred tax arises from the initial
accounting for a business combination, the tax effect is included
in the accounting for the business combination.
The operational subsidiaries of the Group are incorporated in
the Ukraine and Romania, while the Parent and some holding
companies are incorporated in Cyprus. The Group's management and
control is exercised in Cyprus.
The Group's Management does not intend to dispose of any asset,
unless a significant opportunity arises. In the event that a
decision is taken in the future to dispose of any asset it is the
Group's intention to dispose of shares in subsidiaries rather than
assets. The corporate income tax exposure on disposal of
subsidiaries is mitigated by the fact that the sale would represent
a disposal of the securities by a non--resident shareholder and
therefore would be exempt from tax. The Group is therefore in a
position to control the reversal of any temporary differences and
as such, no deferred tax liability has been provided for in the
financial statements.
4.24.4 Withholding Tax
The Group follows the applicable legislation as defined in all
double taxation treaties (DTA) between Cyprus and any of the
countries of Operations (Romania, Ukraine). In the case of Romania,
as the latter is part of the European Union, through the relevant
directives the withholding tax is reduced to NIL subject to various
conditions.
4.24.5 Dividend distribution
Dividend distribution to the Company's shareholders is
recognised as a liability in the Group's financial statements in
the period in which the dividends are approved by the Company's
shareholders.
4.25 Value added tax
VAT levied at various jurisdictions were the Group is active,
was at the following rates, as at the end of the reporting
period:
-- 20% on Ukrainian domestic sales and imports of goods, works
and services and 0% on export of goods and provision of works or
services to be used outside the Ukraine.
-- 19 % on Cyprus domestic sales and imports of goods, works and
services and 0% on export of goods and provision of works or
services to be used outside Cyprus.
-- 19% on Romanian domestic sales and imports of goods, works
and services (decreased from 20% from 1 January 2017) and 0% on the
export of goods and provision of works or services to be used
outside Romania.
4.26 Operating segments analysis
Segment reporting is presented on the basis of Management's
perspective and relates to the parts of the Group that are defined
as operating segments. Operating segments are identified on the
basis of their economic nature and through internal reports
provided to the Group's Management who oversee operations and make
decisions on allocating resources serve. These internal reports are
prepared to a great extent on the same basis as these consolidated
financial statements.
For the reporting period the Group has identified the following
material reportable segments, where the Group is active in
acquiring, holding, managing and disposing:
Commercial-Industrial Residential Land Assets
* Warehouse segment * Residential segment * Land assets - the Group owns a number of land assets
which are either available for sale or for potential
development
* Office segment
* Retail segment
------------------------------- ----------------------------------------------------------------
The Group also monitors investment property assets on a
Geographical Segmentation, namely the country where its property is
located.
4.27 Earnings and Net Assets value per share
The Group presents basic and diluted earnings per share (EPS)
and net asset value per share (NAV) for its ordinary shares.
Basic EPS amounts are calculated by dividing net profit/loss for
the year, attributable to ordinary equity holders of the Company by
the weighted average number of ordinary shares outstanding during
the year. Basic NAV amounts are calculated by dividing net asset
value as at the year end, attributable to ordinary equity holders
of the Company by the number of ordinary shares outstanding at the
end of the year.
Diluted EPS is calculated by dividing net profit/loss for the
year, attributable to ordinary equity holders of the parent, by the
weighted average number of ordinary shares outstanding during the
year plus the weighted average number of ordinary shares that would
be issued on conversion of all the potentially dilutive ordinary
shares into ordinary shares.
Diluted NAV is calculated by dividing net asset value as at the
year end, attributable to ordinary equity holders of the parent
with the number of ordinary shares outstanding at year end plus the
number of ordinary shares that would be issued on conversion of all
the potentially dilutive ordinary shares into ordinary shares.
4.28 Comparative Period
Where necessary, comparative figures have been adjusted to
conform to changes in presentation in the current year.
5. New accounting pronouncement
At the date of approval of these financial statements, standards
and interpretations were issued by the International Accounting
Standards Board which were not yet effective. Some of them were
adopted by the European Union and others not yet. The Board of
Directors expects that the adoption of these accounting standards
in future periods will not have a material effect on the financial
statements of the Company.
6. Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRSs
requires the use of certain critical accounting estimates and
requires Management to exercise its judgment in the process of
applying the Group's accounting policies. It also requires the use
of assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. These estimates
are based on Management's best knowledge of current events and
actions and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. Actual
results though may ultimately differ from those estimates.
As the Group makes estimates and assumptions concerning the
future, the resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below:
-- Provision for impairment of receivables
The Group reviews its trade and other receivables for evidence
of their recoverability. Such evidence includes the counterparties
payment record, and overall financial position, as well as the
state's ability to pay its dues (VAT receivable). If indications of
non-recoverability exist, the recoverable amount is estimated and a
respective provision for impairment of receivables is made. The
amount of the provision is charged through the profit and loss
account. The review of credit risk is continuous and the
methodology and assumptions used for estimating the provision are
reviewed regularly and adjusted accordingly. As at the reporting
date Management did not consider necessary to make a provision for
impairment of receivables.
-- Fair value of financial assets
The fair value of financial instruments that are not traded in
an active market is determined by using valuation techniques. The
Company uses its judgement to select a variety of methods and make
assumptions that are mainly based on market conditions existing at
each reporting date. The fair value of the financial assets at fair
value through other comprehensive income has been estimated based
on the fair value of these individual assets .
-- Fair value of investment property
The fair value of investment property is determined by using
various valuation techniques. The Group selects accredited
professional valuers with local presence to perform such
valuations. Such valuers use their judgment to select a variety of
methods and make assumptions that are mainly based on market
conditions existing at each financial reporting date. For the
current period, the Group has used the same fair values as those
determined for 31 December 2020 (Note 19.2).
-- Income taxes
Significant judgment is required in determining the provision
for income taxes. There are transactions and calculations for which
the ultimate tax determination is uncertain during the ordinary
course of business. The Group recognises liabilities for
anticipated tax audit issues based on estimates of whether
additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded,
such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
-- Impairment of tangible assets
Assets that are subject to depreciation are reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss
is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset's fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable
cash flows (cash-generating units).
-- Provision for deferred taxes
Deferred tax is not provided in respect of the revaluation of
the investment property and investment property under development
as the Group is able to control the timing of the reversal of this
temporary difference and the Management has intention not to
reverse the temporary difference in the foreseeable future. The
properties are held by subsidiary companies in the Ukraine, Greece
and Romania. Management estimates that the assets will be realised
through a share deal rather than through an asset deal. Should any
subsidiary be disposed of, the gains generated from the disposal
will be exempt from any tax.
-- Application of IFRS 10
The Group has considered the application of IFRS 10 and
concluded that the Company is not an Investment Entity as defined
by IFRS 10 and it should continue to consolidate all of its
investments, as in 2016. The reasons for such conclusion are among
others that the Company continues:
a) not to be an Investment Management Service provider to Investors,
b) to actively manages its own portfolio (leasing, development,
allocation of capital expenditure for its properties, marketing
etc.) in order to provide benefits other than capital appreciation
and/or investment income,
c) to have investments that are not bound by time in relation to
the exit strategy nor to the way that are being exploited,
d) to provide asset management services to its subsidiaries, as
well as loans and guarantees (directly or indirectly),
e) even though is using Fair Value metrics in evaluating its
investments, this is being done primarily for presentation purposes
rather that evaluating income generating capability and making
investment decisions. The latter is being based on metrics like
IRR, ROE and others.
7. Risk Management
7.1 Financial risk factors
The Group is exposed to operating country risk, real estate
property holding and development associated risks, property market
price risk, interest rate risk, credit risk, liquidity risk,
currency risk, other market price risk, operational risk,
compliance risk, litigation risk, reputation risk, capital risk and
other risks, arising from the financial instruments it holds. The
risk management policies employed by the Group to manage these
risks are discussed below.
7.1.1 Operating Country Risks
The Group is exposed to risks stemming from the political and
economic environment of countries in which it operates.
Notably:
7.1.1.1 Ukraine
Ukraine continues to limit its economic ties with Russia
demonstrating refocus on the European Union market, and realising
the potential of established Deep and Comprehensive Free Trade Area
("DCFTA") with EU, thus effectively responding to mutual trade
restrictions between Ukraine and Russia. At the same time
long-standing tensions between the two countries have flared up
again, although a general conflict is highly unlikely.
The economy has performed better than anticipated during the
pandemic, when GDP contracted by 4% in 2020, mainly due to better
macroeconomic conditions, and is expected to recover gradually with
economic output returning to 2019 levels in 2022. The main concern
is whether the government's commitment and focus to structural
reforms will continue, as relevant wavering has been observed
recently.
7.1.1.2 Romania
After a milder than anticipated decline in 2020, Romania's
economy is set to recover from the COVID-19 crisis and return to
pre-crisis levels of economic activity before the end of 2021.
Nevertheless, uncertainty remains high given the unpredictable
evolution of the pandemic and the slow deployment of the domestic
vaccination roll-out.
Romania is set to receive significant amounts of EU funds,
which, if absorbed effectively, will be crucial for boosting
investment and protect local vulnerable households and businesses.
On a more general context, the development of digital
infrastructure and the reduction of regulatory barriers to
competition are deemed essential to help the economy achieve
sustainable growth.
7.1.2 Risks associated with property holding and development
associated risks
Several factors may affect the economic performance and value of
the Group's properties, including:
-- risks associated with construction activity at the
properties, including delays, the imposition of liens and defects
in workmanship;
-- the ability to collect rent from tenants on a timely basis or
at all, taking also into account currency rapid devaluation
risk;
-- the amount of rent and the terms on which lease renewals and
new leases are agreed being less favorable than current leases;
-- cyclical fluctuations in the property market generally;
-- local conditions such as an oversupply of similar properties
or a reduction in demand for the properties;
-- the attractiveness of the property to tenants or residential purchasers;
-- decreases in capital valuations of property;
-- changes in availability and costs of financing, which may
affect the sale or refinancing of properties;
-- covenants, conditions, restrictions and easements relating to the properties;
-- changes in governmental legislation and regulations,
including but not limited to designated use, allocation,
environmental usage, taxation and insurance;
-- the risk of bad or unmarketable title due to failure to
register or perfect our interests or the existence of prior claims,
encumbrances or charges of which we may be unaware at the time of
purchase;
-- the possibility of occupants in the properties, whether
squatters or those with legitimate claims to take possession;
-- the ability to pay for adequate maintenance, insurance and
other operating costs, including taxes, which could increase over
time; and
-- political uncertainty, acts of terrorism and acts of nature,
such as earthquakes and floods that may damage the properties.
7.1.3 Property Market price risk
Market price risk is the risk that the value of the Group's
portfolio investments will fluctuate as a result of changes in
market prices. The Group's assets are susceptible to market price
risk arising from uncertainties about future prices of the
investments. The Group's market price risk is managed through
diversification of the investment portfolio, continuous elaboration
of the market conditions and active asset management. To quantify
the value of its assets and/or indicate the possibility of
impairment losses, the Group commissioned internationally acclaimed
valuers.
7.1.4 Interest rate risk
Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market interest
rates.
The Group's income and operating cash flows are substantially
independent of changes in market interest rates as the Group has no
significant interest--bearing assets apart from its cash balances
that are mainly kept for liquidity purposes.
The Group is exposed to interest rate risk in relation to its
borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk. Borrowings issued at fixed rates
expose the Group to fair value interest rate risk. All of the
Group's borrowings are issued at a variable interest rate.
Management monitors the interest rate fluctuations on a continuous
basis and acts accordingly.
7.1.5 Credit risk
Credit risk arises when a failure by counterparties to discharge
their obligations could reduce the amount of future cash inflows
from financial assets at hand at the end of the reporting period.
Cash balances are held with high credit quality financial
institutions and the Group has policies to limit the amount of
credit exposure to any financial institution.
7.1.6 Currency risk
Currency risk is the risk that the value of financial
instruments will fluctuate due to changes in foreign exchange
rates.
Currency risk arises when future commercial transactions and
recognised assets and liabilities are denominated in a currency
that is not the Group's functional currency. Excluding the
transactions in the Ukraine all of the Group's transactions,
including the rental proceeds are denominated or pegged to the
Euro. In Ukraine, even though there is no recurring income stream,
the fluctuations of UAH against EUR entails significant FX risk for
the Group in terms of its local assets valuation. Management
monitors the exchange rate fluctuations on a continuous basis and
acts accordingly, although there are no available financial tools
for hedging the exposure on UAH. It should be noted though that the
current political uncertainty in Ukraine, and any probable currency
devaluation may affect the Group's financial position.
7.1.7 Capital risk management
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximizing the return to
shareholders through the optimisation of the debt and equity
balance. The Group's core strategy is described in Note 42.1 of the
consolidated financial statements.
7.1.8 Compliance risk
Compliance risk is the risk of financial loss, including fines
and other penalties, which arises from non--compliance with laws
and regulations of each country in which the Group is present, as
well as from the stock exchange where the Company is listed.
Although the Group is trying to limit such risk, the uncertain
environment in which it operates in various countries increases the
complexities handled by Management.
7.1.9 Litigation risk
Litigation risk is the risk of financial loss, interruption of
the Group's operations or any other undesirable situation that
arises from the possibility of non--execution or violation of legal
contracts and consequentially of lawsuits. The risk is restricted
through the contracts used by the Group to execute its
operations.
7.1.10 Insolvency risk
Insolvency arises from situations where a company may not meet
its financial obligations towards a lender as debts become due.
Addressing and resolving any insolvency issues is usually a slow
moving process in the Region. Management is closely involved in
discussions with creditors when/if such cases arise in any
subsidiary of the Group aiming to effect alternate repayment plans
including debt repayment so as to minimise the effects of such
situations on the Group's asset base.
7.2. Operational risk
Operational risk is the risk that derives from the deficiencies
relating to the Group's information technology and control systems,
as well as the risk of human error and natural disasters. The
Group's systems are evaluated, maintained and upgraded
continuously.
7.3. Fair value estimation
The fair values of the Group's financial assets and liabilities
approximate their carrying amounts at the end of the reporting
period.
8. Investment in subsidiaries
The Company has direct and indirect holdings in other companies,
collectively called the Group, that were included in the
consolidated financial statements, and are detailed below.
