ANNUAL REPORT
2023
Table of Contents
SECTION A- Annual Report
1. Letter to Shareholders
2. Management Report
2.1 Corporate Overview & Financial Performance
2.2 Property Holdings
2.3 Financial and Risk Management
2.4 2024 and beyond
3. Regional Economic Developments
4. Real Estate Market Developments
4.1 Romania
4.2 Ukraine
5. Property Assets
5.1 Innovations Logistics Park, Romania
5.2 Residential portfolio
GreenLake, Bucharest, Romania
5.6 Land Assets
Kiyanovskiy Residence – Kiev, Ukraine
Tsymlyanskiy Residence – Kiev, Ukraine
Rozny Lane – Kiev Oblast, Kiev, Ukraine
SECTION B- Financial Statements
SECURE PROPERTY DEVELOPMENT AND INVESTMENT PLC
KIRIAKOU MATSI 16, AG. OMOLOGITES,1082, NICOSIA,CYPRUS
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5
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7
10
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12
13
13
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14
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ANNUAL REPORT 2023| 2
SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC
Key Figures
31 Dec 2023
31 Dec 2022
Change
Total Assets (€million):
28
30
-6,4%
Number of income producing
commercial Properties:
1
1
-
Average occupancy rate of
82%
80%
2,5%
income producing assets:
Operational Gearing:
21%
34%
-38%
Average borrowing cost:
4,7%
5,4%
-13%
Operating Income*(€million):
0,6
0,7
-10%
EBITDA*(€million):
(0,8)
(0,6)
-22%
Net Equity**(€million):
18,7
13,1
42%
Issued Shares:
129.191.442
129.191.442
-
NAV per share (€):
0,14
0,10
40%
* Excluding fair value related impact (Table 1).
** Attributable to the shareholders.
This report may contain forward-looking statements about the Company. Such statements are predictive in nature and depend upon or refer to future
events or conditions and may include such words as ‘‘expects’’, ‘‘plans’’, ‘‘anticipates’’, ‘‘believes’’, ‘‘estimates’’ or other similar expressions. In addition, any
statement regarding future performances, strategies, prospects, actions or plans is also a forward-looking statement. Forward-looking statements are subject
to known and unknown risks and uncertainties and other factors that may cause actual results, events, activities and achievements to differ materially from
those expressed or implied by such statements. Such factors include general economic, political and market conditions, interest and foreign exchange rates,
regulatory or judicial proceedings, technological change and catastrophic events. You should consider these and other factors carefully before making any
investment decisions and before relying on forward-looking statements.
ANNUAL REPORT 2023| 3
1.
Letter to Shareholders
27 June 2024
2023 experienced further market disruption with one war continuing and another one commencing in our
South East Europe / East Mediterranean Region. On the other hand global (and European) inflation seems
to have been tamed and interest rate reduction is expected to hit the markets within 2024. In this difficult
environment, SPDI succeeded in lightening its balance sheet eliminating both a number of liabilities,
including settling the Bluehouse legal dispute, which in itself allowed the Company to get rid of the relative
provision from its books, as well as a number of subsidiary SPVs.
In parallel, SPDI's Management increased its effort to monetize the remaining assets that had not yet been
sold to Arcona Property Fund N.V. (Arcona) (“APF”) while it commenced discussions about the future of
the Company, after it reduces its capital and distributes the APF shares it owns to its shareholders.
We expect 2024 will be a pivotal year for SPDI as its shareholders will receive the APF shares concluding
the effective merger of the two entities, and any new strategy for the future of the company is put forward.
Management and directors of SPDI are confident that the effective merger with Arcona which generates a
pan-East European property company listed in Amsterdam will help our shareholders generate further value
from their investment while also facilitating monetization for those that would like to do so. In any case,
we believe we have followed through our promise to deliver on both options and are happy to see our long
standing efforts nearing realization.
Best regards,
Lambros G. Anagnostopoulos, Chief Executive Officer
ANNUAL REPORT 2023| 4
2.
Management Report
2.1 Corporate Overview & Financial Performance
SPDI’s core property asset portfolio consists of South Eastern European prime commercial and
Summary
Corporate
developments
industrial real estate, the majority of which is let to blue chip tenants on long leases. During
2023, in line with the Company’s strategy to maximise value for shareholders, management
worked towards closing 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 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 Czech Republic, Poland and Slovakia, the combination of two
complementary asset portfolios is expected to create a significant European property company,
benefiting both the Company’s and Arcona’s respective shareholders.
Following the completion of Stage 1 of the transaction in 2019, which involved the sale of two
land plots in Ukraine and residential and land assets in Bulgaria and resulted in the Company
receiving a total of 593.534 Arcona shares and 144.084 warrants over Arcona shares, in June
2021, the two parties signed SPA agreements for Stage 2 of the Arcona transaction. This stage
involved the transfer of the EOS and Delenco assets in Romania and the Kiyanovskiy and Rozny
land plots in Ukraine with a total net asset value of €8,2 million, in exchange for approximately
560.000 new ordinary shares in Arcona and approximately 135.000 warrants over shares in
Arcona, as well as €1 million in cash, subject to, inter alia, standard form adjustment and
finalisation in accordance with the relevant agreements.
During March and June 2022 the transactions for the sale of EOS and Delenco were concluded,
in exchange for the issue to the Company of 479.376 new shares in Arcona and 115.543 warrants
over shares in Arcona.
Although, the invasion of Ukraine by Russia during February 2022, suspended the transfer
process of the relevant Ukrainian assets included in Stage 2 of the transaction, during 2023 the
Management has worked intensively to resolve all relevant issues for the sale to be concluded,
and as at today the transactions are expected to finally close during Q3 2024.
Furthermore, during 2023, as part of the cost optimization process adopted by the Board, the
Company has started the implementation of the externalization of all existing HR and office costs
in all jurisdictions that it currently operates, except Ukraine. As previously announced, the cost
optimization plan involves an agreement with a Cyprus based advisory company wholly owned
by the Company’s CEO Lambros Anagnostopoulos, which has assumed all direct individual
personnel contracts, all service contracts with local real estate service providers and all HR and
office costs in Romania, for a fixed monthly fee of € 24.000 plus VAT. All relevant agreements
ANNUAL REPORT 2023| 5
related to this plan were signed during the period, and currently the Company has externalized
all HR costs. It has been estimated that the plan will result in an annual reduction of 35% and
50% compared to similar costs incurred by the group in 2021 and 2020 respectively. The agreed
monthly fee has been set to effectively reflect the reduced personnel time/cost and office
expenses of the Company during the current phase of the transformation.
Moreover, during 2023, as part of the joint venture agreement with Myrian Nes Limited for
converting € 2,5 milion of a loan into equity for developing logistics properties in Romania, the
parties have identified and appraised relevant potential deals, and currently concentrate into one
transaction involving the development of two different properties for the same tenant in two
regional Romanian cities. The main terms have been in principle agreed and due diligence on
relevant properties has been finalized, while the legal teams are currently engaging with drafting
the required documentation.
Finally, during the period the Company sold its interests in all the corporate vehicles associated
with Phase I of the GreenLake project in Bucharest, Romania, which remained idle following the
sale of all Phase I units.
Regarding the economic environment in which the Company operates, the Romanian economy
which constitutes the main operating market of the Company, grew by 2,1% in 2023. The
economy decelerated during the year due to higher inflation and weaker external demand.
Romanian economic
developments
Growth was driven by strong consumer spending, which increased significantly year-on-year on
the back of the increased wages. The inflation rate dropped to 9,7% in 2023, while
unemployment showed a marginal decrease to 5,5%, keeping the labor market relatively tight
and wage increases high. Real estate investment volume reached in 2023 €0,5 billion, 60% lower
than the volume registered in the previous year, with retail assets representing 57% of the annual
volume, while office assets attracted 17% and industrial/logistics 14%.
Income from operations increased by 92% during 2023 as a result of new tenant agreements
and increased energy costs re-charged to tenants, and similarly net operating income from
Financial
performance
operations increased by 90%.
ANNUAL REPORT 2023| 6
Table 1
The administration costs increased by 5%, and the recurring EBITDA decreased to -€0,78 million
from -€0,63 million in 2022.
Overall, operating results after finance and tax for the year remained at the same levels to -€1,14
million as compared to -€1,18 million in 2022.
2.2 Property Holdings
The Company's portfolio at the year-end, and as at the date of this report, consists of commercial
Property
income producing property in Romania, as well as land plots in Ukraine.
Assets
Commercial Property
Innovations Logistics Park
Location
Bucharest, Romania
Key Features
Gross Leaseable Area:
Anchor Tenant:
Occupancy Rate:
16.570 sqm
Favorit Business Srl
82%
Commercial
Land & Residential Assets
Kiyanovskiy Residence
Tsymlyanskiy Residence*
Rozny Lane
Location
Kiev, Ukraine
Kiev, Ukraine
Kiev, Ukraine
Key Features
Plot of land (~ th. sqm):
Plot of land (~ th. sqm):
Plot of land (~ th. sqm):
Land &
Residential
6
4
420
ANNUAL REPORT 2023| 7
*As of November 2021, the Company submitted an official request to the City of Kiev to extend
the lease of the property for another 5 years, since it 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 many other cases had
accumulated which had time priority over our 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 then
on, all decisions have been put on hold due to the Russian insurgence of Ukraine. Management
remains confident that the Company will be awarded the lease extension when the war status
permits.
In 2023, the Company’s accredited valuers, namely CBRE Ukraine for the Ukrainian Assets, and
NAI RealAct for the Romanian Asset, remained appointed. The valuations have been carried out
by the appraisers on the basis of Market Value in accordance with the current Practice Statements
Property
Asset
Valuations
contained within the Royal Institution of Chartered Surveyors (“RICS”) Valuation – Global
Standards (2017) (the “Red Book”) and are also compliant with the International Valuation
Standards (IVS).
Following disposals of previous periods, SPDI’s portfolio, excluding the Arcona shares, has become
more concentrated in terms of geography. At the end of the reporting period, Romania remains
the prime country of operations (86%) in terms of Gross Asset Value, excluding the Arcona shares,
while in Ukraine (14%) the Company still has interests in land plots intended to be sold as part
of the Arcona transaction.
2023 - GAV % allocation by Country
14%
86%
Ukraine
Romania
ANNUAL REPORT 2023| 8
In respect of the Company’s income generation capacity, Romania has become gradually the
single operating income source.
The table below summarizes the main financial position of each of the Company’s assets
(representing the Company’s participation in each asset) at the end of the reporting period.
Table 2
Country
Rom
Ukr
Property
Innovations Logistics Park
Land banking
Total Value
Other balance sheet items, net **
Net Asset Value total
Market Cap in EUR as at 31/12/2023 (Share price at £0,04)
Market Cap in EUR as at 19/06/2024 (Share price at £0,04)
Discount of Market Cap in EUR at 19/06/2024 vs NAV at 31/12/2023
* Reflects the Company’s participation at each asset
**Among other items including Arcona shares. Refer to balance sheet and related notes of the financial statements.
NAV
3,8
1,5
5,3
+13,4
18,7
5,94
6,09
-68%
GAV*
9,7
1,5
11,2
2023
€m Debt *
5,9
0
5,9
Asset
Contribution
to Net Asset
Value
The Net Equity attributable to the shareholders as at 31 December 2023 stood at ~€18,7 million.
The table below depicts the discount of Market Share Price over NAV since 2012.
Net Equity
ANNUAL REPORT 2023| 9
The NAV per share as at 31 December 2023 stood at GBP 0,125 and the discount of the Market
Value vis a vis the Company’s NAV denominated in GBP stands at 68% at year-end.
Net Asset
Value per
share
2.3 Financial and Risk Management
The Group’s overall bank debt exposure at the end of the reporting period was ~€5,9
million being the balance of the financial lease of Innovations Logistics park.
Leverage
Throughout 2023, the Company focused on managing and preserving liquidity through
cash flow optimization. In this context, Management secured a) collection of scheduled
re-payments of loans provided to third parties, b) complete sale of residential assets
and c) advancement of discussions related to transaction with Arcona Property Fund
Liquidity
Management-
Cash Flow Risk
N.V..
ANNUAL REPORT 2023| 10
2.4 2024 and beyond
During 2024 the Company intends to complete the repositioning of its remaining
property assets as well as the distribution of its Arcona shares to its shareholders, with
Arcona
transaction
main operations already being minimized, including the externalization of all HR and
relevant costs. Management is working along the guidelines of the board for the closing
of the transaction with Arcona Property Fund N.V., which will mark effectively the
maximization of Company’s value and will give our shareholders the opportunity to
gain direct exposure to an entity of considerably larger size, with a strong dividend
distribution policy, and active in a more diversified and faster growing region (Central
and South Eastern Europe) of the European property market.
At the same time, the Company along with the JV partner for the logistics platform in
Romania, are evaluating different opportunities throughout the country, expecting the
venture to materialize during 2024.
ANNUAL REPORT 2023| 11
3.
Regional Economic Developments 1
The Romanian economy experienced in 2023 a growth of ~2,1% marking a slower y-
Romania
o-y pace compared to previous years. Growth resulted from strong private
consumption, despite the ongoing conflict in neighboring Ukraine and the high inflation
rate from the increased energy prices.
The rate of unemployment is estimated marginally lower but still in low levels at 5,5%
from 5,6% in 2022, keeping the labor market relatively tight and wage increases high.
Inflation closed at ~9,7% at year end, marking a significant decline when compared
to 2022 peak rate at 13,8%.
Macroeconomic data
Romania
GDP (EUR bn)
Population (mn)
Real GDP (y-o-y %)
CPI (average, y-o-y %)
Unemployment rate (%)
2017
188
19,6
7,0
1,3
4.3
2018
203
19,5
4,1
4,6
3,6
2019
223
19,5
4,1
3,3
3,1
2020
218
19,3
-3,7
2,3
6,1
2021
241
19,3
5,9
4,1
5,4
2022 2023f
285
280
19,5
19,6
2,1
4,6
9,7
13,8
5,5
5,6
Ukraine's economy grew by 5,3% in 2023 after contracting by almost a third in the
first year of Russia's full-scale invasion. The economy is dependant on the financial
Ukraine
aid received from Western countries and the World Bank, which reached during 2023
a total of $37,5 bilion. Ukraines’s trade deficit increased by c.30% during the year due
to a ban on exporting agricultural products into Eastern Europe, despite the
resumption of the maritime corridor for sea exports.
During 2023, the consumer price index (CPI) experienced a significant decline to
~14% from ~25% in 2022. The reduction was greater than the anticipated one By
NBU, and came as a result of the successfully applied measures for the stabilization
of the foreign exchange market, which limited the growth of prices for imported
goods.
According to predictions of international financial institutions and agencies, the
expected GDP will fluctuate in the range of 3-5% in 2024, and the pre-war GDP level
is expected to be reached no sooner than 2030 provided average growth of 4% in
2025-2029.
1 Sources: World Bank Group, Eurostat, EBRD, National Institute of Statistics- Romania, National Institute of Statistics –
Ukraine, IMF, European Commission, CBRE.
ANNUAL REPORT 2023| 12
4.
Real Estate Market Developments2
4.1 Romania
Total real estate investment volume in Romania reached in 2023 €0,5 billion,
General
representing a 60% y-o-y decrease, but reflecting cautious optimism in the face of all
underlying issues, such as neighboring conflict, high energy prices and broader
European economic considerations. Investment in 2023 spread beyond the capital
Bucharest, with main drivers the tourist destinations of Brasov, Cluj, and Constanta.
For the first time, Bucharest accounted for 25% of total volume, with 75% attributed
to regional cities. After many years, retail emerged as the most attractive asset class,
reaching 57% of total investment volume. Office and industrial/logistics segments
represented 17% and 14% respectively of the annual volume, while hotel segment
secured 8% of the market.
Prime yields registered a moderate adjustment in 2024, with office and retail yields
settling at 7,75% from 7,5%, while industrial yields remained steady at ~7,75%. Local
investors represent 23% of total investment volume, while foreign investment was
driven by UK (44%) and Czech investors (12%).
With c.1.000.000 sq m delivered during 2023, the total modern industrial/ logistics
stock reached c.7,6 million sq m. Almost 50% of the new deliveries were in Bucharest
area, being by far the largest consumer market in the country. The following most
important industrial/logistics hub in the country are Timisoara (11%), Brasov (7%),
Ploiesti (5%) and Cluj (5%). At the end of 2023 the vacancy rate in Romania’s
industrial modern stock stood at ~4,8%, while the vacancy rate for Bucharest was
~5,5%. Headline rent in logistic parks is on an ascending trend and stands at
€4,5/sqm/month mainly as a result of the robust demand.
Logistics
Market
4.2 Ukraine
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
General
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.
2 Sources : CBRE, Colliers International, Cushman & Wakefield, Crosspoint Real Estate, Knight Frank, Coldwell Banker Research,
National Institute of Statistics- Romania, State Statistics Service-Ukraine, NAI Real Act
ANNUAL REPORT 2023| 13
5. Property Assets
5.1
Innovations Logistics Park, Romania
The park incorporates approximately 8.470 sqm of multipurpose warehousing space, 6.395
sqm of cold storage and 1.705 sqm of office space. It is located in the area of Clinceni, south
west of Bucharest center, 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.
