REG - Secure Property Dev - Final Results <Origin Href="QuoteRef">SPDI.L</Origin> - Part 4
28/06/2017 07:11
- Part 4: For the preceding part double click ID:nRSb3360Jc
2016 the intangible assets were composed of the capitalized expenditure on the Enterprise Resource
Planning system (Microsoft Dynamics-Navision) in the amount of E96.183. Accumulated amortization as at the reporting date
amounts to E62.270 as the system was already in use.
As at 31 December 2016 and 2015 the tangible non-current assets mainly consisted of the machinery and equipment used for
the servicing the Group's investment properties in Ukraine and Romania.
16. Long Term Receivables and prepayments
31 Dec 2016 31 Dec 2015
E E
Long Term Receivable 251.181 252.916
Prepayment for Investments 100.000 100.000
Total 351.181 352.916
Long term receivable mainly includes the cash collateral from Piraeus Leasing.
17. Inventory
E 30 Dec 2016 31 Dec 2015
At 1 January 11.300.000 -
Sale of Inventories (1.522.233) -
Transfer to Investment Property (4.686.000) -
Acquisition of subsidiaries - 12.300.000
Impairment of inventory (63.513) (1.000.000)
At 31 December 5.028.254 11.300.000
In May 2015 by acquiring the mixed use Sec South portfolio (Note 13) the Group acquired 100% of a residential portfolio in
Boyana, in Sofia, Bulgaria which is classified as Inventory.
After a decision of the Board of Directors of Boyana to change the initial plan for construction in the land and hold this
land for capital appreciation, E4.686.000 which related to the land that was transferred to Investment Properties (Note
12.2) and from now on will be treated under IAS 40.
18. Available for sale financial assets
In April 2015 the Group completed the acquisition of a 20% interest in a fully let and income generating office building in
Sofia, Autounion, for a cash consideration of E4.059.839 including the assignment of a loan amounting to E1.859.278
together with accumulated interest up to the acquisition date (Note 19). The holding was classified as "Available for Sale
Financial Assets" in conformity with IAS 39. Autounion is a Class A BREEAM certified office building, located close to the
Sofia Airport. The building has a Gross Lettable Area of 19.476 sqm over ten floors, includes underground parking and is
fully let to one of the largest Bulgarian insurance companies on a long lease extending to 2027.
In Q3-2016, as a result of the vendor (BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L) of BIGBLUEBOX 3 (Praktiker
Craiova) requesting redemption of the 8.618.997 Secured Redeemable Convertible Preference Class B Shares ("RCPS"), the
Company transferred, the security, its 20% participation over Autounion to the said vendor. Although there is a difference
appearing as a liability to the vendor (Note 25), the Group is in negotiation as to the final settlement amount and the
method of payment.
Fair value gain for the period represents the difference between the fair value of the investment at acquisition date minus
the fair value of investment at the reporting date.
31 Dec 2016 31 Dec 2015
E E
At 1 January 2.783.535 -
Acquisition cost of the investment - 2.298.006
Fair Value gain - 485.529
Disposal of AFS investment (2.783.535) -
At 31 December - 2.783.535
As a result of Autounion transfer a net loss of E206.491 was recognized in the Group's consolidated statement of
comprehensive income for 2016. The amount reflects the aggregate book value of 20% interest in Autounion E2.783.535 plus
the assigned loan including accumulated interest up to the disposal date amounting to E1.968.486 minus the accumulated fair
value gain in the amount of E485.529 that was initially recognised in equity and recycled to the loss of the year as of the
disposal date minus a pledged value of E4.060.000. The total remaining liability recognized at the reporting date to the
vendor amounts to E2.521.211 (Note 25).
19. Prepayments and other current assets
31 Dec 2016 31 Dec 2015
E E
Trade and other receivables 992.482 792.565
VAT and other taxes receivable 378.455 938.464
Deferred expenses 159.866 921.427
Receivables due from related parties 7.284 3.384
Loan receivable from 3rd parties 1.000.000 -
Loan to associates (Note 32.4) 264.110 254.718
Loan to Available for Sale Financial Assets (Note 18) - 1.905.933
Allowance for impairment of prepayments and other current assets (23.836) (21.268)
Total 2.778.361 4.795.223
Trade and other receivables mainly include receivables from tenants (including the Greek electricity grid administrator)
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 related to ongoing share capital increase and
due diligence expenses related to the possible acquisition of investment properties in the near future.
Loan receivable from 3rd party represents an amount provided as an advance payment for acquiring a participation into an
investment property and has a maturity date 30 June 2018.
Loan to associates reflects a loan receivable from Greenlake Development SRL, holding company of Greenlake Phase A (Note
14, Note 32.4).
Loan to Available for Sale Financial Assets reflects a loan receivable from Bluehouse V, holding company of Autounion
building disposed in 2016 (Note 18).
20. Cash and cash equivalents
Cash and cash equivalents represent liquidity held at banks.
