2018 Audited Annual Results

RNS Number : 8692D

Secure Property Dev & Inv PLC

28 June 2019

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

28 June 2019

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

2018 Audited Annual Results

Secure Property Development & Investment PLC, the AIM quoted South Eastern European focused property company, is pleased to announce its full year audited financial results for the year ended 31 December 2018.

Full year Net Equity standing at a 100%+ premium to SPDI's market valuation, similar to last year's premium, while operating results and EBITDA remain positive at €0,4m and €1,8m respectively, despite sale of the fully let BigBlueBox in Romania

Full Year Financial Highlights

Second successive annual positive operating result after finance and tax expenses:

· Operating result after finance and tax expenses of €0.414m (31 Dec 2017: €1,5m)

· EBITDA of €1,8m compared to €3,7m in 2017 - year on year reduction largely due to the sale of the fully let BigBlueBox in Romania

Significant asset backing behind the Company:

· Net Equity of €35,6 million as at 31 December 2018 (31 Dec 2017: €36,3 million)

· NAV per share stood at GBP 0.25 as at 31 December 2018 - current share price trading at a ca. 72% discount to NAV per share

Ongoing successful management of cost base:

· 14% reduction in business costs to €2,021 million (2017: €2,35 million) - builds on 10% reduction in costs in 2017

· 41% reduction in interest costs to ~€1,2m compared to ~€2,0m in 2017 - builds on 36% reduction in interest costs in 2017

Operational Highlights

Successfully executing strategy to realise value of South Eastern European property portfolio:

· €2.5m cash generated net to SPDI following profitable sale of BigBlueBox in Romania at a Gross Asset Value of ~€6,5m

· Sale of nine residential units in Romania and Bulgaria for a total gross consideration of ~€980,000 resulting in €0.7m reduction in SPDI's residential property asset debt to €11.5m and ~€280,000 free cash

· Conditional Sale of Non-Greek assets at a deemed €29.25 million valuation, a 95% premium to SPDI's total current market capitalisation

o Three stage completion process - Stage 1 covers assets in Ukraine and Bulgaria; Stages 2 and 3 include assets in Romania as well as the remaining assets in Ukraine

o Subject to, inter alia, shareholder and regulatory approval, SPDI to receive ca. 2.1m shares in and ca. 0.5m warrants over Arcona Property Fund N.V. an Amsterdam-listed company focused on Central Eastern European commercial property

o Signing of the various transaction documents and Closing of Stage 1, subject to any necessary approvals being obtained, expected within July 2019

· Following receipt of a number of expressions of interest, SPDI is in the final stages of negotiations with one particular party with regards to signing an agreement, subject to a number of conditions precedent, including all necessary approvals being granted, to sell Victini Logistics in Greece - finalisation of the agreement expected to occur in July 2019, which will then be followed by negotiations on definitive documentation.

Corporate Highlights

· Appointment of Mr Michael Beys as Non-Executive Chairman

· Post period end - formation of a smaller and more efficient Board comprised of Michael Beys (Chairman), Harin Thaker (Vice-Chairman), Ian Domaille (Non-executive Director), Tony Kaffas (Non-executive) and Lambros Anagnostopoulos (Chief Executive Officer)

· Post period end - formation of an Advisory Council to provide strategic advice and support to the Board

Lambros G. Anagnostopoulos, Chief Executive Officer, said, "Representing 15% of our current market capitalisation, our €1.8m EBITDA for the full year validates what we have been saying for a long time, specifically a huge disconnect has opened up between how the industry and how the stock market value our portfolio of South Eastern European properties. We continue to focus on closing this valuation gap which still stands at >70%.

"The December 2018 announcement on the conditional sale of our non-Greek portfolio for €29,25m, a 95% premium to our then market cap, to Amsterdam-listed Arcona Property Fund N.V. will go some way to achieving this. Not only does the sale value equate to a more realistic valuation of our properties, the all share transaction exposes our shareholders to a dividend-paying fund with a diversified portfolio of income producing properties in Central Eastern Europe valued after closing at ca. €161 million. We are working hard to close the transaction in 2019, at which point we would have taken a major step towards delivering on our objective to build a leading property company focused on the fast-growing economies and strategic intercontinental trade routes of South Eastern Europe."

Copies of the Annual report and Accounts are being posted to Shareholders today and are available on the Company's website at www.secure-property.eu.

Note to readers: Following the conditional agreement signed in December 2018 with Arcona Property Fund N.V for the sale of Company's non-Greek portfolio of assets, as well as plans and discussions regarding the Greek asset, the Company has classified its assets in 2018 as discontinued operations (Note 4.3) and has restated accordingly 2017 figures for comparative purposes.

* * ENDS * *

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

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

Lambros Anagnostopoulos	SPDI	Tel: +357 22 030783

Rory Murphy Ritchie Balmer Jack Botros	Strand Hanson Limited	Tel: +44 (0) 20 7409 3494

Jon Belliss Cosima Akerman Frank Buhagiar	Novum Securities Limited St Brides Partners Ltd	Tel: +44 (0) 207 399 9400 Tel: +44 (0) 20 7236 1177

Notes to Editors

Secure Property Development and Investment plc is an AIM listed property development and investment company focused on the South East European markets. The Company's strategy is focused on generating healthy investment returns principally derived from: the operation of income generating commercial properties and capital appreciation through investment in high yield real estate assets. The Company is focused primarily on commercial and industrial property in populous locations with blue chip tenants on long term rental contracts. The Company's senior management consists of a team of executives that possess extensive experience in managing real estate companies both in the private and the publicly listed sector, in various European countries.

1. Chairman Statement

During 2018, the favorable fundamentals of our target markets continued to prevail, with Romania continuing its leading growth within the EU, and Greece finally and firmly on a path to recovery. In general, property markets in our region have continued to experience steady yield compression, as the global search for yield has compelled new investors to allocate funds to these markets. During the period, SPDI continued to pursue opportunities to implement its strategic objective of growing while simultaneously disposing of non-core assets, in order to generate value for its shareholders. Indeed, in 2018 we sold our Praktiker asset in Craiova, the only Romanian property that was not located in Bucharest, and also examined a number of partnership opportunities to grow our asset base.

During the current year, we have intensified such efforts, aiming to consummate a merger-like transaction with Arcona, which we hope and expect to close by year's end.

Michael Beys

Chairman of the Board

2. Letter to Shareholders

Dear Shareholders,

2018 has been a year when SPDI's vision, strategy and asset portfolio attracted a number of third parties interested in joining forces with our Company. In fact, our long standing diligent effort to establish SPDI as the regional property company of reference in South Eastern Europe, proved key to SPDI attracting such interest and most of the year was taken up evaluating various options in order to capitalize on such efforts and generate value for our shareholders.

As the regional economies and related property markets SPDI is present in continued their respective growth trends, SPDI was not only able to sell one of its non-core assets in a substantial cash generating transaction in Q3, but was able to choose among the various options of value-add opportunities available to it. Specifically, as announced in December (with further updates being provided during 2019), we commenced a potential merger like transaction with the Amsterdam and Prague listed Arcona Property Fund N.V. (APF) with assets in Poland, Czech Republic and Slovakia. The closing of the transaction, should we be able to bring it to fruition and subject to the necessary approvals being obtained as expected within 2019, will see our non-Greek assets moving under the corporate umbrella of APF and our shareholders gaining relative exposure to a much larger and broader East European regional property company, as per our original plan. The value that the Arcona transaction places on SPDI is its real Net Asset Value (NAV). Our shareholders will benefit from owning shares and warrants of APF equivalent to NAV, confirming our age old argument that the market has not reflected SPDI's true potential by applying a >50% discount to such value.

In 2018, Romania continued being the fastest growing economy of the European Union and saw property prices continue rising across all sectors, facilitating our residential sales and confirming our choice not to have gone all out on selling such assets the years before. At the same time Bulgarian property market prices, especially in the residential sector, saw a substantial increase allowing us to prepare the ground for the sale of further residential units in Boyana. Finally, Greece turned the corner and experienced for the first time in years increased output for the year, with its own property market showing signs of strengthening. This led to numerous expressions of interest for our Athens logistics terminal, a property not included in the APF potential deal.

The combination of higher values and sales prices, as well as increased interest in our assets and our platform as a whole, gives us the ability to generate more cash through the sale of non-core assets but also the confidence that one way or another we will be able to reach our objective of generating value for our shareholders through our well placed and efficiently run asset portfolio. The consolidation of our Board of Directors to an active, leaner unit and a strong advisory council we can tap on, offers management the necessary support to continue its all-out efforts and effect the moves needed to achieve SPDI's objectives and ensure that the exercises under way will result in transforming the Company.

Best regards,

Lambros G. Anagnostopoulos, Chief Executive Officer

3. Management Report

3.1 Corporate Overview & Financial Performance

SPDI's core property asset portfolio consists of South Eastern European prime commercial and industrial real estate, the majority of which is let to blue chip tenants on long leases. During 2018, management continued to focus on its strategy to dispose of non-core assets, while at the same time continued to source partnerships which are able to effectively set the grounds for further value creation.

With this in mind, during the period the Company sold the BlueBigBox asset fully let to Praktiker, a regional DIY retailer in Craiova, Romania, generating more than €2,5m in cash.

Most importantly, in 2018 the Company, in line with its strategy to maximise value for shareholders, entered into a conditional implementation agreement for the sale of its property portfolio, excluding its Greek logistics property, in an all-share transaction to Arcona Property Fund N.V, an Amsterdam and Prague listed company that invests in commercial property in Central Europe. Arcona currently holds high yielding real estate investments in Czech Republic, Poland and Slovakia. The transaction values the SPDI assets at ~ €29m, or 225% higher than the current market value of the Company as a whole. If one takes into consideration and assumes the warrants that will be issued together with the ARCONA shares, the transaction values the SPDI assets at their Net Asset Value.

Such sale of the Company's non-Greek portfolio, together with existing debt, is to be settled through the issuance of new Arcona Property Fund N.V. shares which will be distributed eventually to existing SPDI shareholders pro-rata to their shareholding in the Company's shares.

The combination of the two complimentary asset portfolios is expected to create a significant European Property company, benefiting both the Company's and the buyer's respective shareholders.

Regarding the economic environment in which the Company operates, the Romanian economy continued to grow strongly with a 4,1% increase, whilst maintaining record low unemployment. Bucharest is bustling with property development and it is expected that the following year will set new records especially in Logistics and Office markets, backed by international and domestic investor interest.

Greece exited the financing and stabilization programme and experienced economic growth for the second consecutive year. It posted a 4%+ primary surplus, and in 2019 is expected to be able to go to the markets to support its development plans with a number of property investors knocking on its door. While a series of elections are planned for the coming year (national, municipal, European) many analysts believe that Greece is on the growth turn and such growth may prove to be faster than expected.

Following the successful sale of BlueBigBox asset in Craiova in 2018 and the sale of the Ukrainian asset, Terminal Brovary in Kiev in 2017, SPDI's operating income reduced by 32%. Consequently, 2018, EBITDA decreased to €1,8m compared to €3,7m in 2017. Finance costs dropped to ~€1,2m and overall corporate and administration costs were reduced by 14% following continued successful cost management by the Company.

Table 1

EUR	2018			2017
	Continued Operations	Discontinued Operations	Total	Continued Operations	Discontinued Operations	Total
Rental, Utilities, Management & Sale of electricity Income	769,463	2,378,875	3,148,338	2,180,502	2,445,466	4,625,968
Net gain/(loss) on disposal of investment property	421,257	636,521	1,057,778	-	195,273	195,273
Income from Operations of Investments	1,190,720	3,015,396	4,206,116	2,180,502	2,640,739	4,821,241
Asset operating expenses	(118,319)	(606,069)	(724,388)	(123,261)	(629,842)	(753,103)
Net Operating Income from Investments	1,072,401	2,409,327	3,481,728	2,057,241	2,010,897	4,068,138
Share of profits from associates	-	364,920	364,920	-	390,217	390,217
Impairment allowance for inventory and provisions	-	-	-	150,000	-	150,000
Gain on disposal of subsidiaries	-	-	-	1,483,737	-	1,483,737
Total Income	1,072,401	2,774,247	3,846,648	3,690,978	2,401,114	6,092,092

Administration expenses	(1,768,847)	(260,714)	(2,029,561)	(1,994,481)	(353,532)	(2,348,013)

Operating Result (EBITDA)	(696,446)	2,513,533	1,817,087	1,696,497	2,047,582	3,744,079

Finance Cost, net	332,442	(1,532,601)	(1,200,159)	(385,928)	(1,651,475)	(2,037,403)
Income tax expense	(106,306)	(96,567)	(202,873)	(124,805)	(71,910)	(196,715)

Operating Result after Finance and Tax Expenses	(470,310)	884,365	414,055	1,185,764	324,197	1,509,961

Other income / (expenses), net	(31,716)	(363,435)	(395,151)	(378,076)	2,668	(375,408)
Income Tax - One off	(506,728)	-	(506,728)	(399,450)	-	(399,450)
Fair value adjustments from Investment Properties	(1,266,438)	(1,916,596)	(3,183,034)	181,102	(88,919)	92,183
Gain realized on acquisition of subsidiaries	-	-	-	-	23,921	23,921
Foreign exchange differences, net	(71,390)	(10,233)	(81,623)	(38,047,966)	(1,335,517)	(39,383,483)

Result for the year	(2,346,582)	(1,405,899)	(3,752,481)	(37,458,626)	(1,073,650)	(38,532,276)

Exchange difference on I/C loans to foreign holdings	-	1,850	1,850	37,349,385	-	37,349,385
Exchange difference on translation due to presentation currency	-	421,086	421,086	-	(615,583)	(615,583)

Total Comprehensive Income for the year	(2,346,582)	(982,963)	(3,329,545)	(109,241)	(1,689,233)	(1,798,474)

3.2 Property Holdings

The Company's portfolio at year-end consists of commercial income producing and residential properties in Romania, Greece and Bulgaria, as well as land plots in Ukraine, Bulgaria and Romania.

Commercial Property	Location	Key Features
Victini Logistics
	Athens, Greece	Gross Leaseable Area:	17.756 sqm
		Anchor Tenant:	Kuehne + Nagel and GE Dimitriou SA
		Occupancy Rate:	100%
EOS Business Park
	Bucharest, Romania	Gross Leaseable Area:	3.386 sqm
		Anchor Tenant:	Danone Romania (lease runs to 2025)
		Occupancy Rate:	100%
Delenco (SPDI has a 24,35% interest)
	Bucharest, Romania	Gross Leaseable Area:	10.280 sqm
		Anchor Tenant:	ANCOM (Romanian telecoms regulator)
		Occupancy Rate:	100%
Innovations Logistics Park
	Bucharest, Romania	Gross Leaseable Area:	16.570 sqm
		Anchor Tenant:	Favorit Business Srl
		Occupancy Rate 2018:	37%
		Occupancy Rate Currently:	83%
Kindergarten
	Bucharest, Romania	Gross Leaseable Area:	1.400 sqm
		Anchor Tenant:	International School for Primary Education
		Occupancy Rate:	100%

Land & Residential Assets	Location	Key Features
Bela Logistic Park	Odessa, Ukraine	Plot of land (~ th. sqm):	224
Kiyanovskiy Residence	Kiev, Ukraine	Plot of land (~ th. sqm):	6
Tsymlyanskiy Residence	Kiev, Ukraine	Plot of land (~ th. sqm):	4
Balabino Project	Zaporozhye, Ukraine	Plot of land (~ th. sqm):	264
Rozny Lane	Kiev, Ukraine	Plot of land (~ th. sqm):	420
Boyana Land	Sofia, Bulgaria	Plot of land (~ th. sqm):	20
GreenLake Land (SPDI has a ~44% interest)	Bucharest, Romania	Plot of land (~ th. sqm):	40


Romfelt, Monaco, Blooming, GreenLake, Boyana	Romania & Bulgaria	Sold units during 2018:	24
Romfelt, Monaco, Blooming, GreenLake, Boyana	Romania & Bulgaria	Available units (end 2018):	118

In 2018, the Company's accredited valuers, namely CBRE Ukraine for the Ukrainian Assets, and Real Act for the Romanian, Bulgarian and Greek Assets, remained appointed. The valuations have been carried out by the appraisers on the basis of Market Value in accordance with the current Practice Statements contained within the Royal Institution of Chartered Surveyors ("RICS") Valuation - Global Standards (2017) (the "Red Book") and are also compliant with the International Valuation Standards (IVS).

In recent years, following the successful implementation of the Company's strategy, SPDI's portfolio became even more diversified in terms of geography, as well as asset class. At the end of the reporting period, taking into account the % participation in the properties that the Company holds directly, Romania is the prime country of operations (48%) in terms of Gross Asset Value, despite the fact that, following the sale of Praktiker retail center, its exposure reduced by 10%.

In respect of the Company's income generation capacity, Romania is the prime source with 63%, with the remaining income deriving from Greece (36%) and Cyprus (1%).

The table below summarizes the main financial position of each of the Company's assets (representing the Company's participation in each asset) at the end of the reporting period.

Table 2

PROPERTY	COUNTRY	GAV*	2018 €m Debt (principal)*	NAV
Innovations Logistics Park	Rom	10,6	7,0	3,6
Eos Business Park	Rom	7,6	3,9	3,7
Delenco (associate)	Rom	5,6	0,5	5,1
Victini Logistics	Gr	16,1	10,7	5,4
Kindergarten	Rom	0,7	0,4	0,3
Residential units	Rom & Bul	9,3	4,8	4,5
Land banking	Rom & Ukr & Bul	20,6	3,8	16,8
Total Value		70,5	31,1	39,5
Other balance sheet items, net **				-3,8
Net Asset Value Total				35,6
Net Asset Value total				35,6
Market Cap 31/12/2018 (Share price at £0,095)					13,5
Market Cap 27/06/2019 (Share price at £0,090)					12,8
Discount of Market Cap (at the date of this report) vs NAV (at 31/12/2018)					-62%
* Reflects the Company's participation at each asset
**Refer to balance sheet and related notes of the financial statements

The Net Equity attributable to the shareholders as at 31 December 2018 stood at ~€35,6m vs ~€36,3m in 2017. The NAV per share as at 31 December 2018 stood at GBP 0,25 and the discount of the Market Value vis a vis the Company's NAV increased to 62% at year-end.

3.3 Financial and Risk Management

The Group's overall bank principal debt exposure at the end of the reporting period was ~€30,6m (including fully consolidated properties, calculating relative to the Company's percentage shareholding in each), comprised of the following:

a) €3,4m finance lease of EOS Business Park with Alpha Leasing Romania and €0,5m debt facility received by First Phase from Alpha Bank Romania.

b) €7m finance lease of Innovations Logistics Park with Piraeus Leasing Romania.

c) €10,7m debt financing of Victini Logistics (ex GED) and photovoltaic park with Eurobank.

d) €0,4m being the Company's portion on debt financing of the Kindergarten with Eurobank Ergasias.

e) €4,9m being the Company's portion on the residential portfolio debt financing.

f) €3,8m being the Company's portion on land plot related debt financing in Romania and Bulgaria.

Throughout 2018, the Company focused on managing and preserving liquidity through cash flow optimization. In this context, the BlueBigBox asset in Craiova, Romania, was sold, and the Company is focused on completing the aforementioned transaction with Arcona Property Fund N.V.

3.4 2019 and beyond

2019 is expected to be a landmark year for the Company when completion of the transformative transaction with Arcona Property Fund N.V. is expected to take place.

Following the conditional implementation agreement signed in December 2018 by the two parties, during the first half of the year, the parties engaged in extensive discussions to put the deal into specific frameworks, conducting at the same time mutual due diligence and third-party property valuations. Currently both sides are engaged in agreeing binding terms for the first step of the transaction. Overall completion of the transaction planned in two further steps is expected to be executed within H2 2019.

The finalization of the transaction with Arcona Property Fund N.V. marks effectively the maximization of the Company's value from the current asset portfolio, providing the Company's shareholders the opportunity to gain direct exposure to a property fund of significantly larger size, listed on two stock exchanges, having a strong dividend distribution policy, and active in a fast-growing area (Central and South Eastern Europe) of the European property market.

4. Regional Economic Developments¹

[1] Sources: World Bank Group, Eurostat, EBRD, 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, SigmaBleyzer, IMF, European Commission, Oxford Economics.

The Romanian economy is undergoing strong growth. The labor market benefited from the economic growth with unemployment reaching historical lows of 3,6%. Romania's economy continued its exceptional growth, gaining one place to rank 15th by Gross Domestic Product (GDP) values according to Eurostat, ranking it above Portugal, but slightly under Czech Republic (€206,8 billion). Romania's Real GDP (GDP adjusted for price changes - inflation/deflation) growth for 2018 was 4,1%.

The strong growth has been fueled by domestic private consumption, on the back of a multi-year fiscal expansion and minimum wage hikes. These led to inflationary pressures, which forced the National Bank of Romania to increase the policy rate repeatedly during 2018.

Macroeconomic data and forecasts
Romania	2012	2013	2014	2015	2016	2017	2018e
GDP (EUR bn)	133,2	143,8	150,5	160,3	170,4	187,5	202,9
Population (mn)	20,1	20,0	20,0	19,9	19,8	19,6	19,5
Real GDP (y-o-y %)	2,1	3,5	3,4	3,9	4,8	7,0	4,1
CPI (average, y-o-y %)	3,3	4,0	1,1	-0,6	-1,5	1,3	4,6
Unemployment rate (%)	6,8	7,1	6,8	6,8	5,9	4,3	3,6

In Bulgaria, driven mainly by private consumption and renewed investment, due to the recovery in EU investment funding, Real GDP (GDP adjusted for price changes - inflation/deflation) growth for 2018 was 3,2%, while the unemployment rate fell to a post-crisis low of 5,2%.

Fiscal performance remained positive on the back of improved revenue collection, strong economic activity, better compliance, and higher minimum wages, while despite higher public wages the fiscal accounts remained in surplus at 0,8%.

Macroeconomic data and forecasts
Bulgaria	2012	2013	2014	2015	2016	2017	2018e
GDP (EUR bn)	42,0	41,9	42,8	45,3	48,1	51,7	55,2
Population (mn)	7,3	7,2	7,2	7,2	7,1	7,1	7,0
Real GDP (y-o-y %)	0,0	0,5	1,8	3,5	3,9	3,8	3,2
CPI (average, y-o-y %)	3,0	0,9	-1,4	-0,1	-0,8	2,1	2,8
Unemployment rate (%)	12,3	13,0	11,4	9,2	7,6	6,3	5,2

The Greek economy experienced growth in terms of Real GDP (GDP adjusted for price changes - inflation/deflation) for the second consecutive year (2018: 2,1%, 2017: 1,5%), primarily due to a rise in exports, but also due to an increase in domestic demand, recording a primary surplus over 4%, exceeding medium-term target.

2018 was a landmark year for the Greek economy, as not only the economic recovery that started in 2017 continued, but it also marked the exit of Greece from the financing and stabilization programme. Greek Government Bonds fell to their lowest yield since 2006, shrinking the "trust gap" between Greece and the rest of Europe.

Still, public debt remains high. Reducing it will require sustained pro-growth reforms, high primary surpluses and additional debt restructuring. Commitment to full reform implementation is key to strengthening inclusive growth.

The unemployment rate improved from a low of 27,5% in 2013, falling to 19,3% in 2018. Although the Greek labour market cannot be called positive, the peak of the employment crisis has passed. Tight access to finance continues to constrain business investment.

Banks are making inroads into their high levels of non-performing loans, which fell to 44,7% of outstanding loans in December 2018. E-auctions of collateral in default are becoming more common, but foreclosures have also increased.

Some of the sectors that recorded the deepest downturns, such as construction and real estate, are finally recovering, as record tourist arrivals are leading to new accommodation developments.

Macroeconomic data and forecasts
Greece	2012	2013	2014	2015	2016	2017	2018e
GDP (EUR bn)	191,2	180,7	178,7	177,3	176,5	180,2	184,7
Population (mn)	11,1	11,0	10,9	10,9	10,8	10,8	10,7
Real GDP (y-o-y %)	-7,3	-3,2	0,7	-0,4	-0,2	1,5	2,1
CPI (average, y-o-y %)	1,5	-0,9	-1,3	-1,7	-0,8	1,1	0,6
Unemployment rate (%)	24,5	27,5	26,6	25,0	23,6	21,4	19,3

The Ukrainian economy recovered from the economic and political crisis of previous years, achieving Real GDP (GDP adjusted for price changes - inflation/deflation) growth for the third consecutive year (2018: 3,3%, 2017: 2,5% & 2016: 2,3%).

From a trading perspective, the economy has demonstrated a refocusing on the EU market since 2017, which was a result of the signed Association Agreement with the EU in January 2016 which established the Deep and Comprehensive Free Trade Area ("DCFTA"). Implementation of DCFTA commenced in January 2017.

In March 2015, Ukraine signed a four-year Extended Fund Facility ("EFF") with the IMF that will last until March 2019. The total programme amounted to US$17,5 billion. In 2018 Ukraine renewed its cooperation with the International Monetary Fund (IMF), EU, and WBG to cover is current account deficit and to rebuild international reserves that reached US$20.8 billion. The Stand-By Arrangement expires in March 2020.

Macroeconomic data and forecasts
Ukraine	2012	2013	2014	2015	2016	2017	2018e
GDP (EUR bn)	136,7	135,2	98,4	81,6	84,4	99,4	105,4
Population (mn)	45,4	45,2	42,8	42,6	42,4	42,2	42,0
Real GDP (y-o-y %)	0,2	0,0	-6,6	-9,8	2,4	2,5	3,3
CPI (average, y-o-y %)	0,6	-0,2	12,1	48,7	13,9	14,4	11,0
Unemployment rate (%)	7,5	7,2	9,3	9,1	9,4	9,5	8,8

5. Real Estate Market Developments²

2 Sources : Danos Research, NAIRealAct, Eurobank, Jones Lang LaSalle, DTZ Research, CBRE Research, Colliers International, Cushman & Wakefield, Crosspoint Real Estate, Savills Plc, Knight Frank, Coldwell Banker Research, National Institute of Statistics- Romania.

5.1 Romania

The 2018 property investment volume for Romania is estimated at almost €1,03 billion, slightly lower than in 2017. Market volumes were dominated by office segment (63%) and retail transactions (30%), while industrial and hotels accounted for 6% and 1%, respectively.

Prime office and retail yields are at 7,25% and 7% respectively, while prime industrial yields are at 8,50%. Yields for office and retail have slightly compressed by 25 bps since 2017, while industrial yields have remained stable over the year.

Approximately 455.000 sqm, a new record in the industrial market, delivered in 2018, setting the total industrial stock at 3,75 million sqm. The rental level has remained relatively stable, with prime headline rents around 4,25€/sqm/month.

The Industrial sector registered solid leasing activity coupled with a record volume of new supply delivered at the national level. Demand counted for 520.000 sqm of major leases at the national level, with most of the deals being new leases.

Bucharest concentrated almost 58% of the registered demand, while Cluj and Timisoara are the following largest markets, concentrating a combined 30% of the total demand.