Property
description
As at the year end the terminal was 82% leased. Anchor tenant with 46% is Favorit Business
Current status
Srl, a large Romanian logistics operator, which accommodates in the terminal their new
business line which involves as end user Carrefour. Following last relevant agreement, Favorit’s
leases extended until 2026. During 2023, the Company signed a new lease agreement with
Baustoff + Metall for 3.000 sq m ambient storage space plus office space.
5.2 Residential portfolio
GreenLake, Bucharest, Romania
A residential compound of 40.500 sqm GBA, which consists of apartments and villas, situated
on the banks of Grivita Lake, in the northern part of the Romanian capital – the only residential
property in Bucharest with a 200 meters 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.
Property
description
During 2023 all the units of the complex have been sold.
Current status
ANNUAL REPORT 2023| 14
5.3 Land Assets
Kiyanovskiy Residence – Kiev, Ukraine
The property consists of 0,55 Ha of freehold and leasehold land located at Kiyanovskiy Lane,
near Kiev city center. It is destined for the development of businesses and luxury residences
with beautiful protected views overlooking the scenic Dnipro River, St. Michaels’ Spires and
historic Podil. Leasehold has been recently extended for a 10-year period.
Property
description
The asset is part of Stage 2 of the Arcona transaction and relevant SPA for its disposal has
Current status
already been signed in June 2021 while closing has been postponed due to the invasion of
Russia in Ukraine, with the parties trying to conclude the transaction in 2024.
Tsymlyanskiy Residence – Kiev, Ukraine
The 0,36 Ha plot is located in the historic and rapidly developing Podil District in Kiev. The
Company owns 55% of the SPV which leases the plot, with a local co-investor owning the
Property
description
remaining 45%.
The extension of the lease, originally expected during 2021, was delayed and currently is on
Current status
hold due to the invasion of Russia in Ukraine. The asset is planned to be part of Stage 3 of the
Arcona transaction.
Rozny Lane – Kiev Oblast, Kiev, Ukraine
The 42 Ha land plot located in Kiev Oblast is destined to be developed as a residential complex.
Following a protracted legal battle, it has been registered under the Company pursuant to a
Property
description
legal decision in July 2015.
The asset is part of Stage 2 of the Arcona transaction and relevant SPA for its disposal has
Current status
already been signed in June 2021 while closing has been postponed due to the invasion of
Russia in Ukraine, with the parties trying to conclude the transaction during 2024.
ANNUAL REPORT 2023| 15
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2023
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2023
CONTENTS
Corporate Information
Chairman’s Statement
Declaration
Management Report
Independent Auditor’s Report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
PAGE
18
19
20
21-23
24-27
28
29
30
31
32-89
CONSOLIDATED FINANCIAL STATEMENTS 2023| 17
Corporate Information
Board of Directors
Lambros Anagnostopoulos
Ian Domaille
Antonios Kaffas
Harin Thaker
Michael Petros Beys
Registered Address
16, Kyriakou Matsi Avenue,
Eagle House, 10th floor, PC 1082,
Agioi Omologites, Nicosia, Cyprus
Principal Places of Business
6, Nikiforou Foka Street,
1016 Nicosia,
Cyprus
10A Zizin Street, Interphone 32,
Ap. no 32, 8th&9th floor, District 3,
Bucharest, PC 031263
Prytys'ko-Mykilska 5
Kiev 04070,
Ukraine
Company Secretary
Chanteclair Secretarial Ltd
16, Kyriakou Matsi Avenue
Eagle House, 10th floor, PC 1082, Nicosia, Cyprus
Nominated Adviser
Strand Hanson Ltd
26 Mount Row,
Mayfair, London, W1K 3SQ
Registrars
Computershare Investor Services PLC
The Pavillions, Bridgewater Road,
Bristol BS99 7NH, UK
Main Collaborating Banks
Eurobank EFG Cyprus Ltd
41, Makarios Avenue, 5th floor,
1065 Nicosia, Cyprus
First Bank
B-dul Nicolae Titulescu, No. 29 - 31, etaj 5
Sector 1, Bucuresti, Romania
Broker
Novum Securities Limited
8-10 Grosvenor Gardens,
Belgravia, London,SW1W 0DH
Cymain Registrars Limited
P.O. Box 25719,
1311 Nicosia, Cyprus
UNIVERSAL Bank
54/19, Avtozavodska Street., 04114
Kiev, Ukraine
Banca Transilvania
SOS Bucuresti – Ploiesti Nr.43, Sector 1
Bucuresti, Romania
Alpha Bank Romania
Neocity 2 Building, 237B, Calea Dorobantilor Street,
District 1, Bucharest, Romania
Piraeus Leasing Romania
B-dul Nicolae Titulescu, No. 29 - 31, etaj 5
Sector 1, Bucuresti, Romania
Vista Bank (Romania) S.A.
90-92 Emanoil Porumbaru Str.,
1st District, Bucharest, Romania
Solicitors
WTS Tax Legal Consulting LLC
5, Pankivska Street, 5th floor
Kiev, Ukraine, 01033
Lucu and Associates
4, Splaiul Blvd,
040031 Bucharest, Romania
Auditors
Baker Tilly Klitou and Partners Limited
Corner C. Hatzopoulou & 30 Griva Digheni Avenue
1066 Nicosia, Cyprus
Reed Smith LLP
The Broadgate Tower 20 Primrose Street,
London EC2A 2RS, United Kingdom
Georgiades & Pelides LLC
Kyriakou Matsi Avenue,
Eagle House, 10th floor, PC 1082, Nicosia, Cyprus
CONSOLIDATED FINANCIAL STATEMENTS 2023| 18
Chairman’s Statement
Despite the continuation of the war in Ukraine and the eruption of another war in our broader region, in late 2023, SPDI managed to progress
with the process of merging with Arona Property Fund and the settlement of all remaining liabilities from its balance sheet. As such, we are
now close to being able to distribute the APF shares to our shareholders, who will therefore have the opportunity to benefit of a larger East
European Property market. Meanwhile, SPDI will be growing the Romanian Logistic JV, a market which is expected to grow substantially,
especially after the Ukraine war ends. We therefore have made strides towards our objective, despite this difficult environment to monetize
SPDI's value for our shareholders through the APF asset contribution and generate further value through Logistics development in Romania.
The Company's management and board are committed to honoring their promise to our shareholders on doing exactly that.
Michael Beys
Chairman of the Board
CONSOLIDATED FINANCIAL STATEMENTS 2023| 19
DECLARATION BY THE MEMBERS OF THE BOARD OF DIRECTORS AND THE
PERSON RESPONSIBLE FOR THE PREPARATION OF THE CONSOLIDATED
FINANCIAL STATEMENTS OF THE COMPANY
We, the Members of the Board of Directors and the person responsible for the preparation of the consolidated financial statements
of SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC for the year ended 31 December 2023, based on our opinion, which is a
result of diligent and scrupulous work, declare that the elements written in the consolidated financial statements are true and
complete.
Board of Directors members:
Lambros Anagnostopoulos
Michael Petros Beys
Ian Domaille
Antonios Kaffas
Harin Thaker
Person responsible for the preparation of the consolidated financial statements for the year ended 31 December 2023:
Theofanis Antoniou
CONSOLIDATED FINANCIAL STATEMENTS 2023| 20
MANAGEMENT REPORT
The Board of Directors presents its report and the audited consolidated financial statements of SECURE PROPERTY DEVELOPMENT &
INVESTMENT PLC (“SPDI” or the “Company”) and its subsidiaries (the “Group”) for the year ended 31 December 2023.
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, operation and selling of
property assets in the Region.
Review of current position, future developments and significant risks
Following relevant decision in 2018, management has been proceeding since 2019, with the implementation of the agreement with
Arcona Property Fund N.V. (Arcona), a fund listed on Amsterdam and Prague Stock Exchanges. This agreement involves the effective
exchange of Company's portfolio for new Arcona shares, effectively combining the two entities' complimentary portfolios, creating at
the same time a significant European property company for the benefit of all shareholders.
The "new" company will have presence in Central and South East Europe and in particular in Czech Republic, Poland, Slovakia,
Ukraine, Romania and Bulgaria, with an estimated portfolio size of ~€160 million and a NAV of ~€78 million.
As part of the aforementioned agreement, in 2019 the Company completed Stage 1 of the transaction with Arcona, involving the sale
of Bela and Balabino land plots in Ukraine, and the Boyana asset in Bulgaria, receiving from these sales a total of 593.534 Arcona
shares and 144.084 warrants over shares in Arcona. Moreover, in June 2021, the Company signed with Arcona relevant SPAs for the
transfer of assets included in Stage 2 of the transaction which includes two office properties in Bucharest, Romania (Delenco and
EOS), as well as the Kiyanovskiy and Rozny assets in Ukraine. In March and June 2022, the parties signed the closing documents of
the transaction regarding the Delenco and EOS assets in Romania in exchange for the issue to SPDI of 479.376 new shares in Arcona
and 115.543 warrants over shares in Arcona.
Closing of the transactions regarding the Ukrainian assets included in Stage 2 has been put temporarily on hold after the Russian
invasion of Ukraine. However, the two Parties continued relevant discussions and currently they have reached an agreement on the
commercial terms, working closely towards the effective closing of the transactions, which are expected to materialize during the third
quarter of 2024.
Obviously, the prevailing conditions have increased the associated risk, and inevitably successful completion of the remaining Stage
2 transactions in Ukraine is closely dependent on how conflict will evolve.
Discussions regarding Stage 3 of the transaction are on hold due to the overall delay, thereby forcing the Company to monetize the
assets included in Stage 3, succeeding in the sale of all remaining assets in GreenLake complex, including non-zoned land, at prices
higher than those offered by Arcona.
In general, the conflict between Ukraine and Russia, on top of the huge humanitarian and economic problems that it has brought in
Ukraine, has also harmed confidence and economic sentiment in the whole region (including Romania). At the same time, increased
energy prices have resulted in inflationary trends which brought turbulence in the markets. Although currently the general economic
sentiment has been mostly recovered, foreign investment volumes in the region have been substantially decreased, something that
in the mid-term may have negative impacts on real estate markets. On the other hand, we should note at this point that negative
impact from any inflationary trends is minimized through the indexation clauses included in Group's lease agreements.
Results and Dividends
The Group's results for the year are set out on page 28. No dividends were declared during the year.
Share Capital
Authorised share capital
The authorized share capital of the Company as at the date of issuance of this report is as follows:
a) 989.869.935 Ordinary Shares of €0,01 nominal value each,
b) 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each, (Note 27.3).
Issued share capital
As at the end of 2023, the issued share capital of the Company was as follows:
a) 129.191.442 Ordinary Shares of €0,01 nominal value each,
b) 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each (Note 27.3)
CONSOLIDATED FINANCIAL STATEMENTS 2023| 21
MANAGEMENT REPORT
Issued share capital (continued)
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:
- in lieu of redemption 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., while final settlement has also been reached pursuant to a
consensual order issued by the District Court of Nicosia in action no.3362/2018 (Note 39.3). As a result the Company has
planned to cancel these shares and has included relevant resolution in the forthcoming Extraordinary General Meeting to
be held on 10 July 2024.
Board of Directors
The members of the Company's Board of Directors as at 31 December 2023 and at the date of this report are presented on page 18.
All Directors were members of the Board throughout the year ended 31 December 2023.
There were no changes in the assignment of responsibilities of the Board of Directors.
Board Committees
The Board has constituted two committees, the audit committee and the remuneration committee.
The membership and the responsibilities of both committees remained unchanged during the reporting period:
- Audit Committee: Mr. Domaille (Chairman) and Mr. Kaffas
- Remuneration Committee: Mr. Domaille (Chairman) and Mr. Thaker
Advisory Council
An Advisory Council has been established to provide strategic advice and support to the Board. The Council is comprises former
directors of the Company, namely Paul Ensor, Vagharshak Barseghyan, Franz Hoerhager, Kalypso Maria Nomikou, Alvaro Portela
plus Emmanuel Blouin, the Company's in house investment banking advisor.
Remuneration Policy
The remuneration policy for the Board (non-executive members) of the Company which includes a monetary portion, as well as
equity-linked instruments to further incentivize the recipients and further align their interests with those of the shareholders, remains
unchanged. Such equity-linked instruments and the respective granting terms have been approved by the Annual General Meeting of
30th December 2013 and/or of 31st December 2014.
During 2019, 261.100 ordinary shares were issued to the Board members for their H1 2019 remuneration, 176.576 ordinary shares
were issued to existing and previous Board members for their before H2 2016 fees, and 718.000 ordinary shares were issued to two
members of the Board by means of settling existing Company's liabilities for services and incentives related to the closing of the Stage
1 of the transaction with Arcona Property Fund N.V.
As far as the Board's remuneration is concerned, this has been adjusted to be related to the growth of the Gross Asset Value of the
Company as mandated by the relevant policy. It should be noted that the said policy relates to payments through shares which are
locked up for the earlier of two years from the date of issue or the date following which the 30-day average traded value exceeds
GBP 70.000. Since 1st of July 2016, the BoD has decided to forego any remuneration for the period 1/7/2016 - 31/12/2018. It has
also been decided that any fees from H2 2019 onwards will be paid in cash. Until H1 2022 included, the annual fees for non-executive
members of the Board had been set at GBP 129k. Relevant fees for the period H2 2022 and 2023 have been set at EUR 250k.
The remuneration of the senior management is described in Note 12 and Note 38.1.2.
Directors and Management Holdings in the Company
The table below presents Directors and Management direct shareholding in the Company as at the date of issuance of this report:
Name
Michael Petros Beys
Ian Domaille *
Antonios Kaffas
Harin Thaker
Lambros Anagnostopoulos
Theofanis Antoniou
George Dopoulos
Position
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive Director and CEO
Amount of Shares held
679.976
2.594.890
343.832
1.277.192
1.001.092
107.333
117.952
*includes a number of 83.196 shares as non-beneficial owner
CONSOLIDATED FINANCIAL STATEMENTS 2023| 22
MANAGEMENT REPORT
Events after the end of the reporting period
The significant events that occurred after the end of the reporting period are described in Note 42 to the financial statements.
Independent auditors
The Independent Auditors, Baker Tilly Klitou and Partners Limited, have expressed their willingness to continue in office.
The Audit Committee will be proposing to the Board the appointment of the Independent Auditors for 2024, authorizing the CEO and
the CFO to negotiate their remuneration so as to present a relevant proposal to the Annual General Meeting of the Shareholders of
the Group.
The Board of Directors
CONSOLIDATED FINANCIAL STATEMENTS 2023| 23
Corner C. Hatzopoulou &
30 Griva Digheni Avenue
1066, Nicosia
P.O Box 27783,
2433 Nicosia, Cyprus
T: +357 22 458500
F: +357 22 751648
info@bakertilly.com.cy
www.bakertilly.com.cy
T: +357 22 458500
F: +357 22 751648
Independent Auditor's Report
To the Members of Secure Property Development & Investment Plc
info@bakertilly.com.cy
Report on the Audit of the Consolidated Financial Statements
www.bakertilly.com.cy
Opinion
We have audited the consolidated financial statements of Secure Property Development & Investment Plc (the
''Company'') and its subsidiaries (the ''Group''), which are presented in pages 32 to 89 and comprise the consolidated
statement of financial position as at 31 December 2023, and the consolidated statements of comprehensive income,
changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including
a material accounting policy information.
In our opinion, the accompanying financial statements give a true and fair view of the consolidated financial position of
the Group as at 31 December 2023, and of its consolidated financial performance and its consolidated cash flows for the
year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European
Union and the requirements of the Cyprus Companies Law, Cap. 113.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the ''Auditor's Responsibilities for the Audit of the Consolidated Financial Statements''
section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for
Accountants' International Code of Ethics for Professional Accountants (including International Independence
Standards) (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated
financial statements in Cyprus, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Notes 2 and 9 to the consolidated financial statements which refer to Management’s assessment
of going concern and the transactions that the Group plans to complete in the foreseeable future. The Group’s financial
position and cash flows will be significantly affected in a manner which cannot be determined with certainty at this
stage. These conditions indicate the existence of a material uncertainty which casts significant doubt as to the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
ADVISORY ASSURANCE TAX
Baker Tilly Klitou & Partners Ltd trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which
are separate and independent legal entities.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key audit matter
Value of investment properties presented within assets classified as held for sale
Refer to Note 4 - Significant accounting policies, Note 9 –
Discontinued operations and Note 19 - Investment Property.
Our audit procedures included, amongst others, the
below:
How our audit addressed the key audit matter
The Group holds investment properties which are presented
within assets classified as held for sale. As at 31 December
2023 these are carried at a value of €11.257.513. We
focused in this area as significant judgment and assumptions
are made to result in the fair value of each property.
