REG - Black Sea Property - Annual Financial Report
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RNS Number : 0395P Black Sea Property PLC 30 June 2025
BLACK SEA PROPERTY PLC
("Black Sea Property" or the "Company")
Audited Results for the year ended 31 December 2024
The Board of Black Sea Property PLC is pleased to announce its audited results
for year ended 31 December 2024.
Electronic copies of the annual report will be available at the Company's
website www.blackseapropertyplc.com (http://www.blackseapropertyplc.com) .
The Directors of the Company are responsible for the contents of this
announcement.
For further information, please visit www.blackseapropertyplc.com
(http://www.blackseapropertyplc.com) or contact the following:
BLACK SEA PROPERTY PLC simon.hudd@d3ainvestments.com (mailto:simon.hudd@d3ainvestments.com)
Simon Hudd, Chairman
PETERHOUSE CAPITAL LIMITED
+44 (0) 20 7469 0930
Aquis Growth Market Corporate Advisor
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation EU 596/2014 as it forms part of retained EU law
(as defined in the European Union (Withdrawal) Act 2018).
Black Sea Property PLC
Consolidated Annual Report
Year ended 31 December 2024
Page
Corporate Information 1
Chairman's Statement 2 - 3
Directors' Report 4 - 6
Statement of Directors' Responsibilities 7
Independent Auditor's Report to the members of Black Sea Property PLC 8 - 14
Consolidated Statement of Comprehensive Income 15
Consolidated Statement of Financial Position 16
Consolidated Statement of Changes in Equity 17
Consolidated Statement of Cash Flows 18
Notes to the Consolidated Financial Statements 19 - 46
Directors AQSE Corporate Advisor
Valentino Georglev (appointed 3 April 2024) Peterhouse Capital Limited
Todor Ivanov (appointed 3 April 2024) 15-17 Eldon Street
Simon Hudd London
Yordan Naydenov (resigned 3 April 2024) EC2M 7LD
Miroslav Georgiev (resigned 3 April 2024) United Kingdom
Ventsislava Altanova (resigned 3 April 2024)
Registered office Registrar
6(th) Floor Share Registrars Limited
Victory House 27/28 Eastcastle Street
Prospect Hill London
Douglas, Isle of Man W1W 8DH
IM1 1EQ United Kingdom
Administrator Property Investment Advisor
Crowe Trust Isle of Man Limited Phoenix Capital Management JSC
6(th) Floor 109-115 Todor Aleksandrov Blvd
Victory House Sofia
Prospect Hill Bulgaria
Douglas, Isle of Man
IM1 1EQ
Website Auditor of the Company and Group
www.blackseapropertyplc.com (http://www.blackseapropertyplc.com) Grant Thornton Limited
Exchange House
54 - 62 Athol Street
Registered Agent Douglas, Isle of Man
Crowe Trust Isle of Man Limited IM1 1JD
Chairman's Statement
Highlights
· Revenue increased by 128.6% to € 2,991,434 up from € 1,308,384 in
2023, driven by higher occupancy at Camping South Beach.
· Camping South Beach achieved strong seasonal occupancy with over 71%
in July and 61% in August 2024, leading to a 19.5% increase in reservation
revenues compared to 2023.
- An approximate increase of 5-10% occupancy for 2025 in Camping South
Beach, due to domestic demand.
- The Nobu Hospitality agreement signed to develop two landmark
properties into Nobu-branded hotels and restaurants, is now in the technical
planning phase of development.
I am pleased to present the financial statements of Black Sea Property PLC
("Black Sea Property" or the "Company") for the year ended 31 December 2024.
The net asset value as at 31 December 2024 was € 52,556,450 or 2.10
cents per share (2023: € 50,511,892 or 2.01 cents per share).
The Company generated revenues from camping reservations of € 2,991,434
(2023: € 1,308,384). This resulted in earnings per share attributable to the
parent of 0.08 cents (2023: 0.54 cents). Earnings per share (EPS) has
decreased in the current year primarily due to the absence of any bargain
purchase gains. In the prior year, EPS was elevated by one-off gains arising
from the acquisition of subsidiaries. As no similar transactions occurred this
year, the current EPS reflects the Group's underlying operational performance.
Investments
Camping South Beach EOOD ("CSB")
In 2024, CSB maintained its prime position as a destination for luxury camping
holidays and beach houses. Whilst the military conflict in Ukraine continues
to negatively affect tourism in many ways, including the reduction in Russian
tourists visiting the Bulgarian Black Sea coast, CSB's performance was buoyed
by strong domestic demand.
CSB achieved occupancy levels of over 71% in July and 61% in August 2024,
which is a 19.5% increase in revenues from reservations in 2024 compared to
2023.
The fair value of the investment property in CSB at the year-end
was €17,100,000 which represents an increase of € 280,000 above the
value at the end of the previous year.
Outlook for CSB in 2025
The expectations for the tourist segment in 2025 are positive despite the
challenging economic environment arising from the war in Ukraine.
Over the years, an insignificant part of the Company's revenues was generated
by tourists from the countries affected by the conflict. The forecasts
prepared by the management for the summer season 2025 do not include revenues
from this segment.
The initial forecast by the management indicates an approximate increase of
5-10% in occupancy for 2025, based on current reservations and forecasts.
Chairman's Statement (Continued)
Star Mill
The Black Sea Star hotel complex which was acquired in 2022, and is owned by a
BSP subsidiary, increased its market value in 2024 to EUR 8,210,710. The hotel
complex is located in an excellent location on the Black Sea coast, behind
CSB.
Ivan Vazov 1 Building and Grand Hotel Varna Dolphins ("GHV-Dolphins")
In April 2024 two of the Company's subsidiaries in Bulgaria (BSPF Bulgaria and
GHV-Dolphins EAD) signed a license and management agreement with Nobu
Hospitality LLC to transform two of the Company's existing properties into a
Nobu Hotel and Restaurant in the heart of Sofia and on the Black Sea Coast.
The two projects are now in a Technical phase.
Outlook
The Company operates in a challenging macroeconomic and geopolitical
environment and is not able to assess the full impact of the war in Ukraine.
All sectors of Bulgaria's economy are significantly affected by the
consequences of the military conflict in Ukraine, namely rising inflation
levels, raw materials price increases and market uncertainty. However, the
Directors are taking cautious measures to manage the cash flow and cost base
of the Company and are confident that the business is well equipped to
withstand this near-term uncertainty.
Despite the tough environment, the Directors believe that in 2025 revenue from
CSB will increase by over 10% compared to 2024, based on current reservations
and forecasts. Traditionally, CSB relies mainly on domestic demand and an
insignificant part of its revenues are generated by tourists from countries
affected by the conflict in Ukraine.
The transformation of Ivan Vazov Building is planned to be successfully
finalized in the next 2 to 3 years. The unique architecture and prime downtown
location will position it as a leading hospitality destination in Sofia.
Signed on behalf of the Board by:
Simon Hudd
Chairman
27 June 2025
Directors' Report
As at 31 December 2024 the significant shareholders of Black Sea Property PLC
(the "Company) were as follows:
Beneficial shareholder Holding Percentage
Neo London Capital PLC 491,126,806 19.98%
Elea Capital Holding JSC 669,000,000 27.21%
Mamferay Holdings Ltd 449,957,561 18.30%
DF Compass Progress 169,356,690 6.89%
Interfund Investments PLC 89,500,000 3.64%
DF C 80,200,000 3.26%
Mix
The shareholder structure as at 31 December 2023 was as follows:
Beneficial shareholder Holding Percentage
Neo London Capital PLC 515,126,806 20.95%
Elea Capital Holding JSC 645,000,000 26.24%
Mamferay Holdings Ltd 449,957,561 18.30%
DF Compass Progress 169,356,690 6.89%
Interfund Investments PLC 89,500,000 3.64%
DF C 80,200,000 3.26%
Mix
Auditor
The Company's Auditor - Grant Thornton Limited, being eligible, has expressed
their willingness to continue in office in accordance with the Isle of Man
Companies Act 2006.
Directors' Interests
No current Director has an interest in the share capital of the Company.
Directors' Remuneration
Directors' remuneration comprises solely of the fee payments received by the
Directors. No Directors received any benefits under long-term or short-term
incentive schemes.
The maximum amount of the aggregate Directors' (other than those holding
executive office with the Company or any subsidiary of the Company) ordinary
remuneration permitted by Article 83.1 of the Company's Memorandum and
Articles of Association is 100,000 pound sterling (112,970 euros) per annum,
plus expenses.
Directors' Remuneration for the Directors of Parent company are:
Fees Fees Payable Fees Fees payable
Year ended As at Year ended As at
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
€ € € €
Ventsislava Altanova 3,602 - 14,096 -
Miroslav Georgiev 3,544 - 14,096 -
Yordan Naydenov 3,544 - 14,042 -
Simon Hudd* 14,071 - 13,845 -
Todor Ivanov 10,849 - - -
Valentino Georgiev 10,961 - - -
46,571 - 56,079 -
*Chairman and non-executive director of the parent company
Directors' Report (Continued)
Corporate Governance
The company is committed to applying the highest standards of corporate
governance corresponding to its size.
While the Company is not required to comply with the provisions set out in the
UK Corporate Governance code issued by the Financial Reporting Council or to
comment on its compliance with the provisions of the Code, the Board is
nevertheless accountable to the shareholders for the good corporate governance
of the Company.
The Board consists of three Directors and holds at least four board meetings
annually. Matters which would normally be referred to appointed committees,
such as the Audit, Remuneration and Nomination Committees, are dealt with by
the Board as a whole.
Going concern
As of the reporting date the group has reported an operating profit of EUR
1.58m (2023: loss of EUR 0.38m), net profit in the year of EUR 2.04m (2023:
EUR 10.41m). The group's current liabilities exceed its current assets by EUR
13.2m.
In previous year, the group started renovating and developing its properties.
The expectations of management are that after the completion of the renovation
works, the investment properties will be recognized as a significant
investment project, which is expected to generate income in the medium-term
future and lead to stability in the financial position of the group. In
addition, there are two signed license and management agreements with Nobu
Hospitality during the year end, which will start two new projects - one in
Varna and one in Sofia, which will attract customers and make profit for the
group in the foreseeable future.
The major shareholders of the parent company have undertaken to provide the
financial supports to the group to secure its functioning as a going concern
and within its normal capacity for a period of at least 12 months from the
date of signing the financial statements for the year ended 31 December 2024.
The Directors are therefore, satisfied that the group has sufficient resource
available along with support from major shareholders who have sufficient
liquid resource to provide financial support to the group. Given this the
Directors have a reasonable expectation that the group will continue in
operational existence in the foreseeable future, and for a period of at least
12 months from the date of signing these financial statements. Therefore,
financial statements have been prepared on a going concern basis.
Directors' Report (Continued)
Post balance sheet events
On February 14, 2025, a contract was signed with GHV Dolphins EAD and the
Ministry of Tourism for the lease of the "Saint Ilia" seaside beach for a
period of 5 years. The agreed rent for 2025 is EUR 30,679. For each subsequent
year, the rental amount will be indexed in accordance with the Methodology for
Determining the Minimum Rental Price for Sea Beaches.
Simon Hudd
Chairman
27 June 2025
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the Group
financial statements in accordance with applicable law and regulations.
The Directors are required to prepare Group financial statements for each
financial year. The Directors have elected to prepare the Group financial
statements in accordance with the UK-adopted International Accounting
Standards ("UK adopted IASs") and applicable 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 of its profit or loss for that period. In preparing each of the
Group financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and estimates that are reasonable, relevant
and reliable;
· state whether they have been prepared in accordance with UK
adopted IASs;
· assess the Group'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 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 Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable
them to ensure that its financial statements comply with the Isle of Man
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.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group's website.
