GLOBE TRADE CENTRE S.A.
CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR
ENDED
31 DECEMBER 2022
Globe Trade Centre S.A.
Consolidated Statement of Financial Position
as of 31 December 2022
(in thousands of Euro)
2
Note
31 December
2022
31 December
2021
ASSETS
Non-current assets
Investment property
17
2,243,663
2,240,660
Residential landbank
19
26,610
27,002
Property, plant and equipment
16
11,141
7,834
Blocked deposits
22
11,948
11,078
Deferred tax asset
15
3,161
3,786
Derivatives
20
17,054
826
Non-current financial assets (related to
investment property) measured at fair value
through profit or loss
18 130,341
-
Other non-current assets
190
163
Loan granted to non-controlling interest
partner
28 10,936 10,628
2,455,044
2,301,977
Current assets
Accounts receivables
7,913
6,161
Accrued income
4,391
3,448
Receivables from shareholders
31
-
123,425
VAT and other tax receivables
27
5,305
2,957
Income tax receivables
1,958
456
Prepayments, deferred expenses and other
receivables
34 7,739
11,515
Derivatives
20
7,793
-
Short-term blocked deposits
22
13,025
14,341
Cash and cash equivalents
23
115,079
87,468
Assets held for sale 33
51,635
292,001
214,838
541,772
TOTAL ASSETS
2,669,882
2,843,749
Globe Trade Centre S.A.
Consolidated Statement of Financial Position
as of 31 December 2022
(in thousands of Euro)
3
Note
31 December
2022
31 December
2021
EQUITY AND LIABILITIES
Equity attributable to equity holders of the
Company
Share capital
31
12,920
11,007
Share premium
31
668,904
550,522
Unregistered share capital increase
31
-
120,295
Capital reserve
31
(49,311)
(49,489)
Hedge reserve
20
(7,515)
(30,903)
Foreign currency translation reserve
(2,621)
(2,570)
Accumulated profit
31
490,532
501,704
1,112,909
1,100,566
Non-controlling interest
28
22,678
16,423
Total Equity
1,135,587
1,116,989
Non-current liabilities
Long-term portion of long-term
borrowings
29 1,189,284 1,255,114
Lease liabilities
30
41,483
38,767
Deposits from tenants
25
11,948
11,078
Long term payables
26
2,394
2,426
Share based payment liabilities
32
758
1,410
Derivatives
20
46,798
38,743
Deferred tax liabilities
15
141,176
140,145
1,433,841
1,487,683
Current liabilities
Current portion of long-term borrowings
29
48,571
44,337
Current portion of lease liabilities
30
388
198
Trade payables and provisions
21
41,208
31,092
Deposits from tenants
25
1,639
1,932
VAT and other taxes payables
1,828
2,222
Income tax payables
3,571
1,000
Derivatives
20
2,180
2,681
Advances received
1,069
784
Liabilities related to assets held for sale
33
-
154,831
100,454
239,077
TOTAL EQUITY AND LIABILITIES
2,669,882
2,843,749
Globe Trade Centre S.A.
Consolidated Income Statement
for the year ended 31 December 2022
(in thousands of Euro)
4
Note
Year ended
31 December
2022
Year ended
31
December
2021
Rental revenue
10,14
123,556
130,289
Service charge revenue
10,14
43,007
41,662
Service charge costs
10,14
(47,365)
(44,356)
Gross margin from operations
119,198
127,595
Selling expenses
11
(1,768)
(1,652)
Administration expenses
12
(15,040)
(14,145)
Loss from revaluation of investment
property and residential landbank
17
(29,422)
(12,867)
Other income
1,467
1,432
Other expenses
24
(2,979)
(1,062)
Profit from continuing operations before
tax finance income / expense and
foreign exchange differences
71,456
99,301
Foreign exchange gain / (loss), net
(2,238)
196
Finance income
13
1,412
304
Finance costs
13
(33,108)
(43,281)
Profit before tax
37,522
56,520
Taxation
15
(12,761)
(13,784)
Profit for the year
24,761
42,736
Attributable to:
Equity holders of the Parent Company
23,411
41,651
Non-controlling interest
28
1,350
1,085
Basic earnings
per share (in Euro)
35
0.04
0.09
Diluted earnings
per share (in Euro)
35
0.04
0.09
Globe Trade Centre S.A.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
(In thousands of Euro)
5
Year ended
31 December
2022
Year ended
31 December
2021
Profit/(loss) for the period
24,761
42,736
Other comprehensive income for the period,
not to be reclassified to profit or loss in subsequent
periods, net of tax
- -
Gain/(loss) on hedge transactions
27,533
(20,356)
Income tax
(4,145)
1,383
Net gain/(loss) on hedge transactions
23,388
(18,973)
Foreign currency translation
(51)
(17)
Other comprehensive income for the period,
to be reclassified to profit or loss in subsequent
periods, net of tax
23,337 (18,990)
Total comprehensive income/(loss) for the
period, net of tax
48,098 23,746
Attributable to:
Equity holders of the Company
46,748
22,661
Non-controlling interest
1,350
1,085
Globe Trade Centre S.A.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
(In thousands of Euro)
6
Share capital
Share
premium
Unregistered
share capital
increase
Capital reserve
Hedge reserve
Foreign
currency
translation
reserve
Accumulated
profit
Total
Non-
controlling
interest
Total
Balance as of
1 January 2022
11,007 550,522 120,295 (49,489) (30,903) (2,570) 501,704 1,100,566 16,423 1,116,989
Other comprehensive
income/(loss)
- - - - 23,388 (51) - 23,337 - 23,337
Result for the year ended
31 December 2022
- - - - - - 23,411 23,411 1,350 24,761
Total comprehensive
income / (loss) for the
period
- - - - 23,388 (51) 23,411 46,748 1,350 48,098
Registered share capital
increase
1,913 118,382 (120,295) - - - - - - -
Dividend paid
-
-
-
-
-
-
(34,583)
(34,583)
-
(34,583)
Transaction with non-
controlling interest
- - - 178 - - - 178 5,658 5,836
Dividend paid to
non-controlling interest
- - - - - - - - (753) (753)
Balance as of
31 December 2022
11,007 550,522 (49,489) (11,930) (2,553) 460,053 957,610 16,538 974,148
12,920 668,904 - (49,311) (7,515) (2,621) 490,532 1,112,909 22,678 1,135,587
Share capital
Share
premium
Unregistered
share capital
increase
Capital reserve
Hedge reserve
Foreign
currency
translation
reserve
Accumulated
profit
Total
Non-
controlling
interest
Total
Balance as of
1 January 2021
11,007 550,522 - (49,489) (11,930) (2,553) 460,053 957,610 16,538 974,148
Other comprehensive
income
- - - - (18,973) (17) - (18,990) - (18,990)
Profit for the year ended
31 December 2021
- - - - - - 41,651 41,651 1,085 42,736
Total comprehensive
income / (loss) for the
period
- - - - (18,973) (17) 41,651 22,661 1,085 23,746
Unregistered share capital
increase (note 30)
- - 120,295 - - - - 120,295 - 120,295
Dividend distribution to
non-controlling interest
- - - - - - - - (1,200) (1,200)
Balance as of
31 December 2021
11,007 550,522 (49,489) (11,930) (2,553) 460,053 957,610 16,538 974,148
11,007 550,522 120,295 (49,489) (30,903) (2,570) 501,704 1,100,566 16,423 1,116,989
Globe Trade Centre S.A.
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
(In thousands of Euro)
7
Note
Year ended
31 December
2022
Year ended
31
December
2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit/(loss) before tax
37,522
56,520
Adjustments for:
Loss from revaluation of investment property and residential
landbank
17
29,422
12,867
Foreign exchange loss/(gain), net
2,238
(196)
Finance income
13
(1,412)
(304)
Finance cost
13
33,108
43,281
Share based payment loss/(profit)
12
(652)
432
Depreciation
16
544
653
Operating cash before working capital changes
100,770
113,253
Increase in accounts receivables, prepayments and other
current assets
(2,007)
(4,952)
Decrease in advances received
285
583
Increase in deposits from tenants
1,153
2,878
Increase (decrease) in trade and other payables
(1,021)
3,550
Cash generated from operations
99,180
115,312
Tax paid in the period
(11,092)
(8,885)
Net cash from operating activities
88,088
106,427
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures on investment property and property, plant
and equipment
17
(85,359)
(92,784)
Purchase of completed assets and land
17
(58,113)
(262,937)
Purchase of residential landbank
19
-
(13,300)
Sale of landbank and residential landbank
17,33
11,182
-
Sale of subsidiary, net of cash in disposed assets
9,17,33
186,163
595
Purchase of non-current financial assets
18
(130,341)
-
Decrease in short term deposits designated for investment
-
1,150
Advances received for assets held for sale
-
1,210
VAT/tax on purchase/sale of investment property
(2,376)
(614)
Interest received
1,104
28
Net cash used in investing activities
(77,740)
(366,652)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings
29
6,173
706,070
Repayment of long-term borrowings
29
(52,125)
(585,323)
Interest paid and other financing breaking fees
(28,666)
(32,786)
Proceeds from issue of share capital, net of issuance costs
9,31
120,386
-
Dividend paid to shareholders
9
(33,210)
-
Repayment of lease liabilities
30
(642)
(516)
Loans origination payment
(236)
(8,147)
Dividend paid to non-controlling interest
28
(753)
(300)
Decrease/(increase) in short term deposits
(130)
5,908
Net cash from financing activities
10,797
84,906
Net foreign exchange difference, related to cash and
cash equivalents
(2,699)
(44)
Net increase/ (decrease) in cash and cash equivalents
18,446
(175,363)
Cash and cash equivalents at the beginning of
the period
23
96,633
271,996
Cash and cash equivalents at the end of the period
23
115,079
96,633
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
8
1. Principal activities
Globe Trade Centre S.A. (the “Company”, „GTC S.A.” or “GTC”) with its subsidiaries (“GTC
Group” or “the Group”) is an international real estate developer and investor. The Company
was registered in Warsaw on 19 December 1996. The Company’s registered office is in
Warsaw (Poland) at Komitetu Obrony Robotników 45a. The Company owns, through its
subsidiaries, commercial and residential real estate companies with a focus on Poland,
Hungary, Bucharest, Belgrade, Zagreb and Sofia. There is no seasonality in the business of
the Group companies.
The Group’s main business activities are development and rental of office and retail space.
As of 31 December 2022 and 31 December 2021, the number of full-time equivalent working
employees in the Group companies was 223 and 211, respectively.
GTC is primarily listed on the Warsaw Stock Exchange and inward listed on Johannesburg
Stock Exchange.
As of 31 December 2022, the majority shareholder of the Company is GTC Dutch Holdings
B.V. (“GTC Dutch”) who holds 247,461,591 shares in the Company representing 43.10% of
the Company’s share capital, entitling to 247,461,591 votes in the Company, representing
43.10% of the total number of votes in GTC S.A. Additionally, GTC Holding Zrt. holds
21,891,289 shares, entitling to 21,891,289 votes in GTC S.A., representing 3.81% of the
Company’s share capital and carrying the right to 3.81% of the total number of votes in GTC
S.A. Ultimate shareholder of GTC Dutch Holding B.V. and GTC Holding Zrt. is Optimum
Venture Private Equity Funds, which indirectly holds 269,352,880 shares of GTC S.A.,
entitling to 269,352,880 votes in the Company, representing 46.91% of the Company’s share
capital and carrying the right to 46.91% of the total number of votes in GTC S.A.
The ultimate controlling party of the Group is Pallas Athéné Domus Meriti Foundation.
Based on the power of attorney granted to GTC Dutch by Icona Securitization Opportunities
Group S.A R.L. (“Icona”), who holds directly 90,176,000 shares representing 15.70% of the
share capital of the Company, GTC Dutch also exercises voting rights from 90,176,000
shares belonging to Icona. As a result, Optimum Venture Private Equity Funds is entitled to
359,528,880 votes in GTC S.A. representing 62.61% of the total number of votes in the
Company.
Additionally, GTC Holding Zrt., GTC Dutch and Icona are acting in concert based on the
agreement concerning joint policy towards the Company and exercising of voting rights on
selected matters at the general meeting of the Company in an agreed manner.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
9
2. Functional and presentation currencies
The functional currency of GTC S.A. and most of its subsidiaries is euro, as the Group
primarily generates and expends cash in euro: prices (rental income) are denominated in
euro) and all borrowings are denominated in euro or hedged to euro through swap
instruments. The functional currency of some of GTC’s subsidiaries is other than euro.
The financial statements of those companies prepared in their functional currencies are
included in the consolidated financial statements by a translation into euro using appropriate
exchange rates outlined in IAS 21 The Effects of Changes in Foreign Exchange Rates.
Assets and liabilities are translated at the period end exchange rate, while income and
expenses are translated at average exchange rates for the period if it approximates actual
rate. All resulting exchange differences are classified in equity as “Foreign currency
translation reserve” without affecting earnings for the period.
3. Basis of preparation and statement of compliance
The Company maintains its books of account in accordance with accounting principles and
practices employed by enterprises in Poland as required by the Polish accounting
regulations. The companies outside Poland maintain their books of account in accordance
with local GAAP. The consolidated financial statements include a number of adjustments
not included in the books of account of the Group entities, which were made in order
to bring the financial statements of those entities to conformity with IFRS.
These consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS”) as adopted by the EU („EU IFRS").
At the date of authorisation of these consolidated financial statements, taking into account
the EU IFRS's ongoing process of IFRS endorsement and the nature of the Group's
activities, there is no relevant difference between IFRS applying to these consolidated
financial statements and IFRS endorsed by the European Union.
GTC S.A. is the parent that produces consolidated financial statements at the most senior
level of the Group. Based on the Management’s knowledge, consolidated financial
statements at the higher level of the Group, which includes the Group as a subsidiary, are
not prepared.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
10
4. Going concern
The Group’s policies and processes are aimed at managing the Group’s capital, financial
and liquidity risks on a sound basis. The Group meets its day to day working capital
requirements through the generation of operating cash-flows from rental income. Further
details of liquidity risks and capital management processes are described in note 38.
As of 31 December 2022, the Group’s net working capital (defined as current assets less
current liabilities) was positive and amounted to EUR 114,384.
The management has analysed the timing, nature and scale of potential financing needs
of particular subsidiaries and believes that there are no risks for paying current financial
liabilities and cash on hand, as well as, expected operating cash-flows will be sufficient to
fund the Group’s anticipated cash requirements for working capital purposes, for at least the
next twelve months from the date of the financial statements. Consequently, the
consolidated financial statements have been prepared on the assumption that the Group
companies will continue as a going concern in the foreseeable future, for at least twelve
months from the date of the financial statements.
Based on management’s analysis, the current cash liquidity of the Company and prepared
cash flow budget assumptions, the management concluded that there is no material
uncertainty as to the Company’s ability to continue as a going concern in the foreseeable
future i.e. at least in the next 12 months from the date of this financial statements.
5. Accounting policies
The accounting policies adopted in the preparation of these consolidated financial statements
are consistent with those followed in the preparation of the Group’s annual consolidated
financial statements for the year ended 31 December 2021 except for the new standards,
which are effective as at 1 January 2022 (see note 6).
There were no changes in significant accounting estimates and management's judgements
during the period.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
11
6. New standards and interpretations that have been issued
STANDARDS ISSUED AND EFFECTIVE FOR FINANCIAL YEARS BEGINNING ON OR
AFTER 1 JANUARY 2022:
• Amendments to IFRS 3 Business Combinations – amendments to standard published in
May 2020 relate to the applicable references to Conceptual Framework for Financial
Reporting, without changes to the substance of business combinations accounting.
• Amendments to IAS 16 Property, plant and equipment – the amendment to IAS 16
prohibits an entity from deducting from the cost of an item of PPE any proceeds received
from selling items produced while the entity is preparing the asset for its intended use.
The proceeds from selling such items, together with the costs of producing them, are
now recognized in profit or loss.
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets - the
amendment to IAS 37 includes a clarification as to whether the unavoidable costs under
a contract exceed the expected economic benefits.
• Annual improvements to IFRSs 2018-2020 - the annual improvements contain
amendments to IFRS 1 First-time Adoption of International Financial Reporting
Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and to illustrative examples
to IFRS 16 Leasing. Amendments include explanations and clarify standards guidelines
to recognition and valuation.
The Company’s assessment is that the above changes (new standards/amendments) have
no material impact.
STANDARDS ISSUED BUT NOT YET EFFECTIVE:
• IFRS 17 Insurance Contracts (issued on 18 May 2017 and amended on 25 June 2020)
– effective for financial years beginning on or after 1 January 2023.
• Amendments to IAS 1 - Disclosure of accounting policies and IAS 8 - Definition of
accounting estimates (issued on 12 February 2021) –– effective for financial years
beginning on or after 1 January 2023.
• Amendment to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and
IFRS 9 - Comparative Information (issued on 9 December 2021) –– effective for financial
years beginning on or after 1 January 2023.
• Amendments to IAS 12: Income Taxes: Deferred Tax related to Assets and Liabilities
arising from a Single Transaction (issued on 7 May 2021) –– effective for financial years
beginning on or after 1 April 2023.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
12
6. New standards and interpretations that have been issued (continued)
• IFRS 14 Regulatory Deferral Accounts (issued on 30 January 2014) - The European
Commission has decided not to launch the endorsement process of this interim standard
and to wait for the final standard– not yet endorsed by EU at the date of approval of
these financial statements - effective for annual periods beginning on or after 1 January
2016.
• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities
as Current or Non-current (issued on 23 January 2020 amended 15 July 2020 and 31
October 2022) - not yet endorsed by EU at the date of approval of these financial
statements – effective for financial years beginning on or after 1 January 2024.
• Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture (issued on 11 September 2014) - the endorsement
process of these Amendments has been postponed by EU - effective for annual periods
beginning on or after a date to be determined by the International Accounting Standards
Board (IASB).
• Amendment to IFRS 16 Leases: Lease liability in a Sale and Leaseback (issued on 22
September 2022) – not yet endorsed by EU at the date of approval of these financial
statements – effective for financial years beginning on or after 1 January 2024.
The effective dates are dates provided by the International Accounting Standards Board.
Effective dates in the European Union may differ from the effective dates provided in
standards and are published when the standards are endorsed by the European Union.
The Group plans to adopt all new standards on the required effective date. The Group does
not expect a significant impact on its statement of financial position and equity, but they could
impact disclosures.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
13
7. Summary of significant accounting policies
(a) BASIS OF ACCOUNTING
The consolidated financial statements have been prepared on a historical cost basis, except
for investment properties, investment property under construction (“IPUC”) if the certain
condition described in note 7(c) ii are met, share based payments, non-current financial
assets and derivative financial instruments that have been measured at fair value.
Key accounting principles are described below and significant judgements and estimates are
presented in point 7(x) and 7(y).
(b) PROPERTY, PLANT AND EQUIPMENT
Plant and equipment consist of vehicles and equipment. Property, plant and equipment are
recorded at cost less accumulated depreciation and impairment. Depreciation is provided
using the straight-line method over the estimated useful life of the asset. Reassessment of
the useful life and indications for impairment is performed each quarter.
The following depreciation rates have been applied:
Depreciation rates
Equipment 7-20%
Buildings 2%
Vehicles 20%
Assets under construction are shown at cost. The direct costs paid to subcontractors for the
improvement of the property are capitalised into construction in progress. Capitalised costs
also include borrowing costs, planning and design costs, construction overheads and other
directly related costs. Assets under construction are not depreciated.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
14
7. Summary of significant accounting policies (continued)
(c) INVESTMENT PROPERTIES
Investment property comprises a land plot or a building or a part of a building held to earn
rental income and/or for capital appreciation and property that is being constructed
or developed for future use as an investment property (investment property under
construction).
Investment properties are initially measured at cost, including transaction costs. The carrying
amount includes the replacement costs if the recognition criteria are met and excludes the
costs of day-to-day servicing of an investment property.
Subsequent to initial recognition, investment properties are stated at fair value. Any gain or
loss arising from a change in the fair value of investment property is recognized in the profit
or loss for the year in which it arose.
(i) Completed Investment properties
Investment properties are stated at fair value according to the fair value model, which reflects
market conditions at the reporting date.
Completed investment properties were externally valued by independent appraisers as of
31 December 2022 and 31 December 2021 based on open market values (RICS Standards).
Completed properties are either valued on the basis of discounted cash flow (DCF) or - as
deemed appropriate – on the basis of the income capitalisation or yield method. The applied
method is defined by the valuer.
Investment properties are derecognised 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 recognised in the income statement in the year of retirement or disposal.
Transfers are made to investment property only when there is a change in use, evidenced by
the end of owner occupation or commencement of a lease. Transfers are made from
investment property only when there is a change in use, evidenced by commencement of
owner occupation or commencement of development with a view to sale.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
15
7. Summary of significant accounting policies (continued)
(ii) Investment property under construction ("IPUC”)
The Group revalue IPUC based on its fair value, once a substantial part of the development
risks has been eliminated so fair value can be established reliably. IPUC, which does not
meet this condition, is presented at a recoverable amount, not exceeding the sum of fair value
of land and capitalized expenditures. The recoverable amount is determined based on a fair
value, externally valued by independent appraisers.
The land is reclassified to IPUC at the moment, at which active development of this land
begins (i.e. when construction works start).
The Group has adopted the following criteria to assess whether the substantial risks are
eliminated with regard to particular IPUC:
• agreement with a general contractor is signed;
• a building permit is obtained;
• at least 20% of the rentable area is leased to tenants (based on the signed lease
agreements and letters of intent);
• financing is secured.
The fair values of IPUC were determined as at their development stage at the end of the
reporting period. Valuations were performed in accordance with RICS and IVSC Valuation
Standards using the residual method approach.
The future assets’ value is estimated based on the expected future income from the project,
using discount rate which includes business risk, related to construction process (completion
on time or within the budget). The remaining expected costs to completion are deducted from
the estimated future assets value.
For projects where the completion is expected in the future, also a developer profit margin of
unexecuted works was deducted from the value. The profit margin deducted is reduced when
the construction is closer to completion.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
16
7. Summary of significant accounting policies (continued)
(d) FAIR VALUE HIERARCHY OF INVESTMENT PROPERTIES
Fair value hierarchy is based on the sourced of input used to estimate the fair value:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities,
Level 2: other techniques for which all inputs which have a significant effect on the recorded
fair value are observable, either directly or indirectly,
Level 3: techniques that use inputs that have a significant effect on the recorded fair value
that are not based on observable market data.
As of 31 December 2022, the Group made reassessment of fair value hierarchy due to
significant changes on the market and in economic environment. Based on performed
reassessment and analysis, the Group applied Level 3 category of fair value hierarchy for all
investment property of the Group as of reporting date. Assessment of fair value classification
is done periodically.
(e) INVESTMENTS IN ASSOCIATES
Investments in associates are accounted for using the equity method. The investment is
carried in the statement of financial position at cost plus post-acquisition changes in the
Group share of net assets of the associate.
(f) INVESTMENTS IN JOINT VENTURES
Investments in joint ventures are accounted for using the equity method. The investment is
carried in the statement of financial position at cost plus post-acquisition changes in the
Group share of net assets of the joint ventures.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
17
7. Summary of significant accounting policies (continued)
(g) LEASE ORIGINATION COSTS
The costs incurred to originate a lease (mainly brokers’ fees) for available rental space are
added to the carrying value of investment property until the date of revaluation of the related
investment property to its fair value. If as of the date of revaluation, the carrying value is
higher than the fair value, the costs are recognized in the income statement.
(h) NON-CURRENT ASSETS HELD FOR SALE
Non-current assets and their disposal groups are classified as held for sale if their carrying
amount will be recovered principally through a sale transaction rather than through continuing
use. This requirement can be fulfilled only if the occurrence of a sale transaction is highly
probable and the item of assets is available for immediate sale in its present condition. The
classification of an asset as held for sale assumes the intent of the entity’s management to
realise the transaction of sale within one year from the moment of asset classification to the
held for sale category. Non-current assets held for sale are measured at the lower of their
carrying amount and fair value less costs to sell.
(i) ADVANCES RECEIVED
Advances received are deferred to the extent that they are not reflected as revenue as
described below in note 7(j).
(j) RENTAL REVENUE
Rental revenues result from operating leases and are recognised as income over the lease
term on a straight-line basis (according to IFRS 16 Leases).
(k) INTEREST AND DIVIDEND INCOME
Interest income is recognised on an accrual basis using the effective interest method that is
the rate that exactly discounts estimated future cash flows through the expected life
of financial instruments to the net carrying amount of the underlying financial asset or liability.
Dividend income is recognised when the shareholders’ right to receive payments is
established.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
18
7. Summary of significant accounting policies (continued)
(l) CONTRACT REVENUE AND COSTS RECOGNITION
Except from rental revenue mentioned in point (j) Group has Service charge revenue stream.
Service charge represents fees paid by the tenants of the Group’s investment properties to
cover the costs of the services provided by the Group in relation to their leases. Service
charge is billed on a monthly basis, based on service fee rate agreed in the contract, which
represents the best estimate for a particular project. Allocation of service charge to tenants
is done based on the leased area.
Heating, water, and sewage are billed separately on a monthly basis, based on leased area
and rates agreed in the contract. Revenue from other services in lease agreements represent
non-lease component and are accounted for using rules described below.
Service charge revenue under IFRS 15 Revenue from Contracts with Customers
Service charge revenue is recognised under IFRS 15 when control of the goods or services
are transferred to the customer at an amount that reflects the consideration to which the
Group expects to be entitled in exchange for those goods or services. The Group recognises
revenue from service charge over time because the customer simultaneously receives and
consumes the benefits provided to them.
The Group recognizes service charge revenue under two models:
• Acting as an agent. Some tenants install counters for electricity. In this case, the
invoices for electricity are billed through GTC entities and addressed to the tenants
directly. For financial statement purposes such income and expenses are disclosed
on a net basis, as GTC acts as an agent.
• Acting as a principal. In the other cases, all service charges are billed to GTC
entities. The Group bills the tenants based on the rates in the contract on a monthly
basis. By the end of the year, the Group does reconciliation of actual service charges
costs vs. billed one, and then bills for deficit or return the overpayment to the tenant
if it is required. For financial statement purposes such expenses are disclosed on a
gross basis, as GTC acts as a principal, because it typically controls the goods or
services before transferring them to the customer.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
19
7. Summary of significant accounting policies (continued)
(m) BORROWING COSTS
Borrowing costs directly attributable to the acquisition or construction of 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 the asset. All other borrowing costs are expensed in the
period in which they occur. Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
The interest capitalised is calculated using the Group’s weighted average cost
of borrowings after adjusting for borrowings associated with specific developments. Where
borrowings are associated with specific developments, the amount capitalised is the gross
interest incurred on those borrowings less any investment income arising on their temporary
investment. Interest is capitalised from the commencement of the development work until
the date of practical completion, i.e., when substantially all of the development work is
completed. The capitalisation of finance costs is suspended if there are prolonged periods
when development activity is interrupted. Interest is also capitalised on the purchase cost of
a site of property acquired specifically for redevelopment, but only where activities necessary
to prepare the asset for redevelopment are in progress.
(n) SHARE ISSUANCE EXPENSES
Share issuance costs are deducted from equity (share premium), net of any related income
tax benefits.
(o) INCOME TAXES & OTHER TAXES
The current provision for corporate income tax for the Group companies is calculated
in accordance with tax regulations ruling in particular country of operations and is based on
the profit or loss reported under relevant tax regulations.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
20
7. Summary of significant accounting policies (continued)
Deferred tax liabilities are recognised for all taxable temporary differences, except:
• where the deferred tax liability arises from the initial recognition of goodwill or of an asset
or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss,
• in respect of taxable temporary differences associated with investments in subsidiaries,
associates, and interests in joint ventures, where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, and the carry forward
of unused tax credits and unused tax losses can be utilised, except:
• where the deferred tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss,
• in respect of deductible temporary differences associated with investments in
subsidiaries, associates, and interests in joint ventures, deferred tax assets are
recognised only to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilised.
Deferred tax assets and liabilities are measured using the tax rates enacted to taxable
income in the years in which these temporary differences are expected to be recovered or
settled.
The measurement of deferred tax liabilities and deferred tax assets reflects the tax
consequences that would follow from the manner in which each company of the Group
expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.
At each reporting date, the Group companies re-assess unrecognised deferred tax assets
and the carrying amount of deferred tax assets. The companies recognise a previously
unrecognised deferred tax asset to the extent that it has become probable that future taxable
profit will allow the deferred tax asset to be recovered.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
21
7. Summary of significant accounting policies (continued)
The companies conversely reduce the carrying amount of a deferred tax asset to the extent
that it is no longer probable that sufficient taxable profit will be available to allow the benefit
of part or all of the deferred tax asset that might be utilised.
Deferred tax relating to items recognised outside profit and loss is also recognized outside
profit and loss: in other comprehensive income if relates to items recognised under other
comprehensive income, or in equity – if relates to items recognized in equity.
Deferred tax assets and deferred tax liabilities are offset if, and only if, a legally enforceable
right exists to set off current tax assets against current tax liabilities, and the deferred tax
assets and deferred tax liabilities relate to income taxes that are levied by the same taxation
authority.
Revenues, expenses, assets and liabilities are recognized net of the amount of value added
tax except:
• where the value added tax incurred on a purchase of assets or services is not
recoverable from the taxation authority, in which case value added tax is recognized as
part of the cost of acquisition of the asset or as part of the expense item, as applicable
and
• receivables and payables, which are stated with the amount of value added tax included.
The net amount of value added tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the statement of financial position.
If, according to the Group’s assessment, it is probable that the tax authorities will accept an
uncertain tax treatment or a group of uncertain tax treatments, the Group determines taxable
income (tax loss), tax base, unused tax losses and unused tax credits and tax rates, after
considering in its tax return the applied or planned approach to taxation.
If the Group ascertains that it is not probable that the tax authorities will accept an uncertain
tax treatment or a group of uncertain tax treatments, the Group reflects the impact of this
uncertainty in determining taxable income (tax loss), unused tax losses, unused tax credits
or tax rates. The Group accounts for this effect using the following methods:
• determining the most probable amount – it is a single amount from among possible
results or
• providing the expected amount – it is the sum of the amounts weighted by probability
from among possible results.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
22
7. Summary of significant accounting policies (continued)
(p) FOREIGN EXCHANGE DIFFERENCES
For companies with euro as a functional currency, transactions denominated in a foreign
currency (including Polish Zloty) are recorded in euro at the actual exchange rates prevailing
at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are revalued at period-end using period-end exchange rates. Foreign currency
translation differences related to valuation as of balance sheet date and settlement of
monetary positions denominated in foreign currency are charged to the income statement.
The following exchange rates were used for measurement purposes.
31 December 2022 31 December 2021
PLN/EUR 4.6899 4.5994
USD/EUR 1.0654 1.1329
HUF/EUR 400.23 369.01
(q) INTEREST BEARING LOANS AND BORROWINGS AND DEBT SECURITIES
All loans and borrowings and debt securities are initially recognized at fair value, net of
transaction costs associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings and debt securities are
measured at amortised cost using the effective interest rate method.
Debt issuance expenses are deducted from the amount of debt originally recognised. These
costs are amortised through the income statement over the estimated duration of the loan.
Debt issuance expenses represent an adjustment to effective interest rates.
Amortised cost is calculated by taking into account any transaction costs, and any discount
or premium on settlement.
Gains and losses are recognised in profit or loss when the liabilities are derecognised.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
23
7. Summary of significant accounting policies (continued)
(r) FINANCIAL INSTRUMENTS – INITIAL RECOGNITION AND SUBSEQUENT
MEASUREMENT
A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised
cost, fair value through other comprehensive income (“OCI”), and fair value through profit or
loss.
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them.
With the exception of trade receivables that do not contain a significant financing component
or for which the Group has applied the practical expedient, the Group initially measures a
financial asset at its fair value plus, in the case of a financial asset not at fair value through
profit or loss, transaction costs. Trade receivables that do not contain
a significant financing component or for which the Group has applied the practical expedient
are measured at the transaction price determined under IFRS 15. Refer to the accounting
policies in note 7(l) Contract revenue and costs recognition.
Purchases or sales of financial assets that require delivery of assets within a time frame
established by regulation or convention in the market place (regular way trades) are
recognised on the trade date, i.e., the date that the Group commits to purchase or sell the
asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four
categories:
• Financial assets at amortised cost (debt instruments);
• Financial assets at fair value through OCI with the recycling of cumulative gains and
losses (debt instruments);
• Financial assets designated at fair value through OCI with no recycling of cumulative
gains and losses upon derecognition (equity instruments);
• Financial assets at fair value through profit or loss.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
24
7. Summary of significant accounting policies (continued)
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at
amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial
assets in order to collect contractual cash flows and
• The contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest
rate (“EIR”) method and are subject to expected credit losses (ECL) impairment charge.
Gains and losses are recognised in profit or loss when the asset is derecognised, modified
or impaired.
The Group’s financial assets at amortised cost include trade receivables, loans to associate,
short-term deposits under current financial assets and cash and cash equivalents.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading,
financial assets designated upon initial recognition at fair value through profit or loss,
or financial assets mandatorily required to be measured at fair value. Financial assets are
classified as held for trading if they are acquired for the purpose of selling or repurchasing
in the near term. Derivatives, including separated embedded derivatives, are also classified
as valued at fair value through profit or loss unless they are designated as effective hedging
instruments.
Financial assets with cash flows that are not solely payments of principal and interest are
classified and measured at fair value through profit or loss, irrespective of the business
model.
Financial assets at fair value through profit or loss are carried in the statement of financial
position at fair value with net changes in fair value recognised in the statement of profit or
loss.
The Group’s financial assets at fair value through profit or loss include non-current financial
assets (related to investment property).
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
25
7. Summary of significant accounting policies (continued)
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans, and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings,
including bank overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments
entered into by the Group that are not designated as hedging instruments in hedge
relationships as defined by IFRS 9. Separated embedded derivatives are also classified as
held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the
consolidated statement of financial position if there is a currently enforceable legal right to
offset the recognized amounts and there is an intention to settle on a net basis, to realize
the assets and settle the liabilities simultaneously.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
26
7. Summary of significant accounting policies (continued)
(s) CASH AND CASH EQUIVALENTS
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly
liquid investments that readily convert to a known amount of cash and which are subject to
an insignificant risk of changes in value.
