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Prodea R.E.I.C. S.A.

Interim / Quarterly Report Sep 30, 2021

2663_ir_2021-09-30_726822b1-6dd7-4725-9287-d5d16518c294.pdf

Interim / Quarterly Report

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Prodea Real Estate Investment Company Société Anonyme

Interim Financial Report for the period from January 1 to June 30, 2021

This financial report has been translated from the original report that has been prepared in the Greek language. Reasonable care has been taken to ensure that this report represents an accurate translation of the original text. In the event that differences exist between this translation and the original Greek language financial report, the Greek language financial report will prevail over this document.

September 2021

Certification of the Board of Directors 3
Board of Directors' Semi- Annual Report 4
Independent Auditor's Review Report 17
Interim Condensed Statement of Financial Position 19
Interim Condensed Income Statement – 6 month period 20
Interim Condensed Statement of Total Comprehensive Income – 6 month period 21
Interim Condensed Income Statement – 3 month period 22
Interim Condensed Statement of Total Comprehensive Income – 3 month period 23
Interim Condensed Statement of Changes in Equity - Group 24
Interim Condensed Statement of Changes in Equity - Company 25
Interim Condensed Cash Flow Statement - Group 26
Interim Condensed Cash Flow Statement - Company 27
NOTE 1: General Information 28
NOTE 2: Summary of Significant Accounting Policies 29
2.1.
Basis of preparation of unaudited interim condensed Company and Consolidated financial statements 29
2.2.
Qualitative and quantitative information on the impacts of COVID-19 – Going concern29
2.3.
Adoption of International Financial Reporting Standards (IFRSs)32
NOTE 3: Financial Risks Management 34
3.1.
Financial Risk Management 34
3.2.
Fair Value Estimation of Financial Assets and Liabilities 34
NOTE 4: Critical Accounting Estimates and Judgments 35
NOTE 5: Segment Reporting 35
NOTE 6: Investment Property 40
NOTE 7: Property and Equipment 50
NOTE 8: Acquisition of Subsidiaries (business combinations and asset acquisitions) 52
NOTE 9:
Investments in Subsidiaries 53
NOTE 10: Investments in Joint Ventures 55
NOTE 11: Trade and Other Assets 56
NOTE 12: Cash and Cash Equivalents 57
NOTE 13: Restricted cash 58
NOTE 14: Assets and liabilities held for sale and discontinued operations58
NOTE 15: Share Capital 61
NOTE 16: Reserves 61
NOTE 17: Other Equity 61
NOTE 18: Non-controlling interests 61
NOTE 19: Borrowings 63
NOTE 20: Trade and Other payables 66
NOTE 21: Deferred Tax Assets and Liabilities 67
NOTE 22: Dividends per share 67
NOTE 23: Revenue 68
NOTE 24: Property Taxes-Levies 68
NOTE 25: Direct Property Related Expenses 68
NOTE 26: Personnel Expenses 69
NOTE 27: Other Expenses 69
NOTE 28: Finance costs 69
NOTE 29: Taxes 70
NOTE 30: Earnings per share 70
NOTE 31: Contingent Liabilities and Commitments 71
NOTE 32: Related Party Transactions 72
NOTE 33: Events after the Date of the Interim Financial Statements 76

Certification by Members of the Board of Directors pursuant to article 5 of Law 3556/2007

We, the members of the Board of Directors of the company Prodea Real Estate Investment Company Société Anonyme, certify that to the best of our knowledge:

  • (1) The interim condensed financial information for the six-month period ended June 30, 2021 have been prepared in accordance with International Accounting Standard for Interim Financial Statements (IAS 34) and present a true and fair view of the items in the Interim Condensed Statement of Financial Position, Interim Condensed Income Statement, Interim Condensed Statement of Comprehensive Income, Interim Condensed Statement of Changes in Equity and Interim Condensed Cash Flow Statement of the Company and of the companies included in the consolidation.
  • (2) The Board of Directors report for the six-month period ended June 30, 2021 truly and fairly presents all information required by Article 5, Para 6 of Law 3556/2007.

Athens, September 30, 2021

The Vice-Chairman of the BoD

and CEO The Executive Member of the BoD The Member of the BoD

Aristotelis Karytinos Thiresia Messari Athanasios Karagiannis

Semi-annual Board of Directors Report of "Prodea Real Estate Investment Company Société Anonyme"

on the Interim Condensed Financial Information for the six-month period ended 30.06.2021

In accordance with the provisions of L.3556/2007 and the Decisions no. 1/434/3.7.2007, 7/448/11.10.2007 and 8/754/14.4.2016 of the Hellenic Capital Market Commission, we present below the Board of Directors Report of the Company (hereinafter Board of Directors or BoD) on the Interim Condensed Financial Information for the period from January 1, 2021 to June 30, 2021 (all amounts are expressed in € thousand, unless otherwise stated).

FINANCIAL POSITION OF THE GROUP

During the first semester of 2021, the Group continued with its increased investment activity in real estate, with the new investments being fully attached to the Company's strategy for the development of its portfolio with selected placement to properties with significant investment characteristics (see "SIGNIFICANT EVENTS DURING THE FIRST SEMESTER OF 2021" below). The new acquisitions were financed by loans.

As of June 30, 2021, the Group's real estate portfolio consisted of 369 (December 31, 2020: 357) commercial properties (mainly retail and offices), of a total leasable area of 1,261 thousand sq.m.. Three hundred and fifteen (315) of those properties are located in Greece, mainly in prime areas. In addition, twenty four (24) properties are located in Cyprus, twenty six (26) properties are located in Italy, two (2) properties in Bulgaria and two (2) properties in Romania. As of June 30, 2021 the fair value of the Group's investment property amounted to €2,156,159 (December 31, 2020: €1,977,157) including the Company's owner-occupied property with a fair value of €9,448 as of June 30, 2021 (December 31, 2020: €9,232) and the land plot in Elliniko for the development of residential properties for sale owned by the Company with a fair value €4,563 as of June 30, 2021 (December 31, 2020: Nil), according to the valuation performed by the independent statutory valuers, i.e. the company "(representative of Cushman & Wakefield) and jointly the companies "P. Danos & Associates" (representative of BNP Paribas) and "Athinaiki Oikonomiki EPE" (representative of Jones Lang LaSalle) and the company "HVS Hospitality Consulting Services S.A." for the properties outside Italy and the company "Jones Lang LaSalle S.p.A." for the properties in Italy.

As of June 30, 2021, the subsidiary Aphrodite Hills Resort Limited has been classified as held for sale since all the criteria of IFRS 5 are met. As of June 30, 2021 the fair value of the properties owned by the aforementioned company (investment property, property and equipment and inventories) amounted to €86,690 (December 31, 2020: €88,700) (including the value of furniture, fixtures and equipment (June 30, 2021: €4,148, December 30, 2020: €3,990)).

In addition, the Company participates in the following companies which are presented in the line "Investment in joint ventures" in the Interim Condensed Statement of Financial Position as of June 30, 2021:

  • 40% in the company EP Chanion S.A., owner of two land plots in Chania, Crete. The fair value of the land plots, according to the valuation performed by the independent statutory valuer, as of June 30, 2021 amounted to €8,700. (December 31, 2020: €8,400).
  • 49% in the company Panterra S.A. which owns two adjacent commercial properties in Athens. The fair value of the properties, according to the valuation performed by the independent statutory valuer, as of June 30, 2021 amounted to €43,256. (December 31, 2020: €28,663).
  • 35% in the company RINASCITA S.A., which has a long-term lease agreement for a multistorey building in Athens. The fair value of the property, according to the valuation performed by the independent statutory valuer, as of June 30, 2021 amounted to €22,700. (December 31, 2020: €13,300).
  • 30% in the company PIRAEUS TOWER S.A. The PIRAEUS TOWER has signed a concession for the redevelopment and exploitation of Piraeus Tower with the Municipality of Piraeus. The fair value of the property, according to the valuation performed by the independent statutory valuer, as of June 30, 2021 amounted to €21,952. (December 31, 2020: €18,379).

• 45% in the company MHV Mediterranean Hospitality Venture Limited which owns the hotels The Landmark Nicosia and Parklane, a Luxury Collection Resort & Spa Limassol, in Cyprus and Nikki Beach Resort & Spa in Greece. The fair value of the properties (hotel facilities, investment properties, inventories and other equipment) of MHV as of June 30, 2021 amounted to €302,528 ((December 31, 2020: €63,710) (including the fair value of furniture, fixtures and equipment (June 30, 2021: €14,378, December 31, 2020: €1.492)).

As of June 30, 2021, the fair value of the Assets Under Management of Prodea amounted to €2,370,464 (December 31, 2020: €2,073,270). It is noted that fair value of the properties of the Investment in joint ventures has been calculated based on the participation percentage of Prodea in each company. For the companies that were classified as held for sale, the fair value of its properties has been calculated based on the final participation percentage of Prodea (i.e. the percentage after the completion of the sale of the investments).

Management always evaluates the optimal management of the Group's portfolio property, including a possible sale if market conditions are appropriate. During the first semester of 2021 and until the issue date of the Interim Condensed Financial Statements the Company completed the sale of two properties in Greece and the sale of part of its investments (see "SIGNIFICANT EVENTS DURING THE FIRST SEMESTER 2021" and '' EVENTS AFTER THE DATE OF THE INTERIM FINANCIAL STATEMENTS'' below).

SIGNIFICANT EVENTS DURING THE FIRST SEMESTER OF 2021

A. CORPORATE EVENTS

On June 8, 2021 the Annual General Meeting of the Company's Shareholders, approved the distribution of a total amount of €89,934 (i.e. 0.352 per share – amount in €) as dividend to its shareholders for the year 2020. Due to the distribution of interim dividend of a total amount of €35,769 (i.e. €0.14 per share – amount in €), following the relevant decision of the Board of Directors dated November 30, 2020, the remaining dividend to be distributed amounts to €54,165 (i.e. €0.212 per share – amount in €).

B. INVESTMENTS

During the first semester of 2021, the Group proceeded with the below investments which contributed to the dispersion of the Group's real estate portfolio:

  • On January 22, 2021, the Company concluded the acquisition of 47 parking spaces with a total area of 507.6 sq.m. on a property located at 44 Kifisias Anenue, Maroussi, Attica. The consideration for the acquisition of the property amounted to €367 while the fair value of the property at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €402.
  • On February 19, 2021, the Company concluded the acquisition of a property with a total area of 2.4 thousand sq.m. located at 377 Syggrou Avenue, Athens. The consideration for the acquisition of the property amounted to €3,100 (excluding acquisition costs of €54) while the fair value of the property at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €3,790. From the total consideration, an amount of €775 was paid on the same day while the remaining amount was paid on April 1, 2021.
  • On February 25, 2021, the subsidiary Picasso Fund acquired a property used as offices and parking spaces in Milan, Italy, of a total area of 11.1 thousand sq.m. The greatest part of the property is already leased to creditworthy tenants. The consideration for the acquisition of the property amounted to €19,000 (excluding acquisition costs of €620) while the fair value of the property at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €22,000. From the total consideration, an amount of €7,600 was paid on the same day and the remaining amount will be paid within 12 months from the date of the acquisition (Note 20). To secure the deferred payment, Picasso Fund submitted to the seller an irrevocable letter of guarantee issued by Intesa Sanpaolo S.p.A.

  • On March 26, 2021, the Company proceeded with the acquisition of a majority stake of 80% of the shares of the company CI Global RE S.a.r.l. SICAF-RAIF, (hereinafter "CI Global"), in Luxembourg (representing 46.2% of the CI Global's economic rights). CI Global owns the units of Fondo Tarvos - Fondo Comune di Investimento Alternativo Immobiliare di Tipo Chiuso Riservato (hereinafter ''Tarvos Fund'') which owns 11 commercial properties in Italy. The fair value of the properties at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €105,610 (Note 8).

  • On April 7, 2021, the Company acquired an additional shareholding (36.22%) in the subsidiary Aphrodite Springs Public Limited. Upon completion of the transaction the Company owns 96.22% of the shares of Aphrodite Springs Public Limited. Aphrodite Springs spread over 1,472 thousand sq.m. of land and is licensed to develop a golf course and 125 thousand sq.m. of residential properties and properties of supplementary uses.
  • On May 6, 2021, the Company signed a Share Purchase Agreement with LAMDA DEVELOPMENT S.A for the acquisition of 100% of the shares of LAMDA ILIDA OFFICE S.M.S.A., 100% subsidiary of LAMDA DEVELOPMENT S.A. and owner of "ILIDA BUSINESS CENTER", an office building in Maroussi. "ILIDA BUSINESS CENTER" is a Class A office building with a total superstructure area of 11,750 sq.m. and 277 parking spaces. The transaction will be concluded upon the completion of certain condition precedents as defined in the aforementioned share purchase agreement. The deadline for such completion is September 30, 2021. The consideration for the acquisition of the shares will be equal to the net asset value (NAV) of LAMDA ILIDA OFFICE S.M.S.A. as this will be determined, based on the provisions of the SPA, at the completion of the transaction.
  • On June 30, 2021 the Company acquired a land plot with a total area of 2.6 thousand sq.m. in which luxury residentials with modern specifications is aimed to be developed based on the principles of sustainability. The consideration for the acquisition of the land plot amounted to €4,400 while its fair value at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €4,563.

C. OTHER EVENTS

    1. Within December 2020, the competent bodies of the Company decided the strategic cooperation of the Company with Invel Real Estate and the Cypriot group of companies YODA Group of Mr. Ioannis Papalekas in the hotel and tourism sector in the wider Mediterranean region. In the context of the aforementioned cooperation, the Company, On April 1, 2021, transferred the 45% of the Company's participation in MHV in the context of the sale and purchase agreement dated December 30,2020 which was modified on March 31, 2021. The consideration amounted to €26,803, out of which an amount of €12,073 was received the same day and the remaining amount will be received according to the provisions of the sale and purchase agreement. In addition, on April 7 2021, the Company signed a sale and purchase agreement for the sale of 15% of its participation in the company Aphrodite Hills Resort Limited. The transfer was completed on August 11, 2021 for a consideration amounted to €8,000 (see '' EVENTS AFTER THE DATE OF THE INTERIM FINANCIAL STATEMENTS'' below).
    1. Management always evaluates the optimal management of the Group's portfolio property, including a possible sale if market conditions are appropriate. In this context during the first semester of 2021 the Company completed the disposal of two properties in Greece. The total consideration amounted to €18,778 and their book value at the date of the disposal amounted to €18,780.

D. COVID 19 - Pandemic

In the first quarter of 2020 the World Health Organization declared the outbreak of the Coronavirus pandemic (COVID-19). The COVID-19 and the subsequent lockdowns have affected the economic activity globally. Governments, including those of countries in which the Group operates, announced several measures in order to support business activity and the economy.

The Group's source of revenues is mainly through investment property (i.e. rental income) and to a lesser extent through the hospitality and ancillary services of the subsidiaries Aphrodite Hills Resorted Limited (hereinafter ''AH'') and MHV Mediterranean Hospitality Venture Limited (hereinafter "MHV") in Cyprus. The Company during 2020 announced the strategic cooperation with Invel Real Estate and the YODA Group of Mr. Ioannis Papalekas in the hospitality sector. On April 1, 2021, MHV was set under common control and AH will be set under join control and thus the company has been presented as of June 30, 2021 in the held for sale. The results for the first quarter of 2021 of MHV and the results of the first semester of 2021 have been presented as discontinued operations.

Impact on rental income

The main sectors that were affected by COVID-19 were high street retail (excluding hypermarkets) and hospitality. The above sectors represent approximately 11.7% of the Group's annualized rents as of June 30, 2021. Additionally, the Group's revenue from its five largest tenants, i.e. National Bank of Greece, Sklavenitis, Hellenic Republic, Cosmote and Italian Republic, representing about the 67.5% of the Group's annualized rents as of June 30, 2021 have not been affected by COVID-19.

From January 2021 Greek government, in the context of the support to the affected businesses, imposed a mandatory 40% reduction of the monthly rent for the affected businesses, while for businesses that remain closed by state order, the mandatory reduction amounts to 100% of the monthly rent. However, it is noted that the Greek government will compensate the legal entities-lessors by paying 60% of the monthly rent for months January to June 2021. In the other countries in which the Group operates, there were no government decisions for mandatory reductions on rents, however the Group, in some cases, proceeded to voluntary rent reductions to support its tenants.

Taking into account the above, the reduction in rental income for the six-month period ended June 30,2021 amounted to €1,607 for the Group and €1,300 for the Company, taking into account the compensation from the Greek government of the 60% of the monthly rents for businesses that remain closed by state order for the sixmonth period ended June 30,2021, amounted to €1,362 for the Group and €1,268 for the Company (Note 23).

Impact on revenue from hospitality and ancillary services (discontinued operations)

Prodea's presence in the hospitality sector is mainly in Cyprus through the companies MHV and AH. This is the business sector and jurisdiction in which the Group operates that was mostly affected by the pandemic as hotel operations in Cyprus were continued its malfunctioning during 2021. In the context of supporting the affected businesses, the Cypriot government announced a pay subsidy scheme for the employees of these companies as well as a state sponsorship scheme to cover the operating expenses of the companies.

As mentioned above, in the Interim Financial Statements for the six-month period ended June 30, 2021, AH has been classified as held for sale, and itsresults have been presented as discontinued operations, due to the strategic collaboration in the hospitality sector between the Company, Invel Real Estate and the Cypriot group of companies YODA Group of Mr. Ioannis Papalekas and the sale of the 45% of the Company's investment in MHV was completed on April 1, 2021.

Assessment of the fair value of the Investment Property and the Property Plant and equipment which include land and buildings related to hotel and other facilities of the Group

According to the current legislation for REICs, the valuations of the properties are performed by independent valuers. The valuations of June 30, 2021 were performed by the company "Proprius Commercial Property Consultants ΕPE" (representative of Cushman & Wakefield) and jointly the companies "P. Danos & Associates" (representative of BNP Paribas) and "Athinaiki Oikonomiki EPE" (representative of Jones Lang LaSalle) and the company "HVS Hospitality Consulting Services S.A." for the properties outside Italy and the company "Jones Lang LaSalle S.p.A." for the properties in Italy.

Regarding the effect of COVID-19 in the value of the properties, it is noted the pandemic and the measures taken to deal with it continue to affect the economy and the real estate market worldwide. However, with the exception of properties belonging to hospitality sector or properties with use directly affected by the hospitality sector, it is considered that at the valuation date, the real estate markets are operating for the most part and trading volumes and other relevant data are sufficient to provide market data on which valuations can be based. Based on the above, the relevant valuations have not been prepared on the basis of "material valuation uncertainty", as defined in the RICS Valuation - Global Standards and International Valuation Standards.

In the case of properties belonging to hospitality sector or properties with use directly affected by the hospitality sector, the market continues to face unprecedented situations at the valuation date, as a result of COVID-19 and a lack of relevant / sufficient market data on which to base valuations. As a result, the relevant valuations have been prepared on the basis of "material valuation uncertainty" as defined in the RICS Valuation - Global Standards and International Valuation Standards. For this reason, the values of these properties are going through a period during which they are monitored with a higher degree of attention. Independent valuers have confirmed that the statement of "substantial appraisal uncertainty" does not mean that no one can't rely on real estate valuations. On the contrary, the above statement is used to provide clarity and transparency to all parties, in a professional manner, that in the current emergency situation, less certainty is given to the valuations than would otherwise be the case. In this context, recognizing the possibility of rapid changes in market conditions as a result of measures to control the spread of COVID-19, the assessors emphasize the importance of the assessment date.

The valuation methods from last year have not been modified with the exception of property with commercial use in Bulgaria, which at the current reporting date was valuated using the discounted cash flow method (DCF) and the comparative method, while the previous reporting date was valued at the discounted cash flow method (DCF) and the method of cost of replacement. The above modification has no impact on the fair value of the property. It is also noted that the estimates take into account the impact of COVID-19 on real estate at the date of the assessment.

The investment of funds which is noted in the market, in combination with the reduction of interest rates and the comparatively higher returns offered by the Greek real estate market has led to a squeeze in the returns of prime real estate and especially for these who can provide guaranteed and stable income from tenants with adequate creditworthiness of reliable employees, such as the NBG, Sklavenitis SA, the Greek State, etc. At the same time, the market records a lack of a suitable investment product with the aforementioned characteristics. The above concerns a large part of the portfolio of stores, which in addition was not obliged to shut down as part of the measures against COVID-19.

Regarding the offices, in addition to the above, there is a large increase in demand, especially for high quality buildings and / or bioclimatic buildings, while dragging the office market in general.

Regarding hotels, the impact of COVID-19 is immediate due to the dramatic reduction in travel and consequently the occupancy of hotels, operating negatively on expected revenues.

Logistics are in increasing demand, which has led to a squeeze on their returns and in some cases an increase in rents.

The Management will monitor the trends that will be demonstrated in the investment real estate market in the upcoming months because the full outcome of the consequences of the financial situation in Greece and in the other countries in which the Group operates may affect the values of the Group's investment properties in the future. In this context, the Management also closely monitors the developments regarding the spread of COVID-19 as the short-term effects on the values of the Group's investment properties that are directly related to the net asset value of the Group remain unknown.

Liquidity Risk

The available cash balances and credit limits offer the Group strong liquidity. As part of a prudent financial management policy, the Company's Management seeks to manage its borrowing (short-term and long-term) utilizing a variety of financial sources and in accordance with its business planning and strategic objectives. The Company assesses its financing needs and the available sources of financing in the international and domestic financial markets and investigates any opportunities to raise additional funds by issuing loans in these markets. In

this context, on July 2, 2021 the Board of Directors of the Company approved the issuance of a Green common bond loan amounting up to €300,000, with minimum amount of €250,000 and duration of seven (7) years. (Note 33). The company is also in discussions with banks regarding the provision of additional funds to secure the cash in order to carry out its short-term / medium-term investment plan.

