REG-Alina Holdings PLC Alina Holdings PLC: AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
31/05/2022 07:15
============
Alina Holdings PLC (ALNA)
Alina Holdings PLC: AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
31-May-2022 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
═══════════════════════════════════════════════════════════════════════════════════════════════════
Alina Holdings plc
(Reuters: ALNA.L, Bloomberg: ALNA:LN)
(“ALNA” or the “Company”)
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
Alina Holdings PLC (LSE: ALNA) today announces its audited results for the year ended 31 December
2021.
The information set out below is extracted from the Company's Report and Accounts for the year
ended 31 December 2021, which will be published today on the Company's
website 1 www.alina-holdings.com. A copy will also be submitted to the National Storage Mechanism
where it will be available for inspection. Cross-references in the extracted information below
refer to pages and sections in the Company's Report and Accounts for the year ended 31 December
2021.
Alina Holdings PLC (“Alina” or the “Company”) is a company registered on the Main Market of the
London Stock Exchange.
In December 2020 the Company changed its accounting reference date to 31 December in each year,
giving rise to a fifteen-month period. The period reported on in this document is for the 12 months
to 31 December 2021, however the comparable figures are for a fifteen-month period as per IAS 1.
Future financial statements will report on 12 months periods to 31 December.
Investment Strategy
The Company’s investment strategy is to identify and acquire interests in businesses, which, in the
opinion of the directors, are capable of delivering long term value for its shareholders. The
Company’s initial strategy, as set out in its RNS of 28 September 2020, was to seek to acquire
interests in companies in the European leisure, hospitality and entertainment sectors. The extended
impact of Covid-19, rapidly followed by the war in Ukraine and excessive valuations in many markets
has resulted in the directors researching and purchasing holdings, which the directors consider to
offer better value, outside of the travel and leisure industries, whilst at the same time trying to
mitigate market exposure.
The directors will continue to actively manage the Company’s property portfolio and will sell
properties only when the directors consider it to be in the best interests of the Company’s
shareholders to do so.
Chairman’s Statement
Regarding Sock Market Manias
“I can calculate the movement of stars, but not the madness of men.”
Sir Isaac Newton commenting on the madness in the trading of the South Sea Bubble.
Regarding the stupidity of War
“No-man’s land under snow is like the face of the moon: chaotic, crater ridden, uninhabitable,
awful, the abode of madness.”
Lieutenant Wilfred Owen, in a letter to his mother, January 1917
__________________
Given the war, destruction and suffering in Ukraine, shareholders will, I hope, forgive me for not
using the usual “I am pleased to present the accounts …”
I am anything but pleased. In fact, it is with considerable concern that I look to the future and
present the Company’s accounts to 31 December 2021.
Notwithstanding substantial ambivalence, I fear that the war in Ukraine will continue for some time
and that if Western backed Ukrainian forces inflict too much (without knowing what the definition
of ‘too much’ is) damage on Russian troops or assets, or the Russian economy were to be near
collapse, the likelihood of Russia using tactical nuclear weapons becomes ever more likely. Add to
that and the ever-increasing likelihood that China may (will?) attack Taiwan leaves me wondering
why ‘man’ has learned nothing about the futility of war.
Politics, Economics and the madness of men…
Following the 2020 spread of Covid-19, one could be forgiven for thinking that the World would
‘normalise’ in 2021/2022…no such luck. Central Bankers kept the proverbial interest rate spigot
open (far too long!) and investors, punters and stock jockeys responded by driving meme stocks
beyond any measure of ‘value’, which in turn launched major indices from their March 2020 lows to
all-time highs in November/December 2021 or, in the case of the S&P500, January 2022. As a result
of belated Central Bank interest rate tightening, and the invasion of Ukraine, markets have fallen
precipitously, but nonetheless, have probably further to fall.
On 6 May 2022, Lu Wang, Vildana Hajric and Isabelle Lee from Bloomberg summed up the current market
gyrations as follows –
First it was a rout in the stay-at-home names that surged in the pandemic. Then speculative
software makers with barely any earnings went south. Now the giant technology names whose sway on
benchmarks has been decried by bears for years are dragging the market down. Dizzying as the
downdraft has been, you can’t say you weren’t warned.
It’s axiomatic in markets: you never see it coming. But this selloff is an argument that sometimes
you do. People have been saying for months that inflation would surge, forcing the Federal Reserve
into action. Wall Street veterans like Charlie Munger spent 18 months lambasting the Robinhood
crowd for its infatuation with speculative flotsam. Warnings the market would bend under its
trillion-dollar tech monopolies have never been hard to find.
While the timing was often wrong, it’s hard to say those views aren’t playing out now, with the S&P
500 falling for five straight weeks, its longest retreat in a decade. The index has slumped 14%
from a record on the year’s first trading day, wiping about $6 trillion from its value.
“The normal signs of excess have been out there for a while, whether it be in valuation, whether it
be in all the speculative overshooting of some of these stock that have great stories but not a
real solid business underneath them,” said Michael Ball, managing director of Denver-based
Weatherstone Capital Management. What starts as a trickle “turns into a bigger outfall as
everybody starts to say, ‘I need to take off risk’ and nobody wants to take the other side.”
Saying the market is acting in a predictable way sounds crazy after the week that just ended.
Hawkish pronouncements by the Fed on Wednesday were occasion for a 3.4% surge in the Nasdaq 100,
before the whole gain was unwound a day later. Treasury yields buckled and jumped, making Thursday
only the fourth time in 20 years that the main stock and bond ETFs both lost 2% at the same time.
Through a broader lens, the results look a little less disorderly. For the Nasdaq 100, which traded
at almost 6 times sales as recently as November, the bull market is over, its five-month loss
exceeding 23%. More speculative companies as proxied by funds like Ark Innovation ETF (ticker ARKK)
are nursing losses of twice that. Faddy groups like special purpose acquisition companies have
suffered similar dents, while losses in the older-school industries repped by the Dow Jones
Industrial Average are lower by a relatively tame 10%.
“In a lot of ways, it’s following a typical playbook,” said Jerry Braakman, chief investment
officer and president of First American Trust in Santa Ana, California. “Market leadership is the
losing leadership. That’s when the panic sets in.” Of course, just because it makes sense doesn’t
mean everyone was ready for it. Dip-buyers were in evidence through the start of this month, with
bounces like Wednesday’s giving bulls hopes. Until April, investors had kept funnelling money into
equity funds, sticking to their dip-buying strategy. “Investors tend to say, ‘this time is
different,’” said Sam Stovall, chief investment strategist at CFRA. “Investors get tired and say,
‘I’m not going to fight the tape, because even with higher multiples, the market just wants to keep
going up.’” That’s not what’s happening now. The five tech giants, Meta Platforms Inc., Apple
Inc., 2 Amazon.com Inc., Microsoft Corp. and Alphabet Inc., at one point accounted for a quarter
of the S&P 500, boasting an influence that’s greater than any comparable group of stocks since at
least 1980. Now that the group, known as the Faangs, has seen their total value shaved by 23% from
the December peak, a drag that the market has no chance of shaking off. The S&P 500 is mired in its
second-longest correction since the global financial crisis.
By the time shareholders read this Statement, Global Stock Markets may have bottomed (but I doubt
it), and we could be back in a bull market. Sadly, I don’t think that the next bull (-market) is on
the horizon, and the current bear may well roar for a while …particularly if, as I do, you adhere
to the Jeremy Grantham (JG) point of view that we have not just been in a bubble, or 2 sigma
bubble, but are currently in only the fourth (3 sigma) ‘Super Bubble’ in the past 100 years in the
US. JG believes that the S&P 500 will revert to the mean of its long-term growth trend, as low as
2,500, from its current level of ±4,123 and a high of ±4,796. This would imply a 40% – 50% decline
in the S&P 500 from its January 2022 high, and a further 39% decline from current levels to around
2,550!
Jeremy Grantham’s view of the world may cause some investors more than a little nausea, but his
writings, nonetheless, make for compelling reading, even if you disagree with his conclusions.
3 https://www.gmo.com/globalassets/articles/viewpoints/2022/gmo_let-the-wild-rumpus-begin_1-22.pdf
Operational Review
Property Holdings
As stated in the 2 March 2022 trading statement, the Company's objective continues to be to
liquidate the current portfolio of retail shopping and residential assets, which currently show a
Gross Initial Yield of more than 16%, but only if a sale can achieve a sensible return in excess of
the year end 2021 carrying value of £2.45m.
In order to optimise the value of the Company’s property assets, there is a need to undertake
selective improvements to enhance sale values. This exercise is currently being undertaken and
development plans are being drawn up for the Company’s properties in Hastings and Bristol.
Hastings is currently yielding ±11% even though half empty. Once the vacant units have been
refurbished and the upper units converted to residential, I am confident that the rental income
will more than double the current income of £90,000 and substantially increase the current book
value of £700,000.
Quoted Holdings
As at 6 May 2022, Alina currently has ±£2.68m of investment holdings, of which ±£2.5m are long and
±£0.2m are short. The company’s most significant holdings are:
Dolphin Capital Investors (DCI LN)
DCI is an Eastern European (Greece, Cyprus, Croatia) focused Leisure development company. Current
NAV of DCI as of May 2022 is 15p vs 31 December 2021 valuation of 4.3p and current market price of
3.6p. Alina currently owns just under 3% of DCI. As previously, stated, I do not believe that DCI
will return 15p per share to shareholders in a liquidation, but consider 8p to 10p more realistic.
Part of the problem for DCI is, that having sold 50.25% of Aristo to the Aristo CEO, it is now a
minority shareholder in Cyprus based Aristo Development with little or no ability to influence or
achieve a fair sale price. The situation is further complicated by the war in Ukraine, which along
with rampant inflation and the possibility of slowing economic growth in Europe will likely have a
negative impact on sales of luxury leisure properties.
and HEIQ plc
HEIQ is an innovative specialist materials chemical company with a current market capitalisation of
£130.9m (100p/share) and 2021 Revenues of $57.9m v 2020 Revenues of $50.4m. The Company’s objective
is to grow intermediate sales to $300m. Many of the Company’s materials are used by leisure
clothing manufacturers, which was recently endorsed by the investment into HEIQ AEONIQ (Cellulosic
yarn made from seaweed) by Lycra, and the recently reported $5m investment, by Hugo Boss at an
implied valuation of $200m for HEIQ’s AEONIQ subsidiary.
Hedge Positions
The recent rapid sell off in most major stock markets hardly came as a surprise to us and in
anticipation of the correction we had various hedges in place with the intention of mitigating the
potential for markdown in our long positions. Our objective, unlike a hedge fund, is not to
increase our risk exposure by leveraging the company’s balance sheet, but rather to use leverage
built into the instruments that we are using. Clearly there is risk associated with these
instruments, which we monitor closely to avoid the potential for substantial potential losses. The
strategy is currently working effectively and has made, and continues to make, making a positive
contribution to the Company’s results.
Conclusion
Madness is never usually here today and gone tomorrow..
Companies, when sensibly valued, should trade on reasonable multiples of sustainable free cash
flow. defined as, the amount of cash that a company generates after allowance for maintenance
capital expenditure. During times of madness companies are valued (for much longer than makes
sense) on various metrics, such as hits and clicks, as was the case during the dot com bubble,
which saw the NASDAQ rise 400% from 1995 to March 2000, before falling 78%. This period of madness
was followed by the US housing bubble which blew up spectacularly in 2008, causing the Great
Financial Crisis (GFC). The collapse in US housing and US stocks caused the biggest recession in
the USA since the great depression of 1930 and spread worldwide. To refresh memories, the housing
bubble or Collateralised Debt Obligations (CDO) or Mortgage-Backed Securities (MBS) bubble was
simply alchemy! Wall Street Investment Bankers, with help from Rating Agencies, turned BBB
mortgages into AAA MBSs or, if one prefers, turned cigar butts into gold. Fool’s Gold! I won’t
retell the entire story but would instead recommend that anyone interested should pick up a copy of
Michael Lewis’s book ‘The Big Short’, and/or watch the movie by the same name.
Which brings us to the current, bubble, created between 2009 and 2022. The current bubble, which
include stocks, bonds and housing has the potential to make the 1999 and 2008 bubbles appear
irrelevant by comparison. Why, because the 1999 Tech bubble was just that, whilst the 2008 bubble
was a two-tier bubble of housing and stocks compared to the current three-tier bubble, which
includes stocks, bonds, and housing. The chances that the Federal Reserve (FED) and the G7 Central
Bankers can dance their way through this bubble without a recession are probably somewhere between
‘Slim ‘and his cousin ‘None’.
It is my firm belief that the Fed has created a three headed monster which, if they are seriously
intent on combatting, can only end in recession. Using monetary policy alone to control any
economy, is like using a sledgehammer to bang-in a tack (small nail). Having said that, the speed
of the current collapse in stock prices might also be the Fed’s saviour. Year to date, the DOW is
-10%, the S&P 500 -15%, and the NASDAQ -25%.
If the Fed gets lucky and consumption slows rapidly, inflation should also slow, which should then
allow a reduction in planned rate-increases, thus avoiding a potential collapse in housing and a
recession. There are some including those in the Federal Open Market Committee (FOMC) who are
hoping or praying for this benign outcome; there are others who don’t give the Fed a snowball’s
chance in hell of achieving a soft landing. Sadly, given the war in Ukraine and the latest Covid-19
shut down in China, I am of the opinion that US cannot avoid Stagflation.
Strategy
Given the above review and the probability for sustained conflict in Ukraine, and its impact on
food and energy prices, the board is of the opinion that the current correction in financial
markets will increasingly present the Company with acquisition opportunities on reasonable
multiples of earnings, free cash flow and book value. In other words, ‘slow and steady will win the
race’.