Legislation in the Isle of Man governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Signed on behalf of the Board by:
Simon Hudd
Chairman
27 June 2025
Independent auditor's report to the members of Black Sea Property PLC
Opinion
We have audited the financial statements of Black Sea Property PLC ("Company")
and its subsidiaries (the "Group''), which comprise the Consolidated Statement
of Comprehensive Income, Consolidated Statement of Financial Position,
Consolidated Statement of Changes in Equity, Consolidated Statement of Cash
Flows for the year ended 31 December 2024, and the related notes to the
financial statements, including material accounting policy information.
The financial reporting framework that has been applied in the preparation of
the financial statements is applicable law and UK-adopted International
Accounting Standards (UK-adopted IAS).
In our opinion, Group's financial statements:
· give a true and fair view in accordance with UK-adopted IAS of
the assets, liabilities and financial position of the Group as at 31 December
2024 and of the Group financial performance and consolidated cash flows for
the year then ended; and
· have been properly prepared in accordance with the requirements
of the Isle of Man 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 'Responsibilities of the auditor for
the audit of the financial statements' section of our report. We are
independent of the Group and Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the
Isle of Man, including the FRC's Ethical Standard, applied as determined to be
appropriate in the circumstances for the entity. 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 directors'
use of going concern basis of accounting in the preparation of the financial
statements is appropriate. Our evaluation of the validity of the directors'
assessment of the Group and Company's ability to continue to adopt the going
concern basis of accounting included;
· Evaluating management's future cash flow forecasts, the process
by which they were prepared, and assessed the calculations are mathematically
accurate;
· Challenging the underlying key assumptions such as expected cash
outflow for property operating and other operating expenses; and
· Obtained the letter of support from major shareholders and
assessed the capacity and willingness of stakeholders to provide the required
financial support
· Assessing the adequacy of the disclosures with respect to the
going concern assertion
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 and Company's ability to
continue as a going concern for a period of at least twelve months from the
date when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Independent auditor's report to the members of Black Sea Property PLC
(Continued)
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
financial 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 the directing of 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
therefore we do not provide a separate opinion on these matters.
Overall audit strategy
We designed our audit by determining materiality and assessing the risks of
material misstatement in the financial statements. In particular, we looked at
where the directors made subjective judgements, for example, valuation of
investment properties that involved making assumptions and considering future
events that are inherently uncertain. We also addressed the risk of management
override of internal controls, including evaluating whether there was any
evidence of potential bias that could result in a risk of material
misstatement due to fraud.
Based on our considerations as set out below, our areas of focus included:
• Valuation of investment properties
How we tailored the audit scope
Black Sea property Plc is an Isle of Man incorporated company and listed on
Aquis Stock Exchange. The group is property investment group, which seeks to
generate capital gains through the development, financing, and sale of
property in Bulgaria. The group engages Phoenix Capital Management JSC as
property investment advisor.
Our group audit was scoped by obtaining an understanding of the Group and its
environment, including Group's system of internal control and assessing the
risk of material misstatements in the financial statements. We also addressed
the risk of management of management override of internal controls, including
assessing whether there is evidence of bias by the directors that may have
represented a risk of material misstatement.
We sent group audit instructions to certain number of the group components.
The group audit instructions were sent for audit of complete financial
information of 2 components and audit procedures of specific balances of 7
components. As group auditor, we retained overall responsibility for the audit
of group financial statements. The components where audit of complete
financial information performed accounted for 98% of total revenue, 13% of
total assets and 17% of total liabilities before consolidation adjustments.
The components where audit procedure on specific balances performed accounted
for 2% of total revenue, 84% of total assets, 83% of total liabilities before
consolidation adjustments.
Components represent companies across the Group considered for audit scoping
purpose.
The directors control the affairs of the group and are responsible for the
overall investment property policy, which is determined by them. The board
has delegated certain responsibilities to Crowe Trust Isle of Man Limited and
Crowe Bulgaria ("the Administrators"). The company engages the administrators
to manage certain duties and responsibilities with regards to the management
of the group and its component.
The group financial statements, which remain the responsibility of the
directors, are prepared on their behalf by the administrator, Crowe Trust Isle
of Man Limited.
In establishing the overall approach to our audit we assessed the risk of
material misstatement at group level, taking into account the nature,
likelihood and potential magnitude of any misstatement. As part of our risk
assessment, we considered the group's interaction with the administrator, and
we assessed the control environment in place at the administrator.
Independent auditor's report to the members of Black Sea Property PLC
(Continued)
Materiality and audit approach
The scope of our audit is influenced by our application of materiality. We set
certain quantitative thresholds for materiality. These, together with
qualitative considerations, such as our understanding of the entity and its
environment, the history of misstatements, the complexity of the Group and the
reliability of the control environment, helped us to determine the scope of
our audit and the nature, timing and extent of our audit procedures and to
evaluate the effect of misstatements, both individually and on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the group
as €1,022,000 being 1% of the Group's Total Assets at 31 December 2024. We
have applied this benchmark because the group is primarily an investment
property group.
We have set Performance materiality for the group at €767,000 (75% of
materiality) having considered our prior year experience of the risk of
misstatements, business risks and fraud risks associated with the entity and
it's control environment, This is to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements in
the financial statements exceeds materiality for the financial statements as a
whole.
We agreed with the Directors that we would report to them misstatements
identified during our audit above triviality of €51,000 (5% of materiality),
as well as misstatements below that amount that, in our view, warranted
reporting for qualitative reasons.
Significant matters identified
The risks of material misstatement that had the greatest effect on our audit,
including the allocation of our resources and effort, are set out below as
significant matters together with an explanation of how we tailored our audit
to address these specific areas in order to provide an opinion on the
consolidated financial statements as a whole. This is not a complete list of
all risks identified by our audit.
Independent auditor's report to the members of Black Sea Property PLC
(Continued)
Key audit matters (Continued)
Significant Matter How the scope of our audit addressed the significant matter
Valuation of Investment property Our audit work included, but was not restricted to, the following:
· We obtained an understanding of the processes in place in
relation to valuation of investment properties and tested the design and
As detailed in note 9, the group owns investment properties with a fair value implementation of relevant controls.
of €48.3 million at 31 December 2024.
· We assessed the competency, independence, qualifications and
objectivity of the independent valuer to confirm that they are appropriately
qualified to value the properties.
The determination of the fair value of the investment properties is considered
to be a significant judgement as detailed in note 9 and we therefore · We reviewed the valuation reports to ensure that all valuations
considered this to be a significant audit risk and key audit matter. have been carried out in line with relevant professional standards and in
accordance with the group's accounting policy.
· We assessed and challenged the significant judgements used in the
The group engages independent valuers to determine the fair value of the valuations to ensure they are reasonable.
properties at the year end. The valuations consider the nature of the
property, its location and any comparable property transactions. The · We reviewed the appropriateness of the disclosures within the
valuations require the independent valuers to make significant professional group's financial statements in relation to the valuation methodology, key
judgements in relation to expected future cash flows, market capitalisation valuation inputs and valuation uncertainty.
yields and appropriate input information provided by the management in
relation to occupancy and rental values. Any inaccuracies in this input · We recalculated the movement in fair value based off revaluation
information or unreasonable judgements made in the valuations could result in reports, and agreed the movement posting to the financial statements.
a material misstatement in the group financial statements.
We completed our planned audit procedures, with no exceptions noted.
Independent auditor's report to the members of Black Sea Property PLC
(Continued)
Other information
Other information comprises information included in the annual report, other
than the financial statements and our auditor's report thereon, including the
Chairman's Statement and the Directors' Report. The directors are responsible
for the other information. 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.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies in the financial
statements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
financial statements
As explained more fully in the Directors' responsibilities statement,
management is responsible for the preparation of the financial statements
which give a true and fair view in accordance with UK-adopted IAS, and for
such internal control as directors determine necessary to enable the
preparation of financial statements are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing
the Group and the 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 management either intends to
liquidate the Group or the Company to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Group's
financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
The objectives of an auditor 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
their 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.
A further description of an auditor's 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.
Independent auditor's report to the members of Black Sea Property PLC
(Continued)
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
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. Owing to the inherent limitations of an audit, there is an
unavoidable risk that material misstatement in the financial statements may
not be detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The extent to which our procedures are capable
of detecting irregularities, including fraud is detailed below.
Based on our understanding of the Group and industry, we identified that the
principal risks of non-compliance with laws and regulations related to the
Data Privacy Act, and the listing regulations of Aquis Stock Exchange and we
considered the extent to which non-compliance might have a material effect on
the financial statements. We also considered those laws and regulations that
have a direct impact on the preparation of the financial statements such as
Isle of Man Companies Act 2006 and the taxation law. The Audit Principal
considered the experience and expertise of the engagement team to ensure that
the team had appropriate competence and capabilities to identify or recognise
non-compliance with the laws and regulation. We evaluated management's
incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls) and determined that
the principal risks were related to posting inappropriate journal entries to
manipulate financial performance and management bias through judgements and
assumptions in significant accounting estimates, in particular in relation to
significant one-off or unusual transactions. We apply professional scepticism
through the audit to consider potential deliberate omission or concealment of
significant transactions, or incomplete/inaccurate disclosures in the
financial statements.
The group engagement team shared the risk assessment with the component
auditors so that they could include appropriate audit procedures in response
to such risks in their work.
In response to these principal risks, our audit procedures included but were
not limited to:
· enquiries of management and board on the policies and procedures
in place regarding compliance with laws and regulations, including
consideration of known or suspected instances of non-compliance and whether
they have knowledge of any actual, suspected or alleged fraud;
· inspection of the Group's regulatory and legal correspondence and
review of minutes of board meetings and annual general meeting during the year
to corroborate inquiries made;
· gaining an understanding of the entity's current activities, the
scope of authorisation and the effectiveness of its control environment to
mitigate risks related to fraud;
· discussion amongst the engagement team in relation to the
identified laws and regulations and regarding the risk of fraud, and remaining
alert to any indications of non-compliance or opportunities for fraudulent
manipulation of financial statements throughout the audit;
· identifying and testing journal entries to address the risk of
inappropriate journals and management override of controls;
· designing audit procedures to incorporate unpredictability around
the nature, timing or extent of our testing;
· challenging assumptions and judgements made by management in
their significant accounting estimates, including valuation of investment
property and expected credit losses;
· review of the financial statement disclosures to underlying
supporting documentation and inquiries of management; and
· requested information from component auditors on instances of
non-compliance with laws or regulations that could give rise to a material
misstatement of the group financial statements.
Independent auditor's report to the members of Black Sea Property PLC
(Continued)
The primary responsibility for the prevention and detection of irregularities
including fraud rests with those charged with governance and management. As
with any audit, there remains a risk of non-detection or irregularities, as
these may involve collusion, forgery, intentional omissions,
misrepresentations or override of internal controls.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the company's members, as a body, in accordance
with the terms of engagement letter. 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.
Grant Thornton Limited
Douglas
Isle of Man
Date 30 June 2025
Consolidated Statement of Comprehensive Income for the year ended 31 December 2024
Note Year to Year to
31 Dec 24 31 Dec 23
€ €
Revenue 4) 4,013,057 1,629,379
Property operating expenses 4) (2,549,955) (1,260,397)
1,463,102 368,982
Fair value gain on revaluation of investment properties 9) 3,180,759 79,399
Fair value gain on financial assets at fair value through profit and loss 29) 257,806 335,901
3,438,565 415,300
Administration and other expenses 5) (2,116,186) (1,170,345)
Operating profit / (loss) 2,785,481 (386,063)
Other Income 6) 1,777,744 2,135,886
Bargain purchase 11) - 10,213,883
Write off of loans (60,841) (2,025)
Interest payable and similar charges 6) (2,341,512) (1,170,443)
Interest receivable and similar income 6) 266,944 119,237
Profit before taxes 2,427,816 10,910,475
Taxation 7) (383,258) (497,028)
Profit and total comprehensive income 2,044,558 10,413,447
Profit and total comprehensive income attributable to the:
- shareholders of the parent company 2,038,912 10,409,093
- non-controlling interest 5,646 4,354
Earnings per share
Basic and Diluted earnings per share (cents) 20) 0.08 0.54
The results are derived from continuing operations during the year.