2018 saw the delivery of 190.000 sqm of new office spaces, taking the total stock to over 2,9 million sqm, while 2019 is expected to be a record year, with 360.000 sqm planned for delivery. In areas like Floreasca/Barbu Vacarescu and the Western submarket the lowest vacancy rates are observed, while the vacancy rate for the South sub-market exceeds 20%. Overall, the increasing demand led to a historically low vacancy rate of 7%, 1,5% lower than the vacancy at the end of last year.

Macroeconomic changes in Romania resulted in a decline in the residential market in 2018. Additionally, the 'Prima Casă' programme which had created a more favourable climate for the Residential Market, as well as both for investors and the end consumers, recorded a decrease in demand, while construction companies rank second in the top companies under insolvency, mainly due to lack of a qualified workforce and price increases for construction materials. According to the National Institute of Statistics, residential construction works volume reduced by 31% y-o-y, while demand on the residential segment dropped by 18%.

The increased construction costs, as well as other macroeconomic factors, resulted in 5% price increases on average in Bucharest. However, Bucharest's residential market recorded the highest demand in the country, and is estimated to remain high, with smart and green buildings, especially medium sized dwellings with access to public transportation, concentrating the highest interest. More than 300 projects were in progress during 2018 and are expected to be complete during the period 2018-2020. Upon completion, the available new residential units will exceed 55.000, with the most units located in the 6th and 4th districts with 20.000 and 103.00 respectively.

5.2 Bulgaria

The 2018 property investment volume for Bulgaria is estimated at almost €668 million, considerably lower than in 2017 (record year with €957 million of transactions). Market volumes were dominated by office segment (57%) and retail transactions (29%), with the remaining transaction concerning development land, industrial properties and hotels.

Prime yields have slightly compressed since the beginning of the year, being 8% for office space, 7,25% for retail and 9,5% for industrial properties.

Growth in the economy, low interest rates and an increase in the availability of credit play a key role in the residential market and is estimated to continue to do so.

Residential stock of newly completed projects in Sofia marked an 8% increase. The number of residential units grew to 8,870 (apartments / row or single houses), mainly concentrated in the Southern neighbourhoods and at the foot of Vitosha Mountain.

Despite the emergence of new attractive locations for buyers, the established areas such as the Sofia city center, the Lozenets district and the region around the Doctor's Monument remain leading in terms of the number of deals. At the same time, an appreciation in the value of the properties has led to an outflow of buyers in the region of Doctor's Monument, although the supply there has been rising over the past year. Higher price levels were less likely to meet buyer expectations, resulting in a reduced number of deals.

The shortage of completed quality projects maintained the surge in sales of residential properties under construction (trend remaining in place since 2015), representing 60% of the total deal volume in 2018.

Overall, sales and rental prices maintained their levels, with luxury properties reporting minimal price increases, while the overall market has been subdued. The flat growth in supply and the reaching of buy-in prices have exhausted the potential of the market for appreciation and the expectations for 2019 are for levels already reached to be maintained.

Additionally, a noticeable trend is that the market is driven by buyers, with more than 70% of the deals having been negotiated with a discount on the offer price. Statistics show that the average discount in 2018 was 7,4% (under 7% for apartments and over 10% for houses). The biggest share of sales in 2018 has been achieved with a 5% discount, which is a sign of a gradual balancing of the market. The discount transactions trend is expected to continue, which will likely lead to overvalued properties staying on the market for months.

5.3 Greece

Following the upwards trend of the Greek economy, the local real estate market has shown signs of solid growth during the last two years. A number of projects, from privatization to long term leases of infrastructure, moved ahead, revitalizing a subdued sector, which is deemed instrumental in disengaging the state's resources and attracting privately held funds, local and international alike. Office, retail and residential property segments followed positive trends during 2018.

The geographic location of Greece offers high potential to the logistics sector, which is considered to be one of the pillars of the country's economic development, while new business opportunities have been created upon the granting of management concessions for Piraeus port to COSCO, Thessaloniki port to the Deutsche Invest- Terminal Link-Belterrra consortium, and TRAINOSE to Italian Stet owned company Ferrovie Delo Stato, as well as the development of new logistic centers in Athens (Thriasio) and Thessaloniki (Str. Gonou), which are in progress.

In Athens and Thessaloniki, the average yields for quality logistics properties are around 11%, while the vacancy rate for Grade A properties is as low as 5%. In Aspropyrgos, the investment yields range from 9,75% to 10,75% and average vacancy rate is 10%, while for Grade A properties reaches 5%. The rental values remained stable or marginally increased during 2018. Nevertheless, the low vacancy rates, along with the slow, yet substantial, increase in demand and the lack of large, high quality logistics properties, due to bureaucratic barriers, lack of an effective urban planning system and the defined land uses, will eventually result in rental values increasing and investment yields decreasing.

5.4 Ukraine

The economic growth the country has experienced in recent years has affected the real estate market, creating an upwards trend, despite many problems created during the economic crisis being still in place.

Low development activity and increased demand in the office segment has led to a decrease in primary vacancies and an increase in prime rents. Continuous low new supply and strengthening occupier demand in the warehousing and logistics segment forced the market-wide vacancy to significantly low levels. Likewise, scant new supply and rising absorption of previously vacant space in the retail segment has led to a substantial decline in average market vacancy and to noticeable rental growth.

With regards to the Ukrainian land market, due to lack of finance, many potential investors are placing unfinished projects in the market. However, particularly in Kiev, there is scarcity of undeveloped land plots near the city center with access to public transportation and especially to metro stations. On the supply side, the sellers pool consists of development companies, unable to develop due to the lack of finance, companies or individuals having speculatively acquired land plots prior to the crisis with the intention to sell on and banks possessing mortgaged land upon default of previous owners. The demand for land plots has started increasing since 2016, especially for ones suitable for commercial development, with large land plots sales in 2017, reflecting the existing positive investment trend.

Devaluation of the national currency had led to land price decreases during the previous years. Since 2017, the supply of high quality land plots mainly for residential, but also for commercial, development near Kiev has led the land market up. That, along with the growth of the economy and the business activity in the country forced the prices in the city up during 2018, while outside the city the prices remained relatively stable. No significant alterations are expected in the land prices during the following year as well.

6. Property Assets

6.1 Victini Logistics (ex GED), Athens, Greece

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 20 minutes from the port of Piraeus (where Cosco runs a container port handling more than 4 million containers a year) and the National Road connecting Athens to the north of the country. The roof of the warehouse buildings houses a photovoltaic park of 1,000 KWp.

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).

Currently, Kuehne & Nagel (the German transportation and logistics company), occupies all the warehouse space and almost all of the office space until 2023.

6.2 EOS Business Park - Danone headquarters, Romania

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 served by public transportation. The park is highly energy efficient.

The Company acquired the office building in November 2014. The complex is fully let to Danone Romania, the French multinational food company, until 2025. The asset is planned to be part of the Arcona transaction.

6.3 Delenco office building, Romania

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 300 m from the metro station.

The Company acquired 24,35% of the property in May 2015. As at the year end 2018, the building is 100% let, with ANCOM (the Romanian Telecommunications Regulator) being the anchor tenant (70% of GLA). The asset is planned to be part of the Arcona transaction.

6.4 Innovations Logistics Park, Romania

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

In April 2017, the Company signed a lease agreement with Aquila Srl, a large Romanian logistics operator, for 5.740 sqm of ambient space in the warehouse which expired during April 2018 without being extended. During Q3 2018 the Company signed a short term lease agreement for 2.000 sqm of ambient storage space with Chipita Romania Srl, one of the fastest growing regional food companies, currently under discussions for extension. During Q1 2019 the Company signed with Favorit Business Srl a lease agreement for 3.000 sqm of cold storage space, 506 sqm of ambient storage space, and 440 sqm of office space. In Q2 2019 the Company agreed with Favorit Business Srl a lease of an extra 3.000 sqm of cold storage space, and an extra 210 sqm of office space to accommodate their new business line which involves as end user Carrefour. As at the year end, the terminal was ~37% leased, while based on current agreements occupancy for the forthcoming period has reached ~83%. The asset is planned to be part of the Arcona transaction.

6.5 Kindergarten, Romania

Situated on the GreenLake compound on the banks of Grivita Lake, a standalone building on ground and first floor, is used as a nursery by one of the Bucharest's leading private schools.

The building is erected on 1.428,59 sqm plot with a total gross area of 1.198 sqm.

The property is 100% leased to International School for Primary Education until 2032. The asset is planned to be part of the Arcona transaction.

6.6 Residential Portfolio

· Romfelt Plaza (Doamna Ghica), Bucharest, Romania

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

During 2018, 10 units were sold and, at the end of 2018, four apartments were available. The asset is planned to be part of the Arcona transaction.

· Monaco Towers, Bucharest, Romania

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

At the end of 2018, 22 apartments were available, four of which were rented. Following extended negotiations for the last two years with the company which acquired Monaco's loan, the SPV holding Monaco units entered into insolvency status in order to protect itself from its creditors. During 2019, based on regulatory procedures for disposing assets held by the debtor and upon agreement of all involved parties and the judicial administrator's approval, 3 units were sold. The asset is planned to be part of the Arcona transaction.

· Blooming House, Bucharest, Romania

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

At the end of 2018, 8 apartments were available while one was rented. The asset is planned to be part of the Arcona transaction.

· GreenLake, Bucharest, Romania

A residential compound of 40.500 sqm GBA, which consists of apartments and villas, situated on the banks of Grivita Lake, in the northern part of the Romanian capital - the only residential property in Bucharest with a 200 meters frontage to a lake. The compound also includes facilities such as one of Bucharest's leading private schools (International School for Primary Education), outdoor sports courts and a mini-market. Additionally, GreenLake includes land plots totaling 40.360 sqm. SPDI owns ~43% of this property asset portfolio.

During 2018, six apartments and villas were sold while at the end of the year, of the 50 units that were unsold, 10 were let. The asset is planned to be part of the Arcona transaction.

· Boyana Residence, Sofia, Bulgaria

A residential compound, which consisted at acquisition date (May 2015) of 67 apartments plus 83 underground parking slots developed on a land surface of 5.700 sqm, situated in the Boyana high end suburb of Sofia, at the foot of Vitosha mountain with Gross Buildable Area ("GBA") totaling 11.400 sqm. The complex includes adjacent land plots available for sale or development of ~22.000 sqm of gross buildable area.

During 2018 three apartments were sold, with 34 remaining unsold at the end of 2018. The asset is planned to be part of the Arcona transaction.

6.7 Land Assets

· Aisi Bela - Bela Logistics Park, Odessa, Ukraine

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

Development has been put on hold. The asset is planned to be part of the Arcona transaction.

· Kiyanovskiy Residence - Kiev, Ukraine

Development has been put on hold. The asset is planned to be part of the Arcona transaction.

· Tsymlyanskiy Residence - Kiev, Ukraine

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

Discussions are ongoing with interested parties with a view to partnering in the development or sale of this property. The asset is planned to be part of the Arcona transaction.

· Balabino Project, Zaporozhye, Ukraine

The 26,38 Ha site is situated on the south entrance of Zaporozhye city, 3km away from the administrative border of Zaporozhye. It borders the Kharkov-Simferopol Highway (which connects eastern Ukraine and Crimea and runs through the two largest residential districts of the city), as well as another major artery accessing the city center.

The site is zoned for retail and entertainment. Development has been put on hold. The asset is planned to be part of the Arcona transaction.

· Rozny Lane - Kiev Oblast, Kiev, Ukraine

The 42 Ha land plot located in Kiev Oblast is destined to be developed as a residential complex. Following a protracted legal battle, it has been registered under the Company pursuant to a legal decision in July 2015.

The Company is evaluating potential commercialization options to maximize the property's value. The asset is planned to be part of the Arcona transaction.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2018

	Note	2018		2017 Restated*
		€		€
Continued Operations
Income	10	769.463		2.180.502
Asset operating expenses	11	(118.319)		(123.261)
Net Operating Income		651.144		2.057.241

Administration expenses	12	(1.768.847)		(1.994.481)
Valuation gains from Investment Property	13	-		181.102
Net loss on disposal of investment property	14b	(845.181)		-
Provisions	15	-		150.000
Gain on disposal of subsidiaries	21b	-		1.483.737
Other operating expenses, net	16	(31.716)		(378.076)

Operating profit / (loss)		(1.994.600)		1.499.523

Finance income	17	686.183		3.563
Finance costs	17	(353.741)		(389.491)

Profit / (loss) before tax and foreign exchange differences		(1.662.158)		1.113.595

Foreign exchange (loss), net	18a	(71.390)		(695.043)
Forex transfer on disposal of foreign operation	18b	-		(37.352.923)

Loss before tax		(1.733.548)		(36.934.371)

Income tax expense	19	(613.034)		(524.255)

Loss for the year from continuing operations		(2.346.582)		(37.458.626)

Loss from discontinued operations	9b	(1.405.899)		(1.073.650)

Loss for the year		(3.752.481)		(38.532.276)

Other comprehensive income

Exchange difference on I/C loans to foreign holdings	18b	1.850		37.349.385
Exchange difference on translation of foreign operations	30	421.086		(615.583)
Total comprehensive income for the year		(3.329.545)		(1.798.474)

Loss for the year from continued operations attributable to:
Owners of the parent		(2.346.582)		(37.458.626)
Non-controlling interests		-		-
		(2.346.582)		(37.458.626)

Loss for the year from discontinued operations attributable to:
Owners of the parent		(699.271)		(1.985.925)
Non-controlling interests		(706.628)		912.275
		(1.405.899)		(1.073.650)

Loss for the year attributable to:
Owners of the parent		(3.045.853)		(39.444.551)
Non-controlling interests		(706.628)		912.275
		(3.752.481)		(38.532.276)
Total comprehensive income attributable to:
Owners of the parent		(2.463.822)		(2.962.061)
Non-controlling interests		(865.723)		1.163.587
		(3.329.545)		(1.798.474)

Earnings/(losses) per share (Euro per share):	39b
Basic earnings/(losses) for the year attributable to ordinary equity owners of the parent			(0,03)	(0,40)
Diluted earnings/(losses) for the year attributable to ordinary equity owners of the parent			(0,03)	(0,38)

*Restatement due to IFRS 5.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the year ended 31 December 2018

	Note	2018	2017
		€	€
ASSETS
Non‑current assets
Investment properties	20.4a	-	74.732.502
Investment properties under development	20.4b	-	4.586.009
Tangible and intangible assets	24	3.674	70.504
Long-term receivables and prepayments	25	850	316.788
Investments in associates	22	-	5.115.587
		4.524	84.821.390
Current assets
Inventory	26	-	4.812.550
Prepayments and other current assets	27	5.585.408	5.846.584
Cash and cash equivalents	28	282.713	831.124
		5.868.121	11.490.258
Assets classified as held for sale	9d	79.678.738	-
		85.546.859	11.490.258
Total assets		85.551.383	96.311.648
EQUITY AND LIABILITIES
Issued share capital	29	1.272.702	1.035.893
Share premium		71.381.259	123.126.328
Foreign currency translation reserve	30	9.874.757	9.294.576
Exchange difference on I/C loans to foreign holdings	41.3	(215.820)	(217.670)
Accumulated losses		(46.704.622)	(96.888.569)
Equity attributable to equity holders of the parent		35.608.276	36.350.558
Non-controlling interests	31	7.535.691	8.401.414

Total equity		43.143.967	44.751.972
Non‑current liabilities
Borrowings	32	380.256	25.324.378
Finance lease liabilities	37	-	10.435.241
Bonds issued	33	1.033.842	1.033.842
Trade and other payables	34	-	417.791
Taxes payables	36	362.010	602.200
Provision on taxes	36	399.450	399.450
Deposits from tenants	35	-	187.976
		2.175.558	38.400.878
Current liabilities
Borrowings	32	22.034	5.162.087
Finance lease liabilities	37	-	391.002
Bonds issued	33	88.628	20.495
Trade and other payables	34	4.174.936	6.920.308
Taxes payable	36	652.324	613.859
Provisions on taxes	36	43	51.047
		4.937.965	13.158.798
Liabilities directly associated with assets classified as held for sale	9d	35.293.893	-
		40.231.858	13.158.798
Total liabilities		42.407.416	51.559.676

Total equity and liabilities		85.551.383	96.311.648

Net Asset Value (NAV) € per share:	39c
Basic NAV attributable to equity holders of the parent		0,28	0,43
Diluted NAV attributable to equity holders of the parent		0,28	0,38

On 28 June 2019 the Board of Directors of SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC authorised these financial statements for issue.


Lambros Anagnostopoulos	Michael Beys	Theofanis Antoniou
Director & Chief Executive Officer	Director & Chairman of the Board	Finance Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2018

	Attributable to owners of the Company
	Share capital	Share premium, Net¹	Accumulated losses, net of non-controlling interest²	Exchange difference on I/C loans to foreign holdings³	Foreign currency translation reserve⁴	Total	Non- controlling interest	Total
	€	€	€	€	€	€	€	€
Balance - 31 December 2016	900.145	122.874.268	(57.444.020)	(37.567.055)	10.161.471	38.924.809	7.237.827	46.162.636
Loss for the year	-	-	(2.091.626)	-	-	(2.091.626)	912.275	(1.179.351)
Issue of share capital (Note 29)	135.748	252.060	-	-	-	387.808	-	387.808
Exchange difference on I/C loans to foreign holdings which disposed (Note 18b)	-	-	(37.352.923)	37.352.923	-	-	-	-
Exchange difference on I/C loans to foreign holdings (Note 18b)	-	-	-	(3.538)	-	(3.538)	-	(3.538)
Foreign currency translation reserve	-	-	-	-	(866.895)	(866.895)	251.312	(615.583)
Balance 1 January 2018 as initially reported	1.035.893	123.126.328	(96.888.569)	(217.670)	9.294.576	36.350.558	8.401.414	44.751.972
Adjustment on initial application of IFRS 9, net of tax	-	-	(339.495)	-	-	(339.495)	-	(339.495)
Balance 1 January 2018 restated	1.035.893	123.126.328	(97.228.064)	(217.670)	9.294.576	36.011.063	8.401.414	44.412.477
Loss for the year	-	-	(3.045.853)	-	-	(3.045.853)	(706.628)	(3.752.481)
Issue of share capital (Note 29)	66.044	810.522	-	-	-	876.566	-	876.566
Exchange difference on I/C loans to foreign holdings (Note 18b)	-	-	-	1.850	-	1.850	-	1.850
Share premium set off with accumulated losses (Note 29.7)	-	(53.569.295)	53.569.295	-	-	-	-	-
Expenses for capital raising	-	(735.623)	-	-	-	(735.623)	-	(735.623)
Exercised warrants (Note 29.4)	170.765	1.749.327	-	-	-	1.920.092		1.920.092
Foreign currency translation reserve	-		-	-	580.181	580.181	(159.095)	421.086
Balance - 31 December 2018	1.272.702	71.381.259	(46.704.622)	(215.820)	9.874.757	35.608.276	7.535.691	43.143.967

¹ Share premium is not available for distribution.

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

³ Exchange differences on intercompany loans to foreign holdings arose as a result of devaluation of the Ukrainian Hryvnia during previous years. The Group treats the mentioned loans as a part of the net investment in foreign operations (Note 41.3).

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

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2018

	Note	2018	2017
		€	€
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax and non-controlling interests-continued operations		(1.733.548)	(36.934.371)
Loss before tax and non-controlling interests-discontinued operations	9b	(1.309.332)	(1.001.740)
Loss before tax and non-controlling interests		(3.042.880)	(37.936.111)
Adjustments for:
(Gains) on revaluation of investment property	13	1.218.297	(326.961)
Net loss/(gain) on disposal of investment property	14b	893.406	(4.366)
Other non-cash movements		113	411
Write offs of prepayments	16	-	44.040
Impairment charge on receivables	16	415.289	-
Accounts payable written off	16	(85)	(21.860)
Depreciation/ Amortization charge	12	27.384	44.128
Interest income	17	(696.162)	(13.376)
Interest expense	17	1.836.590	1.929.583
Share of losses/(profit) from associates	22	(364.920)	(390.217)
Gain on acquisition of subsidiaries	21a	-	(23.921)
Reversal of provision	15	-	(150.000)
Gain on disposal of subsidiaries	21b	-	(1.483.737)
Effect of foreign exchange differences	18a	81.623	2.030.561
Forex transfer on disposal of foreign operation	18b	-	37.349.385
Cash flows from/(used in) operations before working capital changes		368.655	1.047.559

Change in inventory	26	208.506	215.706
Change in prepayments and other current assets	27	15.564	(497.198)
Change in trade and other payables	34	708.591	(585.447)
Change in VAT and other taxes receivable	27	240.255	103.009
Change in provisions	36	14.998	408.331
Change in other taxes payables	36	(543.861)	(423.658)
Increase in deposits from tenants	35	55.345	(108.196)

Cash generated from operations		1.068.053	160.106
Income tax paid		(368.156)	(152.416)

Net cash flows provided in operating activities		699.897	7.690
CASH FLOWS FROM INVESTING ACTIVITIES
Sales proceeds from disposal of investment property	14b	8.016.573	363.985
Dividend received from associates	22	143.263	231.363
Interest received		405	1.543
Increase in long term receivables		45.667	(65.606)
Cash inflow on disposal of subsidiaries	21b	-	2.844.494
Loan granted for property acquisition	27	(350.000)	(3.345.000)
Net cash flows from / (used in) investing activities		7.855.908	30.779
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital	29	-	135.748
Bonds issue	33	-	1.033.842
Proceeds from bank and non-bank loans	32	1.044.408	1.455.336
Repayment of bank and non-bank loans	32	(7.558.655)	(1.437.587)
Interest and financial charges paid		(1.528.913)	(1.774.925)
Decrease in financial lease liabilities	37	(356.231)	(320.766)
Net cash flows from / (used in) financing activities		(8.399.391)	(908.352)

Net increase/(decrease) in cash at banks		156.414	(869.883)
Cash:
At beginning of the year		831.124	1.701.007

At end of the year	28	987.538	831.124

Notes to the Consolidated Financial Statements

For the year ended 31 December 2018

1. General Information

Country of incorporation

SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC (the ''Company'') was incorporated in Cyprus on 23 June 2005 and is a public limited liability company, listed on the London Stock Exchange (AIM): ISIN CY0102102213. Its registered office is at Kyriakou Matsi 16, Eagle House, 10th floor, Agioi Omologites, 1082 Nicosia, Cyprus while its principal place of business is in Cyprus at 11 Bouboulinas Avenue, 4th floor, office No. 48, 1060 Nicosia, Cyprus.

Principal activities

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

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

As at 31 December 2018, the companies of the Group employed and/or used the services of 15 full time equivalent people, (2017 à 19 full time equivalent people).

2. Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap.113. The consolidated financial statements have been prepared under the historical cost as modified by the revaluation of investment property and investment property under construction.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates and requires Management to exercise its judgment in the process of applying the Company's accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on Management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.

Following certain conditional agreement signed in December 2018 with Arcona Property Fund N.V for the sale of Company's non-Greek portfolio of assets, as well as plans and discussions regarding the Greek asset, the Company has classified its assets in 2018 as discontinued operations (Note 4.3) and has restated accordingly 2017 figures for comparative purposes.

Going concern basis

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.

In particular, the Company is in a process of disposing of its non-Greek portfolio of assets in an all share transaction with Arcona Property Fund N.V., meaning that as soon as this transaction consummates the Company will be left with its Greek asset, as well as its corporate receivables and liabilities.

These conditions raise substantial doubt about the Company's ability to continue as a going concern within the next twelve months from the date these financial statements are available to be issued. The ability to continue as a going concern is dependent upon positive future cash flows.

Management believes that the Company will be able to finance its needs given the fact that the Greek asset may contribute considerable free cash flow in case it is sold. In such case, when coupled with the additional corporate receivables, then all corporate liabilities can be effectively discharged. At the same time, the transaction with Arcona Property Fund N.V., which is a cash flow generating entity, will result in the Company being for at least the initial period a ~45% shareholder, entitled to dividends according to the dividend policy of Arcona Property Fund N.V.

3. Adoption of new and revised Standards and Interpretations

During the current year, the Company adopted all the new and revised International Financial Reporting Standards (IFRS) that are relevant to its operations and are effective for accounting periods beginning on 1 January 2018. This adoption had a material effect on the accounting policies of the Company as follows:

• IFRS 9 ''Financial Instruments''

As explained below, in accordance with the transition provisions of IFRS 9 and IFRS 15, the Company has elected the simplified approach for adoption of the standards. Accordingly, IFRS 9 and IFRS 15 were adopted without restating the comparative information. The comparative information is prepared in accordance with IAS 39, IAS 18 and IAS 11, and the impact of adoption has been recognised in the opening accumulated losses reserve.

3. Adoption of new and revised Standards and Interpretations (continued)

The following table summarizes the impact of adoption of the new standard on each individual line item of the statement of financial position. Line items that were not affected by the changes have not been included. As a result, the sub totals and totals disclosed cannot be recalculated from the numbers provided. The adjustments are explained in more detail by standard below.

a. Impact on the statement of financial position

	Balance at 31 December 2017 as previously presented	Re-classifications	31 December 2017 under IAS 18 and IAS 39	Effect of adoption of IFRS 15	Effect of adoption of IFRS 9	1 January 2018 under IFRS 15 and IFRS
	€	€	€	€	€	€
Trade and other Receivables	715.406	-	-	-	(15.009)	700.397
Loan Receivables	4.618.476	-	-	-	(316.926)	4.301.550
Cash and cash equivalents	831.124	-	-	-	(7.560)	823.564
Accumulated Losses	96.888.569	-	-	-	339.495	97.228.064

The Company has voluntarily changed the presentation of certain amounts in the comparative statement of financial position as disclosed in the table above to reflect the terminology of IFRS 15 and IFRS 9.

(i) IFRS 9 ''Financial instruments''

IFRS 9 ''Financial instruments'' replaces the provisions of IAS 39 that relate to recognition and derecognition of financial instruments and classification and measurement of financial assets and financial liabilities. IFRS 9 further introduces new principles for hedge accounting and a new forward looking impairment model for financial assets.

The new standard requires debt financial assets to be classified into two measurement categories: those to be measured subsequently at fair value (either through other comprehensive income (FVOCI) or through profit or loss (either FVTPL or FVPL) and those to be measured at amortized cost). The determination is made at initial recognition. For debt financial assets the classification depends on the entity's business model for managing its financial instruments and the contractual cash flows characteristics of the instruments. For equity financial assets it depends on the entity's intentions and designation.

In particular, assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Lastly, assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss.

For investments in equity instruments that are not held for trading, the classification depends on whether the entity has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. If no such election has been made or the investments in equity instruments are held for trading, they are required to be classified at fair value through profit or loss.

IFRS 9 also introduces a single impairment model applicable for debt instruments at amortised cost and fair value through other comprehensive income and removes the need for a triggering event to be necessary for recognition of impairment losses. The new impairment model under IFRS 9 requires the recognition of allowances for doubtful debts based on expected credit losses (ECL), rather than incurred credit losses as under IAS 39. The standard further introduces a simplified approach for calculating impairment on trade receivables, as well as for calculating impairment on contract assets and lease receivables; which also fall within the scope of the impairment requirements of IFRS 9.

