RNS Number : 6185A

Secure Property Dev & Inv PLC

30 September 2015

Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate

30 September 2015

Secure Property Development & Investment PLC ('SPDI' or 'the Company')

Interim Results

Secure Property Development & Investment PLC, the AIM quoted South Eastern European focused property and investment company, is pleased to announce its interim results for the period ended 30 June 2015.

Financial Highlights

·    103% increase in total asset value to €134 million (31 December 2014: €66million) reflecting the transformational property acquisitions made during the period across the region

·    77% increase in rental income to €2.3 million (H12014: €1.3million)

·    EBITDA turned positive to €1.5 million compared to a loss of €0.4million for H12014

·    €8 million cash raised via Open Offer in March 2015

·    84% increase in Net Asset Value to €59 million (31 December 2014: €32 million) due to share capital increase via Open Offer and issue of shares in settlement of asset acquisitions

·    The loan to value ratio as at 30 June 2015 stands at 53% (31 December 2014: 48%) demonstrating strong asset backing behind the Company

Operational Highlights

·    Successfully implemented strategy to expand the geographic spread of the portfolio to encompass fast growing South Eastern European countries which offer high yields and capital growth

·    Acquired three income producing assets in Romania, Greece and Bulgaria that, combined, generate ~€3 million of Net Operating Income ('NOI') annually, increasing the Company's annualised NOI by ~73% to ~€7 million by the end of H12015;

o NOI now stands at c. ~€8 million following the completion of the acquisition in Craiova post period end

·    Blue chip tenants on long leases in acquired properties including: multinational logistics company Kuehne and Nagel; Pratiker; and the Romanian Telecoms Regulator - long lease terms provide revenue visibility

·    Acquisitions add a combined ~€64.5 million of gross asset value since year end, increasing total Assets under Management ('AuM') to ~€126 million

·    Provides further geographic diversification of portfolio, and ensures SPDI's position as a South Eastern Europe  regional property company

·    Cash generative and asset backed platform in place to take advantage of highly positive South Eastern European property market fundamentals and the ongoing European yield compression play

Lambros G. Anagnostopoulos, Chief Executive Officer, said, "Thanks to the acquisition of a further five properties, the six months under review has seen excellent progress made towards delivering on our objective to build a diversified portfolio of prime properties in South Eastern Europe with visible income streams and significant capital growth potential.  The numbers speak for themselves: we now have a portfolio of six income producing property assets in four countries in the region as well as residential and land non-core assets; our AuM now stands at €126 million; while our annualised NOI totals c. €8m. As a result we now have a cash generative, asset backed platform in place which will allow us to accelerate the roll-out of our strategy through the acquisition of additional properties that fit our investment criteria: prime locations; strong covenants with blue chip tenants on long term rental contracts; secured at attractive high yields.

"We believe we are in the right market at the right time.  The supply and demand dynamics of the region's commercial property markets remain favourable in terms of future rental growth and potential capital uplift.  Meanwhile the commencement of the ECB's quantitative easing programme earlier in the year provides a significant tailwind to the ongoing European yield compression play which in our view has a long way to run further, particularly in our core area of focus.  Backed by a strong team of non-executive directors, seasoned executives and experienced staff and advisers, which has proven its ability to identify and secure prime properties at attractive prices, Secure is ideally placed to deliver on its goal to create the leading institutional South Eastern European income producing and dividend yielding property company."

* * ENDS * *

For further information please visit www.secure-property.eu or contact:

Lambros Anagnostopoulos	SPDI	Tel: +30-210-7226470
Constantinos Bitros Tercel Moore	SPDI SP Angel Corporate Finance LLP	Tel: +30-210-7226470 Tel: +44 (0) 20 3463 2260
Jeff Keating	SP Angel Corporate Finance LLP	Tel: +44 (0) 20 3463 2260
Lottie Brocklehurst	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177
Frank Buhagiar	St Brides Partners Ltd	Tel: +44 (0) 20 7236 1177

1.            Management Report

In summary

The first half of 2015 saw SPDI complete the first phase of its expansion and diversification plan. By the end of June 2015, the Company owned assets in Romania, Bulgaria, Greece and Ukraine, the four largest (by population) countries of South East Europe, attaining three distinct stated goals:

a) diversifying its asset base with no-one country presenting more than 50% of its AUM.

b) growing to more than EUR 100m of Assets under Management, and

c) building up a strong Operating Revenue stream that would facilitate both return to its shareholders as well as further asset growth.

To achieve these goals, management's efforts in the first months of 2015 were focused on both the efficient raising of capital and the acquisition of assets, which meet our investment criteria. SPDI raised more than EUR 10m of new capital through an open offer to its shareholders in March 2015 and through the execution of warrants in July 2015. In parallel SPDI concluded or signed the agreement for the acquisition of the following assets:

1.     A fully let 17.000 sqm logistics park west of Athens, the majority of which is let to the German logistics operator Kuehne + Nagel, generating ~EUR 1,5 net operating income. The logistics centre also has a 1MW photovoltaic park installation on its roof generating and selling electricity to the grid,

2.     A fully let 19.000 sqm office building in Sofia (20% ownership) let to one of Bulgaria's largest insurance companies, generating EUR 2,9m net operating income,

3.     A fully let 9.000 sqm retail property in Craiova, Romania, rented to  Praktiker, a leading European DIY retailer,  generating EUR 1m of net operating income,

4.     A fully let 10.000 sqm office building in Bucharest (24,35% ownership) mostly let to Romania's Telecom Regulatory Authority generating EUR 1,75m net operating income, and

5.     A portfolio of residential properties in Bucharest and Sofia, the majority of which are currently let, generating more than EUR 0,3m annual rental revenues. These properties are for sale.

True to our strategy to grow the Company with the lowest possible cash outlay, the last three assets were acquired by SPDI in exchange for newly issued shares in the Company.  This has not only facilitated the task of surpassing the EUR 100m AUM mark and ending the period with EUR 126m AUM, but has also brought onto the Company's shareholder register a number of highly respected institutional investors in the region who share the Company's vision and strategy to build the prime professional real estate company in the region. In addition, the acquisitions increased the Company's annualized Net Operating Income by EUR 3m.

While the economic climate in Europe improved further in the first half of 2015, Greece lapsed back into political turmoil with the new Government elected in January 2015 abandoning the path prescribed by the agreements between the old government and its EU creditors. By August 2015, and after various failed attempts to change course and a July referendum, a new agreement with the creditors had been signed, indicating signs of stabilization, needed for the country to return to a growth path following six years of harsh recession.  At the same time, Ukraine continued its path towards taking political stabilization measures, even though the economic recession that has followed the 2014 war with Russia and the ensuing large devaluation of the local currency has taken a bigger bite of the economy than the semester before hand. Even though the IMF and other international bodies are working with the Ukrainian government to minimize the effects of such recession, the country's economy is not expected to pick up within 2015. On the contrary, Romania's economy continues its fast ascent, with GDP growth above 3,4%,  low unemployment and FDI picking up, making Romania a high growth economy target for the next few years. It is this fundamental macroeconomic environment that guided SPDI's growth pattern that has left the Company at the end of the period with its highest property exposure in Romania (58%) and much lower in Greece (16%), Ukraine (35%) or Bulgaria (17%).

  The global macroeconomic picture has also provided a positive tailwind over the review period.   In March 2015, Europe entered a period of Quantitative Easing which signals the continuation of the low interest rate environment while the US is expected to turn the corner with interest rates picking up.  As a result, European Real Estate is becoming more and more attractive for global investors, particularly South East Europe where asset prices are low. This is the macro environment in which the Company expects to prevail for the next 12 months and plans to take advantage of for the benefit of its shareholders.  As a result, and following the success of the Open Offer to shareholders and the ensuing property asset acquisitions, the Company engaged a small number of advisers - brokers on both sides of the Atlantic to facilitate further growth, as per its vision guided strategy.

As at period end, all our income generating properties have prime locations, generate substantial income from blue chip tenants, provide immediate stable cash flows with long term visibility, and offer scope for significant capital uplift over the short to medium term, as the on-going European yield compression play gathers momentum across the continent. Thanks to the progress made during the six months, Secure has a highly cash generative platform from which to accelerate the roll-out of its strategy to grow its portfolio of prime real estate, and in the process build the leading institutional South Eastern European income producing and dividend yielding property company. 

P&L

The table below presents the operating performance in the last 3 years:

	2015 1H	2014 1H	2013 1H
€
Rental Income	2.319.351	1.272.609	1.371.162
Sevice charges and utilities Income	279.901	133.520	-
Income from sale of electricity	135.140	-	-
Property Operating expenses	(287.584)	(254.857)	(291.190)
Share of profits from associates	354.949
Net Income from Investment properties	2.801.757	1.151.272	1.079.972
Sales of assets	671.368		-
Cost of sale of assets	(469.850)	-	-
Net Income from sale of assets	201.518	-	-
Income from operations	3.003.275	1.151.272	1.079.972
Administration expenses	(1.599.125)	(1.543.497)	(1.070.535)
Other income/ (expenses), net	42.270	(16.624)	174.325
Operating profit	1.446.420	(408.849)	183.762
Gains on acquisitions	5.237.790	391.205	-
Finance costs, net	(1.643.882)	(565.132)	(602.250)
Profit/(loss) before tax	5.040.328	(582.776)	(418.488)
Income tax expense	(2.894)	(12.931)	-
Profit /(Loss)  for the year	5.037.434	(595.707)	(418.488)
Investment property related gains (Note1)	4.737.805	13.225.535	-
Foreign exchange losses, net (Note 2)	(4.976.537)	(14.590.388)	(19.518)
Profit / (Loss)  for the year	4.798.702	(1.960.560)	(438.006)

Note 1: this includes a) the upward revaluation of Ukrainian assets caused by the foreign exchange difference between the US$ and the EUR (in itself mostly negated by the devaluation of the UAH) minus b) a precautionary provision that management has taken on the recently acquired assets.

Note 2: these relate to the EBRD loan towards Terminal Brovary (mostly hedged due to the USD denominated income) and to various intercompany loans for which any associated losses, (predominately paper), are caused by the devaluation of the UAH from 8 at the beginning of the year to 23 to the US$ by the end of the reporting period (a drop of ~65%).

2.            Regional Economic Developments ¹

Romania

Romania's GDP expanded by a real 3,7% yoy in H1 2015, as per the indication provided by the country's statistics office. In Q2 2015, GDP grew by 3,2% yoy, one of the highest in EU-28. According to recent reports, this growing trend is expected to continue throughout the rest of 2015, forecasting a yoy GDP growth of 3,4% overall.

CPI is negative at 1,7% so far for the year while the recent VAT rate decreasing for all food products from 24% to 9% has contributed another -0,2% for June. The unemployment rate was 6,8% at the end of June, remaining stable compared with a year ago, while the industrial output index for the first seven months of 2015 registered a 2,6% increase yoy.

In May, the National Bank of Romania decreased the monetary policy rate to a record low of 1,75%. Exchange rates remained stable over the first 6 months, fluctuating between RON 4,40 to RON 4,48 to the EUR. Government debt decreased below 38,5% of GDP, the third lowest in the EU, while foreign direct investments in H1 2015 totaled EUR 1,66 billion, 39% higher than last year.

Macroeconomic data and forecasts
	2011	2012	2013	2014	2015f
GDP (EUR bn)	131,4	131,8	142,2	149,3	156,0
Population (mn)	20,1	20,0	19,9	19,9	19,9
GDP (constant prices y-o-y %)	2,2	0,7	3,4	2,9	3,4
CPI (average, y-o-y %)	5,8	3,4	4,0	1,1	-0,5
Unemployment rate (%)	7,4	7,0	7,1	6,8	6,5
Net FDI (EUR bn)	1,8	2,2	2,6	2,5	3,1
Sources : IMF, National Sources, Eurobank EFG, European Comission

Bulgaria  

The pace of growth in Q1 2015 (2% yoy) was the strongest since Q2 2011 increasing by 2,2% year-on-year with the strongest contribution coming from net exports.

Bulgaria posted a consolidated budget surplus of EUR 455 million for H1 2015 or 1,1% of the country's projected GDP, compared to a deficit of EUR 509 million for the same period last year.

CPI in June 2015 stood at -0,6% yoy. Foreign direct investment for the period January-May 2015 amounted to EUR 617 million, compared to the EUR 622 million for the same period in 2014. The unemployment rate was 9,6% in June, matching EU's average rate, while the country's industrial output rose by 5,7% yoy. Exchange rates remained stable over the first 6 months at BGN 1,96 to the EUR.

Macroeconomic data and forecasts
	2011	2012	2013	2014	2015f
GDP (EUR bn)	38,5	39,7	39,9	40,4	40,9
Population (mn)	7,3	7,3	7,3	7,2	7,2
GDP (constant prices y-o-y %)	1,8	0,8	0,9	1,7	1,8
CPI (average, y-o-y %)	4,2	3,0	1,4	-1,6	0,2
Unemployment rate (%)	11,2	12,3	12,9	11,7	9,8
Net FDI (EUR bn)	1,2	1,2	1,1	1,2	1,5
Sources : IMF, National Sources, Eurobank EFG, European Comission

Ukraine

The ongoing conflict in the Eastern border and sharp depreciation of the hryvnya in Q1 2015, have led the economy into a deep recession without signs of clear stabilization as of yet. In accordance with the preliminary estimates of the Ministry of Economic Development and Trade of Ukraine, in the first half of 2015 real GDP contracted by -16,3% yoy. If this is sustained through the year the aggregate recession in Ukraine since late 2013 is expected to exceed 50% in USD terms.

The official exchange rate was 15,78 UAH / USD at the start of 2015 and reached its record of 30 UAH/USD in February 2015. By the end of the first quarter of 2015 the official exchange rate stabilized at around 23 UAH/USD and during the second quarter of 2015 it was largely stable, varying in the range of 20,5-22 UAH/USD.

In January-June 2015, consumer price inflation reached 48,1% year-on-year, compared to 5,8% in the first half of 2014, with the main contributor being the sharp depreciation of the UAH and the resultant increase in prices for imported goods, increase of the state-regulated tariffs and high inflation expectations.

Currently Ukraine remains dependant on the USD 17,5 billion IMF loan. After the review of the authorities' performance under the programme, IMF allocated the second tranche amounting to USD 1,7 billion in early August 2015 and discussions for a restructuring of the debt including a write off are fully fledged at the moment.

Macroeconomic data and forecasts
	2011	2012	2013	2014	2015f
GDP (USD bn)	163,4	176,2	177,4	127,6	115,8
Population (mn)	45,6	45,6	45,5	42,7	42,5
GDP (constant prices y-o-y %)	5,2	0,2	0,0	-6,0	-9,2
CPI (average, y-o-y %)	8,0	0,6	-0,2	12,1	51,0
ILO Unemployment rate (%)	7,9	7,5	7,4	10,5	11,0
Net FDI (USD bn)	7,0	6,6	3,3	0,2	0,5
Sources : IMF, National Sources, European Comission, Oxford Economics

Greece

After bailout talks between the Greek government and foreign lenders broke down during the last weekend of June, the European Central Bank froze vital ELA funding support to Greek banks, leaving Athens with little choice but to shut down the system to keep the banks from collapsing by imposing capital controls.  As a result of these actions the Athens Stock Exchange closed from June 26 to August 3.

On July 13, Eurozone leaders reached a unanimous agreement over a third Greek bailout. The Greek government managed to pass the measures by parliamentary majority on August 14, so Greece will be able to benefit from the ~EUR 86 bln of bailout loans. Following that, the government resigned and announced early elections for September 20, which resulted in the same government coalition.

Amidst a very negative environment Greece's GDP grew 0,8% in Q2 2015, mainly driven by the ongoing tourist season and higher private consumption during the days of capital controls as people feared losing their money and preferred to spend it!

Assuming that the elections will facilitate the formation of a coalition government that will actively pursue fulfilling the prerequisites of the bailout program the Greek economy is expected to be slowly back on track within 2016.

Macroeconomic data and forecasts
	2011	2012	2013	2014e	2015f
GDP (EUR bn)	208,5	193,4	182,1	179,1	175,2
Population (mn)	10,8	11,1	11,0	11,0	10,9
GDP (constant prices y-o-y %)	-1,1	-6,6	-3,9	-0,9	-0,8
CPI (average, y-o-y %)	4,2	3,0	0,9	-1,4	-0,3
Unemployment rate (%)	17,9	24,5	27,5	26,6	25,0
Net FDI (EUR bn)	0,8	1,4	1,6	1,0	0,0
Sources : IMF, National Sources, Eurobank EFG, European Comission

[1] Sources : World Bank Group, Eurostat, National Bank of Greece, Elstat, Eurobank Research, and Economic Research Division, National Institute of Statistics- Romania, National Statistical Institute -Republic of Bulgaria, National Institute of Statistics - Ukraine, Bank of Serbia.