Duncan Soukup
Chairman
Alina Holdings plc
26 May 2022
Strategic Report
The Strategic Report includes the Chairman’s Statement on pages 6 to 9.
Operating Review
Business Model
During the year, the business concentrated on helping tenants through the problems caused by
Covid-19 and on reviewing refurbishment plans.
In line with the Company’s investment strategy, the directors have continued to review and analyse
potential investment and acquisition opportunities.
Financial Review
The financial statements contained in this report have been prepared in accordance with UK Adopted
International Accounting Standards.
Result
The Group recorded an IFRS loss for the year to 31 December 2021 of £294,000, or 1.30 pps (12
months to 31 December 2020: loss £490,000, or 2.05 pps).
Key Performance Indicators (“KPI’s”)
Throughout the reporting period the Group had no borrowings and held cash reserves at 31 December
2021 of £1.767 million (31 December 2020: £4.073 million). The KPI’s relating to Interest Cover,
Loan to Value and Gearing, shown in previous reports, are therefore no longer applicable. The Net
Asset Value per Share at 31 December 2021 was 27.5p (31 December 2020: 28.8p).
It is the directors’ intention to introduce key performance indicators more relevant to the revised
investment policy as investments are made under the new policy
Property Operating Expenses
Property operating expenses for the year to 31 December 2021 were £136,000 (12 months to 31
December 2020: £95,000). This is predominantly caused by the property rates increases and the
vacancy of a larger floorspace in Hastings. There was a release of bad debt provision in the
comparable period which increases the variance.
Administrative Expenses
Administrative expenses were £540,000 during the year to 31 December 2021 (12 months to 31 December
2020: £457,000). The major increase was within consultancy costs for the ongoing investment
strategy.
Net Asset Value (“NAV”)
The NAV at 31 December 2021 was £6.23 million or 27.5p per share, based on 22.7 million shares in
issue, excluding those held in treasury (31 December 2020: £6.53 million, 28.8p per share, based on
22.7 million shares in issues
At 31 December 2021 the Group held £1.767 million of cash (31 December 2020: £4.073 million). At 31
December 2021 the Group had no banking debt (31 December 2020: £nil).
The reduction in Net Asset Value reflected the cost of administering the Company’s property
portfolio, which in turn reflected general trends in the UK property market, together with the
reduction in rental income as a result of property disposals in previous periods and the effect of
currency market fluctuations on the Group’s cash holdings.
For the Group as a whole, Allsop LLP, a firm of independent chartered surveyors, valued the Group’s
property portfolio at 30 September 2019 and 30 September 2020. In view of the restrictions imposed
as a result of the COVID-19 epidemic, the directors have adopted the valuations at 30 September
2020 for use in the 31 December 2021 financial statements after undertaking a review of the current
market conditions.
For 30 September 2019 Allsop LLP performed a desktop valuation of the Group’s properties, which
comprised an update of the full valuation (including site inspections) of the properties that they
had carried out in July 2019. The 30 September 2020 valuation comprised a full valuation of two of
the Group’s larger properties and a desktop valuation of the remainder.
One property considered to be held for sale at 31 December 2021 is valued in the Company’s accounts
at that date at its anticipated sale price less sales costs.
The valuations were undertaken in accordance with the Royal Institute of Chartered Surveyors
Appraisal and Valuation Standards on the basis of market value. Market value is defined as the
estimated amount for which a property should exchange on the date of valuation between a willing
buyer and a willing seller in an arm’s length transaction, after proper marketing wherein the
parties had each acted knowledgeably, prudently and without compulsion.
The Directors have concluded that they will be maintaining the valuation of the property portfolio
at previous levels. The Board is also of the opinion that the carrying values, based on the "Red
Book" valuation, do not reflect the real value of the properties.
The Company's objective is still to liquidate the current portfolio of shopping assets which
currently show a Gross Initial Yield of more than 16%, but only if a sale can achieve a sensible
return in excess of the year end 2021 carrying value of £2.45m.
Financing
The Company had no borrowings during the reporting period. Throughout the year the Company’s
operations were financed from its property income.
During the reporting period the Company held some of its cash in foreign currencies. These holdings
generated a small unrealised profit at the end of the period, principally from the reduction in GBP
value against USD across the period.. The risk associated with foreign currency holdings is
described in Note 15 to the financial statements.
Taxation
As a result of the share buy-back offer finalised at the beginning of the reporting period ending
December 2020, the Company no longer fulfilled the conditions of the UK REIT tax regime. It was
subsequently agreed with HM Revenue & Customs, that the Group would continue to operate within the
REIT regime until 30 September 2020 at which time it would depart from the REIT regime unless it
had fulfilled the relevant conditions by that date. In the event, the Company’s shareholders
decided, during September 2020, to adopt a new investment strategy and re-list on the Standard
element of the Main Market of the London Stock Exchange and, in consequence, leave the REIT regime.
In consequence of this, the Group is considered to have exited the REIT regime for the entirety of
its financial year beginning 1 October 2018, being the first year during which the Company did not
fulfil all the REIT conditions and is deemed to be liable to corporation tax from that date.
However, in the light of the losses incurred since 1 October 2018 there is no anticipated
corporation tax liability in respect of the year ended 2021.
Dividend
In line with the Group’s current dividend distribution policy no dividend will be paid in respect
of the reporting period. The directors will continue to review the dividend policy in line with
progress with the Company’s investment strategy.
Risk Management & Operational Controls
The directors recognise that commercial activities invariably involve an element of risk. A number
of the risks to which the business is exposed, such as the condition of the UK domestic economy and
sentiment in the UK property market, are beyond the Company’s influence. However, such risk areas
are monitored and appropriate mitigating action, such as reviewing the substance and timing of the
Company’s operational plans, is taken wherever practicable in response to significant changes. The
directors consider the risk areas the Company is exposed to in the light of prevailing economic
conditions and the risk areas set out in this section are subject to review.
In relation to asset management, the Company’s approach to risk reflects the Company’s granular
business model and position in the market and involves the expertise of its directors, management
and third-party advisers. Operational progress and key investment and disposal decisions are
considered in regular management team meetings as well as being subject to informal peer review.
Higher level risks and financial exposures are subject to constant monitoring. Major investment and
disposal decisions are subject to review by the directors in accordance with a protocol set by the
Board.
The Board was satisfied that its approach to macroeconomic risks supplied an appropriate response
to the effects of the COVID-19 pandemic during the reporting period. The Board continues to review
its risk management approach to ensure that it reflects the risk profile of the Company’s revised
investment strategy and the challenges highlighted by the COVID-19 pandemic.
The Board’s approach in this area is further explained in the Governance section, under Risk &
Internal Control.
Principal Risks and Uncertainties
Potential Risk Impact Mitigation
Property and Investment
Portfolio Performance
• Actual and prospective voids and
rental arrears continually
monitored.
• Early identification of /
discussions with tenants in
difficulties
• Regular review of all properties
for lease terminations and tenant
risk, with early action to take
• Tenant defaults control of units as appropriate
• Reduced rental income • Limited requirement for tenant
Effect of downturn in • Increased void costs incentives within sub-sector
• Reduction in Net Asset • Close liaison with local agents
macroeconomic environment Value and realisation value enables swift decisions on
of assets individual properties
• Tendency of small traders to take
early action in response to
economic conditions
• Diverse tenant base
• Sustainable location and property
use
• Ensuring positions are
sufficiently hedged to ensure
long and short positions are in
place to take advantage of the
market movements
Higher than anticipated • Income insufficient to • All material expenditure subject
property cover costs to authorisation regime
maintenance costs • Decline in property value • Capital expenditure subject to
regular review
• Monitoring of UK property
• Adverse impact on portfolio environment and regulatory
Changes to legal environment, • Loss of development proposals
opportunity • Close liaison with agents and
planning law or local • Reduction in realisation advisers
planning policy value of assets
• Membership of and dialogue with
relevant industry bodies
• Guidance on regulatory
requirements provided by managing
agents and professional advisers
Failure to comply with • Individual properties monitored
regulatory requirements in • Tenant and third-party by asset managers and agents
connection with claims resulting in • Managing agents operate formal
financial loss regulatory certification process
property portfolio, including for residential accommodation
health, • Reputational damage • Ongoing programme of risk
assessments for key
safety and environmental multi-tenanted sites
• Key risks covered by insurance
policies
Corporate Governance &
Management
• Impact on operations and
Non-availability of reporting ability
information technology • Financial claims arising • Provision of effective security
systems or failure of data from regime with automatic off-site
security data and systems back-up
• leak of confidential
information
• Insufficient finance
available at acceptable
rates to fulfil business
plans • The Group is debt-free and debt
• Inability to execute finance has not been required.
Financial and property market investment property • Finance risks reduced with
conditions disposal strategy owing to provision of cash reserve
fall in property market
values • Impact of interest rates on
• Financial impact of debt property yields monitored
interest
• Breach of banking covenants
Operational Controls
During the year, the directors continued to recognise that the Company’s ability to operate
successfully is largely dependent on the maintenance of its straightforward approach to doing
business and its reputation for integrity. All those who act on the Company’s behalf are required
to behave and transact business in accordance with the highest professional standards. As well as
compliance with all relevant regulatory requirements, this extends to customer care and external
complaint guidelines. The Company has adopted a Code, Policy and Procedures under the Market Abuse
Regulation. During the period the employee responsible for operations reduced working hours and the
majority of the operations were contracted to Eddisons Property Management. Eddisons have looked
after the property management for previous years and include the provision of all applicable
compliance procedures. The directors were satisfied that the governance procedures adopted by
Eddisons in relation to its clients were appropriate and protected the Company’s interests. The
Company’s corporate governance regime is underpinned by a whistle-blowing procedure, enabling
perceived irregularities to be notified to members of the Board, principally the senior independent
non-executive director.
The Board has overall responsibility for the Company’s internal control systems and for monitoring
its effectiveness. The Board’s approach is designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only provide reasonable assurance against material
misstatements or loss. The directors have not considered it appropriate to establish a separate
internal audit function, having regard to the Company’s size. The Board’s approach to internal
controls covers all companies within the Group and there are no associate or joint venture entities
which it does not cover.
The principal foundations of the Company’s internal control framework during the reporting period
were:
• statements of areas of responsibility reserved to the directors, with prescribed limits to
executive authority to commit to expenditure and borrowing;
• effective committee structure with terms of reference and reporting arrangements to the Board;
• clear remits for the delegation of executive direction and internal operational management
functions;
• framework for independent directors to provide advice and support to executive directors on an
individual basis;
• top-level risk identification, evaluation and management framework;
• effective systems for authorising capital expenditure and significant revenue items and
monitoring actual cost incurred;
• ongoing reporting to the Board of operational activity and results;
• regular review of operational forecasts and consideration by the directors;
• ongoing reporting to the directors on health, safety and environmental matters.
The Board reviews the effectiveness of the Company’s risk management systems against the principal
risks facing the business and their associated mitigating factors, taking account of the findings
and recommendations of the auditors at the Company’s half-year and year-end. Following its review
of the auditors’ findings during the reporting period, the Board considers that the Company’s
approach remains effective and appropriate for a business of the Company’s size and complexity.
Key Contracts
There are currently no contracts which require third party approval for any change to the nature,
constitution, management or ownership of the business. The appointment agreements of directors do
not contain any provisions specifically relating to a change of control.
Charitable and Political Donations
During the reporting period the Company made no donations for charitable or political purposes
(2020: nil)
Section 172 Companies Act 2006
The Directors acknowledge their duty under s.172 of the Companies Act 2006 and consider that they
have, both individually and together, acted in the way that, in good faith, would be most likely to
promote the success of the Company for the benefit of its members as a whole. In doing so, they
have had regard (amongst other matters) to:
• the likely consequences of any decision in the long term. The Group’s long-term investment
strategy is shown in the Chairman’s Report, with associated risks highlighted in the Strategic
report.
• the interests of the Company’s employees. Our employees are fundamental to us achieving our
long-term strategic objectives.
• the impact of the Company’s operations on the community and the environment. The Group operates
honestly and transparently. We consider the impact on the environment on our day-to-day
operations and how we can minimise this.
• the desirability of the Company maintaining a reputation for high standards of business
conduct. Our intention is to behave in a responsible manner, operating within the high standard
of business conduct and good corporate governance, as highlighted in the Corporate Governance
Statement on page 12
• the need to act fairly as between members of the Company. Our intention is to behave
responsibly towards our shareholders and treat them fairly and equally so that they may benefit
from the successful delivery of our strategic objectives.
This Strategic Report was approved by the directors on 20 May 2022.
Duncan Soukup, Chairman
26 May 2022
Corporate Responsibility Statement
During the year we continued to focus on the three principal contributors to the success of our
business:
• the talent and commitment of our executives;
• our relationships with national and local advisers, partners and clients; and
• the well-being of the businesses that occupy our properties and the communities in which they
operate.
The directors remain conscious that the Company’s ability to operate effectively rests on our
reputation for fairness and a straightforward and honest approach to conducting business. We
therefore strive to transact business in accordance with the highest professional standards and all
those who act on our behalf are expected to do the same. Besides complying with all relevant
legislation and professional guidelines, this includes customer care and external complaint
procedures.
We have again considered whether it is appropriate to report on relevant human rights issues. In
the context of our business and the reduced size of our investment portfolio, we do not believe
that the provision of detailed information in this area would provide any meaningful enhancement to
the understanding of the performance of our business. However, we are confident that our approach
to doing business does not contravene any human rights principles or applicable legislation.
Our approach to corporate responsibility matters is underpinned by a whistle-blowing procedure,
enabling perceived irregularities to be notified to directors, principally the senior independent
non-executive director.
Employees
The Company had two employees during the year (2020: one). During the year the Company had two
directors.
On 7 February 2022, Gareth Edwards resigned as a director and was replaced by Tim Donell.