Credit Risk

No significant losses are expected as lease agreements are agreed with clients - tenants with sufficient creditworthiness. As mentioned above, 67.5% of the annual leases come from the following tenants: National Bank, Sklavenitis, Greek State, Cosmote and Italian State and the reduction in rental income for the six month period ended 30.06.2021, due to the pandemic, amounts to €1,607 for the Group and €1,300 for the Company taking into account the compensation from the Greek government of the 60% of the monthly rent for the businesses that remain closed by state order for the six month period ended 30.06.2021, amounted to €1,362 for the Group and €1,268 for the Company. In addition, the Group receives from tenants, in the framework of lease agreements, securities, such as guarantees, to mitigate credit risk.

The Management, taking into consideration the above as well as:

    1. The current financial position of the Company and the Group,
    1. The diversification of the Group's real estate portfolio,
    1. The fact that even if COVID-19 negatively affects the revenue and the operating results of the Group in the short term, the Group's business plan has a long-term perspective,
    1. The necessary funds for the realization of the Group's short to medium term business plan have been already secured,

concluded that the Company and the Group have sufficient resources in order to continue the business activity and the implementation of the Group's short to medium term business plan. Therefore, the Annual Financial Statements of the Group and the Company have been prepared based on the going concern principle.

Management will continue to monitor and evaluate the situation closely.

FINANCIAL PERFORMANCE OF THE GROUP

Revenue: Total revenue for the six-month ended June 30, 2021 amounted to €64,898 compared to €68,157 for the six month ended June 30, 2020, representing a decrease of 4.8%. The decrease mainly relates to the disposal of 19 investment properties during 2020 and the government measures in the countries where the Group operates to address the COVID-19. The decrease is partially counterbalanced by the increase on rental income from new properties acquired by the Group during the second semester of 2020 and during the current period as well as to the indexation of the leases.

Net gain / (loss) from the fair value adjustment of investment property: During the first semester of 2021, the fair value of investment properties of the Group increased by €57,267 (compared to decrease of €5,482 in previous period).

Property related expenses (incl. property taxes-levies): Property related expenses including property taxes-levies amounted to €12,171 for the six-month period compared to €8,864 of the prior period, representing an increase by €3,307 or 37.3%. This increase is mainly attributable to the increase of Fees and expenses of lawyers, notaries, land registrars, technical and other advisors (June 30, 2021: €1,133, June 30, 2020: €257) and to the Advisory services in relation to real estate portfolio (June 30, 2021: €3,850, June 30, 2020: €2,261) and relates to the increased investing activity of the Group during the first semester of 2021.

Personnel expenses: Personnel expenses amounted to €4,493 for the first semester of 2021 compared to €8,547 of the prior period, with a decrease €4,054 or 47.4%. The decrease is mainly due to the profits distribution of year 2020 to the personnel and to the BoD members of amount €1,984, following to the relevant resolution of the Annual General Meeting of the Company held on June 8, 2021 compared to the profits distribution of year 2019 to the personnel and to the BoD members of amount €6,158, following to the relevant resolution of the Annual General Meeting of the Company held on April 13, 2020.

Other Expenses: Other expenses of the Group for the first semester of 2021 amounted to €5,621 compared to €3,963 of the previous period, with an increase €1,658 or 41.8%. The increase is mainly due to the increase of third parties fees by €1,517 (June 30, 2021: €4,006, June 30, 2020: €2,489). The increase derives from the companies Picasso Lux and CI Global which acquired by the Group during the first semester of 2021 (third parties fees €1,941) which was partially counterbalanced by the decrease of the third parties fees of the Company (June 30, 2021: €1,246, June 30, 2020: €1,660).

Profit / (Loss) from continuing operations: The Group's profit from continuing operations for the first semester of 2021 amounted to €108,791 compared to profit of €28,116 of the previous period. By excluding the net gain/(loss) from the fair value adjustment of investment property (June 30, 2021: net gain of €57,267, June 30, 2020: net loss of €5,482), the gain from the sale of investment properties (June 30, 2021: €16, June 30, 2020: Nil), the net change in fair value of financial instruments at fair value through profit or loss (June 30, 2021: Nil, June 30, 2020: €2), the share of profit of joint ventures (June 30, 2021: €16,720, June 30, 2020: €3,667) and the non-recurring (income)/expenses as analysed in note 1 under the table Funds from Operations (FFO) (June 30, 2021: income €4,314, June 30, 2020: expenses €4,752) the Group's profit from continuing operations for six month period ended June 30,2021 amounted to €30,474 compared to €34,681 of the prior period (12.1% decrease). The decrease relates to the decrease in revenues as analysed above.

BASIC RATIOS OF EFFICIENCY AND EFFECTIVENESS

The Company's Management measures and monitors the Group's performance on a regular basis based on the following ratios, which are widely used in the sector in which the Group operates.

30.06.2021 31.12.2020
Current ratio 1 1.36x 0.67x
(Current assets / Current liabilities)
Gearing ratio 2
33.7% 36.8%
LTV 3 41.4% 41.7%
Net LTV 4 38.1% 36.5%

1 The increase of the current ratio is mainly due to the below:

  • ii. Borrowings of Picasso Fund totally amounted to €99,754 as of December 31, 2020 are included in short-term borrowings since these amounts were payable on June 30, 2021. As of July 5, 2021 the company Picasso Fund received approval from the competent financial institution for the extension of the maturity of the loans until the December 31, 2022, effective from June 30, 2021.
  • iii. As of December 31, 2020 the Group's and the Company's short-term bond loans include an amount of €80,995 which relates to prepayment of capital of a bond loan due to the disposal of eighteen properties on December 24, 2020, as a prenotation of mortgage had been established on six of these properties in favour of the financial institution. The Company had given irrevocable instructions to the financial institution in order to proceed with the repayment of the above amount and the financial institution's actions were completed on January 4, 2021.

2 The Gearing Ratio is defined as the long-term and short-term borrowings as they are presented in the statement of financial position divided by total assets at each reporting date.

3 The LTV ratio is defined as the outstanding capital of borrowings divided by the fair value of the real estate portfolio as determined by the independent valuers (i.e. investment property, owner occupied property as well as the investment property and hotel units and other facilities and the real estate inventories, which are included in the line "Assets held for sale") at each reporting date. The outstanding balance of the borrowings as at December 31, 2020 has been decreased by €80,995, amount for which irrevocable instructions were sent to the financial institution in order to proceed with the prepayment of a loan and the actions by the financial institution were completed in January 2021.

4 The net LTV ratio is defined as the outstanding capital of borrowings minus cash & cash equivalents and restricted cash and pledged deposits divided by the fair value of the real estate portfolio as determined by the independent valuers (i.e., investment property, owner occupied property as well as the investment property and hotel units and other facilities and Real Estate Inventories which as of December 31, 2020 are included in line " Assets held for sale ") at each reporting date.

i. Borrowings of the Company of an amount of €362,618 are presented in short-term borrowings in the Statement of Financial Position as of December 31, 2020, as the Company at the end of the year ended December 31, 2020 assessed a non-compliance with the financial covenant "Net Debt to EBITDA" in three bond loans due to the impact of COVID-19 pandemic in the financial performance of the Group and the Company. According to the provisions of the loan agreements, the non-compliance is ascertained with the submission of the annual audited financial statements to the competent financial institutions. For presentation purposes according to IFRSs, the balance of these loans is included in short-term borrowings. Within March 2021 the Company sent relevant waiver requests, according to the provisions of the loan agreements, which were accepted by the financial institutions, as despite the lag of the financial covenant, the overall financial status of the Group and the Company has not been affected and thus all the obligations can be fully met on a timely manner. As of June 30, 2021 in the Interim Financial Statements, the outstanding balances of these loans, in the interim financial statements of the Group and the Company, are included in long-term liabilities.

By excluding the assets and liabilities directly associated to assets held for sale, the LTV ratio is equal to 41.6% (December 31, 2020: 43.2%) and net LTV ratio is equal to 38.3% (December 31, 2020: 37.7%).

The Company's Management defines as Net Asset Value (NAV) the total shareholders' equity taking into account, at each reporting date, the difference between the fair value and the net book value of the owner-occupied properties, real estate inventories and other non-current assets. (30.06.2021: €10,866, 31.12.2020: €2,220).

Net Asset Value (NAV) 30.06.2021 31.12.2020
NAV 1,438,974 1,367,907
No. of shares at year end (in thousands) 255,495 255,495
NAV (per share) 5.63 5.35
From 01.01. to
30.06.2021 30.06.2020 Change %
Profit for the period from continuing operations 108,791 28,116
Plus: Depreciation of property and equipment and
amortization of intangible assets
276 198
Plus: Net Finance costs 15,416 14,872
Plus: Taxes 1,144 1,049
EBITDA 125,627 44,235
Plus / (Less): Net loss / (gain) from the fair value
adjustment of investment properties
(57,267) 5,482
Less: Net change in fair value of financial instruments at fair
value through profit or loss
- (2)
Less : Net Gain from disposal of investment property (16) -
Less: Adjustments in respect to investments in joint
ventures
(16,677) (3,950)
Plus / (Less): Net non-recurring expenses / (income)1 (4,314) 4,752
Adjusted EBITDA 47,353 50,517 (6.3)%
Funds from Operations (FFO) From 01.01. to
30.06.2021 30.06.2020 Change %
Profit for the period attributable to the Company's equity 107,379 28,263
shareholders from continuing operations
Plus: Depreciation and Amortization 276 198
Plus / (Less):Expenses / (Income) from Deferred taxes (116) (140)
Plus: Net impairment loss on financial assets 784 830
Less: Net change in fair value of financial instruments at fair
value through profit or loss
- (2)
Less: Gain from disposal of investment property (16) -
Less: Net gain from modification of
terms of loan
agreements
988 277
Plus/ (Less): Finance costs /(income) due to measurement of
financial liabilities at present value
(105) 75
Plus / (Less): Net non-recurring expenses / (income)1 (4,314) 4,752
Plus/ (Less): Net loss/ (gain) from fair value adjustment of
investment properties
(57,267) 5,482
Less: Unrealized gains from investments in joint ventures (17,034) (4,149)
Plus: Gain attributable to the non-controlling interest of the
abovementioned adjustments
(133) 37
FFO 30,442 35,623 (14,5)%

1 Net non-recurring expenses/(income) includes:

Από 01.01. έως
30.06.2021 30.06.2020
Negative goodwill from acquisition of subsidiary (8.846) -
Expenses for the relocation of Company's headquarters - 223
Non-recurring legal fees 551 250
Non-recurring consulting fees 2,225 202
Non-recurring technical fees 217 -
Non-recurring profit distribution to the BoD and personnel - 3,791
BoD fees in relation to prior years - 228
Expenses in relation to the establishment of company 1,538 -
Other non-recurring expenses 1 58
Total (4,314) 4,752

EVENTS AFTER THE DATE OF THE INTERIM FINANCIAL STATEMENTS

On July 2, 2021 the Board of Directors of the Company decided the issuance of a "green" common bond loan for a maximum amount €300,000 and minimum amount €250,000 with a duration of seven (7) years and the placement of the bonds through a public offer in Greece and the listing to trading of the bonds in the Fixed Income Segment of the Regulated market of the Athens Exchange. The purpose of the bond is mainly the financing of sustainable investments in real-estate as well as for the repayment of an existing lending facility in relation to a sustainable (green) real estate property, pursuant to the evaluation criteria of the Green Bond Framework adopted by the Company, based on the Green Bond Principles of the International Capital Market Association (ICMA) (as of June 2018) and within the context of article 22 of Law 2778/1999, as in force. Following the completion of the public offer on July 16, 2021, 300.000 dematerialized common bearer bonds of the Company with a nominal value of €1,000 each have been placed and as a result funds of €300,000 have been raised, which was disbursed on July 20, 2021. The bonds bear an interest of 2.3% p.a. According to the terms of the loan, on July 29, 2021 the Company proceeded with the fully repayment of the bond loan dated 20.02.2018 of an amount of €55,977.

As of July 5, 2021 the company Picasso Fund received the approval from the competent financial institution for the extension of the maturity date of its loans, which would expire on June 30, 2021, until the December 31, 2022, with effective date June 30, 2021.

On July 6, 2021 the Extraordinary General Meeting of the Company's shareholders resolved on the decrease of the share capital of the Company by €74,093 by means of the decrease of the nominal value of each of the 255,494,534 ordinary, registered, voting shares of the Company, from €3.00 to €2.71 nominal value per share, in order to return capital to shareholders by payment in cash.

On July 15, 2021 the subsidiary company Prodea Immobiliare acquired a 4* hotel in Milan, Italy, of a total area of €16 thousand sq.m. The consideration for the acquisition of the property amounted to €9,500 while its fair value at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €9,110.

On July 16, 2021 the Company signed an agreement for the acquisition of a property with industrial and logistic use in Oinofyta, Viotia, with a total area of 28.2 thousand sq.m. The consideration for the acquisition amounted to €8,250 while its fair value at the date of acquisition, according to the valuatiuon performed by the independent statutory valuers, amounted to €8,288. The acquisition of the property was completed on August 5, 2021.

On July 23, 2021 the Company acquired the remaining 51% of the shares of Panterra S.A. for a consideration of €15,324. Upon completion of the acquisition, the Company owns 100% of the shares of Panterra.

Following the preliminary agreement dated June 1, 2020, on July 23, 2021 the Company concluded the acquisition of 100% of the units of New Metal Expert Μ.ΙΚΕ. The company owns two leased logistic centers of a total area of 23.8 thousand sq.m. located in Aspropyrgos, Attica. The consideration for the acquisition amounted to €12,449.

On July 29, 2021, the Company proceeded with the signing of a bond loan agreement for an amount up to €280,000 with Alpha Bank S.A. The bond loan has a six-years maturity bearing interest of 3-month Euribor plus a margin of 2.55% per annum. The proceeds of the loan will be used for the repayment of existing borrowings, to serve the general business needs of the Company and for new investments. On September 23, 2021, an amount of €222,000 was disbursed, out of which an amount of €170.357 was utilized the same for the repayment of existing borrowings.

On July 29, 2021, the Company proceeded with the signing of a bond loan agreement for an amount up to €100,000 with National Bank of Greece S.A. The bond loan has a five-years maturity bearing interest of 3-month Euribor plus a margin of 2.5% per annum. The proceeds of the loan will be used to serve the general business needs of the Company and for new investments. On August 6, 2021, an amount of €54,000 was disbursed.

On August 6, 2021, Prodea proceeded to the signing of an agreement for the acquisition of 35% of the shares of the companies OURANIA Investment M.AE and IQ HUB M.AE. The company Ourania Investment MAE is the owner of land plots in Thessaloniki in which a bioclimatic complex of offices with a total area of approximately 16.7 thousand sq.m. will be developed. The company IQ HUB M.A.E. is the owner of a plot of land in Maroussi in which a bioclimatic complex of offices with a total area of approximately 7.9 thousand sq.m. will be developed. The completion of the transfer of shares will be completed after the fulfilment of specific conditions provided in the agreement.

On August 11, 2021, the sale of 15% of the Company's investment in Aphrodite Hills Resort Limited was completed. The total consideration for the transfer of 15% of the shares and the proportion of the shareholder loan (15%) amounted to €8,000, of which an amount of €1,452 was received on the same day, an amount of €1,452 will be received in accordance with the terms of the sale and purchase agreement, and an amount of €5,095 relates to the transfer of 15% of the shareholder loan.

There are no other significant events subsequent to the date of the interim financial statements relating to the Group or the Company for which disclosure is required by International Financial Reporting Standards (hereinafter IFRSs).

SIGNIFICANT RISKS

Fluctuations in property values (price risk)

The Group is exposed to risk from changes in property values and rents which can originate from:

  • a) the developments in the real estate market in which the Group operates,
  • b) the characteristics of properties owned by the Group and
  • c) events concerning existing tenants of the Group.

The Group minimizes its exposure to this risk, as the majority of the Group's lease agreements consists of longterm operating leases with creditworthy tenants, for a period between 20 and 25 years. Additionally, for the vast majority of the leases, the annual rental adjustment is associated with either the Consumer Price Index (CPI) of the country in which each Group company operates or the European Harmonized CPI and in the event of deflation, there is no negative impact on the rents.

The Group is governed by an institutional framework (Law 2778/1999, as in force) under which:

  • a) periodic valuation of properties by an independent professional valuer is required,
  • b) a valuation of properties prior to an acquisition or a sale by an independent professional valuer is required,
  • c) development or repair of properties is permitted if the cost of works does not exceed 40% of the final commercial value after the completion of works and
  • d) the value of each property must not exceed 25% of the value of the property portfolio.

This framework contributes significantly to prevent or/and timely manage related risks.

Credit risk

Credit risk relates to cases of default of counterparties to meet their transactional obligations. As of June 30, 2021, the Group has concentrations of credit risk with respect to cash and cash equivalents and trade receivables which relates to mainly receivables from rentals under property operating lease contracts. No material losses are anticipated as lease agreements are conducted with customers - tenants of sufficient creditworthiness. It is noted that the Group's maximum exposure mainly results from NBG (30.06.2021: 42.6%, 30.06.2020: 44.6% of total rental income).

The Group applies IFRS 9 Financial Instruments in relation to the impairment of the Group's financial assets, including lease receivables and receivables from customers in the context of the hotels' operation (city hotel, resort).

The impact of IFRS 9 in the Group and Company Financial Statements as of June 30, 2021 was not material and is presented in Note 11.

Inflation risk

The uncertainty over the real value of the Group's investments resulting from a potential increase of inflation in the future. The Group minimizes its exposure to inflation risk as the majority of the Group's leases consist of longterm operating leases with tenants for a period between 20 and 25 years. Additionally, for the vast majority of the leases, the annual rental adjustment is associated with either the Consumer Price Index (CPI) of the country in which each Group company operates or the European Harmonized CPI and in the event of deflation, there is no negative impact on the rents.

Cash flow risk and fair value interest rate risk

The Group has significant interest-bearing assets comprising demand deposits and short-term bank deposits. Furthermore, the Group's liabilities include borrowings.

The Group is exposed to fluctuations in interest rates prevailing in the market and on its financial position and cash flows. Borrowing costs may increase as a result of such changes and create losses or borrowing costs may be reduced by the occurrence of unexpected events. To reduce the Group's exposure to fluctuations in interest rates of long-term borrowings, the re-pricing dates are limited by contract to a maximum period of six month.

Liquidity risk

The current or prospective risk to earnings and capital arising from the Group's inability to collect outstanding receivables without incurring significant losses. The Group ensures timely the required liquidity in order to meet its liabilities through the regular monitoring of liquidity needs and collection of amounts due from customers, the preservation of bridge loans with financial institutions and prudent cash management.

Capital risk management

The Group's objective when managing capital is to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure.

According to the common industry practice in Greece, the Group monitors the capital structure on the basis of gearing ratio (or debt ratio). This ratio is calculated as total borrowings divided by total assets, as depicted in the Interim Condensed Statement of Financial Position. The regulatory regime governing Real Estate Investment Companies (hereinafter REICs) in Greece permits to Greek REICs to borrow up to 75.0% of their total assets, for acquisitions and improvements on properties.

The goal of the Group's Management is to optimise the Group's capital structure through the effective use of debt financing.

The table below presents the gearing ratio (or debt ratio) as at June 30, 2021 and December 31, 2020.

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Borrowings 867,481 901,855 678,763 745,509
Total assets 2,573,044 2,449,402 2,043,208 2,069,039
Gearing ratio 33.7% 36.8% 33.2% 36.0%

Under the terms of the borrowing facilities of the Group, the Group is required to comply, among other, with certain financial covenants. It is noted that throughout the six-month period ended June 30, 2021 the Group was in compliance with this obligation.

External factors and international investments

The Group has investments in Cyprus, Italy, Romania and Bulgaria. External factors which may affect the Group's financial position and results are the economic conditions prevailing in the above-mentioned countries, as well as any changes in the tax framework.

Climate change risk

Extreme weather conditions are occurring more frequently as a result of climate change. Among Group's objectives is the protection of its investment product against extreme climate change phenomena such as prolonged heat wave periods, intense thunderstorms and strong winds, but at the same time contributing to climate change mitigation. Towards this direction, the designed strategies of the Group include the creation of a resilient real estate portfolio assets which consists of energy efficient, environmentally and resource friendly buildings and are governed by the principles of sustainability both in their construction and operation phase.

Corporate responsibility program "STRUCTURES OF RESPONSIBILITY"

During the first semester of 2021, the Company continued the realization of the corporate responsibility program entitled "Structures of Responsibility", adopted during 2016, a continuously evolving plan of social actions and interventions. The improvement of infrastructure and the operational upgrade of important social structures have been selected as the program's field of action and basic element, using the experience and expertise of the Company's executives and in cooperation with well-known bodies in local and national level and aiming at the substantial social contribution and the address of key social problems. Further information for the actions of the program "Structures of Responsibility" are available in the site of the Company (Corporate Social Responsibility / Prodea).

RELATED PARTY TRANSACTIONS

All transactions with related parties have been carried out on the basis of the "arm's length" principle (under normal market conditions for similar transactions with third parties). The significant transactions with related parties as defined by International Accounting Standard 24 "Related Party Disclosures" (IAS 24) are thoroughly described in Note 32 of the Interim Financial Statements for the six-month period ended June 30, 2021.