3.            Real Estate Market Developments²

3.1    Romania

General

The total investment volume registered in Romania in the first six months of 2015 was modest compared to H1 2015, recording a 78% decrease, but the low level of investment volume can be explained by the effervescence registered at the end of 2014.

Logistics Market

In H1 2015, the industrial property stock increased by 100.000 sqm to approximately 2.000.000 sqm., of which half is in Bucharest with another 160.000sqm  yet to be added by year end.   But still take up is very high levels with vacancy in Bucharest being less than 9% (outside Bucharest 10-12%) while prime rents remained relatively stable at EUR 3,5-4 per sqm.

Office Market

Total stock of office space reached 2,25 million sqm in H1 2015, with new deliveries accounting for approx. 50.000 sqm. In Q1 2015, 37% from total leasing activity (56.000 sqm) was dominated by transactions performed by tenants from the IT&C sector. This trend continued even stronger in the second quarter, reaching 72% of TLA (75.000 sqm). Vacancy rates continue to be uneven between sub-markets, which is also reflected in the evolution of the rental levels. While in South, Baneasa and Pipera North vacancy rates are above 30%, the vacancy rate in Dimitrie Pompeiu, Floreasca Barbu Vacarescu, North, Central-North, CBD and West is below 10%. Overall vacancy stands at 13%, slightly decreased from 14% at the end of 2014. Headline rent remains at ~EUR 18,5 per sqm.

Retail Market

Modern retail stock reached the 3 million sqm mark with some 120.000 sqm GLA delivered in H1 2015. Two important shopping centers opened so far this year: Coresi Shopping Resort in Brasov and Mega Mall in Bucharest. During the first six months of 2015, at least 30 new retailers have entered the local market targeting mainly Bucharest. Prime rent in Bucharest for retail parks is ~EUR 8,5 per sqm and 60-70 per sqm for shopping centres.

Residential Market

During H1 2015, prices for residential projects remained relatively stable as in 2014 but demand has picked up as the spending capacity of Romanians improves. Some new projects targeted more affluent purchasers, in contrast with previous years' focus on low income products. Both local and international developers sought to finalize one and two bedroom apartments in semi-central locations, or in the vicinity of popular office districts. Romanian authorities issued 18.229 building permits for residential projects in H1 2015, up 3,1% year-on-year, according to the national statistics office.

3.2    Bulgaria

General

The total value of closed transactions on the investment market in Bulgaria in the first half of 2015 was slightly above EUR 90 mln. It is expected by the end of the year the total sales transactions volume will be similar or higher than in 2014 (EUR ~220 mln).

Office Market

Office stock in Sofia has increased to 1,64 million sqm, as new deliveries for H1 2015 amounted to 14.000 sqm. Development of several projects have commenced, increasing the active construction to 198.600 sqm. Overall office market vacancy rates continued to decline to 14,2% in H1 2015 from 15,4% in Q4 2014, a new 4 year low. Market demand continues to be driven primarily by the IT sector. Rental rates for class A offices have increased to EUR 11,5 per sqm, while in CBD (Central Business District) properties the average rate is EUR 13,7 per sqm.

Retail Market

Total modern retail stock in Bulgaria is 844.000 sqm with shopping centers accounting for 95%. The vacancy rate in Sofia dropped to 11% (from 12% in 2014). No new project openings are expected by the end of the year. Retail activity will be concentrated on the repositioning of existing shopping centers and unfreezing projects at the development stage.

Residential Market

A total of 2.100 residential building permits were issued in H1 2015. Sofia represents the major part of approved projects with 37% of the total. The market appears to be absorbing the new supply with developers reporting a significant amount of sales, increased by 8% compared to last year. Average sales prices in Sofia are around EUR 770 per sqm almost 50% lower than the pre-crisis pricing level.

3.3    Ukraine

General

Due to the deepening of the economic recession in Ukraine, many businesses were adopting a wait-and-see attitude in relation to further activity in the country, whilst the purchasing power of the country's population further decreased.

Logistics Market

In late June 2015, total stock of modern warehousing and logistics space in the Greater Kiev area amounted to ~1.778.000 sqm. Overall development activity in the Greater Kiev area remains very low. During H1 2015 vacancy in the sector increased, reaching 12% in late June 2015 with asking rents dropping to the range of USD 2,5-5 per sqm for prime warehousing space in the Greater Kiev area, while for B-class properties average monthly rent was at around USD 2 per sqm.

Office Market

The total office stock in Kiev reached over 1,7 million sqm at the end of June 2015. In the first half of 2015 a majority of tenants decided to stay in their current properties and as a result, lease renewals and renegotiations accounted for almost 77% of total office take-up during the first six months of 2015. During the first half of 2015, vacancy in the office property sector in Kiev hovered at 23%. The indicative prime rent declined by 8% on average from USD 25 to USD 23 per sqm per month.

Retail Market

Total modern retail stock in Kiev amounted to around 1,55 million sqm in late June 2015. As of August 2015, DTZ estimates that presently around 560.000 sqm (GLA) of new 'modern' retail space in Kiev are actively in either the planning or construction stages. In late June 2015, average monthly rents in quality retail schemes in Kiev varied in the range of USD 45-65 per sqm for premises of 100-250 sqm. The retail premises in high street locations in Kiev commanded monthly rents of USD 30-50 per sqm. 

3.4    Greece

General

The property market is expected to recover gradually, assuming Greece will emerge from the recession cycle. In terms of investment interest, the most dynamic sectors appear to be that of hospitality, as a result of a projected substantial growth in tourism.

Logistics Market

The market is characterised by the absence of activity with very few leasing deals occurring, linked to the economic uncertainty shrouding the Greek market. Deals that are closing stem from existing occupiers taking advantage of the weak fundamentals and either moving to secure better price space or indeed renegotiating their existing leases to be more flexible and at a lower rent. Prime rents are EUR 3-4 per sqm for logistic space, stable for the last 12 months.

Office Market

Prime supply levels in the office sector have stabilized as weaker demand and the lack of new developments balance each other out. There is no pipeline of new or refurbished projects in most markets and this is not expected to change over the short to medium term, with most developers unwilling to commit to new construction. In prime office locations, rental rates have been stable between EUR 8- 15 per sqm.

² Sources : National Bank of Greece, Bank of Greece, Eurobank, Jones Lang LaSalle, DTZ Research, CBRE Research, Colliers International, Cushman & Wakefield, MBL Research.

4.      Property Assets

4.1       Aisi Brovary - Terminal Brovary Logistic Park , Ukraine

Project description

The Brovary Logistic Park consists of a 49.180 sqm GLA Class A warehouse and associated office space. The building has large facades to Brovary ring road, at the intersection of the Brovary (Е-95/М-01 highway) and Borispil ring roads. It is located 10 km from Kiev city border and 5 km from Borispol international airport.

The building is divided into six independent sections (each at least 6.400 sqm), with internal clear ceiling of 12m height and industrial flooring constructed with an anti-dust overlay quartz finish. The terminal accommodates 90 parking spaces for cars and trucks, as well as 24 hour security and municipal provided sewage, water and garbage collection.

Current status

As of the end of June, the park remained 72% leased, with 79% of its warehouse capacity leased.

4.2       Innovations Logistics Park, Romania

Project description

The Park incorporates approximately 8.470 sqm of multipurpose warehousing space, 6.395 sqm of cold storage and 1.705 sqm of office space. It is located in the area of Clinceni, south west of Bucharest center, 200m from the city's ring road and 6km from Bucharest-Pitesti (A1) highway. Its construction was tenant specific, was completed in 2008 and it comprises four separate warehouses, two of which offer cold storage.

Current status

As of the end of June the warehouse was 87% leased with Nestle Ice Cream Romania being the anchor tenant (100% of cold space and 79% of total NOI).

4.3       EOS Business Park - Danone headquarters, Romania

Project description

The park consists of 5.000 sqm of land including a class "A" office building of 3.386 sqm GLA and 90 parking places. It is located next to the Danone factory, in the North-Eastern part of Bucharest with access to the Colentina Road and the Fundeni Road.  The Park is very close to Bucharest's ring road and the DN 2 national road (E60 and E85) and is also serviced by public transportation. The park is highly energy efficient.

Current status

The Company acquired the asset in November 2014. The complex at the end of June is fully let to Danone Romania, the French multinational food company, until 2026.

4.4       Praktiker Retail Center, Romania

Project description

The retail park consists of 21.860 sqm of land including a retail BigBox of 9.385 sqm GLA and 280 parking places. It is located in Craiova, on one of the main arteries of the city, along with most of the DIY companies.

Current status

The Company has reached a binding agreement in May 2015 for the acquisition of the asset which was finalised in July 2015. The complex at the end of June is fully let to Praktiker Romania, a leading DIY retailer, until 2020.

4.5       Delenco office building, Romania

Project description

The property is a 10.280 sqm office building, which consists of two underground levels, a ground floor and ten above-ground floors. The building is strategically located in the very center of Bucharest, close to three main squares of the city: Unirii, Alba Iulia and Muncii, only 300m from the metro station.

Current status

The Company acquired 24,35% of the property in May 2015. As of the end of June, the building is 100% let, with ANCOM (the Romanian Telecommunications Regulator) being the anchor tenant (70% of GLA).

4.6       Autounion office building, Bulgaria

Project description

A 19.476 sqm Class A office building which is located in a prime business area of Sofia, very close to the international airport and close to the city center. The building is BREEAM certified. 

Current status

The Company acquired 20% of the property in April 2015. Autounion at the end of H1 2015 is fully let to Eurohold Bulgaria, a leading Bulgarian insurance company, on long lease extending to 2027.

4.7       GED Logistics Park and Photovoltaic Park, Greece

Project description

The 17.756 sqm complex that consists of industrial and office space is situated on a 44.268 sqm land plot in the West Attica Industrial Area (Aspropyrgos). It is located at exit 4 of Attiki Odos (the Athens ring road) and is 10 minutes from the port of Piraeus (where COSCO runs two of the three piers of one of the biggest container port in the Mediterranean Sea) and the National Road connecting Athens to the north of the country. The roofs of the warehouse buildings house a photovoltaic park of 1.000KWp.

The buildings are characterized by high construction quality and state-of-the-art security measures. The complex includes 100 car parking spaces, as well as two central gateways (south and west).

Current status

The complex at the end of June is 100% occupied, while the major tenant (approximately 70%) being the German transportation and logistics company Kuehne + Nagel.

4.8       Residential portfolio

·           Romfelt Plaza (Doamna Ghica), Bucharest, Romania

Project description

Romfelt Plaza is a residential complex located in Bucharest, Sector 2, relatively close to the city center, easily accessible by public transport and nearby supporting facilities and green areas.

The residential unit portfolio acquired by the Company comprised 2.990 sqm across nine studios, six  two bed apartments and thirteen three bed apartments, all located in buildings A, D, E, F, and I.

Current status

During the period, 2 apartments were sold while as of the end of June total existing leases stood at 16 indicating an occupancy rate of 64%.

·           Linda Residence, Bucharest, Romania

Project description

Linda Residence is a residential complex located in Bucharest, Sector 3, close to subway transportation which connects the project to all areas in Bucharest in less than 30 minutes.

The 2.642 sqm residential portfolio acquired by the Company comprised twenty seven apartments including two studios, fifteen two bed, eight three bed and two four bed apartments, as well as 27 storage spaces, and 20 surface parking spaces.

Current status

During the period, 2 apartments were sold while as of the end of June there are a total of 2 existing leases indicating an occupancy rate of approximately 8%.

·           Monaco Towers, Bucharest, Romania

Project description

Monaco Towers is a residential complex located in South Bucharest, Sector 4, enjoying good car access due to the large boulevards, public transportation, and a shopping mall (Sun Plaza) reachable within a short driving distance or easily accessible by subway.

The residential portfolio acquired by the Company comprised forty apartments, twenty five two-room apartments and fifteen three-room apartments, totaling 3.609 sqm.

Current status

During the period, 5 apartments were sold while as of the end of June the total existing leases stood at 22 indicating an occupancy rate of 63%.

·           Blooming House, Bucharest, Romania

Project description

Blooming House is a residential development project located in Bucharest, Sector 3, a residential area with the biggest development and property value growth in Bucharest, offering a number of supporting facilities such as access to Vitan Mall, kindergartens, café, schools and public transportation (both bus and tram).

The residential unit portfolio acquired by the Company comprised twenty seven apartments, comprising twelve two bed, fourteen three bed, and one five bed, totaling 2.387 sqm, plus 28 parking spaces, 13 above ground, 15 underground.

Current status

During the period, 2 apartments were sold while at the end of June the total existing leases stood at 13 indicating an occupancy rate of approximately 52%.

·           Green Lake, Bucharest, Romania

Project description

A residential compound of 40.500 sqm GBA, which at the end of June consisted of 35 unsold apartments plus 23 unsold villas, situated on the banks of Grivita Lake, in the northern part of the Romanian capital. The compound also includes facilities such as Bucharest's leading private kindergarten, outdoor sport courts and restaurants. Additionally the plot includes a 48.360 sqm land area with a Gross Buildable Area of ~82.250 sqm (63.400 sqm above ground). SPDI owns ~40% of this property asset portfolio.

Current status

During the period, 4 apartments and villas were sold while at the end of June, 82 units were unsold with the occupancy rate being ~41% (64% for apartments and 16% for villas).

·           Boyana Residence, Sofia, Bulgaria

Project description

A residential compound, which consists of 67 apartments plus 83 underground parking slots developed on a land surface of 5.700 sqm, situated in the Boyana high end suburb of Sofia, at the foot of Vitosha mountain with GBA totaling to 11.400 sqm. The complex includes adjacent land plots with surface of 17.000 sqm with building permits to develop GBA of 21.851 sqm.

Current status

During the period, 6 apartments were sold while at the end of June 61 units remained unsold.

4.9       Land Bank

·           Aisi Bela - Bela Logistic Center , Odessa, Ukraine

Project description

The site consists of a 22,4 ha plot of land with zoning allowance to construct up to 103.000 sqm GBA industrial properties and is situated on the main Kiev - Odessa highway, 20km from Odessa port, in an area of high demand for logistics and distribution warehousing.

Current status

Following the completion of planning and issuance of permits in 2008, construction commenced, with column foundation and peripheral walls for 100.000 sqm completed in 2009. Development was then put on hold, due to lack of funding and deteriorating market conditions.

·           Kiyanovskiy Lane - Kiev, Ukraine

Project description

The project consists of 0,55 ha of land located at Kiyanovskiy Lane, near Kiev city centre. It is destined for the development of business to luxury residences with beautiful protected views overlooking the scenic Dnipro River, St. Michaels' Spires and historic Podil.

Current status

The concept design of the project is under review with the proposed development to include residential apartments (GBA of circa 21.000 sqm) and 100 parking spaces across two basement levels.

·           Tsymlyanskiy Lane - Kiev, Ukraine

Project description

The 0,36 ha plot is located in the historic and rapidly developing Podil District in Kiev. The Company owns 55% of the plot, with one local co-investor owning the remaining 45%.

Current status

In 2009, all necessary documents were submitted to relevant authorities for approval and issuance of a construction permit. The plan was to develop approximately 10.000 sqm GBA of 40 high end residential units and office spaces on lower floors, as well as 41 parking spaces over three underground levels. Since then, the project has been on hold. In 2014 the company renewed its holding permit.

·           Balabino- Zaporozhye, Ukraine

Project description

The 26,38 site is situated on the south entrance of Zaporozhye city, three km away from the administrative border of Zaporozhye. It borders the Kharkov-Simferopol Highway (which connects eastern Ukraine and Crimea and runs through the two largest residential districts of the city) as well as another major artery accessing the city centre.

Current status

The site is zoned for retail and entertainment and various development options are being evaluated as per the market's needs.

·           Delia Lebada, Romania

Project description

The site consists of a ~40.000 sqm plot of land in east Bucharest situated on the shore of Pantelimon Lake, opposite to a famous Romanian hotel, the Lebada Hotel. The lake itself, having a 360 hectare surface, is the largest lake of Bucharest and provides for many leisure activities like fishing, cycling, walking, etc. At the back of the property there is a forest which transforms the area into a very attractive habitat for families and adds value to the residential units to be developed.