31 Dec 2016 31 Dec 2015
E E
Cash with banks in USD 17.670 25.205
Cash with banks in EUR 152.742 214.177
Cash with banks in UAH 31.744 40.505
Cash with banks in RON 1.319.686 569.424
Cash with banks in BGN 179.165 3.701
Cash equivalents - 42.410
Total 1.701.007 895.422
An amount of ~E1,1m held in accounts related to properties that carry debt facilities is restricted cash, as the lending
banks control its usage to conform to contractual obligations.
21. Share capital
Number of Shares during 2016 and 2015
31 December 2014 13 March 2015 31 May 2015 29 June 2015 1 July 2015 27 July 2015 12 August 2015 31 December 2015 13 October 2016 31 December 2016
Increase of share capital Increase of share capital Repayment RCPS Increase of share capital Exercise of warrants Exercise of warrants Redemption of redeemable shares
Authorised
Ordinary shares of E0,01 989.869.935 989.869.935 989.869.935
Total equity 989.869.935 989.869.935 989.869.935
RCP Class A Shares of E0,01 785.000 785.000 785.000
RCP Class B Shares of E0,01 8.618.997 8.618.997 8.618.997
Total 990.654.935 8.618.997 999.273.932 999.273.932
Issued and fully paid
Ordinary shares of E0,01 33.884.054 23.777.748 18.028.294 - 8.785.580 5.539.047 90.014.723 90.014.723
Total equity 33.884.054 23.777.748 18.028.294 - 8.785.580 5.539.047 90.014.723 90.014.723
RCP Class A Shares of E0,01 785.000 (392.500) 392.500 (392.500) -
RCP Class B Shares of E0,01 8.618.997 8.618.997 (8.618.997) -
Total 34.669.054 23.777.748 18.028.294 (392.500) 8.618.997 8.785.580 5.539.047 99.026.220 (99.026.220) 90.014.723
Nominal value (E) for 2016 and 2015
E 31 December 2014 13 March 2015 31 May 2015 29 June 2015 1 July 2015 27 July 2015 12 August 2015 31 December 2015 13 October 2016 31 December 2016
Increase of share capital Increase of share capital Repayment RCPS Increase of share capital Exercise of warrants Exercise of warrants Redemption of redeemable shares
Authorised
Ordinary shares of E0,01 9.898.699 9.898.699 9.898.699
Total equity 9.898.699 9.898.699 9.898.699
RCP Class A Shares of E0,01 7.850 7.850 7.850
RCP Class B Shares of E0,01 - 86.190 86.190 86.190
Total 9.906.549 86.190 9.992.739 9.992.739
Issued and fully paid
Ordinary shares of E0,01 338.839 237.777 180.283 87.856 55.390 900.145 900.145
Total equity 338.839 237.777 180.283 87.856 55.390 900.145 900.145
RCP Class A Shares of E0,01 (Note 21.6) 7.850 (3.925) 3.925 (3.925) -
RCP Class B Shares of E0,01 (Note 21.6) - 86.190 86.190 (86.190) -
Total 346.689 237.777 180.283 (3.925) 86.190 87.856 55.390 990.260 (990.190) -
21.1 Authorised share capital
As at the end of 2015 the authorized share capital of the Company was 989.869.935 Ordinary Shares of E0,01 nominal value
each, 785.000 Redeemable Preference Class A Shares of E0,01 nominal value each and 8.618.997 Redeemable Preference Class B
Shares of E0,01 nominal value each.
No changes were effected during the reporting period as far as the authorized share capital of the Company is concerned and
therefore at the end of the reporting period the authorized share capital of the Company remained at 989.869.935 Ordinary
Shares of E0,01 nominal value each, 785.000 Redeemable Preference Class A Shares of E0,01 nominal value each and 8.618.997
Redeemable Preference Class B Shares of E0,01 nominal value each. Yet the Company is in process to cancel the Class A and
Class B Redeemable Preference Shares (Note 21.6), a process that will be completed in 2017.
21.2 Issued Share Capital
As at the end of 2015 the issued share capital of the Company was as follows:
a) 90.014.723 Ordinary Shares of E0,01 nominal value each,
b) 392.500 Redeemable Preference Class A Shares of E0,01 nominal value each,
c) 8.618.997 Redeemable Preference Class B Shares of E0,01 nominal value each.
No changes were effected throughout the reporting period in respect of the issued share capital of the Company and as at
the end of the reporting period the issued share capital of the Company remained as follows:
a) 90.014.723 Ordinary Shares of E0,01 nominal value each,
b) 392.500 Redeemable Preference Class A Shares of E0,01 nominal value each, subject to cancellation during 2017 (Note
21.6),
c) 8.618.997 Redeemable Preference Class B Shares of E0,01 nominal value each, subject to cancellation during 2017 (Note
21.6).
