TIDMSPDI
RNS Number : 6657D
Secure Property Dev & Inv PLC
30 October 2020
Secure Property Development & Invest PLC/ Index: AIM / Epic:
SPDI / Sector: Real Estate
30 October 2020
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 ended 30
June 2020.
As announced on 30 September 2020, the Company was granted by
AIM Regulation a one-month extension to the date by which it is
required under AIM Rule 18 to publish its interim accounts for the
six months ended 30 June 2020. Accordingly, the Company is required
to announce its half year report before 31 October 2020.
Financial Overview
Outbreak of COVID-19 pandemic has brought barriers to the
successful completion of negotiations with Arcona Property Fund N.V
('Arcona')
-- EBITDA decreased to EUR0,18m compared to EUR0,47m in H1 2019
as a result of operating income reduction related to the sale of
the Greek logistics park
-- Net finance costs reduced by 56% to EUR0,24m
-- Operating result after finance and tax expenses increased by
8% to EUR0,081m loss from EUR0,088m loss in H1 2019
-- Romania has now become the single operating income source of the Company
Corporate Overview
Company maintains strategy to maximise value for shareholders
through continued discussions with regards to SPDI's property
portfolio
-- Following the completion of Stage 1 of the Arcona transaction
(the 'Transaction') in 2019, involving two land plots in Ukraine
and a residential and land asset in Bulgaria, the Company received
a total of 595.534 Arcona shares and 144.264 warrants over Arcona
shares
-- Discussions with Arcona for the completion of Stage 2 of the
Transaction are progressing slowly during the COVID-19 pandemic and
enforced lockdowns, SPDI expects activity to pick up as measures
put in place to combat COVID-19 in the various related
jurisdictions (Holland, Czech Republic for Arcona, Romania, Cyprus
and the UK) are eased
-- Discussions regarding Stage 3 will follow the successful closing of Stage 2
Lambros G. Anagnostopoulos, Chief Executive Officer, said , "
The majority of our income producing assets in Romania are let to
blue chip tenants operating in defensive industries, such as the
food and the telco sectors. As a result, to date our tenants and
our income have experienced little to no disruption from the
COVID-19 crisis. Yet, the COVID-19 associated lockdowns have caused
delays to the Arcona Transaction process. W e are continuing to
work hard alongside Arcona to overcome such delays and progress the
final steps of Stage 2 of the Transaction."
* *S * *
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
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
Jack Botros
Jon Belliss Novum Securities Limited Tel: +44 (0) 207 399 9400
Cosima Akerman St Brides Partners Ltd Tel: +44 (0) 20 7236 1177
Frank Buhagiar
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.
1. Management Report
1.1 Corporate Overview and Financial Performance
SPDI's core property asset portfolio currently 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 2020, management in line with 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 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 Czech Republic, Poland and Slovakia,
with the transaction valueing the SPDI assets NAV at EUR29m,
significantly higher than the current market value of the Company
as a whole. If one takes into consideration and assumes the
warrants that will be issued together with the ARCONA shares, the
transaction values the SPDI assets at their Net Asset Value.
Following the completion of Stage 1 of the transaction in 2019,
which involved two land plots in Ukraine and residential and land
asset in Bulgaria and resulted in Company receiving a total of
595.534 Arcona shares and 144.264 warrants over Arcona shares,
during the current period the two parties engaged in negotiating
and planning Stage 2 of the aforementioned transaction. This Stage
is centred on the sale of two commercial income producing assets in
Romania and three land plots in Ukraine. The combination of the two
complimentary asset portfolios is expected to create a significant
European Property company, benefiting both the Company's and the
buyer's respective shareholders.
However, the rapid development of COVID-19 outbreak and its
effects on all related countries and therefore on all participants
in this process, have caused major delays. Lockdowns, travel
restrictions, remote working and other similar measures, have
affected the effective completion of all relevant actions and
therefore brought barriers to the successful completion of the
negotiations. Both parties are currently trying to overcome all
issues and continue towards completion of this part of the
transaction.
The table below presents the operating performance for H1 2020
compared to H1 2019. EBITDA reached EUR0,18m compared to EUR0,47m
in H1 2019, net finance costs reduced by 56% to EUR0,24m, and
operating result after finance and tax expenses increased by 8% to
-EUR0,080m from -EUR0,088m in H1 2019. Romania has now become the
single operating income source of the Company.
EUR 2020 2019
------------------------------------------------------------------ ----------------------------------------------------------------------
Continued Discontinued Total Continued Discontinued Total
Operations Operations Operations Operations
----------------- ---------------------- ---------------------- ------------------ ---------------------- ---------------------- ----------------------
Rental,
Utilities,
Management
& Sale of
electricity
Income 399,986 513,533 913,519 150,041 1,203,928 1,353,969
Net gain/(loss)
on disposal
of investment
property 0 120,022 120,022
Income from
Operations 399,986 513,533 913,519 150,041 1,323,950 1,473,991
Asset operating
expenses - (193,889) (193,889) - (319,445) (319,445)
Net Operating
Income 399,986 319,644 719,630 150,041 1,004,505 1,154,546
Share of
profits from
associates - 218,862 218,862 - 224,177 224,177
Total Income 399,986 538,506 938,492 150,041 1,228,682 1,378,723
Administration
expenses (680,837) (77,490) (758,327) (800,710) (111,352) (912,062)
Operating
Result
(EBITDA) (280,851) 461,016 180,165 (650,669) 1,117,330 466,661
Finance Cost,
net 203,979 (441,396) (237,417) 165,067 (701,091) (536,024)
Income tax
expense (81) (23,452) (23,533) (2,212) (16,368) (18,580)
Operating
Result after
Finance and
Tax Expenses (76,953) (3,832) (80,785) (487,814) 399,871 (87,943)
Other income /
(expenses),
net 34,305 48 34,353 66,056 237,474 303,530
Fair value
adjustments
from
Investment
Properties - 996,297 996,297 - 286,595 286,595
Net gain/(loss)
on disposal
of investment
property - 1,199 1,199 - (2,067) (2,067)
Impairment of
financial
investments (284,404) - (284,404) - - -
Foreign
exchange
differences,
net (42,043) (132,904) (174,947) (43,865) (274,005) (317,870)
Result for the
year (369,095) 860,808 491,713 (465,623) 649,935 184,312
Exchange
difference on
I/C loans to
foreign
holdings - (42,638) (42,638) - 21,828 21,828
Exchange
difference on
translation due
to presentation
currency - (1,176,630) (1,176,630) - (183,153) (183,153)
Total
Comprehensive
Income for the
year (369,094) (358,460) (727,554) (465,623) 488,610 22,987
----------------- ---------------------- ---------------------- ------------------ ---------------------- ---------------------- ----------------------
2. Regional Economic Developments
Romania
In Romania, growth fell to a six year low in Q1 2020, mainly due
to March 2020 being hit by the consequences of the COVID-19
containment measures. GDP growth for Q1 2020 was 2,4%, considerably
lower than Q4's 2019 4,3% expansion. In seasonally-adjusted
quarter-on-quarter terms, GDP plunged 12,3% in Q2 as COVID-19
containment measures took their toll, marking the worst reading on
record. Although only projections can be used at the moment,
analysts forecast GDP falling by 5,7% in 2020, while for 2021 they
see growth of 4,9%.
Fixed investment growth lost significant traction in Q1, slowing
to 5,9% from 15,7% in Q4 2019 and lost even more steam in Q2 to
1,8%. Moreover, public spending growth decelerated to 0,8% in Q1,
down markedly from Q4's 2019 9,4% rise, while in Q2 accelerated by
4,7% y-o-y as the government deployed various stimulus measures,
including employment support schemes and tax relief, to mitigate
the economic spillover from the lockdown. Private consumption fell
by 3,8% in Q1, following previous quarter's 7,3% increase, and
13,3% annually in Q2 due to lockdown measures enacted at the end of
March, marking the worst result in the series' history.
On the external front, exports of goods and services fell by
28,5% y-o-y in Q2, considerably steeper than Q1's 1,6% drop.
Similarly, imports of goods and services fell 21,6%, contrasting
Q1's 2,2% increase. Thus, taken together, net trade contributed
positively to growth in Q2.
Ukraine
GDP fell 11,4% y-o-y in Q2, following Q1's 1,3% decline and
marking the sharpest contraction since Q2 2015. Although a
comprehensive release is not yet available, the downturn likely
reflected a broad-based deterioration across the major sectors of
the economy as COVID-19 and related containment measures hit
activity.
The economy is set to shrink this year as COVID-19 takes its
toll. A higher unemployment rate and social distancing measures
will weigh on private consumption, while lingering uncertainties
should restrain capital inflows. On the upside, the recently
secured IMF loan should give the government room to boost fiscal
spending and cushion the downturn. Analysts project GDP to fall
5,2% this year, which is up 0,1 percentage points from last month's
forecast. In 2020, they see the economy expanding 4,2%.
Sources: World Bank Group, EBRD, National Bank of Greece,
Eurobank Research, and Economic Research Division, National
Institute of Statistics- Romania, National Statistical Institute
-Republic of Bulgaria, National Institute of Statistics - Ukraine,
IMF, FocusEconomics
3. Real Estate Market Developments
3.1 Romania
With a transaction volume in the first quarter of 2020 of around
130 million Euros, Romanian investment market had a similar start
to 2019, where it featured a volume of 117,5 million Euros in the
first quarter. Overall volume was expected to be similar to 2019,
with optimistic scenarios placing the total investment in volume
for 2020 at 750 million Euros and pessimistic scenarios at 500
million Euros. As of Q1 the office sector continues to dominate the
market with over 60% of the Q1 investments. As far as yields are
concerned, prime yields in Romania continue to be amongst the
highest in Europe across all market sectors, at around 7%. However,
as of Q2, due to the COVID-19 pandemic, the situation changed. As
of late March, all retail projects drastically reduced their
activities and several scheduled deliveries have been postponed for
the second part of the year. Additionally, leasing activity faced a
50% decrease compared to Q1 2020.
As of Q1 2020, the industrial sector could be considered the
rising star of Romania real estate. Romania's modern industrial
stock space reached 4,7 million sqm in Q1 2020, expected to reach 5
million within the end of 2020. Total leasing activity (TLA),
tripled within Q1 2020 as compared to Q1 2020. Nevertheless, the
sector was also hit by the COVID-19 pandemic, and although an
increase in the logistics market is expected to be held within
2020, the sector is facing a slowdown and final results are yet to
be recorded.
Work from home imposed by the mandatory lockdown slowed down
companies expansion plans. A new supply of 104.000 sqm was
delivered for the first half of 2020, increasing Bucharest's modern
office stock to 3,3 million sqm. The transactional activity,
overall limited compared to previous year, was mainly generated by
Computers Hi-Tech and Financial sectors.
Surprisingly, the residential market in Romania managed to stay
strong in face of the COVID-19 repercussions. In spite of the
measures taken and the lockdown, asking prices for residential
properties in Romania increased by 7,1% in Q2 2020 as compared to
the previous year, and only slightly decreased by 1,7% as compared
to Q1 2020. Nationwide, in the first quarter of 2020 133.181
properties were sold, 14,7% more than the same period in 2019, with
a downfall following in the second quarter, as 105.928 properties
were sold, representing a 15,5 % downfall. Nevertheless, the
residential market had a strong reaction after the measures were
lifted, with 135.000 potential buyers recorded interested in
acquiring a property, and both demand and supply started to
boost.
3.2 Ukraine
The Ukrainian real estate market started strong in Q1 2020,
following a 3,3% increase in real GDP in 2019. On a quarterly basis
the housing market prices increased by 1,25% Q-o-Q, and the market
was showing signs of steady growth. Surprisingly, although the
COVID-19 pandemic occured, the Ukrainian real estate market managed
to stand fast. Although a presidential election, the collapse of
one of the country's biggest construction firms and the COVID-19
pandemic occurred, all of which are events that could have affected
negatively Ukraine's real etate market, both commercial and
residential real estate in the country managed to maintain a slow
but steady growth.
As of 2020, 272.000 sqm of new shopping centers are planned to
be developed, with OceanVille, RetroMall, Rive Gauche and New Ray
under construction. Office space counts for approximately 100.000
sqm, with more demand incoming. Although the pandemic sent 70% of
the employees working from home, according to analysts, this is
only a temporary measure, and with positive news of an incoming
vaccine, the office sector is ready to meet the ongoing demand.
In Ukraine, residential investements are considered to be the
most solid real estate investments. Nevertheless, the deficit of
residential real estate remains high in the country. The main
constraint is high mortgage interest rates (18-22% per annum),
which means that fewer people can afford to invest in new housing
complexes and so fewer developers have enough backers to start
constructing. During the quarantine in Q2 2020, the residential
real estate market slowed down, as people self isolated and stopped
buying property. Although the market was expected to shrink by 50%,
prices went down only by 10%. However, no one is taking the risk to
make a projection on the final impact the pandemic will have on
real estate, as the parameters are changing on a day to day
basis.
4. Property Assets
4.1 EOS Business Park - Danone headquarters, Romania
The park consists of 5.000 sqm of land including a class "A"
office building of 3.386 sqm 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 planned to be part of the
Arcona transaction.
4.2 Delenco office building, Romania
The property is a 10.280 sqm office building, which consists of
two underground levels, a ground floor and ten above-ground floors.
The building is strategically located in the very center of
Bucharest, close to three main squares of the city: Unirii, Alba
Iulia and Muncii, only 300 m from the metro station.
The Company acquired 24,35% of the property in May 2015. As at
the year end 2019, the building is 100% let, with ANCOM (the
Romanian Telecommunications Regulator) being the anchor tenant (70%
of GLA). The asset is planned to be part of the Arcona
transaction.
4.3 Innovations Logistics Park, Romania
The park incorporates approximately 8.470 sqm of multipurpose
warehousing space, 6.395 sqm of cold storage and 1.705 sqm of
office space. It is located in the area of Clinceni, south west of
Bucharest center, 200 m from the city's ring road and 6km from
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 sqm of ambient
space in the warehouse which expired during April 2018 without
being extended. During Q1 2019 the Company signed with Favorit
Business Srl a lease agreement for 3,000 sqm of cold storage space,
506 sqm of ambient storage space, and 440 sqm of office space. In
Q2 2019 the Company agreed with Favorit Business Srl a lease of an
extra 3.000 sqm of cold storage space, and an extra 210 sqm of
office space to accommodate their new business line which involves
as end user Carrefour. Moreover, during 2019 and H1 2020 the
Company signed short term lease agreements for 2.000 sqm of ambient
storage space with Chipita Romania Srl, one of the fastest growing
regional food companies. As at the end of the reporting period, the
terminal was 83% leased. The asset is planned to be part of the
Arcona transaction.
4.4 Kindergarten, Romania
Situated on the GreenLake compound on the banks of Grivita Lake,
a standalone building on ground and first floor, is used as a
nursery by one of the Bucharest's leading private schools.
The building is erected on 1.428,59 sqm plot with a total gross
area of 1.198 sqm.
The property is 100% leased to International School for Primary
Education until 2032. The asset is planned to be part of the Arcona
transaction.
4.5 Residential portfolio
-- Romfelt Plaza (Doamna Ghica), Bucharest, Romania
Romfelt Plaza is a residential complex located in Bucharest,
Sector 2, relatively close to the city center, easily accessible by
public transport and nearby supporting facilities and green
areas.
At the end of June 2020, one apartment was available. The asset
is planned to be part of the Arcona transaction.
-- 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.
At the end of H1 2020, 10 apartments were available, 3 of which
were rented. Following extended negotiations for the last two years
with the company which acquired Monaco's loan, the SPV holding
Monaco units entered into insolvency status in order to protect
itself from its creditors. During 2020, based on regulatory
procedures for disposing assets held by the debtor and upon
agreement of all involved parties and the judicial administrator's
approval, 7 units were sold. The asset is planned to be part of the
Arcona transaction.
-- Blooming House, Bucharest, Romania
Blooming House is a residential development project located in
Bucharest, Sector 3, a residential area with the biggest
development and property value growth in Bucharest, offering a
number of supporting facilities such as access to Vitan Mall,
kindergartens, café, schools and public transportation (both bus
and tram).
During H1 2020 2 units and one commercial space were sold and at
the end of the period 2 apartments were available. The asset is
planned to be part of the Arcona transaction.
