TIDMSPDI
RNS Number : 1611O
Secure Property Dev & Inv PLC
29 September 2023
29 September 2023
Secure Property Development & Investment PLC ('SPDI' or the
'Company')
2023 Interim Results
Secure Property Development & Investment PLC, the AIM quoted
Southern Eastern European focused property company, is pleased to
announce its unaudited interim results for the period ended 30 June
2023.
Overview
-- NAV per share stood at 10p a share as at 30 June 2023 - 66%
higher than the current share price
-- The process of the sale of the Ukrainian assets included in
Stage 2 of the transaction with Arcona Property Fund N.V.
("Arcona") as part of the conditional implementation agreement for
the sale of the Company's property portfolio is ongoing, for a cash
and share transaction to Arcona
Micheal Beys, Chairman of the Board, said: " In 2023 to date, we
have continued to make progress on the Company's strategy of
monetizing our assets. While the process of transferring several
Ukrainian assets is progressing slowly, as a result of the ongoing
war, we continue to work towards overcoming this and aim to
finalise all transfers to close Stage 2 over the coming months. In
addition, implementation of the announced HR and office cost
optimization measures has taken effect resulting in significant
annual reductions in costs.
"As one of the largest shareholders in Arcona through the
combination of asset portfolios, we continue to believe in the
value being created for SPDI shareholders."
**S**
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
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
Jon Belliss Novum Securities Limited Tel: +44 (0) 207 399 9400
Catherine Leftley St Brides Partners Ltd Tel: +44 (0) 20 7236 1177
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 & Financial Performance
Summary
SPDI's core property asset portfolio consists of South Eastern
European prime commercial and industrial real estate, the majority
of which is let to blue chip tenants on long leases. During H1
2023, management, in line with the Company's strategy to maximise
value for shareholders, worked towards closing the sale of the
Ukrainian assets included in Stage 2 of the transaction with Arcona
as part of the conditional implementation agreement for the sale of
the Company's property portfolio, excluding its Greek logistics
property (which has now also separately been sold), in an all-share
transaction to Arcona, an Amsterdam and Prague listed company that
invests in commercial property in Central Europe. Arcona originally
held high yielding real estate investments in the Czech Republic,
Poland and Slovakia, with the total agreement valuing the SPDI net
asset value at EUR 29 million, significantly higher than the
current market value of the Company as a whole.
The combination of two complementary asset portfolios is
expected to create a significant European property company,
benefiting both the Company's and Arcona's respective
shareholders.
Corporate Developments
SPDI's core property asset portfolio consists of South Eastern
European prime commercial and industrial real estate, the majority
of which is let to blue chip tenants on long leases. During H1
2023, management, in line with the Company's strategy to maximise
value for shareholders, worked towards closing the sale of the
Ukrainian assets included in Stage 2 of the transaction with Arcona
as part of the conditional implementation agreement for the sale of
the Company's property portfolio, excluding its Greek logistics
property (which has now also separately been sold), in an all-share
transaction to Arcona, an Amsterdam and Prague listed company that
invests in commercial property in Central Europe. Arcona originally
held high yielding real estate investments in the Czech Republic,
Poland and Slovakia, with the total agreement valuing the SPDI net
asset value at EUR 29 million, significantly higher than the
current market value of the Company as a whole.
The combination of two complementary asset portfolios is
expected to create a significant European property company,
benefiting both the Company's and Arcona's respective
shareholders.
Financial Performance
Net operating income decreased by EUR 0,25 million during H1
2023, as a result of the disposal of the assets as part of Stage 2
of the transaction with Arcona that took place in H1 2022.
The administration expenses, adjusted by the one-off costs
associated with non-recurring tasks, remained at the same levels,
but recurring EBITDA decreased to losses of EUR 0,5 million as
compared to profits of EUR 0,07 million in H1 2022, due to the
decrease in net operating income and losses resulted from share of
profits from associates. Net finance cost decreased to EUR 0,18
million from EUR 0,23 million in H1 2022 and the operating result
after finance and taxes decreased to losses of EUR 0,67 million as
compared to losses of EUR 0,19 million in the comparative
period.
EUR H1 2023 H1 2022
---------------------------------------- -----------------------------------------
Continued Discontinued Total Continued Discontinued Total
Operations Operations Operations Operations
------------------------------- ------------ ------------- ----------- ------------ ------------- ------------
Rental, Utilities, Asset
Management fees 788.075 76.009 864.084 509.750 417.610 927.360
Income from Operations 788.075 76.009 864.084 509.750 417.610 927.360
Asset operating expenses - (466.390) (466.390) - (276.221) (276.221)
Net Operating Income 788.075 (390.381) 397.694 509.750 141.389 651.139
Share of profits from
associates - (335.533) (335.533) - - -
Net Operating Income
from Investments 788.075 (725.914) 62.161 509.750 141.389 651.139
Administration expenses (510.811) (44.838) (555.649) (504.980) (70.823) (575.803)
Operating Result (EBITDA) 277.264 (770.752) (493.488) 4.770 70.566 75.336
Finance Income/(Cost),
net 122.465 (303.748) (181.283) 126.095 (359.407) (233.312)
Income tax expense (90) - (90) 2,277 (33.251) (30.974)
Operating Result after
Finance and Tax Expenses 399.639 (1.074.500) (674.861) 133.142 (322.092) (188.950)
Other income / (expenses),
net (9.901) (71) (9.972) 860 (104.116) (103.256)
One-off costs associated
with non-recurring tasks (92.000) - (92.000) (184.500) - (184.500)
One-off costs associated
with Arcona transaction (21.021) - (21.021) (170.192) - (170.192)
Fair value adjustments
from Investment Properties - 33.150 33.150 - (1.793.710) (1.793.710)
Net gain/(loss) on disposal - - - - (3.953.743) (3.953.743)
of investments
Impairment of financial
investments (62.398) - (62.398) (446.671) - (446.671)
Foreign exchange differences,
net (34.386) (19.066) (53.452) (11.068) (30.976) (42.044)
Result for the year 179.933 (1.060.487) (880.554) (678.429) (6.204.637) (6,883.066)
Exchange difference - - - - - -
on I/C loans to foreign
holdings
Exchange difference
on translation due to
presentation currency - 1.080.634 1.080.634 - 19.148 19.148
Total Comprehensive
Income for the year 179.933 20.147 200.080 (678.429) (6.185.489) (6.863.918)
2. Regional Economic Developments [1]
2.1 Romania
Following significant growth of 4,8% in 2022 driven by strong
private consumption and robust investment, despite the ongoing war
in neighbouring Ukraine and the high inflation rate from the
increased energy prices, Romania's economy slowed down in H1 2023
with the relevant GDP growth rate estimated to be 1,7%, prompting
local officials to cut forecasts for 2023 to 1,5% from 2,5% that
was initially set. This drop came as a result of the ongoing high
inflation, weaker consumption, tight financing conditions and
declining industrial production. On the other hand, economic
activity is expected to be supported by private investment and
investment financed by EU funds.
The rate of unemployment for 2023 is projected at 5,5%, slightly
lower compared with the rate registered in 2022, while inflation is
expected to decrease to 10,3% in 2023, marking a reduction of 3,5%
compared with 2022 value.
2.2 Ukraine
The invasion of Ukraine by Russia in February 2022 delivered a
devastating blow to Ukraine's economy and has caused enormous
damage to country's infrastructure, leading to a 30% drop of GDP
for the whole year. However, during 2023, the local economy seems
to have absorbed the shock of the invasion and is trying to recover
on the back of the financial support provided mainly by the World
Bank. The Central Bank of Ukraine has set its forecast for GDP
growth in 2023 to 2,9%, although international institutions are
more cautious and have set their forecasts at 0,5%.
At the same time, during H1 2023 the Ukrainian hryvnia remained
relatively stable against major foreign currencies, following its
sharp devaluation during 2022, also revealing signs of mild
recovery of the local economy.
3. Real Estate Market Developments [2]
3.1 Romania
General
In H1 2023 the real estate investment volume in Romania reached
EUR 184 million, a 43% decrease compared with the amount transacted
in H1 2022. It is the first period after five consecutive years
where investment volume directed to regional areas rather than the
capital, Bucharest, with regional cities attracting 61% from total
investment volume.
In terms of property use, industrial and office properties
registered similar shares from the total volume, 33% and 29%
respectively, followed by retail (21%) and hotels (17%).
Romania still has some of the most attractive yields in the EU,
increased slightly during H1 2023. 7,5% for the office market, 7,5%
for the retail market and 7,75% for the industrial market, are the
estimates of the prime yields for local real estate markets.
Logistics Market
During H1 2023, industrial and logistics prime stock in Romania
reached 6,9 million m(2) , with Bucharest being the region hosting
almost half of total space (48%). The vacancy rate of Romania's
industrial / logistics prime stock stands at 5%, while for
Bucharest stands at 5,8%. Headline rent showed an upward trend,
reaching EUR 4,25 m(2) /month at the end of H1 2023.
3.1 Ukraine
The real estate market in Ukraine has not functioned normally
since the invasion of the country by Russia in February 2022. Given
the ongoing conflict, any relevant activity during the period is
almost impossible, the country is operating under martial law,
there are no available statistics and / or publications, and
therefore no meaningful statements and inferences can be made for
the local real estate market.
4. Property Assets
4.1 Innovations Logistics Park, Romania
Property Description
The park incorporates approximately 8.470 m(2) of multipurpose
warehousing space, 6.395 m(2) of cold storage and 1.705 m(2) of
office space. It is located in the area of Clinceni, south west of
Bucharest center, 200m 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.
Current Status
The terminal is currently 82% leased. The anchor tenant with
46%, is Favorit Business Srl, a large Romanian logistics operator,
which accommodates in the terminal their new business line which
involves the end user, Carrefour. Following the last relevant
agreement, Favorit's leases has been extended until 2026. During
2023, the Company signed a new lease agreement with Baustoff and
Metall for 3.000 m(2) ambient storage space plus office space. The
asset is planned to be part of Stage 3 of the Arcona
transaction.
4.2 Residential portfolio
GreenLake, Bucharest, Romania
Property Description
A residential compound of 40.500 m(2) 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 m 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 m(2) . SPDI owns 43% of this property
asset portfolio.
Current Status
During H1 2023, the remaining seven units were all sold and only
auxiliary units (storage areas, parkings) remain to be sold. The
asset used to be part of Stage 3 of the Arcona transaction, but
since there was no agreement in valuation and therefore delays in
the process, the units were sold in the free market at higher
prices.
4.3 Land Assets
Kiyanovskiy Residence - Kiev, Ukraine
Property Description
The property consists of 0,55 Ha of freehold and leasehold land
located at Kiyanovskiy Lane, near Kiev city centre. It is destined
for the development of businesses and luxury residences with
beautiful protected views overlooking the scenic Dnipro River, St.
Michaels' Spires and historic Podil.
Current Status
The asset is part of Stage 2 of the Arcona transaction and the
relevant SPA for its disposal has already been signed in June 2021
while closing has been postponed due to the invasion of Ukraine by
Russia, with the Parties trying to conclude the sale during
2023.
Tsymlyanskiy Residence - Kiev, Ukraine
Property Description
The 0,36 Ha plot is located in the historic and rapidly
developing Podil District in Kiev. The Company owns 55% of the SPV
which leases the plot, with a local co-investor owning the
remaining 45%.
Current Status
The extension of the lease, originally expected during 2021, was
delayed and currently is on hold due to the invasion of Ukraine by
Russia. The asset is planned to be part of Stage 3 of the Arcona
transaction.
Rozny Lane - Kiev Oblast, Kiev, Ukraine
Property Description
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.
Current Status
The asset is part of Stage 2 of the Arcona transaction and
relevant SPA for its disposal has already been signed in June 2021
while closing has been postponed due to the invasion of Ukraine by
Russia, with the Parties trying to conclude the sale during
2023.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2023
Note 30 June 30 June
2023 2022
Continued Operations EUR EUR
Income 10 788.075 509.750
Net Operating Income 788.075 509.750
Administration expenses 12 (623.832) (859.672)
Other operating income/(expenses),
net 15 (9.901) 3.641
Fair value (loss)/gain on financial
assets at FV through P&L 25 (62.398) (446.674)
Gain/(loss) realized on acquisition
of assets/subsidiary - 1.041
Share of profits/(losses) associates 21 - (3.822)
Operating profit/(Loss) 91.944 (795.736)
Finance income 16 159.777 187.273
Finance costs 16 (37.312) (61.178)
Profit/ (Loss) before tax and foreign
exchange differences 214.409 (669.641)
Foreign exchange (loss), net 17a (34.386) (11.065)
Profit/ (Loss) before tax 180.023 (680.706)
Income tax expense 18 (90) 2.277
Profit/ (Loss) for the period from
continuing operations 179.933 (678.429)
Profit/(Loss) from discontinued operations 9b (1.060.487) (6,204.637)
Profit/ (Loss) for the period (880.554) (6.883.066)
Other comprehensive income
Exchange difference on translation
of foreign operations 28 1.080.634 19.148
Total comprehensive income for the 200.080 (6.863.918)
period
Profit/ (Loss) for the period from
continued operations attributable to:
Owners of the parent 179.933 (678.429)
Non-controlling interests - -
179.933 (678.429)
Profit/(Loss) for the period from
discontinued operations attributable
to:
Owners of the parent (1.051.053) (5.982.678)
Non-controlling interests (9.434) (221.959)
(1.060.487) (6.204.637)
Profit/(Loss) for the period attributable
to:
Owners of the parent (871.120) (6.661.107)
Non-controlling interests (9.434) (221.959)
(880.554) (6,883.066)
Total comprehensive income attributable
to:
Owners of the parent 212,877 (6,690.897)
Non-controlling interests (12.797) (173.021)
200.080 (6.863.918)
Earnings/(losses) per share (Euro 36 b,c
per share):
Basic earnings/(losses) for the period
attributable to ordinary equity owners
of the parent 0,001 (0.005)
Diluted earnings/(losses) for the 0.001 (0.005)
period attributable to ordinary equity
owners of the parent
(0.008) (0.05)
Basic earnings/(losses) for the period
from discontinued operations attributable
to ordinary equity owners of the (0.008) (0.05)
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 2023
Note 30 June 31 December
2023 2022
EUR EUR
ASSETS
Non--current assets
Tangible and intangible assets 22 466 816
Financial Assets at FV through P&L 25 12.016.410 12.078.808
Investments in associates 21 1 1
Long-term receivables and prepayments 23 820 824
------------- -------------
12.017.697 12.080.449
Current assets
Prepayments and other current assets 24 3.808.506 4.153.162
Cash and cash equivalents 26 88.258 66.570
------------- -------------
3,896,764 4.219.732
Assets classified as held for sale 9d 13.282.670 13,835,091
Total assets 29.197.131 30.135.272
EQUITY AND LIABILITIES
Issued share capital 27 1.291.281 1.291.281
Share premium 72.107.265 72.107.265
Foreign currency translation reserve 28 9.568.504 8.484.507
Exchange difference on I/C loans to
foreign holdings 38.3 (211.199) (211.199)
Accumulated losses (69.431.714) (68.560.594)
Equity attributable to equity holders 13.324.137 13.111.260
of the parent
Non-controlling interests 29 356.602 369.399
Total equity 13.680.739 13.480.659
Non--current liabilities
Borrowings 30 113.621 597.357
Bonds issued 31 723.690 723.690
Taxation 34 56.940 579.519
894.251 1.900.566
Current liabilities
Bonds issued 31 122.697 99.046
Trade and other payables 32 3.445.708 3.731.769
Tax payable and provisions 34 33.742 37.574
3.602.147 3.868.389
Liabilities directly associated with
assets classified as held for sale 9d 11.019.994 10.885.658
14.622.141 14.754.047
Total liabilities 15.516.392 16.654.613
Total equity and liabilities 29.197.131 30.135.272
On 28 September 2023 the Board of Directors of SECURE PROPERTY
DEVELOPMENT & INVESTMENT PLC authorised these financial
statements
Lambros Anagnostopoulos Michael Beys Theofanis Antoniou
Director & Chief Executive Director & Chairman CFO
Officer of the Board
The notes to the accounts form an integral part of these
condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT IF CHANGES IN EQUITY
For the six months ended 30 June 2023
Attributable to owners of the Company
------------------------------------------------------------------------------------ ------------ ------------
Share Share Accumulated Exchange Foreign Total Non- Total
capital premium, losses, difference currency controlling
Net [3] net of on I/C translation interest
non-controlling loans to reserve
interest foreign [6]
[4] holdings
[5]
EUR EUR EUR EUR EUR EUR EUR EUR
Balance 1
January 2022 1.291.281 72.107.265 (58.903.610) (211.199) 8.969.787 23.253.524 5.748.132 29.001.656
Loss for the
year - - (6.238.962) - - (6.238.962) (644.104) (6.883.066)
Foreign
currency
translation
reserve - - - (95.179) (95.179) 114,327 19.148
Balance 30
June 2022 1.291.281 72.107.265 (65.142.572) (211.199) 8.874.608 16.919.383 5.218.355 22.137.738
Loss for the
year - - (3.418.022) - - (3.418.022) (1.342.792) (4,760,814)
Foreign
currency
translation
reserve - - - - (390.101) (390.101) (321.953) (712.054)
Disposal of
subsidiaries - - - - - - (3.184.211) (3.184.211)
Balance 31
December
2022 1.291.281 72.107.265 (68.560.594) (211.199) 8.484.507 13.111.260 369.399 13.480.659
Loss for the
year - - (871.120) - - (871,120) (9.434) (880.554)
Foreign
currency
translation
reserve - - - 1.083.997 1.083.997 (3.363) 1.080.634
Balance 30
June 2022 1.291.281 72.107.265 (69.431.714) (211.199) 9.568.504 13.324.137 356.602 13.680.739
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2023
30 June
Note 30 June 2023 2022
EUR EUR
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax and non-controlling interests-continued
operations 180.023 (680.706)
Profit/(Loss )before tax and non-controlling
interests-discontinued operations 9b ( 1 .060.487) (6.171.386)
Profit/(Loss) before tax and non-controlling
interests (880.464) (6.852.092)
Adjustments for:
(Gains)/losses on revaluation of investment
property 13 (33.150) 1.793.710
Net gain/loss on disposal of investment
properties 14 - 982.792
Depreciation/ Amortization charge 12 399 852
Finance income 16 (160.226) (191.918)
Interest expense 16 338.516 421.551
Share of profit from associates 21 335.533 3.822
(Gain)/loss realized in acquisition of
asset/subsidiary - (1.041)
20.2.1 - 2.970.951
(Gain)/loss on disposal of subsidiaries A&B
Fair value change on financial investment 25 62.398 446.674
Effect of foreign exchange differences 17a 53.452 42.041
Cash flows from/(used in) operations before
working capital changes (283.542) (382.658)
Change in prepayments and other current
assets 24 169.629 (461.427)
Change in trade and other payables 32 484.194 105.445
Change in VAT and other taxes receivable 24 (42.090) (27.016)
Change in other taxes payables 34 (88 . 739) 157.299
Change in provisions 34 (399.410) -
Change in deposits from tenants 33 - (41.229)
Cash generated from operations (159.958) (649.586)
Income tax paid (15.313) (112.321)
Net cash flows provided/(used) in operating
activities (175.271) (761.907)
CASH FLOWS FROM INVESTING ACTIVITIES
Sales proceeds from disposal of investment
property 14 - 774.833
Payment for acquisition of associate 21 - (6.296)
Dividend received from associates 21 94.952 121.772
Repayment of principle amount of loans
receivable 24 591.194 -
Interest received 24 178.194 95.649
(Increase)/Decrease in long term receivable 23 4 (13.809)
Net cash flows from / (used in) investing
activities 864.344 972.149
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of principle amount of borrowings 30 (392.500) (1.224.086)
( 250.270
Interest and financial charges paid 30 ) (267.725)
Decrease in financial lease liabilities 35 (140.642) (142.951)
Net cash flows from / (used in) financing ( 783.412
activities ) (1.634.762)
Net increase/(decrease) in cash at banks (94.399) (1.424.520)
Cash:
At beginning of the period 351.398 2.555.246
At end of the period 26 256.999 1.130.726
------------- -----------
Notes to the Condensed Consolidated Interim Financial
Statements
For the six months ended 30 June 2023
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 10 full time equivalent people, (2022:
10 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, the Company classifies its assets since 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 2023. This adoption did not have a material
effect on the accounting policies of the Company.