The valuation of the Group’s properties is inherently
subjective due to unique nature, location and expected
future prospects of each property. The methodology applied
in determining the fair values is set out in Note 19 of the
consolidated financial statements. Valuations, as disclosed in
Note 4, are carried out by third-party valuers. The Valuers
performed their work in accordance with the Royal
Institution of Chartered Surveyors (“RICS”) Valuation –
Professional Standards and is also compliant with the
International Valuation Standards (IVS), taking into account
property specific information.
-
-
-
-
of
the
independence,
Assessment
qualifications
the
of
independent valuator which was used for
the valuation of
the
investment property.
fair value of
skills
and
Review of the methodology used for the
the
determination of
investment property,
the
assessing
acceptable methods
investment property, with the assistance
provided by the auditor’s experts.
fair value of
as per
for
of
the
of
Assessment
assumptions used by the independent
valuator, with the assistance provided by
the auditor’s experts.
rationale
Assessment of adequacy of relevant
dislcosures in the notes of the Financial
Statements.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information
included in the Annual Report, the Chairman’s Statement and the Management Report, but does not include the
consolidated financial statements and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors for the Consolidated Financial Statements
The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fair
view in accordance with International Financial Reporting Standards as adopted by the European Union and the
requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines
is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
ADVISORY ASSURANCE TAX
Baker Tilly Klitou & Partners Ltd trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which
are separate and independent legal entities.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Board of Directors.
Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures
in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves a true and fair view.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
ADVISORY ASSURANCE TAX
Baker Tilly Klitou & Partners Ltd trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which
are separate and independent legal entities.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal Requirements
Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:
In our opinion, the Management Report has been prepared in accordance with the requirements of the Cyprus
Companies Law, Cap 113, and the information given is consistent with the consolidated financial statements.
In our opinion, and in the light of the knowledge and understanding of the Group and its environment obtained
in the course of the audit, we have not identified material misstatements in the Management Report.
Other Matters
This report, including the opinion, has been prepared for and only for the Group's members as a body in accordance
with Section 69 of the Auditors Law of 2017 and for no other purpose. We do not, in giving this opinion, accept or
assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.
The engagement partner on the audit resulting in this independent auditor’s report is Moisis Aristidou.
Moisis Aristidou
Certified Public Accountant and Registered Auditor
for and on behalf of
Baker Tilly Klitou
Certified Public Accountants and Registered Auditors
Corner C. Hatzopoulou and 30 Griva Digheni Avenue
1066 Nicosia, Cyprus
Nicosia, 27 June 2024
ADVISORY ASSURANCE TAX
Baker Tilly Klitou & Partners Ltd trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which
are separate and independent legal entities.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
Note
10
12
20.2.3
20.2.2
25
21
15
25
16
16
17
18
9b
28
Continued Operations
Income
Net Operating Income
Administration expenses
Gain on disposal of Investment
Gain on disposal of subsidiary/associate
Fair Value loss on Financial Assets at FV through P&L
Gain realized on acquisition on associate
Share of loss of associates
Other operating income/(expenses), net
Operating profit / (loss)
Dividend income
Finance income
Finance costs
Profit / (Loss) before tax and foreign exchange differences
Foreign exchange loss, net
Profit/(Loss) before tax
Income tax expense
Profit/(Loss) for the year from continuing operations
Loss from discontinued operations
Profit/ (Loss) for the year
Other comprehensive income
Exchange difference on translation of foreign operations
Total comprehensive income for the year
Profit/ (Loss) for the year from continued operations attributable to:
Owners of the parent
Non-controlling interests
Profit/ (Loss) for the year from discontinued operations attributable to:
Owners of the parent
Non-controlling interests
Profit/ (Loss) for the year attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
Earnings/(Losses) per share (Euro per share):
Basic earnings/(losses) for the year attributable to ordinary equity owners of the
parent
Diluted earnings/(losses) for the year attributable to ordinary equity owners of the
parent
Basic earnings/(losses) for the year from discontinued operations attributable to
ordinary equity owners of the parent
Diluted earnings/(losses) for the year from discontinued operations attributable to
ordinary equity owners of the parent
36b
36b
36c
36c
2023
€
1.430.588
1.430.588
(1.632.282)
5.604.752
2.024.927
(392.210)
-
-
2.034.104
2022
€
1.143.752
1.143.752
(1.464.626)
-
-
(1.071.119)
1.041
(9.040)
(3.390)
9.069.879
(1.403.382)
160.937
308.466
(66.500)
-
361.035
(198.331)
9.472.782
(1.240.678)
(26.824)
(17.647)
9.445.958
(1.258.325)
(2.434)
17.940
9.443.524
(1.240.385)
(2.987.872)
(10.403.495)
6.455.652
(11.643.880)
(931.988)
5.523.664
(692.906)
(12.336.786)
9.443.524
-
9.443.524
(1.240.385)
-
(1.240.385)
(2.966.646)
(21.226)
(2.987.872)
(8.416.599)
(1.986.896)
(10.403.495)
6.476.878
(21.226)
6.455.652
5.546.471
(22.807)
5.523.664
(9.656.984)
(1.986.896)
(11.643.880)
(10.142.264)
(2.194.522)
(12.336.786)
0,07
0,07
(0,02)
(0,02)
(0,01)
(0,01)
(0,06)
(0,06)
The notes on pages 32 to 89 form an integral part of these consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS 2023|28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2023
ASSETS
Non-current assets
Tangible and intangible assets
Long-term receivables and prepayments
Investment in associate
Financial Assets at FV through P&L
Current assets
Prepayments and other current assets
Cash and cash equivalents
Assets classified as held for sale
Total assets
EQUITY AND LIABILITIES
Issued share capital
Share premium
Foreign currency translation reserve
Exchange difference on I/C loans to foreign holdings
Accumulated losses
Equity attributable to equity holders of the parent
Non-controlling interests
Total equity
Non-current liabilities
Borrowings
Bonds issued
Tax payable and provisions
Current liabilities
Borrowings
Bonds issued
Trade and other payables
Tax payable and provisions
Liabilities directly associated with assets classified as held for sale
Total liabilities
Total equity and liabilities
Note
22
23
21
25
24
26
9d
27
28
38.3
29
30
31
34
30
31
32
34
9d
2023
€
2022
€
164
818
-
11.686.598
816
824
1
12.078.808
11.687.580
12.080.449
4.034.537
152.241
4.186.778
12.327.462
4.153.162
66.570
4.219.732
13.835.091
28.201.820
30.135.272
1.291.281
72.107.265
7.554.101
(211.199)
(62.083.716)
18.657.732
1.291.281
72.107.265
8.484.507
(211.199)
(68.560.594)
13.111.260
113.668
369.399
18.771.400
13.480.659
-
-
17.173
17.173
114.794
870.373
1.795.884
21.438
597.357
723.690
579.519
1.900.566
-
99.046
3.731.769
37.574
2.802.489
3.868.389
6.610.758
9.413.247
9.430.420
10.885.658
14.754.047
16.654.613
28.201.820
30.135.272
Net Asset Value (NAV) € per share:
36d
Basic NAV attributable to equity holders of the parent
Diluted NAV attributable to equity holders of the parent
0,14
0,14
0,10
0,10
On 27 June 2024 the Board of Directors of SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC authorised these financial
statements for issue.
Lambros Anagnostopoulos
Director & Chief Executive Officer
Michael Beys
Director & Chairman of the Board
Antonios Kaffas
Director
The notes on pages 32 to 89 form an integral part of these consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS 2023|29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Attributable to owners of the Company
Share capital
Share
premium,
Net1
€
€
Accumulated
losses, net of
non-controlling
interest2
€
Exchange
difference on I/C
loans to foreign
holdings3
€
Foreign
currency
translation
reserve4
€
Total
Non-
controlling
interest
Total
€
€
€
Balance - 31 December 2021
Loss for the year
Foreign currency translation reserve
Disposals of subisdiaries
Balance - 31 December 2022
Profit for the year
Foreign currency translation reserve
Disposals of subisdiaries
Balance - 31 December 2023
1.291.281
-
-
-
1.291.281
-
-
-
1.291.281
72.107.265
-
-
-
72.107.265
-
-
-
72.107.265
(58.903.610)
(9.656.984)
-
-
(68.560.594)
6.476.878
-
-
(62.083.716)
(211.199)
-
-
-
(211.199)
-
-
-
(211.199)
8.969.787
-
(485.280)
-
8.484.507
-
(930.406)
-
7.554.101
23.253.524
(9.656.984)
(485.280)
-
13.111.260
6.476.878
(930.406)
-
18.657.732
5.748.132
(1.986.896)
(207.626)
(3.184.211)
369.399
(21.226)
(1.582)
(232.923)
113.668
29.001.656
(11.643.880)
(692.906)
(3.184.211)
13.480.659
6.455.652
(931.988)
(232.923)
18.771.400
1 Share premium is not available for distribution.
2 Companies which do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits.
Special contribution for defence at 17% and GHS contribution at 1,7%-2,65% for deemed distributions after 1 March 2019 will be payable on such deemed dividends to the extent that the ultimate shareholders are both Cyprus
tax resident and Cyprus domiciled. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defence is payable by the Company
for the account of the shareholders.
3 Exchange differences on intercompany loans to foreign holdings arose as a result of devaluation of the Ukrainian Hryvnia during previous years. The Group treats the mentioned loans as a part of the net investment in foreign
operations (Note 38.3).
4 Exchange differences related to the translation from the functional currency of the Group’s subsidiaries are accounted for directly to the foreign currency translation reserve. The foreign currency translation reserve represents
unrealized profits or losses related to the appreciation or depreciation of the local currencies against the euro in the countries where the Group’s subsidiaries own property assets.
The notes on pages 32 to 89 form an integral part of these consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS 2023|30
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
Note
2023
€
2022
€
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(Loss) before tax and non-controlling interests-continued operations
Profit/(Loss) before tax and non-controlling interests-discontinued operations
Profit/(Loss) before tax and non-controlling interests
Adjustments for:
(Gain)/Loss on revaluation of investment property
Net loss on disposal of investment property
Fair Value (gain)/loss on Financial Assets at FV through P&L
(Reversal) /Impairment of prepayments and other current assets
Accounts payable written off
Depreciation/ Amortization charge
Interest income
Interest expense
Share of profit from associates
Gain on disposal of Investements
Effect of foreign exchange differences
Cash flows from/(used in) operations before working capital changes
Change in prepayments and other current assets
Change in trade and other payables
Change in VAT and other taxes receivable
Change in provisions
Change in other taxes payables
Change in deposits from tenants
Cash generated from operations
Income tax paid
Net cash flows provided in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Sales proceeds from disposal of investment property
Cash inflow from sale of subsidiaries
Dividend received
Payment on acquisition of associate
Increase/(Decrease) in long term receivables
Repayment of principal and interest of loan receivable
Net cash flows from / (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of bank and non-bank loans
Interest and financial charges paid
Reoayment of fiinancial lease principal and interest
Net cash flows from / (used in) financing activities
Net increase/(decrease) in cash at banks
Cash:
At beginning of the year
At end of the year
9b
13
14
25
15
15
12
16
16
21
20
17
24
32
24
34
34
33
14
20
21
23
24
30
35
26
26
(1.258.325)
9.445.958
(2.982.917)
(10.329.155)
6.463.041 (11.587.480)
223.730
-
392.210
-
(2.045.485)
792
(308.938)
666.324
245.316
(6.682.887)
82.523
1.245.230
825.392
1.071.119
2.721.151
(4.401)
7.292
(369.017)
850.400
(326.493)
4.870.768
182.812
(963.374)
(513.227)
215.871
1.363.311
(89.362)
(399.500)
14.084
-
(531.409)
(1.230.439)
141.751
-
(173.788)
(41.229)
141.030
(2.348.341)
(228.860)
(117.762)
(87.830)
(2.466.103)
-
-
255.889
-
6
850.053
1.105.948
1.164.133
382.750
219.190
(8.000)
(18.263)
821.891
2.561.701
(392.500)
(107.667)
(371.960)
(872.127)
(1.618.403)
(391.126)
(289.917)
(2.299.446)
145.991
(2.203.848)
351.398
2.555.246
497.389
351.398
The notes on pages 32 to 89 form an integral part of these consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS 2023|31
Notes to the Consolidated Financial Statements
For the year ended 31 December 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 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 31 December 2023, the companies of the Group employed and/or used the services of 2 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) .
Going concern basis
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and
discharge its liabilities in the normal course of business for the foreseeable future.
In particular, the Company is in a process of disposing of its portfolio of assets in an all share transaction with Arcona Property Fund N.V.,
meaning that as soon as this transaction consummates the Company will be left with its corporate receivables and liabilities.
These conditions raise some doubt about the Company’s ability to continue as a going concern within the next twelve months from the
date these financial statements are available to be issued. The ability to continue as a going concern is dependent upon positive future
cash flows.
Management believes that the Company will be able to finance its needs given the fact that the additional corporate receivables, as well
as the consideration received in the form of Arcona shares is estimated that it can effectively discharge all corporate liabilities. At the
same time, the transaction with Arcona Property Fund N.V., which is a cash flow generating entity, will result in the Company being a
significant shareholder, entitled to dividends according to the dividend policy of Arcona Property Fund N.V.
CONSOLIDATED FINANCIAL STATEMENTS 2022|32
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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|33
4. Significant accounting policies (continued)
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 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:
Currency
USD
UAH
RON
2023
1,0813
39,5582
4,9465
4.3 Discontinued operations
Average
31 December
2022
1,0530
33,9820
4,9315
2023
1,1050
42,2079
4,9746
2022
1,0666
38,9510
4,9474
2021
1,1326
30,9226
4,9481
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which:
represents a separate major line of business or geographic area of operations;
is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as
held-for-sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the
operation had been discontinued from the start of the comparative year.
4.4 Investment Property at fair value
Investment property, comprising freehold and leasehold land, investment properties held for future development, warehouse and office
properties, as well as the residential property units, is held for long term rental yields and/or for capital appreciation and is not occupied
by the Group. Investment property and investment property under construction are carried at fair value, representing open market value
determined annually by external valuers. Changes in fair values are recorded in the statement of comprehensive income and are included
in other operating income.
A number of the land leases (all in Ukraine) are held for relatively short terms and place an obligation upon the lessee to complete
development by a predetermined 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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|34
4. Significant accounting policies (continued)
4.4 Investment Property at fair value (continued)
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.
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 in 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 actions, wherein the parties had each acted knowledgeably,
prudently and without compulsion”.
CONSOLIDATED FINANCIAL STATEMENTS 2023|35
4. Significant accounting policies (continued)
4.4 Investment Property at fair value (continued)
Basis of valuation (continued)
In expressing opinions on Market Value, in certain cases the appraisers have estimated net annual rentals/income from sale. These are
assessed on the assumption that they are the best rent/sale prices at which a new letting/sale of an interest in property would have been
completed at the date of valuation assuming: a willing landlord/buyer; that prior to the date of valuation there had been a reasonable
period (having regard to the nature of the property and the state of the market) for the proper marketing of the interest, for the agreement
of the price and terms and for the completion of the letting/sale; that the state of the market, levels of value and other circumstances
were, on any earlier assumed date of entering into an agreement for lease/sale, the same as on the valuation date; that no account is
taken of any additional bid by a prospective tenant/buyer with a special interest; that the principal deal conditions assumed to apply are
the same as in the market at the time of valuation; that both parties to the transaction had acted knowledgeably, prudently and without
compulsion.
A number of properties are held by way of ground leasehold interests granted by the City Authorities. The ground rental payments of
such interests may be reviewed on an annual basis, in either an upwards or downwards direction, by reference to an established formula.
Within the terms of the lease, there is a right to extend the term of the lease upon expiry in line with the existing terms and conditions
thereof. In arriving at opinions of Market Value, the appraisers assumed that the respective ground leases are capable of extension in
accordance with the terms of each lease. In addition, given that such interests are not assignable, it was assumed that each leasehold
interest is held by way of a special purpose vehicle (“SPV”), and that the shares in the respective SPVs are transferable.
With regard to each of the properties considered, in those instances where project documentation has been agreed with the respective
local authorities, opinions of the appraisers of value have been based on such agreements.
In those instances where the properties are held in part ownership, the valuations assume that these interests are saleable in the open
market without any restriction from the co-owner and that there are no encumbrances within the share agreements which would impact
the sale ability of the properties concerned.
The valuation is exclusive of VAT and no allowances have been made for any expenses of realization or for taxation which might arise in
the event of a disposal of any property.
In some instances the appraisers constructed a Discounted Cash Flow (DCF) model. DCF analysis is a financial modeling technique based
on explicit assumptions regarding the prospective income and expenses of a property or business. The analysis is a forecast of receipts
and disbursements during the period concerned. The forecast is based on the assessment of market prices for comparable premises, build
rates, cost levels etc. from the point of view of a probable developer.