-- GreenLake, Bucharest, Romania
A residential compound of 40.500 sqm GBA, 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 meter 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 totalling 40.360 sqm. SPDI owns 43%
of this property asset portfolio.
During H1 2020, 6 apartments and villas were sold while at the
end of the period, of the 40 units that were unsold, 5 were let.
The asset is planned to be part of the Arcona transaction.
4.6 Land Assets
-- Kiyanovskiy Residence - Kiev, Ukraine
The property consists of 0,55 Ha of land located at Kiyanovskiy
Lane, near Kiev city center. 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.
Discussions are ongoing with interested parties with view to
sale the property. The asset is planned to be part of the Arcona
transaction.
-- Tsymlyanskiy Residence - Kiev, Ukraine
The 0,36 Ha 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%.
Discussions are ongoing with interested parties with a view to
partnering in the development or sale of this property. The asset
is planned to be part of the Arcona transaction.
-- Rozny Lane - Kiev Oblast, Kiev, Ukraine
The 42 Ha 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 Company is evaluating potential commercialization options to
maximize the property's value. The asset is planned to be part of
the Arcona transaction.
UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2020
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2020
Note 30 June 30 June
2020 2019
EUR EUR
Continued Operations
Income 9 399.986 150.041
Net Operating Income 399.986 150.041
Administration expenses 11 (680.837) (800.710)
Other operating income/(expenses),
net 14 34.305 66.056
Impairment of financial investments 26 (284.404) -
Operating profit loss (530.950) (584.613)
Finance income 15 260.543 232.715
Finance costs 15 (56.564) (67.648)
Loss before tax and foreign exchange
differences (326.971) (419.546)
Foreign exchange (loss), net 16a (42.043) (43.865)
Loss before tax (369.014) (463.411)
Income tax expense 17 (81) (2.212)
Loss for the period from continuing
operations (369.095) (465.623)
Profit/(Loss) from discontinued operations 8b 860.808 649.935
Profit/(Loss) for the period 491.713 184.312
Other comprehensive income
Exchange difference on I/C loans to
foreign holdings 16b (42.638) 21.828
Exchange difference on translation
of foreign operations 29 (1.176.630) (183.153)
Total comprehensive income for the
period (727.555) 22.987
Loss for the period from continued
operations attributable to:
Owners of the parent (369.095) (465.623)
Non-controlling interests - -
(369.095) (465.623)
Profit/(Loss) for the period from discontinued
operations attributable to:
Owners of the parent 962.448 513.193
Non-controlling interests (101.640) 136.742
860.808 649.935
Profit/(Loss) for the period attributable
to:
Owners of the parent 593.353 47.570
Non-controlling interests (101.640) 136.742
491.713 184.312
Total comprehensive income attributable
to:
Owners of the parent (638.119) 73.392
Non-controlling interests (89.436) (50.405)
(727.555) 22.987
Earnings/(losses) per share (Euro
per share): 38b
Basic earnings/(losses) for the period
attributable to ordinary equity owners
of the parent 0.003 0,0004
Diluted earnings/(losses) for the 0.003 0,0004
period attributable to ordinary equity
owners of the parent 0.007 0.005
Basic earnings/(losses) for the period
from discontinued operations attributable 0.007 0.005
to ordinary equity owners of the parent
Diluted earnings/(losses) for the
period from discontinued operations
attributable to ordinary equity owners
of the parent
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the six months ended 30 June 2020
Note 30 June 31 December
2020 2019
EUR
ASSETS
Non--current assets
Tangible and intangible assets 22 514 566
Financial Assets at FV through P&L 26 7.327.474 3.581.643
Long-term receivables and prepayments 23 841 852
------------- -------------
7.328.829 3.583.061
Current assets
Prepayments and other current assets 25 6.885.924 10.833.913
Cash and cash equivalents 27 282.966 207.251
------------- -------------
7.168.890 11.041.164
Assets classified as held for sale 8d 49.134.964 49.891.627
56.303.854 60.932.791
Total assets 63.632.683 64.515.852
EQUITY AND LIABILITIES
Issued share capital 28 1.291.911 1.291.911
Share premium 71.924.045 71.924.045
Foreign currency translation reserve 29 9.144.465 10.232.119
Exchange difference on I/C loans to
foreign holdings 40.3 (191.903) (149.263)
Accumulated losses (53.312.991) (53.906.344)
Equity attributable to equity holders 28.855.527 29.392.468
of the parent
Non-controlling interests 30 7.255.639 7.446.255
Total equity 36.111.166 36.838.723
Non--current liabilities
Borrowings 31 7.154 7.249
Bonds issued 32 1.033.842 1.033.842
Taxation 35 549.181 595.541
1.590.177 1.636.632
Current liabilities
Borrowings 31 987.909 420.751
Bonds issued 32 190.734 156.761
Trade and other payables 33 4.528.316 4.579.595
Taxation 35 544.339 550.162
6.251.298 5.707.269
Liabilities directly associated with
assets classified as held for sale 8d 19.680.042 20.333.228
25.931.340 26.040.497
Total liabilities 27.521.517 27.677.129
Total equity and liabilities 63.632.683 64.515.852
Net Asset Value (NAV) EUR per share: 38d
Basic NAV attributable to equity holders
of the parent 0,22 0,23
Diluted NAV attributable to equity holders
of the parent 0,22 0,23
Lambros Anagnostopoulos Michael Beys Theofanis Antoniou
Director & Chief Executive Director & Chairman Finance Director
Officer of the Board
On 29 October 2020 the Board of Directors of SECURE PROPERTY
DEVELOPMENT & INVESTMENT PLC authorised these financial
statements for issue.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2020
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 2019 1.272.702 71.381.259 (46.704.622) (215.820) 9.874.757 35.608.276 7.535.691 43.143.967
Loss for the
year - - 47.570 - - 47.570 136.742 184.312
Exchange
difference
on
I/C loans
to foreign
holdings
(Note 16b ) - - - 21.828 - 21.828 - 21.828
Foreign
currency
translation
reserve - - - - 3.993 3.993 (187.147) (183.154)
Balance 30
June 2019 1.272.702 71.381.259 (46.657.052) (193.992) 9.878.750 35.681.667 7.485.286 43.166.953
Loss for the
year - - (7.249.292) - - (7.249.292) (91.951) (7.341.243)
Issue of
share
capital,net 19.209 542.786 - - - 561.995 - 561.995
Exchange
difference
on
I/C loans
to foreign
holdings
(Note 16b ) - - - 44.729 - 44.729 - 44.729
Foreign
currency
translation
reserve - - - - 353.369 353.369 52.920 406.289
Balance 31
December
2019 1.291.911 71.924.045 (53.906.344) (149.263) 10.232.119 29.392.468 7.446.255 36.838.723
Loss for the
year - - 593.353 - - 593.353 (101.640) 491.713
Exchange
difference
on
I/C loans
to foreign
holdings
(Note 16b ) - - - (42.640) - (42.640) - (42.640)
Foreign
currency
translation
reserve - - - - (1087.654) (1.087.654) (88.976) (1.176.630)
Balance - 30
June 2020 1.291.911 71.924.045 (53.312.991) (191.903) 9.144.465 28.855.527 7.255.639 36.111.166
(1) Share premium is not available for distribution.
(2) Companies which do not distribute 70% of their profits after
tax, as defined by the relevant tax law, within two years after the
end of the relevant tax year, will be deemed to have distributed as
dividends 70% of these profits. Special contribution for defense at
20% will be payable on such deemed dividends to the extent that the
shareholders (companies and individuals) are Cyprus tax residents.
The amount of deemed distribution is reduced by any actual
dividends paid out of the profits of the relevant year at any time.
This special contribution for defense is payable on account of the
shareholders.
(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 40.3).
(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 2020
30 June
Note 30 June 2020 2019
EUR EUR
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax and non-controlling interests-continued
operations (369.014) (463.411)
Profit/(Loss )before tax and non-controlling
interests-discontinued operations 8b 878.830 666.303
Profi/(Loss) before tax and non-controlling
interests 509.816 202.892
Adjustments for:
(Gains)/losses on revaluation of investment
property 12 (996.297) (408.684)
Net gain/loss on disposal of investment
properties 13 (1.199) 2.067
Accounts payable written off 14 (95) (238.399)
Depreciation/ Amortization charge 11 3.620 12.348
Finance income 15 (265.213) (237.756)
Interest expense 15 498.075 764.151
Share of profit from associates 20 (218.862) (224.177)
Effect of foreign exchange differences 16a 174.947 317.870
Cash flows from/(used in) operations before
working capital changes (295.208) 190.312
Change in prepayments and other current
assets 25 77.287 43.265
Change in trade and other payables 33 (112.182) 194.198
Change in VAT and other taxes receivable 25 (10.543) (20.315)
Change in other taxes payables 35 22.346 37.955
Change in provisions 35 71.091 (451)
Change in deposits from tenants 34 (898) (47)
Cash generated from operations (248.107) 444.917
Income tax paid (83.149) (107.836)
Net cash flows provided /(used) in operating
activities (331.256) 337.081
CASH FLOWS FROM INVESTING ACTIVITIES
Sales proceeds from disposal of investment
property 13b 744.052 249.600
Dividend received from associates 20 - 121.772
Interest received - 801
Decrease in long term receivable 23 15 43
Net cash flows from / (used in) investing
activities 744.067 372.216
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank and non-bank loans 31 550.000 500.000
Repayment of principle amount of borrowings (459.567) (660.788)
Interest and financial charges paid (145.544) (523.335)
Decrease in financial lease liabilities 36 (286.995) (196.500)
Net cash flows from / (used in) financing
activities (342.106) (880.623)
Net increase/(decrease) in cash at banks 70.705 (171.326)
Cash:
At beginning of the period 771.163 942.489
At end of the period 27 841.868 771.163
------------ ---------
Notes to the Condensed Consolidated Interim Financial
Statements
For the six months ended 30 June 2020
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): ISIN
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 in Cyprus while its principal place
of business is in Cyprus at 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, commercializing,
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 14 full time equivalent people, (2019 à
14 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 IFRSs
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 certain conditional agreement signed in December 2018
with Arcona Property Fund N.V for the sale of 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 are effective for accounting periods
beginning on 1 January 2019. 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, Ukraine, Greece and Bulgaria,
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 recognizes 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 recognized 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
recognized 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 recognized 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 recognized, to reflect new
information obtained about facts and circumstances that existed at
the acquisition date that, if known, would have affected the
amounts recognized 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 unrealized gains on
transactions between group companies are eliminated. Unrealized
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 recognized 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 recognized 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 recognized 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, the Bulgarian lev is the functional currency
for all Group's entities in Bulgaria and the Euro is the functional
currency for all the Greek and 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 recongised 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 2020 - 30 1 Jan 2019 - 31 1 Jan 2018 - 30 30 June 2020 31 December 201 9 30 June 201 9
June 2020 Dec 201 9 June 2019
----------------- ----------------- ----------------- ------------- ------------------ --------------
USD 1,1020 1,1195 1,1298 1,1198 1,1234 1,1380
----------------- ----------------- ----------------- ------------- ------------------ --------------
UAH 28,6031 28,9406 30,4277 29,9500 26,422 29,7302
----------------- ----------------- ----------------- ------------- ------------------ --------------
RON 4,8163 4,7453 4,7414 4,8423 4,7793 4,7351
----------------- ----------------- ----------------- ------------- ------------------ --------------
BGN 1,9558 1,9558 1,9558 1,9558 1,9558 1,9558
----------------- ----------------- ----------------- ------------- ------------------ --------------
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 derecognized
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 recognized 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 2020:
-- 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 arm's-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 capitalized
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 capitalized into
perpetuity.
The capitalization 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 Ukraine.
4.5 Investment Property under development
Property that is currently being constructed or developed, for
future use as investment property is classified as investment
property under development carried at cost until construction or
development is complete, or its fair value can be reliably
determined. This applies even if the works have temporarily being
stopped.
4.6 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 recognized 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.
4.7 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
amortization 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 capitalized 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 amortization 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 derecognized 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 recognized in
the statement of comprehensive income.
4.8 Inventory
Inventory principally comprises of residential property .
Inventory is recognized initially at cost, including transaction
costs, which represent its fair value at the time of acquisition.
Costs related to the development of land are capitalised and
recognized as inventory. Inventory is carried at the lower of cost
and net realizable value.
4.9 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.
4.10 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.
4.11 Financial Instruments
4.11.1 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.
4.11.2 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.
4.11.3 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 .11.4 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 .11.5 Derivative financial instruments and hedge
accounting
Derivative financial instruments and hedge accounting -
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.
4.12 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 Company recognises lease payments received under operating
leases as income on a straight line basis over the lease term as
part of 'other income'.
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
commencementdate;
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.
4.13 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 recognized in 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 capitalized as part of the cost of that
asset.
Fees paid on the establishment of loan facilities are recognized
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 extend there
is no evidence that it is probable that some or all of the facility
will be drawn down, the fee is capitalized 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, amortization of discounts or premium
relating to borrowings, amortization 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.
4.14 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 recognized at nominal value.
4.15 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 recognized immediately in
profit or loss, 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 recognized
for the asset (cash--generating unit) in prior years. A reversal of
an impairment loss is recognized 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.
4.16 Share Capital
Ordinary shares are classified as equity.
4.17 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.
4.18 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 recognized 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 recognized 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 recognizes 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.
4.19 Provisions
Provisions are recognized 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 recognized 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 recognized as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
4.20 Non--current liabilities
Non--current liabilities represent amounts that are due in more
than twelve months from the reporting date.
4.21 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 recognized 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
recognized on the following bases:
4.21.1 Income from investing activities
Income from investing activities includes profit received from
disposal of investments in the Company's subsidiaries and
associates and income accrued on advances for investments
outstanding as at the year end.
4.21.2 Dividend income
Dividend income from investments is recognized 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).
4.21.3 Interest income
Interest income is recognized on a time-proportion (accrual)
basis, using the effective interest rate method.
4.21.4 Rental income
Rental income arising from operating leases on investment
property is recognized on an accrual basis in accordance with the
substance of the relevant agreements.
4.22 Service charges and expenses recoverable from tenants
Income arising from expenses recharged to tenants is recognized
on an accrual basis.
4.23 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.
4.24 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 capitalization.
All other borrowing costs are recognized 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.
4.25 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 recognized within the
cost of the Investment Property and are subsequently accounted as
per the Group's accounting Policy for Investment Property
subsequent measurement.
4.26 Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
4.26.1 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. 26.2 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 recognized to the extent that it is
probable that future taxable profit will be available against which
the temporary differences can be utilized.
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.
4.26.3 Current and deferred tax for the year
Current and deferred tax are recognized in the statement of
comprehensive income, except when they relate to items that are
recognized in other comprehensive income or directly in equity, in
which case, the current and deferred tax are also recognized 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
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.
4.26.4 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.
4.26.5 Dividend distribution
Dividend distribution to the Company's shareholders is
recognized as a liability in the Group's financial statements in
the period in which the dividends are approved by the Company's
shareholders.
4.27 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 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
export of goods and provision of works or services to be used
outside Romania.
4.28 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.
4.29 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 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 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.
4.30 Comparative Period
Where necessary, comparative figures have been adjusted to
conform to changes in presentation in the current year.
5. Critical accounting estimates and judgments
In March 2018 the IASB issued a comprehensive set of concepts
for financial reporting, the revised "Conceptual Framework for
Financial Reporting" (Conceptual Framework), replacing the previous
version issued in 2010. The main changes to the framework's
principles have implications for how and when assets and
liabilities are recognised and derecognised in the financial
statements, while some of the concepts in the revised Framework are
entirely new (such as the "practical ability" approach to
liabilities". To assist companies with the transition, the IASB
issued a separate accompanying document "Amendments to References
to the Conceptual Framework in IFRS Standards". This document
updates some references to previous versions of the Conceptual
Framework in IFRS Standards, their accompanying documents and IFRS
Practice Statements.
(i) Issued by the IASB but not yet adopted by the European Union
New standards
-- IFRS 17 "Insurance Contracts" (effective for annual periods
beginning on or after 1 January 2021).
In May 2017, the IASB issued IFRS 17 Insurance Contracts, a
comprehensive new accounting standard for insurance contracts
covering recognition and measurement, presentation and disclosure.
