REG - Secure Property Dev - 2024 Annual Results
30/06/2025 07:00
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RNS Number : 8565O Secure Property Dev & Inv PLC 30 June 2025
Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI /
Sector: Real Estate
30 June 2025
Secure Property Development & Investment PLC ('SPDI' or 'the Company')
2024 Annual Results
Secure Property Development & Investment PLC, the AIM quoted South Eastern
European focused property company, is pleased to announce its full year
audited financial results for the year ended 31 December 2024.
Highlights
· Successful step forward of the Arcona Property Fund (APF) Stage 2
transaction progressing a multi-year strategic deal that began in 2019
· SPDI's last prime Ukrainian asset (the Kiyanovskiy land plot) was
transferred in December 2024, and the Company received the corresponding APF
shares in February 2025
· The Company's share portfolio in APF is valued at €12,5 million
· Operating income declined by 10% due to lower energy costs re-charged
to tenants
· Net operating income grew by 17%, driven by reduced asset operating
expenses
· SPDI is now focused on monetizing the remaining property assets and
re-evaluating strategic options for growth.
Copies of the Annual report and Accounts are being posted to Shareholders
today and are available on the Company's website at www.secure-property.eu
(http://www.secure-property.eu/) .
* * ENDS * *
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014
For further information please visit www.secure-property.eu
(http://www.secure-property.eu/#_blank) or contact:
Lambros Anagnostopoulos SPDI Tel: +357 22 030783
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409 3494
Ritchie Balmer
Jon Belliss Novum Securities Limited Tel: +44 (0) 207 399 9400
Susie Geliher St Brides Partners Ltd Tel: +44 (0) 20 7236 1177
1. Letter to Shareholders
2024 experienced continued market fluidity in South East Europe / East
Mediterranean Region both with wars persisting and with markets being
cautious, especially as the new USA administration seems to have changed
strategy in the region. Politically, Romania experienced the annulment of the
first round of the Presidential elections with new elections having been
called for May 2025 (have taken place), putting the usual market growth in
reverse gear. In this difficult environment, SPDI succeeded in closing the
Arcona Property Fund (APF) transaction by contributing to APF the final Kiev
property asset with an agreement having been signed in December 2024 and with
the related APF shares having been received in February 2025, in a transaction
that took an extremely long time to finalise for various different reasons.
Following the APF transaction closing, SPDI's directors and Management are
focused on monetizing the remaining property assets of the Company and
reviewing its strategy for future growth, both of which we expect to show
substantial progress within the first half of 2025.
Best regards,
Lambros G. Anagnostopoulos, Chief Executive Officer
2. Management Report
2.1 Corporate Overview & Financial Performance
SPDI's core property asset portfolio consists of South Eastern European prime
commercial and industrial real estate, the majority of which is let to blue
chip tenants on long leases. During H1 2024, management in line with the
Company's strategy to maximise value for shareholders, worked towards closing
the sale of the Ukrainian assets included in Stage 2 of the transaction with
Arcona Property Fund N.V (Arcona) as part of the conditional implementation
agreement for the sale of Company's property portfolio, excluding its Greek
logistics property (which has now also separately been sold), in an all-share
transaction to Arcona, an Amsterdam and Prague listed company that invests in
commercial property in Central Europe. Arcona originally held high yielding
real estate investments in Czech Republic, Poland and Slovakia, the
combination of two complementary asset portfolios is expected to create a
significant European property company, benefiting both the Company's and
Arcona's respective shareholders.
Following the completion of Stage 1 of the transaction in 2019, which involved
the sale of two land plots in Ukraine and residential and land assets in
Bulgaria, the transfer of the EOS and Delenco assets in Bucharest, Romania in
2022 (as part of Stage 2) during 2024 the Company sold to Arcona the
Kiyanovskiy land plot in Ukraine for a consideration of approximately $1,08
million plus 68.782 new ordinary shares in Arcona. On top of that, the Company
also received 10.689 new ordinary shares in Arcona as deferred payment for the
transactions of the Romanian assets in 2022.
Since Arcona did not proceed with the acquisition of Rozny, the other land
plot in Ukraine, and any discussions for Stage 3 of the transaction have been
put on hold due to the overall delay, the sale of Kiyanovskiy marked the
completion of the overall transaction with Arcona, from which the Company
ended, over and above any cash consideration, with 1.152.381 Arcona shares and
259.627 warrants over the Arcona shares, from which 115.543 are still
exercisable upon meeting certain terms. Based on the last reported NAV per
share of Arcona, the Company's share portfolio in Arcona is valued at €12,4
million.
Moreover, during 2024 and as part of the joint venture agreement with Myrian
Nes Limited for converting €2,5 million of a loan into equity for developing
logistics properties in Romania, the parties have reached an agreement
involving the development of two different properties for the same tenant in
two regional Romanian cities. The agreements with the prospective tenant have
been signed, the permitting process has been finalized and the properties are
under development. During 2025 the two parties have initiated the process of
contributing their assets into a joint vehicle in Cyprus, effectively
materializing the joint venture plan.
Income from operations decreased by 10% during 2024 as a result of reduced
energy prices which are re-charged to tenants. Net operating income from
operations increased by 17%, as a result of the reduced asset operating
expenses.
Table 1
EUR 2024 2023
Continued Operations Discontinued Operations Total Continued Operations Discontinued Operations Total
Rental, Utilities, Management & Sale of electricity Income 1,280,106 155,444 1,435,550 1,430,588 156,016 1,586,604
Net gain/(loss) on disposal of investment property - - - - - -
Income from Operations 1,280,106 155,444 1,435,550 1,430,588 156,016 1,586,604
Asset operating expenses - (591,346) (591,346) - (867,484) (867,484)
Net Operating Income 1,280,106 (435,902) 844,204 1,430,588 (711,468) 719,120
Share of profit/(loss) and gains from associates - - - - (245,316) (245,316)
Dividends income - - - 160,937 - 160,937
Net Operating Income from investments 1,280,106 (435,902) 844,204 1,591,525 (956,784) 634,741
Administration expenses (666,241) (62,172) (728,413) (1,208,698) (201,344) (1,410,042)
Operating Result (EBITDA) 613,865 (498,074) 115,791 382,827 (1,158,128) (775,301)
Finance result, net (86,967) (273,979) (360,946) 241,966 (604,360) (362,394)
Income tax expense (1,172) (10,073) (11,245) (2,434) (4,955) (7,389)
Operating Result after Finance and Tax Expenses 525,726 (782,126) (256,400) 622,359 (1,767,443) (1,145,084)
Other income / (expenses), net (156,933) (1,732) (158,665) 2,034,104 5,792 2,039,896
One off costs associated with Arcona transaction (32,545) - (32,545) (49,850) - (49,850)
Personnel incentives (400,000) - (151,370) -
One off costs associated with new tax ruling - - - (70,000) - (70,000)
One off costs associated with other non-recurring tasks (BH case, disposals) (20,476) - (20,476) (152,364) - (152,364)
Fair value adjustments from Investment Properties - (703,641) (703,641) - (223,730) (223,730)
Result on disposal of subsidiaries - 694,302 694,302 7,629,679 (946,792) 6,682,887
Fair Value adjustment on financial investments 97,442 - 97,442 (392,210) - (392,210)
Foreign exchange differences, net (1,160) (61,538) (62,698) (26,824) (55,699) (82,523)
Result for the year 12,054 (854,735) (842,681) 9,443,524 (2,987,872) 6,455,652
Exchange difference on translation due to presentation currency - 65,387 65,387 - (931,988) (931,988)
Total Comprehensive Income for the year 12,054 (789,348) (777,294) 9,443,524 (3,919,860) 5,523,664
The administration costs decreased by 48%, and as a result the recurring
EBITDA increased by 115% to €0,1m from -€0,78m in 2023.
Overall, operating losses after finance and tax for the year reduced to
-€0,25m as compared to -€1,14m in 2023.
2.2 property Holdings
The Company's portfolio at year-end, and as at the date of this report,
consists of a commercial income producing property in Romania and land plots
in Ukraine.
Commercial Property Location Key Features
Innovations Logistics Park
Bucharest, Romania Gross Leaseable Area: 16.570 sqm
Anchor Tenant: Favorit Business Srl
Occupancy Rate: 82%
Land & Residential Assets Location Key Features
Tsymlyanskiy Residence* Kiev, Ukraine Plot of land (~ th. sqm): 4
Rozny Lane Kiev, Ukraine Plot of land (~ th. sqm): 42
Land & Residential Assets Location Key Features
Tsymlyanskiy Residence* Kiev, Ukraine Plot of land (~ th. sqm): 4
Rozny Lane Kiev, Ukraine Plot of land (~ th. sqm): 42
*As of November 2021, the Company had already submitted official request to
the City of Kiev to extend the lease of the property for another 5 years,
since it has first extension rights over any other interested party. The first
step in the process whereby the presiding committee of the municipality,
before the final approval by the City Council, did not place as many other
cases had accumulated which had time priority over our case. During the
following period, the committee did not convene at all due to the Russian
invasion of Ukraine.
In 2024, the Company's accredited valuers, namely CBRE Ukraine for the
Ukrainian Asset, and NAI RealAct for the Romanian Asset, remained appointed.
The valuations have been carried out by the appraisers on the basis of Market
Value in accordance with the current Practice Statements contained within the
Royal Institution of Chartered Surveyors ("RICS") Valuation - Global Standards
(2017) (the "Red Book") and are also compliant with the International
Valuation Standards (IVS).
Following disposals of previous periods, SPDI's portfolio, excluding the
Arcona shares, has became more concentrated in terms of geography. At the end
of the reporting period, Romania is the prime country of operations (95%) in
terms of Gross Asset Value, excluding the Arcona shares, while in Ukraine (5%)
the Company still has interests in land plots intended to be sold.
In respect of the Company's income generation capacity, for the last 5 years
Romania is the single operating income source.
The table below summarizes the main financial position of each of the
Company's assets (representing the Company's participation in each asset) at
the end of the reporting period.
Table 2
2024
Property Country GAV* €m Debt * NAV
Innovations Logistics Park Rom 9,0 5,6 3,4
Land banking Ukr 0,4 0 0,4
Total Value 9,4 5,6 3,8
Other balance sheet items, net ** +2,4
Net Asset Value total 6,17
* Reflects the Company's participation at each asset
**Among other items including Arcona shares and payable to shareholders. Refer
to balance sheet and related notes of the financial statements.
The NAV per share as at 31 December 2024 stood at GBP 0,04 and the premium of
the Market Value vis a vis the Company's NAV denominated in GBP stands at
1,26% at year-end.
It is noted that if we take into account the amount due but not paid yet to
shareholders, pursuant to the decision of the EGM held on 10 July 2024, the
adjusted NAV per share as at 31 December 2024 stood at GBP 0,12, reflecting
the actual value of shareholders in the Company.
2.3 Financial and Rick Management
The Group's overall bank debt exposure at the end of the reporting period was
~€5,6m being the balance of the financial lease of Innovations Logistics
park.
Throughout 2024, the Company focused on managing and preserving liquidity
through cash flow optimization. In this context, Management secured under
extremely difficult conditions the closing of the transaction with Arcona
related to Kiyanovskiy, the main asset held in Ukraine.
2.4 2025 and beyond
With main operations already being minimized, including the externalization of
all HR and relevant costs, the Company during 2025 is aiming at repositioning
all of its remaining assets, as well as distributing its Arcona shares to its
shareholders. Management is working along the guidelines of the board for
effectively maximizing the Company's value, by giving our shareholders the
opportunity to gain direct exposure to an entity of considerably larger size,
with a dividend distribution policy, and active in a more diversified and
faster growing region (Central and South Eastern Europe) of the European
property market.
3. Regional Economic Developments 1 (#_ftn1)
The Romanian economy experienced in 2024 a slower growth of 0,8% as compared
to previous years, facing difficult challenges related to domestic and
external factors. Such growth was based on strong private consumption,
resulted from the increase in wages and pensions of both public and private
sectors.
Unemployment rate is estimated marginally lower but still in low levels at
5,30% from 5,50% in 2023, keeping the labor market relatively tight and wage
increases high. Inflation rate decreased to 5,50% at year end, marking a
significant decline when compared to previous year, and NBR's monetary policy
interest rate was gradually decreased during the year to 6,50%.
Macroeconomic data
Romania 2018 2019 2020 2021 2022 2023 2024f
GDP (EUR bn) 203 223 218 241 280 285 287
Population (mn) 19,5 19,5 19,3 19,3 19,6 19,5 19,5
Real GDP (y-o-y %) 4,1 4,1 -3,7 5,9 4,6 2,1 0,8
CPI (average, y-o-y %) 4,6 3,3 2,3 4,1 13,8 9,7 5,5
Unemployment rate (%) 3,6 3,1 6,1 5,4 5,6 5,5 5,3
The Ukrainian economy recorded a 2,90% real GDP growth in 2024, a slowdown
compared to the 5,50% growth in 2023. This growth occurred despite the ongoing
war and Russia's attacks on infrastructure, with the fourth quarter even
experiencing a slight contraction of 0,1%. Domestic demand, loose fiscal
policy, and the National Bank of Ukraine's efforts to maintain financial
stability supported the economy.
In 2024, the consumer price index (CPI) accelerated to 12% exceeding the
forecasts made by country's National Bank. The increase came as a direct
consequence of the war, and in particular as a result of increased food costs
from the disruption of supply chains, as well as increased electricity costs
from the disruption of infrastructure facilities.
4. Real Estate Market Developments 2 (#_ftn2)
4.1 Romania
Despite the political turbulence during 2024, Romania's investment volume
increased by 47% y-o-y compared to 2023, reaching EUR 733 million. Investment
in 2024 distributed evenly between Bucharest (47%) and other main regional
markets (53%). Industrial and logistics segment attracted more investment
capital, contributing 40% of the total investment volume. The retail segment
ranked second, accounting for 32%, followed by the office sector (22%) and
hotel sector (6%).
Foreign investors prevailed in the Romanian property market in 2024,
accounting for 76% of total investment volume, while local investors
contributed the remaining 24%. In 2024, prime yields compressed among all
asset classes, with office and retail yields reaching 7,75% and industrial
yields reaching 7,50%.
With 690.000 new sq m delivered during 2024, the total modern industrial/
logistics stock reached 7,9 million sq m. Almost half, 47%, of the stock is in
Bucharest area, being by far the largest sub-market in the country, followed
by West/North with 23%, South with 16%, Central with 10% and East/North with
4%. At the end of 2024 the vacancy rate in Romania's industrial modern stock
stood at ~4,0%, while the vacancy rate for Bucharest was ~5,0%. Headline rent
in logistic parks recorded increased and stood at 4,75 €/sqm/month mainly as
a result of the robust demand.
4.2 Ukraine
The real estate market in Ukraine has not functioned normally since the
invasion of the country by Russia in February 2022. Given the ongoing
conflict, any relevant activity during the period is almost impossible, the
country is operating under martial law, there are no available statistics
and/or publications, and therefore no meaningful statements and inferences can
be made for the local real estate market.
5. Property Assets
5.1 Innovations Logistics Park, Romania
The park incorporates approximately 8.470 sqm of multipurpose warehousing
space, 6.395 sqm of cold storage and 1.705 sqm of office space. It is located
in the area of Clinceni, south west of Bucharest center, 200m from the city's
ring road and 6km from Bucharest-Pitesti (A1) highway. Its construction was
completed in 2008 and was tenant specific. It comprises four separate
warehouses, two of which offer cold storage.
As at the year end the terminal was 82% leased. Anchor tenant with 46% is
Favorit Business Srl, a large Romanian logistics operator, which accommodates
in the terminal their new business line which involves as end user Carrefour.
During 2023, the Company also signed a lease agreement with Baustoff + Metall
for 3.000 sq m ambient storage space plus office space.
5.2 Land Assets
Tsymlyanskit Residence - Kiev, Ukraine
The 0,36 Ha plot is located in the historic and rapidly developing Podil
District in Kiev. The Company owns 55% of the SPV which leases the plot, with
a local co-investor owning the remaining 45%.
The extension of the lease, originally expected during 2021, was delayed and
currently is on hold due to the invasion of Russia in Ukraine. The asset is
planned to be sold upon effective extension of its lease.
Rozny Lane - Kiev Oblast, Kiev, Ukraine
The 42 Ha land plot located in Kiev Oblast is destined to be developed as a
residential complex. Following a protracted legal battle, it has been
registered under the Company pursuant to a legal decision in July 2015.
The asset was part of Stage 2 of the Arcona transaction and relevant SPA for
its disposal was signed in June 2021 while closing had been postponed due to
the invasion of Russia in Ukraine. During the closing process of the Arcona
transaction for the Ukrainian properties, Arcona refused to proceed with the
asset, and as a result the Company has started looking in the market for
alternative buyers.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2024
Note 2024 2023
€ €
Continued Operations
Income 10 1.280.106 1.430.588
Net Operating Income 1.280.106 1.430.588
Administration expenses 12 (1.119.262) (1.632.282)
Gain on disposal of Investment 19.1.2 - 5.604.752
Gain on disposal of subsidiary/associate 19.1.1 - 2.024.927
Fair Value loss on Financial Assets at FV through P&L 24 97.442 (392.210)
Other operating income/(expenses), net 14 (156.933) 2.034.104
Operating profit / (loss) 101.353 9.069.879
Dividend income 24 - 160.937
Finance income 15 37.524 308.466
Finance costs 15 (124.491) (66.500)
Profit / (Loss) before tax and foreign exchange differences 14.386 9.472.782
Foreign exchange loss, net 16 (1.160) (26.824)
Profit/(Loss) before tax 13.226 9.445.958
Income tax expense 17 (1.172) (2.434)
Profit/ (Loss) for the year from continuing operations 12.054 9.443.958
Loss from discontinued operations 9b (854.735) (2.987.872)
Profit / (Loss) for the year (842.681) 6.455.652
Other comprehensive income
Exchange difference on translation of foreign operations 27 65.387 (931.988)
Total comprehensive income for the year (777.294) 5.523.664
Profit/ (Loss) for the year from continued operations attributable to:
Owners of the parent 12.054 9.443.524
Non-controlling interests - -
12.054 9.443.524
Profit/ (Loss) for the year from discontinued operations attributable to:
Owners of the parent (850.123) (2.966.646)
Non-controlling interests (4.612) (21.226)
(854.735) (2.987.872)
Profit/ (Loss) for the year attributable to:
Owners of the parent (838.069) 6.476.878
Non-controlling interests (4.612) (21.226)
(842.681) 6.455.652
Total comprehensive income attributable to:
Owners of the parent (777.723) 5.546.471
Non-controlling interests 429 (22.807)
(777.294) 5.523.664
Earnings/(Losses) per share (Euro per share):
Basic earnings/(losses) for the year attributable to ordinary equity owners of 36b 0,00 0,07
the parent
Diluted earnings/(losses) for the year attributable to ordinary equity owners 36b 0,00 0,07
of the parent
Basic earnings/(losses) for the year from discontinued operations 36c (0,01) (0,02)
attributable to ordinary equity owners of the parent
Diluted earnings/(losses) for the year from discontinued operations 36c (0,01) (0,02)
attributable to ordinary equity owners of the parent
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2024
Note 2024 2023
€ €
ASSETS
Non‑current assets
Tangible and intangible assets 21 13 164
Long-term receivables and prepayments 22 818 818
Financial Assets at FV through P&L 24 12.553.640 11.686.598
12.554.471 11.687.580
Current assets
Prepayments and other current assets 23 4.154.664 4.034.537
Cash and cash equivalents 25 1.047.918 152.241
5.202.582 4.186.778
Assets classified as held for sale 9d 10.361.341 12.327.462
Total assets 28.118.394 28.201.820
EQUITY AND LIABILITIES
Issued share capital 26 1.291.281 1.291.281
Share premium 60.401.817 72.107.265
Foreign currency translation reserve 27 7.614.448 7.554.101
Exchange difference on I/C loans to foreign holdings 38.3 (211.199) (211.199)
Accumulated losses (62.816.718) (62.083.716)
Equity attributable to equity holders of the parent 6.279.629 18.657.732
Non-controlling interests 28 9.029 113.668
Total equity 6.288.658 18.771.400
Non‑current liabilities
Tax payable and provisions 33 - 17.173
- 17.173
Current liabilities
Borrowings 29 517.240 114.794
Bonds issued 30 911.602 870.373
Trade and other payables 31 2.252.319 1.795.884
Payable due to shareholders 35 11.705.448 -
Tax payable and provisions 33 79.589 21.438
15.466.198 2.802.489
Liabilities directly associated with assets classified as held for sale 9d 6.363.538 6.610.758
21.829.736 9.413.247
Total liabilities 21.829.736 9.430.420
Total equity and liabilities 28.118.394 28.201.820
Net Asset Value (NAV) € per share: 36d
Basic NAV attributable to equity holders of the parent 0,05 0,14
Diluted NAV attributable to equity holders of the parent 0,05 0,14
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
( )
Attributable to owners of the Company
Share capital Share premium, Accumulated losses, net of non-controlling interest(2) Exchange difference on I/C loans to foreign holdings(3) Foreign currency translation reserve(4) Total Non- controlling interest Total
Net(1)
€ € € € € € € €
Balance - 31 December 2022 1.291.281 72.107.265 (68.560.594) (211.199) 8.484.507 13.111.260 369.399 13.480.659
Profit for the year - - 6.476.878 - - 6.476.878 (21.226) 6.455.652
Foreign currency translation reserve - - - - (930.406) (930.406) (1.582) (931.988)
Disposals of subsidiaries - - - - - - (232.923) (232.923)
Balance - 31 December 2023 1.291.281 72.107.265 (62.083.716) (211.199) 7.554.101 18.657.732 113.668 18.771.400
Disposals of subsidiaries 2023- correction Minority Interest - - 105.067 - - 105.067 (105.067) -
Profit for the year - - (838.069) - - (838.069) (4.612) (842.681)
Foreign currency translation reserve - - - - 60.347 60.347 5.040 65.387
Share premium reduction - (11.705.448) - - - (11.705.448) - (11.705.448)
Balance - 31 December 2024 1.291.281 60.401.817 (62.816.718) (211.199) 7.614.448 6.279.629 9.029 6.288.658
( )
( )
(1 Share premium is not available for distribution.)