Holding %
Name Country Related Asset as at as at as at
30 June 2021 31 Dec 2020 30 June 2020
--------- ----------------------------- -------------- ------------- --------------
SC Secure Capital Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
LLC Aisi Ukraine Ukraine Kiyanovskiy Residence 100 100 100
--------- ----------------------------- -------------- ------------- --------------
LLC Trade Center Ukraine 100 100 100
---------------------------------------- -------------- ------------- --------------
LLC Almaz--Pres--Ukraine Ukraine Tsymlyanskiy Residence 55 55 55
--------- ----------------------------- -------------- ------------- --------------
LLC Retail Development
Balabino Ukraine 100 100 100
---------------------------------------- -------------- ------------- --------------
LLC Interterminal Ukraine 100 100 100
---------------------------------------- -------------- ------------- --------------
LLC Aisi Ilvo Ukraine 100 100 100
---------------------------------------- -------------- ------------- --------------
Myrnes Innovations Park
Limited Cyprus Innovations Logistics Park 100 100 100
--------- ----------------------------- -------------- ------------- --------------
Best Day Real Estate Srl Romania 100 100 100
---------------------------------------- -------------- ------------- --------------
Yamano Holdings Limited Cyprus EOS Business Park 100 100 100
----------------------------- --------- ----------------------------- -------------- ------------- --------------
N-E Real Estate Park First
Phase Srl Romania 100 100 100
---------------------------------------- -------------- ------------- --------------
Victini Holdings Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Zirimon Properties Limited Cyprus Delea Nuova (Delenco) 100 100 100
--------- ----------------------------- -------------- ------------- --------------
Bluehouse Accession Project
IX Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Bluehouse Accession Project
IV Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
BlueBigBox 3 Srl Romania 100 100 100
---------------------------------------- -------------- ------------- --------------
SPDI Real Estate Srl Romania Kindergarten 50 50 50
--------- ----------------------------- -------------- ------------- --------------
SEC South East Continent
Unique Real Estate
Investments II Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
SEC South East Continent
Unique Real Estate
(Secured) Investments
Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Residential and Land
Diforio Holdings Limited Cyprus portfolio 100 100 100
--------- ----------------------------- -------------- ------------- --------------
Demetiva Holdings Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Ketiza Holdings Limited Cyprus 90 90 90
---------------------------------------- -------------- ------------- --------------
Frizomo Holdings Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Ketiza Real Estate Srl Romania 90 90 90
---------------------------------------- -------------- ------------- --------------
Edetrio Holdings Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Emakei Holdings Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
RAM Real Estate Management
Limited Cyprus 50 50 50
---------------------------------------- -------------- ------------- --------------
Iuliu Maniu Limited Cyprus 45 45 45
---------------------------------------- -------------- ------------- --------------
Moselin Investments Srl Romania 45 45 45
---------------------------------------- -------------- ------------- --------------
Rimasol Enterprises Limited Cyprus 70,56 44,24 44,24
---------------------------------------- -------------- ------------- --------------
Rimasol Real Estate Srl Romania 70,56 44,24 44,24
---------------------------------------- -------------- ------------- --------------
Ashor Ventures Limited Cyprus 44,24 44,24 44,24
---------------------------------------- -------------- ------------- --------------
Ashor Development Srl Romania 44,24 44,24 44,24
---------------------------------------- -------------- ------------- --------------
Jenby Ventures Limited Cyprus 44,30 44,30 44,30
---------------------------------------- -------------- ------------- --------------
Jenby Investments Srl Romania 44,30 44,30 44,30
---------------------------------------- -------------- ------------- --------------
Ebenem Limited Cyprus 44,30 44,30 44,30
---------------------------------------- -------------- ------------- --------------
Ebenem Investments Srl Romania 44,30 44,30 44,30
---------------------------------------- -------------- ------------- --------------
Sertland Properties Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Mofben Investments Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
SPDI Management Srl Romania 100 100 100
---------------------------------------- -------------- ------------- --------------
During the period the Company initiated the process of striking
off six holding subsidiaries in Cyprus, which became idle following
recent disposals of local asset owning companies and properties.
The companies to be struck off are: Bluehouse Accession Project IV
Limited, Demetiva Holdings Limited, Diforio Holdings Limited, Jenby
Ventures Limited, Ebenem Limited and Mofben Investments Limited.
Relevant official clearance from local Trade Registry and Tax
Authorities is expected in the following period.
During H1 2021 the Group acquired an additional 26,32% stake in
Rimasol Enterprises Limited, which through Rimasol Real Estate Srl
owns Plot R in GreenLake, part of the Second Phase of the overall
GreenLake project. With this acquisition the total stake of the
Group in this particular plot increased to 70,56% (Note 20).
9. Discontinued operations
9.(a) Description
The Company announced on 18 December 2018 that it has entered
into a conditional implementation agreement for the sale of its
property portfolio, excluding its Greek logistics properties ('the
Non-Greek Portfolio'), in an all-share transaction to the Arcona
Property Fund N.V. The transaction is subject to, among other
things, asset and tax due diligence (including third party asset
valuations) and regulatory approvals (including the approval of a
prospectus required in connection with the issuance and admission
to listing of the new Arcona Property Fund N.V. shares), as well as
the successful negotiating and signature of transaction documents.
During 2019 and as part of the Arcona transaction the Company sold
the Boyana Residence asset in Bulgaria, as well as the Bela and
Balabino land plots in the Ukraine, while in June 2021 the Company
has signed SPAs relating to Stage 2 of the transaction, namely for
the EOS and Delenco assets in Romania, as well as the Kiyanovskiy
and Rozny assets in the Ukraine, which are expected to close in Q4
2021.
The companies that are classified under discontinued operations
are the following:
-- Cyprus: Ashor Ventures Limited, Ebenem Limited, Jenby
Ventures Limited, Edetrio Holdings Limited, Rimasol Enterprises
Limited, Emakei Holdings Limited, Iuliu Maniu Limited, Ram Real
Estate Management Limited, Frizomo Holdings Limited, Ketiza
Holdings Limited
-- Romania: Ashor Development Srl, Ebenem Investments Srl, Jenby
Investments Srl, Rimasol Real Estate Srl, Moselin Investments Srl,
Best Day Real Estate Srl, N-E Real Estate Park First Phase Srl,
Ketiza Real Estate Srl, SPDI Real Estate Srl
-- Ukraine: LLC Aisi Ukraine, LLC Almaz--Pres--Ukraine, LLC
Trade Center, LLC Retail Development Balabino
As a result, the Company has reclassified all assets and
liabilities related to these properties as held for sale according
to IFRS 5 (Note 4.3 & 4.8).
9.(b) Results of discontinued operations
For the period ended 30 June 2021
Note 30 June 2021 30 June 2020
EUR EUR
Income 10 530.033 513.533
Asset operating expenses 11 (256.068) (193.889)
------------- -------------
Net Operating Income 273.965 319.644
Administration expenses 12 (103.110) (77.490)
Share of profits from associates 21 194.863 218.862
Valuation gains/(losses) from Investment Property 13 250.201 996.297
Net profit /(loss) on disposal of investment property 14 294.514 1.199
Other operating income/(expenses), net 15 (107.144) 48
Operating profit 792.837 1.458.560
Finance income 16 4.645 4.670
Finance costs 16 (386.921) (446.066)
Profit /(Loss) before tax and foreign exchange differences 410.561 1.017.164
Foreign exchange (loss), net 17a (157.942) (132.904)
Profit/(Loss) before tax 252.619 884.260
Income tax expense 18 (17.849) (23.452)
Profit/(Loss) for the year 234.770 860.808
Profit/(Loss) attributable to:
Owners of the parent 146.385 962.448
Non-controlling interests 88.385 (101.640)
234.770 860.808
9.(c) Cash flows from (used in) discontinued operations
30 June 2021 30 June 2020
EUR EUR
------------- -------------
Net cash flows provided in operating activities (218.890) 179.050
------------- -------------
Net cash flows from / (used in) financing activities (2.392.148) 744.056
------------- -------------
Net cash flows from / (used in) investing activities 2.201.166 (1.122.110)
------------- -------------
Net increase/(decrease) from discontinued operations (409.872) (199.004)
------------- -------------
9.(d) Assets and liabilities of disposal group classified as
held for sale
The following assets and liabilities were reclassified as held
for sale in relation to the discontinued operation as at 30 June
2021:
Note 30 June 2021 31 Dec 2020
EUR EUR
----- ------------- ------------
Assets classified as held for sale
----- ------------- ------------
Investment properties 19.4 33.209.123 34.903.480
----- ------------- ------------
Tangible and intangible assets 23 12.203 12.357
----- ------------- ------------
Long-term receivables and prepayments 24 465.000 315.000
----- ------------- ------------
Investments in associates 21 5.155.858 5.071.656
----- ------------- ------------
Financial asset at fair value through OCI 22 1 1
----- ------------- ------------
Prepayments and other current assets 25 833.198 748.127
----- ------------- ------------
Cash and cash equivalents 27 525.680 740.788
----- ------------- ------------
Total assets of group held for sale 40.201.063 41.791.409
----- ------------- ------------
Liabilities directly related with assets classified as held for sale
----- ------------- ------------
Borrowings 31 4.515.536 6.324.461
----- ------------- ------------
Finance lease liabilities 36 9.494.540 9.692.029
----- ------------- ------------
Trade and other payables 33 828.344 870.472
----- ------------- ------------
Taxation 35 305.937 277.275
----- ------------- ------------
Deposits from tenants 34 64.231 64.231
----- ------------- ------------
Total liabilities of group held for sale 15.208.588 17.228.468
----- ------------- ------------
10. Income
Income from continued operations for the period ended 30 June
2021 represents:
a) Rental income, as well as service charges and utilities
income collected from tenants as a result of the rental agreements
concluded with the tenants of the Innovations Logistics Park
(Romania). It is noted that part of the rental and service charges/
utilities income related to Innovations Logistics Park (Romania) is
currently invoiced by the Company as part of a relevant lease
agreement with the Innovations SPV and the lender, however the
asset, through the SPV, is planned to be transferred as part of the
transaction with Arcona Property Fund N.V. Upon a final agreement
for such transfer, the Company will negotiate with the lender its
release from the aforementioned lease agreement, and if it
succeeds, upon completion such income will also be transferred.
b) Asset management income.
Continued operations 30 June 2021 30 June 2020
EUR EUR
------------- -------------
Rental income 339.831 286.536
------------- -------------
Service charges and utilities income 116.675 93.450
------------- -------------
Asset management income 200.937 20.000
------------- -------------
Total income 657.443 399.986
------------- -------------
Income from discontinued operations for the period ended 30 June
2021 represents:
a) rental income, as well as service charges and utilities
income collected from tenants as a result of the rental agreements
concluded with tenants of the Innovations Logistics Park (Romania),
and EOS Business Park (Romania), and;
b) income from third parties and /or partners for consulting and
managing real estate properties.
Discontinued operations (Note 9) 30 June 2021 30 June 2020
EUR EUR
------------- -------------
Rental income 515.772 497.248
------------- -------------
Service charges and utilities income 13.798 15.238
------------- -------------
Property management income 463 1.047
------------- -------------
Total income 530.033 513.533
------------- -------------
Occupancy rates in the various income producing assets of the
Group as at 30 June 2021 were as follows:
Income producing assets
% 30 June 2021 30 June 2020
--------- ------------- -------------
EOS Business Park Romania 100 100
--------- ------------- -------------
Innovations Logistics Park Romania 89 83
--------- ------------- -------------
Kindergarten Romania 100 100
--------- ------------- -------------
11. Asset operating expenses
The Group incurs expenses related to the proper operation and
maintenance of all properties in Kiev and Bucharest. A part of
these expenses is recovered from the tenants through the service
charges and utilities recharged (Note 10 ).
Under continued operations there are no such expenses related to
asset operating expenses.
Under discontinued operations there are such expenses related to
the Innovations Logistics Park (Romania), EOS Business Park
(Romania), Residential Portfolio (Romania), GreenLake (Romania),
and all the Ukrainian properties.
Discontinued operations (Note 9) 30 June 2021 30 June 2020
EUR EUR
------------- -------------
Property related taxes (55.871) (54.682)
------------- -------------
Repairs and technical maintenance (37.883) (14.701)
------------- -------------
Utilities (110.518) (88.711)
------------- -------------
Property security (22.922) (13.903)
------------- -------------
Property insurance (3.804) (1.495)
------------- -------------
Leasing expenses (22.908) (20.319)
------------- -------------
Other investment property operating expenses (2.162) (78)
------------- -------------
Total (256.068) (193.889)
------------- -------------
Property related taxes reflect local taxes of land and building
properties (in the form of land taxes, building taxes, garbage
fees, etc.).
Repairs and technical maintenance increased substantially in H1
2021 due to required works performed at the Innovations Logistics
Park and Green Lake stock in Bucharest.
Utilities refer mainly to electricity and fuel costs which
increased as a result of the increased consumption by the tenant in
Innovations Logistics Park (Romania) during the period. Such costs
are re-invoiced to the tenant.
Property security refers to expenses related to the security of
the assets by third party service providers, and its increase
resulted mainly from the need to upgrade the security contract in
the Innovations Logistics Park.
Leasing expenses reflect expenses related to long term land
leasing.
12. Administration Expenses
Continued operations 30 June 30 June
2021 2020
EUR EUR
---------- ----------
Salaries and Wages (174.753) (188.094)
---------- ----------
Advisory and broker fees (86.136) (218.475)
---------- ----------
Public group expenses (73.538) (71.053)
---------- ----------
Corporate registration and maintenance fees (32.285) (24.791)
---------- ----------
Vat Expensed (5.253) (4.447)
---------- ----------
Audit and accounting fees (60.523) (62.185)
---------- ----------
Legal fees (25.390) (41.275)
---------- ----------
Depreciation /Amortisation charge (688) (1.724)
---------- ----------
Corporate operating expenses (94.964) (68.793)
---------- ----------
Total Administration Expenses (553.530) (680.837)
---------- ----------
Discontinued operations (Note 9) 30 June 30 June
2021 2020
EUR EUR
---------- ---------
Salaries and Wages (16.241) (10.608)
---------- ---------
Advisory fees and broker fees (38.003) (2.169)
---------- ---------
Corporate registration and maintenance fees (19.998) (18.586)
---------- ---------
Vat Expensed (3.871) (4.483)
---------- ---------
Audit and accounting fees (19.406) (19.174)
---------- ---------
Legal fees (2.195) -
---------- ---------
Depreciation /Amortisation charge (50) (1.896)
---------- ---------
Corporate operating expenses (13.798) (20.574)
---------- ---------
Total Administration Expenses (113.562) (77.490)
---------- ---------
Salaries and wages include the remuneration of the CEO, the CFO,
the Group Commercial Director and the Country Managers in the
Ukraine and Romania, as well as the salary cost of personnel
employed in the various Company offices in the region.
Advisory and broker fees mainly relate to advisors, brokers and
other professionals engaged in relevant transactions and capital
raising campaigns, as well as outsourced human resources support on
the basis of relevant contracts. The increase in relevant fees in
discontinued operations resulted from the increased sales
commissions and brokerage fees mainly associated with extended
sales of units in the GreenLake complex.
Audit and accounting expenses include the audit fees and
accounting fees for the Company and all the subsidiaries.
Public group expenses include among others, fees paid to the
London Stock Exchange and the Nominated Adviser of the Company, as
well as other expenses related to the listing of the Company, such
as public relations and registry expenses.
Corporate registration and maintenance fees represent fees
charged for the annual maintenance of the Company and its
subsidiaries, as well as fees and expenses related to the normal
operation of the companies including charges by the relevant local
authorities. The increase during the period is a result of ad hoc
relevant fees associated with the strike off of six Companies in
Cyprus.
Legal fees represent legal expenses incurred by the Group in
relation to corporate matters and asset operations (rentals, sales,
etc.), ongoing legal cases in Ukraine, Cyprus and Romania,
compliance with the AIM listing, as well as one-off fees associated
with legal services and advise in relation to due diligence
processes, and transactions.
Corporate operating expenses include office expenses, travel
expenses, (tele)communication expenses, D&O insurance and all
other general expenses for the Cypriot, Romanian and Ukrainian
operations. The increase during the current period resulted from
the substantial increase of the cost of the D&O insurance
policy.
13. Valuation gains / (losses) from investment properties
Valuation gains /(losses) from investment property for the
reporting period, excluding foreign exchange translation
differences which are incorporated in the table of Note 19.2, are
presented in the tables below.