The notes on pages 19 to 46 are an integral part of these consolidated
financial statements.
The financial statements were approved and authorised for issue by the Board
of Directors on 27 June 2025 and were signed on their behalf by:
Simon Hudd
Valentino Georgiev
Chairman
Director
Consolidated Statement of Financial Position as at 31 December 2024
Note 2024 2023
Non-current assets € €
Investment properties 9) 48,340,327 58,888,532
Intangible assets 10) 1,908,853 1,882,912
Tangible assets 12) 34,561,502 20,018,830
Long term deposit 27) 11,693 102,258
Loan receivable 28) - 2,754,689
Total non-current assets 84,822,375 83,647,221
Current assets
Trade and other receivables 13) 3,920,774 2,653,084
Short term Investment 29) 12,163,597 12,330,603
Cash and cash equivalents 14) 1,250,649 2,559,356
Total current assets 17,335,020 17,543,043
Total assets 102,157,395 101,190,264
Equity and liabilities
Issued share capital 18) 81,019,442 81,019,442
Retained earnings 19) (27,938,860) (29,977,772)
Foreign currency translation reserve 19) (1,533,086) (1,533,086)
Total equity, attributable to the shareholders of the parent company 51,547,496 49,508,584
Non-controlling interest 11) 1,008,954 1,003,308
Total equity 52,556,450 50,511,892
Liabilities
Non-current liabilities
Bank loans 16) 14,217,236 16,869,504
Trade and other payables 15) 1,708,923 2,000,852
Deferred tax liability 7) 3,152,676 2,869,332
Total non-current liabilities 19,078,835 21,739,688
Current liabilities
Trade and other payables 15) 2,428,819 1,850,981
Tax liability 13,925 80,950
Bank loans 16) 3,355,402 3,698,920
Shareholder loan 26) 24,723,964 23,307,833
Total current liabilities 30,522,110 28,938,684
Total liabilities 49,600,945 50,678,372
Total equity and liabilities 102,157,395 101,190,264
Number of ordinary shares in issue 18) 2,458,323,603 2,458,323,603
NAV per ordinary share (cents) 20) 2.10 2.01
The notes on pages 19 to 46 are an integral part of these consolidated
financial statements.
The financial statements were approved and authorised for issue by the Board
of Directors on 27 June 2025 and were signed on their behalf by:
Simon Hudd
Valentino Georgiev
Chairman
Director
Consolidated Statement of Changes in Equity for the year ended 31 December 2024
Share capital Retained earnings Foreign currency translation reserve Total equity attributable to the parent company Non-controlling interests Total
€ € € € € €
At 1 January 2023 70,699,442 (40,386,865) (1,533,086) 28,779,491 - 28,779,491
Issue of share capital 10,320,000 - - 10,320,000 - 10,320,000
Profit for the year - 10,409,093 - 10,409,093 - 10,409,093
Non-controlling interest - - - 0 1,003,308 1,003,308
Total comprehensive income 0 10,409,093 0 10,409,093 1,003,308 11,412,401
At 31 December 2023 81,019,442 (29,977,772) (1,533,086) 49,508,584 1,003,308 50,511,892
At 1 January 2024 81,019,442 (29,977,772) (1,533,086) 49,508,584 1,003,308 50,511,892
Profit for the year - 2,038,912 - 2,038,912 - 2,038,912
Non-controlling interest - - - - 5,646 5,646
Total comprehensive income - 2,038,912 - 2,038,912 5,646 2,044,558
At 31 December 2024 81,019,442 (27,938,860) (1,533,086) 51,547,496 1,008,954 52,556,450
The notes on pages 19 to 46 are an integral part of these consolidated
financial statements.
The financial statements were approved and authorized for issue by the Board
of Directors on 27 June 2025
and were signed on their behalf by:
Simon Hudd
Valentino Georgiev
Chairman
Director
Consolidated Statement of Cash Flows for the year ended 31 December 2024
Note 2024 2023
€ €
Operating activities
Profit before taxation 2,427,816 10,910,475
Fair value gain on revaluation of investment property 9) (3,180,759) (79,399)
Bargain Purchase on Acquisition 11) - (10,213,883)
Amortisation of intangible fixed assets 10) 114,508 48,001
Depreciation of property, plant and equipment 12) 446,520 27,519
Interest receivable 6) (266,944) (119,237)
Bad debt recovered 6) (827,269) (1,957,176)
Interest and similar charges payable 6) 2,341,512 1,170,443
Changes in working capital 1,055,384 213,257
(Increase)/Decrease in trade and other receivables (1,267,690) 17,261,922
Increase/(Decrease) in trade and other payables 569,253 (650,010)
Cash used in operations 356,947 16,398,655
Tax paid (450,283) (496,504)
Cash flows used in operating activities (93,336) 15,902,151
Investing activities
Investment property additions - (5,484,400)
Tangible fixed assets additions (3,351,784) -
Proceeds from sale of tangible fixed assets 2,091,556 -
Acquisition of intangibles (140,450) (142,499)
Acquisition of Subsidiaries 11) - (27,291,684)
Bad debt recovered 6) 827,269 1,957,176
Interest received 266,944 119,237
Long term deposit paid 90,565 (102,258)
Cash held by the acquired subsidiary 11) - 733,937
Short term investments 29) 167,006 (12,330,603)
Net cash (outflow) from investing activities (248,842) (42,541,094)
Financing activities
Proceeds from issuing share capital - 10,320,000
Loans repaid (241,096) (932,691)
Interest paid and other charges (2,341,512) (1,170,443)
Loans granted from shareholders 1,416,131 20,742,025
Net cash (outflow)/inflow from financing activities (1,464,213) 28,958,891
Net (decrease) / increase in cash and cash equivalents 14) (1,308,707) 2,319,947
Cash and cash equivalents at beginning of year 2,559,356 239,409
Cash and cash equivalents at end of year 14) 1,250,649 2,559,356
The notes on pages 19 to 46 are an integral part of these consolidated
financial statements.
The financial statements were approved and authorised for issue by the Board
of Directors on 27 June 2025
and were signed on their behalf by:
Simon Hudd
Valentino Georgiev
Chairman
Director
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
1) General information
Black Sea Property PLC (the "Company") was originally incorporated in Jersey
on 27 January 2005 and re-domiciled to the Isle of Man with effect from 20
July 2016 and continues under the Isle of Man Companies Act 2006 with
registered number 013712V.
The Company seeks to generate capital gains through the development, financing
and sale of property in Bulgaria, including the prime areas of Bulgaria's
Black Sea coast, the ski resorts and the capital, Sofia. The financial
statements represent the financial position and effects of the operations of
the Company and its subsidiaries (collectively referred as the "Group").
Black Sea Property Plc is an entity listed on the Aquis stock exchange.
Aquis is a primary and secondary market for equity and debt securities.
2) Summary of material accounting policies
a) Basis of preparation
The principal accounting policies applied in the preparation of the
consolidated financial statements are set out below. These policies have been
consistently applied throughout the year, unless otherwise stated.
The consolidated financial statements have been prepared on a going concern
basis under the historical-cost convention as modified by the revaluation of
financial assets held at fair value through profit or loss and investment
properties that have been measured at fair value.
Statement of compliance
The consolidated financial statements have been prepared in accordance with
the UK-adopted International Accounting Standards ("IASs") and International
Financial Reporting Interpretations Committee ("IFRIC") interpretations as
applicable to an Isle of Man company under the Isle of Man Companies Act 2006.
Use of estimates and judgements
The preparation of financial statements in conformity with IASs requires the
Directors to make judgements, estimates and assumptions that affect the
reported amounts of assets, liabilities, income and expenses. These estimates
and associated assumptions are based on historical experience and various
other factors, which are believed to be reasonable under the circumstances,
and are reviewed on an on-going basis. The Directors believe that the
estimates utilised in preparing its financial statements are reasonable and
prudent. Actual results could differ from these estimates. The most
significant accounting estimate affecting the financial statements is the
valuation of investment property and debtors (see note 3).
b) Standards and amendments which are first effective for the
period beginning 1 January 2024
· Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current
· Amendments to IAS 1 Presentation of Financial Statements:
Non-current Liabilities with Covenants
· Amendments to IFRS 16 Leases: Lease Liability in a Sale and
Leaseback
· Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures: Supplier Finance Arrangements
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
None of the above listed amendments have had a significant effect on the
financial statements. All other standards or amendments to standards that have
been issued by the UK endorsement board, and are effective from 1 January
2024, onwards are not applicable or material to the Group.
c) New standards, amendments and interpretations issued but not
yet effective and not early
adopted
A number of new standards are effective for annual periods beginning after 1
January 2025 and earlier application is permitted; however, the Group has not
early adopted the new or amended standards in preparing these consolidated
financial statements.
· Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates: Lack of Exchangeability (effective 1 January 2025)
· Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9, Financial Instruments and IFRS 7, Financial
Instruments: Disclosures) (effective 1 January 2026)
· Amendments to IFRS 9 and IFRS 7: Contracts Referencing
Nature-dependent Electricity (effective 1 January 2026)
· IFRS 18 Presentation and Disclosure in Financial Statements
(effective 1 January 2027)
· IFRS 19 Subsidiaries without Public Accountability: Disclosures
(effective 1 January 2027)
· Annual improvements to IFRS Accounting Standards (Volume 11)
(effective 1 January 2026)
Management anticipates that all relevant pronouncements will be adopted for
the first period beginning on or after the effective date of pronouncement.
New standards, amendments and interpretations not adopted in the current year
have not been disclosed as they are not expected to have a material impact on
the group financial statements except for IFRS 18 which will enhance the
presentation and disclosure of financial information to include the
comparability and transparency particularly regarding the consolidated
statement of comprehensive income. The Directors are still assessing the
impact of IFRS18.
d) Basis of consolidation
The financial statements comprise the results of the Company and its
subsidiaries as set out in note 17. Subsidiaries in which the Company has the
ability to exercise control are fully consolidated. Control is defined as
having exposure, or rights, to variable returns due to involvement in an
investee and the ability to affect those returns.
Inter-company transactions, balances and unrealized gains and losses on
transactions between Group companies are eliminated. The amounts reported in
the financial statements of subsidiaries have been adjusted where necessary to
ensure consistency with the accounting policies adopted by group.
e) Going concern
As of the reporting date the group has reported an operating profit of EUR
1.58m (2023: loss of EUR 0.38m), net profit in the year of EUR 2.04m (2023:
10.41m). The group's current liabilities exceed its current assets by EUR
13.2m.
The group is renovating and developing its properties. The expectations of the
management are that after the completion of the renovation works, the
investment properties will be recognized as a significant investment project,
which is expected to generate income in the medium-term future and lead to
stability in the financial position of the group. In addition, there are two
signed license and management agreements with Nobu Hospitality, which will
start two new projects - one in Varna and one in Sofia, which will attract
customers and make profit for the group in the foreseeable future.
Included in the groups current liabilities are shareholders loans of EUR 24.7m
(2023: EUR23.3m). Excluding the shareholders loans, the group has net current
assets of EUR 11.6m.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
e) Going concern (Continued)
The major shareholders of the parent company have undertaken to provide the
financial supports to the group to secure its functioning as a going concern
and within its normal capacity for a period of at least 14 months from the
date of signing the financial statements for the year ended 31 December 2024.
The Directors are therefore, satisfied that the group has sufficient resource
available along with support from major shareholders who have sufficient
liquid resource to provide financial support to the group. Given this the
Directors have a reasonable expectation that the group will continue in
operational existence in the foreseeable future, and for a period of at least
12 months from the date of signing these financial statements. Therefore,
financial statements have been prepared on a going concern basis.
f) Functional and presentation currency
Since January 1, 1999, the exchange rate of the Bulgarian Lev (BGN) has been
fixed to the Euro (EUR). The exchange rate is BGN 1.95583 / EUR.