(2 Companies which do not distribute 70% of their profits after tax, as
defined by the relevant tax law, within two years after the end of the
relevant tax year, will be deemed to have distributed as dividends 70% of
these profits. Special contribution for defence at 17% and GHS contribution at
1,7%-2,65% for deemed distributions after 1 March 2019 will be payable on such
deemed dividends to the extent that the ultimate shareholders are both Cyprus
tax resident and Cyprus domiciled. The amount of deemed distribution is
reduced by any actual dividends paid out of the profits of the relevant year
at any time. This special contribution for defence is payable by the Company
for the account of the shareholders.)
(3 Exchange differences on intercompany loans to foreign holdings arose as a
result of devaluation of the Ukrainian Hryvnia during previous years. The
Group treats the mentioned loans as a part of the net investment in foreign
operations (Note 38.3).)
(4 Exchange differences related to the translation from the functional
currency of the Group's subsidiaries are accounted for directly to the foreign
currency translation reserve. The foreign currency translation reserve
represents unrealized profits or losses related to the appreciation or
depreciation of the local currencies against the euro in the countries where
the Group's subsidiaries own property assets.)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2024
Note 2024 2023
€ €
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(Loss) before tax and non-controlling interests-continued operations 13.226 9.445.958
Profit/(Loss) before tax and non-controlling interests-discontinued operations 9b (844.662) (2.982.917)
Profit/(Loss) before tax and non-controlling interests (831.436) 6.463.041
Adjustments for:
(Gain)/Loss on revaluation of investment property 13 703.641 223.730
Fair Value (gain)/loss on Financial Assets at FV through P&L 24 (97.442) 392.210
Accounts payable written off 14 (9.366) (2.045.485)
Depreciation/ Amortization charge 12 208 792
Interest income 15 (37.576) (308.938)
Interest expense 15 394.530 666.324
Share of profit from associates 20 - 245.316
Gain on disposal of investments 19 (694.302) (6.682.887)
Effect of foreign exchange differences 16 62.698 82.523
Cash flows from/(used in) operations before working capital changes (509.045) (963.374)
Change in prepayments and other current assets 23 (348.489) 215.871
Change in trade and other payables 31 546.044 1.363.311
Change in VAT and other taxes receivable 23 (40.868) (89.362)
Change in Borrowings 29 397.000 -
Change in provisions 33 - (399.500)
Change in other taxes payables 33 (935) 14.084
Cash generated from operations 43.707 141.030
Income tax paid (16.622) (228.860)
Net cash flows provided in operating activities 27.085 (87.830)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash inflow from sale of subsidiaries 19 1.039.194 -
Dividend received 20,24 - 255.889
Increase/(Decrease) in long term receivables 22 - 6
Repayment of principal and interest of loan receivable 23 150.000 850.053
Net cash flows from / (used in) investing activities 1.189.194 1.105.948
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of bank and non-bank loans 29,30 (5.191) (392.500)
Interest and finance charges paid (5.224) (107.667)
Repayment of lease principal and interest 34 (536.550) (371.960)
Net cash flows from / (used in) financing activities (546.965) (872.127)
Net increase/(decrease) in cash at banks 669.314 145.991
Cash:
At beginning of the year 25 497.389 351.398
At end of the year 25 1.166.703 497.389
Notes to the Consolidated Financial Statements
For the ended 31 December 2024
1. General Information
Country of incorporation
SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC (the ''Company'') was
incorporated in Cyprus on 23 June 2005 and is a public limited liability
company, listed on the London Stock Exchange (AIM): ISIN CY0102102213. Its
registered office is at Kyriakou Matsi 16, Eagle House, 10th floor, Agioi
Omologites, 1082 Nicosia, Cyprus while its principal place of business is in
Cyprus at 6 Nikiforou Foka Street, 1060 Nicosia, Cyprus.
Principal activities
The principal activities of the Group are to invest directly or indirectly in
and/or manage real estate properties, as well as real estate development
projects in South East Europe (the "Region"). These include the acquisition,
development, commercializing, operating and selling of property assets in the
Region.
The Group maintains offices in Nicosia - Cyprus, and Kiev - Ukraine.
As at 31 December 2024, the companies of the Group employed and/or used the
services of 2 full time equivalent people (2023, 2 full time equivalent
people).
2. Basis of preparation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union (EU) and the requirements of the Cyprus Companies Law, Cap.113. The
consolidated financial statements have been prepared under the historical cost
as modified by the revaluation of investment property and investment property
under construction, of financial assets at fair value through other
comprehensive income and of financial assets at fair value through profit and
loss.
The preparation of financial statements in conformity with IFRSs requires the
use of certain critical accounting estimates and requires Management to
exercise its judgment in the process of applying the Company's accounting
policies. It also requires the use of assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Although these estimates
are based on Management's best knowledge of current events and actions, actual
results may ultimately differ from those estimates.
Following certain conditional agreement signed in December 2018 with Arcona
Property Fund N.V for the sale of Company's non-Greek portfolio of assets, the
Company classifies its assets since 2018 as discontinued operations (Note
4.3).
Going concern basis
The financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future.
In particular, the Company has been engaged in a process of disposing of its
portfolio of assets in an all share transaction with Arcona Property Fund N.V.
Following the completion of the said transaction, the Company is aiming in
monetizing all its remaining assets, meaning that as soon as this consummates,
it will be left with its corporate receivables and liabilities.
These conditions raise some doubt about the Company's ability to continue as a
going concern within the next twelve months from the date these financial
statements are available to be issued. The ability to continue as a going
concern is dependent upon positive future cash flows.
Management believes that the Company will be able to finance its needs given
the fact that the additional corporate receivables, as well as the
consideration received as part of the transaction with Arcona Property Fund
N.V. and of the rest of the transactions, is estimated that it can effectively
discharge all corporate liabilities.
3. Adoption of new and revised Standards and Interpretations
During the current year the Company adopted all the new and revised
International Financial Reporting Standards (IFRS) that are relevant to its
operations and are effective for accounting periods beginning on 1 January
2024. This adoption did not have a material effect on the accounting policies
of the Company.
4. Material accounting policy information
The material accounting policies adopted in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all years presented in these consolidated financial
statements unless otherwise stated.
Local statutory accounting principles and procedures differ from those
generally accepted under IFRS. Accordingly, the consolidated financial
information, which has been prepared from the local statutory accounting
records for the entities of the Group domiciled in Cyprus, Romania, and
Ukraine reflects adjustments necessary for such consolidated financial
information to be presented in accordance with IFRS.
4.1 Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities (including special purpose entities) controlled by
the Company (its subsidiaries).
Subsidiaries are all entities (including structured entities) over which the
Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity.
The Group applies the acquisition method to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the fair
values of the assets transferred, the liabilities incurred to the former
owners of the acquiree and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets
acquired, liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition
date. The Group recognizes any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognized amounts of
acquiree's identifiable net assets.
If the business combination is achieved in stages, the acquisition date
carrying value of the acquirer's previously held equity interest in the
acquiree is re-measured to fair value at the acquisition date; any gains or
losses arising from such re-measurement are recognized in profit or loss.
Any contingent consideration to be transferred by the Group is recognized at
fair value at the acquisition date. Subsequent changes to the fair value of
the contingent consideration that is deemed to be an asset or liability is
recognized in accordance with IAS 39, either in profit or loss or as a change
to other comprehensive income. Contingent consideration that is classified as
equity is not re-measured and its subsequent settlement is accounted for
within equity.
If the initial accounting for a business combination is incomplete by the end
of the reporting period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see
above), or additional assets or liabilities are recognized, to reflect new
information obtained about facts and circumstances that existed at the
acquisition date that, if known, would have affected the amounts recognized at
that date.
Business combinations that took place prior to 1 January 2010 were accounted
for in accordance with the previous version of IFRS 3.
Inter-company transactions, balances and unrealized gains on transactions
between group companies are eliminated. Unrealized losses are also eliminated.
When necessary, amounts reported by subsidiaries have been adjusted to conform
with the Group's accounting policies.
Changes in ownership interests in subsidiaries without change of control and
Disposal of Subsidiaries
Transactions with non-controlling interests that do not result in loss of
control are accounted for as equity transactions - that is, as transactions
with the owners in their capacity as owners. The difference between fair value
of any consideration paid and the relevant share acquired of the carrying
value of net assets of the subsidiary is recorded in equity. Gains or losses
on disposals of non-controlling interests are also recorded in equity.
When the Group ceases to have control, any retained interest in the entity is
re-measured to its fair value at the date when control is lost, with the
change in carrying amount recognized in profit or loss. The fair value is the
initial carrying amount for the purposes of subsequently accounting for the
retained interest as an associate, joint venture or financial asset. In
addition, any amounts previously recognized in other comprehensive income in
respect of that entity are accounted for as if the Group had directly disposed
of the related assets or liabilities. This may mean that amounts previously
recognized in other comprehensive income are reclassified to profit or loss.
4.2 Functional and presentation currency
Items included in the Group's financial statements are measured applying the
currency of the primary economic environment in which the entities operate
(''the functional currency''). The national currency of Ukraine, the Ukrainian
Hryvnia, is the functional currency for all the Group's entities located in
Ukraine, the Romanian leu is the functional currency for all Group's entities
located in Romania, and the Euro is the functional currency for all Cypriot
subsidiaries.
The consolidated financial statements are presented in Euro, which is the
Group's presentation currency.
As Management records the consolidated financial information of the entities
domiciled in Cyprus, Romania, Ukraine in their functional currencies, in
translating financial information of the entities domiciled in these countries
into Euro for inclusion in the consolidated financial statements, the Group
follows a translation policy in accordance with IAS 21, "The Effects of
Changes in Foreign Exchange Rates", and the following procedures are
performed:
• All assets and liabilities are translated at
closing rate;
• Equity of the Group has been translated using
the historical rates;
• Income and expense items are translated using
exchange rates at the dates of the transactions, or where this is not
practicable the average rate has been used;
• All resulting exchange differences are
recognized as a separate component of equity;
• When a foreign operation is disposed of through
sale, liquidation, repayment of share capital or abandonment of all, or part
of that entity, the exchange differences deferred in equity are reclassified
to the consolidated statement of comprehensive income as part of the gain or
loss on sale;
• Monetary items receivable from foreign
operations for which settlement is neither planned nor likely to occur in the
foreseeable future and in substance are part of the Group's net investment in
those foreign operations are recongised initially in other comprehensive
income and reclassified from equity to profit or loss on disposal of the
foreign operation.
The relevant exchange rates of the European and local central banks used in
translating the financial information of the entities from the functional
currencies into Euro are as follows:
Average 31 December
Currency 2024 2023 2024 2023 2022
USD 1,0824 1,0813 1,0389 1,1050 1,0666
UAH 43,4504 39,5582 43,6855 42,2079 38,9510
RON 4,9748 4,9465 4,9741 4,9746 4,9474
4.3 Discontinued operations
A discontinued operation is a component of the Group's business, the
operations and cash flows of which can be clearly distinguished from the rest
of the Group and which:
• represents a separate major line of business or
geographic area of operations;
• is part of a single coordinated plan to dispose
of a separate major line of business or geographic area of operations; or
• is a subsidiary acquired exclusively with a view
to resale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets the criteria to be classified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative
statement of profit or loss and OCI is re-presented as if the operation had
been discontinued from the start of the comparative year.
4.4 Investment Property at fair value
Investment property, comprising freehold and leasehold land, investment
properties held for future development, warehouse and office properties, as
well as the residential property units, is held for long term rental yields
and/or for capital appreciation and is not occupied by the Group. Investment
property and investment property under construction are carried at fair value,
representing open market value determined annually by external valuers.
Changes in fair values are recorded in the statement of comprehensive income
and are included in other operating income.
A number of the land leases (all in Ukraine) are held for relatively short
terms and place an obligation upon the lessee to complete development by a
predetermined date. It is important to note that the rights to complete a
development may be lost or at least delayed if the lessee fails to complete a
permitted development within the timescale set out by the ground lease.
In addition, in the event that a development has not commenced upon the expiry
of a lease then the City Authorities are entitled to decline the granting of a
new lease on the basis that the land is not used in accordance with the
designation. Furthermore, where all necessary permissions and consents for the
development are not in place, this may provide the City Authorities with
grounds for rescinding or non-renewal of the ground lease. However Management
believes that the possibility of such action is remote and was made only under
limited circumstances in the past.
Land held under operating lease is classified and accounted for as investment
property when the rest of the definition is met.
Investment property under development or construction initially is measured at
cost, including related transaction costs.
The property is classified in accordance with the intention of the management
for its future use. Intention to use is determined by the Board of Directors
after reviewing market conditions, profitability of the projects, ability to
finance the project and obtaining required construction permits.
The time point, when the intention of the management is finalized is the date
of start of construction. At the moment of start of construction, freehold
land, leasehold land and investment properties held for a future redevelopment
are reclassified into investment property under development or inventory in
accordance to the final decision of management.
Initial measurement and recognition
Investment property is measured initially at cost, including related
transaction costs. Investment properties are derecognized when either they
have been disposed of or when the investment property is permanently withdrawn
from use and no future economic benefit is expected from its disposal. Any
gains or losses on the retirement or disposal of an investment property are
recognized in the consolidated statement of comprehensive income in the period
of retirement or disposal.
Transfers are made to investment property when, and only when, there is a
change in use, evidenced by the end of owner occupation, or the commencement
of an operating lease to third party. Transfers are made from investment
property when, and only when, there is a change in use, evidenced by
commencement of owner occupation or commencement of development with a view to
sale.
If an investment property becomes owner occupied, it is reclassified as
property, plant and equipment, and its fair value at the date of
reclassification becomes its cost for accounting purposes. Property that is
being constructed or developed for future use as investment property is
classified as investment property under construction until construction or
development is complete. At that time, it is reclassified and subsequently
accounted for as investment property.
Subsequent measurement
Subsequent to initial recognition, investment property is stated at fair
value. Gains or losses arising from changes in the fair value of investment
property are included in the statement of comprehensive income in the period
in which they arise.
If a valuation obtained for an investment property held under a lease is net
of all payments expected to be made, any related liabilities/assets recognized
separately in the statement of financial position are added back/reduced to
arrive at the carrying value of the investment property for accounting
purposes.
Subsequent expenditure is charged to the asset's carrying amount only when it
is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other
repairs and maintenance costs are charged to the statement of comprehensive
income during the financial period in which they are incurred.
Basis of valuation
The fair values reflect market conditions at the financial position date.
These valuations are prepared annually by chartered surveyors (hereafter
"appraisers"). The Group appointed valuers in 2014, which remain the same in
2024:
• CBRE Ukraine, for all its Ukrainian properties,
• NAI Real Act for all its Romanian properties.
The valuations have been carried out by the appraisers on the basis of Market
Value in accordance with the appropriate sections of the current Practice
Statements contained within the Royal Institution of Chartered Surveyors
("RICS") Valuation - Global Standards (2018) (the "Red Book") and is also
compliant with the International Valuation Standards (IVS).
"Market Value" is defined as: "The estimated amount for which a property
should be exchanged on the date of valuation between a willing buyer and a
willing seller in an arm's-length transaction after proper marketing actions,
wherein the parties had each acted knowledgeably, prudently and without
compulsion".
In expressing opinions on Market Value, in certain cases the appraisers have
estimated net annual rentals/income from sale. These are assessed on the
assumption that they are the best rent/sale prices at which a new letting/sale
of an interest in property would have been completed at the date of valuation
assuming: a willing landlord/buyer; that prior to the date of valuation there
had been a reasonable period (having regard to the nature of the property and
the state of the market) for the proper marketing of the interest, for the
agreement of the price and terms and for the completion of the letting/sale;
that the state of the market, levels of value and other circumstances were, on
any earlier assumed date of entering into an agreement for lease/sale, the
same as on the valuation date; that no account is taken of any additional bid
by a prospective tenant/buyer with a special interest; that the principal deal
conditions assumed to apply are the same as in the market at the time of
valuation; that both parties to the transaction had acted knowledgeably,
prudently and without compulsion.
A number of properties are held by way of ground leasehold interests granted
by the City Authorities. The ground rental payments of such interests may be
reviewed on an annual basis, in either an upwards or downwards direction, by
reference to an established formula. Within the terms of the lease, there is a
right to extend the term of the lease upon expiry in line with the existing
terms and conditions thereof. In arriving at opinions of Market Value, the
appraisers assumed that the respective ground leases are capable of extension
in accordance with the terms of each lease. In addition, given that such
interests are not assignable, it was assumed that each leasehold interest is
held by way of a special purpose vehicle ("SPV"), and that the shares in the
respective SPVs are transferable.
With regard to each of the properties considered, in those instances where
project documentation has been agreed with the respective local authorities,
opinions of the appraisers of value have been based on such agreements.
In those instances where the properties are held in part ownership, the
valuations assume that these interests are saleable in the open market without
any restriction from the co-owner and that there are no encumbrances within
the share agreements which would impact the sale ability of the properties
concerned.
The valuation is exclusive of VAT and no allowances have been made for any
expenses of realization or for taxation which might arise in the event of a
disposal of any property.
In some instances the appraisers constructed a Discounted Cash Flow (DCF)
model. DCF analysis is a financial modeling technique based on explicit
assumptions regarding the prospective income and expenses of a property or
business. The analysis is a forecast of receipts and disbursements during the
period concerned. The forecast is based on the assessment of market prices for
comparable premises, build rates, cost levels etc. from the point of view of a
probable developer.