PROSPECTS

Following a long economic and unprecedented epidemiological crisis due to COVID-19, the Greek economy is entering a phase of restart and the prospects for the implementation of new investments are auspicious.

Management always evaluates the optimization of the performance of the Group's real estate portfolio, including a possible sale if the market conditions are appropriate. The Company continues its investment plan with its main strategy being to amend the composition of the real estate portfolio and the qualitative characteristics of its properties.

In terms of qualitative characteristics, the Company emphasizes on parameters that have been pillars of the Company's development, such as sustainability, investment in bioclimatic office buildings that adopt the principles of Environmental and Social Governance ("ESG") and taking into account practices to ensure the health and wellbeing of the employees through the use of modern electromechanical equipment that meets the most modern standards in the field of health safety. Properties with these specifications are not readily available in the market so the Company either develops the properties itself (indicatively the under-development office building in Maroussi, Northern Athens), or cooperates with developers through participation in joint ventures or by the singing of preliminary agreements for the acquisition of properties after the completion of their construction. As a result, the maturity of these investments is expected within the next two years. It is noted that the Company will also be part of the research and evaluation system of the Global Real Estate Sustainability Benchmark ("GRESB"), which aims to strengthen values through the evaluation and promotion of sustainability practices.

In terms of portfolio composition, the Company focuses in new sectors, such as logistics, a strategic sector of development in our country considering its key geographical position. The Company's strategy is the acquisition of logistics with modern specifications, which, as in the case of the offices above, are not readily available, and it takes time for their maturity, which varies from nine to twelve months. Finally, in relation to the hospitality sector, a sector with special characteristics in comparison to the traditional commercial real estate sector, investments will be mainly realized through "MHV Mediterranean Hospitality Venture Limited", which is the joint investment vehicle of the Company, Invel Real Estate and the Cypriot group of companies YODA Group. This vehicle will be the investment arm of the Group in the hospitality and tourism sector in Greece, Cyprus and the wider Mediterranean region.

Athens, September 30, 2021

The Vice-Chairman of the BoD

and CEO The Executive Member of the BoD The Member of the BoD

Aristotelis Karytinos Thiresia Messari Athanasios Karagiannis

ERNST & YOUNG (HELLAS) Certified Auditors-Accountants S.A. 8B Chimarras str., Maroussi 151 25 Athens, Greece

Tel: +30 210 2886 000 Fax:+30 210 2886 905 ey.com

THIS IS A TRANSLATION FROM THE ORIGINAL VERSION IN THE GREEK LANGUAGE

Independent auditor's review report

To the Board of Directors of the Company "Prodea Real Estate Investment Company Société Anonyme"

Report on the Review of the Interim Financial Information

Introduction

We have reviewed the accompanying condensed separate and consolidated statement of financial position of the "Prodea Real Estate Investment Company Société Anonyme" (the "Company"), as at June 30, 2021, and the related condensed separate and consolidated statements of income statement, comprehensive income, changes in equity and cash flows for the six-month period then ended, as well as the selected explanatory notes that comprise the interim condensed financial information and which form an integral part of the six-month financial report required by Law 3556/2007.

Management is responsible for the preparation and presentation of this interim condensed financial information in accordance with International Financial Reporting Standards as adopted by the European Union and applicable to interim financial reporting (International Accounting Standard "IAS 34"). Our responsibility is to express a conclusion on this interim condensed financial information based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing as incorporated in Greek Law and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial information is not prepared, in all material respects, in accordance with IAS 34.

Other matter

The separate and consolidated financial statements of the Company "Prodea Real Estate Investment Company Société Anonyme" for the year ended December 31, 2020, were audited by another Certified Auditor Accountant, who expressed an unqualified opinion on April 29, 2021.

Report on other Legal and Regulatory Requirements

Our review has not identified any material inconsistency or error in the declarations of the members of Board of Directors and the information contained in the Semi-annual Board of Directors Report prepared in accordance with article 5 and 5a of Law 3556/2007 and the interim condensed separate and consolidated financial information.

Athens, September 30, 2021

The Certified Auditor Accountant

Andreas Hadjidamianou S.O.E.L. R.N. 61391 ERNST &YOUNG (HELLAS) CERTIFIED AUDITORS ACCOUNTANTS S.A. CHIMARRAS 8B 151 25 MAROUSSI SOEL REG. No. 107

Group Company
Note 30.06.2021 31.12.2020 30.06.2021 31.12.2020
ASSETS
Non-current assets
Investment property 6 2,092,433 1,918,015 1,366,945 1,332,779
Investments in subsidiaries 9 - - 369,147 378,716
Investments in joint ventures 10 126,127 15,995 105,336 11,924
Property and equipment 7 10,778 10,929 10,599 10,740
Intangible assets 34 51 34 51
Other long-term assets 32 14,263 20,519 42,685 47,997
Total non-current assets 2,243,635 1,965,509 1,894,746 1,782,207
Current assets
Trade and other assets 11 101,651 76,182 97,672 68,614
Inventories 4,484 - 4,484 -
Cash and cash equivalents 12 67,574 104,842 34,050 73,243
Restricted cash 13 636 81,069 636 81,069
174,345 262,093 136,842 222,926
Assets held for sale 14 155,064 221,800 11,620 63,906
Total current assets 329,409 483,893 148,462 286,832
Total assets 2,573,044 2,449,402 2,043,208 2,069,039
SHAREHOLDERS' EQUITY
Share capital 15 766,484 766,484 766,484 766,484
Share premium 15 15,890 15,890 15,970 15,970
Reserves
Other equity
16
17
360,474
-
355,484
(7,403)
358,927
-
354,263
-
Retained Earnings 285,260 235,232 191,455 161,683
Equity attributable to equity holders of the parent 1,428,108 1,365,687 1,332,836 1,298,400
Non-controlling interests 18 130,561 37,612 - -
Total equity 1,558,669 1,403,299 1,332,836 1,298,400
LIABILITIES
Long-term liabilities
Borrowings 19 752,463 299,017 574,471 249,780
Retirement benefit obligations 341 323 341 323
Deferred tax liability 21 13,258 13,349 - -
Other long-term liabilities 5,790 6,134 3,986 3,911
Total long-term liabilities 771,852 318,823 578,798 254,014
Short-term liabilities
Trade and other payables 20 50,517 29,505 26,330 19,901
Borrowings 19 115,018 602,838 104,292 495,729
Current tax liabilities 1,099 1,072 952 995
166,634 633,415 131,574 516,625
Liabilities directly associated with assets held for sale 14 75,889 93,865 - -
Total short-term liabilities 242,523 727,280 131,574 516,625
Total liabilities 1,014,375 1,046,103 710,372 770,639
Total equity and liabilities 2,573,044 2,449,402 2,043,208 2,069,039
Athens, September 30, 2021
The Vice-Chairman B' of the BoD
and CEO The CFO / COO The Deputy CFO
Aristotelis Karytinos Thiresia Messari Anna Chalkiadaki
Group
From 01.01. to
Company
From 01.01. to
Note 30.06.2021 30.06.2020 30.06.2021 30.06.2020
Continuing operations
Revenue 23 64,898 68,157 46,792 51,782
64,898 68,157 46,792 51,782
Net gain / (loss) from the fair value adjustment of
investment property 6 57,267 (5,482) 48,795 1,309
Result from disposal of Investment property 16 - (2) -
Direct property related expenses 25 (7,378) (3,919) (4,773) (2,070)
Property taxes-levies 24 (4,793) (4,945) (3,329) (3,875)
Personnel expenses 26 (4,493) (8,547) (4,424) (8,480)
Depreciation of property and equipment and amortisation
of intangible assets 7 (276) (198) (264) (185)
Net change in fair value of financial instruments at fair
value through profit or loss - 2 - -
Net impairment loss on financial assets (784) (830) (124) (104)
Net impairment loss on non - financial assets - - (671) -
Gain from disposal of subsidiaries 9 - - 19,168 -
Other income
1,113 449 2,500 5,101
Other expenses 27 (5,621) (3,963) (2,465) (2,802)
Corporate Responsibility (164) (354) (164) (354)
Operating Profit 99,785 40,370 101,039 40,322
Share of profit of joint ventures 10 16,720 3,667 - -
Negative goodwill from acquisition of subsidiaries 8 8,846 - - -
Interest income 9 53 1,055 1,091
Finance costs 28 (15,425) (14,925) (12,541) (12,248)
Profit before tax 109,935 29,165 89,553 29,165
Taxes 29 (1,144) (1,049) (952) (1,006)
Profit for period from continuing operations 108,791 28,116 88,601 28,159
Discontinued operations
Loss from discontinued operations 14 (321) (11,625) - -
Profit for the period 108,470 16,491 88,601 28,159
Attributable to:
Non-controlling interests 714 (3,435) - -
Company's equity shareholders 107,756 19,926 88,601 28,159
108,470 16,491 88,601 28,159
Earnings per share (expressed in
€ per share) - Basic and diluted from continuing operations 30 0.42 0.11
Earnings per share (expressed in
€ per share) - Basic and diluted from discontinuing 30 - 0.03
operations
Earnings per share (expressed in
€ per share) - Basic and diluted from continuing and 30 0.42 0.08
discontinued operations
Athens, September 30, 2021
The Vice-Chairman Β' of the BoD The CFO / COO The Deputy CFO
and CEO
Aristotelis Karytinos Thiresia Messari Anna Chalkiadaki
Group
From 01.01. to
Company
From 01.01. to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Profit for the period 108,470 16,491 88,601 28,159
Other comprehensive income / (loss):
Items that may not be reclassified subsequently to
profit or loss:
Revaluation reserve - (1,318) - 144
Total of items that may not be reclassified
subsequently to profit or loss
- (1,318) - 144
Items that may be reclassified subsequently
to profit or loss:
Currency translation differences 34 60 - -
Total of items that may be reclassified subsequently
to profit or loss
34 60 - -
Other comprehensive income/(loss) for the period 34 (1,258) - 144
Total comprehensive income for the period 108,504 15,233 88,601 28,303
Attributable to:
Non-controlling interests 714 (4,020) - -
Company's equity shareholders 107,790 19,253 88,601 28,303
108,504 15,233 88,601 28,303
Total comprehensive income / (loss) for the period
attributable to Company's equity shareholders arises
from:
Continuing operations 107,413 28,467 88,601 28,303
Discontinued operations 377 (9,214) - -
107,790 19,253 88,601 28,303
Athens, September 30, 2021
The Vice-Chairman B' of the BoD and
CEO
The CFO / COO The Deputy CFO
Aristotelis Karytinos Thiresia Messari Anna Chalkiadaki
Group Company
From 01.04. to
From 01.04. to
Continuing operations 30.06.2021 30.06.2020 30.06.2021 30.06.2020
Revenue 33,630 33,361 23,476 25,306
33,630 33,361 23,476 25,306
Net gain / (loss) from the fair value adjustment of 54,633 (4,678) 48,350 1,532
investment property
Result from disposal of Investment property 16 - (2)
Direct property related expenses (3,341) (2,523) (1,464) (1,193)
Property taxes-levies (2,613) (2,618) (1,663) (2,025)
Personnel expenses (3,231) (7,170) (3,195) (7,136)
Depreciation of property and equipment and
amortisation of intangible assets
(137) (131) (131) (123)
Net change in fair value of financial instruments at - 7 -
fair value through profit or loss
Net impairment loss on financial assets (493) (472) 4 (71)
Net impairment loss on non - financial assets - - (671)
Gain from disposal of subsidiaries - - 2,891
Other income 991 314 2,500 2,000
Other expenses (2,797) (2,437) (1,681) (1,736)
Corporate Responsibility (152) (308) (152) (308)
Operating Profit 76,506 13,345 68,262 16,246
Share of profit of joint ventures 17,243 4,077 -
Negative goodwill from acquisition of subsidiaries 22 - -
Interest income 7 43 502 570
Finance costs (7,820) (8,054) (6,272) (6,730)
Profit before tax 85,958 9,411 62,492 10,086
Taxes (559) (409) (483) (500)
Profit for period from continuing operations 85,399 9,002 62,009 9,586
Discontinued operations
Loss from discontinued operations (24) (6,909) -
Profit for the period 85,375 2,093 62,009 9,586
Attributable to:
Non-controlling interests 835 (2,063) -
Company's equity shareholders 84,540 4,156 62,009 9,586
85,375 2,093 62,009 9,586
Earnings per share (expressed in
€ per share) - Basic and diluted from continuing
operations
0.33 0.04
Earnings per share (expressed in
€ per share) - Basic and diluted from discontinuing - 0.02
operations
Earnings per share (expressed in
€ per share) - Basic and diluted from continuing and 0.33 0.02
discontinued operations
Athens, September 30, 2021
The Vice-Chairman Β' of the BoD and
CEO
The CFO / COO The Deputy CFO
30.06.2021 Group
From 01.04. to
30.06.2020
30.06.2021 Company
From 01.04. to
30.06.2020
Profit for the period 85,375 2,093 62,009 9,586
Other comprehensive income / (loss):
Items that may not be reclassified subsequently to
profit or loss:
Revaluation reserve - (1,462) - -
Total of items that may not be reclassified
subsequently to profit or loss
Items that may be reclassified subsequently
- (1,462) - -
to profit or loss:
Currency translation differences (21) 11 - -
Total of items that may be reclassified subsequently
to profit or loss
(21) 11 - -
Other comprehensive income / (loss) for the period (21) (1,451) - -
Total comprehensive income for the period 85,354 642 62,009 9,586
Attributable to:
Non-controlling interests
Company's equity shareholders
835
84,519
(2,648)
3,290
-
62,009
-
9,586
85,354 642 62,009 9,586
Total comprehensive income / (loss) for the period
attributable to Company's equity shareholders arises
from:
Continuing operations 84,100 9,337 62,009 9,586
Discontinued operations 419 (6,047) - -
84,519 3,290 62,009 9,586
Athens, September 30, 2021
The Vice-Chairman B' of the BoD and
CEO
The CFO / COO The Deputy CFO
Aristotelis Karytinos Thiresia Messari Anna Chalkiadaki
Attributable to Company's shareholders
Note Share
capital
Share
premium
Reserves Other
equity
Retained Earnings
/ (Losses)
Total Non-controlling
interests
Total
Balance January 1, 2020 766,484 15,890 347,531 (8,869) 297,408 1,418,444 42,465 1,460,909
Other comprehensive loss
for the period
- - (673) - - (673) (585) (1,258)
Profit / (Loss) for the period - - - - 19,926 19,926 (3,435) 16,491
Total comprehensive income
/ (loss)
after tax
- - (673) - 19,926 19,253 (4,020) 15,233
Transfer to reserves - - 8,567 - (8,567) - - -
Dividend distribution 2019 22 (75,371) (75,371) - (75,371)
Put option held by non-controlling interests - - - 1,466 - 1,466 - 1,466
Share capital increase of non-controlling interests - - - - - - 24 24
Balance June 30,
2020
766,484 15,890 355,425 (7,403) 233,396 1,363,792 38,469 1,402,261
Balance January 1, 2021 766,484 15,890 355,484 (7,403) 235,232 1,365,687 37,612 1,403,299
Other comprehensive income
for the period
- - 34 - - 34 - 34
Profit for the period - - - - 107,756 107,756 714 108,470
Total comprehensive income/ (loss)
after tax
- - 34 - 107,756 107,790 714 108,504
Transfer to reserves - - 4,956 - (4,956) - - -
Dividend distribution 2020 22 - - - - (54,165) (54,165) - (54,165)
Put option held by non-controlling interests 17 - - - 7,403 - 7,403 - 7,403
Partial disposal of shareholding in subsidiaries 9 - - - - 30 30 59,560 59,590
Acquisition of Non-controlling interests 9 - - - - 1,363 1,363 (6,072) (4,709)
Acquisition of subsidiaries 9 - - - - - - 38,735 38,735
Share capital increase of non-controlling interests - - - - - - 12 12
Balance June
30, 2021
766,484 15,890 360,474 - 285,260 1,428,108 130,561 1,558,669

Statement of Changes in Equity - Company for the period ended June 30, 2021

Note Share capital Share premium Reserves Retained Earnings /
(Losses)
Total
Balance January 1, 2020 766,484 15,970 345,845 217,029 1,345,328
Other comprehensive income
for the period
- - 144 - 144
Profit for the period - - - 28,159 28,159
Total comprehensive income after tax - - 144 28,159 28,303
Transfer to reserves - - 8,288 (8,288) -
Dividend distribution 2019 22 - - - (75,371) (75,371)
Balance June 30,
2020
766,484 15,970 354,277 161,529 1,298,260
Balance January 1, 2021 766,484 15,970 354,263 161,683 1,298,400
Profit for the period - - - 88,601 88,601
Total comprehensive income after tax - - - 88,601 88,601
Transfer to reserves - - 4,664 (4,664) -
Dividend distribution 2020 22 - - - (54,165) (54,165)
Balance June
30, 2021
766,484 15,970 358,927 191,455 1,332,836
From 01.01. to
Note 30.06.2021 30.06.2020
Cash flows from operating activities
Profit before tax from continuing operations 109,935 29,165
Loss before tax from discontinued operations (433) (12,023)
Adjustments for:
-
Provisions for employee benefits
18 16
-
Depreciation of property and equipment & amortisation of intangible assets
7 276 2,408
-
Net (gain) / loss from the fair value adjustment of investment property
6 (57,247) 6,536
-
Interest income
(9) (53)
-
Finance costs
14,28 16,149 16,528
-
Net change in fair value of financial instruments at fair value through profit or loss
-
Net impairment loss on financial assets
-
926
(2)
843
-
Net impairment loss on non-financial assets
886 5,080
-
Result from disposal of investment property
(16) -
-
Negative goodwill from acquisition of subsidiaries
(8,846) -
-
Share of profit of joint ventures
(16,774) (3,667)
-
Other
- (20)
Changes in working capital:
-
Decrease in receivables
(12,516) (4,307)
-
Decrease of inventories
(2,866) 2,767
-
Increase / (Decrease) in payables
3,041 11,293
Cash flows from operating activities 32,524 54,564
Interest paid (13,944) (13,497)
Tax paid (1,240) (1,170)
Net cash flows from operating activities 17,340 39,897
Cash flows from / (used in) investing activities
Acquisition of investment property 6 (11,760) (3,975)
Subsequent capital expenditure on investment property 6 (7,162) (3,401)
Proceeds from disposal of investment property 64,284 60,450
Purchases of property and equipment and intangible assets 7 (375) (1,482)
Disposal of property and equipment - 13
Prepayments and expenses related to future acquisition of investment property
Proceeds from disposal of subsidiaries
9 (6,995)
21,900
(5,013)
-
Acquisitions of subsidiaries (net of cash acquired) 8 5,363 -
Acquisition of investment in joint ventures - (918)
Acquisition of additional shareholding in subsidiaries (4,709) -
Participation in share capital increase of investment in joint ventures (66,610) -
Dividends received from equity method investments 95 -
Interest received 10 50
Net cash flows from / (used in) investing activities (5,959) 45,724
Cash flows from / (used in) financing activities
Decrease of restricted cash 13 80,995 -
Proceeds from share capital increase of subsidiaries 12 24
Proceeds from the issuance of bond loans and other
borrowed funds
19 26,872 174,290
Expenses related to the issuance of bond loans and - (304)
other borrowed funds
Repayment of borrowings (101,749) (67,729)
Dividends paid 22 (54,636) (75,977)
Net cash flows from / (used in) financing activities (48,506) 30,304
Net increase / (decrease) in cash and cash equivalents (37,125) 115,925
Cash and cash equivalents at the beginning of the period 108,973 71,174
Effect of foreign exchange currency differences on cash and
cash equivalents (16) -
Cash and cash equivalents at the end of the period 71,832 187,099

The notes on pages 28 to 77 form an integral part of these Interim Financial Statements

From 01.01. to
Note 30.06.2021 30.06.2020
Cash flows from operating activities
Profit before tax 89,553 29,165
Adjustments for:
-
Provisions for employee benefits
18 16
-
Depreciation of property and equipment & amortisation of
7 264 185
intangible assets
-
Net (gain) / loss from the fair value adjustment of investment
6 (48,795) (1,309)
property
-
Interest income
(1,055) (1,091)
-
Finance costs
28 12,541 12,248
Net impairment loss on financial assets 124 104
-
Net impairment loss on non-financial assets
671 -
-
Result from disposal of investment property
2 -
-
Gain from disposal of investment in subsidiaries
9 (19,168) -
Changes in working capital:
-
(Increase) / Decrease in receivables
(16,414) (3,453)
-
(Increase) / Decrease of Inventories
(4,484) -
-
Increase / (Decrease) in payables
6,404 8,830
Cash flows from operating activities 19,661 51,601
Interest paid (10,623) (10,804)
Tax paid (996) (973)
Net cash flows from operating activities 8,042 39,824
Cash flows from / (used in) investing activities
Acquisition of investment property 6 (3,540) (3,975)
Subsequent capital expenditure on investment property 6 (602) (1,128)
Proceeds from disposal of investment property 64,237 60,450
Purchases of property and equipment and intangible assets 7 (106) (914)
Prepayments
and
expenses
related
to
future
acquisition
of
(6,995) (5,013)
investment property
Proceeds from disposal of subsidiaries 9 22,402 -
Acquisition of additional shareholding in subsidiaries (4,709) -
Acquisition of investment in joint ventures - (918)
Participation in subsidiaries' capital increase and Investment in joint 9 (76,258) (11,976)
ventures
Interest received 7 37
Net cash flows from / (used in) investing activities (5,564) 36,563
Cash flows from / (used in) financing activities
Decrease of restricted cash 13 80,995 -
Proceeds from the issuance of bond loans and
other borrowed funds 19 25,000 173,150
Expenses related to the issuance of bond loans and
other borrowed funds - (296)
Repayment of borrowings (93,501) (61,409)
Dividends paid 22 (54,165) (75,371)
Net cash flows from / (used in) financing activities (41,671) 36,074
Net increase / (decrease) in cash and cash equivalents (39,193) 112,461
Cash and cash equivalents at the beginning of the period 73,243 31,825
Cash and cash equivalents at the end of the period 34,050 144,286

NOTE 1: General Information

"Prodea Real Estate Investment Company Société Anonyme" (hereinafter "Company") operates in the real estate investment market under the provisions of Article 22 of L. 2778/1999, as in force. As a Real Estate Investment Company (REIC), the Company is supervised by the Hellenic Capital Market Commission. It is also noted that the Company is licensed as an internally managed alternative investment fund according to Law 4209/2013.