4. Significant Accounting Policies
The principal accounting policies adopted in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all years presented in
these consolidated financial statements unless otherwise
stated.
Local statutory accounting principles and procedures differ from
those generally accepted under IFRS. Accordingly, the consolidated
financial information, which has been prepared from the local
statutory accounting records for the entities of the Group
domiciled in Cyprus, Romania, and Ukraine, reflects adjustments
necessary for such consolidated financial information to be
presented in accordance with IFRS.
4.1 Basis of Consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities (including special purpose
entities) controlled by the Company (its subsidiaries).
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired,
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group 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, and the Euro is the functional currency for all
the Cypriot subsidiaries.
The consolidated financial statements are presented in Euro,
which is the Group's presentation currency.
As Management records the consolidated financial information of
the entities domiciled in Cyprus, Romania, Ukraine 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 2023 - 30 1 Jan 2022 - 31 1 Jan 2022 - 30 30 June 2023 31 December 202 2 30 June 2022
June 2023 Dec 202 2 June 2022
----------------- ----------------- ------------------ ------------- ------------------ -------------
USD 1,0807 1,0530 1,0934 1,0866 1,0666 1,0387
----------------- ----------------- ------------------ ------------- ------------------ -------------
UAH 39,5226 33,9820 31,7356 40,0006 38,9510 30,7776
----------------- ----------------- ------------------ ------------- ------------------ -------------
RON 4,9335 4,9315 4,9463 4,9634 4,9474 4,9454
----------------- ----------------- ------------------ ------------- ------------------ -------------
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 as determined annually by external
valuers and reviewed by Management who finally decides on reported
values. 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 2023:
-- 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 the 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.
4.5 Goodwill
Goodwill arising on an acquisition of a business is carried at
cost as established at the date of acquisition of the business less
accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to
each of the Group's cash-generating units (or Groups of
cash-generating units) that is expected to benefit from the
synergies of the combination.
A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is
indication that the unit may be impaired. If the recoverable amount
of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of
the unit pro rata based on the carrying amount of each asset in the
unit. Any impairment loss for goodwill is recognized directly in
profit or loss in the consolidated statement of comprehensive
income. An impairment loss 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.
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.
4.7 Cash and Cash equivalents
Cash and cash equivalents include cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose of the
statement of cash flows.
4.8 Assets held for sale
Non-current assets, or disposal groups comprising assets and
liabilities, are classified as held-for-sale if it is highly
probable that they will be recovered primarily through sale rather
than through continuing use.
Such assets, or disposal groups, are generally measured at the
lower of their carrying amount and fair value less costs to sell.
Any impairment loss on a disposal group is allocated first to
goodwill, and then to the remaining assets and liabilities on a pro
rata basis, except that no loss is allocated to inventories,
financial assets or investment property, which continue to be
measured in accordance with the Group's other accounting policies.
Impairment losses on initial classification as held-for-sale or
held-for-distribution and subsequent gains and losses on
remeasurement are recognised in profit or loss.
4.9 Financial Instruments
4.9.1 Recognition and initial measurement
Trade receivables and debt securities issued are initially
recognised when they are originated. All other financial assets and
financial liabilities are initially recognised when the Group
becomes a party to the contractual provisions of the
instrument.
A financial asset (unless it is a trade receivable without a
significant financing component) or financial liability is
initially measured at fair value plus, for an item not at FVTPL,
transaction costs that are directly attributable to its acquisition
or issue. A trade receivable without a significant financing
component is initially measured at the transaction price.
4.9.2 Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as
measured at: amortised cost; FVOCI - debt investment; FVOCI -
equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their
initial recognition unless the Group changes its business model for
managing financial assets, in which case all affected financial
assets are reclassified on the first day of the first reporting
period following the change in the business model.
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVTPL:
-- it is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
-- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the
following conditions and is not designated as at FVTPL:
-- it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling
financial assets; and
-- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
On initial recognition of an equity investment that is not held
for trading, the Group may irrevocably elect to present subsequent
changes in the investment's fair value in OCI. This election is
made on an investment-by-investment basis.
Financial assets - Business model assessment:
The Group makes an assessment of the objective of the business
model in which a financial asset is held at a portfolio level
because this best reflects the way the business is managed and
information is provided to management. The information considered
includes:
-- the stated policies and objectives for the portfolio and the
operation of those policies in practice. These include whether
management's strategy focuses on earning contractual interest
income, maintaining a particular interest rate profile, matching
the duration of the financial assets to the duration of any related
liabilities or expected cash outflows or realising cash flows
through the sale of the assets;
-- how the performance of the portfolio is evaluated and
reported to the Group's management;
-- the risks that affect the performance of the business model
(and the financial assets held within that business model) and how
those risks are managed;
-- how managers of the business are compensated - e.g. whether
compensation is based on the fair value of the assets managed or
the contractual cash flows collected; and
-- the frequency, volume and timing of sales of financial assets
in prior periods, the reasons for such sales and expectations about
future sales activity.
Transfers of financial assets to third parties in transactions
that do not qualify for derecognition are not considered sales for
this purpose, consistent with the Group's continuing recognition of
the assets.
Financial assets that are held for trading or are managed and
whose performance is evaluated on a fair value basis are measured
at FVTPL.
Financial assets - Assessment whether contractual cash flows are
solely payments of principal and interest:
For the purposes of this assessment, 'principal' is defined as
the fair value of the financial asset on initial recognition.
'Interest' is defined as consideration for the time value of money
and for the credit risk associated with the principal amount
outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative
costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely
payments of principal and interest, the Group considers the
contractual terms of the instrument. This includes assessing
whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it
would not meet this condition. In making this assessment, the Group
considers:
-- contingent events that would change the amount or timing of cash flows;
-- terms that may adjust the contractual coupon rate, including
variable-rate features;
-- prepayment and extension features; and
-- terms that limit the Group's claim to cash flows from
specified assets (e.g. non-recourse features).
A prepayment feature is consistent with the solely payments of
principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest
on the principal amount outstanding, which may include reasonable
additional compensation for early termination of the contract.
Additionally, for a financial asset acquired at a discount or
premium to its contractual par amount, a feature that permits or
requires prepayment at an amount that substantially represents the
contractual par amount plus accrued (but unpaid) contractual
interest (which may also include reasonable additional compensation
for early termination) is treated as consistent with this criterion
if the fair value of the prepayment feature is insignificant at
initial recognition.
Financial assets - Subsequent measurement and gains and
losses:
These assets are subsequently measured at fair value. Net gains
and losses, including any interest or dividend income, are
recognised in profit or loss. However for derivatives designated as
hedging instruments.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using
the effective interest method. The amortised cost is reduced by
impairment losses. Interest income, foreign exchange gains and
losses and impairment are recognised in profit or loss. Any gain or
loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest
income calculated using the effective interest method, foreign
exchange gains and losses and impairment are recognised in profit
or loss. Other net gains and losses are recognised in OCI. On
derecognition, gains and losses accumulated in OCI are reclassified
to profit or loss.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends
are recognised as income in profit or loss unless the dividend
clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and
are never reclassified to profit or loss.
4.9.3 Derecognition
Financial assets
The Group derecognises a financial asset when the contractual
rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks
and rewards of ownership and it does not retain control of the
financial asset.
The Group enters into transactions whereby it transfers assets
recognised in its statement of financial position, but retains
either all or substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred assets are not
derecognised.
Financial liabilities
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled, or expire. The
Group also derecognises a financial liability when its terms are
modified and the cash flows of the modified liability are
substantially different, in which case a new financial liability
based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference
between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed)
is recognised in profit or loss.
4.9.4 Offsetting
Financial assets and financial liabilities are offset and the
net amount presented in the statement of financial position when,
and only when, the Group currently has a legally enforceable right
to set off the amounts and it intends either to settle them on a
net basis or to realise the asset and settle the liability
simultaneously.
4.9.5 Derivative financial instruments and hedge accounting
Derivative financial instruments and hedge accounting
The Group holds derivative financial instruments to hedge its
foreign currency and interest rate risk exposures, embedded
derivatives are separated from the host contract and accounted for
separately if the host contract is not a financial asset and
certain criteria are met.
Derivatives are initially measured at fair value. Subsequent to
initial recognition, derivatives are measured at fair value, and
changes therein are generally recognised in profit or loss.
The Group designates certain derivatives as hedging instruments
to hedge the variability in cash flows associated with highly
probable forecast transactions arising from changes in foreign
exchange rates and interest rates and certain derivatives and
non-derivative financial liabilities as hedges of foreign exchange
risk on a net investment in a foreign operation.
At inception of designated hedging relationships, the Group
documents the risk management objective and strategy for
undertaking the hedge. The Group also documents the economic
relationship between the hedged item and the hedging instrument,
including whether the changes in cash flows of the hedged item and
hedging instrument are expected to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow hedging
instrument, the effective portion of changes in the fair value of
the derivative is recognised in OCI and accumulated in the hedging
reserve. The effective portion of changes in the fair value of the
derivative that is recognised in OCI is limited to the cumulative
change in fair value of the hedged item, determined on a present
value basis, from inception of the hedge. Any ineffective portion
of changes in the fair value of the derivative is recognised
immediately in profit or loss.
The Group designates only the change in fair value of the spot
element of forward exchange contracts as the hedging instrument in
cash flow hedging relationships. The change in fair value of the
forward element of forward exchange contracts ('forward points') is
separately accounted for as a cost of hedging and recognised in a
costs of hedging reserve within equity.
When the hedged forecast transaction subsequently results in the
recognition of a non-financial item such as inventory, the amount
accumulated in the hedging reserve and the cost of hedging reserve
is included directly in the initial cost of the non-financial item
when it is recognised.
For all other hedged forecast transactions, the amount
accumulated in the hedging reserve and the cost of hedging reserve
is reclassified to profit or loss in the same period or periods
during which the hedged expected future cash flows affect profit or
loss.
If the hedge no longer meets the criteria for hedge accounting
or the hedging instrument is sold, expires, is terminated or is
exercised, then hedge accounting is discontinued prospectively.
When hedge accounting for cash flow hedges is discontinued, the
amount that has been accumulated in the hedging reserve remains in
equity until, for a hedge of a transaction resulting in the
recognition of a non-financial item, it is included in the
non-financial item's cost on its initial recognition or, for other
cash flow hedges, it is reclassified to profit or loss in the same
period or periods as the hedged expected future cash flows affect
profit or loss.
If the hedged future cash flows are no longer expected to occur,
then the amounts that have been accumulated in the hedging reserve
and the cost of hedging reserve are immediately reclassified to
profit or loss.
Net investment hedges
When a derivative instrument or a non-derivative financial
liability is designated as the hedging instrument in a hedge of a
net investment in a foreign operation, the effective portion of,
for a derivative, changes in the fair value of the hedging
instrument or, for a non-derivative, foreign exchange gains and
losses is recognised in OCI and presented in the translation
reserve within equity. Any ineffective portion of the changes in
the fair value of the derivative or foreign exchange gains and
losses on the non-derivative is recognised immediately in profit or
loss. The amount recognised in OCI is reclassified to profit or
loss as a reclassification adjustment on disposal of the foreign
operation.
4.10 Leases
At inception of a contract, the Company assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Company assesses
whether:
-- the contract involves the use of an identified asset this may
be specified explicitly or implicitly, and should be physically
distinct or represent substantially all of the capacity of a
physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
-- the Company has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of
use; and
-- the Company has the right to direct the use of the asset. The
Company has this right when it has the decision making rights that
are most relevant to changing how and for what purpose the asset is
used. In rare cases where the decision about how and for what
purpose the asset is used is predetermined, the Company has the
right to direct the use of the asset if either:
-- the Company has the right to operate the asset; or
-- the Company designed the asset in a way that predetermines
how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a
lease component, the Company allocates the consideration in the
contract to each lease component on the basis of their relative
stand alone prices. However, for the leases of land and buildings
in which it is a lessee, the Company has elected not to separate
non lease components and account for the lease and non lease
components as a single lease component.
The Company as lessor
When the Company acts as a lessor, it determines at lease
inception whether each lease is a finance lease or an operating
lease.
To classify each lease, the Company makes an overall assessment
of whether the lease transfers substantially all of the risks and
rewards incidental to ownership of the underlying asset. If this is
the case, then the lease is a finance lease; if not, then it is an
operating lease. As part of this assessment, the Company considers
certain indicators such as whether the lease is for the major part
of the economic life of the asset.
When the Company is an intermediate lessor, it accounts for its
interests in the head lease and the sub lease separately. It
assesses the lease classification of a sub lease with reference to
the right of use asset arising from the head lease, not with
reference to the underlying asset. If a head lease is a short term
lease to which the Company applies the exemption described above,
then it classifies the sub lease as an operating lease.
If an arrangement contains lease and non lease components, the
Company applies IFRS 15 to allocate the consideration in the
contract. The Company recognises lease payments received under
operating leases as income om 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 commencement
date;
-- amounts expected to be payable under a residual value guarantee; and
-- the exercise price under a purchase option that the Company
is reasonably certain to exercise, lease payments in an optional
renewal period if the Company is reasonably certain to exercise an
extension option, and penalties for early termination of a lease
unless the Company is reasonably certain not to terminate
early.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate,
if there is a change in the Company's estimate of the amount
expected to be payable under a residual value guarantee, or if the
Company changes its assessment of whether it will exercise a
purchase, extension or termination option.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the
right of use asset, or is recorded in profit or loss if the
carrying amount of the right of use asset has been reduced to
zero.
The Company presents its right of use assets that do not meet
the definition of investment property in 'Property, plant and
equipment' in the statement of financial position.
The lease liabilities are presented in 'loans and borrowings' in
the statement of financial position.
Short term leases and leases of low value assets
The Company has elected not to recognise the right of use assets
and lease liabilities for short term leases that have a lease term
of 12 months or less and leases of low value assets (i.e. IT
equipment, office equipment etc.). The Company recognises the lease
payments associated with these leases as an expense on a straight
line basis over the lease term.
4.11 Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently stated at
amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption value is 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.
4.12 Tenant security deposits
Tenant security deposits represent financial advances made by
lessees as guarantees during the lease and are repayable by the
Group upon termination of the contracts. Tenant security deposits
are recognized at nominal value.
4.13 Impairment of tangible and intangible assets other than
goodwill
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs. Where a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated
to individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units for which
a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment loss
annually, and whenever there is an indication that the asset may be
impaired.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre--tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash--generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash--generating unit) is reduced to its
recoverable amount. An impairment loss is 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.
4.14 Share Capital
Ordinary shares are classified as equity.
4.15 Share premium
The difference between the fair value of the consideration
received by the shareholders and the nominal value of the share
capital being issued is taken to the share premium account.
4.16 Share-based compensation
The Group had in the past and intends in the future to operate a
number of equity-settled, share-based compensation plans, under
which the Group receives services from Directors and/or employees
as consideration for equity instruments (options) of the Group. The
fair value of the Director and employee cost related to services
received in exchange for the grant of the options is 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.
4.17 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.
4.18 Non--current liabilities
Non--current liabilities represent amounts that are due in more
than twelve months from the reporting date.
4.19 Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is reduced for estimated customer
returns, rebates and other similar allowances. It is 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:
4.19.1 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.
4.19.2 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).
4.19.3 Interest income
Interest income is recognized on a time-proportion (accrual)
basis, using the effective interest rate method.
4.19.4 Rental income
Rental income arising from operating leases on investment
property is recognized on an accrual basis in accordance with the
substance of the relevant agreements.
4.20 Service charges and expenses recoverable from tenants
Income arising from expenses recharged to tenants is recognized
on an accrual basis.
4.21 Other property expenses
Irrecoverable running costs directly attributable to specific
properties within the Group's portfolio are charged to the
statement of comprehensive income. Costs incurred in the
improvement of the assets which, in the opinion of the directors,
are not of a capital nature are written off to the statement of
comprehensive income as incurred.
4.22 Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their
intended use or sale.
Investment income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for 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.