(t) ACCOUNTS RECEIVABLES
A receivable represents the Group’s right to an amount of consideration that is unconditional
(i.e., only the passage of time is required before payment of the consideration is due). Refer
to accounting policies of financial assets in section r) Financial instruments – initial
recognition and subsequent measurement.
(u) IMPAIRMENT OF NON-CURRENT NON-FINANCIAL ASSETS
The carrying value of non-financial assets not measured at fair value is periodically reviewed
by the Management Board to determine whether impairment may exist. In particular, the
Management Board assesses whether the impairment indicators exist.
(v) PURCHASE OF SHARES OF NON-CONTROLLING INTEREST
If the Group increases its share in the net assets of its controlled subsidiaries, the difference
between the remuneration paid/to-be-paid and the carrying amount of non-controlling interest
is recognised in equity attributable to equity holders of the parent.
(w) DERIVATIVES FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as interest rate swaps and cap, to
hedge its interest rate risks. Such derivative financial instruments are initially recognised at
fair value on the date on which a derivative contract is entered into and are subsequently
re-measured at fair value. Derivatives are carried as financial assets when the fair value is
positive and as financial liabilities when the fair value is negative.
For the purpose of hedge accounting, hedges are classified as cash flow hedges when
hedging the exposure to variability in cash flows that is either attributable to a particular risk
associated with a recognised asset or liability or a highly probable forecast transaction or the
foreign currency risk in an unrecognised firm commitment.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
27
7. Summary of significant accounting policies (continued)
At the inception of a hedge relationship, the Group formally designates and documents the
hedge relationship to which it wishes to apply hedge accounting and the risk management
objective and strategy for undertaking the hedge.
The documentation includes identification of the hedging instrument, the hedged item, the
nature of the risk being hedged and how the Group will assess whether the hedging
relationship meets the hedge effectiveness requirements (including the analysis of sources
of hedge ineffectiveness and how the hedge ratio is determined).
A hedging relationship qualifies for hedge accounting if it meets all of the following
effectiveness requirements:
• There is ‘an economic relationship’ between the hedged item and the hedging instrument.
• The effect of credit risk does not ‘dominate the value changes’ that result from that
economic relationship.
• The hedge ratio of the hedging relationship is the same as that resulting from the quantity
of the hedged item that the Group actually hedges and the quantity of the hedging
instrument that the Group actually uses to hedge that quantity of hedged item.
Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as
described below.
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the
cash flow hedge reserve, while any ineffective portion is recognised immediately in the
statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the
cumulative gain or loss on the hedging instrument and the cumulative change in fair value of
the hedged item.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
28
7. Summary of significant accounting policies (continued)
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated
or exercised, or no longer qualifies for hedge accounting. At that point of time, any cumulative
gain or loss recognised in equity is transferred to net profit or loss for the year.
For derivatives that do not qualify for hedge accounting, any gain or losses arising from
changes in fair value are recorded directly to net profit or loss of the year.
The fair value of cross-currency interest swap, interest rate swaps and caps contracts is
determined by using discounted cash flow method using observable inputs (fair value level
hierarchy 2).
(x) ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with International Financial Reporting
Standards requires Management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and contingent assets and liabilities at the balance date. The
actual results may differ from these estimates.
Investment property represents property held for long-term rental yields. Investment property
is carried at fair value, which is established at least annually by an independent registered
valuer based on discounted projected cash flows from the investment property using the
discounts rates applicable for the local real estate market and updated by the Management
judgment or - as deemed appropriate – on basis of the Income capitalisation or yield method.
The applied methods and main assumptions are defined by the valuers and are disclosed in
note 17.
The Group uses estimates in determining the amortization rates used (note 16, note 30).
The fair value of financial instruments for which no active market exists is assessed by means
of appropriate valuation methods. In selecting the appropriate methods and assumptions, the
Group applies professional judgment (note 18).
The Group recognises deferred tax asset based on the assumption that taxable profits will
be available in the future against which the deferred tax asset can be utilised. Deterioration
of future taxable profits might render this assumption unreasonable (note 15).
The Group uses estimates in determining the settlement of share-based payment in cash
(note 32)
.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
29
7. Summary of significant accounting policies (continued)
(y) SIGNIFICANT ACCOUNTING JUDGEMENTS
In the process of applying the Group's accounting policies, management has made the
following judgments:
The functional currency of GTC S.A. and most of its subsidiaries is euro, as the euro has
a significant and pervasive impact on them:
• valuation of investment properties is carried out in EUR;
• loans and borrowings are mainly denominated in EUR. Debt in other currencies
(bonds in PLN and HUF) are hedged to EUR through cross currency interest rate
swaps;
• the majority of all lease contracts is denominated in the EUR.
The Group has entered into commercial property leases on its investment property portfolio.
The Group has determined that it retains all the significant risks and rewards of ownership of
these properties which are leased out on such operating leases.
Significant accounting judgements related to investment property are presented in note
7(c)(ii), related to determination of IPUC valuation.
Significant accounting judgements related to market liquidity of investment property are
presented in note 7(d).
The Group classifies its residential inventory to current or non-current assets, based on their
development stage within the business operating cycle. The normal operating cycle in most
cases does not exceed 5 years. Residential projects, which are active, are classified as
current inventory. Residential projects which are planned to be completed in a period longer
than the operating cycle are classified as residential landbank under non-current assets.
The Group determines whether a transaction or other event is a business combination by
applying the definition of a business in IFRS 3.
Deferred tax with respect to outside temporary differences relating to subsidiaries was
calculated based on an estimated probability that these temporary differences will be realized
in the foreseeable future.
The Group also makes an assessment of the probability of realization of deferred tax asset.
If necessary, the Group decreases deferred tax asset to the realizable value.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
30
7. Summary of significant accounting policies (continued)
(z) BASIS OF CONSOLIDATION
The consolidated financial statements comprise the financial statements of GTC and the
financial statements of its subsidiaries for the year ended 31 December 2022.
The financial statements of the subsidiaries are prepared for the same reporting period as
those of the parent company, using consistent accounting policies and based on the same
accounting policies applied to similar business transactions and events. Adjustments are
made to bring into line any dissimilar accounting policies that may exist.
The Group, regardless of the nature of its involvement with an entity (the investee), shall
determine whether it is a parent by assessing whether it controls the investee.
The Group controls an investee when it is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power
over the investee.
Thus, the Group controls an investee if, and only if, it has all the following:
• power over the investee;
• exposure, or rights, to variable returns from its involvement with the investee and
• the ability to use its power over the investee to affect the amount of the investor's returns.
Subsidiaries are consolidated from the date on which control is transferred to the Group and
cease to be consolidated from the date on which control is transferred out of the Group.
All significant intercompany balances and transactions, including unrealised gains arising
from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated
unless they indicate impairment.
(aa) PROVISIONS
Provisions are recognised when the Group has present obligation (legal or assumed i.e.
customarily accepted) as a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
31
7. Summary of significant accounting policies (continued)
(ab) SHARE-BASED PAYMENT TRANSACTIONS
Amongst others, GTC remunerates key personnel by granting them rights for payments
based on GTC’s share price performance in PLN, in exchanges for their services (“Phantom
shares”).The cost of the phantom shares is measured initially at fair value at the grant date.
The liability is re-measured to fair value at each reporting date up and at the settlement date.
The costs of the program during the vesting period and the effects of changes in fair value
are recognized in administration expenses. The employee acquires the right to payment from
phantom shares in annual tranches during the period of work / service. Costs are recognized
on a straight-line basis over the vesting period for each tranche.
(ac) EARNINGS PER SHARE
Earnings per share for each reporting period is calculated as quotient of the profit for the
given reporting period attributable to equity holders and the weighted average number of
shares outstanding in that period.
(ad) SHORT TERM DEPOSITS
Short-term deposits include deposits related to loan agreements and other contractual
commitments and can be used only for certain operating activities as determined by
underlying agreements. Deposits related to loan agreements can be used anytime (for the
defined purposes upon approval of the lender), as so, they are presented within current
assets.
(ae) DEPOSITS FROM TENANTS
Deposits from tenants include deposits received from tenants to secure the obligation of the
tenants towards the landlord. The deposits are refundable at the end of the lease.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
32
7. Summary of significant accounting policies (continued)
(af) RESIDENTIAL INVENTORY AND RESIDENTIAL LANDBANK
Inventory related to residential projects under construction is stated at the lower of cost and
net realisable value. The realisable value is determined using the Discounted Cash Flow
method or Comparison method by independent appraisers. Costs relating to the construction
of a residential project are included in the inventory.
Commissions paid to sales or marketing agents on the sale of real estate units, which are not
refundable, are expensed in full when the contract to sell is secured.
The Group classifies its residential inventory to current or non-current assets based on their
development stage within the business operating cycle. The normal operating cycle, in most
cases, does not exceed 5 years. Residential projects, which are active, are classified as
current inventory. Residential projects which are planned to be completed in a period longer
than the operating cycle are classified as residential landbank under non-current assets.
(ag) LEASES
There are two types of leases in GTC Group that are subject to IFRS 16 and affect the
financial statements:
• Property rented to tenants - the primary activity of GTC Group.
For this leasing activity, GTC Group acts as a Lessor. The Group has entered into leases on
its property portfolio. Leases, where the Group does not transfer substantially all the risk and
benefits of ownership of the asset, are classified as operating leases.
• Leases of lands under perpetual usufruct where the Group acts as Lessee.
Perpetual usufruct payments are payments, which are done in advance or in arrears on an
annual or monthly basis within a define period (from 33 to 87 years). Perpetual usufruct
payments are made in Poland, Croatia, Romania and Serbia.
Due to the fact that perpetual usage payments, by substance, are lease payments, they are
accounted for under IFRS 16.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
33
7. Summary of significant accounting policies (continued)
In the consolidated financial position statements, the Group recognized a Right of Use and
Lease Liabilities:
a) Right of use of lands under perpetual usufruct is presented:
• as part of the Investment Property, with separate disclosure in a separate note;
• as part of the residential landbank.
b) Lease Liabilities are presented separately, as part of the short-term and long-term
liabilities, with a separate disclosure.
The Right of Use of lands under perpetual usufruct is amortized over the lease period
(for cost method) or valued using the fair value approach (for investment properties valued
at fair value). For Right of Use measured at fair value, the Group presents the amortization
or the change in fair value within the profit (loss) on revaluations. Interest embedded within
land leases is presented as finance expenses.
The Group entered into several other leases (low value, short term), which are exempt from
IFRS 16. In such cases, the lease is expensed without balance sheet recognition. Amount of
such expenses is immaterial.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
34
8. Investment in subsidiaries
The consolidated financial statements include the financial statements of the Company and
its subsidiaries listed below together with direct and indirect ownership of these entities, and
voting rights proportion as at the end of each period (the table presents the effective stake):
Subsidiaries
Name
Holding
Company
Country of
incorporation
31 December
2022
31 December
2021
GTC Konstancja Sp. z o.o. (1)
GTC S.A.
Poland
100%
100%
GTC Korona S.A.
GTC S.A.
Poland
100%
100%
Globis Poznań Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Aeropark Sp. z o.o.
GTC S.A.
Poland
100%
100%
Globis Wrocław Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Satellite Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Sterlinga Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Karkonoska Sp. z o.o. (1)
GTC S.A.
Poland
100%
100%
GTC Ortal Sp. z o.o.
GTC S.A.
Poland
100%
100%
Diego Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Francuska Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC UBP Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Pixel Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Moderna Sp. z o.o.
GTC S.A.
Poland
100%
100%
Centrum Handlowe Wilanow Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Management Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Corius Sp. z o.o.
GTC S.A.
Poland
100%
100%
Centrum Światowida Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Galeria CTWA Sp. z o.o.
GTC S.A.
Poland
100%
100%
Artico Sp. z o.o.
GTC S.A.
Poland
100%
100%
GTC Hungary Real Estate
Development Company Pltd.
(“GTC Hungary”)
GTC S.A. Hungary 100% 100%
GTC Duna Kft.
GTC Hungary
Hungary
100%
100%
Váci út 81-85. Kft.
GTC Hungary
Hungary
100%
100%
Riverside Apartmanok Kft. (1)
GTC Hungary
Hungary
100%
100%
Centre Point I. Kft.
Váci út 81-85. Kft.
Hungary
100%
100%
Centre Point II. Kft.
Váci út 81-85. Kft.
Hungary
100%
100%
Spiral I. Kft.
GTC Hungary
Hungary
100%
100%
Albertfalva Üzletközpont Kft.
GTC Hungary
Hungary
100%
100%
GTC Metro Kft.
GTC Hungary
Hungary
100%
100%
Kompakt Land Kft.
GTC Hungary
Hungary
100%
100%
GTC White House Kft.
GTC Hungary
Hungary
100%
100%
VRK Tower Kft.
GTC Hungary
Hungary
100%
100%
(1) Under liquidation.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
35
8. Investment in subsidiaries (continued)
Name
Holding
Company
Country of
incorporation
31 December
2022
31 December
2021
GTC Future Kft.
GTC Hungary
Hungary 100% 100%
Globe Office Investments Kft.
GTC Hungary
Hungary 100% 100%
Office Planet Kft. (1)
GTC Hungary
Hungary - 100%
GTC Investments Sp. z o.o. GTC Hungary Poland 100% 100%
GTC Univerzum Projekt Kft. GTC Hungary Hungary 100% 100%
GTC Origine Investments Pltd.
(“GTC Origine”)
GTC S.A.
Hungary 100% 100%
GTC HBK Project Kft. GTC Origine Hungary 100% 100%
GTC VI188 Property Kft. GTC Origine Hungary 100% 100%
GTC FOD Property Kft. GTC Origine Hungary 100% 100%
G-Delta Adrssy Kft.
GTC Origine
Hungary 100% 100%
GTC KLZ 7-10 Kft.
GTC Origine
Hungary 100% 100%
GTC PSZTSZR Projekt Kft (2)
GTC Origine
Hungary 100% -
GTC DBRNT Projekt Kft (2)
GTC Origine
Hungary 100% -
GTC B41 d.o.o. (2) GTC Origine Serbia 100% -
GTC K43-45 Property Kft. (3) GTC Origine Hungary 100% -
GTC Liffey Kft. (3) GTC Origine Hungary 100% -
GTC UK Real Estate Investments Ltd. (3)
GTC Origine
United Kingdom 100% -
GTC Nekretnine Zagreb d.o.o.
GTC S.A.
Croatia 100% 100%
Euro Structor d.o.o.
GTC S.A.
Croatia 70% 70%
Marlera Golf LD d.o.o.
GTC S.A.
Croatia 100% 100%
Nova Istra Idaeus d.o.o.
Marlera Golf
LD d.o.o.
Croatia 100% 100%
GTC Matrix d.o.o. (1)
GTC S.A.
Croatia - 100%
GTC Seven Gardens d.o.o.
GTC S.A.
Croatia 100% 100%
Towers International Property S.R.L. GTC S.A. Romania 100% 100%
Green Dream S.R.L.
GTC S.A.
Romania 100% 100%
Aurora Business Complex S.R.L.
GTC S.A.
Romania 100% 100%
Cascade Building S.R.L. (1) GTC S.A. Romania - 100%
City Gate Bucharest S.R.L.
GTC S.A.
Romania 100% 100%
Venus Commercial Center S.R.L.
GTC S.A.
Romania 100% 100%
City Gate S.R.L.
GTC S.A.
Romania 100% 100%
City Rose Park S.R.L.
GTC S.A.
Romania 100% 100%
Deco Intermed S.R.L.
GTC S.A.
Romania 66.7% 66.7%
GML American Regency Pipera S.R.L. (4) GTC S.A. Romania 75% 66.7%
(1) Sold (please refer to note 9).
(2) Acquired (please refer to note 9). Accounted as an asset acquisition not a business combination.
(3) Newly established wholly-owned subsidiary.
(4) Acquisition of non-controlling interest.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
36
8. Investment in subsidiaries (continued)
(1) Sold (please refer to note 9).
(2) Newly established wholly-owned subsidiary.
(3) GTC S.A. holds 100% shares through a wholly-owned subsidiary GTC Hungary, which has 70% of shares and remaining
30% is held directly by GTC S.A.
Name
Holding
Company
Country of
incorporation
31 December
2022
31 December
2021
NRL EAD
GTC S.A.
Bulgaria
100%
100%
Advance Business Center EAD
GTC S.A.
Bulgaria 100% 100%
GTC Yuzhen Park EAD
GTC S.A.
Bulgaria 100% 100%
Dorado 1 EOOD GTC S.A. Bulgaria 100% 100%
GOC EAD GTC S.A. Bulgaria 100% 100%
GTC Flex EAD (2) GTC S.A. Bulgaria 100% -
GTC Medj Razvoj Nekretnina d.o.o.
Beograd (1)
GTC S.A.
Serbia - 100%
GTC Business Park d.o.o. Beograd (1)
GTC S.A.
Serbia
-
100%
Commercial and Residential Ventures
d.o.o. Beograd (1)
GTC S.A.
Serbia - 100%
Demo Invest d.o.o. Novi Beograd (1)
GTC S.A.
Serbia - 100%
Atlas Centar d.o.o. Beograd (1)
GTC S.A.
Serbia - 100%
Commercial Development d.o.o.
Beograd
GTC S.A.