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The consolidated financial
statements are presented in Euros, which is the Parent Company's
presentational currency. The functional currency of each entity within the
Group is a key judgement of management and the Directors. This judgement
prioritizes primary factors, such as the source of competitive forces and the
denomination of sales prices and input costs, over secondary considerations
such as the source of financing, in accordance with IAS21. These
considerations indicate that the functional currency of the Bulgarian entities
is Bulgarian Lev and the functional currency of the parent company and other
subsidiaries are the Euro. Amounts are rounded to the nearest Euro unless
otherwise stated.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognized in the
Consolidated Statement of Comprehensive Income. Non-monetary items carried at
fair value, which are denominated in foreign currencies, are translated at the
rates prevailing at the date when the fair value was determined, and the gain
or loss is recognized in the Consolidated Statement of Comprehensive Income.
(iii) Foreign operations
The results and financial position of all the foreign entities (none of which
has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
· assets and liabilities are translated to Euro at exchange rates
at the reporting date;
· income and expenses are translated at average exchange rates
(unless this average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the dates of the transactions); and
· all resulting exchange differences are recognised as a separate
component of Other Comprehensive Income.
When a foreign operation is sold, such exchange differences are recognised in
the Consolidated Statement
of Comprehensive Income as part of the gain or loss on sale.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
g) Fair value measurement principles
The Group measures its investments in properties at fair value. Fair value is
the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either
in the principal market for the asset or liability or, in the absence of a
principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Group.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest. The
fair value for financial instruments traded in active markets at the reporting
date is based on their mid quoted price or binding dealer price quotations,
without any deduction for transaction costs. Securities defined in these
accounts as 'listed' are traded in an active market.
The valuations of investment properties are performed by an external
accredited independent valuer with recognised and relevant professional
qualifications and with recent experience in the location and category of
the investment property being valued. The valuations are prepared in
accordance with the RICS Valuation - Global Standards, which incorporate the
International Valuation Standards ("IVS") and the RICS UK Valuation standards
(the "RICS Red Book"), as set out by the International Valuation Standards
Council ("IVSC"), taking into consideration the relevant IFRS 13 requirements.
In arriving at their estimates of market values, the valuers have used their
market knowledge and professional judgement and not only relied on historical
transactional comparables. Properties are valued annually.
All assets and liabilities for which fair value is measured or disclosed in
the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to
the fair value measurement as a whole:
· Level 1 - Quoted (unadjusted) market prices in active markets for
identical assets or liabilities.
· Level 2 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or indirectly
observable.
· Level 3 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
h) Impairment of financial assets
The Group assesses at each reporting date whether a financial asset is
impaired. A financial asset is deemed to be impaired if, and only if, there is
objective evidence of impairment as a result of one or more events that have
occurred after the initial recognition of the asset and that loss event has an
impact on the estimated future cash flows of the financial asset that can be
reliably estimated.
If there is objective evidence that an impairment loss has been incurred, the
amount of the loss is measured as the difference between the assets' carrying
amount and the present value of estimated future cash flows discounted using
the asset's original effective interest rate.
i) Leased assets
As a lessor the Group classifies its leases as either operating or finance
leases. The Group assessed whether it transfers substantially all the risks
and rewards of ownership. Those assets that do not transfer substantially all
the risks and rewards are classified as operating leases. The Group has
currently not entered into any lease that is classified as a finance lease.
Rental income is accounted for on a straight-line basis over the lease term
and is included in revenue due to its operating nature.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
j) Interest and other income
Interest and other income are recognised on a receivable basis.
k) Revenue
Revenue comprises of camping reservations fees, restaurant income, income from
other tourist services, rentals, and other property income.
Revenue is measured by reference to the fair value of consideration received
or receivable payment, taking, taking into account the amount of any trade
discounts and volume rebates made by the group.
The main services provided by the group include tourist service for
accommodation in bungalows and caravans at Camping Gradina and rental of
objects located on the territory of the Camping.
Revenue is recognised as the group satisfies performance obligation by
transferring the services to its customers, as such the group recognise the
revenue at over the period of time when the group has satisfied its
performance obligation of providing services of renting the camp site.
Revenue related to a service transaction is recognized depending on the stage
of completion of the transaction at the balance sheet date and when the
outcome of the transaction can be reliably assessed. Revenue from rental
(tourist service and rental of objects) is recognized on the basis of the
straight-line method over the period of time. Where the reservation fees are
billed to the customers in advance, the unearned element of the fees billed
during the year is reported and carried forward as deferred income, in the
Consolidated Statement of Financial Position.
l) Expenses
The Group's property operating expenses, administration fees, interest payable
and similar charges and all other expenses are charged to the Consolidated
Statement of Comprehensive Income and are accounted for on an accrual basis.
Transaction costs directly attributable to the purchase of investment property
are included within the cost of the property.
m) Loans payable at amortised cost
Loans payable are recognised when cash is received from lenders and are
derecognised when the cash, and related interest, has been repaid. Loans
payable are initially recorded at fair value plus any directly attributable
transaction costs and are subsequently measured at amortised cost using the
effective interest method.
n) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash held at the bank, demand
deposits and bank overdrafts. Bank overdrafts are shown within borrowings /
loans in current liabilities.
Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and that are subject to an insignificant
risk of changes in value.
Blocked cash and cash equivalents are funds on which the company can operate
under certain conditions. Such assets are used by the Company as collateral
for its obligations.
o) Trade and other receivables
Trade receivables are non-derivative financial assets and amounts due from
customers for goods and services sold, with fixed or determinable payment
terms that are not quoted in an active market. The carrying value of trade
receivables approximates their fair values. A provision for impairment of
trade receivables is established when there is objective evidence that the
Group will not be able to collect all amounts due according to the original
terms of receivables.
p) Investment properties
Property that is held for rental yields or for capital appreciation or both is
classified as investment property. Investment property comprises freehold
land, freehold buildings, and land held under long term operating leases.
Investment property is measured initially at its cost, including related
transaction costs and subsequently revalued annually to fair value. Any gain /
loss from change in the fair value or from sale of investment property is
recognised immediately in the Consolidated Statement of Comprehensive Income
within fair value 'gain / loss on revaluation of investment properties.
Investment property that is being redeveloped for continuing use as investment
property or for which the market has become less active continues to be
measured at fair value.
Investment properties are accounted for on completion of contract when
ownership is recorded in the trade registry.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
q) Fixed assets investments
A subsidiary is an entity controlled by the company. Control is the power to
govern the financial and operating policies of the entity so as to obtain
benefits from its activities. The consolidated financial statements
incorporate the results of business combinations using the acquisition method.
In the statement of financial position, the acquirer's identifiable assets,
liabilities and contingent liabilities are initially recognised at their fair
values at the acquisition date. The results of acquired operations are
included in the Consolidated Statement of Comprehensive Income from the date
on which control is obtained. They are deconsolidated from the date on which
control ceases. The group attributes total comprehensive income or loss of
subsidiaries between the owners of the parent and the non-controlling
interests based on their respective ownership interests.
An associate is an entity, being neither a subsidiary nor a joint venture, in
which the company holds a long-term interest and where the company has
significant influence. The company considers that it has significant influence
where it has the power to participate in the financial and operating decisions
of the associate. Investment in associates is initially recognised in the
consolidated statement of financial position at cost. Subsequently associates
are accounted for using the equity method, where the Group's share of
post-acquisition profits and losses and other comprehensive income is
recognised in the Consolidated Statement of Comprehensive Income (except for
losses in excess of the Group's investment in the associate unless there is an
obligation to make good those losses).
r) Tangible fixed assets - property, plant and equipment
Property, plant and equipment and land and buildings are initially measured at
cost and subsequently measured at cost net of depreciation and any impairment
losses. Property, plant and equipment and buildings are depreciated when
available for use.
Depreciation is recognised so as to write off the cost of assets less their
residual values over their useful lives on the following bases:
Property 25 years on a straight-line basis.
Plant and equipment 3 - 6 years on a straight-line basis.
The gain or loss arising on the disposal of an asset is determined as the
difference between the sale
proceeds and the carrying value of the asset, and is credited or charged to
Consolidated Statement of Comprehensive Income. Depreciation is included
within 'Administration and other expenses' within the Consolidated Statement
of Comprehensive Income.
s) Tangible fixed assets - assets under construction
Assets under construction are initially measured at cost and comprises actual
cost relating to the construction. Assets under construction are not
depreciated.
As of 31 December 2024, the assets in the tangible fixed assets include a
property transferred from the Investment Properties category, which is
undergoing renovation and finishing works to be adapted for its new intended
use. Therefore, the property has not yet been put into use and is not being
depreciated.
t) Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax not recognised in other comprehensive income or directly in equity.
Current tax is payable on taxable profits for the year. Taxable profit differs
from net profit as reported in the Consolidated Statement of Comprehensive
Income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the reporting date.
Current taxes include irrecoverable withholding tax on the interest receivable
on loans from the Company to its Bulgarian subsidiaries.
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the reporting date, where transactions or
events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the reporting date. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be sufficient profits from which the future
reversal of the temporary differences can be deducted.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
u) Trade and other payables
Trade and other payables are recognised at amortised cost and relate to
amounts accrued in the normal course of business.
v) Share capital and reserves
Ordinary share capital
Ordinary shares are classified as equity. External costs directly attributable
to the issue of new shares are deducted from the proceeds of issue and shown
as a deduction to reserves.
Founder shares
Founder shares are classified as equity.
Foreign currency translation reserves
Comprise foreign currency translation differences arising from translation of
financial statements of the Group's foreign entities' activities into Euro.
The Bulgarian lev is pegged to the Euro in the ratio of 1 EUR = 1.95583 BGN.
Retained earnings
Retained earnings includes all the current and prior year retained profit /
loss net of any dividends paid.
w) Acquisition of businesses
The acquisition method of accounting is used to account for business
combinations by the Group.
The consideration transferred for the acquisition of a subsidiary comprises
the fair value of the assets transferred, the liabilities incurred and the
equity interests issued by the Group. The consideration transferred also
includes the fair value of any contingent consideration arrangement and the
fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred. The bargain purchase is
the amount by which the fair value of assets acquired and liabilities assumed
exceeds purchase consideration and is recognised in Consolidated Statement of
Comprehensive Income.
x) Disposal of businesses
When the Group loses control over a subsidiary, it derecognizes the assets and
liabilities of the subsidiary, and any related NCI and other components of
equity. Any resulting gain or loss is recognised in Consolidated Statement of
Comprehensive Income.
y) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another.
(i) Financial assets
Financial assets are classified at initial recognition. The classification of
financial assets at initial recognition that are debt instruments depends on
the financial asset's contractual cash flow characteristics and the Group's
business model for managing them. The Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs. Short term investments are
classified at financial assets at fair value through profit and loss.
In order for a financial asset to be classified and measured at amortised cost
or fair value through other comprehensive income ("OCI"), it needs to give
rise to cash flows that are solely payments of principal and
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(i) Financial assets (continued)
interest ("SPPI") on the principal amount outstanding. This assessment is
referred to as the SPPI test and is performed at an instrument level.
Financial assets at fair value through profit and loss are subsequent measured
at fair value. Net gains and losses, including interest and dividend income,
are recognized in profit or loss, except for derivatives designated as hedging
instruments for which hedge accounting applies.
Financial assets at amortised cost are subsequently valued at amortized cost
using the effective interest method.
Classification and measurement are based on both whether contractual cash
flows are solely payments of principal and interest; and whether the debt
instrument is held to collect those cash flows. In the case of the Company or
Group, all financial assets meet these criteria and so are held at amortised
cost.