Once effective, IFRS 17 will replace IFRS 4 Insurance Contracts
that was issued in 2005. IFRS 17 applies to all types of insurance
contracts (i.e. life, non life, direct insurance and re insurance),
regardless of the type of entities that issue them, as well as to
certain guarantees and financial instruments with discretionary
participation features. A few scope exceptions will apply.
Amendments
-- Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non current (issued on
23 January 2020) (effective for annual periods beginning on or
after 1 January 2020).
-- Amendment to IFRS 3 Business Combinations (issued on 22
October 2018) (effective for annual periods beginning on or after 1
January 2020)
The amendments revise definition of a business. A business must
have inputs and a substantive process that together significantly
contribute to the ability to create outputs. The new guidance
provides a framework to evaluate when an input and a substantive
process are present, including for early stage companies that have
not generated outputs. An organised workforce should be present as
a condition for classification as a business if are no outputs. The
definition of the term 'outputs' is narrowed to focus on goods and
services provided to customers, generating investment income and
other income, and it excludes returns in the form of lower costs
and other economic benefits. It is also no longer necessary to
assess whether market participants are capable of replacing missing
elements or integrating the acquired activities and assets. An
entity can apply a 'concentration test'. The assets acquired would
not represent a business if substantially all of the fair value of
gross assets acquired is concentrated in a single asset (or a group
of similar assets).
-- IFRS 10 (Amendments) and IAS 28 (Amendments) "Sale or
Contribution of Assets between an Investor and its Associate or
Joint Venture(effective date postponed indefinitely).
The amendments address an acknowledged inconsistency between the
requirements in IFRS 10 and those in IAS 28, in dealing with the
sale or contribution of assets between an investor and its
associate or joint venture. The main consequence of the amendments
is that a full gain or loss is recognised when a transaction
involves a business (as defined in IFRS 3). A partial gain or loss
is recognised when a transaction involves assets that do not
constitute a business. In December 2015, the IASB postponed the
effective date of this amendment indefinitely pending the outcome
of its research project on the equity method of accounting.
The above are expected to have no significant impact on the
Company's financial statements when they become effective.
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 counter party's
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 profit or loss. 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 judgment 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 .
6. Risk Management
-- 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. The fair
value has been estimated as at 31 December 2019 (Note 18.2).
-- 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 recognizes 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 recognized 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 Ukraine, Greece and
Romania. Management estimates that the assets will be realized
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. 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 2020 31 Dec 2019 30 June 2019
---------- ----------------------------- -------------- ------------- --------------
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
---------- ----------------------------- -------------- ------------- --------------
Bela Logistic Park
LLC Aisi Bela Ukraine Balabino Project - - 100
---------- ----------------------------- -------------- ------------- --------------
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 Victini Logistics 100 100 100
---------- ----------------------------- -------------- ------------- --------------
Victini Logistics Park S.A.
(ex SPDI Logistics S.A.) Greece - - 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 44,24 44,24 44,24
----------------------------------------- -------------- ------------- --------------
Rimasol Real Estate Srl Romania 44,24 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
----------------------------------------- -------------- ------------- --------------
Boyana Residence ood Bulgaria - - 100
----------------------------------------- -------------- ------------- --------------
Mofben Investments Limited Cyprus 100 100 100
----------------------------------------- -------------- ------------- --------------
SPDI Management Srl Romania 100 100 100
----------------------------------------- -------------- ------------- --------------
During the 2019 the Group proceeded with the disposal of Aisi
Bela in Ukraine as well as with the disposal of the Boyana
Residence in Bulgaria, as part of the Arcona's transaction. In
addition the Group also disposed of Victini Logistics Park AE in
Greece on top of the aforementioned transactions with Arcona.
The Group has resolved to streamline its structure in Cyprus and
Romania for cost cutting and tax optimization purposes. Towards
this goal, during 2018 the following mergers have been
finalized:
. merger by absorption of SecVista Real Estate Srl acting as
Absorbed Company, with Best Day Real Estate Srl acting as Absorbing
Company,
. merger by absorption of SecRom Real Estate Srl and Secure
Property Development and Investment Srl acting as Absorbed
Companies, with N-E Real Estate Park First Phase Srl acting as
Absorbing Company.
Following extended but unsuccessful negotiations for more than 2
years with Tonescu Finance Srl, the company which has acquired
Monaco Towers property's loan, SecMon Real Estate Srl entered
voluntarily in January 2018 into insolvency process, in order to
protect its interests against its creditor, given that the value of
the assets is higher than the value of the relevant loan. 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 is not consolidated in the present consolidated
financial statements.
8. Discontinued operations
8.(a) Description
The Company announced at 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 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
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 Ukraine, while currently it is negotiating
with Arcona the sale of the assets included in Stage 2 of the
transaction, EOS and Delenco assets in Romania, as well as the
Rozny, Tsymlyanskiy and Kiyanovskiy assets in Ukraine
Additionally, the Company also sold the Greek logistics property
Victini Logistics, which was not part of the Arcona
transaction.
The companies that are classified under discontinued operations
are the followings:
-- Bulgaria: Boyana Residence ood (sold during 2019)
-- 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
-- Greece: Victini Logistics Park S.A. (sold during 2019)
-- 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 Bela (sold during 2019), 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 & 4.10).
8.(b) Results of discontinued operations
For the period ended 30 June 2020
Note 30 June 2020 30 June 2019
EUR EUR
Income 9 513.533 1.203.928
Asset operating expenses 10 (193.889) (319.445)
------------- -------------
Net Operating Income 319.644 884.483
Administration expenses 11 (77.490) (111.352)
Share of profits from associates 20 218.862 224.177
Valuation gains/(losses) from Investment Property 12 996.297 408.684
Net profit /(loss) on disposal of investment property 13b 1.199 (2.067)
Other operating income/(expenses), net 14 48 237.474
Operating profit 1.458.560 1.641.399
Finance income 15 4.670 5.041
Finance costs 15 (446.066) (706.132)
Profit /(Loss) before tax and foreign exchange differences 1.017.164 940.308
Foreign exchange (loss), net 16a (132.904) (274.005)
Profit/(Loss) before tax 884.260 666.303
Income tax expense 17 (23.452) (16.368)
Profit/(Loss) for the year 860.808 649.935
Profit/(Loss) attributable to:
Owners of the parent 962.448 513.193
Non-controlling interests (101.640) 136.742
860.808 649.935
8.(c) Cash flows from(used in) discontinued operation
30 June 2020 30 June 2019
EUR EUR
------------- -------------
Net cash flows provided in operating activities 179.050 947.288
------------- -------------
Net cash flows from / (used in) financing activities 744.056 (1.380.187)
------------- -------------
Net cash flows from / (used in) investing activities (1.122.110) 371.819
------------- -------------
Net increase/(decrease) from discontinued operations (199.004) (61.080)
------------- -------------
8.(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
2020:
Note 30 June 2020 31 Dec 2019
EUR EUR
------ ------------- ------------
Assets classified as held for sale
------ ------------- ------------
Investment properties 18.4a 40.967.207 42.180.852
------ ------------- ------------
Tangible and intangible assets 22 12.902 14.342
------ ------------- ------------
Long-term receivables and prepayments 23 315.261 315.265
------ ------------- ------------
Investments in associates 20 5.591.114 5.380.021
------ ------------- ------------
Financial asset at fair value through OCI 21 1 1
------ ------------- ------------
Prepayments and other current assets 25 1.689.577 1.470.772
------ ------------- ------------
Cash and cash equivalents 27 558.902 530.374
------ ------------- ------------
Total assets of group held for sale 49.134.964 49.891.627
------ ------------- ------------
Liabilities directly related with assets classified as held for sale
------ ------------- ------------
Borrowings 31 8.559.266 8.949.660
------ ------------- ------------
Finance lease liabilities 36 9.797.475 10.084.470
------ ------------- ------------
Trade and other payables 33 954.364 1.015.266
------ ------------- ------------
Taxation 35 302.566 216.563
------ ------------- ------------
Deposits from tenants 34 66.371 67.269
------ ------------- ------------
Total liabilities of group held for sale 19.680.042 20.333.228
------ ------------- ------------
9. Income
Income from continued operations for the period ended 30 June
2020 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 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 succeeds, upon completion
such income will be also transferred.
Continued operations 30 June 2020 30 June 2019
EUR EUR
------------- -------------
Rental income 286.536 132.025
------------- -------------
Service charges and utilities income 93.450 18.016
------------- -------------
Property management income 20.000 -
------------- -------------
Total income 399.986 150.041
------------- -------------
Income from discontinued operations for the period ended 30 June
2020 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 Innovations Logistics Park (Romania), and
EOS Business Park (Romania),
b) rental income and service charges by tenants of the Residential Portfolio, and;
c) income from third parties and /or partners for consulting and managing real estate properties
Discontinued operations (Note 8) 30 June 2020 30 June 2019
EUR EUR
------------- -------------
Rental income 497.248 1.076.619
------------- -------------
Sale of electricity - 82.965
------------- -------------
Service charges and utilities income 15.238 43.281
------------- -------------
Service and property management income 1.047 1.063
------------- -------------
Total income 513.533 1.203.928
------------- -------------
Occupancy rates in the various income producing assets of the
Group as at 30 June 2020 were as follows:
Income producing assets
% 30 June 2020 30 June 2019
--------- ------------- -------------
EOS Business Park Romania 100 100
--------- ------------- -------------
Innovations Logistics Park Romania 83 83
--------- ------------- -------------
Victini Logistics Greece - 100
--------- ------------- -------------
Kindergarten Romania 100 100
--------- ------------- -------------
10. 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 recharge (Note 9 ).
Under continued operations are no any expenses related to asset
operating expenses.
Under discontinued operations are all the expenses related to
Innovations Logistics Park (Romania), EOS Business Park (Romania),
Residential Portfolio (Romania), GreenLake (Romania), and all
Ukrainian properties.
Discontinued operations (Note 8) 30 June 2020 30 June 2019
EUR EUR
------------- -------------
Property related taxes (54.682) (103.884)
------------- -------------
Repairs and technical maintenance (14.701) (134.613)
------------- -------------
Utilities (88.711) (23.630)
------------- -------------
Property security (13.903) (22.282)
------------- -------------
Property insurance (1.495) (11.805)
------------- -------------
Leasing expenses (20.319) (23.231)
------------- -------------
Other investment property operating expenses (78) -
------------- -------------
Total (193.889) (319.445)
------------- -------------
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 decreased substantially in
2020 since during H1 2029 relevant works performed in Innovations
Logistics Park in Bucharest, essential for hosting successfully new
tenant in the cold spaces of the property.
Utilities refer mainly to electricity and fuel costs which
increased substantially as a result of the use of temperature
controlled space by new tenant in Innovations Logistics Park
(Romania) during the whole of the period. Such costs are
re-invoiced to the tenant.
Leasing expenses reflect expenses related to long term land
leasing.
11. Administration Expenses
Continued operations 30 June 30 June
2020 2019
EUR EUR
---------- ----------
Salaries and Wages (188.094) (247.355)
---------- ----------
Advisory fees (218.475) (146.649)
---------- ----------
Due Dilligence expenses for non acquired projects - (60.410)
---------- ----------
Public group expenses (71.053) (38.583)
---------- ----------
Corporate registration and maintenance fees (24.791) (31.765)
---------- ----------
Vat Expensed (4.447) (84.423)
---------- ----------
Audit and accounting fees (62.185) (55.504)
---------- ----------
Legal fees (41.275) (59.293)
---------- ----------
Depreciation /Amortization charge (1.724) (1.699)
---------- ----------
Corporate operating expenses (68.793) (75.029)
---------- ----------
Total Administration Expenses (680.837) (800.710)
---------- ----------
Discontinued operations (Note 8) 30 June 30 June
2020 2019
EUR EUR
--------- ----------
Salaries and Wages (10.608) (20.015)
--------- ----------
Advisory fees (2.169) (5.589)
--------- ----------
Corporate registration and maintenance fees (18.586) (22.329)
--------- ----------
Vat Expensed (4.483) (4.179)
--------- ----------
Audit and accounting fees (19.174) (30.059)
--------- ----------
Legal fees - (8.224)
--------- ----------
Depreciation /Amortization charge (1.896) (10.649)
--------- ----------
Corporate operating expenses (20.574) (10.308)
--------- ----------
Total Administration Expenses (77.490) (111.352)
--------- ----------
Salaries and wages include the remuneration of the CEO, the CFO,
the Group Commercial Director and the Country Managers of Ukraine
and Romania, as well as the salary cost of personnel employed in
the various Company's offices in the region.
Advisory fees are mainly related 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
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
AIM:LSE stock exchange and the Nominated Adviser of the Company, as
well as other expenses related to the listing of the Company. The
increase is such costs is due to a related credit invoice which
issued and posted during H1 2019 resulted in a significant
reduction of the total amount during that period.
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.
Legal fees represent legal expenses incurred by the Group in
relation to asset operations (rentals, sales, etc.), ongoing legal
cases in Ukraine, Cyprus and Romania, compliance with 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 Cypriot, Romanian, Ukrainian, Bulgarian
(in 2019) and Greek (in 2019) operations.
12. Valuation gains / (losses) from investment properties
Discontinued operations (Note 8)
Property Name (EUR) Valuation gains/(losses)
---------------------------
30 June 30 June
2020 2019
------------ -------------
EUR EUR
------------ -------------
Bela Logistic Park - (79.758)
------------ -------------
Kiyanovskiy Residence 349.653 (47.264)
------------ -------------
Tsymlyanskiy Residence 135.349 (16.247)
------------ -------------
Balabino Project - (22.155)
------------ -------------
Rozny Lane 23.586 6.448
------------ -------------
Innovations Logistics Park 138.654 159.177
------------ -------------
EOS Business Park 100.720 114.127
------------ -------------
Residential Portfolio 9.588 20.333
------------ -------------
GreenLake 219.937 252.911
------------ -------------
Kindergarten 18.810 21.112
------------ -------------
Total 996.297 408.684
------------ -------------
13. 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 disposal of such properties are presented below:
During H1 2020 the Group sold 2 parking spaces (H1 2019: 1
apartment) in Romfelt Plaza (Doamna Ghica) and 2 apartments, 8
parking spaces and 1 commercial space in Zizin (H1 2019: 2
apartments and 1 parking space). The Group also sold one villa in
Moselin (Greenlake Parcel K).
Discontinued operations (Note 8) 30 June 30 June
2020 2019
EUR EUR
---------- ----------
Income from sale of investment property 744.052 249.600
---------- ----------
Cost of investment property (742.853) (251.667)
---------- ----------
Loss from disposal of investment property 1.199 (2.067)
---------- ----------
14. Other operating income/(expenses), net
Continued operations 30 June 30 June
2020 2019
EUR EUR
-------- --------
Other income 39.653 66.810
-------- --------
Other income 39.653 66.810
-------- --------
Penalties (4.638) (754)
-------- --------
Other expenses (710) -
-------- --------
Other expenses (5.348) (754)
-------- --------
Other operating income/(expenses), net 34.305 66.056
-------- --------
Discontinued operations (Note 8) 30 June 30 June
2020 2019
EUR EUR
-------- --------
Accounts payable written off 95 238.399
-------- --------
Other income 95 238.399
-------- --------
Penalties - (452)
-------- --------
Other expenses (47) (473)
-------- --------
Other expenses (47) (925)
-------- --------
Other operating income/(expenses), net 48 237.474
-------- --------
Accounts payable written off in H1 2019 relates to Boyana asset
which sold later in the year, and in particular to a payable to
constructor of the project as part of the withholding of a Good
Performance Guarantee that has been written off as a result of
statute of limitations.
Other income, for both periods, represent income received as
part of the sale of Terminal Brovary and in particular sale prce
adjustment according to the relevant sale and purchase
agreement.