Diversity
The Company has a formal diversity and equal opportunities policy in place and is committed a
culture of equal opportunities for all regardless of age, race or gender. The Board currently
comprises two male directors.
Health, Safety and Welfare
The directors were responsible for ensuring that the Company discharged its obligations for health,
safety and welfare during the reporting period, including matters delegated to the Company’s
managing agents and other contractors. No material health, safety and welfare incidents were
notified during the period. Our property managers and contractors continued to be required to
ensure that property management, maintenance and construction activities conform to all relevant
regulations, with due consideration being given to the welfare of occupants and neighbours.
Environmental, Social and Governance
We have always believed that our local asset model is by its nature supportive of reducing the
carbon impact of retail shopping. Our past development activity has been aimed at returning to
profitable use redundant space that would otherwise remain vacant, potentially relieving
development pressure on greenfield sites elsewhere. Any development activity undertaken is carried
out in accordance with applicable energy and resource saving standards, noise impact reduction
requirements, and, where relevant, the need to preserve the character of buildings, including
listed properties. Our contractors are required to dispose of waste in accordance with best
practice. We continue to take action to upgrade the energy performance of our letting units
wherever required.
It is our policy to seek to deal constructively with all stakeholders in relation to any community
issues that arise in relation to our properties. Our policy is to prefer to use local advisers,
agents and contractors whenever appropriate to do so.
It is our intention to review our response to environmental, social and governance factors in line
with the development of our investment policy to ensure that our policies are appropriate to the
revised strategy and operational profile. This review will take account of related issues, such as
modern slavery.
Anti-Corruption and Anti-Bribery
The Company has in place an Anti-Bribery and Anti-Corruption Policy which the directors consider
fulfils UK Government guidelines for compliance with UK Bribery Act 2010
Governance
Regulatory Compliance
The Company is subject to, and seeks to comply with, the Financial Conduct Authority’s (“FCA”)
Listing Rules (“Listing Rules”), the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority. The Company is also subject to the UK City
Code on Takeovers and Mergers.
In the prior period the Company adopted the Corporate Governance Code of the Quoted Companies
Alliance (the “QCA Code”). The directors consider that the QCA Code provides a corporate governance
framework proportionate to the risks inherent to the size and complexity of the Company’s
operations. The directors apply the QCA Code in the ways set out below.
Board Level Responsibility
The Company’s directors are ultimately responsible for the effective stewardship of the business,
with the Chairman holding specific responsibility for corporate governance and effective leadership
of the Board. In discharging this obligation, the Chairman regularly consults the Company’s Senior
Independent Non-Executive Director (who is qualified by background and experience to assist in this
sphere), as well as the Company’s legal advisers and the Company Secretary.
Conflicts of Interest
The Company’s Articles of Association provide a framework for directors to report actual or
potential situational conflicts, enabling the Board to give such situational conflicts appropriate
and early consideration. All directors are aware of the importance of consulting the Company
Secretary regarding possible situational conflicts.
Board Leadership
The Company is led by its Board, which is responsible for determining the strategy of the business
and its effective stewardship. All major strategic and investment decisions are taken by the Board
as a whole, which monitors the resources available to the Company, to ensure that they are
sufficient to enable its goals to be achieved. The Board meets regularly to review the Company’s
operations and progress with its strategy. The directors are in regular liaison outside formal
meetings. Risk management and controls are reviewed in the light of advice from the external
auditors, who have access to all the directors.
The Board comprises an executive Chairman and an independent non-executive director (who was also
the senior independent non-executive director), as set out below.
Duncan Soukup
Executive Chairman, aged 67
Duncan Soukup is the founder and Executive Chairman of Thalassa Holdings Ltd (“Thalassa”), a
company listed on the London Stock Exchange, and has over 35 years of investment experience. Prior
to establishing Thalassa, Mr Soukup worked in investment banking for 10 years, including as
managing director in charge of the non-US equity business of Bear Sterns. Thereafter, he
established the AIM-listed investment management business Acquisitor plc.
As the executive chairman with a beneficial interest in the Company’s shares, Mr Soukup is not
considered to be independent.
Martyn Porter (Appointed May 2022)
Independent Non-Executive Director, aged 52
Martyn has over 25 years' experience in international banking and financial services with the HSBC
Group. He has held senior leadership positions in the UK, Malta, the Philippines, Hong Kong,
Vietnam, Luxembourg and latterly Monaco, where he served as Chief Executive Officer of the HSBC
Private Bank and Asset Management companies. As a board director and regulated officer of HSBC
companies in Ireland, Luxembourg and Monaco, Mr. Porter has significant knowledge and understanding
of corporate governance and regulatory compliance. He also has a highly successful track record in
the leadership of businesses undergoing complex strategic change and transformation. During his
career, Mr. Porter has built a wide and diverse network of business relationships, as well as
demonstrating strong values and business ethics.
Gareth Edwards (resigned February 2022)
Independent Non-Executive Director, aged 63
Gareth Edwards is a qualified solicitor and was formerly a partner at international law firm
Pinsent Masons LLP. He has extensive experience as an adviser to boards and senior management of a
range of public, private and entrepreneurial companies on their strategy and wider business and
commercial issues. He is Chairman of Honye Financial Services Limited, a company listed on the Main
Market of the London Stock Exchange. He is also a director of the AIM-listed company Cornerstone FS
Plc.
Tim Donell (Appointed February 2022)
Chief Financial Officer, aged 40
A certified chartered accountant, Tim has over 15 years' experience in finance, accounting and
management roles within growth companies across travel, e-commerce and web technology and has a
demonstrated track record of developing and improving financial processes to drive business
performance.
Division of Responsibilities
The responsibilities of each director are set out clearly in the director’s letter of appointment,
which is available for inspection by members of the Company at its registered office during normal
office hours. All directors ensure that they provide sufficient time to fulfil their obligations.
All directors have access to the advice and services of the Company Secretary and to independent
legal advice at the Company’s expense.
During the reporting period the directors monitored the Company’s operational progress and the
activities of the executive management. The Chairman is responsible for ensuring that due
consideration is given to key items of business both at formal meetings of the directors and
liaison outside these. The independent non-executive director provides a separate communication
channel for shareholders and other interested parties and has a remit under the Company’s
“whistle-blowing” arrangements.
Nomination, Audit and Remuneration Committees were in place throughout the reporting period, with
responsibility for specific areas within the Company’s overall corporate governance structure.
During the reporting period there was no requirement for either of the Remuneration Committee or
the Nomination Committee to meet.
Due to the transition period that the Company has been going through over the last 18 months and
the nature of the business, the Board met and held discussions throughout the year. The frequency
of the meetings fluctuated as required but averaged out on a weekly basis. The meetings consisted
of discussion to agree strategy and the handling of the assets. The majority of the meetings were
on an informal and operational basis with the conclusions appropriately documented.
Aside from the meetings described above each director’s attendance record at Board and Committee
meetings during the reporting period is set out in the table below:
Director Board Audit Remuneration Nomination
Duncan Soukup n/a 1 n/a n/a
Gareth Edwards n/a 1 n/a n/a
Under the Company’s Articles one-third of the directors are subject to retirement at each Annual
General Meeting. Additionally, the Articles require that director appointments made by the Board
directors are ratified at the subsequent General Meeting of the Company.
Arrangements are made to provide new directors with an induction programme into the Company’s
activities. Non-executive directors also meet with management on an informal basis. Arrangements
are made for directors to inspect investment properties.
Risk & Internal Control
In addressing its responsibilities in this area, the Board pays particular attention to:
• monitoring the integrity of the Company’s financial statements and formal announcements
relating to its financial performance and reviewing significant financial reporting judgements
contained in them;
• reviewing the adequacy and effectiveness of the Company’s internal financial controls, internal
control and risk management systems, fraud detection, regulatory compliance and whistle-blowing
arrangements;
• making recommendations for the approval of shareholders on the appointment, re- engagement or
removal of the external Auditors and approving the Auditors’ terms of engagement and
remuneration;
• overseeing the Company’s relationship with the external Auditors, reviewing and monitoring the
Auditors’ independence and objectivity and effectiveness;
• approving the annual audit plan and reviewing the Auditors’ findings and the effectiveness of
the audit programme.
The Company’s approach to risk management is set out on pages 12 and 13.
Directors’ Remuneration Policy and Remuneration Implementation Report
There was no requirement for the Remuneration Committee to meet during the reporting period. The
Company had no employee directors during the year and no share-related incentive schemes were in
operation. Although it is not currently required, the remuneration policy for employee directors
summarised below was approved by shareholders at the annual general meeting held in March 2020:
• within a competitive market, enabling the recruitment and retention of individuals whose talent
matches the entrepreneurial and leadership needs of the business, enabling the Company to
fulfil its investment objectives for its shareholders; and
• placing emphasis on performance-related rewards and focusing on incentive targets that are
closely aligned with the interests of shareholders.
Base Salary To be pitched at market median for the role, with advice taken from
independent consultants.
Termination Service contracts to be capable of termination at not more than one
year’s notice
Future scheme to be based on the achievement of
profitability and cash generation targets based on the Company’s
Annual Bonus Scheme annual budget.
Individual awards to be capped at 100% of base salary.
Scheme to be based on the award of shares or cash equivalent.
Share Based Performance Scheme
Awards to vest on the achievement of medium-term and long-term
targets derived from the Company’s investment strategy.
Pension Company contribution to individuals’ pension plans of up to 10% of
base salary.
Health Plan Individuals may participate in private healthcare arrangements
supplied by the Company.
In applying the remuneration policy, the Board will use its discretion to provide a tailored mix of
benefits that encourages individuals to maximise their efforts in the best interests of
shareholders. In particular, the remuneration policy would be subject to any special considerations
that may arise in relation to the execution of any revised investment policy approved by the
Company’s shareholders.
Non-Executive Pay
The Company’s policy has been to provide remuneration to its non-executive directors commensurate
with the need to attract and retain individuals with levels of skill and experience appropriate to
the Company’s needs. No non-executive directors have participated in any bonus or share-based
arrangements of the Company.
Directors’ Remuneration
The below table highlighted total directors’ remuneration in the period.
Director Salary Short term Long term Pension Benefits in Total
incentives incentives contributions kind
Duncan Soukup** - - - - - -
Gareth 10,000 - - - - 10,000
Edwards**
Total 10,000 - - - - 10,000
The aggregate directors’ remuneration during the reporting period was £10,000 (2020: £10,969).
Directors’ Service Contracts
Date of initial Date of current
Non-executive directors
appointment appointment letter
Duncan Soukup 4 October 2019 4 October 2020
Gareth Edwards* 4 October 2019 4 October 2020
*Resigned 7 February 2022
At the Company’s 2021 Annual General Meeting shareholders passed a resolution approving the
Remuneration Implementation Report for 2020, with 97.1% of votes cast in favour of the Remuneration
Implementation Report, 2.9% of votes against and 6,894 votes withheld.
A similar resolution, on the remuneration of directors as set out above, will be put to the
Company’s Annual General Meeting for 2022
Directors’ Interests in the Company’s Shares (audited)
The interests during the reporting period of the directors who held office during the reporting
period in the issued share capital of the Company as at the date of this report are set out below:
Ordinary 1p Shares*
Director 2021 2020
Duncan Soukup 5,418,857 5,418,857
Gareth Edwards - -
In addition to the direct interest shown above, Duncan Soukup has an indirect interest in 4,618,001
and 1,734 Ordinary Shares arising from his interests in entities of Thalassa Discretionary Trust,
and Thalassa Holdings Ltd.
Directors’ Indemnities and Insurance Cover
To the extent permitted by law, the Company indemnifies its directors and officers against claims
arising from their acts and omissions related to their office. The Company also maintains an
insurance policy in respect of claims against directors.
Audit Committee Report
The Audit Committee, consisted of the independent non-executive director. The key functions of the
audit committee are for monitoring the quality of internal controls and ensuring that the financial
performance of the Group is properly measured and reported on and for reviewing reports from the
Company’s auditors relating to the Company’s accounting and internal controls, in all cases having
due regard to the interests of Shareholders. The Committee has formal terms of reference.
The Committee paid particular attention to the significant areas set out below, which were
discussed in detail with the Auditors: Valuation of Investment Properties: the methodology adopted
and valuations provided by Allsop LLP (“Allsop”), for both 30 September 2019 and 30 September 2020
and the directors’ valuation as at 31 December 2021.
The financial statements attached to this report have been prepared on the Going Concern basis. In
deciding that the Going Concern basis is appropriate, the directors reviewed projections of future
activity over the 12 months following the date of this report. The Directors concluded that there
were no identifiable material uncertainties, and present cash reserves were sufficient to meet all
liabilities as they fall due, up to and beyond that date.
The Committee also considered the following items:
• ensuring that the format of the financial statements and the information supplied meets the
standards set by the International Accounting Standards Board;
• reviewing the accounting treatment of receivables and ensuring effective co-ordination between
the Company’s records and those of its managing agents;
• ensuring that the audit scope properly reflected the risk profile of the business;
• ensuring that the Company has in place appropriate tax advice arrangements and that its exit
from the UK REIT regime was appropriately managed appropriately and so as to minimise the
Company’s tax exposure;
• ensuring that the Committee’s terms of reference continued to accord with regulatory
requirements.
The Committee considered the independence of external auditors, seeking to ensure that any
non-audit services provided, by external auditors do not impair the auditors’ objectivity or
independence. The Company’s auditors, Jeffreys Henry LLP, did not supply any non-audit services to
the Company during the period.
Having assessed the performance, objectivity and independence of the auditors, as well as the audit
process and approach taken, the Committee recommended the re-appointment of Jeffreys Henry LLP at
the Company’s annual general meeting in 2022.