Current status

The construction permit, which allows for ~54.000 sqm to be built, was renewed in April 2014 and since then, the project has been on hold.

For the six months ended 30 June 2015

	Note	Six month ended
		30 June 2015		30 June 2014 Restated*
		€		€
Operational income	8	2.935.910		1.406.129
Investment Property related gains	15 d	4.737.805		13.225.535
Administration expenses	9	(1.599.125)		(1.543.497)
Investment property operating expenses	10	(287.584)		(254.857)
Other operating income/(expenses), net	11	42.270		(16.624)
Gain realized on acquisition	16	5.237.790		391.205
Share of profits from associates	17	354.949		-
Operating profit		11.422.015		13.207.891
Finance income	12	13.199		52.915
Finance costs	12	(1.657.081)		(618.047)
Foreign exchange loss	13 a	(4.976.537)		(3.966.512)
Income/(loss) before tax		4.801.596		8.676.247
Income tax expense	14	(2.894)		(12.931)
Profit/(loss) for the period		4.798.702		8.663.316
Other comprehensive (loss)/income
Exchange difference on intercompany loans to foreign holdings	13 b, 28.3	(7.323.715)		(10.623.876)
Exchange difference on translation of foreign operations	21	5.022.908		1.358.894
Total comprehensive Profit/ (loss) for the period		2.497.895		(601.666)
Profit/(loss) attributable to:
Owners of the parent		4.706.590		8.690.773
Non-controlling interests		92.112		(27.457)
		4.798.702		8.663.316
Total comprehensive Profit/(loss) attributable to:
Owners of the parent		2.496.590		(574.209)
Non-controlling interests		1.305		(27.457)
		2.497.895		(601.666)
Profit/(loss) per share (EUR per share):	6
Basic Profit/(loss) for the period attributable to ordinary equity owners of the parent		0,09		0,31
Diluted Profit/(loss)  for the period attributable to ordinary equity owners of the parent		0,07		0,27

^*Note 13

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2015

	Note	30 June  2015		31 December 2014		30 June 2014
		€		€		€
ASSETS
Non-current assets
Investment properties	15b	105.779.543		53.533.187		42.296.658
Investment property under construction	15a	5.541.156		5.083.216		6.634.330
Prepayments made for investments	15c	2.334.337		2.674.219		3.685.739
Tangible and intangible assets		201.318		200.203		64.684
Goodwill		43.269		43.269		-
Long-term receivables		253.027		125.909		126.437
Investments in associates	17	12.007.807		-		-
		126.160.457		61.660.003		52.807.848
Current assets
Prepayments and other current assets	18	5.325.967		4.251.489		3.082.991
Cash and cash equivalents	19	2.832.054		891.938		3.100.367
		8.158.021		5.143.427		6.183.358
Total assets		134.318.478		66.803.430		58.991.206
EQUITY AND LIABILITIES				72.035.042
Issued share capital	20	756.899		338.839		4.389.185
Share premium		121.227.562		97.444.044		92.815.992
Translation difference reserve	21	3.701.890		(1.411.825)		(8.957.084)
Exchange difference on intercompany loans to foreign holdings		(27.069.826)		(19.746.111)		(10.623.876)
Accumulated losses		(39.357.885)		(44.064.475)		(40.402.340)
Equity attributable to equity holders of the parent		59.258.640		32.560.472		37.221.877
Non-controlling interests	22	1.349.250		651.882		921.174
Total equity		60.607.890		33.212.354		38.143.051
Non-current liabilities
Interest bearing borrowings	23	44.750.322		12.255.716		-
Finance lease liabilities	27	11.340.099		11.463.253		7.362.229
Redeemable preference shares	20	-		349.325		-
Trade and other payables	24	428.553		214.685		326.626
Deposits from tenants	25	638.519		499.831		434.067
		57.157.493		24.782.810		8.122.922
Current liabilities
Interest bearing borrowings	23	10.343.906		5.960.706		10.930.710
Trade and other payables	24	4.702.110		1.654.852		933.863
Taxes payable	26	862.229		431.828		206.361
Redeemable preference shares	20	349.325		349.325		-
Provisions	26	-		68.253		81.800
Deposits from tenants	25	117.387		161.579		119.781
Finance lease liabilities	27	178.138		181.723		452.718
		16.553.095		8.808.266		12.725.233
Total liabilities		73.710.588		33.591.076		20.848.155
Total equity and liabilities		134.318.478		66.803.430		58.991.206
EUR € Net Asset Value (NAV) per share:                   6
Basic NAV attributable to equity holders of the parent		0,78	0,96		1,30
Diluted NAV attributable to equity holders of the parent		0,48	0,84		1,14

On 25^th September 2015 the Board of Directors of SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC authorised these financial statements for issue.

Lambros Anagnostopoulos	Paul Ensor	Constantinos Bitros
Director & Chief Executive Officer	Director & Chairman of the Board	Chief Financial Officer

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2015

		Attributable to owners of the Company
		Share capital	Share premium, net(1)	Accumulated losses, net of non-controlling interest(2)		Exchange difference on intercompany loans to foreign holdings(3)	Foreign currency translation reserve(4)	Total	Non- controlling interests	Total
		€	€	€		€	€	€	€	€
Balance - 31 December 2013		4.383.018	92.704.841	(49.093.113)		-	(10.315.978)	37.678.768	948.631	38.627.399
Profit/(loss) for the period		-	-	8.690.773		-	-	8.690.773	(27.457)	8.663.316
Issue of share capital		6.167	111.151	-		-	-	117.318	-	117.318
Exchange difference on intercompany loans to foreign holdings		-	-	-		(10.623.876)	-	(10.623.876)	-	(10.623.876)
Foreign currency translation reserve		-	-	-		-	1.358.894	1.358.894	-	1.358.894
Balance - 30 June 2014		4.389.185	92.815.992	(40.402.340)		(10.623.876)	(8.957.084)	37.221.877	921.174	38.143.051
Profit/(loss) for the period		-	-	(7.763.436)		-	-	(7.763.436)	68.209	(7.695.227)
Issue of share capital		50.955	4.628.052	-		-	-	4.679.007	-	4.679.007
Reduction of share capital		(4.101.301)	-	4.101.301		-	-	-	-	-
Exchange difference on intercompany loans to foreign holdings		-	-	-		(9.122.235)	-	(9.122.235)	-	(9.122.235)
Foreign currency translation reserve		-	-	-		-	7.545.259	7.545.259	(337.501)	7.207.758
Balance - 31 December 2014		338.839	97.444.044	(44.064.475)		(19.746.111)	(1.411.825)	32.560.472	651.882	33.212.354
Profit/(loss) for the period		-	-	4.706.590		-	-	4.706.590	92.112	4.798.702
Issue of share capital, net (note 20)		418.060	23.783.518	-		-	-	24.201.578	-	24.201.578
Exchange difference on intercompany loans to foreign holdings		-	-	-		(7.323.715)	-	(7.323.715)	-	(7.323.715)
Foreign currency translation reserve		-	-	-		-	5.113.715	5.113.715	(90.807)	5.022.908
Acquisition of subsidiary including Non-Controlling Interest		-	-	-		-	-	-	696.063	696.063
Balance - 30 June 2015		756.899	121.227.562	(39.357.885)		(27.069.826)	3.701.890	59.258.640	1.349.250	60.607.890

¹Share premium is not available for distribution

²Companies which do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits. Special contribution for defense at 20% will be payable on such deemed dividends to the extent that the shareholders (companies and individuals) are Cyprus tax residents. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defense is payable on account of the shareholders.

³ Exchange differences on intercompany loans to foreign holdings arose as a result of devaluation of the Ukrainian Hryvnia. The Group treats the mentioned loans as a part of the net investment in foreign operations.

⁴ Exchange differences related to the translation from the functional currency of the Group's subsidiaries are accounted for directly to the foreign currency translation reserve. The foreign currency translation reserve represents unrealized profits or losses related to the appreciation or depreciation of the local currencies against the € in the countries where the Company's subsidiaries own property assets.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2015

	Note	30 June 2015		30 June 2014
		€		€
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(Loss) before tax and non-controlling interest		4.801.596		8.676.247
Adjustments for:
Depreciation of property, plant and equipment	9	6.979		5.940
Other expenses/(income)		(108.550)		(5.926)
Interest expense	12	1.435.894		579.501
Interest income	12	(13.199)		(52.915)
Change in tax provisions		(68.253)		(38.806)
Foreign exchange loss/(gain)	13	4.976.537		3.966.512
Investment property related loss/  (gain)	15 d	(4.737.805)		(13.225.535)
Loss/ (Gain) realized on acquisition	16	(5.237.790)		(391.205)
Share of loss / (profit) from associates	17	(354.949)		-
Cash flows used in operations before working capital changes		700.460		(486.187)
Decrease/(increase) in prepayments and other current assets	18	1.718.119		(560.644)
Increase in VAT recoverable	18	(6.059)		121.773
Decrease in trade and other payables	24	(267.057)		(345.682)
Change in other taxes and duties		338.734		27.233
Decrease in deposit from tenants		(112.731)		151.984
Increase in long-term receivables		(127.118)		-
Income tax paid		(198.353)		(262.128)
Net Working Capital Changes		1.345.535		(867.464)
Net cash flows used in operating activities		2.045.995		(1.353.651)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of investment in associates	17	(4.059.839)		-
Capital expenditures on investment property and prepayment on acquisition		(110.539)		(422)
Interest received		13.199		52.915
Payment for the acquisition of subsidiary		(1.786.934)		(4.332.624)
Net cash flows used in investing activities		(5.944.113)		(4.280.131)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital	20	8.001.212		-
Repayment of preference shares		(349.325)		-
Repayment of borrowings		(313.676)		(218.948)
Repayment of finance leases		(126.739)		(8.169)
Interest and financial charges paid		(1.373.238)		(695.146)
Net cash flow from financing activities		5.838.234		(922.263)
Effect of foreign exchange rates on cash		(34.130)		(11.848)
Net increase/(decrease) in cash at banks		1.905.986		(6.556.045)
Cash:
At beginning of the period	19	891.938		9.668.260
At end of the period		2.832.054		3.100.367

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2015

1. General Information

Country of incorporation

SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC (the ''Company'') was incorporated in Cyprus on 23 June 2005 and is a public limited liability company, listed on the London Stock Exchange (AIM): ISIN CY0102102213. Its registered office is at Kyriacou Matsi 16, Eagle House, 10^th floor, Agioi Omologites, 1082 Nicosia, Cyprus.

Principal activities

The principal activities of the Group, which are unchanged from last year, are directly or indirectly to invest in and/or manage real estate properties as well as real estate development projects in Central, East and South East Europe (the "Region").  These include the acquisition, development, operation and selling of property assets, in the Region.

The Group maintains offices in Nicosia, Cyprus; Kiev, Ukraine; and Bucharest, Romania.

As at the reporting date, the Group had 24 Full Time Equivalent (FTEs: 9 in Ukraine and 10 in Romania, 5 in Cyprus) employed persons, including the CEO and the CFO (December 2014 à 19).

2.  Adoption of new and revised Standards and Interpretations

The accounting policies adopted for the preparation of these condensed consolidated interim financial statements for the six months ended 30 June 2015 are consistent with those followed for the preparation of the annual financial statements for the year ended 31 December 2014.

3. Significant accounting policies

Basis of preparation

The condensed consolidated interim financial statements for the six months ended 30 June 2015 have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting".

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with the International Financial Reporting Standards ("IFRS") have been condensed or omitted. However, such information reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of the Group's Management, necessary to fairly state the results of interim periods.

Interim results are not necessarily indicative of the results to be expected for the full year.

The 31 December 2014 statement of financial position was derived from the audited consolidated financial statements.

Basis of consolidation

The condensed consolidated interim financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries).

The Group's condensed consolidated interim financial statements comprise the financial statements of the parent company, SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC and the financial statements of the following subsidiaries:

Holding %

Name

Country of incorporation

Related Asset

as at 30.06.2015

as at 31.12.2014

as at 30.06.2014

SC SECURE Capital Limited

Cyprus

100

100

100

SL SECURE Logistics Limited

Cyprus

Brovary Logistics Park

100

100

100

LLC Aisi Brovary

Ukraine

100

100

100

LLC Terminal Brovary

Ukraine

100

100

100

LLC Aisi Ukraine

Ukraine

Kiyanovskiy Residence

100

100

100

LLC Retail Development Balabyno

Ukraine

100

100

100

LLC Trade Center

Ukraine

100

100

100

LLC Almaz‑press‑Ukrayina

Ukraine

Tsymlianskiy Residence

55

55

55

LLC Aisi Bela

Ukraine

Bela Logistic Park

100

100

100

LLC Merelium Investments

Ukraine

Merged

-

100

100

LLC Interterminal

Ukraine

Zaporizhia Retail Center

100

100

100

LLC Aisi Outdoor

Ukraine

Merged

-

100

100

LLC Aisi Vida

Ukraine

Merged

-

-

100

LLC Aisi Val

Ukraine

Merged

-

-

100

LLC Aisi Ilvo

Ukraine

100

100

100

LLC Aisi Consta

Ukraine

Merged

-

-

100

LLC Aisi Roslav

Ukraine

Merged

-

-

100

LLC Aisi Donetsk

Ukraine

Merged

-

100

100

Myrnes Innovations Park Limited

Cyprus

Innovations Logistics Park

100

100

100

Best Day Real Estate SRL

Romania

100

100

100

Yamano Holdings Limited

Cyprus

EOS Business Park

100

100

-

Secure Property Development and Investment Srl

Romania

100

100

-

N-E Real Estate Park First Phase Srl

Romania

100

100

-

SEC South East Continent Unique Real Estate Investments II Limited

Cyprus

Residential Portfolio

100

100

-

Diforio Holdings Limited

Cyprus

100

100

-

Demetiva Holdings Limited

Cyprus

100

100

-

Ketiza Holdings Limited

Cyprus

45

45

-

Frizomo Holdings Limited

Cyprus

100

100

-

SecMon Real Estate SRL

Romania

100

100

-

SecVista Real Estate SRL

Romania

100

100

-

SecRom Real Estate SRL

Romania

100

100

-

Ketiza Real Estate SRL

Romania

90

45

-

Victini Holdings Limited

Cyprus

GED Warehouse

100

-

-

GED Logistics S.A.

Greece

100

-

-

SEC South East Continent Unique Real Estate (Secured) Investments Limited

Cyprus

100

-

-

Edetrio Holdings Limited

Cyprus

Residential Portfolio and Land

100

-

-

Emakei Holdings Limited

Cyprus

100

-

-

RAM Real Estate Management Limited

Cyprus

50

-

-

Iuliu Maniu Limited

Cyprus

45

-

-

Moselin Investments srl

Romania

45

-

-

Rimasol Enterprises Limited

Cyprus

44,24

-

-

Rimasol Real Estate Srl

Romania

44,24

-

-

Ashor Ventures Limited

Cyprus

44,24

-

-

Ashor Development Srl

Romania

44,24

-

-

Jenby Ventures Limited

Cyprus

44,24

-

-

Jenby Investments Srl

Romania

44,24

-

-

Ebenem Limited

Cyprus

44,24

-

-

Ebenem Investments Srl

Romania

44,24

-

-

Sertland Properties Limited

Cyprus

100

-

-

Boyana Residence ood

Bulgaria

100

-

-

Mofben Investments Limited

Cyprus

Pantelimon Lake

100

-

-

Delia Lebada Invest srl

Romania

65

-

-

Zirimon Properties Limited

Cyprus

Delea Nuova

100

-

-

Within the reporting period the subsidiaries LLC Aisi Outdoor, LLC Merelium Investments and LLC Aisi Donetsk were under merged to LLC Aisi Ilvo. The reorganization (merger) process was finished in June 2015.

During the reporting period the Company realized a number of acquisitions namely of GED Warehouse and a mixed portfolio including commercial, residential properties and land (notes 15 & 16).

Functional and presentation currencies

Items included in the Group's financial statements are measured applying the currency of the primary economic environment in which the entities operate (''the functional currency''). The national currency of Ukraine, the Ukrainian Hryvnia, is the functional currency for all the Group's entities located in Ukraine, the Euro for all the Romanian, Bulgarian and Greek subsidiaries, while the parent company and its Cyprus based subsidiaries use either the Euro or the US dollar as the functional currency.

The condensed consolidated interim financial statements are presented in Euro which is the Group's presentation currency.