Impairment of financial assets
IFRS 9's impairment requirements use more forward-looking information to
recognise expected credit losses ("ECLs") - the ECL model.
ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to
receive, discounted at the original effective interest rate ("EIR").
The expected cash flows will include cash flows from the sale of collateral
held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12 months (a '12-month ECL'). For those credit
exposures for which there has
been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of
the exposure, irrespective of the timing of the default (a 'lifetime ECL').
For trade receivables and contract assets, the Group applies a simplified
approach in calculating ECLs. Therefore, the Group does not track changes in
credit risk, but instead recognises a loss allowance based on lifetime ECLs at
each reporting date.
It is the Group's policy to measure ECLs on such instruments on a 12-month
basis.
(ii) Financial liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at amortised cost. The Group's financial liabilities include trade
and other payables and loans.
Subsequent measurement
Loans and borrowings and trade and other payables.
After initial recognition, interest-bearing loans and borrowings and trade and
other payables are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss and OCI when the
liabilities are derecognised, as well as through the EIR amortisation process.
Amortised cost is calculated by considering any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the Consolidated Statement of
Comprehensive Income and other comprehensive income. This category generally
applies to trade and other payables.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
(ii) Financial liabilities (continued)
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the Consolidated Statement of
Comprehensive Income and other comprehensive income.
z) Intangible assets
Intangible assets include the rights under a concession agreement of 20 and 5
years and also licenses and software.
Concession agreements are accounted for using the cost model. The cost
comprises discounted cash flows of the future payment according to the
concession agreements.
Software and other intangibles have a useful life of upto 5 years and are
amortised on a straight line basis. Amortisation is included within 'Property
operating cost' within the Consolidated Statement of Comprehensive Income.
After initial recognition, an intangible asset is carried at its cost less any
accumulated amortization and any accumulated impairment losses. Impairment
losses are recognised in the Consolidated Statement of Comprehensive Income
for the respective period.
Subsequent expenditure on an intangible asset after its purchase or its
completion is expensed as incurred unless it is probable that this expenditure
will enable the asset to generate future economic benefits in excess of its
originally assessed standard of performance and this expenditure can be
measured reliably and attributed to the asset. If these two conditions are
met, the subsequent expenditure is added to the carrying amount of the
intangible asset.
The remaining amortization period of the concession agreements held by Camp
South Beach EOOD and Lazuren Bryag 91" EOOD is 16 years. The license acquired
by GHV Dolphins has a useful life of 20 years as at year-end.
aa) Loan receivables
Loan receivables are non-derivative financial assets with fixed or
determinable payments that are no quoted in an active market and are
recognised in the balance sheet at amortised cost.
ab) Interest and borrowing costs
Interest expenses are reported on an accrual basis using the effective
interest rate method.
Borrowing costs primarily comprise interest on the Group's borrowings.
Borrowing costs directly attributable to the acquisition, construction of
production of a qualifying asset are capitalized during the period of time
that is necessary to complete and prepare the asset for its intended use or
sale. Other borrowing costs are expensed in the period in which they are
incurred and reported in the Consolidated Statement of comprehensive income
within 'interest payable and similar charges.
ac) Provisions, contingent liabilities and contingent assets
Provisions are measured at the estimated expenditure required to settle the
present obligation, based on the most reliable evidence available at the
reporting date, including the risks and uncertainties associated with the
present obligation. Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. Provisions are discounted to
their present values, where the time value of money is material.
Any reimbursement that the Group is virtually certain to collect from a third
party with respect to the obligation is recognised as a separate asset.
However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of
present obligations is not probable. Such situations are disclosed as
contingent liabilities unless the outflow of resources is remote.
3) Significant accounting judgements, estimates and assumptions
The preparation of the Group's financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts
recognised in the financial statements and disclosure of contingent
liabilities. However, uncertainty about these assumptions and estimates could
result in outcomes that could require a material adjustment to the carrying
amount of the asset or liability affected in future periods.
The Group based its assumptions and estimates on parameters available when the
financial statements were prepared. However, existing circumstances and
assumptions about future developments may change due to market changes or
circumstances arising beyond the control of the Group. Such changes are
reflected in the assumptions when they occur.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
3) Significant accounting judgements, estimates and
assumptions (Continued)
A key judgement area for the Group is the valuation of investment properties.
External independent valuers assessed the fair value of investment properties.
The valuations are performed by a recognised valuer with a relevant
professional qualification and recent experience in the location and category
of the investment properties as described in note 2g. These valuations are
based on income and market approach and primarily include unobservable inputs:
the estimated rental value, cashflows, the discount rate, and adherence to
specific legal and regulatory requirements. Details of investment properties
held at fair value can be found in note 9.
The investment properties are valued annually. The Directors consider any
relevant movements in property markets that may impact the carrying values of
the property held between the date of the last valuation
and the date of financial statements.
Expected Credit Losses (ECL) represents an estimate of potential losses that
may arise from defaults over the expected life of a financial instrument. The
calculation of ECL involves considerable uncertainty and requires management
to make complex judgments about future economic conditions and credit
behavior, such as the likelihood of borrowers defaulting and the resulting
losses. As such, actual results could differ from these estimates.
4) Net operating income
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Camping reservations, hospitality services, restaurant income and tourist 2,991,434 1,308,384
services
Rental and other property income 1,021,623 320,995
Property operating expenses (2,549,955) (1,260,397)
1,463,102 368,982
Income during the year is primarily due to camping reservations and restaurant
income from Camp South Beach EOOD and Lazuren Bryag 91 EOOD, rental and other
property income earned by other subsidiaries of the group. All the revenue is
recognised over time when the services is transferred and generated from
subsidiaries in Bulgaria.
5) Administration and other expenses
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Directors' remuneration 67,509 117,568
Administration fees - Isle of Man 147,599 179,620
Legal and professional fees 393,118 627,941
Auditors' remuneration 100,213 55,937
Foreign currency expenses 7,961 9,136
Other administration and professional fees 838,758 170,850
Depreciation expense and amortization 561,028 9,293
2,116,186 1,170,345
In 2024, key management personnel comprise the Board (2023: The Board). The
parent company's Board of Directors' compensation comprised Directors' fees
only during the year, the amount of which is summarized within the Directors'
Report.
The average monthly number of persons (including directors) employed by the
company during the year was: 3 (2023: 4). The average monthly number of
persons (including directors) employed by the group during the year was 74
(2023: 74).
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
6) Interest and other income receivable and payable
The following amounts have been included in the Consolidated Statement of
Comprehensive Income line for the reporting periods presented:
Interest receivable and other income Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Interest income - cash and deposit instruments 266,944 119,237
Bad debts recovered 827,269 1,957,176
Others 950,475 178,710
2,044,688 2,255,123
Year ended 31 Dec 2024 Year ended 31 Dec 2023
Interest payable and similar charges € €
Interest expense on borrowings* 411,927 698,160
Other 1,929,585 472,283
2,341,512 1,170,443
*The interest on borrowings relates mainly to the secured debt funding (note
16).
7) Taxation
Isle of Man
There is no taxation payable on the Parent Company's or its Jersey
subsidiaries' results as they are based in the Isle of Man and in Jersey
respectively where the tax rates are 0% (2023: 0%).
Bulgaria
Subsidiaries of the Company incorporated in Bulgaria are taxed in accordance
with the applicable tax laws of Bulgaria. The Bulgarian corporate tax rate for
the year was 10% (2023: 10%).
Tax losses can be carried forward and set off against future taxable profits.
The company cannot reliably determine the amounts and realisation periods of
future taxable profits due to uncertainty in the environment in which it
operates. As a result, no deferred tax asset has been recognised on tax losses
carried forward as at 31 December 2024 and as at 31 December 2023.
Losses for which no tax assets have been recognised total € 3,037,594 (2023:
€ 2,960,380).
A reconciliation of the tax charge for the year to the standard rate tax for
the Isle of Man of 0% (2023: 0%) is shown below.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
7) Taxation (continued)
Year ended Year ended
31 Dec 2024
31 Dec 2023
€ €
Profit before tax 2,427,816 10,910,475
Profit on ordinary activities multiplied by the standard rate in the Isle of - -
Man of 0% (2023: 0%)
Effect of different tax rates in different countries 65,182 30,935
Deferred tax liability on fair value uplift of investment property 318,076 466,093
Current charge for the year 383,258 497,028
Bulgarian tax losses brought-forward at 10% (347,840) (183,943)
Tax losses added, utilised and lost in the year 180,925 (163,897)
Bulgarian tax losses carried-forward at 10% (166,914) (347,840)
Deferred tax liability
Opening deferred tax liability balance 2,869,332 2,407,965
Deferred tax liability on fair value uplift of investment property on - -
Acquisition/(disposal) of a subsidiary
Bulgarian deferred tax liability charge (34,732) (4,726)
Deferred tax movement on fair value uplift of investment property 318,076 466,093
Closing deferred tax liability balance 3,152,676 2,869,332
An analysis of the temporary differences is shown below.
Year ended Year ended
31 Dec 2024
31 Dec 2023
€ €
Receivables 47,048 55,152
Depreciation of fixed assets 20,790 8,682
Investments fair value movements 34,811 2,000
Other timing differences 30,886 41,686
Property fair value movements (3,286,210) (2,976,852)
Deferred tax liability (3,152,676) (2,869,332)
8) Leases
The Group leases out investment properties under operating leases consisting
of certain properties (see Note 9).
The lease contracts are all non-cancellable for five years from the
commencement of the lease.
Maturity analysis of future operating lease rentals are as follows:
Within 1 year 1-2 years 2-5 years After 5 years Total
€ € € € €
31 December 2024 1,054,895 1,130,948 208,215 - 2,394,058
31 December 2023 906,660 1,276,311 52,000 - 2,234,971
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
9) Investment properties
Investment properties includes real estate properties in Bulgaria which we are
owned to earn rentals and for capital appreciation.
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Fair value non-financial assets: Level 3
Beginning of year 58,888,532 47,517,500
Additions - (note 11) - 5,318,900
Additions - 5,484,400
Transfers to tangible fixed assets - (note 12) (13,728,964) 488,333
Fair value adjustment 3,180,759 79,399
At end of year 48,340,327 58,888,532
BSPF Bulgaria EAD (Ivan Vazov 1 Building) - 12,710,332
Camp South Beach EOOD (CSB) 17,100,000 16,820,000
CSB - additional plots 5,900,000 5,725,000
BSPF Project 1 EAD (Byala Land) 11,240,000 11,040,000
Star Mill 8,210,710 7,274,300
Lazuren Bryag 91" EOOD - Acquisition (note 11) 5,889,617 5,318,900
Total investment property 48,340,327 58,888,532
Fair value determination:
The valuations of the other Group properties at 31 December 2024 and 31
December 2023 were based on the most recent independent valuation received for
each property. The valuations were performed by external accredited
independent valuers with recognised professional qualifications and with
recent experience in the location and category of the investment properties
being valued.
The fair value of completed investment property has been determined on a
market value basis in accordance with the RICS "Red Book". In arriving at
their estimates of market values, the valuers have used their market knowledge
and professional judgement, historical transactional comparable and discounted
cash flow forecasts. The highest and best use of the investment properties is
not considered to be different from its current use.
The Group's investment properties are measured at fair value based on a
valuation performed by an independent external valuer. Due to limited market
data and the property's development status, the residual method was used. The
valuation is based on various unobservable inputs. This approach is classified
as a Level 3 fair value measurement under IFRS 13.
The Byala Land properties, and CSB properties along with additional plots were
all evaluated by Cushman & Wakefield Forton, an independent professional
valuation specialist.
In 2024, Ivan Vazov 1 Building was reconstructed in order to change its use.
As a result and in accordance with the business development plans, the
property has been transferred to tangible fixed assets.
The Byala Land properties and the CSB properties with additional plots were
valued as at 31 December 2024. The CSB properties are also pledged as
security to Central Cooperative Bank against the company's investment loans
and overdraft positions (note 16).