Tim Donell
Executive Director acting as Audit Committee Chairman 26 May 2022
Directors’ Report
The directors of Alina Holdings Plc (“the Company”) present their report and the audited financial
statements of the Company together with its subsidiary and associated undertakings (“the Group”)
for the year ended 31 December 2021.
In consequence of the change in the Company’s accounting reference date to 31 December in each
year, these financial statements report on the 15 months to 31 December 2020, with comparative
figures for the year to 30 September 2019. As these two periods are not of equal length, they are
not directly comparative. Future statements will report on 12 months periods to 31 December.
The following directors held office during the reporting period:
Gareth Edwards (appointed 4 October 2019 and resigned 7 February 2022)
Duncan Soukup (appointed 4 October 2019)
Tim Donell (appointed 7 February 2022)
Martyn Porter (appointed 20 May 2022)
The Directors’ Report also includes the information set out on pages 5 to 25, together with the
description of the Company’s investment policy and business model described on page 5.
Group Result and Dividend
The loss for the Group attributable to shareholders for the period was £294,000 (2020: loss
£465,000). In accordance with the investment policy, no dividend has been or will be distributed in
respect of the financial year. The directors continue to keep the dividend distribution policy
under review.
Post Balance Sheet Events
No significant post-balance sheet events have been identified.
Going Concern Basis
The financial statements attached to this report have been prepared on the Going Concern basis. In
deciding that the Going Concern basis is appropriate, the directors reviewed projections of future
activity over the 12 months following the date of this report. The Directors concluded that there
were no identifiable material uncertainties, and present cash reserves were sufficient to meet all
liabilities as they fall due, up to and beyond that date.
Future Developments
This information has not been included in the Directors’ Report as it is shown in the Strategic
Report, as permitted by Section 414 c (11) of the Companies Act 2006.
Share Capital
Details of the Company’s issued share capital are set out in note 17 to the financial statements.
All of the Company’s issued shares are listed on the London Stock Exchange. The Company’s share
capital comprises one class of Ordinary Shares of 1p each (re-denominated from Ordinary Shares of
10p each on 29 August 2019). All issued shares are fully paid up and rank equally. Certain of the
Company’s Articles impose requirements on shareholders in relation to distributions and the size of
individual holdings, to ensure that the Company’s adherence to the rules of the UK REIT tax regime.
As the Company is no longer subject to the UK REIT these Articles no longer have effect and there
are no restrictions on the transfer of shares or the size of holdings. The directors are not aware
of any agreements between shareholders in relation to the Company’s shares.
Investment Policy and Listing on the London Stock Exchange
During the reporting period the directors reviewed the options open to the Company for its future
strategy following the approval by the Company’s shareholders in September 2020, of the directors’
proposals for the Company’s new investment strategy, the change of the Company’s name and the
transfer of the Company’s listing on the London Stock Exchange to a standard listing on Main List.
In tandem with this approval, the Company’s then largest shareholder, Thalassa Holdings Ltd,
distributed the majority of its shares in the Company to its own shareholders. This enabled the
Company to apply to the Financial Conduct Authority for the restoration of trading in the Company’s
shares on the London Stock Exchange, which took place on 19 November 2020.
In accordance with the new investment strategy adopted by its shareholders, the Company changed its
name to Alina Holdings PLC on 26 November 2020.
The Company has no rules in place in relation to the amendment of its Articles in addition to
statutory provisions.
Substantial Interests
As at 19 May 2022, the last practicable reporting date before the production of this document, the
Company’s share register showed the following major interests (of 3% or more, excluding shares held
in treasury) in its issued share capital:
Shareholder Ordinary Shares %
Vidacos Nominees Limited* 10,036,857 44.22
Vidacos Nominees Limited** 6,416,223 28.27
Ferlim Nominees Limited 1,220,000 5.38
*Included within Vidacos Nominees Limited are shares of 5,418,857 owned by C D Soukup and 4,618,001
held by Thalassa Discretionary Trust.
**The Company has also been notified that 6,391,223 (28.16%) shares are beneficially owned by Peter
Gyllenhammar AB.
Independence
As a result of the share buy-back programme concluded in October 2019, for part of the period
reported on, the Company had a controlling shareholder, Thalassa Holdings Ltd (“Thalassa”). For
this part-period, the Company was required under the Listing Rules to ensure that: (a) transactions
and arrangements with the controlling shareholder (and/or any of its associates) were conducted at
arm’s length and on normal commercial terms; and (b) neither the controlling shareholder nor any of
its associates could take any action that would have the effect of preventing the Company from
complying with its obligations under the Listing Rules. The Financial Conduct Authority was
notified by the Company that it had a controlling shareholder as soon as the situation arose the
relevant Listing Rule requirements were followed in practice. This situation was fully resolved
when Thalassa transferred the majority of its shares in the Company to its own shareholders,
following which Company no longer had a controlling shareholder.
Investor Relations
Subject to regulatory constraints, the directors are keen to engage with the Company’s
shareholders, placing considerable emphasis on effective communications with the Company’s
investors. Directors are happy to comply with shareholder requests for meetings as soon as
practicable, subject to regulatory constraints. The Board is provided with feedback on such
meetings, as well as regular commentary from investors and the Company’s bankers and advisers. The
Board provides reports and other announcements via the regulatory news service in accordance with
regulatory requirements. Regulatory announcements and key publications can also be accessed via the
Company’s website. The Company’s Annual General Meeting provides a further forum for investors to
discuss the Company’s progress and the Board encourages shareholders to attend. The Company
complies with relevant regulatory requirements in relation to convening the meeting, its conduct
and the announcement of voting on resolutions. The Annual Report and Notice of the Annual General
Meeting are sent to shareholders at least 20 working days prior to the meeting and are available on
the Company’s website. The results of resolutions considered at the Annual General Meeting are
announced to the Stock Exchange and are also published on the website and lodged with the National
Storage Mechanism. Investors may elect to receive communications from the Company in electronic
form and be advised by email that communications may be accessed via the Company’s website.
Whistleblowing Policy
The Group has in place a whistleblowing policy which sets out the formal process by which an
employee of the Group may in confidence raise concerns about possible improprieties in the Group’s
affairs, including financial reporting.
Emissions and Energy Consumption Reporting
The directors believe that the Company’s outsourced business model, which focusses on the
employment of agents, advisers and contractors who are local to our property assets, is inherently
environmentally friendly. However, the collection of consumption data from such businesses is not
practicable. It is also not possible for our national agents and advisers to separately identify
such data in relation to the proportion of their work devoted to the Company’s activities,
particularly given the increase in staff working from home during the COVID-19 lockdown. It is not
possible to measure the energy consumed by the Company’s tenants (nor is this consumption within
the Company’s control). The consumption of water, waste output and greenhouse gases other than CO2
within the Company’s control is negligible.
For previous reporting periods the Company has supplied environmental reporting information focused
on energy consumed by the Company and its wholly owned subsidiaries through the activities of its
office base, shared facilities provided by the Company within its property portfolio and activities
within vacant properties within the Company’s control.
In relation to Scope 1 Carbon Emissions (consumption of gas and fuel), since the termination of the
Company’s third-party investment advisory agreement and the relocation of its registered office it
has not been possible to separately identify the energy consumed on the Company’s activities. An
element of the Company’s administration activity is carried out at its registered office. However,
this is a de minimis element of the overall activity and energy consumption at that site. Other
activity is undertaken by the Company’s directors and management working at home. In both cases, it
has not been possible to separately identify the energy consumed on the Company’s activities at
those locations. In previous years, data has been supplied relating to fuel consumed on journeys on
Company activities. As the Company does not operate company cars, all such journeys are made in
employees’ private vehicles or on public transport. The reduction in the Company’s property
portfolio has significantly reduced the requirement for such journeys, which were then further
restricted during the reporting period by the COVID-19 lockdown regime. Accordingly, the directors
do not consider that any meaningful Scope 1 data can be supplied.
Similar limitations apply to Scope 2 data, which in previous reports comprised an estimate of
consumption for vacant property units for which the Company is responsible. The number of these and
the related energy consumption has been de minimis throughout the reporting period. Similarly, it
has not been practicable to measure Scope 3 emissions.
The Company’s direct usage and emissions of water is also minimal. Although a small element of
utility supply charges within vacant premises relate to water and to gas, this largely relates to
standing charges and consumption is negligible.
In relation to The Companies (Directors’ Report) and LLP Partnerships (Energy and Carbon Report)
Regulations 2018, the Company consumes less than 40,000 kWh of energy per annum and therefore
qualifies as a low energy user and therefore does not come within the scope of those regulations.
Statement of Disclosure to Auditors
The directors who were in office at the date of the approval of the financial statements have
confirmed that, as far as they are aware, there is no relevant audit information of which the
auditors are unaware. Each of the directors has confirmed that they have taken all necessary steps
that they ought to have taken as directors in order to make themselves aware of any relevant audit
information and to establish that this has been communicated with the auditors.
This report was approved by the directors on 20 May 2022
Alasdair Johnston
Company Secretary 20 May 2022
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Annual Report and the Group and parent Company
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent Company financial statements for
each financial year. Under that law they are required to prepare the Group financial statements in
accordance with UK Adopted International Accounting Standards and applicable law and have elected
to prepare the parent Company financial statements in accordance with UK accounting standards,
including FRS 102 The Financial Reporting Standard applicable in the UK.
Under company law the directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Group and parent Company and of
their profit or loss for that period. In preparing each of the Group and parent Company financial
statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant, reliable and prudent;
• for the Group financial statements, state whether they have been prepared in accordance with UK
Adopted International Accounting Standards;
• for the parent Company financial statements, state whether applicable UK accounting standards
have been followed, subject to any material departures disclosed and explained in the parent
company financial statements;
• assess the Group and parent Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or
the parent Company or to cease operations or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the parent Company’s transactions and disclose with reasonable accuracy at any time the
financial position of the parent Company and enable them to ensure that its financial statements
comply with the Companies Act 2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a Strategic
Report, Directors’ Report, Directors’ Remuneration Report and Corporate Responsibility Statement
that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the company’s website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility statement of the directors in respect of the annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities, financial position and profit
or loss of the company and the undertakings included in the consolidation taken as a whole; and
• the strategic report/directors’ report includes a fair review of the development and
performance of the business and the position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess the group’s position and
performance, business model and strategy.
The foregoing reports were approved by the directors on 20 May 2022
Alasdair Johnston
Company Secretary 26 May 2022
Independent Auditors’ Report to the members of Alina Holdings PLC
Opinion
We have audited the financial statements of Alina Holdings Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2021 which comprise the consolidated
income statement, the consolidated statement of comprehensive income, the consolidated and company
balance sheet, the consolidated statement of cash flows, the consolidated statements of changes in
equity and notes to the financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in the preparation of the group
financial statements is applicable law and UK adopted International Accounting Standards. The
financial reporting framework that has been applied in the preparation of the parent company
financial statements is applicable law and United Kingdom Accounting Standards, including Financial
Reporting Standard 102 (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the
parent company’s affairs as at 31 December 2021 and of the group’s loss for the period then
ended;
• the group financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards ;
• the parent company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are
independent of the group in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the FRC’s Ethical Standard as applied to public
listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going
concern basis of accounting in the preparation of the financial statements is appropriate. Our
evaluation of the directors’ assessment of the entity’s ability to continue to adopt the going
concern basis of accounting included reviews of expected cash flows for a period of 12 months, to
determine expected cash burn, which was compared to the liquid assets held in the entity.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the Group's
ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In relation to the group’s reporting on how it has applied the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Our approach to the audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we looked at where the directors made
subjective judgments, for example in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently uncertain. As in all of our
audits we also addressed the risk of management override of internal controls, including evaluating
whether there was evidence of bias by the directors that represented a risk of material
misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial statements as a whole, taking into account the structure of the Group and
the Company, the accounting processes and controls, and the industry in which they operate.
The Group financial statements are a consolidation of six reporting units, comprising the Group’s
operating businesses and holding companies.
We performed audits of the complete financial information of the Group and Parent Company of Alina
Holdings Plc
We performed audits of the complete financial information of Alina Holdings Plc, NOS 4 Ltd, NOS 5
Ltd and NOS 6 Ltd, which were individually financially significant and accounted for 100% of the
Group’s revenue and 100% of the Group’s absolute profit before tax (i.e. the sum of the numerical
values without regard to whether they were profits or losses for the relevant reporting units).
Specific reviews undertaken for NOS 7 Ltd and Gilfin Property Holdings Ltd, as they were deemed to
be insignificant components.
The Group engagement team performed all audit procedures.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) we identified, including
those which had the greatest effect on: the overall audit strategy, the allocation of resources in
the audit; and directing the efforts of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. This is not a complete list of all risks
identified by our audit.
Key audit matter How our audit addressed the key audit matter
We reviewed the recognition, capitalisation and
fair valuation of investment properties in
conjunction with IAS 40 Investment Property and
IFRS 13 Fair Value Measurement.
Valuation and presentation of investment property
We assessed the competence, capabilities,
The Group holds £2,784,000 (2020: £2,762,000) as qualifications and objectivity of the external
at the year end as well as £330,000 (2020: independent valuers employed by the Group.
£330,000) of assets held for sale.
We have critically evaluated managements
Investment properties are held at fair value which methodologies in reviewing valuations and
represents a significant area of management adjusting the fair values of investment
judgment. Assets held for sale are held at net properties.
realisable value being expected sales price less
cost to sell. All properties that the Group were in the
process of selling were allocated as held for
sale.
We found no issues with the valuations and
presentations of investment properties.
Value of parent investment in subsidiaries
The parent company held £3,105,000 (2020:
£3,105,000) of investments as at the year end. We reviewed the director’s impairment review. An
impairment had been made against individual
subsidiaries to reduce the carrying value of the
investments to that of the net assets in the
The directors are required to review the respective companies.
investments for impairments on an annual basis.