Discontinued operations (Note 9)
Property Name (EUR) Valuation gains/(losses)
---------------------------
30 June 30 June
2021 2020
-------------- -----------
EUR EUR
-------------- -----------
Kiyanovskiy Residence (101.366) 349.653
-------------- -----------
Tsymlyanskiy Residence (37.168) 135.349
-------------- -----------
Rozny Lane 30.137 23.586
-------------- -----------
Innovations Logistics Park 118.108 138.654
-------------- -----------
EOS Business Park 78.349 100.720
-------------- -----------
Residential Portfolio 1.783 9.588
-------------- -----------
GreenLake 143.542 219.937
-------------- -----------
Kindergarten 16.816 18.810
-------------- -----------
Total 250.201 996.297
-------------- -----------
14. Gain/ (Loss) from disposal of Investment properties
During the reporting period the Group proceeded with selling
properties classified under either Investment Property (Romanian
residential assets) designated as non-core assets. The gain/
(losses) from the disposal of such properties are presented
below:
During H1 2021 the Group sold nothing (H1 2020: 2 parking
spaces) in the Romfelt Plaza (Doamna Ghica) and 1 apartment and 3
parking spaces in Zizin (H1 2020: 2 apartments, 8 parking spaces
and 1 commercial space). The Group also during H1 2021 sold 5
villas in Moselin (Greenlake Parcel K) (H1 2020: 1 villa).
Discontinued operations (Note 9) 30 June 30 June
2021 2020
EUR EUR
---------------- ----------
Income from sale of investment property 2.126.423 744.052
---------------- ----------
Cost of investment property (1.831.909) (742.853)
---------------- ----------
Profit from disposal of investment property 294.514 1.199
---------------- ----------
15. Other operating income/(expenses), net
Continued operations 30 June 30 June
2021 2020
EUR EUR
-------- --------
Other income 5.464 39.653
-------- --------
Other income 5.464 39.653
-------- --------
Penalties (233) (4.638)
-------- --------
Other expenses (1.707) (710)
-------- --------
Other expenses (1.940) (5.348)
-------- --------
Other operating income/(expenses), net 3.524 34.305
-------- --------
Discontinued operations (Note 9) 30 June 30 June
2021 2020
EUR EUR
---------- --------
Accounts payable written off 2.081 95
---------- --------
Other income 2.081 95
---------- --------
Penalties (240) -
---------- --------
Other expenses (108.985) (47)
---------- --------
Other expenses (109.225) (47)
---------- --------
Other operating income/(expenses), net (107.144) 48
---------- --------
Other expenses in discontinued operations represent VAT
adjustments on the construction of buildings resulted from sales of
villas with no VAT to individuals. The amount has been received
from the clients through the selling price.
16. Finance costs and income
Continued operations
Finance income 30 June 30 June
2021 2020
-------- --------
EUR EUR
-------- --------
Interest received from non-bank loans (Note
39.1.1) 254.819 260.543
-------- --------
Total finance income 254.819 260.543
-------- --------
Finance costs 30 June 30 June
2021 2020
EUR EUR
---------- ---------
Interest expenses (non-bank) (Note 39.1.2) (69.490) (19.381)
---------- ---------
Finance charges and commissions (3.226) (3.210)
---------- ---------
Bonds interest (33.787) (33.973)
---------- ---------
Total finance costs (106.503) (56.564)
---------- ---------
Net finance result 148.316 203.979
---------- ---------
Discontinued operations (Note 9)
Finance income 30 June 30 June
2021 2020
-------- --------
EUR EUR
-------- --------
Interest received from non-bank loans (Note
39.1.1) 4.645 4.670
-------- --------
Total finance income 4.645 4.670
-------- --------
Finance costs 30 June 30 June
2021 2020
EUR EUR
---------- ----------
Interest expenses (bank) (215.867) (201.500)
---------- ----------
Interest expenses (non-bank) (Note 39.1.2) (12.702) (7.048)
---------- ----------
Finance leasing interest expenses (157.166) (236.173)
---------- ----------
Finance charges and commissions (1.186) (1.345)
---------- ----------
Total finance costs (386.921) (446.066)
---------- ----------
Net finance result (382.276) (441.396)
---------- ----------
Interest income from non-bank loans, reflects income from loans
granted by the Group for the financial assistance of associates.
This amount includes also interest on Loan receivables from 3rd
parties provided as an advance payment for acquiring a
participation in an investment property portfolio (Olympians
portfolio) in Romania. The loan provided initially with a
convertibility option which was not exercised. According to the
last addendum signed on 30 June 2021 the loan has certain one-off
and monthly payments and is fully payable by 30 June 2022. The loan
is bearing a fixed interest rate of 10% and the Company is in the
process of getting agreed security in the form of a pledge of
shares following the relevant process provided in the initial Loan
Agreement as well as the last Addendum of it.
Borrowing interest expense represents the interest expense
charged on bank and non-bank borrowings (Note 31).
Finance leasing interest expenses relate to the sale and lease
back agreements of the Group (Note 36).
Finance charges and commissions include regular banking
commissions and various fees paid to the banks.
Bonds interest represent interest calculated for the bonds
issued by the Company during 2018 (Note 32).
17. Foreign exchange profit / (losses)
a. Non realised foreign exchange loss
Foreign exchange losses (non-realised) resulted from the loans
and/or payables/receivables denominated in non EUR currencies when
translated in EUR. The exchange loss for the year ended 30 June
2021 from continued operations amounted to EUR47.406 (30 June 2020:
loss EUR42.043).
The exchange loss from discontinued operations for the year
ended 30 June 2021 amounted to EUR157.942 (30 June 2020: loss
EUR132.904) (Note 9).
b. Exchange difference on intercompany loans to foreign holdings
The Company has loans receivable from foreign group subsidiaries
which are considered as part of the Group's net investments in
those foreign operations (Note 39.3). For these intercompany loans
the foreign exchange differences are recognised initially in other
comprehensive income and in a separate component of equity. During
30 June 2021, the Group did not recognise foreign exchange loss (30
June 2020: loss of EUR42.638).
18. Tax Expense
Continued operations 30 June 30 June
2021 2020
EUR EUR
-------- --------
Income and defence tax expense (124) (81)
-------- --------
Taxes (124) (81)
-------- --------
Discontinued operations (Note 9) 30 June 30 June
2021 2020
EUR EUR
--------- ---------
Income and defence tax expense (17.849) (23.452)
--------- ---------
Taxes (17.849) (23.452)
--------- ---------
For the period ended 30 June 2021 the corporate income tax rate
for the Group's subsidiaries are as follows: in Ukraine 18%, and in
Romania 16%. The corporate tax that is applied to the qualifying
income of the Company and its Cypriot subsidiaries is 12,5%.
19. Investment Property
19.1 Investment Property Presentation
Investment Property consists of the following assets:
Income Producing Assets
-- EOS Business Park consists of 3.386 sqm gross leasable area
and includes a Class A office Building in Bucharest, which is
currently fully let to Danone Romania until 2025.
-- Innovations Logistics Park is a 16.570 sqm gross leasable
area logistics park located in Clinceni in Bucharest, which
benefits from being on the Bucharest ring road. Its construction
was tenant specific, completed in 2008 and is separated in four
warehouses, two of which offer cold storage (freezing temperature),
the total area of which is 6.395 sqm. The Innovations Logistics
Park was acquired by the Group in May 2014 and was 89% leased at
the end of the reporting period.
-- During 2017 the Company proceeded with an internal
reorganization and the Kindergarten asset of GreenLake which was
under the ownership of the associate GreenLake Development Srl was
acquired by a separate entity (SPDI Real Estate). The Kindergarten
is fully let to one of Bucharest's leading private schools and
produces an annual rental income of c.EUR115.000.
Residential Assets
The Company owns a residential portfolio, consisting at the end
of the reporting period of 4 apartments and villas in GreenLake
Residential complex in Bucharest. All units in Romfelt Plaza and
the Blooming House complexes have been effectively sold. Regarding
the Monaco Towers complex, during 2017 Tonescu Finance (the company
which acquired the Monaco Towers related loan) commenced legal
proceedings against SecMon Real Estate Srl and in order for SecMon
Real Estate Srl to protect itself it entered voluntarily in January
2018 into the insolvency process. The entering of SecMon Real
Estate Srl in the insolvency process means loss of control as per
the definition of IFRS 10. As such SecMon Real Estate Srl (Monaco
Towers assets) is not consolidated in the present financial
statements. The company has exited insolvency during the current
period and the relevant process for re-gaining full control has
been commenced. (Note 8).
Land Assets
-- Kiyanovskiy Residence consists of four adjacent plots of
land, totaling 0,55 Ha earmarked for a residential development,
overlooking the scenic Dnipro River, St. Michael's Spires and
historic Podil neighborhood.
-- Tsymlyanskiy Residence is a 0,36 Ha plot of land located in
the historic Podil District of Kiev and is destined for the
development of a residential complex.
-- Rozny Lane is a 42 Ha land plot located in Kiev Oblast,
destined for the development of a residential complex. It has been
registered under the Group pursuant to a legal decision in
2015.
-- GreenLake land is a 40.360 sqm plot and is adjacent to the
GreenLake part of the Company's residential portfolio, which is
classified under Investments in Associates (Note 21). It is
situated in the northern part of Bucharest on the bank of Grivita
Lake in Bucharest. SPDI owns c.44% of these plots, but has
effective management control.
19.2 Investment Property Movement during the reporting
period
For measuring the fair values of the assets during the period,
the Group used the same valuation reports as at 30/12/2020. The
table below presents a reconciliation of the Fair Value movements
of the investment property during the reporting period due to
relevant transactions and foreign exchange impact of local currency
vs. reporting currency.
Continued Operations
In H1 2021 and 2020, the Company did not have any Investment
Property assets classified within continued operations.
Discontinued Operations
30 June 2021 ( Fair Value movements Asset Value at
EUR ) the Beginning
of the period
or at Acquisition/Transfer
date
Asset Name Type Carrying Foreign Fair value Disposals Additions Carrying
amount exchange gain/(loss) H1 2021 H1 2021 amount
as at translation based as at 31/12/2020
30/06/2021 difference on local
currency
valuations
------------- ------------ ------------ ------------- ------------ ---------- ------------------
Kiyanovskiy
Residence Land 2.524.403 180.781 (101.366) - - 2.444.988
------------- ------------ ------------ ------------- ------------ ---------- ------------------
Tsymlyanskiy
Residence Land 925.614 66.286 (37.168) - - 896.496
------------- ------------ ------------ ------------- ------------ ---------- ------------------
Rozny Lane Land 925.614 (1.019) 30.137 - - 896.496
------------- ------------ ------------ ------------- ------------ ---------- ------------------
Total Ukraine 4.375.631 246.048 (108.397) - - 4.237.980
------------ ------------ ------------- ------------ ---------- ------------------
Innovations
Logistic
s Park Warehouse 10.100.000 (118.108) 118.108 - - 10.100.000
------------- ------------ ------------ ------------- ------------ ---------- ------------------
EOS Business
Park Office 6.700.000 (78.349) 78.349 - - 6.700.000
------------- ------------ ------------ ------------- ------------ ---------- ------------------
Residential
portfolio Residential - (1.783) 1.783 (152.500) - 152.500
------------- ------------ ------------ ------------- ------------ ---------- ------------------
Land
&
GreenLake Residential 10.595.492 (143.542) 143.542 (1.679.508) - 12.275.000
------------- ------------ ------------ ------------- ------------ ---------- ------------------
Kindergarten Retail 1.438.000 (16.816) 16.816 - - 1.438.000
------------- ------------ ------------ ------------- ------------ ---------- ------------------
Total Romania 28.833.492 (358.598) 358.598 (1.832.008) - 30.665.500
------------ ------------ ------------- ------------ ---------- ------------------
Total 33.209.123 (112.550) 250.201 (1.832.008) - 34.903.480
------------ ------------ ------------- ------------ ---------- ------------------
31 December 2020 Fair Value movements Asset Value at
( EUR ) the Beginning
of the period
or at Acquisition/Transfer
date
Asset Name Type Carrying Foreign Fair value Disposals Additions Carrying
amount exchange gain/(loss) 2020 2020 amount
as at translation based as at 31/12/2019
31/12/2020 difference on local
(a) currency
valuations
(b)
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
Kiyanovskiy
Residence Land 2.444.988 (704.961) 390.469 - - 2.759.480
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
Tsymlyanskiy
Residence Land 896.496 (266.501) 94.811 - - 1.068.186
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
Rozny Lane Land 896.496 - (171.690) - - 1.068.186
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
Total Ukraine 4.237.980 (971.462) 313.590 - - 4.895.852
----------- ------------ ------------ ------------ ---------- ------------------
Innovations
Logistic
s Park Warehouse 10.100.000 (194.106) (305.894) - - 10.600.000
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
EOS Business
Park Office 6.700.000 (136.749) (863.251) - - 7.700.000
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
Residential
portfolio Residential 152.500 (13.835) (1.950) (564.715) - 733.000
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
GreenLake Land 12.275.000 (293.437) (2.664.980) (1.580.583) - 16.814.000
& Residential
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
Kindergarten Retail 1.438.000 (26.785) 26.785 - - 1.438.000
-------------- ----------- ------------ ------------ ------------ ---------- ------------------
Total Romania 30.665.500 (664.912) (3.809.290) (2.145.298) - 37.285.000
----------- ------------ ------------ ------------ ---------- ------------------
TOTAL 34.903.480 (1.636.374) (3.495.700) (2.145.298) - 42.180.852
------------- ----------- ------------ ------------ ------------ ---------- ------------------
19.3 Investment Property Carrying Amount per asset as at the
reporting date
The table below presents the values of the individual assets as
appraised on 31/12/2020 by the appointed valuer and after the
effect of the foreign exchange adjustments due to local currency
valuations and translation differences.