15. Finance costs and income
Continued operations
Finance income 30 June 30 June
2020 2019
-------- --------
EUR EUR
-------- --------
Interest received from non-bank loans (Note
40.1.1) 260.543 232.715
-------- --------
Total finance income 260.543 232.715
-------- --------
Finance costs 30 June 30 June
2020 2019
EUR EUR
--------- ---------
Interest expenses (bank) - (700)
--------- ---------
Interest expenses (non-bank) (Note 40.1.2) (19.381) (24.837)
--------- ---------
Finance charges and commissions (3.210) (8.324)
--------- ---------
Bonds interest (33.973) (33.787)
--------- ---------
Total finance costs (56.564) (67.648)
--------- ---------
Net finance result 203.979 165.067
--------- ---------
Discontinued operations (Note 8)
Finance income 30 June 30 June
2020 2019
-------- --------
EUR EUR
-------- --------
Interest received from non-bank loans (Note
40.1.1) 4.670 4.645
-------- --------
Interest income associated with banking accounts - 396
-------- --------
Total finance income 4.670 5.041
-------- --------
Finance costs 30 June 30 June
2020 2019
EUR EUR
---------- ----------
Interest expenses (bank) (201.500) (454.405)
---------- ----------
Interest expenses (non-bank) (Note 40.1.2) (7.048) (3.550)
---------- ----------
Finance leasing interest expenses (236.173) (246.872)
---------- ----------
Finance charges and commissions (1.345) (1.305)
---------- ----------
Total finance costs (446.066) (706.132)
---------- ----------
Net finance result (441.396) (701.091)
---------- ----------
Interest income from non-bank loans, reflects income from loans
granted by the Group for 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, the loan had certain
one-off and monthly payments for a period until 30 June 2020. The
two parties are currently engaged in discussions for agreeing and
signing a new addendum with a new re-payment schedule. The loan is
bearing 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.
Borrowing interest expense represents 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).
16. 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
2020 from continued operations amounted to EUR42.043 (30 June 2019:
loss EUR43.865).
The exchange loss from discontinued operations for the year
ended 30 June 2020 amounted to EUR132.904 (30 June 2019: loss
EUR274.005) (Note 8).
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 40.3). For these intercompany loans
the foreign exchange differences are recognized initially in other
comprehensive income and in a separate component of equity. During
30 June 2020, the Group recognized a foreign exchange loss of
EUR42.638 (30 June 2019:profit EUR21.828).
17. Tax Expense
Continued operations 30 June 30 June
2020 2019
EUR EUR
-------- --------
Income and defence tax expense (81) (2.212)
-------- --------
Taxes (81) (2.212)
-------- --------
Discontinued operations (Note 8) 30 June 30 June
2020 2019
EUR EUR
--------- ---------
Income and defence tax expense (23.452) (16.368)
--------- ---------
Taxes (23.452) (16.368)
--------- ---------
For the period ended 30 June 2020 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%.
18. Investment Property
18.1 Investment Property Presentation
Investment Property consists of the following assets:
Income Producing Assets
-- Victini Logistics (ex GED) is a logistics park comprising
17.756 gross leasable sqm. It is fully let to the German
multinational transportation and logistics company, Kuehne &
Nagel and to a Greek commercial company trading electrical
appliances GE Dimitriou SA. On the roof of the warehouse there is a
1MW photovoltaic park installed with the electricity generated
being sold to Greek Electric Grid on a long term contract. The
asset was sold within 2019.
-- 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, was 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. Innovations Logistics Park
was acquired by the Group in May 2014 and was 83% 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 rent inflow of EUR115.000.
Residential Assets
The Company owns a residential portfolio, consisting at the end
of the reporting period of 16 apartments and villas across four
three separate complexes located in different residential areas of
Bucharest (Residential portfolio: Romfelt Plaza, Blooming House,
GreenLake Residential: GreenLake Parcel K). During 2017 Tonescu
Finance (the company which acquired the Monaco Towers related loan)
commenced against SecMon Real Estate Srl legal proceedings and in
order for SecMon Real Estate Srl to protect itself it entered
voluntarily in January 2018 into insolvency process in January
2018. 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. (Note 8).
Land Assets
-- Bela Logistic Park is a 22,4 Ha plot in Odessa situated on
the main highway to Kiev. Following the issuance of permits in
2008, below ground construction for the development of a 103.000
sqm GBA logistic center commenced. Construction was put on hold in
2009. The asset was sold in H2 2019.
-- 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.
-- Balabino Project is a 26,38 Ha plot of land situated on the
south entrance of Zaporizhia, a city in the south of Ukraine with a
population of 800.000 people. Balabino Project is zoned for retail
and entertainment development. The asset was sold in H2 2019.
-- 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 20). It is
situated in the northern part of Bucharest on the bank of Grivita
Lake in Bucharest. SPDI owns 44% of these plots, but has effective
management control.
-- Boyana Land: The complex of Boyana Residence ood includes
adjacent land plots available for sale or development of 22.000 sqm
of gross buildable area. The asset was sold in H2 2019.
18.2 Investment Property Movement during the reporting
period
The table below presents a reconciliation of the Fair Value
movements of the investment property during the reporting period
broken down by property and by local currency vs. reporting
currency.
Continued Operations
In H1 2020 and 2019 , the Company did not have any Investment
Property assets classified within continued operations.
Discontinued Operations
30 June 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 Transfer Disposals Transfer Carrying
amount exchange gain/(loss) to FA and change from amount
as at translation based at fair in Continued as at
30/06/2020 difference on local value allowance Operations 31/12/2019
currency through for
valuations OCI investment
(Note property
21) for H1
2020
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
Kiyanovskiy
Residence Land 2.768.351 (340.782) 349.653 - - - 2.759.480
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
Tsymlyanskiy
Residence Land 1.071.620 (131.915) 135.349 - - - 1.068.186
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
Balabino Land
Project - - - - - -
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
Rozny Lane Land 1.071.620 (20.152) 23.586 - - - 1.068.186
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
Total Ukraine 4.911.591 (492.849) 508.588 - - - 4.895.852
----------- ------------ ------------ --------- ----------- ----------- ------------
Innovations
Logistic
s Park Warehouse 10.600.000 (138.654) 138.654 - - - 10.600.000
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
EOS Business
Park Office 7.700.000 (100.720) 100.720 - - - 7.700.000
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
Residential
portfolio Residential 341.476 (496.119) 9.588 - 95.007 - 733.000
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
GreenLake Land 15.976.140 (219.937) 219.937 - (837.860) - 16.814.000
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
Kindergarten Retail 1.438.000 (18.810) 18.810 - - - 1.438.000
------------- ----------- ------------ ------------ --------- ----------- ----------- ------------
Total Romania 36.055.616 (974.240) 487.709 - (742.853) - 37.285.000
----------- ------------ ------------ --------- ----------- ----------- ------------
Total 40.967.207 (1.467.089) 996.297 - (742.853) - 42.180.852
----------- ------------ ------------ --------- ----------- ----------- ------------
Discontinued Operations
31 December 2019 Fair Value movements Asset Value at the Beginning
( EUR ) of the period or at
Acquisition/Transfer
date
Asset Name Type Carrying Foreign Fair value Transfer Disposals Transfer Carrying
amount exchange gain/(loss) to FA at and change from amount
as at translation based fair value in Continued as at
30/06/2019 difference on local through allowance Operations 31/12/2018
currency OCI (Note for
valuations 21) investment
property
for H1
2019
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Bela Logistic Land - - - (4.716.157) - - 4.716.157
Park
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Kiyanovskiy
Residence Land 2.759.480 507.983 (543.263) - - - 2.794.760
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Tsymlyanskiy
Residence Land 1.068.186 185.028 (77.541) - - - 960.699
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Balabino Land - - - (1.310.044) - - 1.310.044
Project
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Rozny Lane Land 1.068.186 20.152 - - - 1.048.034
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Total Ukraine 4.895.852 693.011 (600.652) (6.026.201) - - 10.829.694
----------- ------------ ------------ ------------- ----------- ----------- ------------
Innovations
Logistic
s Park Warehouse 10.600.000 (257.785) 257.785 - - - 10.600.000
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
EOS Business
Park Office 7.700.000 (185.545) 285.545 - - - 7.600.000
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Residential
portfolio Residential 733.000 (32.889) 27.366 (615.477) - - 1.354.000
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Greenlake Land 16.814.000 (409.385) 381.385 - - - 16.842.000
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Greenlake
-kindergarten Commercial 1.438.000 (34.423) 66.423 - - - 1.406.000
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Total Romania 37.285.000 (920.027) 1.018.504 (615.477) - - 37.802.000
----------- ------------ ------------ ------------- ----------- ----------- ------------
Boyana Land - - - (4.230.000) - - 4.230.000
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Total Bulgaria - - - (4.230.000) - - 4.230.000
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Victini Warehouse - - - (15.200.000) - - 15.200.000
Logistics
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Total Greece - - - (15.200.000) - - 15.200.000
------------- ----------- ------------ ------------ ------------- ----------- ----------- ------------
Total 42.180.852 (227.016) 417.852 (26.071.678) - - 68.061.694
----------- ------------ ------------ ------------- ----------- ----------- ------------
18.3 Investment Property Carrying Amount per asset as at the
reporting date
The table below presents the values of the individual assets as
appraised by the appointed valuer as at the reporting date.
Asset Name Location Principal Related Carrying amount as at
Operation Companies
30 June 20 20 31 Dec 2019
------------ ---------------- ---------------- --------------------------- --------------------------
Continued Discontinued Continued Discontinued
operations operations operations operations
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
EUR EUR EUR
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
Bela Logistic Odesa Land and LLC Aisi Bela - - - -
Park Development
Works for
Warehouse
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
Kiyanovskiy Podil, Land for LLC Aisi - 2.768.351 - 2.759.480
Residence Kiev City residential Ukraine
Center development LLC Trade
Center
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
Tsymlyanskiy Podil, Land for LLC Almaz -- - 1.071.620 - 1.068.186
Residence Kiev City residential Pres -- Ukraine
Center Development
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
Balabino Zaporizhia Land for retail LLC Aisi Bela - - - -
Project development
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
Rozny Lane Brovary Land for SC Secure - 1.071.620 - 1.068.186
district, residential Capital Limited
Kiev Development
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
Total Ukraine - 4.911.591 - 4.895.852
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
Innovations Clinceni, Warehouse Myrnes - 10.600.000 - 10.600.000
Logistics Bucharest Innovations
Park Park Limited
Best Day Real
Estate Srl
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
EOS Business Bucharest Office building Yamano Holdings - 7.700.000 - 7.700.000
Park 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
Ketiza Real
Estate Srl
N-E Real
Estate Park
First Phase
Srl (in 2018
Residential after merger
apartments with SecRom
Residential (3 in total in Real Estate
Portfolio Bucharest 2 complexes) Srl) - 341.476 - 733.000
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
GreenLake Bucharest Residential SEC South East - 15.976.140 - 16.814.000
villas Continent
(13 villas) & Unique Real
land for Estate
residential (Secured)
development Investments
Limited
Edetrio
Holdings
Limited
Emakei
Holdings
Limited
Iuliu Maniu
Limited
Ram Real
Estate
Management
Limited
Moselin
Investments
Srl
Rimasol
Enterprises
Limited
Rimasol Real
Estate Srl
Ashor Ventures
Limited
Ashor
Development
Srl
Jenby
Investments
Srl
Ebenem
Investments
Srl
------------ ---------------- ---------------- ------------ ------------- ----------- -------------
Total Romania - 36.055.616 - 37.285.000
--------- ------------- ----------- -------------
TOTAL - 40.967.207 - 42.180.852
--------- ------------- ----------- -------------
18.4 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 Residenceand Rozny Lane
in Ukraine, and GreenLake in Romania
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
At the beginning of
the reporting period - 42.180.852 - 63.345.537
---------------------- ---------------------- --------------------- ----------------------
Disposal of investment
Property - (742.853) - (21.355.521)
---------------------- ---------------------- --------------------- ----------------------
Revaluation
(loss)/gain on
investment property - 996.297 - 417.852
---------------------- ---------------------- --------------------- ----------------------
Translation difference - (1.467.089) - (227.016)
---------------------- ---------------------- --------------------- ----------------------
As at the end of the
reporting period - 40.967.207 - 42.180.852
---------------------- ---------------------- --------------------- ----------------------
Disposals in H1 2020 of Investment Properties represent the
sales of apartments,commercial spaces and parking spaces of
residential portfolio. During 2019 the Bela and Balabino land plots
in Ukraine, the Boyana Residence in Bulgaria and the Victini
Logistics asset in Greece were sold.
b. Investment Properties Under Development
Investment property under development represents the carrying
value of Bela Logistic Park property, which has reached the +10%
construction in late 2008 but it is stopped since then. This
property sold during December 2019.
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ----------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ----------------------- --------------------- -----------------------
At 1 January - - - 4.716.157
--------------------- ----------------------- --------------------- -----------------------
Revaluation on - - - -
investment property
--------------------- ----------------------- --------------------- -----------------------
Disposal of IP - - - (4.716.157)
--------------------- ----------------------- --------------------- -----------------------
Translation - - - -
difference
--------------------- ----------------------- --------------------- -----------------------
Transferred to Assets - - - -
held for sale
--------------------- ----------------------- --------------------- -----------------------
At 31 December - - - -
--------------------- ----------------------- --------------------- -----------------------
19. Investment Property Acquisitions, Goodwill Movement and
Disposals
Disposal of subsidiaies
Victini Logistics Aisi Bela Boyana Total
Park AE
ASSETS EUR EUR EUR EUR
------------------ ------------ ----------- ------------
Non-current assets
------------------ ------------ ----------- ------------
Investment property 15.200.000 1.318.104 4.230.000 20.748.104
------------------ ------------ ----------- ------------
Investment property - 4.745.167 - 4.745.167
under construction
------------------ ------------ ----------- ------------
Tangibles and intangibles
assets 16.994 - - 16.994
------------------ ------------ ----------- ------------
15.216.994 6.063.271 4.230.000 25.510.265
------------------ ------------ ----------- ------------
Current assets
------------------ ------------ ----------- ------------
Inventories - - 4.604.044 4.604.044
------------------ ------------ ----------- ------------
Prepayments and other
current assets 475.143 938 1.255 477.336
------------------ ------------ ----------- ------------
Cash and cash equivalents 35.994 27 2.187 38.208
------------------ ------------ ----------- ------------
511.137 965 4.607.486 5.119.588
------------------ ------------ ----------- ------------
Total assets 15.728.131 6.064.236 8.837.486 30.629.853
------------------ ------------ ----------- ------------
Non-current liabilities
------------------ ------------ ----------- ------------
Borrowings 10.082.370 - 2.257.980 12.340.350
------------------ ------------ ----------- ------------
Deposits from tenants 151.930 - - 151.930
------------------ ------------ ----------- ------------
10.234.300 - 2.257.980 12.492.280
------------------ ------------ ----------- ------------
Current liabilities
------------------ ------------ ----------- ------------
Borrowings - - 336.329 336.329
------------------ ------------ ----------- ------------
Trade and other payables 586.870 78.068 24.046 688.984
------------------ ------------ ----------- ------------
Tax Payable 180.883 - 136.138 317.021
------------------ ------------ ----------- ------------
Provisions 42.512 - - 42.512
------------------ ------------ ----------- ------------
810.265 78.068 496.513 1.384.846
------------------ ------------ ----------- ------------
Total liabilities 11.044.565 78.068 2.754.493 13.877.126
------------------ ------------ ----------- ------------
Net assets disposed 4.683.566 5.986.168 6.082.993 16.752.727
------------------ ------------ ----------- ------------
Financed by
------------------ ------------ ----------- ------------
Cash consideration 2.030.624 - - 2.030.624
received
------------------ ------------ ----------- ------------
Retained receivables
from tenants 337.600 - - 337.600
------------------ ------------ ----------- ------------
Financial assets received - 3.735.555 4.241.544 7.977.099
------------------ ------------ ----------- ------------
Bank Loan pending
transfer (Notes 25
& 44 c) - - 775.641 775.641
------------------ ------------ ----------- ------------
Net deferred consideration
in the form of a loan
receivable - - 639.000 639.000
------------------ ------------ ----------- ------------
Total result from (2.315.342) (2.250.613) (426.808) (4.992.763)
disposal
------------------ ------------ ----------- ------------
On 8 August 2019 Victini Logistcs Park AE the owner of Victini
Logistics property in Athens, Greece, was sold at a Gross Asset
Value of EUR 12,5m payable in cash, excluding the receivables from
the tenant of the property G. Dimitriou S.A. of a total of EUR
337.600 plus all future rent invoicing until 31/12/2020. The
transaction resulted in a cash inflow of EUR 2,03m, plus the amount
to be recovered in the future from G.Dimitriou S.A.