Impairments are based on estimated recoverable This appears to be a reasonable estimate of
amounts, which is based on estimates and recoverable amount of the investment. The
judgments. calculations have been reviewed as part of the
audit.
We found no issues with the valuation of
The subsidiaries have historically been loss investments in subsidiaries.
making which is a sign of impairment. Furthermore,
as the companies have been disposing of properties
in the year the net assets of the company have
been falling on a year-on-year basis.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain
quantitative thresholds for materiality. These, together with qualitative considerations, helped us
to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgment, we determined materiality for the financial statements as a
whole as follows:
Group financial statements Company financial statements
Overall materiality £66,000 £65,000
How we determined it 1% of group gross assets 1% of gross assets limited by Group
materiality
Rationale for We believe that net assets are the We believe that net assets are the
benchmark applied primary measures used by shareholders primary measures used by shareholders in
in assessing the Group’s performance. assessing the Company’s performance. It
It is considered a standard industry is considered a standard industry
benchmark. benchmark.
For each component in the scope of our Group audit, we allocated a materiality that is less than
our overall Group materiality. The range of materiality allocated across components was between
£10,000 and £60,000.
We agreed with the Audit Committee that we would report to them misstatements identified during our
audit above £3,300 for the Group and £3,250 for the Company, as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative reasons.
Other information
The other information comprises the information included in the annual report other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in
the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year
for which the financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic
report or the directors’ report
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for
our audit have not been received from branches not visited by us; or
• the parent company financial statements and the part of the director’s remuneration report to
be audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit; or
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 25, the
directors are responsible for the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and
parent company’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 directors either intend
to liquidate the group or the parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the 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 (UK) 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 financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of
irregularities, including fraud and non-compliance with laws and regulations, was as follows:
• the senior statutory auditor ensured the engagement team collectively had the appropriate
competence, capabilities and skills to identify or recognise non-compliance with applicable
laws and regulations;
• we focused on specific laws and regulations which we considered may have a direct material
effect on the financial statements or the operations of the company.
• we assessed the extent of compliance with the laws and regulations identified above through
making enquiries of management and inspecting legal correspondence; and
• identified laws and regulations were communicated within the audit team regularly and the team
remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement,
including obtaining an understanding of how fraud might occur, by:
• making enquiries of management as to where they considered there was susceptibility to fraud,
their knowledge of actual, suspected and alleged fraud;
• considering the internal controls in place to mitigate risks of fraud and non-compliance with
laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
• performed analytical procedures to identify any unusual or unexpected relationships;
• tested journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining the accounting estimates set
out in Note 1 were indicative of potential bias;
• investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed
procedures which included, but were not limited to:
• agreeing financial statement disclosures to underlying supporting documentation;
• reading the minutes of meetings of those charged with governance;
• enquiring of management as to actual and potential litigation and claims;
• Obtaining confirmation of compliance from the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws
and regulations are from financial transactions, the less likely it is that we would become aware
of non-compliance. Auditing standards also limit the audit procedures required to identify
non-compliance with laws and regulations to enquiry of the directors and other management and the
inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from
error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located
on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters which we are required to address
We were re-appointed by the members of the Company on 8 July 2021 to audit the financial statements
for the year ending 31 December 2021 and subsequent financial periods. The period of total
uninterrupted engagement is 3 years, covering the periods ended 30 September 2019 to 31 December
2021.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or
the parent company and we remain independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of this report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Sanjay Parmar
Senior Statutory Auditor
For and on behalf of
Jeffreys Henry LLP (Statutory Auditors)
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
26 May 2022
Consolidated Statement of Income
For the year ended 31 December 2021
Year ended 31 December 15 months ended 31
2021 December 2020
Note £000 £000
Gross rental income 437 598
Property operating expenses 3 (136) (159)
Net rental income 301 439
Profit/Loss on disposal of investment properties 4 - 1
Loss from change in fair value of investment 10 - (325)
properties
Administrative expenses including non-recurring 5 (540) (489)
items
Operating loss before net financing costs (239) (374)
Depreciation 10 (3) -
Financing income 7 23 3
Financing expenses 7 (75) (94)
Loss before tax (294) (465)
Taxation 8 - -
Loss for the period from continuing operations (294) (465)
Loss for the year (294) (465)
Attributable to:
Equity shareholders of the parent (294) (465)
Non-controlling interest - -
(294) (465)
Earnings per share - GBP pence (using weighted
average number of shares)
Basic and Diluted - GBP pence 9 (1.30) (2.05)
The notes on pages 38 to 57 form an integral part of this consolidated interim financial
information.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Year ended 31 December 2021 15 months ended 31 December 2020
£000 £000
Loss for the financial year (294) (465)
Other comprehensive income:
- -
Total comprehensive income (294) (465)
Loss for the period attributable to:
Equity shareholders (294) (465)
Total Comprehensive income (294) (465)
The notes on pages 38 to 57 form an integral part of this consolidated interim financial
information.
Consolidated Statement of Financial Position
As at 31 December 2021
Year Ended 31 December 2021 Year Ended 31 December 2020
Note £000 £000
Assets
Non-current assets
Investment properties 10 2,784 2,762
Total non-current assets 2,784 2,762
Current assets
Investment property held for sale 10 330 330
Available for sale financial assets 11 1,819 -
Trade and other receivables 12 255 228
Cash and cash equivalents 13 1,767 4,073
Total current assets 4,171 4,630
Liabilities
Current liabilities
Trade and other payables 14 398 566
Total current liabilities 398 566
Net current assets 3,773 4,065
Non-current liabilities
Finance lease liabilities 15 324 300
Total non-current liabilities 324 300
Net assets 6,233 6,527
Shareholders’ Equity
Share capital 20 319 319
Capital redemption reserve 20 598 598
Retained earnings 5,316 5,610
Total shareholders' equity 6,233 6,527
The notes on pages 38 to 57 form an integral part of this consolidated interim financial
information.
These financial statements were approved by the board on 20 May 2022.
Signed on behalf of the board by: Duncan Soukup
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Notes Year ended 31 December 15 months ended 31
2021 December 2020
£000 £000
Cash flows from operating activities
Profit/(Loss) for the year before taxation (239) (465)
Loss from change in fair value of investment 10 - 325
properties
(Profit)/Loss from change in fair value of head 26 48
leases
(Profit)/Loss on disposal of investment properties - (1)
Net financing loss/(income) (3) 91
Decrease/(Increase) in trade and other receivables 12 (27) 150
(Decrease)/Increase in trade and other payables 14 (168) 146
Loss on foreign exchange (44) (57)
Lease liability interest (22) (26)
Interest received - 3
Interest paid (6) (7)
Profit from change in fair value of investments (4) -
held for sale
Cash generated by operations (487) 207
Taxation - -
Net cash flow from operating activities (487) 207
Purchase of investments held for sale 11 (1,993) -
Sale of investments held for sale 11 200 -
Unrealised Gain or (Loss) on Investment - -
Net Proceeds from sale of investment properties - 348
Net cash flow in investing activities (1,793) 348
Cash flows from financing activities
(Increase)/reduction on head lease liabilities 15 (26) (48)
Net cash flow from financing activities - (26) (48)
continuing operations
Net increase in cash and cash equivalents (2,306) 507
Cash and cash equivalents at the start of the year 4,073 3,566
Effects of exchange rate changes on cash and cash - -
equivalents
Cash and cash equivalents at the end of the year 1,767 4,073
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Capital
Share Redemption Retained
Capital Reserves Reserves Earnings Total
£000 £000 £000 £000 £000
Balance as at 30 September 2019 319 - 598 6,075 6,992
Total comprehensive income for the 15 month period to - (465) (465)
December 2020
Balance as at 31 December 2020 319 - 598 5,610 6,527
Total comprehensive income for the year - - - (294) (294)
Balance as at 31 December 2021 319 - 598 5,316 6,233
The notes on pages 38 to 57 form an integral part of this consolidated interim financial
information.
Notes to the Consolidated Financial Statements
1. General information
Alina Holdings PLC (“Alina” or the “Company”) is a company registered on the Main Market of the
London Stock Exchange. It is incorporated, domiciled and registered in England. The Company’s
registered number is 05304743 and the address of its registered office is Eastleigh Court,
Bishopstrow, Warminster, BA12 9HW
2. Significant Accounting policies
The Group prepares its accounts in accordance with applicable UK Adopted International Accounting
Standards.
The group financial statements consolidate those of the Company and its subsidiaries (together
referred to as the “Group”). The parent company financial statements present information about the
Company as a separate entity and not about its group.
The accounting policies set out below have, unless otherwise stated, been applied consistently to
all periods presented in these group financial statements.
Judgements made by the directors, in the application of these accounting policies that have
significant effect on the financial statements and estimates with a significant risk of material
adjustment in the next year are discussed later in this note under the heading “Use of Estimates
and Judgements”.
The financial statements are prepared in pounds sterling. They have been prepared under the
historical cost convention except for the following assets which are measured on the basis of fair
value: investment properties, and investment properties held for sale.
Segmental reporting
IFRS 8 requires operating segments to be identified on the basis of internal reports that are
regularly reported to the chief operating decision maker to allocate resources to the segments and
to assess their performance. Since the strategy review in July 2013 the Group has identified one
operation and one reporting segment, being rental income in the UK, which is reported to the Board
of directors on a quarterly basis. The Board of directors is considered to be the chief operating
decision maker.
Basis of preparation
The consolidated financial statements include the financial statements of the Company and all its
subsidiary undertakings up to 31 December 2021. Subsidiaries are entities controlled by the Group.
The Group controls an entity when it 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. In assessing control, the Group takes into consideration potential voting rights. The
acquisition date is the date on which control is transferred to the acquirer. The financial
statements of subsidiaries are included in the consolidated financial statements from the date that
control commences until the date that control ceases. The financial statements of subsidiaries are
prepared using consistent accounting policies. Inter-company transactions and balances are
eliminated.
All intra-group transactions, balances, income and expenses are eliminated in full on
consolidation.
Going concern
The financial information has been prepared on the going concern basis as management consider that
the Group has sufficient cash to fund its current commitments for the foreseeable future.
Investment Properties
Investment properties are those properties owned by the Group that are held to earn rental income
or for capital appreciation or both and are not occupied by the Company or any of its subsidiaries.
Since the Balance Sheet date, no properties have exchanged contracts for sale, been sold at auction
or have completed sale following an exchange of contracts during the year other than those held as
available for sale.
Allsop LLP, a firm of independent chartered surveyors valued the Group’s property portfolio at 30
September 2018 and 31 March 2019. On each of these dates Allsop LLP performed a full valuation of
25% of the Group’s properties (including site inspections) and a desktop valuation of the
remainder, such that all properties owned by the Group are inspected and valued over the two-year
period. The valuations, using assumptions regarding yield rates, void levels and comparable market
transactions, were undertaken in accordance with the Royal Institute of Chartered Surveyors
Appraisal and Valuation Standards on the basis of market value. Market value is defined as the
estimated amount for which a property should exchange on the date of valuation between a willing
buyer and a willing seller in an arm’s length transaction, after proper marketing wherein the
parties had each acted knowledgeably, prudently and without compulsion.
In July 2019 Allsop LLP provided a full valuation (including site visits) on all the properties
then held by the Group. In the light of that valuation, for the 30 September 2019 financial
statements the Company had desktop valuations prepared by Allsop LLP for all the properties in the
portfolio at that date, except for three properties which were considered to be held for sale and
were therefore valued at their expected sale price less sales costs.
During the six months’ period to 31 March 2020 sales were completed on two properties considered at
30 September 2019 to be held for sale.
In view of the market uncertainty and the operational restrictions arising from the COVID-19
outbreak, the directors did not consider it appropriate to carry out a fresh valuation of the
property portfolio at 31 March 2020. The six properties contained in the portfolio therefore
continued to be recognised at 31 March 2020 in the financial statements at their holding value in
the Company’s accounts at 30 September 2019.
The six property assets held at 30 September 2020 were valued at that date by Allsop LLP. In line
with the Company’s established valuation policy, two of the larger assets were subject to full RICS
valuations, including site inspections, with the remainder subject to desktop updates of their
previous carrying values.
In view of the proximity in time to the September valuations, and the operational restrictions
arising from the COVID-19 outbreak, the Directors did not consider it appropriate to carry out a
fresh valuation of the property portfolio at 31 December 2020. The properties contained in the
portfolio therefore continue to be recognised at 31 December 2020 at their holding value in the
Group's financial statements at 30 September 2020. Of the six properties in the portfolio, one
property is considered to be held for sale and its holding value in the Company’s accounts
therefore takes account of agreed pricing and sales costs.
The Directors are pleased to announce the completion of sale of the Westcliff property held for
sale as at 31 December 2020 and 2021, which was agreed under the previous board in 2019 and has
taken until now to finalise. The price (£330k) remained as agreed in 2019 and recognized as for
sale in the intervening accounting periods.
The Directors have concluded that they will be maintaining the valuation of the property portfolio
at previous levels. The Board is also of the opinion that the carrying values, based on the "Red
Book" valuation, do not reflect the real value of the properties.
The Company's objective is still to liquidate the current portfolio of shopping assets which
currently show a Gross Initial Yield of more than 16%, but only if a sale can achieve a sensible
return in excess of the year end 2021 carrying value of £2.45m.
The Directors obtained pricing and yields of similar transactions made within the accounting period
and compared them to the Gross Initial Yield stated above. In all cases the transactions that were
measured came in at a lower value than that currently being achieved. As stated, although the data
is below the Yield being achieved it was felt prudent to leave the valuations as they stand.