As Management records the condensed consolidated interim financial information of the entities domiciled in Cyprus, Romania and Ukraine in their functional currencies, in translating financial information of the entities domiciled in these countries into Euro for inclusion in the condensed consolidated interim financial statements, the Group follows a translation policy in accordance with International Accounting Standard No. 21, "The Effects of Changes in Foreign Exchange Rates", and the following procedures are performed:

·      All assets and liabilities are translated at closing rate;

·      Income and expense items are translated using exchange rates at the dates of the transactions, or where this is not practicable the average rate has been used;      

·      All resulting exchange differences are recognized as a separate component of equity;

·      When a foreign operation is disposed of through sale, liquidation, repayment of share capital or abandonment of all, or part of that entity, the exchange differences deferred in equity are reclassified to the consolidated statement of comprehensive income as part of the gain or loss on sale.

The relevant exchange rates for the entities domiciled in countries where the Group operates into Euro are as follows:

	Average			As at
Currency	01/01/2015 -30/06/2015	2014	01/01/2014 -30/06/2014	30/06/2015	31/12/2014	30/06/2014
USD	1,1115	1,3285	1,3703	1,1189	1,2141	1,3566
UAH	23,8303	15,6833	14,0973	23,5414	19,2329	16,0868
RON	4,4479	4,4446	4,4643	4,4725	4,4821	4,3830
BGN	1,9558	-	1,9558	1,9558	-	1,9558

4. Financial risk Management

4.1 Financial risk factors

The Group is exposed to operating country risk, real estate holding and development associated risks, market price risk, interest rate risk, credit risk, liquidity risk, currency risk, other market price risk, operational risk, compliance risk, litigation risk, reputation risk, capital risk management and other risks arising from the financial instruments it holds. The risk management policies employed by the Group to manage these risks are discussed below. Financial Risk Management is also described in note 31 of the condensed consolidated interim financial statements.

4.1.1 Operating Country Risks

The Group is exposed to country risk, stemming from the political and economic environment of countries in which it operates. Notably:

4.1.1.1 Cyprus

During the past 10 years Cyprus has become an established financial center taking advantage of favorable double tax treaties with various countries around the world, most importantly with Eastern European countries where the Group operates. Due to the world financial crisis erupting in 2008 and the ensuing debt crisis which had a liquidity effect of the Cypriot banking system as in all of the south and east European countries, following the restructuring of the Greek public debt certain of the Cypriot banks have taken a blow to their solvency (write off of €4,5bn of Greek debt) and have requested the support of the ECB through the ELA mechanism.

Thus, the indebtedness of the Cypriot Republic and its two main banks Bank of Cyprus and Cyprus Popular Bank (Laiki) created the basis for the country to be part of a financial rescue plan under the supervision of the IMF, the ECB and the European Union in early 2013, a moment when the Cypriot State stopped being able to borrow from the international debt markets.

At the same time, the recent discovery of potentially significant natural gas and oil deposits within the boundaries of the Cypriot exclusive economic zone perplexes the geographic and political relationships and developments as Cyprus is in the crossroad of 3 continents.

Any failure to effect and implement an economic restructuring plan, may have a significant negative effect on the financials of the Cypriot economy that could lead to a default and the abandonment of the Euro currency. Such result would have a destabilizing effect on the operations of the Company at the corporate level.  Cyprus has achieved within the first half of 2015 to return to the international debt markets which signifies a return to normality.

On that note, the Company had proactively evaluated the probable effect of the measures in relation to the levy on deposits and the restrictions on capital movement applied to Cyprus based financial institutions. The Company held most of its liquidity with non-Cypriot owned banking institutions, partly in Cyprus and partly outside Cyprus and to this date all operations of the Group's throughout Ukraine continued to be carried out normally.

4.1.1.2 Ukraine

Nearly two years after the clashes that resulted in the fall of the incumbent government in November 2013, the deterioration and finally breaking off of Russia-Ukraine relations and the loss of part of Ukraine's geographic area, the situation remains particularly volatile. The social and geopolitical instability continues to affect not only Ukraine's economic and political well-being, but also relations between Russia and the rest of the world, as the international financial markets remain volatile.

Although Ukraine had made significant progress in increasing its gross domestic product, decreasing inflation, stabilizing its currency, increasing real wages and improving its trade balance between 2011 and 2013 these gains have already being reversed as a result of the current tough relations  with Russia which has plunged the country into a state of  war and separatism.

The implementation of reforms has been impeded by lack of political consensus, controversies over privatization, the restructuring of the energy sector, the removal of exemptions and privileges for certain state-owned enterprises or for certain industry sectors, the limited extent of cooperation with international financial institutions and non-stable taxing environment. Ukraine has engaged in broad discussion with its lender including IMF, for a restructuring of its foreign debt. Such discussions are crucial for the future economic development of the country.  Overall, the future remains uncertain for the country, even though steps have been made towards European integration Should the IMF reforms are implemented and the foreign debt is restructured as well as political stability reemerges the country's economy has the potential to boom. As Ukraine's government relies to a significant extent on official or multilateral borrowings to avoid bankruptcy, finance its budget deficit, fund its payment obligations under domestic and international borrowings and support foreign exchange reserves on the current debt discussions are critical for  Ukraine's ability to achieve a stable political environment to implement strategic, institutional and structural reforms but seems to be mainly depending on how long and how severe the current geopolitical conflict will last.

In the first quarter of 2015, real GDP decreased by (-17,2%) year-on-year. In January-June 2015, consumer price inflation reached 48,1% year-on-year, compared to 5,8% inflation in the first half of 2014. Major sources of price inflation during the first six months of 2015 were sharp depreciation of the hryvnya and the resultant increase in prices for imported goods, growth of the state-regulated tariffs and high inflation expectations. The basic consumer price index, which reflects demand pressure, increased by 40,6% in January-June 2015, compared to the 4% growth in the first half of 2014.

Apart from the international and internal political turmoil, Ukraine's legal system continuous to be in transition and is, therefore, subject to greater risks and uncertainties than a more mature legal system.  In particular, risks associated with the Ukrainian legal system include, but are not limited to:

(i) inconsistencies between and among the Constitution of Ukraine and various laws, presidential decrees, governmental, ministerial and local orders, decisions, resolutions and other acts;

(ii) provisions in the laws and regulations that are ambiguously worded or lack specificity and thereby raise difficulties when implemented or interpreted;

(iii) difficulty in predicting the outcome of judicial application of Ukrainian legislation; and

(iv) the fact that not all Ukrainian resolutions, orders and decrees and other similar acts are readily available to the public or available in understandably organized form. 

Furthermore, several fundamental Ukrainian laws either have only relatively recently become effective or are still pending hearing or adoption by the Parliament.  The recent origin of much of Ukrainian legislation, the lack of consensus about the scope, content and pace of economic and political reform and the rapid evolution of the Ukrainian legal system in ways that may not always coincide with market developments, place the enforceability and underlying constitutionality of laws in doubt, and result in ambiguities, inconsistencies and anomalies. 

In addition, Ukrainian legislation often contemplates implementing regulations. Often such implementing regulations have either not yet been promulgated, leaving substantial gaps in the regulatory infrastructure, or have been promulgated with substantial deviation from the principal rules and conditions imposed by the respective legislation, which results in a lack of clarity and growing conflicts between companies and regulatory authorities.

Tax laws are changing and compared to more developed market economies are in a non-mature level thus creating often an unclear tax environment of unusual complexity. This particularly may affect negatively the ability of the Group to recuperate VAT paid and/or to utilize operating losses as a carry forward tax shield.

During the year from the first quarter of 2014, the Ukrainian hryvnya was subject to significant devaluation. Starting from 7,99 UAH / USD in February 2014, the official exchange rate depreciated to 15,78 UAH / USD at the end of 2014 and reached its record low of 30 UAH/USD in February 2015. By the end of the first quarter of 2015 the official exchange rate stabilized at around 23 UAH/USD. As a result the National Bank of Ukraine, among other measures, imposed certain temporary restrictions to the Banks on processing client payments and on purchasing foreign currencies on the inter-banking market as well as certain capital controls towards foreign payments. 

The final resolution and impact of the political crisis are difficult to predict and the ongoing crisis may further adversely affect Ukrainian economy. Subsequent to 30th of June 2015 the Group has been operating in the normal course of business and the Management of the Group believes that it has undertaken all necessary measures to maintain the economic stability of the Group under these circumstances.

4.1.1.3 Greece

During the period the Hellenic Republic continued discussions with the creditor institutions (EU/ECB/IMF/ESM) resulting in retaining the risk of political and economic instability of the country. Failure to reach agreement at the end of June led to the implementation of capital controls in the banking sector, a 3-week bank holiday on 27 June, as well as the lapse of the existing economic support program for the country which led to the failure of the Hellenic Republic to repay an instalment to the IMF on 30 June.

Following a referendum on a deal proposed by international institutions and further negotiations, a preliminary agreement was reached on 12 July for a 3-year €86 billion support package, which was followed in August by the signing of a related  agreement and the ratifications by Greek and a number of EU member country parliaments of this agreement in August, signaling the commitment of Greece to remain in the Eurozone and effect any necessary reforms requested by the creditor institutions as a prerequisite to capital deployment. As such and following elections in September which secured another tenure for the government that reached this agreement, political and economic instability seems to be withdrawing.

Overall, the program has an aim to reduce the risk of economic instability in Greece; however there is still risk around implementation of the program. The implementation of the program and its effects on the economy are beyond the Group's control.

Various risks emerge should the program not be implemented as planned, including restrictions on use of local bank deposits, liquidity of the financial sector and businesses, recoverability of receivables, impairment of assets, sufficiency of financing by the lending banks, serving of existing financing arrangements and/or compliance with existing terms and financial covenants of such arrangements. These and any possible further negative developments in Greece could impact the results and financial position of the Group΄s Greek operations to some extent, in a manner not currently determinable.

The Group has been closely assessing developments in Greece and preparing for a number of eventualities around the Greek crisis, in line with its established risk management policy in order to ensure that timely actions and response are undertaken so as to minimize any impact on the Group's business and operations.

4.1.2 Risks associated with property holding

Several factors may affect the economic performance and value of the Group's properties, including: 

·      risks associated with construction activity at the properties, including delays, the imposition of liens and defects in workmanship;  

·      the ability to collect rent from tenants , on a timely basis or at all, taking also into account the UAH rapid devaluation;

·      the amount of rent and the terms on which lease renewals and new leases are agreed being less favorable than current leases;  

·      cyclical fluctuations in the property market generally;  

·      local conditions such as an oversupply of similar properties or a reduction in demand for the properties;

·      the attractiveness of the property to tenants or residential purchasers;  

·      decreases in capital valuations of property;  

·      changes in availability and costs of financing, which may affect the sale or refinancing of properties;

·      covenants, conditions, restrictions and easements relating to the properties;  

·      changes in governmental legislation and regulations, including but not limited to designated use, allocation, environmental usage, taxation and insurance;  

·      the risk of bad or unmarketable title due to failure to register or perfect our interests or the existence of prior claims, encumbrances or charges of which we may be unaware at the time of purchase;  

·      the possibility of occupants in the properties, whether squatters or those with legitimate claims to take possession;   

·      the ability to pay for adequate maintenance, insurance and other operating costs, including taxes, which could increase over time; and

·      political uncertainty, acts of terrorism and acts of nature, such as earthquakes and floods that may damage the properties.

4.1.3 Property Market price risk

Market price risk is the risk that the value of the Company's portfolio investments will fluctuate as a result of changes in market prices. The Group's assets are susceptible to market price risk arising from uncertainties about future prices of the investments. The Group's market price risk is managed through diversification of the investment portfolio, continuous elaboration of the market conditions and active asset management. To quantify the value of its assets and/or indicate the possibility of impairment losses, the Company commissioned internationally acclaimed valuers.

Valuations reported as at 31 December 2014 take into account recent political developments in Ukraine. Given the nature of the Group's assets the most immediate effect would be the prolongation of the period needed to market and effectively sell an asset under such duress conditions.

The BoD is monitoring the situation to ensure that assets value is preserved while at the same time through diversification according to the strategic plan of the Company, Ukrainian operations are gradually becoming part of a larger structure.

4.1.4 Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates.

The Group's income and operating cash flows are substantially independent of changes in market interest rates as the Group has no significant interest‑bearing assets apart from its cash balances that are mainly kept for liquidity purposes.

The Group is exposed to interest rate risk in relation to its borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. All of the Group's borrowings are issued at a variable interest rate. Management monitors the interest rate fluctuations on a continuous basis and acts accordingly.

4.1.5 Credit risk

Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets at hand at the end of the reporting period. Cash balances are held with high credit quality financial institutions and the Group has policies to limit the amount of credit exposure to any financial institution.

Management has been in continuous discussions with banking institutions monitoring their ability to extend financing as per the Group's needs. The sovereign debt crisis has affected the pan-European banking system during 2011 and 2012 imposing financing uncertainties for new development projects.  The financial crisis in the European Union periphery has strained any remaining liquidity and the financial institutions in the region (including those that have Italian, Greek or Austrian parent) have entered into deleveraging programs.

4.1.6 Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Group's functional currency. Most of the Group's transactions, including the rental proceeds are denominated in € or pegged to € or USD (the latter being the case of Ukraine). For the rest of the foreign exchange exposure Management monitors the exchange rate fluctuations on a continuous basis and acts accordingly, by limiting net exposures to a few days to 2 months.

Apart from liquidity maintained in local currency for operating reasons the Group's liquid assets are held in EUR denominated deposit accounts while most of the inflows of the company are pegged to the €/USD It should be noted that the current political uncertainty in Ukraine, and the currency devaluation may affect the Group's income streams indirectly through affecting the financial condition of the tenants of the Group's properties their solvency and their income generating capacity. Management is monitoring the situation closely and acts accordingly.

4.1.7 Capital risk management

The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group's core strategy is described in note 31 of the condensed consolidated interim financial statements.

4.1.8 Compliance risk

Compliance risk is the risk of financial loss, including fines and other penalties, which arises from non‑compliance with laws and regulations of the state. Although the Group is trying to limit such risk, the uncertain environment in which it operates in various countries increases the complexities handled by Management.

4.1.9 Litigation risk

Litigation risk is the risk of financial loss, interruption of the Group's operations or any other undesirable situation that arises from the possibility of non‑execution or violation of legal contracts and consequentially of lawsuits. The risk is restricted through the contracts used by the Group to execute its operations and is discussed in note 29.

4.2.  Operational risk

Operational risk is the risk that derives from the deficiencies relating to the Group's information technology and control systems as well as the risk of human error and natural disasters. The Group's systems are evaluated, maintained and upgraded continuously.

4.3. Fair value estimation

The fair values of the Group's financial assets and liabilities approximate their carrying amounts at the end of the reporting period. Valuations reported as at 31 December 2014 take into account past political developments in Ukraine which given the nature of the Group's assets the most immediate effect would be the prolongation of the period needed to market and effectively sell an asset under such duress conditions.

5. Critical accounting estimates and judgments

The accounting estimates and judgments used in the preparation of the condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2014.

6. Earnings and net assets per share attributable to equity holders of the parent

a.     Weighted average number of ordinary shares

	30 June 2015		30 June 2014
Issued ordinary shares	75.690.096		28.788.559
Weighted average number of ordinary shares (Basic)	51.191.365		28.192.277
Diluted weighted average number of ordinary shares	64.480.647		32.304.928

b.    Basic diluted and adjusted earnings per share

	30 June 2015		30 June 2014
	€		€
Profit/(loss) after tax attributable to owners of the parent	4.706.590		8.690.773
Basic	0,09		0,31
Diluted	0,07		0,27

c.     Net assets per share

	30 June 2015		31 December 2014
	€		€
Net assets attributable to equity holders of the parent	59.258.640		32.560.472
Number of ordinary shares	75.690.096		33.884.054
Diluted number of ordinary shares	122.559.555		38.866.775
Basic	0,78		0,96
Diluted	0,48		0,84

7. Segment information

All commercial and financial information related to the properties held directly or indirectly by the Group is being provided to members of executive Management who report to the Board of Directors.  Such information relates to rentals, valuations, income, costs and capital expenditures. The individual properties are aggregated into segments based on the economic nature of the property.  For the reporting period the Group has identified the following material reportable segments:

Industrial

·              Warehouse segment - the Group acquires, develops, operates and disposes warehouses

       Commercial

·              Office segment - the Group acquires, develops, operates and disposes offices

Residential

·              Residential segment - the Group is in the process of disposing residential properties

        Land Assets

·              Land assets - the Group owns a number of land assets which are either available for sale or for potential development

There are no sales between the segments.