In respect of the Class A Redeemable Preference Shares, issued in connection to the Innovations acquisition and the Class B
Redeemable Preference Shares, issued in connection to the acquisition of Craiova Praktiker, following the holders of such
shares notifying the Company on their intent to redeem within 2016, the Company:
- actually proceeded in effecting full redemption of the Class A shares (392.500) which was finalized in Q1-2017 while the
process of cancelling them will be concluded within 2017
- for the Class B Redeemable Preference Shares, in lieu of redemption the Company gave its 20% holding in Autounion (Note
18) in October 2016, to the Craiova Praktiker seller BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L and has been
negotiating the resulting difference (if any) for a final settlement. As soon as the case is settled, the Company will
proceed with the cancelation of the Class B Redeemable Preference Shares
21.3 Option schemes
A. Under the scheme adopted in 2007, each of the directors serving at the time, who is still a Director of the Company
is entitled to subscribe for 2.631 Ordinary Shares exercisable as set out below:
Exercise Price Number of
USD Shares
Exercisable until 1 August 2017 57 1.754
Exercisable until 1 August 2017 83 877
B. Under a second scheme also adopted in 2007, director Franz M. Hoerhager is entitled to subscribe for 1.829 ordinary
shares exercisable as set out below:
Exercise Price Number of
GBP Shares
Exercisable until 1 August 2017 40 1.219
Exercisable until 1 August 2017 50 610
C. Under a scheme adopted in 2015, pursuant to an approval by the AGM of 31/12/2013, the Company proceeded in 2015 in
issuing 590.000 options to its employees, as a reward for their effort and support during the previous year. Each option
entitles the Option holder to one Ordinary Share. Exercise price stands at GBP 0,15. The Option holders lose and thus may
not exercise any option from the moment they cease to offer their services to the Company. The CEO and the CFO of the
Company did not receive any options.
a. 147.500 Options may be exercised within 2016. Out of the Options that may be exercised in 2016, none has been
exercised until the reporting date,
b. 147.500 Options may be exercised within 2017,
c. 295.000 Options may be exercised within 2018.
The Company considers that all option schemes are currently out of money and therefore has not made any relevant
provision.
21.4 Class A Warrants issued
The Company acquired the Sec South portfolio in 2015 (Notes 12,13) in exchange of Ordinary shares which were issued at GBP
0,65 each. The sellers were also provided certain Class A Warrants giving the right to the Warrant holders to subscribe in
cash at the Exercise price for additional Ordinary Shares in the Company. The Company issued then two sets of Class A
Warrants as follows:
1) 18.028.294 warrants corresponding to 18.028.294 ordinary shares, exercisable within 45 days from signing at an exercise
price of GBP 0,10 per ordinary share. 14.324.627 out of these warrants were exercised by August 2015 (Notes 21.2). The
remaining warrants have lapsed.
2) 18.028.294 warrants corresponding to 18.028.294 ordinary shares, were exercisable by 31 December 2016 at an exercise
price of GBP 0,45 per ordinary share. None of these warrants were exercised by 31 December 2016 and thus the warrants have
lapsed.
21.5 Class B Warrants issued
On 8 August 2011 the Company issued an amount of Class B Warrants for an aggregate corresponding to 12,5% of the issued
share capital of the Company after the exercise date. The Class B Warrants may be exercised at any time until 30 June 2017.
The exercise price of the Class B Warrants will be the nominal value per Ordinary Share as at the date of exercise. The
Class B Warrant Instruments have anti-dilution protection so that, in the event of further share issuances by the Company,
the number of Ordinary Shares to which the holder of a Class B Warrant is entitled will be adjusted so that he receives the
same percentage of the issued share capital of the Company (as nearly as practicable), as would have been the case had the
issuances not occurred. This anti-dilution protection will freeze on the earlier of (i) the expiration of the Class B
Warrants; and (ii) capital increase(s) undertaken by the Company generating cumulative gross proceeds in excess of USD
100.000.000. As at the financial statements issue date none of the Class B Warrants have been exercised. As of the
reporting date, the aggregate amount of Class B Warrant is 12.859.246.
21.6 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 2016 (as at) 31 December 2015
Ordinary shares of E0,01 Issued and Listed in AIM 90.014.723 90.014.723
Class A Warrants - 18.028.294
Class B Warrants 12.859.246 12.859.246
Total number of Shares Non-Dilutive Basis 90.014.723 90.014.723
Total number of Shares Full Dilutive Basis 102.873.969 102.873.969
Options 4.460 4.460
Redeemable Preference Class A Shares
The Redeemable Preference Class A Shares which do not have voting or dividend rights where issued as part of the Innovation
acquisition purchase consideration. As at the reporting date all of the Redeemable Shares Class A shares have been redeemed
and the Company will proceed in their cancellation within 2017.
Redeemable Preference Class B Shares
The Redeemable Preference Class B Shares, issued to BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L as part of the
Praktiker Craiova asset acquisition (Note 13) do not have voting rights but have economic rights at par with ordinary
shares. As at the reporting date all of the Redeemable Shares Class B have been redeemed (Note 26) but the Company is in
discussions with the vendor in respect of a final settlement (Note 18).
22. Foreign Currency Translation Reserve
Exchange differences related to the translation from the functional currency of the Group's subsidiaries are accounted 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 the EUR in the
countries where the Company's subsidiaries' functional currencies are not EUR.
