REG - Secure Property Dev - Final Results <Origin Href="QuoteRef">SPDI.L</Origin> - Part 2
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installed in the premises. At the same time, the
Company was in extensive discussions through 2016 with the lender of the property, Piraeus Bank Leasing, in order to review
the sale and leaseback agreement following the settlement with Nestle finally managing to strike an agreement in February
2017. Based on the amended agreement the Innovations Park is subject to a sale and lease Back for a period of nine years
and during this period SPDI is free to lease out spaces of the Innovations Park at its own discretion. In April 2017, the
Company signed a lease agreement with Aquila srl, a large Romanian logistics operator, for 5,740 sqm of ambient space in
the warehouse, which produces an annual rent payable by Aquila of~E300,000. As at the issuance date of this report the
terminal is 60% leased.
6.6. Terminal Brovary Logistic Park, Ukraine
The Brovary Logistic Park consists of a 49,180 sqm GLA Class A warehouse and associated office space. The building has
large facades to the Brovary ring road, at the intersection of the Brovary (Е-95/М-01 highway) and Borispol ring roads. It
is located 10 km from the Kiev city border and 5 km from Borispol international airport.
The building is divided into six independent sections (each at least 6,400 sqm), with internal clear ceiling of 12m height
and industrial flooring constructed with an anti-dust overlay quartz finish. The terminal accommodates 90 parking spaces
for cars and trucks, as well as 24 hour security.
In May 2016 the Company fully leased the warehouse space to Rozetka UA, the leading Ukrainian internet retailer. In
September 2016, the Company signed a sale and purchase agreement with Temania Enterprises Ltd (company related to Rozetka
UA) for the sale of its Terminal Brovary warehouse at a gross asset value of over US$16 million (before the deduction of
the outstanding EBRD). The sale was completed successfully at the end of January 2017, generating for the Company a net
cash inflow of over US$3m.
6.7. Residential portfolio
· Romfelt Plaza (Doamna Ghica), Bucharest, Romania
Romfelt Plaza is a residential complex located in Bucharest, Sector 2, relatively close to the city center, easily
accessible by public transport and nearby supporting facilities and green areas.
During 2016 two units were sold and at the end of 2016, 18 apartments were available while 13 of them were rented,
indicating an occupancy rate of 72%.
· Monaco Towers, Bucharest, Romania
Monaco Towers is a residential complex located in South Bucharest, Sector 4, enjoying good car access due to the large
boulevards, public transportation, and a shopping mall (Sun Plaza) reachable within a short driving distance or easily
accessible by subway.
During 2016 four units were sold and at the end of 2016, 22 apartments were available while 9 of them were rented,
indicating an occupancy rate of 41%.
· Blooming House, Bucharest, Romania
Blooming House is a residential development project located in Bucharest, Sector 3, a residential area with the biggest
development and property value growth in Bucharest, offering a number of supporting facilities such as access to Vitan
Mall, kindergartens, café, schools and public transportation (both bus and tram).
During 2016 seven units were sold and at the end of 2016, 15 apartments were available while 6 of them were rented,
indicating an occupancy rate of 40%.
· Green Lake, Bucharest, Romania
A residential compound of 40,500 sqm GBA, which consists of apartments and villas, situated on the banks of Grivita Lake,
in the northern part of the Romanian capital - the only residential property in Bucharest with a 200 meter frontage to a
lake. The compound also includes facilities such as one of Bucharest's leading private schools (International School for
Primary Education), outdoor sports courts and a mini-market. Additionally Green Lake includes land plots totaling 40,360
sqm. SPDI owns ~43% of this property asset portfolio.
At the end of 2015 the portfolio consisted of 40 unsold apartments plus 37 unsold villas. During 2016, six apartments and
villas were sold while at the end of 2016, of the 71 units that were unsold 26 of them were let (occupancy rate of ~37%).