Segment assets for the investment properties segments represent investment property (including investment properties under construction and prepayments made for the investment properties). Segment liabilities represent interest bearing borrowings, finance lease liabilities and deposits from tenants.

For the six months 30 June 2015  (€)	Warehouse	Office	Residential	Land Assets	Total
Segment profit
Sales income	-	-	671.368	-	671.368
Cost of sales	-	-	(469.850)	-	(469.850)
Rental income	1.976.449	233.594	109.308	-	2.319.351
Service charges and utilities income	241.788	38.113	-	-	279.901
Income from electricity production	135.140	-	-	-	135.140
Investment properties operating expenses	(237.698)	(33.480)	(16.406)		(287.584)
Investment property related gains FX related	4.711.511	-	-	3.340.085	8.051.596
Gain realized on acquisition of subsidiaries (note 16)	1.552.134	-	-	-	1.552.134
Share of profits from associates (note 17)	-	43.390	-	311.559	354.949
Segment profit	8.379.324	281.617	294.420	3.651.644	12.607.005
Management provision on Investment Property acquired (note 15 d)					(3.313.791)
Gain realized on acquisition of subsidiaries					3.685.656
Administration expenses					(1.599.125)
Other income/(expenses), net					42.270
Finance income					13.199
Finance costs					(1.657.081)
Foreign exchange losses, net					(4.976.537)
Profit before tax					4.801.596

For the period 1 January 2014 to 30 June 2014, the Group had income only from the warehouse segment.

30 June 2015 (€)	Warehouse	Office	Residential	Land Assets	Provision on Acquired Assets (note 15 d)	Total
Assets
Investment properties	49.447.093	6.400.000	20.889.348	32.356.893	(3.313.791)	105.779.543
Investment property under construction	-	-	-	5.541.156		5.541.156
Prepayments made for investments	100.000	-	-	2.234.337		2.334.337
Goodwill	-	43.269	-	-		43.269
Long-term receivables	250.104	-	1.193	1.730		253.027
Investments in associates	-	7.033.963	-	4.973.844		12.007.807
Segment assets	49.797.197	13.477.232	20.890.541	45.107.960	(3.313.791)	125.959.139
Tangible and intangible assets						201.318
Prepayments and other current assets						5.325.967
Cash and cash equivalents						2.832.054
Total assets						134.318.478
Liabilities
Interest bearing borrowings	25.114.894	-	11.506.239	18.473.095		55.094.228
Finance lease liabilities	7.528.668	3.934.972	-	54.597		11.518.237
Deposits from tenants	717.898	-	38.008	-		755.906
Redeemable preference shares	349.325	-	-	-		349.325
Segment liabilities	33.710.785	3.934.972	11.544.247	18.527.692		67.717.696
Trade and other payables						5.130.663
Taxes payable						862.229
Total liabilities						73.710.588

31 December 2014 (€)	Warehouse	Office	Residential	Land Assets	Total
Assets
Investment properties	31.463.310	6.400.000	8.373.000	7.296.877	53.533.187
Investment property under construction		-	-	5.083.216	5.083.216
Prepayments made for investments	624.841	-	-	2.049.378	2.674.219
Goodwill		43.269			43.269
Long-term receivables	125.909				125.909
Segment assets	32.214.060	6.443.269	8.373.000	14.429.471	61.459.800
Tangible and intangible assets					200.203
Prepayments and other current assets					4.251.489
Cash and cash equivalents					891.938
Total assets					66.803.430

Liabilities
Interest bearing borrowings	11.756.612	-	6.459.810	-	18.216.422
Finance lease liabilities	7.594.863	3.981.252	-	68.861	11.644.976
Deposits from tenants	621.129	-	40.281	-	661.410
Redeemable preference shares	698.650	-	-	-	698.650
Provision	-	-	-	68.253	68.253
Segment liabilities	20.671.254	3.981.252	6.500.091	137.114	31.289.711
Trade and other payables					1.869.537
Taxes payable					431.828
Total liabilities					33.591.076

Geographical information

Revenue (€)	30 June 2015	30 June 2014
Ukraine	1.191.853	1.241.528
Romania	1.310.316	164.601
Greece	432.185	-
Bulgaria	1.556	-
Total	2.935.910	1.406.129

	30 June 2015	31 December 2014
Carrying amount of investment property, including under construction and prepayments made for investments (€)
Ukraine	34.766.288	31.892.781
Romania	53.392.000	28.773.000
Greece	16.510.539	624.841
Bulgaria	12.300.000	-
Provision on Acquired Assets (note 15 d)	(3.313.791)
Total	113.655.036	61.290.622

The increase in value of investment properties, including under construction in Ukraine is due to the foreign currency exchange rates fluctuations. While for the purpose of these condensed consolidated interim financial statements the valuation results are expressed in USD (and are the same as of 31/12/2014) the resulting increase presented in the above table is derived from the devaluation of the EUR against the USD.

8. Operational income

Operational income in the amount of €2.935.910 for the period ended 30 June 2015 represents rental income as well as service charges and utilities income collected from tenants generated during the reporting periods as a result of the rental agreements concluded with tenants of the Terminal Brovary Logistic Park, Innovations Logistics Park, EOS Business Park, GED Logistics and sales or rental agreements for  Residential Portfolio while for the period ended 30 June 2014 it was only generated by Terminal Brovary and Innovations Logistics Park.

	30 June 2015	30 June 2014
	€	€
Income from sales of assets	671.368	-
Cost of assets sold	(469.850)	-
Rental income	2.319.351	1.272.609
Service charges and utilities income	279.901	133.520
Sales of electricity	135.140	-
Total Revenues	2.935.910	1.406.129

Income and Cost from sales of assets reflects figures associated with the sales of residential units.

Rental income and service charges and utilities income represent inflows for the rental agreements that the Company has with various tenants that rent space in its properties (mainly commercial and industrial). Vacancy rates in the various income producing assets of the company as at 30 June 2015 are as follows:

Income producing assets
%		30 June 2015	30 June 2014
EOS Business Park	Romania	0	n/a
Innovations Logistics Park	Romania	13	0
GED Logistics	Greece	0	n/a
Terminal Brovary	Ukraine	28	0

Income from sales of assets represents several apartments and parking spaces sold in Residential Portfolio while Cost of assets sold represents the acquisition value of the apartment and parking space reduced by the related depreciation amount until the finalisation of the sale.

The income from electricity is generated at GED Logistics using the alternative energy sources and sold to the Greek Electric Grid.

9. Administration Expenses

	30 June 2015	30 June 2014
	€	€
Salaries and Wages	573.350	365.513
Advisory fees	243.398	636.877
Legal fees	201.548	133.271
Travelling and other office expenses	129.606	142.219
Property Taxes and duties	125.505	12.380
Directors' remuneration	119.628	84.395
Public group expenses	71.970	52.450
Audit and accounting fees	62.159	54.375
Depreciation	6.979	5.940
Sundry expenses	64.982	56.077
Total Administration Expenses	1.599.125	1.543.497

Salaries and wages include the remuneration:

                a) of the CEO, the CFO, the Group Commercial Director and the Managing Directors Ukraine and Romania

                b) of personnel employed in Ukraine, Romania and Cyprus

Legal and advisory fees mainly represent expenses of the Company regarding the various legal and tax cases it has in Ukraine as well as fees for the normal operation of the Group.

Property taxes and duties reflect mainly property taxes and fees paid for Ukrainian and Romanian land plots and residential assets.

Directors' remuneration represents the remuneration of all non-executive Directors and committee members (note 28).

Public group expenses include among others fees paid to the AIM: LSE stock exchange and the Nominated Advisor of the Company related to the listing of the Company.

10. Investment property operating expenses

	30 June 2015	30 June 2014
	€	€
Property management, utility expenses and other property costs	287.584	254.857

The Group has Maintenance and Property Management Agreements in respect of the servicing of Terminal Brovary Logistics Park, Innovation Logistics Park and GED Logistics Park. The Group is also incurring property operating expenses including utility expenses, insurance premiums, land and building taxes as well as various other expenses needed for the proper operation of the income generating properties in Kiev and in Bucharest. Part of these expenses are recovered from the tenants through the rental agreements.

11. Other operating income/ (expenses), net

	30 June 2015	30 June 2014
	€	€
Income from enforcement of guarantees	122.867	-
Penalties	(1.559)	(8.241)
Other expenses, net	(79.038)	(8.383)
Total	42.270	(16.624)

Income from enforcement of guarantees relates to the income from the tenants of Terminal Brovary LLC for the early termination of the lease agreements.

Penalties recognized in the period ended 30 June 2015 and 30 June 2014 relate to Terminal Brovary LLC which were accrued by the tax authority on the land leased in Brovary.

Other expenses for the period ended 30 June 2015 mainly consist of maintenance and repair expenses at the operating companies of the Group representing residential, warehouse and office segments, as well as other operating expenses concerning the functioning of the Group.

12. Finance costs and income

Finance income	30 June 2015	30 June 2014
	€	€
Bank interest income	13.199	52.915
Net finance result	13.199	52.915

Finance costs	30 June 2015	30 June 2014
	€	€
Borrowing interest expenses (note 23)	1.104.169	529.384
Finance leasing interest expenses (note 27)	331.725	50.117
Finance charges and commissions	221.187	38.546
Net finance result	1.657.081	618.047

Borrowing interest represents interest expense charged on bank borrowings (note 23) as well as on loans granted to associate companies (note 17).

Finance leasing interest expenses relate to the sales and lease back agreements of the Group with Piraeus Leasing Romania for Innovations Logistics Park and with Alpha Bank for EOS Business Park as well as to the land lease agreements of Ukrainian entities of the Group signed with the municipal authorities in Kiev (note 27).

Finance charges and commissions include fees paid to the banks, including a fee payable to EBRD for the restructuring of the Terminal Brovary loan.

13. Foreign exchange profit/ (losses)

a.     Foreign exchange loss

Foreign exchange losses (non-realised) resulted from the loans and /or payables denominated in non EUR currencies when translated in EUR, mainly the EBRD loan (note 23) The exchange loss for the period end 30 June 2015 amounted to €4.976.537.

b.    Exchange difference on intercompany loans to foreign holdings

The intercompany loans provided by SC Secure Capital Limited to Ukrainian subsidiaries (note 28.3) incurred an exchange loss  (non-realised) of €7.323.715, due to the UAH devaluation which took place during the reporting period.

The foreign exchange loss for the period as reported in the financial statements of June 2014 amounting to €14.590.388 have been restated in order to reflect the split between the foreign exchange loss and the exchange difference on intercompany loans to foreign holdings. As a result the foreign exchange loss for the reporting period ending 30th June 2016 are presented as €3.966.512 and the remaining  €10.623.876 are presented under exchange difference on intercompany loans to foreign holdings. The restatement was made in order to better reflect the devaluation of UAH during 2014 which is took place at 31 December 2014 on and had an effective date 1 January 2014 (note 28.3).

14. Income Tax expense

The corporate income tax rate for the Company's Ukrainian subsidiaries is 19%, for the Romanian subsidiaries is 16% , for the Greek subsidiary 26% and for the Bulgarian subsidiaries 20% for the six months ended 30 June 2015. The corporate tax that is applied to the qualifying income of the Company and its Cypriot subsidiaries is 12.5% for the six months ended 30 June 2015.

15. Investment Property (all)

Investment Property consists of the following assets:

·      Terminal Brovary Logistic Park consists of a 49.180 sqm Class A warehouse and associated office space, situated on the junction of the main Kiev - Moscow highway and the Borispil road. The facility is in operation since Q1 2010 and as at the end of the reporting period is 72% leased.

·      Innovations Logistic Park is a 16.570 sqm gross leasable area logistics park located in Clinceni in Bucharest, which benefits from being on the Bucharest ring road. Its construction was tenant specific, was completed in 2008 and is separated in four warehouses, two of which offer cold storage, the total area of which being 6.395 sqm. Innovations was acquired by the Company in May 2014 and as of the end of the reporting period is 87% leased.

·      EOS Business Park is a 3.386 sqm gross leasable area and includes a Class A office Building in Bucharest, which is currently fully let to Danone Romania, the French multinational food company. EOS Business Park was acquired by the Group in October 2014.

·      GED Logistics is a logistics park comprising 17.756 leasable sq m and has a net operating income ("NOI") of approximately €1.5 million. It is fully let 70% to the German multinational transportation and logistics company, Kuehne + Nagel and 30% to a Greek commercial company trading electrical appliances GE Dimitriou SA. The NOI also includes income from selling electric energy produced by the 1MW photovoltaic park installed on the roof of the warehouse property to the Greek Electric Grid.

·      Residential portfolio is an income producing residential portfolio in Bucharest, Romania consisting as of end of June of 184 apartments and villas across six separate complexes (Romfelt, Linda, Monaco, Blooming House, Moselin - Green Lake Parcel K and Boyana) located in different residential areas of Bucharest and Sofia. The Group acquired it partly in August 2014 and partly May 2015. The aggregate residential portfolio is ~30% let at the end of June.

·      Bela Logistic Center is a 22,4 ha plot in Odessa situated on the main highway to Kiev. Following the issuance of permits in 2008, below ground construction for the development of a 103.000 sq m GBA logistic center commenced. Construction was put on hold in 2009 following adverse macro-economic developments at the time.

·      Kiyanovsky Lane consists of four adjacent plots of land, totaling 0,55 Ha earmarked for a residential development, overlooking the scenic Dnipro River, St. Michael's Spires and historic Podil neighbourhood.

·      Tsymlianskiy Lane, is a 0,36 ha plot of land located in the historic Podil District of Kiev and is destined for the development of a residential complex.

·     Balabino project is a 26,38 ha plot of land situated on the south entrance of Zaporizhia, a city in the south of Ukraine with a population of 800.000 people. Balabino is zoned for retail and entertainment development.

·     Pantelimon Lake consists of a ~40.000 sq m plot of land in east Bucharest situated on the shore of Pantelimon Lake, opposite to a very famous Romanian hotel, the Lebada Hotel. The construction permit, which allows for ~54.000 sqm residential space to be built, was renewed in April 2014.

·     Boyana Land The complex of Boyana Residence includes adjacent land plots with surface of 17.000 sqm with building permits to develop GBA of 21.851 sqm.

·     Green Lake land Green Lake land plot includes a 48.360m² land area with a Gross Buildable Area of ~82.250 sqm (63.400 sqm above ground). The Green Lake project is situated in the northern part of Bucharest on the bank of Grivita Lake in Bucharest. SPDI owns 44,24% of these plots.