23. 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 2016 31 Dec 2015
LLC Almaz-Press-Ukraine 45,00 45,00
Ketiza Limited 10,00 10,00
Ketiza srl 10,00 10,00
Ram Real Estate Management Limited 50,00 50,00
Iuliu Maniu Limited 55,00 55,00
Moselin Investments Srl 55,00 55,00
Rimasol Enterprises Limited 55,76 55,76
Rimasol Real Estate Srl 55,76 55,76
Ashor Ventures Limited 55,76 55,76
Ashor Development Srl 55,76 55,76
Jenby Ventures Limited 55,70 55,70
Jenby Investments Srl 55,70 55,70
Ebenem Limited 55,70 55,70
Ebenem Investments Srl 55,70 55,70
Delia Lebada Invest SRL 35,00 35,00
24. Borrowings
Project 31 Dec 2016 31 Dec 2015
E E
Principal of bank Loans
European Bank for Reconstruction and Development ("EBRD") Terminal Brovary 11.551.023 12.164.107
Banca Comerciala Romana /Tonescu Finance Monaco Towers 924.562 1.210.962
Bancpost SA Blooming House 1.245.657 1.739.634
Alpha Bank Romania Romfelt Plaza 809.919 869.602
Alpha Bank Romania EOS Business Park 991.000 -
Raiffeisen Bank Romania Linda Residence - 429.858
Bancpost SA GreenLake - Parcel K 3.092.926 3.099.639
Alpha Bank Bulgaria Boyana 2.680.492 3.460.813
Alpha Bank Bulgaria Boyana/Sertland 693.514 736.864
Bank of Cyprus Delia Lebada/Pantelimon 4.569.725 4.569.725
Eurobank Ergasias SA SPDI Logistics 11.726.960 12.343.116
Piraeus Bank SA GreenLake-Phase 2 2.525.938 2.525.938
Marfin Bank Romania Praktiker Craiova 4.502.128 4.839.149
Loans by non-controlling shareholders - 2.713.458
Loans from other 3rd parties 359.134 -
Overdrafts 2.062 26.516
Total principal of bank and non bank Loans 45.675.040 50.729.381
Restructuring fees and interest payable to EBRD 29.898 32.767
Interest accrued on bank loans 2.723.889 2.175.165
Interests accrued on non-bank loans 46.627 743.466
Total 48.475.454 53.680.779
31 Dec 2016 31 Dec 2015
E E
Current portion 31.580.299 27.417.220
Non-current portion 16.895.155 26.263.559
Total 48.475.454 53.680.779
EBRD loan related to Terminal Brovary
According to the agreement the loan expires in 2022 and has a balloon payment of USD 3.633.333. The loan bears interest of
3 M LIBOR + 6,75%. Such loan has a maturity date in 2022 and following Terminal Brovary sale (Note 36a), the Company sold
LLC Terminal Brovary with its assets and liabilities (EBRD loan included).
Under the current agreement the collaterals accompanying the existing loan facility are as follows:
1. LLC Terminal Brovary pledged all movable property with the carrying value more than USD 25.000.
2. LLC Terminal Brovary pledged its Investment property, Brovary Logistics Centre the construction of which was
finished in 2010 (Note 12), and all property rights on the center.
3. SPDI PLC pledged 100% corporate rights in SL SECURE Logistics Ltd, a Cyprus Holding Company which is the
Shareholder of LLC Terminal Brovary and LLC Aisi Brovary.
4. SL SECURE Logistics Ltd pledged 99% corporate rights in LLC Aisi Brovary.
5. LLC Aisi Brovary pledged 100% corporate rights in LLC Terminal Brovary.
6. LLC Terminal Brovary pledged all current and reserve accounts opened by LLC Terminal Brovary in Unicreditbank
Ukraine.
7. LLC Aisi Brovary entered into a call and put option agreement with EBRD, pursuant to which following an Event of
Default (as described in the Agreement) EBRD has the right (Call option) to purchase at the Call Price from LLC Aisi
Brovary, 20% of the Participatory Interest of LLC Terminal Brovary on the relevant Settlement Date.
8. LLC Terminal Brovary has granted EBRD a second ranking mortgage in relation to its own and LLC Aisi Brovary's
obligations under the call and put option agreement.
9. LLC Terminal Brovary has pledged its rights arising in connection with the existing Lease agreements with Tenants.
10. LLC Aisi Brovary has entered with EBRD into a conditional assignment agreement of 20% and 80% corporate rights in LLC
Terminal Brovary.
11. SL SECURE Logistics Ltd has entered with EBRD into a conditional assignment agreement of 99% corporate rights in LLC
Aisi Brovary.
12. SPDI PLC has issued a corporate guarantee dated 12 January 2009 guaranteeing all liabilities and fulfilment of
conditions under the existing loan agreement remains in force. The maturity of the guarantee is equal to the maturity of
the loan.
The existing credit agreement with EBRD includes among others the following requirements for LLC Terminal Brovary and the
Group as a whole:
1. At all times LLC Brovary Logistics shall maintain a balance in the Debt Service Reserve Amount (DSRA) account
equal to not less than the sum of all payments of principal and interest on the Loan which will be due and payable during
the next six months.