· Boyana Residence, Sofia, Bulgaria
A residential compound, which consisted at acquisition date (May 2015) of 67 apartments plus 83 underground parking slots
developed on a land surface of 5,700 sqm, situated in the Boyana high end suburb of Sofia, at the foot of Vitosha mountain
with Gross Buildable Area ("GBA") totaling to 11,400 sqm. The complex includes adjacent land plots with building permits
under renewal to develop GBA of 21,851 sqm.
During 2016, twenty one apartments were sold, with 40 units remaining unsold at the end of 2016.
6.8. Land Assets
· Aisi Bela - Bela Logistic Center, Odessa, Ukraine
The site consists of a 22.4 Ha plot of land with zoning allowance to construct up to 103,000 sqm GBA industrial properties
and is situated on the main Kiev - Odessa highway, 20km from Odessa port, in an area of high demand for logistics and
distribution warehousing.
The Company does not intend to recommence construction in the near future.
· Kiyanovskiy Lane - Kiev, Ukraine
The property consists of 0.55 Ha of land located at Kiyanovskiy Lane, near Kiev city centre. It is destined for the
development of business to luxury residences with beautiful protected views overlooking the scenic Dnipro River, St.
Michaels' Spires and historic Podil.
Discussions with local developers who approached the Company in order to explore possibilities of value generation are in
progress.
· Tsymlyanskiy Lane - 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
plot, with one local co-investor owning the remaining 45%.
Discussions are on-going with interested parties with a view to partnering in the development of this property.
· Balabino- Zaporozhye, Ukraine
The 26.38 Ha site is situated on the south entrance of Zaporozhye city, 3km away from the administrative border of
Zaporozhye. It borders the Kharkov-Simferopol Highway (which connects eastern Ukraine and Crimea and runs through the two
largest residential districts of the city) as well as another major artery accessing the city centre.
The site is zoned for retail and entertainment. Development has been put on hold.
· 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 protracted legal
battle, it has been registered under the Company pursuant to a legal decision in July 2015.
The Company is evaluating potential commercialization options to maximize the property's value.
· Delia Lebada, Romania
The site consists of a ~40,000 sqm plot of land in east Bucharest situated on the shore of Pantelimon Lake, opposite a
famous Romanian hotel, the Lebada Hotel. The lake itself, having a 360 Ha surface, is the largest lake of Bucharest and
accommodates many leisure activities such as fishing, cycling, walking, etc. At the back of the property there is a forest
which transforms the area into a very attractive habitat for families and adds value to the residential units to be
developed.
The construction permit, which allows for ~54,000 sqm to be built, was renewed in April 2014 but the property has been on
hold. Following the SPV owning the plot entering into an insolvency status the lending bank (Bank of Cyprus) entered into
discussions with the Company and its partners in respect to the future of the defaulted loan. Such discussions are
expected to be concluded within Q3-2017 and result into an amicable solution for all involved parties.
7. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2016
Note 2016 2015
E E
Income 2 6.070.940 5.448.960
Asset operating expenses 3 (992.441) (1.124.583)
Net Operating Income 5.078.499 4.324.377
Administration expenses 4 (2.614.188) (3.013.942)
Share of profits/(losses) from associates 14 469.248 (1.244.572)
Valuation gains/(losses) from Investment Property 5 896.793 (2.335.247)
Net loss on disposal of inventory 6 (368.907) (51.359)