4.23 Asset Acquisition Related Transaction Expenses
Expenses incurred by the Group for acquiring a subsidiary or
associate company as part of an Investment Property and are
directly attributable to such acquisition are recognized within the
cost of the Investment Property and are subsequently accounted as
per the Group's accounting Policy for Investment Property
subsequent measurement.
4.24 Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
4.24.1 Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit as reported in the
consolidated statement of comprehensive income because of items of
income or expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Group's liability
for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting
period.
4.24.2 Deferred tax
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Currently enacted tax rates are used in the determination of
deferred tax.
Deferred tax assets are 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.
4.24.3 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.
4.24.4 Withholding Tax
The Group follows the applicable legislation as defined in all
double taxation treaties (DTA) between Cyprus and any of the
countries of Operations (Romania, Ukraine,). In the case of
Romania, as the latter is part of the European Union, through the
relevant directives the withholding tax is reduced to NIL subject
to various conditions.
4.24.5 Dividend distribution
Dividend distribution to the Company's shareholders is
recognized as a liability in the Group's financial statements in
the period in which the dividends are approved by the Company's
shareholders.
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.
4.26 Operating segments analysis
Segment reporting is presented on the basis of Management's
perspective and relates to the parts of the Group that are defined
as operating segments. Operating segments are identified on the
basis of their economic nature and through internal reports
provided to the Group's Management who oversee operations and make
decisions on allocating resources serve. These internal reports are
prepared to a great extent on the same basis as these consolidated
financial statements.
For the reporting period the Group has identified the following
material reportable segments, where the Group is active in
acquiring, holding, managing and disposing:
Commercial-Industrial Residential Land Assets
* Warehouse segment * Residential segment * Land assets - the Group owns a number of land assets
which are either available for sale or for potential
development
* Office segment
* Retail segment
------------------------------- ----------------------------------------------------------------
The Group also monitors investment property assets on a
Geographical Segmentation, namely the country where its property is
located.
4.27 Earnings and Net Assets value per share
The Group presents basic and diluted earnings per share (EPS)
and net asset value per share (NAV) for its ordinary shares.
Basic EPS amounts are calculated by dividing net profit/loss for
the year, attributable to ordinary equity holders of the Company by
the weighted average number of ordinary shares outstanding during
the year. Basic NAV amounts are calculated by dividing net asset
value as at 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.
4.28 Comparative Period
Where necessary, comparative figures have been adjusted to
conform to changes in presentation in the current year.
5. New Accounting Pronouncement
At the date of approval of these financial statements, standards
and interpretations were issued by the International Accounting
Standards Board which were not yet effective. Some of them were
adopted by the European Union and others not yet. The Board of
Directors expects that the adoption of these accounting standards
in future periods will not have a material effect on the financial
statements of the Company.
6. Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRSs
requires the use of certain critical accounting estimates and
requires Management to exercise its judgment in the process of
applying the Group's accounting policies. It also requires the use
of assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. These estimates
are based on Management's best knowledge of current events and
actions and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. Actual
results though may ultimately differ from those estimates.
As the Group makes estimates and assumptions concerning the
future, the resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below:
Provision for impairment of receivables
The Group reviews its trade and other receivables for evidence
of their recoverability. Such evidence includes the 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.
Fair value of investment property
The fair value of investment property is determined by using
various valuation techniques. The Group selects accredited
professional valuers with local presence to perform such
valuations. Such valuers use their judgment to select a variety of
methods and make assumptions that are mainly based on market
conditions existing at each financial reporting date. For the
current period, the Group has used the same fair values as those
determined for 31 December 2022. (Note 19.2).
Income taxes
Significant judgment is required in determining the provision
for income taxes. There are transactions and calculations for which
the ultimate tax determination is uncertain during the ordinary
course of business. The Group 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. Risk Management
7.1 Financial risk factors
The Group is exposed to operating country risk, real estate
property holding and development associated risks, property market
price risk, interest rate risk, credit risk, liquidity risk,
currency risk, other market price risk, operational risk,
compliance risk, litigation risk, reputation risk, capital risk and
other risks, arising from the financial instruments it holds. The
risk management policies employed by the Group to manage these
risks are discussed below.
7.1.1 Operating Country Risks
The Group is exposed to risks stemming from the political and
economic environment of countries in which it operates.
Notably:
7.1.1.1 Ukraine
The risk associated with Company's interests in Ukraine has
increased dramatically with the invasion of the country by Russia
in February 2022. Currently, the political and economic risks
associated with Company's activities in the region do not really
allow for any relevant assessment for the future.
Following a 30% sharp decline in 2022, the Central Bank of
Ukraine has set its forecast for GDP growth to 2,9% in 2023,
although international institutions are more cautious and set their
forecasts at 0,5%. In any way, it seems that local economy has
absorbed the huge impact from the invasion and tries to recover on
the back of the financial support provided mainly by World Bank.
The Ukrainian hryvnia remained relatively stable during H1 2023
against major foreign currencies, and as at 30 June 2023 the
exchange rate to the US dollar was 36.93 hryvnias and to the euro
was 40.08 hryvnias (as at 31 December 2022 36.57 and 38.95,
respectively). The war has also affected the assessment of
Ukraine's solvency by international rating agencies. Currently,
Standard & Poor's credit rating for Ukraine stands at CCC with
negative outlook. Moody's credit rating for Ukraine stands at Ca
with stable outlook). Fitch's credit rating for Ukraine was last
reported at CC.
The Company owns land plots in Ukraine, either in Kiev or close
to the capital, reported at time of publishing still under
Ukrainian control. The plots do not generate income and therefore
the cash flow of the Group is not affected by the invasion.
The Management, given the associated uncertainty, has decided to
value the Ukrainian assets lower than the last values as provided
by the third-party valuers (CBRE Ukraine) at 2022 year end. As a
result, the Ukrainian assets contribute EUR1,87 million in Group's
assets, as compared to EUR3,06 million provided by the valuers as
at 31 December 2022.
Moreover, the war, as well as the preceded tensions during the
previous period, affect also the land leaseholds that the Company
has in the country. In particular, as of November 2021, the Group
had submitted properly the official request to the City of Kiev to
extend the lease of Tsymlyanskiy Residence property for another 5
years, since the Group has first extension rights over any other
interested party. The first step in the process, which involves the
approval of a relevant committee of the municipality, before the
final approval by the City Council, has not been obtained yet as
many other cases had accumulated which had time priority over
Group's case. During the period between December 15th 2021 and
January 20th of 2022, the committee did not convene at all as is
usual during holiday and vacation times. Once the holiday season
was over, the main focus of the committee and the City Council were
on issues not related to property lease extensions, but rather more
pressing matters for the interests and operational stability of the
City of Kiev. From there on, all decisions have been put on hold
due to the Russian insurgence of Ukraine. The Management remains
confident that the Group will be awarded
the lease extension once the war status permits. However, as a
result of such development, commencing from H1 2022 the asset does
not contribute value to Group's assets. The Management will monitor
developments in the country and change policy as appropriate.
The Company will revert to inform investors upon having a
clearer view on the developments associated with the conflict and
its consequences on real estate assets.
7.1.1.2 Romania
Following significant growth of 4,8% in 2022 driven by strong
private consumption and robust investment despite the ongoing war
in neighboring Ukraine and the high inflation rate from the
increased energy prices, Romania's economy slowed down in H1 2023
with relevant GDP growth rate estimated to 1,7%, prompting local
officials to cut forecasts for 2023 to 1,5% from 2,5% that was
initially set. This drop came as a result of weaker consumption and
declining industrial production, while at the same time estimates
for the fiscal and current account deficits remain elevated as a
result of the social and economic measures adopted by the
Government for the support of low income citizens. In total, the
macroeconomic indicators of local economy have become weaker, and
therefore the associated risk has been increased.
7.1.2 Risks associated with property holding and development
associated risks
Several factors may affect the economic performance and value of
the Group's properties, including:
-- risks associated with construction activity at the
properties, including delays, the imposition of liens and defects
in workmanship;
-- the ability to collect rent from tenants on a timely basis or
at all, taking also into account currency rapid devaluation
risk;
-- the amount of rent and the terms on which lease renewals and
new leases are agreed being less favorable than current leases;
-- cyclical fluctuations in the property market generally;
-- local conditions such as an oversupply of similar properties
or a reduction in demand for the properties;
-- the attractiveness of the property to tenants or residential purchasers;
-- decreases in capital valuations of property;
-- changes in availability and costs of financing, which may
affect the sale or refinancing of properties;
-- covenants, conditions, restrictions and easements relating to the properties;
-- changes in governmental legislation and regulations,
including but not limited to designated use, allocation,
environmental usage, taxation and insurance;
-- the risk of bad or unmarketable title due to failure to
register or perfect our interests or the existence of prior claims,
encumbrances or charges of which we may be unaware at the time of
purchase;
-- the possibility of occupants in the properties, whether
squatters or those with legitimate claims to take possession;
-- the ability to pay for adequate maintenance, insurance and
other operating costs, including taxes, which could increase over
time; and
-- political uncertainty, acts of terrorism and acts of nature,
such as earthquakes and floods that may damage the properties.
7.1.3 Property Market price risk
Market price risk is the risk that the value of the Group's
portfolio investments will fluctuate as a result of changes in
market prices. The Group's assets are susceptible to market price
risk arising from uncertainties about future prices of the
investments. The Group's market price risk is managed through
diversification of the investment portfolio, continuous elaboration
of the market conditions and active asset management. To quantify
the value of its assets and/or indicate the possibility of
impairment losses, the Group commissioned internationally acclaimed
valuers.
7.1.4 Interest rate risk
Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market interest
rates.
The Group's income and operating cash flows are substantially
independent of changes in market interest rates as the Group has no
significant interest bearing assets apart from its cash balances
that are mainly kept for liquidity purposes.
The Group is exposed to interest rate risk in relation to its
borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk. Borrowings issued at fixed rates
expose the Group to fair value interest rate risk. All of the
Group's borrowings are issued at a variable interest rate.
Management monitors the interest rate fluctuations on a continuous
basis and acts accordingly.
7.1.5 Credit risk
Credit risk arises when a failure by counter parties to
discharge their obligations could reduce the amount of future cash
inflows from financial assets at hand at the end of the reporting
period. Cash balances are held with high credit quality financial
institutions and the Group has policies to limit the amount of
credit exposure to any financial institution.
7.1.6 Currency risk
Currency risk is the risk that the value of financial
instruments will fluctuate due to changes in foreign exchange
rates.
Currency risk arises when future commercial transactions and
recognized assets and liabilities are denominated in a currency
that is not the Group's functional currency. Excluding the
transactions in Ukraine all of the Group's transactions, including
the rental proceeds are denominated or pegged to EUR. In Ukraine,
even though there is no recurring income stream, the fluctuations
of UAH against EUR entails significant FX risk for the Group in
terms of its local assets valuation. Management monitors the
exchange rate fluctuations on a continuous basis and acts
accordingly, although there are no available financial tools for
hedging the exposure on UAH. It should be noted though that the
current political uncertainty in Ukraine, and any probable currency
devaluation may affect the Group's financial position.
7.1.7 Capital risk management
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximizing the return to
shareholders through the optimization of the debt and equity
balance. The Group's core strategy is described in Note 41.1 of the
consolidated financial statements.
7.1.8 Compliance risk
Compliance risk is the risk of financial loss, including fines
and other penalties, which arises from non compliance with laws and
regulations of each country the Group is present, as well as from
the stock exchange where the Company is listed. Although the Group
is trying to limit such risk, the uncertain environment in which it
operates in various countries increases the complexities handled by
Management.
7.1.9 Litigation risk
Litigation risk is the risk of financial loss, interruption of
the Group's operations or any other undesirable situation that
arises from the possibility of non execution or violation of legal
contracts and consequentially of lawsuits. The risk is restricted
through the contracts used by the Group to execute its
operations.
7.1.10 Insolvency risk
Insolvency arises from situations where a company may not meet
its financial obligations towards a lender as debts become due.
Addressing and resolving any insolvency issues is usually a slow
moving process in the Region. Management is closely involved in
discussions with creditors when/if such cases arise in any
subsidiary of the Group aiming to effect alternate repayment plans
including debt repayment so as to minimize the effects of such
situations on the Group's asset base.
7.2. Operational risk
Operational risk is the risk that derives from the deficiencies
relating to the Group's information technology and control systems,
as well as the risk of human error and natural disasters. The
Group's systems are evaluated, maintained and upgraded
continuously.
7.3. Fair value estimation
The fair values of the Group's financial assets and liabilities
approximate their carrying amounts at the end of the reporting
period.
8. Investment in subsidiaries
The Company has direct and indirect holdings in other companies,
collectively called the Group, that were included in the
consolidated financial statements, and are detailed below.
Holding %
Name Country Related Asset as at as at as at
30 June 2023 31 Dec 2022 30 June 2022
--------- ----------------------------- -------------- ------------- --------------
SC Secure Capital Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
LLC Aisi Ukraine Ukraine Kiyanovskiy Residence 100 100 100
--------- ----------------------------- -------------- ------------- --------------
LLC Trade Center Ukraine 100 100 100
---------------------------------------- -------------- ------------- --------------
LLC Almaz--Pres--Ukraine* Ukraine Tsymlyanskiy Residence* 55 55 55
--------- ----------------------------- -------------- ------------- --------------
LLC Retail Development
Balabino** Ukraine 100 100 100
---------------------------------------- -------------- ------------- --------------
LLC Interterminal** Ukraine 100 100 100
---------------------------------------- -------------- ------------- --------------
LLC Aisi Ilvo Ukraine 100 100 100
---------------------------------------- -------------- ------------- --------------
Myrnes Innovations Park
Limited Cyprus Innovations Logistics Park 100 100 100
--------- ----------------------------- -------------- ------------- --------------
Best Day Real Estate Srl Romania 100 100 100
---------------------------------------- -------------- ------------- --------------
Yamano Holdings Limited Cyprus 100 100 100
----------------------------- ---------------------------------------- -------------- ------------- --------------
Zirimon Properties Limited Cyprus Delea Nuova (Delenco) 100 100 100
--------- ----------------------------- -------------- ------------- --------------
Bluehouse Accession Project
IX Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Bluehouse Accession Project
IV Limited** Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
BlueBigBox 3 Srl Romania - - 100
---------------------------------------- -------------- ------------- --------------
SPDI Real Estate Srl Romania Kindergarten - - 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
---------------------------------------- -------------- ------------- --------------
SecMon Real Estate Sr Romania 100 100 100
---------------------------------------- -------------- ------------- --------------
Ketiza Real Estate Srl Romania 90 90 90
---------------------------------------- -------------- ------------- --------------
Edetrio Holdings Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Emakei Holdings Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
RAM Real Estate Management
Limited Cyprus 50 50 50
---------------------------------------- -------------- ------------- --------------
Iuliu Maniu Limited Cyprus 45 45 45
---------------------------------------- -------------- ------------- --------------
Moselin Investments Srl Romania 45 45 45
---------------------------------------- -------------- ------------- --------------
Rimasol Enterprises Limited Cyprus - - 70,56
---------------------------------------- -------------- ------------- --------------
Rimasol Real Estate Srl Romania - - 70,56
---------------------------------------- -------------- ------------- --------------
Ashor Ventures Limited Cyprus - - 44,24
---------------------------------------- -------------- ------------- --------------
Ashor Development Srl Romania - - 44,24
---------------------------------------- -------------- ------------- --------------
Jenby Ventures Limited** Cyprus 44,30 44,30 44,30
---------------------------------------- -------------- ------------- --------------
Jenby Investments Srl Romania - - 44,30
---------------------------------------- -------------- ------------- --------------
Ebenem Limited** Cyprus 44,30 44,30 44,30
---------------------------------------- -------------- ------------- --------------
Ebenem Investments Srl Romania - - 44,30
---------------------------------------- -------------- ------------- --------------
Sertland Properties Limited Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
Mofben Investments Limited** Cyprus 100 100 100
---------------------------------------- -------------- ------------- --------------
SPDI Management Srl Romania 100 100 100
---------------------------------------- -------------- ------------- --------------
* As of November 2021, the Group had submitted properly the
official request to the City of Kiev to extend the lease of
Tsymlyanskiy Residence property for another 5 years, since the
Group has first extension rights over any other interested party.
The first step in the process whereby the presiding committee of
the municipality, before the final approval by the City Council,
did not place as too many other cases had accumulated which had
time priority over Group's case. During the period between December
15th 2021 and January 20th of 2022, the committee did not convene
at all as is usual during holiday and vacation times. Once the
holiday season was over, the main focus of the committee and the
City Council unfortunately were on issues not related to property
lease extensions, but rather more pressing matters for the
interests and operational stability of the City of Kiev. From there
on, all decisions have been put on hold due to the Russian
insurgence of Ukraine. The Management remains confident that the
Company will be awarded the lease extension once the war status
permits.
** During 2020 the Company initiated the process of striking off
six holding subsidiaries in Cyprus, which became idle following
recent disposals of local asset owning companies and properties.
The companies to be struck off are: Bluehouse Accession Project IV
Limited, Demetiva Holdings Limited, Diforio Holdings Limited, Jenby
Ventures Limited, Ebenem Limited and Mofben Investments Limited.
Relevant official clearance from local Trade Registry and Tax
Authorities is expected in the following period. During 2022 the
Group has also initiated strike off process for two additional
Ukrainian entities, LLC Retail Development Balabino and LLC
Interterminal, which became idle following relevant asset
disposals.
As part of Stage 2 of the transaction with Arcona, during the
first half of 2022 the Group proceeded with closing the disposal of
N-E Real Estate Park First Phase Srl, the entity which owns the EOS
asset, in exchange of 116.688 new ordinary shares in Arcona and
28.125 warrants over shares in Arcona.
During 2023 BlueBigBox 3 Srl, the SPV which used to hold
Praktiker Craiova property that was sold back in 2018, was entered
into an insolvency process initiated by a vendor . The case is
associated with the Bluehouse litigation case (Note 39.3) and
Management monitors developments closely. The entering into such
process effectively means loss of control and therefore Management
decided to exclude the SPV from the current accounts. The SPV
currently holds no asset.
In an effort to accelerate monetization of assets that were to
be part of Stage 3 of the transaction with Arcona, and since the
discussions with Arcona took much longer than expected and
negotiations on their valuation did not conclude, the Company
managed to monetize remaining GreenLake assets in the broader
market. As such, the Kindergarten and the remaining Green Lake land
were sold during 2022 at values higher than those offered by
Arcona.