Investment properties are treated as acquired at the point the Group assumes the significant risks
and returns of ownership. Subsequent expenditure is charged to the asset’s carrying value only
when it is probable that future economic benefits associated with the expenditure will flow to the
Group and the cost of each item can be reliably measured. All other repairs and maintenance costs
are charged to the Income Statement during the period in which they are incurred.
Rental income from investment properties is accounted for as described below.
Investment Properties Held for Sale
Investment properties held for sale are included in the Balance Sheet at their fair value less
estimated sales costs. In determining whether assets no longer meet the investment criteria of the
Group, consideration has been given to the conditions required under IFRS 5.
An investment property shall classify a non-current asset as held for sale if its carrying amount
will be recovered principally through a sale transaction rather than through continuing use.
The asset must be available for immediate sale in its present condition subject only to terms that
are usual and customary for sales of such assets and its sale must be highly probable as at the
year end.
The sale of the Westcliff property, the only asset held for sale at 31 December 2021, was completed
in February 2022.
Head Leases
Where a property is held under a head lease and is classified as an investment property, it is
initially recognised as an asset based on the sum of the premium paid on acquisition and if the
remaining life of the lease at the date of acquisition is considered to be material, the net
present value of the minimum ground rent payments. The corresponding rent liability to the
leaseholder was included in the Balance Sheet as a finance obligation in current and non-current
liabilities.
The payment of head rents has been expensed through the Income Statement.
Trade and Other Receivables
Trade and other receivables are initially recognised at fair value and subsequently held at
amortised cost less impairment. Impairment is made where it is established that there is objective
evidence that the Group will not be able to collect all amounts due according to the original terms
of the receivable. The impairment is recorded in the Income Statement.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and deposits held on call. Cash equivalents are
short-term, highly liquid investments with original maturities of three months or less.
Financial Assets
Financial assets are impaired when there is objective evidence that the cash flows from the
financial asset are reduced.
Financial Instruments
Financial assets and financial liabilities are initially classified as measured at amortised cost,
fair value through other comprehensive income, or fair value through profit and loss when the
Company becomes a party to the contractual provisions of the instrument. Financial assets are
derecognised when the contractual rights to the cash flows expire, or the Company no longer retains
the significant risks or rewards of ownership of the financial asset. Financial liabilities are
derecognised when the obligation is discharged, cancelled or expires.
Financial assets are classified dependent on the Company’s business model for managing the
financial and the cash flow characteristics of the asset. Financial liabilities are classified and
measured at amortised cost except for trading liabilities, or where designated at original
recognition to achieve more relevant presentation. The Company classifies its financial assets and
liabilities into the following categories:
Financial assets at amortised cost
The Company’s financial assets at amortised cost comprise trade and other receivables. These
represent debt instruments with fixed or determinable payments that represent principal or interest
and where the intention is to hold to collect these contractual cash flows. They are initially
recognised at fair value, included in current and non-current assets, depending on the nature of
the transaction, and are subsequently measured at amortised cost using the effective interest
method less any provision for impairment.
Impairment of trade and other receivables
In accordance with IFRS 9 an expected loss provisioning model is used to calculate an impairment
provision. We have implemented the IFRS 9 simplified approach to measuring expected credit losses
arising from trade and other receivables, being a lifetime expected credit loss. This is calculated
based on an evaluation of our historic experience plus an adjustment based on our judgement of
whether this historic experience is likely reflective of our view of the future at the balance
sheet date. In the previous year the incurred loss model is used to calculate the impairment
provision.
Financial liabilities at amortised cost
Financial liabilities at amortised cost comprise loan liabilities, including convertible loan note
liability elements, and trade and other payables. They are classified as current and non- current
liabilities depending on the nature of the transaction, are subsequently measured at amortised cost
using the effective interest method. All convertible loan notes are held at amortised cost and no
election has been made to hold them as fair value through profit and loss.
Financial assets at fair value through profit and loss
Financial assets at fair value are recognized and measured at fair value using the most recent
available market price with gains and losses recognised immediately in the profit and loss.
The fair value measurement of the Company’s financial and non- financial assets and liabilities
utilises market observable inputs and data as far as possible. Inputs used in determining fair
value measurements are categorised into different levels based on how observable the inputs used in
the valuation technique utilised are (the ‘fair value hierarchy’).
Level 1 – Quoted prices in active markets
Level 2 – Observable direct or indirect inputs other than Level 1 inputs
Level 3 – Inputs that are not based on observable market data
Trade and Other Payables
Trade and other payables are initially recognised at fair value and subsequently held at amortised
cost.
Ordinary Share Capital
External costs directly attributable to the issue of new shares are shown in equity as a deduction
from the proceeds.
Shares which have been repurchased are classified as treasury shares and shown in retained
earnings. They are recognised at the trade date for the amount of consideration paid, together with
directly attributable costs. This is presented as a deduction from total equity. Shares held by the
Employee Benefit Trust are treated as being those of the Group until such time as they are
distributed to employees, when they are expensed in the profit and loss account.
The nominal value of shares cancelled has been taken to a capital redemption reserve.
Rental Income
Rental income from investment properties leased out under operating leases is recognised in the
Income Statement on a straight-line basis over the term of the lease. When the Group provides lease
incentives to its tenants the cost of incentives are recognised over the lease term, on a
straight-line basis, as a reduction to income.
Taxation
Corporation tax on the profit or loss for the year comprises current and deferred tax. Corporation
tax is recognised in the Income Statement except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantively enacted at the balance sheet date and any adjustment to tax payable in respect of
previous years. Deferred tax is provided using the balance sheet liability method. Provision is
made for temporary differences between the carrying amounts of assets and liabilities in the
financial statements for financial reporting purposes and the amounts used for taxation purposes.
Deferred income tax is calculated after taking account of any indexation allowances and capital
losses on an undiscounted basis. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and liabilities using tax
rates enacted or substantially enacted at the balance sheet date. Deferred tax assets are
recognised only to the extent that it is probable that future profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no
longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities
are only offset if there is a legally enforceable right of set-off.
Pensions
The Company has contribution only pension arrangements in operation for certain employees.
Use of Estimates and Judgements
To be able to prepare accounts according to generally accepted accounting principles, management
must make estimates and assumptions that affect the asset and liability items and revenue and
expense amounts recorded in the financial statements. These estimates are based on historical
experience and various other assumptions that management and the Board of directors believe are
reasonable under the circumstances. The results of these considerations form the basis for making
judgements about the carrying value of assets and liabilities that are not readily available from
other sources.
The areas requiring the use of estimates and judgements that may significantly impact the Group’s
earnings and financial position include the estimation of the fair value of investment properties.
The valuation basis of the Group’s investment properties is set out above.
Adoption of new and revised standards
Standards issued but not yet effective:
There were a number of standards and interpretations which were in issue during the current period
but were not effective at that date and have not been adopted for these Financial Statements. The
Directors have assessed the full impact of these accounting changes on the Company. To the extent
that they may be applicable, the Directors have concluded that none of these pronouncements will
cause material adjustments to the Group’s Financial Statements. They may result in consequential
changes to the accounting policies and other note disclosures. The new standards will not be early
adopted by the Group and will be incorporated in the preparation of the Group Financial Statements
from the effective dates noted below.
The new standards include:
IFRS 16 Leases (amendments) 1 & 2
IAS 39 Financial instruments recognition and measurement 1
IFRS 9 Financial instruments (amendments) 1
IFRS 7 Financial instruments disclosures (amendments) 1
IFRS 4 Insurance contracts 1
IFRS 3 Business combinations 2
IAS 37 Provisions, contingent liabilities and contingent assets 2
IFRS 17 Insurance contracts 2
IAS 1 Presentation of financial statements 3
IAS 8 Accounting policies, changes in accounting estimates and errors 3
1 Effective for annual periods beginning on or after 1 January 2021
2 Effective for annual periods beginning on or after 1 January 2022
3 Effective for annual periods beginning on or after 1 January 2023
3. Property Operating Expenses
Year ended 31 December 2021 15 months ended 31 December 2020
£000 £000
Bad debt charge (7) 1
Head rent payments (0) (37)
Head rent treated as interest (Note 5) - 26
Repairs (21) (27)
Business rates and council tax (35) (32)
Irrecoverable service charge 18 3
Utilities (2) 9
Insurance (0) (12)
Managing agent fees (26) (38)
Legal & professional (48) (36)
EPC amortisation, Abortives, and Misc (15) (16)
Total property operating expenses (136) (159)
4. Property Disposals
Year ended 31 December 2021 15 months ended 31 December
2020
Number Number
Number of Sales - 2
£000 £000
Average Value - 177
Sales
Total sales - 355
Carrying value - (347)
Profit/(Loss) on disposals before - 8
transaction costs
Transaction costs
Legal fees - (4)
Agent fees, marketing and brochure costs - (3)
Total Transaction Costs (7)
Profit/(Loss) on disposals after - 1
transaction costs
Transaction costs as percentage of sales - 2%
value
5. Administrative Expenses
Year ended 31 December 2021 15 months ended 31 December
2020
£000 £000
Investment manager fees (0) (18)
Legal and professional (48) (163)
Tax and audit* (44) (42)
Remuneration Costs** (315) (179)
Other (117) (55)
Irrecoverable VAT on Administration (16) (32)
expenses
Total administrative expenses (540) (489)
*Within the tax and audit figure are £30,000 (2020: £40,000) accrued for auditors remuneration. It
is estimated that the figures will be £17,000 for the Parent Company and the balance for the
subsidiaries.
**During the period remuneration consisted of both employees and contractors. From the end of the
year ended 31 December 2021, there were no employees.
6. Employees
Year ended 31 December 2021 15 months ended 31 December 2020
Admin 1 1
1 1
7. Net Financing (Loss)/Income
Year ended 31 December 2021 15 months ended 31 December
2020
£000 £000
Interest receivable 0 3
Unrealised Gain or (Loss) on Investment 23 -
Financing income 23 3
Interest paid (5) (7)
Loss on foreign exchange (44) (57)
Realised Gain or (Loss) on Investment (3) -
Finance lease depreciation (3) (4)
Head rents treated as finance leases (note (23) (26)
2)
Financing expenses (78) (94)
Net financing (loss)/income (55) (91)
8. Taxation
Year ended 31 December 2021 15 months ended 31 December
2020
£000 £000
Loss before tax (294) (465)
Corporation tax in the UK of 19% (2020: (56) (93)
20%)
Effects of:
Revaluation deficit and other - 65
non-deductible items
Deferred tax asset not recognised 28 28
Total tax - -
Following the Company’s adoption of its new investment policy in September 2020, the Group is
considered by HM Customs & Revenue to have exited the REIT tax regime with effect from 1 October
2018 and, from that date, is fully subject to corporation tax.
However, the Board believes that the Group’s activities since then and the availability of tax
losses means that the Company’s activities are unlikely to have generated any material corporation
tax liability for periods since 1 October 2018. Accordingly, no provision for corporation tax has
been made in these accounts. The deferred tax asset not recognised relating to these losses can be
carried forward indefinitely. It is not anticipated that sufficient profits from the residual
business will be generated in the foreseeable future to utilise the losses carried forward and
therefore no deferred tax asset has been recognised in these accounts.
9. Earnings per share
The calculation of basic earnings per share was based on the profit attributable to ordinary
shareholders and a weighted average number of ordinary shares outstanding
Year ended 31 December 15 months ended 31 December
2021 2020
£000 £000
The calculation of earnings per share is based
on the loss and number of shares:
Profit/(loss) for the period (£'000) (294) (465)
Weighted average number of shares of the Company 22,697 22,697
('000)
Earnings per share:
Basic and Diluted (GBP - pence) (1.30) (2.05)
10. Investment Properties
Freehold Leasehold
Investment Investment
Properties Properties Total
£000 £000 £000
At 30 September 2019 40 3,099 3,139
Fair value adjustment - head leases - (48) (48)
Depreciation - head leases - (4) (4)
Fair value adjustments - property - (325) (325)
At 31 December 2020 40 2,722 2,762
Fair value adjustment - head leases - 25 25
Depreciation - head leases - (3) (3)
At 31 December 2021 40 2,744 2,784
Allsop LLP, a firm of independent chartered surveyors valued the Group’s property portfolio at 30
September 2017, 31 March 2018, 30 September 2018 and 31 March 2019. On each of these dates Allsop
LLP performed a full valuation of 25% of the Group’s properties (including site inspections) and a
desktop valuation of the remainder, such that all properties owned by the Group have been inspected
and valued over the two-year period. The valuations, using assumptions regarding yield rates, void
levels and comparable market transactions, were undertaken in accordance with the Royal Institute
of Chartered Surveyors Appraisal and Valuation Standards on the basis of market value. Market value
is defined as the estimated amount for which a property should exchange on the date of valuation
between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing
wherein the parties had each acted knowledgeably, prudently and without compulsion
In July 2019 Allsop LLP carried out a full valuation (including site visits) on all the properties
held at that date. In the light of that recent full valuation, for the 30 September 2019 financial
statements the Company had desktop valuations prepared by Allsops for all the properties in the
portfolio at that date, except for three properties which were considered to be held for sale and
were therefore valued at their expected sale price less sales costs.
The six property assets held at 30 September 2020 were valued at that date by Allsop LLP. In line
with the Company’s established valuation policy, two of the larger assets were subject to full RICS
valuations, including site inspections, with the remainder subject to desktop updates of their
previous carrying values. In view of the market uncertainty and the operational restrictions
arising from the COVID-19 outbreak, the directors did not consider it appropriate to carry out a
fresh valuation of the property portfolio at the half-year. The six properties contained in the
portfolio therefore continue to be recognised in the financial statements at their holding value in
the Company’s accounts at 30 September 2020. One property is considered to be held for sale and its
holding value in the Company’s accounts therefore takes account of agreed pricing and sales costs.