The headquarters are located at 9, Chrisospiliotissis street, Athens, Greece. The Company is registered with the No. 3546201000 in the General Commercial Companies Registry (G.E.MI.) and its duration expires on December 31, 2110.

The Company together with its subsidiaries (hereinafter the "Group") operates in real estate investments both in Greece and abroad, such as Cyprus, Italy, Bulgaria and Romania.

As of June 30, 2021, the Group's and the Company's number of employees was 453 and 39, respectively (June 30, 2020: 542 employees for the Group and 35 employees for the Company). The Group's number of employees as of June 30, 2021 includes 413 employees from the company Aphrodite Hills Resort Limited (June 30, 2020: 368), which has been classified as held for sale (Note 14). In addition, as of June 30, 2020, the Group's number of employees includes 138 employees from the company The Cyprus Tourism Development Company Limited, 100% subsidiary of MHV Mediterranean Hospitality Venture Limited (herein «MHV»), which from April 1, 2021 is Investment in joint ventures, as the disposal of the 45% investment of the Company to MHV was concluded (Note 10).

The current Board of Directors has a term of three years which expires on June 7, 2024 with an extension until the first Annual General Meeting of Shareholders, which will take place after the end of the term. The Board of Directors was elected by the Annual General Meeting of Shareholders held on June 8, 2021 and was constituted as a body in its same day meeting. The Board of Directors has the following composition:

Christophoros N. Papachristophorou Chairman, Businessman Executive Member
Spyridon G. Makridakis Professor at University of Nicosia &
Emeritus Professor at INSEAD
Business School
Vice-Chairman A' - Independent -
Non Executive Member
Aristotelis D. Karytinos Vice-Chairman, CEO Vice-Chairman B' - Executive Member
Thiresia G. Messari CFO / COO Executive Member
Athanasios D. Karagiannis Investment Advisor Executive Member
Nikolaos M. Iatrou Economist Non Executive Member
Ioannis P. Kyriakopoulos General Manager of NBG Group Non Executive Member
Georgios E. Kountouris Economist Non Executive Member
Prodromos G. Vlamis Assistant Professor at University of
Piraeus
Independent - Non Executive
Member
Garifallia V. Spiriouni Group Tax Director of Coca-Cola
HBC Group
Independent - Non Executive
Member

The current Board of Directors has the following composition:

These consolidated and separate Interim Financial Statements have been approved for issue by the Company's Board of Directors on September 30, 2021, are available on the website address https://prodea.gr/.

NOTE 2: Summary of Significant Accounting Policies

2.1 Basis of preparation of unaudited interim condensed Company and Consolidated financial statements

Τhe interim condensed financial information of the Group and the Company for the six-month period ended June 30, 2021 (the "Interim Financial Statements") have been prepared in accordance with the International Accounting Standard 34 "Interim Financial Reporting".

These Interim Financial Statements include selected explanatory notes and do not include all the information required for full annual financial statements. Therefore, the Interim Financial Statements should be read in conjunction with the annual consolidated and separate financial statements of the Company and the Group as at and for the year ended December 31, 2020, which have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as endorsed by the European Union (the "EU").

The accounting policies adopted are consistent with those of the previous financial year, except for the adoption of new and amended standards as set out below (Note 2.3.1).

The amounts are stated in Euro, rounded to the nearest thousand (unless otherwise stated) for ease of presentation.

It is mentioned that where necessary, comparative figures have been adjusted to conform to changes in the current period's presentation. The Interim Condensed Income Statement for the period ended June 30,2020 as well as the corresponding notes have been restated to include as discontinued operations the results of companies classified as held for sale (Note 14). Management believes that such adjustments do not have a material impact in the presentation of financial information.

2.2 Qualitative and quantitative information on the impacts of COVID 19 - Going concern

In the first quarter of 2020 the World Health Organization declared the outbreak of the Coronavirus pandemic (COVID-19). The COVID-19 pandemic and the subsequent lockdowns have affected the economic activity globally. Governments, including those of countries in which the Group operates, announced several measures in order to support business activity and the economy.

The Group's source of revenues is mainly through investment property (i.e. rental income) and to a lesser extent through the hospitality and ancillary services of the subsidiaries Aphrodite Hills (hereinafter "AH") and MHV Mediterranean Hospitality Venture Limited (hereinafter "MHV") in Cyprus. The Company during 2020 announced the strategic collaboration with Invel Real Estate and YODA Group of Mr's Ioannis Papalekas, in the hospitality sector. On April 1, 2021, MHV was set under common control and AH will be set under common control and consequently the entity has been presented as Held for Sale as of June 30, 2021. The results for the first quarter of 2021 of MHV and the results of the first semester of 2021 of AH have been presented as discontinued operations.

Impact on rental income

The main sectors that were affected by COVID-19 were high street retail (excluding hypermarkets) and hospitality. The above sectors represent approximately 11.7% of the Group's annualized rents as of June 30, 2021. Additionally, the Group's revenue from its five largest tenants, i.e. National Bank of Greece, Sklavenitis, Hellenic Republic, Cosmote and Italian Republic, representing about the 67.5% of the Group's annualized rents as of June 30, 2021 have not been affected by COVID-19.

From January 2021 Greek government, in the context of the support to the affected businesses, imposed a mandatory 40% reduction of the monthly rent for the affected businesses, while for businesses that remain closed by state order, the mandatory reduction amounts to 100% of the monthly rent. However, it is noted that the Greek government will compensate the legal entities-lessors by paying 60% of the monthly rent for months January to

June 2021. In the other countries in which the Group operates, there were no government decisions for mandatory reductions on rents, however the Group, in some cases, proceeded to voluntary rent reductions to support its tenants.

Taking into account the above, the reduction in rental income for the six-month period ended June 30, 2021 amounted to €1,607 for the Group and €1,300 for the Company, including the compensation from the Greek government of the 60% of the monthly rent for businesses that remain closed by state order for the six-month period ended June 30, 2021 amounted to €1,362 for the Group and €1,268 for the Company (Note 23).

Impact on revenue from hospitality and ancillary services (discontinued operations)

Prodea's presence in the hospitality sector is mainly in Cyprus through MHV and AH. This is the business sector and jurisdiction in which the Group operates that was mostly affected by the pandemic and the hotels continued to be underperformed during 2021. In order to support the affected companies, the Cypriot government announced a subsidy plan for the employees' salaries of those companies and a state sponsorship to cover the operating expenses of those companies.

As mentioned above, in the Interim Financial Statements for the six-month period ended June 30, 2021, AH has been classified as held for sale, and itsresults have been presented as discontinued operations, due to the strategic collaboration in the hospitality sector between the Company, Invel Real Estate and the Cypriot group of companies YODA Group of Mr. Ioannis Papalekas and the disposal of the 45% of the Company's investment in MHV was completed on April 1, 2021.

Assessment of the fair value of the Investment Property and the Property Plant and equipment which include land and buildings related to hotel and other facilities of the Group

According to the current legislation for REICs, the valuations of the properties are performed by independent valuers. The valuations as of June 30, 2021 were performed by the company "Proprius Commercial Property Consultants ΕPE" (representative of Cushman & Wakefield) and jointly the companies "P. Danos & Associates" (representative of BNP Paribas) and "Athinaiki Oikonomiki EPE" (representative of Jones Lang LaSalle) and the company "HVS Hospitality Consulting Services S.A." for the properties outside Italy and the company "Jones Lang LaSalle S.p.A." for the properties in Italy.

Regarding the effect of COVID-19 in the value of the properties, it is noted the pandemic and the measures taken to deal with it continue to affect the economy and the real estate market worldwide. However, with the exception of properties belonging to hospitality sector or properties with use directly affected by the hospitality sector, it is considered that at the valuation date, the real estate markets are operating for the most part and trading volumes and other relevant data are sufficient to provide market data on which valuations can be based. Based on the above, the relevant valuations have not been prepared on the basis of "material valuation uncertainty", as defined in the RICS Valuation - Global Standards and International Valuation Standards.

In the case of properties belonging to hospitality sector or properties with use directly affected by the hospitality sector, the market continues to face unprecedented situations at the valuation date, as a result of COVID-19 and a lack of relevant / sufficient market data on which to base valuations. As a result, the relevant valuations have been prepared on the basis of "material valuation uncertainty" as defined in the RICS Valuation - Global Standards and International Valuation Standards. For this reason, the values of these properties are going through a period during which they are monitored with a higher degree of attention. Independent valuers have confirmed that the statement of "substantial appraisal uncertainty" does not mean that no one can't rely on real estate valuations. On the contrary, the above statement is used to provide clarity and transparency to all parties, in a professional manner, that in the current emergency situation, less certainty is given to the valuations than would otherwise be the case. In this context, recognizing the possibility of rapid changes in market conditions as a result of measures to control the spread of COVID-19, the assessors emphasize the importance of the assessment date.

The valuation methods from last year have not been modified and at the date of the valuation take into account the impact of COVID-19 in the properties.

The valuation methods from last year have not been modified with the exception of property with commercial use in Bulgaria, which at the current reporting date was valuated using the discounted cash flow method (DCF) and the comparative method, while the previous reporting date was valued at the discounted cash flow method (DCF) and the method of cost of replacement. The above modification has no impact on the fair value of the property. It is also noted that the estimates take into account the impact of COVID-19 on real estate at the date of the assessment.

The investment of funds which is noted in the market, in combination with the reduction of interest rates and the comparatively higher returns offered by the Greek real estate market has led to a squeeze in the returns of prime real estate and especially for these who can provide guaranteed and stable income from tenants with adequate creditworthiness of reliable employees, such as the NBG, Sklavenitis SA, the Greek State, etc. At the same time, the market records a lack of a suitable investment product with the aforementioned characteristics. The above concerns a large part of the portfolio of stores, which in addition was not obliged to shut down as part of the measures against COVID-19.

Regarding hotels, the impact of COVID-19 is immediate due to the dramatic reduction in travelling and consequently in the occupancy of hotels, operating negatively on expected revenues.

Logistics are in increasing demand, which has led to a squeeze on their returns and in some cases an increase in rents.

The Management will monitor the trends that will be demonstrated in the investment real estate market in the upcoming months because the full outcome of the consequences of the financial situation in Greece and in the other countries in which the Group operates may affect the values of the Group's investment properties in the future. In this context, the Management also closely monitors the developments regarding the spread of COVID-19 as the short-term effects on the values of the Group's investment properties that are directly related to the net asset value of the Group remain unknown.

Liquidity Risk

The available cash balances and credit limits offer the Group strong liquidity. As part of a prudent financial management policy, the Company's Management seeks to manage its borrowing (short-term and long-term) utilizing a variety of financial sources and in accordance with its business planning and strategic objectives. The Company assesses its financing needs and the available sources of financing in the international and domestic financial markets and investigates any opportunities to raise additional funds by issuing loans in these markets. In this context, on July 2, 2021 the Board of Directors of the Company approved the issuance of a Green common bond loan amounting to up to €300,000, with minimum amount of €250,000 and duration of seven (7) years. (Note 33). The company is also in discussions with banks regarding the provision of additional funds to secure the cash in order to carry out its short-term / medium-term investment plan.

Credit Risk

No significant losses are expected as lease agreements are agreed with clients - tenants with sufficient creditworthiness. As mentioned above, 67.5% of the annual leases come from the following tenants: National Bank, Sklavenitis, Greek State, Cosmote and Italian State and the reduction in rental income for the six-month period ended June 30, 2021, due to the pandemic, amounts to €1,607 for the Group and €1,300 for the Company taking into account the compensation from the Greek government of the 60% of the monthly rent for the businesses that remain closed by state order for the six-month period ended June 30, 2021, amounted to €1,362 for the Group and €1,268 for the Company. In addition, the Group receives from tenants, in the framework of lease agreements, securities, such as guarantees, to mitigate credit risk.

The Management, taking into consideration the above as well as:

    1. The current financial position of the Company and the Group,
    1. The diversification of the Group's real estate portfolio,
    1. The fact that even if COVID-19 negatively affects the revenue and the operating results of the Group in the short term, the Group's business plan has a long-term perspective,
    1. The necessary funds for the realization of the Group's short to medium term business plan have been already secured,

concluded that the Company and the Group have sufficient resources in order to continue the business activity and the implementation of the Group's short to medium term business plan. Therefore, the Annual Financial Statements of the Group and the Company have been prepared based on the going concern principle.

Management will continue to monitor and evaluate the situation closely.

2.3 Adoption of International Financial Reporting Standards (IFRSs)

2.3.1 New standards, amendments and interpretations to existing standards applied from 1 January 2021:

  • Interest Rate Benchmark Reform – Phase 2 – IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Amendments). In August 2020, the IASB published Interest Rate Benchmark Reform – Phase 2, Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, completing its work in response to IBOR reform. The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). In particular, the amendments provide for a practical expedient when accounting for changes in the basis for determining the contractual cash flows of financial assets and liabilities, to require the effective interest rate to be adjusted, equivalent to a movement in a market rate of interest. Also, the amendments introduce reliefs from discontinuing hedge relationships including a temporary relief from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component. There are also amendments to IFRS 7 Financial Instruments: Disclosures to enable users of financial statements to understand the effect of interest rate benchmark reform on an entity's financial instruments and risk management strategy. While application is retrospective, an entity is not required to restate prior periods. The adoption of this amendment did not have any material impact on the Interim Financial Statements of the Group and the Company.
  • IFRS 16 Leases-Cοvid 19 Related Rent Concessions (Amendment). The amendment applies, retrospectively, to annual reporting periods beginning on or after 1 June 2020. Earlier application is permitted, including in financial statements not yet authorized for issue at 28 May 2020. IASB amended the standard to provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the covid-19 pandemic. The amendment provides a practical expedient for the lessee to account for any change in lease payments resulting from the covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change was not a lease modification, only if all of the following conditions are met:
  • The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change.
  • Any reduction in lease payments affects only payments originally due on or before 30 June 2021.
  • There is no substantive change to other terms and conditions of the lease.

The adoption of this amendment did not have any material impact on the Interim Financial Statements of the Group and the Company.

2.3.2. New standards and amendments to existing standards effective after 2021:

Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture. The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. In December

2015 the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting. The amendments have not yet been endorsed by the EU and is not anticipated to have any material impact in the Financial Statements of the Group and the Company.

  • IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments). The amendments are effective for annual reporting periods beginning on or after January 1, 2022 with earlier application permitted. However, in response to the covid-19 pandemic, the Board has deferred the effective date by one year, i.e. 1 January 2023, to provide companies with more time to implement any classification changes resulting from the amendments. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current or non-current. The amendments affect the presentation of liabilities in the statement of financial position and do not change existing requirements around measurement or timing of recognition of any asset, liability, income or expenses, nor the information that entities disclose about those items. Also, the amendments clarify the classification requirements for debt which may be settled by the company issuing own equity instruments. These amendments have not yet been endorsed by the EU and is not anticipated to have any material impact in the Financial Statements of the Group and the Company.
  • IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets as well as Annual Improvements 2018-2020 (Amendments). The amendments are effective for annual periods beginning on or after 1 January 2022 with earlier application permitted. The IASB has issued narrow-scope amendments to the IFRS Standards as follows:
  • IFRS 3 Business Combinations (Amendments) update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations.
  • IAS 16 Property, Plant and Equipment (Amendments) prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.
  • IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendments) specify which costs a company includes in determining the cost of fulfilling a contract for the purpose of assessing whether a contract is onerous.
  • Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases.

These amendments are not anticipated to have any material impact in the Financial Statements of the Group and the Company.

  • IFRS 16 Leases - Cοvid 19 Related Rent Concessions beyond 30 June 2021 (Amendment). The Amendment applies to annual reporting periods beginning on or after 1 April 2021, with earlier application permitted, including in financial statements not yet authorized for issue at the date the amendment is issued. In March 2021, the Board amended the conditions of the practical expedient in IFRS 16 that provides relief to lessees from applying the IFRS 16 guidance on lease modifications to rent concessions arising as a direct consequence of the covid-19 pandemic. Following the amendment, the practical expedient now applies to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022, provided the other conditions for applying the practical expedient are met. The amendment has not yet been endorsed by the EU and is not anticipated to have any material impact in the Financial Statements of the Group and the Company.
  • IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (Amendments). The Amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application permitted. The amendments provide guidance on the application of materiality judgements to accounting policy disclosures. In particular, the amendments to IAS 1 replace the requirement to disclose 'significant' accounting policies with a requirement to disclose 'material' accounting policies. Also, guidance and illustrative examples are added in the Practice Statement to assist in the application of the materiality concept when making judgements about accounting policy disclosures. The amendments have not yet been

endorsed by the EU and is not anticipated to have any material impact in the Financial Statements of the Group and the Company.

  • IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (Amendments). The Amendments become effective for annual reporting periods beginning on or after January 1, 2023 with earlier application permitted and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. The amendments introduce a new definition of accounting estimates, defined as monetary amounts in financial statements that are subject to measurement uncertainty. Also, the amendments clarify what changes in accounting estimates are and how these differ from changes in accounting policies and corrections of errors. The amendments have not yet been endorsed by the EU and is not anticipated to have any material impact in the Financial Statements of the Group and the Company.
  • IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments):

The amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application permitted. In May 2021, the Board issued amendments to IAS 12, which narrow the scope of the initial recognition exception under IAS 12 and specify how companies should account for deferred tax on transactions such as leases and decommissioning obligations. Under the amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning liability and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal. The amendments have not yet been endorsed by the EU and is not anticipated to have any material impact in the Financial Statements of the Group and the Company.

NOTE 3: Financial Risk Management

3.1 Financial Risk Management

The Group is exposed to a variety of financial risks such as market risk, credit risk and liquidity risk. The financial risks relates to the following financial instruments: trade and other assets, restricted cash, cash and cash equivalents, trade and other payables and borrowings. The risk management policy, followed by the Group, focuses on minimizing the impact of unexpected market changes.

The Interim Financial Statements do not include all information regarding the financial risk management and the relevant disclosures required in the annual Financial Statements and should be read in conjunction with the published consolidated and separate Financial Statements for the year ended December 31, 2020.

3.2 Fair Value Estimation of Financial Assets and Liabilities

The Group measures the fair value of financial instruments based on a framework for measuring fair value that categorises financial instruments based on three-level hierarchy in accordance with the hierarchy of the inputs used to the valuation technique, as described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. More specifically, the fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: Inputs for the asset or liability that are not based on observable market data. More specifically if one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

Financial instruments not carried at fair value

The tables below analyse financial assets and liabilities of the Group not carried at fair value as at June 30, 2021 and December 31, 2020, respectively:

June 30, 2021 Valuation hierarchy
Liabilities Level 1 Level 2 Level 3 Total
Borrowings - - 867,481 867,481
December 31, 2020 Valuation hierarchy
Liabilities Level 1 Level 2 Level 3 Total

The liabilities included in the tables above are carried at amortized cost and their carrying value approximates their fair value.

As at June 30, 2021 and December 31, 2020, the carrying value of cash and cash equivalents, restricted cash, trade and other assets as well as trade and other payables approximates their fair value.

NOTE 4: Critical Accounting Estimates and Judgments

In preparing these Interim Financial Statements, the significant estimates, judgments and assumptions made by Management in applying the Group's accounting policies and the key sources of estimation uncertainty were similar to those applied to the consolidated and separate Financial Statements for the year ended December 31, 2020.

The Group's Management estimates and judgments in relation to investment property and the property and equipment which include land and buildings relating to hotel and other facilities, were similar to those applied to the consolidated and separate Financial Statements for the year ended December 31, 2020. The last valuation of the Group's properties was performed at June 30, 2021, by independent valuers, as stipulated by the relevant provisions of L.2778/1999, as in force. In the case of properties belonging to hospitality sector or properties with use directly affected by the hospitality sector, the relevant valuations have been prepared on the basis of "material valuation uncertainty" as defined in the RICS Valuation - Global Standards and International Valuation Standards given the uncertainty from the evolution of COVID-19 pandemic and the possible future impact on the real estate market in our country and internationally and due to lack of sufficient comparative information, as analysed in Note 2.2.