9. Discontinued operations
9.1 Description
The Company announced on 18 December 2018 that it has entered
into a conditional implementation agreement for the sale of its
property portfolio, excluding its Greek logistics properties ('the
Non-Greek Portfolio'), in an all-share transaction to 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 in March and June 2021 has
signed SPAs related to Stage 2 of the transaction, namely for the
EOS and Delenco assets in Romania, as well as the Kiyanovskiy and
Rozny assets in Ukraine. In March and June 2022, the Company sold
effectively to Arcona the Delenco and EOS assets. Regarding the
Ukrainian assets, further discussions for closing have been put on
hold due to the existing circumstances in the country
The companies that are classified under discontinued operations
are the followings:
-- Cyprus: Ashor Ventures Limited, Edetrio Holdings Limited,
Rimasol Enterprises Limited, Emakei Holdings Limited, Iuliu Maniu
Limited, Ram Real Estate Management Limited, Frizomo Holdings
Limited and Ketiza Holdings Limited
-- Romania: Ashor Development Srl, Ebenem Investments Srl, Jenby
Investments Srl, Rimasol Real Estate Srl, Moselin Investments Srl,
Best Day Real Estate Srl, N-E Real Estate Park First Phase Srl,
Ketiza Real Estate Srl, SPDI Real Estate Srl and Secmon SRL
-- Ukraine: LLC Aisi Ukraine, LLC Almaz--Pres--Ukraine, LLC
Trade Center, LLC Retail Development Balabino
As a result, the Company has reclassified all assets and
liabilities related to these properties as held for sale according
to IFRS 5 (Note 4.3 & 4.8).
9.2 Results of the Discounted Operations
Note 30 June 2023 30 June 2022
EUR EUR
Income 10 76.009 417.610
Asset operating expenses 11 (466.390) (276.221)
------------- -------------
Net Operating Income (390.381) 141.389
Administration expenses 12 (44.838) (70.823)
Share of profits from associates 21 (335.533) -
Valuation gains/(losses) from Investment Property 13 33.150 (1.793.710)
Gain/(loss) on disposal of subsidiary 20.2.1 A&B - (2.970.951)
Net profit /(loss) on disposal of investment property 14 - (982.792)
Other operating income/(expenses), net 15 (71) (104.116)
Operating profit (737.673) (5.781.003)
Finance income 16 449 4.645
Finance costs 16 (304.197) (364.052)
Profit /(Loss) before tax and foreign exchange differences (1.041.421) (6.140.410)
Foreign exchange (loss), net 17a (19.066) (30.976)
Profit/(Loss) before tax (1.060.487) (6.171.386)
Income tax expense 18 - (33.251)
Profit/(Loss) for the year (1.060.487) (6.204.637)
Profit/(Loss) attributable to:
Owners of the parent (1.051.053) (5.982.678)
Non-controlling interests (9.434) (221.959)
(1.060.487) (6.204.637)
9.3 Cash Flows from (used in) discontinued operation
30 June 2023 30 June 2022
EUR EUR
------------- -------------
Net cash flows provided in operating activities (348.415) (2.014.264)
------------- -------------
Net cash flows from / (used in) financing activities 94.977 5.473.653
------------- -------------
Net cash flows from / (used in) investing activities (239.742) (565.587)
------------- -------------
Net increase/(decrease) from discontinued operations (493.180) 2.893.802
------------- -------------
9.4 Assets and liabilities of disposal group classified as held
for sale
The following assets and liabilities were reclassified as held
for sale relation to the discontinued operation as at 30 June
2023:
Note 30 June 2023 31 December 2022
EUR EUR
----- ------------- -----------------
Assets classified as held for sale
----- ------------- -----------------
Investment properties 19.4 11.596.620 11.631.996
----- ------------- -----------------
Tangible and intangible assets 22 20 20
----- ------------- -----------------
Long-term receivables and prepayments 23 315.000 315.000
----- ------------- -----------------
Investments in associates 21 1 335.534
----- ------------- -----------------
Prepayments and other current assets 24 1.202.288 1.267.713
----- ------------- -----------------
Cash and cash equivalents 26 168.741 284.828
----- ------------- -----------------
Total assets of group held for sale 13.282.670 13.835.091
----- ------------- -----------------
Liabilities directly related with assets classified as held for sale
----- ------------- -----------------
Borrowings 30 4.225.522 4.021.192
----- ------------- -----------------
Finance lease liabilities 35 6.085.288 6.225.930
----- ------------- -----------------
Trade and other payables 32 479.006 431.307
----- ------------- -----------------
Taxation 34 207.176 184.227
----- ------------- -----------------
Deposits from tenants 33 23.002 23.002
----- ------------- -----------------
Total liabilities of group held for sale 11.019.994 10.885.658
----- ------------- -----------------
10. Income
Income from continued operations for the period ended 30 June
2023 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 2023 30 June 2022
EUR EUR
------------- -------------
Rental income 384.909 358.514
------------- -------------
Service charges and utilities income 403.166 151.236
------------- -------------
Total income 788.075 509.750
------------- -------------
Income from discontinued operations for the period ended 30 June
2023 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),
Kindergarten (Romania), and EOS Business Park (Romania). Decrease
in H1 2023 is due to the sale of EOS and Kindergarten during the
year.
b) rental income and service charges by tenants of the Residential Portfolio, and;
Discontinued operations (Note 9) 30 June 2023 30 June 2022
EUR EUR
------------- -------------
Rental income 64.265 408.891
------------- -------------
Service charges and utilities income 11.744 8.719
------------- -------------
Total income 76.009 417.610
------------- -------------
Occupancy rates in the various income producing assets of the
Group as at 30 June 2023 were as follows:
Income producing assets
% 30 June 2023 30 June 2022
--------- ------------- -------------
EOS Business Park Romania - 100
--------- ------------- -------------
Innovations Logistics Park Romania 80 73
--------- ------------- -------------
Kindergarten Romania - 100
--------- ------------- -------------
11. Asset operating expenses
The Group incurs expenses related to the proper operation and
maintenance of all properties in Kiev and Bucharest. Part of these
expenses is recovered from the tenants through the service charges
and utilities recharge process (Note 10).
Under continued operations there are no such expenses related to
operation of the assets.
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 9) 30 June 2023 30 June 2022
EUR EUR
------------- -------------
Property related taxes (24.961) (82.212)
------------- -------------
Repairs and technical maintenance (12.362) (13.432)
------------- -------------
Utilities (405.121) (147.382)
------------- -------------
Property security (21.573) (17.565)
------------- -------------
Property insurance (329) (6.208)
------------- -------------
Leasing expenses (2.044) (3.421)
------------- -------------
Other investment property operating expenses - (6.001)
------------- -------------
Total (466.390) (276.221)
------------- -------------
Property related taxes reflect local taxes of land and building
properties (in the form of land taxes, building taxes, garbage
fees, etc.). Relevant decrease in H1 2023 resulted from the
disposal of assets during 2022.
Repairs and technical maintenance reflect the relevant works
performed on properties during the period for facilitating their
proper use, and / or successful sale, and remained at the same
levels during the current period.
Utilities increase came from Innovations Logistics Park in
Bucharest, and is matched effectively with the increased service
charges and utilities income, as these were invoiced by the Company
and included in continued operations.
Leasing expenses reflect expenses related to long term land
leasing and registered lower due to the pending status of
Tsymlyanskiy lease extension.
12. Administration Expenses
Continued operations 30 June 30 June
2023 2022
EUR EUR
---------- ----------
Salaries and Wages (49.479) (166.927)
---------- ----------
Incentives pursuant to RemCo proposal - (184.500)
---------- ----------
Advisory and broker fees (167.593) (85.107)
---------- ----------
Public group expenses (96.601) (75.005)
---------- ----------
Corporate registration and maintenance fees (24.618) (24.395)
---------- ----------
Vat Expensed (3.868) (10.711)
---------- ----------
Audit and accounting fees (45.991) (47.468)
---------- ----------
Tax advisory services (70.000) -
---------- ----------
Legal fees (76.430) (152.731)
---------- ----------
Depreciation /Amortization charge (349) (787)
---------- ----------
Corporate operating expenses (88.903) (112.041)
---------- ----------
Total Administration Expenses (623.832) (859.672)
---------- ----------
Discontinued operations (Note 9) 30 June 30 June
2023 2022
EUR EUR
--------- ---------
Salaries and Wages (9.882) (14.592)
--------- ---------
Advisory fees and broker fees - (1.918)
--------- ---------
Corporate registration and maintenance fees (12.968) (22.188)
--------- ---------
Vat Expensed (3.236) (4.385)
--------- ---------
Audit and accounting fees (13.355) (21.368)
--------- ---------
Legal fees (1.505) (432)
--------- ---------
Depreciation /Amortization charge (50) (65)
--------- ---------
Corporate operating expenses (3.842) (5.875)
--------- ---------
Total Administration Expenses (44.838) (70.823)
--------- ---------
Salaries and wages include the remuneration of the CEO (H1 2023:
EUR0, H1 2022: EUR63.123), 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.
Incentives provided in 2022 to personnel for the successful
implementation of Group's plan pursuant to relevant Remuneration
Committee proposal dated 7 May 2021 as approved by the BoD on 01
June 2021.
Advisory fees are mainly related to advisors, brokers, valuers
and other professionals engaged in relevant transactions, as well
as outsourced human resources support on the basis of relevant
contracts.
Accounting and related fees include fees from external
accounting services, as well as fees for transfer pricing and tax
filing services.
Tax advisory fees are related to ad-hoc fees paid to advisors
for applying and succeeding a new tax ruling for the Company, which
based on current structure of operations, is estimated to produce
significantly lower imposed taxes.
Public group expenses include among others fees paid to the
AIM:LSE stock exchange, Cyprus Stock Exchange as custodian, and the
Nominated Adviser of the Company, as well as other expenses related
to the listing of the Company, such as public relations and
registry expenses.
Corporate registration and maintenance fees represent fees
charged for the annual maintenance of the Company and its
subsidiaries, as well as fees and expenses related to the normal
operation of the companies including charges by the relevant local
authorities.
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. During the
current period, the Group incurred EUR11k relevant legal fees
associated with the closings as part of Stage 2 of the transaction
with Arcona, and EUR57k associated with the Bluehouse
litigation.
Corporate operating expenses include office expenses, travel
expenses, (tele)communication expenses, D&O insurance and all
other general expenses for Cypriot, Romanian and Ukrainian
operations.
The annual Directors fees including Chairman and Committee
remunerations have been set at GBP 129k, while the decision for
registering relevant fees for 2022 and H1 2023 is still pending by
the board.
13. Valuation gains / (losses) from investment properties
Valuation gains /(losses) from investment property for the
reporting period, excluding foreign exchange translation
differences which are incorporated in the table of Note 19.2, are
presented in the tables below.
Discontinued operations (Note 9)
Property Name (EUR) Valuation gains/(losses)
---------------------------
30 June 30 June
2023 2022
---------- ---------------
EUR EUR
---------- ---------------
Kiyanovskiy Residence 11.150 (1.296.510)
---------- ---------------
Rozny Lane (9.491) (485.608)
---------- ---------------
Innovations Logistics Park 31.491 (5.295)
---------- ---------------
GreenLake - (5.576)
---------- ---------------
Kindergarten - (721)
---------- ---------------
Total 33.150 (1.793.710)
---------- ---------------
As of November 2021, the Group had submitted properly the
official request to the City of Kiev to extend the lease of
Tsymlyanskiy Residence property for another 5 years, since the
Group has first extension rights over any other interested party.
The first step in the process, which involves the approval by a
relevant committee of the municipality, before the final approval
by the City Council, has not been obtained yet as many other cases
had accumulated which had time priority over Group's case. During
the period between December 15th 2021 and January 20th of 2022, the
committee did not convene at all as is usual during holiday and
vacation times. Once the holiday season was over, the main focus of
the committee and the City Council unfortunately were on issues not
related to property lease extensions, but rather more pressing
matters for the interests and operational stability of the City of
Kiev. From there on, all decisions have been put on hold due to the
Russian insurgence of Ukraine. We remain confident that we will be
awarded the lease extension once the war status permits.
In relation to the Ukrainian assets excluding Tsymlyanskiy, and
in view of the ongoing conflict in the country, the Management
decided in H1 2022 accounts to impair the value of those assets at
50% of their reported value and continues the same in current
period.
Valuation gains and losses result not only from the differences
in the values of the properties as reported by valuers at the
different points in time, but also from the fluctuation of the FX
rate between the denominated currency of the valuation report
itself and the functional currency of the company which posts
valuation amount in its accounting books. For example, valuations
of Ukrainian assets are denominated in USD and translated to UAH
for entering effectively in the accounting books of the local
entities. Similarly, valuations of Romanian assets are denominated
in EUR and translated to RON for accounting purposes.
14. Gain/ (Loss) from disposal of Investment properties
During the reporting period the Group has no proceeded with any
sale of property classified under Investment Properties. Any gain/
(losses) from disposal of such properties are presented below:
During H1 2022 the Group sold in Moselin (Greenlake Parcel K) 2
villas , Green Lake Phase 2 land, in particular Parcels B,C,F and
part of G and additional adjacent land owned by Green Lake
Development SRL, in a transaction with a local developer. The
results of the part of the transaction which conducted by Green
Lake Development SRL are not included in the table below since the
selling entity is an associate.
Discontinued operations (Note 9) 30 June 30 June
2023 2022
EUR EUR
--------- ----------------
Income from sale of investment property - 3.495.146
--------- ----------------
Cost of investment property - (4.477.938)
--------- ----------------
Loss from disposal of investment property - (982.792)
--------- ----------------
15. Other Operating Income/ (expenses) net
Continued operations 30 June 30 June
2023 2022
EUR EUR
--------- --------
Other income 9.003 9.198
--------- --------
Other income 9.003 9.198
--------- --------
Penalties (192) (323)
--------- --------
Other expenses (18.712) (5.234)
--------- --------
Other expenses (18.904) (5.557)
--------- --------
Other operating income/(expenses), net (9.901) 3.641
--------- --------
Continued operations
Other income represents income from services to an associate
company.
Discontinued operations
Other expenses in discontinued operations in comparative
represent mainly VAT adjustments on the construction of buildings
resulted from sales of villas with no VAT to individuals. Such
amounts have been received from the clients through the selling
price.
16. Finance Costs and Income
Continued operations
Finance income 30 June 30 June
2023 2022
-------- --------
EUR EUR
-------- --------
Interest received from non-bank loans (Note
38.1.1) 159.777 187.273
-------- --------
Total finance income 159.777 187.273
-------- --------
Finance costs 30 June 30 June
2023 2022
EUR EUR
--------- ---------
Interest expenses (non-bank) (Note 38.1.2) (11.455) (24.985)
--------- ---------
Finance charges and commissions (2.206) (2.406)
--------- ---------
Bonds interest (23.651) (33.787)
--------- ---------
Total finance costs (37.312) (61.178)
--------- ---------
Net finance result 122.465 126.095
--------- ---------
Discontinued operations (Note 9)
Finance income 30 June 30 June
2023 2022
-------- --------
EUR EUR
-------- --------
Interest received from non-bank loans (Note
38.1.1) 424 4.645
-------- --------
Interest received from bank deposits 25 -
-------- --------
Total finance income 449 4.645
-------- --------
Finance costs 30 June 30 June
2023 2022
EUR EUR
---------- ----------
Interest expenses (bank) (158.792) (199.643)
---------- ----------
Interest expenses (non-bank) (Note 38.1.2) - (11.993)
---------- ----------
Finance leasing interest expenses (144.618) (151.143)
---------- ----------
Finance charges and commissions (787) (1.273)
---------- ----------
Total finance costs (304.197) (364.052)
---------- ----------
Net finance result (303.748) (359.407)
---------- ----------
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
funds provided initially with a convertibility option which was not
exercised, and is currently treated as a loan.
According to the last addendum of the loan agreement, part of
the principal equal to EUR2,5 million will be contributed to a
joint venture between the Company and the borrower for the
development of logistics assets in Romania (Note 25). The remaining
principal plus the interest is repaid in installments, expected to
be fully repaid by the end of 2023. The loan is bearing a fixed
interest rate of 10%.
Interest expenses represent interest charged on Bank and
non-Bank borrowings (Note 30).
Finance leasing interest expenses relate to the sale and lease
back agreements of the Group ( Note 35).
Finance charges and commissions include regular banking
commissions and various fees imposed by the Banks.
Bonds interest represents interest calculated for the bonds
issued by the Company during 2018 (Note 31).
17. Foreign exchange profit / (losses)
a. Non realised foreign exchange loss
Foreign exchange losses (non-realised) resulted from the loans
and/or payables/receivables denominated in non EUR currencies when
translated in EUR. The exchange loss for the year ended 30 June
2023 from continued operations amounted to EUR34.386 (30 June 2022:
loss EUR11.065).
The exchange loss from discontinued operations for the year
ended 30 June 2023 amounted to EUR19.066 (30 June 2022: loss
EUR30.976) (Note 9).
b. Exchange difference on intercompany loans to foreign holdings
The Company has loans receivable from foreign group subsidiaries
which are considered as part of the Group's net investments in
those foreign operations (Note 38.3). 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 2023, the Group recognized a foreign exchange loss of EUR0
(30 June 2022: loss of EUR0).
18. Tax Expose
Continued operations 30 June 30 June
2023 2022
EUR EUR
-------- --------
Income and defence tax expense (90) 2.277
-------- --------
Taxes (90) 2.277
-------- --------
Discontinued operations (Note 9) 30 June 30 June
2023 2022
EUR EUR
--------- ---------
Income and defence tax expense - (33.251)
--------- ---------
Taxes - (33.251)
--------- ---------
For the period ended 30 June 2023 the corporate income tax rate
for the Group's subsidiaries are as follows: in Ukraine 18%, and in
Romania 16%. The corporate tax that is applied to the qualifying
income of the Company and its Cypriot subsidiaries is 12,5%.
19. Investment Property
19.1 Investment Property Presentation
Investment Property consists of the following assets:
Income Producing Assets
-- EOS Business Park consists of 3.386 sqm gross leasable area
and includes a Class A office Building in Bucharest, which is
currently fully let to Danone Romania until 2025. In June 2022 the
Company proceeded to the sale of the Romanian SPV which holds the
asset as part of Stage 2 of the transaction with Arcona.