To these projected cash flows, an appropriate, market-derived discount rate is
applied to establish an indication of the present value of the income stream
associated with the property. In this case, it is a development property and
thus estimates of capital outlays, development costs, and anticipated sales
income are used to produce net cash flows that are then discounted over the
projected development and marketing periods. The Net Present Value (NPV) of
such cash flows could represent what someone might be willing to pay for the
site and is therefore an indicator of market value. All the payments are
projected in nominal US Dollar/Euro amounts and thus incorporate relevant
inflation measures.
Valuation Approach
In addition to the above general valuation methodology, the appraisers have
taken into account in arriving at Market Value the following:
Pre Development
In those instances where the nature of the 'Project' has been defined, it was
assumed that the subject property will be developed in accordance with this
blueprint. The final outcome of the development of the property is determined
by the Board of Directors decision, which is based on existing market
conditions, profitability of the project, ability to finance the project and
obtaining required construction permits.
Development
In terms of construction costs, the budgeted costs have been taken into
account in considering opinions of value. However, the appraisers have also
had regard to current construction rates prevailing in the market which a
prospective purchaser may deem appropriate to adopt in constructing each
individual scheme. Although in some instances the appraisers have adopted the
budgeted costs provided, in some cases the appraisers' own opinions of costs
were used.
Post Development
Rental values have been assessed as at the date of valuation but having regard
to the existing occupational markets taking into account the likely supply and
demand dynamics during the anticipated development period. The standard
letting fees were assumed within the valuations. In arriving at their
estimates of gross development value ("GDV"), the appraisers have capitalized
their opinion of net operating income, having deducted any anticipated
non-recoverable expenses, such as land payments, and permanent void allowance,
which has then been capitalized into perpetuity.
The capitalization rates adopted in arriving at the opinions of GDV reflect
the appraisers' opinions of the rates at which the properties could be sold as
at the date of valuation.
In terms of residential developments, the sales prices per sq. m. again
reflect current market conditions and represent those levels the appraisers
consider to be achievable at present. It was assumed that there are no
irrecoverable operating expenses and that all costs will be recovered from the
occupiers/owners by way of a service charge.
The valuations take into account the requirement to pay ground rental payments
and these are assumed not to be recoverable from the occupiers. In terms of
ground rent payments, the appraisers have assessed these on the basis of
information available, and if not available they have calculated these
payments based on current legislation defining the basis of these assessments.
4.5 Goodwill
Goodwill arising on an acquisition of a business is carried at cost as
established at the date of acquisition of the business less accumulated
impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the
Group's cash-generating units (or Groups of cash-generating units) that is
expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for
impairment annually, or more frequently when there is indication that the unit
may be impaired. If the recoverable amount of the cash-generating unit is less
than its carrying amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other
assets of the unit pro rata based on the carrying amount of each asset in the
unit. Any impairment loss for goodwill is recognized directly in profit or
loss in the consolidated statement of comprehensive income. An impairment loss
recognized for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of
goodwill is included in the determination of the profit or loss on disposal.
4.6 Property, Plant and equipment and intangible assets
Property, plant and equipment and intangible non-current assets are stated at
historical cost less accumulated depreciation and amortization and any
accumulated impairment losses.
Properties in the course of construction for production, rental or
administrative purposes, or for purposes not yet determined and intangibles
not inputted into exploitation, are carried at cost, less any recognized
impairment loss. Cost includes professional fees and, for qualifying assets,
borrowing costs capitalized in accordance with the Group's accounting policy.
Depreciation of these assets, on the same basis as other property assets,
commences when the assets are ready for their intended use.
Depreciation and amortization are calculated on the straight line basis so as
to write off the cost of each asset to its residual value over its estimated
useful life. The annual depreciation rates are as follows:
Type %
Leasehold 20
IT hardware 33
Motor vehicles 25
Furniture, fixtures and office equipment 20
Machinery and equipment 15
Software and Licenses 33
No depreciation is charged on land.
Assets held under leases are depreciated over their expected useful lives on
the same basis as owned assets or, where shorter, the term of the relevant
lease.
The assets residual values and useful lives are reviewed, and adjusted, if
appropriate, at each reporting date.
Where the carrying amount of an asset is greater than its estimated
recoverable amount, the asset is written down immediately to its recoverable
amount.
Expenditure for repairs and maintenance of tangible and intangible assets is
charged to the statement of comprehensive income of the year in which it is
incurred. The cost of major renovations and other subsequent expenditure are
included in the carrying amount of the asset when it is probable that future
economic benefits in excess of the originally assessed standard of performance
of the existing asset will flow to the Group. Major renovations are
depreciated over the remaining useful life of the related asset.
An item of tangible and intangible assets is derecognized upon disposal or
when no future economic benefits are expected to arise from the continued use
of the asset. Any gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the difference between
the sales proceeds and the carrying amount of the asset and is recognized in
the statement of comprehensive income.
4.7 Cash and Cash equivalents
Cash and cash equivalents include cash balances and call deposits. Bank
overdrafts that are repayable on demand and form an integral part of the
Group's cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash flows.
4.8 Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are
classified as held-for-sale if it is highly probable that they will be
recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their
carrying amount and fair value less costs to sell. Any impairment loss on a
disposal group is allocated first to goodwill, and then to the remaining
assets and liabilities on a pro rata basis, except that no loss is allocated
to inventories, financial assets or investment property, which continue to be
measured in accordance with the Group's other accounting policies. Impairment
losses on initial classification as held-for-sale or held-for-distribution and
subsequent gains and losses on remeasurement are recognised in profit or loss.
4.9 Financial Instruments
4.9.1 Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when
they are originated. All other financial assets and financial liabilities are
initially recognised when the Group becomes a party to the contractual
provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant
financing component) or financial liability is initially measured at fair
value plus, for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue. A trade receivable without a
significant financing component is initially measured at the transaction
price.
4.9.2 Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at:
amortised cost; FVOCI - debt investment; FVOCI - equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition
unless the Group changes its business model for managing financial assets, in
which case all affected financial assets are reclassified on the first day of
the first reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the
following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective
is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following
conditions and is not designated as at FVTPL:
- it is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling financial
assets; and
- its contractual terms give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
- On initial recognition of an equity investment
that is not held for trading, the Group may irrevocably elect to present
subsequent changes in the investment's fair value in OCI. This election is
made on an investment-by-investment basis.
Financial assets - Business model assessment:
The Group makes an assessment of the objective of the business model in which
a financial asset is held at a portfolio level because this best reflects the
way the business is managed and information is provided to management. The
information considered includes:
- the stated policies and objectives for the
portfolio and the operation of those policies in practice. These include
whether management's strategy focuses on earning contractual interest income,
maintaining a particular interest rate profile, matching the duration of the
financial assets to the duration of any related liabilities or expected cash
outflows or realising cash flows through the sale of the assets;
- how the performance of the portfolio is evaluated
and reported to the Group's management;
- the risks that affect the performance of the
business model (and the financial assets held within that business model) and
how those risks are managed;
- how managers of the business are compensated -
e.g. whether compensation is based on the fair value of the assets managed or
the contractual cash flows collected; and
- the frequency, volume and timing of sales of
financial assets in prior periods, the reasons for such sales and expectations
about future sales activity.
Transfers of financial assets to third parties in transactions that do not
qualify for derecognition are not considered sales for this purpose,
consistent with the Group's continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose
performance is evaluated on a fair value basis are measured at FVTPL.
Financial assets - Assessment whether contractual cash flows are solely
payments of principal and interest:
For the purposes of this assessment, 'principal' is defined as the fair value
of the financial asset on initial recognition. 'Interest' is defined as
consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period of time and
for other basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of
principal and interest, the Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a
contractual term that could change the timing or amount of contractual cash
flows such that it would not meet this condition. In making this assessment,
the Group considers:
- contingent events that would change the amount or
timing of cash flows;
- terms that may adjust the contractual coupon rate,
including variable-rate features;
- prepayment and extension features; and
- terms that limit the Group's claim to cash flows
from specified assets (e.g. non-recourse features).
A prepayment feature is consistent with the solely payments of principal and
interest criterion if the prepayment amount substantially represents unpaid
amounts of principal and interest on the principal amount outstanding, which
may include reasonable additional compensation for early termination of the
contract. Additionally, for a financial asset acquired at a discount or
premium to its contractual par amount, a feature that permits or requires
prepayment at an amount that substantially represents the contractual par
amount plus accrued (but unpaid) contractual interest (which may also include
reasonable additional compensation for early termination) is treated as
consistent with this criterion if the fair value of the prepayment feature is
insignificant at initial recognition.
Financial assets - Subsequent measurement and gains and losses:
These assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognised in profit or loss.
However for derivatives designated as hedging instruments.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment are recognised in
profit or loss. Any gain or loss on derecognition is recognised in profit or
loss.
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income
calculated using the effective interest method, foreign exchange gains and
losses and impairment are recognised in profit or loss. Other net gains and
losses are recognised in OCI. On derecognition, gains and losses accumulated
in OCI are reclassified to profit or loss.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognised
as income in profit or loss unless the dividend clearly represents a recovery
of part of the cost of the investment. Other net gains and losses are
recognised in OCI and are never reclassified to profit or loss.
4.9.3 Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the
cash flows from the financial asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction in which substantially all
of the risks and rewards of ownership of the financial asset are transferred
or in which the Group neither transfers nor retains substantially all of the
risks and rewards of ownership and it does not retain control of the financial
asset.
The Group enters into transactions whereby it transfers assets recognised in
its statement of financial position, but retains either all or substantially
all of the risks and rewards of the transferred assets. In these cases, the
transferred assets are not derecognised.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations
are discharged or cancelled, or expire. The Group also derecognises a
financial liability when its terms are modified and the cash flows of the
modified liability are substantially different, in which case a new financial
liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying
amount extinguished and the consideration paid (including any non-cash assets
transferred or liabilities assumed) is recognised in profit or loss.
4.9.4 Offsetting
Financial assets and financial liabilities are offset and the net amount
presented in the statement of financial position when, and only when, the
Group currently has a legally enforceable right to set off the amounts and it
intends either to settle them on a net basis or to realise the asset and
settle the liability simultaneously.
4.9.5 Derivative financial instruments and hedge accounting
Derivative financial instruments and hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency
and interest rate risk exposures. Embedded derivatives are separated from the
host contract and accounted for separately if the host contract is not a
financial asset and certain criteria are met.
Derivatives are initially measured at fair value. Subsequent to initial
recognition, derivatives are measured at fair value, and changes therein are
generally recognised in profit or loss.
The Group designates certain derivatives as hedging instruments to hedge the
variability in cash flows associated with highly probable forecast
transactions arising from changes in foreign exchange rates and interest rates
and certain derivatives and non-derivative financial liabilities as hedges of
foreign exchange risk on a net investment in a foreign operation.
At inception of designated hedging relationships, the Group documents the risk
management objective and strategy for undertaking the hedge. The Group also
documents the economic relationship between the hedged item and the hedging
instrument, including whether the changes in cash flows of the hedged item and
hedging instrument are expected to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the
effective portion of changes in the fair value of the derivative is recognised
in OCI and accumulated in the hedging reserve. The effective portion of
changes in the fair value of the derivative that is recognised in OCI is
limited to the cumulative change in fair value of the hedged item, determined
on a present value basis, from inception of the hedge. Any ineffective portion
of changes in the fair value of the derivative is recognised immediately in
profit or loss.
The Group designates only the change in fair value of the spot element of
forward exchange contracts as the hedging instrument in cash flow hedging
relationships. The change in fair value of the forward element of forward
exchange contracts ('forward points') is separately accounted for as a cost of
hedging and recognised in a costs of hedging reserve within equity.
When the hedged forecast transaction subsequently results in the recognition
of a non-financial item such as inventory, the amount accumulated in the
hedging reserve and the cost of hedging reserve is included directly in the
initial cost of the non-financial item when it is recognised.
For all other hedged forecast transactions, the amount accumulated in the
hedging reserve and the cost of hedging reserve is reclassified to profit or
loss in the same period or periods during which the hedged expected future
cash flows affect profit or loss.
If the hedge no longer meets the criteria for hedge accounting or the hedging
instrument is sold, expires, is terminated or is exercised, then hedge
accounting is discontinued prospectively. When hedge accounting for cash flow
hedges is discontinued, the amount that has been accumulated in the hedging
reserve remains in equity until, for a hedge of a transaction resulting in the
recognition of a non-financial item, it is included in the non-financial
item's cost on its initial recognition or, for other cash flow hedges, it is
reclassified to profit or loss in the same period or periods as the hedged
expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the
amounts that have been accumulated in the hedging reserve and the cost of
hedging reserve are immediately reclassified to profit or loss.
Net investment hedges
When a derivative instrument or a non-derivative financial liability is
designated as the hedging instrument in a hedge of a net investment in a
foreign operation, the effective portion of, for a derivative, changes in the
fair value of the hedging instrument or, for a non-derivative, foreign
exchange gains and losses is recognised in OCI and presented in the
translation reserve within equity. Any ineffective portion of the changes in
the fair value of the derivative or foreign exchange gains and losses on the
non-derivative is recognised immediately in profit or loss. The amount
recognised in OCI is reclassified to profit or loss as a reclassification
adjustment on disposal of the foreign operation.
4.10 Leases
At inception of a contract, the Company assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Company assesses whether:
the contract involves the use of an identified asset this may be specified
explicitly or implicitly, and should be physically distinct or represent
substantially all of the capacity of a physically distinct asset. If the
supplier has a substantive substitution right, then the asset is not
identified;
- the Company has the right to obtain substantially
all of the economic benefits from use of the asset throughout the period of
use; and
- the Company has the right to direct the use of the
asset. The Company has this right when it has the decision making rights that
are most relevant to changing how and for what purpose the asset is used. In
rare cases where the decision about how and for what purpose the asset is used
is predetermined, the Company has the right to direct the use of the asset if
either:
- the Company has the right to operate the asset; or
- the Company designed the asset in a way that
predetermines how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a lease component,
the Company allocates the consideration in the contract to each lease
component on the basis of their relative stand alone prices. However, for the
leases of land and buildings in which it is a lessee, the Company has elected
not to separate non lease components and account for the lease and non lease
components as a single lease component.
The Company as lessor
When the Company acts as a lessor, it determines at lease inception whether
each lease is a finance lease or an operating lease.
To classify each lease, the Company makes an overall assessment of whether the
lease transfers substantially all of the risks and rewards incidental to
ownership of the underlying asset. If this is the case, then the lease is a
finance lease; if not, then it is an operating lease. As part of this
assessment, the Company considers certain indicators such as whether the lease
is for the major part of the economic life of the asset.
When the Company is an intermediate lessor, it accounts for its interests in
the head lease and the sub lease separately. It assesses the lease
classification of a sub lease with reference to the right of use asset arising
from the head lease, not with reference to the underlying asset. If a head
lease is a short term lease to which the Company applies the exemption
described above, then it classifies the sub lease as an operating lease.
If an arrangement contains lease and non lease components, the Company applies
IFRS 15 to allocate the consideration in the contract.
The Company recognises lease payments received under operating leases as
income on a straight line basis over the lease term as part of 'other income'.
The accounting policies applicable to the Company as a lessor in the
comparative period were not different from IFRS 16. However, when the Company
was an intermediate lessor the sub leases were classified with reference to
the underlying asset.
The Company as lessee
The Company recognises a right of use asset and a lease liability at the lease
commencement date. The right of use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right of use asset is subsequently depreciated using the straight line
method from the commencement date to the earlier of the end of the useful life
of the right of use asset or the end of the lease term. The estimated useful
lives of the right of use assets are determined on the same basis as those of
property and equipment. In addition, the right of use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the
following:
- fixed payments, including in substance fixed
payments;
- variable lease payments that depend on an index or
a rate, initially measured using the index or rate as at the commencement
date;
- amounts expected to be payable under a residual
value guarantee; and
- the exercise price under a purchase option that
the Company is reasonably certain to exercise, lease payments in an optional
renewal period if the Company is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the Company is
reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, if there is a change in the
Company's estimate of the amount expected to be payable under a residual value
guarantee, or if the Company changes its assessment of whether it will
exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right of use asset, or is recorded in
profit or loss if the carrying amount of the right of use asset has been
reduced to zero.
The Company presents its right of use assets that do not meet the definition
of investment property in 'Property, plant and equipment' in the statement of
financial position.
The lease liabilities are presented in 'loans and borrowings' in the statement
of financial position.
Short term leases and leases of low value assets
The Company has elected not to recognise the right of use assets and lease
liabilities for short term leases that have a lease term of 12 months or less
and leases of low value assets (i.e. IT equipment, office equipment etc.). The
Company recognises the lease payments associated with these leases as an
expense on a straight line basis over the lease term.
4.11 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is
recognized in profit or loss over the period of the borrowings, using the
effective interest method, unless they are directly attributable to the
acquisition, construction or production of a qualifying asset, in which case
they are capitalized as part of the cost of that asset.
Fees paid on the establishment of loan facilities are recognized as
transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs. To the extend there is no evidence that it is
probable that some or all of the facility will be drawn down, the fee is
capitalized as a prepayment and amortised over the period of the facility to
which it relates.
Borrowing costs are interest and other costs that the Group incurs in
connection with the borrowing of funds, including interest on borrowings,
amortization of discounts or premium relating to borrowings, amortization of
ancillary costs incurred in connection with the arrangement of borrowings,
finance lease charges and exchange differences arising from foreign currency
borrowings to the extent that they are regarded as an adjustment to interest
costs.
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset, being an asset that
necessarily takes a substantial period of time to get ready for its intended
use or sale, are capitalised as part of the cost of that asset, when it is
probable that they will result in future economic benefits to the Group and
the costs can be measured reliably.
Borrowings are classified as current liabilities, unless the Group has an
unconditional right to defer settlement of the liability for at least twelve
months after the reporting date.
4.12 Tenant security deposits
Tenant security deposits represent financial advances made by lessees as
guarantees during the lease and are repayable by the Group upon termination of
the contracts. Tenant security deposits are recognized at nominal value.
4.13 Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Group reviews the carrying amounts of
its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to which the
asset belongs. Where a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual cash-generating
units, or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent allocation basis
can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet
available for use are tested for impairment loss annually, and whenever there
is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset.
If the recoverable amount of an asset (or cash generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (cash
generating unit) is reduced to its recoverable amount. An impairment loss is
recognized immediately in profit or loss, unless the relevant asset is carried
at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognized for the asset (cash generating unit) in prior years. A
reversal of an impairment loss is recognized immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
4.14 Share Capital
Ordinary shares are classified as equity.
4.15 Share premium
The difference between the fair value of the consideration received by the
shareholders and the nominal value of the share capital being issued is taken
to the share premium account.
4.16 Share-based compensation
The Group had in the past and intends in the future to operate a number of
equity-settled, share-based compensation plans, under which the Group receives
services from Directors and/or employees as consideration for equity
instruments (options) of the Group. The fair value of the Director and
employee cost related to services received in exchange for the grant of the
options is recognized as an expense. The total amount to be expensed is
determined by reference to the fair value of the options granted, excluding
the impact of any non-market service and performance vesting conditions. The
total amount expensed is recognized over the vesting period, which is the
period over which all of the specified vesting conditions are to be satisfied.
At each financial position date, the Group revises its estimates on the number
of options that are expected to vest based on the non-marketing vesting
conditions. It recognizes the impact of the revision to original estimates, if
any, in the statement of comprehensive income, with a corresponding adjustment
to equity. The proceeds received net of any directly attributable transaction
costs are credited to share capital and share premium when the options are
exercised.