Asset Name Location Principal Related Carrying amount as at
Operation Companies
30 June 20 21 31 Dec 2020
------------- ------------- ------------- ---------------------------- ---------------------------
Continued Discontinued Continued Discontinued
operations operations operations operations
------------- ------------- ------------- ------------- ------------- ------------ -------------
EUR EUR EUR
------------- ------------- ------------- ------------- ------------- ------------ -------------
Kiyanovskiy Podil, Land for LLC Aisi 2.444.988
Residence Kiev City residential Ukraine - 2.524.403 -
Center development LLC Trade
Center
------------- ------------- ------------- ------------- ------------- ------------ -------------
Podil, Land for LLC Almaz --
Tsymlyanskiy Kiev City residential Pres --
Residence Center Development Ukraine - 925.614 - 896.496
------------- ------------- ------------- ------------- ------------- ------------ -------------
Brovary Land for SC Secure
district, residential Capital
Rozny Lane Kiev Development Limited - 925.614 - 896.496
------------- ------------- ------------- ------------- ------------- ------------ -------------
Total Ukraine - 4.375.631 - 4.237.980
------------- ------------- ------------- ------------- ------------- ------------ -------------
Innovations Clinceni, Warehouse Myrnes 10.100.000
Logistics Bucharest Innovations - 10. 1 -
Park Park Limited 00.000
Best Day
Real Estate
Srl
------------- ------------- ------------- ------------- ------------- ------------ -------------
EOS Business Bucharest Office Yamano 6.700.000
Park building Holdings - 6 .700.000 -
Limited,
N-E Real
Estate Park
First Phase
Srl
------------- ------------- ------------- ------------- ------------- ------------ -------------
Kindergarten Bucharest Retail SPDI Real - 1.438.000 - 1.438.000
Estate Srl
------------- ------------- ------------- ------------- ------------- ------------ -------------
SEC South
East
Continent
Unique Real
Estate
Investments
II Limited
Ketiza
Holdings
Limited
Residential Residential Ketiza Real
Portfolio Bucharest apartments Estate Srl - - - 152.500
------------- ------------- ------------- ------------- ------------- ------------ -------------
GreenLake Bucharest Residential Edetrio
villas (4 Holdings
villas) Limited
& Emakei 12.275.000
Land for Holdings
Residential Limited
Development Iuliu Maniu -
Limited - 10.595.492
Moselin
Investments
Srl
Rimasol
Enterprises
Limited
Rimasol
Real Estate
Srl
Ashor
Ventures
Limited
Ashor
Development
Srl
Jenby
Investments
Srl
Ebenem
Investments
Srl
------------- ------------- ------------- ------------- ------------- ------------ -------------
Total Romania - 28.833.492 - 30.665.500
---------- ------------- ------------ -------------
TOTAL - 33.209.123 - 34.903.480
---------- ------------- ------------ -------------
19.4 Investment Property analysis
a. Investment Properties
The following assets are presented under Investment Property:
Innovations Logistics park, EOS Business Park, Kindergarten of
GreenLake, the Residential Portfolio (consisting of apartments in 2
complexes) and GreenLake parcel K, as well as all the land assets
namely Kiyanovskiy Residence, Tsymlyanskiy Residence and Rozny Lane
in the Ukraine, and GreenLake in Romania.
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ----------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ----------------------- --------------------- -----------------------
At the beginning of
the reporting period - 34.903.480 - 42.180.852
--------------------- ----------------------- --------------------- -----------------------
Disposal of
investment Property - (1.832.008) - (2.145.298)
--------------------- ----------------------- --------------------- -----------------------
Revaluation
(loss)/gain on
investment property - 250.201 - (3.495.700)
--------------------- ----------------------- --------------------- -----------------------
Translation
difference - (112.550) - (1.636.374)
--------------------- ----------------------- --------------------- -----------------------
As at the end of the
reporting period - 33.209.123 - 34.903.480
--------------------- ----------------------- --------------------- -----------------------
Disposals in H1 2021 of Investment Properties represent the
sales of parking spaces in Residential portfolio and villas in
Greenlake Parcel K.
20. Investment Property Acquisitions, Goodwill Movement and
Disposals
Acquisition of asset
On 31 March 2021 the Group acquired an additional 26,32% stake
in Rimasol Ltd, which through Rimasol Srl owns Plot R in the
Greenlake complex, part of the Second Phase land of the overall
project. With this purchase the total stake of the Group in this
particular plot increased to 70,56%. The asset is a land plot of
3.777 square meters situated in the perimeter of Greenlake
residential development, and currently there are ongoing
discussions for its co-development independently. The value of the
transaction reached EUR200.000 while the fair value of such stake
according to the valuation report as at 31/12/2020 is
EUR212.402.
Disposal pre-contract
During the period, the Company honouring certain commitments
made in the past during the restructuring of the holdings of
Greenlake project, signed a pre-agreement for the sale of its 50%
stake in the Kindergarten asset in Greenlake, Bucharest. The
consideration of the transaction has been set at EUR175.000 plus
release of available company's cash pledged by the Bank, while the
agreement is conditional on the effective payment of the price by
the buyer until 31/12/2021.
21. Investments in associates
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
Cost of investment in
associates at the
beginning of the
period - - 5.071.656 - 5.380.021
---------------------- ---------------------- --------------------- ----------------------
Share of profits from
associates - 194.863 - (179.775)
---------------------- ---------------------- --------------------- ----------------------
Dividend Income - - - (242.403)
---------------------- ---------------------- --------------------- ----------------------
Foreign exchange
difference - (110.661) - 113.813
---------------------- ---------------------- --------------------- ----------------------
Total - 5.155.858 - 5.071.656
---------------------- ---------------------- --------------------- ----------------------
Dividend Income reflects dividends received from Delenco Srl,
owner of the Delea Nuova building, where the Group maintains a
24,35% participation. During the period ended 30 June 2021 , there
was no dividend received.
The share of profit from the associate GreenLake Development Srl
was limited up to the interest of the Group in the associate.
As at 30 June 2021, the Group's interests in its associates and
their summarised financial information, including total assets at
fair value, total liabilities, revenues and profit or loss, were as
follows:
Project Associates Total Total Profit/ Holding Share Country Asset
Name assets liabilities (loss) of profits type
from
associates
EUR EUR EUR % EUR
-------------- ------------ -------------- ---------- -------- -------------- -------- ------------
Lelar
Holdings
Limited
and S.C.
Delea Delenco
Nuova Construct Office
Project Srl 22.598.967 (1.428.496) 800.126 24,35% 194.863 Romania building
-------------- ------------ -------------- ---------- -------- -------------- -------- ------------
Green GreenLake
Lake Development Residential
Project Srl 5.765.057 (8.613.170) 375.735 40,35% - Romania assets
-------------- ------------ -------------- ---------- -------- -------------- -------- ------------
28.364.024 (10.041.666) 1.175.861 194.863
------------ ---------------------------------------- ---------- -------- -------------- -------- ------------
As at 30 June 2020, the Group's interests in its associates and
their summarised financial information, including total assets at
fair value , total liabilities, revenues and profit or loss, were
as follows:
Project Associates Total Total Profit/ Holding Share Country Asset
Name assets liabilities (loss) of profits type
from
associates
EUR EUR EUR % EUR
-------------- ------------ -------------- ---------- -------- ------------- -------- ------------
Lelar
Holdings
Limited
and S.C.
Delea Delenco
Nuova Construct Office
Project Srl 25.589.484 (2.631.805) 898.671 24,35% 218.862 Romania building
-------------- ------------ -------------- ---------- -------- ------------- -------- ------------
GreenLake
Project GreenLake
- Phase Development Residential
A Srl 9.670.127 (11.085.797) 153.953 40,35% - Romania assets
-------------- ------------ -------------- ---------- -------- ------------- -------- ------------
Total 35.259.611 (13.717.602) 1.052.624 218.862
------------ ------------- ---------- -------- ------------- -------- ------------
22. Financial assets at fair value through OCI
The Group proceeded in 2018 with an impairment of EUR297.200 on
Monaco Towers, following the court decision in relation to the SPV
company SecMon Real Estate Srl to enter into insolvency in January
2018. As a result, the Company lost control over the asset and as
such it was reclassified as Financial assets at fair value through
OCI as per table below (where the fair value of the property was
adjusted at 80% of its value). Although, during the current period
the SPV has exited insolvency status and the Group is in the
process of regaining full control, for H1 2021 the Management
maintained the accounting treatment of the asset as a Financial
asset at fair value through OCI, and its value is the same as in
the previous period, until the local Court resolves officially on
this.
Discontinued operations (Note 9)
Unadjusted Adjusted
------------ ------------
ASSETS EUR EUR
------------ ------------
Non-current assets
------------ ------------
Investment property 1.486.000 1.188.800
------------ ------------
Current assets
------------ ------------
Prepayments and other current assets 20.447 20.447
------------ ------------
Cash and cash equivalents 10.321 10.321
------------ ------------
Total assets 1.516.768 1.219.568
------------ ------------
Current liabilities
------------ ------------
Borrowings (1.075.176) (1.075.176)
------------ ------------
Other liabilities (19.433) (19.433)
------------ ------------
Intercompany loans (1.845.700) (124.958)
------------ ------------
Total liabilities (2.940.309) (1.219.567)
------------ ------------
Total Net equity (1.423.541) 1
------------ ------------
Add back Intercompany loans 1.845.700 -
------------ ------------
Total Net equity (excluding IC) 422.159 1
------------ ------------
Financial Asset at fair value through OCI 1
------------ ------------
23. Tangible and intangible assets
As at 30 June 2021 the intangible assets were composed of the
capitalised expenditure on the Enterprise Resource Planning system
(Microsoft Dynamics-Navision) in the amount of EUR103.193 (31 Dec
2020: EUR103.193) which is under continued operations. Accumulated
amortization as at the reporting date amounts to EUR103.193 (31 Dec
2020: EUR103.193) and therefore net value amounts to EUR0 (31 Dec
2020: EUR0).
As at 30 June 2021 the tangible non-current assets under
continued operations were comprised mainly by electronic equipment
(mobiles, computers etc.) of a net value of EUR1.632 (31 Dec 2020:
EUR2.859).
As at 30 June 2021 the tangible non-current assets under
discontinued operations mainly consisted of the machinery and
equipment used for servicing the Group's investment properties in
Ukraine and Romania amount to EUR79.863 (31 Dec 2020 EUR77.978).
Accumulated depreciation as at the reporting date amounts to
EUR67.660 (31 Dec 2020: EUR65.621).
24. Long Term Receivables and prepayments
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Long Term Receivables 826 465.000 836 315.000
--------------------- ---------------------- --------------------- -----------------------
Total 826 465.00 836 315.000
--------------------- ---------------------- --------------------- -----------------------
Long term receivables mainly include cash pledged in favour of
Piraeus Leasing and in favour of Alpha Leasing.
25. Prepayments and other current assets
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Trade and other
receivables 362.268 533.576 307.549 487.185
--------------------- ---------------------- --------------------- -----------------------
VAT and other tax
receivables 232.167 103.901 239.191 105.348
--------------------- ---------------------- --------------------- -----------------------
Deferred expenses 90 49.983 - 1.095
--------------------- ---------------------- --------------------- -----------------------
Receivables due from
related parties 69.297 6.744 45.077 10.783
--------------------- ---------------------- --------------------- -----------------------
Loan receivables from
3(rd) parties 5.285.539 124.958 6.365.654 124.958
--------------------- ---------------------- --------------------- -----------------------
Loan to associates
(Note 39.4) 9.187 306.244 9.026 301.600
--------------------- ---------------------- --------------------- -----------------------
Allowance for
impairment of
prepayments and other
current assets (71.289) (292.208) (86.421) (282.842)
--------------------- ---------------------- --------------------- -----------------------
Total 5.887.259 833.198 6.880.076 748.127
--------------------- ---------------------- --------------------- -----------------------
Trade and other receivables mainly include receivables from
tenants and prepayments made for services.
VAT receivable represent VAT which is refundable in Romania,
Cyprus and Ukraine.
Deferred expenses include mainly recognition of property tax
expenses. During the current period, pursuant to recent local norms
in Romania, the total annual amount is recognised instead of just
the amount which is payable during the period.
Loan receivables from 3rd parties include an amount of
EUR4.580.000 provided as an advance payment for acquiring a
participation in an investment property portfolio (Olympians
portfolio) in Romania, as well as associated interest of
EUR1.161.860 (2020 EUR1.071.271) less accumulated expected credit
loss of EUR54.256. The loan provided initially with a
convertibility option which was not exercised. On 30 June 2021 an
addendum was signed by the two parties providing certain one-off
and monthly payments for a period until 30 June 2022 when the loan
is fully re-payable. The loan bears a fixed interest rate of 10%
and secured by relevant corporate guarantees, while the Company is
in the process of getting agreed security in the form of pledge of
shares following the relevant process provided in the initial Loan
Agreement as well as the last signed annex in force.
Loan receivable from 3rd parties under discontinued operations
include a loan receivable from SecMon Real Estate Srl which since
January 2018 is classified as Financial Asset at Fair value through
OCI (Note 21).
Loan to associates reflects a loan receivable from GreenLake
Development Srl, holding company of GreenLake Project-Phase A
(Notes 21 and 40.4).
26. Financial Assets at FV through P&L
The table below presents the analysis of the balance of
Financial Assets at FV through P&L in relation to the continued
operations of the Company:
30 June 2021 31 Dec 2020
EUR EUR
------------- ------------
Arcona shares 6.783.642 3.549.453
------------- ------------
Transfer from Receivables - 4.030.234
------------- ------------
FV change in Arcona shares 27.754 (796.045)
------------- ------------
Arcona shares at reporting date 6.811.396 6.783.642
------------- ------------
Warrants over Arcona shares 3.602 32.190
------------- ------------
Transfer from Receivables - 1
------------- ------------
FV change in warrants 51.530 (28.589)
------------- ------------
Arcona warrants at reporting date 55.132 3.602
------------- ------------
Total Financial Assets at FV 6.866.528 6.787.244
------------- ------------
FV change in Arcona shares 27.754 (796.045)
------------- ------------
FV change in warrants 51.530 (28.589)
------------- ------------
Fair Value loss on Financial Assets
at FV through P&L 79.284 (824.634)
------------- ------------
The Company received during 2019, 277.943 Arcona shares as part
of the disposal of Aisi Bella LLC, the owner of Bella and Balabino
assets in the Ukraine, to Arcona Property Fund N.V. Moreover the
Company received during 2020, 315.591 Arcona shares as part of the
disposal of Boyana, and therefore a relevant transfer from
receivables account took place. At the end of the reporting period
the shares revalued to their fair value based on the NAV per share
of Arcona at the same date, and as a result a relevant fair value
gain of EUR27.754 is recognised.
On top of the aforementioned shares, the Company received for
the sale of Bella and Balabino assets, 67.063 warrants over shares
in Arcona for a consideration of EUR1, and 77.201 warrants over
Arcona shares for the sale of Boyana, for a consideration of EUR1.
The warrants are exercisable upon the volume weighted average price
of the Arcona shares traded on a regulated market at EUR8,10 or
higher. At the end of the reporting period, the warrants are
re-valued to fair value and as a result a relevant gain of
EUR51.530 is recognised. The terms and assumptions used for such
warrant re-valuation are:
-- Current stock price (as retrieved from Amsterdam Stock
Exchange): EUR5,95 per share
-- Strike price of the warrants: EUR8,10 per share
-- Expiration date: 1 November 2024
-- Standard deviation in stock price: 23,41%
-- Annualised dividend yield on shares: 0,00%
-- 5 year Government Bond rate (weighted average rate of
Government Bonds of countries that Arcona is exposed): 0,908%
27. Cash and cash equivalents
Cash and cash equivalents represent liquidity held at banks.
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in USD 15.855 - 15.755 -
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in EUR 25.372 1.124 33.234 216.224
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in UAH 64 340 6 418
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in RON 30.206 524.216 79.577 524.146
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in GBP 2.797 - 1.287 -
--------------------- ---------------------- --------------------- ----------------------
Total 74.294 525.680 129.859 740.788
--------------------- ---------------------- --------------------- ----------------------
28. Share capital
Number of Shares
EUR 30 June 2021 31 Dec 2020
Authorised
------------- -------------
Ordinary shares of EUR 0,01 989.869.935 989.869.935
------------- -------------
Total ordinary shares 989.869.935 989.869.935
------------- -------------
RCP Class A Shares of EUR0,01 - -
------------- -------------
RCP Class B Shares of EUR0,01 8.618.997 8.618.997
------------- -------------
Total redeemable shares 8.618.997 8.618.997
------------- -------------
Issued and fully paid
------------- -------------
Ordinary shares of EUR0,01 129.191.442 129.191.442
------------- -------------
Total ordinary shares 129.191.442 129.191.442
------------- -------------
Total 129.191.442 129.191.442
------------- -------------
Nominal value (EUR)
EUR 30 June 2021 31 Dec 2020
Authorised
------------- ------------
Ordinary shares of EUR 0,01 9.898.699 9.898.699
------------- ------------
Total ordinary shares 9.898.699 9.898.699
------------- ------------
RCP Class A Shares of EUR0,01 - -
------------- ------------
RCP Class B Shares of EUR0,01 86.190 86.190
------------- ------------
Total redeemable shares 86.190 86.190
------------- ------------
Issued and fully paid
------------- ------------
Ordinary shares of EUR0,01 1.291.281 1.291.281
------------- ------------
Total ordinary shares 1.291.281 1.291.281
------------- ------------
Total 1.291.281 1.291.281
------------- ------------
28.1 Authorised share capital
T he authorised share capital of the Company as at the date of
issuance of this report is as follows:
a) 989.869.935 Ordinary Shares of EUR0,01 nominal value
each,
b) 8.618.997 Redeemable Preference Class B Shares of EUR0,01
nominal value each, (Note 28.3) .