NOTE 5: Segment Reporting

The Group has recognized the following operational segments:

Business Segments:

  • Retail big boxes & high street retail,
  • Bank Branches
  • Offices
  • Other (include hotels, storage space, archives, petrol stations, parking spaces, land plots and other properties with special use),

Geographical Segments:

  • Greece
  • Italy
  • Cyprus
  • Other countries1

Information per business segment and geographical segment for the six-month period ended June 30, 2021 and June 30, 2020 is presented below:

1 In segment Other Countries include Romania and Bulgaria.

A)
Business Segments of Group
Retail
big
boxes &
Bank
Period
ended June
30,
2021
high street retail Branches Offices Other Total
Continuing operations
Rental Income 11,330 17,768 31,134 3,264 63,496
Other 814 40 164 384 1,402
Total Segment Revenue 12,144 17,808 31,298 3,648 64,898
Result from disposal of investment property - (2) - 18 16
Net gain
/ (loss)
from the fair value adjustment of investment property
10,735 10,193 35,635 704 57,267
Direct property related expenses & Property taxes-levies (2,991) (1,293) (6,520) (1,367) (12,171)
Net impairment loss on financial assets (284) - (81) (419) (784)
Other income 615 - 409 - 1,024
Total Segment Operating profit 20,219 26,706 60,741 2,584 110,250
Unallocated operating income 89
Unallocated operating expenses (10,554)
Operating Profit 99,785
Unallocated interest income 9
Unallocated finance costs (12,429)
Allocated finance costs (759) - (1,054) (1,183) (2,996)
Unallocated income 25,566
Profit before tax 109,935
Deferred taxes (24) (1) 429 (522) (118)
Unallocated taxes (1,026)
Profit for the period
from continuing operations
108,791
Allocated gain/(loss) from discontinued operations 186 - (5) 6,542 6,723
Unallocated loss from discontinued operations (7,044)
Profit for the period 108,470
Segment Assets as at June
30,
2021
Assets 482,419 449,140 1,025,702 348,020 2,305,281
Unallocated Assets 267,763
Total Assets 2,573,044
Segment Liabilities as at June 30,
2021
Liabilities 47,754 3,020 88,289 127,196 266,259
Unallocated Liabilities 748,116
Total Liabilities 1,014,375
Non-current assets additions as at June
30,
2021
59,669 11 65,533 10,545 135,758
Retail
big
boxes &
Bank
Period ended June
30,
2020
high street retail Branches Offices Other Total
Continuing operations
Rental Income 10,820 19,382 33,830 4,125 68,157
Total Segment Revenue 10,820 19,382 33,830 4,125 68,157
Net gain
/ (loss)
from the fair value adjustment of investment property
(1,395) 719 (4,239) (567) (5,482)
Direct property related expenses
& Property taxes-levies
(1,910) (1,271) (4,380) (1,303) (8,864)
Net impairment loss on financial assets (292) - (291) (247) (830)
Total Segment Operating profit 7,223 18,830 24,920 2,008 52,981
Unallocated operating income 451
Unallocated operating expenses (13,062)
Operating Profit 40,370
Unallocated interest income 53
Unallocated finance costs (11,850)
Allocated finance costs (723) - (1,138) (1,214) (3,075)
Unallocated non-operating income 3,667
Profit before tax 29,165
Deferred taxes 19 (5) (143) 268 139
Unallocated taxes (1,188)
Profit for the period from continuing operations 28,116
Allocated loss
from discontinued operations
(384) - - (1,252) (1,636)
Unallocated loss from discontinued operations (9,989)
Profit for the period 16,491
Segment Assets as at December
31,
2020
Assets 409,332 463,918 971,997 379,455 2,224,702
Unallocated Assets 224,700
Total Assets 2,449,402
Segment Liabilities as at December
31,
2020
Liabilities 45,106 1,609 76,168 136,009 258,892
Unallocated Liabilities 787,211
Total Liabilities 1,046,103
Non-current assets additions as at December
31,
2020
6,190 - 25,680 11,455 43,325

All amounts expressed in € thousand, unless otherwise stated

B) Geographical Segments of Group

Period ended June
30,
2021
Greece Italy Cyprus Other
Countries
Total
Continuing operations
Rental Income 46,210 8,462 5,316 3,508 63,496
Other 1,402 - - - 1,402
Total Segment Revenue 47,612 8,462 5,316 3,508 64,898
Result from disposal of investment property (2) 18 - - 16
Net gain/(loss)
from the fair value adjustment of investment property
56,647 1,852 (1,186) (46) 57,267
Direct property related expenses & Property taxes-levies (8,202) (2,588) (1,227) (154) (12,171)
Net impairment
loss on financial assets
(110) (85) (589) - (784)
Other income - 996 28 - 1,024
Total Segment Operating profit 95,945 8,655 2,342 3,308 110,250
Unallocated operating income 89
Unallocated operating expenses (10,554)
Operating Profit 99,785
Unallocated interest income 9
Unallocated finance costs (12,429)
Allocated finance costs (2,385) - - (611) (2,996)
Unallocated
non-operating
income
25,566
Profit before tax 109,935
Deferred taxes - - (17) (101) (118)
Unallocated taxes (1,026)
Profit for the period
from continuing operations
108,791
Allocated gain from discontinued operations - - 6,723 - 6,723
Unallocated loss from discontinued operations (7,044)
Profit for the period 108,470
Segment Assets as at June 30,
2021
Assets 1,475,246 389,777 336,935 103,323 2,305,281
Unallocated Assets 267,763
Total Assets 2,573,044
Segment Liabilities as at June 30,
2021
Liabilities 140,864 21,682 65,303 38,410 266,259
Unallocated Liabilities 748,116
Total Liabilities 1,014,375
Non-current assets additions as at June
30,
2021
7,374 127,450 934 - 135,758
Period ended June
30,
2020
Greece Italy Cyprus Other
Countries
Total
Continuing operations
Rental Income 52,766 6,399 5,475 3,517 68,157
Total Segment Revenue 52,766 6,399 5,475 3,517 68,157
Net gain/(loss)
from the fair value adjustment of investment property
4,913 (8,845) (853) (697) (5,482)
Direct property related expenses & Property taxes-levies (6,022) (1,095) (1,669) (78) (8,864)
Net impairment loss on financial assets (142) (247) (441) - (830)
Total Segment Operating profit/(loss) 51,515 (3,788) 2,512 2,742 52,981
Unallocated operating income 451
Unallocated operating expenses (13,062)
Operating Profit 40,370
Unallocated interest income 53
Unallocated finance costs (11,850)
Allocated finance costs (2,422) - - (653) (3,075)
Unallocated non-operating income 3,667
Profit before tax 29,165
Deferred taxes - - 173 (34) 139
Unallocated taxes (1,188)
Profit for the period
from continuing operations
28,116
Allocated loss
from discontinued operations
- - (1,636) - (1,636)
Unallocated loss from discontinued operations (9,989)
Profit for the period 16,491
Segment Assets as at December
31,
2020
Assets 1,459,191 257,087 405,023 103,401 2,224,702
Unallocated Assets 224,700
Total Assets 2,449,402
Segment Liabilities as at December
31,
2020
Liabilities 138,045 5,396 75,803 39,648 258,892
Unallocated Liabilities 787,211
Total Liabilities 1,046,103
Non-current assets additions as at December
31,
2020
41.015 1.639 671 - 43.325

In relation to the above segment analysis we state that:

  • (a) There are no transactions between business segments.
  • (b) Segment assets include investment property, inventories, property and equipment, other intangible assets (customer contracts), trade & other assets and other long-term assets.
  • (c) Unallocated assets include property and equipment, software, equity method investments, investment in joint ventures, cash and cash equivalents, restricted cash, other long-term and current assets.
  • (d) Unallocated liabilities as of June 30, 2021 and December 31, 2020 mainly include borrowings amounted to €715,744 and €747,996 respectively.

Concentration of customers

NBG, lessee of the Group, represents more than 10% of Group's rental income. Rental income from NBG for the six-month period ended June 30, 2021 amounted to €27,053, i.e. 42.6% (six-month period ended June 30, 2020: €30,464, i.e. 44.6%).

NOTE 6: Investment Property

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Balance at the beginning of the period 1,918,015 2,090,040 1,332,779 1,359,579
Additions:
- Direct acquisition of investment property 23,169 32,208 3,549 32,208
- Acquisitions through business combinations 105,610 - - -
- Acquisitions of subsidiaries other than through
business combinations (Note 8)
- 1,550 - -
- Subsequent capital expenditure on investment
property
6,979 9,567 602 1,945
- Transfer from property and equipment (Note 7) - 3,063 - 2,263
- Transfer to property and equipment (Note 7) - (8,771) - (8,771)
- Transfer to inventories - (4,120) - -
- Disposal of investment property (18,809) (132,429) (18,780) (132,429)
- Transfer to Assets held for sale (Note 14) (315) (67,826) - -
Net gain / (loss) from the fair value adjustment of
investment property
57,784 (5,267) 48,795 299
Balance at the end of the period 2,092,433 1,918,015 1,366,945 1,332,779

It is noted that the item "Net gain / (loss) from the fair value adjustment of investment property" of the Interim Condensed Income Statement for the period ended June 30, 2021 of an amount of €57,267 includes a loss of €517 due to the measurement of the fair value of the real estate property at 5 Cavour Str. in Rome, Italy, which has been classified as held for sale (Note 14).

On January 22, 2021, the Company concluded the acquisition of 47 parking spaces with a total area of 507.6 sq.m located at 44 Kifisias Anenue, Maroussi, Attica. The consideration for the acquisition of the property amounted to €367 (not including direct acquisition expenses of €19) while the fair value of the property at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €402.

On February 19, 2021, the Company concluded the acquisition of a property located at 377 Syggrou Avenue, Athens, with a total area of 2.4 thousand sq.m. The consideration for the acquisition of the property amounted to €3,100 (not including direct acquisition expenses of €63) while the fair value of the property at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €3,790. From the total consideration, an amount of €775 was paid on the same day while the remaining amount was paid on April 1, 2021.

On February 25, 2021, the company Picasso Fund acquired a property used as offices and parking spaces in Milan, Italy, of a total area of 11.1 thousand sq.m. The greatest part of the property is already leased to creditworthy tenants. The consideration for the acquisition of the property amounted to €19,000 (not including direct acquisition expenses of €620) while the fair value of the property at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €22,000. From the total consideration, an amount of €7,600 was paid on the same day and the remaining amount will be paid within 12 months from the date of the acquisition. To secure the deferred payment, Picasso Fund submitted to the seller an irrevocable letter of guarantee issued by Intesa Sanpaolo S.p.A.

On March 26, 2021, the Company proceeded with the acquisition of a majority stake of 80% of the shares of the company CI Global RE S.a.r.l. SICAF-RAIF (hereinafter "CI Global") in Luxembourg (representing 46.2% of the CI Global's economic rights). CI Global owns the units of Fondo Tarvos - Fondo Comune di Investimento Alternativo Immobiliare di Tipo Chiuso Riservato (hereinafter ''Tarvos Fund'') which owns 11 commercial properties in Italy. The fair value of the properties at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €105,610 (Note 8).

On May 6, 2021, the Company signed a Share Purchase Agreement with LAMDA DEVELOPMENT S.A for the acquisition of 100% of the shares of LAMDA ILIDA OFFICE S.M.S.A., 100% subsidiary of LAMDA DEVELOPMENT S.A. and owner of "ILIDA BUSINESS CENTER", an office building in Maroussi. "ILIDA BUSINESS CENTER" is a Class A office building with a total superstructure area of 11,750 sq.m. and 277 parking spaces. The transaction will be concluded upon the completion of certain condition precedents as defined in the aforementioned share purchase agreement. The deadline for such completion is September 30, 2021. The consideration for the acquisition of the shares will be equal to the net asset value (NAV) of LAMDA ILIDA OFFICE S.M.S.A. as this will be determined, based on the provisions of the SPA, at the completion of the transaction.

Management always evaluates the optimization of the performance of the Group's real estate portfolio, including a possible sale if market conditions are appropriate. In this context, on June 18, 2021, the Company concluded the disposal of two properties in Greece. The total consideration for the sale amounted to €18,778 and their book value at the date of the disposal amounted to €18,780. From the total consideration, the Company received amount of €10,000 until the June 30, 2021, while the amount of €8,778 was recorded in the trade receivables in the Interim Condensed Statement of Financial Position of the Group and the Company as of June 30, 2021 (Note 11).

The Group's borrowings which are secured on investment property are stated in Note 19.

All amounts expressed in € thousand, unless otherwise stated

The Group's and Company's investment property is measured at fair value. The table below presents the Group's investment property per business segment and geographical area as at June 30, 2021 and December 31, 2020. The Group's policy is to recognize transfers into and out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. During the six-month period, there were no transfers into and out of Level 3.

Greece Italy Romania Cyprus Bulgaria 30.06.2021
Segments Retail Office Other1 Retail Office Other2 Retail Office Retail Office Other3 Retail Office Total
Level 3 3 3 3 3 3 3 3 3 3 3 3 3
Fair value at 01.01.2021 719,972 584,159 71,081 9,620 143,140 51,740 1,230 5,490 99,050 46,305 89,708 9,600 86,920 1,918,025
Additions:
Direct Acquisition of investment
property - 3,549 - - 19,620 - - - - - - - - 23,169
Acquisitions through business - - - 59,490 36,720 9,400 - - - - - - - 105,610
combinations
Subsequent capital expenditure on 137 3,687 1 53 1,957 210 - - - - 934 - - 6,979
investment property
Disposal of Investment Property (7,850) (10,930) - - - (29) - - - - - - - (18,809)
Transfers among segments 307 (307) - - - - - - - - - - - -
Transfer to Assets held for sale (315) - - - - - - - - - - - - (315)
Net gain / (loss) from the fair value
adjustment of investment property 21,059 33,555 2,033 (463) 3,213 (381) 11 (38) 484 (722) (948) (149) 130 57,784
Fair value at 30.06.2021 733,310 613,713 73,115 68,700 204,650 60,940 1,241 5,452 99,534 45,583 89,694 9,451 87,050 2,092,433

1 The segment "Other" in Greece includes hotels, commercial warehouses, storage spaces, archives, petrol stations and parking spaces.

2 The segment "Other" in Italy relates to land plot, storage spaces and parking spaces.

3 The segment "Other" in Cyprus relates to hotels, land plot, storage space and other properties with special use.

All amounts expressed in € thousand, unless otherwise stated

The segment "Retail" is further analysed as below:

Country Greece Italy Romania Cyprus Bulgaria 30.06.2021
Segment Retail big
boxes &
high street retail
Bank
Branches
Retail big
boxes &
high street retail
Bank
Branches
Bank
Branches
Retail big
boxes &
high street retail
Retail big
boxes &
high street retail
Total
Level 3 3 3 3 3 3 3
Fair value at 01.01.2021 276,960 443,012 6,070 3,550 1,230 99,050 9,600 839,472
Additions:
Acquisitions through business
combinations
- - 59,490 - - - - 59,490
Subsequent capital expenditure
on investment property
126 11 53 - - - - 190
Disposal of Investment Property - (7,850) - - - - - (7,850)
Transfers among segments 5,146 (4,439) - - - - - 307
Transfer to Assets held for sale (315) - - - - - - (315)
Net gain / (loss) from the fair
value adjustment of investment
property
10,877 10,182 (463) - 11 484 (149) 20,942
Fair value at 30.06.2021 292,794 440,516 65,150 3,550 1,241 99,534 9,451 912,236

All amounts expressed in € thousand, unless otherwise stated

Greece Italy Romania Cyprus Bulgaria 31.12.2020
Segments Retail Office Other1 Retail Office Other2 Retail Office Retail Office Other3 Retail Office Total
Level 3 3 3 3 3 3 3 3 3 3 3 3 3
Fair value at 01.01.2020 756,155 645,108 65.436 13,976 198,944 52,890 1,204 5,426 99,832 48,704 104.978 10,401 86,986 2,090,040
Additions:
Direct Acquisition of investment 4,620 17,382 10,206 - - - - - - - - - - 32,208
property
Acquisitions other than through 1,443 - 107 - - - - - - - - - - 1,550
business combinations
Subsequent capital expenditure on 64 7,169 24 59 1,129 451 - - 4 226 441 - - 9,567
investment property
Disposal of Investment Property (42,476) (89,953) - - - - - - - - - - - (132,429)
Transfers among segments 145 6,155 (6,300) - - - - - 2,360 8,420 (10,780) - - -
Transfer from property and
equipment
- 2,263 - - - - - - - - 800 - - 3,063
Transfer to property and - (8,771) - - - - - - - - - - - (8,771)
equipment
Transfer to inventories - - - - - - - - - - (4,120) - - (4,120)
Transfer to Assets held for sale - - - (4,090) (45,820) - - - (2,290) (14,796) (830) - - (67,826)
Net gain / (loss) from the fair value 21 4,806 1,608 (325) (11,113) (1,601) 26 64 (856) 3,751 (781) (801) (66) (5,267)
adjustment of investment property
Fair value at 31.12.2020 719,972 584,159 71,081 9,620 143,140 51,740 1,230 5,490 99,050 46,305 89,708 9,600 86,920 1,918,015

1 The segment "Other" in Greece includes hotels, student housing, commercial warehouses, storage spaces, archives, petrol stations and parking spaces.

2 The segment "Other" in Italy relates to land plot and storage space.

3 The segment "Other" in Cyprus relates to hotels, land plot, storage space and other properties with special use.

The segment "Retail" is further analysed as below:
---------------------------------------------------- -- -- -- -- -- -- --
Country Greece Italy Romania Cyprus Bulgaria 31.12.2020
Segment Retail big
boxes &
high street retail
Bank
Branches
Retail big
boxes &
high street retail
Bank
Branches
Bank
Branches
Retail big
boxes &
high street retail
Retail big
boxes &
high street retail
Total
Level 3 3 3 3 3 3 3
Fair value at 01.01.2020 271,834 484,321 10,396 3,580 1,204 99,832 10,401 881,568
Additions:
Direct acquisition of investment
property
4,620 - - - - - - 4,620
Acquisitions other than through
business combinations
1,443 - - - - - - 1,443
Subsequent capital expenditure
on investment property
64 - 59 - - 4 - 127
Disposal of Investment Property (384) (42,092) - - - - - (42,476)
Transfers among segments (1,488) 1,633 - - - 2,360 2,505
Transfer to Held for sale - - (4,090) - - (2,290) - (6,380)
Net gain / (loss) from the fair
value adjustment of investment
property
871 (850) (295) (30) 26 (856) (801) (1,935)
Fair value at 31.12.2020 276,960 443,012 6,070 3,550 1,230 99,050 9,600 839,472

All amounts expressed in € thousand, unless otherwise stated

Information about fair value measurements of investment property per business segment and geographical area for June 30, 2021:

Country Segment Fair Value Valuation Method Monthly market
rent
Discount rate (%) Capitalization
rate (%)
Greece Retail
big
boxes & high street retail
292,794 15%-20% market approach
and
1,616 6.35% -
10.87%
5,35% -
9.50%
80%-85% discounted cash flows
(DCF)
Greece Bank Branches 440,516 15%-20% market approach and 80%-85% DCF 1,988 6.79% -
9.89%
5.50% -
8.50%
Greece Offices 613,713 15%-20% market approach and 80%-85% DCF 3,286 7.23% -
9.87%
6.00% -
8.50%
Greece Other1 73,115 0%-15%-20% market approach and 80%-85%-100% DCF 280 8.70% -
10.35%
7.55% -
9.00%
Italy Retail
big
boxes & high street retail
65,150 0% market approach and 100% DCF 464 6.00% -
9.80%
5.40% -
8.70%
Italy Bank Branches 3,550 0% market approach and 100% DCF 18 6.30% 5.15%
Italy Offices 204,650 0% market approach and 100% DCF 1.355 5.68% -
10.00%
5.25% -
7.50%
Italy Other2 51,000 0% market approach and 100% residual method - 6.40% -
0% market approach and 100%
Italy Other3 435 direct capitalization method 2 - 4.60%
Italy Other4 9,505 0% market approach and 100% DCF 52 4.00% -
8.15%
7.25%
Romania Bank Branches 1,241 15% market approach and 85% DCF 11 9.13% -
10.39%
7.75%
-
9.00%
Romania Offices 5,452 15% market approach and 85% DCF 31 9.13%
-
9.14%
7.75%
Cyprus Retail
big
boxes & high street retail
99,534 15%-20%
market approach and 80%-85%
DCF
486 6.71% -
8.00%
5.00% -
6.50%
0%-20% market approach and 80%-100%
DCF
or 0% market
Cyprus Offices 45,583 approach and 100% residual method 238 7.01% -
8.01%
5.50% -
6.50%
0% -20% market approach and 80%-100%
DCF
or 0% market
Cyprus Other5 89,694 approach and 100% residual method 142 6.76% -
16.85%
5.25% -
9.00%
Bulgaria Retail
big
boxes & high street retail
9,451 0% market approach and 100% DCF 158 10.49% 8.50%
Bulgaria Offices 87,050 20% market approach and 80% DCF 536 9.04% 7.50%
2,092,433

1 The segment "Other" in Greece include hotels, storage spaces, archives, petrol stations and parking spaces.

2 The segment "Other" in Italy relates to land plot.

3 The segment "Other" in Italy relates to storage space.

4 The segment "Other" in Italy relates to logistics and parking space.

5 The segment "Other" in Cyprus relates to hotels, land plot, storage spaces and other properties with special use.

All amounts expressed in € thousand, unless otherwise stated

Country Segment Fair Value Valuation Method Monthly market
rent
Discount rate (%) Capitalization
rate (%)
Greece Retail
big
boxes & high street retail
276,960 15%-20% market approach
and
80%-85% discounted cash flows
(DCF)
1,540 6.78% -
11.23%
5.50% -
10.00%
Greece Bank Branches 443,012 15%-20% market approach and 80%-85% DCF 1,987 6.83% -
9.89%
5.75% -
8.50%
Greece Offices 584,159 15%-20% market approach and 80%-85% DCF 3,182 6.95% -
11.56%
6.25% -
9.00%
Greece Other1 71,081 0%-15%-20% market approach and 80%-85%-100% DCF 301 8.32% -
10.33%
7.25% -
9.00%
Italy Retail
big
boxes & high street retail
6,070 0% market approach and 100% DCF 35 5.70% -
7.70%
5.40% -
6.65%
Italy Bank Branches 3,550 0% market approach and 100% DCF 18 6.05% 5.15%
Italy Offices 143,140 0% market approach and 100% DCF 807 5.45% -
9.40%
5.25% -
6.90%
Italy Other2 51,300 0% market approach and 100% residual method - 6.45% -
Italy Other3 440 0% market approach and 100%
direct capitalization method
2 - 4.60%
Romania Bank Branches 1,230 0% market approach and 100% DCF 10 9.55% -
10.35%
7.75%
-
8.75%
Romania Offices 5,490 0% market approach and 100% DCF 39 9.55% 7.75%
Cyprus Retail
big
boxes & high street retail
99,050 20% market approach and 80%
DCF
473 5.75% -
8.25%
5.25% -
7.00%
Cyprus Offices 46,305 20% market approach and 80% DCF 241 4.97% -
7.99%
5.00% -
6.75%
Cyprus Other4 89,708 0% -20% market approach and 80%-100%
DCF
or 0% market
approach and 100% residual method
143 5.00% -
11.06%
4.85% -
10.00%
Bulgaria Retail
big
boxes & high street retail
9,600 0% depreciated replacement cost method and 100% DCF 179 9.25% 8.00%
Bulgaria Offices 86,920 0% market approach and 100% DCF 557 8.50% 7.25%
1,918,015

Information about fair value measurements of investment property per business segment and geographical area for December 31, 2020:

1 The segment "Other" in Greece include hotels, student housing, storage spaces, archives, petrol stations and parking spaces.