4.17 Provisions
Provisions are recognized when the Group has a present obligation (legal, tax
or constructive) as a result of a past event, it is probable that the Group
will be required to settle the obligation and a reliable estimate can be made
of the amount of the obligation. As at the reporting date the Group has
settled all its construction liabilities.
The amount recognized as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value of those cash
flows (where the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are
expected to be recovered from a third party, a receivable is recognized as an
asset if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
4.18 Non current liabilities
Non current liabilities represent amounts that are due in more than twelve
months from the reporting date.
4.19 Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable. Revenue is reduced for estimated customer returns, rebates and
other similar allowances. It is recognized to the extent that it is probable
that the economic benefits associated with the transaction will flow to the
Group and the revenue can be measured reliably. Revenue earned by the Group is
recognized on the following bases:
4.20.1 Income from investing activities
Income from investing activities includes profit received from disposal of
investments in the Company's subsidiaries and associates and income accrued on
advances for investments outstanding as at the year end.
4.20.2 Dividend income
Dividend income from investments is recognized when the shareholders' right to
receive payment has been established (provided that it is probable that the
economic benefits will flow to the Group and the amount of income can be
measured reliably).
4.20.3 Interest income
Interest income is recognized on a time-proportion (accrual) basis, using the
effective interest rate method.
4.20.4 Rental income
Rental income arising from operating leases on investment property is
recognized on an accrual basis in accordance with the substance of the
relevant agreements.
4.20 Service charges and expenses recoverable from tenants
Income arising from expenses recharged to tenants is recognized on an accrual
basis.
4.21 Other property expenses
Irrecoverable running costs directly attributable to specific properties
within the Group's portfolio are charged to the statement of comprehensive
income. Costs incurred in the improvement of the assets which, in the opinion
of the directors, are not of a capital nature are written off to the statement
of comprehensive income as incurred.
4.22 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings
pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalization.
All other borrowing costs are recognized in the statement of comprehensive
income in the period in which they are incurred as interest costs which are
calculated using the effective interest rate method, net result from
transactions with securities, foreign exchange gains and losses, and bank
charges and commission.
4.23 Asset Acquisition Related Transaction Expenses
Expenses incurred by the Group for acquiring a subsidiary or associate company
as part of an Investment Property and are directly attributable to such
acquisition are recognized within the cost of the Investment Property and are
subsequently accounted as per the Group's accounting policy for Investment
Property subsequent measurement.
4.24 Taxation
Income tax expense represents the sum of the tax currently payable and
deferred tax.
4.24.1 Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from profit as reported in the consolidated statement of
comprehensive income because of items of income or expense that are taxable or
deductible in other years and items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting period.
4.24.2 Deferred tax
Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Currently enacted tax rates are
used in the determination of deferred tax.
Deferred tax assets are recognized to the extent that it is probable that
future taxable profit will be available against which the temporary
differences can be utilized.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when the deferred taxes relate to the same fiscal authority.
4.24.3 Current and deferred tax for the year
Current and deferred tax are recognized in the statement of comprehensive
income, except when they relate to items that are recognized in other
comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognized in other comprehensive income or directly in
equity respectively. Where current tax or deferred tax arises from the initial
accounting for a business combination, the tax effect is included in the
accounting for the business combination.
The operational subsidiaries of the Group are incorporated in Ukraine and
Romania, while the Parent and some holding companies are incorporated in
Cyprus. The Group's management and control is exercised in Cyprus.
The Group's Management does not intend to dispose of any asset, unless a
significant opportunity arises. In the event that a decision is taken in the
future to dispose of any asset it is the Group's intention to dispose of
shares in subsidiaries rather than assets. The corporate income tax exposure
on disposal of subsidiaries is mitigated by the fact that the sale would
represent a disposal of the securities by a non resident shareholder and
therefore would be exempt from tax. The Group is therefore in a position to
control the reversal of any temporary differences and as such, no deferred tax
liability has been provided for in the financial statements.
4.24.4 Withholding Tax
The Group follows the applicable legislation as defined in all double taxation
treaties (DTA) between Cyprus and any of the countries of Operations (Romania,
Ukraine,). In the case of Romania, as the latter is part of the European
Union, through the relevant directives the withholding tax is reduced to NIL
subject to various conditions.
4.24.5 Dividend distribution
Dividend distribution to the Company's shareholders is recognized as a
liability in the Group's financial statements in the period in which the
dividends are approved by the Company's shareholders.
4.25 Value added tax
VAT levied at various jurisdictions were the Group is active, was at the
following rates, as at the end of the reporting period:
• 20% on Ukrainian domestic sales and imports of
goods, works and services and 0% on export of goods and provision of works or
services to be used outside Ukraine.
• 19% on Cyprus domestic sales and imports of
goods, works and services and 0% on export of goods and provision of works or
services to be used outside Cyprus.
• 19% on Romanian domestic sales and imports of
goods, works and services (decreased from 20% from 1 January 2017) and 0% on
export of goods and provision of works or services to be used outside Romania.
4.26 Operating segments analysis
Segment reporting is presented on the basis of Management's perspective and
relates to the parts of the Group that are defined as operating segments.
Operating segments are identified on the basis of their economic nature and
through internal reports provided to the Group's Management who oversee
operations and make decisions on allocating resources serve. These internal
reports are prepared to a great extent on the same basis as these consolidated
financial statements.
For the reporting period the Group has identified the following material
reportable segments, where the Group is active in acquiring, holding, managing
and disposing:
Commercial-Industrial Land Assets
· Warehouse segment · Land assets - the Group owns a number of land assets which are either
available for sale or for potential development
The Group also monitors investment property assets on a Geographical
Segmentation, namely the country where its property is located.
4.27 Earnings and Net Assets value per share
The Group presents basic and diluted earnings per share (EPS) and net asset
value per share (NAV) for its ordinary shares.
Basic EPS amounts are calculated by dividing net profit/loss for the year,
attributable to ordinary equity holders of the Company by the weighted average
number of ordinary shares outstanding during the year. Basic NAV amounts are
calculated by dividing net asset value as at year end, attributable to
ordinary equity holders of the Company by the number of ordinary shares
outstanding at the end of the year.
Diluted EPS is calculated by dividing net profit/loss for the year,
attributable to ordinary equity holders of the parent, by the weighted average
number of ordinary shares outstanding during the year plus the weighted
average number of ordinary shares that would be issued on conversion of all
the potentially dilutive ordinary shares into ordinary shares.
Diluted NAV is calculated by dividing net asset value as at year end,
attributable to ordinary equity holders of the parent with the number of
ordinary shares outstanding at year end plus the number of ordinary shares
that would be issued on conversion of all the potentially dilutive ordinary
shares into ordinary shares.
4.28 Comparative Period
Where necessary, comparative figures have been adjusted to conform to changes
in presentation in the current year.
5. New accounting pronouncement
At the date of approval of these financial statements, standards and
interpretations were issued by the International Accounting Standards Board
which were not yet effective. Some of them were adopted by the European Union
and others not yet. The Board of Directors expects that the adoption of these
accounting standards in future periods will not have a material effect on the
financial statements of the Company.
6. Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRSs requires the
use of certain critical accounting estimates and requires Management to
exercise its judgment in the process of applying the Group's accounting
policies. It also requires the use of assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. These estimates are
based on Management's best knowledge of current events and actions and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances. Actual results though may ultimately
differ from those estimates.
As the Group makes estimates and assumptions concerning the future, the
resulting accounting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below:
• Provision for impairment of receivables
The Group reviews its trade and other receivables for evidence of their
recoverability. Such evidence includes the counter party's payment record, and
overall financial position, as well as the state's ability to pay its dues
(VAT receivable). If indications of non-recoverability exist, the recoverable
amount is estimated and a respective provision for impairment of receivables
is made. The amount of the provision is charged through profit or loss. The
review of credit risk is continuous and the methodology and assumptions used
for estimating the provision are reviewed regularly and adjusted accordingly.
As at the reporting date Management did not consider necessary to make a
provision for impairment of receivables.
• Fair value of financial assets
The fair value of financial instruments that are not traded in an active
market is determined by using valuation techniques. The Company uses its
judgment to select a variety of methods and make assumptions that are mainly
based on market conditions existing at each reporting date. The fair value of
the financial assets at fair value through other comprehensive income has been
estimated based on the fair value of these individual assets.
• Fair value of investment property
The fair value of investment property is determined by using various valuation
techniques. The Group selects accredited professional valuers with local
presence to perform such valuations. Such valuers use their judgment to select
a variety of methods and make assumptions that are mainly based on market
conditions existing at each financial reporting date. The fair value has been
estimated as at 31 December 2024 (Note 18.2).
• Income taxes
Significant judgment is required in determining the provision for income
taxes. There are transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group
recognizes liabilities for anticipated tax audit issues based on estimates of
whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such
differences will impact the income tax and deferred tax provisions in the
period in which such determination is made.
• Impairment of tangible assets
Assets that are subject to depreciation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognized for the amount by which the
asset's carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset's fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units).
• Provision for deferred taxes
Deferred tax is not provided in respect of the revaluation of the investment
property and investment property under development as the Group is able to
control the timing of the reversal of this temporary difference and the
Management has intention not to reverse the temporary difference in the
foreseeable future. The properties are held by subsidiary companies in
Ukraine, Greece and Romania. Management estimates that the assets will be
realized through a share deal rather than through an asset deal. Should any
subsidiary be disposed of, the gains generated from the disposal will be
exempt from any tax.
• Application of IFRS 10
The Group has considered the application of IFRS 10 and concluded that the
Company is not an Investment Entity as defined by IFRS 10 and it should
continue to consolidate all of its investments, as in 2016. The reasons for
such conclusion are among others that the Company continues:
a) not to be an Investment Management Service provider to Investors,
b) to actively manages its own portfolio (leasing, development, allocation
of capital expenditure for its properties, marketing etc.) in order to provide
benefits other than capital appreciation and/or investment income,
c) to have investments that are not bound by time in relation to the
exit strategy nor to the way that are being exploited,
d) to provide asset management services to its subsidiaries, as well as
loans and guarantees (directly or indirectly),
e) even though is using Fair Value metrics in evaluating its
investments, this is being done primarily for presentation purposes rather
that evaluating income generating capability and making investment decisions.
The latter is being based on metrics like IRR, ROE and others.
7. Risk Management
7.1 Financial risk factors
The Group is exposed to operating country risk, real estate property holding
and development associated risks, property market price risk, interest rate
risk, credit risk, liquidity risk, currency risk, other market price risk,
operational risk, compliance risk, litigation risk, reputation risk, capital
risk and other risks, arising from the financial instruments it holds. The
risk management policies employed by the Group to manage these risks are
discussed below.
7.1.1 Operating Country Risks
The Group is exposed to risks stemming from the political and economic
environment of countries in which it operates. Notably:
7.1.1.1 Ukraine
Ukrainian economy recorded a 2,90% real GDP growth in 2024, a slowdown
compared to the 5,50% growth in 2023. This growth occurred despite the ongoing
war and Russia's attacks on infrastructure, with the fourth quarter even
experiencing a slight contraction of 0,1%. Domestic demand, loose fiscal
policy, and the National Bank of Ukraine's efforts to maintain financial
stability supported the economy.
In 2024, the consumer price index (CPI) accelerated to 12% exceeding the
forecasts made by country's National Bank. The increase came as a direct
consequence of the war, and in particular as a result of increased food costs
from the disruption of supply chains, as well as increased electricity costs
from the disruption of infrastructure facilities.
7.1.1.2 Romania
Romanian economy decelerated as compared to previous years and grew by 0,9% in
2024 driven primarily by private consumption on the back of wage and pension
increases. In contrast, agricultural and construction sectors, as well as
overall investment, recorded decrease in their activities, affecting in that
way negatively the overall growth of the economy.
The general government deficit reached 9,3% in 2024 due to the high increases
in public wages and pensions, while unemployment rate recorded marginally
lower at 5,4% and inflation rate notably lower at 5,8%. Taking into account
the European economic considerations and the international political
circumstances, the macroeconomic indicators of local economy have become
weaker than previous years, and therefore the associated risk has been
increased.
7.1.2 Risks associated with property holding and development associated risks
Several factors may affect the economic performance and value of the Group's
properties, including:
• risks associated with construction activity at
the properties, including delays, the imposition of liens and defects in
workmanship;
• the ability to collect rent from tenants on a
timely basis or at all, taking also into account currency rapid devaluation
risk;
• the amount of rent and the terms on which lease
renewals and new leases are agreed being less favorable than current leases;
• cyclical fluctuations in the property market
generally;
• local conditions such as an oversupply of
similar properties or a reduction in demand for the properties;
• the attractiveness of the property to tenants or
residential purchasers;
• decreases in capital valuations of property;
• changes in availability and costs of financing,
which may affect the sale or refinancing of properties;
• covenants, conditions, restrictions and
easements relating to the properties;
• changes in governmental legislation and
regulations, including but not limited to designated use, allocation,
environmental usage, taxation and insurance;
• the risk of bad or unmarketable title due to
failure to register or perfect our interests or the existence of prior claims,
encumbrances or charges of which we may be unaware at the time of purchase;
• the possibility of occupants in the properties,
whether squatters or those with legitimate claims to take possession;
• the ability to pay for adequate maintenance,
insurance and other operating costs, including taxes, which could increase
over time; and
• political uncertainty, acts of terrorism and
acts of nature, such as earthquakes and floods that may damage the properties.
7.1.3 Property Market price risk
Market price risk is the risk that the value of the Group's portfolio
investments will fluctuate as a result of changes in market prices. The
Group's assets are susceptible to market price risk arising from uncertainties
about future prices of the investments. The Group's market price risk is
managed through diversification of the investment portfolio, continuous
elaboration of the market conditions and active asset management. To quantify
the value of its assets and/or indicate the possibility of impairment losses,
the Group commissioned internationally acclaimed valuers.
7.1.4 Interest rate risk
Interest rate risk is the risk that the value of financial instruments will
fluctuate due to changes in market interest rates.
The Group's income and operating cash flows are substantially independent of
changes in market interest rates as the Group has no significant interest
bearing assets apart from its cash balances that are mainly kept for liquidity
purposes.
The Group is exposed to interest rate risk in relation to its borrowings.
Borrowings issued at variable rates expose the Group to cash flow interest
rate risk. Borrowings issued at fixed rates expose the Group to fair value
interest rate risk. All of the Group's borrowings are issued at a variable
interest rate. Management monitors the interest rate fluctuations on a
continuous basis and acts accordingly.
7.1.5 Credit risk
Credit risk arises when a failure by counter parties to discharge their
obligations could reduce the amount of future cash inflows from financial
assets at hand at the end of the reporting period. Cash balances are held with
high credit quality financial institutions and the Group has policies to limit
the amount of credit exposure to any financial institution.
7.1.6 Currency risk
Currency risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates.
Currency risk arises when future commercial transactions and recognized assets
and liabilities are denominated in a currency that is not the Group's
functional currency. Excluding the transactions in Ukraine, all of the Group's
transactions, including the rental proceeds are denominated or pegged to EUR.
In Ukraine, even though there is no recurring income stream, the fluctuations
of UAH against EUR entails significant FX risk for the Group in terms of its
local assets valuation. Management monitors the exchange rate fluctuations on
a continuous basis and acts accordingly, although there are no available
financial tools for hedging the exposure on UAH. It should be noted though
that the current war in Ukraine causing economic and political problems, as
well as any probable currency devaluation may affect Group's financial
position.
7.1.7 Capital risk management
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximizing the return to shareholders through the
optimization of the debt and equity balance. The Group's core strategy is
described in Note 41.1 of the consolidated financial statements.
7.1.8 Compliance risk
Compliance risk is the risk of financial loss, including fines and other
penalties, which arises from non compliance with laws and regulations of each
country the Group is present, as well as from the stock exchange where the
Company is listed. Although the Group is trying to limit such risk, the
uncertain environment in which it operates in various countries increases the
complexities handled by Management.
7.1.9 Litigation risk
Litigation risk is the risk of financial loss, interruption of the Group's
operations or any other undesirable situation that arises from the possibility
of non execution or violation of legal contracts and consequentially of
lawsuits. The risk is restricted through the contracts used by the Group to
execute its operations.
7.1.10 Insolvency risk
Insolvency arises from situations where a company may not meet its financial
obligations towards a lender as debts become due. Addressing and resolving any
insolvency issues is usually a slow moving process in the Region. Management
is closely involved in discussions with creditors when/if such cases arise in
any subsidiary of the Group aiming to effect alternate repayment plans
including debt repayment so as to minimize the effects of such situations on
the Group's asset base.
7.2. Operational risk
Operational risk is the risk that derives from the deficiencies relating to
the Group's information technology and control systems, as well as the risk of
human error and natural disasters. The Group's systems are evaluated,
maintained and upgraded continuously.
7.3. Fair value estimation
The fair values of the Group's financial assets and liabilities approximate
their carrying amounts at the end of the reporting period.
8. Investment in subsidiaries
The Company has direct and indirect holdings in other companies, collectively
called the Group, that were included in the consolidated financial statements,
and are detailed below.
Holding %
Name Country of incorporation Related Asset as at as at
31 Dec 2024 31 Dec 2023
SC Secure Capital Limited Cyprus 100 100
LLC Aisi Ukraine Ukraine Kiyanovskiy Residence - 100
LLC Trade Center Ukraine - 100
LLC Almaz‑Pres‑Ukraine Ukraine Tsymlyanskiy Residence* 55 55
LLC Retail Development Balabino** Ukraine 100 100
LLC Interterminal** Ukraine 100 100
LLC Aisi Ilvo** Ukraine 100 100
Myrnes Innovations Park Limited Cyprus Innovations Logistics Park 100 100
Best Day Real Estate Srl Romania 100 100
Yamano Holdings Limited** Cyprus 100 100
Bluehouse Accession Project IX Limited Cyprus 100 100
BlueBigBox 3 Srl *** Romania - -
SEC South East Continent Unique Real Estate Investments II Limited Cyprus 100 100
Ketiza Holdings Limited Cyprus 90 90
Frizomo Holdings Limited** Cyprus 100 100
SecMon Real Estate Srl Romania 100 100
Ketiza Real Estate Srl Romania 90 90
Jenby Ventures Limited** Cyprus 44,30 44,30
Ebenem Limited** Cyprus 44,30 44,30
SPDI Management Srl Romania 100 100
* As of November 2021, the Group had submitted properly the official request
to the City of Kiev to extend the lease of Tsymlyanskiy Residence property for
another 5 years, since the Group has first extension rights over any other
interested party. The first step in the process whereby the presiding
committee of the municipality convenes, before the final approval by the City
Council, delayed, and following the Russian insurgence of Ukraine, everything
has been put on hold. The Management remains confident that the Company will
be awarded the lease extension once the war status permits.
** The Company has initiated the process of striking off subsidiaries in
Cyprus, and Ukraine which became idle following the disposals of local asset
owning companies and properties. Some of these companies are still expecting
relevant official clearance from local Trade Registry and Tax Authorities.
*** During 2023 BlueBigBox 3 Srl, the SPV which used to hold Praktiker Craiova
property that was sold back in 2018, was entered into an insolvency process
initiated by a vendor. The case is associated with the Bluehouse litigation
case (Note 39.3). Following the settlement made with BLUEHOUSE ACCESSION
PROPERTY HOLDING III S.A.R.L. pursuant to a consensual order issued by the
District Court of Nicosia in action no. 3362/2018, relevant legal motions
against Bluebigbox3 Srl have been withdrawn. Although SPDI has re-gained
control of the subsidiary, it has been decided the insolvency process to be
continued, since the company is idle following the disposal of its relevant
asset.