To these projected cash flows, an appropriate, market-derived discount rate is applied to establish an indication of the present value of
the income stream associated with the property. In this case, it is a development property and thus estimates of capital outlays,
development costs, and anticipated sales income are used to produce net cash flows that are then discounted over the projected
development and marketing periods. The Net Present Value (NPV) of such cash flows could represent what someone might be willing to
pay for the site and is therefore an indicator of market value. All the payments are projected in nominal US Dollar/Euro amounts and thus
incorporate relevant inflation measures.
Valuation Approach
In addition to the above general valuation methodology, the appraisers have taken into account in arriving at Market Value the following:
Pre Development
In those instances where the nature of the ‘Project’ has been defined, it was assumed that the subject property will be developed in
accordance with this blueprint. The final outcome of the development of the property is determined by the Board of Directors decision,
which is based on existing market conditions, profitability of the project, ability to finance the project and obtaining required construction
permits.
Development
In terms of construction costs, the budgeted costs have been taken into account in considering opinions of value. However, the appraisers
have also had regard to current construction rates prevailing in the market which a prospective purchaser may deem appropriate to adopt
in constructing each individual scheme. Although in some instances the appraisers have adopted the budgeted costs provided, in some
cases the appraisers’ own opinions of costs were used.
Post Development
Rental values have been assessed as at the date of valuation but having regard to the existing occupational markets taking into account
the likely supply and demand dynamics during the anticipated development period. The standard letting fees were assumed within the
valuations. In arriving at their estimates of gross development value (“GDV”), the appraisers have capitalized their opinion of net operating
income, having deducted any anticipated non-recoverable expenses, such as land payments, and permanent void allowance, which has
then been capitalized into perpetuity.
CONSOLIDATED FINANCIAL STATEMENTS 2023|36
4. Significant accounting policies (continued)
4.4 Investment Property at fair value (continued)
Valuation Approach (continued)
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.
4.6 Property, Plant and equipment and intangible assets
Property, plant and equipment and intangible non-current assets are stated at historical cost less accumulated depreciation and
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
IT hardware
Motor vehicles
Furniture, fixtures and office equipment
Machinery and equipment
Software and Licenses
No depreciation is charged on land.
%
20
33
25
20
15
33
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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|37
4. Significant accounting policies (continued)
4.6 Property, Plant and equipment and intangible assets (continued)
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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|38
4. Significant accounting policies (continued)
4.9 Financial Instruments (continued)
4.9.2 Classification and subsequent measurement (continued)
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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|39
4. Significant accounting policies (continued)
4.9 Financial Instruments (continued)
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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|40
4. Significant accounting policies (continued)
4.9 Financial Instruments (continued)
4.9.5 Derivative financial instruments and hedge accounting (continued)
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:
ly 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;
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:
se of the asset throughout the period of use; and
in a way that predetermines how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract
to each lease component on the basis of their relative stand alone prices. However, for the leases of land and buildings in which it is a
lessee, the Company has elected not to separate non lease components and account for the lease and non lease components as a single
lease component.
The Company as lessor
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards
incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease.
As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life
of the asset.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub lease separately. It assesses the
lease classification of a sub lease with reference to the right of use asset arising from the head lease, not with reference to the underlying
asset. If a head lease is a short term lease to which the Company applies the exemption described above, then it classifies the sub lease
as an operating lease.
If an arrangement contains lease and non lease components, the Company applies IFRS 15 to allocate the consideration in the contract.
The Company recognises lease payments received under operating leases as income on a straight line basis over the lease term as part
of 'other income'.
The accounting policies applicable to the Company as a lessor in the comparative period were not different from IFRS 16. However, when
the Company was an intermediate lessor the sub leases were classified with reference to the underlying asset.
The Company as lessee
The Company recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it is located, less any lease incentives received.
CONSOLIDATED FINANCIAL STATEMENTS 2023|41
4. Significant accounting policies (continued)
4.10 Leases (continued)
The Company as lessee (continued)
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:
ance fixed payments;
tdate;
chase 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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|42
4. Significant accounting policies (continued)
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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|43
4. Significant accounting policies (continued)
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:
4.20.1 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.
4.20.2 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).
4.20.3 Interest income
Interest income is recognized on a time-proportion (accrual) basis, using the effective interest rate method.
4.20.4 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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|44
4. Significant accounting policies (continued)
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.
4.25 Value added tax
VAT levied at various jurisdictions were the Group is active, was at the following rates, as at the end of the reporting period:
20% on Ukrainian domestic sales and imports of goods, works and services and 0% on export of goods and provision of works
or services to be used outside 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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|45
4. Significant accounting policies (continued)
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
Land Assets
Warehouse segment
Land assets – the Group owns a number of land assets which are either
available for sale or for potential development
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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|46
6. Critical accounting estimates and judgments (continued)
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. The fair value has been estimated as
at 31 December 2023 (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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|47
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
In 2023, growth in Ukraine had been supported by a record harvest, reaching 5,3%. However, recent war damage to the country’s
electricity infrastructure is among factors seen likely to constrain even higher growth in 2024.
The economy was boosted not only by bumper crops but also increased defense spending, which supported domestic demand, while net
exports continued to decline as a result of the ongoing conflict.
Other supportive factors of 2023 economic performance, included the Ukrainian authorities’ success in restoring electrical supply after the
previous winter’s Russian attacks on civilian infrastructure, and the resilience and adaptability of Ukrainian business. Moreover, timely
external financing in 2023 was a further stabilizing factor, helping to reduce inflation to target levels. These lifted official foreign reserves
to record levels as public debt surged to close to 90% of GDP.
However, in 2024, the prospect of a prolonged war of attrition and renewed doubts about external financing for this year, which persisted
for several months before being resolved, have raised new challenges. Limited domestic demand, labour shortages and insufficient
investments are also among factors that will likely constrain further growth prospects.
On the positive side, a new Ukrainian Black Sea export corridor along the coastline has been opened, removing some of the wartime
uncertainty about the safety of using the Black Sea to export Ukraine’s vast offerings of agricultural produce and other bulk good such as
metals and ores.
After a slow start, this corridor’s usage has been picking up, boosting not only agriculture but also the metal industry and mining, which
have been among the hardest hit industries over the last two years. A recovery in exports and higher domestic military production will
likely generate economic growth of +3% in 2024, accelerating to 6 per cent in 2025. However, risks remain high, in particular related to
the damages in port and electricity infrastructure.
7.1.1.2 Romania
Romanian economy grew by 2,1% in 2023 despite the slow start made during the first two quarters, marking however a significant slower
y-o-y pace compared to the previous periods.
Growth succeeded mainly due to strong private consumption, and despite the ongoing war in neighboring Ukraine and the high, although
significantly lower than 2022, inflation rates.
Fiscal and current account deficits remain elevated as a result of the social politics adopted by the Government for the support of low
income citizens, while unemployment rate is estimated marginally lower to 5,5%. Taking into account the European economic
considerations and the international political circumstances, 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;
CONSOLIDATED FINANCIAL STATEMENTS 2023|48
7. Risk Management (continued)
7.1 Financial risk factors (continued)
7.1.2 Risks associated with property holding and development associated risks (continued)
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 war in Ukraine causing economic and political problems, as well as any probable currency devaluation may affect 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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|49
7. Risk Management (continued)
7.1 Financial risk factors (continued)
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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|50
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.
Name
SC Secure Capital Limited
LLC Aisi Ukraine
LLC Trade Center
LLC Almaz-Pres-Ukraine
LLC Retail Development Balabino**
LLC Interterminal**
LLC Aisi Ilvo
Myrnes Innovations Park Limited
Best Day Real Estate Srl
Yamano Holdings Limited
Zirimon Properties Limited
Bluehouse Accession Project IX Limited
BlueBigBox 3 Srl ***
SEC South East Continent Unique Real
Estate Investments II Limited
SEC South East Continent Unique Real
Estate (Secured) Investments Limited
Ketiza Holdings Limited
Frizomo Holdings Limited
SecMon Real Estate Srl
Ketiza Real Estate Srl
Edetrio Holdings Limited
Emakei Holdings Limited
RAM Real Estate Management Limited
Iuliu Maniu Limited
Moselin Investments Srl
Jenby Ventures Limited**
Ebenem Limited**
Sertland Properties Limited
SPDI Management Srl
Country of
incorporation
Cyprus
Ukraine
Ukraine
Ukraine
Ukraine
Ukraine
Ukraine
Cyprus
Romania
Cyprus
Cyprus
Cyprus
Romania
Cyprus
Cyprus
Cyprus
Cyprus
Romania
Romania
Cyprus
Cyprus
Cyprus
Cyprus
Romania
Cyprus
Cyprus
Cyprus
Romania
Related Asset
Kiyanovskiy Residence
Tsymlyanskiy Residence*
Innovations Logistics Park
EOS Business Park
Delea Nuova (Delenco)
Holding %
as at
31 Dec 2023
100
100
100
55
100
100
100
100
100
100
-
100
-
as at
31 Dec 2022
100
100
100
55
100
100
100
100
100
100
100
100
-
100
-
90
100
100
90
-
-
-
-
-
44,30
44,30
-
100
100
100
90
100
100
90
100
100
50
45
45
44,30
44,30
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 15 December 2021 and 20 January
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. Bluehouse Accession Project IV Limited, Demetiva Holdings Limited, Diforio
Holdings Limited and Mofben Investments Limited were already deleted from registrar of Companies. Jenby Ventures Limited and Ebenem
Limited are still expected relevant official clearance from local Trade Registry and Tax Authorities 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.
*** 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). Following the settlement
made with BLUEHOUSE ACCESSION PROPERTY HOLDING III S.A.R.L. pursuant to a consensual order issued by the District Court of
Nicosia in action no. 3362/2018, relevant legal motions against Bluebigbox3 Srl have been withdrawn. In relation to the insolvency
procedure of the company, next hearing has been set on 17 September 2024, when the judicial administrator will file the request to close
the bankruptcy procedure before the court. Following this, SPDI will re-gain control and will start the process of an ordinary liquidation,
since the entity does no longer hold any assets.
CONSOLIDATED FINANCIAL STATEMENTS 2023|51
9. Discontinued operations
9.(a) Description
The Company announced on 18 December 2018 that it has entered into a conditional implementation agreement for the sale of its
property portfolio, excluding its Greek logistics properties (‘the Non-Greek Portfolio’), in an all-share transaction to 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 included in Stage 2 of the transaction, discussions for closing had been put on hold after the
invasion of Russia in the country, however currently negotiations have re-emerged, a commercial agreement has been reached, and
relevant closing documentation is drafted for execution.
During 2023, the Company sold through a third-party transaction, SEC South East Continent Unique Real Estate (Secured) Investments
Limited along with its subsidiaries, which no longer possessed any asset.
The companies that are classified under discontinued operations are the followings:
•
•
•
Cyprus: Frizomo Holdings Limited and Ketiza Holdings Limited
Romania: Best Day Real Estate Srl, Ketiza 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.(b) Results of discontinued operations
For the year ended 31 December 2023
Income
Asset operating expenses
Net Operating Income
Administration expenses
Share of profits/(losses) from associates
Valuation gains/(losses) from Investment Property
Net gain/(loss) on disposal of investment property
Loss on Disposal of subsidiaries
Other operating income/(expenses), net
Operating profit / (loss)
Finance income
Finance costs
Profit/(Loss) before tax and foreign exchange differences
Foreign exchange (loss), net
Profit/(Loss) before tax
Income tax expense
Profit/(Loss) for the year
Loss attributable to:
Owners of the parent
Non-controlling interests
Note
10
11
12
21
13
14
20.2.4
15
16
16
17
18
2023
€
156.016
(867.484)
(711.468)
(201.344)
(245.316)
(223.730)
-
(946.792)
5.792
(2.322.858)
472
(604.832)
(2.927.218)
2022
€
505.785
(446.380)
59.405
(242.157)
335.533
(1.245.230)
(825.392)
(4.871.809)
(2.721.353)
(9.511.003)
7.982
(660.969)
(10.163.990)
(55.699)
(2.982.917)
(165.165)
(10.329.155)
(4.955)
(74.340)
(2.987.872)
(10.403.495)
(2.966.646)
(21.226)
(2.987.872)
(8.416.599)
(1.986.896)
(10.403.495)
CONSOLIDATED FINANCIAL STATEMENTS 2023|52
9. Discontinued operations (continued)
9.(c) Cash flows from(used in) discontinued operation
Net cash flows provided in operating activities
Net cash flows from / (used in) financing activities
Net cash flows from / (used in) investing activities
Net increase/(decrease) from discontinued operations
31 Dec 2023
€
(635.218)
31 Dec 2022
€
5.569.628
472
(886.067)
(939.540)
1.754.358
(1.520.813)
6.384.446
9.(d) Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were reclassified as held for sale in relation to the discontinued operation as at 31 December 2023:
Assets classified as held for sale
Investment properties
Tangible and intangible assets
Long-term receivables and prepayments
Investments in associates
Prepayments and other current assets
Cash and cash equivalents
Total assets of group held for sale
Liabilities directly related with assets classified as held for sale
Borrowings
Finance lease liabilities
Trade and other payables
Taxation
Deposits from tenants
Total liabilities of group held for sale
10. Income
Note
31 Dec 2023
€
31 Dec 2022
€
19.4a
22
23
21
24
26
30
35
32
34
33
11.257.513
25
315.000
-
409.776
345.148
12.327.462
71
5.943.201
488.612
155.872
23.002
6.610.758
11.631.996
20
315.000
335.534
1.267.713
284.828
13.835.091
4.021.192
6.225.930
431.307
184.227
23.002
10.885.658
Income from continued operations for the year ended 31 December 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.
The increase in the service charge and utility income in 2023 is due to the increased energy costs of the park re-invoiced to tenants.
Continued operations
Rental income
Service charges and utilities income
Asset & property management income
Total income
Income from discontinued operations represents:
31 Dec 2023
€
761.683
668.905
-
1.430.588
31 Dec 2022
€
763.242
276.996
103.514
1.143.752
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) for the year ended 31 December 2023, while for 2022 there was relevant income
from Kindergarten (Romania) and EOS Business Park (Romania) which were sold during this year.
b) rental income and service charges by tenants of the Residential Portfolio;
Discontinued operations (Note 9)
Rental income
Service charges and utilities income
Total income
31 Dec 2023
€
130.678
25.338
156.016
31 Dec 2022
€
489.653
16.132
505.785
CONSOLIDATED FINANCIAL STATEMENTS 2023|53
10. Income (continued)
Occupancy rates as at 31 December 2023 were as follows:
Income producing assets
%
Innovations Logistics Park
11. Asset operating expenses
Romania
82
80
31 Dec 2023
31 Dec 2022
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 the operation of the assets.
Under discontinued operations all such expenses related to Innovations Logistics Park (Romania), EOS Business Park (Romania) in
2022, Residential Portfolio (Romania) in 2022, GreenLake (Romania), and all Ukrainian properties.
Discontinued operations (Note 9)
Property related taxes
Property management fees
Repairs and technical maintenance
Utilities
Property security
Property insurance
Leasing expenses
Total
31 Dec 2023
€
(49.800)
-
(77.505)
(688.775)
(43.388)
(3.971)
(4.045)
(867.484)
31 Dec 2022
€
(112.420)
(3.758)
(30.595)
(251.507)
(35.527)
(7.695)
(4.878)
(446.380)
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 2023 resulted from the assets sold during 2022.
Repairs and technical maintenance increased in 2023 due to required works conducted in Innovations Logistics Park, bringing the property
in line with newly adopted Fire and Environmental legislation.
Utilities’ increase resulted from Innovations Logistics Park in Bucharest, and matches with the increased service charges and utilities
income invoiced back by the Company and included in continued operations.
Leasing expenses reflect expenses related to long term land leasing.
12. Administration Expenses
Continued operations
Salaries and Wages
Incentives pursuant to RemCo proposal
Advisory and broker fees
Public group expenses
VAT expensed
Corporate registration and maintenance fees
Audit fees
Tax advisory services
Accounting and related fees
Legal fees
Depreciation/Amortization charge
Directors Renumeration
Provision for Director fees
Corporate operating expenses
Total Administration Expenses
31 Dec 2023
€
(84.464)
(151.370)
(415.049)
(164.085)
(3.989)
(32.085)
(67.275)
(70.000)
(16.383)
(170.657)
(651)
(75.020)
(250.000)
(131.254)
(1.632.282)
31 Dec 2022
€
(263.477)
(184.500)
(270.457)
(138.908)
(89.315)
(32.458)
(67.332)
-
(15.529)
(233.098)
(2.784)
-
-
(166.768)
(1.464.626)
CONSOLIDATED FINANCIAL STATEMENTS 2023|54
12. Administration Expenses (continued)
Discontinued operations (Note 9)
Salaries and Wages
Advisory and broker fees
Corporate registration and maintenance fees
Audit fees
Accounting and related fees
Legal fees
Depreciation/Amortization charge
Corporate operating expenses
Total Administration Expenses
31 Dec 2023
€
(18.763)
(111.311)
(21.155)
(15.554)
(13.350)
(3.009)
(141)
(18.061)
(201.344)
31 Dec 2022
€
(30.221)
(99.323)
(33.142)
(26.230)
(20.973)
(4.488)
(4.508)
(23.272)
(242.157)
Salaries and wages include the remuneration of the CEO (2023: €1, 2022: €63.123), the CFO, the Group Commercial Director and the
Country Managers in Ukraine and Romania, as well as the salary cost of personnel employed in the various Company’s offices. Relevant
decrease came as a result of the externalization of all HR costs after April 2023, except those in Ukraine, as part of the cost reduction
plan adopted by the board.