2 The segment "Other" in Italy relates to land plot.

3 The segment "Other" in Italy relates to storage space.

4 The segment "Other" in Cyprus relates to hotels, land plot, storage spaces and other properties with special use.

In accordance with existing Greek REIC legislation, property valuations are supported by appraisals performed by independent professionally qualified valuers who prepare their reports as at June 30 and December 31. The investment property valuation for the consideration of the fair value is performed taking into consideration the high and best use of each property given the legal status, technical characteristics and the allowed uses for each property. In accordance with existing Greek REIC legislation JMD 26294/B1425/19.7.2000, valuations are based on at least two methods.

The last valuation of the Group's properties was performed at June 30, 2021 by independent valuers, as stipulated by the relevant provisions of L.2778/1999, as in force, i.e. the company "Proprius Commercial Property Consultants ΕPE" (representative of Cushman & Wakefield) and jointly the companies "P. Danos & Associates" (representative of BNP Paribas) and "Athinaiki Oikonomiki EPE" (representative of Jones Lang LaSalle) and the company "HVS Hospitality Consulting Services S.A." for the properties outside Italy and the company "Jones Lang LaSalle S.p.A." for the properties in Italy. The impact of COVID-19 in the valuations of the properties as of June 30, 2021 is analysed in Note 2.2.

For the Group's portfolio the market approach and the discounted cash flow (DCF) method were used, for the majority of the valuations. For the valuation of the Group's properties, except for three (3) properties, the DCF method was assessed by the independent valuers to be the most appropriate. The method of income and more specifically the method of discounted cash flows (DCF) is considered the most appropriate for investment properties whose value depends on the income they produce, such as the properties of the portfolio.

Especially, for the valuation of Group's properties in Greece, Cyprus and Romania, the DCF method was used in all properties, except for one property in Cyprus as mentioned below, and in the most properties the market approach. For the weighing of the two methods (DCF and market approach), the rates 80%, 85% or 100% for the DCF method and 20%, 15% or 0%, respectively, for the market approach have been applied, as shown in the table above. The increased weighting for the DCF method is due to the fact that this method reflects more effectively the manner in which investment properties, such as the properties of our portfolio, transact in the market.

For the retail property in Bulgaria, two methods were used, the DCF method and the market approach. For the weighing of the two methods the rates 100% for the DCF method and 0% for the market approach have been applied, as shown in the table above. The increased weighting for the DCF method is due to the fact that this method reflects more effectively the manner in which investment properties, as the appraised one, transact in the market.

For the office property in Bulgaria, two methods were used, the DCF method and the market approach. For the weighing of the two methods (DCF and market approach), the rates 100% for the DCF method and 0% for the market approach have been applied, as shown in the table above. The increased weighting for the DCF method is due to the fact that this method reflects more effectively the manner in which investment properties, as the appraised one, transact in the market, while the property is under development thus the other methods are considered as less appropriate.

For the properties in Italy, which constitute commercial properties (offices and retail) and storage spaces, the independent valuers used two methods, the DCF method and the market approach, except for the property located at Via Vittoria12, in Ferrara, for which the direct capitalization method and the market approach were used, as shown in the table above. For the weighing of the two methods the rates 100% for the DCF and direct capitalisation methods and 0% for the market approach have been applied. The increased weighting for the DCF and direct capitalisation methods is due to the fact that these methods reflect more effectively the manner in which investment properties, as the appraised ones, transact in the market and represents the common appraisal practice, while the value derived by using the market approach is very close to the one derived by using the DCF and direct capitalisation methods.

Specifically, for the property in Torvaianica area, in the municipality of Pomezia, Rome, and the property owned by the company Aphrodite Springs Public Limited, in Paphos, Cyprus which are land plots with development potential, two methods were used, the residual method and the market approach, as shown in the table above. For the weighing of the two methods the rates 100% for the residual method and 0% for the market approach have been applied. The increased weighting for the residual method is due to the fact that the valuers take into consideration the current development plan, which is difficult to be considered by using another method, and that the value derived by using the market approach is very close to the one derived by using the residual method.

The abovementioned valuation had as a result a net gain from fair value adjustment of investment property amounting to €57,267 for the Group and €48,795 for the Company (June 30, 2020: net loss of €5,482 for the Group and net gain of €1,309 for the Company) (excluding the loss of €20 as of June 30, 2021 and the loss of €1,054 of June 30, 2020 from discontinued operations (Note 14)).

Were the discount rate as at June 30, 2021, used in the DCF analysis, to increase or decrease by +/-10% from Management estimates, the carrying amount of investment property would be lower by €110,763 or higher by €112,857, respectively.

Were the capitalization rate as at June 30, 2021 used in the DCF analysis, to increase or decrease by +/-10% from Management estimates, the carrying amount of investment property would be lower by €59.241 or higher by €72,721, respectively.

Were the sale price per square meter of the future development of residencies as at June 30, 2021 used in the valuation to determine the fair value of the land plot owned by the company Aphrodite Springs Public Limited in Paphos, Cyprus, different by +/- 10% from Management's estimates, the carrying amount of investment property would be estimated to be €18,800 higher or €18,800 lower, respectively.

Were the construction cost per square meter of the future development of residencies as at June 30, 2021 used in the valuation to determine the fair value of the land plot owned by the company Aphrodite Springs Public Limited, in Paphos, Cyprus, to increase or decrease by +/-10% from Management estimates, the carrying amount of investment property would be lower by €11,800 or higher by €11,800 respectively.

Were the sales price/rental value of the development as at June 30, 2021, used in the valuation to determine the fair value of the land plot in Italy, to increase or decrease by +/-10% from Management estimates, the carrying amount of investment property would be higher by €59,500 higher or negative, respectively.

Were the construction cost of the development as at June 30, 2021, used in the valuation to determine the fair value of the land plot in Italy, to increase or decrease by +/-10% from Management estimates, the carrying amount of investment property would be negative or €51,800 higher, respectively.

All amounts expressed in € thousand, unless otherwise stated

NOTE 7: Property and Equipment

Group Land and buildings
(Administrative Use)
Land and buildings (Hotel &
Other Facilities)
Motor
vehicles
Fixtures and
equipment
Leasehold
improvements
Assets under
construction &
Advances
Right-of
use Asset
Total
Cost or Fair value
Balance at January 1, 2020 2,435 104,114 9 8,307 66 1 1,631 116,563
Additions 605 544 - 2,063 - - 943 4,155
Transfer to investment property
(Note 6)
(2,436) (800) - - - - - (3,236)
Transfer from investment property
(Note 6)
8,771 - - - - - - 8,771
Disposals - - - (23) - - - (23)
Other - - - - - - (56) (56)
Transfer to assets held for sale
(Note 14)
- (103,858) - (8,643) - - (1,921) (114,422)
Balance at
December 31, 2020
9,375 - 9 1,704 66 1 597 11,752
Accumulated depreciation
Balance at January 1, 2020 (314) (4,166) (9) (1,567) (4) - (468) (6,528)
Depreciation charge (114) (1.241) - (1.649) (10) - (726) (3,740)
Transfer to investment property
(Note 6)
317 - - - - - - 317
Impairment - (6,650) - - - - - (6,650)
Disposals - - - 18 - - - 18
Other - - - - - - 21 21
Transfer to assets held for sale - 12,057 - 2,646 - - 1,036 15.739
Balance at
December 31, 2020
(111) - (9) (552) (14) - (137) (823)
Net book value at December 31, 2020 9,264 - - 1,152 52 1 460 10,929
Cost or Fair value
Balance at January 1,
2021
9,375 - 9 1,704 66 1 597 11,752
Additions 87 - - 18 - - - 22
Additions through acquisition of subsidiary (Note 8) - - - 1 - - - 1
Other - - - - - - 2 2
Balance at June
30, 2021
9,462 - 9 1,723 66 1 599 11,860
Accumulated depreciation
Balance at January 1,
2021
(111) - (9) (552) (14) - (137) (823)
Depreciation charge (66) - - (143) (5) - (45) (259)
Balance at June
30, 2021
(177) - (9) (695) (19) - (182) (1,082)
Net book value at June
30, 2021
9,285 - - 1,028 47 1 417 10,778

All amounts expressed in € thousand, unless otherwise stated

The category "Land and buildings - Hotel & Other Facilities" comprises of the properties of Aphrodite Hills Resort Limited and The Cyprus Tourism Development Company Limited. The above companies as of December 31, 2020 were classified as held for sale. Aphrodite Hills has the only certified PGA National Cyprus golf course in Cyprus, as well as hotel facilities and other properties related to the use, operation and exploitation of the resort. CTDC is the owner of the 5* hotel "The Landmark Nicosia" in Cyprus. On April 1, 2021 the sale of the 45% of MHV, which owns the 100% of the shares of CTDC, was completed and thus the company is included in the Investments in Joint Ventures (Note 10) and the Aphrodite Hills Resort has been classified as held for sale. (Note 14).

Company Land and
buildings
(Administrative
use)
Motor
vehicles
Fixtures
and
equipment
Right-of
use Asset
Total
Cost
Balance at January 1, 2020 2,435 9 657 247 3,348
Additions 605 - 1,037 255 1,897
Transfer to investment property (Note 6) (2,436) - - - (2,436)
Transfer from investment property (Note 6) 8,771 - - - 8,771
Other - - - (54) (54)
Balance at December 31, 2020 9,375 9 1,694 448 11,526
Accumulated depreciation
Balance at January 1, 2020 (314) (9) (325) (67) (715)
Depreciation charge (114) - (221) (74) (409)
Transfer to investment property (Note 6) 317 - - - 317
Other - - - 21 21
Balance at December 31, 2020 (111) (9) (546) (120) (786)
Net book value at December 31, 2020 9,264 - 1,148 328 10,740
Cost
Balance at January 1, 2021 9,375 9 1,694 448 11,526
Additions 87 - 19 - 106
Balance at June 30 2021 9,462 9 1,713 448 11,632
Accumulated depreciation
Balance at January 1, 2021 (111) (9) (546) (120) (786)
Depreciation charge (67) - (141) (39) (247)
Balance at June 30 2021 (178) (9) (687) (159) (1,033)
Net book value at June 30, 2021 9,284 - 1,026 289 10,599

The category ''Land and buildings'' of the Group and the Company comprise of the owner-occupied property of the Company located at 9, Chrisospiliotissis Street, Athens, used for administration purposes.

The borrowings of the Group and the Company are secured on land and buildings of the Company and the Group (Note 19).

NOTE 8: Acquisition of Subsidiaries (business combinations)

Business Combinations

On March 26, 2021, the Company proceeded with the acquisition of a majority stake of 80% of the shares of the company CI Global RE S.a.r.l. SICAF-RAIF (hereinafter "CI Global") in Luxembourg (representing 46.2% of the CI Global's economic rights). CI Global owns the units of Fondo Tarvos - Fondo Comune di Investimento Alternativo Immobiliare di Tipo Chiuso Riservato (hereinafter ''Tarvos Fund'') which owns 11 commercial properties in Italy. The acquisition was accounted for as a business combination. Therefore, all transferred assets and liabilities of CI Global were valued at fair value. Until the date of the approval of the Interim Financial Statements the fair values of assets, liabilities and non-controlling interests as of the date of acquisition are not final.

The following table summarizes the provisional fair values of assets and liabilities of CI Global as of the date of acquisition, which is March 26, 2021:

26.03.2021
ASSETS
Investment Property 105,610
Cash and cash equivalents 5,363
Other assets 1,417
Total assets 112,390
LIABILITIES
Borrowings (35,823)
Other liabilities (4,570)
Total liabilities (40,393)
Fair value of acquired interest in net assets 71,997
Νon-controlling interests over the Fair value of acquired net assets (38,735)
Negative Goodwill (8,846)
Total purchase consideration 24,416

Source: Unaudited financial information

The consideration for the acquisition of CI Global amounted to €24,416 out of which amount €11,259 was in cash and amount €13,157 in share exchange in the context of the acquisition of the 20% of the shares of the company Picasso (Note 9). The consideration was lower than the fair value of the net assets acquired of amount €33,262 and the gain (negative goodwill) amounted to €8,846 was recognized directly in the Interim Condensed Income Statement for six-month period ended June 30, 2021 in line "Negative goodwill from acquisition of subsidiaries".

The acquired subsidiary contributed €1,729 in the revenue and €2,275 in the profit of the period from the day of its acquisition until June 30, 2021. If the above acquisition had occurred on January 1, 2021, with all other variables held constant, Group's revenue for the six-month period ended June 30, 2021 would have been €66,595 and Group's profit from continuing operations for the six-month period ended June 30, 2021 would have been €107,957.

NOTE 9: Investments in Subsidiaries

Group Company
Subsidiaries Country of
incorporation
Unaudited tax
years
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Karolou Touristiki S.A. Greece 2015-2020 100.00% 100.00% 100.00% 100.00%
Anaptixi Fragokklisia Real Estate S.A. Greece 2018-2020 100.00% 100.00% 100.00% 100.00%
Irinna Ktimatiki S.A. Greece 2017-2020 100.00% 100.00% 100.00% 100.00%
ILDIM M. IKE Greece 2018-2020 100.00% 100.00% 100.00% 100.00%
MILORA M.IKE Greece 2019-2020 100.00% 100.00% 100.00% 100.00%
Egnatia Properties S.A. Romania 2015-2020 99.96% 99.96% 99.96% 99.96%
PNG Properties EAD Bulgaria 2017-2020 100.00% 100.00% 100.00% 100.00%
I&B Real Estate EAD Bulgaria 2016-2020 100.00% 100.00% 100.00% 100.00%
Quadratix Ltd. Cyprus 2016-2020 100.00% 100.00% 100.00% 100.00%
Lasmane Properties Ltd. Cyprus 2016-2020 100.00% 100.00% 100.00% 100.00%
Aphrodite Hills Resort Limited (1) Cyprus 2016-2020 60.00% 60.00% 60.00% 60.00%
Aphrodite Hotels Limited (1) Cyprus 2016-2020 60.00% 60.00% - -
Aphrodite Hills Property Management Limited (1) Cyprus 2016-2020 60.00% 60.00% - -
The Aphrodite Tennis and Spa Limited (1) Cyprus 2016-2020 60.00% 60.00% - -
Aphrodite Hills Services Limited (1) Cyprus 2016-2020 60.00% 60.00% - -
Aphrodite Springs Public Limited Cyprus 2015-2020 96.22% 60.00% 96.22% 60.00%
MHV Mediterranean Hospitality Venture Limited (1) Cyprus 2018- 2020 - 90.00% - 90.00%
The Cyprus Tourism Development Company Limited (1) Cyprus 2015-2020 - 90.00% - -
CYREIT AIF Variable Investment Company Plc Cyprus 2018-2020 88.23% 88.23% 88.23% 88.23%
Letimo Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Elizano Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Artozaco Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Consoly Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Smooland Properties Ltd. (3) Cyprus 2013-2020 88.23% 88.23% - -
Threefield Properties Ltd. (3) Cyprus 2015-2020 88.23% 88.23% - -
Bascot Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Nuca Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Vanemar Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Alomnia Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Kuvena Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Azemo Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Ravenica Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Wiceco Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Lancast Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Rouena Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Allodica Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Vameron Properties Ltd. (3) Cyprus 2015-2020 88.23% 88.23% - -
Orleania Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Primaco Properties Ltd. (3) Cyprus 2016-2020 88.23% 88.23% - -
Arleta Properties Ltd. (3) Cyprus 2017-2020 88.23% 88.23% - -
Nash S.r.L. Italy 2015-2020 100.00% 100.00% 100.00% 100.00%
Prodea Immobiliare SrL Italy - 80.00% 80.00% 80.00% 80.00%
Picasso Lux S.a.r.l. SICAF-RAIF(2) Luxembourg - 80.00% - 80.00% -
Picasso Fund(4) Italy 2015-2020 80.00% 100.00% - 100.00%
CI Global RE S.a.r.l. SICAF-RAIF(2) Luxembourg - 80.00% - 80.00% -
Tarvos Fund(5) Italy 2015-2020 80.00% - - -
Euclide S.r.l. (5) Italy 2015-2020 80.00% - - -

(1) The company Aphrodite Hills Resort Limited and its subsidiaries, MHV Mediterranean Hospitality Venture Limited and The Cyprus Tourism Development Company Limited, have been classified as "Assets held for sale" (Note 14).

(2) The Company owns 80% of the share capital of the companies Picasso Lux S.a.r.l. SICAF-RAIF and CI Global RE S.a.r.l. SICAF-RAIF representing 46.2% of the economic rights of those companies.

(3) These companies are 100% subsidiaries of the company CYREIT AIF Variable Investment Company Plc.

(4) The company Picasso Fund is 100% subsidiary of Picasso Lux S.a.r.l. SICAF-RAIF.

(5) The companies Tarvos Fund and Euclide S.r.l. are 100% subsidiaries of the company CI Global RE S.a.r.l. SICAF-RAIF.

The subsidiaries are consolidated with the full consolidation method.

The financial years 2015 up to 2019 of Karolou Touristiki S.A. have been audited by the elected under L. 4548/2018 statutory auditor, in accordance with article 82 of L. 2238/1994 and the article 65Α of L. 4174/2013 and the relevant tax audit certificates were issued with no qualification. Until the date of approval of the Interim Financial Statements, the tax audit by the statutory auditor for the year 2020 has not been completed.

The financial years 2018 up to 2019 for the companies Irina Ktimatiki S.A. and Anaptixi Fragokklisia Real Estate S.A. has been audited by the elected under L. 4548/2018 statutory auditor, in accordance with article 82 of L. 2238/1994 and the article 65Α of L. 4174/2013 and the relevant tax audit certificates were issued with no qualification. The financial year 2018 of ILDIM M.IKE has not been audited for tax purposes from the Greek tax authorities and consequently the tax obligations for this year are not considered as final. However, the Management estimates that the results of future tax audits may conducted by the tax authorities, will not have a material effect on the financial position of the Company. The financial year 2019 has been audited by the elected under L. 4548/2018 statutory auditor, in accordance with article 82 of L. 2238/1994 and the article 65Α of L. 4174/2013 and the relevant tax audit certificate was issued with no qualification. Until the date of approval of the Interim Financial Statements, the tax audit by the statutory auditor for the year 2020 has not been completed.

According to POL. 1006/05.01.2016, the companies for which a tax audit certificate with no qualifications is issued, are not exempted from tax audit for offenses of tax legislation by the tax authorities. Therefore, the tax authorities may come back and conduct their own tax audit. However, the Management estimates that the results of future tax audits may conducted by the tax authorities, will not have a material effect on the financial position of the companies.

Below is presented an analysis of the cost of investments in subsidiaries as it is presented in the Company's Interim Condensed Statement of Financial Position as of June 30, 2021 and December 31, 2020:

Cost of Investment 30.06.2021 31.12.2020
Nash S.r.L. 52,720 52,510
Picasso Fund - 80,753
Egnatia Properties S.A. 20 20
Quadratix Ltd. 10,802 10,802
Karolou Touristiki S.A. 4,147 4,147
PNG Properties EAD 441 151
Lasmane Properties Ltd. 13,210 13,210
Anaptixi Fragokklisia Real Estate S.A. 17,400 17,400
Irina Ktimatiki S.A. 11,174 11,174
I & B Real Estate EAD 40,142 40,142
Aphrodite Springs Public Limited 7,109 2,400
CYREIT AIF Variable Investment Company Plc 140,437 140,437
ILDIM M. IKE 3,012 3,012
Prodea Immobiliare SrL 1,048 1,000
MILORA M.IKE 1,558 1,558
Picasso Lux S.a.r.l. SICAF-RAIF 41,512 -
CI Global RE S.a.r.l. SICAF-RAIF 24,415 -
Total 369,147 378,716

On February 9, 2021 the Company contributed an amount of €8,500 as capital contribution in the company Picasso Fund.

On March 17, 2021 the Company contributed an amount of €48 as capital contribution in the subsidiary Prodea Immobiliare SrL.