-- 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 is 80% leased at the end
of the reporting period.
-- Residential Assets
-- At the end of the reporting period the Company does not own
any more residential units, having sold during 2022 the remaining
residential portfolio held by Moselin Investments Srl in GreenLake
Residential complex. The associate company Green Lake Developments
Srl also sold all 7 remaining units during H1 2023 still owning
some auxiliary properties (parking and storage spaces), classified
under associates (Note 21).
Land Assets
-- Kiyanovskiy Residence consists of four adjacent plots of
land, totaling 0,55 Ha earmarked for a residential development,
overlooking the scenic Dnipro River, St. Michael's Spires and
historic Podil neighborhood.
-- Tsymlyanskiy Residence is a 0,36 Ha plot of land located in
the historic Podil District of Kiev and is destined for the
development of a residential complex. As of November 2021, the
Group had submitted properly the official request to the City of
Kiev to extend the lease of Tsymlyanskiy Residence property for
another 5 years, since the Group has first extension rights over
any other interested party. The first step in the process, which
involves the approval of a relevant committee of the municipality,
before the final approval by the City Council, has not been
obtained yet as many other cases had accumulated which had time
priority over Group's case. During the period between December 15th
2021 and January 20th of 2022, the committee did not convene at all
as is usual during holiday and vacation times. Once the holiday
season was over, the main focus of the committee and the City
Council unfortunately were on issues not related to property lease
extensions, but rather more pressing matters for the interests and
operational stability of the City of Kiev. From there on, all
decisions have been put on hold due to the Russian insurgence of
Ukraine. We remain confident that we will be awarded the lease
extension once the war status permits.
-- Rozny Lane is a 42 Ha land plot located in Kiev Oblast,
destined for the development of a residential complex. It has been
registered under the Group pursuant to a legal decision in
2015.
-- GreenLake land is a 40.360 sqm plot and is adjacent to the
GreenLake part of the Company's residential portfolio, which is
classified under Investments in Associates (Note 21). The land was
sold during 2022.
19.2 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
Discontinued Operations
30 June 2023 ( EUR Fair Value movements Asset Value
) at the Beginning
of the period
or at Acquisition/Transfer
date
Asset Name Type Carrying Foreign Fair Disposals Additions Carrying
amount exchange value H1 2023 H1 2023 amount
as at translation gain/(loss) as at 31/12/2022
30/06/2023 difference based
on local
currency
valuations
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Kiyanovskiy
Residence Land 1.380.453 (37.035) 11.150 - - 1.406.338
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Tsymlyanskiy
Residence Land 1 - - - - 1
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Rozny Lane Land 506.166 - (9.491) - - 515.657
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Total Ukraine 1.886.620 (37.035) 1.659 - - 1.921.996
-------------- ------------- ------------- ---------- ---------- ------------------
Innovations
Logistic s
Park Warehouse 9.710.000 (31.491) 31.491 - - 9.710.000
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Total Romania 9.710.000 (31.491) 31.491 - - 9.710.000
-------------- ------------- ------------- ---------- ---------- ------------------
Total 11.596.620 (68.526) 33.150 - - 11.631.996
-------------- ------------- ------------- ---------- ---------- ------------------
30 June 2023 ( EUR Fair Value movements Asset Value
) at the Beginning
of the period
or at Acquisition/Transfer
date
Asset Name Type Carrying Foreign Fair Disposals Additions Carrying
amount exchange value H1 2023 H1 2023 amount
as at translation gain/(loss) as at 31/12/2022
30/06/2023 difference based
on local
currency
valuations
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Kiyanovskiy
Residence Land 1.380.453 (37.035) 11.150 - - 1.406.338
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Tsymlyanskiy
Residence Land 1 - - - - 1
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Rozny Lane Land 506.166 - (9.491) - - 515.657
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Total Ukraine 1.886.620 (37.035) 1.659 - - 1.921.996
-------------- ------------- ------------- ---------- ---------- ------------------
Innovations
Logistic s
Park Warehouse 9.710.000 (31.491) 31.491 - - 9.710.000
----------- -------------- ------------- ------------- ---------- ---------- ------------------
Total Romania 9.710.000 (31.491) 31.491 - - 9.710.000
-------------- ------------- ------------- ---------- ---------- ------------------
Total 11.596.620 (68.526) 33.150 - - 11.631.996
-------------- ------------- ------------- ---------- ---------- ------------------
19.3 Investment Property Carrying Amount per asset as at the
reporting date
The table below presents the values of the individual assets as
appraised by the appointed valuer as at the reporting date.
Asset Name Location Principal Related Carrying amount as at
Operation Companies
30 June 20 23 31 Dec 2022
------------- ------------- ------------- ---------------------------- ---------------------------
Continued Discontinued Continued Discontinued
operations operations operations operations
------------- ------------- ------------- ------------- ------------- ------------ -------------
EUR EUR EUR EUR
------------- ------------- ------------- ------------- ------------- ------------ -------------
Kiyanovskiy Podil, Land for LLC Aisi 1.406.338
Residence Kiev City residential Ukraine - 1.380.453 -
Center development LLC Trade
Center
------------- ------------- ------------- ------------- ------------- ------------ -------------
Podil, Land for LLC Almaz --
Tsymlyanskiy Kiev City residential Pres --
Residence Center Development Ukraine - 1 - 1
------------- ------------- ------------- ------------- ------------- ------------ -------------
Brovary Land for SC Secure
district, residential Capital
Rozny Lane Kiev Development Limited - 506.166 - 515.657
------------- ------------- ------------- ------------- ------------- ------------ -------------
Total Ukraine - 1.886.620 - 1.921.996
---------- ------------- ------------ -------------
Innovations Clinceni, Warehouse Myrnes 9.710.000
Logistics Bucharest Innovations - 9.710.000 -
Park Park
Limited
Best Day
Real Estate
Srl
------------- ------------- ------------- ------------- ------------- ------------ -------------
Total Romania - 9.710.000 - 9.710.000
---------- ------------- ------------ -------------
TOTAL - 11.596.620 - 11.631.996
---------- ------------- ------------ -------------
19.4 Investment Property analysis
Investment Properties
The following assets are presented under Investment Property:
Innovations Logistics park in Romania, and Kiyanovskiy,
Tsymlyanskiy and Rozny Lane land assets in Ukraine.
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
At the beginning of
the reporting period - 11.631.996 - 31.554.991
---------------------- ---------------------- --------------------- ----------------------
Additions - - -
---------------------- ---------------------- --------------------- ----------------------
Disposal of investment
Property - - - (18.235.000)
---------------------- ---------------------- --------------------- ----------------------
Revaluation
(loss)/gain on
investment property - 33.150 - (1.245.230)
---------------------- ---------------------- --------------------- ----------------------
Translation difference - (68.526) - (442.765)
---------------------- ---------------------- --------------------- ----------------------
As at the end of the
reporting period - 11.596.620 - 11.631.996
---------------------- ---------------------- --------------------- ----------------------
Disposals in 2022 of Investment Properties represent the sale of
EOS, Kindergarten, GreenLake Phase 2 land, and apartments and
parking spaces in Residential Portfolio and villas in GreenLake
parcel K .
20. Investment Property Acquisitions, Goodwill Movement and
Disposals
20.1 Acquisition of asset
Based on the relevant agreement in 2021, the Company, in
February 2022, acquired 50% of the share capital of Equardo
Limited, an SPV holding stake in Victoria City (Vic City) project
in Bucharest. The participation took place through a share capital
increase of the order of EUR 8.000, where the remaining
shareholders waived their right to participate. Vic City is a land
plot in north Bucharest on Bucuresti Noi Boulevard near a metro
station, where a commercial mixed used center was to be developed.
The project was to be contributed to SPDI by its promoters at the
time, but neither its development nor its contribution progressed
due to other priorities. SPDI participated in Equardo Limited so as
to retain some of the value originally destined to be part of its
asset portfolio.
20.2 Disposals of subsidiaries and associates
20.2.1 (A) Disposal of EOS Business Park
Following relevant SPA signed in June 2021 and as part of Stage
2 of the transaction with Arcona, during in June 2022 the Company
closed the agreement for the disposal of the Romanian SPV which
owns the EOS Business Park asset in Bucharest. In exchange for the
sale the Company received 116.688 new ordinary shares in Arcona and
28.125 warrants over shares in Arcona.
ASSETS EUR
Non-current assets
------------
Investment properties 6.700.000
------------
Other non-current assets 41.674
------------
6.741.674
------------
Current assets
------------
Prepayments and other
current assets 72.198
------------
Cash and cash equivalents 49.783
------------
121.981
------------
Total Assets 6.863.655
------------
LIABILITIES
------------
Interest bearing borrowings 3.347.799
------------
Other liabilities 44.372
------------
Total Liabilities 3.392.171
------------
NET ASSET 3.471.484
------------
Consideration:
------------
Shares in Arcona 1.386.249
------------
Loss on Disposal (2.085.235)
------------
In view of closing the transaction with Arcona for EOS, the
Company entered in December 2021 into a new loan facility for
re-financing the previous leasing contract of the asset, securing a
net amount of EUR 800k which was used to partially re-pay the
shareholder loan provided by the Company to the relevant SPV before
the closing of the transaction with Arcona.
20.2.1 (B) Disposal of Associate Lelar Holdings Limited (Note
21)
During 2022 and as part of Stage 2 of the transaction with
Arcona, the Company sold Lelar Holdings Limited, the Cypriot
holding company associated with Delea Nuova asset in Bucharest. In
exchange of the transfer, the Company received 362.688 new ordinary
shares in Arcona and 87.418 warrants over shares in Arcona, while
at the same time the parties agreed that the already declared
dividends by Lelar Holding Limited will be allocated and paid to
the Company. The relevant amount of such dividends corresponding to
the transferred ownership stake of 24,35% was EUR 298k which has
already been collected by the Company.
EUR
Value of associate 5.178.669
at date of Disposal
(Note 21)
----------
Consideration:
----------
Shares in Arcona 4.292.953
----------
Loss on Disposal (885.716)
----------
20.2.1 (C) Disposal of Kindergarden
ASSETS EUR
Non-current assets
----------
Investment properties 1.320.000
----------
Current assets
----------
Prepayments and other
current assets 16.369
----------
Cash and cash equivalents 2.308
----------
Total Assets 1.338.677
----------
LIABILITIES
----------
Interest bearing borrowings 628.063
----------
Other liabilities 14.214
----------
Total Liabilities 642.277
----------
NET ASSET 696.400
----------
Net share of the group
50% 348.200
----------
Consideration:
----------
Cash 130.750
----------
Net off debt between
the parties 44.250
----------
Total Consideration 175.000
----------
Loss on Disposal (173.200)
----------
The Company honouring certain commitment made in the past during
the restructuring of the holdings of Green Lake project, proceeded
to the sale of its 50% stake in Kindergarten asset in Greenlake,
Bucharest. The consideration of the transaction was set at
EUR175.000 plus release of available company's cash pledged by the
Bank.
20.2.1 (D) Disposal of GreenLake Phase II land
Rimasol Rimasol Ashor Ashor Ebenem Jenby Total
SRL LTD SRL LTD SRL SRL
ASSETS EUR EUR EUR EUR EUR EUR EUR
-------- --------- ---------- -------- -------- ---------- ------------
Non-current assets
-------- --------- ---------- -------- -------- ---------- ------------
Investment properties 808.000 - 1.510.000 - 612.000 2.562.000 5.492.000
-------- --------- ---------- -------- -------- ---------- ------------
Current assets
-------- --------- ---------- -------- -------- ---------- ------------
Prepayments and
other current
assets 5.789 - 118.695 - 3.406 8.644 136.534
-------- --------- ---------- -------- -------- ---------- ------------
Cash and cash
equivalents 62 - 18.982 - 44 40 19.128
-------- --------- ---------- -------- -------- ---------- ------------
Total Assets 813.851 - 1.647.677 - 615.450 2.570.684 5.647.662
-------- --------- ---------- -------- -------- ---------- ------------
LIABILITIES
-------- --------- ---------- -------- -------- ---------- ------------
Interest bearing
borrowings 623 - 1.555 - 12.239 19.757 34.174
-------- --------- ---------- -------- -------- ---------- ------------
Other liabilities 31.622 94.736 26.259 4.626 16.801 25.773 199.817
-------- --------- ---------- -------- -------- ---------- ------------
Total Liabilities 32.245 94.736 27.814 4.626 29.040 45.530 233.991
-------- --------- ---------- -------- -------- ---------- ------------
NET ASSET 781.606 (94.736) 1.619.863 (4.626) 586.410 2.525.154 5.413.671
-------- --------- ---------- -------- -------- ---------- ------------
Group % Holding 70,56% 70,56% 44,24% 44,24% 44,30% 44,30%
-------- --------- ---------- -------- -------- ---------- ------------
Net share of
the group 551.501 (66.846) 716.627 (2.047) 259.780 1.118.643 2.577.658
-------- --------- ---------- -------- -------- ---------- ------------
Consideration:
-------- --------- ---------- -------- -------- ---------- ------------
Cash 400.000
-------- --------- ---------- -------- -------- ---------- ------------
Variable Compensation 450.000
-------- --------- ---------- -------- -------- ---------- ------------
Total Consideration 850.000
-------- --------- ---------- -------- -------- ---------- ------------
Loss on Disposal (1.727.658)
-------- --------- ---------- -------- -------- ---------- ------------
During 2022, i n an effort to accelerate monetization of assets
that were to be part of Stage 3 of the transaction with Arcona, and
since the discussions with Arcona took much longer than expected
and negotiations on their valuation did not conclude, the Company
proceeded with monetization of the remaining GreenLake land plots.
The remaining land portfolio was not zoned for development and its
disposal resulted also to the settlement, after prolonged
negotiations with neighbouring land owners, of an ongoing
overlapping dispute over the GreenLake land at a cost of EUR500k
gross.
Total losses on Disposal (A) & (B) & (C) & (D) (4.871.809)
21. Investments in associates
During 2022 the Company acquired 50% of the share capital of
Equardo Holdings Limited, an SPV holding stake in Victoria City
(Vic City) project in Bucharest. The participation took place
through a share capital increase of the order of EUR 8.000. Vic
City is a plot of land for development in north Bucharest on
Bucuresti Noi Boulevard near the metro station, where a commercial
mixed use center was to be developed. The project was to be
contributed to SPDI by its promoters at the time, but neither its
development nor its contribution progressed due to other
priorities. SPDI participated in Equardo Holdings Limited so as to
retain some of the value originally destined to be part of its
asset portfolio.
Dividend Income reflects dividends declared by Lelar Holdings
Limited the holding SPV of Delea Nuova building, where the Group
used to hold a 24,35% participation. The associate was sold during
2022 with the already declared dividends agreed to be paid to the
Company (Note 20.2.1 B).
The share of profit from the associate GreenLake Development Srl
and Equardo Holdings Limited were limited up to the interest of the
Group in the associate.
As at 30 June 2023, 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
-------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
Equardo
Vic City Holdings
Project Limited 267.600 (267.080) (7.349) 50% - Romania Land
-------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
Green GreenLake
Lake Development Residential
Project Srl 1.365.226 (1.851.214) (835.741) 40,35% (335.533) Romania assets
-------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
1.632.826 (2.118.294) (843.090) (335.533)
------------------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
As at 30 June 2022, 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
-------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
Delea Lelar - - - - - Romania Office
Nuova Holdings building
Project Limited
and S.C.
Delenco
Construct
Srl
-------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
Equardo
Vic City Holdings
Project Limited 273.954 (255.872) (7.643) 50% (3.822) Romania Land
-------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
Green GreenLake 3.783.789 (5.426.760) 1.233.492 40,35% - Romania Residential
Lake Development assets
Project Srl
-------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
4.057.743 (5.682.632) 1.225.849 (3.822)
------------------------- ---------- ------------- ---------- -------- ----------------- -------- ------------
22. Tangible and intangible assets
As at 30 June 2023 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
2022: EUR103.193) which is under continued operations. Accumulated
amortization as at the reporting date amounts to EUR103.193 (31 Dec
2022: EUR103.193) and therefore net value amounts to EUR0 (31 Dec
2022: EUR0).
As at 30 June 2023 the tangible non-current assets under
continued operations were comprised mainly by electronic equipment
(mobiles, computers etc.) of a net value of EUR466 (31 Dec 2022:
EUR816).
As at 30 June 2023 the tangible non-current assets under
discontinued operations mainly consisted of the machinery and
equipment used for servicing the Group's investment properties in
Ukraine and Romania amount to EUR31.474 (31 Dec 2022 EUR32.244).
Accumulated depreciation as at the reporting date amounts to
EUR31.454 (31 Dec 2022: EUR32.224).
23. Long Term Receivables and prepayments
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Long Term Receivables 820 315.000 824 315.000
--------------------- ---------------------- --------------------- -----------------------
Total 820 315.000 824 315.000
--------------------- ---------------------- --------------------- -----------------------
Long term receivables under discontinued operations mainly
include the cash collateral existing in favor of Piraeus Leasing in
relation to Innovations asset .
24. Prepayments and other current assets
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Trade and other
receivables 662.766 1.131.159 603.257 1.019.634
--------------------- ---------------------- --------------------- -----------------------
VAT and other tax
receivables 156.566 71.131 132.771 52.836
--------------------- ---------------------- --------------------- -----------------------
Deferred expenses 299 - - 128
--------------------- ---------------------- --------------------- -----------------------
Receivables due from
related parties 43.104 200.529 75.095 195.115
--------------------- ---------------------- --------------------- -----------------------
Loan receivables from 3.003.762 - -
3(rd) parties 3.463.985
--------------------- ---------------------- --------------------- -----------------------
Loan to associates
(Note 38.4) - 80.665 - 229.629
--------------------- ---------------------- --------------------- -----------------------
Allowance for
impairment of
prepayments and other
current assets (57.991) (281.196) (121.946) (229.629)
--------------------- ---------------------- --------------------- -----------------------
Total 3.808.506 1.202.288 4.153.162 1.267.713
--------------------- ---------------------- --------------------- -----------------------
Trade and other receivables mainly include receivables from
tenants and prepayments made for services.
VAT receivable represent VAT which is refundable in Romania,
Cyprus and Ukraine.