Incentives provided to personnel refer for the successful implementation of Group’s plan pursuant to relevant Remuneration Committee
proposal dated 7 May 2021 as approved by the board 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. The increase during the current period resulted from the
externalization of HR and related costs, as well as from the increased fees to consultants in Ukraine in relation to the extension of
Company’s leaseholds in the country.
Accounting and related fees include fees from external accounting 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 expected to produce significantly lower imposed taxes, while its application has produced beneficial
retrospective results.
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. Relevant increase in current period resulted from ad hoc advise in respect of listing rule transaction opinion of the order of
~€25k.
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 ~€152k relevant legal fees associated with with
the Bluehouse litigation and its eventual settlement.
Following relevant confirmation by the board, the Company registered in 2023 the remuneration of the board associated with H1 2022
(€75k) which remained pending from previous year, as well as a provision of a remuneration to cover the period including H2 2022 and
2023 (€250k).
Corporate operating expenses include D&O insurance, travel expenses, (tele)communication and conference expenses, software fees and
other general expenses in Cyprus, Romania and Ukraine.
Summary of
Directors’
Total
Remuneration
31 Dec 2023
31 Dec 2022
€
€
€
Base
remuneration
Chairman/
Committee
Fees
Deferred
Amounts
€
Total
€
€
€
Base
remuneration
Chairman/
Committee
Fees
Deferred
Amounts
€
Total
Michael Beys
Harin Thaker
Ian Domaille
Anthonios Kaffas
Total
19.191
18.028
19.773
18.028
75.020
-
-
-
-
-
19.191
19.191
18.028
19.773
18.028
75.020
18.028
19.773
18.028
75.020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
CONSOLIDATED FINANCIAL STATEMENTS 2023|55
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 (€)
Kiyanovskiy Residence
Rozny Lane
Innovations Logistics Park
Total
Valuation gains/(losses)
31 Dec 2023
€
(177.757)
(99.367)
53.394
(223.730)
31 Dec 2022
€
(798.325)
(455.560)
8.655
(1.245.230)
* 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 many other
cases had accumulated which had time priority over Group’s case. During the period between 15 December 2021 and 20 January 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, although
received updated third-party valuation reports to monitor effectively the underlying values, decided in H1 2022 accounts to impair the
value of those assets at 50% of their value as at the end of 2021 and continues the same in every period since then.
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 properties
During 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 was an
associate.
Discontinued operations (Note 9)
Income from sale of investment property
Cost of investment property
Profit/(Loss) from disposal of investment property
15. Other operating income/(expenses), net
Continued operations
Other income
Accounts payable written off
Other income
Penalties
Impairment of prepayments and other current assets
Other expenses
Other expenses
31 Dec 2023
€
-
-
-
31 Dec 2022
€
3.897.608
(4.723.000)
(825.392)
31 Dec 2023
€
31 Dec 2022
€
10.657
2.027.275
2.037.932
(302)
-
(3.526)
(3.828)
18.834
3.022
21.856
(348)
(19.648)
(5.250)
(25.246)
Other operating income/(expenses), net
2.034.104
(3.390)
CONSOLIDATED FINANCIAL STATEMENTS 2023|56
15. Other operating income/(expenses), net (continued)
Discontinued operations (Note 9)
Accounts payable written off
Other income
Other income
Penalties
Impairments
Other expenses
Other expenses
Other operating income/(expenses), net
Continued operations
Other income represents income from services to an associate company.
31 Dec 2023
€
31 Dec 2022
€
18.210
4.290
22.500
-
-
(16.708)
(16.708)
1.379
4.571
5.950
(215)
(2.701.503)
(25.585)
(2.727.303)
5.792
(2.721.353)
Account payable written off under continued operations, represents the reversal of the provision made in the past for the Bluehouse
litigation case, as a result of the Redeemable Class B share redemption (Note 32). Pursuant to a concensual order issued by the District
Court of Nicosia in action no.3362/2018, the Company paid €494.000, and as a result the surplus provision was reversed,since it is no
longer necessary.
Discontinued operations
Account payable written off in 2023 refer to old payable balances of Secmon for which local legislation allows for their effective elimination.
Other expenses in discontinued operations represent mainly property tax penalties incurred by a Romanian company from Local Tax
Authorities.
16. Finance costs and income
Continued operations
Finance income
Interest received from non-bank loans
Total finance income
Finance costs
Interest expenses (non-bank)
Finance charges and commissions
Bonds interest
Total finance costs
Net finance result
31 Dec 2023
€
308.466
308.466
31 Dec 2022
€
361.035
361.035
31 Dec 2023
€
31 Dec 2022
€
(15.348)
(3.515)
(47.637)
(66.500)
(127.748)
(5.883)
(64.700)
(198.331)
241.966
162.704
CONSOLIDATED FINANCIAL STATEMENTS 2023|57
16. Finance costs and income (continued)
Discontinued operations (Note 9)
Finance income
Interest received from-bank loans
Interest received from non-bank loans (Note 38.1.1)
Total finance income
Finance costs
Interest expenses (bank)
Interest expenses (non-bank)
Finance leasing interest expenses
Finance charges and commissions
Total finance costs
Net finance result
31 Dec 2023
€
48
424
472
31 Dec 2022
€
10
7.972
7.982
31 Dec 2023
€
31 Dec 2022
€
(317.586)
-
(285.753)
(1.493)
(604.832)
(353.428)
(4.892)
(299.632)
(3.017)
(660.969)
(604.360)
(652.987)
Continued operations
Interest income from non-bank loans, reflects 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 €2,5 million will be contributed to a joint venture between the Company and the borrower for the development of logistics assets
in Romania (Note 24). The remaining principal plus the interest is repaid in installments, expected to be fully repaid by the end of 2024.
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).
Discontinued operations
Interest income from non-bank loans, reflects income from loans granted by the Group for financial assistance of associates.
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.
17. Foreign exchange profit / (losses)
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 31 December 2023 from continued operations is €26.824 (2022: loss €17.647).
The exchange loss from discontinued operations for the year ended 31 December 2023 is €55.699 (2022: loss €165.165) (Note 9).
CONSOLIDATED FINANCIAL STATEMENTS 2023|58
18. Tax Expense
Continued operations
Reversal of tax/(Income and defence tax expense)
Taxes
Discontinued operations (Note 9)
Income and defence tax expense
Taxes
31 Dec 2023
€
31 Dec 2022
€
(2.434)
(2.434)
17.940
17.940
31 Dec 2023
€
31 Dec 2022
€
(4.955)
(4.955)
(74.340)
(74.340)
For the year ended 31 December 2023, the corporate income tax rate for the Group’s subsidiaries is 18% in Ukraine, and 16% in Romania.
The corporate tax that is applied to the qualifying income of the Company and its Cypriot subsidiaries is 12,5%.
The tax on the Group's results differs from the theoretical amount that would arise using the applicable tax rates as follows:
Profit / (loss) before tax
Tax calculated on applicable rates
Expenses not recognized for tax purposes
Tax effect of allowances and income not subject to tax
Tax effect on tax losses for the year
Tax effect on tax losses brought forward
10% additional tax
Tax effect of Group tax relief
Defence contribution current year
Prior year tax
Total Tax
31 Dec 2023
€
6.463.041
31 Dec 2022
€
(11.587.480)
(154.218)
521.478
(452.550)
742
91.113
596
-
228
-
(7.389)
(318.782)
592.568
(221.122)
2.644.670
(2.617.009)
8.057
-
17.173
(161.955)
(56.400)
CONSOLIDATED FINANCIAL STATEMENTS 2023|59
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 at the end of the reporting period is 82% leased.
Residential Assets
At the end of the reporting period the Company does not own any more residential units, having sold during the period the
remaining residential portfolio.
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. The Company recently secured for
the leashold part of the property a 10-year extension.
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 whereby the presiding committee of the municipality, before the
final approval by the City Council, did not place as many other cases had accumulated which had time priority over Group’s
case. During the period between 15 December 2021 and 20 January 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 in GreenLake and which 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
2023 (€)
Asset Name
Type
Land
Land
Land
Kiyanovskiy
Residence
Tsymlyanskiy
Residence
Rozny Lane
Total Ukraine
Innovations
Logistics Park
Total Romania
Carrying
amount as at
31/12/2023
Fair Value movements
Foreign
exchange
translation
difference
(a)
Fair value
gain/(loss)
based on local
currency
valuations (b)
1.131.222
(97.359)
(177.757)
1
416.290
-
-
-
(99.367)
1.547.513
(97.359)
(277.124)
Warehouse
9.710.000
(53.394)
9.710.000
(53.394)
53.394
53.394
TOTAL
11.257.513
(150.753)
(223.730)
Disposals 2023
Asset Value at the Beginning of the period or at
Acquisition/Transfer date
Transfer to
Assets held
for sale
Additions
2023
Carrying
amount as at
31/12/2022
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.406.338
1
515.657
1.921.996
9.710.000
9.710.000
11.631.996
CONSOLIDATED FINANCIAL STATEMENTS 2023|60
19. Investment Property (continued)
19.2 Investment Property Movement during the reporting period (continued)
2022 (€)
Asset Name
Type
Carrying
amount as at
31/12/2022
Fair Value movements
Foreign
exchange
translation
difference
(a)
Fair value
gain/(loss)
based on local
currency
valuations (b)
1.406.338
(444.110)
(798.325)
1
515.657
-
-
-
(455.560)
1.921.996
(444.110)
(1.253.885)
Land
Land
Land
-
-
-
-
Warehouse
9.710.000
1.345
8.655
Office
Residential
Land & Resi
Retail
-
-
-
-
-
-
-
-
-
-
-
-
(6.700.000)
-
(10.215.000)
(1.320.000)
9.710.000
1.345
8.655
(18.235.000)
Kiyanovskiy
Residence
Tsymlyanskiy
Residence
Rozny Lane
Total Ukraine
Innovations
Logistics Park
EOS Business Park
Residential
portfolio
GreenLake
Kindergarten
Total Romania
TOTAL
11.631.996
(442.765)
(1.245.230)
(18.235.000)
Disposals 2022
Asset Value at the Beginning of the period or at
Acquisition/Transfer date
Transfer to
Assets held
for sale
Additions
2022
Carrying
amount as at
31/12/2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.648.773
1
971.217
3.619.991
9.700.000
6.700.000
-
10.215.000
1.320.000
27.935.000
31.554.991
Discontinued Operations
Due to the situation in Ukraine and the associated uncertainty, the Management has decided in H1 2022 to proceed with valueing those
assets 50% lower than the values provided by the third-party valuers (CBRE Ukraine), and in turn decided to keep the same decision in
all subsequent periods, including the current one. As a result, the Ukrainian assets contribute €1,5 million in Group’s assets, as compared
to €3,1 million provided by the valuers and €3,1 million in 2022 accounts.
The two components comprising the fair value movements are presented in accordance with the requirements of IFRS in the consolidated
statement of comprehensive income as follows:
a. The translation loss due to the devaluation of local currencies of €150.753 (a) (2022: loss €442.765) is presented as part of the
exchange difference on translation of foreign operations in other comprehensive income in the statement of comprehensive income
and then carried forward in the Foreign currency translation reserve; and,
b. The fair value loss in terms of the local functional currencies amounting to €223.730 (b) (2022: loss €1.245.230), is presented as
Valuation gains/(losses) from investment properties in the statement of comprehensive income and is carried forward in Accumulated
losses.
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
Operation
Related
Companies
Carrying amount as at
Podil,
Kiev City
Center
Podil,
Kiev City
Center
Brovary
district, Kiev
Clinceni,
Bucharest
Land for residential
Development
LLC Aisi Ukraine
LLC Trade Center
Land for residential
Development
LLC
Almaz‑Pres‑Ukraine
Land for residential
Development
SC Secure Capital
Limited
Warehouse
Myrnes
Innovations Park
Limited
Best Day Real
Estate Srl
Kiyanovskiy
Residence
Tsymlyanskiy
Residence
Rozny Lane
Total Ukraine
Innovations
Logistics Park
Total Romania
TOTAL
31 Dec 2023
Continued
operations
€
31 Dec 2023
Discontinued
operations
€
31 Dec 2022
Continued
operations
€
31 Dec 2022
Discontinued
operations
€
-
-
-
-
-
-
-
1.131.222
1
416.290
1.547.513
9.710.000
9.710.000
11.257.513
-
-
-
-
-
-
-
1.406.338
1
515.657
1.921.996
9.710.000
9.710.000
11.631.996
CONSOLIDATED FINANCIAL STATEMENTS 2023|61
19. Investment Property (continued)
19.4 Investment Property analysis
a.
Investment Properties
The following assets are presented under Investment Property: Innovations Logistics park and all the land assets namely Kiyanovskiy
Residence, Tsymlyanskiy Residenceand Rozny Lane in Ukraine.
At 1 January
Additions
Disposal of Investment Property
Revaluation (loss)/gain on investment property
Translation difference
At 31 December
31 Dec 2023
31 Dec 2023
31 Dec 2022
31 Dec 2022
Continued
operations
€
-
-
-
-
-
-
Discontinued
operations
(Note 9)
€
11.631.996
-
-
(223.730)
(150.753)
11.257.513
Continued
operations
€
-
-
-
-
-
-
Discontinued
operations
(Note 9)
€
31.554.991
-
(18.235.000)
(1.245.230)
(442.765)
11.631.996
Disposals of Investment Properties in 2022 represent the sale of EOS, Kindergarten and GreenLake Phase 2 land.
19.5 Investment Property valuation method presentation
In respect of the Fair Value of Investment Properties the following table represents an analysis based on the various valuation methods.
The different levels as defined by IFRS have been defined as follows:
-
-
-
Level 1 relates to quoted prices (unadjusted) in active and liquid markets for identical assets or liabilities.
Level 2 relates to inputs other than quoted prices that are observable for the asset or liability indirectly (that is, derived from
prices). Level 2 fair values of investment properties have been derived using the market value approach by comparing the
subject asset with similar assets for which price information is available. Under this approach the first step is to consider the
prices for transactions of similar assets that have occurred recently in the market. The most significant input into this valuation
approach is price per sqm.
Level 3 relates to inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
Level 3 valuations have been performed by the external valuer using the income approach (discounted cash flow) due to the
lack of similar sales in the local market (unobservable inputs).
To derive Fair Values the Group has adopted a combination of income and market approach weighted according to the predominant local
market and economic conditions.
Fair value measurements at 31 Dec 2023(€)
(Level 1)
(Level 2)
(Level 3)
Total
Recurring fair value measurements
Tsymlyanskiy Residence – Podil, Kiev City Center*
Kiyanovskiy Residence – Podil, Kiev City Center*
Rozny Lane – Brovary district, Kiev *
Innovations Logistics Park – Bucharest
Totals
-
-
-
-
-
1
1.131.222
416.290
-
1.547.513
-
-
-
9.710.000
9.710.000
1
1.131.222
416.290
9.710.000
11.257.513
Fair value measurements at 31 Dec 2022 (€)
(Level 1)
(Level 2)
(Level 3)
Total
Recurring fair value measurements
Tsymlyanskiy Residence – Podil, Kiev City Center*
Kiyanovskiy Residence – Podil, Kiev City Center*
Rozny Lane – Brovary district, Kiev *
Innovations Logistics Park – Bucharest
Totals
-
-
-
-
-
1
1.406.338
515.657
-
1.921.996
-
-
-
9.710.000
9.710.000
1
1.406.338
515.657
9.710.000
11.631.996
CONSOLIDATED FINANCIAL STATEMENTS 2023|62
19. Investment Property (continued)
19.5 Investment Property valuation method presentation (continued)
The table below shows yearly adjustments for Level 3 investment property valuations:
Level 3 Fair value
measurements at 31 Dec
2023 (€)
Opening balance
Profit/(loss) on revaluation
Disposal
Translation difference
Closing balance
Innovations Logistics
Park
Total
9.710.000
9.710.000
53.394
53.394
-
(53.394)
9.710.000
-
(53.394)
9.710.000
Level 3 Fair value
measurements at 31 Dec
2022 (€)
Innovations Logistics
Park
EOS Business Park
Kindergarten
Total
Opening balance
Profit/(loss) on revaluation
Disposal
Translation difference
Closing balance
9.700.000
6.700.000
1.320.000
17.720.000
8.655
-
-
8.655
-
(6.700.000)
(1.320.000)
(8.020.000)
1.345
9.710.000
-
-
-
-
1.345
9.710.000
Information about Level 3 Fair Values is presented below:
Fair value at
31 Dec 2023
Fair value at
31 Dec 2022
Valuation
technique
Unobservable
inputs
Relationship of unobservable
inputs to fair value
Innovations
Logistics Park –
Bucharest
€
9.710.000
€
9.710.000
€
Income approach
€
Future rental income
and costs for 10
years, discount rate
€
The higher the rental income the
higher the fair value. The higher the
discount rate, the lower fair value
Total
9.710.000
9.710.000
CONSOLIDATED FINANCIAL STATEMENTS 2023|63
20. Investment Property Acquisitions, Goodwill Movement and Disposals
20.1 Acquisition of asset
In 2022, the Company 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 €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 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 Limited so as to retain some of the value originally
destined to be part of its asset portfolio. During 2023, the Company acquired the remaining 50% of Equardo Limited for a consideration
of €90.000.