Serbia 100% 100%
Glamp d.o.o. Beograd (3) GTC S.A. Serbia 100% 100%
GTC BBC d.o.o. (1) GTC S.A. Serbia - 100%
GTC Aurora Luxembourg S.A. GTC S.A. Luxembourg 100% 100%
Europort Investment (Cyprus) 1 Limited
GTC S.A.
Cyprus
100% 100%
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
37
9. Events in the period
MANAGEMENT BOARD CHANGES AND OTHER CORPORATE EVENTS
On 4 January 2022, National Court Register registered the amendment to the Company’s
articles of association regarding the increase of the Company’s share capital through
the issuance of ordinary series O bearer shares. On 10-11 January 2022, the Group recorded
proceeds from issue of share capital (net of issuance costs) in amount
of EUR 120.4 million.
On 10 January 2022, the Company received notifications from GTC Holding Zrt and GTC
Dutch Holdings B.V regarding a change in the total number of votes in the Company resulting
from issue of 88,700,000 ordinary O series shares and registration of the increase in the
Company’s share capital. Before the abovementioned change, GTC Holding Zrt held, directly
and indirectly, 320,466,380 shares in the Company, entitling to 320,466,380 votes in the
Company, representing 66% of the share capital of the Company and carried the right to 66%
of the total number of votes in the Company.
After the abovementioned change, GTC Holding
Zrt holds, directly and indirectly, 359,528,880 shares in the Company, entitling to
359,528,880 votes in the Company, representing 62.61% of the share capital of the Company
and carrying the right to 62.61% of the total number of votes in the Company.
On 14 January 2022, GTC entered into a mutual employment contract termination agreement
with Mr. Yovav Carmi, former President of the Management Board. Subsequently, Mr Carmi
resigned from his seat on the Management Board of the Company and other subsidiaries.
On 21 January 2022, the management board of the Warsaw Stock Exchange (WSE) adopted
resolution regarding the admission and introduction to stock exchange trading on the main
market of the WSE of 88,700,000 ordinary bearer series O shares in the Company with a
nominal value of PLN 0.10 each, according to which the management board of the WSE
stated that the series O shares are admitted to trading on the main market and resolved to
introduce them to stock exchange trading on 26 January 2022.
On 28 January 2022, Mr. Gyula Nagy resigned from his seat on the Management Board
of the Company.
On 19 February 2022, the Company received notification from GTC Dutch Holdings B.V. with
its registered office in Amsterdam, the Netherlands (the “Seller”) and Icona Securitization
Opportunities Group S.à r.l. acting on behalf of its compartment Central European
Investments with its registered office in Luxembourg, Grand Duchy of Luxembourg (the
“Buyer”) that the Seller and the Buyer entered into a preliminary share purchase agreement
relating to the acquisition by the Buyer from the Seller of 15.7% of the shares in the Company.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
38
9. Events in the period (continued)
However, pursuant to the notification, the Buyer and the Seller agreed that the shareholders’
agreement will constitute an acting in concert agreement within the meaning of Articles
87(1)(5) and 87(1)(6) in connection with Article 87(3) of the Act of 29 July 2005 on Public
Offerings and the Conditions for the Introduction of Financial Instruments to the Organised
Trading System and Public Companies (the “Act on Public Offering”) on joint policy towards
the Company and exercising of voting rights on selected matters in an agreed manner. Also,
pursuant to the assignment agreement, the Buyer will, among others, transfer to the Seller
its voting rights attached to the Shares and grant the power of attorney to exercise voting
rights attached to the shares. The assignment agreement expires in case either call or put
option under the call and put option agreement is exercised and/or in case of a material
default under the transaction documentation. On 1 March 2022, the Company received
notification that the transaction was completed, and the Buyer acquired 15.7% of the shares
in the Company.
As a result of execution of the transaction, Icona Securitization Opportunities Group S.à r.l.
holds 90,176,000 ordinary bearer shares in the Company which constitute 15.7% of total
votes at GTC's general meeting, with reservations that (i) all the voting rights were transferred
to the Seller and that (ii) Buyer granted the Power of Attorney to Buyer’s Voting Rights to the
Seller.
As a result of execution of the Transaction GTC Holding Zrt holds jointly 269,352,880 shares
of the Company, entitling to 269,352,880 votes in the Company, representing 46.9% of the
share capital of the Company and carrying the right to 46.9% of the total number of votes in
the Company, including:
• directly holds 21,891,289 shares of the Company, entitling to 21,891,289 votes
in the Company, representing 3.8% of the share capital of the Company and carrying
the right to 3.8% of the total number of votes in the Company; and
• indirectly (i.e. through GTC Dutch Holdings B.V.) holds 247,461,591 shares of the
Company, entitling to 247,461,591 votes in the Company, representing 43.1% of the
share capital of the Company and carrying the right to 43.1% of the total number of
votes in the Company.
In addition, GTC Holding Zrt also holds indirectly, through GTC Dutch Holdings B.V., the
Buyer’s Voting Rights, i.e. the right to exercise 90,176,000 votes in the Company, entitling to
15.7% of the total number of votes in the Company.
Since 1 March 2022, GTC Holding Zrt, GTC Dutch Holdings B.V. and Icona Securitization
Opportunities Group S.à r.l. are acting in concert based on the agreement concerning joint
policy towards the Company and exercising of voting rights on selected matters at the general
meeting of the Company in an agreed manner.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
39
9. Events in the period (continued)
On 17 March 2022, the Supervisory Board of the Company appointed Zoltán Fekete as the
President of the Management Board of the Company, effective immediately.
On 14 June 2022, the Company’s shareholders adopted a resolution regarding distribution
of dividend in the amount of PLN 160.8 million (EUR 34.4 million). On 18 October 2022,
dividend to shareholders was paid in the amount of EUR 33.2 million.
On 5 July 2022, effective from 15 July 2022, Mr. Pedja Petronijevic resigned from his seat on
the Management Board of the Company.
On 10 August 2022, the Management Board of GTC S.A. announced re-orientation
of strategy of the Group, within which the Management Board decided to pursue potential
new investments in certain new sectors which may diverge from the current core scope
of the Company’s operations (namely, the development and management of office, retail and
certain other types of real estate). Potential new sectors identified for investment as part of
the new strategy include:
1. investment in innovation and technology parks;
2. investment in renewable energy facilities; and
3. investment in development of PRS assets (private rented sector property -
residential).
On 12 September 2022, the Company received notification on a change in the shareholding
of the Company. Pursuant to the Notification, as a result of completion of the intra-group
corporate reorganization Global Debt Strategy S.à r.l. (“GDS”) being a subsidiary of Alpine
Holding Korlátolt Felelősségű Társaság (“Alpine”), directly acquired from GTC Holding
control over 100% of the shares of GTC Dutch Holdings B.V. As a result of the transaction
Alpine holds indirectly (i.e. through GDS, which in turn indirectly holds through GTC Dutch
Holdings B.V) 43.10% of GTC’s shares. For more details please see current report no
40/2022.
ACQUISITIONS AND DEVELOPMENTS
On 13 January 2022, GTC Origine Investments Pltd, a wholly-owned subsidiary of the
Company, acquired 100% holding of G-Zeta DBRNT Kft. ("GTC DBRNT Projekt Kft”) from a
company related to the majority shareholder of the Company, which owns an existing office
building on the Danube riverbank with GLA of 2,540 sqm for a consideration of EUR 7.7
million. Due to the nature of transaction, the transaction was treated as asset deal.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
40
9. Events in the period (continued)
On 4 February 2022, GTC Origine Investments Pltd, a wholly-owned subsidiary of the
Company, acquired 100% holding of G-Epsilon PSZTSZR Kft. (“GTC PSZTSZR Projekt Kft”)
from a company related to the majority shareholder of the Company, which owns a land plot
of 25,330 sqm in Budapest with existing six old buildings for a consideration of EUR 9.9
million. The Group is refurbishing the existing buildings and once refurbished, the project will
provide a 14,000 sqm new Class A office campus. Due to the nature of transaction, the
transaction was treated as asset deal.
On 11 February 2022, GTC Origine Investments Pltd., a wholly-owned subsidiary of the
Company, acquired from Groton Global Corp Napred company ("GTC B41 d.o.o.”) in
Belgrade holding a land plot of 19,537 sqm for a consideration of EUR 33.8 million.
In March 2022, the Group has completed a Class A office building in Budapest, Hungary –
Pillar.
In March 2022, the Group commenced the development of the third building within the Matrix
Office Park in Zagreb – Matrix C.
On 4 July 2022, GTC Origine Investments Pltd., a wholly-owned subsidiary of the Company,
established GTC K43-45 Property Kft. in Budapest for future development project. In July
2022, GTC K43-45 Property Kft acquired a landplot in CBD in Budapest for a consideration
of EUR 6.55 million. The project has an existing building permit for the development of
approximately 6,400 sqm of hospitality, student housing or short-term rental apartments.
On 9 August 2022, a subsidiary of the Company entered into an agreement concerning a
transaction involving a joint venture investment into an innovation park in County Kildare,
Ireland (the “Transaction”). The Transaction involves an investment of approximately EUR
115 million into the Kildare Innovation Campus. The project involves other international
professional investors acting through a Luxemburg partnership advised by Icona Capital, an
entity from the same group as GTC’s minority partner (for more details please refer to note
18).
On 28 August 2022, GTC Origine Investments Pltd., a wholly-owned subsidiary of the
Company, acquired 34% of units in Regional Multi Asset Fund Compartment 2 of Trigal
Alternative Investment Fund GP S.á.r.l. (“Fund”) for consideration of EUR 12.6 million from
an entity related to the majority shareholder. The Fund’s focus is commercial real estate
investments in Slovenia and Croatia with a total gross asset value of EUR 68.75 million. The
fund expected maturity is in Q4 2028.
In October 2022, the Group has completed a Class A office building in Belgrade, Serbia –
GTC X.
In December 2022, the Group has completed a Class A office building in Sofia, Bulgaria –
Sofia Tower 2.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
41
9. Events in the period (continued)
DISPOSAL OF SUBSIDIARIES
On 12 January 2022, GTC Group finalized sale of the entire share capital of Serbian
subsidiaries: Atlas Centar d.o.o. Beograd, Demo Invest d.o.o. Novi Beograd, GTC BBC
d.o.o., GTC Business Park d.o.o. Beograd, GTC Medjunarodni Razvoj Nekretnina d.o.o.
Beograd and Commercial and Residential Ventures d.o.o. Beograd and Hungarian company
Office Planet Kft. ( which has 70% in shares of sold Serbian entities), following the satisfaction
of customary conditions precedent. For details please refer to note 33.
On 28 July 2022, GTC has sold Cascade Building S.R.L., a wholly-owned subsidiary of the
Company owning Cascade Office Building in Bucharest (4,211 sqm) for EUR 10.3 million.
Net proceeds from sale of subsidiary were EUR 9.6 million.
On 30 November 2022, GTC has sold GTC Matrix d.o.o. a wholly-owned subsidiary of the
Company owning a portfolio of two A-class office buildings in Zagreb – Matrix A and B for
EUR 52.2 million. Net proceeds from sale of GTC Matrix d.o.o. were EUR 51.3 million.
DISPOSAL OF ASSETS
On 19 July 2022, GTC FOD Property Kft., a wholly-owned subsidiary of the Company, signed
a sale and purchase agreement, concerning the sale of the office building Forrest Office
Debrecen owned by the subsidiary. The selling price under the agreement is HUF 19.1 billion
(an equivalent of EUR 47.7 million as at 31 December 2022). The transaction was closed on
30 January 2023.
REPAYMENT OF BONDS, BANK LOAN REFINANCING AND OTHER CHANGES
TO BANK LOAN AGREEMENTS
On 18 April 2022, GTC SA repaid all bonds issued under ISIN code PLGTC0000292 (full
redemption). The original nominal value was EUR 9,440.
On 13 May 2022, GTC SA signed an amendment agreement to the revolving facility
agreement dated 29 October 2021. As a result, the available amount of unsecured revolving
credit facility was increased to EUR 94 million. As of balance sheet date, credit facility was
not used.
On 18 May 2022, Globis Wrocław Sp. z o.o., a wholly-owned subsidiary of the Company,
signed a prolongation of the existing facility with Santander Bank Polska. Final repayment
date was extended to 31 August 2025 and the outstanding balance of the loan in the amount
of EUR 13.5 million will be paid as a balloon payment on the maturity date.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
42
9. Events in the period (continued)
On 28 June 2022, GTC UBP Sp. z o.o., a wholly-owned subsidiary of the Company, signed
with Berlin Hyp AG amendment agreement to bank loan agreement, according to which a
prepayment of EUR 6.1 million was made at the beginning of July 2022. The outstanding
balance of the loan will be paid as the balloon payment on the maturity date.
On 4 November 2022, GTC SA repaid partially bonds issued under ISIN code
PLGTC0000318 (one-third of total issue) in the amount of EUR 17,100 (PLN 73,333) –
including hedge component.
Impact of the situation in Ukraine on GTC Group
Since the start of the war in Ukraine on 24 February 2022, even though the Group does not
conduct any activities in the territory of Ukraine, Russia or Belarus, it cannot be ruled out that
the current geopolitical situation in Europe triggered by this war, which has resulted in a
number of macroeconomic consequences for Poland and other European countries, may
also have an impact on the Group’s operations. The continuation of the war, its scale and
further course of military operations may cause an extension of the set of economic sanctions
imposed thus far, further disruption in supply chains, limited availability of subcontractors and
a general increase in the prices of materials resulting from, among others, rising energy
prices, which in turn may translate into significant costs of the implementation of investments
carried out by the Group. A significantly higher and volatile costs of energy (severe energy
crunch because of steep cuts in natural gas supplies from Russia following the outbreak of
the Russia-Ukraine conflict) and general uncertainties related to the impact of the war in
Ukraine on both global and the SEE/CEE economy and the deterioration of the global and
regional economies may adversely impact the economic situation of the Group.
As at the date of this financial statements, the impact of the war in Ukraine on the Group’s
operations is not material. However, it is not possible to estimate the scale of such impact in
the future and due to high volatility, the Company monitors the situation on an ongoing basis
and analyses its potential impact both from the perspective of individual projects and the
entire Group and its long-term investment plans.
Effects of climate-related matters on financial statements
The climate and environmental risks are subject to risk management and the Risk
Management Policy. The role of the Management is to supervise corporate risk, define the
scope of risk management, define directions for the development of the risk management
system, and determine acceptable risk exposure levels. The Group analysed potential impact
of the climate-related matters and concluded that the climate-related matters do not
significantly affect these Consolidated Financial Statements.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
43
10. Revenue from operations and Service charge costs
Rental income includes variable rental revenue based on tenants’ turnover for the year ended
31 December 2022 of EUR 5,887 (2021: EUR 4,976). The remaining revenue is based on
fixed contractual rental fees.
The Group has entered into various operational lease contracts on its property portfolio in
Poland, Romania, Croatia, Serbia, Bulgaria, and Hungary. The commercial property leases
typically include clauses to enable the periodic upward revision of the rental charge according
to European Consumer Price Index (CPI).
Future minimum rental revenue under operating leases (not discounted lease payments)
from completed projects are as follows (in millions of euro):
31 December 2022
31 December 2021
Within 1 year
124 111
Within 2 year
108 88
Within 3 year 79 64
Within 4 year 57 45
Within 5 year 38 33
Within 6 year
24 18
More than 6 years
33 18
Total
463 377
Most of the revenue from operations is earned predominantly on the basis of amounts
denominated in, directly linked to, or indexed by reference to the EUR.
Service charge revenue includes income from charging maintenance costs to tenants.
Service charge is billed on a monthly basis, based on the agreed rate from the contract with
standard payment terms.
Service charge costs comprise of remuneration costs of EUR 2,690 (2021: EUR 2,145) and
third party services, material and energy usage and other operating costs.
11. Selling expenses
Selling expenses comprise of the following:
Year ended
31 December 2022
Year ended
31 December 2021
External services - advertising and marketing 573 424
Payroll and related expenses
1,195
1,228
Total
1,768
1,652
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
44
12. Administration expenses
Administration expenses comprise of the following:
Year ended
31 December 2022
Year ended
31 December 2021
Remuneration and other employee benefits 9,149 9,002
Audit and valuations 1,250 755
Legal, tax, IT and other advisory 1,817 1,306
Office and insurance expenses
1,532
1,167
Travel expenses 440 242
Supervisory board remuneration fees 248 187
Depreciation 544 653
Investors relations and other expenses 712 401
Total before share based payment
15,692
13,713
Share based payment (652) 432
Total
15,040 14,145
13. Finance income and finance expense
Finance income comprises of the following:
Year ended
31 December 2022
Year ended
31 December 2021
Interest on deposits and other 1,104 28
Interest on loan granted to non-controlling interest 308 276
Total 1,412 304
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
45
13. Finance income and finance expense (continued)
Finance expense comprises of the following:
Year ended
31 December 2022
Year ended
31 December 2021
Interest expenses (on financial liabilities that are
not fair valued through profit or loss), banking
costs and other charges
(28,914) (31,841)
Finance costs related to lease liability (1,853) (1,938)
Early prepayment costs - (5,102)
Amortization of long-term borrowings raising
costs
(2,341) (4,400)
Total
(33,108)
(43,281)
The weighted average interest rate (including hedges) on the Group’s loans (excluding loans
related to assets held for sale) as of 31 December 2022 was 2.21% p.a. (2.16% p.a. as of
31 December 2021).
14. Segmental analysis
The operating segments are aggregated into reportable segments, taking into consideration
the nature of the business, operating markets, and other factors. GTC operates in six core
markets: Poland, Hungary, Bucharest, Belgrade, Sofia and Zagreb.