Asset Name	Description/ Location	Principal Operation	Related Companies	Carrying amount (€) as at
				30 June 2015	31 December 2014
Terminal Brovary Logistics Park	Brovary, Kiev oblast	Warehouse	LLC TERMINAL BROVARY LLC AISI BROVARY SL LOGISTICS LIMITED	19.036.554	17.463.310
Bela Logistic Center	Odesa	Land and Development Works for Warehouse	LLC AISI BELA	5.541.156	5.083.216
Kiyanovskiy Lane	Podil, Kiev City Center	Land for residential development	LLC AISI UKRAINE LLC TORGOVIY CENTR RETAIL DEVELOPMENT BALABYNO	4.379.301	4.017.381
Tsymlianskiy Lane	Podil, Kiev City Center	Land for residential development	LLC ALMAZ PRES UKRAINE	1.251.229	1.147.823
Balabino	Zaporizhia	Land for retail development	LLC INTERTERMINAL	2.323.711	2.131.673
Total Ukraine				32.531.951	29.843.403
Innovations Logistic Park	Clinceni, Bucharest	Warehouse	MYRNES INNOVATIONS PARK LIMITED BEST DAY REAL ESTATE SRL	14.000.000	14.000.000
EOS Business Park	Bucharest	Office building	YAMANO LIMITED SPDI SRL, N-E Real Estate Park First Phase Srl	6.400.000	6.400.000
Residential Portfolio	Bucharest	Residential apartments	Secure Investment  II Demetiva Ltd Diforio Limited Frizomo Limited Ketiza Limited Sec Rom Srl Sec Vista Srl Sec Mon Srl Ketiza Srl	8.373.000	8.373.000
Green Lake	Bucharest	Residential apartments land for residential development	Edetrio Holdings Limited Emakei Holdings Limited Iuliu Maniu Limited Moselin Investments srl Rimasol Limited Rimasol Real Estate Srl Ashor Ventures Limited Ashor Develpoment Srl Jenby Ventures Limited Jenby Investments Srl Ebenem Limited Ebenem Investments Srl	18.797.000	-
Pantelimon Lake	Bucharest	Land for residential development	Mofben Investments Limited Delia Lebada Invest srl	5.822.000	-
Total Romania				53.392.000	28.773.000
Boyana Project	Sofia	Residential apartments and land for residential development	Sertland Properties Limited Boyana Residence ood	12.300.000	-
Total Bulgaria				12.300.000	-
GED Logistics	Athens	Warehouse	Victini Holdings Limited. GED Logistics S.A.	16.410.539	-
Total Greece				16.410.539	-
Provision on acquired Investment Properties				(3.313.791)
TOTAL				111.320.699	58.616.403

Carrying amounts of the properties owned as of 30 June 2015 stated in these condensed consolidated interim financial statements remain the same as were presented in the Group's audited consolidated financial statements as of 31 December 2014 for the assets the Company owned at the time and at the fair value at acquisition for assets acquired during the period; the carrying amounts of Ukrainian properties remain the same in terms of their value in US$ as provided by CBRE an external valuer. The exchange gains related to the Ukrainian assets of €8.051.596 presented in these condensed consolidated interim financial statements arose from UAH devaluation as well as the translation from the valuation currency (US$) to the reporting currency (€) which took place during the reporting period.

c.     Investment Property Under Construction 

As at 30 June 2015 investment property under construction represents the carrying value of Bela Logistic Center project, which has reached the +10% construction in late 2008 but it is stopped since then. The Company's external valuer has appraised the property's value at US$6.200.000 as at 31 December 2014.

d.    Investment Property

	30 June 2015
	€
At 1 January	53.533.187
Capital expenditure on investment property	10.539
Revaluation gain/(loss) on investment property	3.366.380
Acquisition of investment property	53.329.539
Translation difference	(4.460.102)
At 30 June	105.779.543

Terminal Brovary, Kiyanovskiy Lane, Tsymlyanskiy Lane, Balabino, Innovations, EOS Business Park, Residential Portfolio, (note 15 above), Pantelimon Lake land, Green Lake land, Boyana land and GED Logistics S.A. are included in the Investment Property category.

e.     Prepayment made for Investments

The Group has made an advance payment of ~US$12mil. (representing principal plus interest) for the acquisition of a project in Podil (Kiev) in 2007. As of the end of the reporting period the Management does not expect such acquisition to proceed while the seller has already defaulted on his credit to the Group.

As a consequence, the Group has progressed the legal proceedings initiated in 2013, for the transfer of the collateral (land plot of 42 ha in Kiev Oblast) in the Group's name as well as legal proceeding against the company which collected the original US$12mil. payment. As the collateral's value, as valued by CBRE, has been reduced the Group has reduced the amount of the receivable to the value of the collateral having a carrying value of € 2.049.378.

f.      Investment property related gains

	30 June 2015	30 June 2014
	€	€
Gain as a result of functional currency devaluation	8.051.596	13.225.535
Provision on acquired Investment Properties	(3.313.791)	-
Investment Property related gains	4.737.805	13.225.535

Gain as a result of functional currency devaluation is the revaluation of Ukrainian assets attributable to the foreign exchange difference between the US$ and the EUR (to a great extent negated by the devaluation of the UAH).

Management has taken a provision of €3.313.791 in relation to the non-core (residential and adjacent land plots) property assets included in the portfolio acquired during the period, so as to reflect the consideration paid rather than the Fair Value of the assets acquired. Such provision is to be reviewed at year end by taking into account the valuations then as well as the operational performance of the assets under the SPDI management.

16. Investment Property Acquisitions

During the reporting period the Group completed the acquisition of an income producing logistics park (the "Park"), located in the West Attica Industrial Area of Athens, Greece. The Park comprises a fully let 17.756 leasable sqm warehouse property which has a photovoltaic alternative energy production facility installed on its roof. 70% of the space is let to the multinational transportation and logistics Company Kuehne + Nagel, with the remaining 30% let to GE Dimitriou SA, a Greek company which trades electrical appliances.

During the reporting period the Group acquired a number of prime property assets in Romania and Bulgaria. The acquisition is in line with the Company's strategy to build a diversified portfolio of prime commercial real estate in East and Southeast Europe, which generates cash flow from blue chip tenants and offers substantial potential for capital growth. The acquired investment properties include Green Lake (residential and land), Pantelimon Lake (land) and Boyana (residential and land) projects.

The fair value of identifiable assets and liabilities of acquired projects as of the date of their acquisition was as follows:

€	GED Logistics	SEC South East	Total
ASSETS
Non-current assets
Investment property	16.400.000	36.919.000	53.319.000
Investments in associates	-	7.958.336	7.958.336
Other non-current assets	29.911	69.536	99.447
Current assets
Prepayments and other current assets	353.366	2.433.172	2.786.538
Cash and cash equivalents	160	777.247	777.407
Total assets	16.783.437	48.157.291	64.940.728
Non-current liabilities
Interest bearing borrowings	12.549.180	23.865.253	36.414.433
Deposits from tenants	211.243	-	211.243
Current liabilities
Interest bearing borrowings	135.110	1.431.464	1.566.574
Trade and other payables	492.060	3.074.332	3.566.392
Taxes payable	56.776	252.033	308.809
Total liabilities	13.444.369	28.623.082	42.067.451
Net assets acquired (net of non-controlling interest)	3.339.068	18.838.146	22.177.214
Non-controlling interest	-	696.063	696.063
Gain realized on acquisition (Net Assets - Total consideration)	1.552.134	3.685.656	5.237.790
Financed by
Cash consideration paid	1.786.934	-	1.786.934
Issue of shares	-	15.152.490	15.152.490
Total consideration	1.786.934	15.152.490	16.939.424

During the reporting period the Company acquired the mixed Portfolio of Sec South, which includes investment properties and investment in associates, (notes 15, 16, 17) via in kind contribution to the vendors by issuing 18.028.294 ordinary shares of €0,01 and 2 equivalent set of warrants as described below (note 20).The shares were issued at a price of 0.65 GBP per share while the first set of warrants had an exercise price of £0,10 and the second £0,45. In parallel the Company in exchange of these shares wrote off a past liability of the portfolio of €0,2m and took over via assignment a loan that had been contributed by a partner of a project  amounting to €838.561.

17. Investments in associates

In April 2015 the Company completed the acquisition of an interest in a fully let and income generating office building in Sofia. The Company has acquired 20% of the corporate entity owning the building for a cash consideration of €4.059.839. Autounion is a Class A BREEAM certified office building, located to close to Sofia Airport. The building has a Gross Lettable Area of 19.476 square sqm over ten floors, includes underground parking and is fully let to a leading Bulgarian insurance company on a long lease extending to 2027.

In May 2015 the Group acquired a number of prime property assets in Romania and Bulgaria (in exchange of shares - note 20) some of them being investment properties (notes 15, 16) and some of them being associates. The associates acquired are as follows:

a)   Green Lake Development is residential compound which consists as of end of June of 44 apartments plus 24 villas as well as 4 commercial designated buildings, situated on the banks of Grivita Lake, in the northern part of the Romanian capital. The compound includes also facilities such as private kindergarten, nautical club, outdoor sport courts, and restaurants. The Company has a 40,35% participation in this asset. The project as of the end of June was 50% let.

b)   The Company acquired a 24,35% participation in the Delea Nuova Project in Bucharest. The project is a 10.280 sqm office building, which consists of two underground levels, a ground floor and ten above-ground floors. As of the end of June, the building is 100% let, with ANCOM (the Romanian Telecommunications Regulator) being the anchor tenant (70% of GLA).

The table below summarizes the movements in the carrying amount of the Group's investment in associates.

€	30 June 2015
At 1 January	-
Acquisition of participation interest	12.018.175
Share of profits from associates	354.949
Dividend Received	(365.317)
At 30 June	12.007.807

Share of profits from associates reflects the post aquisition after tax proifts of each associate derived from rental income minus operational and financial expenses for the period ended 30 June 2015.

As at 30 June 2015, the Group's interests in its associates and their summarised financial information, including total assets, liabilities, revenues and profit or loss, were as follows:

Project Name	Associates	Total assets	Total liabilities	Profit/ (loss)	Holding	Share of profits from associates	Country	Asset type
		€	€	€	%	€
Autounion Project	Bluehouse Accession Project V	24.090.574	23.401.587	197.241	20,00	39.448	Bulgaria	Office building
Delea Nuova Project	Lelar Holdings Limited	8.628.492	3.637.013	16.186	24,35	3.942	Romania	Office building
Green Lake Project - Phase A	GreenLake Development Srl	14.414.863	16.503.089	772.140	40,35	311.559	Romania	Residential assets and land for development
Total		47.133.929	43.541.689	985.567		354.949

18. Prepayments and other current assets

	30 June 2015	31 December 2014
	€	€
Prepayments and other receivables	3.060.078	922.115
VAT and other tax receivable	1.235.116	1.229.057
Deferred expenses	1.024.490	2.100.317
Receivables from related parties	6.283	-
Total	5.325.967	4.251.489

Prepayments and other receivables reflect prepayments of clients (~€743.000),receivables from associate companies (~€1.458.000) and pre-payments made for the acquisition of assets and/or share capital increases (~€458.000). 

VAT and other tax receivable mainly represents the current portion of the Terminal Brovary VAT receivable (€ 745.944), to be offset from VAT charged over rental income during the next years. The remaining is VAT income to be collected from tenant and residential unit buyers.

Deferred expenses include legal, advisory, consulting and marketing expenses related to the ongoing share capital increases and due diligence expenses related to the possible acquisition of investment.

19. Cash and cash equivalents

Cash and cash equivalents represent liquidity held at banks.

	30 June 2015	31 December 2014
	€	€
Cash at banks in USD	84.812	43.612
Cash at banks in EUR	1.867.993	495.052
Cash at banks in UAH	81.095	150.029
Cash at banks in RON	497.716	201.984
Cash at banks in BGN	201.562	-
Cash equivalents	98.876	1.261
Total	2.832.054	891.938

20. Share capital

Number of Shares (as at)	31 December 2014	13 March 2015	31 May 2015	29 June 2015	30 June 2015
		Increase of Share Capital	Increase of Share Capital	Repayment of redeemable preference shares
Authorised
Ordinary shares of €0,01	989.869.935	-	-	-	989.869.935
Total equity	989.869.935	-	-	-	989.869.935
Redeemable preference shares of €0,01	785.000	-	-	-	785.500
Total	990.654.935	-	-	-	990.654.935
Issued and fully paid
Ordinary shares of €0,01 each	33.884.054	23.777.748	18.028.294	-	75.690.096
Total equity	33.884.054	23.777.748	18.028.294	-	75.690.096
Redeemable preference shares of €0,01	785.000	-	-	(392.500)	392.500
Total	34.669.054	23.777.748	18.028.294	(392.500)	76.082.596

Value (as at) (€)	31 December 2014	13 March 2015	31 May 2015	29 June 2015	30 June 2015
		Increase of Share Capital	Increase of Share Capital	Repayment of redeemable preference shares
Authorised
Ordinary shares of €0,01	9.898.699	-	-	-	9.898.699
Total equity	9.898.699	-	-	-	9.898.699
Redeemable preference shares of €0,01	7.850	-	-	-	7.850
Total	9.906.549	-	-	-	9.906.549
Issued and fully paid
Ordinary shares of €0,01	338.839	237.777	180.283	-	756.899
Total equity	338.839	237.777	180.283	-	756.899
Redeemable preference shares of €0,01	7.850	-	-	(3.925)	3.925
Total	346.689	237.777	180.283	(3.925)	760.824

20.1 Authorised Share Capital

As at the end of 2014 the authorized share capital of the Company was 989.869.935 Ordinary Shares of €0,01 nominal value each and 785.000 Preference Shares of €0,01 nominal value each.

As at the end of the reporting period the authorized share capital of the Company is 989.869.935 Ordinary Shares of €0,01 nominal value each and 785.000 Preference Shares of €0,01 nominal value each.

During the EGM dated 24 June 2015, it was approved by the shareholders of the Company that the authorized share capital of the Company will be increased to €9.992.739,35 divided into: (a) 989.869.935 ordinary shares of € 0,01 each; (b) 785.000 Redeemable Preference Shares Class A of €0,01 each; and (c) 8.618.997 Redeemable Preference Shares Class B of €0,01 each by the creation of 8.618.997 Redeemable Preference Shares Class B of €0,01 each. The above approval has effective date 1 July 2015. The reorganization of the capital was mandated by the acquisition growth plan of the Company since the creation of the Redeemable Preference Shares Class B was necessary to be issued to BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L which was the seller of the income producing real estate asset in Craiova, Romania, which the Company acquired in July 2015 (note 32).

20.2 Issued Share Capital

As at the end of 2014 the issued share capital of the Company was 33.884.054 Ordinary Shares of €0,01 nominal value each,  and 785.000 Preference Shares of €0,01 nominal value each.

Further to the resolutions approved at the AGM of 31 December 2014 the Board has proceeded in allocating shares as follows:

1.     On 13/3/2015, the allotment of 23.777.748 ordinary shares of €0,01 each for the purpose of capital raising of €8.000.000 in the Company by its existing shareholders.

2.     On 31/5/2015, the allotment of 18.028.294 ordinary shares of €0,01 each for the purpose of an in kind contribution of mixed Portfolio acquisition and (notes 15,16,17).

Furthermore the Company proceeded on 29/6/2015 with payment of half of the issued convertible shares (392.500) but the cancellation of these shares within the appropriate authorities will be completed in second semester of 2015.

As at the end of the reporting period the issued share capital of the Company is as follows:

a) 75.690.096 Ordinary Shares of €0, 01 nominal value each and

b) 392.500 Convertible Shares of €0, 01 nominal value each, following the above described redemption which shall be officially finalized in second semester of 2015.

20.3 Director's Option scheme

Under the said scheme each of the directors serving at the time, which is remain a Director of the Company is entitled to subscribe for 2.631 Ordinary Shares exercisable as set out below:

	Exercise Price	Number of
	US$	Shares
Exercisable till 1 August 2017	57	1.754
Exercisable till 1 August 2017	83	877

The Company considers the said options well out of the money (as the share price at the reporting date is USD 0,46), thus the possibility of exercising them is remote and therefore no provision has been made in respect of this.

Director Franz M. Hoerhager Option scheme, 12 October 2007

Under the said scheme, director Franz M. Hoerhager is entitled to subscribe for 1.829 ordinary shares exercisable as set out below:

	Exercise Price	Number of
	GBP	Shares
Exercisable till 1 August 2017	40	1.219
Exercisable till 1 August 2017	50	610

The Company considers the said options well out of the money (as the share price at the reporting date is GBP 0, 30), thus the possibility of exercising them is remote and therefore no provision has been made in respect of this.

20.4 Class A Warrants issued

During the period ended 30 June 2015 the Company acquired the Sec South portfolio (notes 16,17) in exchange of Ordinary shares (issued at GBP0.65 each ) and of Class A Warrants  giving the right to the Warrant holders to subscribe in cash at the Exercise Amount for the Ordinary Shares. The Company issued two sets of Warrants as follows:

1) 18.028.294 warrants corresponding to 18.028.294 ordinary shares, exercisable within 45 days from signing at an exercise amount of £0.10 per ordinary share. These warrants were exercised (in part) by August 2015 (14.324.627 out of a total of 18.028.294 warrants) (note 32), indicating an effective share issuing price for the sellers of 41p. Following their exercise these have lapsed. Out of these exercised warrants Ionian Equity Participations Limited, a substantial shareholder in the Company, exercised 2.995.360 warrants; an entity in which Lambros Anagnostopoulos (the CEO and a director of the Company) has a majority stake exercised 716.014 warrants; and, Constantinos Bitros (the CFO of the Company) exercised 98.010 warrants. (note 32)

                2)  warrants corresponding to 18.028.294 ordinary shares, exercisable by 31 December 2016 at an exercise amount of £0.45 per ordinary share.

The shares that will be received under the above warrants bear a lock-in period of 12 months.

20.5 Class B Warrants issued

On 8 August 2011 the Company issued an amount of Class B Warrants for an aggregate equivalent to 12,5% of the issued share capital of the Company at the exercise date. Each Class B Warrant entitles the holder to receive one Ordinary Share.  The Class B Warrants may be exercised at any time until 31st December 2016, pursuant to a decision by the AGM of 30/12/2013. The exercise price of the Class B Warrants will be the nominal value per Ordinary Share as at the date of exercise.  The Class B Warrant Instruments have anti-dilution protection so that, in the event of further share issuances by the Company, the number of Ordinary Shares to which the holder of a Class B Warrant is entitled will be adjusted so that he receives the same percentage of the issued share capital of the Company (as nearly as practicable), as would have been the case had the issuances not occurred. This anti-dilution protection will lapse on the earlier of (i) the expiration of the Class B Warrants; and (ii) capital increase(s) undertaken by the Company generating cumulative gross proceeds in excess of US$100.000.000. As of the reporting date, the aggregate amount of class B warrant is 10.812.871.