All valuations were based on expected rental income or cash flows, net of
operating expenses, and capitalised using a discount rate reflecting the
market yield from recent transactions of similar properties.
These valuations are based on income and market approach and primarily include
unobservable inputs: the estimated rental value, cashflows, the discount rate,
and adherence to specific legal and regulatory requirements.
Sensitivity Analysis
The fair value of the Group's investment properties has been determined on a
market value basis, in accordance with the RICS Valuation - Global Standards
(the "Red Book"). These valuations are sensitive to changes in capitalization
rates.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
9) Investment properties (Continued)
If capitalization rates were 0.5% lower, the fair value would increase by
approximately €2.7m. If capitalization rates were 0.5% higher, the fair
value would decrease by approximately €2.4m.
These sensitivities are indicative only and assume all other variables remain
constant.
As of 31 December 2024, the Directors' valuation determined the carrying value
of both the Star Mill and Lazuren Bryag properties. Star Mill is secured
against the company's bank loans with UniCredit Bulbank AD, while Lazuren
Bryag is collateral for the company's investment loans and overdrafts with
Central Cooperative Bank (note 16).
10) Intangible assets
Concessions:
At the end of 2020, after participating in an open concession award procedure,
the Group through Camping South Beach received the concession rights over the
sea beach "Camping Gradina". During the active summer season of 2021, the
beach was managed by CSB under the terms of a lease agreement. The concession
agreement entered into force on 17 October 2020, and at the beginning of 2021
the handover of the sea beach by the grantor Ministry of Tourism to the
concessionaire was carried out. The term of the contract is 20 years.
The concession contract of CSB grants the right to operate the sea beach,
performing alone or through subcontractors providing visitors to the sea beach
of the following services: beach services, including the provision of
umbrellas and sunbeds, services in fast food restaurants, sports and
entertainment services, water attraction services, health and rehabilitation
services and other events, after prior agreement with the grantor. A condition
for operation of the concession site is the implementation of mandatory
activities, which include provision of water rescue activities, security of
the adjacent water area, health and medical services for beach users, sanitary
and hygienic maintenance of the beach, maintenance for use of the elements of
the technical infrastructure, the temporary connections, the movable objects,
the facilities and their safe functioning.
In 2020 the Group paid the first due concession fee, which provides the period
from the date of entry into force of the concession agreement until the end of
the same calendar year and the period from January 1 of the last calendar year
in which the concession agreement is valid until the date upon expiration of
the contract.
According to the financial model presented by the Company, which is accepted
by the grantor and is an integral part of the concession agreement, for the
concession period the Group will make additional investments related to the
implementation of mandatory activities and investments to improve access to
the beach. After the expiration of the concession contract, all constructed
sites remain the property of the grantor. The activities related to the
operation of the concession site are performed by the concessionaire at his
risk and at his expense.
Lazuren Bryag holds two concession contracts, with a carrying value of
€1,243,702 (2023: €1,324,551) as at the year end.
The first concession contract was granted by the Ministry of Tourism in 2020
and grants the right to operate the sea beach "Varna - central" in the city of
Varna. The concession contract is valid for a period of twenty years.
The second concession contract in addition, Lazuren Bryag was signed in 2022
and permits the company to rent the sea beach "Ribarski - West" and sea beach
"Fisherman - East". The contract is valid for a period of five years.
Guarantees have been issued in relation to the concession agreements (See note
22).
License:
As of December 31, 2024, GHV Dolphins has contractual obligations related to
the acquisition of a trademark license, under which the licensee is required
to operate a restaurant named "NOBU Varna" and maintain the property in
accordance with the brand's standards.
The amortisation expense has been included with in property operating expenses
in the Consolidated Statement of Comprehensive Income.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
10) Intangible assets (Continued)
Year ended 31 Dec 2024 Concessions Licences Software Total
€ € € €
Cost
Cost at the beginning of the year 2,269,149 - 11,182 2,280,331
Additions - 140,450 - 140,450
Cost at the end of the year 2,269,149 140,450 11,182 2,420,781
Accumulated amortization
Accumulated Amortization at the (387,426) - (9,994) (397,420)
Beginning of the year
Amortization (113,458) - (1,050) (114,508)
Accumulated amortization at the (500,884) - (11,044) (511,928)
end of year
Net book value at the end of 1,768,266 140,450 138 1,908,853
Year 31 December 2024
Net book value at the end of 1,881,723 - 1,188 1,882,911
Year 31 December 2023
Year ended 31 Dec 2023 Concessions Licences Software Total
€ € € €
Cost
Cost at the beginning of the year 788,626 - 11,182 799,808
Reclassification 142,499 - - 142,499
Lazuren Bryag - Acquisition (note 11) 1,338,024 - - 1,338,024
Cost at the end of the year 2,269,149 - 11,182 2,280,331
Accumulated amortization
Accumulated Amortization at the (341,160) - (8,260) (349,420)
Beginning of the year
Amortization (46,266) - (1,734) (48,000)
Accumulated amortization at the (387,426) - (9,994) (397,420)
end of year
Net book value at the end of 1,881,723 - 1,188 1,882,911
Year 31 December 2023
Net book value at the end of 447,468 - 2,922 450,390
Year 31 December 2022
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
11) Acquisition of a subsidiary
On 2 November 2023, the Company acquired 99.4% of the share capital of
Littoral Invest EAD including all its assets and liabilities. The
consideration for this acquisition was €4,501,000. Littoral Invest EAD own
100% of the share capital of Lazuren Bryag 91 EOOD.
The fair value of the net identifiable assets acquired totaled €7,993,925
(net of NCI € 95,864)
On 6 November 2023, the Company through its owned subsidiary, BSPF (Property
2) Limited, acquired 82.04% of the share capital of Grand Hotel Varna AD,
including all its assets and liabilities. As part of the same agreement, the
Company through its owned subsidiary Littoral Invest EAD acquired a further
16.23% of the share capital of Grand Hotel Varna AD, bringing the total share
capital held to 98.17%. Grand Hotel Varna AD owns 100% of the share capital of
GHV Dolphins EAD, a company incorporated in Bulgaria. The consideration for
this acquisition was €22,790,684.
The fair value of the net identifiable assets acquired totaled €29,511,642
(net of NCI €903,090)
The fair value of the identifiable assets and liabilities acquired were:
Pre- acquisition carrying value Fair value adjustments Recognised value on acquisition
€ € €
Investment property (note 9) 2,204,051 3,114,849 5,318,900
Plant and equipment 4,033,799 15,982,931 20,016,730
NCI at acquisition (998,954) - (998,954)
Intangible assets 1,615,787 (277,763) 1,338,024
Loan receivable 2,831,513 - 2,831,513
Short term investment 12,330,603 - 12,330,603
Trade and other receivables 1,253,231 - 1,253,231
Deferred tax asset 86,369 - 86,369
Cash and cash equivalents 733,937 - 733,937
Trade and other payables (3,783,324) - (3,783,324)
Bank loans (1,621,463) - (1,621,463)
Total net identifiable assets 18,685,550 18,820,017 37,505,567
Purchase consideration transferred - cash 27,291,684
Bargain purchase on acquisition (10,213,883)
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
12) Tangible fixed assets
Year ended 31 Dec 2024 Plant and other equipment Land and Buildings Assets under construction Total
€ € €
€
Cost
Cost at the beginning of the year 195,177 19,862,879 6,194 20,064,250
Additions during the year 131,895 2,720,583 499,306 3,351,784
Disposals during the year (120,836) (1,970,720) - (2,091,556)
Transfers out - (2,064,131) 2,064,131 -
Transfer from investment property 1,018,632 12,710,332 - 13,728,964
Cost at the end of the year 1,224,868 31,258,943 2,569,631 35,053,442
Accumulated depreciation
Accumulated depreciation at the beginning of the year 45,420 - - 45,420
Depreciation 562,310 5,046 - 567,356
Disposals (120,836) - - (120,836)
Accumulated depreciation at the end of year 486,894 5,046 - 491,940
Net book value at the end of year 31 December 2024 737,974 31,253,896 2,569,631 34,561,501
Net book value at the end of year 31 December 2023 149,757 19,862,879 6,194 20,018,830
a) In 2024, the BSPF Bulgaria EAD initiated active steps on a project to
change the purpose of its existing administrative building, previously
recognized as an investment property, into a hotel and restaurant. In
accordance with IAS 40 Investment Property, if an entity owns and operates a
hotel, the services provided to guests are considered a significant component
of the overall arrangement. Therefore, an owner-operated hotel is regarded as
an owner-occupied property, rather than an investment property.
Accordingly, the Group reclassified the real estate assets previously treated
as investment property under IAS 40 to property, plant, and equipment (PPE)
under IAS 16.
As of 31 December 2024, the BSPF Bulgaria EAD is in the process of obtaining
the necessary permits to carry out the aforementioned changes so that the
building complies with all requirements for its new designated use as
determined by management. Therefore, the property-including land and building,
as well as all subsequent expenditures incurred by the end of the year in
connection with launching the new project-is presented in this report under
the category "Assets under construction."
Part of the contractual arrangements related to this project involve the
acquisition of a license, which will be recognized as an intangible asset upon
completion of the project. The remaining costs will be recognized as property,
plant, and equipment.
b) As of December 31, 2024, GHV - Dolphins EAD has contractual obligations
related to the design, construction and reconstruction, as well as furnishing,
in accordance with prepared plans and specifications, for the construction of
a Hotel Complex on the territory of St. St. Constantine and Helena. The
contracts for the investment project include the construction and
modernization of buildings, activities for the installation of mechanical
systems and built-in installations for the building that serve the Hotel,
including but not limited to heating, ventilation, air conditioning,
electrical and plumbing systems, elevators and escalators, as well as built-in
laundry, refrigeration, and kitchen equipment, furniture, and complete
construction and branding of the Hotel's brand.
The company has not pledged properties, machinery, or equipment as collateral
for its liabilities.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
12) Tangible fixed assets (Continued)
Year ended 31 Dec 2023 Plant and other equipment Land and Buildings Assets under construction Total
€ € €
€
Cost
Cost at the beginning of the year 47,519 - 488,333 535,852
Additions from acquisition (note 11) 147,658 19,862,879 6,194 20,016,731
Transfers out - - (488,333) (488,333)
Cost at the end of the year 195,177 19,862,879 6,194 20,064,250
Accumulated depreciation
Accumulated depreciation at the beginning of the year 17,900 - - 17,900
Depreciation 27,520 - - 27,520
Accumulated depreciation at the end of year 45,420 - - 45,420
Net book value at the end of year 31 December 2023 149,757 19,862,879 6,194 20,018,830
Net book value at the end of year 31 December 2022 29,619 - 488,333 517,952
13) Trade and other receivables
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Trade and other receivables 3,894,433 2,421,954
Prepayments 26,341 231,130
3,920,774 2,653,084
Trade and other receivables are presented net of expected credit loss of
€nil (2023: €827,264). There is reversal of expected credit loss amounting
to €827,264 (2023: €1,957,176) recorded within other income.