9. Discontinued operations
9.(a) Description
The Company announced on 18 December 2018 that it has entered into a
conditional implementation agreement for the sale of its property portfolio,
excluding its Greek logistics properties ('the Non-Greek Portfolio'), in an
all-share transaction to Arcona Property Fund N.V. The transaction is subject
to, among other things, asset and tax due diligence (including third party
asset valuations) and regulatory approvals (including the approval of a
prospectus required in connection with the issuance and admission to listing
of the new Arcona Property Fund N.V. shares), as well as successful
negotiating and signature of transaction documents. During 2019 and as part of
the Arcona transaction the Company sold the Boyana Residence asset in
Bulgaria, as well as the Bela and Balabino land plots in Ukraine, while in
March and June 2021 has signed SPAs related to Stage 2 of the transaction,
namely for the EOS and Delenco assets in Romania, as well as the Kiyanovskiy
and Rozhny assets in Ukraine. In March and June 2022, the Company sold
effectively to Arcona the Delenco and EOS assets, and in December 2024 the
Kiyanovskiy asset in Ukraine was sold. Regarding Rozhny asset, Arcona stepped
back from its acquisition and therefore the Company is seeking alternative
ways for its effective disposal.
The companies that are classified under discontinued operations are the
followings:
• Cyprus: Ketiza Holdings Limited
• Romania: Best Day Real Estate Srl, Ketiza Real
Estate Srl and Secmon SRL
• Ukraine: LLC Almaz‑Pres‑Ukraine, LLC Retail
Development Balabino
As a result, the Company has reclassified all assets and liabilities related
to these properties as held for sale according to IFRS 5 (Note 4.3 & 4.8).
9.(b) Results of discontinued operations
For the year ended 31 December 2024
Note 2024 2023
€ €
Income 10 155.444 156.016
Asset operating expenses 11 (591.346) (867.484)
Net Operating Income (435.902) (711.468)
Administration expenses 12 (62.172) (201.344)
Share of profits/(losses) from associates 20 - (245.316)
Valuation gains/(losses) from Investment Property 13 (703.641) (223.730)
Profit/ (losses) on Disposal of subsidiaries 19.1.4 694.302 (946.792)
Other operating income/(expenses), net 14 (1.732) 5.792
Operating profit / (loss) (509.145) (2.322.858)
Finance income 15 52 472
Finance costs 15 (274.031) (604.832)
Profit/(Loss) before tax and foreign exchange differences (783.124) (2.927.218)
Foreign exchange (loss), net 16 (61.538) (55.699)
Profit/(Loss) before tax (844.662) (2.982.917)
Income tax expense 17 (10.073) (4.955)
Profit / (Loss) for the year (854.735) (2.987.872)
Loss attributable to:
Owners of the parent (850.123) (2.966.646)
Non-controlling interests (4.612) (21.226)
(854.735) (2.987.872)
9.(c) Cash flows from (used in) discontinued operation
31 Dec 2024 31 Dec 2023
€ €
Net cash flows provided in operating activities (833.960) (635.218)
Net cash flows from / (used in) financing activities 1.039.244 472
Net cash flows from / (used in) investing activities (377.895) (886.067)
Net increase/(decrease) from discontinued operations (172.611) (1.520.813)
9.(d) Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were reclassified as held for sale in
relation to the discontinued operation as at 31 December 2024:
Note 31 Dec 2024 31 Dec 2023
€ €
Assets classified as held for sale
Investment properties 18.4a 9.423.526 11.257.513
Tangible and intangible assets 21 - 25
Long-term receivables and prepayments 22 315.000 315.000
Prepayments and other current assets 23 504.030 409.776
Cash and cash equivalents 25 118.785 345.148
Total assets of group held for sale 10.361.341 12.327.462
Liabilities directly related with assets classified as held for sale
Borrowings 29 132 71
Finance lease liabilities 34 5.641.613 5.943.201
Trade and other payables 31 548.694 488.612
Taxation 33 150.097 155.872
Deposits from tenants 32 23.002 23.002
Total liabilities of group held for sale 6.363.538 6.610.758
10. Income
Income from continued operations for the year ended 31 December 2024
represents:
a) rental income, as well as service charges and utilities income
collected from tenants as a result of the rental agreements concluded with
tenants of Innovations Logistics Park in Romania. It is noted that part of the
rental and service charges/ utilities income related to Innovations Logistics
Park is currently invoiced by the Company as part of a relevant lease
agreement with the Innovations SPV and the lender, however the asset, through
the SPV, is planned to be transferred as part of the overall strategy of the
Company. Upon a final agreement for such transfer, the Company will negotiate
with the lender its release from the aforementioned lease agreement, and if
succeeds, upon completion such income will be also transferred.
The increase in the rental income is a result of rent indexation and the
decrease in service charges and utility income is a result of the
de-escalation of energy and utility prices, which are re-invoiced to the
tenants.
Continued operations 31 Dec 2024 31 Dec 2023
€ €
Rental income 806.540 761.683
Service charges and utilities income 473.566 668.905
Total income 1.280.106 1.430.588
Income from discontinued operations for the period ended 31 December 2024
represents rental income, as well as service charges and utilities income
collected from tenants as a result of the direct rental agreements concluded
with tenants in Innovations Logistics Park in Romania by the respective local
SPV.
Discontinued operations (Note 9) 31 Dec 2024 31 Dec 2023
€ €
Rental income 137.948 130.678
Service charges and utilities income 17.496 25.338
Total income 155.444 156.016
Occupancy rates as at 31 December 2024 were as follows:
Income producing assets
% 31 Dec 2024 31 Dec 2023
Innovations Logistics Park Romania 82 82
11. Asset operating expenses
The Group incurs expenses related to the proper operation and maintenance of
all properties. Part of these expenses is recovered from the tenants through
the service charges and utilities recharge process (Note 10).
Under continued operations, there are no such expenses related to the
operation of the assets.
Under discontinued operations are all the expenses related to Innovations
Logistics Park (Romania) and the Ukrainian properties.
Discontinued operations (Note 9) 31 Dec 2024 31 Dec 2023
€ €
Property related taxes (82.163) (49.800)
Repairs and technical maintenance (26.075) (77.505)
Utilities (427.157) (688.775)
Property security (44.207) (43.388)
Property insurance (8.217) (3.971)
Leasing expenses (3.527) (4.045)
Total (591.346) (867.484)
Property related taxes reflect local taxes of land and building properties (in
the form of land taxes, building taxes, garbage fees, etc.).
Repairs and technical maintenance reflect the relevant works performed on
properties during the period for facilitating their proper use, and/ or
successful sale.
Utilities decrease resulted from de-escalation of energy prices associated
with the Innovations terminal in Bucharest, matched effectively with the
decreased service charges and utilities income, as these were invoiced by the
Company and included in continued operations.
Leasing expenses reflect expenses related to long term land leasing.
12. Administration Expenses
Continued operations 31 Dec 2024 31 Dec 2023
€ €
Salaries and Wages (15.244) (75.321)
Incentives pursuant to RemCo proposal (400.000) (151.370)
Advisory and broker fees (307.881) (424.192)
Public group expenses (143.456) (164.085)
VAT expensed (3.639) (3.989)
Corporate registration and maintenance fees (37.782) (32.085)
Audit fees (54.560) (67.825)
Tax advisory services - (70.000)
Accounting and related fees (21.003) (15.833)
Legal fees (54.130) (170.657)
Depreciation/Amortization charge (151) (651)
Directors Renumeration - (75.020)
Provision for Director fees - (250.000)
Corporate operating expenses (81.416) (131.254)
Total Administration Expenses (1.119.262) (1.632.282)
Discontinued operations (Note 9) 31 Dec 2024 31 Dec 2023
€ €
Salaries and Wages (10.584) (18.763)
Advisory and broker fees (21.500) (111.311)
Corporate registration and maintenance fees (12.104) (21.155)
Audit fees (3.496) (15.554)
Accounting and related fees (4.247) (13.350)
Legal fees - (3.009)
Depreciation/Amortization charge (57) (141)
Corporate operating expenses (10.184) (18.061)
Total Administration Expenses (62.172) (201.344)
Salaries and wages include the remuneration of the CEO (2024: €1, 2023:
€1), and the administrators in Cyprus and Ukraine. The minimization of these
costs came as a result of the externalization of all HR costs after April
2023, except those in Ukraine, as part of the cost reduction plan adopted by
the board.
Incentives provided to management refer for the successful implementation of
Group's plan pursuant to relevant Remuneration Committee proposal dated 7 May
2021 as approved by the board on 01 June 2021. Mr. Lambros Anagnostopoulos,
director and CEO of the Company, was awarded during 2025 €230k as part of
management incentives.
Advisory fees are mainly related to advisors, brokers, valuers and other
professionals engaged in relevant transactions, as well as outsourced human
resources support on the basis of relevant contracts.
Accounting and related fees include fees from external accounting services.
Tax advisory fees in 2023 are related to ad-hoc fees paid to advisors for
applying and succeeding a new tax ruling for the Company, which based on
current structure of operations, is expected to produce significantly lower
imposed taxes, while its application has produced beneficial retrospective
results.
Public group expenses include among others fees paid to the AIM:LSE stock
exchange, Cyprus Stock Exchange as custodian, and the Nominated Adviser of the
Company, as well as other expenses related to the listing of the Company, such
as public relations and registry expenses.
Corporate registration and maintenance fees represent fees charged for the
annual maintenance of the Company and its subsidiaries, as well as fees and
expenses related to the normal operation of the companies including charges by
the relevant local authorities.
Legal fees represent legal expenses incurred by the Group in relation to asset
operations (rentals, sales, etc.), ongoing legal cases in Ukraine, Cyprus and
Romania, compliance with AIM listing, as well as one-off fees associated with
legal services and advise in relation to due diligence processes and
transactions. During 2024, legal fees associated mainly with the transaction
with Arcona for the sale of the Ukrainian assets, as well as the Bluehouse
case.
Corporate operating expenses include office expenses, travel expenses,
(tele)communication expenses, D&O insurance and all other general expenses
for Cypriot, Romanian and Ukrainian operations.
Following relevant confirmation by the board, the Company registered in 2023
the remuneration of the board associated with H1 2022 (€75k) which remained
pending from the previous year, as well as a provision of a remuneration to
cover the period including H2 2022 and 2023 (€250k).
Corporate operating expenses include D&O insurance, travel expenses,
(tele)communication and conference expenses, software fees and other general
expenses in Cyprus, Romania and Ukraine.
Summary of Directors' 31 Dec 2024 31 Dec 2023
Total Remuneration
€ € € € € € € €
Base remuneration Chairman/ Committee Fees Deferred Amounts Total Base remuneration Chairman/ Committee Fees Deferred Amounts Total
Michael Beys - - - - 63.750 - 19.191 82.941
Harin Thaker - - - - 60.000 - 18.028 78.028
Ian Domaille - - - - 66.250 - 19.773 86.023
Anthonios Kaffas - - - - 60.000 - 18.028 78.028
Total - - - - 250.000 - 75.020 325.020
13. Valuation gains / (losses) from investment properties
Valuation gains /(losses) from investment property for the reporting period,
excluding foreign exchange translation differences which are incorporated in
the table of Note 18.2, are presented in the tables below.
Discontinued operations (Note 9)
Property Name (€) Valuation gains/(losses)
31 Dec 2024 31 Dec 2023
€ €
Kiyanovskiy Residence - (177.757)
Rozny Lane 7.235 (99.367)
Innovations Logistics Park (710.876) 53.394
Total (703.641) (223.730)
* As of November 2021, the Group had submitted properly the official request
to the City of Kiev to extend the lease of Tsymlyanskiy Residence property for
another 5 years, since the Group has first extension rights over any other
interested party. The first step in the process whereby the presiding
committee of the municipality convenes, before the final approval by the City
Council, delayed, and following the Russian insurgence of Ukraine, everything
has been put on hold. The Management remains confident that the Company will
be awarded the lease extension once the war status permits.
In relation to the Ukrainian assets excluding Tsymlyanskiy, and in view of the
ongoing conflict in the country, the Management, although receives updated
third-party valuation reports to monitor effectively the underlying values,
decided since H1 2022 accounts to impair the value of those assets at 50% of
their value and continues the same in every period since then.
Valuation gains and losses result not only from the differences in the values
of the properties as reported by valuers at the different points in time, but
also from the fluctuation of the FX rate between the denominated currency of
the valuation report itself and the functional currency of the company which
posts valuation amount in its accounting books. For example, valuations of
Ukrainian assets are denominated in USD and translated to UAH for entering
effectively in the accounting books of the local entities. Similarly,
valuations of Romanian assets are denominated in EUR and translated to RON for
accounting purposes.
14. Other operating income/(expenses), net
Continued operations 31 Dec 2024 31 Dec 2023
€ €
Other income - 10.657
Accounts payable written off 5.841 2.027.275
Other income 5.841 2.037.932
Penalties (280) (302)
Other expenses (162.494) (3.526)
Other expenses (162.774) (3.828)
Other operating income/(expenses), net (156.933) 2.034.104
Discontinued operations (Note 9) 31 Dec 2024 31 Dec 2023
€ €
Accounts payable written off 3.525 18.210
Other income 28.877 4.290
Other income 32.402 22.500
Penalties (43) -
Other expenses (34.091) (16.708)
Other expenses (34.134) (16.708)
Other operating income/(expenses), net (1.732) 5.792
Continued operations
Other income in 2023 represents income from services to a prior associate
company of the Group Greenlake Development SRL.
Account payable written off under continued operations in 2023, represents the
reversal of the provision made in the past for the Bluehouse litigation
case, as a result of the Redeemable Class B share redemption. Pursuant to a
consensual order issued by the District Court of Nicosia in action
no.3362/2018, the Company paid €494.000, and as a result the surplus
provision was reversed, since it was no longer necessary.
Other expenses under continued operations represents old balances with
receivables amounts which are not expected to be recovered.
Discontinued operations
Account payable written off in 2023 refer to old payable balances of Secmon
for which local legislation allows for their effective elimination.
Other expenses in discontinued operations represent penalties incurred by
Authorities, as well as written off balances which are not expected to be
recovered.
15. Finance costs and income
Continued operations
Finance income 31 Dec 2024 31 Dec 2023
€ €
Interest received from non-bank loans 37.524 308.466
Total finance income 37.524 308.466
Finance costs 31 Dec 2024 31 Dec 2023
€ €
Interest expenses (non-bank) (11.597) (15.348)
Finance charges and commissions (2.743) (3.515)
Bonds interest (47.651) (47.637)
Forgiveness of interest income of previous years (62.500) -
Total finance costs (124.491) (66.500)
Net finance result (86.967) 241.966
Discontinued operations (Note 9)
Finance income 31 Dec 2024 31 Dec 2023
€ €
Interest received from-bank loans 52 48
Interest received from non-bank loans (Note 38.1.1) - 424
Total finance income 52 472
Finance costs 31 Dec 2024 31 Dec 2023
€ €
Interest expenses (bank) - (317.586)
Interest expenses (non-bank) - -
Finance leasing interest expenses (272.782) (285.753)
Finance charges and commissions (1.249) (1.493)
Total finance costs (274.031) (604.832)
Net finance result (273.979) (604.360)
Continued operations
Interest income from non-bank loans, reflects interest on Loan receivables
from 3rd parties provided as an advance payment for acquiring a participation
in an investment property portfolio (Olympians portfolio) in Romania The funds
provided initially with a convertibility option which was not exercised, and
is currently treated as a loan. According to the last addendum of the loan
agreement, part of the principal equal to €2,5 million will be contributed
to a joint venture between the Company and the borrower for the development of
logistics assets in Romania. The remaining principal plus the interest is
repaid in installments, expected to be fully repaid by the end of 2025. The
loan is bearing a fixed interest rate of 10%.
Interest expenses represent interest charged on Bank and non-Bank borrowings
(Note 29).
Finance leasing interest expenses relate to the sale and lease back agreements
of the Group (Note 34).
Finance charges and commissions include regular banking commissions and
various fees imposed by the Banks.
Bonds interest represents interest calculated for the bonds issued by the
Company during 2018 (Note 30).
Forgiveness of interest income of previous years, refers to a write off of an
amount of interest accrued to the Loan provided to Myrian Nes Limited, as
compensation of the expenses incurred by the Borrower as part of their actions
in relation to the JV agreement between the two parties.
Discontinued operations
Interest income from non-bank loans, reflects income from loans granted by the
Group for financial assistance of associates.
Interest expenses represent interest charged on Bank and non-Bank borrowings
(Note 29).
Finance leasing interest expenses relate to the sale and lease back agreements
of the Group (Note 34).
Finance charges and commissions include regular banking commissions and
various fees imposed by the Banks.
16. Foreign exchange profit / (losses)
Non realised foreign exchange loss
Foreign exchange losses (non-realised) resulted from the loans and/or
payables/receivables denominated in non EUR currencies when translated in EUR.
The exchange loss for the year ended 31 December 2024 from continued
operations amounted to €1.160 (31 December 2023: loss €26.824).
The exchange loss from discontinued operations for the year ended 31 December
2024 amounted to €61.538 (31 December 2023: loss €55.699) (Note 9b).
17. Tax Expense
Continued operations 31 Dec 2024 31 Dec 2023
€ €
Reversal of tax/(Income and defence tax expense) (1.172) (2.434)
Taxes (1.172) (2.434)
Discontinued operations (Note 9) 31 Dec 2024 31 Dec 2023
€ €
Income and defence tax expense (10.073) (4.955)
Taxes (10.073) (4.955)
For the year ended 31 December 2024, the corporate income tax rate for the
Group's subsidiaries is 18% in Ukraine, and 16% in Romania. The corporate tax
that is applied to the qualifying income of the Company and its Cypriot
subsidiaries is 12,5%.
The tax on the Group's results differs from the theoretical amount that would
arise using the applicable tax rates as follows:
31 Dec 2024 31 Dec 2023
€ €
Profit / (loss) before tax (831.436) 6.463.041
Tax calculated on applicable rates (19.380) (154.218)
Expenses not recognized for tax purposes 51.909 521.478
Tax effect of allowances and income not subject to tax (2.291) (452.550)
Tax effect on tax losses for the year - 742
Tax effect on tax losses brought forward (20.269) 91.113
10% additional tax 103 596
Defence contribution current year - 228
Prior year tax 1.173 -
Total Tax 11.245 7.389
18. Investment Property
18.1 Investment Property Presentation
Investment Property consists of the following assets:
Income Producing Assets
· Innovations Logistics Park is a 16.570 sqm gross leasable area
logistics park located in Clinceni in Bucharest, which benefits from being on
the Bucharest ring road. Its construction was tenant specific, was completed
in 2008 and is separated in four warehouses, two of which offer cold storage
(freezing temperature), the total area of which is 6.395 sqm. Innovations
Logistics Park was acquired by the Group in May 2014 and at the end of the
reporting period is 82% leased.
Land Assets
· Kiyanovskiy Residence consists of four adjacent plots of land,
totaling 0,55 Ha earmarked for a residential development, overlooking the
scenic Dnipro River, St. Michael's Spires and historic Podil neighborhood. The
Company recently secured for the leashold part of the property a 10-year
extension. The asset sold during 2024 as part of Stage 2 of the transaction
with Arcona Property Fund N.V.
· Tsymlyanskiy Residence is a 0,36 Ha plot of land located in the
historic Podil District of Kiev and is destined for the development of a
residential complex. As of November 2021, the Group had submitted properly the
official request to the City of Kiev to extend the lease of Tsymlyanskiy
Residence property for another 5 years, since the Group has first extension
rights over any other interested party. The first step in the process whereby
the presiding committee of the municipality convenes, before the final
approval by the City Council, delayed and following the Russian insurgence of
Ukraine all decisions have been put on hold. We remain confident that we will
be awarded the lease extension once the war status permits.
· Rozny Lane is a 42 Ha land plot located in Kiev Oblast, destined for
the development of a residential complex. It has been registered under the
Group pursuant to a legal decision in 2015.