20.6 Capital Structure as at the end of the reporting period

As at the reporting date the Company's share capital is as follows:

Number of		(as at) 30 June 2015	(as at) 31 December 2014
Ordinary shares of €0,01	Issued and Listed in AIM	75.690.096	33.884.054
Class A Warrants		36.056.588	-
Class B Warrants		10.812.871	4.840.579
Total number of Shares	Non-Dilutive Basis	75.690.096	33.884.054
Total number of Shares	Full Dilutive Basis	122.559.555	38.724.633
Options		4.460	4.460

20.7 Redeemable Preference Shares

During the reporting period the Company repaid half of 785.000 preference SPDI shares of nominal value €0, 01 each, pending finalization of the process in the second semester of 2015. The Preference Shares have no voting powers or rights to dividend. The remaining 392.500 of the Preference Shares may be redeemed by 31 January 2016 (the "Redemption Date 2") at the price of €0, 89. At any time prior to the Redemption Dates the holders shall have the option to unilaterally reconvert the Preference Shares into ordinary shares of €0, 01 each.

During  the EGM dated 24 June 2015,the shareholders approved the reorganization of the Capital of the company (note 20.1)  via the reclassification of the old Redeemable shares as Redeemable Preference Shares Class A and via the issuance of  8.618.997 Redeemable Preference Shares Class B of €0.01 for the purpose of acquiring Craiova asset in Romania (note 32). The above approval has effective date 1 July 2015.

Redeemable Preference Shares Class A

The Redeemable Preference Shares Class A do not have voting or dividend rights. The 392.500 of the Redeemable Preference Shares Class A were redeemed on 31 January 2015 ("Redemption Date 1") at a price of €0,89 each and the remaining 392.500 of the Redeemable Shares Class A may be redeemed by the Company on 31 January 2016 at a price of €0,89 each or the holders of the Redeemable Preference Shares Class A shall have the option to immediately convert the Redeemable Preference Shares Class A into ordinary Shares of €0,01 each.

Redeemable Preference Shares Class B

The Redeemable Preference Shares Class B shall not have voting rights and shall have economic rights at par with ordinary shares. The Redeemable Preference Shares Class B, if not converted into ordinary Shares, may be redeemed at the sole discretion of the holder of the Redeemable Preference Shares Class B on the expiration of the 12th month following the date of issue of the Redeemable Preference Shares Class B (the "Redemption Date"); the redemption price shall be €0,7056 per Redeemable Preference Share Class B.  The Redeemable Preference Shares Class B shall have priority on the winding-up of the Company, over any other shares or class of shares issued by the Company from time to time including without limitation the Redeemable Preference Shares Class A but otherwise rank pari passu with the ordinary  shares in all respects.

21. Foreign Currency Translation Reserve

Exchange differences related to the translation from the functional currency of the Group's subsidiaries are accounted by entries made directly to the foreign currency translation reserve. The foreign exchange translation reserve represents unrealized profits or losses related to the appreciation or depreciation of the local currencies against the EUR in the countries where the Company's subsidiaries' functional currencies are not EUR.

22. Non-Controlling Interests

Non-controlling interests represent the equity value of shareholdings not owned by the Group:

%	Non-controlling interest portion
Group Company	30 June 2015	31 December 2014
LLC Almaz-Press-Ukraine	45,00	45,00
Ketiza Limited	10,00	55,00
Ketiza srl	10,00	55,00
Ram Real Estate Management Limited	50,00	-
Iuliu Maniu Limited	55,00	-
Moselin Investments Srl	55,00	-
Rimasol Enterprises Limited	55,76	-
Rimasol Real Estate Srl	55,76	-
Ashor Ventures Limited	55,76	-
Ashor Development Srl	55,76	-
Jenby Ventures Limited	55,76	-
Jenby  Investments Srl	55,76	-
Ebenem Limited	55,76	-
Ebenem Investments Srl	55,76	-

23. Interest bearing borrowings

	30 June 2015	31 December 2014
	€	€
Principal of bank Loans
Principal EBRD loan	12.559.955	11.808.915
Banca Comerciala Romana	1.615.529	1.783.826
Bancpost SA	2.088.583	2.157.501
Alpha Bank Romania	1.103.753	1.184.688
Raiffeisen Bank Romania	1.004.819	1.093.176
Bancpost SA	3.091.754	-
Alpha Bank Bulgaria	1.781.266	-
Alpha Bank Bulgaria	3.720.418
Bank of Cyprus	4.569.725	-
Eurobank Ergasias SA	12.522.728	-
Piraeus Bank SA	2.800.000	-
Loans by non-controlling shareholders	6.063.693	-
Total Principal of Bank Loans	52.922.223	18.028.106
Restructuring fees and interest payable to EBRD	32.211	29.685
Interest accrued on bank loans	1.482.011	240.619
Interests accrued on non-bank loans	657.783	-
Prepaid fees to EBRD	-	(81.988)
Total	55.094.228	18.216.422

	30 June 2015	31 December 2014
	€	€
Current portion	10.343.906	5.960.706
Non-current portion	44.750.322	12.255.716
Total	55.094.228	18.216.422

EBRD loan related to Terminal Brovary

In February 2015 the restructuring of the Brovary construction loan with the EBRD which was signed in December 2014 was effected. According to the agreement the loan repayment is being extended to 2022, with a balloon payment of US$3.633.333. The loan has an interest of 3 M LIBOR + 6.75% and the capital repayments are scheduled as follows: 2015-$900.000 2016-$1.000.000 2017-$1.220.000 2018-$1.350.000 2019-$1.500.000 2020-$1.650.000 2021-$1.800.000 2022-$4.983.333, 32.

Under the current agreement the collaterals accompanying the existing loan facility are as follows:

1.   LLC Terminal Brovary pledged all movable property with the carrying value more than US$25.000.

2.   LLC Terminal Brovary pledged its Investment property, Brovary Logistics Centre the construction of which was finished in 2010 (note 15), and all property rights on the center.

3.   SPDI PLC pledged 100% corporate rights in SL SECURE Logistics Ltd, a Cyprus Holding Company which is the Shareholder of LLC Terminal Brovary, LLC Aisi Brovary.

4.   SL SECURE Logistics Ltd pledged 99% corporate rights in LLC Aisi Brovary.

5.   LLC Aisi Brovary pledged 100% corporate rights in LLC Terminal Brovary.

6.   LLC Terminal Brovary pledged all current and reserved accounts opened by LLC Terminal Brovary in Unicreditbank Ukraine.

7.   LLC Aisi Brovary entered into a call and put option agreement with EBRD, pursuant to which following an Event of Default (as described in the Agreement) EBRD has the right (Call option) to purchase at the Call Price from LLC Aisi Brovary, 20% of the Participatory Interest of LLC Terminal Brovary on the relevant Settlement Date.

8.   LLC Terminal Brovary has granted EBRD a second ranking mortgage in relation to its own and LLC Aisi Brovary's obligations under the call and put option agreement.

9.   LLC Terminal Brovary has pledged its rights arising in connection with the existing Lease agreements with Tenants.

10. LLC Aisi Brovary has entered with EBRD into a conditional assignment agreement of 20% and 80% corporate rights in LLC Terminal Brovary.

11. SL Secure Logistics Limited has entered with EBRD into a conditional assignment agreement of 99% corporate rights in LLC Aisi Brovary.

The issued corporate guarantee dated 12 January 2009 guaranteeing all liabilities and fulfilment of conditions under the existing loan agreement remains in force. The maturity of the guarantee is equal to the maturity of the loan.

The existing credit agreement with EBRD includes among others the following requirements for LLC Terminal Brovary and the Group as a whole:

1.   At all times LLC Brovary Logistics shall maintain a balance in the Debt Service Reserve Amount (DSRA) account equal to not less than the sum of all payments of principal and interest on the Loan which will be due and payable during the next six months. 

2.   LLC Terminal Brovary shall achieve a "CNRI"(Contract Net Rental Income is the aggregate of monthly lease payments, net of value added tax, contracted by the Borrower pursuant to the Lease Agreements as of the relevant testing date and converted into Dollars at the official exchange rate established by the National Bank of Ukraine as of such testing date) according to the following schedule:

(1) on 31 December 2014, CNRI of USD 200,000 or more;

(2) on 30 June 2015, CNRI of USD 220,000 or more;

                        (3) on 31 December 2015, CNRI of USD 230,000 or more; and

(4) on 30 June and 31 December in each year commencing on the date of 30 June 2016, CNRI of USD 250,000 or more, in respect of the six month period commencing  on any such date. 

3.   LLC Terminal Brovary shall achieve a "DSCR"(Debt Service Coverage Ratio is the sum of net income minus operating expenses plus amortization, divided with the sum of paid principal & interest) according to the following schedule:

i.  in respect of the 6 months period ending on 31 December 2014, the DSCR of more than 1,10x.

ii. in respect of the 6 months period ending on 30 June 2015 and 31 December 2015, the DSCR of more than 1,15x.

iii. in respect of the 6 months period ending on 30 June or 31 December in any year commencing on the date of 30 June 2016, the DSCR of more than 1,2x.

Other bank Borrowings (related to residential projects)

SecRom Real Estate Srl entered (2009) into a loan agreement with Alpha Bank- Romania for a credit facility for financing part of the acquisition of the Doamna Ghica Project apartments. As of the end of the reporting period, the balance of the loan is €1.103.753, bears interest of EURIBOR 3M+5,25% and is repaid on the basis of investment property sales. The loan matures in October 2016 and is secured by all assets of SecRom Real Estate Srl as well as its shares.

Ketiza Real Estate Srl entered (2012) into a loan agreement with Bancpost S.A. for a credit facility for financing the acquisition of the Blooming House Project and 100% of the remaining (without VAT) construction works Blooming House project. As of the end of the reporting period the balance of the loan is €2.088.583. The loan bears interest of EURIBOR 3M plus 3,5% and matures in May 2017.  The bank loan is secured by all assets of Ketiza Real Estate Srl as well as its shares.

SecVista Real Estate Srl entered (2011) into a loan agreement with Raiffeisen Bank- Romania for a credit facility for financing part of the acquisition of the Linda Residence Project apartments. As of the end of the reporting period the balance of the loan is €1.004.819. The loan bears interest of EURIBOR 1M+5,2% and is currently under restructuring negotiation. The loan is secured by all assets of SecVista Real Estate Srl as well as its shares.

SecMon Real Estate Srl (2011) entered into a loan agreement with Banca Comerciala Romana for a credit facility for financing part of the acquisition of the Monaco Towers Project apartments. As of the end of the reporting period the balance of the loan is €1.615.529 and bears interest of EURIBOR 3M plus 5%. The loan is repayable in October 2015 and is secured by all assets of SecMon Real Estate Srl as well as its shares.

GED Logistics SA entered (April 2015) into a loan agreement with EUROBANK SA to refinance the existing debt facility. As of the end of the reporting period the balance of the loan is €12.522.728 and bears interest of EURIBOR 6M plus 3,2%. The loan is repayable by 2022, has a balloon payment of €8.660.000 and is secured by all assets of GED Logistics SA as well as its shares.

SEC South East Continent Unique Real Estate (Secured) Investments Limited has a debt facility with Piraeus Bank (since 2007) for the acquisition of the Green Lake project land in Bucharest Romania. As of the end of the reporting period the balance of the loan is €2.800.000 and bears interest of EURIBOR 3M plus 4% plus the Greek law 128/78 0, 6% contribution. The term of the loan facility has expired but the Company has agreed with the Bank a prolongation of the maturity until 2017 to be implemented in Q3-2015.

Moselin Investments Srl (2010) entered into a construction loan agreement with Bancpost SA covering the construction works of Parcel K -Green Lake project. As of the end of the reporting period the balance of the loan is €3.091.754 and bears interest of EURIBOR 3M plus 5%. The loan is repayable from the sales proceeds while it matures in 2017.  The loan is secured as follows with the property itself and the shares of Moselin Investments Srl.

Other Borrowings from acquisitions

Delia Lebada Invest Srl, a subsidiary, entered into a loan agreement with the Bank of Cyprus Limited to effectively finance a leveraged buy-out of the subsidiary by the Company. The bank loan amounting to €4.830.000 is secured with a mortgage at 120% of the loan value and with a corporate guarantee. The loan bears 7% fixed interest while interest is payable quarterly. The balance of the loan as of end of the period ended 30 June 2015 is €4.569.725. The Company is currently in discussion with its partner to sell the asset and with the bank for the loan restructuring at the same time. In the meantime Delia Lebada Invest Srl has entered into protection from creditor's procedure.

Sertland Properties Limited entered (2008) into a loan agreement with Alpha Bank- Bulgaria for an acquisition loan related to the acquisition of 70% of Boyana Residence ood. As of the end of the reporting period the balance of the loan is €1.781.266 and bears interest of EURIBOR 3M plus 5,75%. The loan matures in 2017 and discussions have been initiated with the bank for a prolongation. The loan is secured with a   pledge on company's shares, and a corporate guarantee by SEC South East Continent Unique Real Estate (Secured) Investments Limited. 

Boyana Residence ood entered (2011) into a loan agreement with Alpha Bank- Bulgaria for a construction loan related to the constructions of the Boyana Residence projects (finished in 2014). As of the end of the reporting period the balance of the loan is €3.720.418 and bears interest of EURIBOR 3M plus 5,75%. The loan matures in 2017 and discussions have been initiated with the bank for a prolongation. The loan currently is being repaid through sales proceeds. The facility is secured through a mortgage over the property and a pledge over the company shares as well as those of Sertland Properties Limited.

Other bank borrowing include as well borrowing from non-controlling interests. During the last five years and in order to support of Parcel K of Green Lake project and Boyana project the shareholders of Moselin and Boyana (other than the Company) have contributed their share by means of shareholder loans. The loans bear interest at 7% annually and are repayable in 2016.

24. Trade and other payables

	30 June 2015	31 December 2014
	€	€
Payables to related parties (note 28.2)	1.789.720	335.004
Payables for construction, non-current	406.150	202.200
Other payables	2.829.685	916.827
Deferred income from tenants, non-current	22.403	12.485
Deferred income from tenants, current	34.402	132.782
Accruals	48.303	270.239
Total	5.130.663	1.869.537

	30 June 2015	31 December 2014
	€	€
Current portion	4.702.110	1.654.852
Non - current portion	428.553	214.685
Total	5.130.663	1.869.537

The fair values of trade and other payables due within one year approximate their carrying amounts as presented above.

Payables to related parties represent the balances with Secure Management Ltd and Grafton Properties as well as amounts due to board of directors and committee members and accrued management remuneration (note 28.2).

Payables for construction represent amounts payable to the contractor of Bela Logistic Center in Odessa. The settlement was reached in late 2011 on the basis of maintaining the construction contract in an inactive state (to be reactivated at the option of the Group), while upon reactivation of the contract or termination of it (because of the sale of the asset) the Group would have to pay an additional UAH5.400.000 (~US$ 450.000) payable upon such event occurring. Since it is uncertain when the latter amount is to be paid it has been discounted at the current discount rates in Ukraine and is presented as a non-current liability. Payables for construction includes as well €~245.000 amount payable to Boyana's constructor which has been withheld as Good Performance Guarantee.

Other payables mainly represent shareholder loan balances owned to minority partners of the property assets acquired within the period.

Deferred income from tenants represents advances from tenants which will be used as future rental income and utilities charges.

Payables for services include payables to non-controlling shareholders in the amount of €1.003.168. The rest of payables and accruals for services represent amounts payable to various service providers including auditors, legal advisors, consultants and third party accountants related to the current operations of the Group as well as with due diligence related expenses incurred in preparation of new acquisitions.

25. Deposits from Tenants

Deposits from tenants appearing under current and non-current liabilities include the amounts received from the tenants of LLC Terminal Brovary, Best Day SRL, GED Logistics S.A. and companies representing residential segment as advances/guarantees and are to be reimbursed to these clients at the expiration of the leases agreements.