14) Cash and cash equivalents
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Cash at bank 1,250,649 2,559,356
1,250,649 2,559,356
Cash and cash equivalents comprise cash on hand, cash held at the bank and
demand deposits. Cash equivalents are short-term, highly liquid investments
that are readily convertible to known amounts of cash and that are subject to
an insignificant risk of changes in value. €109,928 (€2023: €46,016)
cash are restricted according to the bank loan agreement with UniCredit.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
15) Trade and other payables
Non-current trade and other payables can be presented as follows:
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Concession payable 1,693,209 1,999,494
Other payables 15,714 1,358
1,708,923 2,000,852
The current trade and other payables can be presented as follows:
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Trade creditors 423,971 675,464
Concession payable 102,737 23,822
Other payables 1,757,553 898,296
Deferred income 144,558 253,399
2,428,819 1,850,981
16) Bank loans
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Loan from UniCredit (a) 7,668,835 8,324,781
Loan from BACB (b) 3,343,341 3,648,013
Central Cooperative Bank (c) 6,560,462 8,595,630
17,572,638 20,568,424
Long term bank loans 14,217,236 16,869,504
Current bank loans 3,355,402 3,698,920
Reconciliation of bank loans
Beginning of year (gross loan) 20,568,424 19,956,478
Bank loan arrangement fees (8,998) (38,718)
Loan received / acquired 11,740 3,183,243
Interest charged 709,663 698,160
Principal repayments (2,959,722) (2,484,052)
Interest payments (748,469) (746,687)
Total bank loans - end of year 17,572,638 20,568,424
(a) In October 2017, BSPF Bulgaria EAD, a subsidiary of parent
company entered into a secured debt funding of €7 million from UniCredit
Bulbank AD ("UniCredit"), a leading Bulgarian commercial bank which was used
to complete the acquisition of the Ivan Vazov 1 Building. The debt funding
from UniCredit is secured by a commercial mortgage on the property valued at
€13,548,212. The debt funding is also secured by a first rank pledge of all
the receivables, claims, rights and interests, both current and future, of the
company along with a first ranking registered pledge of the commercial
enterprise of the company and a first ranking pledge of 100% of the shares of
the capital of the company. The initial term of the debt funding was
thirty-six months from date of execution of the loan documentation and the
repayment shall be made as a one-off payment on the repayment deadline.
The company renegotiated the terms of the loan in November 2021, extending the
repayment period until 30 November 2033 and changed the margin to the interest
rate to 2%. The principal should be repaid in equal installments, with the
first installment set from 23 December 2023. The interest on the loan is now
the floating interest rate based on 3 month EURIBOR plus 2.00% (2023: 2%).
The liabilities under this loan amount to €6,546 thousand, of which €433
thousand are short-term.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
16) Bank loans (continued)
In November 2021, BSPF Bulgaria EAD entered into an agreement with Unicredit
Bulbank AD ("UniCredit"), a leading Bulgarian commercial bank, which involved
revised and extended lending terms for the construction of the Ivan Vazov 1
Building. The Company entered into a secured debt funding of up to BGN
4,498,409 (approximately €2.3 million) from UniCredit Bulbank AD
("UniCredit"), a leading Bulgarian commercial bank which was used to partly
finance the construction costs for the planned renovation of the roof and
overhaul of the administrative building known as the Ivan Vazov 1 Building.
The secured debt funding is made up of an investment limit of up to €1.8
million and a revolving limit of up to €0.5 million. The debt funding from
UniCredit is secured by a commercial mortgage on the property valued
at €13,548,212. The debt funding is also secured by a second rank pledge of
all the receivables, claims, rights and interests, both current and future, of
the company along with a second ranking registered pledge of the commercial
enterprise of the company and a second ranking pledge of 100% of the shares of
the capital of the company. The utilization deadline of €1.5 million of
the investment limit is no later than 30 November 2023 while the utilization
deadline of the remaining €0.3 million is no later than 30 November 2024.
There is a grace period on the repayment of the principal amount due until 30
November 2023. After this date the principal will be repaid in equal monthly
instalments. Interest is also repayable monthly with no grace period agreed.
The repayment period is up until 30 November 2033.The repayment of the
revolving limit is made within 6 months of each utilized amount and the
repayment period is up until 31 July 2032.
The liabilities under this loan amount to €1,123 thousand, of which €109
thousand are short-term.
(b) In 2022, the BSPF Project 1, a subsidiary of the parent
company, received financing from a commercial bank in the amount of BGN
8,150,000 (approximately €4,167,028). The financing was granted in
connection with the acquisition of an investment in Star Mill EOOD. The loan
is repayable by 20 October 2030 in instalments according to a repayment plan.
The loan is charged a floating interest sum of LEONIA Plus and a risk
allowance. The loan is secured by the following assets:
• Receivables of the BSPF Project 1 from Star Mill EOOD;
• Bank deposit of the BSPF Project 1 of €102,258, which will be
released after full payment to the creditor;
• Mortgage of the real estate of Star Mill EOOD;
• Current and future funds of the BSPF Project 1 and Star Mill EOOD
on current accounts opened with the creditor bank.
(c) Central Cooperative bank loan and overdraft
As at As at
31 Dec 2024 31 Dec 2023
€ €
Central Cooperative Bank overdraft (i) 664,449 662,768
Central Cooperative Bank overdraft (ii) 4,390,183 5,278,752
Central Cooperative Bank investment loan (iii) 959,195 1,155,108
Central Cooperative Bank loans (iv) - 1,499,002
6,013,827 8,595,630
(i) On 24 June 2016, the company entered an overdraft credit
agreement with the Central Cooperative Bank AD with a limit of €818,067. On
29 June 2018, the parties agreed that the Company will pay annual interest at
floating interest rate based on 3 months EURIBOR plus 4%. On 12 March 2020,
the agreed interest rate was renegotiated and reduced to 2.8%. In 2020, the
terms of the contract were extended to 24 June 2022. As at 31 December 2024,
the carrying amount was €664,449.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
16) Bank loans (continued)
(ii) On 28 December 2017, the company entered an overdraft
credit agreement with the Central Coorporative Bank AD with a limit of
€8,569,252. On 12 March 2020, the agreed interest rate was 2.8%. The
overdraft usage period has a maturity date of 21 January 2028. As at 31
December 2024 the carrying amount was €4,390,183.
(iii) On 28 December 2017, the company entered an investment
loan agreement with the Central Cooperative Bank AD. The loan was for an
amount of €2,024,205 and is due for repayment by 21 January 2028. On 12
March 2020, the agreed interest rate was renegotiated and reduced to 2.8%. As
at 31 December 2024, the carrying amount was €959,195.
The above overdraft and loans positions are secured by the commercial property
of South Beach (Gradina) Camp which includes all the tangible fixed assets of
the property along with the mortgage on the land.
(iv) This relates to two loans held by Lazuren Bryag 91 EOOD
and provided by the Central Cooperative Bank. The loans are subject to a rate
of 1-month Euribor plus 1.3%, however not less than 3.5% and no more than
3.85%. The second loan is subject to a rate of 2.8%. The loans will mature on
16 September 2024 and 12 September 2025 and the real estate owned by Lazuren
Bryag 91 EOOD has been charged as security for the total loan amount.
17) Details of Group undertakings
The Group holds 20% or more of the nominal value of any class of share capital
in the following investments:
Held directly: Share-holding Nature of Business Country of Incorporation
BSPF (Property 2) Limited 100% Investment Holding Jersey
BSPF (Property 3) Limited 100% Dormant Jersey
BSPF (Property 4) Limited 100% Dormant Jersey
BSPF (Property 5) Limited 100% Dormant Jersey
BSPF (Property 6) Limited 100% Dormant Jersey
BSPF Project 1 EAD 100% Investment Holding Bulgaria
BSPF Super Borovetz EAD 100% Financial Services Bulgaria
BSPF Bulgaria EAD 100% Property Investment Bulgaria
European Convergence Development Company Plc (ECDC Plc) 29.85% Investment Holding Isle of Man
Littoral Invest AD 99.40% Financial Services Bulgaria
Held indirectly:
Camping South Beach EOOD 100% Tourism Services Bulgaria
Star Mill EOOD 100% Tourism Services Bulgaria
Grand Hotel Varna AD 98.17% Investment Holding Bulgaria
GHV Dolphins EAD 98.17% Tourism Services Bulgaria
Lazuren Bryag 91 EOOD 99.40% Hospitality and Tourism Services Bulgaria
As at 31 December 2024, ECDC is at net liability position of €99,034 (2023:
€47,252). In 2022, the Group stopped recognising its share of losses in ECDC
plc because it has no further obligations arising from incurring these losses.
In 2024, the group's proportionate share in the losses of ECDC amounting to
€15,457 (2023: €13,970) cumulatively €40,665 (2023: €25,208).
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
17) Details of Group undertakings (continued)
The group includes two subsidiaries, Grand Hotel Varna AD and GHV Dolphins EAD
with material non-controlling interests (NCI) of 1.83%.
As at 31 December 2024, Grand Hotel Varna AD had, before intergroup
eliminations, Revenue of €657, Net profit for the year of €186,340, Total
assets of €16,039,178 and Net assets of €15,215,159. Total comprehensive
income for the year attributable to non-controlling interest is 3,405 whereas
amount of net assets attributable to non-controlling interest is €564,756.
As at 31 December 2024, GHV Dolphins EAD had, before intergroup eliminations,
Revenue of €3,272, Net loss for the year of €102,688, Total assets of €
4,279,750 and Net assets of € 3,147,117. Total comprehensive loss for the
year attributable to non-controlling interest is €1,876 whereas amount of
net assets attributable to non-controlling interest is €345,357.
18) Issued share capital
As at As at
Authorised 31 Dec 2024 31 Dec 2023
Founder shares of no par value 10 10
Ordinary shares of no par value Unlimited Unlimited
Issued and fully paid
€ €
2 Founders shares of no par value (2023: 2) - -
2,458,323,603 ordinary shares of no par value (2023: 2,458,323,603) 81,019,442 81,019,442
The Founders shares do not carry any rights to dividends or profits and on
liquidation they will rank behind Shares for the return of the amount paid up
on each of them. The shares carry the right to receive notice of and attend
general meetings, but carry no right to vote thereat unless there are no
ordinary Shares in issue.
Capital management
The capital of the group will be managed in accordance with the Investment
Strategy documented on the Parent Company's website. The group manages its
capital to ensure its functioning as a going concern, while at the same time
seeking to maximize returns for shareholders through optimization of the
debt-to-equity ratio (return on invested capital). The purpose of the
Management is to maintain the confidence of investors, creditors and the
market and to guarantee the future development of the group.
19) Reserves
The following describes the nature and purpose of each reserve within equity:
Retained earnings - The retained earnings represent cumulative net profits and
losses recognised in the Group's statement of comprehensive income.
Foreign currency translation reserve - Exchange differences relating to the
translation of the results and net assets of the Group's foreign operations
from their functional currencies to the Group's presentation currency (i.e.
Currency Units). The Bulgarian subsidiaries' functional currency is the
Bulgarian Lev which is pegged to the Euro at 1 EUR = 1.95583 BGN, hence there
is no movement of foreign currency translation reserve during the year.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
20) Profit and Net Asset Value per share
Profit per share
The basic profit per ordinary share is calculated by dividing the net profit
attributable to the ordinary
shareholders of the Company by the weighted average number of ordinary shares
in issue during the year.
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Profit attributable to owners of parent (€) 2,038,912 10,409,093
Weighted average number of ordinary shares in issue 2,458,323,603 1,922,885,247
Basic profit per share (cents) 0.08 0.54
The Company has no dilutive potential ordinary shares; the diluted earnings
per share is the same as the
basic earnings per share.
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Net assets attributable to owners of the parent (€) 51,547,496 49,508,584
Number of ordinary shares issued 2,458,323,603 2,458,323,603
Net Asset Value per share (cents) 2.10 2.01
21) Segmental analysis
IFRS 8 Operating Segments requires operating segments to be identified on the
basis of internal reports about components of the Group that are regularly
reviewed by the chief operating decision maker in order to allocate resources
to the segments and to assess their performance.
The Group is organised into one main operating and reporting segment focusing
on investment in the Bulgarian property market.
No additional disclosure is included in relation to segmental reporting as the
Group's activities are limited to one operating and reporting segment.