On 1 November 2019 the Company announced the disposal of Aisi
Bella, the owner company of Bella and Balabino assets in Ukraine,
to Arcona in exchange for the issue to the Company of 277.943 new
shares in Arcona and 67.063 warrants over shares in Arcona. Based
on the NAV per Arcona share the consideration corresponds to EUR
3,7m (excluding the issue of warrants), while the price paid for
the warrants was EUR1. The warrants give the Company the right to
receive ordinary shares in Arcona of EUR 5 each nominal value,
exercisable before 1 November 2024 and when the shares have traded
at a volume weighted average price of EUR 8,10.
On 5 December 2019 the Company announced the disposal of Boyana
Residence, the owner company of Boyana assets in Sofia, Bulgaria,
to Arcona in exchange of 315.591 new shares in Arcona and 77.201
warrants over shares in Arcona. Based on the NAV per Arcona share
the consideration corresponds to EUR 4,2m (excluding the issue of
warrants), while the price paid for the warrants was EUR1. The
Company also maintained as part of the transaction, a Sellers Loan
with Boyana Residence equal to EUR 750k, as adjusted finally by a
reverse liability of EUR 111k to a net amount of EUR 639k,
receivable by the end of 2020. Moreover, as part of the transaction
it was agreed that an associated to Boyana loan from Alpha Bank at
Sertland level of EUR 0,77m will be transferred to Arcona. The
transfer of the loan completed successfully in August 2020. The
warrants give the Company the right to receive ordinary shares in
Arcona of EUR 5 each nominal value, exercisable before 1 November
2024 and when the shares have traded at a volume weighted average
price of EUR 8,10. The shares and the warrants issued to the
Company in relation to this transaction held in escrow, to be
released upon agreement on the terms of the extension of the loan
associated with the asset. As at the reporting period, the shares
and warrants were still in escrow, released successfully in
February 2020.
20. Investments in associates
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
Cost of investment in
associates at the
beginning of the
period - 5.380.021 - 5.313.235
---------------------- ---------------------- --------------------- ----------------------
Share of profits from
associates - 280.982 - 297.985
---------------------- ---------------------- --------------------- ----------------------
Dividend Income - - - (121.772)
---------------------- ---------------------- --------------------- ----------------------
Foreign exchange
difference - (69.889) - (109.427)
---------------------- ---------------------- --------------------- ----------------------
Total - 5.591.114 - 5.380.021
---------------------- ---------------------- --------------------- ----------------------
Dividend Income reflects dividends received from Delenco Srl,
owner of the Delea Nuova building, where the Group maintains a
24,35% participation.
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 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
-------------- ------------ -------------- ---------- -------- -------------- -------- ------------
Green GreenLake
Lake Development Residential
Project Srl 9.670.127 (11.085.797) 153.953 40,35% - Romania assets
-------------- ------------ -------------- ---------- -------- -------------- -------- ------------
35.259.611 (13.717.602) 1.052.624 218.862
------------ ---------------------------------------- ---------- -------- -------------- -------- ------------
As at 30 June 2019, 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 24.180.906 (2.181.762) 920.493 24,35% 224.177 Romania building
-------------- ------------ -------------- --------- -------- -------------- -------- ------------
GreenLake
Project GreenLake
- Phase Development Residential
A Srl 9.171.101 (11.379.751) (26.150) 40,35% - Romania assets
-------------- ------------ -------------- --------- -------- -------------- -------- ------------
Total 33.352.007 (13.561.513) 894.343 224.177
------------ ------------- --------- -------- -------------- -------- ------------
21. Financial assets at fair value through OCI
The Group proceeded with an impairment of EUR297.200 for Monaco
Towers (company SecMon Real Estate Srl) in 2018 for which following
the court decision for entering into insolvency in January 2018,
the Company lost the 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): During the reporting period, the Management
believes that the fair value of the Financial asset at fair value
through OCI should remain the same as last year.
Discontinued operations (Note 8)
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
------------ ------------
22. Tangible and intangible assets
As at 30 June 2020 the intangible assets were composed of the
capitalized expenditure on the Enterprise Resource Planning system
(Microsoft Dynamics-Navision) in the amount of EUR103.193 (31 Dec
2019: EUR103.193) which is under continued operations. Accumulated
amortization as at the reporting date amounts to EUR103.193 (31 Dec
2019: EUR103.193) and therefore net value amounts to EUR0 (31 Dec
2019: EUR0).
As at 30 June 2020 the tangible non-current assets under
continued operations were comprised mainly by electronic equipment
(mobiles, computers etc.) of a net value of EUR514 (31 Dec 2019:
EUR566).
As at 30 June 2020 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, Romania, Greece and Bulgaria, amount to EUR85.377 (31 Dec
2019:EUR 60.741). Accumulated depreciation as at the reporting date
amounts to EUR72.475 (31 Dec 2019: EUR46.399).
23. Long Term Receivables and prepayments
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Long Term Receivables 841 315.261 852 315.265
--------------------- ---------------------- --------------------- -----------------------
Total 841 315.261 852 315.265
--------------------- ---------------------- --------------------- -----------------------
Long term receivables mainly include the cash collateral
existing in favor of Piraeus Leasing and the guarantee deposit from
a tenant in Innovations Logistics Park.
24. Inventory
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ----------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ----------------------- --------------------- -----------------------
At 1 January - - - 4.604.044
--------------------- ----------------------- --------------------- -----------------------
Sale of Inventories
(Note 13a) - - - -
--------------------- ----------------------- --------------------- -----------------------
Transfer to assets
classified as held
for sale - - - (4.604.044)
--------------------- ----------------------- --------------------- -----------------------
As at the end of the
reporting period - - - -
--------------------- ----------------------- --------------------- -----------------------
The residential portfolio in Boyana, Sofia, Bulgaria is
classified as Inventory. Boyana residential portfolio was sold
within 2019.
25. Prepayments and other current assets
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Trade and other
receivables 1.099.929 656.060 1.062.508 437.183
--------------------- ---------------------- --------------------- -----------------------
Bank Loan pending
transfer (Note 19) - 775.641 - 775.641
--------------------- ---------------------- --------------------- -----------------------
Receivable from Arcona - - 4.030.233 -
--------------------- ---------------------- --------------------- -----------------------
VAT and other tax
receivables 172.101 74.616 145.910 111.350
--------------------- ---------------------- --------------------- -----------------------
Deferred expenses 135 50.461 14.533 15.245
--------------------- ---------------------- --------------------- -----------------------
Receivables due from
related parties 66.792 5.347 71.147 6.927
--------------------- ---------------------- --------------------- -----------------------
Loan receivables from
3(rd) parties 5.606.142 124.958 5.575.555 124.958
--------------------- ---------------------- --------------------- -----------------------
Loan to associates
(Note 40.4) - 296.878 - 292.208
--------------------- ---------------------- --------------------- -----------------------
Allowance for
impairment of
prepayments and other
current assets (59.175) (294.384) (65.973) (292.740)
--------------------- ---------------------- --------------------- -----------------------
Total 6.885.924 1.689.577 10.833.913 1.470.772
--------------------- ---------------------- --------------------- -----------------------
Trade and other receivables mainly include receivables from
tenants and prepayments made for services.
Bank Loan pending transfer refers to the agreement, as part of
the transaction for the sale of Boyana to Arcona, of the transfer
of the relevant loan at Sertland level to Arcona upon signing
relevant documentation with Alpha Bank. The transfer completed
effectively in August 2020 (Note 19 & Note 44 c).
Receivables from Arcona refer to the consideration shares and
warrants in relation to the disposal of Boyana asset, which at year
end were in escrow account, agreed then to be released to the
Company upon agreement of the extension terms of the associated
loans. The consideration shares and warrants were released
effectively in February 2020.
VAT receivable represent VAT which is refundable in Romania,
Cyprus and Ukraine.
Deferred expenses include legal, advisory, consulting and
marketing expenses related to ongoing share capital increase and
due diligence expenses related to the possible acquisition of
investment properties.
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 EUR897.182
(2019 EUR771.125). The loan provided initially with a
convertibility option which was not exercised. According to the
last addendum the loan had certain one-off and monthly payments for
a period until 30 June 2020. The two parties are currently engaged
in discussions for agreeing and signing a new addendum with a new
re-payment schedule.The loan is bearing 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.
Moreover, Loans receivables from 3rd parties include an amount
of EUR750.000 which represents effectively part of the
consideration for the disposal of Boyana asset to Arcona deferred
until 31/12/2020 in the form of a loan. The loan has a scaling
structure of interest rates: 6% until 31/3/2020, 8% until 30/6/2020
and 10% until 31/12/2020. Final agreement involved also a reverse
payable of the Company of EUR111k which is classified
appropriately.
Loans receivables from 3rd parties also include an amount of
EUR115.000 provided to the SPV that acquired Delia Lebada asset, as
part of an agreement of obtaining a 5% stake on the property.
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 2020 31 Dec 2019
EUR EUR
------------- ------------
Arcona shares 3.549.453 3.735.555
------------- ------------
Transfer from Receivables 4.030.234
------------- ------------
FV change in Arcona
shares (260.870) (186.102)
------------- ------------
Arcona shares at reporting 7.318.817 3.549.453
date
------------- ------------
Warrants over Arcona
shares 32.190 1
------------- ------------
Transfer from Receivables 1 -
------------- ------------
FV change in warrants (23.534) 32.189
------------- ------------
Arcona warrants at
reporting date 8.657 32.190
------------- ------------
Total Financial Assets 7.327.474 3.581.643
at FV
------------- ------------
FV change in Arcona
shares (260.870) (186.102)
------------- ------------
FV change in warrants (23.534) 32.189
------------- ------------
Fair Value loss on
Financial Assets at
FV through P&L (284.404) (153.913)
------------- ------------
The Company received during 2019, 277.943 Arcona shares as part
of the disposal of Aisi Bella LLC, the owner company of Bella and
Balabino assets in Ukraine, to Arcona Property Fund N.V. Moreover
the Company received during H1 2020, 315.591 Arcona shares held
previously in escrow, 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 re-valued to their
fair value based on the NAV per share of Arcona at the same date,
and as a result a relevant fair value loss of EUR 260.870 is
recognized.
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 EUR 1, and 77.201 warrants over
Arcona shares for the sale of Boyana, held previously in escrow,
for a consideration of EUR 1. The warrants are exercisable upon the
volume weighted average price of the Arcona shares traded on a
regulated market at EUR 8,10 or higher. At year end, the warrants
are re-valued to fair value and as a result a relevant loss of EUR
23.534 is recognized. The terms and assumptions used for such
warrant re-valuation are:
-- Current stock price (as retrieved from Amsterdam Stock
Exchange): EUR 4,35 per share
-- Strike price of the warrants: EUR 8,10 per share
-- Expiration date: 1 November 2024
-- Standard deviation of stock price: 19,45%
-- Annualized dividend yield on shares: 0,10%
-- 5 year Government Bond rate (weighted average rate of
Government Bonds of countries that Arcona is exposed): 0,677%
27. Cash and cash equivalents
Cash and cash equivalents represent liquidity held at banks.
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in USD 15.550 1 15.700 -
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in EUR 186.274 51.517 151.349 51.539
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in UAH 11 94 59 95
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in RON 81.131 507.290 40.143 478.740
--------------------- ---------------------- --------------------- ----------------------
Total 282.966 558.902 207.251 530.374
--------------------- ---------------------- --------------------- ----------------------
28. Share capital
Number of Shares
30 June 2020 31 Dec 2019
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
------------- -------------
RCP Class A Shares of EUR0,01 - -
------------- -------------
RCP Class B Shares of EUR0,01 - -
------------- -------------
Total redeemable shares - -
------------- -------------
Total 129.191.442 129.191.442
------------- -------------
Nominal value (EUR)
EUR 30 June 2020 31 Dec 2019
EUR EUR
------------- ------------
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 1.291.911 1.291.911
------------- ------------
Total ordinary shares 1.291.911 1.291.911
------------- ------------
RCP Class A Shares of EUR0,01 - -
------------- ------------
RCP Class B Shares of EUR0,01 - -
------------- ------------
Total redeemable shares - -
------------- ------------
Total 1.291.911 1.291.911
------------- ------------
28.1 Authorised share capital
As at the end of 2017, the authorized share capital of the
Company was 989.869.935 Ordinary Shares of EUR0,01 nominal value
each, 785.000 Redeemable Preference Class A Shares of EUR0,01
nominal value each and 8.618.997 Redeemable Preference Class B
Shares of EUR0,01 nominal value each.
The Company cancelled the Redeemable Preference Class A Shares
following the AGM decision of 29 December 2017 and the subsequent
court approval obtained during H1 2018 while Redeemable Preference
Class B Shares (Note 28.6) remain to be cancelled.
Following the cancellation of the Redeemable Preference Class A
Shares completed within H1 2018 the 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 28.6) .
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,
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
28.6) 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 41.3). 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 28.6) .
28.3 Class A Warrants issued
The Company in order to acquire up to a 50% interest in a
portfolio of fully let logistics properties in Romania, the
Olympians Portfolio, (Note 25) issued a financial instrument, 35%
of which consists of a convertible bond and 65% of which is made up
of a warrant. Pursuant to issuing the instrument, the Company
issued 17.066.560 Class A warrants which were exercised during 2017
at an exercise price of GBP0,10 per ordinary share and the Company
proceeded at, beginning of 2018, with the issuance of 17.066.560
new ordinary shares corresponding to these warrants.
There are no Class A warrants in circulation as at the issuance
date of the financial statements.
28.4 Class B Warrants issued
On 8 August 2011 the Company issued an amount of Class B
Warrants for an aggregate corresponding to 12,5% of the issued
share capital of the Company after the exercise date. Further to
the resolution approved at the AGM of 30 December 2016 the exercise
period of the Class B Warrants was extended until 30 June 2017, at
an exercise price of the nominal value per Ordinary Share as at the
date of exercise. The Class B Warrant Instruments have
anti-dilution protection so that, in the event of further share
issuances by the Company, the number of Ordinary Shares to which
the holder of a Class B Warrant is entitled will be adjusted so
that he receives the same percentage of the issued share capital of
the Company (as nearly as practicable), as would have been the case
had the issuances not occurred. This anti-dilution protection will
freeze on the earlier of (i) the expiration of the Class B
Warrants; and (ii) capital increase(s) undertaken by the Company
generating cumulative gross proceeds in excess of USD
100.000.000.
As at 30 June 2017 there were 12.948.694 warrants in circulation
corresponding to an equal amount of ordinary shares (1:1) and the
Company received valid notices from holders of Class B warrants for
the full exercise of their warrants and proceeded with the issue of
12.948.694 new ordinary shares.
There are no Class B warrants in circulation.
28.5 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 2020 (as at) 31 December (as at) 31 December
2019 2018
Ordinary shares of Issued and Listed on
EUR0,01 AIM 129.191.442 129.191.442 127.270.481
---------------------- --------------------- ---------------------- -----------------------
Total number of
Shares Non-Dilutive Basis 129.191.442 129.191.442 127.270.481
---------------------- --------------------- ---------------------- -----------------------
Total number of
Shares Full Dilutive Basis 129.191.442 129.191.442 127.270.481
---------------------- --------------------- ---------------------- -----------------------
Options - - - -
---------------------- --------------------- ---------------------- -----------------------
Shares issued in 2018
for exercise of
warrants and options
in 2017 - - - -
---------------------- --------------------- ---------------------- -----------------------
Redeemable Preference Class A Shares
The Redeemable Preference Class A Shares which do not have
voting or dividend rights where issued as part of the Innovations
Logistics Park acquisition consideration. As at the reporting date
all of the Redeemable Preference Class A Shares have been redeemed
and the Company, following the approval received by the AGM on 29
December 2017, proceeded in their cancellation within 2018.
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, 41.3).
28. Share capital (continued)
28.6 Other share capital related matters
Pursuant to decisions taken by the AGM of 29(th) December 2017,
the Company proceeded with the following actions in H1 2018
(finalized during June):
- That the balance of the share premium account of the Company
will be reduced by EUR53.569.295 and will be set off against
carried forward losses of the Company amounting to
EUR53.569.295.