18.2 Investment Property Movement during the reporting period
The table below presents a reconciliation of the Fair Value movements of the
investment property during the reporting period broken down by property and by
local currency vs. reporting currency.
Discontinued Operations
2024 (€) Fair Value movements Asset Value at the Beginning of the period or at Acquisition/Transfer date
Asset Name Type Carrying amount as at 31/12/2024 Foreign exchange translation difference Fair value gain/(loss) based on local currency valuations (b) Disposals 2024 Transfer to Assets held for sale Additions Carrying amount as at 31/12/2023
(a) 2024
Kiyanovskiy Residence Land - - - (1.131.222) - - 1.131.222
Tsymlyanskiy Residence Land 1 - - - - - 1
Rozny Lane Land 423.525 - 7.235 - - - 416.290
Total Ukraine 423.526 - 7.235 (1.131.222) - - 1.547.513
Innovations Logistics Park Warehouse 9.000.000 876 (710.876) - - 9.710.000
Total Romania 9.000.000 876 (710.876) - - - 9.710.000
TOTAL 9.423.526 876 (703.641) (1.131.222) - - 11.257.513
2023 (€) Fair Value movements Asset Value at the Beginning of the period or at Acquisition/Transfer date
Asset Name Type Carrying amount as at 31/12/2023 Foreign exchange translation difference Fair value gain/(loss) based on local currency valuations (b) Disposals 2023 Transfer to Assets held for sale Additions Carrying amount as at 31/12/2022
(a) 2023
Kiyanovskiy Residence Land 1.131.222 (97.359) (177.757) - - - 1.406.338
Tsymlyanskiy Residence Land 1 - - - - - 1
Rozny Lane Land 416.290 - (99.367) - - - 515.657
Total Ukraine 1.547.513 (97.359) (277.124) - - - 1.921.996
Innovations Logistics Park Warehouse 9.710.000 (53.394) 53.394 - - 9.710.000
Total Romania 9.710.000 (53.394) 53.394 - - - 9.710.000
TOTAL 11.257.513 (150.753) (223.730) - - - 11.631.996
Discontinued Operations
Due to the situation in Ukraine and the associated uncertainty, the Management
has decided since H1 2022 to proceed with valuing those assets 50% lower than
the values provided by the third-party valuers (CBRE Ukraine), and in turn
decided to keep the same decision in all subsequent periods, including the
current one. As a result, the Ukrainian assets contribute €0,4 million in
Group's assets, as compared to €0,8 million provided by the valuers.
The two components comprising the fair value movements are presented in
accordance with the requirements of IFRS in the consolidated statement of
comprehensive income as follows:
a. The translation gain due to the devaluation of local currencies of
€876 (a) (2023: loss €150.753) is presented as part of the exchange
difference on translation of foreign operations in other comprehensive income
in the statement of comprehensive income and then carried forward in the
Foreign currency translation reserve; and,
b. The fair value loss in terms of the local functional currencies
amounting to €703.641 (b) (2023: to loss €223.730), is presented as
Valuation gains/(losses) from investment properties in the statement of
comprehensive income and is carried forward in Accumulated losses.
18.3 Investment Property Carrying Amount per asset as at the reporting date
The table below presents the values of the individual assets as appraised by
the appointed valuer as at the reporting date.
Asset Name Location Principal Operation Related Companies Carrying amount as at
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Kiyanovskiy Residence Podil, Land for residential Development LLC Aisi Ukraine - 1.131.222
Kiev City Center LLC Trade Center - -
Tsymlyanskiy Residence Podil, Land for residential LLC Almaz‑Pres‑Ukraine 1 1
Kiev City Center Development - -
Rozny Lane Brovary district, Kiev Land for residential SC Secure Capital Limited 423.525 416.290
Development - -
Total Ukraine - 423.526 - 1.547.513
Innovations Logistics Park Clinceni, Bucharest Warehouse Myrnes Innovations Park Limited 9.000.000 9.710.000
Best Day Real Estate Srl - -
Total Romania - 9.000.000 - 9.710.000
TOTAL - 9.423.526 - 11.257.513
18.4 Investment Property analysis
a. Investment Properties
The following assets are presented under Investment Property: Innovations
Logistics park and all the land assets namely Kiyanovskiy Residence (2023),
Tsymlyanskiy Residenceand Rozny Lane in Ukraine.
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
(Note 9) (Note 9)
€ € € €
At 1 January - 11.257.513 - 11.631.996
Disposal of Investment Property - (1.131.222) - -
Revaluation (loss)/gain on investment property - (703.641) - (223.730)
Translation difference - 876 - (150.753)
At 31 December - 9.423.526 - 11.257.513
Disposals of Investment Properties in 2024 represent the sale of Kiyanovskiy
Residence.
18.5 Investment Property valuation method presentation
In respect of the Fair Value of Investment Properties the following table
represents an analysis based on the various valuation methods. The different
levels as defined by IFRS have been defined as follows:
- Level 1 relates to quoted prices (unadjusted) in active and liquid
markets for identical assets or liabilities.
- Level 2 relates to inputs other than quoted prices that are
observable for the asset or liability indirectly (that is, derived from
prices). Level 2 fair values of investment properties have been derived using
the market value approach by comparing the subject asset with similar assets
for which price information is available. Under this approach the first step
is to consider the prices for transactions of similar assets that have
occurred recently in the market. The most significant input into this
valuation approach is price per sqm.
- Level 3 relates to inputs for the asset or liability that are not
based on observable market data (that is, unobservable inputs). Level 3
valuations have been performed by the external valuer using the income
approach (discounted cash flow) due to the lack of similar sales in the local
market (unobservable inputs).
To derive Fair Values the Group has adopted a combination of income and market
approach weighted according to the predominant local market and economic
conditions.
Fair value measurements at 31 Dec 2024(€) (Level 1) (Level 2) (Level 3) Total
Recurring fair value measurements
Tsymlyanskiy Residence - Podil, Kiev City Center* - 1 - 1
Rozny Lane - Brovary district, Kiev * - 423.525 - 423.525
Innovations Logistics Park - Bucharest - - 9.000.000 9.000.000
Totals - 423.526 9.000.000 9.423.526
Fair value measurements at 31 Dec 2023(€) (Level 1) (Level 2) (Level 3) Total
Recurring fair value measurements
Tsymlyanskiy Residence - Podil, Kiev City Center* - 1 - 1
Kiyanovskiy Residence - Podil, Kiev City Center* - 1.131.222 - 1.131.222
Rozny Lane - Brovary district, Kiev * - 416.290 - 416.290
Innovations Logistics Park - Bucharest - - 9.710.000 9.710.000
Totals - 1.547.513 9.710.000 11.257.513
The table below shows yearly adjustments for Level 3 investment property
valuations:
Level 3 Fair value measurements at 31 Dec 2024 (€) Innovations Logistics Park Total
Opening balance 9.710.000 9.710.000
Profit/(loss) on revaluation (710.876) (710.876)
Translation difference 876 876
Closing balance 9.000.000 9.000.000
Level 3 Fair value measurements at 31 Dec 2023 (€) Innovations Logistics Park Total
Opening balance 9.710.000 9.710.000
Profit/(loss) on revaluation 53.394 53.394
- -
Disposal
Translation difference (53.394) (53.394)
Closing balance 9.710.000 9.710.000
Information about Level 3 Fair Values is presented below:
Fair value at Fair value at Valuation technique Unobservable inputs Relationship of unobservable inputs to fair value
31 Dec 2024 31 Dec 2023
€ € € € €
Innovations Logistics Park - Bucharest 9.000.000 9.710.000 Income approach Future rental income and costs for 10 years, discount rate The higher the rental income the higher the fair value. The higher the
discount rate, the lower fair value
Total 9.000.000 9.710.000
19. Investment Property Acquisitions, Goodwill Movement and Disposals
19.1 Acquisition and disposal of subsidiaries and associates
19.1.1 Acquisition and disposal of associate Equardo Holding Limited.
The Company in 2023 acquired the remaining 50% of the share capital of Equardo
Holdings Limited (Note 20) for the consideration price of €90.000 increasing
its participation in the company to 100% having a NAV of €180.218. Equardo
has an indirect investment in a large land plot in Bucharest with a
substantially higher value, yet the monetization of such invesment is of
increased risk and is expected to take substantial time. As such the Company
sold this investment to the subsidiary Sertland Properties Limited in exchange
of intra group payables of € 2.205.145, i.e. generating a book profit on
disposdal of €2.024.927.
19.1.2 Acquisition and disposal of Nottin Holdings Limited
The Company in 2023 acquired the 33,3% of Nottin Holding Limited and a
receivable from the company amounted to €93.300 for a consideration of €1.
Nottin Holdings Limited has an indirect investment in a large property and
land plot in Belgrade with a substantially higher value, yet the monetization
of such invesment is of increased risk and is expected to take substantial
time. As such the Company sold this investment to the subsidiary Zirimon
Properties Limited in exchange of intra group payables of € 5.604.753, i.e.
generating a book profit on disposdal of €5.604.752.
19.1.3 Disposal of SEC I.
The Company in 2023 proceeded to the sale of SEC I group to a 3(rd) party.
SEC I LTD Sertland LTD Zirimon LTD Ram LTD Emakei LTD Edetrio LTD Iuliu Maniu LTD Moselin Investments srl Total
ASSETS € € € € € € €
Non-current assets
Investment in shares - 1.543.602 3.923.327 - - 90.218 - - 5.557.147
Current assets
Prepayments and other current assets 2.384 - 93.300 - - - - 527.248 622.932
Cash and cash equivalents - - - - - - - 18.814 18.814
Total Assets 2.384 1.543.602 4.016.627 - - 90.218 - 546.062 6.198.893
LIABILITIES
Interest bearing borrowings 4.381.964 - - - - - 1.183 4.383.147
Other liabilities 9.025 10.764 8.098 3.987 3.169 13.193 3.180 114.578 165.994
Total Liabilities 4.390.989 10.764 8.098 3.987 3.169 13.193 3.180 115.761 4.549.141
NET ASSET (4.388.605) 1.532.838 4.008.529 (3.987) (3.169) 77.025 (3.180) 430.301 1.649.752
Group % Holding 100% 100% 100% 50% 100% 100% 45% 45%
Net share of the group (4.388.605) 1.532.838 4.008.529 (1.994) (3.169) 77.025 (1.431) 193.635 1.416.828
Consideration:
Payable write off 470.036
Total Consideration 470.036
Loss on Disposal (946.792)
19.1.4 Disposal of Aisi Ukraine
Aisi Ukraine LLC Trade Center LLC Total
ASSETS € € €
Non-current assets
Investments Properties 1.131.222 - 1.131.222
Other Non-current assets 21 - 21
Current assets
Prepayments and other current assets 22.217 1.745 23.962
Cash and cash equivalents 26 - 26
Total Assets 1.153.486 1.745 1.155.231
LIABILITIES
Lease Liabilities - 39.760 39.760
Other liabilities 440 539 979
Total Liabilities 440 40.299 40.739
NET ASSET 1.153.046 (38.554) 1.114.492
Group % Holding 100% 100%
Net share of the group 1.153.046 (38.554) 1.114.492
Consideration:
Cash paid 1.039.194
Receivable shares in Arcona at reporting date 769.600
Total Consideration 1.808.794
Profit on Disposal 694.302
20. Investments in associates
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Cost of investment in associates at the beginning of the period - 335.534
- 1
Acquisition of Investment in associates - - - 90.000
Share of profits /(losses) from associates (Note 9) - - - (245.316)
Dividend Income - - - -
Disposal of Investment (Note 19.1.1) - - (1) (180.218)
Foreign exchange difference - - - -
Total - - - -
During 2023 and as part of the sale of SEC I group, the Company sold GreenLake
Development Srl which at that time had no remaining asset for sale in its
portfolio, as well as Equardo Holdings Limited (Note 19.1.3).
The share of profit from the associate GreenLake Development Srl and Equardo
Holdings Limited were limited up to the interest of the Group in the
associate.
As at 31 December 2023, the Group's interests in its associates and their
summarised financial information, including total assets at fair value, total
liabilities, revenues and profit or loss, were as follows:
Project Name Associates Total assets Total liabilities Profit/ Holding Share of profits from associates Country Asset type
(loss)
€ € € % €
GreenLake Project - Phase A GreenLake Development Srl - - (607.969) 40,35 (245.316) Romania Residential assets
Vic City Project Equardo Holdings Limited - - (11.288) 50 - Romania Land
Total - - (619.257) (245.316)
21. Tangible and intangible assets
As at 31 December 2024 the tangible non-current assets under continued
operations were comprised mainly by electronic equipment (mobiles, computers
etc.) of a net value of €13 (2023: €164).
As at 31 December 2024 the tangible non-current assets under discontinued
operations mainly consisted of the machinery and equipment used for servicing
the Group's investment properties in Ukraine and Romania amount to €3.592
(2023: €29.997). Accumulated depreciation as at the reporting date amounts
to €3.592 (2023: €29.972).
22. Long Term Receivables and prepayments
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Long Term Receivables 818 315.000 818 315.000
Total 818 315.000 818 315.000
Long term receivables under discontinued operations mainly include the cash
collateral existing in favor of Piraeus Leasing in relation to Innovations
asset.
23. Prepayments and other current assets
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Trade and other receivables 873.222 505.113 691.296 396.245
VAT and other tax receivables 275.990 39.847 219.790 55.179
Deferred expenses 31 669 40 1.605
Receivables due from related parties 27.947 6.680 30.168 6.679
Loan receivable from 3(rd) parties 477.474 - 3.152.450 -
Loan receivable intended to be converted into a JV equity 2.500.000 - - -
- (59.207)
Allowance for prepayments and other current assets (48.279) (49.932)
Total 4.154.664 504.030 4.034.537 409.776
Continued operations
Trade and other receivables mainly include receivables from tenants and
prepayments made for services.
VAT receivable represent VAT which is refundable in Romania, Cyprus and
Ukraine.
Deferred expenses include legal, advisory, consulting and marketing expenses.
Receivables due from related parties represent all kind of receivables from
related parties of the Group.
Loan receivable from 3(rd) parties plus loan receivable intended to be
converted into JV equity include an amount of a total of €2.853.625 (2023:
€2.909.115) provided as an advance payment for acquiring a participation in
an investment property portfolio (Olympians portfolio) in Romania. The accrued
interest was €123.849 (2023: €243.335). The loan provided initially with a
convertibility option which was not exercised. The loan is bearing a fixed
interest rate of 10%. In August 2022 the Company signed with the borrower a
Shareholders Agreement for a joint venture for developing logistics properties
in Romania. As part of this agreement the Company will convert €2,5 million
of the loan into a 50% equity stake of the joint venture company. The
objective of this new company, in which borrower is contributing €2,5
million in equity funds too, is to develop a portfolio of logistics properties
in Romania with a view of letting them to third party tenants in a market that
has very low vacancy and has shown substantial strength and resilience in
recent years. The parties have evaluated many opportunities and currently are
in the development stage of two different properties in two different regional
cities in Romania. Since 2024 the loan amount intended to be converted into
equity is recorded in different account with no interest accruing. The JV was
set up in 2025 and the conversion has been implemented through an assignment
of the receivable to the joint SPV against relevant participation in a share
capital increase. The remaining part of the Olympians Loan is being repaid in
regular intervals and is expected to be fully repaid to the Company by the end
of 2025.
Discontinued operations
Trade and other receivables decrease due to the sale of associate company
during the year.
VAT receivable represent VAT which is refundable in Romania, Cyprus and
Ukraine.
Deferred expenses include legal, advisory, consulting and marketing expenses.
Receivables due from related parties represent all kind of receivables from
related parties of the Group.
24. Financial Assets at FV through P&L
The table below presents the analysis of the balance of Financial Assets at FV
through P&L in relation to the continued operations of the Company:
31 Dec 2024 31 Dec 2023
€ €
Arcona shares at the beginning of the period 11.660.249 11.920.030
FV change in Arcona shares 76.381 (259.781)
Arcona shares at reporting date 11.736.630 11.660.249
Warrants over Arcona shares at the beginning of the period 26.349 158.778
FV change in warrants 38.250 (132.429)
Arcona warrants at reporting date 64.599 26.349
Consideration price for the sale of Aisi Ukraine not issued and received yet 769.600 -
FV change in Arcona receivable shares (17.189) -
Arcona Receivable shares at reporting date 752.411 -
Total Financial Assets at FV 12.553.640 11.686.598
FV change in Arcona shares 76.381 (259.781)
FV change in warrants 38.250 (132.429)
FV change in Arcona receivable shares (17.189) -
Fair Value (loss)/ gain on Financial Assets at FV through P&L 97.442 (392.210)
The Company received during 2019 and 2020 593.534 Arcona shares as part of the
completion of Stage 1 of the transaction with Arcona, for the sale of Bella
and Balabino assets in Ukraine, and the Boyana asset in Bulgaria. During 2022
the Company received 479.376 additional shares in Arcona as part of Stage 2 of
the transaction with Arcona, for the sale of EOS and Delea Nuova assets in
Romania. During 2024 the Company sold Kiyanovskyi asset in Ukraine to Arcona
and on top of the cash consideration it was entitled to 68.782 newly issued
shares in Arcona, which were received in February 2025 plus 10.689 shares in
Arcona as deferred payment related to the sale of Delea Nuova and EOS assets
in Romania.
At the end of the reporting period the shares are revalued at their fair value
based on the NAV per share of Arcona at the same date, and as a result a
relevant fair value gain of €76.381 (2023: loss €259.781) is recognized.
Moreover, at year end the Company has also revalued at fair price the
receivable shares from the sale of Kiyanovskyi.
On top of the aforementioned shares, the Company received for the sale of
Bella and Balabino assets, 67.063 warrants over shares in Arcona for a
consideration of EUR 1, and 77.021 warrants over Arcona shares for the sale of
Boyana for a consideration of EUR 1. The warrants are exercisable upon the
volume weighted average price of Arcona shares traded on a regulated market at
€8,10 or higher and have expired during 2024 having zero value at year end.
Moreover, during 2022, the Company received 28.125 warrants over shares in
Arcona for the sale of EOS asset, and 87.418 warrants over shares in Arcona
for the sale of Delea Nuova asset for a total consideration of €3. These
warrants are exercisable upon the volume weighted average price of Arcona
shares traded on a regulated market at €7,2 or higher and expire in 2027.
At year end, these warrants are re-valued to fair value and as a result a
relevant gain of €38.250 (2023: loss €132.429) is recognized. The terms
and assumptions used for such warrant re-valuation are:
Current stock price (as retrieved from Amsterdam Stock Exchange): EUR 6,05 per
share
• Strike price of the warrants: EUR 7,20 per share
• Expiration date: 25 March 2027 and 15 June 2027
• Standard deviation of stock price: 20,24%
• Annualized dividend yield on shares: 0,00%
• 5 year Government Bond rate (weighted average
rate of Government Bonds of countries that Arcona is exposed): 5,09%
During 2023, the Company realized dividend income from the shareholding in
Arcona of the order of €160.937, as part of the dividend distribution policy
of Arcona.
25. Cash and cash equivalents
Cash and cash equivalents represent liquidity held at banks.