20.2 Disposals of subsidiaries and associates
20.2.1 (A) Disposal of EOS Bussiness Park
In June 2022 the Company closed the agreement for the sale 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
Non-current assets
Investment properties
Other non-current assets
Current assets
Prepayments and other current assets
Cash and cash equivalents
Total Assets
LIABILITIES
Interest bearing borrowings
Other liabilities
Total Liabilities
NET ASSET
Consideration:
Shares in Arcona
€
6.700.000
41.674
6.741.674
72.198
49.783
121.981
6.863.655
3.347.799
44.372
3.392.171
3.471.484
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 ~€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 €298k which has already been collected by the Company.
Value of associate at date of Disposal
(Note 21)
Consideration:
Shares in Arcona
Loss on Disposal
€
5.178.669
4.292.953
(885.716)
CONSOLIDATED FINANCIAL STATEMENTS 2023|64
20. Investment Property Acquisitions, Goodwill Movement and Disposals (continued)
20.2 Disposals of subsidiaries and associates (continued)
20.2.1 (C) Disposal of Kindergarden
ASSETS
Non-current assets
Investment properties
Current assets
Prepayments and other current assets
Cash and cash equivalents
Total Assets
LIABILITIES
Interest bearing borrowings
Other liabilities
Total Liabilities
NET ASSET
Net share of the group 50%
Consideration:
Cash
Net off debt between the parties
Total Consideration
Loss on Disposal
€
1.320.000
16.369
2.308
1.338.677
628.063
14.214
642.277
696.400
348.200
130.750
44.250
175.000
(173.200)
During 2022, 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
€175.000 plus release of available company’s cash pledged by the Bank.
20.2.1 (D) Disposal of GreenLake Phase II land
Rimasol SRL
Rimasol LTD
Ashor SRL
Ashor LTD
Ebenem SRL
Jenby SRL
Total
€
€
€
€
€
€
€
808.000
-
1.510.000
ASSETS
Non-current assets
Investment properties
Current assets
Prepayments and other current
assets
Cash and cash equivalents
Total Assets
LIABILITIES
Interest bearing borrowings
Other liabilities
Total Liabilities
NET ASSET
Group % Holding
Net share of the group
Consideration:
Cash
Variable Compensation
Total Consideration
Loss on Disposal
5.789
62
813.851
623
31.622
32.245
781.606
70,56%
551.501
-
-
-
-
-
4.626
4.626
612.000
2.562.000
5.492.000
3.406
8.644
136.534
44
40
19.128
615.450
2.570.684
5.647.662
12.239
16.801
19.757
25.773
29.040
45.530
34.174
199.817
233.991
-
-
-
-
94.736
118.695
18.982
1.647.677
1.555
26.259
94.736
27.814
(94.736)
1.619.863
(4.626)
586.410
2.525.154
5.416.671
70,56%
44,24%
44,24%
44,30%
44,30%
(66.846)
716.627
(2.047)
259.780
1.118.643
2.577.658
400.000
450.000
850.000
(1.727.658)
CONSOLIDATED FINANCIAL STATEMENTS 2023|65
20. Investment Property Acquisitions, Goodwill Movement and Disposals (continued)
20.2 Disposals of subsidiaries and associates (continued)
During 2022, 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 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 ~€500k gross.
Total losses on Disposal (A) & (B) & (C) & (D)
(4.871.809)
20.2.2 Acquisition and disposal of associate Equardo Holding Limited.
The Company in 2023 acquired the remaining 50% of the share capital of Equardo Holdings Limited (Note 21) for the consideration price
of €90.000 increasing its participation in the company to 100% having a NAV of €180.218. Equardo has an indirect investment in a large
land plot in Bucharest with a substantially higher value, yet the monetization of such invesment is of increased risk and is expected to
take substantial time. As such the Company sold this investment to the subsidiary Sertland Properties Limited in exchange of intra group
payables of € 2.205.145, i.e. generating a book profit on disposdal of €2.024.927.
20.2.3 Acquisition and disposal of Nottin Holdings Limited
The Company in 2023 acquired the 33,3% of Nottin Holding Limited and a receivable from the company amounted to €93.300 for a
consideration of €1. Nottin Holdings Limited has an indirect investment in a large property and land plot in Belgrade with a substantially
higher value, yet the monetization of such invesment is of increased risk and is expected to take substantial time. As such the Company
sold this investment to the subsidiary Zirimon Properties Limited in exchange of intra group payables of € 5.604.753, i.e. generating a
book profit on disposdal of €5.604.752.
20.2.4 Disposal of SEC I.
The Company in 2023 proceeded to the sale of SEC I group to a 3rd party.
SEC I LTD
Sertland LTD
Zirimon
LTD
Ram LTD
Emakei
LTD
Edetrio
LTD
Iuliu
Maniu LTD
€
€
€
€
€
€
Moselin
Investm
ents srl
Total
€
-
5.557.147
527.248
622.932
18.814
18.814
546.062
6.198.893
-
-
-
-
ASSETS
Non-current
assets
Investment in
shares
Current assets
Prepayments and
other current
assets
Cash and cash
equivalents
Total Assets
LIABILITIES
Interest bearing
borrowings
Other liabilities
-
1.543.602
3.923.327
2.384
-
-
-
93.300
-
2.384
1.543.602
4.016.627
4.381.964
-
-
-
-
-
-
-
-
90.218
-
-
90.218
-
-
-
-
Total Liabilities
4.390.989
9.025
10.764
10.764
8.098
8.098
3.987
3.987
3.169
13.193
3.180
114.578
165.994
3.169
13.193
3.180
115.761
4.549.141
-
1.183
4.383.147
NET ASSET
(4.388.605)
1.532.838
4.008.529
(3.987)
(3.169)
77.025
(3.180)
430.301
1.649.752
Group %
Holding
Net share of the
group
Consideration:
Payable write off
Total
Consideration
Loss on Disposal
100%
100%
100%
50%
100%
100%
45%
45%
(4.388.605)
1.532.838
4.008.529
(1.994)
(3.169)
77.025
(1.431)
193.635
1.416.828
470.036
470.036
(946.792)
CONSOLIDATED FINANCIAL STATEMENTS 2023|66
21. Investments in associates
Cost of investment in associates at the beginning of the
period
Acquisition of Investment in associates
Share of profits /(losses) from associates (Note 9)
Dividend Income
Disposal of Investment (Note 20.2.1 B)
Foreign exchange difference
Total
31 Dec 2023
31 Dec 2023
31 Dec 2022
31 Dec 2022
Continued
operations
€
Discontinued
operations
€
Continued
operations
€
Discontinued
operations
€
1
-
-
-
(1)
-
-
335.534
90.000
(245.316)
-
(180.218)
-
-
-
9.041
(9.040)
-
-
-
1
5.476.576
-
335.533
(297.906)
(5.178.669)
-
335.534
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 €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.
During 2023 and as part of the sale of SEC I group, the Company sold GreenLake Development Srl which at that time had no remaining
asset for sale in its portfolio, as well as Equardo Holdings Limited (Note 20.2.4).
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 31 December 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
Name
Associates
Total assets
Total
liabilities
Profit/
(loss)
Holding
Share of
profits from
associates
Country
Asset type
€
€
€
%
€
GreenLake
Project –
Phase A
Vic City
Project
Total
GreenLake
Development Srl
Equardo Holdings
Limited
-
-
-
-
(607.969)
40,35
(245.316) Romania
Residential
assets
-
(11.288)
50
- Romania
Land
- (619.257)
(245.316)
CONSOLIDATED FINANCIAL STATEMENTS 2023|67
21. Investments in associates (continued)
As at 31 December 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
Name
Associates
Total assets
Total
liabilities
Profit/
(loss)
Holding
Share of
profits from
associates
Country
Asset type
€
€
€
%
€
Delea Nuova
Project
GreenLake
Project –
Phase A
Vic City
Project
Total
Lelar Holdings
Limited and S.C.
Delenco Construct
Srl
GreenLake
Development Srl
Equardo Holdings
Limited
-
-
-
-
- Romania Office building
3.296.244
(2.960.711)
3.436.512
40,35
335.533 Romania
Residential
assets
267.600
(259.831)
(18.082)
50
(9.040) Romania
Land
3.563.844 (3.220.542) 3.418.430
326.493
22. Tangible and intangible assets
As at 31 December 2023 the tangible non-current assets under continued operations were comprised mainly by electronic equipment
(mobiles, computers etc.) of a net value of €164 (2022: €816).
As at 31 December 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 €29.997 (2022: €32.244). Accumulated
depreciation as at the reporting date amounts to €29.972 (2022: €32.224).
23. Long Term Receivables and prepayments
Long Term Receivables
Total
31 Dec 2023
Continued
operations
31 Dec 2023
Discontinued
operations
31 Dec 2022
Continued
operations
31 Dec 2022
Discontinued
operations
€
818
818
€
315.000
315.000
€
824
824
€
315.000
315.000
Long term receivables under discontiniued operations mainly include the cash collateral existing in favor of Piraeus Leasing in relation to
Innovations asset.
24. Prepayments and other current assets
Trade and other receivables
VAT and other tax receivables
Deferred expenses
Receivables due from related parties
Loan receivables from 3rd parties
Loan to associates (Note 39.4)
Allowance for impairment of prepayments and other
current assets
Total
31 Dec 2023
Continued
operations
31 Dec 2023
Discontinued
operations
31 Dec 2022
Continued
operations
31 Dec 2022
Discontinued
operations
€
691.296
219.790
40
30.168
3.152.450
-
€
396.245
55.179
1.605
6.679
-
-
€
603.257
132.771
-
75.095
3.463.985
-
€
1.019.634
52.836
128
195.115
-
229.629
(59.207)
4.034.537
(49.932)
409.776
(121.946)
4.153.162
(229.629)
1.267.713
CONSOLIDATED FINANCIAL STATEMENTS 2023|68
24. Prepayments and other current assets (continued)
Continued operations
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.
Loan receivables from 3rd parties include an amount of €2.909.115 (2022: €3.404.467) provided as an advance payment for acquiring a
participation in an investment property portfolio (Olympians portfolio) in Romania. The accrued interest was €243.335 (2022: €59.517).
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 €2,5 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 €2,5 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 convertion will take place upon identifying and agreeing on the specific project to be
undertaken by the JV. The parties have evaluated many opportunities and currently are in the final negotiations stage with a tenant for
developing two different properties in two different regional cities in Romania.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 2024.
Discontinued operations
Trade and other receivables decrease due to the sale of associate company during the year.
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.
Loan to associates reflects a loan receivable from GreenLake Development Srl, which was sold during the year as part of the sale of SEC
I group (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:
Arcona shares at the beginning of the period
Aquired Arcona shares during the period
FV change in Arcona shares
Arcona shares at reporting date
Warrants over Arcona shares at the beginning of the period
Aquired Arcona Warrants during the period
FV change in warrants
Arcona warrants at reporting date
Total Financial Assets at FV
FV change in Arcona shares
FV change in warrants
31 Dec 2023
€
31 Dec 2022
€
11.920.030
-
(259.781)
11.660.249
7.330.145
5.679.202
(1.089.317)
11.920.030
158.778
-
(132.429)
26.349
140.577
3
18.198
158.778
11.686.598
12.078.808
(259.781)
(132.429)
(1.089.317)
18.198
Fair Value (loss)/ gain on Financial Assets at FV through P&L
(392.210)
(1.071.119)
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 loss of €259.781 (2022: loss €1.089.317) is recognized.
CONSOLIDATED FINANCIAL STATEMENTS 2023|69
25. Financial Assets at FV through P&L (continued)
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 €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 €3. These warrants are exercisable upon the volume
weighted average price of Arcona shares traded on a regulated market at €7,2 or higher.
At year end, the warrants are re-valued to fair value and as a result a relevant loss of €132.429 (2022: gain €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 4,99 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: 20,88%
Annualized dividend yield on shares: 3,01%
5 year Government Bond rate (weighted average rate of Government Bonds of countries that Arcona is exposed): 5,05%
During 2023, the Company realized dividend income from the shareholding in Arcona of the order of €160.937, as part of the dividend
distribution policy of Arcona.
26. Cash and cash equivalents
Cash and cash equivalents represent liquidity held at banks.
Cash with banks in USD
Cash with banks in EUR
Cash with banks in UAH
Cash with banks in RON
Cash with banks in GBP
Total
27. Share capital
Number of Shares during 2023 and 2022
Authorised
Ordinary shares of €0,01
Total ordinary shares
RCP Class A Shares of €0,01
RCP Class B Shares of €0,01
Total redeemable shares
Issued and fully paid
Ordinary shares of €0,01
Total ordinary shares
Total
31 Dec 2023
31 Dec 2023
31 Dec 2022
31 Dec 2022
Continued
operations
Discontinued
operations
Continued
operations
Discontinued
operations
€
399
144.760
46
7.008
28
152.241
€
-
89
455
344.604
-
345.148
€
1.472
38.704
395
25.710
289
66.570
€
7.734
80.151
813
196.130
-
284.828
31 December 2023
31 December 2022
989.869.935
989.869.935
-
8.618.997
8.618.997
989.869.935
989.869.935
-
8.618.997
8.618.997
129.191.442
129.191.442
129.191.442
129.191.442
129.191.442
129.191.442
CONSOLIDATED FINANCIAL STATEMENTS 2023|70
27. Share capital (continued)
Nominal value (€) for 2023 and 2022
€
Authorised
Ordinary shares of €0,01
Total ordinary shares
RCP Class A Shares of €0,01
RCP Class B Shares of €0,01
Total redeemable shares
Issued and fully paid
Ordinary shares of €0,01
Total ordinary shares
Total
27.1 Authorised share capital
31 December 2023
31 December 2022
9.898.699
9.898.699
-
86.190
86.190
1.291.281
1.291.281
1.291.281
9.898.699
9.898.699
-
86.190
86.190
1.291.281
1.291.281
1.291.281
The authorised share capital of the Company as at the date of issuance of this report is as follows:
a) 989.869.935 Ordinary Shares of €0,01 nominal value each,
b) 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each, (Note 27.3).
27.2 Issued Share Capital
As at the end of 2023, the issued share capital of the Company was as follows:
a) 129.191.442 Ordinary Shares of €0,01 nominal value each,
b) 8.618.997 Redeemable Preference Class B Shares of €0,01 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:
- in lieu of redemption transferred 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., while final settlement has also been reached pursuant to a
consensual order issued by the District Court of Nicosia in action no.3362/2018 (Note 39.3). As a result the Company has
planned to cancel these shares and has included relevant resolution in the forthcoming Extraordinary General Meeting to be
held on 10 July 2024.
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
Ordinary shares of €0,01
Total number of Shares
Total number of Shares
Options
Issued and Listed on AIM
Non-Dilutive Basis
Full Dilutive Basis
-
(as at) 31 December
2023
129.191.442
129.191.442
129.191.442
(as at) 31 December
2022
129.191.442
129.191.442
129.191.442
-
-
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 and the Company plans to cancel them .
28. Foreign Currency Translation Reserve
Exchange differences relate to the translation from the functional currency to EUR of Group’s subsidiaries’ accounts and are recognized
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 Company’s subsidiaries’
functional currencies are not EUR. The Company had €931.988 loss on foreign exchange losses/gains on translation due to presentation
currency for 2023, in comparison to €692.906 relevant loss in 2022.