Net loss on disposal of investment property 6 (438.516) (266.964)
Result on disposal of available for sale financial assets 18 (206.491) -
Impairment allowance for inventory and provisions 7 (63.513) (1.675.659)
Gain realized on acquisition of subsidiaries 13a - 2.181.834
Other operating income/(expenses), net 8 (1.304.304) 653.856
Goodwill impairment 13b - (657.082)
Operating profit / (loss) 1.448.621 (2.084.758)
Finance income 9 1.153.243 63.596
Finance costs 9 (3.738.951) (4.438.191)
Foreign exchange (loss), net 10a (1.041.239) (5.071.048)
Loss before tax (2.178.326) (11.530.401)
Income tax expense 11 (174.315) (80.188)
Loss for the year (2.352.641) (11.610.589)
Other comprehensive income
Exchange difference on I/C loans to foreign holdings 10b (4.167.542) (13.653.402)
Exchange difference on translation of foreign operations 22 3.508.448 8.064.848
Available-for-sale financial assets - fair value gain 18 - 485.529
Available-for-sale financial assets - Gains recycled to loss for the year 18 (485.529) -
Total comprehensive income for the year (3.497.264) (16.713.614)
Loss attributable to:
Owners of the parent (2.363.693) (11.015.852)
Non-controlling interests 11.052 (594.737)
(2.352.641) (11.610.589)
Total comprehensive income attributable to:
Owners of the parent (3.477.567) (15.981.196)
Non-controlling interests (19.697) (732.418)
(3.497.264) (16.713.614)
Earnings / (Losses) per share (Euro cent per share): 30b
Basic earnings/(losses) for the year attributable to ordinary equity owners of the parent (0,03) (0,16)
Diluted earnings/(losses) for the year attributable to ordinary equity owners of the parent (0,02) (0,13)
8. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2016
Note 2016 2015
E E
ASSETS
Non-current assets
Investment properties 12.4a 95.654.207 94.340.471
Investment properties under development 12.4b 5.027.986 5.125.389
Tangible and intangible assets 15 129.396 164.617
Long-term receivables and prepayments 16 351.181 352.916
Investments in associates 14 5.217.310 4.887.944
Available for sale financial assets 18 ___________- ____2.783.535
106.380.080 107.654.872
Current assets
Inventory 17 5.028.254 11.300.000
Prepayments and other current assets 19 2.778.361 4.795.223
Cash and cash equivalents 20 1.701.007 895.422
9.507.622 16.990.645
Total assets 115.887.702 124.645.517
EQUITY AND LIABILITIES
Issued share capital 21 900.145 900.145
Share premium 122.874.268 122.874.268
Foreign currency translation reserve 22 10.161.471 6.653.023
Exchange difference on I/C loans to foreign holdings 31.3 (37.567.055) (33.399.513)
Available for sale financial assets - fair value reserve - 485.529
Accumulated losses (57.444.020) (55.080.327)
Equity attributable to equity holders of the parent 38.924.809 42.433.125
Non-controlling interests 23 7.237.827 615.527
Total equity 46.162.636 43.048.652
Non-current liabilities
Borrowings 24 16.895.155 26.263.559
Finance lease liabilities 28 11.081.379 11.273.639
Trade and other payables 25 451.123 4.672.888
Deposits from tenants 26 217.328 623.770
28.644.985 42.833.856
Current liabilities
Borrowings 24 31.580.299 27.417.220
Trade and other payables 25 7.038.170 3.044.036
Taxes payable 27 1.147.018 822.005
Redeemable preference shares 21.6 - 6.430.536
Provisions 27 742.166 724.445
Deposits from tenants 26 271.019 132.684
Finance lease liabilities 28 301.409 192.083
41.080.081 38.763.009
Total liabilities 69.725.066 81.596.865
Total equity and liabilities 115.887.702 124.645.517
Net Asset Value (NAV) E per share: 30c
Basic NAV attributable to equity holders of the parent 0,43 0,47
Diluted NAV attributable to equity holders of the parent 0,38 0,41
On 27 June 2017 the Board of Directors of SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC authorised these financial
statements for issue.
9. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2016
Attributable to owners of the Company
Share capital Share premium, Net1 Accumulated losses, net of non-controlling interest2 Exchange difference on I/C loans to foreign holdings3 Foreign currency translation reserve4 Available for sale financial assets - fair value reserve5 Total Non- controlling interest Total
E E E E E E E E
Balance - 31 December 2014 338.839 97.444.044 (44.064.475) (19.746.111) (1.411.825) - 32.560.472 651.882 33.212.354
Loss for the year - - (11.015.852) - - - (11.015.852) (594.737) (11.610.589)
Exchange difference on I/C loans to foreign holdings (Note 10b) - - - (13.653.402) - - (13.653.402) - (13.653.402)
Foreign currency translation reserve - - - - 8.064.848 - 8.064.848 (137.681) 7.927.167
Fair value gain on available-for-sale financial assets (Note 18) - - - - - 485.529 485.529 - 485.529
Acquisition of non-controlling interest - - - - - - - 696.063 696.063
Issue of share capital, net (Note 21) 561.306 25.430.224 - - - - 25.991.530 - 25.991.530
Balance - 31 December 2015 900.145 122.874.268 (55.080.327) (33.399.513) 6.653.023 485.529 42.433.125 615.527 43.048.652
Loss for the year - - (2.363.693) - - - (2.363.693) 11.052 (2.352.641)
Exchange difference on I/C loans to foreign holdings (Note 10b) - - - (4.167.542) - - (4.167.542) - (4.167.542)
Foreign currency translation reserve - - - - 3.508.448 - 3.508.448 (30.749) 3.477.699
Available-for-sale financial assets - Gains recycled to loss for the year (Note 18) (485.529) (485.529) - (485.529)
Restructuring of the business (Note 29) - - - - - 6.641.997 6.641.997
Balance - 31 December 2016 900.145 122.874.268 (57.444.020) (37.567.055) 10.161.471 - 38.924.809 7.237.827 46.162.636
1Share premium is not available for distribution.
2Companies 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 defense at 20% will be payable on such deemed dividends to the extent that the shareholders (companies and
individuals) are Cyprus tax residents. 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 defense is payable on account of the shareholders.
3 Exchange differences on intercompany loans to foreign holdings arose as a result of devaluation of the Ukrainian Hryvnia
during 2015 and 2016. The Group treats the mentioned loans as a part of the net investment in foreign operations (Note
32.3).
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.
5 Available For Sale financial assets are measured at fair value. Fair value changes on AFS assets are recognized directly
in equity, through other comprehensive income.
10. CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2016
Note 2016 2015
E E
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax and non-controlling interests (2.178.326) (11.530.401)
Adjustments for:
(Gains)/losses on revaluation of investment property 5 (896.793) 2.335.247
Net loss on disposal of investment property 6b 438.516 266.964
Other non-cash movements (1.367) 35.071
Write offs of prepayments 8 6.701 47.316
Impairment of assets 8 - 342.280
Accounts payable written off 8 (109.602) (1.197.740)
Depreciation/ Amortization charge 4 58.491 40.823
Interest income 9 (1.153.243) (63.596)
Interest expense 9 3.571.387 3.834.696
Share of losses/(profit) from associates 14 (469.248) 1.244.572
Gain on acquisition of subsidiaries 13a - (2.181.834)
Results on disposal of available for sale assets 18 206.491 -
Impairment of inventory 7 63.513 975.659
Goodwill impairment 13b - 657.082
Effect of foreign exchange differences 10a 1.041.239 5.071.048
Cash flows from/(used in) operations before working capital changes 577.759 (122.813)
Change in inventory 17 1.522.234 24.341
Change in prepayments and other current assets 19 (380.280) (659.770)
Change in trade and other payables 25 (2.134.760) 1.131.688
Change in VAT and other taxes receivable 19 560.009 (290.593)
Change in Provisions 27 17.721 656.192
Change in other taxes payables 27 157.026 87.524
Increase in deposits from tenants 26 (268.107) (117.497)
Cash generated from operations 51.602 709.072
Income tax paid (2.879) (238.616)
Net cash flows provided in operating activities 48.723 470.456
CASH FLOWS FROM INVESTING ACTIVITIES
Sales proceeds from disposal of investment property 6b 2.043.055 1.635.615
Prepayment made for acquisition of investment property 12 - (100.000)
Cash outflow on available for sales financial assets - (2.298.006)
Capital expenditure on property plant and equipment (23.266) -
Dividend received from associates 127.570 -
Interest received 886 63.596
Increase in long term receivables 1.734
Cash outflow on acquisition of subsidiaries 13 - (1.786.934)
Net cash flows from / (used in) investing activities 2.149.979 (2.485.728)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital/shareholders advances 21 - 10.839.040
Proceeds from bank loans 24 1.000.000 -
Repayment of borrowings 24 (2.881.423) (5.672.198)
Interest and financial charges paid (3.716.433) (2.619.506)
Decrease in financial lease liabilities 28 (82.934) (179.255)
Increase in Non controlling interest 4.287.673
Repayment of preference shares 21 - (349.325)
Net cash flows from / (used in) financing activities (1.393.117) 2.018.756
Net increase/(decrease) in cash at banks 797.092 (203.603)
Cash:
At beginning of the year 895.422 891.938
Effect of foreign exchange rates on cash and cash equivalents (8.493) (207.086)
At end of the year 20 1.701.007 895.422
11. Notes to the Consolidated Financial Statements
For the year ended 31 December 2016
1. 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. The Group is planning to streamline its structure in Cyprus and
Romania throughout 2017.