Deferred expenses include legal, advisory, consulting and
marketing expenses.
Receivables due from related parties represent all kind of
receivables from related parties of the Group mainly associated
with the GreenLake project.
Loan receivables from 3(rd) parties include an amount of
EUR3.404.467 (2021: EUR 3.825.949) provided as an advance payment
for acquiring a participation in an investment property portfolio
(Olympians portfolio) in Romania. The accrued interest was
EUR59.517 (2022: EUR0). The loan provided initially with a
convertibility option which was not exercised. The loan is bearing
a fixed interest rate of 10%. In August 2022 the Company signed
with the borrower a Shareholders Agreement for a joint venture for
developing logistics properties in Romania. As part of this
agreement the Company will convert EUR2,5 million of the loan into
a 50% equity stake of the joint venture company. The objective of
this new company, in which borrower is contributing EUR2,5 million
in equity funds too, is to develop a portfolio of logistics
properties in Romania with a view of letting them to third party
tenants in a market that has very low vacancy and has shown
substantial strength and resilience in recent years. The remaining
part of the Olympians Loan is being repaid in regular intervals and
is expected to be fully repaid to the Company by the end of
2023.
Loan to associates reflects a loan receivable from GreenLake
Development Srl, holding company of GreenLake Project-Phase A
(Notes 21 and 38.4).
25. 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 2023 31 Dec 2022
EUR EUR
------------- ------------
Arcona shares 11.920.030 7.330.145
------------- ------------
Acquired Arcona shares - 5.679.202
------------- ------------
FV change in Arcona shares 10.729 (1.089.317)
------------- ------------
Arcona shares at reporting date 11.930.759 11.920.030
------------- ------------
Warrants over Arcona shares 158.778 140.577
------------- ------------
Acquired Arcona shares - 3
------------- ------------
FV change in warrants (73.127) 18.198
------------- ------------
Arcona warrants at reporting date 85.651 158.778
------------- ------------
Total Financial Assets at FV 12.016.410 12.078.808
------------- ------------
FV change in Arcona shares 10.729 (1.089.317)
------------- ------------
FV change in warrants (73.127) 18.198
------------- ------------
Fair Value loss on Financial Assets (62.398) (1.071.119)
at FV through P&L
------------- ------------
The Company received during 2019 and 2020 593.534 Arcona shares
as part of the completion of Stage 1 of the transaction with
Arcona, for the sale of Bella and Balabino assets in Ukraine, and
the Boyana asset in Bulgaria. During 2022 the Company received
479.376 additional shares in Arcona as part of Stage 2 of the
transaction with Arcona, for the sale of EOS and Delea Nuova assets
in Romania.
At the end of the reporting period the shares are revalued at
their fair value based on the NAV per share of Arcona at the same
date, and as a result a relevant fair value gain of EUR10.729
(2022: loss EUR1. 089.317) 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 77.021 warrants over
Arcona shares for the sale of Boyana for a consideration of EUR 1.
The warrants are exercisable upon the volume weighted average price
of Arcona shares traded on a regulated market at EUR 8,10 or
higher.
Moreover, during 2022 the Company received 28.125 warrants over
shares in Arcona for the sale of EOS asset, and 87.418 warrants
over shares in Arcona for the sale of Delea Nuova asset for a total
consideration of EUR 3. These warrants are exercisable upon the
volume weighted average price of Arcona shares traded on a
regulated market at EUR7,2 or higher.
At reporting period end, the warrants are re-valued to fair
value and as a result a relevant loss of EUR 73.129 (2022: gain EUR
18.198) is recognized. The terms and assumptions used for such
warrant re-valuation are:
Current stock price (as retrieved from Amsterdam Stock
Exchange): EUR 5,42 per share
-- Strike price of the warrants: EUR 8,10 and EUR 7,20 per share
-- Expiration date: 1 November 2024, 25 March 2027, 15 June 2027
-- Standard deviation of stock price: 21,25%
-- Annualized dividend yield on shares: 0%
-- 5 year Government Bond rate (weighted average rate of
Government Bonds of countries that Arcona is exposed): 5,322%
26. Cash and cash equivalents
Cash and cash equivalents represent liquidity held at banks.
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in USD 553 - 1.472 7.734
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in EUR 17.750 23.641 38.704 80.151
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in UAH 254 395 395 813
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in RON 66.430 144.705 25.710 196.130
--------------------- ---------------------- --------------------- ----------------------
Cash with banks in GBP 3.271 - 289 -
--------------------- ---------------------- --------------------- ----------------------
Total 88.258 168.741 66.570 284.828
--------------------- ---------------------- --------------------- ----------------------
27. Share capital
Number of Shares
30 June 2023 31 Dec 2022
Authorised
------------- -------------
Ordinary shares of EUR 0,01 989.869.935 989.869.935
------------- -------------
Total ordinary shares 989.869.935 989.869.935
------------- -------------
RCP Class A Shares of EUR0,01 - -
------------- -------------
RCP Class B Shares of EUR0,01 8.618.997 8.618.997
------------- -------------
Total redeemable shares 8.618.997 8.618.997
------------- -------------
Issued and fully paid
------------- -------------
Ordinary shares of EUR0,01 129.191.442 129.191.442
------------- -------------
Total ordinary shares 129.191.442 129.191.442
------------- -------------
Total 129.191.442 129.191.442
------------- -------------
Nominal value (EUR)
EUR 30 June 2023 31 Dec 2022
Authorised
------------- ------------
Ordinary shares of EUR 0,01 9.898.699 9.898.699
------------- ------------
Total ordinary shares 9.898.699 9.898.699
------------- ------------
RCP Class A Shares of EUR0,01 - -
------------- ------------
RCP Class B Shares of EUR0,01 86.190 86.190
------------- ------------
Total redeemable shares 86.190 86.190
------------- ------------
Issued and fully paid
------------- ------------
Ordinary shares of EUR0,01 1.291.281 1.291.281
------------- ------------
Total ordinary shares 1.291.281 1.291.281
------------- ------------
Total 1.291.281 1.291.281
------------- ------------
27.1 Authorised share capital
T he authorised share capital of the Company as at the date of
issuance of this report is as follows:
a) 989.869.935 Ordinary Shares of EUR0,01 nominal value
each,
b) 8.618.997 Redeemable Preference Class B Shares of EUR0,01
nominal value each, (Note 27.3) .
27.2 Issued Share Capital
As at the end of 30 June 2023, the issued share capital of the
Company was 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.
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
27.3) in October 2016, to the Craiova Praktiker seller BLUEHOUSE
ACCESSION PROPERTY HOLDINGS III S.A.R.L. and final settlement for
any resulting difference is expected to be provided by Cypriot
Courts (Note 39.3). As soon as the case is settled, the Company
will proceed with the cancellation of the Redeemable Preference
Class B Shares.
27.3 Capital Structure as at the end of the reporting period
As at the reporting date the Company's share capital is as
follows:
Number of (as at) 30 June 2023 (as at) 31 December (as at) 31 December
2022 2021
Ordinary shares of Issued and Listed on
EUR0,01 AIM 129.191.442 129.191.442 129.191.442
---------------------- --------------------- ---------------------- -----------------------
Total number of
Shares Non-Dilutive Basis 129.191.442 129.191.442 129.191.442
---------------------- --------------------- ---------------------- -----------------------
Total number of
Shares Full Dilutive Basis 129.191.442 129.191.442 129.191.442
---------------------- --------------------- ---------------------- -----------------------
Options - - - -
---------------------- --------------------- ---------------------- -----------------------
Redeemable Preference Class B Shares
The Redeemable Preference Class B Shares, issued to BLUEHOUSE
ACCESSION PROPERTY HOLDINGS III S.A.R.L. as part of the Praktiker
Craiova asset acquisition do not have voting rights but have
economic rights at par with ordinary shares. As at the reporting
date all of the Redeemable Preference Class B Shares have been
redeemed but the Company is in legal proceedings with the vendor in
respect of a final settlement (Notes 32, 39.3).
28. 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 gain on translation
due to presentation currency of EUR1.080.634 in H1 2023, compared
to EUR19.148 in H1 2022.
29. 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 23 2022
---------- --------
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
---------- --------
Jenby Ventures Limited 55,70 55,70
---------- --------
Ebenem Limited 55,70 55,70
---------- --------
30. Borrowings
Project 30 June 2023 31 Dec 2022
Continued Discontinued Continued Discontinued
operations operations operations operations
------------------- ------------------ ----------------- ------------------ ------------------
EUR EUR EUR EUR
------------------- ------------------ ----------------- ------------------ ------------------
Principal of bank
Loans
------------------- ------------------ ----------------- ------------------ ------------------
Piraeus Bank SA GreenLake-Phase 2 - 2.525.938 - 2.525.938
------------------- ------------------ ----------------- ------------------ ------------------
Loans from other 3(rd) parties and
related parties (Note 38.5) 109.599 2.306 502.130 2.314
------------------ ----------------- ------------------ ------------------
Overdrafts - 44 - 17
------------------ ----------------- ------------------ ------------------
Total principal of bank and non-bank
Loans 109.599 2.528.288 502.130 2.528.269
------------------ ----------------- ------------------ ------------------
Interest accrued
on bank loans - 1 . 697.234 - 1.492.923
------------------- ------------------ ----------------- ------------------ ------------------
Interests accrued on non-bank loans 4.022 - 95.227 -
------------------ ----------------- ------------------ ------------------
Total 113.621 4.225.522 597.357 4.021.192
------------------ ----------------- ------------------ ------------------
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued operations
operations
--------------------- ----------------------- --------------------- ------------------------
EUR EUR EUR EUR
--------------------- ----------------------- --------------------- ------------------------
Current portion - 4.225.522 - 4.201.192
--------------------- ----------------------- --------------------- ------------------------
Non-current portion 113.621 - 597.357 -
--------------------- ----------------------- --------------------- ------------------------
Total 113.621 4.225.522 597.357 4.201.192
--------------------- ----------------------- --------------------- ------------------------
Continued Operations
Loans from other 3(rd) parties and related parties under
continued operations include among others:
) Loan from one Director of EUR100k provided as bridge financing
for future property acquisitions . The loan bears annual interest
of 8% (Note 38.5) .
Discontinued Operations
SEC South East Continent Unique Real Estate (Secured)
Investments Limited has a debt facility with Piraeus Bank for the
acquisition of the GreenLake land in Bucharest Romania. As at the
end of the reporting period the balance of the loan was
EUR2.525.938 plus accrued interest EUR1.697.234 and bears interest
of EURIBOR 3M plus 5% plus the Greek law 128/75 0,6% contribution.
During September 2019, the company received a termination notice
from Piraeus Bank and a payment order from court in relation to
this loan, and currently relevant discussions with the Bank are
taking place for a mutually agreed solution.
Loans from other 3(rd) parties and related parties under
discontinued operations includes borrowings from non-controlling
interest parties. During the last nine years and in order to
support the GreenLake project the non-controlling shareholders of
Moselin Investments Srl and SPDI Real Estate SRL (other than the
Group) have contributed their share of capital injections by means
of shareholder loans. The loans bear interest at 4% annually.
31. Bonds
The Company in order to acquire up to a 50% interest in a
portfolio of fully let logistics properties in Romania, the
Olympians Portfolio, issued a financial instrument, 35% of which
consists of a convertible bond and 65% of which is made up of a
warrant. The convertible bond element of the instrument which was
in the value of: EUR723.690 (2022: EUR723.690) 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.
32. 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 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Payables to third
parties 3.055.392 445.063 3.070.074 389.462
--------------------- ---------------------- --------------------- -----------------------
Payables to related
parties (Note 38.2) 209.732 12.176 495.157 13.883
--------------------- ---------------------- --------------------- -----------------------
Deferred income from
tenants - 7.815 - 7.840
--------------------- ---------------------- --------------------- -----------------------
Accruals 85.437 13.952 68.827 20.122
--------------------- ---------------------- --------------------- -----------------------
Pre-sale advances
(Advances received
for sale of
properties) 95.147 - 97.711 -
--------------------- ---------------------- --------------------- -----------------------
Total 3.445.708 479.006 3.731.769 431.307
--------------------- ---------------------- --------------------- -----------------------
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ----------------------- --------------------- -----------------------
EUR EUR EUR EUR
---------------------- ----------------------- --------------------- -----------------------
Current portion 3.445.708 471.191 3.731.769 7.840
---------------------- ----------------------- --------------------- -----------------------
Non-current portion - 7.815 - 423.467
---------------------- ----------------------- --------------------- -----------------------
Total 3.445.708 479.006 3.731.769 431.307
---------------------- ----------------------- --------------------- -----------------------
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 27.3) which
is under legal proceedings for a final settlement (Note 39.3) , 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
38.2). Payables to related parties under discontinued operations
represent payables to non-controlling interest shareholders.
Deferred income from tenants represents advances from tenants
which will be used as future rental income and utilities
charges.
Accruals mainly include the accrued, administration fees,
accounting fees, facility management and other fees payable to
third parties.
Pre-sale advances reflect the advance received in relation to
Kiyanovskiy Residence pre-sale agreement, which upon non closing of
the said sale, part of which will be returned to the prospective
buyer.
33. Deposits from Tenants
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
Deposits from tenants
non-current - 23.002 - 23.002
---------------------- ---------------------- --------------------- ----------------------
Total - 23.002 - 23.002
---------------------- ---------------------- --------------------- ----------------------
Deposits from tenants appearing under non-current liabilities
include the amounts received from the tenants in Innovations
Logistics Park are to be reimbursed to those at the expiration of
the lease agreements.
34. Provisions and Taxes Payables
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Corporate income tax -
non current 39.767 22.099 165.817 41.981
--------------------- ---------------------- --------------------- -----------------------
Defence tax - non
current 17.173 - 14.252 -
--------------------- ---------------------- --------------------- -----------------------
Tax provision - non - -
current - 399.450
--------------------- ---------------------- --------------------- -----------------------
Non-current 56.940 22.099 579.519 41.981
--------------------- ---------------------- --------------------- -----------------------
Corporate income tax -
current 30.255 10.146 30.631 12.064
--------------------- ---------------------- --------------------- -----------------------
Other taxes including
VAT payable - current 3.447 174.931 6.943 130.182
--------------------- ---------------------- --------------------- -----------------------
Provisions - current 40 - - -
--------------------- ---------------------- --------------------- -----------------------
Current 33.742 185.077 37.574 142.246
--------------------- ---------------------- --------------------- -----------------------
Total Provisions and
Taxes Payables 90.682 207.176 617.093 184.227
--------------------- ---------------------- --------------------- -----------------------
Corporate income tax represents taxes payable in Cyprus and
Romania.
Other taxes represent local property taxes and VAT payable in
Romania.
Following the new tax ruling obtained by the Company during H1
2023 in relation to the status of its operations in front of local
tax authorities, the tax provisions made in previous periods have
been eliminated, since it is no longer estimated that such amounts
could be imposed in the future following a relevant tax audit.
35. Finance Lease Liabilities
As at the reporting date the finance lease liabilities consist
of the non-current portion of EUR6.027.887 and the current portion
of EUR57.401 (31 December 2022: EUR6.168.403 and EUR57.527,
accordingly).
Discontinued operations
30 June 2023 Note Minimum lease Interest Principal
payments
EUR EUR EUR
--------- -------------- --------- ----------
41.2
Less than one year & 41.6 561.820 280.826 280.994
--------- -------------- --------- ----------
Between two and 6.297.405 507.301 5.790.104
five years
--------- -------------- --------- ----------
More than five years 18.805 5.116 13.689
-------------- --------- ----------
6.878.030 793.243 6.084.787
--------- -------------- --------- ----------
Accrued Interest 501
-------------- --------- ----------
Total Finance Lease 6.085.288
Liabilities
-------------- --------- ----------
31 Dec 2022 Note Minimum lease Interest Principal
payments
EUR EUR EUR
--------- -------------- --------- ----------
41.2
Less than one year & 41.6 568.486 287.549 280.937
--------- -------------- --------- ----------
Between two and 6.574.889 645.268 5.929.621
five years
--------- -------------- --------- ----------
More than five years 21.831 6.529 15.302
-------------- --------- ----------
7.165.206 939.346 6.225.860
--------- -------------- --------- ----------
Accrued Interest 70
-------------- --------- ----------
Total Finance Lease 6.225.930
Liabilities
-------------- --------- ----------
35 .1 Land Plots Financial Leasing
The Group holds land plots in Ukraine under leasehold agreements
which in terms of the accounts are classified as finance leases.
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 EUR23.663 under current and non-current
portion. The Group's obligations under finance leases are secured
by the lessor's title to the leased assets. Regarding Tsymlyanskiy,
as of November 2021, the Group had submitted properly the official
request to the City of Kiev to extend the lease property for
another 5 years, since the Group has first extension rights over
any other interested party. The first step in the process, which
involves the approval by a committee of the municipality, before
the final approval by the City Council, has not been obtained yet
as many other cases had accumulated which had time priority over
Group's case. During the period between December 15th 2021 and
January 20th of 2022, the committee did not convene at all as is
usual during holiday and vacation times. Once the holiday season
was over, the main focus of the committee and the City Council
unfortunately were on issues not related to property lease
extensions, but rather more pressing matters for the interests and
operational stability of the City of Kiev. From there on, all
decisions have been put on hold due to the Russian insurgence of
Ukraine. We remain confident that we will be awarded the lease
extension once the war status permits, and we continue calculate
relevant future lease obligations.
35.2 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
EUR6.061.625 (2022: EUR6.201.629), bearing interest rate at 3M
Euribor plus 4,45% margin, being repayable in monthly tranches
until 2026 with a balloon payment of EUR5.244.926. At the maturity
of the lease agreement and upon payment of the balloon Best Day
Real Estate Srl will become owner of the asset.
Under the current finance lease agreement the collaterals for
the facility are as follows:
1. Best Day Real Estate Srl pledged its future receivables from its tenants.
2. Best Day Real Estate Srl pledged its shares.
3. Best Day Real Estate Srl pledged all current and reserved
accounts opened in Piraeus Leasing, Romania.
4. Best Day Real Estate Srl was obliged to provide cash
collateral in the amount of EUR250.000 in Piraeus Leasing Romania,
which had been deposited as follows, half in May 2014 and half in
May 2015.