CONSOLIDATED FINANCIAL STATEMENTS 2023|71
29. Non-Controlling Interests
Non-controlling interests represent the percentage participations in the respective entities not owned by the Group:
%
Group Company
LLC Almaz-Press-Ukraine
Ketiza Holdings Limited
Ketiza Real Estate Srl
Ram Real Estate Management Limited
Iuliu Maniu Limited
Moselin Investments Srl
Jenby Ventures Limited
Jenby Investments Srl
Ebenem Limited
30. Borrowings
Principal of bank Loans
Piraeus Bank SA
Loans from other 3rd parties
and related parties (Note 38.5)
Overdrafts
Total principal of bank and
non-bank Loans
Interest accrued on bank loans
Interests accrued on non-bank
loans (Note 38.5)
Total
Current portion
Non-current portion
Total
Continued Operations
Non-controlling interest
portion
31 Dec 2023
45,00
10,00
10,00
-
-
-
-
-
-
31 Dec 2022
45,00
10,00
10,00
50,00
55,00
55,00
55,70
-
55,70
Project
31 Dec 2023
Continued
operations
€
31 Dec 2023
Discontinued
operations
€
31 Dec 2022
Continued
operations
€
31 Dec 2022
Discontinued
operations
€
Land banking
-
106.682
-
106.682
-
8.112
114.794
-
-
71
71
-
-
71
-
2.525.938
502.130
-
2.314
17
502.130
-
2.528.269
1.492.923
95.227
597.357
-
4.021.192
31 Dec 2023
Continued
operations
€
114.794
-
114.794
31 Dec 2023
Discontinued
operations
€
31 Dec 2022
Continued
operations
€
31 Dec 2022
Discontinued
operations
€
71
-
71
-
597.357
597.357
4.021.192
-
4.021.192
Loans from other 3rd parties and related parties under continued operations include among others:
Α) Loan from one Director of €100k 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. As at the end of the
previous period the balance of the loan was €2.525.938 plus accrued interest €1.492.923 bearing 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. During 2023, the Company sold SEC South East Continent Unique Real Estate (Secured)
Investments Limited.
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
loan element of the instrument has been redeemed by 30% and at the end of the reporting period the balance stands at €723.690 (2022:
€723.690). The instrument bears a 6,5% coupon, has a 7 year term, maturing in July 2024, and is convertible into ordinary shares of the
Company at the option of the holder at 25p. starting from 1 January 2018. The Company plans to extend the maturity of the bond and
for that purpose the consent of most of the bondholders has already been received. As at 31 December 2023 , the balance of the bonds
with interest amounts to €870.373.
CONSOLIDATED FINANCIAL STATEMENTS 2023|72
32. Trade and other payables
The fair value of trade and other payables due within one year approximate their carrying amounts as presented below.
Payables to third parties
Payables to related parties
Deferred income from tenants
Accruals
Pre-sale advances (Advances received for sale of
properties)
Total
Current portion
Non-current portion
Total
Continued Operations
31 Dec 2023
Continued
operations
€
1.095.564
536.867
-
73.281
31 Dec 2023
Discontinued
operations
€
484.786
-
-
3.826
31 Dec 2022
Continued
operations
€
3.070.074
495.157
-
68.827
31 Dec 2022
Discontinued
operations
€
389.462
13.883
7.840
20.122
90.172
1.795.884
-
488.612
97.711
3.731.769
-
431.307
31 Dec 2023
Continued
operations
€
1.795.884
-
1.795.884
31 Dec 2023
Discontinued
operations
€
31 Dec 2022
Continued
operations
€
31 Dec 2022
Discontinued
operations
€
-
488.612
488.612
3.731.769
-
3.731.769
7.840
423.467
431.307
Payables to third parties represents: a) payable provision due to Bluehouse Capital as a result of the Redeemable Class B share redemption
(Note 27.3) which was under legal proceedings and resolved during the current period (Note 39.3). As a result the remaining payable
provision was written off through the profit and loss account; 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).
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.
Discontinued Operations
Payables to related parties under discontinued operations represent payables to non-controlling interest shareholders.
Accruals mainly include the accrued, administration fees, accounting fees, facility management and other fees payable to third parties.
33. Deposits from Tenants
Deposits from tenants non-current
Total
31 Dec 2023
Continued
operations
€
31 Dec 2023
Discontinued
operations
€
31 Dec 2022
Continued
operations
€
31 Dec 2022
Discontinued
operations
€
-
-
23.002
23.002
-
-
23.002
23.002
Deposits from tenants appearing under non-current liabilities include the amounts received from tenants in Innovations Logistics Park.
CONSOLIDATED FINANCIAL STATEMENTS 2023|73
34. Taxation
31 Dec 2023
Continued
operations
€
31 Dec 2023
Discontinued
operations
€
Corporate income tax – non current
Defence tax – non current
Tax provision – non current
Non- current
Corporate income tax - current
Other taxes including VAT payable - current
Current
Total Provisions and Taxes Payables
-
17.173
-
17.173
21.146
292
21.438
38.611
Corporate income tax represents taxes payable in Cyprus and Romania.
Other taxes represent local property taxes and VAT payable in Romania.
31 Dec 2022
Continued
operations
€
165.817
14.252
399.450
579.519
-
-
-
-
4.955
150.917
155.872
155.872
30.631
6.943
37.574
617.093
31 Dec 2022
Discontinued
operations
€
41.981
-
-
41.981
12.064
130.182
142.246
184.227
During 2023, the prior year taxes due were re-assessed downwards by the tax authorities following relevant motion by the Company.
35. Finance Lease Liabilities
As at the reporting date the finance lease liabilities consist of the non-current portion of €5.885.895 and the current portion of €57.306
(31 December 2022: €6.168.403 and €57.527, accordingly).
Discontinued operations
31 Dec 2023
Less than one year
Between two and five years
More than five years
Accrued Interest
Total Finance Lease Liabilities (Note 9d)
31 Dec 2022
Less than one year
Between two and five years
More than five years
Accrued Interest
Total Finance Lease Liabilities (Note 9d)
35.1 Land Plots Financial Leasing
Note
41.2
&
41.6
Note
41.2
&
41.6
Minimum lease
payments
€
555.030
6.022.565
15.496
6.593.091
Minimum lease
payments
€
568.486
6.574.889
21.831
7.165.206
Interest
Principal
€
274.004
372.190
3.773
649.967
€
281.026
5.650.375
11.723
5.943.124
77
5.943.201
Interest
Principal
€
287.549
645.268
6.529
939.346
€
280.937
5.929.621
15.302
6.225.860
70
6.225.930
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 €21.580 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 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 15 December 2021 and 20 January 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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|74
35. Finance Lease Liabilities (continued)
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 €5.921.621 (2022:
€6.201.629), being repayable in monthly tranches until 2026 with a balloon payment of €5.244.926. 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 €250.000 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.
36. Earnings and net assets per share attributable to equity holders of the parent
a. Weighted average number of ordinary shares
Issued ordinary shares capital
Weighted average number of ordinary shares (Basic)
Diluted weighted average number of ordinary shares
b. Basic diluted and adjusted earnings per share
Earnings per share
Profit/(Loss) after tax attributable to owners of the parent
Basic
Diluted
c. Basic diluted and adjusted earnings per share from discontinued operations
Earnings per share
Loss after tax from discontinued operations attributable to owners of the parent
Basic
Diluted
d. Net assets per share
Net assets per share
Net assets attributable to equity holders of the parent
Number of ordinary shares
Diluted number of ordinary shares
Basic
Diluted
31 Dec 2023
129.191.442
129.191.442
129.191.442
31 Dec 2022
129.191.442
129.191.442
129.191.442
31 Dec 2023
€
31 Dec 2022
€
9.443.524
0,07
0,07
(1.240.385)
(0,01)
(0,01)
31 Dec 2023
€
31 Dec 2022
€
(2.966.646)
(0,02)
(0,02)
(8.416.599)
(0,06)
(0,06)
31 Dec 2023
€
31 Dec 2022
€
18.657.732
129.191.442
129.191.442
0,14
0,14
13.111.260
129.191.442
129.191.442
0,10
0,10
CONSOLIDATED FINANCIAL STATEMENTS 2023|75
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)- 2022 only
Retail segment - Kindergarten of GreenLake- 2022 only
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 year 2023
Warehouse
€
Office
€
Retail
€
Residential
€
Land Plots
€
Corporate
€
Total
€
Segment profit
Rental income (Note 10)
Service charges and utilities
income (Note 10)
Impairment of financial
investments (Note 25)
Result from disposal of
Investment
Result from disposal of
associate (Note 21)
Profit from discontinued
operation (Note 9b)
Segment profit
Administration expenses
(Note 12)
Other (expenses)/income,
net (Note 15)
Dividend Income (Note 25)
Finance income (Note 16)
Interest expenses (Note 16)
Other finance costs (Note
16)
Profit from discontinued
operations (Note 9b)
Foreign exchange losses, net
(Note 17)
Income tax expense (Note
18)
Exchange difference on I/C
loan to foreign holdings
(Note 28)
Total Comprehensive
Income
-
-
-
-
-
33.736
33.736
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
761.683
761.683
668.905
668.905
(392.210)
(392.210)
5.604.752
5.604.752
2.024.927
2.024.927
5.773
(535.101)
(1.631.714)
(2.127.306)
5.773
(535.101)
(7.036.343)
6.540.751
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1.632.282)
2.034.104
160.937
308.466
(62.985)
(3.515)
(860.566)
(26.824)
(2.434)
(931.988)
5.523.664
CONSOLIDATED FINANCIAL STATEMENTS 2023|76
-
-
37. Segment information (continued)
Profit and Loss for the year 2022
Segment profit
Rental income (Note 10)
Service charges and utilities
income (Note 10)
Property Management
income (Note 10)
Impairment of financial
investments (Note 25)
Gain on disposal of
subsidiaries
Share of profit/loss of
associate (Note 21)
Profit from discontinued
operation (Note 9b)
Segment profit
Administration expenses
(Note 12)
Other (expenses)/income,
net (Note 15)
Finance income (Note 16)
Interest expenses (Note 16)
Other finance costs (Note
16)
Profit from discontinued
operations (Note 9b)
Foreign exchange losses, net
(Note 17)
Income tax expense (Note
18)
Exchange difference on I/C
loan to foreign holdings
(Note 28)
Total Comprehensive
Income
Warehouse
€
Office
€
Retail
€
Residential Land Plots
€
€
Corporate
€
Total
€
-
-
103.514
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
763.242
763.242
276.996
276.996
-
103.514
(1.071.119)
(1.071.119)
1.041
1.041
(9.040)
(9.040)
(31.359)
72.155
(2.285.712)
(2.285.712)
(120.588)
(120.588)
(64.466)
(64.466)
(3.458.376)
(3.458.376)
(586.990)
(625.870)
(6.547.491)
(6.482.857)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1.464.626)
(3.390)
361.035
(192.448)
(5.883)
(3.856.004)
(17.647)
17.940
(692.906)
-
(12.336.786)
* It is noted that part of the rental and service charges/ utilities income related to Innovations Logistics Park in Romania is currently
invoiced by the Company as part of a relevant lease agreement with the Innovations SPV and the lender. However the asset, which are
held through the SPV, are 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.
CONSOLIDATED FINANCIAL STATEMENTS 2023|77
37. Segment information (continued)
Discontinued Operations
Profit and Loss for the year 2023
Warehouse
Office
Retail
Residential Land Plots
Corporate
Total
€
€
€
€
€
€
€
Segment profit
Rental income (Note 10)
Service charges and utilities
income (Note 10)
Valuation gains/(losses)
from investment property
(Note 13)
Share of profits/(losses)
from associates
(Note 21)
Loss on disposal of
subsidiaries (Note 20.2.4)
Asset operating expenses
(Note 11)
Segment profit
Administration expenses
(Note 12)
Other (expenses)/income,
net (Note 15)
Finance income (Note 16)
Interest expenses (Note 16)
Other finance costs (Note
16)
Foreign exchange losses, net
(Note 17)
Income tax expense (Note
18)
Loss for the year
128.878
17.497
53.394
-
-
(166.032)
33.737
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.800
7.841
-
-
(277.124)
(245.316)
-
-
-
-
-
-
-
130.678
25.338
(223.730)
(245.316)
-
(946.792)
(946.792)
(3.868)
5.773
(12.661)
(535.101)
(684.923)
(1.631.715)
(867.484)
(2.127.306)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(201.344)
5.792
472
(603.339)
(1.493)
(55.699)
(4.955)
(2.987.872)
CONSOLIDATED FINANCIAL STATEMENTS 2023|78
37. Segment information (continued)
Profit and Loss for the year 2022
Warehouse
Office
Retail
Residential Land Plots
Corporate
Total
€
€
€
€
€
€
€
Segment profit
Property Sales income (Note
14)
Cost of Property sold (Note
14)
Rental income (Note 10)
Service charges and utilities
income (Note 10)
Valuation gains/(losses)
from investment property
(Note 13)
Share of profits/(losses)
from associates
(Note 21)
Loss on disposal of
subsidiaries (Note 20)
Asset operating expenses
(Note 11)
Segment profit
Administration expenses
(Note 12)
Other (expenses)/income,
net (Note 15)
Finance income (Note 16)
Interest expenses (Note 16)
Other finance costs (Note
16)
Foreign exchange losses, net
(Note 17)
Income tax expense (Note
18)
Loss for the year
-
-
-
-
3.897.608
-
332.356
-
90.054
-
3.303
(4.723.000)
-
-
-
-
-
-
-
-
-
-
6.980
(1.253.885)
335.533
-
63.940
9.152
8.655
-
-
-
-
-
-
-
-
3.897.608
(4.723.000)
489.653
16.132
(1.245.230)
335.533
(2.602.950)
(199.229)
(65.746)
(1.661.910)
(341.974)
(4.871.809)
(113.107)
(31.360)
(15.118)
(2.285.712)
(11.413)
(120.588)
(2.022)
(64.465)
(59.704)
(3.458.377)
(245.016)
(586.990)
(446.380)
(6.547.493)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(242.157)
(2.721.353)
7.982
(657.952)
(3.017)
(165.165)
(74.340)
(10.403.495)
CONSOLIDATED FINANCIAL STATEMENTS 2023|79
37. Segment information (continued)
Total Operations
Balance Sheet as at 31 December 2023
Warehouse
€
Office
€
Retail
€
Residential
€
Land plots
€
Corporate
Total
€
Assets
Long-term receivables and
prepayments
Investment in associate
Financial Assets at FV through
P&L
Assets held for sale
Segment assets
Tangible and intangible assets
Prepayments and other
current assets
Cash and cash equivalents
Total assets
Liabilities associated with
assets classified as held for
disposal
Borrowings
Segment liabilities
Trade and other payables
Taxation
Bonds
Total liabilities
818
-
-
10.025.000
10.025.818
-
-
-
-
5.944.693
6.682
5.951.375
-
-
-
-
Balance Sheet as at 31 December 2022
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
818
-
-
1.547.513
1.547.513
11.686.598
754.949
11.686.598
12.327.462
12.441.547 24.014.878
-
-
-
-
21.581
-
21.581
-
-
-
-
-
164
4.034.537
-
-
152.241
- 28.201.820
644.484
108.112
752.596
-
-
-
-
6.610.758
114.794
6.725.552
1.795.884
38.611
870.373
9.430.420
Warehouse
€
Office
€
Retail
€
Residential
€
Land plots
€
Corporate
Total
€
Assets
Long-term receivables and
prepayments
Investment in associate
Financial Assets at FV through
P&L
Assets held for sale
Segment assets
Tangible and intangible assets
Prepayments and other
current assets
Cash and cash equivalents
Total assets
Liabilities associated with
assets classified as held for
disposal
Borrowings
Segment liabilities
Trade and other payables
Taxation
Bonds
Total liabilities
-
-
-
10.025.000
10.025.000
-
-
-
-
6.224.647
9.630
6.234.277
-
-
-
-
-
-
-
1
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
824
1
824
1
-
1.286.313
1.286.313
12.078.808
2.523.777
12.078.808
13.835.091
14.603.410 25.914.724
-
-
-
-
-
816
4.153.162
-
-
66.570
- 30.135.272
4.045.477
-
4.045.477
-
-
-
-
615.534
587.727
10.885.658
597.357
1.203.261 11.483.015
3.731.769
-
617.093
-
-
822.736
- 16.654.613
CONSOLIDATED FINANCIAL STATEMENTS 2023|80
37. Segment information (continued)
Discontinued operations
Assets and Liabilities held for sale 2023
Warehouse
€
Office
€
Retail
€
Residential
€
Land plots
€
Corporate
€
Total
€
Assets
Investment properties
Long-term receivables and
prepayments
Investments in associates
Segment assets
Tangible and intangible assets
Prepayments and other
current assets
Cash and cash equivalents
Total assets
Borrowings
Finance lease liabilities
Deposits from tenants
Segment liabilities
Trade and other payables
Taxation
Total liabilities
9.710.000
315.000
-
10.025.000
-
-
-
-
71
5.921.621
23.002
5.944.694
-
-
-
-
-
-
0
-
-
-
-
-
-
-
-
-
-
-
Assets and Liabilities held for sale 2022
Warehouse
€
Office
€
Retail
€
Assets
Investment properties
Long-term receivables and
prepayments
Investments in associates
Segment assets
Tangible and intangible assets
Prepayments and other
current assets
Cash and cash equivalents
Total assets
Borrowings
Finance lease liabilities
Deposits from tenants
Segment liabilities
Trade and other payables
Taxation
Total liabilities
9.710.000
315.000
-
10.025.000
-
-
-
-
16
6.201.629
23.002
6.224.647
-
-
-
-
-
1
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.547.513
-
11.257.513
-
-
1.547.513
-
-
-
-
-
21.580
-
21.580
-
-
-
315.000
-
-
-
- 11.572.513
-
-
-
25
409.776
345.148
- 12.327.462
71
-
5.943.201
-
23.002
-
5.966.274
-
488.612
-
155.872
-
6.610.758
-
Residential
€
Land plots
€
Corporate
€
Total
€
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
950.779
971.217
11.631.996
-
335.533
1.286.313
-
-
315.000
335.534
971.217 12.282.530
-
-
-
-
4.021.176
24.301
-
4.045.477
-
-
-
-
-
-
20
1.267.713
284.828
- 13.835.091
4.021.192
-
6.225.930
-
-
23.002
- 10.270.124
431.307
-
-
184.227
- 10.885.658
CONSOLIDATED FINANCIAL STATEMENTS 2023|81
37. Segment information (continued)
Geographical information
Income (Note 10)
Ukraine
Romania
Greece
Bulgaria
Cyprus *
Total
31 Dec 2023
Continued
operations
€
31 Dec 2023
Discontinued
operations
€
31 Dec 2022
Continued
operations
€
31 Dec 2022
Discontinued
operations
€
-
-
-
-
1.430.588
1430.588
-
156.016
-
-
-
156.016
-
103.514
-
-
1.040.238
1.143.752
-
505.785
-
-
-
505.785
* It is noted that part of the rental and service charges/ utilities income related to Innovations Logistics Park in 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. or in the broader market. 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.