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Cash with banks in USD 922.716 - 399 -
Cash with banks in EUR 23.119 74 144.760 89
Cash with banks in UAH 223 288 46 455
Cash with banks in RON 101.731 118.423 7.008 344.604
Cash with banks in GBP 129 - 28 -
Total 1.047.918 118.785 152.241 345.148
26. Share capital
Number of Shares during 2024 and 2023
31 December 2024 31 December 2023
Authorised
Ordinary shares of €0,01 989.869.935 989.869.935
Total ordinary shares 989.869.935 989.869.935
RCP Class A Shares of €0,01 - -
RCP Class B Shares of €0,01 - 8.618.997
Total redeemable shares - 8.618.997
Issued and fully paid
Ordinary shares of €0,01 129.191.442 129.191.442
Total ordinary shares 129.191.442 129.191.442
Total 129.191.442 129.191.442
Nominal value (€) for 2024 and 2023
€ 31 December 2024 31 December 2023
Authorised
Ordinary shares of €0,01 9.898.699 9.898.699
Total ordinary shares 9.898.699 9.898.699
RCP Class A Shares of €0,01 - -
RCP Class B Shares of €0,01 - 86.190
Total redeemable shares - 86.190
Issued and fully paid
Ordinary shares of €0,01 1.291.281 1.291.281
Total ordinary shares 1.291.281 1.291.281
Total 1.291.281 1.291.281
26.1 Authorised share capital
The authorised share capital of the Company as at the date of issuance of this
report is as follows:
989.869.935 Ordinary Shares of €0,01 nominal value each.
26.2 Issued Share Capital
As at the end of 2023, the issued share capital of the Company was as follows:
129.191.442 Ordinary Shares of €0,01 nominal value each.
With a relevant decision of the Extraodinary General Meeting in 10 July 2024,
the Company proceeded to the reduction in its share capital with the
cancellation of 8.618.997 redeemable preference Class B shares of €0,01
each. The shares were issued in the names of BLUEHOUSE ACCESSION PROPERTY
HOLDING III S.A.R.L. and the amount reduced was settled against payment that
had already been made to BLUEHOUSE pursuant to a consensual order issued by
the District Court of Nicosia in action no. 3362/2018.
26.3 Capital Structure as at the end of the reporting period
As at the reporting date the Company's share capital is as follows:
Number of (as at) 31 December 2024 (as at) 31 December 2023
Ordinary shares of €0,01 Issued and Listed on AIM 129.191.442 129.191.442
Total number of Shares Non-Dilutive Basis 129.191.442 129.191.442
Total number of Shares Full Dilutive Basis 129.191.442 129.191.442
Options - - -
27. Foreign Currency Translation Reserve
Exchange differences relate to the translation from the functional currency to
EUR of Group's subsidiaries' accounts and are recognized by entries made
directly to the foreign currency translation reserve. The foreign exchange
translation reserve represents unrealized profits or losses related to the
appreciation or depreciation of the local currencies against EUR in the
countries where Company's subsidiaries' functional currencies are not EUR. The
Company had €65.387 profit on foreign exchange losses/gains on translation
due to presentation currency for 2024, in comparison to €931.988 relevant
loss in 2023.
28. Non-Controlling Interests
Non-controlling interests represent the percentage participations in the
respective entities not owned by the Group:
% Non-controlling interest portion
Group Company 31 Dec 2024 31 Dec 2023
LLC Almaz-Press-Ukraine 45,00 45,00
Ketiza Holdings Limited 10,00 10,00
Ketiza Real Estate Srl 10,00 10,00
29. Borrowings
Project 31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Principal of Loans
Loans from other 3(rd) parties and related parties (Note 38.4) 497.000 106.682
- -
Overdrafts - 132 - 71
Total principal of Loans 497.000 132 106.682 71
Interests accrued on Loans (Note 38.4) 20.240 8.112
- -
Total 517.240 132 114.794 71
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Current portion 517.240 132 114.794 71
Non-current portion - - - -
Total 517.240 132 114.794 71
Continued Operations
Loans from other 3(rd) parties and related parties under continued operations
include among others:
Α) Loan from one Director of €100k provided as bridge financing for future
property acquisitions. The loan bears annual interest of 8% (Note 38.4).
B) Incentive payables to management converted (Note 12) into loans for
facilitating the cash flow of the Company.
30. Bonds
The Company in order to acquire up to a 50% interest in a portfolio of fully
let logistics properties in Romania, the Olympians Portfolio, issued a
financial instrument, 35% of which consists of a convertible bond and 65% of
which is made up of a warrant. The convertible loan element of the instrument
has been redeemed by 30% and at the end of the reporting period the balance
stands at €718.499 (2023: €723.690). The instrument bears a 6,5% coupon,
originally maturing in July 2024, and is convertible into ordinary shares of
the Company at the option of the holder at 25p. starting from 1 January 2018.
The Company has taken the consent of most of the bondholders to extend the
maturity of the bond. As at 31 December 2024 , the balance of the bonds with
interest amounts to €911.602 (2023: €870.373).
31. Trade and other payables
The fair value of trade and other payables due within one year approximate
their carrying amounts as presented below.
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Payables to third parties 417.354 545.838 886.243 484.786
Payables to related parties (Note 38.2) 939.352 - 746.188 -
Deferred income from tenants - - - -
Accruals 58.493 2.856 73.281 3.826
Pre-sale advances (Advances received for sale of properties) 837.120 90.172
- -
Total 2.252.319 548.694 1.795.884 488.612
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Current portion 2.252.319 - 1.795.884 -
Non-current portion - 548.694 - 488.612
Total 2.252.319 548.694 1.795.884 488.612
Continued Operations
Payables to third parties represents: a) amounts payable to various service
providers including auditors, legal advisors, consultants and third party
accountants related to the current operations of the Group, and b) guarantee
amounts collected from tenants.
Payables to related parties under continued operations represent amounts due
to directors and accrued management remuneration (Note 38.2).
Accruals mainly include the accrued, administration fees, accounting fees,
facility management and other fees payable to third parties.
Pre-sale advances reflect the advance received in relation to Kiyanovskiy
Residence pre-sale agreement, which upon non closing of the said sale, part of
which will be returned to the prospective buyer, and advance received for the
sale of Innovations Terminal in Romania.
Discontinued Operations
Payables to third parties represents amounts payable to various service
providers including auditors, legal advisors, consultants and third party
accountants related to the current operations of the Group.
Accruals mainly include the accrued, administration fees, accounting fees,
facility management and other fees payable to third parties.
32. Deposits from Tenants
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Deposits from tenants non-current - 23.002 - 23.002
Total - 23.002 - 23.002
Deposits from tenants appearing under non-current liabilities include the
amounts received from tenants in Innovations Terminal.
33. Taxation
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Corporate income tax - non current - - - -
Defence tax - non current - - 17.173 -
Tax provision - non current - - - -
Non- current - - 17.173 -
Defence tax 34.315 - - -
Corporate income tax - current 45.097 - 21.146 4.955
Other taxes including VAT payable - current 177 150.097 292 150.917
Current 79.589 150.097 21.438 155.872
Total Provisions and Taxes Payables 79.589 150.097 38.611 155.872
Corporate income tax represents taxes payable in Cyprus and Romania.
Other taxes represent local property taxes and VAT payable in Romania.
During 2023, the prior year taxes due were re-assessed downwards by the tax
authorities following relevant motion by the Company.
34. Finance Lease Liabilities
As at the reporting date the finance lease liabilities consist of the
non-current portion of €5.585.320 and the current portion of €56.293 (31
December 2023: €5.885.895 and €57.306, accordingly).
Discontinued operations
31 Dec 2024 Note Minimum lease payments Interest Principal
€ € €
Less than one year 41.2 537.313 257.305 280.008
& 41.6
Between two and five years 5.462.007 100.402 5.361.605
More than five years - - -
5.999.320 357.707 5.641.613
Accrued Interest -
Total Finance Lease Liabilities (Note 9d) 5.641.613
31 Dec 2023 Note Minimum lease payments Interest Principal
€ € €
Less than one year 41.2 555.030 274.004 281.026
& 41.6
Between two and five years 6.022.565 372.190 5.650.375
More than five years 15.496 3.773 11.723
6.593.091 649.967 5.943.124
Accrued Interest 77
Total Finance Lease Liabilities (Note 9d) 5.943.201
34.1 Land Plots Financial Leasing
The Group holds land plot in Ukraine under leasehold agreements which in terms
of the accounts are classified as finance leases. Lease obligations are
denominated in UAH. The Group's obligations under finance leases are secured
by the lessor's title to the leased assets. Regarding Tsymlyanskiy, as of
November 2021, the Group had submitted properly the official request to the
City of Kiev to extend the lease property for another 5 years, since the Group
has first extension rights over any other interested party. The first step in
the process whereby the presiding committee of the municipality convenes,
before the final approval by the City Council, delayed and following the
Russian insurgence of Ukraine all decisions have been put on hold. We remain
confident that we will be awarded the lease extension once the war status
permits, and we continue calculate relevant future lease obligations.
34.2 Sale and Lease Back Agreements
A. Innovations Logistics Park
In May 2014 the Group concluded the acquisition of Innovations Logistics Park
in Bucharest, owned by Best Day Real Estate Srl, through a sale and lease back
agreement with Piraeus Leasing Romania SA. As at the end of the reporting
period the balance is €5.641.613 (2023: €5.921.621), being repayable in
monthly tranches until 2026 with a balloon payment of €5.244.926. At the
maturity of the lease agreement and upon payment of the balloon Best Day Real
Estate Srl will become owner of the asset.
Under the current finance lease agreement the collaterals for the facility are
as follows:
1. Best Day Real Estate Srl pledged its future receivables from its
tenants.
2. Best Day Real Estate Srl pledged its shares.
3. Best Day Real Estate Srl pledged all current and reserved accounts
opened in Piraeus Leasing, Romania.
4. Best Day Real Estate Srl was obliged to provide cash collateral in
the amount of €250.000 in Piraeus Leasing Romania, which had been deposited
as follows, half in May 2014 and half in May 2015.
SPDI provided a corporate guarantee in favor of the Leasing company related to
the liabilities of Best Day Real Estate Srl arising from the sale and lease
back agreement.
35. Share Premium Reduction- payable to shareholders
As per the Extraordinary General Meeting held on 10 July 2024, the
shareholders of the Company resolved for the reduction of the balance of the
share premium account of the Company by €11.705.448,10 as this amount
exceeds the needs of the Company and that the said amount is distributed pro
rata to the shareholders of the Company holding ordinary shares of €0,01
each, either by the distribution of shares in Arcona Property Fund N.V. held
by the Company or by bank transfer of readily available funds or both as the
board of directors may in their discretion decide. By the end of the year the
Company, expecting to receive the new shares from the sale of Kiyanovskyi, had
not proceeded to the distribution of shares and/ or payment of cash and
therefore the amount remained as payable.
36. Earnings and net assets per share attributable to equity holders of the
parent
a. Weighted average number of ordinary shares
31 Dec 2024 31 Dec 2023
Issued ordinary shares capital 129.191.442 129.191.442
Weighted average number of ordinary shares (Basic) 129.191.442 129.191.442
Diluted weighted average number of ordinary shares 129.191.442 129.191.442
b. Basic diluted and adjusted earnings per share from continued
operations
Earnings per share 31 Dec 2024 31 Dec 2023
€ €
Profit/(Loss) after tax attributable to owners of the parent 12.054 9.443.524
Basic 0,00 0,07
Diluted 0,00 0,07
c. Basic diluted and adjusted earnings per share from discontinued
operations
Earnings per share 31 Dec 2024 31 Dec 2023
€ €
Loss after tax from discontinued operations attributable to owners of the (850.123) (2.966.646)
parent
Basic (0,01) (0,02)
Diluted (0,01) (0,02)
d. Net assets per share
Net assets per share 31 Dec 2024 31 Dec 2023
€ €
Net assets attributable to equity holders of the parent 6.279.629 18.657.732
Number of ordinary shares 129.191.442 129.191.442
Diluted number of ordinary shares 129.191.442 129.191.442
Basic 0,05 0,14
Diluted 0,05 0,14
By taking into account the due and not paid yet amount to shareholders,
pursuant to the decision of the EGM held on 10 July 2024, the net assets per
share figure as at 31 December 2024 is adjusted from €0,05 to €0,14,
reflecting the actual shareholders value in the Company.
37. Segment information
All commercial and financial information related to the properties held
directly or indirectly by the Group is being provided to members of executive
management who report to the Board of Directors. Such information relates to
rentals, valuations, income, costs and capital expenditures. The individual
properties are aggregated into segments based on the economic nature of the
property. For the reporting period the Group has identified the following
material reportable segments:
Commercial-Industrial
· Warehouse segment -Innovations Logistics Park
Land Assets
· Land assets
There are no sales between the segments.
Segment assets for the investment properties segments represent investment
property (including investment properties under development and prepayments
made for the investment properties). Segment liabilities represent interest
bearing borrowings, finance lease liabilities and deposits from tenants.
Continued Operations
Statement of comprehensive income for the year 2024
Warehouse Residential Land Plots Corporate Total
€ € € € €
Segment profit
Rental income (Note 10) - - - 806.540 806.540
Service charges and utilities income (Note 10) - - - 473.566 473.566
Impairment of financial investments (Note 24) - - - 97.442 97.442
Profit from discontinued operations (Note 9b) (902.115) - 693.443 (236.570) (445.242)
Segment profit (902.115) - 693.443 1.140.978 932.306
Administration expenses - - - - (1.119.262)
(Note 12)
Other (expenses)/income, net (Note 14) - - - - (156.933)
- - - - 37.524
Finance income (Note 15)
- - - - (59.248)
Interest expenses (Note 15)
Other finance costs (Note 15) - - - - (65.243)
Profit from discontinued operations (Note 9b) - - - - (409.493)
Foreign exchange losses, net (Note 16) - - - - (1.160)
Income tax expense (Note 17) - - - - (1.172)
Exchange difference on I/C loan to foreign holdings (Note 27) - - - - 65.387
Total Comprehensive Income - - - - (777.294)
Statement of comprehensive income for the year 2023
Warehouse Residential Land Plots Corporate Total
€ € € € €
Segment profit
Rental income (Note 10) - - - 761.683 761.683
Service charges and utilities income (Note 10) - - - 668.905 668.905
Impairment of financial investments (Note 24) - - - (392.210) (392.210)
Result from disposal of Investment - - - 5.604.752 5.604.752
Result from disposal of associate(Note 20) - - - 2.024.927 2.024.927
Profit from discontinued operation (Note 9b) 33.736 5.773 (535.101) (1.631.714) (2.127.306)
Segment profit 33.736 5.773 (535.101) 7.036.343 6.540.751
Administration expenses - - - - (1.632.282)
(Note 12)
Other (expenses)/income, net (Note 14) - - - - 2.034.104
Dividend Income (Note 24) - - - - 160.937
Finance income (Note 15) - - - - 308.466
Interest expenses (Note 15) - - - - (62.985)
Other finance costs (Note 15) - - - - (3.515)
Profit from discontinued operations (Note 9b) - - - - (860.566)
Foreign exchange losses, net (Note 16) - - - - (26.824)
Income tax expense (Note 17) - - - - (2.434)
Exchange difference on I/C loan to foreign holdings (Note 27) - - - - (931.988)
Total Comprehensive Income - - - - 5.523.664
* It is noted that part of the rental and service charges/ utilities income
related to Innovations Logistics Park in Romania is currently invoiced by the
Company as part of a relevant lease agreement with the Innovations SPV and the
lender. However the asset, which are held through the SPV, are planned to be
transferred. Upon a final agreement for such transfer, the Company will
negotiate with the lender its release from the aforementioned lease agreement,
and if succeeds, upon completion such income will be also transferred.
Discontinued Operations
Statement of comprehensive income for the year 2024
Warehouse Residential Land Plots Corporate Total
€ € € € €
Segment profit
Rental income (Note 10) 137.948 - - - 137.948
Service charges and utilities income (Note 10) 17.496 - - - 17.496
Valuation gains/(losses) from investment property (Note 13) (710.876) - 7.235 - (703.641)
Loss on disposal of subsidiaries (Note 19.1.4) - - 694.302 - 694.302
Asset operating expenses (346.682) - (8.094) (236.570) (591.346)
(Note 11)
Segment profit (902.114) - 693.443 (236.570) (445.241)
Administration expenses - - - - (62.172)
(Note 12)
Other (expenses)/income, net (Note 14) - - - - (1.732)
- - - - 52
Finance income (Note 15)
- - - - (272.782)
Interest expenses (Note 15)
Other finance costs (Note 15) - - - - (1.249)
Foreign exchange losses, net (Note 16) - - - - (61.538)
Income tax expense (Note 17) - - - - (10.073)
Loss for the year - - - - (854.735)
Statement of comprehensive income for the year 2023
Warehouse Residential Land Plots Corporate Total
€ € € € €
Segment profit
Rental income (Note 10) 128.878 1.800 - - 130.678
Service charges and utilities income (Note 10) 17.497 7.841 - - 25.338
Valuation gains/(losses) from investment property (Note 13) 53.394 - (277.124) - (223.730)
Share of profits/(losses) from associates - - (245.316) - (245.316)
(Note 20)
Loss on disposal of subsidiaries (Note 19.1) - - - (946.792) (946.792)
Asset operating expenses (166.032) (3.868) (12.661) (684.923) (867.484)
(Note 11)
Segment profit 33.737 5.773 (535.101) (1.631.715) (2.127.306)
Administration expenses - - - - (201.344)
(Note 12)
Other (expenses)/income, net (Note 15) - - - - 5.792
- - - - 472
Finance income (Note 15)
Interest expenses (Note 15) - - - - (603.339)
Other finance costs (Note 15) - - - - (1.493)
Foreign exchange losses, net (Note 16) - - - - (55.699)
Income tax expense (Note 17) - - - - (4.955)
Loss for the year - - - - (2.987.872)
Total Operations
Statement of financial position as at 31 December 2024
Warehouse Residential Land plots Corporate Total
€ € € €
Assets
Long-term receivables and prepayments 818 - - - 818
Financial Assets at FV through P&L - - - 12.553.640 12.553.640
Assets held for sale 9.315.000 - 423.526 622.815 10.361.341
Segment assets 9.315.818 - 423.526 13.176.455 22.915.799
Tangible and intangible assets - - - - 13
Prepayments and other current assets - - - - 4.154.664
Cash and cash equivalents - - - - 1.047.918
Total assets - - - - 28.118.394
Liabilities associated with assets classified as held for disposal 5.664.746 - - 698.791 6.363.537
Borrowings - - - 517.239 517.240
Segment liabilities 5.664.746 - - 1.216.030 6.880.777
Trade and other payables - - - - 2.252.319
Taxation - - - - 79.589
Payable to shareholders form share premium reduction - - - - 11.705.448
Bonds - - - - 911.602
Total liabilities - - - - 21.829.735
Statement of financial position as at 31 December 2023
Warehouse Residential Land plots Corporate Total
€ € € €
Assets
Long-term receivables and prepayments 818 - - - 818
Investment in associate - - - - -
Financial Assets at FV through P&L - - - 11.686.598 11.686.598
Assets held for sale 10.025.000 - 1.547.513 754.949 12.327.462
Segment assets 10.025.818 - 1.547.513 12.441.547 24.014.878
Tangible and intangible assets - - - - 164
Prepayments and other current assets - - - - 4.034.537
Cash and cash equivalents - - - - 152.241
Total assets - - - - 28.201.820
Liabilities associated with assets classified as held for disposal 5.944.693 - 21.581 644.484 6.610.758
Borrowings 6.682 - - 108.112 114.794
Segment liabilities 5.951.375 - 21.581 752.596 6.725.552
Trade and other payables - - - - 1.795.884
Taxation - - - - 38.611
Bonds - - - - 870.373
Total liabilities - - - - 9.430.420
Discontinued operations
Assets and Liabilities held for sale 2024
Warehouse Residential Land plots Corporate Total
€ € € € €
Assets
Investment properties 9.000.000 - 423.526 - 9.423.526
Long-term receivables and prepayments 315.000 - - - 315.000
Segment assets 9.315.000 - 423.526 - 9.738.526
Tangible and intangible assets - - - - -
Prepayments and other current assets - - - - 504.030
Cash and cash equivalents - - - - 118.785
Total assets - - - - 10.361.341
Borrowings 131 - - - 131
Finance lease liabilities 5.641.613 - . - 5.641.613
Deposits from tenants 23.002 - - - 23.002
Segment liabilities 5.664.746 - - - 5.664.746
Trade and other payables - - - - 548.694
Taxation - - - - 150.097
Total liabilities - - - - 6.363.538
Assets and Liabilities held for sale 2023
Warehouse Residential Land plots Corporate Total
€ € € € €
Assets
Investment properties 9.710.000 - 1.547.513 - 11.257.513
Long-term receivables and prepayments 315.000 - - - 315.000
Investments in associates - - - - -
Segment assets 10.025.000 - 1.547.513 - 11.572.513
Tangible and intangible assets - - - - 25
Prepayments and other current assets - - - - 409.776
Cash and cash equivalents - - - - 345.148
Total assets - - - - 12.327.462
Borrowings 71 - - - 71
Finance lease liabilities 5.921.621 - 21.580 - 5.943.201
Deposits from tenants 23.002 - - - 23.002
Segment liabilities 5.944.694 - 21.580 - 5.966.274
Trade and other payables - - - - 488.612
Taxation - - - - 155.872
Total liabilities - - - - 6.610.758
Geographical information
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Income (Note 10) Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Ukraine - - - -
Romania - 155.444 - 156.016
Greece - - - -
Bulgaria - - - -
Cyprus * 1.280.106 - 1.430.588 -
Total 1.280.106 155.444 1.430.588 156.016
* It is noted that part of the rental and service charges/ utilities income
related to Innovations Logistics Park in Romania is currently invoiced by the
Company as part of a relevant lease agreement with the Innovations SPV and the
lender, however the asset, through the SPV, is planned to be transferred. Upon
a final agreement for such transfer, the Company will negotiate with the
lender its release from the aforementioned lease agreement, and if succeeds,
upon completion such income will be also transferred.