Operating segments are divided into geographical zones, which have common
characteristics and reflect the nature of management reporting structure:
a. Poland
b. Belgrade
c. Hungary
d. Bucharest
e. Zagreb
f. Sofia
g. Other
Year ended
31 December 2022
Year ended
31 December 2021
Rental income from office sector 75,064 90,876
Service charge revenue from office sector 24,720 26,439
Rental income from retail sector 48,492 39,413
Service charge revenue from retail sector 18,287 15,223
Total 166,563 171,951
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
46
14. Segmental analysis (continued)
Segment analysis of rental income and costs for the year ended 31 December 2022 and
31 December 2021 is presented below:
Year ended
31 December 2022
Portfolio
Rental
revenue
Service charge
revenue
Service charge
costs
Gross margin
from
operations
Poland
49,922
18,291
(19,087)
49,126
Belgrade
7,899
2,543
(2,967)
7,475
Hungary
34,455
12,801
(13,438)
33,818
Bucharest
8,465
2,346
(3,399)
7,412
Zagreb
10,635
4,024
(4,434)
10,225
Sofia
12,180
3,002
(4,040)
11,142
Total
123,556
43,007
(47,365)
119,198
Year ended
31 December 2021
Portfolio
Rental
revenue
Service charge
revenue
Service charge
costs
Gross margin
from
operations
Poland
47,043
16,775
(17,959)
45,859
Belgrade
25,923
7,632
(8,139)
25,416
Hungary
25,898
7,793
(7,762)
25,929
Bucharest
12,022
2,997
(3,100)
11,919
Zagreb
9,519
3,706
(4,209)
9,016
Sofia
9,884
2,759
(3,187)
9,456
Total
130,289
41,662
(44,356)
127,595
Segment analysis of assets and liabilities as of 31 December 2022 is presented below:
Real estate
(**)
Cash and
deposits
Other
Total
assets
Loans,
bonds and
leases
Deferred
tax
liabilities
Other
Total
liabilities
Poland 874,148 28,348 20,895
923,391
277,675 61,293 14,678
353,646
Belgrade
175,662
4,824
2,372
182,858
815
3,085
8,039
11,939
Hungary
746,985
17,159
24,834
788,978
269,596
19,427
15,355
304,378
Bucharest
179,310
6,454
1,626
187,390
9,389
11,957
2,818
24,164
Zagreb
125,117
5,598
11,960
142,675
43,680
16,352
5,554
65,586
Sofia
199,360
4,571
1,185
205,116
71
8,716
6,883
15,670
Other
30,648
410
456
31,514
2,345
-
13
2,358
Non allocated (*)
-
72,688
135,272
207,960
684,252
20,346
51,956
756,554
Total
2,331,230
140,052
198,600
2,669,882
1,287,823
141,176
105,296
1,534,295
(*) Loans, bonds and leases comprise mainly of bonds issued by GTC S.A., GTC Hungary and GTC Aurora Luxembourg S.A.
Other liabilities comprise mainly of derivatives payable in the amount of EUR 46,798, related to bonds in HUF.
Other assets represent mainly non-current financial assets in Ireland (EUR 117.7 million) and in Luxembourg (EUR 12.6 million).
(**) Real estate comprise of investment property, residential landbank, assets held for sale and value of buildings and related
improvements presented within property, plant and equipment (including right of use).
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
47
14. Segmental analysis (continued)
Segment analysis of assets and liabilities as of 31 December 2021 is presented below:
Real
estate (**)
Cash
and
deposits
Other
Total
assets
Loans,
bonds and
leases
Deferred
tax
liabilities
Other
Total
liabilities
Poland 898,827 43,450 7,456 949,733 299,946 59,706 15,244 374,896
Belgrade 381,875 18,702 3,861 404,438 146,093 3,000 9,156 158,249
Hungary 699,036 28,207 15,302 742,545 267,243 20,057 11,269 298,569
Bucharest 187,047 10,745 1,249 199,041 15,406 13,062 3,925 32,393
Zagreb 163,020 6,243 11,385 180,648 43,704 16,992 4,271 64,967
Sofia 190,516 4,477 1,589 196,582 31 8,528 3,147 11,706
Other 29,835 464 - 30,299 - - - -
Non
allocated (*)
- 15,700 124,763 140,463 722,410 21,800 41,770 785,980
Total 2,550,156 127,988 165,605 2,843,749 1,494,833 143,145 88,782 1,726,760
(*) In other assets are presented receivables from shareholders in the amount of EUR 123,425. Loans, bonds and leases
comprise mainly of bonds issued by GTC S.A., GTC Hungary and GTC Aurora Luxembourg S.A.
(**) Real estate comprise of investment property, residential landbank and value of buildings and related improvements
presented within property, plant and equipment.
Financial data prepared for the purposes of management reporting, on which segment
reporting is based, are based on the same accounting principles that are used in the
preparation of the consolidated financial statements of the Group.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
48
15. Taxation
The major components of tax expense are as follows:
Year ended
31 December 2022
Year ended
31 December 2021
Current corporate and capital gain tax
expense
12,621
5,656
Deferred tax expense / (income) 140
8,128
Total 12,761
13,784
The Group companies are subject to taxes in the following jurisdictions: Poland, Serbia,
Romania, Hungary, Bulgaria, Cyprus, Croatia and Luxembourg. The Group does not
constitute a tax group under local legislation. Therefore, every company in the Group is a
separate taxpayer.
The reconciliation between tax expense and accounting profit multiplied by the applicable tax
rates is presented below:
Year ended
31 December 2022
Year ended
31 December 2021
Accounting profit before tax
37,522
56,520
Taxable expenses at the applicable tax rate in
each country of activity
5,866
7,756
Tax effect of expenses that are not deductible
in determining taxable profit
2,261
2,095
Commercial property tax
89
46
Tax effect of foreign currency differences
829
211
Withholding tax
536
584
Unrecognised deferred tax asset on losses in
current year
2,422
3,092
Other
758
-
Tax expense / (income)
12,761
13,784
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(In thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
49
15. Taxation (continued)
The components of the deferred tax balance were calculated at a rate applicable when the Group expects to recover or settle the carrying amount
of the asset or liability. Net deferred tax assets comprise the following:
As of 1 January 2021
Credit / (charge) to
income statement
As of
31 December
2021
Credit / (charge) to
income statement
Credit /
(charge) to
equity
As of
31 December 2022
Financial instruments (*)
14,385
3,105
17,490
3,135
(997)
19,628
Tax loss carried forwards
6,682
(2,629)
4,053
(601)
-
3,452
Basis differences in non-
current assets (***)
965 643 1,608 742 50
2,400
Accruals
1,046
535
1,581
(470)
-
1,111
Netting (**)
(22,462)
1,516
(20,946)
(3,302)
818
(23,430)
Net deferred tax assets
616
3,170
3,786
(496)
(129)
3,161
Net deferred tax liability comprises of the following:
As of 1 January
2021
Credit / (charge)
to income
statement
Credit /
(charge) to
equity
Reclassified to
liabilities related
to assets held for
sale
As of 31
December
2021
Credit /
(charge) to
income
statement
Credit /
(charge)
to equity
Disposal of
subsidiary
As of
31 December
2022
Financial instruments (*)
(19,486)
(6,297)
1,383
3,000
(21,400)
(1,603)
(3,181)
-
(26,184)
Basis differences in non-
current assets (***)
(136,206) (3,485) -
-
(139,691) (1,811) - 3,080 (138,422)
Netting (**)
22,462
(1,516)
-
-
20,946
3,770
(835)
(451)
23,430
Net deferred tax
liability
(133,230) (11,298) 1,383 3,000 (140,145) 356 (4,016) 2,629 (141,176)
(*) Mostly unrealized interest, foreign exchange differences and valuation of derivatives.
(**) Within a particular company, deferred tax assets are accounted separately from deferred tax liabilities as they are independent in their nature. However, as they represent a future settlement
between the same parties, they are netted off for the purpose of the presentation in financial statements.
(***) Related to difference between book value and tax value of investment properties.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(In thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
50
15.Taxation (continued)
The enacted tax rates in the various countries were as follows:
Tax rate
Year ended
31 December 2022
Year ended
31 December 2021
Poland 19% 19%
Hungary 9%
9%
Bulgaria 10% 10%
Serbia 15% 15%
Croatia 18% 18%
Romania 16% 16%
Cyprus
12.5%
12.5%
Luxembourg
24.94%
24.94%
Future benefit for deferred tax assets has been reflected in these consolidated financial
statements only if it is probable that taxable profits will be available when timing differences
that gave rise to such deferred tax asset reverse.
Regulations regarding VAT, corporate income tax and social security contributions are
subject to frequent changes. These frequent changes result in there being little point of
reference, inconsistent interpretations not consistent, and few established precedents that
may be followed. The binding regulations also contain uncertainties, resulting in differences
in opinion regarding the legal interpretation of tax regulations both between government
bodies and between government bodies and companies. Tax settlements and other areas
of activity (e.g., customs or foreign currency related issues) may be subject to inspection by
administrative bodies authorised to impose high penalties and fines, and any additional
taxation liabilities calculated as a result must be paid together with high interest.
On 15 July 2016, amendments were made to the Polish Tax Ordinance to introduce the
provisions of the General Anti-Avoidance Rule (GAAR). GAAR are targeted to prevent
origination and use of factitious legal structures made to avoid payment of tax in Poland.
The implementation of the above provisions enables Polish tax authority to challenge
arrangements realized by tax remitters as restructuring or reorganization.
Tax settlements may be subject to inspections by tax authorities. Accordingly, the amounts
shown in the financial statements may change at a later date as a result of the final decision
of the tax authorities.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
51
15.Taxation (continued)
Main tax changes to the Polish Corporate Income Tax effective from 1 January 2022
Withholding tax (WHT)
The package of changes introduced to the Polish tax law regulations starting from January
2022 has limited the original scope of the application of pay and refund mechanism
(settlement of WHT in relation to payments exceeding PLN 2 million (EUR 0,4 million) per
annum for each taxpayer). Under new rules, the conditional exemption from WHT or
application of the reduced tax rate stipulated in the applicable double tax treaty (DTT) is
restricted in terms of the passive payments (i.e. dividends, interest, license fees) in the
amount exceeding PLN 2 million per annum made with respect to foreign related entities. In
such cases the tax remitter is obliged to automatically collect the tax at a statutory domestic
rate (19% or 20%) regardless of the fulfilment of the conditions allowing the application of
the exemption or the reduced rate on the basis of the local law or DTT.
There is no significant impact of above change on consolidated financial statements.
Limitation of tax depreciation of commercial buildings
According to general tax regulations depreciation expenses on fixed assets (buildings
classified as investment property) can be tax deductible. However, from 1 January 2022 in
the case of real estate companies, tax-deductible depreciation expenses rates cannot be
greater than the current applied accounting depreciation expenses rates applied to the same
fixed assets in a given year.
There is no significant impact of above change on consolidated financial statements.
The Group companies have tax losses carried forward as of 31 December 2022 available
in the amount of EUR 161 million (EUR 249 million as of 31 December 2021). The expiry
dates of these tax losses as of 31 December 2022 are as follows: within one year - EUR 25
million, between 2-5 years - EUR 88 million, afterwards – EUR 48 million. As of 31 December
2022, the Group has not recognized deferred tax assets for tax losses carried forward in
amount of EUR 129 million (EUR 217 million as of 31 December 2021), as the Group
believes that these losses will not be utilized within claim period.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
52
16. Property, plant, and equipment
The movement in property, plant, and equipment for the year ended 31 December 2022 was
as follows:
Buildings and
related
improvements
Right of
use
assets*
Equipment
and
software
Vehicles
Total
Gross carrying amount
As of 1 January 2022
8,155
171
1,840
779
10,945
Additions
997
2,430
429
696
4,552
Transfers
-
-
364
-
364
Disposals and other decreases
(740)
(171)
(90)
(83)
(1,084)
As of 31 December 2022
8,412
2,430
2,543
1,392
14,777
Accumulated Depreciation
As of 1 January 2022
1,233
129
1,362
387
3,111
Charge for the period
243
61
41
199
544
Transfers
-
-
261
-
261
Disposals and other decreases
(17)
(129)
(87)
(47)
(280)
As of 31 December 2022
1,459
61
1,577
539
3,636
Net book value as of
31 December 2022
6,953 2,369 966 853 11,141
* Mainly relates to building and related improvement.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
53
16. Property, plant, and equipment
The movement in property, plant, and equipment for the year ended 31 December 2021 was
as follows:
Buildings and
related
improvements
Right of
use
assets
Equipment
and
software
Vehicles
Total
Gross carrying amount
As of 1 January 2021
7,599
302
1,909
900
10,710
Additions
1,864
-
192
223
2,279
Reclassified to assets held for
sale
(819)
-
(31) (9)
(859)
Disposals and other decreases
(489)
(131)
(230)
(335)
(1,185)
As of 31 December 2021
8,155
171
1,840
779
10,945
Accumulated Depreciation
As of 1 January 2021
1,057
97
1,345
426
2,925
Charge for the period
295
93
162
103
653
Reclassified to assets held for
sale
(82)
-
(11) (8)
(101)
Disposals and other decreases
(37)
(61)
(134)
(134)
(366)
As of 31 December 2021
1,233
129
1,362
387
3,111
Net book value as of
31 December 2021
6,922 42 478 392 7,834
17. Investment property
Investment properties that are owned by the Group are office and commercial space,
including property under construction:
Investment property can be split up as follows:
31 December 2022
31 December 2021
Completed investment property 2,002,871 1,929,979
Investment property under construction 51,487 132,410
Investment property landbank 150,406 139,843
Right of use of lands under perpetual
usufruct (IFRS 16)
38,899 38,428
Total 2,243,663 2,240,660
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
54
17. Investment property (continued)
The movement in investment property for the periods ended 31 December 2022 and
31 December 2021 was as follows:
Right of use
of lands
under
perpetual
usufruct
(IFRS 16)
Completed
investment
property
Investment
property under
construction
Landbank
Total
Carrying amount as of
1 January 2021
42,679
1,879,173
62,909
140,367
2,125,128
Capitalised expenditure
-
25,499
51,477
3,656
80,632
Purchase of completed assets
and land
-
310,627
-
15,457
326,084
Adjustment to fair value /
(impairment)
-
(17,305)
7,860
(2,026)
(11,471)
Revaluation of right of use of
lands under perpetual usufruct
(416)
-
-
-
(416)
Reclassified to assets held for
sale
(3,724)
(266,763)
-
(1,352)
(271,839)
Reclassified to residential
landbank
-
-
-
(5,500)
(5,500)
Reclassified from landbank to
under construction
-
-
10,164
(10,164)
-
Classified to assets for own
use, net
-
(1,252)
-
-
(1,252)
Disposal of land
-
-
-
(595)
(595)
Decrease
(745)
-
-
-
(745)
Foreign exchange differences
634
-
-
-
634
Carrying amount as of
31 December 2021
38,428
1,929,979
132,410
139,843
2,240,660
Capitalised expenditure
-
17,017
72,454
2,721
92,192
Purchase of completed assets
and land
-
8,029
10,156
40,334
58,519
Reclassification (1)
-
182,300
(161,219)
(21,081)
-
Adjustment to fair value /
(impairment)
-
(25,362)
(2,314)
674
(27,002)
Revaluation of right of use of
lands under perpetual usufruct
(541)
-
-
-
(541)
Reclassified to assets held for
sale (2)
(1,398)
(47,700)
-
(3,198)
(52,296)
Increase
2,427
-
-
-
2,427
Disposal of land (3)
-
-
-
(8,887)
(8,887)
Sale of completed building (4)
-
(61,392)
-
-
(61,392)
Foreign exchange differences
(17)
-
-
-
(17)
Carrying amount as of
31 December 2022
38,899
2,002,871
51,487
150,406
2,243,663
(1) Completion of Pillar building in Hungary in Q1 2022 (EUR 112m), Glamp in Serbia (EUR 50.4m) and Sofia Tower in
Sofia (EUR 19.9m) in Q4 2022. Moreover, commencement of Center Point III construction (transfer from landbank to IPUC).
(2) Please refer also to note 33 Assets held for sale.
(3) Sale of land plots in Poland.
(4) Sale of Cascade and Matrix buildings – please refer also to note 9 Events in the period.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
55
17. Investment property (continued)
Reconciliation between capitalized subsequent expenditure and paid subsequent
expenditure is presented below:
Year ended
31 December
2022
Year ended
31 December
2021
Capitalized expenditure (including purchase of
completed assets and land)
150,711
406,716
Change in payables and provisions related to investing
activities
(9,807)
56
Change in receivables related to investing activities (794)
6,758
Loan on acquisition GTC Univerzum Projekt Kft.
(previously: Winmark Kft.)