2. LLC Terminal Brovary shall achieve a "CNRI"(Contract Net Rental Income is the aggregate of monthly lease
payments, net of value added tax, contracted by the Borrower pursuant to the Lease Agreements as of the relevant testing
date and converted into Dollars at the official exchange rate established by the National Bank of Ukraine as of such
testing date) according to the following schedule:
(1) on 31 December 2015, CNRI of USD 230.000 or more; and
(2) on 30 June and 31 December in each year commencing on the date of 30 June 2016, CNRI of USD 250.000 or more, in respect
of the six month period commencing on any such date.
3. LLC Terminal Brovary shall achieve a "DSCR"(Debt Service Coverage Ratio is the sum of net income minus operating
expenses plus amortization, divided with the sum of paid principal & interest) according to the following schedule:
i. in respect of the 6 months period ending on 30 June 2015 and 31 December 2015, the DSCR of more than 1,15x.
ii.in respect of the 6 months period ending on 30 June or 31 December in any year commencing on the date of 30 June 2016,
the DSCR of more than 1,2x.
Other bank Borrowings
SecMon Real Estate Srl (2011) entered into a loan agreement with Banca Comerciala Romana for a credit facility for
financing part of the acquisition of the Monaco Towers Project apartments. As of the end of the reporting period the
balance of the loan was E924.562 and bears interest of EURIBOR 3M plus 5%. In June 2016, Banca Comerciala Romana has
assigned the loan, all rights and securities to Tonescu Finance SRL. The loan, which is currently expired, is secured by
all assets of SecMon Real Estate Srl as well as its shares. The Group is in discussion with Tonescu Finance SRL for a
potential restructuring.
Ketiza Real Estate Srl entered (2012) into a loan agreement with Bancpost SA for a credit facility for financing the
acquisition of the Blooming House Project and 100% of the remaining (without VAT) construction works of Blooming House
project. As of the end of the reporting period the balance of the loan was E1.245.657. The loan bears interest of EURIBOR
3M plus 3,5% and matures in May 2017. The Group is in discussion for extending the loan to 2020. The bank loan is secured
by all assets of Ketiza Real Estate Srl as well as its shares and is being repaid through sales proceeds.
SecRom Real Estate Srl entered (2009) into a loan agreement with Alpha Bank Romania for a credit facility for financing
part of the acquisition of the Doamna Ghica Project apartments. As of the end of the reporting period, the balance of the
loan was E809.919, bears interest of EURIBOR 3M+5% and is repayable on the basis of investment property sales. The loan has
a maturity date in March 2017 and the Group has been in discussions with the lender for a restructuring. Following an
agreement with the bank the loan was extended in Q1-2017 for another 3 years. The loan is secured by all assets of SecRom
Real Estate Srl as well as its shares and is being repaid through sales proceeds.
SecVista Real Estate Srl entered (2011) into a loan agreement with Raiffeisen Bank Romania for a credit facility for
financing part of the acquisition of the Linda Residence Project apartments. Due to a bulk sale of all the apartment units
of the said project in 2016, the loan was fully repaid in May 2016 and an amount of E326.937 was written off (Note 6b and
9).
Moselin Investments Srl (2010) entered into a construction loan agreement with Bancpost SA covering the construction works
of Parcel K Green Lake project. As of the end of the reporting period the balance of the loan was E3.092.926 and bears
interest of EURIBOR 3M plus 5%. The loan is repayable from the sales proceeds while it matures in June 2017. The Group is
in discussion for extending the loan to 2022. The loan is secured with the property itself and the shares of Moselin
Investments Srl and is being repaid through sales proceeds.
Boyana Residence ood entered (2011) into a loan agreement with Alpha Bank Bulgaria for a construction loan related to the
construction of the Boyana Residence project (finished in 2014). As of the end of the reporting period the balance of the
loan was E2.680.492 and bears interest of EURIBOR 3M plus 5,75%. The loan maturity was extended following negotiation with
the bank to March 2019. The loan currently is being repaid through sales proceeds. The facility is secured through a
mortgage over the property and a pledge over the company's shares as well as those of Sertland Properties Limited. The
Company has provided corporate guarantees for this loan.
Sertland Properties Limited entered (2008) into a loan agreement with Alpha Bank Bulgaria for an acquisition loan related
to the acquisition of 70% of Boyana Residence ood. As of the end of the reporting period the balance of the loan was
E693.514 and bears interest of EURIBOR 3M plus 5,75%. The loan maturity was extended following negotiation with the bank to
March 2019. The loan currently is being repaid through sales proceeds of Boyana Residence apartments. The loan is secured
with a pledge on company's shares, and a corporate guarantee by SEC South East Continent Unique Real Estate (Secured)
Investments Limited.
Delia Lebada Invest Srl, a subsidiary, entered into a loan agreement with the Bank of Cyprus Limited in 2007 to effectively
finance a leveraged buy-out of the subsidiary by the Group. The principal balance of the loan as at the end of the
reporting period was E4.569.725 (without any accrued interest and default penalty). As the loan is in default the bank has
initiated insolvency procedures to take over the Pantelimon lake asset. The Group is currently in discussion with its
partner and the bank in an effort to find an amicable settlement to the case. The Company has provided corporate guarantees
for this loan.