For financial liabilities, the standard retains most of the requirements of IAS 39. The main change is that, in case where the fair value option is taken for financial liabilities, the part of a fair value change due to the entity's own credit risk is recorded in other comprehensive income rather than in profit or loss, unless this creates an accounting mismatch.

With the introduction of IFRS 9 ''Financial Instruments'', the IASB confirmed that gains or losses that result from modification of financial liabilities that do not result in derecognition shall be recognized in profit or loss.

IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ''hedge ratio'' to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that previously prepared under IAS 39.

The Company has adopted IFRS 9 with a date of transition of 1 January 2018, which resulted in changes in accounting policies for recognition, classification and measurement of financial assets and liabilities and impairment of financial assets.

3. Adoption of new and revised Standards and Interpretations (continued)

(i) IFRS 9 ''Financial instruments'' (continued)

The Company's new accounting policies following adoption of IFRS 9 at 1 January 2018 are set out in note.

Impact of adoption

In accordance with the transition provisions in IFRS 9, the Company has elected the simplified transition method for adopting the new standard. Accordingly, the effect of transition to IFRS 9 was recognised as at 1 January 2018 as an adjustment to the opening accumulated losses (or other components of equity, as appropriate). In accordance with the transition method elected by the Company for implementation of IFRS 9 the comparatives have not been restated, but are stated based on the previous policies which comply with IAS 39. Consequently, the revised requirements of IFRS 7 ''Financial Instruments: Disclosures'' have only been applied to the current period. The comparative period disclosures repeat those disclosures made in the prior year.

On 1 January 2018 for debt instruments held by the Company, management has assessed which business models apply to the financial assets and whether the contractual cash flows represent solely payments of principal and interest (SPPI test). In addition, separate assessment for equity instruments held by the Company was performed, in respect of whether they are held for trading or not. As a result of both assessments, Management has classified its debt and equity instruments into the appropriate IFRS 9 categories.

As a result of the adoption of IFRS 9, the Company revised its impairment methodology for each class of assets subject to the new impairment requirements. From 1 January 2018, the Company assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI, cash and cash equivalents and bank deposits with original maturity over 3 months and loan commitments and financial guarantees. The impairment methodology applied depends on whether there has been a significant increase in credit risk and whether the debt instruments qualify as low credit risk.

The Company has the following types of assets that are subject to IFRS 9's new expected credit loss model: trade receivables, contract assets, financial assets at amortised cost, cash and cash equivalents, bank deposits with original maturity over 3 months, debt financial assets at FVOCI, loans commitments and financial guarantees.

The Company has adopted the simplified expected credit loss model for its trade receivables, trade receivables with significant financing component, lease receivables and contract assets, as required by IFRS 9, paragraph 5.5.15, and the general expected credit loss model for financial assets at amortised cost, cash and cash equivalents, bank deposits with original maturity over 3 months, and loan commitments and financial guarantees.

The following table reconciles the carrying amounts of financial instruments, from their previous measurement categories in accordance with IAS 39 into their new measurement categories upon transition to IFRS 9 on 1 January 2018:

Measurement category		Carrying value per IAS 39 (closing at 31 December 2017)	Effect of IFRS 9				Carrying value per IFRs 9 (opening balance at 1 January 2018)
IAS 39	IFRS9	Carrying value per IAS 39 (closing at 31 December 2017)	Re-measurement ECL	Re-measurement Other	Re- classification Mandatory	Re- classification Voluntary
		€	€	€	€	€	€
Trade and other Receivables	Amortised Cost	715.406	(15.009)	-	-	-	700.397
Loans and Receivables	Amortised Cost	4.618.476	(316.926)	-	-	-	4.301.550
Cash and cash equivalents	Amortised Cost	831.124	(7.560)	-	-	-	823.564
Total		6.165.006	(339.495)	-	-	-	5.825.511

· Borrowings:

Under IFRS 9, all gains or losses resulting from the modifications of borrowings that did not result in derecognition should be recognised in profit or loss. Previously, under IAS 39, the Company has amortised modification impact via adjusting the effective interest rate. The Company has assessed the above and concluded that there was no impact on the borrowings balances existing on the date of adoption of IFRS 9.

• Other financial instruments:

For all other financial assets Management assessed that the Company's business model for managing the assets is ''hold to collect'' and these assets meet SPPI tests. As a result, all other financial assets were classified as financial assets at amortised cost and reclassified from the category ''loans and receivables'' under IAS 39, which was ''retired''. Previously, under IAS 39, these financial assets were also measured at amortised cost. Thus there were no impact of adoption of IFRS 9 as of 1 January 2018.

3. Adoption of new and revised Standards and Interpretations (continued)

b. Impact on the statement of comprehensive income (continued)

(i) IFRS 9 ''Financial instruments'' (continued)

At 31 December 2017, all of the Company's financial liabilities were carried at amortised cost. Starting from 1 January 2018 the Company's financial liabilities continued to be classified at amortised cost.

The assessment of the impact of adoption of IFRS 9 on the Company's accounting policies required management to make certain critical judgments in the process of applying the principles of the new standard.

Reconciliation of provision for impairment at 31 December 2017 and credit loss allowance at 1 January 2018.

The following table reconciles the prior period's closing provision for impairment measured in accordance with incurred loss model under IAS 39 to the new credit loss allowance measured in accordance with expected loss model under IFRS 9 at 1 January 2018:

	Provision under IAS 39 or IAS 37 at 31 December 2017	Effect			Effect of adoption of IFRS 9 1 January 2018
	Provision under IAS 39 or IAS 37 at 31 December 2017	Reclassification to FVTPL	Reclassification to FVOCI	Remeasurement from incurred to expected loss	Effect of adoption of IFRS 9 1 January 2018
	€	€	€	€	€
Trade and other Receivables	(26.285)	-	-	(15.009)	(41.294)
Loan Receivables	-	-	-	(316.926)	(316.926)
Cash and Cash equivalents	-	-	-	(7.560)	(7.560)
Total	(26.285)	-	-	(339.495)	(365.780)

The impact of these changes on the Group's equity is as follows:

	Effect on accumulated losses	Total
	€	€
Trade and other Receivables	(15.009)	(15.009)
Loan Receivables	(316.926)	(316.926)
Cash and Cash equivalents	(7.560)	(7.560)
Total	(339.495)	(339.495)

(ii) IFRS 15 ''Revenue from Contracts with Customers''

IFRS 15 ''Revenue from contracts with customers'' and related amendments superseded IAS 18 ''Revenue'', IAS 11 ''Construction Contracts'' and related interpretations. The new standard replaces the separate models for recognition of revenue for the sale of goods, services and construction contracts under previous IFRS and establishes uniform requirements regarding the nature, amount and timing of revenue recognition. IFRS 15 introduces the core principle that revenue must be recognised in such a way to depict the transfer of goods or services to customers and reflect the consideration that the entity expects to be entitled to in exchange for transferring those goods or services to the customer; the transaction price.

The new standard provides a principle based five step model that must be applied to all categories of contracts with customers. Any bundled goods or services must be assessed as to whether they contain one or more performance obligations (that is, distinct promises to provide a good or service). Individual performance obligations must be recognised and accounted for separately and any discounts or rebates in the contract price must generally be allocated to each of them.

The amendments to IFRS 15 clarify how to identify a performance obligation in a contract, how to determine whether a Company is a principal (that is, the provider of a good or service) or an agent (responsible for arranging for the good or service to be provided) and how to determine whether the revenue from granting a license should be recognised at a point in time or over time. In addition to the clarifications, the amendments include two additional reliefs to reduce cost and complexity for a Company when it first applies the new standard.

The Company's new accounting policies following adoption of IFRS 15 at 1 January 2018 are set out below in note 5.

Impact of adoption

In accordance with the transition provisions of IFRS 15, the Company has elected the simplified transition method for adopting the new standard. Accordingly, there is no impact on the Group results by the adoption of this standard.

4. Significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. Apart from the accounting policy changes resulting from the adoption of IFRS 9 and IFRS 15 effective from 1 January 2018, these policies have been consistently applied to all years presented in these consolidated financial statements unless otherwise stated.

4. Significant accounting policies (continued)

Local statutory accounting principles and procedures differ from those generally accepted under IFRS. Accordingly, the consolidated financial information, which has been prepared from the local statutory accounting records for the entities of the Group domiciled in Cyprus, Romania, Ukraine, Greece and Bulgaria, reflects adjustments necessary for such consolidated financial information to be presented in accordance with IFRS.

4.1 Basis of consolidation

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

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognized amounts of acquiree's identifiable net assets.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in profit or loss.

Any contingent consideration to be transferred by the Group is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognized in accordance with IAS 39, either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured and its subsequent settlement is accounted for within equity.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.

Business combinations that took place prior to 1 January 2010 were accounted for in accordance with the previous version of IFRS 3.

Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group's accounting policies.

Changes in ownership interests in subsidiaries without change of control and Disposal of Subsidiaries

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions - that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals of non-controlling interests are also recorded in equity.

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.

4.2 Functional and presentation currency

Items included in the Group's financial statements are measured applying the currency of the primary economic environment in which the entities operate (''the functional currency''). The national currency of Ukraine, the Ukrainian Hryvnia, is the functional currency for all the Group's entities located in Ukraine, the Romanian leu is the functional currency for all Group's entities located in Romania, the Bulgarian lev is the functional currency for all Group's entities in Bulgaria and the Euro is the functional currency for all the Greek and Cypriot subsidiaries.

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

As Management records the consolidated financial information of the entities domiciled in Cyprus, Romania, Ukraine, Greece and Bulgaria in their functional currencies, in translating financial information of the entities domiciled in these countries into Euro for inclusion in the consolidated financial statements, the Group follows a translation policy in accordance with IAS 21, "The Effects of Changes in Foreign Exchange Rates", and the following procedures are performed:

4. Significant accounting policies (continued)

4.2 Functional and presentation currency (continued)

· All assets and liabilities are translated at closing rate;

· Equity of the Group has been translated using the historical rates;

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

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

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

· Monetary items receivable from foreign operations for which settlement is neither planned nor likely to occur in the foreseeable future and in substance are part of the Group's net investment in those foreign operations are recongised initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the foreign operation.

The relevant exchange rates of the European and local central banks used in translating the financial information of the entities from the functional currencies into Euro are as follows:

	Average		31 December
Currency	2018	2017	2018	2017	2016
USD	1,1810	1,1293	1,1450	1,1993	1,0541
UAH	32,1341	30,0129	31,7141	33,4954	28,4226
RON	4,6535	4,5681	4,6639	4,6597	4,5411
BGN	1,9558	1,9558	1,9558	1,9558	1,9558

4.3 Discontinued operations

A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

· represents a separate major line of business or geographic area of operations;

· is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations; or

· is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale.

When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation had been discontinued from the start of the comparative year.

4.4 Investment Property at fair value

Investment property, comprising freehold and leasehold land, investment properties held for future development, warehouse and office properties, as well as the residential property units, is held for long term rental yields and/or for capital appreciation and is not occupied by the Group. Investment property and investment property under construction are carried at fair value, representing open market value determined annually by external valuers. Changes in fair values are recorded in the statement of comprehensive income and are included in other operating income.

A number of the land leases (all in Ukraine) are held for relatively short terms and place an obligation upon the lessee to complete development by a prescribed date. It is important to note that the rights to complete a development may be lost or at least delayed if the lessee fails to complete a permitted development within the timescale set out by the ground lease.

In addition, in the event that a development has not commenced upon the expiry of a lease then the City Authorities are entitled to decline the granting of a new lease on the basis that the land is not used in accordance with the designation. Furthermore, where all necessary permissions and consents for the development are not in place, this may provide the City Authorities with grounds for rescinding or non-renewal of the ground lease. However Management believes that the possibility of such action is remote and was made only under limited circumstances in the past.

Management believes that rescinding or non-renewal of the ground lease is remote if a project is on the final stage of development or on the operating cycle. In undertaking the valuations reported herein, the valuer of Ukrainian properties CBRE has made the assumption that no such circumstances will arise to permit the City Authorities to rescind the land lease or not to grant a renewal.

Land held under operating lease is classified and accounted for as investment property when the rest of the definition is met. The operating lease is accounted for as if it were a finance lease.

Investment property under development or construction initially is measured at cost, including related transaction costs.

4. Significant accounting policies (continued)

4.4 Investment Property at fair value (continued)

The property is classified in accordance with the intention of the management for its future use. Intention to use is determined by the Board of Directors after reviewing market conditions, profitability of the projects, ability to finance the project and obtaining required construction permits.

The time point, when the intention of the management is finalized is the date of start of construction. At the moment of start of construction, freehold land, leasehold land and investment properties held for a future redevelopment are reclassified into investment property under development or inventory in accordance to the final decision of management.

Initial measurement and recognition

Investment property is measured initially at cost, including related transaction costs. Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognized in the consolidated statement of comprehensive income in the period of retirement or disposal.

Transfers are made to investment property when, and only when, there is a change in use, evidenced by the end of owner occupation, or the commencement of an operating lease to third party. Transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of owner occupation or commencement of development with a view to sale.

If an investment property becomes owner occupied, it is reclassified as property, plant and equipment, and its fair value at the date of reclassification becomes its cost for accounting purposes. Property that is being constructed or developed for future use as investment property is classified as investment property under construction until construction or development is complete. At that time, it is reclassified and subsequently accounted for as investment property.

Subsequent measurement

Subsequent to initial recognition, investment property is stated at fair value. Gains or losses arising from changes in the fair value of investment property are included in the statement of comprehensive income in the period in which they arise.

If a valuation obtained for an investment property held under a lease is net of all payments expected to be made, any related liabilities/assets recognized separately in the statement of financial position are added back/reduced to arrive at the carrying value of the investment property for accounting purposes.

Subsequent expenditure is charged to the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the statement of comprehensive income during the financial period in which they are incurred.

Basis of valuation

The fair values reflect market conditions at the financial position date. These valuations are prepared annually by chartered surveyors (hereafter "appraisers"). The Group appointed valuers in 2014, which remain the same in 2018:

· CBRE Ukraine, for all its Ukrainian properties,

· Real Act for all its Romanian, Greek and Bulgarian properties.

The valuations have been carried out by the appraisers on the basis of Market Value in accordance with the appropriate sections of the current Practice Statements contained within the Royal Institution of Chartered Surveyors ("RICS") Valuation - Global Standards (2018) (the "Red Book") and is also compliant with the International Valuation Standards (IVS).

"Market Value" is defined as: "The estimated amount for which a property should be exchanged on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion".

In expressing opinions on Market Value, in certain cases the appraisers have estimated net annual rentals/income from sale. These are assessed on the assumption that they are the best rent/sale prices at which a new letting/sale of an interest in property would have been completed at the date of valuation assuming: a willing landlord/buyer; that prior to the date of valuation there had been a reasonable period (having regard to the nature of the property and the state of the market) for the proper marketing of the interest, for the agreement of the price and terms and for the completion of the letting/sale; that the state of the market, levels of value and other circumstances were, on any earlier assumed date of entering into an agreement for lease/sale, the same as on the valuation date; that no account is taken of any additional bid by a prospective tenant/buyer with a special interest; that the principal deal conditions assumed to apply are the same as in the market at the time of valuation; that both parties to the transaction had acted knowledgeably, prudently and without compulsion.

A number of properties are held by way of ground leasehold interests granted by the City Authorities. The ground rental payments of such interests may be reviewed on an annual basis, in either an upwards or downwards direction, by reference to an established formula. Within the terms of the lease, there is a right to extend the term of the lease upon expiry in line with the existing terms and conditions thereof. In arriving at opinions of Market Value, the appraisers assumed that the respective ground leases are capable of extension in accordance with the terms of each lease. In addition, given that such interests are not assignable, it was assumed that each leasehold interest is held by way of a special purpose vehicle ("SPV"), and that the shares in the respective SPVs are transferable.

4. Significant accounting policies (continued)

4.4 Investment Property at fair value (continued)

With regard to each of the properties considered, in those instances where project documentation has been agreed with the respective local authorities, opinions of the appraisers of value have been based on such agreements.

In those instances where the properties are held in part ownership, the valuations assume that these interests are saleable in the open market without any restriction from the co-owner and that there are no encumbrances within the share agreements which would impact the sale ability of the properties concerned.

The valuation is exclusive of VAT and no allowances have been made for any expenses of realization or for taxation which might arise in the event of a disposal of any property.

In some instances the appraisers constructed a Discounted Cash Flow (DCF) model. DCF analysis is a financial modeling technique based on explicit assumptions regarding the prospective income and expenses of a property or business. The analysis is a forecast of receipts and disbursements during the period concerned. The forecast is based on the assessment of market prices for comparable premises, build rates, cost levels etc. from the point of view of a probable developer.

To these projected cash flows, an appropriate, market-derived discount rate is applied to establish an indication of the present value of the income stream associated with the property. In this case, it is a development property and thus estimates of capital outlays, development costs, and anticipated sales income are used to produce net cash flows that are then discounted over the projected development and marketing periods. The Net Present Value (NPV) of such cash flows could represent what someone might be willing to pay for the site and is therefore an indicator of market value. All the payments are projected in nominal US Dollar/Euro amounts and thus incorporate relevant inflation measures.

Valuation Approach

In addition to the above general valuation methodology, the appraisers have taken into account in arriving at Market Value the following:

Pre Development

In those instances where the nature of the 'Project' has been defined, it was assumed that the subject property will be developed in accordance with this blueprint. The final outcome of the development of the property is determined by the Board of Directors decision, which is based on existing market conditions, profitability of the project, ability to finance the project and obtaining required construction permits.

Development

In terms of construction costs, the budgeted costs have been taken into account in considering opinions of value. However, the appraisers have also had regard to current construction rates prevailing in the market which a prospective purchaser may deem appropriate to adopt in constructing each individual scheme. Although in some instances the appraisers have adopted the budgeted costs provided, in some cases the appraisers' own opinions of costs were used.

Post Development

Rental values have been assessed as at the date of valuation but having regard to the existing occupational markets taking into account the likely supply and demand dynamics during the anticipated development period. The standard letting fees were assumed within the valuations. In arriving at their estimates of gross development value ("GDV"), the appraisers have capitalized their opinion of net operating income, having deducted any anticipated non-recoverable expenses, such as land payments, and permanent void allowance, which has then been capitalized into perpetuity.

The capitalization rates adopted in arriving at the opinions of GDV reflect the appraisers' opinions of the rates at which the properties could be sold as at the date of valuation.

In terms of residential developments, the sales prices per sq. m. again reflect current market conditions and represent those levels the appraisers consider to be achievable at present. It was assumed that there are no irrecoverable operating expenses and that all costs will be recovered from the occupiers/owners by way of a service charge.

The valuations take into account the requirement to pay ground rental payments and these are assumed not to be recoverable from the occupiers. In terms of ground rent payments, the appraisers have assessed these on the basis of information available, and if not available they have calculated these payments based on current legislation defining the basis of these assessments. Property tax is not presently payable in Ukraine.

4.5 Investment Property under development

Property that is currently being constructed or developed, for future use as investment property is classified as investment property under development carried at cost until construction or development is complete, or its fair value can be reliably determined. This applies even if the works have temporarily being stopped.

4. Significant accounting policies (continued)

4.6 Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or Groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss in the consolidated statement of comprehensive income. An impairment loss recognized for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

4.7 Property, Plant and equipment and intangible assets

Property, plant and equipment and intangible non-current assets are stated at historical cost less accumulated depreciation and amortization and any accumulated impairment losses.

Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet determined and intangibles not inputted into exploitation, are carried at cost, less any recognized impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Group's accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Depreciation and amortization are calculated on the straight‑line basis so as to write off the cost of each asset to its residual value over its estimated useful life. The annual depreciation rates are as follows:

Type	%
Leasehold	20
IT hardware	33
Motor vehicles	25
Furniture, fixtures and office equipment	20
Machinery and equipment	15
Software and Licenses	33

No depreciation is charged on land.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

The assets residual values and useful lives are reviewed, and adjusted, if appropriate, at each reporting date.

Where the carrying amount of an asset is greater than its estimated recoverable amount, the asset is written down immediately to its recoverable amount.

Expenditure for repairs and maintenance of tangible and intangible assets is charged to the statement of comprehensive income of the year in which it is incurred. The cost of major renovations and other subsequent expenditure are included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.

An item of tangible and intangible assets is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the statement of comprehensive income.

4.8 Inventory

Inventory principally comprises of residential property. Inventory is recognized initially at cost, including transaction costs, which represent its fair value at the time of acquisition. Costs related to the development of land are capitalised and recognized as inventory. Inventory is carried at the lower of cost and net realizable value.

4.9 Cash and Cash equivalents

Cash and cash equivalents include cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

4. Significant accounting policies (continued)

4.10 Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in accordance with the Group's other accounting policies. Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.

Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.

4.11 Financial Instruments

4.11.1 Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

4.11.2 Classification and subsequent measurement

Financial assets - Policy applicable from 1 January 2018

On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI - debt investment; FVOCI - equity investment; or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

- it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.

Financial assets - Business model assessment: Policy applicable from 1 January 2018

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

- the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management's strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;

- how the performance of the portfolio is evaluated and reported to the Group's management;

- the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

- how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group's continuing recognition of the assets.

4. Significant accounting policies (continued)

4.11 Financial Instruments (continued)

4.11.2 Classification and subsequent measurement (continued)

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest: Policy applicable from 1 January 2018

For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

- contingent events that would change the amount or timing of cash flows;

- terms that may adjust the contractual coupon rate, including variable-rate features;

- prepayment and extension features; and

- terms that limit the Group's claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

Financial assets - Subsequent measurement and gains and losses: Policy applicable from 1 January 2018

Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. However for derivatives designated as hedging instruments.

Financial assets at amortised cost

These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Debt investments at FVOCI

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Equity investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.

Financial assets - Policy applicable before 1 January 2018

The Group classified its financial assets into one of the following categories:

- loans and receivables;

- held to maturity;

- available for sale; and

- at FVTPL, and within this category as:

o held for trading;

o derivative hedging instruments; or

o designated as at FVTPL.

Financial assets - Subsequent measurement and gains and losses: Policy applicable before 1 January 2018

Financial assets at FVTPL

Measured at fair value and changes therein, including any interest or dividend income, were recognised in profit or loss. However for derivatives designated as hedging instruments.

4. Significant accounting policies (continued)

4.11 Financial Instruments (continued)

4.11.2 Classification and subsequent measurement (continued)

Held-to-maturity financial assets

Measured at amortised cost using the effective interest method.

Loans and receivables

Measured at amortised cost using the effective interest method.

Available-for-sale financial assets

Measured at fair value and changes therein, other than impairment losses, interest income and foreign currency differences on debt instruments, were recognised in OCI and accumulated in the fair value reserve. When these assets were derecognised, the gain or loss accumulated in equity was reclassified to profit or loss.

Financial liabilities - Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

4.11.3 Derecognition

Financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognised in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

Financial liabilities

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

4.11.4 Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

4.11.5 Derivative financial instruments and hedge accounting

Derivative financial instruments and hedge accounting - Policy applicable from 1 January 2018

The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates and certain derivatives and non-derivative financial liabilities as hedges of foreign exchange risk on a net investment in a foreign operation.

At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

4. Significant accounting policies (continued)

4.11 Financial Instruments (continued)

4.11.5 Derivative financial instruments and hedge accounting (continued)

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in OCI and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.

The Group designates only the change in fair value of the spot element of forward exchange contracts as the hedging instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts ('forward points') is separately accounted for as a cost of hedging and recognised in a costs of hedging reserve within equity.

When the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount accumulated in the hedging reserve and the cost of hedging reserve is included directly in the initial cost of the non-financial item when it is recognised.

For all other hedged forecast transactions, the amount accumulated in the hedging reserve and the cost of hedging reserve is reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.

If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedging reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item's cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to profit or loss.

Net investment hedges

When a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge of a net investment in a foreign operation, the effective portion of, for a derivative, changes in the fair value of the hedging instrument or, for a non-derivative, foreign exchange gains and losses is recognised in OCI and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognised immediately in profit or loss. The amount recognised in OCI is reclassified to profit or loss as a reclassification adjustment on disposal of the foreign operation.

Derivative financial instruments and hedge accounting - Policy applicable before 1 January 2018

The policy applied in the comparative information presented for 2017 is similar to that applied for 2018. However, for all cash flow hedges, including hedges of transactions resulting in the recognition of non-financial items, the amounts accumulated in the cash flow hedge reserve were reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affected profit or loss. Furthermore, for cash flow hedges that were terminated before 2017, forward points were recognised immediately in profit or loss.

4.12 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalized as part of the cost of that asset.

Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extend there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment and amortised over the period of the facility to which it relates.

Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortization of discounts or premium relating to borrowings, amortization of ancillary costs incurred in connection with the arrangement of borrowings, finance lease charges and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use or sale, are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.

Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

4. Significant accounting policies (continued)

4.13 Tenant security deposits

Tenant security deposits represent financial advances made by lessees as guarantees during the lease and are repayable by the Group upon termination of the contracts. Tenant security deposits are recognized at nominal value.

4.14 Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment loss annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre‑tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash‑generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash‑generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash‑generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash‑generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

4.15 Share Capital

Ordinary shares are classified as equity.

4.16 Share premium

The difference between the fair value of the consideration received by the shareholders and the nominal value of the share capital being issued is taken to the share premium account.

4.17 Share-based compensation

The Group had in the past and intends in the future to operate a number of equity-settled, share-based compensation plans, under which the Group receives services from Directors and/or employees as consideration for equity instruments (options) of the Group. The fair value of the Director and employee cost related to services received in exchange for the grant of the options is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted, excluding the impact of any non-market service and performance vesting conditions. The total amount expensed is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At each financial position date, the Group revises its estimates on the number of options that are expected to vest based on the non-marketing vesting conditions. It recognizes the impact of the revision to original estimates, if any, in the statement of comprehensive income, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options are exercised.

4.18 Provisions

Provisions are recognized when the Group has a present obligation (legal, tax or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. As at the reporting date the Group has settled all its construction liabilities.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

4. Significant accounting policies (continued)

4.19 Leased assets

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognized as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Group's general policy on borrowing costs (see above).

Lease payments are analyzed between capital and interest components so that the interest element of the payment is charged to the statement of comprehensive income over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding. The capital part reduces the amount payable to the lessor.

4.20 Non‑current liabilities

Non‑current liabilities represent amounts that are due in more than twelve months from the reporting date.

4.21 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. It is recognized to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group and the revenue can be measured reliably. Revenue earned by the Group is recognized on the following bases:

4.21.1 Income from investing activities

Income from investing activities includes profit received from disposal of investments in the Company's subsidiaries and associates and income accrued on advances for investments outstanding as at the year end.

4.21.2 Dividend income

Dividend income from investments is recognized when the shareholders' right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably).