-
(58,000)
Expenditures related to residential landbank 1,335
-
Purchase of property, plant and equipment 2,027
191
Paid expenditures in line with cash flow statement 143,472
355,721
Fair value and impairment adjustment consists of the following:
Year ended
31 December 2022
Year ended
31 December 2021
Adjustment to fair value of completed
investment properties
(25,362) (17,305)
Adjustment to the fair value of investment
properties under construction
(2,314) 7,860
Reversal of impairment/(Impairment)
adjustment
674 (2,026)
Total adjustment to fair value /
(impairment) of investment property
(27,002) (11,471)
Adjustment to fair value/(Impairment) of
assets held for sale
(152) (941)
Revaluation of right of use of lands under
perpetual usufruct (including residential
landbank)
(580) (455)
Impairment of residential landbank (1,688) -
Total recognised in profit or loss (29,422) (12,867)
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
56
17. Investment property (continued)
Segment analysis of adjustment to fair value of completed investment properties is
presented below:
Year ended
31 December
2022
Year ended
31 December
2021
Poland
(30,016)
(16,637)
Belgrade
10,505
(444)
Hungary
(1,442)
5,470
Bucharest
(3,477)
(1,599)
Zagreb
2,447
92
Sofia
(3,379)
(4,187)
Total adjustment to fair value of completed assets
(25,362)
(17,305)
Completed assets are valued using discounted cash flow (DCF) method. Completed
investment properties are externally valued by independent appraisers at year end and
middle year based on open market values (RICS Standards).
Assumptions used in the fair value valuations of completed assets as of 31 December 2022
are presented below:
Portfolio
Book value
GLA
thousand
Average
Occupancy
Actual
Average
rent
Average
ERV*
Average
Yield**
‘000 Euro
sqm
%
Euro/
sqm/m
Euro/
sqm/m
%
Poland retail
442,700 114 95% 21.5 21.6 6.2%
Poland office
356,438 195 80% 14.7 14.2 7.7%
Belgrade retail
90,000 34 100% 18.7 21.0 8.5%
Belgrade office
50,400 18 94% 18.0 18.2 7.2%
Hungary office 583,948 198 87% 16.8 16.3 6.0%
Hungary retail
20,700 6 89% 18.1 18.5 6.0%
Bucharest office
163,785 62 74% 18.8 17.8 6.3%
Zagreb retail
84,800 28 98% 21.7 22.3 8.3%
Zagreb office
14,800 7 96% 15.5 14.9 8.4%
Sofia office
113,600 52 89% 16.0 15.3 7.9%
Sofia retail
81,700 23 97% 22.3 23.1 7.2%
Total 2,002,871 737 87% 17.7 17.3 6.8%
(*) ERV- Estimated Rent Value (the open market rent value that a property can be reasonably expected to attain based on
characteristics such as a condition of the property, amenities, location, and local market conditions).
(**) Average yield is calculated as in-place rent divided by fair value of asset.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
57
17. Investment property (continued)
Assumptions used in the fair value valuations of completed assets as of 31 December 2021
are presented below:
Portfolio
Book value
GLA
thousand
Average
Occupancy
Actual
Average
rent
Average
ERV
Average
Yield**
‘000 Euro
sqm
%
Euro/
sqm/m
Euro/
sqm/m
%
Poland retail 443,000 113 94% 20.8 20.7 6.0%
Poland office 373,639 196 87% 14.2 14.2 7.7%
Belgrade retail 90,700 35 96% 18.0 22.3 7.9%
Hungary office 505,437 192 97% 15.5 15.5 6.7%
Hungary retail
21,600 6 90% 17.4 18.4 5.6%
Bucharest office
171,985
67
66%
18.2
17.9
5.6%
Zagreb retail
85,400 28 99% 21.3 21.7 8.2%
Zagreb office
61,918 28 92% 14.6 14.7 7.3%
Sofia office
95,800 44 84% 14.5 14.8 6.7%
Sofia retail
80,500 23 96% 19.7 23.4 6.4%
Total
1,929,979
732
90%
16.5
16.9
6.7%
(*) ERV- Estimated Rent Value (the open market rent value that a property can be reasonably expected to attain based on
characteristics such as a condition of the property, amenities, location, and local market conditions).
(**) Average yield is calculated as in-place rent divided by fair value of asset.
As of 31 December 2022, all investment properties under construction were valued using
residual method, by independent appraisers at year end and middle year based on open
market values (RICS Standards).
Information regarding investment properties under construction as of 31 December 2022
is presented below:
Book value
Estimated area (GLA)
‘000 Euro
thousand sqm
Budapest (Center Point III) 19,500 36
Budapest (Rose Hill Business Campus)
17,000
15
Zagreb (Matrix C) 14,987 11
Total 51,487 62
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
58
17. Investment property (continued)
Information regarding investment properties under construction as of 31 December 2021
is presented below:
Book value
Estimated area (GLA)
‘000 Euro
thousand sqm
Budapest (Pillar) 102,900
29
Belgrade (GTC X)
19,951
17
Sofia (Sofia Tower 2)
9,559
8
Total 132,410
54
Investment property landbank are valued using residual or comparison methods, by
independent appraisers at year end and middle year based on open market values (RICS
Standards).
Information regarding book value of investment property landbank for construction
as of 31 December 2022 and 31 December 2021 is presented below:
31 December 2022
31 December 2021
Poland 38,850 48,526
Hungary 55,103 65,846
Serbia
34,461 -
Romania 7,402 7,200
Bulgaria 4,060 4,657
Croatia 10,530 13,614
Total 150,406 139,843
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
59
17. Investment property (continued)
Inter-relationship between key unobservable inputs and fair value measurements of
completed assets for the discounted cash flow (DCF) method in the year ended
31 December 2022:
Estimated change
Estimated total Fair Value
of completed assets
following the change
millions EUR
millions EUR
Increase of 5% in ERV
92 2,095
Decrease of 5% in ERV
(92) 1,911
Increase of 25bp in Cap rates
(50) 1,953
Decrease of 25bp in Cap rates
53 2,056
The following table presents the significant unobservable inputs used in the fair value
measurement of investment property under construction for the residual method in the year
ended 31 December 2022:
Significant unobservable inputs
Range
Estimated rental value (ERV) 14.0 - 18.5 EUR/sqm /month
Capitalisation rate (Cap rate) 5.8 - 7.3%
Hard costs 1,200 - 1,700 EUR/sqm/GLA
Inter-relationship between key unobservable inputs and fair value measurements of
investment property under construction for the residual method in the year ended 31
December 2022:
Estimated change
Estimated total Fair
Value
of IPUC
following the change
millions EUR
millions EUR
Increase of 5% in ERV
9
60
Decrease of 5% in ERV
(9) 42
Increase of 25bp in Cap rates
(7) 44
Decrease of 25bp in Cap rates
7 58
Increase of 5% in expected construction costs
(6) 45
Decrease of 5% in expected construction costs
6 57
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
60
17. Investment property (continued)
The following table presents the significant unobservable input used in the fair value
measurement of investment property landbank for the residual method in the year ended 31
December 2022:
Significant unobservable inputs
Range
Capitalisation rate (Cap rate) 6 - 7.8%
Inter-relationship between key unobservable inputs and fair value measurements of
investment property landbank for the residual method in the year ended 31 December 2022:
Estimated change
Estimated total Fair
Value
of landbank
following the change
millions EUR
millions EUR
Increase of 25bp in Cap rates
(6) 44
Decrease of 25bp in Cap rates
6 56
Inter-relationship between key unobservable inputs and fair value measurements of
investment property landbank for the comparable method in the year ended 31 December
2022:
Estimated change
Estimated total Fair Value
of landbank
following the change
millions EUR
millions EUR
Increase of 5% in price
5
105
Decrease of 5% in price
(5) 95
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
61
18. Non-current financial assets (related to investment property) measured at fair
value through profit or loss
On 9 August 2022, a subsidiary of the Company entered into an agreement for a joint
investment into an innovation park in County Kildare, Ireland. This transaction involved an
initial investment of approximately EUR 115 million into the Kildare Innovation Campus and
additional investment of EUR 2 million as at 22 September 2022, according to agreement
terms (up to maximum amount of EUR 9 million). GTC acquired a minority of 25% of notes
(debt instruments) issued by a Luxembourg securitization vehicle financial instrument which
accrues a variable return subject to the future proceeds derived from project. The debt
instruments do not meet SPPI test therefore they are measured at fair value through profit
or loss.
As of 31 December 2022 financial data of the Luxembourg securitization vehicle were as
below:
millions EUR
Total assets
475
Total liabilities
58
Equity
417
Kildare Innovation Campus, located outside of Dublin, extends over 72 ha (of which 34 ha
is undeveloped). There are nine buildings that form the campus (around 101,685 sqm): six
are lettable buildings with designated uses including industrial, warehouse, manufacturing
and office/lab space. In addition, there are three amenity buildings, comprising a gym,
a plant area, a campus canteen, and an energy center. The campus currently generates
around EUR 6,260 gross rental income per annum. A masterplan has been prepared
whereby the site and the campus are planned to be converted into a Life Science and
Technology campus with a total of approximately 135,000 sq m. GTC’s investment is
protected by customary investor protection mechanisms in case of certain significant project
milestones are not achieved in a satisfactory manner.
As of reporting date, the master plan which regulates the planning and permitting process
for the future conversion of the site into a life science park and technology campus has not
been submitted yet and it is under currently planning phase.
As of the reporting date the Group with the support of an external appraiser has prepared
a valuation on the financial instrument which confirms the fair value as of 31 December
2022.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
62
18. Non-current financial assets (related to investment property) measured at fair
value through profit or loss (continued)
As of 31 December 2022 fair value of financial instrument is presented below:
millions EUR
Estimated future cash flows assuming successful completion of the project
163
Discount factor to reflect the risk relating to obtaining permit and its timing – 27.5%
(35)
Fair Value of financial instrument
118
Information regarding inter-relationship between key unobservable inputs and fair value
measurements is presented below:
Total Fair Value of
Estimated future cash
flows assuming
successful completion
of the project
millions EUR
Increase of 5% in estimated net rent
180
Decrease of 5% in estimated net rent
146
Increase of 10% in estimated net rent
197
Decrease of 10% in estimated net rent
129
Total Fair Value of
Financial instrument
(Ireland)
millions EUR
Increase of 5 p.p. in permitting factors
126.4
Decrease of 5 p.p. in permitting factors
110.0
Increase of 10 p.p. in permitting factors
134.5
Decrease of 10 p.p. in permitting factors
101.9
Increase of 5% of expected capital expenditure to obtain the permit
117.4
Decrease of 5% of expected capital expenditure to obtain the permit
117.9
Increase of 10% of expected capital expenditure to obtain the permit
117.0
Decrease of 10% of expected capital expenditure to obtain the permit
118.2
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
63
18. Non-current financial assets (related to investment property) measured at fair
value through profit or loss (continued)
On 28 August 2022, GTC Origine Investments Pltd., a wholly-owned subsidiary of the
Company, acquired 34% of units in Regional Multi Asset Fund Compartment 2 of Trigal
Alternative Investment Fund GP S.á.r.l. (“Fund”) for consideration of EUR 12.6 million from
an entity related to the Majority shareholder. The Fund is focus on commercial real estate
investments in Slovenia and Croatia with a total gross asset value of EUR 68.75 million.
The fund expected maturity is in Q4 2028.
Non-current financial assets at fair value through profit or loss are carried in the statement
of financial position at fair value with net changes in fair value recognised in the statement
of profit or loss.
As of 31 December 2022 the fair value of non-current financial assets was as follows:
31 December 2022
31 December 2021
Notes (Ireland) 117,641
-
Units (Trigal) 12,627
-
Other
73
-
Total
130,341
-
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
64
19. Residential landbank
The movement in residential landbank for the year ended 31 December 2021 and
31 December 2022 was as follows:
Residential
landbank
Total
Carrying amount as of 1 January 2021 10,094 10,094
Revaluation of right of use of lands under
perpetual usufruct
(39) (39)
Capitalized expenditure
300
300
Acquisition
13,300
13,300
Reclassified to assets held for sale
(2,153)
(2,153)
Reclassified from investment properties (note 17)
5,500
5,500
Carrying amount as of 31 December 2021
27,002
27,002
Revaluation of right of use of lands under
perpetual usufruct
(39) (39)
Capitalized expenditure
1,335
1,335
Acquisition
-
-
Reversal of impairment/(impairment)
(1,688)
(1,688)
Carrying amount as of 31 December 2022 26,610 26,610
The carrying amount of residential landbank as of 31 December 2022 refers to non-core
land plots designated for residential development in Croatia, Hungary and Romania.
20. Derivatives
The Group holds instruments (IRS, CAP, currency SWAP and cross-currency interest rate
SWAP) that hedge the risk involved in fluctuations of interest rate and currencies rates. The
instruments hedge interest on loans and bonds for a period of 2-10 years.
Derivatives are presented in financial statements as below:
31 December 2022
31 December 2021
Non-current assets
17,054
826
Current assets
7,793
-
Non-current liabilities
(46,798)
(38,743)
Current liabilities
(2,180)
(2,681)
Total
(24,131)
(40,598)
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
65
20. Derivatives (continued)
The movement in derivatives for the years ended 31 December 2022 and 31 December
2021 was as follows:
31 December 2022
31 December 2021
Fair value as of the beginning of the year (40,598) (19,260)
Charged to other comprehensive income
27,533
(20,356)
Charged to profit or loss (*) (11,066) (1,841)
Reclassified to liabilities related to assets
held for sale
- 859
Fair value as of the end of the year
(24,131)
(40,598)
(*) This loss mainly offset a foreign exchange difference gains on bonds nominated in PLN and HUF.
The movement in hedge reserve in equity for the years ended 31 December 2022 and 31
December 2021 was as follows:
31 December 2022
31 December 2021
Hedge reserve as of the beginning of the
year
(30,903) (11,930)
Charged to other comprehensive income
16,467
(22,197)
Realized in the period (charged to profit or
loss) (*)
11,066 1,841
Total impact on other comprehensive income 27,533 (20,356)
Income tax on hedge transactions
(4,145)
1,383
Hedge reserve as of the end of the year
(7,515)
(30,903)
(*) This loss mainly offset a foreign exchange difference gains on bonds nominated in PLN and HUF.
Derivatives are measured at fair value at each reporting date. Valuations of hedging
derivatives are considered as level 2 fair value measurements. Fair value of derivatives
is measured using cash flows models based on the data from publicly available sources.
The Company applies cash flow hedge accounting and uses derivatives as hedging
instruments. The Group uses both qualitative and quantitative methods for assessing
effectiveness of the hedge. All derivatives are measured at fair value, effective part is
included in other comprehensive income and reclassified to profit or loss when hedged item
affects P&L. The Group uses IRS and Cap for hedging interest rate risk on loans, and cross-
currency interest rate swaps for hedging both interest rate risk and currency risk on bonds
denominated in foreign currencies.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
66
20. Derivatives (continued)
Derivatives as of 31 December 2022 and 31 December 2021 consists mainly of IRS and
cross-currency interest rate swaps.
Instruments
Nature
of
hedge
item
Nominal
amount of
hedge item
Currency
31
December
2022
Nominal
amount of
hedge item
Currency
31
December
2021
IRS (EURIBOR
3M)
Loans 315 mEUR 23,643 347 mEUR 595
SWAP (fixed to
fixed / HUF)
Bonds 59,400 mHUF (46,798) 59,400 mHUF (36,403)
SWAP (WIBOR
6M / PLN)
Bonds 147 mPLN (2,180) 220 mPLN (3,844)
Other derivatives
1,204
(946)
Total
(24,131)
(40,598)
For more information regarding derivatives, see note 38.
21. Trade payables and provisions
The balance of trade and other payables increased from EUR 31,092 to EUR 41,208 in the
year ended 31 December 2022.
As of 31 December 2022 payables related to investment activity amounted to EUR 26 million
(as of 31 December 2021: EUR 16 million).
22. Blocked deposits
Blocked deposits include deposits related to loan agreements and other contractual
commitments and can be used only for certain operating activities as determined by
underlying agreements.
Blocked deposits related to contractual commitments include mostly tenants’ deposit
account, security account and capex accounts.
Instruments
Measurement
Rate range for
interest
Currency rate for
SWAP
IRS (EURIBOR 3M)
Fair value
(-0.3%) – (-0.09%)
N/A
SWAP (fixed to fixed / HUF)
Fair value
0.92% - 0.99%
360.33 - 367.66
SWAP (WIBOR 6M / PLN)
Fair value
4.02%
4.2845
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
67
23. Cash and cash equivalents
Cash balance consists of cash in banks and cash in hand. Cash at banks earns interest at
floating rates based on periodical bank deposit rates. Except for minor amounts, all cash is
deposited in banks.
All cash and cash equivalents are available for use by the Group. GTC Group cooperates
mainly with banks with investment ranking above BBB-. The major bank, where Group
deposits 26% of cash and cash equivalents and blocked deposits is financial institution with
credit rating A+. Second bank with major Group's deposits (25%) is institution with credit
rating BBB-. Group monitors ratings of banks and manage concentration risk by allocating
deposits in multiple financial institutions (over 10).
For the purpose of the statement of cash flows, cash and cash equivalents comprise the
following at 31 December 2022 and 31 December 2021:
31 December
2022
31 December
2021
Cash at banks and on hand
115,079
87,468
Cash at banks related to assets held for sale
-
9,165
Cash and cash equivalents at the end of the period
115,079
96,633
24. Other expenses
Other expenses relate mainly to one-off expenses as well as unrecoverable VAT and
maintenance costs related to undeveloped land.
25. Deposits from tenants
Deposits from tenants represent amounts deposited by tenants to guarantee their
performance of their obligations under tenancy agreements. Deposits from tenants that shall
be returned within a year are presented within current liabilities. Deposits are mostly located
in banks with investment ranking above BBB-.