22) Contingencies and commitments
In connection with the implementation of the Concession Agreement dated
17.09.2020, Camp South Beach EOOD, an indirect subsidiary of the Parent
company has obligations to carry out the following current activities and
commitments:
· Securing the concession site;
· Development of the infrastructure of the concession site;
· Organizing the use of the sea beach;
· Beach strip zoning;
· Water rescue activity;
· Medical insurance;
· Sanitary - hygienic maintenance of the sea beach;
· Beach services, sports and entertainment and commercial
activities.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
22) Contingencies and commitments (continued)
According to the financial plan to the concession agreement, for the
implementation of activities on the use of the sea beach, the Company has a
commitment to implement an investment program that is distributed over the
individual years of the concession agreement. In the first year of the
agreement, the Company is committed to make investments and improvements at
the amount of BGN 394,000 (€201,449), which include: construction of rescue
posts and stations, construction of a medical and mobile medical station,
provision of beach umbrellas, sunbeds, changing rooms, showers with cold water
and other tools and facilities for the use of the beach; provision of a beach
cleaning machine, construction of additional commercial areas, construction
and provision of infrastructure related to improving access to the sea beach.
Part of these investments were implemented together with the improvements that
the Company made to the property in 2020. The rest of the assets acquired, and
the improvements were made by both the Company and the tenants -
subcontractors of sites in the camping. This opportunity is provided according
to the terms of the agreement.
For 2024, the Company's commitment is to carry out investments and
improvements at the amount of BGN 2,000 (€1,023), which were effectively
implemented by placing wooden paths along the beach and waste bins.
For the duration of the concession agreement, the Company, its employees,
tenants and authorized persons have an obligation to maintain the sea beach
and the appurtenances without risk to the health and life of visitors to the
site; to ensure the protection of the environment, through information signs
and sufficient waste collection bins; not to carry out activities that are not
compatible with the terms of the above-mentioned agreement or that are
prohibited by law.
Camp South Beach EOOD complies with the provisions of the applicable
legislation, including the Black Sea Coast Development Act; The Ordinance on
water rescue activities and securing water areas; the Environmental Protection
Act; the Biological Diversity Act, etc.
The Company is party to a Framework Agreement with CCB AD for bank guarantees
related to a Concession Agreement, with a limit increased from BGN 250
thousand to BGN 400 thousand annually in favor of the Ministry of Tourism. As
collateral, a special pledge was established on 7 bungalows in Camping Garden.
The agreement is valid until January 31, 2029.
Littoral Invest AD has a framework agreement for issuing bank guarantees up to
BGN 800 thousand (€409 thousand). As of 31 December 2024, guarantees
totaling €169 thousand (2023: €152 thousand) have been issued in favor of
the Ministry of Tourism in connection with concession and lease agreements for
seaside beaches operated by a Group subsidiary. This includes five guarantees
totaling BGN 331 thousand (€169 thousand) for the "Varna - Central" seaside
resort.
As collateral for bank loans of Lazuren Bryag 91 EOOD and under an agreement
concluded by Littoral invest AD, mortgages have been established on properties
owned by Lazuren Bryag 91 EOOD. These include mortgages on buildings and
investment properties under its loan agreements, as well as on investment
properties under the parent company's bank guarantee framework agreement.
23) Directors' interests
The group directors are the only key management personnel. Total compensation
paid to them during the year amounted to €67,509 (2023: €117,568).
24) Ultimate controlling party
The Directors consider that there is no controlling or ultimate controlling
party of the Group.
25) Financial risk management objectives and policies
The Group's financial instruments comprise long term receivables, loan
receivables, cash and cash equivalents, short term investments, trade and
other receivables, bank loans, shareholders loan, and payables that arise
directly from its operations.
The main risks the Group faces from its financial instruments are (i) market
price risk (comprising currency risk, interest rate risk and other price
risk), (ii) liquidity risk and (iii) credit risk.
The Board regularly considers risks applicable to the portfolio.
As a result of the short-term nature of the Group's financial instruments, the
carrying values approximate to fair value.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
25) Financial risk management objectives and policies (continued)
i. Foreign Currency risk
The risk that the fair value or future cash flows of a financial instrument
will vary due to changes in exchange rates. Most of the Group's transactions
are carried out in EUR and Bulgarian LEV. Exposures to currency exchange rates
arise from the Group's overseas sales and purchases, which are primarily
denominated in Bulgarian LEV. The functional and presentational currency of
the Group is EUR. The Group does not hedge this risk.
An analysis of the Group's financial assets and liabilities foreign currency
exposure is detailed below:
GBP EUR Bulgarian LEV Total
As at 31 December 2024 € € € €
Long term deposit - - 11,693 11,693
Loan receivable - - - -
Trade and other receivables - 78,419 3,760,446 3,838,865
Short term investment - - 12,163,597 12,163,597
Cash and cash equivalents 1,053 37,221 1,212,375 1,250,649
Trade and other payables - (139,721) (3,853,463) (3,993,184)
Shareholders loans - (24,723,964) - (24,723,964)
Bank loans - - (17,572,638) (17,572,638)
Net exposure 1,053 (24,748,045) (4,277,990) (29,024,982)
GBP EUR Bulgarian LEV Total
As at 31 December 2023 € € € €
Long term deposit - - 102,258 102,258
Loan receivable - - 2,754,689 2,754,689
Trade and other receivables - 39,221 1,627,523 1,666,744
Short term investment - - 12,330,603 12,330,603
Cash and cash equivalents 57,463 90,178 2,411,175 2,559,356
Trade and other payables - (58,290) (3,540,144) (3,598,434)
Shareholders loans - (23,307,833) - (23,307,833)
Bank loans - - (20,568,424) (20,568,424)
Net exposure 57,463 (23,236,724) (4,881,780) (28,061,041)
Foreign currency sensitivity
The Bulgarian lev has been pegged to the Euro since its launch in 1999 at the
rate of 1.95583 leva = 1 euro, hence effectively there is no foreign currency
risk as long as the peg is in place.
If the EUR/GBP exchange rate as at 31 December 2024 was to strengthen or
weaken by +/-1% it would result in a decrease or increase in the net assets of
€42,769 (2023: a decrease or increase in net assets of €5,746).
ii. Other price risk
The risk that the fair value or future cash flows of a financial instrument
will vary due to changes in market prices (other than those arising from
interest rate risk or currency risk), regardless of whether these changes are
caused by factors specific to the individual financial instrument or its
issuer, or by factors affecting all similar financial instruments traded in
the market. The Group is exposed to other price risk in respect of its
short-term investments.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
iii. Interest rate risk
Interest rate movements may affect: (i) the fair value of the investments in
fixed interest rate securities and (ii) the level of income receivable and
expense payable on cash deposits and loans and borrowings. There are no fixed
interest rate securities as at 31 December 2024 or 31 December 2023.
The interest rate profile of the Group's financial instruments is as follows:
Variable rate Fixed rate Non-interest bearing Total
As at 31 December 2024 €
€ € €
Long term deposit - - 11,693 11,693
Loan Receivable - - - -
Trade and other receivables - - 3,838,865 3,838,865
Short term investment - - 12,163,597 12,163,597
Cash and cash equivalents - - 1,250,649 1,250,649
Trade and other payables - - (3,993,184) (3,993,184)
Shareholder loan - (24,723,964) - (24,723,964)
Bank loans (17,572,638) - - (17,572,638)
(17,572,638) (24,723,964) 13,271,620 (29,024,982)
As at 31 December 2023
Long term deposit - - 102,258 102,258
Loan Receivable - 2,754,689 - 2,754,689
Trade and other receivables - - 1,666,744 1,666,744
Short term investment - - 12,330,603 12,330,603
Cash and cash equivalents - - 2,559,356 2,559,356
Trade and other payables - - (3,598,434) (3,598,434)
Shareholder loan - (23,307,833) - (23,307,833)
Bank loans (20,568,424) - - (20,568,424)
(20,568,424) (20,553,144) 13,060,527 (28,061,041)
Interest rate sensitivity
An increase or decrease of 100 basis points in interest rates during the year
would have decreased or increased the net assets attributable to shareholders
and changes in net assets attributable to shareholders by €422,966 (2023:
€411,216).
iv. Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation
to the Group. The Group is exposed to credit risk from financial assets
including cash and cash equivalents held at banks, trade and other
receivables, short term investments, loan receivables and long-term deposits.
The amount of credit risk is equal to the amounts stated in the statement of
financial position for each of these assets. Cash balances are limited to
high-credit-quality financial institutions.
The allowance for expected credit losses (ECLs) are as disclosed within note
13.
v. Liquidity risk
'Liquidity risk' is the risk that the Group will encounter difficulty in
meeting obligations associated with its financial liabilities that are settled
by delivering cash or another financial asset.
The Group's policy and the Boards approach to managing liquidity is to ensure,
as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stress conditions. The Group's
main assets include investment properties, which are generally illiquid. As a
result, the Group may not be able to liquidate some of its investments in due
time to meet its liquidity requirements. The Group's liquidity is managed on a
daily basis by the administrators of the Company and its subsidiaries in
accordance with policies and procedures in place. The Group's overall
liquidity risk is managed on a monthly basis by the board of the directors.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
v. Liquidity risk (continued)
The following table sets out the carrying amount, by maturity, of the Group's
financial instruments that are
exposed to liquidity risk:
As at 31 December 2024 <1 Year 1-5 Years >5 Years Total
€ € € €
Trade and other payables (2,428,819) (915,126) (793,798) (4,137,742)
Shareholders loan (24,723,964) - - (24,723,964)
Bank loans and interest (3,355,402) (9,933,409) (4,283,827) (17,572,638)
(30,508,185) (10,848,535) (5,077,624) (46,434,344)
As at 31 December 2023 <1 Year 1-5 Years >5 Years Total
€ € € €
Trade and other payables (1,850,981) (2,000,852) - (3,851,833)
Shareholders loan (23,307,833) - - (23,307,833)
Bank loans and interest (3,698,920) (2,110,293) (14,759,211) (20,568,424)
(28,857,734) (4,111,145) (14,759,211) (47,728,090)
26) Related party transactions
In July 2017, the Company appointed Phoenix Capital Management JSC as its
investment adviser with responsibility for advising on the investment of the
Company's property portfolio. Phoenix Capital Holding JSC owns 79.99% of the
Phoenix Capital Management JSC shares. Phoenix Capital Holding JSC, through
its wholly owned subsidiary Mamferay, holds 18.30% (2023: 18.30%) of the
issued share capital of the Company. Phoenix Capital Management JSC received
fees of €160,704 (2023: €214,272). The amount outstanding as at year-end
is €53,568 (2023: €nil).
The total amount outstanding at year end to the shareholders totaled
€24,723,964 (2023: €23,307,833). The loans are unsecured and are interest
bearing.
27) Long term deposit
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Long term deposit 11,693 102,258
11,693 102,258
In connection with the bank loan (note 16) the company placed a deposit with
the lending bank. The fixed term deposit serves as collateral for the loan and
will be released after full payment of the bank loan, which is expected to be
on 20 October 2033.
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December 2024
28) Loan receivable
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Loan receivable - 2,754,689
- 2,754,689
The loan receivable was unsecured and interest was receivable at a fixed rate.
The amount was fully repaid in 2024.
29) Short term investment
During the year, the group hold shares in mutual funds, with the fair value of
the investments in funds being determined based on their redemption prices at
the reporting date. The movement in short term investments during the year was
as shown below.
Year ended 31 Dec 2024 Year ended 31 Dec 2023
€ €
Level 2
Balance at the beginning of the year 12,330,603 -
Acquired during the year 4,826,625 12,005,933
Sold during the year (5,235,151) -
Fair value gain during the year 257,806 335,901
Fair value expense on financial assets (16,286) (11,231)
Balance at the end of the year 12,163,597 12,330,603
30) Subsequent events
On February 14, 2025, a contract was signed with GHV Dolphins EAD and the
Ministry of Tourism for the lease of the "Saint Ilia" seaside beach for a
period of 5 years. The agreed rent for 2025 is EUR 30,679. For each subsequent
year, the rental amount will be indexed in accordance with the Methodology for
Determining the Minimum Rental Price for Sea Beaches.
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