28.2 Issued Share Capital
As at the end of 2018, the issued share capital of the Company
was as follows:
a) 127.270.481 Ordinary Shares of EUR0,01 nominal value each,
b) 392.500 Redeemable Preference Class A Shares of EUR0,01
nominal value each, cancelled during 2018 as per the Annual General
Meeting decision of 29 December 2017 ,
c) 8.618.997 Redeemable Preference Class B Shares of EUR0,01
nominal value each.
In respect of the Redeemable Preference Class B Shares , issued
in connection to the acquisition of Craiova Praktiker, following
the holders of such shares notifying the Company of their intent to
redeem within 2016, the Company:
- for the Redeemable Preference Class B Shares , in lieu of
redemption the Company gave its 20% holding in Autounion (Note
28.3) in October 2016, to the Craiova Praktiker seller BLUEHOUSE
ACCESSION PROPERTY HOLDINGS III S.A.R.L. and final settlement for
any resulting difference is expected to be provided by Cypriot
Courts (Note 40.3). As soon as the case is settled, the Company
will proceed with the cancellation of the Redeemable Preference
Class B Shares .
On 24(th) December 2019 the Company proceeded with the issue of
1.920.961 new Ordinary Shares as follows:
i. 1.219.000 new Ordinary Shares to certain advisors, directors
and executives of the Company involved in the closing of the Stage
I of the Arcona Transaction by means of settling relevant Company's
liabilities.
ii. 437.676 new Ordinary Shares to directors of the Company in
lieu of H1 2019 and before H2 2016 fees.
iii. 200.000 new Ordinary Shares to certain advisor in lieu of
cash fees for financial advisory services rendered in 2019.
iv. 64.285 new Ordinary Shares to certain executive of the
Company in lieu of cash fees for services rendered in 2018.
Following shares issuance completed within 2019, the issued
share capital of the Company as at the date of issuance of this
report is as follows:
a) 129.191.442 Ordinary Shares of EUR0,01 nominal value
each,
b) 8.618.997 Redeemable Preference Class B Shares of EUR0,01
nominal value each, (Note 28.3) .
b) 8.618.997 Redeemable Preference Class B Shares of EUR0,01
nominal value each, (Note 28.3) .
28.3 Capital Structure as at the end of the reporting period
As at the reporting date the Company's share capital is as
follows:
Number of (as at) 30 June 2021 (as at) 31 December (as at) 31 December
2020 2019
Ordinary shares of Issued and Listed on
EUR0,01 AIM 129.191.442 129.191.442 129.191.442
---------------------- --------------------- ---------------------- -----------------------
Total number of
Shares Non-Dilutive Basis 129.191.442 129.191.442 129.191.442
---------------------- --------------------- ---------------------- -----------------------
Total number of
Shares Full Dilutive Basis 129.191.442 129.191.442 129.191.442
---------------------- --------------------- ---------------------- -----------------------
Options - - - -
---------------------- --------------------- ---------------------- -----------------------
Redeemable Preference Class B Shares
The Redeemable Preference Class B Shares, issued to BLUEHOUSE
ACCESSION PROPERTY HOLDINGS III S.A.R.L. as part of the Praktiker
Craiova asset acquisition do not have voting rights but have
economic rights at par with ordinary shares. As at the reporting
date all of the Redeemable Preference Class B Shares have been
redeemed but the Company is in legal proceedings with the vendor in
respect of a final settlement (Notes 33, 40.3).
28.4 Other share capital related matters
Pursuant to decisions taken by the AGM of 31(st) December 2018,
the Board has been authorised and empowered to:
- issue and allot up to 20.000.000 ordinary shares of EUR0,01
each, at an issue price as the Board may in its sole unfettered
discretion from time to time determine (and such price may be at a
discount to the net asset value per share in the Company which is
in issue immediately prior to the issue of the new shares) and for
such purpose any rights of pre-emption and other rights the
Company's shareholders have or may have by operation of law and/or
pursuant to the articles of association of the Company and/or
otherwise in connection with the authority conferred on the Board
for the issue and allotment of shares in the Company as
contemplated in this resolutions or the issue of shares in the
Company pursuant to such authority be and are hereby irrevocably
and unconditionally waived. The authority conferred by this
resolution expired on 31 December 2019. Under this authority and
following relevant Board resolution on 11/12/2019, the Company
issued 1.920.961 ordinary shares of euro 0,01 each.
- issue up to 15.000.000 Class A Warrants, being convertible to
up to 15.000.000 ordinary share of EUR0,01 each in the Company upon
exercise of the Warrants, with such terms and conditions and at an
issue price as the Board may in its sole unfettered discretion from
time to time determine (and such price may be at a discount to the
net asset value per share in the Company which is in issue
immediately prior to the issue of the Warrants)and for such purpose
any rights of pre-emption and other rights the Company's
shareholders have or may have by operation of law and/or pursuant
to the articles of association of the Company and/or otherwise in
connection with the authority conferred on the Board for the issue
and allotment of shares or Warrants in the Company as contemplated
in this resolution or the issue and allotment of shares or Warrants
in the Company pursuant to such authority be and are hereby
irrevocably and unconditionally waived. The authority conferred by
this resolution shall expire on 31 December 2019. The Company did
not issue any Class A Warrants under this authority.
29. Foreign Currency Translation Reserve
Exchange differences related to the translation from the
functional currency to EUR of the Group's subsidiaries are
accounted by entries made directly to the foreign currency
translation reserve. The foreign exchange translation reserve
represents unrealized profits or losses related to the appreciation
or depreciation of the local currencies against EUR in the
countries where the Company's subsidiaries' functional currencies
are not EUR. The Company had foreign exchange losses on translation
due to presentation currency of EUR565.479 for H1 2021, in
comparison to EUR1.176.630 relevant losses for H1 2020.
30. Non-Controlling Interests
Non-controlling interests represent the percentage
participations in the respective entities not owned by the
Group:
% Non-controlling interest
portion
Group Company 30 June 31 Dec
20 21 2020
-------------- -----------
LLC Almaz-Press-Ukraine 45,00 45,00
-------------- -----------
Ketiza Holdings Limited 10,00 10,00
-------------- -----------
Ketiza Real Estate Srl 10,00 10,00
-------------- -----------
Ram Real Estate Management Limited 50,00 50,00
-------------- -----------
Iuliu Maniu Limited 55,00 55,00
-------------- -----------
Moselin Investments Srl 55,00 55,00
-------------- -----------
Rimasol Enterprises Limited 29,44 55,76
-------------- -----------
Rimasol Real Estate Srl 29,44 55,76
-------------- -----------
Ashor Ventures Limited 55,76 55,76
-------------- -----------
Ashor Development Srl 55,76 55,76
-------------- -----------
Jenby Ventures Limited 55,70 55,70
-------------- -----------
Jenby Investments Srl 55,70 55,70
-------------- -----------
Ebenem Limited 55,70 55,70
-------------- -----------
Ebenem Investments Srl 55,70 55,70
-------------- -----------
SPDI Real Estate Srl 50,00 50,00
-------------- -----------
31. Borrowings
Project 30 June 2021 31 Dec 2020
Continued Discontinued Continued Discontinued
operations operations operations operations
------------------ ------------------ ------------------ ------------------ ------------------
EUR EUR EUR EUR
------------------ ------------------ ------------------ ------------------ ------------------
Principal of bank
Loans
------------------ ------------------ ------------------ ------------------ ------------------
Bancpost SA GreenLake - 1.901.094
Parcel K - 133.834 -
------------------ ------------------ ------------------ ------------------ ------------------
Piraeus Bank SA GreenLake-Phase 2 - 2.525.938 - 2.525.938
------------------ ------------------ ------------------ ------------------ ------------------
Kindergarten -
Bancpost SA SPDI RE - 510.188 - 670.293
------------------ ------------------ ------------------ ------------------ ------------------
Loans from other 3(rd) parties and
related parties (Note 39.5) 1.585.749 214.070 2.061.514 235.191
------------------ ------------------ ------------------ ------------------
Overdrafts - 3.146 - 853
------------------ ------------------ ------------------ ------------------
Total principal
of bank and 5.333.369
non-bank Loans 1.585.749 3.387.176 2.061.514
------------------ ------------------ ------------------ ------------------ ------------------
Interest accrued on bank loans - 1.088.031 - 952.321
------------------ ------------------ ------------------ ------------------
Interests accrued on non-bank loans 128.311 40.329 88.863 38.771
------------------ ------------------ ------------------ ------------------
Total 1.714.060 4.515.536 2.150.377 6.324.461
------------------ ------------------ ------------------ ------------------
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued operations
operations
--------------------- ----------------------- --------------------- ------------------------
EUR EUR EUR EUR
--------------------- ----------------------- --------------------- ------------------------
Current portion 1.577.500 3.647.186 2.054.400 3.510.366
--------------------- ----------------------- --------------------- ------------------------
Non-current portion 136.560 868.350 95.977 2.814.095
--------------------- ----------------------- --------------------- ------------------------
Total 1.714.060 4.515.536 2.150.377 6.324.461
--------------------- ----------------------- --------------------- ------------------------
Continued Operations
Loans from other 3(rd) parties and related parties under
continued operations include among others:
) Loans from 3 Directors of EUR375.000 provided as bridge
financing . The loans bear interest at 8% annually and expired on
31 August 2021. The Company and the Directors are discussing the
extension of the loans and relevant process is currently in place.
(Note 39.5) .
B) Safe Growth Investments, a third party company, provided a
loan of EUR1m to the Company in November 2020 to be used for
general working capital purposes. The loan bears interest of 5,35 %
per annum and is payable by end of 2021.
Discontinued Operations
Ketiza Real Estate Srl entered in 2012 into a loan agreement
with Bancpost SA for a credit facility for financing the
acquisition of the Blooming House and 100% of the remaining
(without VAT) construction works of Blooming House project. During
2020 the loan was fully repaid.
SecRom Real Estate Srl entered (2009) into a loan agreement with
Alpha Bank Romania for a credit facility for financing part of the
acquisition of the Doamna Ghica Project apartments. During 2018,
SecRom Real Estate Srl was merged with N-E Real Estate Park First
Phase Srl as a result the loan was transferred to N-E Real Estate
Park First Phase Srl. During 2020, the loan was fully repaid.
Moselin Investments Srl entered into a construction loan
agreement in 2010 with Bancpost SA covering the construction works
of Parcel K GreenLake project. As at the end of the reporting
period the balance of the loan was EUR133.834 and bears interest of
EURIBOR 3M plus 2,5%. Following the restructuring implemented
during 2017 the loan maturity was extended to 2022. The loan is
secured with the property itself and the shares of Moselin
Investments Srl and is being repaid through sales proceeds.
Sertland Properties Limited entered into a loan agreement in
2008 with Alpha Bank Bulgaria for an acquisition loan related to
the acquisition of Boyana Residence ood. As at the end of 2019, the
balance of the loan was EUR666.468 bearing interest of EURIBOR 3M
plus 5,75%. On 29 July 2020 the loan was transferred to Arcona as
part of the transaction for the sale of Boyana Residence in
Bulgaria.
SEC South East Continent Unique Real Estate (Secured)
Investments Limited has a debt facility with Piraeus Bank for the
acquisition of the GreenLake land in Bucharest Romania. As at the
end of the reporting period the balance of the loan was
EUR2.525.938 plus accrued interest EUR1.080.426 and bears interest
of EURIBOR 3M plus 5% plus the Greek law 128/75 0,6% contribution.
During September 2019, the company received a termination notice
from Piraeus Bank and a payment order from court in relation to
this loan, and currently relevant discussions with the Bank are
taking place for a mutual agreed solution.
N-E Real Estate Park First Phase Srl entered in 2016 into a loan
agreement with Alpha Bank Romania for a credit facility of
EUR1.000.000 for working capital purposes. During 2020, the balance
of the loan was fully repaid.
SPDI Real Estate Srl (Kindergarten) has a loan agreement with
Bancpost SA Romania. As at 30 June 2021 the balance of the loan was
EUR510.188 and bears interest of EURIBOR 3m plus 4,6% per annum.
The loan is repayable by 2027.
Loans from other 3(rd) parties and related parties under
discontinued operations includes borrowings from non-controlling
interest parties. During the last nine years and in order to
support the GreenLake project the non-controlling shareholders of
Moselin Investments Srl and SPDI Real Estate SRL (other than the
Group) have contributed their share of capital injections by means
of shareholder loans. The loans bear interest 4% annually.
32. Bonds
The Company in order to acquire up to a 50% interest in a
portfolio of fully let logistics properties in Romania, the
Olympians Portfolio, issued a financial instrument, 35% of which
consists of a convertible bond and 65% of which is made up of a
warrant. The convertible loan element of the instrument which was
in the value of EUR1.033.842 bears a 6,5% coupon, has a 7 year term
and is convertible into ordinary shares of the Company at the
option of the holder at 25p. starting from 1 January 2018. The
associated interest accrued is EUR 258.869.
33. Trade and other payables
The fair value of trade and other payables due within one year
approximate their carrying amounts as presented below.
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Payables to third
parties 3.362.338 765.951 3.243.465 841.122
--------------------- ---------------------- --------------------- -----------------------
Payables to related
parties (Note 39.2) 586.156 41.307 582.829 -
--------------------- ---------------------- --------------------- -----------------------
Deferred income from
tenants - 7.873 - 7.965
--------------------- ---------------------- --------------------- -----------------------
Accruals 52.630 13.213 101.112 21.385
--------------------- ---------------------- --------------------- -----------------------
Pre-sale advances
(Advances received for - - -
sale of properties) 109.556
--------------------- ---------------------- --------------------- -----------------------
Total 4.001.124 828.344 4.036.962 870.472
--------------------- ---------------------- --------------------- -----------------------
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ----------------------- --------------------- -----------------------
EUR EUR EUR EUR
---------------------- ----------------------- --------------------- -----------------------
Current portion 4.001.124 820.471 4.036.962 862.507
---------------------- ----------------------- --------------------- -----------------------
Non-current portion - 7.873 - 7.965
---------------------- ----------------------- --------------------- -----------------------
Total 4.001.124 828.344 4.036.962 870.472
---------------------- ----------------------- --------------------- -----------------------
Payables to third parties represents:
a) payables due to Bluehouse Capital (under continued
operations) as a result of the Redeemable Convertible Class B share
redemption (Note 28.3) which is under legal proceedings for a final
settlement (Note 40.3),
b) amounts payable to various service providers including
auditors, legal advisors, consultants and third party accountants
related to the current operations of the Group, and
c) guarantee amounts collected from tenants.