Holding %
Name Country of incorporation Related Asset as at 31 Dec 2016 as at 31 Dec 2015
SC SECURE Capital Limited Cyprus 100 100
SL SECURE Logistics Limited Cyprus Brovary Logistics Park 100 100
LLC Aisi Brovary Ukraine 100 100
LLC Terminal Brovary Ukraine 100 100
LLC Aisi Ukraine Ukraine Kiyanovskiy Residence 100 100
LLC Retail Development Balabino Ukraine 100 100
LLC Trade Center Ukraine 100 100
LLC Almaz-press-Ukrayina Ukraine Tsymlianskiy Residence 55 55
LLC Aisi Bela Ukraine Bela Logistic Park 100 100
LLC Interterminal Ukraine Zaporizhia Retail Center 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 EOS Business Park 100 100
Secure Property Development and Investment Srl Romania 100 100
N-E Real Estate Park First Phase Srl Romania 100 100
Victini Holdings Limited Cyprus GED Logistics 100 100
SPDI Logistics S.A. Greece 100 100
Zirimon Properties Limited Cyprus Delea Nuova 100 100
Bluehouse Accession Project IX Limited Cyprus Praktiker Craiova 100 100
Bluehouse Accession Project IV Limited Cyprus 100 100
Bluebigbox 3 Srl Romania 100 100
SEC South East Continent Unique Real Estate Investments II Limited Cyprus 100 100
SEC South East Continent Unique Real Estate (Secured) Investments Limited Cyprus 100 100
Diforio Holdings Limited Cyprus Residential and Land portfolio 100 100
Demetiva Holdings Limited Cyprus 100 100
Ketiza Holdings Limited Cyprus 90 90
Frizomo Holdings Limited Cyprus 100 100
SecMon Real Estate SRL Romania 100 100
SecVista Real Estate SRL Romania 100 100
SecRom Real Estate SRL Romania 100 100
Ketiza Real Estate SRL Romania 90 90
Edetrio Holdings Limited Cyprus 100 100
Emakei Holdings Limited Cyprus 100 100
RAM Real Estate Management Limited Cyprus 50 50
Iuliu Maniu Limited Cyprus 45 45
Moselin Investments srl Romania 45 45
Rimasol Enterprises Limited Cyprus 44,24 44,24
Rimasol Real Estate Srl Romania 44,24 44,24
Ashor Ventures Limited Cyprus 44,24 44,24
Ashor Development Srl Romania 44,24 44,24
Jenby Ventures Limited Cyprus 44,30 44,30
Jenby Investments Srl Romania 44,30 44,30
Ebenem Limited Cyprus 44,30 44,30
Ebenem Investments Srl Romania 44,30 44,30
Sertland Properties Limited Cyprus 100 100
Boyana Residence ood Bulgaria 100 100
Mofben Investments Limited Cyprus 100 100
Delia Lebada Invest srl Romania 65 65
During the reporting period the Group did not proceed with any acquisitions. In 2015 it realized a number of acquisitions:
GED Warehouse, Praktiker Craiova and a part of the mixed portfolio including commercial, residential properties and land
which were categorized under "Investment Property" (Notes 12 & 13). Another part of the mixed portfolio (Delea Nuova office
Building, Green Lake land) has been categorized under "Associates" (Note 14). The 20% acquisition of Autounion has been
recorded under "Available for Sale Financial Assets" (Note 18).