4.21.3 Interest income

Interest income is recognized on a time-proportion (accrual) basis, using the effective interest rate method.

4.21.4 Rental income

Rental income arising from operating leases on investment property is recognized on an accrual basis in accordance with the substance of the relevant agreements.

4.22 Service charges and expenses recoverable from tenants

Income arising from expenses recharged to tenants is recognized on an accrual basis.

4.23 Other property expenses

Irrecoverable running costs directly attributable to specific properties within the Group's portfolio are charged to the statement of comprehensive income. Costs incurred in the improvement of the assets which, in the opinion of the directors, are not of a capital nature are written off to the statement of comprehensive income as incurred.

4.24 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognized in the statement of comprehensive income in the period in which they are incurred as interest costs which are calculated using the effective interest rate method, net result from transactions with securities, foreign exchange gains and losses, and bank charges and commission.

4. Significant accounting policies (continued)

4.25 Asset Acquisition Related Transaction Expenses

Expenses incurred by the Group for acquiring a subsidiary or associate company as part of an Investment Property and are directly attributable to such acquisition are recognized within the cost of the Investment Property and are subsequently accounted as per the Group's accounting Policy for Investment Property subsequent measurement.

4.26 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

4.26.1 Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

4.26.2 Deferred tax

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Currently enacted tax rates are used in the determination of deferred tax.

Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority.

4.26.3 Current and deferred tax for the year

Current and deferred tax are recognized in the statement of comprehensive income, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

The operational subsidiaries of the Group are incorporated in Ukraine, Greece, Bulgaria and Romania, while the Parent and some holding companies are incorporated in Cyprus. The Group's management and control is exercised in Cyprus.

The Group's Management does not intend to dispose of any asset, unless a significant opportunity arises. In the event that a decision is taken in the future to dispose of any asset it is the Group's intention to dispose of shares in subsidiaries rather than assets. The corporate income tax exposure on disposal of subsidiaries is mitigated by the fact that the sale would represent a disposal of the securities by a non‑resident shareholder and therefore would be exempt from tax. The Group is therefore in a position to control the reversal of any temporary differences and as such, no deferred tax liability has been provided for in the financial statements.

4.26.4 Withholding Tax

The Group follows the applicable legislation as defined in all double taxation treaties (DTA) between Cyprus and any of the countries of Operations (Romania, Ukraine, Greece, Bulgaria). In the case of Romania, as the latter is part of the European Union, through the relevant directives the withholding tax is reduced to NIL subject to various conditions.

4.26.5 Dividend distribution

Dividend distribution to the Company's shareholders is recognized as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders.

4.27 Value added tax

VAT levied at various jurisdictions were the Group is active, was at the following rates, as at the end of the reporting period:

· 20% on Ukrainian domestic sales and imports of goods, works and services and 0% on export of goods and provision of works or services to be used outside Ukraine.

· 19% on Cyprus domestic sales and imports of goods, works and services and 0% on export of goods and provision of works or services to be used outside Cyprus.

· 19% on Romanian domestic sales and imports of goods, works and services (decreased from 20% from 1 January 2017) and 0% on export of goods and provision of works or services to be used outside Romania.

· 20% on Bulgarian domestic sales and imports of goods, works and services and 0% on export of goods and provision of services to taxable persons outside Bulgaria.

· 24% on Greek domestic sales and imports of goods, works and services (increased from 23% from 1 June 2016) and 0% on export of goods and provision of works or services to be used outside Romania.

4. Significant accounting policies (continued)

4.28 Operating segments analysis

Segment reporting is presented on the basis of Management's perspective and relates to the parts of the Group that are defined as operating segments. Operating segments are identified on the basis of their economic nature and through internal reports provided to the Group's Management who oversee operations and make decisions on allocating resources serve. These internal reports are prepared to a great extent on the same basis as these consolidated financial statements.

For the reporting period the Group has identified the following material reportable segments, where the Group is active in acquiring, holding, managing and disposing:

Commercial-Industrial

Residential

Land Assets

· Warehouse segment

· Office segment

· Retail segment

· Residential segment

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

The Group also monitors investment property assets on a Geographical Segmentation, namely the country where its property is located.

4.29 Earnings and Net Assets value per share

The Group presents basic and diluted earnings per share (EPS) and net asset value per share (NAV) for its ordinary shares.

Basic EPS amounts are calculated by dividing net profit/loss for the year, attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year. Basic NAV amounts are calculated by dividing net asset value as at year end, attributable to ordinary equity holders of the Company by the number of ordinary shares outstanding at the end of the year.

Diluted EPS is calculated by dividing net profit/loss for the year, attributable to ordinary equity holders of the parent, by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the potentially dilutive ordinary shares into ordinary shares.

Diluted NAV is calculated by dividing net asset value as at year end, attributable to ordinary equity holders of the parent with the number of ordinary shares outstanding at year end plus the number of ordinary shares that would be issued on conversion of all the potentially dilutive ordinary shares into ordinary shares.

4.30 Comparative Period

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.

5. New accounting pronouncement

Standards issued but not yet effective

Up to the date of approval of the financial statements, certain new standards, interpretations and amendments to existing standards have been published that are not yet effective for the current reporting period and which the Company has not early adopted, as follows:

(i) Issued by the IASB and adopted by the European Union

• IFRS 16 ''Leases'' (effective for annual periods beginning on or after 1 January 2019).

• Amendments to IFRS 9: Prepayment Features with Negative Compensation (issued on 12 October 2017) (effective for annual periods beginning on or after 1 January 2019).

• IAS 28: Long-term Interests in Associates and Joint Ventures (amendments)

• IFRIC Interpretation 23: Uncertainty over Income Tax Treatments

• IFRS 3: Business Combinations (amendments)

• IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of 'material' (amendments)

• Conceptual Framework in IFRS standards

(ii) Issued by the IASB but not yet adopted by the European Union

New standards

• IFRS 17 ''Insurance Contracts'' (effective for annual periods beginning on or after 1 January 2021).

5. New accounting pronouncement (continued)

(ii) Issued by the IASB but not yet adopted by the European Union (continued)

Amendments

• Amendments to IAS 28: Long term Interests in Associates and Joint Ventures (issued on 12 October 2017) (effective for annual periods beginning on or after 1 January 2019).

• Amendments to IAS 19: Plan Amendment, Curtailment or Settlement (issued on 7 February 2018) (effective for annual periods beginning on or after 1 January 2019).

• Annual Improvements to IFRSs 2015 2017 Cycle (issued on 12 December 2017) (effective for annual periods beginning on or after 1 January 2019)

• Amendments to References to the Conceptual Framework in IFRS Standards (effective for annual periods beginning on or after 1 January 2020)

• IFRS 10 (Amendments) and IAS 28 (Amendments) ''Sale or Contribution of Assets between an Investor and its Associate or Joint Venture(effective date postponed indefinitely).

New IFRICs

• IFRIC Interpretation 23 ''Uncertainty over Income Tax Treatments'' (effective for annual periods beginning on or after 1 January 2019).

The above are expected to have no significant impact on the Company's financial statements when they become effective.

Amendments

· Amendments to IAS 28: Long term Interests in Associates and Joint Ventures (issued on 12 October 2017) (effective for annual periods beginning on or after 1 January 2019).

· Amendments to IAS 19: Plan Amendment, Curtailment or Settlement (issued on 7 February 2018) (effective for annual periods beginning on or after 1 January 2019).

· Annual Improvements to IFRSs 2015 2017 Cycle (issued on 12 December 2017) (effective for annual periods beginning on or after 1 January 2019)

· Amendments to References to the Conceptual Framework in IFRS Standards (effective for annual periods beginning on or after 1 January 2020)

· IFRS 10 (Amendments) and IAS 28 (Amendments) ''Sale or Contribution of Assets between an Investor and its Associate or Joint Venture(effective date postponed indefinitely).

New IFRICs

IFRIC Interpretation 23 ''Uncertainty over Income Tax Treatments'' (effective for annual periods beginning on or after 1 January 2019).

The above are expected to have no significant impact on the Company's financial statements when they become effective.

6. Critical accounting estimates and judgments

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates and requires Management to exercise its judgment in the process of applying the Group's accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on Management's best knowledge of current events and actions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results though may ultimately differ from those estimates.

As the Group makes estimates and assumptions concerning the future, the resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

· Provision for impairment of receivables

The Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes the counter party's payment record, and overall financial position, as well as the state's ability to pay its dues (VAT receivable). If indications of non-recoverability exist, the recoverable amount is estimated and a respective provision for impairment of receivables is made. The amount of the provision is charged through profit or loss. The review of credit risk is continuous and the methodology and assumptions used for estimating the provision are reviewed regularly and adjusted accordingly. As at the reporting date Management did not consider necessary to make a provision for impairment of receivables.

· Fair value of investment property

The fair value of investment property is determined by using various valuation techniques. The Group selects accredited professional valuers with local presence to perform such valuations. Such valuers use their judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at each financial reporting date. The fair value has been estimated as at 31 December 2018 (Note 20.2).

· Income taxes

Significant judgment is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

6. Critical accounting estimates and judgments (continued)

· Impairment of tangible assets

Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

· Provision for deferred taxes

Deferred tax is not provided in respect of the revaluation of the investment property and investment property under development as the Group is able to control the timing of the reversal of this temporary difference and the Management has intention not to reverse the temporary difference in the foreseeable future. The properties are held by subsidiary companies in Ukraine, Greece and Romania. Management estimates that the assets will be realized through a share deal rather than through an asset deal. Should any subsidiary be disposed of, the gains generated from the disposal will be exempt from any tax.

· Application of IFRS 10

The Group has considered the application of IFRS 10 and concluded that the Company is not an Investment Entity as defined by IFRS 10 and it should continue to consolidate all of its investments, as in 2016. The reasons for such conclusion are among others that the Company continues:

a) not to be an Investment Management Service provider to Investors,

b) to actively manages its own portfolio (leasing, development, allocation of capital expenditure for its properties, marketing etc.) in order to provide benefits other than capital appreciation and/or investment income,

c) to have investments that are not bound by time in relation to the exit strategy nor to the way that are being exploited,

d) to provide asset management services to its subsidiaries, as well as loans and guarantees (directly or indirectly),

e) even though is using Fair Value metrics in evaluating its investments, this is being done primarily for presentation purposes rather that evaluating income generating capability and making investment decisions. The latter is being based on metrics like IRR, ROE and others.

7. Risk Management

7.1 Financial risk factors

The Group is exposed to operating country risk, real estate property holding and development associated risks, property market price risk, interest rate risk, credit risk, liquidity risk, currency risk, other market price risk, operational risk, compliance risk, litigation risk, reputation risk, capital risk and other risks arising from the financial instruments it holds. The risk management policies employed by the Group to manage these risks are discussed below.

7.1.1 Operating Country Risks

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

7.1.1.1 Ukraine

In 2018, the Ukrainian economy proceeded recovery from the economic and political crisis of previous years and demonstrated sound real GDP growth of around 3.4% (2017: 2.5%), modest annual inflation of 9.8% (2017: 13.7%), and slight devaluation of national currency by around 2.4% to USD and 8.2% to EUR comparing to previous year averages. Also Ukraine continued to limit its political and economic ties with Russia, given annexation of Crimea, an autonomous republic of Ukraine, and a frozen armed conflict with separatists in certain parts of Luhanska and Donetska regions. Amid such events, the Ukrainian economy demonstrated further refocusing on the European Union ("EU") market realizing all potentials of established Deep and Comprehensive Free Trade Area with EU, in such a way effectively reacting to mutual trading restrictions imposed between Ukraine and Russia. As a result, the weight of the Russian's export and import substantially fell from 18.2% and 23.3% in 2014 to around 7.7% and 14.2% in 2018, respectively. In terms of currency regulations, the new currency law was adopted in 2018 and came into force on 7 February 2019. It purports to enable the NBU to promulgate more liberal currency regulation and soften a number of currency restrictions, such as: requirement to register loans obtained from non-residents with the NBU, 180-day term for making payments in foreign economic transactions, required 50% share of mandatory sale of foreign currency proceeds, etc. Further economic growth depends, to a large extent, upon success of the Ukrainian government in realization of planned reforms, cooperation with the International Monetary Fund ("IMF"), and smooth transition through presidential and parliamentary elections, due in March and October 2019, respectively.

7.1.1.2 Greece

Greek economy experienced growth for the second consecutive year coupled with lower unemployment rate, rise in domestic demand and over 4% primary surplus.

Following the agreement with the credit institutions (EU/ECB/IMF/ESM), Greek economy exited relevant support program in August 2018, with Greek Government Bonds falling to their lowest yields since 2006.

However, public debt remains at high levels, and further reduction requires sustainable pro-growth reforms, high future primary surpluses and additional debt restructuring. Moreover, banking sector continues to face difficulties, with non-performing loans standing at 45% of outstanding bank loan portfolio, and as a result foreclosures and e-auctions of collaterals in default have become common, while at the same time bank financing is tight putting constraints in business and investments.

7. Risk Management (continued)

7.1 Financial risk factors (continued)

7.1.1 Operating Country Risks (continued)

7.1.1.2 Greece (continued)

Officially in a pre-election period, Greece will benefit from a continuous reform program and tight economic policies that will be adopted by any new government, which will allow Greece to do to the markets and strengthen its recovery signs. On the other hand, any political instability will have negative impact on the economy, and consequently the results and financial position of Group's Greek operations could be negatively affected to some extent, in a manner not currently determinable.

7.1.1.3 Romania

Romanian economy continued its growth in 2018, gaining one place to rank 15th by Gross Domestic Product (GDP) values according to Eurostat. The strong growth has been fueled by domestic private consumption, with investment and net exports both having a negative influence.

The economy maintains balanced economic variables with a widen current deficit at around 4% of GDP, public debt less than 35% of GDP and rising inflation rate. Unemployment rate of 3,6% is the lowest it has been for the past 20 years, driving wages up, but still labor cost is one of the lowest in European Union attracting continuously foreign investment in production and services sectors. The labor market is expected to remain tight but inflation is expected to ease from its 2018 high. Finally, budget deficit is forecast to continue increasing, driven by increase on public wages and pensions.

Possible overheating of the economy in the future may emerge risks, as economic activity will slow down, prices will drop, and the local activities of the Group could be negatively affected. The Group monitors closely the performance of the Romanian economy, and the local political and fiscal developments, in order to detect negative signs and being able to adjust effectively its local strategy and its operations in the country.

7.1.2 Risks associated with property holding and development associated risks

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

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

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

7.1.3 Property Market price risk

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

7.1.4 Interest rate risk

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

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

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

7. Risk Management (continued)

7.1 Financial risk factors (continued)

7.1.5 Credit risk

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

7.1.6 Currency risk

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

Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Group's functional currency. Excluding the transactions in Ukraine all of the Group's transactions, including the rental proceeds are denominated or pegged to EUR. In Ukraine, even though there is no steady income stream, the fluctuations of UAH against EUR entails significant FX risk for the Group in terms of its local assets valuation. Management monitors the exchange rate fluctuations on a continuous basis and acts accordingly. It should be noted that the current political uncertainty in Ukraine, and any currency devaluation may affect the Group's financial position.

Management is monitoring foreign exchange fluctuations closely and acts accordingly.

7.1.7 Capital risk management

The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group's core strategy is described in Note 44.1 of the consolidated financial statements.

7.1.8 Compliance risk

Compliance risk is the risk of financial loss, including fines and other penalties, which arises from non‑compliance with laws and regulations of each country the Group is present, as well as from the stock exchange where the Company is listed. Although the Group is trying to limit such risk, the uncertain environment in which it operates in various countries increases the complexities handled by Management.

7.1.9 Litigation risk

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

7.1.10 Insolvency risk

Insolvency arises from situations where a company may not meet its financial obligations towards a lender as debts become due. Addressing and resolving any insolvency issues is usually a slow moving process in the Region. Management is closely involved in discussions with creditors when/if such cases arise in any subsidiary of the Group aiming to effect alternate repayment plans including debt repayment so as to minimize the effects of such situations on the Group's asset base.

7.2. Operational risk

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

7.3. Fair value estimation

The fair values of the Group's financial assets and liabilities approximate their carrying amounts at the end of the reporting period.

8. Investment in subsidiaries

The Company has direct and indirect holdings in other companies, collectively called the Group, that were included in the consolidated financial statements, and are detailed below.

			Holding %
Name	Country of incorporation	Related Asset	as at 31 Dec 2018	as at 31 Dec 2017
SC Secure Capital Limited	Cyprus		100	100
LLC Aisi Ukraine	Ukraine	Kiyanovskiy Residence	100	100
LLC Trade Center	Ukraine	Kiyanovskiy Residence	100	100
LLC Almaz‑Pres‑Ukraine	Ukraine	Tsymlyanskiy Residence	55	55
LLC Aisi Bela	Ukraine	Bela Logistic Park Balabino Project	100	100
LLC Retail Development Balabino	Ukraine		100	100
LLC Interterminal	Ukraine		100	100
LLC Aisi Ilvo	Ukraine		100	100
Myrnes Innovations Park Limited	Cyprus	Innovations Logistics Park	100	100
Best Day Real Estate Srl	Romania	Innovations Logistics Park	100	100
Yamano Holdings Limited	Cyprus	EOS Business Park	100	100
Secure Property Development and Investment Srl	Romania		-	100
N-E Real Estate Park First Phase Srl	Romania		100	100
Victini Holdings Limited	Cyprus	Victini Logistics	100	100
Victini Logistics Park S.A. (ex SPDI Logistics S.A.)	Greece	Victini Logistics	100	100
Zirimon Properties Limited	Cyprus	Delea Nuova (Delenco)	100	100
Bluehouse Accession Project IX Limited	Cyprus		100	100
Bluehouse Accession Project IV Limited	Cyprus		100	100
BlueBigBox 3 Srl	Romania		100	100
SPDI Real Estate Srl	Romania	Kindergarten	50	50
SEC South East Continent Unique Real Estate Investments II Limited	Cyprus		100	100
SEC South East Continent Unique Real Estate (Secured) Investments Limited	Cyprus		100	100
Diforio Holdings Limited	Cyprus	Residential and Land portfolio	100	100
Demetiva Holdings Limited	Cyprus		100	100
Ketiza Holdings Limited	Cyprus		90	90
Frizomo Holdings Limited	Cyprus		100	100
SecMon Real Estate Srl	Romania		-	100
SecVista Real Estate Srl	Romania		-	100
SecRom Real Estate Srl	Romania		-	100
Ketiza Real Estate Srl	Romania		90	90
Edetrio Holdings Limited	Cyprus		100	100
Emakei Holdings Limited	Cyprus		100	100
RAM Real Estate Management Limited	Cyprus		50	50
Iuliu Maniu Limited	Cyprus		45	45
Moselin Investments Srl	Romania		45	45
Rimasol Enterprises Limited	Cyprus		44,24	44,24
Rimasol Real Estate Srl	Romania		44,24	44,24
Ashor Ventures Limited	Cyprus		44,24	44,24
Ashor Development Srl	Romania		44,24	44,24
Jenby Ventures Limited	Cyprus		44,30	44,30
Jenby Investments Srl	Romania		44,30	44,30
Ebenem Limited	Cyprus		44,30	44,30
Ebenem Investments Srl	Romania		44,30	44,30
Sertland Properties Limited	Cyprus		100	100
Boyana Residence ood	Bulgaria		100	100
Mofben Investments Limited	Cyprus		100	100
SPDI Management Srl	Romania		100	100

During the reporting period the Group did not proceed with any acquisitions or disposals, however BlueBigBox 3 Srl sold its property, Praktiker Craiova to a 3^rd party.

8. Investment in subsidiaries (continued)

The Group has resolved to streamline its structure in Cyprus and Romania for cost cutting and tax optimization purposes. Towards this goal, during the reporting period the following mergers have been finalized:

Α. merger by absorption of SecVista Real Estate Srl acting as Absorbed Company, with Best Day Real Estate Srl acting as Absorbing Company,

Β. merger by absorption of SecRom Real Estate Srl and Secure Property Development and Investment Srl acting as Absorbed Companies, with N-E Real Estate Park First Phase Srl acting as Absorbing Company.

A restructuring in 2017 was implemented at GreenLake project and the Kindergarten together with one villa were passed to another SPV, namely SPDI Real Estate Srl (Note 21a). As far as disposals is concerned during 2017 the Company concluded successfully the sale of its Terminal Brovary in Ukraine, as well as the sale of Delia land plot in Bucharest, Romania (Note 21b).

Following extended but unsuccessful negotiations for more than 2 years with Tonescu Finance Srl, the company which has acquired Monaco Towers property's loan, SecMon Real Estate Srl entered voluntarily in January 2018 into insolvency process, in order to protect its interests against its creditor, given that the value of the assets is higher than the value of the relevant loan. The entering of SecMon Real Estate Srl in the insolvency process means loss of control as per the definition of IFRS 10. As such SecMon Real Estate Srl is not consolidated in the present consolidated financial statements.

9. Discontinued operations

9.(a) Description

The Company announced at 18 December 2018 that it has entered into a conditional implementation agreement for the sale of its property portfolio, excluding its Greek logistics properties ('the Non-Greek Portfolio'), in an all-share transaction to Arcona Property Fund N.V.. The transaction is subject to, among other things, asset and tax due diligence (including third party asset valuations) and regulatory approvals (including the approval of a prospectus required in connection with the issuance and admission to listing of the new Arcona Property Fund N.V. shares), as well as successful negotiating and signature of transaction documents. If successful, the Company and Arcona expect to close the transaction during H2 2019.

Additionally, the Company is entertaining strong interest to sell also the Greek Logistic property during 2019 and it is in discussions with various possible buyers.

The companies that are classified under discontinued operations are the followings:

· Bulgaria: Boyana Residence ood

· Cyprus: Ashor Ventures Limited, Ebenem Limited, Jenby Ventures Limited, Edetrio Holdings Limited, Rimasol Enterprises Limited, Emakei Holdings Limited, Iuliu Maniu Limited, Ram Real Estate Management Limited, Frizomo Holdings Limited, Ketiza Holdings Limited

· Greece: Victini Logistics Park S.A.

· Romania: Ashor Development Srl, Ebenem Investments Srl, Jenby Investments Srl, Rimasol Real Estate Srl, Moselin Investments Srl, Best Day Real Estate Srl, N-E Real Estate Park First Phase Srl, Ketiza Real Estate Srl, SPDI Real Estate Srl

· Ukraine: LLC Aisi Bela, LLC Aisi Ukraine, LLC Almaz‑Pres‑Ukraine, LLC Trade Center, LLC Retail Development Balabino

As a result, the Company has reclassified all assets and liabilities related to these properties as held for sale according to IFRS 5 (Note 4.3 & 4.10).

9. Discontinued operations (continued)

9.(b) Results of discontinued operations

	Note	2018	2017
		€	€
Income	10	2.378.875	2.445.466
Asset operating expenses	11	(606.069)	(629.842)
Net Operating Income		1.772.806	1.815.624

Administration expenses	12	(260.714)	(353.532)
Share of profits/(losses) from associates	22	364.920	390.217
Valuation gains/(losses) from Investment Property	13	(1.218.297)	145.859
Net loss on disposal of inventory	14a	(13.553)	(43.871)
Net gain/(loss) on disposal of investment property	14b	(48.225)	4.366
Gain realized on acquisition of assets	21a	-	23.921
Other operating income/(expenses), net	16	(363.435)	2.668
Operating profit / (loss)		233.502	1.985.252

Finance income	17	9.979	9.813
Finance costs	17	(1.542.580)	(1.661.288)
Profit / (loss) before tax and foreign exchange differences		(1.299.099)	333.777

Foreign exchange (loss), net	18a	(10.233)	(1.335.517)
Loss before tax		(1.309.332)	(1.001.740)

Income tax expense	19	(96.567)	(71.910)

Loss for the year		(1.405.899)	(1.073.650)

Loss attributable to:
Owners of the parent		(699.271)	(1.985.925)
Non-controlling interests		(706.628)	912.275
		(1.405.899)	(1.073.650)

9.(c) Cash flows from(used in) discontinued operation

	31 Dec 2018	31 Dec 2017
	€	€
Net cash flows provided in operating activities	2.930.026	338.194
Net cash flows from / (used in) financing activities	(3.910.958)	589.605
Net cash flows from / (used in) investing activities	1.287.742	(2.112.036)
Net increase/(decrease) from discontinued operations	306.810	(1.184.237)

9.(d) Assets and liabilities of disposal group classified as held for sale

The following assets and liabilities were reclassified as held for sale in relation to the discontinued operation as at 31 December 2018:

	Note	31 Dec 2018	31 Dec 2017
		€	€
Assets classified as held for sale

Investment properties	20.4a	63.345.537	67.232.502
Investment properties under development	20.4b	4.716.157	4.586.009
Tangible and intangible assets	24	42.534	61.711
Long-term receivables and prepayments	25	270.271	270.301
Investments in associates	22	5.313.235	5.115.587
Financial asset at fair value through OCI	23	1	-
Inventory	26	4.604.044	4.812.550
Prepayments and other current assets	27	682.134	1.008.456
Cash and cash equivalents	28	704.825	477.809
Total assets of group held for sale		79.678.738	83.564.925

Liabilities directly related with assets classified as held for sale

Borrowings	32	22.605.474	25.577.585
Finance lease liabilities	37	10.470.012	10.826.243
Trade and other payables	34	1.500.603	1.389.189
Taxes payables	36	432.528	474.253
Provision on taxes	36	66.002	-
Deposits from tenants	35	219.274	187.976
Total liabilities of group held for sale		35.293.893	38.455.246

10. Income

Income from continued operations for the year ended 31 December 2018 represents:

a) rental income, as well as service charges and utilities income collected from tenants as a result of the rental agreements concluded with tenants of Innovations Logistics Park (Romania) and Praktiker Craiova (Romania). It is noted that part of the rental and service charges/ utilities income related to Innovations Logistics Park (Romania) is currently invoiced by the Company as part of a relevant lease agreement with the Innovations SPV and the lender, however the asset, through the SPV, is planned to be transferred as part of the transaction with Arcona Property Fund N.V. Upon a final agreement for such transfer, the Company will negotiate with the lender its release from the aforementioned lease agreement, and if succeeds, upon completion such income will be also transferred.

b) income from third parties and /or partners for consulting and managing real estate properties (sale of property Praktiker Craiova, GreenLake etc., Terminal Brovary for 2017).