26. Long term payables
Long term payables consist of long term commitments related to the purchase of office
building and development of infrastructure.
27. VAT and other tax receivable
VAT and other tax receivable represent VAT receivable on the purchase of assets and due
to development activity.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
68
28. Non-controlling interest
The Company’s subsidiary that holds Avenue Mall (Euro Structor d.o.o.) has granted in 2018
its shareholders a loan, pro-rata to their stake in the subsidiary. The loan principal and
interest shall be repaid by 30 December 2026. In the event that Euro Structor renders a
resolution for the distribution of dividend, Euro Structor has the right to set-off the dividend
against the loan. In case a shareholder will sell its stake in Euro Structor, the loan shall be
due for repayment upon the sale.
Loans were granted and received on market terms.
Summarized financial information of the material non-controlling interest as of 31 December
2022 is presented below:
Euro Structor
d.o.o.
Non-
core projects
Total
Non-current assets
136,389
-
136,389
Current assets
5,838
752
6,590
Total assets
142,227
752
142,979
Equity
81,861
(5,638)
76,223
Non-current liabilities
58,555
6,389
64,944
Current liabilities
1,811
1
1,812
Total equity and liabilities
142,227
752
142,979
Revenue
11,012
-
11,012
Profit /(loss) for the year
4,649
2,231
6,880
Other comprehensive
profit/(loss)
- -
-
NCI share in equity
24,558
(1,880)
22,678
Loan granted to NCI
(10,936)
-
(10,936)
Loan received from NCI
-
2,441
2,441
NCI share in profit / (loss)
1,395
(45)
1,350
In 2022 dividend was distributed to non-controlling interest in amount of EUR 753.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
69
28. Non-controlling interest (continued)
Summarized financial information of the material non-controlling interest as of 31 December
2021 is presented below:
Dividend distributed to non-controlling interest in amount of EUR 900 for 2021 was set-off
against loan granted to NCI. Remaining amount of EUR 300 was paid.
Euro Structor
d.o.o.
Non-
core projects
Total
Non-current assets
135,878
2,833
138,711
Current assets
4,155
380
4,535
Total assets
140,033
3,213
143,246
Equity
79,722
(22,483)
57,239
Non-current liabilities
59,204
24,612
83,816
Current liabilities
1,107
1,084
2,191
Total equity and liabilities
140,033
3,213
143,246
Revenue
10,182
-
10,182
Profit /(loss) for the year
4,374
(683)
3,691
Other comprehensive
profit/(loss)
- -
-
NCI share in equity
23,917
(7,494)
16,423
Loan granted to NCI
(10,628)
-
(10,628)
Loan received from NCI
-
8,760
8,760
NCI share in profit / (loss)
1,312
(227)
1,085
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
70
29. Long-term loans and bonds
31 December
2022
31 December
2021
Bonds mature in 2022-2023 (Poland) (PLGTC0000318)
31,495
48,166
Green bonds mature in 2027-2030 (HU0000360102)
99,010
107,389
Green bonds mature in 2028-2031 (HU0000360284)
49,866
54,056
Green bonds mature in 2026 (XS2356039268)
503,784
503,263
Bonds 0422 (PLGTC0000292)
-
9,520
Loan from Santander (Globis Poznan)
15,693
16,323
Loan from Santander (Pixel)
18,322
19,011
Loan from Santander (Globis Wroclaw)
13,501
20,675
Loan from Berlin Hyp (Corius)
9,500
9,500
Loan from Pekao (Sterlinga)
14,088
14,613
Loan from PKO BP (Artico)
12,828
13,338
Loan from Erste and Raiffeisen (Galeria Jurajska)
110,375
115,250
Loan from Berlin Hyp (UBP)
35,000
41,543
Loan from Santander (Francuska)
17,950
18,625
Loan from OTP (Centre Point)
46,055
47,862
Loan from UniCredit Bank (Pillar)
57,000
50,827
Loan from OTP (Duna)
35,715
37,116
Loan from Erste (HBK)
10,873
10,775
Loan from Erste (Váci Greens D)
23,688
24,438
Loan from OTP (Ericsson/evosoft Hungary)
80,000
80,000
Loan from Erste (V188)
16,268
16,225
Loan from Zagrabecka Banka (Avenue Mall Zagreb)
42,500
42,500
Loans from NCI
2,441
8,760
Deferred issuance debt expenses
(8,097)
(10,324)
Total
1,237,855
1,299,451
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
71
29. Long-term loans and bonds (continued)
Long-term loans and bonds have been separated into the current portion and the long-term
portion as disclosed below:
31 December
2022
31 December
2021
Current portion of long-term loans and bonds:
Bonds mature in 2022-2023 (Poland) (PLGTC0000318)
31,495
16,278
Green bonds mature in 2027-2030 (HU0000360102)
72
72
Green bonds mature in 2028-2031 (HU0000360284)
397
397
Green bonds mature in 2026 (XS2356039268)
5,877
5,918
Bonds 0422 (PLGTC0000292)
-
9,520
Loan from Santander (Globis Poznan)
629
629
Loan from Santander (Pixel)
690
690
Loan from Berlin Hyp (UBP)
-
870
Loan from Erste and Raiffeisen (Galeria Jurajska)
4,875
4,875
Loan from Santander (Globis Wroclaw)
-
693
Loan from Pekao (Sterlinga)
525
525
Loan from PKO BP (Artico)
510
510
Loan from Santander (Francuska)
676
676
Loan from OTP (Centre Point)
1,807
1,807
Loan from OTP (Duna)
1,401
1,401
Loan from Erste (Váci Greens D)
750
750
Loan from Erste (HBK)
98
-
Loan from Erste (V188)
43
-
Deferred issuance debt expenses
(1,274)
(1,274)
Total
48,571
44,337
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
72
29. Long-term loans and bonds (continued)
31 December
2022
31 December
2021
Long term portion of long-term loans and bonds:
Bonds mature in 2022-2023 (Poland) (PLGTC0000318)
-
31,888
Green bonds mature in 2027-2030 (HU0000360102)
98,938
107,317
Green bonds mature in 2028-2031 (HU0000360284)
49,469
53,659
Green bonds mature in 2026 (XS2356039268)
497,907
497,345
Loan from Santander (Globis Poznan)
15,064
15,694
Loan from Santander (Pixel)
17,632
18,321
Loan from Santander (Globis Wroclaw)
13,501
19,982
Loan from Berlin Hyp (Corius)
9,500
9,500
Loan from Pekao (Sterlinga)
13,563
14,088
Loan from PKO BP (Artico)
12,318
12,828
Loan from Erste and Raiffeisen (Galeria Jurajska)
105,500
110,375
Loan from Berlin Hyp (UBP)
35,000
40,673
Loan from Santander (Francuska)
17,274
17,949
Loan from OTP (Centre Point)
44,248
46,055
Loan from OTP (Duna)
34,314
35,715
Loan from Erste (HBK)
10,775
10,775
Loan from Erste (Váci Greens D)
22,938
23,688
Loan from OTP (Ericsson/evosoft Hungary)
80,000
80,000
Loan from Erste (V188)
16,225
16,225
Loan from UniCredit Bank (Pillar)
57,000
50,827
Loan from Zagrabecka Banka (Avenue Mall Zagreb)
42,500
42,500
Loans from NCI
2,441
8,760
Deferred issuance debt expenses
(6,823)
(9,050)
Total
1,189,284
1,255,114
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
73
29. Long-term loans and bonds (continued)
As securities for the bank loans, the banks have mortgage over the assets and security
deposits together with assignment of the associated receivables and insurance rights.
In its financing agreements with banks, the Group undertakes to comply with certain financial
covenants that are listed in those agreements. The main covenants are: maintaining a Loan-
to-Value and Debt Service Coverage ratios in the company that holds the project.
In addition, substantially, all investment properties and IPUC that were financed by a lender
have been pledged to secure the long-term loans from banks. Unless otherwise stated, fair
value of the pledged assets exceeds the carrying value of the related loans.
Bonds (series maturing in 2022-2023) are denominated in PLN. Green Bonds (series
maturing in 2027-2030) and green bonds (series maturing in 2028-2031) are denominated
in HUF. All other bank loans and bonds are denominated in euro.
For further information please refer also to note 38.
As at 31 December 2022, the Group continue to comply with the financial covenants set out
in their loan agreements and bonds’ terms and conditions.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
74
29. Long-term loans and bonds (continued)
The movement in long term loans and bonds for the years ended 31 December 2022
and 31 December 2021 was as follows:
31 December
2022
31 December 2021
Balance as of the beginning of the year 1,299,451 1,261,292
Drawdowns
6,173
706,070
Repayments
(52,125)
(585,323)
Reclassified to liabilities related to assets held for
sale
- (142,369)
Loan on acquisition of GTC Univerzum Projekt Kft. - 58,000
Conversion of loan from NCI to equity (5,887) -
Change in accrued interest
41
6,531
Change in deferred issuance debt expenses
2,227
(3,486)
Foreign exchange differences
(12,025)
(1,264)
Balance as of end of the year
1,237,855
1,299,451
30. Lease liability and Right of Use
Lease liabilities include mostly lease payments for land subject to perpetual usufruct
payments and classified as land under investment property (completed, under construction,
and landbank) and residential landbank.
The balance of Right of Use as of 31 December 2022 was as follows:
Country
Completed
investment
property
Investment
property
landbank at cost
Residential
landbank
Property,
plant and
equipment
Total
Poland
14,425
16,723
-
-
31,148
Romania
6,948
-
- - 6,948
Serbia - 803
- - 803
Croatia
-
-
1,064
-
1,064
Other
-
-
-
2,369
2,369
Balance as of
31 December 2022
21,373 17,526
1,064 2,369 42,332
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
75
30. Lease liability and Right of Use of assets (continued)
The balance of Right of Use as of 31 December 2021 was as follows:
Country
Completed
investment
property
Investment
property
landbank at
cost
Residential
landbank
Property, plant
and equipment
Total
Poland 10,730 21,052 - - 31,782
Romania 6,646 - - - 6,646
Serbia
-
-
-
-
-
Croatia
-
-
1,102
-
1,102
Bulgaria - - - 5 5
Hungary - - - 37 37
Balance as of
31 December 2021
17,376 21,052 1,102 42 39,572
The balance of lease liability as of 31 December 2022 was as follows:
Country
Completed
investment
property
Investment
property
landbank at
cost
Residential
landbank
Property,
plant and
equipment
Total
Discount
rate
Poland
14,425
15,992
-
-
30,417
4.2%
Romania
6,948
-
-
-
6,948
5.7%
Serbia
-
815
-
-
815
7.6%
Croatia
-
-
1,180
-
1,180
4.4%
Other
-
-
-
2,511
2,511
3.0%
Balance as of
31 December 2022
21,373 16,807 1,180 2,511 41,871
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
76
30. Lease liability and Right of Use of assets (continued)
The balance of lease liability as of 31 December 2021 was as follows:
Country
Completed
investment
property
Investment
property
landbank at
cost
Residential
landbank
Property,
plant and
equipment
Total
Discount
rate
Poland
10,730
20,339
-
-
31,069
4.2%
Romania
6,646
-
-
-
6,646
5.7%
Serbia
-
-
-
-
-
7.6%
Croatia
-
-
1,204
-
1,204
4.4%
Bulgaria
-
-
-
30
30
4.5%
Hungary
-
-
-
16
16
3.9%
Balance as of
31 December 2021
17,376 20,339 1,204 46 38,965
The lease liabilities were discounted using discount rates applicable to long-term borrowing
in local currencies in the countries of where the assets are located.
The movement in Right of Use for the year ended 31 December 2022 and 31 December
2021 was as follows:
2022
2021
Balance as of 1 January
39,572
44,024
Recognition / (derecognition) of Right of Use asset for lands under
perpetual usufruct and other assets
4,815 (745)
Revaluation and amortization of right of use
(641)
(531)
Reclassification to assets held for sale
(1,398)
(3,724)
Foreign exchange differences
(16)
548
Balance as of 31 December
42,332
39,572
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
77
30. Lease liability and Right of Use of assets (continued)
The movement in lease liability for the year ended 31 December 2022 and 31 December
2021 was as follows:
2022
2021
Balance as of 1 January
38,965
43,054
Recognition / (derecognition) of lease
liability for lands under perpetual usufruct
and other assets
4,815 (745)
Payments of leases
(642)
(516)
Change in provision
(358)
970
Change in accrued interest
752
(658)
Reclassification to liabilities related to
assets held for sale
(1,342) (3,724)
Foreign exchange differences
(319)
584
Balance as of 31 December
41,871
38,965
The group pays an annual amount of EUR 2,056 (EUR 2,120 in 2021) as lease payment
(principal and interest) for lands under perpetual usufruct. Payment of leases in table
above relates only to principal repayment.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
78
31. Capital and Reserves
SHARE CAPITAL
As at 31 December 2022, the shares structure was as follows:
Number of Shares
Share series
Total value
Total value
in PLN in EUR
139,286,210 A 13,928,621 3,153,995
1,152,240 B 115,224 20,253
235,440 B1 23,544 4,443
8,356,540
C
835,654
139,648
9,961,620 D 996,162 187,998
39,689,150 E 3,968,915 749,022
3,571,790 F 357,179 86,949
17,120,000 G 1,712,000 398,742
100,000,000 I 10,000,000 2,341,372
31,937,298 J 3,193,729 766,525
108,906,190 K 10,890,619 2,561,293
10,087,026 L 1,008,703 240,855
13,233,492 M 1,323,349 309,049
2,018,126 N 201,813 47,329
88,700,000 O 8,870,000 1,912,439
574,255,122
57,425,512
12,919,912
All shares are entitled to the same rights.
Shareholders who as at 31 December 2022, held above 5% of the Company shares were
as follows:
• GTC Dutch Holdings B.V
• Icona Securitization Opportunities Group S.A R.L.
• Powszechne Towarzystwo Emerytalne PZU S.A. (managing Otwarty Fundusz
Emerytalny PZU “Złota Jesień”)
• Powszechne Towarzystwo Emerytalne Allianz Polska S.A. (managing jointly Allianz
OFE, Allianz DFE and Drugi Allianz OFE)
CAPITAL RESERVE
Capital reserve represents a loss attributed to non-controlling partners of the Group, which
crystalized once the Group acquired the non-controlling interest in the subsidiaries of the
Group.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
79
31. Capital and Reserves (continued)
SHARE ISSUE
On 29 June 2021, the Annual General Meeting adopted a resolution regarding the capital
increase of up to 20% of the existing share capital. As per the Annual General Meeting
authorization, the Management launched the capital increase via the accelerated book
building in December 2021. The subscription agreements with the shareholders participating
in the offer of O series bearer shares were signed on 20-21 December 2021. As a result the
Company issued 88,700,000 series O bearer shares. The capital increase and new Articles
of Association were registered by the National Court Register on 4 January 2022 and the
funds were transferred to the Company’s account. The O series bearer shares were
admitted to trading on the respective stock exchange on 26 January 2022.
As of December 31, 2021 the Group recognized receivables from shareholders in the
amount of EUR 123,425 and unregistered share capital increase in the amount
of EUR 120,295. Unregistered share capital increase represents value of share capital
increase at the moment of signing the subscription agreements, decreased by
corresponding share issue costs.
In Q1 2022 the Group reclassified unregistered share capital to share capital of EUR 1,913
and share premium of EUR 118,382 after share capital increase was registered (please
refer to note 9).
DISTRIBUTION OF THE 2021 PROFIT
On 14 June 2022, the Annual General Meeting adopted a resolution regarding distribution
of profit for the financial year 2021. Based on resolution EUR 34,583 (PLN 160,791) were
distributed to the Company’s shareholders in the form of a dividend and the remaining
amount was left with the Company as retained profits.
32. Provision for share based payments
PHANTOM SHARES
Certain key management personnel of the Group is entitled to specific cash payments
resulting from phantom shares in the Group (the “Phantom Shares”). The company uses
binomial model to evaluate the fair value of the phantom shares. The input data includes
date of valuation, strike price, and expiry date.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
80
32. Provision for share based payments (continued)
The Phantom shares (as presented in below mentioned table) have been accounted for
based on future cash settlement.
As at December 31, 2022, the Group's share based payment liabilities amounted to
EUR 758 (as at December 31, 2021 EUR 1,410). The gain recognized in the income
statement amounted to EUR 652 (in 2021: loss of EUR 432).
As at 31 December 2022, phantom shares issued were as follows:
Strike (PLN)
Granted
Vested
Total
5.75 - 5.95
946,500
2,531,600
3,478,100
6.03 – 6.31
-
468,000
468,000
6.42 – 6.69
1,850,000
175,000
2,025,000
Total
2,796,500
3,174,600
5,971,100
As at 31 December 2021, phantom shares issued were as follows:
Strike (PLN)
Granted
Vested
Total
6.03
-
827,416
827,416
6.11
-
100,000
100,000
6.23
2,891,000
1,292,100
4,183,100
6.31 - 250,000 250,000
Total
2,891,000
2,469,516
5,360,516
The Phantom shares (as presented in above table) have been provided for assuming cash
payments will be materialized, as the Company assesses that it is to be settled in cash.