SPDI provided a corporate guarantee in favor of the Leasing
company related to 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 the SPV N-E Real Estate Park
First Phase Srl, through a sale and lease back agreement with Alpha
Bank Romania SA. The leasing facility borne an interest of 3M
Euribor plus 5,25% margin. During December 2021 the SPV re-paid
fully the leasing facility and acquired the property, through a new
loan from Patria Bank of the order of EUR3,5 million, bearing an
interest rate of 3M Euribor plus 3,5% margin. The SPV was sold
during 2022 as part of Stage 2 of the transaction with Arcona.
36. Earnings and net assets per share attributable to equity
holders of the parent
a. Weighted average number of ordinary shares
30 June 2023 31 Dec 2022 30 June 2022
Issued ordinary shares capital 129.191.442 129.191.442 129.191.442
------------- ------------ -------------
Weighted average number of ordinary shares (Basic) 129.191.442 129.191.442 129.191.442
------------- ------------ -------------
Diluted weighted average number of ordinary shares 129.191.442 129.191.442 129.191.442
------------- ------------ -------------
b. Basic diluted and adjusted earnings per share
Earnings per share 30 Jun 2023 30 Jun 2022
EUR EUR
------------ ------------
Profit/ (Loss) after tax attributable to owners of the parent 179.933 (678.429)
------------ ------------
Basic 0,001 (0,005)
------------ ------------
Diluted 0,001 (0,005)
------------ ------------
c. Basic diluted and adjusted earnings per share from discontinued operations
Earnings per share 30 Jun 2023 30 Jun 2022
EUR EUR
------------ ------------
Profit/ (Loss) after tax from discontinued operations attributable to owners of the (1.060.487) (6.204.637)
parent
------------ ------------
Basic (0,008) (0,05)
------------ ------------
Diluted (0,008) (0,05)
------------ ------------
d. Net assets per share
Net assets per share 30 Jun 2023 31 Dec 2022
EUR EUR
------------ ------------
Net assets attributable to equity holders of the parent 13.324.137 13.111.260
------------ ------------
Number of ordinary shares 129.191.442 129.191.442
------------ ------------
Diluted number of ordinary shares 129.191.442 129.191.442
------------ ------------
Basic 0,10 0,10
------------ ------------
Diluted 0,10 0,10
------------ ------------
37. 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 -Innovations Logistics Park,
-- Office segment - Eos Business Park - Delea Nuova (Associate)
-- Retail segment - Kindergarten in Green Lake
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 23
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- ------- ------- ------------ ----------- ------------ ------------
Segment profit
---------- ------- ------- ------------ ----------- ------------ ------------
Rental income (Note 384.90
10) - - - - - 384.909 9
---------- ------- ------- ------------ ----------- ------------ ------------
Service charges and
utilities income (Note
10) - - - - - 403.166 403.166
---------- ------- ------- ------------ ----------- ------------ ------------
Profit from discontinued
operation (Note 9) 46.793 - - 865 (338.307) (402.115) (692.764)
---------- ------- ------- ------------ ----------- ------------ ------------
Impairment of financial
investments (Note
25) - - - - - (62.398) (62.398)
---------- ------- ------- ------------ ----------- ------------ ------------
Segment profit 46.793 - - 865 (338.307) 323.562 32.913
---------- ------- ------- ------------ ----------- ------------ ------------
Administration expenses
(Note 12) - - - - - - (623.832)
---------- ------- ------- ------------ ----------- ------------ ------------
Other (expenses)/income,
net (Note 15) - - - - - - (9.901)
---------- ------- ------- ------------ ----------- ------------ ------------
Finance income (Note
16) - - - - - - 159.777
---------- ------- ------- ------------ ----------- ------------ ------------
Interest expenses
(Note 16) - - - - - - (35.106)
---------- ------- ------- ------------ ----------- ------------ ------------
Other finance costs
(Note 16) - - - - - - (2.206)
---------- ------- ------- ------------ ----------- ------------ ------------
Foreign exchange losses,
net (Note 17a) - - - - - - (34.386)
---------- ------- ------- ------------ ----------- ------------ ------------
Income tax expense
(Note 18) - - - - - - (90)
---------- ------- ------- ------------ ----------- ------------ ------------
Profit from discontinued
operations (Note 9) - - - - - - (367.723)
---------- ------- ------- ------------ ----------- ------------ ------------
Exchange difference
on translation foreign - - - - - - 1.080.634
holdings (Note 28)
---------- ------- ------- ------------ ----------- ------------ ------------
Total Comprehensive
Income 200.080
---------- ------- ------- ------------ ----------- ------------ ------------
Continued Operations
Profit and Loss for the period ended 30 June 20 22
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- ---------- ------- ------------ ------------ -------------- --------------
Segment profit
---------- ---------- ------- ------------ ------------ -------------- --------------
Rental income (Note
10) - - - - - 358.514 358.514
---------- ---------- ------- ------------ ------------ -------------- --------------
Service charges and
utilities income (Note
10) - - - - - 151.236 151.236
---------- ---------- ------- ------------ ------------ -------------- --------------
Profit from discontinued
operation (Note 9) (41.186) (569.325) 51.266 (510) (2.819.347) (2.226.963) (5.606.065)
---------- ---------- ------- ------------ ------------ -------------- --------------
Gain realized on
acquisition
of subsidiary - - - - - 1.041 1.041
---------- ---------- ------- ------------ ------------ -------------- --------------
Gains/(losses) from
investments in
associates
(Note 21) - - - - - (3.822) (3.822)
---------- ---------- ------- ------------ ------------ -------------- --------------
Impairment of financial
investments (Note
25) - - - - - (446.674) (446.674)
---------- ---------- ------- ------------ ------------ -------------- --------------
Segment profit (41.186) (569.325) 51.266 (510) (2.819.347) (2.166.668) (5.545.770)
---------- ---------- ------- ------------ ------------ -------------- --------------
Administration expenses
(Note 12) - - - - - - (859.672)
---------- ---------- ------- ------------ ------------ -------------- --------------
Other (expenses)/income,
net (Note 15) - - - - - - 3.641
---------- ---------- ------- ------------ ------------ -------------- --------------
Finance income (Note
16) - - - - - - 187.273
---------- ---------- ------- ------------ ------------ -------------- --------------
Interest expenses
(Note 16) - - - - - - (58.772)
---------- ---------- ------- ------------ ------------ -------------- --------------
Other finance costs
(Note 16) - - - - - - (2.406)
---------- ---------- ------- ------------ ------------ -------------- --------------
Foreign exchange losses,
net (Note 17a) - - - - - - (11.065)
---------- ---------- ------- ------------ ------------ -------------- --------------
Income tax expense
(Note 18) - - - - - - 2.277
---------- ---------- ------- ------------ ------------ -------------- --------------
Profit from discontinued
operations (Note 9) - - - - - - (598.572)
---------- ---------- ------- ------------ ------------ -------------- --------------
Exchange difference
on translation foreign
holdings (Note 28) - - - - - - 19.148
---------- ---------- ------- ------------ ------------ -------------- --------------
Total Comprehensive
Income - - - - - - (6.863.918)
---------- ---------- ------- ------------ ------------ -------------- --------------
* 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 agreement
between the Company and the lender, with which the Company leases
part of the terminal's space. 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.
Discontinued Operations
Profit and Loss for the period ended 30 June 2023
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- ------- ------- ------------ ----------- ---------- ------------
Segment profit
---------- ------- ------- ------------ ----------- ---------- ------------
Rental income (Note
10) 63.062 - - 1.203 - - 64.265
---------- ------- ------- ------------ ----------- ---------- ------------
Service charges
and utilities income
(Note 10) 8.749 - - - 2.995 - 11744
---------- ------- ------- ------------ ----------- ---------- ------------
Valuation gains/(losses)
from investment
property (Note 13) 31.491 - - - 1659 - 33.150
---------- ------- ------- ------------ ----------- ---------- ------------
Gains/(losses) from
investments in associates
(Note 21) - - - - (335.533) - (335.533)
---------- ------- ------- ------------ ----------- ---------- ------------
Asset operating
expenses ( 56.509 ( 338 ( 7.428 ( 402.115 ( 466.390
(Note 11) ) - - ) ) ) )
---------- ------- ------- ------------ ----------- ---------- ------------
Segment profit 46.793 - - 865 (338.307) (402.115) (692.764)
---------- ------- ------- ------------ ----------- ---------- ------------
Administration expenses ( 44.838
(Note 12) - - - - - - )
---------- ------- ------- ------------ ----------- ---------- ------------
Other (expenses)/income,
net (Note 15) - - - - - - ( 71 )
---------- ------- ------- ------------ ----------- ---------- ------------
Finance income (Note
16) - - - - - - 449
---------- ------- ------- ------------ ----------- ---------- ------------
Interest expenses ( 303.410
(Note 16) - - - - - - )
---------- ------- ------- ------------ ----------- ---------- ------------
Other finance costs
(Note 16) - - - - - - (787)
---------- ------- ------- ------------ ----------- ---------- ------------
Foreign exchange
losses, net (Note
17a) - - - - - - (19.066)
---------- ------- ------- ------------ ----------- ---------- ------------
Income Tax (Note
18) - - - - - - -
---------- ------- ------- ------------ ----------- ---------- ------------
Total Comprehensive
Income - - - - - - (1.060.487)
---------- ------- ------- ------------ ----------- ---------- ------------
Profit and Loss for the period ended 30 June 2022
Warehouse Office Retail Residential Land Plots Corporate Total
EUR EUR EUR EUR EUR EUR EUR
---------- ---------- -------- ------------ ------------ ------------ -------------
Segment profit
---------- ---------- -------- ------------ ------------ ------------ -------------
Property Sales income - -
(Note 14) - - - 3.495.146 3.495.146
---------- ---------- -------- ------------ ------------ ------------ -------------
Cost of Property - (4.477.93 - ( 4.477.938
sold (Note 14) - - - 8 ) )
---------- ---------- -------- ------------ ------------ ------------ -------------
Rental income (Note
10) 16.930 331.363 59 .998 600 - - 408.891
---------- ---------- -------- ------------ ------------ ------------ -------------
Service charges
and utilities income
(Note 10) 2.393 - - - 6.326 - 8.719
---------- ---------- -------- ------------ ------------ ------------ -------------
Valuation gains/(losses)
from investment
property (Note 13) (5.295) - (721) - (1.787.694) - (1.793.710)
---------- ---------- -------- ------------ ------------ ------------ -------------
Loss on disposal
of subsidiary (Note
20.2.1 A&B) - (885.614) - - - (2.085.337) (2.970.951)
---------- ---------- -------- ------------ ------------ ------------ -------------
Asset operating
expenses ( 55.214 ( 15.072 ( 8.011 ( 1.112 ( 55.186 ( 141.626 ( 276.221
(Note 11) ) ) ) ) ) ) )
---------- ---------- -------- ------------ ------------ ------------ -------------
Segment profit (41.186) (569.323) 51.266 (512) (2.819.346) (2.226.963) (5.606.064)
---------- ---------- -------- ------------ ------------ ------------ -------------
Administration expenses ( 70.823
(Note 12) - - - - - - )
---------- ---------- -------- ------------ ------------ ------------ -------------
Other (expenses)/income, ( 104.116
net (Note 15) - - - - - - )
---------- ---------- -------- ------------ ------------ ------------ -------------
Finance income (Note
16) - - - - - - 4.645
---------- ---------- -------- ------------ ------------ ------------ -------------
Interest expenses ( 362.779
(Note 16) - - - - - - )
---------- ---------- -------- ------------ ------------ ------------ -------------
Other finance costs
(Note 16) - - - - - - (1.273)
---------- ---------- -------- ------------ ------------ ------------ -------------
Foreign exchange
losses, net (Note
17a) - - - - - - (30.976)
---------- ---------- -------- ------------ ------------ ------------ -------------
Income Tax (Note
18) - - - - - - (33.251)
---------- ---------- -------- ------------ ------------ ------------ -------------
Total Comprehensive
Income - - - - - - (6.204.637)
---------- ---------- -------- ------------ ------------ ------------ -------------
Total Operations
Balance Sheet as at 30 June 2023
Warehouse Office Retail Residential Land Corporate Total
plots
EUR EUR EUR EUR EUR EUR EUR
----------- ------- ------- ------------ ---------- ----------- -----------
Assets
----------- ------- ------- ------------ ---------- ----------- -----------
Long-term receivables
and prepayments 820 - - - - - 820
----------- ------- ------- ------------ ---------- ----------- -----------
Investment in
associates - - - - - 1 1
----------- ------- ------- ------------ ---------- ----------- -----------
Available-for-sale
investments - - - - - 12.016.410 12.016.410
----------- ------- ------- ------------ ---------- ----------- -----------
Assets held for
sale 10.025.000 - - - 1.886.621 1.371.049 13.282.670
----------- ------- ------- ------------ ---------- ----------- -----------
Segment assets 10.025.820 - - - 1.886.621 13.387.460 25.299.901
----------- ------- ------- ------------ ---------- ----------- -----------
Tangible and intangible
assets - - - - - - 466
Prepayments and
other current
assets - - - - - - 3.808.506
---------- ---------- -------- -----------
Cash and cash
equivalents - - - - - - 88.258
---------- ---------- -------- -----------
Total assets - - - - - - 29.197.131
---------- ---------- -------- -----------
Borrowings 9.599 - - - - 104.022 113.621
---------- ---------- -------- -----------
Liabilities associated
with assets classified
as held for disposal 6.084.670 - - - 4.249.142 686.182 11.019.994
---------- ---------- -------- -----------
Segment liabilities 6.094.269 - - 4.249.142 790.204 11.133.615
---------- ---------- -------- -----------
Trade and other
payables - - - - - - 3.445.708
---------- ---------- -------- -----------
Taxes payable
and provisions - - - - - - 90.682
---------- ---------- -------- -----------
Bonds - - - - - - 846.387
---------- ---------- -------- -----------
Total liabilities - - - - - - 15.516.392
---------- ---------- -------- -----------
Balance Sheet as at 31 December 2022
Warehouse Office Retail Residential Land Corporate Total
plots
EUR EUR EUR EUR EUR EUR
------------ -------- -------- ------------- ----------- ----------- -----------
Assets
------------ -------- -------- ------------- ----------- ----------- -----------
Long-term receivables
and prepayments - - - - - 824 824
------------ -------- -------- ------------- ----------- ----------- -----------
Investment in
associate - - - - - 1 1
------------ -------- -------- ------------- ----------- ----------- -----------
Financial Assets
at FV through
P&L - - - - - 12.078.808 12.078.808
------------ -------- -------- ------------- ----------- ----------- -----------
Assets held for
sale 10.025.000 1 - - 1.286.313 2.523.777 13.835.091
------------ -------- -------- ------------- ----------- ----------- -----------
Segment assets 10.025.000 1 - - 1.286.313 14.603.410 25.914.724
------------ -------- -------- ------------- ----------- ----------- -----------
Tangible and intangible
assets - - - - - - 816
Prepayments and
other current
assets - - - - - - 4.153.162
---------- ---------- ---------- -----------
Cash and cash
equivalents - - - - - - 66.570
---------- ---------- ---------- -----------
Total assets - - - - - - 30.135.272
---------- ---------- ---------- -----------
Liabilities associated
with assets classified
as held for disposal 6.224.647 - - - 4.045.477 615.534 10.885.658
---------- ---------- ---------- -----------
Borrowings 9.630 - - - - 587.727 597.357
---------- ---------- ---------- -----------
Segment liabilities 6.234.277 - - - 4.045.477 1.203.261 11.483.015
---------- ---------- ---------- -----------
Trade and other
payables - - - - - - 3.731.769
---------- ---------- ---------- -----------
Taxation - - - - - - 617.093
---------- ---------- ---------- -----------
Bonds - - - - - - 822.736
---------- ---------- ---------- -----------
Total liabilities - - - - - - 16.654.613
---------- ---------- ---------- -----------
Discontinued operations
Assets and Liabilities held for sale 30 June 2023
Warehouse Office Retail Residential Land Corporate Total
plots
EUR EUR EUR EUR EUR EUR EUR
----------- ------- ------- ------------ ---------- ---------- -----------
Assets
----------- ------- ------- ------------ ---------- ---------- -----------
Investment properties 9.710.000 - - - 1.886.620 - 11.596.620
----------- ------- ------- ------------ ---------- ---------- -----------
Long-term receivables
and prepayments 315.000 - - - - - 315.000
----------- ------- ------- ------------ ---------- ---------- -----------
Investments in
associates - - - - 1 - 1
----------- ------- ------- ------------ ---------- ---------- -----------
Segment assets 10.025.000 - - - 1.886.621 - 11.911.621
----------- ------- ------- ------------ ---------- ---------- -----------
Tangible and intangible
assets - - - - - - 20
Prepayments and
other current
assets - - - - - - 1.202.288
---------- ---------- -----------
Cash and cash
equivalents - - - - - - 168.741
---------- ---------- -----------
Total assets - - - - - - 13.282.670
---------- ---------- -----------
Borrowings 43 - - - 4.225.479 - 4.225.522
---------- ---------- -----------
Finance lease
liabilities 6.061.625 - - - 23.663 - 6.085.288
---------- ---------- -----------
Deposits from
tenants 23.002 - - - - - 23.002
---------- ---------- -----------
Segment liabilities 6.084.670 - - - 4.249.142 - 10.333.812
---------- ---------- -----------
Trade and other
payables - - - - - - 479.006
---------- ---------- -----------
Taxation - - - - - - 207.176
---------- ---------- -----------
Total liabilities - - - - - - 11.019.994
---------- ---------- -----------
Assets and Liabilities held for sale 2022
Warehouse Office Retail Residential Land Corporate Total
plots
EUR EUR EUR EUR EUR EUR EUR
----------- ------- ------- ------------ ---------- ---------- -----------
Assets
----------- ------- ------- ------------ ---------- ---------- -----------
Investment properties 9.710.000 - - - 950.779 971.217 11.631.996
----------- ------- ------- ------------ ---------- ---------- -----------
Long-term receivables
and prepayments 315.000 - - - - - 315.000
----------- ------- ------- ------------ ---------- ---------- -----------
Investments in
associates - 1 - - 335.533 - 335.534
----------- ------- ------- ------------ ---------- ---------- -----------
Segment assets 10.025.000 1 - - 1.286.313 971.217 12.282.530
----------- ------- ------- ------------ ---------- ---------- -----------
Tangible and intangible
assets - - - - - - 20
Prepayments and
other current assets - - - - - - 1.267.713
---------- ---------- -----------
Cash and cash equivalents - - - - - - 284.828
---------- ---------- -----------
Total assets - - - - - - 13.835.091
---------- ---------- -----------
Borrowings 16 - - - 4.021.176 - 4.021.192
---------- ---------- -----------
Finance lease liabilities 6.201.629 - - - 24.301 - 6.225.930
---------- ---------- -----------
Deposits from tenants 23.002 - - - - - 23.002
---------- ---------- -----------
Segment liabilities 6.224.647 - - - 4.045.477 - 10.270.124
---------- ---------- -----------
Trade and other
payables - - - - - - 431.307
---------- ---------- -----------
Taxation - - - - - - 184.227
---------- ---------- -----------
Total liabilities - - - - - - 10.885.658
---------- ---------- -----------
Geographical information
30 June 2023 30 June 2022
Income (Note 10) Continued operations Continued operations Continued operations Discontinued
operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Romania - 76.009 - 417.610
--------------------- ---------------------- --------------------- -----------------------
Cyprus * 788.075 - 509.750 -
--------------------- ---------------------- --------------------- -----------------------
Total 788.075 76.009 509.750 417.610
--------------------- ---------------------- --------------------- -----------------------
* 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 agreement
between the Company 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 2023 30 June 2022
disposal of investment
properties (Note 14)
--------------------------------------------- ----------------------------------------------
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Romania - - - (982.792)
--------------------- ---------------------- --------------------- -----------------------
Total - - - (982.792)
--------------------- ---------------------- --------------------- -----------------------
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- --------------------- --------------------- ----------------------
EUR EUR EUR EUR
--------------------- --------------------- --------------------- ----------------------
Carrying amount of
assets ( investment
properties and
associates)
--------------------- --------------------- --------------------- ----------------------
Ukraine - 1.886.620 - 1.921.996
--------------------- --------------------- --------------------- ----------------------
Romania 1 9.710.001 1 10.045.534
--------------------- --------------------- --------------------- ----------------------
Total 1 11.596.621 1 11.967.530
--------------------- --------------------- --------------------- ----------------------
38. Related Party Transactions
The following transactions were carried out with related
parties:
38.1 Income/ Expense
38.1.1 Income
30 June 2023 30 June 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
Interest Income from
loan to associates
(Note 16) - 424 161 4.645
---------------------- ---------------------- --------------------- ----------------------
Total - 424 161 4.645
---------------------- ---------------------- --------------------- ----------------------
Interest income from loan to related parties represent interest
income from GreenLake Development Srl (associate).