SPDI Logistics SA entered (April 2015) into a loan agreement with EUROBANK SA to refinance the existing debt facility
related to GED Logistics terminal. As of the end of the reporting period the balance of the loan is E11.726.960 and bears
interest of EURIBOR 6M plus 3,2%+30% of the asset swap. The loan is repayable by 2022, has a balloon payment of E8.660.000
and is secured by all assets of SPDI Logistics SA as well as its shares.
SEC South East Continent Unique Real Estate (Secured) Investments Limited has a debt facility with Piraeus Bank (since
2007) for the acquisition of the Green Lake project land in Bucharest Romania. As of the end of the reporting period the
balance of the loan was E2.525.938 (without any accrued interest and default penalty) and bears interest of EURIBOR 3M plus
4% plus the Greek law 128/78 0,6% contribution. The loan matured in February 2017 and the Group is in discussions with the
bank for prolongation of the term of facility to 2022. The Company has provided corporate guarantees for this loan.
BlueBigBox3 srl (Praktiker Craiova) has a loan agreement with Marfin Bank Romania. As of the end of the reporting period
the balance of the loan was E4.502.128 and bears interest of EURIBOR 6M plus 5% and 3M plus 4,5%. The loan which is
repayable by 2025 with a balloon payment of E2.159.628 and is secured by the asset as well as the shares of BlueBigBox3
srl.
N-E Real Estate Park First Phase SRL entered in 2016 into a loan agreement with Alpha Bank Romania for a credit facility of
E1.000.000 for working capital purposes. As of the end of the reporting period, the balance of the loan was E991.000, bears
interest of EURIBOR 1M+4,5% and is repayable from the free cash flow resulting from the rental income of the related
property. The loan matures in April 2024 and is secured by a second rank mortgage over assets of N-E Real Estate Park First
Phase SRL as well as its shares.
Other non bank borrowing includes borrowings from non-controlling interests. During the last eight years and in order to
support the GreenLake project the non controlling shareholders of Moselin and Rimasol Limited (other than the Group) have
contributed their share of capital injections by means of shareholder loans. The loans bear interest between 5% and 7%
annually and were repayable in 2016 and 2017. An amount of E~2,7m from such loans as presented in 2015 financial statements
has been agreed to be capitalized (the process is to be concluded within 2017) and therefore appears under equity section.
25. 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 2016 31 Dec 2015
E E
Payables to third parties 4.734.924 6.209.235
Payables to related parties (Note 32.2) 1.146.150 743.200
Deferred income from tenants current 635.240 99.554
Accruals 536.160 259.031
Payables due for construction 436.819 405.904
Total 7.489.293 7.716.924
31 Dec 2016 31 Dec 2015
E E
Current portion 7.038.170 3.044.036
Non-current portion 451.123 4.672.888
Total 7.489.293 7.716.924
Payables to third parties represents: a) payable balances to third party shareholders of entities where the Group maintains
a participation. An amount of E~4m has been been agreed to be capitalized during 2016 (the process is to be concluded
within 2017) and therefore has been transferred under equity section, b) payables due to Bluehouse Capital as a result the
Redeemable Convertible Class B share redemption (Note 18) that are under negotiation for a final settlement and c) amounts
payable to various service providers including auditors, legal advisors, consultants and third party accountants related to
the current operations of the Group.
Payables to related parties represent amounts due to board of directors and board committee members and accrued management
remuneration as well as the balances with Secure Management Ltd and Grafton Properties (Note 32.2).
Deferred income from tenants represents advances from tenants which will be used as future rental income and utilities
charges.
Accruals mainly include the accrued, administration fees, accounting fees, facility management and other fees payable to
third parties for the year 2016 (expenses not invoiced within 2016) as well as legal fees for the sale of Terminal Brovary
logistics which was finalized at the beginning of 2017.
Payables for construction represent amounts payable to the contractor of Bela Logistic Center in Odessa. The settlement was
reached in late 2011 on the basis of maintaining the construction contract in an inactive state (to be reactivated at the
option of the Group), while upon reactivation of the contract or termination of it (because of the sale of the asset) the
Group would have to pay an additional UAH 5.400.000 (~USD 160.000) payable upon such event occurring. Since it is uncertain
when the latter amount is to be paid, it has been discounted at the current discount rates in Ukraine and is presented as a
non-current liability. Payables for construction also include an amount of ~E245.000 payable to Boyana's constructor which
has been withheld as Good Performance Guarantee.
26. Deposits from Tenants
31 Dec 2016 31 Dec 2015
E E
Deposits from tenants non-current 217.328 623.770
Deposits from tenants current 271.019 132.684
Total 488.347 756.454
Deposits from tenants appearing under current and non-current liabilities include the amounts received from the tenants of
]Terminal Brovary Logistics, Innovations Logistics Park, EOS Business Park, Craiova Praktiker, GED Logistics and companies
representing residential segment as advances/guarantees and are to be reimbursed to these clients at the expiration of the
lease agreements.