2. Income
Income for the year ended 31 December 2016 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 the Terminal Brovary Logistic Park (Ukraine), Innovations Logistics Park (Romania),
EOS Business Park (Romania), Praktiker Craiova (Romania), and GED Logistics (Greece)
b) the income from Nestle (~E1,6m) pursuant to the agreement to early termination of their rental contract at
Innovations Logistics Park (Romania)
c) income from the sale of electricity by GED Logistics to the Greek grid,
d) rental income and service charges by tenants of the Residential Portfolio, and;
e) income from third parties and /or partners for managing real estate properties in Romania.
31 Dec 2016 31 Dec 2015
E E
Rental income 5.262.607 4.605.022
Sale of electricity 315.599 297.962
Service charges and utilities income 458.648 545.976
Service and property management income 34.086 -
Total income 6.070.940 5.448.960
Occupancy rates in the various income producing assets of the Group as at 31 December 2016 were as follows:
Income producing assets
% 31 Dec 2016 31 Dec 2015
EOS Business Park Romania 100 100
Innovations Logistics Park (Note 36b) Romania 25 87
GED Logistics Greece 100 100
Terminal Brovary (Note 36a) Ukraine 100 47
Praktiker Craiova Romania 100 100
3. Asset operating expenses
The Group incurs expenses related to the proper operation and maintenance of all the income generating properties in Kiev,
Bucharest, Athens, Sofia and Craiova. A part of these expenses is recovered from the tenants through the rental agreements
(Note 2). The effective reduction between 2015 and 2016 is attributed in part to cost optimizing and in part to reduced
occupancy at Innovations Logistics Park.
31 Dec 2016 31 Dec 2015
E E
Property related taxes (283.193) (363.080)
Utilities (207.086) (274.149)
Property management fees (173.363) (253.060)
Repairs and technical maintenance (101.325) (70.247)
Property security (86.574) (55.688)
Property insurance (49.622) (48.258)
Leasing expenses (89.335) (30.861)
Other operating expenses (1.943) (29.240)
Total (992.441) (1.124.583)
Property related taxes reflect local taxes related to land and building properties (in the form of land taxes, building
taxes, garbage fees, etc).
Property Management fees relate to Property Management Agreements for Terminal Brovary Logistics Park, Innovation Logistics
Park and Praktiker Craiova with third party managers outsourcing the related services.
Leasing expenses reflect expenses related to long term land leasing.
4. Administration Expenses
31 Dec 2016 31 Dec 2015
E E
Salaries and Wages (977.304) (1.108.614)
Advisory fees (403.185) (323.232)
Audit and accounting fees (192.514) (191.230)
Public group expenses (146.047) (155.766)
Corporate registration and maintenance fees (185.772) (226.326)
Directors' remuneration (140.779) (278.417)
Legal fees (127.926) (241.092)
Depreciation/Amortization charge (58.491) (40.823)
Corporate operating expenses (382.170) (448.442)
Total Administration Expenses (2.614.188) (3.013.942)
Salaries and wages include the remuneration of the CEO, the CFO, the Group Commercial Director, the Group Investment
Director and the Country Managers of Ukraine and Romania who have accepted a reduction in their remuneration, as well as
the salary cost of personnel employed in the region.
Advisory fees are mainly related to outsourced human resources support on the basis of advisory contracts, capital raising
advisory expenses and marketing expenses incurred by the Group in relation to Cypriot, Ukrainian, Romanian, Bulgarian and
Greek operations.
Audit and accounting expenses include the audit fees and accounting fees for the Company and all the subsidiaries.