Payables to related parties under continued operations represent
amounts due to directors and accrued management remuneration (Note
39.2). Payables to related parties under discontinued operations
represent payables to non-controlling interest shareholders.
Deferred income from tenants represents advances from tenants
which will be used as future rental income and utilities
charges.
Accruals mainly include the accrued, administration fees,
accounting fees, facility management and other fees payable to
third parties.
Pre-sale advances reflect the advance received in relation to
Kiyanovskiy Residence pre-sale agreement, which upon non closing of
the said sale part of which had to be returned to the prospective
buyer.
34. Deposits from Tenants
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
Deposits from tenants
non-current - 64.231 - 64.231
---------------------- ---------------------- --------------------- ----------------------
Total - 64.231 - 64.231
---------------------- ---------------------- --------------------- ----------------------
Deposits from tenants appearing under non-current liabilities
include the amounts received from the tenants of Innovations
Logistics Park and EOS Business Park, as advances/guarantees and
are to be reimbursed to these clients at the expiration of the
lease agreements.
35. Provisions and Taxes Payables
30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Corporate income tax -
non current 199.654 29.010 237.521 30.374
--------------------- ---------------------- --------------------- -----------------------
Defence tax - non
current 13.132 - 26.091 15
--------------------- ---------------------- --------------------- -----------------------
Tax provision - non
current 399.450 - 399.450 -
--------------------- ---------------------- --------------------- -----------------------
Corporate income tax -
current 432.254 42.739 449.844 58.960
--------------------- ---------------------- --------------------- -----------------------
Other taxes including
VAT payable - current 173.234 212.046 163.972 165.521
--------------------- ---------------------- --------------------- -----------------------
Provisions - current 6.470 22.142 6.549 22.405
--------------------- ---------------------- --------------------- -----------------------
Total Provisions and
Taxes Payables 1.224.195 305.937 1.283.427 227.275
--------------------- ---------------------- --------------------- -----------------------
Corporate income tax represents taxes payable in Cyprus and
Romania.
Other taxes represent local property taxes and VAT payable in
Ukraine, Romania, and Cyprus.
Non current amounts represent the part of the settlement plan
agreed with the Cyprus tax authorities up to 2022.
36. Finance Lease Liabilities
As at the reporting date the finance lease liabilities consist
of the non-current portion of EUR8.977.818 and the current portion
of EUR516.722 (31 December 2020: EUR9.235.265 and EUR456.764,
accordingly).
Discontinued operations
30 June 2021 Note Minimum lease Interest Principal
payments
EUR EUR EUR
--------- -------------- ---------- ----------
42.2
Less than one year & 42.6 960.235 443.374 516.861
--------- -------------- ---------- ----------
Between two and 10.252.025 1.298.497 8.953.528
five years
--------- -------------- ---------- ----------
More than five years 38.220 103.223 (65.003)
-------------- ---------- ----------
11.250.480 1.845.094 9.405.386
--------- -------------- ---------- ----------
Accrued Interest 89.154
-------------- ---------- ----------
Total Finance Lease 9.494.540
Liabilities
-------------- ---------- ----------
31 Dec 2020 Note Minimum lease Interest Principal
payments
EUR EUR EUR
--------- -------------- ---------- ----------
42.2
Less than one year & 42.6 917.759 455.241 462.518
--------- -------------- ---------- ----------
Between two and 5.265.225 1.414.550 3.850.675
five years
--------- -------------- ---------- ----------
More than five years 5.506.778 209.027 5.297.751
--------- -------------- ---------- ----------
11.689.762 2.078.818 9.610.944
--------- -------------- ---------- ----------
Accrued Interest 81.085
-------------- ---------- ----------
Total Finance Lease 9.692.029
Liabilities
-------------- ---------- ----------
36 .1 Land Plots Financial Leasing
The Group holds land plots in the Ukraine under leasehold
agreements. Lease obligations are denominated in UAH. The fair
value of lease obligations approximate to their carrying amounts as
included above. Following the appropriate discounting, finance
lease liabilities are carried at EUR33.534 under current and
non-current portion. The Group's obligations under finance leases
are secured by the lessor's title to the leased assets.
36.2 Sale and Lease Back Agreements
A. Innovations Logistics Park
In May 2014 the Group concluded the acquisition of the
Innovations Logistics Park in Bucharest, owned by Best Day Real
Estate Srl, through a sale and lease back agreement with Piraeus
Leasing Romania SA. As at the end of the reporting period the
balance is EUR6.621.641 bearing interest rate at 3M EURIBOR plus
4,45% margin, being repayable in monthly tranches until 2026 with a
balloon payment of EUR5.244.926. At the maturity of the lease
agreement and upon payment of the balloon Best Day Real Estate Srl
will become owner of the asset.
Under the current finance lease agreement the collaterals for
the facility are as follows:
1. Best Day Real Estate Srl pledged its future receivables from its tenants.
2. Best Day Real Estate Srl pledged its shares.
3. Best Day Real Estate Srl pledged all current and reserved
accounts opened in Piraeus Leasing, Romania.
4. Best Day Real Estate Srl was obliged to provide cash
collateral in the amount of EUR250.000 in Piraeus Leasing Romania,
which had been deposited as follows, half in May 2014 and half in
May 2015.
SPDI provided a corporate guarantee in favour of the bank
towards the liabilities of Best Day Real Estate Srl arising from
the sale and lease back agreement.
B. EOS Business Park
In October 2014 the Group concluded the acquisition of the EOS
Business Park in Bucharest, owned by N-E Real Estate Park First
Phase Srl, through a sale and lease back agreement with Alpha Bank
Romania SA. As at the end of the reporting period the balance is
EUR2.839.365 b earing interest rate at 3M EURIBOR plus 5,25%
margin, being repayable in monthly tranches until 2024 with a
balloon payment of EUR2.546.600. At the maturity of the lease
agreement and upon payment of the balloon, N-E Real Estate Park
First Phase Srl will become owner of the asset.
Under the current finance lease agreement the collaterals for
the facility are as follows:
1. N-E Real Estate Park First Phase Srl pledged its future receivables from its tenants.
2. N-E Real Estate Park First Phase Srl pledged Bank Guarantee receivables from its tenants.
3. N-E Real Estate Park First Phase Srl pledged its shares.
4. N-E Real Estate Park First Phase Srl pledged all current and
reserved accounts opened in Alpha Bank Romania SA.
5. N-E Real Estate Park First Phase Srl is obliged to provide
cash collateral in the amount of EUR300.000 in Alpha Bank Romania
SA, in equal annual installments starting with the 5(th) year of
the agreement.
6. SPDI provided a corporate guarantee in favour of the bank
towards the liabilities of N-E Real Estate Park First Phase Srl
arising from the sales and lease back agreement.
37. Earnings and net assets per share attributable to equity
holders of the parent
a. Weighted average number of ordinary shares
30 June 2021 31 Dec 2020 30 June 2020
Issued ordinary shares capital 129.191.442 129.191.442 129.191.442
------------- ------------ -------------
Weighted average number of ordinary shares (Basic) 129.191.442 129.191.442 129.191.442
------------- ------------ -------------
Diluted weighted average number of ordinary shares 129.191.442 129.191.442 129.191.442
------------- ------------ -------------
b. Basic diluted and adjusted earnings per share
Earnings per share 30 Jun 2021 30 Jun 2020
EUR EUR
------------ ------------
Profit/ (Loss) after tax attributable to owners of the parent 287.507 (369.095)
------------ ------------
Basic 0,002 (0,003)
------------ ------------
Diluted 0,002 (0,003)
------------ ------------
c. Basic diluted and adjusted earnings per share from discontinued operations
Earnings per share 30 Jun 2021 30 Jun 2020
EUR EUR
------------ ------------
Profit/ (Loss) after tax from discontinued operations attributable to owners of the
parent 234.770 860.808
------------ ------------
Basic 0,001 0,007
------------ ------------
Diluted 0,001 0,007
------------ ------------
d. Net assets per share
Net assets per share 30 June 2021 31 Dec 2020
EUR EUR
------------- ------------
Net assets attributable to equity holders of the parent 23.523.001 23.712.973
------------- ------------
Number of ordinary shares 129.191.442 129.191.442
------------- ------------
Diluted number of ordinary shares 129.191.442 129.191.442
------------- ------------
Basic 0,18 0,18
------------- ------------
Diluted 0,18 0,18
------------- ------------
38. Segment information
All commercial and financial information related to the
properties held directly or indirectly by the Group is being
provided to members of the executive management team who report to
the Board of Directors. Such information relates to rentals,
valuations, income, costs and capital expenditures. The individual
properties are aggregated into segments based on the economic
nature of the property. For the reporting period the Group has
identified the following material reportable segments:
Commercial-Industrial
-- Warehouse segment -Innovations Logistics Park,
-- Office segment - Eos Business Park - Delea Nuova (Associate)
-- Retail segment - Kindergarten in GreenLake
Residential
-- Residential segment
Land Assets
-- Land assets
There are no sales between the segments.
Segment assets for the investment properties segments represent
investment property (including investment properties under
development and prepayments made for the investment properties).
Segment liabilities represent interest bearing borrowings, finance
lease liabilities and deposits from tenants.
Continued Operations
Profit and Loss for the period ended 30 June 20 21
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- -------- ------- ------------ ----------- ------------ ------------
Segment profit
---------- -------- ------- ------------ ----------- ------------ ------------
Rental income (Note
10) - - - - - 339.831 339.831
---------- -------- ------- ------------ ----------- ------------ ------------
Service charges
and utilities income
(Note 10) - - - - - 116.675 116.675
---------- -------- ------- ------------ ----------- ------------ ------------
Profit from discontinued
operation (Note
9) 183.623 600.369 70.569 15.393 252.626 (109.037) 1.013.543
---------- -------- ------- ------------ ----------- ------------ ------------
Impairment of financial
investments - - - - - 79.284 79.284
---------- -------- ------- ------------ ----------- ------------ ------------
Property management
(Note 10) - - - - - 200.937 200.937
---------- -------- ------- ------------ ----------- ------------ ------------
Segment profit 183.623 600.369 70.569 15.393 252.626 627.690 1.750.270
---------- -------- ------- ------------ ----------- ------------ ------------
Administration expenses
(Note 12) - - - - - - (553.530)
---------- -------- ------- ------------ ----------- ------------ ------------
Other (expenses)/income,
net (Note 15) - - - - - - 3.524
---------- -------- ------- ------------ ----------- ------------ ------------
Finance income (Note
16) - - - - - - 254.819
---------- -------- ------- ------------ ----------- ------------ ------------
Interest expenses
(Note 16) - - - - - - (103.277)
---------- -------- ------- ------------ ----------- ------------ ------------
Other finance costs
(Note 16) - - - - - - (3.226)
---------- -------- ------- ------------ ----------- ------------ ------------
Foreign exchange
losses, net (Note
17a) - - - - - - (47.406)
---------- -------- ------- ------------ ----------- ------------ ------------
Income tax expense
(Note 18) - - - - - - (124)
---------- -------- ------- ------------ ----------- ------------ ------------
Profit from discontinued
operations (Note
9) - - - - - - (778.773)
---------- -------- ------- ------------ ----------- ------------ ------------
Exchange difference
on translation foreign
holdings (Note 29) - - - - - - (565.479)
---------- -------- ------- ------------ ----------- ------------ ------------
Total Comprehensive
Income - - - - - - (43.202)
---------- -------- ------- ------------ ----------- ------------ ------------
* It is noted that part of the rental and service charges/
utilities income related to Innovations Logistics Park (Romania) is
currently invoiced by the Company as part of a relevant lease
agreement with the Innovations SPV and the lender, however the
asset, through the SPV, is planned to be transferred as part of the
transaction with Arcona Property Fund N.V. Upon a final agreement
for such transfer, the Company will negotiate with the lender its
release from the aforementioned lease agreement, and if it
succeeds, upon completion such income will also be transferred.