- That the balance of the share premium account of the Company
will be reduced by EUR698.650 and that the said amount will be set
off against any outstanding balances between the Company, Myrian
Nes Ltd and Theandrion Estates Ltd related to the Redeemable
Preference Class A Shares.
- That the authorised share capital of the Company, as well as
the issued share capital of the Company each will be reduced, by
the cancellation of 785.000 Redeemable Preference Class A Shares of
EUR0,01 each, namely 777.150 Redeemable Preference Class A Shares
of EUR0,01 each in the name of Myrian Nes Ltd and 7.850 Redeemable
Preference Class A Shares of EUR0,01 each in the name of Theandrion
Estates Ltd and the amount reduced will be set off against any
outstanding balances between the Company, Myrian Nes Ltd and
Theandrion Estates Ltd.
- That the articles of association of the Company will be
amended by adding the following new Regulation 3.10 after
Regulation 3.9:
"Subject to the provisions of the Law, the Company may purchase
its own shares (including any redeemable shares)."
Pursuant to decisions taken by the AGM of 31(st) December 2018,
the Board has been authorized and empowered to:
- issue and allot up to 20.000.000 ordinary shares of euro 0,01
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 euro 0,01 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 EUR1.176.630 for H1 2020, in
comparison to EUR183.153 relevant losses for H1 2019.
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 20 201 9
-------------- -----------
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 55,76 55,76
-------------- -----------
Rimasol Real Estate Srl 55,76 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 2020 31 Dec 2019
Continued Discontinued Continued Discontinued
operations operations operations operations
------------------ ------------------ ------------------ ------------------ ------------------
EUR EUR EUR EUR
------------------ ------------------ ------------------ ------------------ ------------------
Principal of bank
Loans
------------------ ------------------ ------------------ ------------------ ------------------
Eurobank SA Blooming House - - - 277.802
------------------ ------------------ ------------------ ------------------ ------------------
A lpha B ank
Romania Romfelt Plaza - 31.027 - 51.594
------------------ ------------------ ------------------ ------------------ ------------------
Alpha Bank
Romania EOS Business Park 170.335 - 293.466
------------------ ------------------ ------------------ ------------------ ------------------
Eurobank SA GreenLake - 3.249.926
Parcel K - 3.249.926 -
------------------ ------------------ ------------------ ------------------ ------------------
Alpha Bank Boyana Residence
Bulgaria (Sertland Loan) - 666.468 - 666.468
------------------ ------------------ ------------------ ------------------ ------------------
Piraeus Bank SA GreenLake-Phase 2 - 2.525.938 - 2.525.938
------------------ ------------------ ------------------ ------------------ ------------------
Kindergarten -
Eurobank SA SPDI RE - 694.040 - 732.107
------------------ ------------------ ------------------ ------------------ ------------------
Loans from other 3(rd) parties and
related parties (Note 40.5) 932.360 181.761 382.455 177.686
------------------ ------------------ ------------------ ------------------
Overdrafts 459 2.417 459 2.546
------------------ ------------------ ------------------ ------------------
Total principal of bank and non-bank
Loans 932.819 7.521.912 382.914 7.977.533
------------------ ------------------ ------------------ ------------------
Interest accrued on bank loans - 972.967 - 922.073
------------------ ------------------ ------------------ ------------------
Interests accrued on non-bank loans 62.244 64.387 45.086 50.054
------------------ ------------------ ------------------ ------------------
Total 995.063 8.559.266 428.000 8.949.660
------------------ ------------------ ------------------ ------------------
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued operations
operations
--------------------- ----------------------- --------------------- ------------------------
EUR EUR EUR EUR
--------------------- ----------------------- --------------------- ------------------------
Current portion 987.909 3.504.668 420.751 3.451.833
--------------------- ----------------------- --------------------- ------------------------
Non-current portion 7.154 5.054.598 7.249 5.497.827
--------------------- ----------------------- --------------------- ------------------------
Total 995.063 8.559.266 428.000 8.949.660
--------------------- ----------------------- --------------------- ------------------------
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. The
loan bears interest EURIBOR 3M plus 3,5% and secured by all assets
of Ketiza Real Estate Srl, as well as its shares and is being
repaid through sales proceeds. As at the end of the reporting
period the loan has been repaid in full.
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. As at the end of the reporting period, the
balance of the loan was EUR51.594, bears interest of EURIBOR
1M+4.25% and is repayable on the basis of investment property
sales. The loan is secured by all assets of SecRom Real Estate Srl,
currently held by N-E Real Estate Park First Phase Srl, as well as
its shares and is being repaid through sales proceeds with a
maturity in 2021.
31. Borrowings (continued)
Moselin Investments Srl entered in 2010 into a construction loan
agreement with Eurobank SA (ex Bancpost) covering the construction
works of Parcel K GreenLake project. As at the end of the reporting
period the balance of the loan was EUR3.249.926 and bears interest
of EURIBOR 3M plus 2,5%. Following 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 in 2008 into a loan
agreement with Alpha Bank Bulgaria for an acquisition loan related
to the acquisition of 70% of Boyana Residence ood. .The loan bears
interest of EURIBOR 3M plus 5,75% and has been agreed to be
transferred to Arcona as part of the transaction of the sale of
Boyana Residence ood in Bulgaria on 5 December 2019. The relevant
agreement between Sertland, Arcona and Alpha Bank was signed in
August 2020 when the transfer of the loan from Sertland to Arcona
effectively enforced (Note 19).
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 EUR471.112 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 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. As at the end of the
reporting period, the balance of the loan was EUR170.335, bears
interest of EURIBOR 1M+4,5% and is repayable from the free cash
flow resulting from the rental income of company's property. The
loan matures in April 2024 and is secured by a second rank mortgage
over assets of SecRom Real Estate Srl, which has been absorbed by
N-E Real Estate Park First Phase Srl, as well as its shares.
SPDI Real Estate Srl (Kindergarten) has a loan agreement with
Eurobank. As at the end of the reporting period the balance of the
loan was EUR694.040 and bears interest of Euribor 3m plus 4,6% per
annum. The loan is repayable by 2027.
Loans from other 3rd parties and related parties under continued
operations includes also loans from related parties provided as
bridge financing for future property acquisitions (Note 40.5).
) Loans from Directors reflects loans provided from 3 Directors
as bridge financing for future property acquisitions. The loans
bear interest 8% annually and are repayable on 31 March 2020. The
Company discusses with the Directors the extension of the loans
until year end and relevant documentation process is currently in
place.
) The Company has borrowed during the period EUR500.000 from an
unrelated third party for funding operating needs. The loan bears
fixed interest rate 10% and is payable within 2020, following the
re-payment of the Sellers Loan that the Company has granted as part
of the sale of Boyana Residences ood to Arcona.
Loans from other 3rd parties and related parties under
discontinued operations includes borrowings from non-controlling
interest. 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, (Notes 25 and 28.4) 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.
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 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Payables to third
parties 3.571.166 765.966 3.729.592 854.974
--------------------- ---------------------- --------------------- -----------------------
Payables to related
parties (Note 40.2) 680.058 16.623 606.214 177
--------------------- ---------------------- --------------------- -----------------------
Deferred income from
tenants - 8.010 - 8.216
--------------------- ---------------------- --------------------- -----------------------
Accruals 150.015 163.76 5 99.744 151.899
--------------------- ---------------------- --------------------- -----------------------
Pre-sale advances 127.077 - 144.045 -
--------------------- ---------------------- --------------------- -----------------------
Total 4.528.316 954.364 4.579.595 1.015.266
--------------------- ---------------------- --------------------- -----------------------
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ----------------------- --------------------- -----------------------
EUR EUR EUR EUR
---------------------- ----------------------- --------------------- -----------------------
Current portion 4.528.316 946.354 4.579.595 1.007.050
---------------------- ----------------------- --------------------- -----------------------
Non-current portion - 8.010 - 8.216
---------------------- ----------------------- --------------------- -----------------------
Total 4.528.316 954.364 4.579.595 1.015.266
---------------------- ----------------------- --------------------- -----------------------
33. Trade and other payables (continued)
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 28.6) which
is under legal proceedings for a final settlement (Note 41.3) , 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
40.2). Payables to related parties under discontinued operations
represent payables to non-contolling intetest 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 will be returned to the prospective
buyer.
34. Deposits from Tenants
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
Deposits from tenants
non-current - 66.371 - 67.269
---------------------- ---------------------- --------------------- ----------------------
Total - 66.371 - 67.269
---------------------- ---------------------- --------------------- ----------------------
Deposits from tenants appearing under non-current liabilities
include the amounts received from the tenants of Innovations
Logistics Park, EOS Business Park, and companies representing
residential segment, 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 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Corporate income tax -
non current 121.602 44.442 167.961 43.535
--------------------- ---------------------- --------------------- -----------------------
Defence tax - non
current 28.129 15 28.130 15
--------------------- ---------------------- --------------------- -----------------------
Tax provision - non
current 399.450 71.391 399.450 -
--------------------- ---------------------- --------------------- -----------------------
Corporate income tax -
current 436.356 56.796 450.450 56.865
--------------------- ---------------------- --------------------- -----------------------
Other taxes including
VAT payable - current 107.942 107.393 99.669 93.322
--------------------- ---------------------- --------------------- -----------------------
Provisions - current 41 22.529 43 22.826
--------------------- ---------------------- --------------------- -----------------------
Total Provisions and
Taxes Payables 1.093.520 302.566 1.145.703 216.563
--------------------- ---------------------- --------------------- -----------------------
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 to be paid within the next
five years.
36. Finance Lease Liabilities
As at the reporting date the finance lease liabilities consist
of the non-current portion of EUR9.405.624 and the current portion
of EUR391.851 (31 December 2019: EUR9.699.050 and EUREUR385.420,
accordingly).
Discontinued operations
30 June 2020 Note Minimum lease Interest Principal
payments
EUR EUR EUR
--------- -------------- ---------- ----------
42.2
Less than one year & 42.6 857.140 465.289 391.851
--------- -------------- ---------- ----------
Between two and 5.476.678 1.510.101 3.966.577
five years
--------- -------------- ---------- ----------
More than five years 5.773.801 334.993 5.438.808
--------- -------------- ---------- ----------
12.107.619 2.310.383 9.797.236
--------- -------------- ---------- ----------
Accrued Interest 239
-------------- ---------- ----------
Total Finance Lease 9.797.475
Liabilities
-------------- ---------- ----------
36. Finance Lease Liabilities (continued)
31 Dec 2019 Note Minimum lease Interest Principal
payments
EUR EUR EUR
--------- -------------- ---------- -----------
42.2
Less than one year & 42.6 861.304 475.884 385.420
--------- -------------- ---------- -----------
Between two and 5.637.702 1.611.343 4.026.359
five years
--------- -------------- ---------- -----------
More than five years 6.053.782 381.375 5.672.407
--------- -------------- ---------- -----------
12.552.788 2.468.602 10.084.186
--------- -------------- ---------- -----------
Accrued Interest 284
-------------- ---------- -----------
Total Finance Lease 10.084.470
Liabilities
-------------- ---------- -----------
36 .1 Land Plots Financial Leasing
The Group holds land plots in 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 EUR47.811 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 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
EUR6.693.531, 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 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 favor 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 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
EUR3.064.481 bearing 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 by
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 favor of the bank
towards the liabilities of N-E Real Estate Park First Phase Srl
arising from the sales and lease back agreement.
37. Restructuring of the business
During 2016 the non-controlling shareholders of the companies
related to GreenLake project (Moselin Investments Srl, Iuliu Maniu
Limited, RAM Real Estate Management Limited, Rimasol Enterprises
Limited, Rimasol Real Estate Srl, Ashor Ventures Limited, Ashor
Development Srl, Ebenem Limited, Ebenem Investments Srl, Jenby
Ventures Limited and Jenby Investments Srl) in agreement with the
Group capitalized the bigger part of their capital injections by
means of shareholder loans and payables effected from 2008 onwards.
An amount of EUR6.641.997 from such loans and payables have been
transferred to the equity section while the process of
capitalization was partially finalised in 2017 with the remaining
finalised within 2018.
38. Earnings and net assets per share attributable to equity
holders of the parent
a. Weighted average number of ordinary shares
30 June 2020 31 Dec 201 9 30 June 201 9
Issued ordinary shares capital 129.191.442 129.191.442 127.270.481
------------- ------------- --------------
Weighted average number of ordinary shares (Basic) 129.191.442 127.275.743 127.270.481
------------- ------------- --------------
Diluted weighted average number of ordinary shares 129.191.442 127.275.743 127.270.481
------------- ------------- --------------
b. Basic diluted and adjusted earnings per share
Earnings per share 30 Jun 2020 30 Jun 2019
EUR EUR
------------ ------------
Loss after tax attributable to owners of the parent 369.095 47.570
------------ ------------
Basic 0,03 0,0004
------------ ------------
Diluted 0,03 0,0004
------------ ------------
c. Basic diluted and adjusted earnings per share from discontinued operations
Earnings per share 30 Jun 2020 30 Jun 2019
EUR EUR
------------ ------------
Loss after tax from discontinued operations attributable to owners of the parent 855.378 649.935
------------ ------------
Basic 0.007 0.005
------------ ------------
Diluted 0.007 0.005
------------ ------------
d. Net assets per share
Net assets per share 30 June 2020 31 Dec 201 9
EUR EUR
------------- -------------
Net assets attributable to equity holders of the parent 28.454.530 29.392.468
------------- -------------
Number of ordinary shares 129.191.442 129.191.442
------------- -------------
Diluted number of ordinary shares 129.191.442 129.191.442
------------- -------------
Basic 0,22 0,23
------------- -------------
Diluted 0,22 0,23
------------- -------------
39. Segment information
All commercial and financial information related to the
properties held directly or indirectly by the Group is being
provided to members of executive management 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 - Victini Logistics, 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 20
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- -------- ------- ------------ ----------- ----------- ------------
Segment profit
---------- -------- ------- ------------ ----------- ----------- ------------
Rental income (Note 280.61 286.53
9) 5.924 2 6
---------- -------- ------- ------------ ----------- ----------- ------------
Service charges
and utilities income
(Note 9) 93.450 93.450
---------- -------- ------- ------------ ----------- ----------- ------------
Profit from discontinued
operation (Note
8) 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 20.000 20.000
---------- -------- ------- ------------ ----------- ----------- ------------
Segment profit 223.500 621.585 77.408 33.146 669.141 21.374 1.646.154
---------- -------- ------- ------------ ----------- ----------- ------------
Administration expenses
(Note 11) (680.837)
---------- -------- ------- ------------ ----------- ----------- ------------
Other (expenses)/income,
net (Note 14) 34.305
---------- -------- ------- ------------ ----------- ----------- ------------
Finance income (Note
15) 260.543
---------- -------- ------- ------------ ----------- ----------- ------------
Interest expenses
(Note 15) (53.355)
---------- -------- ------- ------------ ----------- ----------- ------------
Other finance costs
(Note 15) (3.209)
---------- -------- ------- ------------ ----------- ----------- ------------
Foreign exchange
losses, net (Note
16a) (42.043)
---------- -------- ------- ------------ ----------- ----------- ------------
Income tax expense
(Note 17) (81)
---------- -------- ------- ------------ ----------- ----------- ------------
Profit from discontinued
operations (Note
8) (675.194)
---------- -------- ------- ------------ ----------- ----------- ------------
Exchange difference
on I/C loan to foreign
holdings (Note 16b) (42.638)
---------- -------- ------- ------------ ----------- ----------- ------------
Exchange difference (1.179.550)
on translation foreign
holdings (Note 29)
---------- -------- ------- ------------ ----------- ----------- ------------
Total Comprehensive
Income (735.905)
---------- -------- ------- ------------ ----------- ----------- ------------
* 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 succeeds,
upon completion such income will be also transferred.