Continued operations	31 Dec 2018	31 Dec 2017
	€	€
Rental income	631.636	986.748
Service charges and utilities income	9.534	30.206
Service and property management income	128.293	1.163.548
Total income	769.463	2.180.502

Income from discontinued operations for the year ended 31 December 2018 represents:

b) income from the sale of electricity by Victini Logistics to the Greek grid,

c) rental income and service charges by tenants of the Residential Portfolio, and;

d) income from third parties and /or partners for consulting and managing real estate properties

Discontinued operations (Note 9)	31 Dec 2018	31 Dec 2017
	€	€
Rental income	1.963.724	1.985.059
Sale of electricity	294.773	321.365
Service charges and utilities income	118.211	135.936
Service and property management income	2.167	3.106
Total income	2.378.875	2.445.466

Occupancy rates in the various income producing assets of the Group as at 31 December 2018 were as follows:

Income producing assets
%		31 Dec 2018	31 Dec 2017
EOS Business Park	Romania	100	100
Innovations Logistics Park	Romania	37	60
Victini Logistics	Greece	100	100
Praktiker Craiova	Romania	-	100
Kindergarten	Romania	100	100

11. Asset operating expenses

The Group incurs expenses related to the proper operation and maintenance of all properties in Kiev, Bucharest, Athens, Sofia and Craiova. A part of these expenses is recovered from the tenants through the service charges and utilities recharge (Note 10).

Under continued operations are all the expenses related to Praktiker Craiova.

Continued operations	31 Dec 2018	31 Dec 2017
	€	€
Property related taxes	(77.723)	(57.638)
Property management fees	-	(26.923)
Repairs and technical maintenance	(4.150)	(3.465)
Utilities	-	(25.234)
Property security	-	(1.742)
Property insurance	(36.446)	(6.072)
Leasing expenses	-	(2.187)
Total	(118.319)	(123.261)

11. Asset operating expenses (continued)

Under discontinued operations are all the expenses related to Innovations Logistics Park (Romania), EOS Business Park (Romania), Victini Logistics (Greece), Residential Portfolio (Romania), GreenLake (Romania), Boyana Residence (Bulgaria) and all Ukrainian properties.

Discontinued operations (Note 9)	31 Dec 2018	31 Dec 2017
	€	€
Property related taxes	(227.819)	(194.024)
Property management fees	(120.630)	(124.629)
Repairs and technical maintenance	(69.377)	(121.605)
Utilities	(73.715)	(73.500)
Property security	(37.301)	(46.515)
Property insurance	(32.638)	(36.101)
Leasing expenses	(44.258)	(32.142)
Other operating expenses	(331)	(1.326)
Total	(606.069)	(629.842)

Property related taxes reflect local taxes related to land and building properties (in the form of land taxes, building taxes, garbage fees, etc.).

Property Management fees relate to Property Management Agreements for Innovations Logistics Park, Victini Logistics and Praktiker Craiova with third party managers outsourcing the related services.

Leasing expenses reflect expenses related to long term land leasing.

12. Administration Expenses

Continued operations	31 Dec 2018	31 Dec 2017
	€	€
Salaries and Wages	(556.580)	(770.545)
Advisory fees	(438.423)	(349.344)
Public group expenses	(210.097)	(228.373)
Corporate registration and maintenance fees	(65.234)	(170.815)
Audit and accounting fees	(100.141)	(76.523)
Legal fees	(193.644)	(70.121)
Depreciation/Amortization charge	(5.502)	(35.407)
Corporate operating expenses	(199.226)	(293.353)
Total Administration Expenses	(1.768.847)	(1.994.481)

Discontinued operations (Note 9)	31 Dec 2018	31 Dec 2017
	€	€
Salaries and Wages	(43.073)	(54.803)
Advisory fees	(26.666)	(65.697)
Corporate registration and maintenance fees	(54.903)	(43.936)
Audit and accounting fees	(65.690)	(83.017)
Legal fees	(20.650)	(40.227)
Depreciation/Amortization charge	(21.882)	(8.722)
Corporate operating expenses	(27.850)	(57.130)
Total Administration Expenses	(260.714)	(353.532)

Salaries and wages include the remuneration of the CEO, the CFO, the Group Commercial Director, the Group Investment Director (until his departure in April 2017) and the Country Managers of Ukraine and Romania who have accepted a temporary reduction in their remuneration, as well as the salary cost of personnel employed in the various Company's offices in the region which has been reduced following the completion of Terminal Brovary sale in Ukraine.

Advisory fees are mainly related to advisors, brokers and other professionals engaged in relevant transactions and capital raising campaigns, as well as outsourced human resources support on the basis of relevant contracts. In particular, the total amount in 2018 includes one-off elements related to the disposal of Praktiker asset (EUR 180k) and due diligence expenses (EUR 90k) for non-consummated transactions, in relation to the acquisitions of logistic asset portfolios in Greece and Romania.

Audit and accounting expenses include the audit fees and accounting fees for the Company and all the subsidiaries.

Public group expenses include among others fees paid to the AIM:LSE stock exchange and the Nominated Adviser of the Company, as well as other expenses related to the listing of the Company.

Corporate registration and maintenance fees represent fees charged for the annual maintenance of the Company and its subsidiaries, as well as fees and expenses related to the normal operation of the companies including charges by the relevant local authorities.

Legal fees represent legal expenses incurred by the Group in relation to asset operations (rentals, sales, etc.), ongoing legal cases in Ukraine and compliance with AIM listing, as well as one-off fees associated with legal services and advise in relation to due diligence process and capital raising campaigns (EUR 80k) and legal support for the disposal of the Praktiker Craiova asset (EUR 60k).

12. Administration Expenses (continued)

Corporate operating expenses include office expenses, travel expenses, (tele)communication expenses, D&O insurance and all other general expenses for Cypriot, Romanian, Ukrainian, Bulgarian and Greek operations.

13. Valuation gains / (losses) from investment properties

Valuation gains /(losses) from investment property for the reporting period, excluding foreign exchange translation differences which are incorporated in the table of Note 21.2, are presented in the tables below.

Continued operations
Property Name (€)	Valuation gains/(losses)
	31 Dec 2018	31 Dec 2017
	€	€
Delia Lebada	-	(13.618)
Praktiker Craiova	-	194.720
Total	-	181.102

Discontinued operations (Note 9)
Property Name (€)	Valuation gains/(losses)
	31 Dec 2018	31 Dec 2017
	€	€
Bela Logistic Park	(125.768)	356.575
Kiyanovskiy Residence	(23.024)	(166.603)
Tsymlyanskiy Residence	(7.914)	35.379
Balabino Project	(97.707)	51.460
Rozny Lane	(35.932)	(54.446)
Innovations Logistics Park	610.366	(734.463)
EOS Business Park	422.971	524.922
Residential Portfolio	1.362	121.357
GreenLake	(1.107.293)	510.107
Kindergarten	44.642	491.571
Victini Logistics	(900.000)	(500.000)
Boyana Land	-	(490.000)
Total	(1.218.297)	145.859

14. Gain/ (Loss) from disposal of properties

During the reporting period the Group proceeded with selling properties classified under either Investment Property (Romanian residential assets) or Inventory (Bulgarian residential assets), both designated as non-core assets. The gain/ (losses) from disposal of such properties are presented below:

14a Inventory (Note 26)

During 2018 the Group sold 3 apartments in Bulgaria (2017: 3 apartments).

Discontinued operations (Note 9)	31 Dec 2018	31 Dec 2017
	€	€
Income from sale of inventory	194.953	171.833
Cost of inventory	(208.504)	(215.704)
Loss from disposal of inventory	(13.553)	(43.871)

14b Investment property

During October 2018, the Company proceeded with the sale of Praktiker Craiova.

Continued operations	31 Dec 2018	31 Dec 2017
	€	€
Income from sale of investment property	6.517.181	-
Cost of investment property	(7.362.362)	-
Loss from disposal of investment property	(845.181)	-

During 2018 the Group sold 10 apartments in Romfelt Plaza (Doamna Ghica) and 5 apartments and 2 parking spaces in Zizin while during 2017 the Group sold 4 apartments in Romfelt Plaza and 2 apartments in Zizin. Additionally a villa in SPDI Real Estate Srl was sold during 2018.

Discontinued operations (Note 9)	31 Dec 2018	31 Dec 2017
	€	€
Income from sale of investment property	1.499.392	363.985
Cost of investment property	(1.547.617)	(359.619)
(Loss)/ Gain from disposal of investment property	(48.225)	4.366

15. Provisions

Continued operations	31 Dec 2018	31 Dec 2017
	€	€
Provisions (Note 42.3)	-	150.000
Total	-	150.000

Provision was taken by management in 2015 for Delia Lebada amounting to €700.000 while finally the Company as part of the sale of the asset and the release of the corporate guarantee paid €550.000 and as such the difference of €150.000 was reversed in 2017 (Note 42.3).

16. Other operating income/(expenses), net

Continued operations	31 Dec 2018	31 Dec 2017
	€	€
Accounts payable written off	-	1.126
Other income	-	5
Other income	-	1.131

Impairment of prepayments and other current assets	(26.389)	(378.925)
Penalties	(4.959)	(133)
Other expenses	(368)	(149)
Other expenses	(31.716)	(379.207)

Other operating income/(expenses), net	(31.716)	(378.076)

Discontinued operations (Note 9)	31 Dec 2018	31 Dec 2017
	€	€
Accounts payable written off	85	20.735
Other income	30.010	11.360
Other income	30.095	32.095

Impairment of prepayments and other current assets	(388.900)	(2.680)
Penalties	(4.334)	(22.553)
Other expenses	(296)	(4.194)
Other expenses	(393.530)	(29.427)

Other operating income/(expenses), net	(363.435)	2.668

Total impairment of prepayments and other current assets includes the expected credit loss provision due to adoption of IFRS9 which amounts to €118.089 (continued operations €26.389 and discontinued operations €91.700), and in discontinued operations impairment of €297.200 for Monaco Towers (Note 23).

17. Finance costs and income

Continued operations

Finance income	31 Dec 2018	31 Dec 2017
	€	€
Interest received from non-bank loans (Note 41.1.1)	685.778	2.467
Interest income associated with banking accounts	405	1.096
Total finance income	686.183	3.563

Finance costs	31 Dec 2018	31 Dec 2017
	€	€
Interest expenses (bank)	(140.903)	(256.079)
Interest expenses (non-bank) (Note 41.1.2)	(120.376)	(29.975)
Finance charges and commissions	(24.329)	(36.175)
Bonds interest	(68.133)	(20.495)
Other finance expenses	-	(46.767)
Total finance costs	(353.741)	(389.491)

Net finance result	332.442	(385.928)

17. Finance costs and income (continued)

Discontinued operations (Note 9)

Finance income	31 Dec 2018	31 Dec 2017
	€	€
Interest received from non-bank loans (Note 41.1.1)	9.979	9.796
Interest income associated with banking accounts	-	17
Total finance income	9.979	9.813

Finance costs	31 Dec 2018	31 Dec 2017
	€	€
Interest expenses (bank)	(986.466)	(1.021.618)
Interest expenses (non-bank) (Note 41.1.2)	(7.251)	(33.565)
Finance leasing interest expenses	(513.461)	(567.850)
Finance charges and commissions	(35.402)	(31.810)
Other finance expenses	-	(6.445)
Total finance costs	(1.542.580)	(1.661.288)

Net finance result	(1.532.601)	(1.651.475)

Interest income from non-bank loans, reflects income from loans granted by the Group for financial assistance of associates. For 2018 this amount includes also interest on Loan receivables from 3^rd parties provided as an advance payment for acquiring a participation in an investment property portfolio (Olympians portfolio) in Romania. The loan provided under an agreement incorporating a convertibility option exercisable until 28 February 2018. Such option was not exercised and the loan is payable in a 12 month period from the exercise date or the relevant notification date, bearing a fixed interest rate of 10% and secured by relevant corporate guarantees, while the Company is in the process of getting agreed security in the form of pledge of shares following the relevant process provided in the Loan Agreement. Such interest calculated in 2018 for all amounts withdrawn under this loan agreement and their respective interest periods.

Borrowing interest expense represents interest expense charged on bank and non-bank borrowings (Note 32).

Finance leasing interest expenses relate to the sale and lease back agreements of the Group (Note 37).

Finance charges and commissions include regular banking commissions and various fees paid to the banks.

Bonds interest represent interest calculated for the bonds issued by the Company during 2017 (Note 33).

Other finance expenses for 2017 includes interest on tax for prior years related to Cyprus companies.

18. Foreign exchange profit / (losses)

a. Non realised foreign exchange loss

Foreign exchange losses (non-realised) resulted from the loans and/or payables/receivables denominated in non EUR currencies when translated in EUR. The exchange loss for the year ended 31 December 2018 from continued operations amounted to €71.390 (2017: loss €695.043).

The exchange loss from discontinued operations for the year ended 31 December 2018 amounted to €10.233 (2017: loss €1.335.517) (Note 9).

b. Exchange difference on intercompany loans to foreign holdings

The Company has loans receivable from foreign group subsidiaries which are considered as part of the Group's net investments in those foreign operations (Note 41.3). For these intercompany loans the foreign exchange differences are recognized initially in other comprehensive income and in a separate component of equity. During 2018, the Group recognized a foreign exchange profit of €1.850 (2017:loss €3.538). Upon disposal of such foreign operations and thus of Terminal Brovary during 2017, the accumulated foreign exchange difference amounting to €37.352.923 was transferred to the Consolidated Profit or Loss for the year.

19. Tax Expense

Continued operations	31 Dec 2018	31 Dec 2017
	€	€
Income and defence tax expense	(613.034)	(524.255)
Taxes	(613.034)	(524.255)

Discontinued operations (Note 9)	31 Dec 2018	31 Dec 2017
	€	€
Income and defence tax expense	(96.567)	(71.910)
Taxes	(96.567)	(71.910)

19. Tax Expense (continued)

For the year ended 31 December 2018, the corporate income tax rate for the Group's subsidiaries are as follows: in Ukraine 18%, in Romania 16%, in Greece 29% and in Bulgaria 10%. The corporate tax that is applied to the qualifying income of the Company and its Cypriot subsidiaries is 12,5%. For 2018 the amount of tax recorded mainly related to an amount of €506.728 which was derived from the sale of asset in Craiova while for 2017 the amount of tax recorded includes also an amount of €241.435 which represent tax provisions for fiscal years 2015 and 2016 related to Cyprus companies.

The tax on the Group's results differs from the theoretical amount that would arise using the applicable tax rates as follows:

	31 Dec 2018	31 Dec 2017
	€	€
Profit / (loss) before tax	(6.759.507)	(34.334.671)

Tax calculated on applicable rates	(990.634)	(4.307.875)
Expenses not recognized for tax purposes	1.357.212	4.538.828
Tax effect of allowances and income not subject to tax	(303.862)	(153.916)
Tax effect on tax losses for the year	653.310	139.129
Tax effect on tax losses brought forward	(16.981)	(88.352)
10% additional tax	10.514	5.811
Defence tax	-	6
Overseas tax in excess of credit claim used during the year	42	847
Prior year tax	-	461.687
Total Tax	709.601	596.165

20. Investment Property

20.1 Investment Property Presentation

Investment Property consists of the following assets:

Income Producing Assets

· Victini Logistics (ex GED) is a logistics park comprising 17.756 gross leasable sqm. It is fully let to the German multinational transportation and logistics company, Kuehne & Nagel and to a Greek commercial company trading electrical appliances GE Dimitriou SA. On the roof of the warehouse there is a 1MW photovoltaic park installed with the electricity generated being sold to Greek Electric Grid on a long term contract.

· EOS Business Park consists of 3.386 sqm gross leasable area and includes a Class A office Building in Bucharest, which is currently fully let to Danone Romania until 2025.

· Innovations Logistics Park is a 16.570 sqm gross leasable area logistics park located in Clinceni in Bucharest, which benefits from being on the Bucharest ring road. Its construction was tenant specific, was completed in 2008 and is separated in four warehouses, two of which offer cold storage (freezing temperature), the total area of which is 6.395 sqm. Innovations Logistics Park was acquired by the Group in May 2014 and was 37% leased at the end of the reporting period while currently is 83%.

· During 2017 the Company proceeded with an internal reorganization and the Kindergarten asset of GreenLake which was under the ownership of the associate GreenLake Development Srl was acquired by a separate entity (SPDI Real Estate). The Kindergarten is fully let to one of Bucharest's leading private schools and produces an annual rent inflow of ~€115.000.

Residential Assets

The Company owns a residential portfolio, consisting at the end of the reporting period of 26 apartments and villas across four separate complexes located in different residential areas of Bucharest (Residential portfolio: Romfelt Plaza, Blooming House, GreenLake Residential: GreenLake Parcel K). During 2017 Tonescu Finance (the company which acquired the Monaco Towers related loan) commenced against SecMon Real Estate Srl legal proceedings and in order for SecMon Real Estate Srl to protect itself it entered voluntarily into insolvency process in January 2018. The entering of SecMon Real Estate Srl in the insolvency process means loss of control as per the definition of IFRS 10. As such SecMon Real Estate Srl is not consolidated in the present financial statements. (Note 8)

Land Assets

· Bela Logistic Park 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 sqm GBA logistic center commenced. Construction was put on hold in 2009.

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

· Tsymlyanskiy Residence is a 0,36 Ha plot of land located in the historic Podil District of Kiev and is destined for the development of a residential complex.

· Rozny Lane is a 42 Ha land plot located in Kiev Oblast, destined for the development of a residential complex. It has been registered under the Group pursuant to a legal decision in 2015.

· 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 Project is zoned for retail and entertainment development.

· GreenLake land is a 40.360 sqm plot and is adjacent to the GreenLake part of the Company's residential portfolio, which is classified under Investments in Associates (Note 22). It is situated in the northern part of Bucharest on the bank of Grivita Lake in Bucharest. SPDI owns ~44% of these plots, but has effective management control.

· Boyana Land: The complex of Boyana Residence ood includes adjacent land plots available for sale or development of ~22.000 sqm of gross buildable area.

20. Investment Property (continued)

20.2 Investment Property Movement during the reporting period

The table below presents a reconciliation of the Fair Value movements of the investment property during the reporting period broken down by property and by local currency vs. reporting currency.

Continued Operations

2018 (€)			Fair Value movements			Asset Value at the Beginning of the period or at Acquisition/Transfer date
Asset Name	Type	Carrying amount as at 31/12/2018	Foreign exchange translation difference (a)	Fair value gain/(loss) based on local currency valuations (b)	Disposals 2018	Transfer to Assets held for sale	Additions 2018	Carrying amount as at 31/12/2017
Bela Logistic Park	Land	-	-	-	-	(4.586.009)	-	4.586.009
Kiyanovskiy Residence	Land	-	-	-	-	(2.668.223)	-	2.668.223
Tsymlyanskiy Residence	Land	-	-	-	-	(917.202)	-	917.202
Balabino Project	Land	-	-	-	-	(1334.111)	-	1.334.111
Rozny Lane	Land	-	-	-	-	(1.083.966)	-	1.083.966
Total Ukraine		-	-	-	-	(10.589.511)	-	10.589.511
Innovations Logistics Park	Warehouse	-	-	-	-	(10.000.000)	-	10.000.000
EOS Business Park	Office	-	-	-	-	(7.200.000)	-	7.200.000
Residential portfolio	Residential	-	-	-	-	(4.023.000)	-	4.023.000
GreenLake	Land	-	-	-	-	(17.963.000)	-	17.963.000
Kindergarten	Retail	-	-	-	-	(1.713.000)	-	1.713.000
Praktiker Craiova	Retail	-	-	-	(7.500.000)	-	-	7.500.000
Total Romania		-	-	-	(7500.000)	(40.899.000)	-	48.399.000
Boyana	Land	-	-	-	-	(4.230.000)	-	4.230.000
Total Bulgaria		-	-	-	-	(4.230.000)	-	4.230.000
Victini Logistics	Warehouse	-	-	-	-	(16.100.000)	-	16.100.000
Total Greece		-	-	-	-	(16.100.000)	-	16.100.000

TOTAL		-	-	-	(7.500.000)	(71.818.511)	-	79.318.511

Discontinued Operations

2018 (€)			Fair Value movements				Asset Value at the Beginning of the period or at Acquisition/Transfer date
Asset Name	Type	Carrying amount as at 31/12/2018	Foreign exchange translation difference (a)	Fair value gain/(loss) based on local currency valuations (b)	Transfer to FA at fair value through OCI (Note 23)	Disposals 2018	Transfer from Continued Operations	Carrying amount as at 31/12/2017
Bela Logistic Park	Land	4.716.157	255.916	(125.768)	-	-	4.586.009	-
Kiyanovskiy Residence	Land	2.794.760	149.561	(23.024)	-	-	2.668.223	-
Tsymlyanskiy Residence	Land	960.699	51.411	(7.914)	-	-	917.202	-
Balabino Project	Land	1.310.044	73.639	(97.707)	-	-	1.334.111	-
Rozny Lane	Land	1.048.034	-	(35.932)	-	-	1.083.966	-
Total Ukraine		10.829.694	530.527	(290.345)	-	-	10.589.511	-
Innovations Logistics Park	Warehouse	10.600.000	(10.366)	610.366	-	-	10.000.000	-
EOS Business Park	Office	7.600.000	(7.392)	407.392	-	-	7.200.000	-
Residential portfolio	Residential	1.354.000	(2.322)	16.939	(1.486.000)	(1.197.617)	4.023.000	-
GreenLake	Land	16.842.000	(13.707)	(1.107.293)	-	-	17.963.000	-
Kindergarten	Retail	1.406.000	(1.642)	44.642	-	(350.000)	1.713.000	-
Total Romania		37.802.000	(35.429)	(27.954)	(1.486.000)	(1.547.617)	40.899.000	-
Boyana	Land	4.230.000			-	-	4.230.000	-
Total Bulgaria		4.230.000			-	-	4.230.000	-
Victini Logistics	Warehouse	15.200.000		(900.000)	-	-	16.100.000	-
Total Greece		15.200.000		(900.000)	-	-	16.100.000	-

TOTAL		68.061.694	495.098	(1.218.299)	(1.486.000)	(1.547.617)	71.818.511	-

20. Investment Property (continued)

20.2 Investment Property Movement during the reporting period (continued)

2017 (€)			Fair Value movements			Asset Value at the Beginning of the period or at Acquisition/Transfer date
Asset Name	Type	Carrying amount as at 31/12/2017	Foreign exchange translation difference (a)	Fair value gain/(loss) based on local currency valuations (b)	Disposals 2017	Transfer from Inventory	Additions 2017	Carrying amount as at 31/12/2016
Terminal Brovary Logistics Park	Warehouse	-	-	-	(14.900.000)	-	-	14.900.000
Bela Logistic Park	Land	4.586.009	(798.552)	356.575	-	-	-	5.027.986
Kiyanovskiy Residence	Land	2.668.223	(485.542)	(166.603)	-	-	-	3.320.368
Tsymlyanskiy Residence	Land	917.202	(161.721)	35.379	-	-	-	1.043.544
Balabino Project	Land	1.334.111	(235.232)	51.460	-	-	-	1.517.883
Rozny Lane	Land	1.083.966	-	(54.446)	-	-	-	1.138.412
Total Ukraine		10.589.511	(1.681.047)	222.365	(14.900.000)	-	-	26.948.193
Innovations Logistics Park	Warehouse	10.000.000	(265.537)	(734.463)	-	-	-	11.000.000
EOS Business Park	Office	7.200.000	(184.922)	524.922	-	-	-	6.860.000
Residential portfolio	Residential	4.023.000	(113.738)	121.357	(359.619)	-	-	4.375.000
GreenLake	Land	17.963.000	(466.107)	510.107		-	-	17.919.000
Delia Lebada	Land	-	13.618	(13.618)	(4.860.000)	-	-	4.860.000
Kindergarten	Retail	1.713.000	(43.571)	491.571	-	-	1.265.000	-
Praktiker Craiova	Retail	7.500.000	(194.720)	194.720	-	-	-	7.500.000
Total Romania		48.399.000	(1.254.977)	1.094.596	(5.219.619)	-	1.265.000	52.514.000
Boyana	Land	4.230.000	-	(490.000)	-	-	-	4.720.000
Total Bulgaria		4.230.000	-	(490.000)	-	-	-	4.720.000
Victini Logistics	Warehouse	16.100.000	-	(500.000)	-	-	100.000	16.500.000
Total Greece		16.100.000	-	(500.000)	-	-	100.000	16.500.000

TOTAL		79.318.511	(2.936.024)	326.961	(20.119.619)	-	1.365.000	100.682.193

The two components comprising the fair value movements are presented in accordance with the requirements of IFRS in the consolidated statement of comprehensive income as follows:

a. The translation profit due to the devaluation of local currencies of €495.098 (a) (2017: loss €2.936.024) is presented as part of the exchange difference on translation of foreign operations in other comprehensive income in the statement of comprehensive income and then carried forward in the Foreign currency translation reserve; and,

b. The fair value loss in terms of the local functional currencies amounting to €1.218.299 (b) (2017: gain €326.961), is presented as Valuation gains/(losses) from investment properties in the statement of comprehensive income and is carried forward in Accumulated losses.

20. Investment Property (continued)

20.3 Investment Property Carrying Amount per asset as at the reporting date

The table below presents the values of the individual assets as appraised by the appointed valuer as at the reporting date.

Asset Name	Location	Principal Operation	Related Companies	Carrying amount as at
				31 Dec 2018	31 Dec 2018	31 Dec 2017
				Continued operations	Discontinued operations
				€	€	€

Bela Logistic Park	Odesa	Land and Development Works for Warehouse	LLC Aisi Bela	-	4.716.157	4.586.009
Kiyanovskiy Residence	Podil, Kiev City Center	Land for residential development	LLC Aisi Ukraine LLC Trade Center	-	2.794.760	2.668.223
Tsymlyanskiy Residence	Podil, Kiev City Center	Land for residential Development	LLC Almaz‑Pres‑Ukraine	-	960.699	917.202
Balabino Project	Zaporizhia	Land for retail development	LLC Aisi Bela	-	1.310.044	1.334.111
Rozny Lane	Brovary district, Kiev	Land for residential Development	SC Secure Capital Limited	-	1.048.034	1.083.966
Total Ukraine				-	10.829.694	10.589.511
Innovations Logistics Park	Clinceni, Bucharest	Warehouse	Myrnes Innovations Park Limited Best Day Real Estate Srl	-	10.600.000	10.000.000
EOS Business Park	Bucharest	Office building	Yamano Holdings Limited, N-E Real Estate Park First Phase Srl	-	7.600.000	7.200.000
Praktiker Craiova	Craiova	Big Box retail	Bluehouse Accession Project IX Limited Bluehouse Accession Project IV Limited BlueBigBox 3 Srl	-	-	7.500.000
Kindergarten	Bucharest	Retail	SPDI Real Estate Srl	-	1.406.000	1.713.000
Residential Portfolio	Bucharest	Residential apartments (12 in total in 2 complexes)	SEC South East Continent Unique Real Estate Investments II Limited Demetiva Holdings Limited (in 2017) Diforio Holdings Limited (in 2017) Frizomo Holdings Limited (in 2017) Ketiza Holdings Limited SecRom Real Estate Srl (in 2017) SecVista Real Estate Srl (in 2017) SecMon Real Estate Srl (in 2017) Ketiza Real Estate Srl N-E Real Estate Park First Phase Srl (in 2018 after merger with SecRom Real Estate Srl)	-	1.354.000	4.023.000
GreenLake	Bucharest	Residential villas (14 villas) & land for residential development	SEC South East Continent Unique Real Estate (Secured) Investments Limited Edetrio Holdings Limited Emakei Holdings Limited Iuliu Maniu Limited Ram Real Estate Management Limited Moselin Investments Srl Rimasol Enterprises Limited Rimasol Real Estate Srl Ashor Ventures Limited Ashor Development Srl Jenby Investments Srl Ebenem Investments Srl	-	16.842.000	17.963.000
Total Romania				-	37.802.000	48.399.000
Boyana	Sofia	Land	Boyana Residence ood, Sertland Properties Limited	-	4.230.000	4.230.000
Total Bulgaria				-	4.230.000	4.230.000
Victini Logistics	Athens	Warehouse	Victini Holdings Limited, Victini Logistics Park S.A.	-	15.200.000	16.100.000
Total Greece				-	15.200.000	16.100.000

TOTAL				-	68.061.694	79.318.511

20. Investment Property (continued)

20.4 Investment Property analysis

a. Investment Properties

The following assets are presented under Investment Property: Innovations Logistics park, EOS Business Park, Victini Logistics, Praktiker Craiova (sold during October 2018), Kindergarten of GreenLake, the Residential Portfolio (consisting of apartments in 2 complexes) and GreenLake parcel K, as well as all the land assets namely Kiyanovskiy Residence, Tsymlyanskiy Residence, Balabino Project and Rozny Lane in Ukraine, and GreenLake in Romania, as well as the land in Sofia, Bulgaria (Boyana).