38.1.2 Expenses
30 June 2023 30 June 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Management
Remuneration and
incentives (Note 12) 10.657 - 298.843 -
--------------------- ---------------------- --------------------- -----------------------
Interest expenses on
Director and
Management Loans
(Note 16) 11.454 - 19.100 -
--------------------- ---------------------- --------------------- -----------------------
Total 22.111 - 317.943 -
--------------------- ---------------------- --------------------- -----------------------
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.
The annual Directors fees including Chairman and Committee
remunerations have been set at GBP 129k, while the decision for
registering relevant fees for H1 2023 and 2022 is still pending by
the Board.
38.2 Payables to related parties (Note 32)
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Board of Directors &
Committees
remuneration 75.149 - 218.171 -
--------------------- ---------------------- --------------------- -----------------------
Sec South East
Continent Unique Real
Estate Management
Limited 65 - 65 -
--------------------- ---------------------- --------------------- -----------------------
Management
Remuneration 134.518 - 276.921 -
--------------------- ---------------------- --------------------- -----------------------
Total 209.732 - 495.157 -
--------------------- ---------------------- --------------------- -----------------------
38 .2.1 Board of Directors & Committees
The amount payable represents remuneration and expenses payable
to Non-Executive Directors until the end of the reporting period.
The members of the Board of Directors pursuant to a recommendation
by the Remuneration Committee and in order to facilitate the
Company's cash flow used to receive their payment in shares of the
Company. During 2018 the directors received 344.371 ordinary shares
in lieu of their 2016 H1 remuneration amounting to GBP 120.530.
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. Since H2 2019 it has been decided that
relevant fees will be paid in cash. The annual Directors fees
including Chairman and Committee remunerations have been set at GBP
129k, while the decision for registering relevant fees for H1 2023
and 2022 is still pending by the Board.
38 .2.2 Management Remuneration
Management Remuneration represents deferred amounts payable to
the CEO of the Company.
38.3 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
2023 2022
EUR EUR EUR
----------- ---------- ----------
LLC " Trade Center" - 5.915 6.074
----------- ---------- ----------
LLC "Aisi Ukraine" 23.062.351 306.579 295.549
----------- ---------- ----------
LLC " Almaz-Press-Ukraine " 8.236.554 268.542 275.778
----------- ---------- ----------
LLC "Aisi Ilvo" 150.537 18.889 19.398
----------- ---------- ----------
Total 31.449.442 599.925 596.799
----------- ---------- ----------
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 EUR59.993, estimated on balances held at 30 June 2023.
38.4 Loans to associates (Note 24)
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
---------------------- ---------------------- --------------------- ----------------------
EUR EUR EUR EUR
---------------------- ---------------------- --------------------- ----------------------
Loans to GreenLake
Development Srl - 80.665 - 229.629
---------------------- ---------------------- --------------------- ----------------------
Total - 80.665 - 229.629
---------------------- ---------------------- --------------------- ----------------------
The loan was provided to GreenLake Development Srl from Edetrio
Holdings Limited (discontinued operations) and was signed on 14
June 2012. It bears interest 5% and it was partially repaid during
the current period.
38.5 Loans from related parties (Note 30)
30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
--------------------- ---------------------- --------------------- -----------------------
EUR EUR EUR EUR
--------------------- ---------------------- --------------------- -----------------------
Loan from Directors
and Management 100.000 - 492.500 -
--------------------- ---------------------- --------------------- -----------------------
Interest accrued on
loans from related
parties 4.022 - 95.227 -
--------------------- ---------------------- --------------------- -----------------------
Total 104.022 - 587.727 -
--------------------- ---------------------- --------------------- -----------------------
Loan from Directors and Management reflect a loan from one
director of the order of EUR 100.000 as bridge financing for future
property acquisitions. The loan bears interest 8% annually. During
the period the Company proceeded to full repayment of similar loans
from other two directors.
39. Contingent Liabilities
39.1 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 sales of Terminal
Brovary, Balabino and Bela, the exposure of the Group in Ukraine
has been significantly reduced.
The Group performed during the reporting and comparative periods
part of its operations in Romania. In respect of Romanian tax
system, many aspects are subject to varying interpretations and
frequent changes, which in many cases have retroactive effects. In
certain circumstances it is also possible that tax authorities may
act arbitrary.
These facts create tax risks which are substantially more
significant than those typically found in countries with more
advanced tax systems. Management believes that it has adequately
provided for tax liabilities, based on its interpretation of tax
legislation, official pronouncements and court decisions. However,
the interpretations of the relevant authorities could differ and
the effect on these consolidated financial statements, if the
authorities were successful in enforcing their interpretations,
could be significant.
39.2 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.
39.3 Bluehouse Accession case
BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L. (Bluehouse)
filed in Cypriot courts in December 2018 lawsuit against the
Company for the total amount of EUR 5.042.421,87, in relation to
the Praktiker Craiova acquisition in 2015, and the redemption of
the Redeemable Preference Class A shares which were issued as part
of the transaction to the vendor, plus special compensations of
EUR2.500.000 associated with the related pledge agreement. The
redemption of such shares was requested in 2016, and in lieu of
such redemption the Company transferred to the vendor the 20%
holding in Autounion asset which was used as a guarantee to the
transaction for the effective redemption of the Redeemable
Preference Class A shares. At the same time the Company has posted
in its accounts a relevant payable provision for Bluehouse in the
amount of EUR2.521.211 (Note 33). On the other hand, 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 that 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. The next
hearing of the combined cases in front of Cypriot Courts has been
set on 16 October 2023.
39.4 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.
39.5 Other Contingent Liabilities
The Group had no other contingent liabilities as at 30 June
2023.
40. Commitments
The Group had no other commitments as at 30 June 2023.
41. Financial Risk Management
41.1 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 30), bonds (Note 31), trade and other
payables (Note 32) deposits from tenants (Note 33), financial
leases (Note 35), taxes payable (Note 34) 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.
41.2 Categories of Financial Instruments
Note 30 June 2023 31 Dec 2022
Continued operations Discontinued Continued operations Discontinued
operations operations
----- --------------------- -------------------- --------------------- --------------------
EUR EUR EUR EUR
----- --------------------- -------------------- --------------------- --------------------
Financial Assets
----- --------------------- -------------------- --------------------- --------------------
Cash at Bank 26 88.258 168.741 66.570 284.828
----- --------------------- -------------------- --------------------- --------------------
Long-term
Receivables and
prepayments 23 820 315.000 824 315.000
----- --------------------- -------------------- --------------------- --------------------
Financial Assets at 25 12.016.410 - 12.078.808 -
FV through P&L
----- --------------------- -------------------- --------------------- --------------------
Prepayments and 24 3.808.506 1.202.288 4.153.162 1.267.713
other receivables
----- --------------------- -------------------- --------------------- --------------------
Total 15.913.994 1.686.029 16.299.364 1.867.541
-----
Financial Liabilities
Borrowings 30 113.621 4.225.522 597.357 4.021.192
----- --------------------- -------------------- --------------------- --------------------
Trade and other
payables 32 3.445.708 479.006 3.731.769 431.307
-----
Deposits from
tenants 33 - 23.002 - 23.002
----- --------------------- -------------------- --------------------- --------------------
Finance lease 35 - 6.085.288 - 6.225.930
liabilities
----- --------------------- -------------------- --------------------- --------------------
Taxes payable and
provisions 34 90.682 207.176 617.093 184.227
----- --------------------- -------------------- --------------------- --------------------
Bonds 31 846.387 - 822.736 -
----- --------------------- -------------------- --------------------- --------------------
Total 4.496.398 11.019.994 5.768.955 10.885.658
41.3 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.
41.4 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) , 2023, cash
and cash equivalent (including continued and discontinued
operations) financial assets amounted to EUR 256.999 ( 31 December
2022 : EUR 351.398) of which approx. EUR649 in UAH and EUR211.135
in RON (Note 26) while the remaining are mainly denominated in
either GBP, USD or EUR.
The Group is exposed to interest rate risk in relation to its
borrowings (including continued and discontinued operations)
amounting to EUR 4.339.143 (31 December 2022: EUR4.618.549) 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 2023 the weighted average interest rate for all
the interest bearing borrowings of the Group stands at 5,41% (31
December 2022: 5,36%).
The sensitivity analysis for EURIBOR changes applying to the
interest calculation on the borrowings principal outstanding as at
30 June 2023 is presented below:
Actual +100 bps +200 bps
as at 30.06.2023
Weighted average interest
rate 5,41% 6,41% 7,41%
Influence on yearly finance
costs 26.283 52.566
The sensitivity analysis for EURIBOR changes applying to the
interest calculation on the borrowings principal outstanding as at
31 December 2022 is presented below:
Actual +100 bps +200 bps
as at 31.12.2022
Weighted average interest
rate 5,36% 6,36% 7,36%
Influence on yearly finance
costs 30.304 60.608
The Group's exposures to financial risk are also discussed in
Note 7.
41.5 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.
41.6 Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with
the Board of Directors, which applies a framework for the Group's
short, medium and long term funding and liquidity management
requirements. The Treasury function of the Group manages liquidity
risk by preparing and monitoring forecasted cash flow plans and
budgets while maintaining adequate reserves. The following table
details the Group's contractual maturity of its financial
liabilities. The tables below have been drawn up based on the
undiscounted contractual maturities including interest that will be
accrued.
Continued Operations
30 June 2023 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 88.258 88.258 88.258 - -
-----------
Financial Assets 12.016.410 12.016.410 12.016.410 - -
at FV through P&L
-----------
Prepayments and other 3.808.506 3.808.506 3.808.506 - -
receivables
-----------
Long-term Receivables
and prepayments 820 820 - - 820
Total Financial
assets 15.913.994 15.913.994 15.913.174 - 820
Financial liabilities
-----------
Borrowings 113.621 123.621 18.621 105.000 -
-----------
Trade and other paya 3.445.708 3.445.708 3.445.708 - -
bles
Bonds issued 846.387 1.034.546 169.736 47.040 817.770
-----------
Taxes payable and
provisions 90.682 90.682 33.741 56.940 -
-----------
Total Financial
liabilities 4.496.398 4.694.557 3.667.807 208.980 817.770
Total net (liabilities)/
assets 11.417.596 11.219.437 12.245.367 (208.980) (816.950)
-----------
Discontinued Operations
30 June 2023 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 168.741 168.741 168.741 - -
Prepayments and other 1.202.288 1.202.288 1.202.288 - -
receivables
Long-term Receivables
and prepayments 315.000 315.000 - - 315.000
Total Financial
assets 1.686.029 1.686.029 1.371.029 - 315.000
Financial liabilities
Borrowings 4.225.522 4.237.397 4.223.331 14.066 -
Trade and other payables 479.006 479.006 471.191 - 7.815
Deposits from tenants 23.002 23.002 - - 23.002
Finance lease liabilities 6.085.288 6.878.030 561.821 548.752 5.767.457
Taxes payable and
provisions 207.176 207.176 185.077 22.099 -
Total Financial 11.019.994 11.824.611 5.441.420 584.917 5.798.274
liabilities
Total net liabilities (9.333.965) (10.138.582) (4.070.391) (584.917) (5.483.274)
Continued Operations
31 December 2022 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 66.570 66.570 66.570 - -
Prepayments and
other receivables 4.153.162 4.153.162 4.153.162 - -
Financial Assets
at FV through P&L 12.078.808 12.078.808 12.078.808 - -
Long-term Receivables
and prepayments 824 824 - - 824
Total Financial
assets 16.299.364 16.299.364 16.298.540 - 824
Financial liabilities
Borrowings 597.357 647.571 120.334 527.237 -
Trade and other
payables 3.731.769 3.731.769 3.731.769 - -
Bonds issued 822.736 1.010.896 146.086 47.040 817.770
Taxes payable and
provisions 617.093 617.093 37.574 579.519 -
Total Financial
liabilities 5.768.955 6.007.329 4.035.763 1.153.796 817.770
Total net assets/(liabilities) 10.530.409 10.292.035 12.262.777 (1.153.796) (816.946)
Discontinued Operations
31 December 2022 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 284.828 284.828 284.828 - -
------------ ------------- ------------ ------------
Long-term receivables 315.000 315.000 - - 315.000
------------ ------------- ------------ ------------
Prepayments and
other receivables 1.267.713 1.267.713 1.267.713 - -
------------ ------------- ------------ ------------
Total Financial
assets 1.867.541 1.867.541 1.552.541 - 315.000
------------ ------------- ------------ ------------
Financial liabilities
------------ ------------- ------------ ------------
Borrowings 4.021.192 4.033.067 4.018.994 14.073 -
------------ ------------- ------------ ------------
Trade and other
payables 431.307 431.307 423.467 - 7.840
------------ ------------- ------------ ------------
Deposits from tenants 23.002 23.002 - - 23.002
------------ ------------- ------------ ------------
Finance lease liabilities 6.225.930 7.165.206 568.486 555.418 6.041.302
------------ ------------- ------------ ------------
Taxation 184.227 184.227 142.246 41.981 -
------------ ------------- ------------ ------------
Total Financial
liabilities 10.885.658 11.836.809 5.153.193 611.472 6.072.144
------------ ------------- ------------ ------------
Total net assets/(liabilities) (9.018.117) (9.969.268) (3.600.652) (611.472) (5.757.144)
------------ ------------- ------------ ------------
42. Events after the end of the reporting period
a) New lease agreement in Innovations Terminal
On 27 July 2023 the Company signed a new lease agreement in
Innovations Terminal in Bucharest for 3.000 m(2) of ambient
warehousing space plus relevant office space. The agreement was
made with BAUSTOFF and METALL SRL, a multinational construction
materials distributor, present in 14 European countries, operating
7 production units, 125 commercial units and distribution centers
and employing over 2400 employees. The lease term is 5 years
starting August 2023 and maturing August 2028. Following this new
lease, occupancy of the Terminal stands at 82%.
b) Implementation of operating cost optimisation measures
As part of the operating expenses reduction plan which has been
adopted, announced and described by the Company in previous
periods, during July and August 2023 all HR and local office costs
(except Ukraine) have been effectively externalized through a
related third party advisory company owned by CEO Lambros
Anagnostopoulos. Following the signing of all relevant agreements,
currently the Company employs its CEO and an administrator in
Ukraine.
[1] World Bank Group, Eurostat, EBRD, National Institute of
Statistics- Romania, National Institute of Statistics - Ukraine,
IMF, European Commission.
[2] Eurobank, CBRE Research, Colliers International, Cushman
& Wakefield, Crosspoint Real Estate, Knight Frank, Coldwell
Banker Research, National Institute of Statistics- Romania, State
Statistics Service-Ukraine, JLL
[3] Share premium is not available for distribution.
[4] Companies, which do not distribute 70% of their profits
after tax, as defined by the Special Contribution for the Defence
of the Republic Law, within two years after the end of the relevant
tax year, will be deemed to have distributed this amount as
dividend on the 31 of December of the second year. The amount of
the deemed dividend distribution is reduced by any actual dividend
already distributed by 31 December of the second year for the year
the profits relate. The Company pays special defence contribution
on behalf of the shareholders over the amount of the deemed
dividend distribution at a rate of 17% (applicable since 2014) when
the entitled shareholders are natural persons tax residents of
Cyprus and have their domicile in Cyprus. In addition, from 2019
(deemed dividend distribution of year 2017 profits), the Company
pays on behalf of the shareholders General Healthcare System (GHS)
contribution at a rate of 2,65% (31.12.2019: 1,70%), when the
entitled shareholders are natural persons tax residents of Cyprus,
regardless of their domicile.
[5] 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 38.3).
[6] 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 38.3).
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END
IR DKLBLXKLEBBK
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