27. Provisions and Taxes Payables
31 Dec 2016 31 Dec 2015
E E
Corporate income tax 648.825 482.389
Defence tax 29.918 24.920
Other taxes including VAT payable 468.275 314.696
Provision (Notes 7, 33.3) 742.166 724.445
Total Provisions and Tax Liabilities 1.889.184 1.546.450
Corporate income tax represents taxes payable in Cyprus and Romania.
Other taxes represent local property taxes and VAT payable in Ukraine, Romania, Greece, Bulgaria and Cyprus.
28. Finance Lease Liabilities
As at the reporting date the finance lease liabilities consist of the non-current portion of E11.081.379 and the current
portion of E301.409 (31 December 2015: E11.273.639 and E192.083, accordingly).
31 Dec 2016 Note Minimum lease payments Interest Principal
E E E
Less than one year 35.2 & 35.6 961.744 665.796 295.948
Between two and five years 3.754.280 2.138.258 1.616.022
More than five years 11.822.949 2.477.889 9.345.060
16.538.973 5.281.943 11.257.030
Accrued Interest 125.758
Total Finance Lease Liabilities 11.382.788
31 Dec 2015 Note Minimum lease payments Interest Principal
E E E
Less than one year 35.2 & 35.6 775.146 586.626 188.520
Between two and five years 3.592.679 2.169.534 1.423.145
More than five years 12.373.657 2.573.824 9.799.833
16.741.482 5.329.984 11.411.498
Accrued Interest 54.224
Total Finance Lease Liabilities 11.465.722
28.1 Land Plots Financial Leasing
The Group rents in Ukraine land plots classified as finance leases. Lease obligations are denominated in UAH. The fair
value of lease obligations approximate to their carrying amounts as presented above. Following the appropriate discounting
finance lease liabilities are carried at E291.322 under current and non-current portion. The Group's obligations under
finance leases are secured by the lessor's title to the leased assets.
28.2 Sale and Lease Back Agreements
A. Innovations Logistic Park
In May 2014 the Group concluded the acquisition of Innovations Logistics Park in Bucharest, owned by Best Day Srl, through
a sale and lease back agreement with Piraeus Leasing Romania SA. As of the end of the reporting period the balance is
E7.308.731, bearing interest rate at 3M Euribor plus 4,45% margin, being repayable in monthly tranches until 2026 with a
balloon payment of E5.244.926. At the maturity of the lease agreement Best Day SRL will become owner of the asset.
Under the current finance lease agreement the collaterals for the facility are as follows:
1. Best Day SRL pledged its future receivables from its tenants.
2. Best Day SRL pledged its shares.
3. Best Day SRL pledged all current and reserved accounts opened in Piraeus Leasing, Romania.
4. Best Day SRL is obliged to provide cash collateral in the amount of E250.000 in Piraeus Leasing Romania, which
had been deposited as follows, half in May 2014 and half in May 2015.
5. SPDI provided a corporate guarantee in favor of the bank towards the liabilities of Best Day SRL arising from the
sale and lease back agreement.
In late February 2017 the Group finally agreed and signed (following twelve months of discussions) an amended sale and
lease back agreement with the Piraeus Leasing Romania for Innovations Logistics Park in Bucharest, governing the allocation
of the Nestle Romania, early termination fee of ~E1,6 million payable to SPDI (Note 36b).
B. EOS Business Park
In October 2014 the Group concluded the acquisition of EOS Business Park in Bucharest, owned by N-E Real Estate Park First
Phase SRL, through a sale and lease back agreement with Alpha Bank Romania SA. As of the end of the reporting period the
balance is E3.782.735 bearing interest rate at 3M Euribor plus 5,25% margin, being repayable in monthly tranches until 2024
with a balloon payment of E2.546.600. At the maturity of the lease agreement by N-E Real Estate Park First Phase SRL will
become owner of the asset.
Under the current finance lease agreement the collaterals for the facility are as follows:
1. N-E Real Estate Park First Phase SRL pledged its future receivables from its tenants.
2. N-E Real Estate Park First Phase SRL pledged Bank Guarantee receivables from its tenants.
3. N-E Real Estate Park First Phase SRL pledged its shares.
4. N-E Real Estate Park First Phase SRL pledged all current and reserved accounts opened in Alpha Bank Romania SA.
5. N-E Real Estate Park First Phase SRL is obliged to provide cash collateral in the amount of E300.000 in Alpha
Bank Romania SA, starting from October 2019.
6. SPDI provided a corporate guarantee in favor of the bank towards the liabilities of N-E Real Estate Park First
Phase SRL arising from the sales and lease back agreement.
29. Restructuring of the business
During 2016 the non controlling shareholders of Moselin, Iuliu Maniu, Ram, Rimasol Ltd, Rimasol SRL, Ashor Limited, Ashor
SRL, Ebenem Limited, Ebenem SRL, Jenby Limited and Jenby SRL (in agreement with the Group) agreed to capitalize the bigger
part of their capital injections by means of shareholder loans and payables effected from 2008 onwards. An amount of
E6.641.997 from such loans and payables have been transferred to the equity section while the process of capitalization
will be finalized within 2017.