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
At 1 January	74.732.502	-	95.654.207
Acquisitions of investment property	-	-	1.265.000
Disposal of investment Property	(7.500.000)	(3.033.617)	(20.119.619)

Transfer from Inventory/prepayments made	-	-	100.000
Revaluation (loss)/gain on investment property	-	(1.092.530)	(29.614)
Translation difference	-	239.182	(2.137.472)
Transferred to Assets held for sale	(67.232.502)	67.232.502	-
At 31 December	-	63.345.537	74.732.502

Acquisitions of Investment properties represent the internal reorganization to which the Company proceeded during 2017 and the Kindergarten asset of GreenLake which was under the ownership of the associate GreenLake Development Srl was acquired by a separate entity (SPDI Real Estate) (Note 21a).

Disposals of Investment Properties mainly represent the sales of Praktiker in Craiova and for 2017 the sale of Terminal Brovary logistics Park in Ukraine, as well as the Delia Lebada land plot in Romania (Note 21b).

b. Investment Properties Under Development

As at 31 December 2018 investment property under development represents the carrying value of Bela Logistic Park property, which has reached the +10% construction in late 2008 but it is stopped since then.

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
At 1 January	4.586.009	-	5.027.986
Revaluation on investment property	-	(125.768)	356.575
Translation difference	-	255.916	(798.552)
Transferred to Assets held for sale	(4.586.009)	4.586.009	-
At 31 December	-	4.716.157	4.586.009

20.5 Investment Property valuation method presentation

In respect of the Fair Value of Investment Properties the following table represents an analysis based on the various valuation methods. The different levels as defined by IFRS have been defined as follows:

- Level 1 relates to quoted prices (unadjusted) in active and liquid markets for identical assets or liabilities.

- Level 2 relates to inputs other than quoted prices that are observable for the asset or liability indirectly (that is, derived from prices). Level 2 fair values of investment properties have been derived using the market value approach by comparing the subject asset with similar assets for which price information is available. Under this approach the first step is to consider the prices for transactions of similar assets that have occurred recently in the market. The most significant input into this valuation approach is price per sqm.

- Level 3 relates to inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). Level 3 valuations have been performed by the external valuer using the income approach (discounted cash flow) due to the lack of similar sales in the local market (unobservable inputs).

20. Investment Property (continued)

20.5 Investment Property valuation method presentation (continued)

To derive Fair Values the Group has adopted a combination of income and market approach weighted according to the predominant local market and economic conditions.

Fair value measurements at 31 Dec 2018 (€)	(Level 1)	(Level 2)	(Level 3)	Total

Recurring fair value measurements
Balabino Project - Zaporizhia		1.310.044		1.310.044
Tsymlyanskiy Residence - Podil, Kiev City Center		960.699		960.699
Bela Logistics Park - Odessa			4.716.157	4.716.157
Kiyanovskiy Residence - Podil, Kiev City Center		2.794.760		2.794.760
Rozny Lane - Brovary district, Kiev oblast		1.048.034		1.048.034
Innovations Logistics Park - Bucharest			10.600.000	10.600.000
EOS Business Park - Bucharest, City Center			7.600.000	7.600.000
Residential Portfolio (ex GreenLake) - Bucharest		1.354.000		1.354.000
GreenLake - Bucharest		16.842.000		16.842.000
Praktiker - Craiova
Kindergarten - Bucharest			1.406.000	1.406.000
Victini Logistics - Athens			15.200.000	15.200.000
Boyana- Land, Bulgaria		4.230.000		4.230.000
Totals		28.539.537	39.522.157	68.061.694

Fair value measurements at 31 Dec 2017 (€)	(Level 1)	(Level 2)	(Level 3)	Total
-
Recurring fair value measurements
Balabino Project - Zaporizhia	-	1.334.111	-	1.334.111
Tsymlyanskiy Residence - Podil, Kiev City Center	-	917.202	-	917.202
Bela Logistics Park - Odessa	-	-	4.586.009	4.586.009
Kiyanovskiy Residence - Podil, Kiev City Center	-	2.668.223	-	2.668.223
Rozny Lane - Brovary district, Kiev oblast	-	1.083.966	-	1.083.966
Innovations Logistics Park - Bucharest	-	-	10.000.000	10.000.000
EOS Business Park - Bucharest, City Center	-	-	7.200.000	7.200.000
Residential Portfolio (ex GreenLake) - Bucharest	-	4.023.000	-	4.023.000
GreenLake - Bucharest	-	17.963.000	-	17.963.000
Praktiker - Craiova	-	-	7.500.000	7.500.000
Kindergarten - Bucharest	-	-	1.713.000	1.713.000
Victini Logistics - Athens	-	-	16.100.000	16.100.000
Boyana- Land, Bulgaria	-	4.230.000	-	4.230.000
Totals	-	32.219.502	47.099.009	79.318.511

The table below shows yearly adjustments for Level 3 investment property valuations:

Level 3 Fair value measurements at 31 Dec 2018 (€)	Bela Logistics Park	Innovations Logistics Park	EOS Business Park	Praktiker Craiova	Victini Logistics	Kindergarten	Total

Opening balance	4.586.009	10.000.000	7.200.000	7.500.000	16.100.000	1.713.000	47.099.009
Disposals	-	-	-	(7.500.000)	-	-	(7.500.000)
Profit/(loss) on revaluation	(125.768)	610.366	407.392	-	(900.000)	44.642	36.632
Translation difference	255.916	(10.366)	(7.392)	-	-	(351.642)	(113.484)
Closing balance	4.716.157	10.600.000	7.600.000	-	15.200.000	1.406.000	39.522.157

20. Investment Property (continued)

20.5 Investment Property valuation method presentation (continued)

Level 3 Fair value measurements at 31 Dec 2017 (€)	Bela Logistics Park	Innovations Logistics Park	EOS Business Park	Praktiker Craiova	Victini Logistics	Kindergarten	Total

Opening balance	5.027.986	11.000.000	6.860.000	7.500.000	16.500.000	-	46.887.986
Transfer to and from level 2 due to change of valuation methods	-	-	-	-	-	-	-
Acquisitions	-	-	-	-	-	1.265.000	1.265.000
Additions	-	-	-	-	-	-	-
Disposals	-	-	-	-	100.000	-	100.000
Profit/(loss) on revaluation	356.575	(734.463)	524.922	194.720	(500.000)	491.571	333.325
Translation difference	(798.552)	(265.537)	(184.922)	(194.720)	-	(43.571)	(1.487.302)
Closing balance	4.586.009	10.000.000	7.200.000	7.500.000	16.100.000	1.713.000	47.099.009

Information about Level 3 Fair Values is presented below:

	Fair value at 31 Dec 2018	Fair value at 31 Dec 2017	Valuation technique	Unobservable inputs	Relationship of unobservable inputs to fair value
	€	€	€	€	€
Bela Logistic Park - Odessa	4.716.157	4.586.009	Combined market and cost approach	Percentage of development works completion, deterioration rate	The higher the percentage of completion the higher the fair value. The higher the deterioration rate, the lower fair value
Innovations Logistics Park - Bucharest	10.600.000	10.000.000	Income approach	Future rental income and costs for 10 years, discount rate	The higher the rental income the higher the fair value. The higher the discount rate, the lower fair value
EOS Business Park - Bucharest, City Center	7.600.000	7.200.000	Income approach	Future rental income and costs for 10 years, discount rate	The higher the rental income the higher the fair value. The higher the discount rate, the lower fair value
Praktiker Craiova	-	7.500.000	Income approach	Future rental income and costs for 10 years, discount rate	The higher the rental income the higher the fair value. The higher the discount rate, the lower fair value
Victini Logistics	15.200.000	16.100.000	Income approach	Future rental income and costs for 10 years, discount rate for real estate property and for Photovoltaic(PV) 13 + 4 years	The higher the rental/PV income the higher the fair value. The higher the discount rate, the lower fair value
Kindergarten	1.406.000	1.713.000	Income approach	Future rental income and costs of discount rate, vacancy rate	The higher the rental income the higher the fair value. The higher the discount rate and the vacancy rate, the lower fair value
Total	39.522.157	47.099.009

21. Investment Property Acquisitions, Goodwill Movement and Disposals

a. Investment Property Acquisitions

Acquisitions of investment property represents the internal reorganization which the Company undertook during 2017 whereby the Kindergarten asset of GreenLake which was under the ownership of the associate GreenLake Development Srl was acquired by a separate subsidiary entity (SPDI Real Estate Srl).

	€
Fair value of investment property acquired	1.265.000
Consideration paid	(1.241.079)
Gain on acquisition of assets	23.921
Non-controlling interest	11.960,50
SPDI equity holders	11.960,50

21. Investment Property Acquisitions, Goodwill Movement and Disposals (continued)

b. Disposal of subsidiaries

At 27 January 2017 the SL Logistics Group (Terminal Brovary related) was sold to Temania Enterprises Ltd (company related to Rozetka Group). The transaction was concluded at a Gross Asset Value of ~€15 million (before the deduction of the outstanding EBRD loan, which was transferred to the buyer, while the SPDI guarantee to EBRD loan was cancelled). The transaction generated a profit for SPDI of ~€2,7 million, already included in the 2016 financial statements by way of presenting the property at a fair value equal to the transaction value, as well as a cash inflow of ~€3million. As part of the transaction the Group also sold SL SECURE Logistics Ltd, and thus transferred its loan towards Terminal Brovary to the buyer.

The Company had loans receivable from foreign group subsidiaries which are considered as part of the Group's net investments in those foreign operations (Note 41.3). For these intercompany loans the foreign exchange differences are recognized initially in other comprehensive income and in a separate component of equity. Upon disposal of such foreign operations and thus of Terminal Brovary during 2017, the accumulated foreign exchange difference amounting to €37.352.923 is transferred to the Consolidated Profit or Loss for the year.

The table below shows the Balance Sheet of the Terminal Brovary Group at the disposal date.

ASSETS	€
Non-current assets
Investment property	14.900.000
Tangibles and intangibles assets	43.240
Current assets
Prepayments and other current assets	40.740
Cash and cash equivalents	4.693
Total assets	14.988.673
Non-current liabilities
Finance lease liability	235.560
Current liabilities
Borrowings	11.370.804
Trade and other payables	46.366
Deposits from tenants	264.547
Finance lease liability	219
Total liabilities	11.917.496
Net assets disposed	(3.071.177)
Financed by
Cash consideration received	2.849.187
Total result from Terminal Brovary disposal	(221.990)

On 26 July 2017 the Company announced the disposal of Delia Lebada, a ~40.000 sqm (4 hectare) plot of land in east Bucharest on the shore of Pantelimon Lake in which SPDI owned a 65% stake. The sale price was €2,4 million and simultaneously, the associated property loan (principal and interest) totalling €6.594.396 with Bank of Cyprus was settled through a liquidation process, and the associated corporate guarantee was released. The loan was repaid at a rate of 45 cents / Euro (totalling €2,95 million) using a combination of the Land Disposal proceeds (€2,4 million) and an additional payment of €550.000 (Note 15).

Overall the transaction had a positive result of €1.705.727 in the Consolidated Statement of Comprehensive Income, €761.197 being attributed to the equity holders of the Company.

ASSETS	€
Non-current assets
Investment property	4.860.000
Current assets
Prepayments and other current assets	92.990
Cash and cash equivalents	106
Total assets	4.953.096
Current liabilities
Borrowings	4.569.725
Interest due on borrowings	2.024.671
Other liabilities	1.057.357
Total liabilities	7.651.753
Net assets disposed	(2.698.657)
Non-controlling interest	-

Gain on disposal of subsidiaries	2.698.657
Write off intercompany loans of SPDI group to Delia	(992.930)
Total result from Delia disposal	1.705.727
Non-controlling interest	944.530

Net effect of Delia disposal for SPDI equity holders	761.197

Total gain from disposal of subsidiaries (Brovary and Delia)

1.483.737

22. Investments in associates

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Cost of investment in associates at the beginning of the period	5.115.587	-	5.217.310
Share of profits /(losses) from associates	-	364.920	390.217
Dividend Income	-	(143.263)	(231.363)
Foreign exchange difference	-	(24.009)	(260.577)
Transfer to assets classified as held for sale	(5.115.587)	5.115.587	-
Total	-	5.313.235	5.115.587

Dividend Income reflects dividends received from Delenco Srl, owner of the Delea Nuova building, where the Group maintains a 24,35% participation.

The share of profit from the associate GreenLake Development Srl was limited up to the interest of the Group in the associate.

As at 31 December 2018, the Group's interests in its associates and their summarised financial information, including total assets at fair value, total liabilities, revenues and profit or loss, were as follows:

Project Name	Associates	Total assets	Total liabilities	Profit/ (loss)	Holding	Share of profits from associates	Country	Asset type
		€	€	€	%	€
Delea Nuova Project	Lelar Holdings Limited and S.C. Delenco Construct Srl	24.272.364	(2.455.680)	1.498.399	24,354	364.920	Romania	Office building
GreenLake Project - Phase A	GreenLake Development Srl	9.202.949	(11.567.196)	(839.107)	40,35	-	Romania	Residential assets
Total		33.475.313	(14.022.876)	659.292		364.920

As at 31 December 2017, the Group's interests in its associates and their summarised financial information, including total assets at fair value, total liabilities, revenues and profit or loss, were as follows:

Project Name	Associates	Total assets	Total liabilities	Profit/ (loss)	Holding	Share of profits from associates	Country	Asset type
		€	€	€	%	€
Delea Nuova Project	Lelar Holdings Limited and S.C. Delenco Construct Srl	23.980.063	(2.974.921)	1.602.270	24,354	390.217	Romania	Office building
GreenLake Project - Phase A	GreenLake Development Srl	10.228.889	(12.329.782)	(3.560.862)	40,35	-	Romania	Residential assets
Total		34.208.952	(15.304.703)	(1.958.592)		390.217

23. Financial assets at fair value through OCI

The Group proceeded with an impairment of €297.200 for Monaco Towers (company SecMon Real Estate Srl) for which following the court decision for entering into insolvency in January 2018, the Company lost the control over the asset (Note 8) and as such it was reclassified as Financial assets at fair value through OCI as per table below (where the fair value of the property was adjusted at 80% of its value):

Discontinued operations (Note 9)
	Unadjusted	Adjusted
ASSETS	€	€
Non-current assets
Investment property	1.486.000	1.188.800
Current assets
Prepayments and other current assets	20.447	20.447
Cash and cash equivalents	10.321	10.321
Total assets	1.516.768	1.219.568

Current liabilities
Borrowings	(1.075.176)	(1.075.176)
Other liabilities	(19.433)	(19.433)
Intercompany loans	(1.845.700)	(124.958)
Total liabilities	(2.940.309)	(1.219.567)

Total Net equity	(1.423.541)	1

Add back Intercompany loans	1.845.700	-
Total Net equity (excluding IC)	422.159	1

Financial Asset at fair value through OCI		1

Loan receivable from 3^rd parties (Note 27)		124.958
Impairment charge for Monaco Towers (Adjusted less Unadjusted NAV)		(297.200)

24. Tangible and intangible assets

As at 31 December 2018 the intangible assets were composed of the capitalized expenditure on the Enterprise Resource Planning system (Microsoft Dynamics-Navision) in the amount of €103.193 (2017: €103.193) which is under continued operations. Accumulated amortization as at the reporting date amounts to €100.800 (2017: €96.642) and therefore net value amounts to €2.393 (2017: €6.551).

As at 31 December 2018 the tangible non-current assets under continued operations were comprised mainly by electronic equipment (mobiles, computers etc.) of a net value of €1.281 (2017: €2.242).

As at 31 December 2018 the tangible non-current assets under discontinued operations mainly consisted of the machinery and equipment used for servicing the Group's investment properties in Ukraine, Romania, Greece and Bulgaria, amount to €129.516 (2017:€134.483). Accumulated depreciation as at the reporting date amounts to €86.982 (2017: €72.772).

25. Long Term Receivables and prepayments

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Long Term Receivables	850	270.271	316.788
Total	850	270.271	316.788

Long term receivables mainly include the cash collateral existing in favor of Piraeus Leasing and the guarantee deposit from a tenant in Innovations Logistics Park.

26. Inventory

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
At 1 January	4.812.550	-	5.028.254
Sale of Inventories (Note 14a)	-	(208.506)	(215.704)
Transfer to assets classified as held for sale	(4.812.550)	4.812.550	-
At 31 December	-	4.604.044	4.812.550

The residential portfolio in Boyana, Sofia, Bulgaria is classified as Inventory.

During 2016 after a decision of the Board of Directors of Boyana to change the initial plan from construction on the land to hold this land for capital appreciation, the amount of €4.686.000 which was related to the land was transferred under Investment Properties (Note 20.2) and since then is treated under IAS 40.

27. Prepayments and other current assets

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Trade and other receivables	102.243	569.210	741.691
VAT and other tax receivables	123.975	93.331	275.446
Deferred expenses	72.630	1.254	222.797
Receivables due from related parties	54.689	1.010	14.459
Loan receivables from 3^rd parties	5.312.919	124.958	4.345.000
Loan to associates (Note 41.4)	8.374	282.842	273.476
Allowance for impairment of prepayments and other current assets	(89.422)	(390.471)	(26.285)
Total	5.585.408	682.134	5.846.584

Trade and other receivables mainly include receivables from tenants (including the Greek electricity grid administrator) and prepayments made for services.

VAT receivable represent VAT which is refundable in Romania, Bulgaria, Greece, Cyprus and Ukraine.

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

Loan receivables from 3^rd parties include an amount of €4.580.000 provided as an advance payment for acquiring a participation in an investment property portfolio (Olympians portfolio) in Romania, as well as associated interest of €610.853. The loan provided under an agreement incorporating a convertibility option exercisable until 28 February 2018. Such option was not exercised and the loan is payable in a 12 month period from the exercise date or the relevant notification date, bearing a fixed interest rate of 10%, and secured by relevant corporate guarantees, while the Company is in the process of getting agreed security in the form of pledge of shares following the relevant process provided in the Loan Agreement.

Loans receivables from 3^rd parties also include an amount of €115.000 provided to the SPV that acquired Delia Lebada asset, as part of an agreement of obtaining a 5% stake on the property.

Loan receivable from 3^rd partied under discontinued operations include a loan receivable from SecMon Real Estate Srl which is in the comparative figures of these Financial Statements was classified as a subsidiary, while from January 2018 it is classified as Financial Asset at Fair value through OCI (Note 23).

Loan to associates reflects a loan receivable from GreenLake Development Srl, holding company of GreenLake Project-Phase A (Notes 22 and 41.4).

28. Cash and cash equivalents

Cash and cash equivalents represent liquidity held at banks.

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Cash with banks in USD	45.134	2.621	68.007
Cash with banks in EUR	205.679	233.184	365.736
Cash with banks in UAH	71	1.498	2.021
Cash with banks in RON	31.829	465.062	389.123
Cash with banks in BGN	-	2.460	6.237
Total	282.713	704.825	831.124

29. Share capital

Number of Shares during 2018 and 2017

	31 December 2016	28 April 2017	30 June 2017	31 December 2017	26 January 2018	26 January 2018	5 June 2018	31 December 2018
		Increase of share capital	Exercise of warrants		Exercise of warrants & options	Increase of share capital
Authorised
Ordinary shares of €0,01	989.869.935	-	-	989.869.935	-	-	-	989.869.935
Total ordinary shares	989.869.935	-	-	989.869.935	-	-	-	989.869.935
RCP Class A Shares of €0,01	785.000	-	-	785.000	-	-	(785.000)	-
RCP Class B Shares of €0,01	8.618.997	-	-	8.618.997	-	-	-	8.618.997
Total redeemable shares	9.403.997	-	-	9.403.997	-	-	(785.000)	8.618.997

Issued and fully paid
Ordinary shares of €0,01	90.014.723	626.133	12.948.694	103.589.550	17.076.560	6.604.371	-	127.270.481
Total ordinary shares	90.014.723	626.133	12.948.694	103.589.550	17.076.560	6.604.371	-	127.270.481
RCP Class A Shares of €0,01	-	-	-	-	-	-	-	-
RCP Class B Shares of €0,01	-	-	-	-	-	-	-	-
Total redeemable shares	-	-	-	-	-	-	-	-
Total	90.014.723	626.133	12.948.694	103.589.550	17.076.560	6.604.371	-	127.270.481

Nominal value (€) for 2018 and 2017

€	31 December 2016	28 April 2017	30 June 2017	31 December 2017	26 January 2018	26 January 2018	5 June 2018	31 December 2018
		Increase of share capital	Exercise of warrants		Exercise of warrants & options	Increase of share capital
Authorised
Ordinary shares of €0,01	9.898.699	-	-	9.898.699	-	-	-	9.898.699
Total ordinary shares	9.898.699	-	-	9.898.699	-	-	-	9.898.699
RCP Class A Shares of €0,01	7.850	-	-	7.850	-	-	(7.850)	-
RCP Class B Shares of €0,01	86.190	-	-	86.190	-	-	-	86.190
Total redeemable shares	94.040	-	-	94.040	-	-	(7.850)	86.190

Issued and fully paid
Ordinary shares of €0,01	900.145	6.261	129.487	1.035.893	170.765	66.044	-	1.272.702
Total ordinary shares	900.145	6.261	129.487	1.035.893	170.765	66.044	-	1.272.702
RCP Class A Shares of €0,01	-	-	-	-	-	-	-	-
RCP Class B Shares of €0,01	-	-	-	-	-	-	-	-
Total redeemable shares	-	-	-	-	-	-	-	-
Total	900.145	6.261	129.487	1.035.893	170.765	66.044	-	1.272.702

29. Share capital (continued)

29.1 Authorised share capital

As at the end of 2017, the authorized share capital of the Company was 989.869.935 Ordinary Shares of €0,01 nominal value each, 785.000 Redeemable Preference Class A Shares of €0,01 nominal value each and 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each.

The Company cancelled the Redeemable Preference Class A Shares following the AGM decision of 29 December 2017 and the subsequent court approval obtained during H1 2018 while Redeemable Preference Class B Shares (Note 29.6) remain to be cancelled.

Following the cancellation of the Redeemable Preference Class A Shares completed within H1 2018 the authorised share capital of the Company as at the date of issuance of this report is as follows:

a) 989.869.935 Ordinary Shares of €0,01 nominal value each,

b) 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each, (Note 29.6).

29.2 Issued Share Capital

As at the end of 2017, the issued share capital of the Company was as follows:

a) 103.589.550 Ordinary Shares of €0,01 nominal value each,

b) 392.500 Redeemable Preference Class A Shares of €0,01 nominal value each, cancelled during 2018 as per the Annual General Meeting decision of 29 December 2017 (Note 29.6)

c) 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each.

In respect of the Redeemable Preference Class A Shares, issued in connection to the Innovations Logistics Park acquisition and the Redeemable Preference Class A Shares, issued in connection to the acquisition of Craiova Praktiker, following the holders of such shares notifying the Company of their intent to redeem within 2016, the Company:

- actually proceeded with full redemption of the Redeemable Preference Class A Shares (392.500) which was finalized in Q1-2017 while it obtained during the Annual General Meeting of 29 December 2017 the necessary approval for cancelling them during 2018.

- for the Redeemable Preference Class B Shares, in lieu of redemption the Company gave its 20% holding in Autounion (Note 29.6) in October 2016, to the Craiova Praktiker seller BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L. and final settlement for any resulting difference is expected to be provided by Cypriot Courts (Note 42.4). As soon as the case is settled, the Company will proceed with the cancellation of the Redeemable Preference Class B Shares.

On 26^th January 2018 the Company announced that 17.066.560 Class A warrants (at a price of £0,10 per warrant) have been exercised and accordingly, 17.066.560 new ordinary shares were issued and admitted to trading on AIM. The consideration for these shares was paid during 2017 (Notes 34 and 41.2). Furthermore the Company proceeded with the issue of 344.371 new Ordinary Shares to the Non-Executive Directors of the Company who were in office in 2016 in lieu of fees accrued in 2016, as well as the issue of 10.000 new Ordinary Shares to an ex-employee of the Company, who exercised 10.000 options held over Ordinary Shares (exercisable at £0,15 per share) and 6.260.000 new Ordinary Shares (at an average price of £0,10 per new Ordinary Share) to certain advisers in lieu of cash fees for services offered to the Company for raising capital and facilitating capital markets strategies.

The Company proceeded during H1 2018 with the necessary actions, i.e. court applications, in order to implement the decisions of the AGM of 29 December 2017 for the cancellation of the 785.000 Redeemable Preference Class A Shares of €0,01 each, namely 777.150 Redeemable Preference Class A Shares of €0,01 each in the name of Myrian Nes Ltd and 7.850 Redeemable Preference Class A Shares of €0,01 each in the name of Theandrion Estates.

Following shares issuance completed within H1 2018, as well as cancellation of Redeemable Preference Class A Shares the issued share capital of the Company as at the date of issuance of this report is as follows:

a) 127.270.481 Ordinary Shares of €0,01 nominal value each,

b) 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each, (Note 29.6).

29.3 Option schemes

A. Under the scheme adopted in 2007, each of the Directors serving at the time, who is still a Director of the Company is entitled to subscribe for 2.631 Ordinary Shares exercisable as set out below:

	Exercise Price	Number of
	USD	Shares
Exercisable until 1 August 2017	57	1.754
Exercisable until 1 August 2017	83	877

The Company received no notice for exercising the options and as a result, as at the end of the reporting period the options have expired.

29. Share capital (continued)

29.3 Option schemes (continued)

B. Under a second scheme also adopted in 2007, director Franz M. Hoerhager is entitled to subscribe for 1.829 ordinary shares exercisable as set out below:

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

The Company received no notice for exercising the options and as a result as at the end of the reporting period the options have expired.