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Carrying amount of assets (investment properties)
Ukraine - 423.526 - 1.547.513
Romania - 9.000.000 - 9.710.000
Cyprus - - - -
Total - 9.423.526 - 11.257.513
38. Related Party Transactions
The following transactions were carried out with related parties:
38.1 Income/ Expense
38.1.1 Income
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Interest Income from loan to associates - - - 424
Total - - - 424
Interest income from associates relates to interest income from GreenLake
Development Srl.
38.1.2 Expenses
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Management Remuneration (Note 12) - - 10.657 -
Incentives pursuant to RemCo proposal (Note 12) 400.000 - 151.370 -
Directors fees (Note 12) - - 75.020 -
Provision for Director fees (Note 12) - - 250.000 -
Interest expenses on Director and Management Loans (Note 15) 12.128 - 15.348 -
Total 412.128 - 502.395 -
Management remuneration includes the remuneration of the CEO and that of the
administrators in Ukraine. During 2023 the Company externalized most of the
related HR cost as part of the cost minimization plan adopted by the board.
Incentives provided to personnel for the sussessful implementation of Group's
plan pursuant to relevant Remuneration Committee proposal dated 7 May 2021 as
approved by the board of directors on 1st June 2021.
The annual Directors fees including Chairman and Committee remunerations have
been set at GBP 129k. Following relevant confirmation by the board, the
Company registered in 2023 the remuneration of the board associated with H1
2022 (€75k) which remained pending from previous year, as well as a
provision of a remuneration to cover the period including H2 2022 and 2023
(€250k).
38.2 Payables to related parties (Note 31)
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Board of Directors & Committees remuneration 115.776 - 148.879 -
Provision for director fees 250.000 - 250.000 -
Sec South East Continet Unique Real Estate Management Limited - -
435.588 209.321
Management Remuneration 137.988 - 137.988 -
Total 939.352 - 746.188 -
38.2.1 Board of Directors & Committees
The amount payable represents remuneration and expenses payable to
Non-Executive Directors until the end of the reporting period.
38.2.2 Management Remuneration
Management Remuneration represents deferred amounts payable to the CEO of the
Company.
38.3 Loans from SC Secure Capital Limited to the Group's subsidiaries
SC Secure Capital Limited, the finance subsidiary of the Group provided
capital in the form of loans to the Ukrainian subsidiaries of the Company so
as to support the acquisition of assets, development expenses of the projects,
as well as various operational costs. The following table presents the amounts
of such loans which are eliminated for consolidation purposes, but their
related exchange difference affects the equity of the Consolidated Statement
of Financial Position.
Borrower Limit -as at Principal as at Limit -as at Principal as at
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
€ € € €
LLC " Trade Center'' 5.800 - 5.800 5.822
LLC "Aisi Ukraine" 23.062.351 - 23.062.351 315.524
LLC "Almaz-Press-Ukraine" 8.236.554 282.674 8.236.554 264.338
LLC "Aisi Ilvo" 150.537 17.296 150.537 19.398
Total 31.455.242 299.970 31.455.242 605.082
A potential Ukrainian Hryvnia weakening/strengthening by 10% against the US
dollar with all other variables held constant, would result in an exchange
difference on I/C loans to foreign holdings of €29.997 (2023 €60.508),
estimated on balances held at 31 December 2024.
38.4 Loans from related parties (Note 29)
31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Loans from Directors and Management 497.000 - 100.000 -
Interest accrued on loans from related parties 20.240 - 8.112 -
Total 517.240 - 108.112 -
Loans from directors of the order of €375.000 reflect loans provided from
three directors as bridge financing for future property acquisitions. The
loans bear interest 8% annually. The loans have been partially repaid during
2023 and current balance is €100.000.
The rest of the amount of the order of €397.000 reflect payables to
director and management, converted into loans for facilitating Company's cash
flow.
39. Contingent Liabilities
39.1 Tax Litigation
The Group performed during the reporting period part of its operations in the
Ukraine, within the jurisdiction of the Ukrainian tax authorities. The
Ukrainian tax system can be characterized by numerous taxes and frequently
changing legislation, which may be applied retroactively, open to wide and in
some cases, conflicting interpretation. Instances of inconsistent opinions
between local, regional, and national tax authorities and between the National
Bank of Ukraine and the Ministry of Finance are not unusual. Tax declarations
are subject to review and investigation by a number of authorities, which are
authorised by law to impose severe fines and penalties and interest charges.
Any tax year remains open for review by the tax authorities during the three
following subsequent calendar years; however, under certain circumstances a
tax year may remain open for longer. Overall following the sales of Terminal
Brovary, Balabino and Bela, the exposure of the Group in Ukraine has been
significantly reduced.
The Group performed during the reporting and comparative periods part of its
operations in Romania. In respect of Romanian tax system, many aspects are
subject to varying interpretations and frequent changes, which in many cases
have retroactive effects. In certain circumstances it is also possible that
tax authorities may act arbitrary.
These facts create tax risks which are substantially more significant than
those typically found in countries with more advanced tax systems. Management
believes that it has adequtely provided for tax liabilities, based on its
interpretation of tax legislation, official pronouncements and court
decisions. However, the interpretations of the relevant authorities could
differ and the effect on these consolidated financial statements, if the
authorities were successful in enforcing their interpretations, could be
significant.
39.2 Construction related litigation
There are no claims from contractors due to the postponement of projects or
delayed delivery other than those disclosed in the financial statements.
39.3 Other Litigation
The Group has a number of other minor legal cases pending. Management does not
believe that the result of these will have a substantial overall effect on the
Group's financial position. Consequently no such provision is included in the
current financial statements.
39.4 Other Contingent Liabilities
The Group had no other contingent liabilities as at 31 December 2024.
40. Commitments
The Group had no other commitments as at 31 December 2024.
41. Financial Risk Management
41.1 Capital Risk Management
The Group manages its capital to ensure adequate liquidity for implementing
its strategy to maximize the return to stakeholders through the optimization
of the debt-equity structure and value enhancing actions in respect of its
portfolio of investments. The capital structure of the Group consists of
borrowings (Note 29), bonds (Note 30), trade and other payables (Note 31)
deposits from tenants (Note 32), financial leases (Note 34), taxes payable
(Note 33) and equity attributable to ordinary or preferred shareholders.
Management reviews the capital structure on an on-going basis. As part of the
review Management considers the differential capital costs in the debt and
equity markets, the timing at which each investment project requires funding
and the operating requirements so as to proactively provide for capital either
in the form of equity (issuance of shares to the Group's shareholders) or in
the form of debt. Management balances the capital structure of the Group with
a view of maximizing the shareholder's Return on Equity (ROE) while adhering
to the operational requirements of the property assets and exercising prudent
judgment as to the extent of gearing.
41.2 Categories of Financial Instruments
Note 31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Continued operations Discontinued operations Continued operations Discontinued operations
€ € € €
Financial Assets
Cash at Bank 25 1.047.918 118.785 152.241 345.148
Long-term Receivables and prepayments 22 818 315.000 818 315.000
Financial Assets at FV through P&L 24 12.553.640 - 11.686.598 -
Prepayments and other receivables 23 4.154.664 504.030 4.034.537 409.776
Total 17.757.040 937.815 15.874.194 1.069.924
Financial Liabilities
Borrowings 29 517.240 131 114.794 71
Trade and other payables 31 2.252.319 548.694 1.795.884 488.612
Deposits from tenants 32 - 23.002 - 23.002
Finance lease liabilities 34 - 5.641.613 - 5.943.201
Share premium Reduction- payable to shareholders
35 11.705.448 - - -
Taxation 33 79.589 150.097 38.611 155.872
Bonds 30 911.602 - 870.373 -
Total 15.466.198 6.363.537 2.819.662 6.610.758
41.3 Financial Risk Management Objectives
The Group's Treasury function provides services to its various corporate
entities, coordinates access to local and international financial markets,
monitors and manages the financial risks relating to the operations of the
Group, mainly the investing and development functions. Its primary goal is to
secure the Group's liquidity and to minimize the effect of the financial asset
price variability on the cash flow of the Group. These risks cover market
risks including foreign exchange risks and interest rate risk, as well as
credit risk and liquidity risk.
The above mentioned risk exposures may be hedged using derivative instruments
whenever appropriate. The use of financial derivatives is governed by the
Group's approved policies which indicate that the use of derivatives is for
hedging purposes only. The Group does not enter into speculative derivative
trading positions. The same policies provide for the investment of excess
liquidity. As at the end of the reporting period, the Group had not entered
into any derivative contracts.
41.4 Economic Market Risk Management
The Group currently operates in Romania and Ukraine. The Group's activities
expose it primarily to financial risks of changes in currency exchange rates
and interest rates. The exposures and the management of the associated risks
are described below. There has been no change in the way the Group measures
and manages risks.
Foreign Exchange Risk
Currency risk arises when commercial transactions and recognized financial
assets and liabilities are denominated in a currency that is not the Group's
functional currency. Most of the Group's financial assets are denominated in
the functional currency. Management is monitoring the net exposures and adopts
policies to encounter them so that the net effect of devaluation is minimized.
Interest Rate Risk
The Group's income and operating cash flows are substantially independent of
changes in market interest rates as the Group has no significant floating
interest-bearing assets. On December 31(st), 2024, cash and cash equivalent
(including continued and discontinued operations) financial assets amounted to
€1.166.703 (2023: €497,389) of which approx. €511 in UAH and €220.154
in RON (Note 25) while the remaining are mainly denominated in either USD,GBP
or €.
The Group is exposed to interest rate risk in relation to its borrowings
(including continued and discontinued operations) amounting to €517.371 (31
December 2023: €114.865) as they are issued at variable rates tied to the
Libor or Euribor. Management monitors the interest rate fluctuations on a
continuous basis and evaluates hedging options to align the Group's strategy
with the interest rate view and the defined risk appetite. Although no hedging
has been applied for the reporting period, such may take place in the future
if deemed necessary in order to protect the cash flow of a property asset
through different interest rate cycles.
Management monitors the interest rate fluctuations on a continuous basis and
evaluates hedging options to align the Group's strategy with the interest rate
view and the defined risk appetite. Although no hedging has been applied for
the reporting period, such may take place in the future if deemed necessary in
order to protect the cash flow of a property asset through different interest
rate cycles.
Interest Rate Risk (continued)
As at 31 December 2024, the weighted average interest rate for all the
interest bearing borrowing and financial leases of the Group stands at 5,05%
(31 December 2023: 4,7%).
The sensitivity analysis changes applying to the interest calculation on the
borrowings principal outstanding as at 31 December 2024 is presented below:
Actual +100 bps +200 bps
as at 31.12.2024
Weighted average interest rate 5,05% 6,05% 7,05%
%Influence on yearly finance costs 61.387 122.775
The sensitivity analysis changes applying to the interest calculation on the
borrowings principal outstanding as at 31 December 2023 is presented below:
Actual +100 bps +200 bps
as at 31.12.2023
Weighted average interest rate 4,7% 5,7% 6,7%
%Influence on yearly finance costs 60.284 120.567
The Group's exposures to financial risk are discussed also in Note 7.
41.5 Credit Risk Management
The Group has no significant credit risk exposure. The credit risk emanating
from the liquid funds is limited because the Group's counterparties are banks
with high credit-ratings assigned by international credit rating agencies. The
Credit risk of receivables is reduced as the majority of the receivables
represent VAT to be offset through VAT income in the future. In respect of
receivables from tenants these are kept to a minimum of 2 months and are
monitored closely.
41.6 Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which applies a framework for the Group's short, medium and long
term funding and liquidity management requirements. The Treasury function of
the Group manages liquidity risk by preparing and monitoring forecasted cash
flow plans and budgets while maintaining adequate reserves. The following
table details the Group's contractual maturity of its financial liabilities.
The tables below have been drawn up based on the undiscounted contractual
maturities including interest that will be accrued.
Continued Operations
31 December 2024 Carrying amount Total Less than From one to More than two years
Contractual one year two years
Cash Flows
€ € € € €
Financial assets
Cash at Bank 1.047.918 1.047.918 1.047.918 - -
Prepayments and other receivables 4.154.664 4.154.664 4.154.664 - -
Financial Assets at FV through P&L 12.553.640 12.553.640 12.553.640 - -
Long-term Receivables and prepayments 818 818 - - 818
Total Financial assets 17.757.040 17.757.040 17.756.222 - 818
Financial liabilities
Borrowings 517.240 596.760 60.000 536.760 -
Trade and other payables 2.252.319 2.252.319 2.252.319 - -
911.602 911.602 911.602 - -
Bonds issued
Share premium Reduction- payable to shareholders 11.705.448 11.705.448 11.705.448 - -
Taxes payable and provisions 79.589 79.589 -
79.589
Total Financial liabilities 15.466.198 15.545.718 15.008.958 536.760 -
Total net assets/(liabilities) 2.290.842 2.211.322 2.747.264 (536.760) 818
Discontinued Operations
31 December 2024 Carrying amount Total Less than From one to More than two years
Contractual one year two years
Cash Flows
€ € € € €
Financial assets
Cash at Bank 118.785 118.785 118.785 - -
Long-term receivables 315.000 315.000 - - 315.000
Prepayments and other receivables 504.030 504.030 504.030 - -
Total Financial assets 937.815 937.815 622.815 - 315.000
Financial liabilities
Borrowings 131 131 131 - -
Trade and other payables 548.694 548.694 548.694 - -
Deposits from tenants 23.002 23.002 - - 23.002
Finance lease liabilities 5.641.613 5.999.320 537.313 5.462.007 -
Taxation 150.097 150.097 150.097 - -
Total Financial liabilities 6.363.537 6.721.244 1.236.235 5.462.007 23.002
Total net assets/(liabilities) (5.425.722) (5.783.429) (613.420) (5.462.007) 291.998
Continued Operations
31 December 2023 Carrying amount Total Less than From one to More than two years
Contractual one year two years
Cash Flows
€ € € € €
Financial assets
Cash at Bank 152.241 152.241 152.241 - -
Prepayments and other receivables 4.034.537 4.034.537 4.034.537 - -
Financial Assets at FV through P&L 11.686.598 11.686.598 11.686.598 - -
Long-term Receivables and prepayments 818 818 - - 818
Total Financial assets 15.874.194 15.874.194 15.873.376 - 818
Financial liabilities
Borrowings 114.794 125.461 13.445 112.016 -
Trade and other payables 1.795.884 1.795.884 1.795.884 - -
870.373 870.373 870.373 - -
Bonds issued
Taxes payable and provisions 38.611 38.611 21.438 17.173 -
Total Financial liabilities 2.819.662 2.830.329 2.701.140 129.189 -
Total net assets/(liabilities) 13.054.532 13.043.865 13.172.236 (129.189) 818
Discontinued Operations
31 December 2023 Carrying amount Total Less than From one to More than two years
Contractual one year two years
Cash Flows
€ € € € €
Financial assets
Cash at Bank 345.148 345.148 345.148 - -
Long-term receivables 315.000 315.000 - - 315.000
Prepayments and other receivables 409.776 409.776 409.776 - -
Total Financial assets 1.069.924 1.069.924 754.924 - 315.000
Financial liabilities
Borrowings 71 11.831 71 11.760 -
Trade and other payables 488.612 488.612 488.612 - -
Deposits from tenants 23.002 23.002 - - 23.002
Finance lease liabilities 5.943.201 6.593.092 555.030 541.962 5.496.100
Taxation 155.872 155.872 155.872 - -
Total Financial liabilities 6.610.758 7.272.409 1.199.585 553.722 5.519.102
Total net assets/(liabilities) (5.540.834) (6.202.485) (444.661) (553.722) (5.204.102)
42. Events after the end of the reporting period
a) Extraordinary General Meeting of the Shareholders
During the Extraordinary General Meeting (EGM) of the Company, held on 23
April 2025, all resolutions proposed to shareholders were duly passed.
Following the approval of the resolutions at the EGM, the necessary changes to
the Company's share capital structure, as set out in the Notice of EGM and
described in the following RNS,
https://www.secure-property.eu/cms/wp-content/uploads/2025/04/SECURE-PROPERTY-Result-of-EGM-23-April-2025.pdf,
will be undertaken, subject to relevant approvals from competent Authoroties.
b) Receipt of consideration in Arcona Property Fund N.V. shares
In February 2025 the Company successfully received the 68.782 newly issued
shares in Arcona Property Fund N.V. as part of the transaction for the
transfer of the Ukrainian property Kiyanovskyi Residence. At the same time,
the Company also received 10.689 additional shares in Arcona property Fund
N.V. as deferred consideration for the transfers of EOD and Delea Nuova
properties in 2022.
c) Set up of JV vehicle
As part of the agreement of the Company with Myrian Nes Limited for a joint
development and management of logistic properties in Romania, the two parties
have established SECNES Limited, the relevant SPV in Cyprus, while at the same
time, the parties have agreed with a tenant for the development of two
terminals in two regional cities in Romania.
d) Sale of assets
During 2025 the Company has indicatively agreed the sale of 50% of the share
capital of Best Day SRL, the SPV holding the Master Leasing agreement with
Piraeus leasing regarding Innovations Terminal in Bucharest, to Myrian Nes
Limited. The two parties intend to contribute their 50% share each into SECNES
Limited, the joint SPV as per (c) above, effectively adding the terminal into
the under development logistics platform. Subsequently, the Company has
already indicatively agreed and will proceed to sell its 50% interest in
SECNES Limited for a consideration of €2,25 million.
In addition, following the refusal of Arcona Property Fund N.V. to acquire in
2024 Rozny asset in Kiev as per initial plans, the Company during 2025 has
indicatively agreed to sell the asset in the market for a consideration of
$255 thousand.
**ENDS**
1 (#_ftnref1) Sources: World Bank Group, Eurostat, EBRD, National Institute
of Statistics- Romania, National Institute of Statistics - Ukraine, IMF,
European Commission, CBRE.
2 (#_ftnref2) Sources : CBRE, Colliers International, Cushman &
Wakefield, National Institute of Statistics- Romania, State Statistics
Service-Ukraine, NAI Real Act
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