Continued Operations
Profit and Loss for the period ended 30 June 2019
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- -------- ------- ------------ ----------- ---------- ----------
Segment profit
---------- -------- ------- ------------ ----------- ---------- ----------
Rental income (Note
9) - - - - - 132.025* 132.025
---------- -------- ------- ------------ ----------- ---------- ----------
Service charges
and utilities income
(Note 9) - - - - - 18.016* 18.016
---------- -------- ------- ------------ ----------- ---------- ----------
Profit from discontinued
operation (Note
8) 790.870 686.203 62.908 (20.259) 17.012 (21.457) 1.515.277
---------- -------- ------- ------------ ----------- ---------- ----------
Segment profit 790.870 686.203 62.908 (20.259) 17.012 128.584 1.665.318
---------- -------- ------- ------------ ----------- ---------- ----------
Administration expenses
(Note 11) - - - - - - (800.710)
---------- -------- ------- ------------ ----------- ---------- ----------
Other (expenses)/income,
net (Note 14) - - - - - - 66.056
---------- -------- ------- ------------ ----------- ---------- ----------
Finance income (Note
15) - - - - - - 232.715
---------- -------- ------- ------------ ----------- ---------- ----------
Interest expenses
(Note 15) - - - - - - (59.324)
---------- -------- ------- ------------ ----------- ---------- ----------
Other finance costs
(Note 15) - - - - - - (8.324)
---------- -------- ------- ------------ ----------- ---------- ----------
Foreign exchange
losses, net (Note
16a) - - - - - - (43.865)
---------- -------- ------- ------------ ----------- ---------- ----------
Income tax expense
(Note 17) - - - - - - (2.212)
---------- -------- ------- ------------ ----------- ---------- ----------
Profit from discontinued
operations (Note
8) - - - - - - (865.342)
---------- -------- ------- ------------ ----------- ---------- ----------
Exchange difference
on I/C loan to foreign
holdings (Note 16b) - - - - - - 21.828
---------- -------- ------- ------------ ----------- ---------- ----------
Exchange difference
on translation foreign
holdings (Note 29) - - - - - - (183.153)
---------- -------- ------- ------------ ----------- ---------- ----------
Total Comprehensive
Income 22.987
---------- -------- ------- ------------ ----------- ---------- ----------
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 13) 5.942 408.083 330.027 744.052
---------- -------- -------- ------------ ----------- ---------- ----------
Cost of Property (4.29
sold (Note 13) 4 ) (387.537) (351.022) (742.853)
---------- -------- -------- ------------ ----------- ---------- ----------
Rental income (Note
9) 114.277 313.575 63.153 6.243 497.248
---------- -------- -------- ------------ ----------- ---------- ----------
Service charges and
utilities income
(Note 9) 13.890 1.348 15.238
---------- -------- -------- ------------ ----------- ---------- ----------
Sale of electricity
(Note 9)
---------- -------- -------- ------------ ----------- ---------- ----------
Service and Property
Management income
(Note 9) 1.047 1.047
---------- -------- -------- ------------ ----------- ---------- ----------
Valuation gains/(losses)
from investment property
(Note 12) 138.654 101.584 18.810 8.725 728.524 996.297
---------- -------- -------- ------------ ----------- ---------- ----------
Share of profits/(losses)
from associates (Note
20) 218.862 218.862
---------- -------- -------- ------------ ----------- ---------- ----------
Asset operating expenses (14.08 (199.31
(Note 10) (49.245) 4 ) (4.555) (4.763) (38.388) (88.284) 9 )
---------- -------- -------- ------------ ----------- ---------- ----------
Segment profit 217.576 621.585 77.408 33.146 669.141 (88.284) 1.530.572
---------- -------- -------- ------------ ----------- ---------- ----------
Administration expenses
(Note 11) (77.490)
---------- -------- -------- ------------ ----------- ---------- ----------
Other (expenses)/income,
net (Note 14) 48
---------- -------- -------- ------------ ----------- ---------- ----------
Finance income (Note
15) 4.670
---------- -------- -------- ------------ ----------- ---------- ----------
Interest expenses
(Note 15) (444.721)
---------- -------- -------- ------------ ----------- ---------- ----------
Other finance costs
(Note 15) (1.345)
---------- -------- -------- ------------ ----------- ---------- ----------
Foreign exchange
losses, net (Note
16a) (132.904)
---------- -------- -------- ------------ ----------- ---------- ----------
Income Tax (Note
17) (23.452)
---------- -------- -------- ------------ ----------- ---------- ----------
Total Comprehensive
Income 855.378
---------- -------- -------- ------------ ----------- ---------- ----------
Discontinued Operations
Profit and Loss for the period ended 30 June 2019
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- --------- --------- ------------ ----------- ---------- ----------
Segment profit
---------- --------- --------- ------------ ----------- ---------- ----------
Property Sales income
(Note 13) - 83.893 - 165.707 - - 249.600
---------- --------- --------- ------------ ----------- ---------- ----------
Cost of Property
sold (Note 13) - (47.216) - (204.451) - - (251.667)
---------- --------- --------- ------------ ----------- ---------- ----------
Rental income (Note
9) 704.632 305.928 57.250 8.392 417 - 1.076.619
---------- --------- --------- ------------ ----------- ---------- ----------
Service charges and
utilities income
(Note 9) 22.567 20.004 - 710 - - 43.281
---------- --------- --------- ------------ ----------- ---------- ----------
Sale of electricity
(Note 9) 82.965 - - - - - 82.965
---------- --------- --------- ------------ ----------- ---------- ----------
Service and Property
Management income
(Note 9) - - - 1.063 - - 1.063
---------- --------- --------- ------------ ----------- ---------- ----------
Valuation gains/(losses)
from investment property
(Note 12) 159.177 118.872 21.113 15.587 93.935 - 408.684
---------- --------- --------- ------------ ----------- ---------- ----------
Share of profits/(losses)
from associates (Note
20) - 224.177 - - - - 224.177
---------- --------- --------- ------------ ----------- ---------- ----------
Asset operating expenses
(Note 10) (178.471) (19.455) (15.455) (7.267) (77.340) (21.457) (319.445)
---------- --------- --------- ------------ ----------- ---------- ----------
Property Sales income
(Note 13) - 83.893 - 165.707 - - 249.600
---------- --------- --------- ------------ ----------- ---------- ----------
Administration expenses
(Note 11) (111.352)
---------- --------- --------- ------------ ----------- ---------- ----------
Other (expenses)/income,
net (Note 14) 237.474
---------- --------- --------- ------------ ----------- ---------- ----------
Finance income (Note
15) 5.041
---------- --------- --------- ------------ ----------- ---------- ----------
Interest expenses
(Note 15) (704.827)
---------- --------- --------- ------------ ----------- ---------- ----------
Other finance costs
(Note 15) (1.305)
---------- --------- --------- ------------ ----------- ---------- ----------
Foreign exchange
losses, net (Note
16a) (274.005)
---------- --------- --------- ------------ ----------- ---------- ----------
Income Tax (Note
17) (16.368)
---------- --------- --------- ------------ ----------- ---------- ----------
Total Comprehensive
Income 649.935
---------- --------- --------- ------------ ----------- ---------- ----------
Total Operations
Balance Sheet as at 30 June 2020
Warehouse Office Retail Residential Land plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
----------- ----------- ---------- ------------ ----------- ---------- -----------
Assets
----------- ----------- ---------- ------------ ----------- ---------- -----------
Long-term receivables
and prepayments 841 841
----------- ----------- ---------- ------------ ----------- ---------- -----------
Available-for-sale
investments 7.327.474 7.327.474
----------- ----------- ---------- ------------ ----------- ---------- -----------
Assets held
for sale 10.915.000 13.347.850 1.438.000 285.001 20.887.731 2.261.382 49.134.964
----------- ----------- ---------- ------------ ----------- ---------- -----------
Segment assets 10.915.841 13.347.850 1.438.000 285.001 20.887.731 9.588.856 56.463.279
----------- ----------- ---------- ------------ ----------- ---------- -----------
Tangible and
intangible assets 514
Prepayments
and other current
assets 6.885.924
---------- ---------- -------- ------ ---------- ---------- -----------
Cash and cash
equivalents 282.966
---------- ---------- -------- ------ ---------- ---------- -----------
Total assets 63.632.683
---------- ---------- -------- ------ ---------- ---------- -----------
Liabilities
associated with
assets classified
as held for
disposal 6.757.789 3.266.684 893.015 2.700 7.511.271 1.256.930 19.688.389
---------- ---------- -------- ------ ---------- ---------- -----------
Borrowings 7.154 459 987.450 995.063
---------- ---------- -------- ------ ---------- ---------- -----------
Segment liabilities 6.764.943 3.266.684 893.015 2.700 7.511.730 2.244.380 20.683.452
---------- ---------- -------- ------ ---------- ---------- -----------
Trade and other
payables 4.528.316
---------- ---------- -------- ------ ---------- ---------- -----------
Taxes payable
and provisions 1.093.520
---------- ---------- -------- ------ ---------- ---------- -----------
Bonds 1.224.576
---------- ---------- -------- ------ ---------- ---------- -----------
Total liabilities 27.529.864
---------- ---------- -------- ------ ---------- ---------- -----------
Total Operations
Balance Sheet as at 31 December 2019
Warehouse Office Retail Residential Land plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
----------- ----------- ---------- ------------ ----------- ---------- -----------
Assets
----------- ----------- ---------- ------------ ----------- ---------- -----------
Long-term receivables
and prepayments 852 - - - - - 852
----------- ----------- ---------- ------------ ----------- ---------- -----------
Financial Assets
at FV through
P&L - - - - - 3.581.643 3.581.643
----------- ----------- ---------- ------------ ----------- ---------- -----------
Assets held
for sale 10.915.000 13.146.286 1.438.000 667.001 21.709.852 2.015.488 49.891.627
----------- ----------- ---------- ------------ ----------- ---------- -----------
Segment assets 10.915.852 13.146.286 1.438.000 667.001 21.709.852 5.597.131 53.474.122
----------- ----------- ---------- ------------ ----------- ---------- -----------
Tangible and
intangible assets - - - - - - 566
Prepayments
and other current
assets - - - - - - 10.833.913
---------- ---------- -------- -------- ---------- ---------- -----------
Cash and cash
equivalents - - - - - - 207.251
---------- ---------- -------- -------- ---------- ---------- -----------
Total assets - - - - - - 64.515.852
---------- ---------- -------- -------- ---------- ---------- -----------
Liabilities
associated with
assets classified
as held for
disposal 6.921.741 3.518.711 930.730 281.399 7.448.818 1.231.829 20.333.228
---------- ---------- -------- -------- ---------- ---------- -----------
Borrowings 7.248 - - - 459 420.293 428.000
---------- ---------- -------- -------- ---------- ---------- -----------
Segment liabilities 6.928.989 3.518.711 930.730 281.399 7.449.277 1.652.122 20.761.228
---------- ---------- -------- -------- ---------- ---------- -----------
Trade and other
payables - - - - - - 4.579.595
---------- ---------- -------- -------- ---------- ---------- -----------
Taxes payable
and provisions - - - - - - 1.145.703
---------- ---------- -------- -------- ---------- ---------- -----------
Bonds - - - - - - 1.190.603
---------- ---------- -------- -------- ---------- ---------- -----------
Total liabilities - - - - - - 27.677.129
---------- ---------- -------- -------- ---------- ---------- -----------
Discontinued operations
Assets and Liabilities held for sale 30 June 2020
Warehouse Office Retail Residential Land plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
----------- ----------- ---------- ------------ ----------- ---------- -----------
Assets
----------- ----------- ---------- ------------ ----------- ---------- -----------
Investment properties 10.600.000 7.756.476 1.438.000 285.000 20.887.731 40.967.207
----------- ----------- ---------- ------------ ----------- ---------- -----------
Investment properties
under development
----------- ----------- ---------- ------------ ----------- ---------- -----------
Long-term receivables
and prepayments 315.000 261 315.261
----------- ----------- ---------- ------------ ----------- ---------- -----------
Investments 5.591.11 5.591.11
in associates 4 4
----------- ----------- ---------- ------------ ----------- ---------- -----------
Financial asset
at fair value
through OCI 1 1
----------- ----------- ---------- ------------ ----------- ---------- -----------
Segment assets 10.915.000 13.347.851 1.438.000 285.001 20.887.731 46.873.583
----------- ----------- ---------- ------------ ----------- ---------- -----------
Tangible and
intangible assets 12.902
Prepayments
and other current 1.689.57
assets 7
---------- ---------- -------- ------ ---------- -----------
Cash and cash
equivalents 558.902
---------- ---------- -------- ------ ---------- -----------
Total assets 49.134.964
---------- ---------- -------- ------ ---------- -----------
Borrowings 29 202.203 893.015 559 7.463.460 8.559.266
---------- ---------- -------- ------ ---------- -----------
Finance lease 6.693.53 9.805.82
liabilities 0 3.064.481 47.811 2
---------- ---------- -------- ------ ---------- -----------
Deposits from
tenants 64.230 2.141 66.371
---------- ---------- -------- ------ ---------- -----------
Segment liabilities 6.757.789 3.266.684 893.015 2.700 7.511.271 18.431.459
---------- ---------- -------- ------ ---------- -----------
Trade and other
payables 954.364
---------- ---------- -------- ------ ---------- -----------
Taxes payable
and provisions 302.566
---------- ---------- -------- ------ ---------- -----------
Total liabilities 19.688.389
---------- ---------- -------- ------ ---------- -----------
Discontinued operations
Assets and Liabilities held for sale 2019
Warehouse Office Retail Residential Land plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
----------- ----------- ---------- ------------ ----------- ---------- -----------
Assets
----------- ----------- ---------- ------------ ----------- ---------- -----------
Investment properties 10.600.000 7.766.000 1.438.000 667.000 21.709.852 - 42.180.852
----------- ----------- ---------- ------------ ----------- ---------- -----------
Investments
in associates 315. 000 265 - - - - 315. 265
----------- ----------- ---------- ------------ ----------- ---------- -----------
Financial Asset
at FV through
OCI - 5.380.021 - - - - 5.380.021
----------- ----------- ---------- ------------ ----------- ---------- -----------
Investment properties - - - 1 - - 1
----------- ----------- ---------- ------------ ----------- ---------- -----------
Long-term receivables -
and prepayments 10.915.000 13.146.286 1.438.000 667.001 21.709.852 47.876.139
----------- ----------- ---------- ------------ ----------- ---------- -----------
Tangible and
intangible assets - - - - - - 14.342
Prepayments
and other current
assets - - - - - - 1.470.772
---------- ---------- -------- -------- ---------- -----------
Cash and cash
equivalents - - - - - - 530.374
---------- ---------- -------- -------- ---------- -----------
Total assets - - - - - - 49.891.627
---------- ---------- -------- -------- ---------- -----------
Borrowings 36 345.911 930.730 278.360 7.394.623 - 8.949.660
---------- ---------- -------- -------- ---------- -----------
Finance lease
liabilities 6.857.475 3.172.800 - - 54.195 - 10.084.470
---------- ---------- -------- -------- ---------- -----------
Deposits from
tenants 64.230 - 3.039 - - 67.269
---------- ---------- -------- -------- ---------- -----------
Segment liabilities 6.921.741 3.518.711 930.730 281.399 7.448.818 19.101.399
---------- ---------- -------- -------- ---------- -----------
Trade and other
payables - - - - - - 1.015.266
---------- ---------- -------- -------- ---------- -----------
Taxes payable
and provisions - - - - - - 216.563
---------- ---------- -------- -------- ---------- -----------
Total liabilities - - - - - - 20.333.228
---------- ---------- -------- -------- ---------- -----------
Geographical information
30 June 2020 30 June 2019
Income (Note 9) Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Romania 5.924 513.533 - 521.618
--------------------- ---------------------- --------------------- -----------------------
Greece - - - 681.893
--------------------- ---------------------- --------------------- -----------------------
Bulgaria - - - 417
--------------------- ---------------------- --------------------- -----------------------
Cyprus * 394.062 150.041 -
--------------------- ---------------------- --------------------- -----------------------
Total 399.986 513.533 150.041 1.203.928
--------------------- ---------------------- --------------------- -----------------------
* 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 successful, upon completion such income will
be also transferred .