C. Under a scheme adopted in 2015, pursuant to an approval by the AGM of 30/12/2013, the Company proceeded in 2015 in issuing 590.000 options to its employees, as a reward for their effort and support during the previous year. Each option entitles the Option holder to one Ordinary Share. Exercise price stands at GBP 0,15. The Option holders may not exercise any option from the moment they cease to offer their services to the Company. The CEO and the CFO of the Company did not receive any options.

a. 147.500 Options were exercisable within 2016 and none were exercised.

b. 147.500 Options were exercisable within 2017, out of which 10.000 options were exercised by an ex-employee of the Company while the rest have lapsed.

c. 295.000 Options may be exercised within 2018 and as at the date this report none have been exercised.

The Company considers that all option schemes are currently out of money and therefore has not made any relevant provision.

29.4 Class A Warrants issued

The Company in order to acquire up to a 50% interest in a portfolio of fully let logistics properties in Romania, the Olympians Portfolio, (Note 27) issued a financial instrument, 35% of which consists of a convertible bond and 65% of which is made up of a warrant. Pursuant to issuing the instrument, the Company issued 17.066.560 Class A warrants which were exercised during 2017 at an exercise price of £0,10 per ordinary share and the Company proceeded at, beginning of 2018, with the issuance of 17.066.560 new ordinary shares corresponding to these warrants.

There are no Class A warrants in circulation as at the issuance date of the financial statements.

29.5 Class B Warrants issued

On 8 August 2011 the Company issued an amount of Class B Warrants for an aggregate corresponding to 12,5% of the issued share capital of the Company after the exercise date. Further to the resolution approved at the AGM of 30 December 2016 the exercise period of the Class B Warrants was extended until 30 June 2017, at an exercise price of the nominal value per Ordinary Share as at the date of exercise. The Class B Warrant Instruments have anti-dilution protection so that, in the event of further share issuances by the Company, the number of Ordinary Shares to which the holder of a Class B Warrant is entitled will be adjusted so that he receives the same percentage of the issued share capital of the Company (as nearly as practicable), as would have been the case had the issuances not occurred. This anti-dilution protection will freeze on the earlier of (i) the expiration of the Class B Warrants; and (ii) capital increase(s) undertaken by the Company generating cumulative gross proceeds in excess of USD 100.000.000.

As at 30 June 2017 there were 12.948.694 warrants in circulation corresponding to an equal amount of ordinary shares (1:1) and the Company received valid notices from holders of Class B warrants for the full exercise of their warrants and proceeded with the issue of 12.948.694 new ordinary shares.

There are no Class B warrants in circulation.

29.6 Capital Structure as at the end of the reporting period

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

Number of		(as at) 31 December 2018	(as at) 31 December 2017
Ordinary shares of €0,01	Issued and Listed on AIM	127.270.481	103.589.550
Class A Warrants			-
Class B Warrants			-
Total number of Shares	Non-Dilutive Basis	127.270.481	103.589.550
Total number of Shares	Full Dilutive Basis	127.270.481	103.589.550
Options
Shares issued in 2018 for exercise of warrants and options in 2017			17.076.560

29. Share capital (continued)

29.6 Capital Structure as at the end of the reporting period (continued)

Redeemable Preference Class A Shares

The Redeemable Preference Class A Shares which do not have voting or dividend rights where issued as part of the Innovations Logistics Park acquisition consideration. As at the reporting date all of the Redeemable Preference Class A Shares have been redeemed and the Company, following the approval received by the AGM on 29 December 2017, proceeded in their cancellation within 2018.

Redeemable Preference Class B Shares

The Redeemable Preference Class B Shares, issued to BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L. as part of the Praktiker Craiova asset acquisition do not have voting rights but have economic rights at par with ordinary shares. As at the reporting date all of the Redeemable Preference Class B Shares have been redeemed but the Company is in legal proceedings with the vendor in respect of a final settlement (Notes 34, 42.4).

29.7 Other share capital related matters

Pursuant to decisions taken by the AGM of 30^th December 2016, the Board has been authorised and empowered to:

- issue up to 200.000.000 ordinary shares of €0,01 each at an issue price as the Board may from time to time determine (with such price being at a discount to the net asset value per share) so as to facilitate the profitable growth of the Group. Such explicit authority for the issuance of such shares expires on 31 December 2018. Since 31 December 2016 and until the date of this report, the Board had issued 37.255.758 shares under its mandated authority.

- issue Class A Warrants, to subscribe for up to 350% of the outstanding ordinary shares at the time of issuance of the Class A Warrants, upon such terms and conditions as may be determined by the Board (with such price being at a discount to the net asset value per share). Such Class A Warrants may be offered to various third-party entities a) for participating in the capital raising of the Company, b) for their contribution in creating value for the Group and c) for their assistance with fundraising. Such explicit authority for the issuance of such warrants expires on 31 December 2018. The Company issued 17.066.560 Class A warrants under this authority during 2017 which were also exercised.

Pursuant to decisions taken by the AGM of 29^th December 2017, the Company proceeded with the following actions H1 2018 (which finalized during June:

- That the balance of the share premium account of the Company will be reduced by €53.569.295 and will be set off against carried forward losses of the Company amounting to €53.569.295.

- That the balance of the share premium account of the Company will be reduced by €698.650 and that the said amount will be set off against any outstanding balances between the Company, Myrian Nes Ltd and Theandrion Estates Ltd related to the Redeemable Preference Class A Shares.

- That the authorised share capital of the Company, as well as the issued share capital of the Company each will be reduced, by the cancellation of 785.000 Redeemable Preference Class A Shares of €0,01 each, namely 777.150 Redeemable Preference Class A Shares of €0,01 each in the name of Myrian Nes Ltd and 7.850 Redeemable Preference Class A Shares of €0,01 each in the name of Theandrion Estates Ltd and the amount reduced will be set off against any outstanding balances between the Company, Myrian Nes Ltd and Theandrion Estates Ltd.

- That the articles of association of the Company will be amended by adding the following new Regulation 3.10 after Regulation 3.9:

"Subject to the provisions of the Law, the Company may purchase its own shares (including any redeemable shares)."

Pursuant to decisions taken by the AGM of 31^st December 2018, the Board has been authorized and empowered to:

- issue and allot up to 20.000.000 ordinary shares of euro 0,01 each, at an issue price as the Board may in its sole unfettered discretion from time to time determine (and such price may be at a discount to the net asset value per share in the Company which is in issue immediately prior to the issue of the new shares) and for such purpose any rights of pre-emption and other rights the Company's shareholders have or may have by operation of law and/or pursuant to the articles of association of the Company and/or otherwise in connection with the authority conferred on the Board for the issue and allotment of shares in the Company as contemplated in this resolutions or the issue of shares in the Company pursuant to such authority be and are hereby irrevocably and unconditionally waived. The authority conferred by this resolution shall expire on 31 December 2019.

- issue up to 15.000.000 Class A Warrants, being convertible to up to 15.000.000 ordinary share of euro 0,01 each in the Company upon exercise of the Warrants, with such terms and conditions and at an issue price as the Board may in its sole unfettered discretion from time to time determine (and such price may be at a discount to the net asset value per share in the Company which is in issue immediately prior to the issue of the Warrants)and for such purpose any rights of pre-emption and other rights the Company's shareholders have or may have by operation of law and/or pursuant to the articles of association of the Company and/or otherwise in connection with the authority conferred on the Board for the issue and allotment of shares or Warrants in the Company as contemplated in this resolution or the issue and allotment of shares or Warrants in the Company pursuant to such authority be and are hereby irrevocably and unconditionally waived. The authority conferred by this resolution shall expire on 31 December 2019.

30. Foreign Currency Translation Reserve

Exchange differences related to the translation from the functional currency to EUR 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 EUR in the countries where the Company's subsidiaries' functional currencies are not EUR.

31. Non-Controlling Interests

Non-controlling interests represent the percentage participations in the respective entities not owned by the Group:

%	Non-controlling interest portion
Group Company	31 Dec 2018	31 Dec 2017
LLC Almaz-Press-Ukraine	45,00	45,00
Ketiza Holdings Limited	10,00	10,00
Ketiza Real Estate Srl	10,00	10,00
Ram Real Estate Management Limited	50,00	50,00
Iuliu Maniu Limited	55,00	55,00
Moselin Investments Srl	55,00	55,00
Rimasol Enterprises Limited	55,76	55,76
Rimasol Real Estate Srl	55,76	55,76
Ashor Ventures Limited	55,76	55,76
Ashor Development Srl	55,76	55,76
Jenby Ventures Limited	55,70	55,70
Jenby Investments Srl	55,70	55,70
Ebenem Limited	55,70	55,70
Ebenem Investments Srl	55,70	55,70
SPDI Real Estate Srl	50,00	50,00

32. Borrowings

	Project	31 Dec 2018	31 Dec 2018	31 Dec 2017
		Continued operations	Discontinued operations
		€	€	€
Principal of bank Loans
Banca Comerciala Romana /Tonescu Finance	Monaco Towers	-	-	924.562
Bancpost SA	Blooming House	-	614.441	1.080.834
Alpha Bank Romania	Romfelt Plaza	-	191.723	686.693
Alpha Bank Romania	EOS Business Park	-	485.663	828.599
Bancpost SA	GreenLake - Parcel K	-	3.249.926	3.249.926
Alpha Bank Bulgaria	Boyana Residence	-	2.258.128	2.404.187
Alpha Bank Bulgaria	Boyana Residence (Sertland Loan)	-	666.474	678.162
Eurobank Ergasias SA	Victini Logistics	-	10.658.950	11.235.480
Piraeus Bank SA	GreenLake-Phase 2	-	2.525.938	2.525.938
Marfin Bank Romania	Praktiker Craiova	-	-	4.298.128
Bancpost SA	Kindergarten - SPDI RE	-	773.206	912.790
Loans from other 3^rd parties and related parties (Note 41.5)		387.683	177.473	738.742
Overdrafts		499	1.420	6.581
Total principal of bank and non-bank Loans		388.182	21.603.342	29.570.622
Interest accrued on bank loans		1	960.075	698.200
Interests accrued on non-bank loans		14.107	42.057	217.643
Total		402.290	22.605.474	30.486.465

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Current portion	22.034	1.652.875	5.162.087
Non-current portion	380.256	20.952.599	25.324.378
Total	402.290	22.605.474	30.486.465

32. Borrowings (continued)

SecMon Real Estate Srl entered (2011) into a loan agreement with Banca Comerciala Romana for a credit facility for financing part of the acquisition of the Monaco Towers apartments. As at the end of the reporting period the balance of the loan was €924.562 and bears interest of EURIBOR 3M plus 5%. In June 2016, Banca Comerciala Romana has assigned the loan, all rights and securities to Tonescu Finance Srl. The loan, which is currently expired, is secured by all assets of SecMon Real Estate Srl, as well as its shares. During 2017 Tonescu Finance commenced against SecMon Real Estate Srl legal proceedings and in order for SecMon Real Estate Srl to protect itself entered voluntarily into an insolvency process in January 2018. The entering of SecMon Real Estate Srl in the insolvency process means loss of control as per the definition of IFRS 10. As such Sec Mon Srl is not consolidated in the present financial statements (Note 8).

Ketiza Real Estate Srl entered (2012) into a loan agreement with Bancpost SA for a credit facility for financing the acquisition of the Blooming House and 100% of the remaining (without VAT) construction works of Blooming House project. As at the end of the reporting period the balance of the loan was €614.441. The loan bears interest of EURIBOR 3M plus 3,5% and matures in 2019. The bank loan is secured by all assets of Ketiza Real Estate Srl, as well as its shares and is being repaid through sales proceeds. The Company has requested extension of the loan and waiver in relation to the Arcona transaction in order the SPV with its loan to be transferred effectively. An approval for all pending requests is expected in the following period.

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. During 2018, SecRom Real Estate Srl was merged with N-E Real Estate Park First Phase Srl as a result the loan was transferred to N-E Real Estate Park First Phase Srl. As at the end of the reporting period, the balance of the loan was €191.723, bears interest of EURIBOR 1M+4.25% and is repayable on the basis of investment property sales. The loan is secured by all assets of SecRom Real Estate Srl, currently held by N-E Real Estate Park First Phase Srl, as well as its shares and is being repaid through sales proceeds with a maturity 2021.

Moselin Investments Srl entered (2010) into a construction loan agreement with Bancpost SA covering the construction works of Parcel K GreenLake project. As at the end of the reporting period the balance of the loan was €3.249.926 and bears interest of EURIBOR 3M plus 2,5%. Following restructuring implemented during 2017 the loan maturity was extended to 2022. The loan is secured with the property itself and the shares of Moselin Investments Srl and is being repaid through sales proceeds.

Boyana Residence ood entered (2011) into a loan agreement with Alpha Bank Bulgaria for a construction loan related to the construction of the Boyana Residence project (finished in 2014). As at the end of the reporting period the balance of the loan was €2.258.128 and bears interest of EURIBOR 3M plus 5,75%. The loan maturity was extended following negotiation with the bank to March 2019. The loan currently is being repaid through sales proceeds. The facility is secured through a mortgage over the property and a pledge over the company's shares, as well as those of Sertland Properties Limited. The Company has provided corporate guarantees for this loan. The Company has requested extension of the loan and waiver in relation to the Arcona transaction in order the SPV with its loan to be transferred effectively. An approval for all pending requests is expected in the following period.

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 at the end of the reporting period the balance of the loan was €666.474 and bears interest of EURIBOR 3M plus 5,75%. The loan maturity was extended following negotiation with the bank to March 2019. The loan currently is being repaid through sales proceeds of Boyana Residence apartments. The loan is secured with a pledge on company's shares, and a corporate guarantee by SEC South East Continent Unique Real Estate (Secured) Investments Limited. The Company has requested extension of the loan and waiver in relation to the Arcona transaction in order the loan to be transferred effectively. An approval for all pending requests is expected in the following period.

Victini Logistics Park S.A. entered (April 2015) into a loan agreement with EUROBANK SA to refinance the existing debt facility related to Victini Logistics. As at the end of the reporting period the balance of the loan is €10.658.950 and bears interest of EURIBOR 6M plus 3,2%+30% of an asset swap which if negative total spread is accounted for 4,9%. The loan is repayable by 2022, has a balloon payment of €8.660.000 and is secured by all assets of Victini Logistics Park S.A., as well as its shares.

SEC South East Continent Unique Real Estate (Secured) Investments Limited has a debt facility with Piraeus Bank for the acquisition of the GreenLake land in Bucharest Romania. As at the end of the reporting period the balance of the loan was €2.525.938 plus accrued interest €471.112 and bears interest of EURIBOR 3M plus 5% plus the Greek law 128/75 0,6% contribution. The loan matured in September 2023

During 2018, BlueBigBox 3 Srl (Praktiker Craiova) sold its property and repaid its loan to Marfin Bank Romania.

N-E Real Estate Park First Phase Srl entered in 2016 into a loan agreement with Alpha Bank Romania for a credit facility of €1.000.000 for working capital purposes. As at the end of the reporting period, the balance of the loan was €485.663, bears interest of EURIBOR 1M+4,5% and is repayable from the free cash flow resulting from the rental income of company's property. The loan matures in April 2024 and is secured by a second rank mortgage over assets of SecRom Real Estate Srl, which has been absorbed by First Phase, as well as its shares.

SPDI Real Estate Srl (Kindergarten) has a loan agreement with Bancpost SA Romania. As at the end of the reporting period the balance of the loan was €773.206 and bears interest of Euribor 3m plus 4,6% per annum. The loan is repayable by 2027.

Loans from other 3^rd parties and related parties includes borrowings from non-controlling interests. During the last eight years and in order to support the GreenLake project the non-controlling shareholders of Moselin Investments Srl, Rimasol Enterprises Limited and SPDI Real Estate (other than the Group) have contributed their share of capital injections by means of shareholder loans. The loans bear interest between 5% and 7% annually.

Loans from other 3^rd parties and related parties includes also loans from related parties provided as bridge financing for future property acquisitions (Note 41.5).

32. Borrowings (continued)

Α) Loans from Directors reflects loans provided from 3 Directors as bridge financing for future property acquisitions. The loans bear interest 8% annually and are repayable on 31 March 2019. The Directors have accepted the extension of the loans until year end and relevant documentation process is currently in place.

Β) PM Capital Inc., one of the Company's largest shareholders lent the Company in January 2018 €1m to be used for general working capital purposes and for staged payments towards the acquisition of up to a 50% interest in a portfolio of fully let logistics properties in Romania, the Olympians Portfolio. The Loan had interest initially at a rate of 8,5% until the end of Q1 2018, when increased to 11% until its full repayment on 8 October 2018.

33. Bonds

The Company in order to acquire up to a 50% interest in a portfolio of fully let logistics properties in Romania, the Olympians Portfolio, (Notes 27 and 29.4) issued a financial instrument, 35% of which consists of a convertible bond and 65% of which is made up of a warrant. The convertible loan element of the instrument which was in the value of €1.033.842 bears a 6,5% coupon, has a 7 year term and is convertible into ordinary shares of the Company at the option of the holder at 25p. starting from 1 January 2018.

34. Trade and other payables

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

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Payables to third parties	3.213.848	924.137	3.640.233
Payables to related parties (Note 41.2)	743.139	-	2.673.808
Deferred income from tenants	-	8.316	39.431
Accruals	94.905	150.324	459.690
Payables due for construction	-	417.826	408.436
Pre-sale advances	123.044	-	116.501
Total	4.174.936	1.500.603	7.338.099

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Current portion	4.174.936	1.074.460	6.920.308
Non-current portion	-	426.143	417.791
Total	4.174.936	1.500.603	7.338.099

Payables to third parties represents: a) payables due to Bluehouse Capital as a result the Redeemable Convertible Class B share redemption (Note 29.6) which is under legal proceedings for a final settlement (Note 42.4) and b) amounts payable to various service providers including auditors, legal advisors, consultants and third party accountants related to the current operations of the Group.

Payables to related parties represent amounts due to directors and accrued management remuneration, as well as the balances with Secure Management Ltd and Grafton Properties (Note 41.2). Furthermore as of 31 December 2017 an amount of €1.916.392 represents advances received by the investors who participated in the warrant instrument issued by the Company in 2017 and for which shares were issued during January 2018.

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

Accruals mainly include the accrued, administration fees, accounting fees, facility management and other fees payable to third parties.

Payables for construction represent amounts payable to the contractor of Bela Logistic Park in Odessa. The settlement was reached in late 2011 on the basis of maintaining the construction contract in an inactive state (to be reactivated at the option of the Group), while upon reactivation of the contract or termination of it (because of the sale of the asset) the Group would have to pay an additional UAH 5.400.000 (~USD 160.000) payable upon such event occurring. Since it is uncertain when the latter amount is to be paid, it has been discounted at the current discount rates in Ukraine and is presented as a non-current liability. Payables for construction also include an amount of ~€245.000 payable to Boyana's constructor which has been withheld as Good Performance Guarantee.

Pre-sale advances reflect the advance received in relation to Kiyanovskiy Residence pre-sale agreement which upon non closing of the said sale part of which will be returned to the prospective buyer.

35. Deposits from Tenants

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Deposits from tenants non-current	-	219.274	187.976
Total	-	219.274	187.976

Deposits from tenants appearing under non-current liabilities include the amounts received from the tenants of Innovations Logistics Park, EOS Business Park, Victini Logistics and companies representing residential segment as advances/guarantees and are to be reimbursed to these clients at the expiration of the lease agreements.

36. Provisions and Taxes Payables

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Corporate income tax - non current	333.881	-	489.019
Defence tax - non current	28.129	15	24.373
Other taxes including VAT payable - non current	-	-	88.808
Tax provision - non current	399.450	-	399.450
Corporate income tax - current	620.557	67.296	195.040
Other taxes including VAT payable - current	31.767	365.217	418.819
Provisions - current	43	66.002	51.047
Total Provisions and Taxes Payables	1.413.827	498.530	1.666.556

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.

Non-current amounts represent the part of the settlement plan agreed with the Cyprus tax authorities to be paid within the next five years.

37. Finance Lease Liabilities

As at the reporting date the finance lease liabilities consist of the non-current portion of €10.076.579 and the current portion of €393.433 (31 December 2017: €10.435.241 and €391.002, accordingly).

Discontinued operations

31 Dec 2018	Note	Minimum lease payments	Interest	Principal
		€	€	€
Less than one year	44.2 & 44.6	886.771	494.098	392.673
Between two and five years		3.666.346	1.768.504	1.897.842
More than five years		8.861.576	686.781	8.174.795
		13.414.693	2.949.383	10.465.310
Accrued Interest				4.702
Total Finance Lease Liabilities				10.470.012

31 Dec 2017	Note	Minimum lease payments	Interest	Principal
		€	€	€
Less than one year	44.2 & 44.6	899.834	508.853	390.981
Between two and five years		3.583.886	1.832.599	1.751.287
More than five years		9.747.325	1.064.231	8.683.094
		14.231.045	3.405.683	10.825.362
Accrued Interest				881
Total Finance Lease Liabilities				10.826.243

37.1 Land Plots Financial Leasing

The Group holds land plots in Ukraine under leasehold agreements which in terms of the accounts are classified as finance leases. Lease obligations are denominated in UAH. The fair value of lease obligations approximate to their carrying amounts as included above. Following the appropriate discounting, finance lease liabilities are carried at €60.498 under current and non-current portion. The Group's obligations under finance leases are secured by the lessor's title to the leased assets.

37. Finance Lease Liabilities (continued)

37.2 Sale and Lease Back Agreements

A. Innovations Logistics Park

In May 2014 the Group concluded the acquisition of Innovations Logistics Park in Bucharest, owned by Best Day Real Estate Srl, through a sale and lease back agreement with Piraeus Leasing Romania SA. As at the end of the reporting period the balance is €7.007.476, bearing interest rate at 3M Euribor plus 4,45% margin, being repayable in monthly tranches until 2026 with a balloon payment of €5.244.926. At the maturity of the lease agreement Best Day Real Estate Srl will become owner of the asset.

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

1. Best Day Real Estate Srl pledged its future receivables from its tenants.

2. Best Day Real Estate Srl pledged its shares.

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

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

SPDI provided a corporate guarantee in favor of the bank towards the liabilities of Best Day Real Estate Srl arising from the sale and lease back agreement.

In late February 2017 the Group finally agreed and signed (following twelve months of discussions) an amended sale and lease back agreement with Piraeus Leasing Romania for Innovations Logistics Park in Bucharest, governing the allocation of the Nestle Romania, early termination fee of ~€1,6 million payable to SPDI.

B. EOS Business Park

In October 2014 the Group concluded the acquisition of EOS Business Park in Bucharest, owned by N-E Real Estate Park First Phase Srl, through a sale and lease back agreement with Alpha Bank Romania SA. As at the end of the reporting period the balance is €3.402.040 bearing interest rate at 3M Euribor plus 5,25% margin, being repayable in monthly tranches until 2024 with a balloon payment of €2.546.600. At the maturity of the lease agreement by N-E Real Estate Park First Phase Srl will become owner of the asset.

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

1. N-E Real Estate Park First Phase Srl pledged its future receivables from its tenants.

2. N-E Real Estate Park First Phase Srl pledged Bank Guarantee receivables from its tenants.

3. N-E Real Estate Park First Phase Srl pledged its shares.

4. N-E Real Estate Park First Phase Srl pledged all current and reserved accounts opened in Alpha Bank Romania SA.

5. N-E Real Estate Park First Phase Srl is obliged to provide cash collateral in the amount of €300.000 in Alpha Bank Romania SA, in equal annual installments starting with the 5^th year of the agreement.

6. SPDI provided a corporate guarantee in favor of the bank towards the liabilities of N-E Real Estate Park First Phase Srl arising from the sales and lease back agreement.

38. Restructuring of the business

During 2016 the non-controlling shareholders of the companies related to GreenLake project (Moselin Investments Srl, Iuliu Maniu Limited, RAM Real Estate Management Limited, Rimasol Enterprises Limited, Rimasol Real Estate Srl, Ashor Ventures Limited, Ashor Development Srl, Ebenem Limited, Ebenem Investments Srl, Jenby Ventures Limited and Jenby Investments Srl) in agreement with the Group capitalized the bigger part of their capital injections by means of shareholder loans and payables effected from 2008 onwards. An amount of €6.641.997 from such loans and payables have been transferred to the equity section while the process of capitalization was partially finalised in 2017 with the remaining finalised within 2018.

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

a. Weighted average number of ordinary shares

	31 Dec 2018	31 Dec 2017
Issued ordinary shares capital	127.270.481	103.589.550
Weighted average number of ordinary shares (Basic)	125.644.043	96.991.423
Diluted weighted average number of ordinary shares	125.644.043	103.326.122

b. Basic diluted and adjusted earnings per share

Earnings per share	31 Dec 2018	31 Dec 2017
	€	€
Loss after tax attributable to owners of the parent	(3.752.481)	(38.532.276)
Basic	(0,03)	(0,40)
Diluted	(0,03)	(0,37)

39. Earnings and net assets per share attributable to equity holders of the parent (continued)

c. Net assets per share

Net assets per share	31 Dec 2018	31 Dec 2017
	€	€
Net assets attributable to equity holders of the parent	35.608.276	36.350.558
Number of ordinary shares	127.270.481	103.589.550
Diluted number of ordinary shares	125.644.043	103.589.550
Basic	0,28	0,35
Diluted	0,28	0,35

40. Segment information

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

Commercial-Industrial

· Warehouse segment - Victini Logistics, Innovations Logistics Park, Terminal Brovary Logistics Park

· Office segment - Eos Business Park - Delea Nuova (Associate)

· Retail segment - Craiova Praktiker and Kindergarten of GreenLake

Residential

· Residential segment

Land Assets

· Land assets

There are no sales between the segments.

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

Continued Operations

Profit and Loss for the year 2018

	Warehouse	Office	Retail	Residential	Land Plots	Corporate	Total
	€	€	€	€	€	€	€
Segment profit
Property Sales income (Note 14)	-	-	6.517.181	-	-	-	6.517.181
Cost of Property sold (Note 14)	-	-	(7.362.362)	-	-	-	(7.362.362)
Rental income (Note10)	-	-	494.347	-	-	137.289*	631.636
Service charges and utilities income (Note 10)	-	-	-	-	-	9.534*	9.534
Service and Property Management income (Note 10)	-	-	-	-	-	128.293	128.293
Asset operating expenses (Note 11)	-	-	(116.770)	-	(1.549)	-	(118.319)
Profit from discontinued operation (Note 9)	934.156	1.377.516	68.206	(317.594)	(1.501.833)	-	560.451
Segment profit	934.156	1.377.516	(399.398)	(317.594)	(1.503.382)	275.116	366.414
Administration expenses (Note 12)							(1.768.847)
Other (expenses)/income, net (Note 16)							(31.716)
Finance income (Note 17)							686.183
Interest expenses (Note 17)							(329.412)
Other finance costs (Note 17)							(24.329)
Foreign exchange losses, net (Note 18a)							(71.390)
Income tax expense (Note 19)							(613.034)
Profit from discontinued operations (Note 9)							(1.966.350)
Exchange difference on I/C loan to foreign holdings (Note 18b)							1.850
Exchange difference on translation foreign holdings (Note 30)							421.086
Total Comprehensive Income							(3.329.545)

40. Segment information (continued)

* It is noted that part of the rental and service charges/ utilities income related to Innovations Logistics Park (Romania) is currently invoiced by the Company as part of a relevant lease agreement with the Innovations SPV and the lender, however the asset, through the SPV, is planned to be transferred as part of the transaction with Arcona Property Fund N.V. Upon a final agreement for such transfer, the Company will negotiate with the lender its release from the aforementioned lease agreement, and if succeeds, upon completion such income will be also transferred.