Public group expenses include among others fees paid to the AIM:LSE stock exchange and the Nominated Adviser of the Company
as well as other expenses related to the listing of the Group.
Corporate registration and maintenance fees represent fees paid 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.
Directors' remuneration represents the remuneration of all non-executive Directors and committee members for H1-2016 (Note
32.1.2). Following a BOD decision the Directors will receive no remuneration thereafter.
Legal fees represent legal expenses incurred by the Group in relation to asset operations (rentals, sales, etc), ongoing
legal cases in Ukraine and compliance with AIM listing.
Corporate operating expenses include office expenses, travel expenses, communication expenses, D&O insurance and all other
general expenses for Cypriot, Romanian, Ukrainian, Bulgarian and Greek operations.
5. 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 12.2, are presented in the table below.
Property Name (E) Valuation gains/(losses)
31 Dec 2016 31 Dec 2015
E E
Brovary Logistic Park 3.561.403 (589.179)
Bela Logistic Center 283.654 1.513.658
Kiyanivskiy Lane 356.023 278.302
Tsymlyanskiy Lane 111.893 178.669
Balabyne Lane 77.597 (8.143)
Rozny Lane (55.673) (865.054)
Innovations Logistics Park (3.384.853) 400.000
EOS Business Park 337.684 150.000
Residential Portfolio 133.130 251.500
Green Lake 53.139 (865.000)
Pantelimon Lake (941.179) (10.000)
Praktiker Craiova 329.975 (2.870.000)
GED Logistics - 100.000
Boyana - Land 34.000 -
Total 896.793 (2.335.247)
6. Gain/(Loss) from disposal of properties
During the reporting period the Group progressed with selling properties classified under either Investment Property
(Romanian residential assets) or Inventory (Bulgarian residential assets), designated as non-core assets. The sales proceed
from sale of apartments and parking spaces minus the cost of assets sold, representing the fair value of the previous year
of the apartments and parking spaces sold in 2016 is presented below.
6a Inventory (Note 17)
31 Dec 2016 31 Dec 2015
E E
Income from sale of inventory 1.153.326 89.711
Cost of inventory (1.522.233) (141.070)
Gain/(Loss) from disposal of inventory (368.907) (51.359)
6b Investment property
A large part of sold properties during 2016 represent the bulk sale of all the apartments held by the Group at the Linda
Residence project. This sale resulted in E660.000 of income vs the carrying value of E1.014.000 reflecting the 2015 stated
fair value. During the sale process the financing bank agreed to provide a discount of E326.937 against the one off
repayment of the associated debt (Note 9). The net cash proceeds from the sale were ~E450k.
31 Dec 2016 31 Dec 2015
E E
Income from sale of investment property 2.043.055 1.635.615
Cost of investment property (2.481.571) (1.902.579)
Gain/(Loss) from disposal of investment property (438.516) (266.964)
7. Impairment allowance for inventory and provisions
31 Dec 2016 31 Dec 2015
E E
Impairment of Inventory (63.513) (975.659)
Provisions (Notes 27, 33.3) - (700.000)
Total (63.513) (1.675.659)
Impairment of Inventory relates to Boyana residence (Note 17).
Provisions reflect potential contingent liabilities from legal cases (Notes 27, 33).
8. Other operating income/(expenses), net
31 Dec 2016 31 Dec 2015
E E
Break fees received - 182.638
Accounts payable written off 109.602 1.197.740
Other income 109.602 1.380.378
Impairment of assets - (342.280)
Impairment of prepayments and other current assets (6.701) (47.316)
Transaction costs written off (506.837) (287.999)
Penalties (521.595) (16.753)
Other expenses (378.773) (32.174)
Other expenses (1.413.906) (726.522)
Other operating income/(expenses), net (1.304.304) 653.856
Break fees received represents extraordinary income due to early break fees of tenancy agreements by tenants in Terminal
Brovary.