Continued Operations
Profit and Loss for the period ended 30 June 2020
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- -------- ------- ------------ ----------- ----------- -------------
Segment profit
---------- -------- ------- ------------ ----------- ----------- -------------
Rental income (Note 280.61 286.53
10) 5.924 - - - - 2 6
---------- -------- ------- ------------ ----------- ----------- -------------
Service charges
and utilities income
(Note 10) - - - - - 93.450 93.450
---------- -------- ------- ------------ ----------- ----------- -------------
Profit from discontinued
operation (Note
9) 217.576 621.585 77.408 33.146 669.141 (88.284) 1.530.572
---------- -------- ------- ------------ ----------- -------------
Impairment of financial
investments - - - - - (284.404) (284.404)
---------- -------- ------- ------------ ----------- ----------- -------------
Property management
(Note 10) - - - - - 20.000 20.000
---------- -------- ------- ------------ ----------- ----------- -------------
Segment profit 223.500 621.585 77.408 33.146 669.141 21.374 1.646.154
Administration expenses
(Note 12) - - - - - - (680.837)
---------- -------- ------- ------------ ----------- ----------- -------------
Other (expenses)/income,
net (Note 15) - - - - - - 34.305
---------- -------- ------- ------------ ----------- ----------- -------------
Finance income (Note
16) - - - - - - 260.543
---------- -------- ------- ------------ ----------- ----------- -------------
Interest expenses
(Note 16) - - - - - - (53.355)
---------- -------- ------- ------------ ----------- ----------- -------------
Other finance costs
(Note 16) - - - - - - (3.209)
Foreign exchange
losses, net (Note
17a) - - - - - - (42.043)
Income tax expense
(Note 18) - - - - - - (81)
Profit from discontinued
operations (Note
9) - - - - - - (669.764)
Exchange difference
on I/C loan to foreign
holdings (Note 17b) - - - - - - (42.638)
Exchange difference
on translation foreign - - - - - - (1.176.630)
holdings (Note 29)
Total Comprehensive
Income - - - - - - (727.555)
Discontinued Operations
Profit and Loss for the period ended 30 June 2021
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- -------- ------- ------------ ------------ ---------- -----------
Segment profit
---------- -------- ------- ------------ ------------ ---------- -----------
Property Sales income - -
(Note 14) - - 168.817 1.957.606 2.126.423
---------- -------- ------- ------------ ------------ ---------- -----------
Cost of Property - - (1.831.90
sold (Note 14) - - (152.400) (1.679.509) 9 )
---------- -------- ------- ------------ ------------ ---------- -----------
Rental income (Note 515.77
10) 114.612 340.436 59.974 7 50 - - 2
---------- -------- ------- ------------ ------------ ---------- -----------
Service charges and
utilities income
(Note 10) 13. 798 - - - - - 13.798
Service and Property
Management income
(Note 10) - - - - 463 - 463
Valuation gains/(losses)
from investment property
(Note 13) 118.108 78.349 16.816 1.783 35.145 - 250.201
Share of profits/(losses)
from associates (
Note 21) - 194.863 - - - - 194.863
Asset operating expenses
(Note 11) (62.895) (13.279) (6.221) (3.556) (61.080) (109.037) (256.068)
Segment profit 183.623 600.369 70.569 15.394 252.625 (109.037) 1.013.543
---------- -------- ------- ------------ ------------ ---------- -----------
Administration expenses
(Note 12) - - - - - - (113.562)
---------- -------- ------- ------------ ------------ ---------- -----------
Other (expenses)/income,
net (Note 15) - - - - - - (107.144)
Finance income (Note
16) - - - - - - 4.645
---------- -------- ------- ------------ ------------ ---------- -----------
Interest expenses
(Note 16) - - - - - - (385.735)
---------- -------- ------- ------------ ------------ ---------- -----------
Other finance costs
(Note 16) - - - - - - (1.186)
---------- -------- ------- ------------ ------------ ---------- -----------
Foreign exchange
losses, net (Note
17a) - - - - - - (157.942)
Income Tax (Note
18) - - - - - - (17.849)
Total Comprehensive
Income - - - - - - 234.770
---------- ------- ------------ -----------
Discontinued Operations
Profit and Loss for the period ended 30 June 2020
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
------- ------------ ----------- ---------- ----------
Segment profit
Property Sales income
(Note 14) - 5.942 - 408.083 330.027 - 744.052
------------ ----------- ---------- ----------
Cost of Property (4.29
sold (Note 14) - 4 ) - (387.537) (351.022) - (742.853)
------------ ----------- ---------- ----------
Rental income (Note
10) 114.277 313.575 63.153 6.243 - - 497.248
------------ ----------- ---------- ----------
Service charges and
utilities income
(Note 10) 13.890 - - 1.348 - - 15.238
------------ ----------- ---------- ----------
Service and Property
Management income
(Note 10) - - - 1.047 - - 1.047
------------ ----------- ---------- ----------
Valuation gains/(losses)
from investment property
(Note 13) 138.654 101.584 18.810 8.725 728.524 - 996.297
------------ ----------- ---------- ----------
Share of profits/(losses)
from associates (Note
21) - 218.862 - - - - 218.862
------------ ----------- ---------- ----------
Asset operating expenses (14.08 ( 32.958 ( 193.889
(Note 11) (49.245) 4 ) (4.555) (4.763) ) (88.284) )
------------ ----------- ---------- ----------
Segment profit 217.576 621.585 77.408 33.146 674.571 (88.284) 1.536.002
Administration expenses
(Note 12) - - - - - - (77.490)
------------ ----------- ---------- ----------
Other (expenses)/income,
net (Note 15) - - - - - - 48
------------ ----------- ---------- ----------
Finance income (Note
16) - - - - - - 4.670
------------ ----------- ---------- ----------
Interest expenses
(Note 16) - - - - - - (444.721)
------------ ----------- ---------- ----------
Other finance costs
(Note 16) - - - - - - (1.345)
------------ ----------- ---------- ----------
Foreign exchange
losses, net (Note
17a) - - - - - - (132.904)
Income Tax (Note
18) - - - - - - (23.452)
Total Comprehensive
Income - - - - - - 860.808
Total Operations
Balance Sheet as at 30 June 2021
Warehouse Office Retail Residential Land plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
----------- ----------- ---------- ------------ ----------- ---------- -----------
Assets
Long-term receivables
and prepayments - - - - - 826 826
Available-for-sale
investments - - - - - 6.866.528 6.866.528
Assets held
for sale 10.415.000 12.005.857 1.438.000 1 14.075.646 2.266.559 40.201.063
----------- ----------- ---------- ------------ ----------- ---------- -----------
Segment assets 10.415.000 12.005.857 1.438.000 1 14.075.646 9.133.913 47.068.417
Tangible and
intangible assets - - - - - - 1.632
Prepayments
and other current
assets - - - - - - 5.887.259
----------- ----------- -------- ---------- ---------- -----------
Cash and cash
equivalents - - - - - - 74.294
----------- ----------- -------- ---------- ---------- -----------
Total assets - - - - - - 53.031.602
Borrowings - - - - - 1.714.060 1.714.060
----------- ----------- -------- ---------- ---------- -----------
Liabilities
associated with
assets classified
as held for
disposal 6.685.873 2.839.629 697.355 - 3.851.450 1.134.281 15.208.588
----------- ----------- -------- ---------- ---------- -----------
Segment liabilities 6.685.873 2.839.629 697.355 - 3.851.450 2.848.341 16.922.648
Trade and other
payables - - - - - - 4.001.124
----------- ----------- -------- ---------- ---------- -----------
Taxes payable
and provisions - - - - - - 1.224.195
----------- ----------- -------- ---------- ---------- -----------
Bonds - - - - - - 1.292.709
----------- ----------- -------- ---------- ---------- -----------
Total liabilities - - - - - - 23.440.676
Total Operations
Balance Sheet as at 31 December 2020
Warehouse Office Retail Residential Land plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
----------- ----------- ---------- ------------ ----------- ---------- ----------
Assets
Long-term receivables
and prepayments - - - - - 836 836
Financial Assets
at FV through
P&L - - - - - 6.787.244 6.787.244
Assets held
for sale 10.415.000 11.771.656 1.438.000 152.501 15.444.794 2.569.458 41.791.409
----------- ----------- ---------- ------------ -----------
Segment assets 10.415.000 11.771.656 1.438.000 152.501 15.444.794 9.357.538 48.579.489
Tangible and
intangible assets - - - - - - 2.859
Prepayments
and other current
assets - - - - - - 6.880.076
----------- ----------- -------- ----------
Cash and cash
equivalents - - - - - - 129.859
----------- ----------- -------- ----------
Total assets - - - - - - 55.592.283
Borrowings - - - - - 2.150.377 2.150.377
----------- ----------- -------- ----------
Liabilities
associated with
assets classified
as held for
disposal 6.771.706 2.953.643 873.108 - 5.482.264 1.147.747 17.228.468
----------- ----------- -------- ----------
Segment liabilities 6.771.706 2.953.643 873.108 - 5.482.264 3.298.124 19.378.845
Trade and other
payables - - - - - - 4.036.962
----------- ----------- -------- ----------
Taxation - - - - - - 1.283.427
----------- ----------- -------- ----------
Bonds - - - - - - 1.258.923
Total liabilities - - - - - - 25.958.157
Discontinued operations
Assets and Liabilities held for sale 30 June 2021
Warehouse Office Retail Residential Land plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
----------- ---------- ---------- ------------ ----------- ---------- ----------
Assets
Investment properties 10.100.000 6.700.000 1.438.000 - 14.075.646 895.477 33.209.123
----------- ---------- ---------- ------------ -----------
Long-term receivables
and prepayments 315.000 150.000 - - - - 465.000
Investments 5.155.85 - - - - 5.155.85
in associates - 8 8
----------- ---------- ---------- ------------ ----------- ----------
Financial asset
at fair value
through OCI - - - 1 - - 1
----------- ---------- ---------- ------------ -----------
Segment assets 10.415.000 12.005.858 1.438.000 1 14.075.646 895.477 38.829.982
Tangible and
intangible assets - - - - - - 12.203
Prepayments
and other current
assets - - - - - - 833.198
---------- ---------- -------- ----------
Cash and cash
equivalents - - - - - - 525.680
---------- ---------- -------- ----------
Total assets - - - - - - 40.201.063
Borrowings 1 264 697.355 - 3.817.916 - 4.515.536
---------- ---------- -------- ----------
Finance lease
liabilities 6.621.641 2.839.365 - - 33.534 - 9.494.540
---------- ---------- -------- ----------
Deposits from
tenants 64.231 - - - - - 64.231
---------- ---------- -------- ----------
Segment liabilities 6.685.873 2.839.629 697.355 - 3.851.450 - 14.074.307
Trade and other
payables - - - - - - 828.344
---------- ---------- -------- ----------
Taxes payable
and provisions - - - - - - 305.937
---------- ---------- -------- ----------
Total liabilities - - - - - - 15.208.588
Discontinued operations
Assets and Liabilities held for sale 2020
Warehouse Office Retail Residential Land plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
----------- ---------- ---------- ------------ ----------- ---------- ----------
Assets
Investment properties 10.100.000 6.700.000 1.438.000 152.500 15.444.794 1.068.186 34.903.480
----------- ---------- ---------- ------------ -----------
Long-term receivables
and prepayments 315.000 - - - - - 315.000
Investments
in associates - 5.071.656 - - - - 5.071.656
----------- ---------- ---------- ------------ -----------
Financial Asset
at FV through
OCI - - - 1 - - 1
----------- ---------- ---------- ------------ -----------
Segment assets 10.415.000 11.771.656 1.438.000 152.501 15.444.794 1.068.186 40.290.137
Tangible and
intangible assets - - - - - - 12.357
Prepayments
and other current
assets - - - - - - 748.127
---------- ---------- -------- ----------
Cash and cash
equivalents - - - - - - 740.788
---------- ---------- -------- ----------
Total assets - - - - - - 41.791.409
Borrowings - 270 873.108 - 5.451.083 - 6.324.461
---------- ---------- -------- ----------
Finance lease
liabilities 6.707.475 2.953.373 - - 31.181 - 9.692.029
---------- ---------- -------- ----------
Deposits from
tenants 64.231 - - - - - 64.231
---------- ---------- -------- ----------
Segment liabilities 6.771.706 2.953.643 873.108 - 5.482.264 - 16.080.721
Trade and other
payables - - - - - - 870.472
---------- ---------- -------- ----------
Taxation - - - - - - 277.275
---------- ---------- -------- ----------
Total liabilities - - - - - - 17.228.468
Geographical information
30 June 2021 30 June 2020
Income (Note 9) Continued operations Discontinued operations Continued operations Discontinued operations
EUR EUR EUR EUR
Romania 1.836 530.033 5.924 513.533
Cyprus * 655.607 - 394.062 -
Total 657.443 530.033 399.986 513.533
* It is noted that part of the rental and service charges/ utilities income related to Innovations
Logistics Park (Romania) is currently invoiced by the Company as part of a relevant lease
agreement with the Innovations SPV and the lender, however the asset, through the SPV, is
planned to be transferred as part of the transaction with Arcona Property Fund N.V. Upon a
final agreement for such a transfer, the Company will negotiate with the lender its release
from the aforementioned lease agreement, and if successful, upon completion such income will
also be transferred .
Gain/(loss) from 30 June 2021 30 June 2020
disposal of investment
properties (Note 14)
Continued operations Discontinued operations Continued operations Discontinued operations
EUR EUR EUR EUR
Romania - 294.515 - 1.199
Total - 294.515 - 1.199
30 June 2021 31 Dec 2020
Continued operations Discontinued operations Continued operations Discontinued operations
EUR EUR EUR EUR
Carrying amount of
assets ( investment
properties, associates
and Financial asset at
fair
value through OCI)
Ukraine - 4.375.631 - 4.237.980
Romania - 33.989.351 - 35.737.157
Total - 38.364.982 - 39.975.137
39. Related Party Transactions
The following transactions were carried out with related
parties:
39.1 Income/ Expense
39.1.1 Income
30 June 2021 30 June 2020
Continued operations Discontinued operations Continued operations Discontinued operations
EUR EUR EUR EUR
Interest Income on loan
to related parties
(Note 16) - - 2.294 -
Interest Income from
loan to associates
(Note 16) 161 4.645 162 4.670
Total 161 4.645 2.456 4.670
Interest income on loan to related parties relates to interest
income from GreenLake Development Srl (associate) and interest
income from Delia Lebada Srl for the period ended 30 June 2020.
39.1.2 Expenses
30 June 2021 30 June 2020
Continued operations Discontinued operations Continued operations Discontinued operations
EUR EUR EUR EUR
Management Remuneration
and incentives (Note
12) 114.343 - 145.904 -
Interest expenses on
Director and Management
Loans (Note 16) 19.967 - 15.167 -
Interest expenses on
Narrowpeak loan (Note
16) - - 6 -
Total 134.310 - 161.077 -
Management remuneration includes the remuneration of the CEO,
the CFO, the Group Commercial Director and that of the Country
Managers in the Ukraine and Romania pursuant to the decisions of
the remuneration committee.
39.2 Payables to related parties (Note 33)
30 June 2021 31 Dec 2020
Continued operations Discontinued operations Continued operations Discontinued operations
EUR EUR EUR EUR
Board of Directors &
Committees remuneration 129.364 - 129.364 -
Secure Management
Services Ltd - - 1.146 -
SecMon SRL 6.212 - 6.285 -
Sec South East Continent
Unique Real Estate
Management Limited 65 41.307 7.899 -
Management Remuneration 450.515 - 438.135 -
Total 586.156 41.307 582.829 -
39 .2.1 Board of Directors & Committees
The amount payable represents costs payable to Non-Executive
Directors until the end of the reporting period. The members of the
Board of Directors pursuant to a recommendation by the remuneration
committee and in order to facilitate the Company's cash flow used
to receive their payment in shares of the Company. During 2019,
Non-Executive Directors received 261.000 ordinary shares amounting
to EUR73.108 in lieu of their H1 2019 fees, and 176.576 ordinary
shares amounting to EUR74.162,04 in lieu of their before H2 2016
fees. Any H2 2019 and 2020 fees has been decided that will be paid
in cash.
39 .2.2 Management Remuneration
Management Remuneration represents deferred amounts payable to
the CEO of the Company.
39.3 Loans from SC Secure Capital Limited to the Group's
subsidiaries
SC Secure Capital Limited, the finance subsidiary of the Group
provided capital in the form of loans to the Ukrainian subsidiaries
of the Company so as to support the acquisition of assets,
development expenses of the projects, as well as various
operational costs. The following table presents the amounts of such
loans which are eliminated for consolidation purposes, but their
related exchange difference affects the equity of the Consolidated
Statement of Financial Position.
Borrower Limit Principal Principal
as at as at
30 June 31 Dec
2021 2020
EUR EUR EUR
---------
LLC " Trade Center" 5.443 5.266
LLC "Aisi Ukraine" 23.062.351 171.197 137.966
LLC " Almaz-Press-Ukraine " 8.236.554 247.135 239.079
LLC "Aisi Ilvo" 150.537 - 21.750
Total 31.449.442 423.775 404.061
39.4 Loans to associates (Note 25)
30 June 2021 31 Dec 2020
Continued operations Discontinued operations Continued operations Discontinued operations
EUR EUR EUR EUR
Loans to GreenLake
Development Srl 9.187 306.244 9.026 301.600
Total 9.187 306.244 9.026 301.600
The loan was provided to GreenLake Development Srl from Edetrio
Holdings Limited (continued operations) and Sc Capital
(discontinued operations). The agreement with Edetrio Holdings
Limited was signed on 17 February 2012 and bears interest 5% and
the agreement with Sc Capital Limited was signed on 4 December 2017
and bears interest 4% per annum. The maturity date is 30 April 2022
for the Edetrio loan and 4 December 2021 for the SC Capital Limited
loan.
39.5 Loans from related parties (Note 31)
30 June 2021 31 Dec 2020
Continued operations Discontinued operations Continued operations Discontinued operations
EUR EUR EUR EUR
Loan from Directors and
Management 577.500 - 604.400 -
Interest accrued on
loans from related
parties 93.833 - 77.394 -
Total 671.333 - 681.794 -
Loans from directors of the order of EUR375.000 reflect loans
provided from 3 Directors as bridge financing. The loans bear
interest 8% annually and expired on 31 August 2021. The Company and
the directors are discussing the extension of the loans and
relevant process is currently in place.
Rest amount of the order of EUR202.500 reflect payables of
EUR42.000 to 2 executives and of EUR160.500 to one Director,
converted to loans for facilitating Company's cash flow.