Gain/(loss) from disposal of investment properties
(Note 14)
Romania
Total
31 Dec 2023
31 Dec 2023
31 Dec 2022
31 Dec 2022
Continued
operations
€
Discontinued
operations
€
Continued
operations
€
-
-
-
-
-
-
Discontinued
operations
€
(825.392)
(825.392)
31 Dec 2023
Continued
operations
€
31 Dec 2023
Discontinued
operations
€
31 Dec 2022
Continued
operations
€
31 Dec 2022
Discontinued
operations
€
Carrying amount of assets (investment properties and
investment in associates)
Ukraine
Romania
Cyprus
Total
38. Related Party Transactions
The following transactions were carried out with related parties:
38.1 Income/ Expense
38.1.1 Income
-
-
-
-
1.547.513
9.710.000
-
11.257.513
-
-
1
1
1.921.996
10.045.534
-
11.967.530
31 Dec 2023
31 Dec 2023
31 Dec 2022
31 Dec 2022
Continued
operations
€
Discontinued
operations
€
Continued
operations
€
Discontinued
operations
€
Interest Income from loan to associates
Total
-
-
424
424
230
230
7.972
7.972
Interest income from associates relates to interest income from GreenLake Development Srl.
CONSOLIDATED FINANCIAL STATEMENTS 2023|82
38. Related Party Transactions (continued)
38.1 Income/ Expense (continued)
38.1.2 Expenses
31 Dec 2023
Continued
operations
€
31 Dec 2023
Discontinued
operations
€
Management Remuneration (Note 12)
Incentives pursuant to RemCo proposal (Note 12)
Directors fees (Note 12)
Provision for Director fees (Note 12)
Interest expenses on Director and Management Loans
(Note 16)
Total
10.657
151.370
75.020
250.000
15.348
502.395
-
-
-
-
-
-
31 Dec 2022
Continued
operations
€
155.959
184.500
-
-
37.513
377.972
31 Dec 2022
Discontinued
operations
€
-
-
-
-
-
-
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. During 2023 the Company externalized
most of the related HR cost as part of the cost minimization plan adopted by the board.
Incentives provided to personnel for the sussessful implementation of Group’s plan pursuant to relevant Remuneration Committee proposal
dated 7 May 2021 as approved by the BoD on 1st June 2021.
The annual Directors fees including Chairman and Committee remunerations have been set at GBP 129k. Following relevant confirmation
by the board, the Company registered in 2023 the remuneration of the board associated with H1 2022 (€75k) which remained pending
from previous year, as well as a provision of a remuneration to cover the period including H2 2022 and 2023 (€250k).
38.2 Payables to related parties (Note 32)
31 Dec 2023
Continued
operations
31 Dec 2023
Discontinued
operations
31 Dec 2022
Continued
operations
31 Dec 2022
Discontinued
operations
€
€
Board of Directors & Committees remuneration
Provision for director fees
Sec South East Continet Unique Real Esate Management
Limited
Management Remuneration
Total
148.879
250.000
-
137.988
536.867
€
218.171
65
276.921
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.
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
LLC “ Trade Center’’
LLC “Aisi Ukraine”
LLC “Almaz-Press-Ukraine”
LLC “Aisi Ilvo”
Total
Limit –as at
31 Dec 2023
€
5.800
23.062.351
8.236.554
150.537
31.455.242
Principal as
at
31 Dec 2023
€
5.822
315.524
264.338
19.398
605.082
Limit –as at
31 Dec 2022
€
5.800
23.062.351
8.236.554
150.537
31.455.242
Principal as
at
31 Dec 2022
€
6.074
295.549
275.778
19.398
596.799
CONSOLIDATED FINANCIAL STATEMENTS 2023|83
38. Related Party Transactions (continued)
38.3 Loans from SC Secure Capital Limited to the Group’s subsidiaries (continued)
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 €60.508 (2022: €59.680), estimated on balances held at 31 December 2023.
38.4 Loans to associates (Note 24)
Loans to GreenLake Development Srl
Total
31 Dec 2023
Continued
operations
€
31 Dec 2023
Discontinued
operations
€
31 Dec 2022
Continued
operations
€
-
-
-
-
31 Dec 2022
Discontinued
operations
€
229.629
229.629
-
-
The loan was provided to GreenLake Development Srl from Edetrio Holdings Limited (discontinued operations) and from Sc Capital
(continued operations). The agreement with Edetrio Holdings Limited was signed on 14 June 2012 and bears interest 5% and the
agreement with Sc Capital Limited was signed on 4 December 2017 and bears interest 4% per annum. The loan with Sc Capital was fully
repaid during 2022.
38.5 Loans from related parties (Note 30)
Loans from Directors and Management
Interest accrued on loans from related parties
Total
31 Dec 2023
Continued
operations
€
100.000
8.112
108.112
31 Dec 2023
Discontinued
operations
€
-
-
-
31 Dec 2022
Continued
operations
€
492.500
95.227
587.727
31 Dec 2022
Discontinued
operations
€
-
-
-
Loans from directors of the order of €375.000 reflect loans provided from three directors as bridge financing for future property
acquisitions. The loans bear interest 8% annually. The loans have been partially repaid during 2023 and current balance is €100.000.
The rest of the amount of the order of €117.500 reflect payables to one director, converted to loan for facilitating Company’s cash flow.
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 adequtely provided for tax liabilities, based on its interpretation of tax legislation, official
pronouncements and court decisions. However, the interpretations of the relevant authorities could differ and the effect on these
consolidated financial statements, if the authorities were successful in enforcing their interpretations, could be significant.
39.2 Construction related litigation
There are no claims from contractors due to the postponement of projects or delayed delivery other than those disclosed in the financial
statements.
CONSOLIDATED FINANCIAL STATEMENTS 2023|84
39. Contingent Liabilities (continued)
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 €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
€2.500.000 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 posted in its accounts a
relevant payable provision for Bluehouse in the amount of €2.521.211 (Note 32). On the other hand, the Company during 2019, as part
of the judicial process, 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. Following relevant negotiations and taking
into account the timeline and the costs associated with these legal motions, the Company proceeded to a settlement against a payment
of €494.000 pursuant to consensual order issued by the District Court of Nicosia in action no. 3362/2018.
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 31 December 2023.
40. Commitments
The Group had no other commitments as at 31 December 2023.
41. Financial Risk Management
41.1 Capital Risk Management
The Group manages its capital to ensure adequate liquidity for implementing its strategy 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 shareholder’s 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
Financial Assets
Cash at Bank
Long-term Receivables and prepayments
Financial Assets at FV through P&L
Prepayments and other receivables
Total
Financial Liabilities
Borrowings
Trade and other payables
Deposits from tenants
Finance lease liabilities
Taxation
Bonds
Total
Note
31 Dec 2023
31 Dec 2023
31 Dec 2022
31 Dec 2022
Continued
operations
€
Discontinued
operations
€
Continued
operations
€
Discontinued
operations
€
26
23
25
24
30
32
33
35
34
31
152.241
818
11.686.598
4.034.537
345.148
315.000
-
409.776
66.570
824
12.078.808
4.153.162
284.828
315.000
-
1.267.713
15.874.194
1.069.924
16.299.364
1.867.541
114.794
1.795.884
-
-
38.611
870.373
71
488.612
23.002
5.943.201
155.872
-
597.357
3.731.769
-
-
617.093
822.736
4.021.192
431.307
23.002
6.225.930
184.227
-
2.819.662
6.610.758
5.768.955
10.885.658
CONSOLIDATED FINANCIAL STATEMENTS 2023|85
41. Financial Risk Management (continued)
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 floating interest-bearing assets. On December 31st, 2023, cash and cash equivalent (including continued and discontinued
operations) financial assets amounted to €497.389 (2022: €351.398) of which approx. €501 in UAH and €351.612 in RON (Note 26) while
the remaining are mainly denominated in either USD,GBP or €.
The Group is exposed to interest rate risk in relation to its borrowings (including continued and discontinued operations) amounting to
€114.865 (31 December 2022: €4.618.549) 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.
Interest Rate Risk (continued)
As at 31 December 2023, the weighted average interest rate for all the interest bearing borrowing and financial leases of the Group stands
at 4,7% (31 December 2022: 5,36%).
The sensitivity analysis changes applying to the interest calculation on the borrowings principal outstanding as at 31 December 2023 is
presented below:
Weighted average interest rate
%Influence on yearly finance costs
Actual
as at 31.12.2023
4,7%
+100 bps
+200 bps
5,7%
60.284
6,7%
120.567
The sensitivity analysis changes applying to the interest calculation on the borrowings principal outstanding as at 31 December 2022 is
presented below:
Weighted average interest rate
%Influence on yearly finance costs
Actual
as at 31.12.2022
5,36%
+100 bps
+200 bps
6,36%
30.304
7,36%
60.608
The Group’s exposures to financial risk are discussed also in Note 7.
CONSOLIDATED FINANCIAL STATEMENTS 2023|86
41. Financial Risk Management (continued)
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
31 December 2023
Carrying amount
€
Total
Contractual
Cash Flows
€
€
Less than
one year
From one to
two years
More than two
years
Total net assets/(liabilities)
2.819.662
13.054.532
2.830.329
13.043.865
2.701.140
13.172.236
129.189
(129.189)
Discontinued Operations
31 December 2023
Carrying amount
Financial assets
Cash at Bank
Prepayments and other
receivables
Financial Assets at FV through
P&L
Long-term Receivables and
prepayments
Total Financial assets
Financial liabilities
Borrowings
Trade and other payables
Bonds issued
Taxes payable and provisions
Total Financial liabilities
Financial assets
Cash at Bank
Long-term receivables
Prepayments and other
receivables
Total Financial assets
Financial liabilities
Borrowings
Trade and other payables
Deposits from tenants
Finance lease liabilities
Taxation
Total Financial liabilities
Total net assets/(liabilities)
152.241
152.241
152.241
4.034.537
4.034.537
4.034.537
11.686.598
11.686.598
11.686.598
818
15.874.194
818
15.874.194
-
15.873.376
€
-
-
-
-
-
114.794
125.461
13.445
112.016
1.795.884
1.795.884
1.795.884
870.373
870.373
870.373
-
-
38.611
38.611
21.438
17.173
€
-
-
-
818
818
-
-
-
-
-
818
Total
Contractual
Cash Flows
€
345.148
315.000
€
345.148
315.000
409.776
1.069.924
409.776
1.069.924
Less than
one year
From one to
two years
More than two
years
€
345.148
-
409.776
754.924
€
-
-
-
-
€
-
315.000
-
315.000
71
488.612
23.002
5.943.201
155.872
6.610.758
(5.540.834)
11.831
488.612
23.002
6.593.092
155.872
7.272.409
(6.202.485)
71
488.612
-
555.030
155.872
1.199.585
(444.661)
11.760
-
-
541.962
-
553.722
(553.722)
-
-
23.002
5.496.100
-
5.519.102
(5.204.102)
CONSOLIDATED FINANCIAL STATEMENTS 2023|87
41. Financial Risk Management (continued)
41.6 Liquidity Risk Management (continued)
Continued Operations
31 December 2022
Carrying amount
€
Total
Contractual
Cash Flows
€
Less than
one year
From one to
two years
More than two
years
€
66.570
66.570
66.570
4.153.162
4.153.162
4.153.162
12.078.808
12.078.808
12.078.808
824
16.299.364
824
16.299.364
-
16.298.540
€
-
-
-
-
-
€
-
-
-
824
824
-
-
597.357
647.571
120.334
527.237
3.731.769
3.731.769
3.731.769
-
822.736
1.010.896
146.086
47.040
817.770
617.093
617.093
37.574
579.519
-
Total net assets/(liabilities)
5.768.955
10.530.409
6.007.329
10.292.035
4.035.763
12.262.778
1.153.796
(1.153.796)
817.770
(816.946)
Discontinued Operations
31 December 2022
Carrying amount
Less than
one year
From one to
two years
More than two
years
Total
Contractual
Cash Flows
€
284.828
315.000
€
284.828
315.000
€
284.828
-
1.267.713
1.867.541
1.267.713
1.867.541
1.267.713
1.552.541
€
-
-
-
-
€
-
315.000
-
315.000
Financial assets
Cash at Bank
Prepayments and other
receivables
Financial Assets at FV through
P&L
Long-term Receivables and
prepayments
Total Financial assets
Financial liabilities
Borrowings
Trade and other payables
Bonds issued
Taxes payable and provisions
Total Financial liabilities
Financial assets
Cash at Bank
Long-term receivables
Prepayments and other
receivables
Total Financial assets
Financial liabilities
Borrowings
Trade and other payables
Deposits from tenants
Finance lease liabilities
Taxation
Total Financial liabilities
Total net assets/(liabilities)
4.021.192
431.307
23.002
6.225.930
184.227
10.885.658
(9.018.117)
4.033.067
431.307
23.002
7.165.206
184.227
11.836.809
(9.969.269)
4.018.994
423.467
-
568.486
142.246
5.153.193
(3.600.652)
14.073
-
-
555.418
41.981
611.472
(611.472)
-
7.840
23.002
6.041.302
-
6.072.144
(5.757.144)
CONSOLIDATED FINANCIAL STATEMENTS 2023|88
42. Events after the end of the reporting period
a) Stage 2 of Arcona transaction
During 2024, the Company has worked extensively towards the closing of Stage 2 of the transaction with Arcona, which involves the sale
of Rozhny and Kyianivskyi assets in Ukraine. To that end, the commercial terms of the transactions have been finally agreed, and the
relevant valuations, for use as reference of the price, have been ordered and issued by the third-party local valuer. At this point, the two
legal teams are finalizing the required documentation for execution, and it is estimated that, albeit the constraints in force, the transactions
will materialize during the third quarter of the year.
b) Bluebigbox3 Srl insolvency procedure
Following the settlement made with BLUEHOUSE ACCESSION PROPERTY HOLDING III S.A.R.L. pursuant to a consensual order issued by
the District Court of Nicosia in action no. 3362/2018, relevant legal motions against Bluebigbox3 Srl have been withdrawn. In relation to
the insolvency procedure of the company, next hearing has been set on 17 September 2024, when the judicial administrator will file the
request to close the bankruptcy procedure before the court, considering that this proposal was already confirmed by creditors in
accordance with the Creditors Assembly held on 15 March 2024.
c) Liquidation of Romanian entities
During the first quarter of 2024, the Company initiated the process for liquidating two Romanian entities of the Group, without the
appointment of a liquidator, according to the provisions of art.236 of Company law 31/1990. The entities are SPDI Management Srl and
Secmon Srl, and their liquidation has been emerged from the fact that they are currently idle, the former following the externalization of
all local HR and office costs, and the latter following the sale of its entire portfolio of assets.
d) Bond maturity extension
Regarding the Bond instrument issued by the Company on 19 December 2017 and for which 30% of the original amount has already
been redeemed, the Company has at the date of this report secured the agreement of most of the bondholders to the extension of the
maturity date of the instrument for one year, namely to 19 July 2025.
e) Extraordinary General Meeting of the Shareholders
On 17 June 2024, the Company announced the release of a Notice of Extraordinary General Meeting (EGM) to be held at the registered
address of the Company on 10 July 2024. The purpose of the EGM is to make the necessary changes to the Company’s share capital
structure in order to proceed with the distribution to holders of SPDI ordinary shares their pro rata allocation of shares of Arcona Property
Fund N.V. held by the Company, or by a bank transfer of readily available funds, or both as the board of directors in their absolute
discretion may decide. To do this, the Company’s redeemable preference Class B shares need to be cancelled (Resolution 1) and the
Company’s share premium account needs to be reduced (Resolution 2 and 3). Shareholders are encouraged to read the Notice of EGM in
full for further detail. Both resolutions are to be proposed as special resolutions, and therefore require 75% of those present to vote in
favour to pass.
CONSOLIDATED FINANCIAL STATEMENTS 2023|89