30. Earnings and net assets per share attributable to equity holders of the parent
a. Weighted average number of ordinary shares
31 Dec 2016 31 Dec 2015
Issued ordinary shares capital 90.014.723 90.014.723
Weighted average number of ordinary shares (Basic) 90.014.723 69.460.155
Diluted weighted average number of ordinary shares 102.873.969 82.631.610
b. Basic diluted and adjusted earnings per share
Earnings per share 31 Dec 2016 31 Dec 2015
E E
Loss after tax attributable to owners of the parent (2.363.693) (11.015.852)
Basic (0,03) (0,16)
Diluted (0,02) (0,13)
c. Net assets per share
Net assets per share 31 Dec 2016 31 Dec 2015
E E
Net assets attributable to equity holders of the parent 38.924.809 42.433.125
Number of ordinary shares 90.014.723 90.014.723
Diluted number of ordinary shares 102.873.969 102.873.969
Basic 0,43 0,47
Diluted 0,38 0,41
31. 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 - GED Logistics, Innovations Logistics Park, Terminal Brovary Logistics Park
· Office segment - Eos Business Park - Delea Nuova (Associate)
· Retail segment - Craiova Praktiker
Residential
· Residential segment
Land Assets
· Land assets
There are no sales between the segments.
Segment assets for the investment properties segments represent investment property (including investment properties under
development and prepayments made for the investment properties). Segment liabilities represent interest bearing borrowings,
finance lease liabilities and deposits from tenants.
Profit and Loss for the year 2016
Warehouse Office Retail Residential Land Plots Total
E E E E E E
Segment profit
Property Sales income (Note 6) - - - 3.196.381 - 3.196.381
Cost of Property sold (Note 6) - - - (4.003.804) - (4.003.804)
Rental income (Note 2) 4.022.457 579.894 545.564 114.692 - 5.262.607
Service charges and utilities income (Note 2) 374.497 66.784 - 17.367 - 458.648
Sale of electricity (Note 2) 315.599 - - - - 315.599
Asset Management fees (Note 2) - - - 34.086 - 34.086
Valuation gains/(losses) from investment property (Note 5) 176.550 337.684 329.975 133.131 (80.547) 896.793
Share of profits/(losses) from associates(Note 14) 469.248 - - - 469.248
Result on disposal of available for sale financial assets (Note 18) - (206.491) - - - (206.491)
Asset operating expenses (Note 3) (530.020) (71.045) (111.500) (80.429) (199.447) (992.441)
Impairment of inventory and provisions (Note 7) - - - (63.513) - (63.513)
Segment profit 4.359.083 1.176.074 764.039 (652.089) (279.994) 5.367.113
Administration expenses (Note 4) (2.614.188)
Other (expenses)/income, net (Note 8) (1.304.304)
Finance income(Note 9) (Note 6) 1.153.243
Interest expenses (Note 9) (3.571.387)
Other finance costs (Note 9) (167.564)
Foreign exchange losses, net (Note 10a) (1.041.239)
Income tax expense (Note 11) (174.315)
Exchange difference on I/C loan to foreign holdings (Note 10b) (4.167.542)
Exchange difference on translation foreign holdings (Note 22) 3.508.448
Available-for-sale financial assets - Profit transferred to net profit due to disposal (485.529)
Total Comprehensive Income (3.497.264)
Profit and Loss for the year 2015
Warehouse Office Retail Residential Land Plots Total
E E E E E E
Segment profit
Property Sales income (Note 6) - - - 1.725.326 - 1.725.326
Cost of sales (Note 6) - - - (2.043.649) - (2.043.649)
Rental income (Note 2) 3.627.698 523.013 258.191 196.120 - 4.605.022
Service charges and utilities income (Note 2) 470.413 75.563 - - - 545.976
Sale of electricity (Note 2) 297.962 - - - - 297.962
Valuation gains/(losses) from investment property (Note 5) (89.178) 150.000 (2.870.000) 251.500 222.431 (2.335.247)
Gain realized on acquisition of subsidiaries (Note 13) 1.552.134 - - - - 1.552.134
Share of profits/(losses) from associates (Note 14) (705.232) - - (539.340) (1.244.572)
Asset operating expenses (Note 3) (622.699) (155.931) (31.010) (156.863) (158.080) (1.124.583)
Impairment of inventory and provisions (Note 7) - - - - (1.675.659) (1.675.659)
Goodwill impairment (Note 13b) (43.269) (613.813) (657.082)
Segment profit 5.236.330 (155.856) (3.256.632) (27.566) (2.150.648) (354.372)
Gain realized on acquisition of subsidiaries (Note 13) 629.700
Administration expenses (Note 4) (3.013.942)
Other (expenses)/income, net (Note 8) 653.856
Finance income (Note 9) 63.596
Interest expenses (Note 9) (3.834.696)
Other finance costs (Note 9) (603.495)
Foreign exchange losses, net (Note 10a) (5.071.048)
Income tax expense (Note 11)
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