----------------------------------------------------------------------------------------------------------------------
Gain/(loss) from 30 June 2020 30 June 2019
disposal of investment
properties (Note 1 3b)
--------------------------------------------- ----------------------------------------------
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Romania - 1.199 - (2.067)
--------------------- ---------------------- --------------------- -----------------------
Total - 1.199 - (2.067)
--------------------- ---------------------- --------------------- -----------------------
30 June 2020 31 Dec 2019
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- --------------------- --------------------- ----------------------
EUR EUR EUR
--------------------- --------------------- --------------------- ----------------------
Carrying amount of
assets ( investment
properties, associates
and Financial asset at
fair
value through OCI)
--------------------- --------------------- --------------------- ----------------------
Ukraine - 4.911.591 - 4.895.852
--------------------- --------------------- --------------------- ----------------------
Romania - 41.646.731 - 42.665.022
--------------------- --------------------- --------------------- ----------------------
Total - 46.558.322 - 47.560.874
--------------------- --------------------- --------------------- ----------------------
40. Related Party Transactions
The following transactions were carried out with related
parties:
40.1 Income/ Expense
40.1.1 Income
-- 30 June 2020 30 June 2019
-- Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
-- EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Interest Income on
loan to related
parties 2.294 2.281 -
--------------------- ---------------------- --------------------- -----------------------
Interest Income from
loan to associates 162 4.670 161 4.645
--------------------- ---------------------- --------------------- -----------------------
Total 2.456 4.670 2.442 4.645
--------------------- ---------------------- --------------------- -----------------------
Interest income on loan to related parties relates to interest
income from Delia Lebada Srl and interest income from associates
relates to interest income from GreenLake Development Srl.
40.1.2 Expenses
-- 30 June 2020 30 June 2019
-- Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
-- EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Management
Remuneration (Note
11) 145.904 203.870 -
--------------------- ---------------------- --------------------- -----------------------
Interest expenses on
Director Loans 15.167 24.837 -
--------------------- ---------------------- --------------------- -----------------------
Interest expenses on
Narrowpeak loan (Note
15) 6 154
--------------------- ---------------------- --------------------- -----------------------
Total 161.077 228.861 -
--------------------- ---------------------- --------------------- -----------------------
40.1.2 Expenses (continued)
Management remuneration includes the remuneration of the CEO,
the CFO, the Group Commercial Director and that of the Country
Managers of Ukraine and Romania pursuant to the decisions of the
remuneration committee.
40.2 Payables to related parties (Note 33)
-- 30 June 2020 -- 31 Dec 2019
-- Continued -- Discontinued -- Continued -- Discontinued
operations operations operations operations
---------------------- ---------------------- ---------------------- ----------------------
-- EUR -- EUR -- EUR -- EUR
---------------------- ---------------------- ---------------------- ----------------------
Board of Directors &
Committees
remuneration 364 364 -
---------------------- ---------------------- ---------------------- ----------------------
Secure Management SRL - 176 - 177
---------------------- ---------------------- ---------------------- ----------------------
Secure Management 1.188 - - -
Services Ltd
---------------------- ---------------------- ---------------------- ----------------------
Sec South Management 8.091 - - -
Limited
---------------------- ---------------------- ---------------------- ----------------------
Management
Remuneration 670.415 605.850 -
---------------------- ---------------------- ---------------------- ----------------------
Total 680.058 176 606.214 177
---------------------- ---------------------- ---------------------- ----------------------
40 .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
receive their payment in shares of the Company. During 2019,
Non-Executive Directors received 261.000 ordinary shares amounting
to EUR 73.108 in lieu of their H1 2019 fees, and 176.576 ordinary
shares amounting to EUR 74.162,04 in lieu of their before H2 2016
fees.
40 .2.2 Management Remuneration
Management Remuneration represents deferred amounts payable to
the CEO of the Company.
40.3 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
2020 2019
EUR EUR EUR
----------- ---------- ----------
LLC "Aisi Ukraine" 23.062.351 80.493 57.865
----------- ---------- ----------
LLC " Almaz-Press-Ukraine " 8.236.554 294.572 263.330
----------- ---------- ----------
LLC "Aisi Ilvo" 150.537 47.486 28.597
----------- ---------- ----------
Total 31.449.442 422.551 349.792
----------- ---------- ----------
A potential Ukrainian Hryvnia weakening/strengthening by 10%
against the US dollar with all other variables held constant, would
result in an exchange difference on I/C loans to foreign holdings
of (EUR30.533)/ EUR30.533 respectively, estimated on balances held
at 30 June 2019.
40.4 Loans to associates (Note 25)
-- 30 June 2020 -- 31 Dec 201 9
-- Continued -- Discontinued -- Continued -- Discontinued
operations operations operations operations
---------------------- ---------------------- ---------------------- ----------------------
-- EUR -- EUR -- EUR -- EUR
---------------------- ---------------------- ---------------------- ----------------------
Loans to GreenLake
Development Srl 8.862 296.878 8.700 292.208
---------------------- ---------------------- ---------------------- ----------------------
Total 8.862 296.878 8.700 292.208
---------------------- ---------------------- ---------------------- ----------------------
The loan was given to GreenLake Development Srl from Edetrio
Holdings Limited. The agreement with Edetrio Holdings Limited was
signed on 17 February 2012 and bears interest 5%. The maturity date
is 30 April 2021.
40.5 Loans from related parties (Note 31)
30 June 2020 31 Dec 201 9
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Loan from Narrowpeak
Consultants 206 - 206 -
--------------------- ---------------------- --------------------- -----------------------
Loan from Directors 375.000 - 375.000 -
--------------------- ---------------------- --------------------- -----------------------
Other related party 50.000 - - -
loans
--------------------- ---------------------- --------------------- -----------------------
Interest accrued on
loans from related
parties 58.494 - 45.086 -
--------------------- ---------------------- --------------------- -----------------------
Total 483.700 - 420.292 -
--------------------- ---------------------- --------------------- -----------------------
Loans from Directors reflects loans provided from 3 Directors as
bridge financing for future property acquisitions. The loans bear
interest 8% annually and are repayable on 31 March 2020. The
Company and the Directors are discussing the extension of the loans
until year end and relevant documentation process is currently in
place.
41. Contingent Liabilities
41.1 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 characterized 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 Ukraine was significantly
reduced.
The Group performed during the reporting period part of its
operations also in Romania, Greece and Bulgaria. In respect of
Romanian, Bulgarian and Greek taxation systems all are 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 adequtely
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.
41.2 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.
41.3 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 EUR5.042.421,87, 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.
41.4 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.
41.5 Other Contingent Liabilities
The Group had no other contingent liabilities as at 30 June
2020.
42. Commitments
The Group had no other commitments as at 30 June 2020.
43. Financial Risk Management
43.1 Capital Risk Management
The Group manages its capital to ensure adequate liquidity will
be available to implement its stated growth strategy in order to
maximize the return to stakeholders through the optimization 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 on-going 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 maximizing 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.
43.2 Categories of Financial Instruments
Note 30 June 2020 31 Dec 201 9
Continued operations Discontinued Continued operations Discontinued
operations operations
----- --------------------- -------------------- --------------------- --------------------
EUR EUR EUR EUR
----- --------------------- -------------------- --------------------- --------------------
Financial Assets
----- --------------------- -------------------- --------------------- --------------------
Cash at Bank 27 282.966 558.902 207.251 530.374
----- --------------------- -------------------- --------------------- --------------------
Long-term
Receivables and
prepayments 25 841 315.261 852 315.265
----- --------------------- -------------------- --------------------- --------------------
Financial Assets at 26 7.327.474 - 3.581.643 -
FV through P&L
----- --------------------- -------------------- --------------------- --------------------
Prepayments and 25 6.885.924 1.689.577 10.833.913 1.470.772
other receivables
----- --------------------- -------------------- --------------------- --------------------
Financial Asset at
FV through OCI 21 - 1 - 1
----- --------------------- -------------------- --------------------- --------------------
Total 14.497.205 2.563.741 14.623.659 2.316.412
----- --------------------- -------------------- --------------------- --------------------
Financial
Liabilities
----- --------------------- -------------------- --------------------- --------------------
Borrowings 31 995.063 8.559.266 428.000 8.949.660
----- --------------------- -------------------- --------------------- --------------------
Trade and other
payables 33 4.528.316 954.364 4.579.595 1.015.266
----- --------------------- -------------------- --------------------- --------------------
Deposits from
tenants 34 - 66.371 - 67.269
----- --------------------- -------------------- --------------------- --------------------
Finance lease 36 - 9.805.822 - 10.084.470
liabilities
----- --------------------- -------------------- --------------------- --------------------
Taxes payable and
provisions 35 1.093.520 302.566 1.145.703 216.563
----- --------------------- -------------------- --------------------- --------------------
Bonds 32 1.224.576 1.190.603 -
----- --------------------- -------------------- --------------------- --------------------
Total 7.841.475 19.688.389 7.343.901 20.333.228
----- --------------------- -------------------- --------------------- --------------------
43.3 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 minimize 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.
43.4 Economic Market Risk Management
The Group currently operates in Romania and 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 recognized
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
minimized.
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) , 2020, cash
and cash equivalent (including continued and discontinued
operations) financial assets amounted to EUR 841.868( 31 December
201 9: EUR737.625) of which approx . EUR105 in UAH and EUR588.421
in RON (Note 26) while the remaining are mainly denominated in
either USD or EUR.
The Group is exposed to interest rate risk in relation to its
borrowings (including continued and discontinued operations)
amounting to EUR 9.554.329 (31 December 2019: EUR 9.377.660 ) 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 2020 the weighted average interest rate for all
the interest bearing borrowings of the Group stands at 3,91% (31
December 201 9 : 4,07%).
The sensitivity analysis for LIBOR and EURIBOR changes applying
to the interest calculation on the borrowings principal outstanding
as at 30 June 2020 is presented below:
Actual +100 bps +200 bps
as at 30.06.2020
Weighted average interest
rate 3,91% 4.91% 5.91%
------------------ --------- ---------
Influence on yearly finance
costs 95.543 191.086
The sensitivity analysis for LIBOR and EURIBOR changes applying
to the interest calculation on the borrowings principal outstanding
as at 31 December 2019 is presented below:
Actual +100 bps +200 bps
as at 31.12.2019
Weighted average interest
rate 4,07% 5,07% 6,07%
----------------- -------- --------
Influence on yearly finance
costs 180.076 360.152
The Group's exposures to financial risk are discussed also in
Note 6.
43.5 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.
43.6 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.
43.6 Liquidity Risk Management (continued)
Continued Operations
30 June 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 282.966 282.966 282.966
------------------
Available for sale 7.327.474 7.327.474 7.327.474 -
Investments
------------------
Prepayments and other 6.885.924 6.885.924 6.885.924
receivables
------------------
Long-term Receivables
and prepayments 841 841 - - 841
------------------
Total Financial
assets 14.497.205 14.497.205 14.496.364 - 841
Financial liabilities
------------------
Borrowings 995.063 1.088.299 484.321 603.978
------------------
Trade and other payables 4.528.316 4.528.316 4.528.316
1.369.84
Bonds issued 1.224.576 1.694.974 257.934 67.200 0
------------------
Taxes payable and
provisions 1.093.520 1.093.520 544.339 549.181 -
------------------
Total Financial 8.405.109 5.814.910 1.220.359 1.369.84
liabilities 7.841.475 0
Total net (liabilities)/ (1. 368.999
assets 6.655.730 6.092.096 8.681.454 (1.220.359) )
------------------
Discontinued Operations
30 June 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 558.902 558.902 558.902 - -
-------------
Prepayments and other 1.689.57 1.689.57 1.689.57
receivables 7 7 7
-------------
Long-term Receivables
and prepayments 315.261 315.261 - 315.261
-------------
Financial Asset at
fair Value through
OCI 1 1 1
-------------
Total Financial 2.563.74 2.563.74 2.248.48
assets 1 1 0 - 315.261
Financial liabilities
-------------
Borrowings 8.559.266 6.447.183 1.864.758 3.483.204 1.099.221
-------------
Trade and other payables 954.364 954.364 946.354 8.010
Deposits from tenants 66.371 66.371 - - 66.371
-------------
Finance lease liabilities 9.805.822 12.119.619 858.788 961.109 10.299.722
-------------
Taxes payable and
provisions 302.566 302.566 258.108 44.458 -
-------------
Total Financial 19.688.389 19.890.103 3.928.008 4.488.771 11.473.324
liabilities
Total net liabilities ( 17.124.647 ( 17.326.361 ( 1.679.527 ( 4.488.771 ( 11.158.063
) ) ) ) )
-------------
Continued Operations
31 December 2019 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 207.251 207.251 207.251 - -
------------ ------------
Prepayments and other
receivables 10.833.913 10.833.913 10.833.913 - -
------------ ------------
Financial Assets
at FV through P&L 3.581.643 3.581.643 3.581.643 - -
------------ ------------
Long-term Receivables
and prepayments 852 852 - - 852
------------ ------------
Total Financial assets 14.623.659 14.623.659 14.622.807 - 852
------------
Financial liabilities
------------ ------------
Borrowings 428.000 484.060 64.668 419.392 -
------------ ------------
Trade and other payables 4.579.595 4.579.595 4.579.595 -
------------
Bonds issued 1.190.603 1.661.001 223.961 67.200 1.369.841
------------ ------------
Taxes payable and
provisions 1.145.703 1.145.703 550.163 595.541 -
------------ ------------
Total Financial liabilities 7.343.901 7.870.359 5.418.387 1.082.133 1.369.841
------------
Total net assets/(liabilities) 7.279.758 6.753.300 9.204.420 (1.082.133) (1.368.989)
------------ ------------
Discontinued Operations
31 December 2019 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 530.374 530.374 530.374 - -
------------
Prepayments and other
receivables 1.470.772 1.470.772 1.470.772 - -
------------
Financial Asset at
FV through OCI 1 1 1 - -
------------
Long-term Receivables
and prepayments 315.265 315.265 - - 315.265
------------
Total Financial assets 2.316.412 2.316.412 2.001.147 - 315.265
Financial liabilities
------------
Borrowings 8.949.660 6.918.573 2.113.369 3.513.894 1.291.310
------------
Trade and other payables 1.015.266 1.015.266 1.007.050 - 8.216
Deposits from tenants 67.269 67.269 - - 67.269
Finance lease liabilities 10.084.470 12.552.787 861.304 912.841 10.778.642
------------
Bonds issued - - - - -
------------
Taxation 216.563 216.563 173.012 43.551 -
------------
Total Financial liabilities 20.333.228 20.770.458 4.154.735 4.470.286 12.145.437
Total net assets/(liabilities) (18.016.816) (18.454.046) (2.153.588) (4.470.286) (11.830.172)
------------
44. Events after the end of the reporting period
a) COVID-19 effects
As a result of Group's property operations being focused on the
food and the telco sectors, the Group did not suffer any material
adverse effects from the COVID-19 pandemic crisis which started
during Q1 2020 and continues until the date of this report. All of
the large/anchor tenants in Group's properties in Bucharest,
including Favorit, a 3PL logistics operator servicing Carrefour;
Danone, the international food company; ANCOM, the Romanian
Telecoms Regulatory Authority; and the supermarket chain Mega
Image, have experienced little or no disruption from either the
COVID-19 crisis or the lockdown in Romania.
However, like other companies all over the world, during the
pandemic, SPDI has experienced both delayed payment receipts as
well as general delays when interacting with associates who were/
are home bound, while carrying out its business activities.
Moreover, the overall investment apetite for real estate has been
affected by the ongoing crisis, and this will be reflected in
Group's investment activities and future valuation exercises of its
properties.
44. Events after the end of the reporting period (continued)
b) Arcona Property Fund N.V. transaction
Following the conditional Implementation Agreement signed
between the Company and Arcona Property Fund N.V. in December 2018
for the sale of Company's non-Greek portfolio of assets in an all
share transaction, and the completion of Stage 1 of the transaction
in February 2020 with the sale of Boyana in Bulgaria, which
followed the Ukrainian Bella and Balabino asset disposals in Q4
2019, the two parties have been engaged in extensive discussions
for formulating and agreeing the specific terms of Stage 2 of the
transaction which involves EOS and Delenco assets in Romania, and
Rhozny, Kiyanovskiy and Tsymlyanskiy land plots in Ukraine.
Despite the problems during the period from the pandemic which
affected all related participants in all jurisdictions of the two
parties (Holland, Czech Republic, Ukarine, Romania, Cyprus, UK),
discussions and negotiations in relation to agreeing and closing
Stage 2 are progressing slowly.
c) Finalizing Boyana transaction with Arcona
As part of the closing of the sale of Boyana to Arcona in 2019,
the parties agreed the transfer of an Alpha Bank loan of EUR 0,77m
at the level of Sertland to Arcona, following the extension of the
loan by Alpha Bank. The loan was transferred successfully during
August 2020.
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