40. Contingent Liabilities
40.1 Tax Litigation
The Group performed during the reporting period part of its
operations in the Ukraine, 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 retroactively, open to wide and in some cases, conflicting
interpretation. Instances of inconsistent opinions between local,
regional, and national tax authorities and between the National
Bank of Ukraine and the Ministry of Finance are not unusual. Tax
declarations are subject to review and investigation by a number of
authorities, which are authorised by law to impose severe fines and
penalties and interest charges. Any tax year remains open for
review by the tax authorities during the three following subsequent
calendar years; however, under certain circumstances a tax year may
remain open for longer. Overall following the sale of Terminal
Brovary, the exposure of the Group in the Ukraine was significantly
reduced.
The Group performed during the reporting period part of its
operations also in Romania, Greece and Bulgaria. In respect of the
Romanian, taxation system it is subject to varying interpretation
and to constant changes, which may be retroactive. In certain
circumstances the tax authorities can be arbitrary in certain
cases.
These facts create tax risks which are substantially more
significant than those typically found in countries with more
developed tax systems. Management believes that it has adequately
provided for tax liabilities, based on its interpretation of tax
legislation, official pronouncements and court decisions. However,
the interpretations of the relevant authorities could differ and
the effect on these consolidated financial statements, if the
authorities were successful in enforcing their interpretations,
could be significant.
40.2 Construction related litigation
There are no material claims from contractors due to the
postponement of projects or delayed delivery other than those
disclosed in the financial statements.
40.3 Bluehouse Accession case
BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L. (Bluehouse)
filed in Cypriot courts in December 2018 lawsuit against the
Company for the total amount of EUR 5.042.421,87, in relation to
the Praktiker Craiova acquisition in 2015, and the redemption of
the Redeemable Preference Class A shares which were issued as part
of the transaction to the vendor, plus special compensations of
EUR2.500.000 associated with the related pledge agreement. The
redemption of such shares was requested in 2016, and in lieu of
such redemption the Company transferred to the vendor the 20%
holding in Autounion asset which was used as a guarantee to the
transaction for the effective redemption of the Redeemable
Preference Class A shares. At the same time the Company has posted
in its accounts a relevant payable provision for Bluehouse in the
amount of EUR2.521.211 (Note 33). In addition, the Company during
2019, as part of the judicial process, has filed a claim against
Bluehouse for concealing certain key information during the
Praktiker Craiova transaction, which if revealed would have
resulted in a significant reduction of the final acquisition price.
Management believes the Company has good grounds of defence and
valid arguments and the amount already provided is adequate to
cover an eventual final settlement between the parties. Relevant
actions for direction for both cases have been set from Cypriot
courts in November 2021, when next hearing will be set.
40.4 Other Litigation
The Group has a number of other minor legal cases pending.
Management does not believe that the result of these will have a
substantial overall effect on the Group's financial position.
Consequently no such provision is included in the current financial
statements.
40.5 Other Contingent Liabilities
The Group had no other contingent liabilities as at 30 June
2021.
41. Commitments
The Group had no other commitments as at 30 June 2021.
42. Financial Risk Management
42.1 Capital Risk Management
The Group manages its capital to ensure adequate liquidity will
be available to implement its stated growth strategy in order to
maximise the return to stakeholders through the optimisation of the
debt-equity structure and value enhancing actions in respect of its
portfolio of investments. The capital structure of the Group
consists of borrowings (Note 31 ), bonds (Note 32), trade and other
payables (Note 33) deposits from tenants (Note 34), financial
leases (Note 36), taxes payable (Note 35 ) and equity attributable
to ordinary or preferred shareholders.
Management reviews the capital structure on an ongoing basis. As
part of the review Management considers the differential capital
costs in the debt and equity markets, the timing at which each
investment project requires funding and the operating requirements
so as to proactively provide for capital either in the form of
equity (issuance of shares to the Group's shareholders) or in the
form of debt. Management balances the capital structure of the
Group with a view of maximising the shareholders' Return on Equity
(ROE) while adhering to the operational requirements of the
property assets and exercising prudent judgment as to the extent of
gearing.
42.2 Categories of Financial Instruments
Note 30 June 2021 31 Dec 2020
Continued operations Discontinued Continued operations Discontinued
operations operations
EUR EUR EUR EUR
Financial Assets
Cash at Bank 27 74.294 525.680 129.859 740.788
Long-term Receivables
and prepayments 24 826 465.000 836 315.000
Financial Assets at FV
through P&L 26 6.866.528 - 6.787.244 -
Prepayments and other
receivables 25 5.887.259 833.198 6.880.076 748.127
Financial Asset at FV
through OCI 22 - 1 - 1
Total 12.828.907 1.823.879 13.798.015 1.803.916
Financial Liabilities
Borrowings 31 1.714.060 4.515.536 2.150.377 6.324.461
Trade and other
payables 33 4.001.124 828.344 4.036.962 870.472
Deposits from tenants 34 - 64.231 - 64.231
Finance lease
liabilities 36 - 9.494.540 - 9.692.029
Taxes payable and
provisions 35 1.224.195 305.937 1.283.430 277.275
Bonds 32 1.292.709 - 1.258.923 -
Total 8.232.088 15.208.588 8.729.692 17.228.468
42.3 Financial Risk Management Objectives
The Group's Treasury function provides services to its various
corporate entities, coordinates access to local and international
financial markets, monitors and manages the financial risks
relating to the operations of the Group, mainly the investing and
development functions. Its primary goal is to secure the Group's
liquidity and to minimise the effect of the financial asset price
variability on the cash flow of the Group. These risks cover market
risks including foreign exchange risks and interest rate risk, as
well as credit risk and liquidity risk.
The above mentioned risk exposures may be hedged using
derivative instruments whenever appropriate. The use of financial
derivatives is governed by the Group's approved policies which
indicate that the use of derivatives is for hedging purposes only.
The Group does not enter into speculative derivative trading
positions. The same policies provide for the investment of excess
liquidity. As at the end of the reporting period, the Group had not
entered into any derivative contracts.
42.4 Economic Market Risk Management
The Group currently operates in Romania and the Ukraine. The
Group's activities expose it primarily to financial risks of
changes in currency exchange rates and interest rates. The
exposures and the management of the associated risks are described
below. There has been no change in the way the Group measures and
manages risks.
Foreign Exchange Risk
Currency risk arises when commercial transactions and recognised
financial assets and liabilities are denominated in a currency that
is not the Group's functional currency. Most of the Group's
financial assets are denominated in the functional currency.
Management is monitoring the net exposures and adopts policies to
encounter them so that the net effect of devaluation is
minimised.
Interest Rate Risk
The Group's income and operating cash flows are substantially
independent of changes in market interest rates as the Group has no
significant interest-bearing assets. On June 30(th) , 2021, cash
and cash equivalent (including continued and discontinued
operations) financial assets amounted to EUR 599.974 ( 31 December
2020 : EUR 870.647) of which approx . EUR404 in UAH and EUR554.422
in RON (Note 27) while the remaining are mainly denominated in
either GBP, USD or the Euro.
The Group is exposed to interest rate risk in relation to its
borrowings (including continued and discontinued operations)
amounting to EUR 6.229.596 (31 December 2020: EUR 8.474.838 ) as
they are issued at variable rates tied to the Libor or EURIBOR.
Management monitors the interest rate fluctuations on a continuous
basis and evaluates hedging options to align the Group's strategy
with the interest rate view and the defined risk appetite. Although
no hedging has been applied for the reporting period, such may take
place in the future if deemed necessary in order to protect the
cash flow of a property asset through different interest rate
cycles.
Management monitors the interest rate fluctuations on a
continuous basis and evaluates hedging options to align the Group's
strategy with the interest rate view and the defined risk appetite.
Although no hedging has been applied for the reporting period, such
may take place in the future if deemed necessary in order to
protect the cash flow of a property asset through different
interest rate cycles.
As at 30 June 2021 the weighted average interest rate for all
the interest bearing borrowings of the Group stands at 4,63% (31
December 2020: 4%).
The sensitivity analysis for LIBOR and EURIBOR changes applying
to the interest calculation on the borrowings principal outstanding
as at 30 June 2021 is presented below:
Actual +100 bps +200 bps
as at 30.06.2021
Weighted average interest
rate 4,63% 5,63% 6,63%
Influence on yearly finance
costs 49.729 99.459
The sensitivity analysis for LIBOR and EURIBOR changes applying
to the interest calculation on the borrowings principal outstanding
as at 31 December 2020 is presented below:
Actual +100 bps +200 bps
as at 31.12.2020
Weighted average interest
rate 4% 5% 6%
Influence on yearly finance
costs 73.949 147.898
The Group's exposures to financial risk are discussed also in
Note 7.
42.5 Credit Risk Management
The Group has no significant credit risk exposure. The credit
risk emanating from the liquid funds is limited because the Group's
counterparties are banks with high credit-ratings assigned by
international credit rating agencies. The Credit risk of
receivables is reduced as the majority of the receivables represent
VAT to be offset through VAT income in the future. In respect of
receivables from tenants these are kept to a minimum of 2 months
and are monitored closely.
42.6 Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with
the Board of Directors, which applies a framework for the Group's
short, medium and long term funding and liquidity management
requirements. The Treasury function of the Group manages liquidity
risk by preparing and monitoring forecasted cash flow plans and
budgets while maintaining adequate reserves. The following table
details the Group's contractual maturity of its financial
liabilities. The tables below have been drawn up based on the
undiscounted contractual maturities including interest that will be
accrued.
Continued Operations
30 June 2021 Carrying Total Less than From one More than
amount Contractual one year to two years
Cash Flows two years
EUR EUR EUR EUR EUR
------------------
Financial assets
------------------
Cash at Bank 74.294 74.294 74.294 - -
------------------
Financial Assets 6.866.52 6.866.52 6.866.52 - -
at FV through P&L 8 8 8
------------------
Prepayments and other 5.887.259 5.887.259 5.887.259 - -
receivables
------------------
Long-term Receivables
and prepayments 826 826 - - 826
Total Financial 12.828.90 12.828.90 12.828.08
assets 7 7 1 - 826
Financial liabilities
------------------
1.872.63
Borrowings 1.714.060 4 582.598 1.290.036 -
------------------
Trade and other payables 4.001.124 4.001.124 4.001.124 - -
Bonds issued 1.292.709 1.628.708 326.067 67.200 1.235.441
------------------
Taxes payable and 1.224.19 1.224.19
provisions 5 5 611.958 612.23 7 -
------------------
Total Financial 8.232.08 8.726.6 5.521.747 1.969.47 1.235.441
liabilities 5 61 3
Total net (liabilities)/ 4.596.82 4.102.24 7.306.33 ( 1.969.47 ( 1.234.615
assets 2 6 4 3) )
------------------
Discontinued Operations
30 June 2021 Carrying Total Less than From one More than
amount Contractual one year to two years
Cash Flows two years
EUR EUR EUR EUR EUR
-------------
Financial assets
-------------
Cash at Bank 525.680 525.680 525.680 - -
-------------
Prepayments and other
receivables 833.198 833.198 833.198 - -
Long-term Receivables
and prepayments 465.000 465.000 - - 465.000
-------------
Financial Asset at
fair Value through
OCI 1 1 1 - -
-------------
Total Financial
assets 1.823.879 1.823.879 1.358.879 - 465.000
Financial liabilities
-------------
Borrowings 4.515.536 4.682.637 3.822.644 246.492 613.501
-------------
Trade and other payables 828.344 828.344 820.471 - 7.873
Deposits from tenants 64.231 64.231 - - 64.231
-------------
11.250.47
Finance lease liabilities 9.494.540 8 960.234 947.166 9.343.078
-------------
Taxes payable and
provisions 305.937 305.937 276.927 29.010 -
-------------
Total Financial 15.208.588 17.131.62717.131.627 5.880.276 1.222.668 10.028.683
liabilities
Total net liabilities (13.384.709) (15.307748) ( 4.521.397 ( 1.222.668 ( 9.563.683
) ) )
-------------
Continued Operations
31 December 2020 Carrying Total Less than From one More than
amount Contractual one year to two years
Cash Flows two years
EUR EUR EUR EUR EUR
----------- -----------
Financial assets
-----------
Cash at Bank 129.859 129.859 129.859 - -
-----------
Prepayments and other
receivables 836 836 - - 836
-----------
Financial Assets
at FV through P&L 6.787.244 6.787.244 6.787.244 - -
-----------
Long-term Receivables
and prepayments 6.880.076 6.880.076 6.880.076 - -
-----------
Total Financial assets 13.798.015 13.798.015 13.797.179 - 836
Financial liabilities
-----------
Borrowings 2.150.377 2.356.528 566.938 1.789.590 -
-----------
Trade and other payables 4.036.962 4.036.962 4.036.962 - -
Bonds issued 1.258.923 1.594.922 292.281 67.200 1.235.441
-----------
Taxes payable and
provisions 1.283.426 1.283.426 712.903 570.523 -
-----------
Total Financial liabilities 5.609.08 2.427.31
8.729.688 9.271.838 4 3 1.235.441
Total net assets/(liabilities) 5.068.32 8.188.09 ( 2.427.31 ( 1.234.605
7 4.526.177 5 3) )
-----------
Discontinued Operations
31 December 2020 Carrying Total Less than From one More than
amount Contractual one year to two years
Cash Flows two years
EUR EUR EUR EUR EUR
------------
Financial assets
------------
Cash at Bank 740.788 740.788 740.788 - -
------------
Long-term receivables 315.000 315.000 - - 315.000
------------
Financial Asset at
FV through OCI 1 1 1 - -
------------
Prepayments and other
receivables 748.127 748.127 748.127 - -
------------
Total Financial assets 1.803.916 1.803.916 1.488.916 - 315.000
Financial liabilities
------------
Borrowings 6.324.461 4.019.940 2.933.480 272.757 813.702
------------
Trade and other payables 870.472 870.472 862.507 - 7.965
Deposits from tenants 64.231 64.231 - - 64.231
Finance lease liabilities 9.692.029 11.689.763 917.759 953.700 9.818.303
------------
Taxation 277.275 277.275 246.885 30.390 -
------------
Total Financial liabilities 17.228.468 16.921.681 4.960.631 1.256.847 10.704.201
------------
Total net assets/(liabilities) (15.424.552) (15.117.764) (3.471.715) (1.256.847) (10.389.201)
------------
43. Events after the end of the reporting period
a) Group re-gained control in Monaco Towers SPV
In July 2021 the Group officially regained full control of
SecMon Real Estate Srl, the company which owns Monaco Towers assets
and was into insolvency status since 2018. Currently the company
has one remaining unit as all other units have been sold and
relevant considerations have been effectively cashed to the
Group.
b) Group took over 50% of Vic City shareholder SPV
In September 2021 the Group obtained 50% participation in
Equardo Limited, an SPV holding stake in Victoria City (Vic City)
project in Bucharest. The participation took place through a share
capital increase of the order of EUR 8.000, where the remaining
shareholders waived their right to participate. Vic City is a
development land in north Bucharest on Bucuresti Noi Boulevard near
a metro station, where a commercial mixed used center was to be
developed. The project was to be contributed to SPDI by its
promoters at the time, but neither its development nor its
contribution progressed due to other priorities. SPDI participated
in Equardo Limited so as to retain some of the value originally
destined to be part of its asset portfolio.
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