In March 2021, the Company signed a framework agreement with an international investment vehicle with a view to form a collaboration in the Italian commercial real estate market. In this context, on March 23, 2021, the Company proceeded with the establishment of the company Picasso Lux S.a.r.l. SICAF-RAIF (hereinafter "Picasso Lux") in Luxembourg, by the contribution in kind of all of the shares of Picasso Fund and a cash contribution of €600. On March 26, 2021, the Company proceeded with the disposal of 20% of the shares of Picasso Lux (representing 53.8% of the Picasso Lux's economic rights) for a total consideration of €65,518 and at the same time, the Company proceeded with the acquisition of a majority stake of 80% of the shares of the company CI Global RE S.a.r.l. SICAF-RAIF (hereinafter "CI Global") in Luxembourg (representing 46.2% of the CI Global's economic rights) for a consideration of €24,416. The purpose of the cooperation is to increase the value of the properties owned by Picasso Fund and Tarvos Fund and to maximize the returns of the Company and its shareholders, through the merger of Picasso Lux and GI Global in Luxembourg on one hand and of Picasso Fund and Tarvos Fund in Italy on the other hand. In this context, the Company received an amount of €10,329 while the remaining net amount of €30,773 is included in trade receivables in the Interim Condensed Statement of Financial Position of the Group and the Company as of June 30, 2021 (Note 11). The gain for the Company from the disposal of 20% of the shares of Picasso Fund amounted to €17,178 and is included in the item "Gain from disposal of subsidiaries" in the Interim Condensed Income Statement for the six-month period ended June 30, 2021.

On April 1, the sale of 45% of the Company's stake in MHV Mediterranean Hospitality Venture Limited (hereinafter "MHV") and in The Cyprus Tourism Development Company Limited, a 100% subsidiary of MHV was completed (Note 10).

On April 7, 2021, the Company acquired an additional percentage (36.22%) for a consideration of €4,709 in its subsidiary Aphrodite Springs Public Limited. Upon completion of the transaction, the Company holds 96.22% of the share capital of Aphrodite Springs Public Limited.

On April 29, 2021, the General Meeting of Shareholders of PNG Properties EAD decided to increase its share capital by €290 (BGN 567,191) with the issue of 567,191 new shares with a nominal value of BGN 1.

On May 11, 2021 the Company contributed an amount of €210 to its subsidiary Nash S.r.L. as capital contribution.

It is noted that the annual financial statements of the consolidated non-listed subsidiaries of the Group are available on the Company's website address (https://prodea.gr/).

Note 10: Investments in joint ventures

Group Company
Investments in joint ventures Country Unaudited
tax years
30.06.2021 31.12.2020 30.06.2021 31.12.2020
EP Chanion S.A. Greece 2015 - 2020 40% 40% 40% 40%
Panterra S.A. Greece 2019 - 2020 49% 49% 49% 49%
RINASCITA S.A. Greece 2018 - 2020 35% 35% 35% 35%
PIRAEUS TOWER S.A. Greece 2020 30% 30% 30% 30%
MHV Mediterranean Hospitality
Venture Limited
Cyprus 2018 - 2020 45% - 45% -

On April 1, the sale of 45% of the Company's stake in MHV Mediterranean Hospitality Venture Limited and The Cyprus Tourism Development Company Limited, a 100% subsidiary of MHV, was completed (Note 9). Upon completion of the sale, MHV is a joint venture. The consideration amounted to €26,803 of which €12,073 was collected on the same day while the remaining amount of €14,730 will be collected in accordance with the terms of the purchase agreement and has been recorded in the trade receivables in the Interim Condensed Financial Statement of the Group and the Company as of 30 June 2021 (Note 11). The sale of MHV resulted in a profit for the Company amounting to a total €1,990 (gain of €995 from the disposal of the investment and gain of €995 from the remeasurement of the remaining investment in fair value, which represents the deemed cost of the remaining investment in joint ventures) which was recorded in the item " Gain from disposal of subsidiaries " in the Interim Condensed Income Statement of the Company for the six-month period ended June 30, 2021.

On April 7, 2021, the shareholders of MHV approved the share capital increase of the company for a total amount of €143,449 for the implementation of its business plans. The Company, in the context of the share capital increase of MHV, on the same day paid an amount of €64,552, in proportion to its percentage participation in MHV. Following the share capital increase, on April 9, 2021 MHV acquired 100% of the shares of Parklane Hotels Limited, owner of the luxury hotel complex Parklane, a Luxury Collection Resort & Spa Limassol and the Park Tower consisting of 20 luxury apartments in Limassol Cyprus. The consideration for the acquisition of Parklane Hotels Limited was lower than the fair value of the assets acquired and the negative goodwill of €14,097, in proportion to the Company's investment in MHV, is included in the profit from the investment in MHV of €12,945. Additionally, on May 12, 2021 MHV acquired 100% of the shares of Porto Heli Hotel & Marina S.A., owner of the hotel Nikki Beach Resort & Spa in Greece.

On May 17, 2021 the Extraordinary General Meeting of Shareholders of Panterra SA. Real Estate Development and Utilization (hereinafter "Panterra") decided to increase its share capital by €4,200 by issuing 40,000 new shares with a nominal value of €10 (amount in €) and a sale price of €105 (amount in €). The Company paid an amount of €2,058 in proportion to its participation in the share capital of Panterra.

Cost of investments

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Investments in joint ventures
EP Chanion S.A. 3,482 3,533 3,920 3,920
Panterra S.A. 14,404 10,182 7,791 5,733
RINASCITA S.A. 2,832 1,356 1,401 1,401
PIRAEUS TOWER S.A. 1,110 924 870 870
MHV 104,299 - 91,354 -
Total 126,127 15,995 105,336 11,924

As of June 30, 2021, the Group's share of profit of joint ventures amounted to €16,720 as analysed below:

  • Gain of €12,945 from MHV
  • Gain of €2,164 from Panterra S.A.
  • Gain of €1,476 from Rinascita S.A.
  • Gain of €186 from PIRAEUS TOWER S.A.
  • Loss of €51 from EP Chanion S.A.

NOTE 11: Trade and Other Assets

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Trade receivables 71,402 65,790 61,012 59,489
Trade receivables from related parties (Note 32) 13 9 13 9
Receivables from Greek State 4,995 3,491 2,650 2,083
Prepaid expenses 1,790 584 909 383
Other receivables 23,133 8,969 21,262 7,560
Other receivables from related parties (Note 32) 5,100 - 12,858 -
Less: Provisions for expected credit loss (4,782) (2,661) (1,032) (910)
Total 101,651 76,182 97,672 68,614

As of June 30, 2021, the trade receivables of the Group and the Company includes an amount of €30,773 relating to the remaining consideration from the disposal of the 20% of the shares of Picasso Fund (Note 9), an amount of €8,778 relating to the remaining consideration from the disposal of two properties in June 2021 (Note 6) and amount of €14,730 relating to the remaining consideration from the disposal of 45% investment of the Company in MHV (Note 10). As of December 31, 2020 the trade receivables of the Group and the Company includes an amount of €54,237 relating to the remaining consideration from the disposal of eighteen properties in December 2020. The aforementioned amount was received on April 27, 2021.

The Group's and the Company's trade receivables as of June 30, 2021 include an amount of €515 and €475, respectively, (December 31, 2020: €207 for the Group and €165 for the Company, respectively) relating to lease incentives under certain lease agreements. The accounting treatment of these incentives, according to the relevant accounting standards, provides for their partial amortisation over the life of each lease.

Company's receivables from Greek State mainly relate to capital accumulation tax of €1,752 paid by the Company at September 16, 2014 and September 17, 2014. Upon payment of this tax, the Company expressed its reservation on the obligation to pay the tax and at the same time it requested the refund of this amount as a result of paragraph 1, article 31 of L.2778/1999, which states that "the shares issued by a REIC and the transfer of properties to a REIC are exempt of any tax, fee, stamp duty, levies, duties or any other charge in favor of the State, public entities and third parties in general". Regarding the payment of the aforementioned tax, because of the lack of response of the relevant authority after a three-month period, the Company filed an appeal. The Company's Management, based on the opinion of its legal counsels and the fact that on May 27, 2020 the Company received the amount of €5,900 related to capital accumulation tax paid by the Company on April 14, 2010 considers that the reimbursement of the remaining amount is virtual certain.

The analysis of other receivables is as follows:

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Prepayments for the acquisition of companies 19,965 7,030 19,965 7,030
Other 3,168 1,939 1,297 530
Total 23,133 8,969 21,262 7,560

The increase of the prepayments for acquisition of companies of the Group and the Company on June 30, 2021 compared to December 31, 2020 is due to an advance payment of €5,965 which on December 31, 2020 was included in the long-term receivables and an additional advance for acquisition of companies amounting to €6,970 which was paid within the first half of 2021.

NOTE 12: Cash and Cash Equivalents

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Cash in hand 3 2 1 1
Sight and time deposits 67,571 104,840 34,049 73,242
Total 67,574
104,842
34,050 73,243

The fair value of the Group's cash and cash equivalents is estimated to approximate their carrying value.

As of June 30, 2021, sight and time deposits of the Group and the Company include pledged deposits amounted to €6,312 and €2,059, respectively (December 31, 2020: €6,362 for the Group and €2,546 for the Company, respectively), in accordance with the provisions of the loan agreements.

Reconciliation to cash flow statement Group Company
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Cash in hand 3 18 1 2
Sight and time deposits 67,571 187,081 34,049 144,284
Cash and cash equivalents associated with assets
held for sale (Note 14)
4,258 - - -
Total 71,832 187,099 34,050 144,286

NOTE 13: Restricted cash

As of December 31, 2020, the restricted cash of the Group and the Company includes an amount of €80,995 which has been pledged in accordance with the terms of a Company's bond loan and relates to the prepayment of the bond loan due to the disposal of the eighteen properties on December 24, 2020, as a prenotation of mortgage has been established on six of these properties in favour of the financial institution. The Company had given irrevocable instructions to the financial institution to proceed with the prepayment of the bond loan and the financial institution's actions were completed on January 4, 2021.

NOTE 14: Assets and liabilities held for sale and discontinued operations

Assets held for sale as of June 30, 2021 comprise of Aphrodite Hills Resort Limited and its subsidiaries, a property located at 5 Cavour Street, in Rome, Italy of the indirect subsidiary Picasso Fund and a property of the subsidiary Karolou S.A. at 28hs Oktovriou Str, in Patra, Greece. As of December 31, 2020 assets held for sale comprise of Aphrodite Hills Resort Limited and its subsidiaries, as well as MHV Mediterranean Hospitality Venture Limited and its 100% subsidiary The Cyprus Tourism Development Company Limited, and the property located at 5 Cavour Street, in Rome, Italy of the subsidiary Picasso Fund. The profit or losses from discontinued operations for the six-month period ended June 30, 2021 comprise of the company Aphrodite Hills Resort Limited and its subsidiaries, as well as the results of the three-month period ended March 31, 2021 for companies MHV Mediterranean Hospitality Venture Limited and The Cyprus Tourism Development Company Limited, the sale of which was concluded on April 1, 2021 (Note 10). The comparative profit or losses from discontinued operations has been restated to include the abovementioned companies.

Within December 2020, the Company's competent bodies resolved on the strategic collaboration between the Company, Invel Real Estate and the Cypriot based YODA Group of Mr. Ioannis Papalekas in the hospitality and tourism sector in the Mediterranean region. In this context, on April 1, 2021 the Company transferred 45% of its interest in MHV Mediterranean Hospitality Venture Limited (hereinafter "MHV") to a company owned by YODA Group, according to the sale and purchase agreement dated December 30, 2020 as amended on March 31, 2021. Upon the completion of the sale, MHV is an investment in joint venture (Note 10). At the same time, the parties extended their cooperation in Aphrodite Hills Resort Limited with the signing of a sale and purchase agreement on April 7, 2021 for the transfer of 15% of the Company's participation in Aphrodite Hills Resort Limited to Papabull Investments Limited (company of YODA Group) for a consideration of €8,000. The approval by the Commission for the Protection of Competition of the Republic of Cyprus was received on June 23, 2021 and the transaction was completed on August 11, 2021 (Note 33). Upon the completion of the sale, Aphrodite Hills Resort Limited will be an investment in joint venture.

Aphrodite Hills Resort Limited

Aphrodite Hills Resort has the only certified PGA National Cyprus golf course in Cyprus as well as a hotel unit and other properties related to the use, operation and exploitation of the resort. In addition, the company has real estate inventories that include residences and land plots for the development of residences for their future sale. The allocated items of the Interim Condensed Statement of Financial Position and the Interim Condensed Income Statement of the company are included in the business segments "Retail big boxes & high street retail", "Offices" and "Other" and in the geographical segment "Cyprus".

Cavour 5

Within 2020, the Company's competent bodies resolved on the initiation of the process for the sale of a property owned by the subsidiary Picasso Fund located at 5 Cavour Street, in Rome, Italy. The fair value of the property as of June 30, 2021 amounted to €49,400. The investment property is included in the business segments "Retail big boxes & high street retail" and "Offices" and in the geographical segment "Italy".

Property at 28is Oktovriou Str.

On March 23, 2021 the Company's competent bodies resolved on the initiation of the process for the sale of one property owned by the subsidiary Karolou S.A. located at 28is Oktovriou Str., in Patra, Greece. The fair value of the property as of June 30, 2021 amounted to €315. The investment property is included in the businesssegments "Retail big boxes & high street retail" and in the geographical segment "Greece".

Analysis of assets held for sale and liabilities directly associated with assets held for sale:

Group Company
(1)
30.06.2021
31.12.2020(2) (3)
30.06.2021
31.12.2020(4)
ASSETS
Non-current assets
Investment property 2,300 17,916 - -
Investments in subsidiaries - - 11,620 63,906
Equity method investments 440 481 - -
Property and equipment 53,663 98,683 - -
Intangible assets 11,450 11,549 - -
Deferred tax asset 191 - - -
Total non-current assets 68,044 128,629 11,620 63,906
Current assets
Trade and other assets 2,894 3,485 - -
Inventories 30,153 35,645 - -
Cash and cash equivalents 4,258 4,131 - -
Total current assets 37,305 43,261 - -
Total assets 105,349 171,890 11,620 63,906
LIABILITIES
Long-term liabilities
Borrowings 44,656 14,457 - -
Deferred tax liabilities 7,562 9,758 - -
Other long-term liabilities 2,571 9,321 - -
Total long-term liabilities 54,789 33,536 - -
Short-term liabilities
Trade and other payables 14,588 20,342 - -
Borrowings 6,442 39,917 - -
Current tax liabilities 70 70 - -
Total short-term liabilities 21,100 60,329 - -
Total liabilities 75,889 93,865 - -
Equity 29,460 78,025 11,620 63,906

(1)Includes the company Aphrodite Hills Resort Limited and its subsidiaries.

(2)Includes the companies Aphrodite Hills Resort Limited, MHV Mediterranean Hospitality Venture Limited and The Cyprus Tourism Development Company Limited, 100% subsidiary of MHV.

(3)Includes the company Aphrodite Hills Resort Limited.

(4)Includes the companies Aphrodite Hills Resort Limited and MHV Mediterranean Hospitality Venture Limited.

All amounts expressed in € thousand, unless otherwise stated

It is noted that borrowings of Aphrodite Hills Resort Limited amounted to €36,997 as of December 31, 2020 are included in short-term borrowings due to non-compliance of two financial covenants as a result of the significant impact of the COVID-19 pandemic on the hospitality sector. The company sent a waiver request requesting to waive the requirements to test the financial covenants up to June 30, 2022, which was accepted by the competent financial institution in March 2021. Consequently, the balance of these borrowings as of June 30, 2021 are included in longterm borrowings.

Condensed income statement of discontinued operations (1)

Group
From 01.01. to
30.06.2021 30.06.2020
Revenue 10,957 13,025
10,957 13,025
Net gain / (loss) from the fair value adjustment of investment property (20) (1,054)
Direct property related expenses (107) (443)
Property taxes-levies (3) (5)
Personnel expenses (2,459) (4,391)
Depreciation of property and equipment and amortisation of
intangible assets
- (2,210)
Consumables used (297) (533)
Net change in real estate inventories (3,163) (4,755)
Net impairment gain / (loss) on financial assets (142) (14)
Net impairment loss on non-financial assets (886) (5,080)
Gain from disposal of subsidiaries 148 -
Other income 1,100 -
Other expenses (4,891) (4,973)
Operating Profit / (Loss) 237 (10,433)
Share of profit of equity method investments 54 13
Finance costs (724) (1,603)
Loss before tax (433) (12,023)
Taxes 112 398
Loss for the period from discontinued operations (321) (11,625)
Attributable to:
Non-controlling interests (698) (3,289)
Company's equity holders 377 (8,336)
Other comprehensive income / (loss) for the period from
discontinued operations
- (1,462)
Total comprehensive loss for the period from discontinued
operations
(321) (13,087)

(1)Includes the companies Aphrodite Hills Resort Limited, MHV Mediterranean Hospitality Venture Limited and The Cyprus Tourism Development Company Limited.

Cash flows from discontinued operations Group
From 01.01. to
30.06.2021 30.06.2020
Net cash inflows / (outflows) from operating activities 3,796 (340)
Net cash inflows / (outflows) from investing activities (350) (559)
Net cash inflows / (outflows) from financing activities (2,817) (2.401)
Net cash inflows/(outflows) 629 (3,300)

NOTE 15: Share Capital & Share Premium

Group Company
No. of shares Share Capital Share Premium
Balance at June 30, 2021 and December 31, 2020 255,494,534 766,484 15,890 15,970

The total paid up share capital of the Company as of June 30, 2021 and December 31, 2020, amounted to €766,484 divided into 255,494,534 common shares with voting rights with a par value of €3.0 per share.

On July 6, 2021 the Extraordinary General Meeting of the Company's shareholders resolved on the decrease of the share capital of the Company by €74,093 (Note 33).

The Company does not hold own shares.

NOTE 16: Reserves

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Statutory reserve 35,842 30,886 34,798 30,134
Special reserve 323,987 323,987 323,987 323,987
Other reserves 645 611 142 142
Total 360,474 355,484 358,927 354,263

According to article 44 of C.L.2190/1920, as in force, the Company is required to withhold from its net profit a percentage of 5% per year as statutory reserve until the total statutory reserve amounts to the 1/3 of the paid share capital. The statutory reserve cannot be distributed throughout the entire life of the Company.

Special reserve amounting to €323,987 relates to the decision of the Extraordinary General Meeting of the Company's Shareholders held on August 3, 2010 to record the difference between the fair value and the tax value of the contributed properties at September 30, 2009 by NBG, established upon the incorporation of the Company.

NOTE 17: Other Equity

The Other Equity of the Group as at 31 December 2020 includes an amount of €7,403 which related to a liability, which was recognized directly in the Equity of the Group, and arise from a put option of the shareholders of noncontrolled interests to sell to the Company 36.22% of the shares owned by Aphrodite Hills Resort Limited and Aphrodite Springs Public Limited (put option). The Company (call option) had a corresponding right to acquire the above shares. On April 7, 2021, an agreement was signed between the Company and the minority shareholder, based on which these put options were terminated.

NOTE 18: Non-controlling interests

The Group's non‐controlling interests amount to €130,561 as of June 30, 2021 (December 31, 2020: €37,612), arising from the companies Aphrodite Hills Resort Limited (AHRL), Aphrodite Springs Public Limited (ASPL), CYREIT AIF Variable Investment Company Plc (CYREIT), Prodea Immobiliare, Picasso Lux S.a.r.l. SICAF-RAIF (Picasso Lux) and CI Global RE S.a.r.l. SICAF-RAIF (CI Global).

They represent 40% of AHRL equity, 3,78% of ASPL equity, 11.77% of CYREIT equity, 20% of Prodea Immobiliare equity and 53.8% of Picasso Lux and CI Global equity.

The basic financial data of these companies are presented below. The amounts disclosed for each subsidiary are before inter‐company eliminations:

Condensed statement of financial position as of AHRL Picasso CI Other
June 30, 2021 Lux Global companies
Non-current assets 68,044 223,305 109,405 195,505
Current assets 37,381 12,528 4,667 13,523
Long-term liabilities 75,723 96,470 35,289 7,832
Short-term liabilities 21,101 17,720 4,512 6,035
Equity 8,601 121,643 74,271 195,161
Equity attributable to non-controlling interests 3,440 65,445 39,959 21,717 130,561
Condensed statement of financial position as of December Other
31, 2020 AHRL companies
Non-current assets 74,101 255,407
Current assets 37,348 18,188
Long-term liabilities 80,180 16,692
Short-term liabilities 20,931 4,552
Equity 10,338 252,351
Equity attributable to non-controlling interests 4,135 33,477 37,612
Condensed income statement for the period ended June
30, 2021
AHRL Picasso
Lux
CI
Global
Other
companies
Revenue 10,681 3,559 1,729 4,519
Profit / (Loss) for the period (1,737) (81) 2,275 2,059
Profit / (Loss) for the period attributable to non
controlling interests
(695) (44) 1,224 232
Dividend paid to non-controlling interests - - - 471
Condensed income statement for the period ended June 30, 2020 AHRL Other companies
Revenue 11,140 6,594
Loss for the period (6,937) 3,585
Other comprehensive income /(loss) for the period (1,462) -
Loss for the period attributable to non-controlling interests (2,775) (660)
Dividend paid to non-controlling interests (585) -
Condensed cash flow statement for the period ended
June 30, 2021
AHRL Picasso
Lux
CI
Global
Other
companies
Net cash flows from / (for) operating activities 4,334 (408) (137) 1,411
Net cash flows from / (for) investing activities (166) (19) (1,866) (2)
Net cash flows from / (for)from financing activities (2,798) (1,120) (312) (411)
Net increase / (decrease) in cash and cash equivalents 1,370 (1,547) (2,315) 998
Condensed cash flow statement for the period ended June 30, 2020 AHRL Other companies
Net cash flows from / (for) operating activities 902 (2,542)
Net cash flows from / (for) investing activities (531) (56)
Net cash flows from / (for)from financing activities (2,401) 120
Net decrease in cash and cash equivalents (2,030) (2,478)

NOTE 19: Borrowings

All borrowings have variable interest rates. The Group is exposed to fluctuations in interest rates prevailing in the market and which affect its financial position, its income statement and its cash flows. Cost of debt may increase or decrease as a result of such fluctuations.