There were no sales during the period.
The Directors are pleased to announce the completion of sale of the Westcliff property held for
sale as at 31 December 2020 and 2021, which was agreed under the previous board in 2019 and has
taken until now to finalise.
The Directors have concluded that they will be maintaining the valuation of the property portfolio
at previous levels. The Board is also of the opinion that the carrying values, based on the "Red
Book" valuation, do not reflect the real value of the properties.
The Company's objective is still to liquidate the current portfolio of shopping assets which
currently show a Gross Initial Yield of more than 16%, but only if a sale can achieve a sensible
return in excess of the year end 2021 carrying value of £2.45m.
The Directors obtained pricing and yields of similar transactions made within the accounting period
and compared them to the Gross Initial Yield stated above. In all cases the transactions that were
measured came in at a lower value than that currently being achieved. As stated, although the data
is below the Yield being achieved it was felt prudent to leave the valuations as they stand.
The outbreak of the Coronavirus (COVID-19), declared by the World Health Organization as a “Global
Pandemic” on 11 March 2020, has impacted global financial markets and global economy. Despite the
easing of restrictions, the future impact that COVID-19 might have on the real estate market gives
that less certainty should be attached to the valuation than would normally be the case. A
reconciliation of the portfolio valuation at 31 December 2021 to the total value for investment
properties given in the Consolidated Balance Sheet is as follows:
As at 31 December 2021 As at 31 December 2020
£000 £000
Portfolio valuation 2,775 2,775
Investment properties held for sale (330) (330)
Head leases treated as investment properties per 339 317
IFRS 16
Total 2,784 2,762
11. Available for sale financial assets
The Group classifies the following financial assets at fair value through profit or loss (FVPL):-
Year ended 31 December 2021 15 months ended 31 December 2020
£000 £000
Available for sale investments
At the beginning of the period - -
Additions 1,957 -
Unrealised gain/(losses) 23 -
Disposals (197) -
Total 1,783 -
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Year ended 31 December 2021 15 months ended 31 December 2020
£000 £000
Current assets
Available for sale financial assets* 1,783 -
Portfolio Holdings** 36 -
Total 1,819 -
*These assets are formed of equity instruments held on quoted markets globally, they comprise both
long and short positions as per the disclosures in the Strategic Report.
**These holdings comprise foreign currency balances held for short periods from the sale and
purchase of financial assets through the broker
AFS investments have been valued incorporating Level 1 inputs in accordance with IFRS7. They are a
combination of cash and securities held with the listed broker.
Financial instruments require classification of fair value as determined by reference to the source
of inputs used to derive the fair value. This classification uses the following three-level
hierarchy:
• Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 — inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices);
• Level 3 — inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
12. Trade and Other Receivables
As At 31 December 2021 As At 31 December 2020
£000 £000
Trade receivables 145 147
Other receivables 9 8
Corporation tax - -
Prepayments 101 73
Total trade and other receivables 255 228
13. Cash and cash equivalents
Year ended 31 December 2021 15 months ended 31 December 2020
£000 £000
Cash in the Statement of Cash Flows 1,767 4,073
14. Trade and Other Payables
As At 31 December 2021 As At 31 December 2020
£000 £000
Trade payables 25 60
Other taxation and social security - 7
Other payables (note 1) 188 157
Accruals and deferred income 163 221
Head lease liabilities 23 21
Due to associated company - 100
Total trade and other payables 398 566
15. Lease liabilities
Minimum
Finance lease liabilities on head rents are payable as follows: Lease
Payment Interest Principal
£000 £000 £000
At 30 September 2019 3,074 (2,705) 369
Movement in value (340) 292 (48)
At 31 December 2020 2,734 (2,413) 321
Annual head lease payment increase 317 (292) 25
Movement in value (22) 23 0
At 31 December 2021 3,029 (2,682) 346
In the above table, interest represents the difference between the carrying amount and the
contractual liability/cash flow. All leases expire in more than five years.
16. Financial Instruments and Risk Management
The Board of directors has overall responsibility for the establishment and oversight of the
Group’s risk management framework.
As described in the Corporate Governance report, this responsibility has been assigned to the
executive directors with support and feedback from the Audit Committee. The Audit Committee
oversees how management monitors compliance with the Group’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced
by the Group.
The Group has identified exposure to the following financial risks from its use of financial
instruments: capital management risk, market risk, credit risk and liquidity risk.
Capital Management Risk
The Group’s capital consists of cash and equity attributable to the shareholders. The Board do not
consider there is any material capital management risk exposure.
Market Risk
Market risk is the risk that changes in market conditions, such as interest rates, foreign exchange
rates and equity prices, will affect the Group’s profit or loss and cash flows.
Equity risk is mitigated using a combination of long and short positions to ensure that
fluctuations in the market are hedged against.
As at As at
31 Dec 21 31 Dec 20
£000 £000
Market Risk on Available for Sale Investments
Increase by 1% 18 -
Decrease by 1% (18) -
Increase by 5% 89 -
Decrease by 5% (89) -
Sensitivity Analysis
IFRS 7 requires an illustration of the impact on the Group’s financial performance of changes in
interest rates. The following sensitivity analysis has been prepared in accordance with the Group’s
existing accounting policies and considers the impact on the Income Statement and on equity of an
increase of 100 basis points (1%) in interest rates. As interest rates were below 1% in the current
and previous year, it has not been possible to consider the impact of a decrease of 100 basis
points on interest income and expense as it would result in a negative rate of interest. Therefore,
the impact of a fall in interest rates has been restricted to a floor of 0%. All other variables
remain the same and any consequential tax impact is excluded.
Actual results in the future may differ materially from these assumptions and, as such, these
tables should not be considered as a projection of likely future gains and losses.
As at As at
31 Dec 21 31 Dec 20
£000 £000
Interest Rate Risk
Increase by 1% 29 40
Decrease by 0% - -
Increase by 5% 146 201
Decrease by 0% - -
Fair value measurements recognised in the statement of financial position
Investment properties and Investment properties held for sale are measured subsequent to initial
recognition at fair value and have been group as Level 3 (2019: level 3) based on the degree to
which fair value is observable.
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active
markets for identical assets and liabilities;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs
for the asset or liability that are not based on observable market data (unobservable inputs).
Investment properties have been valued using the investment method which involves applying a yield
to rental income streams.
Inputs include equivalent yield, tenancy information, and leasing assumptions. Valuation reports
are based on both information provided by the Company e.g. tenancy information including current
rents, which are derived from the Company’s financial and property management systems and are
subject to the Company’s overall control environment, and assumptions applied by the valuers e.g.
ERVs, and yields. These assumptions are based on market observation and the valuers’ professional
judgement.
An increase/decrease in equivalent yields will decrease/increase valuations, and an increase or
decrease in rental values will increase or decrease valuations. Other inputs include ERVs, and
likely void and rent-free periods. There are interrelationships between these inputs as they are
determined by market conditions. The valuation movement in a period depends on the balance of those
inputs.
Below is a sensitivity analysis of the impact of a 1% increase or decrease in equivalent yields on
income and equity. Actual results may differ materially from these assumptions and, as such, these
tables should not be considered as a projection of likely future gains and losses
As at As at
31 Dec 21 31 Dec 20
£000 £000
Interest Rate Risk
Increase by 1% 28 28
Decrease by 1% (28) (28)
Below is a sensitivity analysis of the impact of a 1% increase or decrease in foreign exchange
rates on income and equity. Actual results may differ materially from these assumptions and, as
such, these tables should not be considered as a projection of likely future gains and losses.
As at As at
31 Dec 21 31 Dec 20
£000 £000
Foreign Exchange Risk
Increase by 1% 23 39
Decrease by 1% (46) (84)
Credit Risk
Credit risk is the risk of financial loss to the Group if a tenant, bank or counterparty to a
financial instrument fails to meet its contractual obligations and arises principally from the
Group’s receivables from tenants, cash and cash equivalents held by the Group’s bankers and
derivative financial instruments entered into with the Group’s bankers.
Trade and Other Receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each
tenant. At 31 December 2021 the Group had over 60 letting units in six properties. There is no
significant concentration of credit risk due to the large number of small balances owed by a wide
range of tenants who operate across all retail sectors. There is no concentration of credit risk in
any one geographic area of the UK. The level of arrears is monitored monthly by the Group on a
tenant by tenant basis.
Cash, Cash Equivalents and Derivative Financial Instruments
The banking services used by the Group are split between a major UK bank and a Swiss private
banking corporation for deposit purposes.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as
they fall due. The Group’s approach to managing liquidity risk is to ensure, as far as possible,
that it will always have adequate resources to meet its liabilities when they fall due for both the
operational needs of the business and to meet planned future investments. This position is formally
reviewed on a quarterly basis or more frequently should events require it.
The Group’s financial liabilities are classified and are shown with their fair value as follows:
31 December 2021
At Amortised Total Carrying At
Cost Amount Fair Value
£0 £0 £0
Finance lease liabilities 346 346 346
Trade payables 25 25 25
Other payables 188 188 188
Due to associated company 0 0 0
Accruals 163 163 163
722 722 722
31 December 2020
At Amortised Total Carrying At
Cost Amount Fair Value
£0 £0 £0
Finance lease liabilities 321 321 321
Trade payables 60 60 60
Other payables 164 164 164
Due to associated company 100 100 100
Accruals 221 221 221
866 866 866
For all classes of financial liabilities, the carrying amount is a reasonable approximation of fair
value.
The maturity profiles of the Group’s financial liabilities are as follows:
31 December 2021
Carrying Contractual Within One to Two to Three to Four to Over
Value Cash Flows One Year Two Three Four Five Five
Years Years Years Years Years
£000 £000 £000 £000 £000 £000 £000 £000
Finance lease
liabilities 346 3,073 23 23 23 23 23 2,960
Trade payables 25 25 25
Other payables 188 188 188
Due to
associated 0 0 0
company
Accruals 163 163 163
722 3,448 398 23 23 23 23 2,960
31 December 2020
Carrying Contractual Within One to Two to Three to Four to Over
Value Cash Flows One Year Two Three Four Five Five
Years Years Years Years Years
£0 £0 £0 £0 £0 £0 £0 £0
Finance lease
liabilities 321 3,055 19 19 19 19 19 2,960
Trade payables 60 60 60
Other payables 164 164 164
Due to
associated 100 100 100
company
Accruals 221 221 221
866 3,600 564 19 19 19 19 2,960
Contractual cash flows include the undiscounted committed interest cash flows and, where the amount
payable is not fixed, the amount disclosed is determined by reference to the conditions existing at
the year end
17. Operating Lease as Lessor
Year ended 31 December 2021 15 months ended 31 December 2020
£000 £000
Within one year 309 320
After one year but not more than five 762 870
years
More than five years 369 478
1,440 1,668
18. Capital Commitments
No capital expenditure was planned at the balance sheet date.
19. Related party balances and transactions
Transactions with Key Management Personnel
The only transactions with key management personnel relate to remuneration which is set out in the
Remuneration Report.
The key management personnel of the Group for the purposes of related party disclosures under IAS
24 comprise all executive and non-executive directors.
As at the year end the Group owed £Nil (2019: £99,700) to Thalassa Holdings Limited (“Thalassa”), a
company under common directorship. During the year services amounting to £123,619 (2020: £99,700)
were charges from Thalassa.
The bulk of this sum related to administration fees settled by Thalassa but payable by the Group.
The remained related to accounting and registered office services supplied to the Group by Thalassa
at cost.
The company was invoiced and paid £215,000 (2020:Nil), to Fleur De Lys Ltd, a company owned and
controlled by the Chairman Duncan Soukup, for consultancy and administration services.
20. Share capital
As at As at
31 Dec 21 31 Dec 20
£ £
Allotted, issued and fully paid:
22,697,000 ordinary shares of £0.01 each 226,970 226,970
9,164,017 treasury shares of £0.01 each 91,640 91,640
Total Share Capital 318,610 318,610
During the year to 30 September 2019, the Company underwent a Court approved restructure of capital
and buy back of shares. Under this action the issued 20p shares were converted to 1p; capital
reserves were transferred to distributable reserves; 59,808,456 shares were repurchased, and a new
Capital Redemption Reserve of £0.598m was established.
Investment in Own Shares
At the year-end, 9,164,017 shares were held in treasury (December 2020: 9,164,017).
21. Group Entities
All the below companies are incorporated in the United Kingdom: -
Effective
Share holding
Name of subsidiary Place of incorporation 2021 2020
NOS 4 Limited** United Kingdom 100% 100%
NOS 5 Limited** United Kingdom 100% 100%
NOS 6 Limited** United Kingdom 100% 100%
NOS 7 Limited ** (Dissolved on 21 Sep 2021) United Kingdom 100% 100%
Gilfin Property Holding Limited*** United Kingdom 100% 100%
NOS Holdings Limited** United Kingdom 100% 100%
** Registered office: Eastleigh Court, Bishopstrow, Warminter, Wiltshire BA12 9HW
***In liquidation - Registered office: No 2 Lochrin Square, 96 Fountainbridge,
Edinburgh,EH3 9QA
22. Contingent Liabilities
There are currently two potential repair obligations at two separate Company properties currently
under investigation, including the extent to which the relevant group company may be required to
underwrite such costs as may arise and the extent to which the tenants or former tenants of the
properties are liable to contribute to such costs under the terms of their tenancy agreements.
23. Subsequent events
The property held for sale at the year end completed the transaction of sale in February 2022 at
the value stated in the financial statements.
24. Controlling Party and copies of the Financial Statements
At 30 September 2019 the ultimate group in which the results were consolidated was Thalassa
Holdings Limited, which was also the controlling party of the Company.