Continued Operations

Profit and Loss for the year 2017

	Warehouse	Office	Retail	Residential	Land Plots	Corporate	Total
	€	€	€	€	€		€
Segment profit
Rental income (Note 10)	386.245	-	600.503	-	-		986.748
Service charges and utilities income (Note 10)	30.206	-	-	-	-		30.206
Service and Property Management income (Note 10)	928.697	-	-	223.080		11.771	1.163.548
Valuation gains/(losses) from investment property (Note 13)	-	-	194.720	-	(13.618)		181.102
Gain on disposal of subsidiary (Note 21b)	(221.990)	-	-	-	1.705.727		1.483.737
Asset operating expenses (Note 11)	(34.581)	-	(84.768)	-	(3.912)		(123.261)
Impairment of inventory and provisions (Note 15)	-	-	-	-	150.000		150.000
Profit from discontinued operation (Note 9)	(16.008)	1.497.628	591.381	(322.927)	586.044	-	2.336.118
Segment profit	1.072.569	1.497.628	1.301.836	(99.847)	2.424.241	11.771	6.208.198
Administration expenses (Note 12)							(1.994.481)
Other (expenses)/income, net (Note 16)							(378.076)
Finance income (Note 17)							3.563
Interest expenses (Note 17)							(306.549)
Other finance costs (Note 17)							(82.942)
Profit from discontinued operations (Note 9)							(3.409.768)
Foreign exchange losses, net (Note 18a)							(695.043)
Forex transfer on disposal of foreign operation (Note 18b)							(37.352.923)
Income tax expense (Note 19)							(524.255)
Exchange difference on I/C loan to foreign holdings (Note 18b)							37.349.385
Exchange difference on translation foreign holdings (Note 30)							(615.583)
Total Comprehensive Income							(1.798.474)

40. Segment information (continued)

Discontinued Operations

Profit and Loss for the year 2018

	Warehouse	Office	Retail	Residential	Land Plots	Corporate	Total
	€	€	€	€	€	€	€
Segment profit
Property Sales income (Note 14)	-	-	271.437	1.227.954	194.952	-	1.694.343
Cost of Property sold (Note 14)	-	-	(350.000)	(1.265.023)	(141.098)	-	(1.756.121)
Rental income (Note 10)	1.214.772	598.123	115.625	34.507	697	-	1.963.724
Service charges and utilities income (Note 10)	36.365	78.015	-	3.352	479	-	118.211
Sale of electricity (Note 10)	294.773	-	-	-	-	-	294.773
Service and Property Management income (Note 10)	-	-	-	2.167	-	-	2.167
Valuation gains/(losses) from investment property (Note 13)	(289.633)	422.971	44.642	1.361	(1.397.638)	-	(1.218.297)
Share of profits/(losses) from associates (Note 22)	-	364.920	-	-	-	-	364.920
Asset operating expenses (Note 11)	(322.122)	(86.513)	(13.498)	(24.711)	(159.225)	-	(606.069)
Other (expenses)/income, net (Note 16)	-	-	-	(297.200)			(297.200)
Segment profit	934.155	1.377.516	68.206	(317.593)	(1.501.833)	-	560.451
Administration expenses (Note 12)							(260.714)
Other (expenses)/income, net (Note 16)							(66.235)
Finance income (Note 17)							9.979
Interest expenses (Note 17)							(1.507.178)
Other finance costs (Note 17)							(35.402)
Foreign exchange losses, net (Note 18a)							(10.233)
Income Tax (Note 19)							(96.567)
Loss for the year							(1.405.899)

40. Segment information (continued)

Discontinued Operations

Profit and Loss for the year 2017

	Warehouse	Office	Retail	Residential	Land Plots	Corporate	Total
	€	€	€	€	€	€	€
Segment profit
Property Sales income (Note 14)	-	-	-	535.818	-	-	535.819
Cost of Property sold (Note 14)	-	-	-	(575.323)	-	-	(575.324)
Rental income (Note 10)	1.227.266	581.567	76.676	99.550	-	-	1.985.059
Service charges and utilities income (Note 10)	36.092	75.550	-	24.294	-	-	135.936
Sale of electricity (Note 10)	321.365	-	-	-	-	-	321.365
Service and Property Management income (Note 10)	-	900	-	2.206	-	-	3.106
Valuation gains/(losses) from investment property (Note 13)	(1.234.463)	524.922	491.571	(368.642)	732.471	-	145.859
Gain/(loss) realized on acquisition of assets/subsidiary (Note 21a)	-	-	23.921	-	-	-	23.921
Share of profits/(losses) from associates (Note 22)	-	390.217	-	-	-	-	390.217
Asset operating expenses (Note 11)	(366.268)	(75.528)	(788)	(40.831)	(146.427)	-	(629.842)
Segment profit	(16.008)	1.497.628	591.380	(322.928)	586.044	-	2.336.116
Administration expenses (Note 12)							(353.532)
Other (expenses)/income, net (Note 16)							2.668
Finance income (Note 17)							9.813
Interest expenses (Note 17)							(1.623.033)
Other finance costs (Note 17)							(38.255)
Foreign exchange losses, net (Note 18a)							(1.335.517)
Income tax expense (Note 19)							(71.910)
Loss for the year							(1.073.650)

Total Operations

Balance Sheet as at 31 December 2018

	Warehouse	Office	Retail	Residential	Land plots	Corporate	Total
	€	€	€	€	€	€	€
Assets
Long-term receivables and prepayments	-	-	-	-	-	850	850
Assets held for sale	26.070.000	13.229.506	1.406.000	5.767.003	30.816.594	2.389.635	79.678.738
Segment assets	26.070.000	13.229.506	1.406.000	5.767.003	30.816.594	2.390.485	79.679.588

Tangible and intangible assets							3.674
Prepayments and other current assets							5.585.408
Cash and cash equivalents							282.713
Total assets							85.551.383
Liabilities associated with assets classified as held for disposal	17.882.585	4.079.598	967.338	618.113	9.747.126	1.999.133	35.293.893
Borrowings	-	-	-	41	459	401.790	402.290
Segment liabilities	17.882.585	4.079.598	967.338	618.154	9.747.585	2.400.923	35.696.183
Trade and other payables							4.174.936
Taxes payable and provisions							1.413.827
Bonds							1.122.470
Total liabilities							42.407.416

40. Segment information (continued)

Total Operations

Balance Sheet as at 31 December 2017

	Warehouse	Office	Retail	Residential	Land plots	Corporate	Total
	€	€	€	€	€		€
Assets
Investment properties	26.100.000	7.200.000	9.213.000	4.023.000	28.196.502	-	74.732.502
Investment properties under development	-	-	-	-	4.586.009	-	4.586.009
Long-term receivables and prepayments	315.636	-	-	301	-	851	316.788
Investments in associates	-	5.115.587	-	-	-	-	5.115.587
Inventory	-	-	-	4.812.550	-	-	4.812.550
Segment assets	26.415.636	12.315.587	9.213.000	8.835.851	32.782.511	851	89.563.436

Tangible and intangible assets							70.504
Prepayments and other current assets							5.846.584
Cash and cash equivalents							831.124
Total assets							96.311.648

Borrowings	11.263.690	828.797	5.412.006	8.745.351	3.642.295	594.326	30.486.465
Finance lease liabilities	7.157.476	3.629.853	-	-	38.914	-	10.826.243
Deposits from tenants	180.621	-	-	7.355	-	-	187.976
Redeemable preference shares	-	-	-	-	-	-	-
Segment liabilities	18.601.787	4.458.650	5.412.006	8.752.706	3.681.209	594.326	41.500.684
Trade and other payables							7.338.099
Taxes payable and provisions							1.666.556
Bonds							1.054.337
Total liabilities							51.559.676

Discontinued operations

Assets and Liabilities held for sale 2018

	Warehouse	Office	Retail	Residential	Land plots	Corporate	Total
	€	€	€	€	€	€	€
Assets
Investment properties	25.800.000	7.916.000	1.406.000	1.038.000	26.100.437	1.085.100	63.345.537
Investment properties under development	-	-	-	-	4.716.157	-	4.716.157
Long-term receivables and prepayments	270.000	271	-	-	-	-	270.271
Investments in associates	-	5.313.235	-	-	-	-	5.313.235
Financial asset at fair value through OCI				1			1
Inventory	-	-	-	4.604.044	-	-	4.604.044
Segment assets	26.070.000	13.229.506	1.406.000	5.642.045	30.816.594	1.085.100	78.249.245

Tangible and intangible assets							42.534
Prepayments and other current assets							682.134
Cash and cash equivalents							704.825
Total assets							79.678.738
Borrowings	10.658.951	677.558	967.338	614.999	9.686.628	-	22.605.474
Finance lease liabilities	7.007.474	3.402.040	-	-	60.498	-	10.470.012
Deposits from tenants	216.160	-	-	3.114	-	-	219.274
Segment liabilities	17.882.585	4.079.598	967.338	618.113	9.747.126	-	33.294.760
Trade and other payables							1.500.603
Taxes payable and provisions							498.530
Total liabilities							35.293.893

40. Segment information (continued)

Geographical information

	31 Dec 2018	31 Dec 2018	31 Dec 2017
Income (Note 10)	Continued operations	Discontinued operations
	€	€	€
Ukraine	-	-	148.799
Romania	594.566	1.098.059	1.939.048
Greece	-	1.280.119	1.319.891
Bulgaria	-	697	10.509
Cyprus *	174.897	-	1.207.723
Total	769.463	2.378.875	4.625.970
* It is noted that part of the rental and service charges/ utilities income related to Innovations Logistics Park (Romania) is currently invoiced by the Company as part of a relevant lease agreement with the Innovations SPV and the lender, however the asset, through the SPV, is planned to be transferred as part of the transaction with Arcona Property Fund N.V. Upon a final agreement for such transfer, the Company will negotiate with the lender its release from the aforementioned lease agreement, and if succeeds, upon completion such income will be also transferred.
Loss from disposal of inventory (Note 14a)	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Bulgaria	-	(13.553)	(43.870)
Total	-	(13.553)	(43.870)

Gain/(loss) from disposal of investment properties (Note 14b)	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Romania	(845.181)	(285.098)	4.366
Total	(845.181)	(285.098)	4.366

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Carrying amount of assets (investment properties, associates, inventory and Financial asset at fair value through OCI)
Ukraine	-	10.829.694	10.589.511
Romania	-	42.917.588	53.514.587
Greece	-	15.200.000	16.100.000
Bulgaria	-	8.834.044	9.042.550
Total	-	77.781.326	89.246.648

41. Related Party Transactions

The following transactions were carried out with related parties:

41.1 Income/ Expense

41.1.1 Income

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€		€
Interest Income on loan to related parties	4.600	-	2.466
Interest Income from loan to associates	325	9.366	9.367
Total	4.925	9.366	11.833

Interest income on loan to related parties relates to interest income from Delia Lebada Srl and interest income from associates relates to interest income from GreenLake Development Srl.

41. Related Party Transactions (continued)

41.1 Income/ Expense (continued)

41.1.2 Expenses

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Management Remuneration (Note 12)	391.359	-	562.584
Interest expenses on Narrowpeak and Secure Management Limited loan (Note 17)	637	-	8.392
Total	391.996	-	570.976

Management remuneration includes the remuneration of the CEO, the CFO, the Group Commercial Director, the Group Investment Director (until his departure in April 2017) and that of the Country Managers of Ukraine and Romania pursuant to the decisions of the remuneration committee.

41.2 Payables to related parties (Note 34)

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Board of Directors & Committees remuneration	80.776		231.461
Grafton Properties	123.549	-	123.549
Secure Management Services Ltd	19.319		13.341
Management Remuneration	519.495	-	387.464
Advances for warrants and options exercise	-	-	1.917.993
Total	743.139	-	2.673.808

41.2.1 Board of Directors & Committees

The amount payable represents remuneration payable to Non-Executive Directors until the end of the reporting period. The members of the Board of Directors pursuant to a recommendation by the remuneration committee and in order to facilitate the Company's cash flow, will receive part of their payment in shares of the Company. During 2018 the directors received 344.371 ordinary shares in lieu of their 2016 H1 remuneration amounting to GBP 120.530.

41.2.2 Loan payable to Grafton Properties

During the Company restructuring in 2011 and 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 as was the SC Secure Capital Limited name then, the total amount of USD 450.000. As at the reporting date the liability towards Grafton Properties, representing the Lenders, was USD 150.000, which is contingent on the Group raising USD 50m of capital in the markets.

41.2.3 Management Remuneration

Management Remuneration represents deferred amounts payable to the CEO of the Company.

41.2.4 Advances for warrants and options exercise

During 2017 (Note 29.4) the Company issued a warrant instrument and received by investors the amount of €1.916.392 for which it issued 17.066.560 ordinary shares during 2018. The Company issued also 10.000 shares to an ex-employee for exercise of his option for the amount of €1.601.

41.3 Loans from SC Secure Capital Limited to the Group's subsidiaries

SC Secure Capital Limited, the finance subsidiary of the Group provided capital in the form of loans to the Ukrainian subsidiaries of the Company so as to support the acquisition of assets, development expenses of the projects, as well as various operational costs. The following table presents the amounts of such loans which are eliminated for consolidation purposes, but their related exchange difference affects the equity of the Consolidated Statement of Financial Position.

Borrower	Limit -as at 31 Dec 2018	Principal as at 31 Dec 2018	Principal as at 31 Dec 2017
	€	€	€
LLC "Aisi Ukraine"	23.062.351	21.711	12.488
LLC "Almaz-Press-Ukraine"	8.236.554	189.938	58.656
LLC "Aisi Ilvo"	150.537	78.890	66.897
Total	31.449.442	290.539	138.041

A potential Ukrainian Hryvnia weakening/strengthening by 10% against the US dollar with all other variables held constant, would result in an exchange difference on I/C loans to foreign holdings of (€23.950)/ €13.804 respectively, estimated on balances held at 31 December 2018.

41. Related Party Transactions (continued)

41.4 Loans to associates (Note 27)

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Loans to GreenLake Development Srl	8.374	282.842	273.476
Total	8.374	282.842	273.476

The loan was given to GreenLake Development Srl from Edetrio Holdings Limited. The agreement with Edetrio Holdings Limited was signed on 17 February 2012 and bears interest 5%. The maturity date is 30 April 2020.

41.5 Loans from related parties (Note 32)

	31 Dec 2018	31 Dec 2018	31 Dec 2017
	Continued operations	Discontinued operations
	€	€	€
Loan from Narrowpeak Consultants	5.256	-	55.032
Loan from Directors	375.000	-	500.000
Interest accrued on loans from related parties	14.107	-	27.298
Total	394.363	-	582.330

Loans from Directors reflects loans provided from 3 Directors as bridge financing for future property acquisitions. The loans bear interest 8% annually and are repayable on 31 March 2019. The Directors have accepted the extension of the loans until year end and relevant documentation process is currently in place.

42. Contingent Liabilities

42.1 Tax Litigation

The Group performed during the reporting period part of its operations in the Ukraine, within the jurisdiction of the Ukrainian tax authorities. The Ukrainian tax system can be characterized by numerous taxes and frequently changing legislation, which may be applied retroactively, open to wide and in some cases, conflicting interpretation. Instances of inconsistent opinions between local, regional, and national tax authorities and between the National Bank of Ukraine and the Ministry of Finance are not unusual. Tax declarations are subject to review and investigation by a number of authorities, which are authorised by law to impose severe fines and penalties and interest charges. Any tax year remains open for review by the tax authorities during the three following subsequent calendar years; however, under certain circumstances a tax year may remain open for longer. Overall following the sale of Terminal Brovary the exposure of the Group in Ukraine was significantly reduced.

The Group performed during the reporting period part of its operations also in Romania, Greece and Bulgaria. In respect of Romanian, Bulgarian and Greek taxation systems all are subject to varying interpretation and to constant changes, which may be retroactive. In certain circumstances the tax authorities can be arbitrary in certain cases.

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.

42.2 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.

42.3 Delia Lebada Srl debt towards Bank of Cyprus

Sec South East Continent Unique Real Estate (SECURED) Investment Limited has provided in 2007 a corporate guarantee to Bank of Cyprus in respect to the loan provided by the latter to its subsidiary Delia Lebada Srl, the owner of the Pantelimon Lake plot (Note 20.2). As the loan was in default, the bank had initiated an insolvency procedure. In July 2017 the Company concluded its discussions with the bank and settled all debts and guarantees following successful disposal of Delia Lebada plot (Note 21b). Provision was taken by management in 2015 for €700.000 while finally the Company as part of the sale of the asset and cancellation of the corporate guarantee paid €550.000 in final settlement and as such the difference of €150.000 was reversed in 2017 (Note 15).

42. Contingent Liabilities (continued)

42.4 Bluehouse accession case

BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L. filed in Cypriot courts in December 2018 lawsuit against the Company for the total amount of €5.042.421,87, in relation to the Praktiker Craiova acquisition in 2015, and the redemption of the Redeemable Preference Class A shares which were issued as part of the transaction to the vendor. The redemption of such shares was requested in 2016, and in lieu of such redemption the Company transferred to the vendor the 20% holding in Autounion asset which was used as a guarantee to the transaction for the effective redemption of the Redeemable Preference Class A shares. At the same time the Company has posted in its accounts a relevant payable provision for BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L. in the amount of €2.521.211 (Note 34). Management believes the Company has good grounds of defence and the amount already provided is adequate to cover an eventual final settlement.

42.5 Other Litigation

The Group has a number of other minor legal cases pending. Management does not believe that the result of these will have a substantial overall effect on the Group's financial position. Consequently no such provision is included in the current financial statements.

42.6 Other Contingent Liabilities

The Group had no other contingent liabilities as at 31 December 2018.

43. Commitments

The Group had no other commitments as at 31 December 2018.

44. Financial Risk Management

44.1 Capital Risk Management

The Group manages its capital to ensure adequate liquidity 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 32), bonds (Note 33), trade and other payables (Note 34) deposits from tenants (Note 35), financial leases (Note 37), taxes payable (Note 36) and equity attributable to ordinary or preferred shareholders.

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

44.2 Categories of Financial Instruments

	Note	31 Dec 2018	31 Dec 2018	31 Dec 2017
		Continued operations	Discontinued operations
		€	€	€
Financial Assets
Cash at Bank	28	282.713	704.825	831.124
Long-term Receivables and prepayments	25	850	270.271	316.788
Prepayments and other receivables	27	5.585.408	682.134	5.846.584
Financial Asset at fair value through OCI	23	-	1	-
Total		5.868.971	1.657.231	6.994.496

Financial Liabilities
Borrowings	32	402.290	22.605.474	30.486.465
Trade and other payables	34	4.174.936	1.500.603	7.338.099
Deposits from tenants	35	-	219.274	187.976
Finance lease liabilities	37	-	10.470.012	10.826.243
Taxes payable and provisions	36	1.413.827	498.530	1.666.556
Bonds	33	1.122.470	-	1.054.337
Total		7.113.523	35.293.893	51.559.676

44. Financial Risk Management (continued)

44.3 Financial Risk Management Objectives

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

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

44.4 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 in the way the Group measures and manages risks.

Foreign Exchange Risk

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

Interest Rate Risk

The Group's income and operating cash flows are substantially independent of changes in market interest rates as the Group has no significant interest-bearing assets. On December 31^st, 2018, cash and cash equivalent (including continued and discontinued operations) financial assets amounted to €987.537 (2017: €831.124) of which approx. €1.569 in UAH and €496.891 in RON (Note 28) while the remaining are mainly denominated in either USD or €.

The Group is exposed to interest rate risk in relation to its borrowings (including continued and discontinued operations) amounting to €23.007.764 (31 December 2017: €30.486.465) as they are issued at variable rates tied to the Libor or Euribor. Management monitors the interest rate fluctuations on a continuous basis and evaluates hedging options to align the Group's strategy with the interest rate view and the defined risk appetite. Although no hedging has been applied for the reporting period, such may take place in the future if deemed necessary in order to protect the cash flow of a property asset through different interest rate cycles.

Management monitors the interest rate fluctuations on a continuous basis and evaluates hedging options to align the Group's strategy with the interest rate view and the defined risk appetite. Although no hedging has been applied for the reporting period, such may take place in the future if deemed necessary in order to protect the cash flow of a property asset through different interest rate cycles.

As at 31 December 2018 the weighted average interest rate for all the interest bearing borrowing and financial leases of the Group stands at 3,83% (31 December 2017: 4,67%).

The sensitivity analysis for LIBOR and EURIBOR changes applying to the interest calculation on the borrowings principal outstanding as at 31 December 2018 is presented below:

Actual

as at 31.12.2018

+100 bps

+200 bps

Weighted average interest rate

3,83%

4,83%

5,83%

Influence on yearly finance costs

(324.007)

(648.014)

The sensitivity analysis for LIBOR and EURIBOR changes applying to the interest calculation on the borrowings principal outstanding as at 31 December 2017 is presented below:

Actual

as at 31.12.2017

+100 bps

+200 bps

Weighted average interest rate

4,67%

5,67%

6,67%

Influence on yearly finance costs

(403.580)

(807.159)

The Group's exposures to financial risk are discussed also in Note 7.

44.5 Credit Risk Management

The Group has no significant credit risk exposure. The credit risk emanating from the liquid funds is limited because the Group's counterparties are banks with high credit-ratings assigned by international credit rating agencies. The Credit risk of receivables is reduced as the majority of the receivables represent VAT to be offset through VAT income in the future. In respect of receivables from tenants these are kept to a minimum of 2 months and are monitored closely.

44. Financial Risk Management (continued)

44.6 Liquidity Risk Management

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

Continued Operations

31 December 2018	Carrying amount	Total Contractual Cash Flows	Less than one year	From one to two years	More than two years
	€	€	€	€	€
Financial assets
Cash at Bank	282.713	282.713	282.713	-	-
Prepayments and other receivables	5.585.408	5.585.408	5.585.408	-	-
Long-term Receivables and prepayments	850	850	-	-	850
Total Financial assets	5.868.971	5.868.971	5.868.121	-	850

Financial liabilities
Borrowings	420.290	439.631	33.991	405.640	-
Trade and other payables	4.174.936	4.174.936	4.174.936
Bonds issued	1.122.470	1.592.868	155.828	67.200	1.369.840
Taxes payable and provisions	1.413.827	1.413.827	652.367	761.460	-
Total Financial liabilities	7.131.523	7.621.262	5.017.122	1.234.300	1.369.840
Total net liabilities	1.262.552	1.752.291	(850.999)	1.234.300	1.368.990

Discontinued Operations

31 December 2018	Carrying amount	Total Contractual Cash Flows	Less than one year	From one to two years	More than two years
	€	€	€	€	€
Financial assets
Cash at Bank	704.825	704.825	704.825	-	-
Prepayments and other receivables	682.134	682.134	682.134	-	-
Financial asset at fair value through OCI	1	1	1	-	-
Long-term Receivables and prepayments	270.271	270.271	-	-	270.271
Total Financial assets	1.657.231	1.657.231	1.386.960	-	270.271

Financial liabilities
Borrowings	22.605.474	22.387.725	4.817.752	2.784.025	14.785.948
Trade and other payables	1.500.603	1.500.603	1.074.460	-	426.143
Deposits from tenants	219.274	219.274	-	-	219.274
Finance lease liabilities	10.470.012	13.414.693	886.771	856.269	11.671.653
Taxes payable and provisions	498.530	498.530	452.665	45.865	-
Total Financial liabilities	35.293.893	38.020.825	7.231.648	3.686.159	27.103.018
Total net liabilities	33.636.662	36.363.594	5.844.688	3.686.159	26.832.747

44. Financial Risk Management (continued)

44.6 Liquidity Risk Management

31 December 2017	Carrying amount	Total Contractual Cash Flows	Less than one year	From one to two years	More than two years
	€	€	€	€	€
Financial assets
Cash at Bank	831.124	831.124	831.124	-	-
Prepayments and other receivables	5.846.584	5.846.584	5.846.584	-	-
Long-term Receivables and prepayments	316.788	316.788	-	-	316.788
Total Financial assets	6.994.496	6.994.496	6.677.708	-	316.788

Financial liabilities
Borrowings	30.486.465	30.486.465	5.162.087	4.072.514	21.251.864
Trade and other payables	7.338.099	7.338.099	6.920.308	-	417.791
Deposits from tenants	187.976	187.976	-	-	187.976
Finance lease liabilities	10.826.243	14.231.045	899.834	880.913	12.450.298
Bonds issued	1.054.337	1.054.337	20.495	-	1.033.842
Taxes payable and provisions	1.666.556	1.666.556	664.906	1.001.650	-
Total Financial liabilities	51.559.676	54.964.478	13.667.630	5.955.077	35.341.771
Total net liabilities	44.565.180	47.969.982	6.989.922	5.955.077	35.024.983

45. Events after the end of the reporting period

a) Arcona Property Fund N.V. transaction

Following the conditional Implementation Agreement signed between the Company and Arcona Property Fund N.V. in December 2018, for the sale of Company's non-Greek portfolio of assets in an all share transaction, the two parties have been engaged in extensive discussions for formulating the transaction which has been decided to be consummated in three steps.

During H1 2019, the parties conducted mutual due diligence, engaged in extensive discussions with the lending institutions from which relevant waivers and approvals have been requested, and performed third party property valuations. Currently the parties negotiate terms for the Framework Agreement, which will superintend the total process, and the transaction terms of the first step of the transaction which includes assets in Ukraine and Bulgaria. The first step of the transaction is expected to close within July 2019 and the overall transaction to be finalized within the current year.

b) Loans from shareholders

During Q1 2019 the Company received two short terms loans from two of its shareholders, with the purpose of financing working capital needs and expenses related to the transaction with Arcona Property Fund N.V. In particular the Company borrowed from Badoli Investments Limited the amount of €200.000 at 8% interest rate payable by 30 June 2019, and from Mount Nelson S.A. the amount of €300.000 at 8% interest rate payable by 30 June 2019. For both loans there is an agreement for an extension of a short term period.

c) Sale of Victini Logistics Park S.A.

Following receipt of a number of expressions of interest, the Company is in the final stages of negotiations with one particular party with regards to signing an agreement, subject to a number of conditions precedent, including all necessary approvals being granted, to sell Victini Logistics Park S.A. - finalization of the agreement expected to occur during July 2019, which will then be followed by negotiations on definitive documentation.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

FR BDGDLRBDBGCI

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