Last year of exercise date Number of phantom shares
2023
2,205,600
2025
1,875,000
Other*
1,890,500
Total 5,971,100
* From one to twelve months after agreement termination.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
81
32. Provision for share based payments (continued)
The number of phantom shares were changed as follows:
Number of phantom shares as of 1 January 2022 5,360,516
Granted during the period* 2,742,000
Expired
(1,599,000)
Exercised during the period
(532,416)
Number of phantom shares as of 31 December 2022 5,971,100
*In 2022 new phantom share program was introduced for management and key personnel.
33. Assets held for sale and liabilities related to assets held for sale
The balance of assets held for sale as of 31 December 2022 and 31 December 2021 was
as follows:
The balance of liabilities, related to assets held for sale as of 31 December 2022 and
31 December 2021 was as follows:
The balance of assets held for sale and liabilities related to assets held for sale decreased
significantly mainly due to the closing transaction on disposal of Serbian entities (for details
please refer to note 9) and selling land plots in Romania and Croatia.
The purchase price on disposal of Serbian entities was calculated on an enterprise value
basis, based on a property value of aggregate EUR 267.6 million and considered repayment
of external loans of EUR 142.4 million. Net proceeds from sale of Serbian completed office
portfolio were EUR 125,112 (net of cash in disposed assets of EUR 10,475).
31 December
2022
31 December
2021
Serbian completed office portfolio
-
287,816
Forest Office Debrecen
47,700
-
Romanian landbank
680
2,833
Landbank in Poland
3,255
-
Croatian landbank
-
1,352
Total
51,635
292,001
31 December
2022
31 December
2021
Serbian completed office portfolio
-
153,621
Romanian landbank
-
1,080
Croatian landbank
-
130
Total
-
154,831
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
82
33. Assets held for sale and liabilities related to assets held for sale (continued)
On 19 July 2022 GTC FOD Property Kft., a wholly-owned subsidiary of the Company, signed
a sale and purchase agreement, concerning the sale of the office building in Debrecen.
Transaction was closed in January 2023 (for details please refer to Subsequent event note).
34. Prepayments, deferred expenses and other receivables
The balance of prepayment and deferred expenses decreased from EUR 11,515 to EUR
7,739 in the year ended 31 December 2022.
The majority of the decrease relates to completion of Pillar project in Hungary.
35. Earnings per share
Basic earnings per share were calculated as follows:
Year ended
31 December 2022
Year ended
31 December 2021
Profit/(loss) for the period attributable to
equity holders (in EUR)
23,411,000 41,651,000
Weighted average number of shares for
calculating basic earnings per share
574,255,122 487,742,245
Basic earnings per share (in EUR) 0.04 0.09
There have been no potentially dilutive instruments as at 31 December 2022
and 31 December 2021.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
83
36. Related party transactions
Transactions with the related parties are arm’s length transactions.
The transactions and balances with related parties are presented below:
In 2022, Group acquired several assets for the total consideration of EUR 30.2 million from
companies related to the majority shareholder of the Company. For further details please
refer to note 9 Events in the period.
Year ended
31 December 2022
Year ended
31 December 2021
Transactions
Rental revenue*
2,801
1,869
Service charge revenue*
599
418
Balances
Accounts receivables*
2,063
795
Receivables from shareholders
-
123,425
Accrued income*
286
1,250
Long term payable**
1,000
1,027
Trade payables and provisions**
343
959
(*) Rental revenue and Service charge revenue in relation to rental guarantees provided by sellers, entities
related to the majority shareholder. All were collected after December 31
st
2022.
(**) In relation to purchase price retention from the seller, an entity related to the majority shareholder.
Management and Supervisory Board GTC S.A. remuneration for the year ended
31 December 2022 amounted to EUR 1.8 million and 177,000 phantom shares were vested.
Management and Supervisory Board GTC S.A. remuneration for the year ended
31 December 2021 amounted to EUR 2 million and 260,000 phantom shares were vested.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
84
37. Commitments, contingent liabilities and guarantees
COMMITMENTS
As of 31 December 2022 (and as at 31 December 2021), the Group had commitments
contracted for in relation to future capital expenditures on investment properties without
specified date, amounting to EUR 116.5 million (EUR 29.7 million as at 31 December 2021).
These commitments are expected to be financed from available cash and current financing
facilities, other external financing or future instalments under already contracted sale
agreements and yet to be contracted sale agreements.
GUARANTEES
As of 31 December 2022 and 31 December 2021 there were no guarantees given to third
parties.
Additionally, the Company gave typical warranties in connection with the sale of its assets
under the sale agreements and construction completion and cost-overruns guarantee to
secure construction loans. The risk involved in the above warranties and guarantees is very
low.
CROATIA
In relation to the Marlera Golf project in Croatia, part of the land is held on a lease basis
from the State. There is furthermore a Consortium agreement with the Ministry of Tourism
of Croatia (Ministry) which includes a deadline for the completion of a golf course that has
expired in 2014. If the deadline is not met, then the Ministry has the right to terminate the
Consortium agreement which might automatically trigger the termination of the Land
Acquisition Agreements, as well as collateral activation and damages claims. Prior to 2014,
the Company has taken active steps to achieve an extension of the period for completing
the project. In February 2014, the Company received a draft amendment from the Ministry
expressing its good faith and intentions to prolong the abovementioned timeline however,
the amendment was not formalized since then. Since formalization of the amendment is not
at the sole discretion of the Group, the Management has decided to revalue the freehold
asset in assuming no development of the golf course project. Furthermore, as a prudential
measure, the Management has also written off the related collateral in the amount of EUR
1 million provided to the Ministry as a guarantee for completing the golf course. As of 31
December 2022 the book value of the investment in Marlera Golf project was assessed by
an independent valuer at EUR 6.8 million.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
85
38. Financial instruments and risk management
The Group’s principal financial instruments comprise bank and shareholders’ loans, bonds,
hedging instruments, trade payables, and other long-term financial liabilities. The main
purpose of these financial instruments is to finance the Group’s operations. The Group has
various financial assets such as trade receivables, loans granted, derivatives, cash and
short-term deposits.
The main risks arising from the Group’s financial instruments are cash flow interest risk,
liquidity risk, foreign currency risk and credit risk.
INTEREST RATE RISK
The Group exposure to changes in interest rates that are not offset by hedge relates
primarily to the Group's long-term debt obligations and loans granted. No other financial
instruments, which are subject for interest rate risk.
The Group’s policy is to obtain finance bearing variable interest rates. To manage the
interest rate risk in a cost-efficient manner, the Group enters into interest rate swaps, swap
currency or cap transactions.
The Group’s loans are nominated or swapped into Euro.
As at 31 December 2022, 95% of the Group’s long-term loans and bonds is hedged (as at
31 December 2021 – 94%).
For 2022, a 50bp increase in EURIBOR rate would lead to EUR 343 change in result before
tax (2021: EUR 486 change in result before tax).
On 7 July 2022, the Act on crowdfunding for business and support for borrowers was
adopted which provides the basis for changing the WIBOR and WIBID benchmarks in
Poland. As a follow up of legislative changes, in September 2022, the Steering Committee
of the National Working Group for benchmark reform accepted the Roadmap for the
replacement of WIBOR and WIBID benchmarks with WIRON index. The details regarding
the replacement will be published in 2023, in the form of the Regulation of the Minister of
Finance which will define the adjustment spread and the date from which the replacement
applies. According to the Roadmap, the publication of old WIBOR/WIBID rates will cease
in 2025.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
86
38. Financial instruments and risk management (continued)
FOREIGN CURRENCY RISK
The Group enters into transactions in currencies other than the functional currency of the
Group’s subsidiaries. Therefore, it hedges the currency risk by either matching the currency
of the inflow, outflow and cash and cash equivalent with that of the expenditures. It is
element of hedge accounting policy of the Group.
Exchange rates as of 31 December 2022 and 2021 were as following:
31 December 2022 31 December 2021
PLN/EUR 4.6899 4.5994
HUF/EUR 400.23 369.01
The table below presents the sensitivity of profit (loss) before tax due to changes in foreign
exchange rates:
2022
2021
PLN/Euro
PLN/Euro
Rate/Percentage of
change
5.1589
(+10%)
4.9244
(+5%)
4.4554
(-5%)
4.2209
(-10%)
5.0593
(+10%)
4.8294
(+5%)
4.3694
(-5%)
4.1395
(-10%)
Cash and blocked
deposits
(3,895) (1,948) 1,948 3,895 (3,709) (1,855) 1,855 3,709
Trade and other
receivables
(314) (157) 157 314 (1,006) (503) 503 1,006
Trade and other
payables
1,289 644 (644) (1,289) 1,608 804 (804) (1,608)
Land leases 3,042 1,521 (1,521) (3,042) 3,107 1,553 (1,553) (3,107)
Total 122 60 (60) (122) - (1) 1
-
The Group does not see any currency risk related to bonds denominated in PLN and HUF
as they are hedged. Exposure to other currencies and other positions in the statement of
financial position is not material.
The potential theoretical impact on the currency exposure whether the Group would have
not hedged the PLN bonds and the HUF Bonds is as following:
Percentage of
change in FX rate
(-10%) (+10%)
Bonds in PLN (3,150) 3,150
Bonds in HUF (14,900) 14,900
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
87
38. Financial instruments and risk management (continued)
CREDIT RISK
Credit risk is the risk that a party to a financial instrument will fail to discharge an obligation.
To manage this risk, the Group periodically assesses the financial viability of its customers.
The Group does not expect any counter parties to fail in meeting their obligations. The Group
has no significant concentration of credit risk with any single counterparty or Group
counterparties.
With respect to trade receivables and other receivables that are neither impaired nor past
due, there are no indications as of the reporting date that those will not meet their payment
obligations. As of reporting date we don’t have material impaired receivables.
With respect to loan granted to non-controlling interest it was assessed in Stage 1 as defined
by IFRS 9 Financial instruments.
With respect to credit risk arising from the other financial assets of the Group, which
comprise cash and cash equivalents, and blocked deposits, the Group’s exposure to credit
risk equals the carrying amount of these instruments.
The maximum exposure to credit risk as of the reporting date is the full amount presented.
There are no material financial assets as of the reporting dates, which are overdue and not
impaired. There are no significant financial assets impaired.
LIQUIDITY RISK
As at 31 December 2022, the Group holds cash and cash equivalents (as defined in IFRS)
in the amount of approximately EUR 115 million. As described above, the Group attempts
to efficiently manage all its liabilities and is currently reviewing its funding plans related to:
(i) debt servicing of its existing assets portfolio; (ii) capex; and (iii) development of
commercial properties. Such funding will be sourced through available cash, operating
income, sales of assets and refinancing. The Management Board believes that based on its
current assumptions, the Group will be able to settle all its liabilities for at least the next
twelve months.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
88
38. Financial instruments and risk management (continued)
Repayments of long-term debt and interest are scheduled as follows (million EUR)
(the amounts are not discounted):
31 December
2022
31 December
2021
First year
(*) 76 127
(**)
Second year
65 148
Third year
149 99
Fourth year
774 144
Fifth year
76 821
Thereafter
206 236
Total
1,346 1,575
(*) Repaid during 12 months from reporting date.
(**) Including EUR 54m liabilities related to assets held for sale
The above table does not contain payments relating to the market value of derivative
instruments. The Group hedges significant parts of the interest risk related to floating
interests rate with derivative instruments. Management plans to refinance some of the
repayment amounts.
Repayments of long-term derivatives are scheduled as follows (million EUR)
(the amounts are not discounted):
31 December
2022
31 December
2021
1
– 4 years
- -
Fifth year
3 -
Thereafter
44 39
Total
47 39
All derivative instruments mature within 1-10 years from the balance sheet date.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
89
38. Financial instruments and risk management (continued)
Long term finance lease represents lease payments for land subject to perpetual usufruct
payments with maturity of 33 - 87 years. The Group pays an annual amount of EUR 2,056
(EUR 2,120 in 2021) as lease payment (principal and interest) for lands under perpetual
usufruct.
Maturity dates of current financial liabilities as of 31 December 2022 were as following:
Total
Overdue
Up to a
month
1-3 months
3 months –
1 year
Trade payables and
provisions
41,208 308 9,600 18,427 12,873
Current portion of long-
term borrowing
48,571 - 140 2,966 45,465
Deposits from tenants
1,639
-
177
136
1,326
Current portion of lease
liabilities
388 - 279 56 53
Derivatives
2,180
-
-
-
2,180
Total
93,986
308
10,196
21,585
61,897
Maturity dates of current financial liabilities as of 31 December 2021 were as following:
Total
Overdue
Up to a
month
1-3 months
3 months –
1 year
Trade payables and
provisions
31,092 521 6,476 17,386 6,709
Current portion of long-
term borrowing
44,337 - - 3,825 40,512
Deposits from tenants
1,932
-
161
483
1,288
Current portion of lease
liabilities
198 - 21 127 50
Derivatives
2,681
-
-
654
2,027
Total
80,240 521 6,658 22,475 50,586
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
90
38. Financial instruments and risk management (continued)
FAIR VALUE
As of 31 December 2022, 78% of all bank loans bears floating interest rate (79% as of 31
December 2021). However, as of 31 December 2022, 87% of these loans are hedged (81%
as of 31 December 2021).
As of 31 December 2022, 5% of all bonds bears floating interest rate (7% as of 31 December
2021). However, as of 31 December 2022, 100% of these bonds are hedged (100% as of
31 December 2021).
For information related to loans granted/received from non-controlling interest please refer
to note 28.
Due to the recent significant increase of an interest rates where the Group operates, the fair
value of the HUF Bonds significantly differs from its carrying value. It is due to the fact that
all the HUF bonds as of the 31 December 2022 bear a fixed interest rate until maturity,
however these bonds are hedged with cross-currency interest rate swaps.
Market value and fair value of bonds as of 31 December 2022 is presented below:
Fair value of all other financial assets/liabilities is close to the carrying value.
For the fair value of investment property, please refer to note 17.
FAIR VALUE HIERARCHY
As at 31 December 2022 and 2021, the Group held several derivatives carried at fair value
in the statement of financial position.
1
Fair value at level 1 - https://gpwcatalyst.pl/notowania-obligacji-obligacje-korporacyjne
2
Fair value at level 2 was calculated based on assumption of market interest rate of 15%.
3
Fair value at level 1 - https://www.boerse-frankfurt.de/bond/xs2356039268-gtc-aurora-luxembourg-s-a-2-25-21-26
Series of bonds
Market value and fair
value
(in million EUR)
Bonds mature in 2023 (Poland) (PLGTC0000318)
1
31.6
Green bonds mature in 2027-2030 (HU0000360102)
2
45.1
Green bonds mature in 2028-2031 (HU0000360284)
2
21.3
Green bonds mature in 2026 (XS2356039268)
3
367.0
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
91
38. Financial instruments and risk management (continued)
The Group uses the following hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities,
Level 2: other techniques for which all inputs which have a significant effect on the recorded
fair value are observable, either directly or indirectly,
Level 3: techniques that use inputs that have a significant effect on the recorded fair value
that are not based on observable market data.
Valuations of derivatives are considered as level 2 fair value measurements. During the year
ended 31 December 2022 and 31 December 2021, there were no transfers among Level 1,
Level 2 and Level 3 fair value measurements in respect to financial instruments.
PRICE RISK
The Group is exposed to fluctuations in the real estate markets in which it operates. These
can have an effect on the Group’s results (due to changes in the market rent rates and in
occupancy of the leased properties).
Further risks are described in the Management Report as of 31 December 2022.
CAPITAL MANAGEMENT
The primary objective of the Group’s capital management is to provide for operational and
value growth while prudently managing the capital and maintaining healthy capital ratios in
order to support its business and maximise shareholder value.
The Group manages its capital structure and adjusts it to dynamic economic conditions.
While observing the capital structure, the Group decides on leverage policy, loans raising
and repayments, investment or divestment of assets, dividend policy, and capital raise, if
needed.
No changes were made in the objectives, policies, or processes during the years ended
31 December 2022 and 31 December 2021.
The Group monitors its gearing ratio, which is Gross Project and Corporate Debt less Cash
& Deposits, divided by its real estate investment value. The Group’s long-term strategy is to
keep its loan-to-value ratio (“LTV”) at a level of 40 per cent, however in case of acquisitions
the Company may deviate temporarily. As of 31 December 2022, LTV was 45.6%.
Globe Trade Centre S.A.
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(in thousands of Euro)
The accompanying notes are an integral part of this Consolidated Financial Statements
92
39. Subsequent events
On 19 July 2022, GTC FOD Property Kft., a wholly-owned subsidiary of the Company,
signed a sale and purchase agreement, concerning the sale of the office building owned by
the subsidiary. The selling price under the Agreement is HUF 19.1 billion (ca. EUR 47.7
million as of 31 December 2022). As of 30 January 2023 the full purchase price (ca. EUR
49.2 million) was paid and the transaction was completed.
On 31 March 2023, GTC Origine Zrt., a wholly-owned subsidiary of the Company, signed a
quota transfer agreement to acquire 100% holding of Tiszai Fény Alfa Kft, which owns 9
newly developed solar power plants with installed nominal capacity of max 0.5 MW each,
operating in Tiszafüred, Hungary for a consideration of HUF 2.4 billion (ca EUR 6.4m). The
project shall be financed partially by a bank facility in the amount of EUR 2.6 million. The
transaction is expected to close in Q2 2023.
40. Approval of the financial statements
The financial statements were authorised for the issue by the Management Board on 24
April 2023.