26. Taxes payable & Provisions for taxes

	30 June 2015	31 December 2014
	€	€
Corporate income and defense tax	379.568	356.929
Other taxes including VAT payable	482.661	74.899
Provisions for taxes in Ukraine	-	68.253
Total Tax Liability	862.229	500.081

Corporate income tax represents taxes payable in Cyprus and Romania.

Other taxes represent local property taxes and VAT payable in Ukraine, Romania, Greece, Bulgaria and Cyprus.

27. Finance lease liabilities

As at the reporting date the finance lease liabilities consist of the non-current portion of €11.340.099 and the current portion of € 178.138 (31 December 2014: € 11.463.253 and € 181.723, accordingly).

30 June 2015 (€)	Minimum lease payments	Interest	Principal
Less than one year	760.565	592.214	168.351
Between two and five years	3.461.289	2.155.663	1.305.626
More than five years	12.709.921	2.723.358	9.986.563
	16.931.775	5.471.235	11.460.540
Accrued Interest			57.697
			11.518.237

31 December 2014 (€)	Minimum lease payments	Interest	Principal
Less than one year	766.289	584.677	181.612
Between two and five years	3.424.203	2.205.329	1.218.874
More than five years	13.285.643	3.094.876	10.190.767
	17.476.135	5.884.882	11.591.253
Accrued Interest			53.723
			11.644.976

27.1 Land Plot Financial Leasing 

The Group rents land plots classified as finance lease. Lease obligations are denominated in UAH. The fair value of lease obligations approximate to their carrying amounts as presented above. Following the appropriate discounting finance lease liabilities are carried at € 152.479 under current and non-current portion. The Group's obligations under finance leases are secured by the lessor's title to the leased assets.

27.2 Sale and Lease Back Agreement

A.    Innovations Logistic Park

In May 2014 the Group concluded the acquisition of Innovations Logistics Park in Bucharest, owned by Best Day Srl, through a lease back agreement with Piraeus Leasing Romania SA. As of the end of the reporting period the balance is €7.400.470 bearing interest rate at 3M Euribor plus 4,45% margin, being repayable in monthly tranches until 2026. At the maturity of the lease agreement Best Day will become owner of the asset.

Under the current finance lease agreement the collaterals for the facility are as follows:

1.     Best Day pledged its future receivables from its tenants.

2.     Best Day pledged its shares.

3.     Best Day pledged all current and reserved accounts opened in Piraeus Leasing, Romania.

4.     Best Day is obliged to provide cash collateral in the amount of €250.000 in Piraeus Leasing Romania, which had been be deposited as follows, half in May 2014 and half in May 2015.

5.     SPDI provided a corporate guarantee in favor of the bank towards the liabilities of Best Day arising from the sales and lease back agreement.

B.    EOS Business Park

In October 2014 the Group concluded the acquisition of EOS Business Park in Bucharest, owned by First Phase Srl, through receiving debt from Alpha Bank Romania SA in the form of a sale and lease back agreement. As of the end of the reporting period the balance is €3.934.972 bearing interest rate at 3M Euribor plus 5,25% margin, being repayable in monthly tranches until 2024. At the maturity of the lease agreement First Phase will become owner of the asset.

Under the current finance lease agreement the collaterals for the facility are as follows:

1.     First Phase pledged its future receivables from its tenants.

2.     First Phase pledged Bank Guarantee receivables from its tenants.

3.     Best Day pledged its shares.

4.     First Phase pledged all current and reserved accounts opened in Alpha Bank Romania SA.

5.     First Phase is obliged to provide cash collateral in the amount of €300.000 in Alpha Bank Romania SA, starting from October 2019.

6.     SPDI provided a corporate guarantee in favor of the bank towards the liabilities of First Phase arising from the sales and lease back agreement.

28. Related Party Transactions

The following represent transactions with related parties:

28.1 Expenses

The below expenses were recognized during the reporting period:

	30 June 2015	30 June 2014
	€	€
Management Remuneration	467.030	174.714
Board of Directors & Committees	119.628	84.395
SECURE Management Ltd	-	35.176
Total	586.658	294.285

Management remuneration includes the remuneration of the CEO, CFO the Commercial Director and that of the country directors of Ukraine and Romania pursuant the decisions of the remuneration committee.

Board of Directors expense represents the remuneration of all the non-executive members of the Board pursuant to the decision of the Remuneration Committee.

28.2 Payables to related parties

The amounts below were payables as at the end of the reporting period:

	30 June 2015	31 December 2014
	€	€
Grafton Properties	123.548	123.548
Secure Management Ltd	1.189.966	18.244
Board of Directors & Committees	316.204	193.212
Management Remuneration	160.002	-
Total	1.789.720	335.004

28.2.1 Board of Directors & Committees

The amount payable represents remuneration payable to non-Executive Directors and members of Committees covering the period ended 30 June 2015 remuneration. The members of the Board of Directors have agreed in order to facilitate the Company's cash flow, to exchange part of their fees related to prior years for shares in the Company's capital. This was approved by the Annual General Meeting of the Company's shareholders.

28.2.2 Loan payable to Grafton Properties

Under the Settlement Agreement of July 2011, the Company undertook the obligation to repay to certain lenders who had contributed funds for the operating needs of the Company between 2009-2011, by lending to AISI Realty Capital LLC, the total amount of US$450.000. As of the reporting date the liability towards Grafton Properties, representing the Lenders, was US$150.000, which is contingent to the Company raising US $50m of capital in the markets.

28.2.3 Payable to Secure Management

Payable to Secure Management represents a liability existing at the time of acquisition of the mixed portfolio of Sec South related to accrued management fee, which is under negotiation for eventual write down or off.

28.2.4 Management Remuneration

Management Remuneration represents deferred amounts payable to the CEO and CFO of the Company, as well as the Commercial Director and the Country Managers for Romania and Ukraine.

28.3 Loans from SC Secure Capital Ltd to the Company's subsidiaries

SC Secure Capital Ltd, the finance subsidiary of the Company has proceeded to provide capital in the form of loans to the Ukrainian subsidiaries of the Company so as to support the acquisition of assets, development expenses of the projects, as well as various operational costs.

Borrower (€)	Limit	Principal as of 30 June 2015	Principal as of 31 December 2014
LLC "TERMINAL BROVARY"	28.827.932	26.882.801	27.578.265
LLC "AISI UKRAINE"	23.062.351	12.275	12.275
LLC "ALMAZ PRES UKRAINE"	8.236.554	140.021	140.021
Total		27.035.097	27.730.561

All loans from SC Secure Capital Limited to the Company's subsidiaries are USD denominated and in 2014 they generated a forex loss totaling €19.746.111 as a result of devaluation of the Ukrainian Hryvnia during the reporting period.

29. Contingent liabilities 

The Group is involved in various legal proceedings in the ordinary course of its business.

29.1 Tax litigation

The Group performed during the reporting period a part of its operations in the Ukraine and therefore within the jurisdiction of the Ukrainian tax authorities. The Ukrainian tax system can be characterized by numerous taxes and frequently changing legislation, which may be applied retroactively, open to wide interpretation and in some cases, conflicting. Instances of inconsistent opinions between local, regional, and national tax authorities and between the National Bank of Ukraine and the Ministry of Finance are not unusual. Tax declarations are subject to review and investigation by a number of authorities, which are authorised by law to impose severe fines and penalties and interest charges.

Any tax year remains open for review by the tax authorities during the three subsequent calendar years; however, under certain circumstances a tax year may remain open for longer. These facts create tax risks which are substantially more significant than those typically found in countries with more developed tax systems. Management believes that it has adequately provided for tax liabilities, based on its interpretation of tax legislation, official pronouncements and court decisions. However, the interpretations of the relevant authorities could differ and the effect on these consolidated financial statements, if the authorities were successful in enforcing their interpretations, could be significant.

At the same time the Group's entities are involved in court proceedings with tax authorities; Management believes that the estimates provided within the financial statements present a reasonable estimate of the outcome of these court cases.

29.2 Construction related litigation

There are no material claims from contractors due to the postponement of projects or delayed delivery other than those disclosed in the financial statements.

29.3 Other Litigation

The Company has a number of legal cases pending. Management does not believe that the result of these will have a substantial overall effect (in excess of €0,5m) on the Group's financial position. Consequently no such provision is included in the current financial statements.

29.4 Other Contingent Liabilities

The Group had no other contingent liabilities as at 30 June 2015.

30. Commitments

The Group had no commitments as at 30 June 2015.

31. Financial Risk Management

31.1 Capital Risk Management

The Group manages its capital to ensure that it will be able to implement its stated growth strategy in order to maximize the return to stakeholders through the optimization of the debt-equity structure and value enhancing actions in respect of its portfolio of investments. The capital structure of the Group consists of borrowings (note 23), trade and other payables (note 24) deposits from tenants (note 25), taxes payable (note 26) and equity attributable to ordinary shareholders (note 20, issued capital, reserves and retained earnings) as well as to preferred shareholders (note 20.7).

The Group is not subject to any externally imposed capital requirements.

Management reviews the capital structure on an on-going basis. As part of the review Management considers the differential capital costs in the debt and equity markets, the timing at which each investment project requires funding and the operating requirements so as to proactively provide for capital either in the form of equity (issuance of shares to the Group's shareholders) or in the form of debt. Management balances the capital structure of the Group with a view of maximizing the shareholder's Return on Equity (ROE) while adhering to the operational requirements of the property assets and exercising prudent judgment as to the extent of gearing.

31.2 Significant Accounting Policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liabilities and equity instruments are disclosed in note 3 of the condensed consolidated interim financial statements.

31.3 Categories of Financial Instruments

	Note	30 June 2015	31 December 2014
		€	€
Financial Assets
Cash at Bank	19	2.832.054	891.938
Total		2.832.054	891.938
Financial Liabilities
Interest bearing borrowings	23	55.094.228	18.216.422
Trade and other payables	24	5.130.663	1.869.537
Deposits from tenants	25	755.906	661.410
Finance lease liabilities	27	11.518.237	11.644.976
Taxes payable	26	862.229	431.828
Redeemable preference shares	20	349.325	698.650
Total		73.710.588	33.522.823

31.4 Financial Risk Management Objectives

The Group's Treasury function provides services to its various corporate entities, coordinates access to local and international financial markets, monitors and manages the financial risks relating to the operations of the Group, mainly the investing and development functions. Its primary goal is to secure the Group's liquidity and to minimize the effect of the financial asset price variability on the cash flow of the Group. These risks cover market risks including foreign exchange risks and interest rate risk as well as credit risk and liquidity risk.

The above mentioned risk exposures may be hedged using derivative instruments whenever appropriate. The use of financial derivatives is governed by the Group's approved policies which indicate that the use of derivatives is for hedging purposes only. The Group does not enter into speculative derivative trading positions. The same policies provide for the investment of excess liquidity. As at 30 June 2015, the Group had not entered into any derivative contracts.

31.5 Economic Market Risk Management

The Group operates in Romania, Bulgaria Greece and Ukraine. The Group's activities expose it primarily to financial risks of changes in currency exchange rates and interest rates. The exposures and the management of the associated risks are described below. There has been no change to the Group's manner in which it measures and manages risks.

Foreign Exchange Risk

Currency risk arises when commercial transactions and recognized financial assets and liabilities are denominated in a currency that is not the Group's functional currency. Most of the Group's financial assets are denominated in the functional currency. Management is monitoring the net exposures and enacts policies to contain them so that the net effect of devaluation is minimized.

Interest Rate Risk

The Group's income and operating cash flows are substantially independent of changes in market interest rates as the Group has no significant interest-bearing assets. On June 30th, 2015, cash and cash equivalent financial assets amounted to €2.832.054 (31 December 2014: € 891.938).

The Group is exposed to interest rate risk in relation to its borrowings amounting to €55.094.228 (31 December 2014: €18.216.422) as they are issued at variable rates tied to the Libor or Euribor. Management monitors the interest rate fluctuations on a continuous basis and evaluates hedging options to align the Group's strategy with the interest rate view and the defined risk appetite. Although no hedging has been applied for the reporting period, such may take place in the future if deemed necessary in order to protect the cash flow of a property asset through different interest rate cycles.

The Group's exposures to financial risk are discussed also in note 4.

31.6 Credit Risk Management

The Group has no significant credit risk exposure. The credit risk emanating from the liquid funds is limited because the Group's counterparties are banks with high credit-ratings assigned by international credit rating agencies. The Credit risk of receivables is reduced as the majority of the receivables represent VAT to be offset through VAT income in the future.

31.7 Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which applies a framework for the Group's short, medium and long term funding and liquidity management requirements. The Treasury function of the Group manages liquidity risk by preparing and monitoring forecasted cash flow plans and budgets while maintaining adequate reserves.  The following table details the Group's contractual maturity of its financial liabilities. The tables below have been drawn up based on the undiscounted contractual maturities including interest that will be accrued.

30 June 2015 €	Carrying amount	Total	Less than one year	From one to two years	More than two years
Financial assets
Cash at Bank	2.832.054	2.832.054	2.832.054	-	-
Financial liabilities
Interest bearing borrowings	55.094.228	62.870.420	14.873.728	16.671.853	31.324.839
Trade and other payables	5.130.663	5.130.663	4.702.110	188.759	239.794
Deposits from tenants	755.906	755.906	117.387	80.346	558.173
Finance lease liabilities	11.518.237	16.931.775	760.565	768.414	15.402.796
Redeemable preference shares	349.325	349.325	349.325	-	-
Taxes payable	862.229	862.229	862.229	-	-
Total	73.710.588	86.900.318	21.665.344	17.709.372	47.525.602
Total net liabilities	70.878.534	84.068.264	18.833.290	17.709.372	47.525.602

31 December 2014 €	Carrying amount	Total	Less than one year	From one to two years	More than two years
Financial assets
Cash at Bank	891.938	891.938	891.938	-	-
Financial liabilities
Interest bearing borrowings	18.216.422	22.319.389	6.665.533	2.743.797	12.910.059
Trade and other payables	1.869.537	1.869.537	1.654.852	73.841	140.844
Deposits from tenants	661.410	661.410	161.579	68.973	430.858
Finance lease liabilities	11.644.976	17.476.135	766.289	769.922	15.939.924
Redeemable preference shares	698.650	698.650	349.325	349.325	-
Taxes payable	431.828	431.828	431.828	-	-
Total	33.522.823	43.456.949	10.029.406	4.005.858	29.421.685
Total net liabilities	32.630.885	42.565.011	9.137.468	4.005.858	29.421.685

31.8 Net Current Liabilities

The current liabilities amounting to €16.553.095 exceed current assets amounting to €8.158.021 by €8.395.074. As this difference is primarily result of certain of the bank borrowings being repayable with the next 12 months, the Company has entered into discussions with the lenders to restructure such borrowings. In the event that these discussions do not lead to debt restructuring, the Company may need to seek alternative funding solutions.

32. Events after the reporting period

A.    Romanian DIY Retail Property Acquisition

Subsequent to the reporting the Group completed the acquisition of 100% interest in BLUEBIGBOX 3 S.R.L ('BLUEBIGBOX'), a DIY retail property in a prime location in Craiova, Romania wholly let to Praktiker, a leading European DIY retailer. The building produces an annualised net operating income ('NOI') of ~€1 million and has a Gross Lettable Area ('GLA') of 9.385 square metres.

The acquisition has been affected through the issuance of 8.618.997 Redeemable Convertible Preference shares ('RCPS') to the vendors which will be either converted to an equal number of ordinary shares or redeemed for €0,7056 per RCPS on 13 July 2016.

B.    Change of Authorised Share Capital

In the EGM dated 24 June 2015,the shareholders approved that the authorized share capital of the Company which is currently € 9.906.549.35 divided into: (a) 989.869.935 ordinary shares of € 0,01 each; and (b) 785.000 Redeemable Preference Shares class A of €0,01 each, be increased to €9.992.739,35 divided into: (a) 989.869.935 ordinary shares of € 0,01 each; (b) 785.000 Redeemable Preference Shares Class A of €0,01 each; and (c) 8.618.997 Redeemable Preference Shares Class B of €0,01 each by the creation of 8.618.997 Redeemable Preference Shares Class B of €0,01 each. The above approval has effective date 1 July 2015.

C.     Board of directors changes

On 22 July the Company announced the appointment to the Board of Ms. Calypso Nomikos and Mr. Vagharshak Barseghyan as Non-Executive Directors with immediate effect and further announced that Mr. Antonios Achilleoudis and Mr. Robert Sinclair have resigned as non-executive Directors to pursue other business interests.

This information is provided by RNS

The company news service from the London Stock Exchange

END IR LLFLRASIAFIE