Accounts payable written off in 2015 represent a write off of management fees associated with SEC South East Continent
Unique Real Estate (SECURED) Investments Ltd charged by a related party, Secure Management Ltd, which has accepted to forgo
any claim on such payable amount.
Impairment of assets in 2015 represents an amount paid by a subsidiary 8 years ago for acquiring an option to buy
properties which has not been exercised.
Transaction costs represent due diligence costs, previously held under deferred expenses, for properties that were
considered for acquisition which at the end were not acquired (in 2016 mainly Bluehouse assets).
Penalties in 2016 mainly represents penalties associated with the 20% share disposal in Autounion (Note 18).
Other income/(expenses) in 2016 includes E246.337 of transaction expenses related to Terminal Brovary sale and E109.654
reflects a non realized loss due to amounts related with non controlling interest restructuring of the Group.
9. Finance costs and income
Finance income 31 Dec 2016 31 Dec 2015
E E
Income associated to partial write off of bank loans 326.937 -
Interest received from non bank loans (Note 32.1) 61.925 48.730
Interest (non bank) written off 763.481 -
Interest income associated with banking accounts 900 14.866
Total finance income 1.153.243 63.596
Income associated to partial write off of bank loans reflects the amount foregone by the Raiffeisen Bank reflecting a
discount of 26% of the principal amount (at the time of the agreement in 2015), upon complete sale of all the Linda
Residence units (Note 6b) (effected in 2016) and full repayment of the remaining associated debt.
Interest received from non bank loans, reflects income from loans granted by the Group for financial assistance of
associates or available for sale properties.
Interest (non bank) written off, represents accrued interest expense associated to one of the projects where the Company
maintains a partnership participation and is under consolidation, whereas the shareholders have agreed to write off the
interest and capitalize the shareholders' loan principal.
Finance costs 31 Dec 2016 31 Dec 2015
E E
Interest expenses (bank) (2.970.765) (3.283.056)
Interest expenses (non bank) (Note 32.1) (14.996) -
Finance leasing interest expenses (585.626) (551.640)
Finance charges and commissions (123.413) (258.493)
Default interest - (325.707)
Other finance expenses (44.151) (19.295)
Total finance costs (3.738.951) (4.438.191)
Net finance result (2.585.708) (4.374.595)
Interest expense (bank) represents interest expense charged on bank borrowings.
Interest expense (non-bank) represents interest expense charged on non-bank borrowings, mainly from related parties. (Note
32.1).
Finance leasing interest expenses relate to the sale and lease back agreements of the Group (Note 28).
Finance charges and commissions include regular banking commissions and various fees paid to the banks.
Default interest in 2015 relates to interest charged by Bank of Cyprus in relation to the loan over Delia Lebada Invest
srl.
10. Foreign exchange profit / (losses)
a. Foreign exchange loss - non realised
Foreign exchange losses (non-realised) resulted from the loans and/or payables/receivables denominated in non EUR
currencies when translated in EUR, mainly the EBRD loan (Note 24). The exchange loss for the year ended 31 December 2016
amounted to E1.041.239 (2015: loss E5.071.048).
b. Exchange difference on intercompany loans to foreign holdings
The intercompany loans provided by SC Secure Capital Limited to Ukrainian subsidiaries (Note 32.3) incurred an exchange
loss (non-realised) of E4.167.542, due to the UAH devaluation which took place during the reporting period (2015: loss
E13.653.402). Settlement of these loans is not planned to occur in the foreseeable future and in substance is part of the
Group's net investment in its foreign operations.
11. Income Tax Expense
31 Dec 2016 31 Dec 2015
E E
Current income and defence tax expense (174.315) (80.188)
Taxes (174.315) (80.188)
For the year ended 31 December 2016, the corporate income tax rate for the Group's subsidiaries are as follows: in Ukraine
18%, in Romania 16%, in Greece 29% and in Bulgaria 10%. 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 2016 31 Dec 2015
E E
Profit / (loss) before tax (1.483.129) (11.530.401)
Tax calculated on applicable rates 410.850 (3.340.505)
Expenses not
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