In October 2020 The Local Shopping REIT plc resolved to change its name to Alina Holdings PLC and
shortly thereafter Thalassa Holdings Limited disposed of its controlling interest in Alina Holdings
PLC.
Accordingly, as at 31 December 2021 the Company had no ultimate controlling party.
The consolidated financial statements of Alina Holdings PLC are available to the public and may be
obtained from the Company’s website: 4 www.alina-holdings.com.
Company Balance Sheet as at 31 December 2021 with comparatives as at 31 December 2020
31 December 2021 31 December 2020
Note £000 £000
Assets
Non-current assets
Investments C2 3,105 3,105
Total non-current assets 3,105 3,105
Current assets
Trade and other receivables C3 5 262
Available for sale financial assets C4 1,819 -
Cash and cash equivalents 1,313 3,575
Total current assets 3,137 3,837
Liabilities
Current liabilities
Trade and other payables C5 112 462
Total current liabilities 112 462
Net current assets 3,025 3,375
Net assets 6,130 6,480
Shareholders’ Equity
Share capital C6 319 319
Capital redemption reserve C6 598 598
Retained earnings C6 5,213 5,563
Total shareholders' equity 6,130 6,480
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its
own profit and loss account in these financial statements. The Company’s loss for the period was
£0.35m (15 months to 31 December 2020: £0.51m).
These financial statements were approved by the Board of directors on 20 May 2022 and were signed
on its behalf by:
C D Soukup
Director
The registered number of the Company is 05304743.
Notes to the Financial Statements
C1. Accounting Policies
These financial statements were prepared in accordance with Financial Reporting Standard 102 The
Financial Reporting Standard applicable in the UK (“FRS 102”) as issued in March 2018. The
presentation currency of these financial statements is sterling. All amounts in the financial
statements have been rounded to the nearest £1,000.
The consolidated financial statements of Alina Holdings PLC are prepared in accordance with UK
Adopted Accounting Standards (IFRS) and are available to the public. In these financial statements,
the company is considered to be a qualifying entity (for the purposes of this FRS) and has applied
the exemptions available under FRS 102 in respect of the following disclosures:
• Reconciliation of the number of shares outstanding from the beginning to end of the period;
• Cash Flow Statement and related notes; and
• Key Management Personnel compensation.
As the consolidated financial statements include the equivalent disclosures, the Company has also
taken the exemptions under FRS 102 available in respect of the following disclosures:
• Certain disclosures required by FRS 102.26 Share Based Payments; and,
• The disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other
Financial Instrument Issues in respect of financial instruments not falling within the fair
value accounting rules of Paragraph 36(4) of Schedule 1.
The Company proposes to continue to adopt the reduced disclosure framework of FRS 102 in its next
financial statements.
The accounting policies set out below have, unless otherwise stated, been applied consistently to
all periods presented in these financial statements.
There were no judgements made by the directors, in the application of these accounting policies
that have significant effect on the financial statements, with a significant risk of material
adjustment in the next year.
Measurement convention
The financial statements are prepared on the historical cost basis.
Classification of financial instruments issued by the Company
In accordance with FRS 102.22, financial instruments issued by the Company are treated as equity
only to the extent that they meet the following two conditions:
a. they include no contractual obligations upon the company to deliver cash or other financial
assets or to exchange financial assets or financial liabilities with another party under
conditions that are potentially unfavourable to the company; and
b. where the instrument will or may be settled in the company’s own equity instruments, it is
either a non-derivative that includes no obligation to deliver a variable number of the
company’s own equity instruments or is a derivative that will be settled by the company’s
exchanging a fixed amount of cash or other financial assets for a fixed number of its own
equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial
liability. Where the instrument so classified takes the legal form of the company’s own shares, the
amounts presented in these financial statements for called up share capital and share premium
account exclude amounts in relation to those shares.
Basic financial instruments
Trade and other creditors are recognised initially at transaction price plus attributable
transaction costs. Subsequent to initial recognition, they are measured at amortised cost, less any
impairment losses in the case of trade debtors. If the arrangement constitutes a financing
transaction, for example if payment is deferred beyond normal business terms, then it is measured
at the present value of future payments discounted at a market rate of instrument for a similar
debt instrument.
Investments in subsidiaries
These are separate financial statements of the company. Investments in subsidiaries are carried at
cost less impairment.
Judgements and Estimates
In testing for impairment, management assesses the recoverable amount of investments and
inter-company debtors by reference to the subsidiaries’ net assets and their ability to recover
these assets.
Provisions
A provision is recognised in the balance sheet when the Company has a present legal or constructive
obligation as a result of a past event, that can be reliably measured and it is probable that an
outflow of economic benefits will be required to settle the obligation. Provisions are recognised
at the best estimate of the amount required to settle the obligation at the reporting date.
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other
companies within its group, the company treats the guarantee contract as a contingent liability
until such time as it becomes probable that the company will be required to make a payment under
the guarantee.
Interest receivable and Interest payable
Interest payable and similar charges include interest payable, finance charges on shares classified
as liabilities and finance leases recognised in profit or loss using the effective interest method,
unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the
profit and loss account
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the
profit and loss account except to the extent that it relates to items recognised directly in equity
or other comprehensive income, in which case it is recognised directly in equity or other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year,
using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to
tax payable in respect of previous years.
Deferred tax is provided on timing differences which arise from the inclusion of income and
expenses in tax assessments in periods different from those in which they are recognised in the
financial statements. The following timing differences are not provided for: differences between
accumulated depreciation and tax allowances for the cost of a fixed asset if and when all
conditions for retaining the tax allowances have been met; and differences relating to investments
in subsidiaries to the extent that it is not probable that they will reverse in the foreseeable
future and the reporting entity is able to control the reversal of the timing difference. Deferred
tax is not recognised on permanent differences arising because certain types of income or expense
are non-taxable or are disallowable for tax or because certain tax charges or allowances are
greater or smaller than the corresponding income or expense.
Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related
difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred
tax balances are not discounted.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it
probable that they will be recovered against the reversal of deferred tax liabilities or other
future taxable profits.
C2. Fixed Assets Investments
Shares in Group
Undertakings Total
£000 £000
Cost
At 31 December 2020 108,605 108,605
Disposals - -
At 31 December 2021 108,605 108,605
Provisions
At 31 December 2020 105,500 105,500
Impairment charge period - -
Disposals - -
At 31 December 2021 105,500 105,500
Net book value
At 31 December 2021 3,105 3,105
At 31 December 2020 3,105 3,105
An impairment review of the carrying value of the Company’s investments in its subsidiary
undertakings has been performed. In carrying out this review, the directors had due regard to the
nature of the property investments held, which is commensurate with the funding arrangements in
place. On the basis of this review which included a review of the underlying assets of the
individual subsidiaries the directors have not written down the value of investments in subsidiary
undertakings. This was concluded due to the underlying assets being undervalued as per the
valuation exercise undertaken within the Group.
The companies in which the Company’s interests at the period end were more than 20% are as follows:
Effective
Share holding
Name of subsidiary Place of incorporation 2021 2020
NOS 4 Limited** United Kingdom 100% 100%
NOS 5 Limited** United Kingdom 100% 100%
NOS 6 Limited** United Kingdom 100% 100%
NOS 7 Limited ** (Dissolved on 21 Sep 2021) United Kingdom 100% 100%
Gilfin Property Holding Limited*** United Kingdom 100% 100%
NOS Holdings Limited** United Kingdom 100% 100%
** Registered office: Eastleigh Court, Bishopstrow, Warminter, Wiltshire BA12
9HW
***In liquidation - Registered office: No 2 Lochrin Square, 96 Fountainbridge,
Edinburgh,EH3 9QA
C3. Trade and other receivables
31 December 2021 31 December 2020
£000 £000
Amounts owed by Group undertakings* - 260
Other debtors 3 -
Prepayments 2 2
5 262
Amounts owed by group undertakings are interest free and repayable on demand
C4. Available for sale financial assets
Year ended 31 December 2021 15 months ended 31 December 2020
£000 £000
Current assets
Available for sale financial assets* 1,783 -
Investments in associated entities** - -
Portfolio Holdings 36 -
At 31 December 1,819 -
*These assets are formed of equity instruments held on quoted markets globally, they comprise both
long and short positions as per the disclosures in the Strategic Report.
**These holdings comprise foreign currency balances held for short periods from the sale and
purchase of financial assets through the broker
AFS investments have been valued incorporating Level 1 inputs in accordance with IFRS7. They are a
combination of cash and securities held with the listed broker.
Financial instruments require classification of fair value as determined by reference to the source
of inputs used to derive the fair value. This classification uses the following three-level
hierarchy:
• Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 — inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices);
• Level 3 — inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
C5. Trade and other payables
31 December 2021 31 December 2020
£000 £000
Trade creditors 12 36
Amounts owed to Group undertakings 14 225
Amounts owed to related party - 100
Other creditors 4 1
Accruals 82 100
112 462
Amounts owed to group undertakings are interest free and repayable on demand
C6. Reconciliation of Shareholders’ Funds
Share Capital
31 December 2021 31 December 2020
Number Amount Number Amount
000 £000 000 £000
Allotted, called up and fully paid 31,861 319 31,861 319
31,861 319 31,861 319
Investment in Own Shares
At the year-end, 9,164,017 shares were held in treasury (2020: 9,164,017), and at the date of this
report 9,164,017 were held in treasury.
Statement of Changes in Equity for the 12 months ended 31 December 2021
Capital
Share Redemption Retained
Capital Reserves Reserves Earnings Total
£000 £000 £000 £000 £000
Balance as at 30 September 2019 319 - 598 6,073 6,990
Total comprehensive income for the 15 month period to - - (510) (510)
December 2020
Balance as at 31 December 2020 319 - 598 5,563 6,480
Total comprehensive income for the year - - - (350) (350)
Balance as at 31 December 2021 319 - 598 5,213 6,130
C7. Controlling Party
Please refer to note 24 in the Group Financial Statements
Glossary
Earnings Per Share (“EPS”)
EPS is calculated as profit attributable to shareholders divided by the weighted average number of
shares in issue in the year.
Equivalent Yield
Equivalent yield is a weighted average of the initial yield and reversionary yield and represents
the return a property will produce based upon the timing of the income received. In accordance with
usual practice, the equivalent yields (as determined by the Group’s external valuers) assume rent
received annually in arrears and on gross values including prospective purchasers’ costs (including
stamp duty, and agents’ and legal fees).
Head Lease
A head lease is a lease under which the Group holds an investment property.
Initial Yield
Initial yield is the annualised net rent generated by a property expressed as a percentage of the
property valuation. In accordance with usual practice the property value is grossed up to include
prospective purchasers’ costs.
Like-for-like Market Rent
This is the Market Rent for the Group’s investment properties at the end of the financial year
compared with the Market Rent for the same properties at the end of the prior year, i.e. excluding
the Market Rent of those properties disposed of during the interim period.
Like-for-like rental income
This is the rental income for the Group’s investment properties at the end of the financial year
compared with the rental income for the same properties at the end of the prior year, i.e.
excluding rental income of those properties disposed of during the interim period.
Market Value
Market value is the estimated amount for which a property should exchange on the date of valuation
between a willing buyer and willing seller in an arm’s length transaction after proper marketing
wherein the parties had each acted knowledgeably, prudently and
without compulsion.
Market Rent
Market rent is the estimated amount for which a property should lease on the date of valuation
between a willing lessor and a willing lessee on appropriate lease terms, in an arm’s length
transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and
without compulsion.
Net Asset Value (“NAV”) per share
NAV per share is calculated as shareholders’ funds divided by the number of shares in issue at the
year-end excluding treasury shares.
Real Estate Investment Trust (“REIT”)
A REIT is a listed property company which qualifies for and has elected to join the UK REIT tax
regime, which exempts qualifying UK property rental income and gains on investment property
disposals from corporation tax. The Group converted to REIT status on 11 May 2007 and left the REIT
tax regime on 1 October 2018
Reversionary Yield
Reversionary yield is the annualised net rent that would be generated by a property if it were
fully let at market rent expressed as a percentage of the property valuation. In accordance with
usual practice the property value is grossed up to include prospective purchasers’ costs
END
Investor Enquiries:
Alina Holdings Ltd
Duncan Soukup, Chairman +33 (0)6 78 63 26 89
5 www.alina-holdings.com
═══════════════════════════════════════════════════════════════════════════════════════════════════
ISIN: GB00B1VS7G47
Category Code: ACS
TIDM: ALNA
LEI Code: 213800SOAIB9JVCV4D57
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 165062
EQS News ID: 1364525
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
6 fncls.ssp?fn=show_t_gif&application_id=1364525&application_name=news&site_id=refinitiv
References
Visible links
1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=5f6e88dfcc72742111bb7f5f70b9e0ef&application_id=1364525&site_id=refinitiv&application_name=news
2. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=83c41852f433c512f20356ce6e3d1838&application_id=1364525&site_id=refinitiv&application_name=news
3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=ee9eb635209851d8b403774b6a3d0124&application_id=1364525&site_id=refinitiv&application_name=news
4. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=5f6e88dfcc72742111bb7f5f70b9e0ef&application_id=1364525&site_id=refinitiv&application_name=news
5. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=5f6e88dfcc72742111bb7f5f70b9e0ef&application_id=1364525&site_id=refinitiv&application_name=news
============Recent news on Alina Holdings
See all newsREG-Alina Holdings PLC Alina Holdings PLC: AGM Notice
AnnouncementREG-Alina Holdings PLC Alina Holdings PLC:Annual Financial Report
AnnouncementREG-Alina Holdings PLC Alina Holdings PLC: Interim Report (30 June 2023)
AnnouncementREG - DCI Advisors Ltd Alina Holdings PLC - Holding(s) in Company
AnnouncementREG - Official List - Restoration of Listing - Alina Holdings Plc
Announcement