On March 8, 2021, the Company entered into an agreement for a bridge loan up to the amount of €25,000 with Eurobank S.A., bearing interest of 3-month Euribor plus a margin of 2.60%.

In the context of a prudent financial management policy, the Company's Management seeks to manage its borrowing (short-term and long-term) utilizing a variety of financial sources and in accordance with its business planning and strategic objectives. The Company assesses its financing needs and the available sources of financing in the international and domestic financial markets and investigates any opportunities to raise additional funds by issuing loans in these markets. In this context, on July 2, 2021 the Board of Directors of the Company decided the issuance of a "green" common bond loan for a maximum amount €300,000 and minimum amount €250,000 with a duration of seven (7) years (Note 33).

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Long-term
Bond loans 574,471 249,780 574,471 249,780
Other borrowed funds 177,992 49,237 - -
Long-term borrowings 752,463 299,017 574,471 249,780
Short-term
Bond loans 29,254 445,704 29,254 445,704
Other borrowed funds 85,764 157,134 75,038 50,025
Short-term borrowings 115,018 602,838 104,292 495,729
Total 867,481 901,855 678,763 745,509

The decrease of the Group's short-term borrowings as of June 30, 2021 compared to December 31, 2020 is mainly due to:

  • In the Statement of Financial Position as of December 31, 2020 in short-term borrowings are included loans of the Company of an amount of €326,618, as the Company at the end of the year ended December 31, 2020 assessed a non-compliance with the financial covenant "Net Debt to EBITDA" in three bond loans due to the impact of COVID-19 pandemic in the financial performance of the Group and the Company. According to the provisions of the loan agreements, the non-compliance is ascertained with the submission of the annual audited financial statements to the competent financial institutions. For presentation purposes according to IFRSs, the balance of these loans is included in short-term borrowings. Within March 2021 the Company sent relevant waiver requests, according to the provisions of the loan agreements, which were accepted by the financial institutions, as despite the backlog of the financial covenant, the general financial performance of the Group and the Company has not been affected and thus are able to fulfil all their obligations properly and on time. As of June 30, 2021 the outstanding balances of these loans are included in the long-term borrowings in the Interim Condensed Statement of Financial Position.
  • As of December 31, 2020 the Group's and the Company's short-term bond loans include an amount of €80,995 which relates to prepayment of capital of a bond loan due to the disposal of eighteen properties on December 24, 2020, as on six of these properties a prenotation of mortgage has been established in favour of the financial institution. The Company had given irrevocable instructions to the bank in order to proceed with the prepayment of the bond loan and the bank's actions were completed on January 4, 2021. As of December 31, 2020 the amount of €80,995 is included in the Statement of Financial Position of the Group and the Company in the line "Restricted Cash " (Note 13).

• Borrowings of Picasso Fund totally amounted to €99,754 as of December 31, 2020 are included in short-term borrowings since these amounts were payable on June 30, 2021. As of July 5, 2021 the company Picasso Fund received approval from the competent financial institution for the extension of the maturity of the loans until the December 31, 2022, with effective date June 30, 2021.

As of June 30, 2021, short-term borrowings of the Group and the Company include an amount of €656 which relates to accrued interest expense on the bond loans (December 31, 2020: €721 for the Group and the Company) and an amount of €851 for the Group and €438 for the Company, which relates to accrued interest expense on other borrowed funds (December 31, 2020: €640 for the Group and €425 for the Company, respectively). The maturity of the Group's borrowings is as follows:

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Up to 1 year 115,018 602,838 104,292 495,729
From 1 to 5 years 678,535 220,279 505,904 176,472
More than 5 years 73,298 78,738 68,567 73,308
Total 867,481 901,855 678,763 745,509

The contractual re-pricing dates are limited to a maximum period up to 6 months.

The Group is not exposed to foreign exchange risk in relation to the borrowings, as all borrowings are denominated in the functional currency, except for the loan of I&B Real Estate EAD located in Bulgaria, which is in foreign currency (BGN), the rate of which is fixed according to European Central Bank.

The securities over the Group's loans, including the collaterals on properties, are listed below:

  • On 67 properties of the Company a prenotation of mortgage was established in favour of National Bank of Greece S.A. (as bondholder agent) for an amount of €360,000. In addition, all rights of the Company, arising from the lease contracts of the above properties, have been assigned in favour of the lender. The outstanding balance of the bond loan as of June 30, 2021 amounted to €184,510 and the fair value of the properties to €498,097. In addition, all rights of the Company, arising from the lease contracts of the above properties, have been assigned in favour of the lender.
  • On one property of the Company a prenotation of mortgage was established in favour of Piraeus Bank S.A. (the representative of the bondholders) for an amount of €78,000. In addition, all rights of the Company, arising from the lease, have been assigned in favour of the bondholders. The outstanding balance of the bond loan as of June 30, 2021 amounted to €55,977 and the fair value of the property to €129,794. In addition, all rights of the Company, arising from the lease, have been assigned in favour of the bondholders.
  • On 33 properties of the Company a prenotation of mortgage was established in favour of Piraeus Bank S.A. for an amount of €144,000. In addition, all rights of the Company, arising from the lease contracts of the above properties, have been assigned in favour of the lender. The outstanding balance of the bond loan as of June 30, 2021 amounted to €114,119 and the fair value of the properties to €227,702. In addition, all rights of the Company, arising from the lease contracts of the above properties, have been assigned in favour of the lender.
  • On 3 properties of the Company a prenotation of mortgage was established in favour of Piraeus Bank S.A. for an amount of €24,000. In addition, all rights of the Company, arising from the lease contracts of the above properties, have been assigned in favour of the lender. The outstanding balance of the loan as of June 30, 2021 amounted to €19,528 and the fair value of the properties to €35,953. In addition, all rights of the Company, arising from the lease contracts of the above properties, have been assigned in favour of the lender.

  • On 30 properties of the Company a prenotation of of mortgage was established in favour of Alpha Bank S.A. for an amount of €240,000. In addition, all rights of the Company, arising from the lease contracts of the above properties, have been assigned in favour of the lender. The outstanding balance of the loan as of June 30, 2021 amounted to €120,757 and the fair value of the properties to €210,030. In addition, all rights of the Company, arising from the lease contracts of the above properties, have been assigned in favour of the lender.

  • The entire share capital of the company CYREIT AIF Variable Investment Company Plc (management and investment shares) is collateral in favour of Bank of Cyprus Public Company Limited, for all amounts due under the bond loan agreement of up to €90,000 signed on April 12, 2019.
  • Four properties owned by Picasso Fund are burdened with first class mortgage in favour of Banca IMI S.p.A. for an amount of €204,000. The outstanding balance of the loan as of June 30, 2021 amounted to €89,760 and the fair value of the properties to €182,640. Finally, all rights of Picasso Fund arising from the lease agreements have been assigned in favour of the lender.
  • Nine properties owned by Picasso Fund are burdened with first class mortgage in favour of Intesa SanPaolo S.p.A. for an amount of €19,700. The outstanding balance of the loan as of June 31, 2021 amounted to €8,950 and the fair value of the properties to €19,965. Finally, all rights of Picasso Fund arising from the lease agreements have been assigned in favour of the lender.
  • One property owned by the subsidiary Quadratix Ltd. is burdened with mortgage in favour of Bank of Cyprus Public Company limited for an amount of €16,500. The outstanding balance of the loan as of June 30, 2021 amounted to €12,438 and the fair value of the property to €27,267.In addition, the entire share capital of Quadratix Ltd. is collateral in favour of Bank of Cyprus Public Company Limited, for all amounts due under the loan agreement, all rights of Quadratix Ltd. arising from the lease agreement with Sklavenitis Cyprus Limited have been assigned in favour of the lender and the assets of the subsidiary are burdened with floating charge in favour of Bank of Cyprus Public Company Limited. It is noted that the Company has given corporate guarantee up to the amount of €5,000 for liabilities of Quadratix Ltd. under the abovementioned loan agreement.
  • Two properties owned by the subsidiary Egnatia Properties S.A. are burdened with mortgage in favour of Bank of Cyprus Public Company Limited for an amount of €6,405. The outstanding balance of the loan as of June 30, 2021 amounted to €6,057 and the fair value of the properties to €6,693. Finally, all rights of Egnatia Properties arising from the lease agreements for the abovementioned properties have been assigned in favour of the lender.
  • On one property owned by the subsidiary Irina Ktimatiki S.A. a prenotation of mortgage was established in favour of Alpha Bank S.A. for an amount of €4,800. Moreover, the entire share capital of Irinna Ktimatiki S.A. is collateral in favour of Alpha Bank S.A, for all amounts due under the loan agreement. The outstanding balance of the loan as of June 30, 2021 amounted to €3,295 and the fair value of the property to €17,498.
  • The property owned by the subsidiary I&B Real Estate EAD is burdened with mortgage in favour of Eurobank Bulgaria AD for an amount of €33,008. The outstanding balance of the loan as of June 30, 2021 amounted to €33,008 and the fair value of the property to €87,050. Moreover, the entire share capital of I&B Real Estate EAD is collateral in favour of Eurobank Bulgaria AD for all amounts due under the loan agreement. Finally, all rights of I&B Real Estate arising from the lease agreements have been assigned in favour of the lender.
  • On ten properties owned by Tarvos Fund are burdened with mortgage in favour of JPMorgan Chase Bank National Association for an amount of €93,600. The outstanding balance of the loan as of June 30, 2021 amounted to €35,326 and the fair value of the property to €100,095.

  • The property and equipment, the investment property and the inventories of the subsidiary Aphrodite Hills Resort Limited and the land plot of the company Aphrodite Springs Public Limited are burdened with mortgage in favour of Bank of Cyprus Public Company Limited for an amount of €104,857. The outstanding balance of the loans as of June 30, 2021 amounted to €34,998 and the fair value of the properties to €86,690. Moreover, the entire share capital of Aphrodite Hills Resort Limited, the share capital of its subsidiaries and the share capital of Aphrodite Springs Public Limited are collateral in favour of Bank of Cyprus Public Company Limited. Finally, the assets of the subsidiary Aphrodite Hills Resort Limited are burdened with floating charge in favour of Bank of Cyprus Public Company Limited.

  • The below securities have been granted to Bank of Cyprus Public Company Limited in the context of the bond loan agreement of up to €32,000 signed on April 18, 2019 between the Company and Bank of Cyprus Public Company Limited:
  • o A corporate guarantee of CTDC up to the amount of €38,400 for the liabilities of the Company arising from the abovementioned bond loan agreement.
  • o Mortgage on CTDC property for an amount of €35,200 and floating charge over the assets of CTDC for an amount €35,200.

It is noted that the subsidiary Aphrodite Hills Resort Limited has been classified as held for sale in the Interim Condensed Statement of Financial Position as of June 30, 2021 and in the Financial Statements as of December 31, 2020 and as discontinued operations in the Interim Condensed Income Statement for the six-month period ended June 30, 2021 and June 30, 2020 (Note 14).

NOTE 20: Trade and Other Payables

The breakdown of trade and other payables is as follows:

Group Company
30.06.2021 31.12.2020 30.06.2021 31.12.2020
Trade payables 21,285 6,711 5,087 4,747
Trade payables to related parties - - 10 -
Taxes – Levies 12,280 7,991 8,183 4,195
Deferred revenues 5,137 4,394 2,313 2,418
Lease liabilities 86 90 71 76
Other payables and accrued expenses 6,006 5,547 5,242 4,538
Other payables and accrued expenses due to related
parties (Note 32)
5,723 4,772 5,424 3,927
Total 50,517 29,505 26,330 19,901

The increase in the trade and other payables of the Group as of June 30, 2021 in comparison to December 31, 2020 is mainly due to the remaining consideration of €11,400 for the acquisition of the property from Picasso Fund on February 25, 2021 (Note 6) and due to the liabilities of the company CI Global acquired by the Group on March 26, 2021 of €3,088 (Note 8) as of June 30, 2021.

Trade and other payables are short term and do not bare interest.

The Group's deferred revenues relate to deferred income for the period following to June 30, 2021, according to the relevant lease agreements.

The analysis of Taxes – Levies is as follows:

Group
30.06.2021 31.12.2020 30.06.2021 31.12.2020
3,349 2,327 3,349 2,327
3,373 58 3,288 -
3,457 3,183 - -
2,101 2,423 1,546 1,868
12,280 7,991 8,183 4,195
Company

NOTE 21: Deferred tax liabilities

Group
Deferred tax liabilities 30.06.2021 31.12.2020
Investment property 13,258 13,349
Total 13,258 13,349
Group
Deferred tax (income) / expense 30.06.2021 30.06.2020
Tax Losses (21) 3
Investment property (95) (143)
Total (116) (140)

Movement of deferred tax liabilities:

Group
Investment
Property
Other Total
Balance January 1, 2020 16,782 11,810 28,592
Charged to the Income Statement (3,271) (2,047) (5,318)
Offset with deferred tax assets - (167) (167)
Transfer to liabilities directly associated with assets
held for sale (Note 14)
(162) (9,596) (9,758)
Balance December 31, 2020 13,349 - 13,349
Income to the Interim Condensed Income Statement (116) - (116)
Offset with deferred tax assets 25 - 25
Balance June 30, 2021 13,258 - 13,258

The tax liability of the Company (and its subsidiaries in Greece) is calculated on the basis of its investments and cash and cash equivalents rather than on its profits, therefore no temporary differences arise and accordingly no deferred tax liabilities and / or assets are recognised. The same applies to the Company's indirect subsidiaries Picasso Fund and Tarvos Fund, in Italy, which are not subject to income tax.

The Company's foreign subsidiaries, Nash S.r.L., Egnatia Properties S.A., CYREIT AIF Variable Investment Company Plc, Quadratix Ltd., Lasmane Properties, PNG Properties EAD, I&B Real Estate EAD, Aphrodite Hills Resort Limited and Aphrodite Springs Public Limited are taxed based on their income (Note 29), therefore temporary differences may arise and accordingly deferred tax liabilities and / or assets may be recognized.

The Group have offset the deferred tax assets and deferred tax liabilities on an entity by entity basis based on the legally enforceable right to set off the recognized amounts i.e. offset current income tax assets against current tax liabilities and when the deferred income taxes relate to the same tax authority.

NOTE 22: Dividends per Share

On June 8, 2021 the Annual General Meeting of the Company's Shareholders, approved the distribution of a total amount of €89,934 (i.e. 0.352 per share – amount in €) as dividend to its shareholders for the year 2020. Due to the distribution of interim dividend of a total amount of €35,769 (i.e. €0.14 per share – amount in €), following the relevant decision of the Board of Directors dated November 30, 2020, the remaining dividend to be distributed amounts to €54,165 (i.e. €0.212 per share – amount in €).

On April 13, 2020 the Annual General Meeting of the Company's Shareholders, approved the distribution of a total amount of €156,618 (i.e. 0.613 per share – amount in €) as dividend to its shareholders for the year 2019. Due to the distribution of interim dividend of a total amount of €81,247 (i.e. €0.318 per share – amount in €), following the relevant decision of the Board of Directors dated December 16, 2019, the remaining dividend that was distributed amounted to €75,371 (i.e. €0.295 per share – amount in €).

NOTE 23: Revenue

Group Company
From 01.01 to
From 01.01 to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Rental income 63,496 68,157 45,484 51,782
Compensation from an early termination of 40 - 40 -
leases
Other 1,362 - 1,268 -
Total 64,898 68,157 46,792 51,782

Rental income of the Group and the Company is not subject to seasonality.

Other revenue refers to compensation from the Greek government of the 60% of the monthly rent for the months January to June 2021, due to the mandatory reduction of 100% of the monthly rent for businesses that remain closed by state order due to COVID-19 pandemic.

NOTE 24: Property Taxes-Levies

For the six-month period ended as of June 30, 2021, property taxes - levies amounted to €4,793 and €3,329 for the Group and the Company, respectively (first semester 2020: €4,945 and €3,875, respectively) and includes ENFIA of €3,373 and €3,288 for the Group and the Company respectively (first semester 2020: €3,744 and €3,685 respectively). The decrease in ENFIA is mainly attributable to the properties sold on December 2020 given that this tax is calculated for the properties own by the legal entity at the January 1st of each year.

NOTE 25: Direct Property Related Expenses

Direct property related expenses include the following:

Group Company
From 01.01 to From 01.01 to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Valuation expenses 547 537 494 482
Fees and expenses of lawyers, notaries, land
registrars, technical and other advisors
1,133 257 873 88
Advisory services in relation to real estate
portfolio
3,850 2,261 2,923 1,151
Insurance expenses 485 439 260 253
Office utilities and other service charges 544 172 101 56
Repair and maintenance expenses 305 201 5 40
Brokerage expenses 130 - 117 -
Other expenses 384 52 - -
Total 7,378 3,919 4,773 2,070

The increase of fees and expenses of lawyers, notaries, land registrars, technical and other advisors and advisory services in relation to real estate portfolio of the Group and the Company for the six-month period June 30, 2021 compared to the six-month period ended June 30, 2020 is due to the increase investing activity during the first semester of 2021.

NOTE 26: Personnel Expenses

Group Company
From 01.01. to
From 01.01. to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Salaries 2,176 1,937 2,109 1,872
Social security costs 240 372 238 370
Profit distribution to personnel - BoD 1,984 6,158 1,984 6,158
Other expenses 93 80 93 80
Total 4,493 8,547 4,424 8,480

As of June 30, 2021, the Group's and the Company's number of employees was 453 and 39, respectively (June 30, 2020: 542 employees for the Group and 35 employees for the Company).

On June 8, 2021, the Annual General Meeting of the Company's shareholders approved the distribution of a total amount of €1,984 to the personnel and members of the BoD out of the profits of the year 2020.

On April 13, 2020, the Annual General Meeting of the Company's shareholders approved the distribution of a total amount of €6,158 to the personnel and members of the BoD out of the profits of the year 2019. The amount is included in the item "Profit distribution to personnel-BoD".

NOTE 27: Other Expenses

Group Company
From 01.01. to From 01.01. to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Third party fees 4,006 2,489 1,246 1,660
Expenses relating to advertising, publication,
etc.
287 303 294 303
Taxies – levies 813 921 529 595
Other 515 250 396 244
Total 5,621 3,963 2,465 2,802

The increase of third party fees of the Group for the six-month period ended June 30, 2021 compared to the sixmonth period ended June 30, 2020 is attributable to the new entities of the Group, Picasso Lux and CI Global (30 June 2021: €1,941) which was counterbalanced partially from the decrease of the third party fees of the Company.

NOTE 28: Finance costs

Group Company
From 01.01. to From 01.01. to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Interest Expense 12,866 12,803 10,201 10,435
Finance and Bank Charges 1,602 1,689 1,350 1,537
Foreign Exchange Differences 74 82 2 -
Other Finance costs 883 351 988 276
Total 15,425 14,925 12,541 12,248

NOTE 29: Taxes

Group
From 01.01. to
Company
From 01.01. to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
REICs' tax 978 1,027 952 1,006
Other taxes 282 162 - -
Deferred tax (Note21) (116) (140) - -
Total 1,144 1,049 952 1,006

As a Real Estate Investment Company ("REIC"), in accordance with article 31, par. 3 of L.2778/1999 as in force, the Company is exempted from corporate income tax and is subject to an annual tax based on its investments and cash and cash equivalents. More specifically, the tax is determined by reference to the average fair value of its investments and cash and cash equivalents at current prices at the tax rate of 10% of the aggregate European Central Bank ("ECB") reference rate plus 1%. According to the article 46, par. 2 of L.4389/2016 a floor was set in the REIC tax of 0.375% on the average investments plus cash and cash equivalents, at current prices. Article 53 of Law 4646/2019 abolished the floor. It is noted, that the subsidiaries of the Company in Greece, Karolou Touristiki S.A., Irina Ktimatiki S.A., Anaptixi Fragokklisia S.A., lldim M.IKE and MILORA M.IKE have the same tax treatment. In the current tax liabilities are included the short-term obligations to tax authorities in relation to the abovementioned tax.

The Company's foreign subsidiaries, Nash S.r.L. and Prodea Immobiliare S.r.L. in Italy, Egnatia Properties S.A. in Romania, Quadratix Ltd., Lasmane Properties Ltd., Aphrodite Hills Resort Limited, Aphrodite Springs Public Company, CYREIT AIF Variable Investment Company Plc and MHV Mediterranean Hospitality Venture Limited in Cyprus and PNG Properties EAD and I&B Real Estate EAD in Bulgaria are taxed on their income, based on a tax rate equal to 27.9% in Italy, 16.0% in Romania, 12.5% in Cyprus and 10.0% in Bulgaria, respectively. The Company's subsidiaries Picasso Lux and CI Global, in Luxembourg, and the indirect subsidiaries Picasso Fund and Tarvos Fund, in Italy, are not subject to income tax. In addition, the Company's indirect subsidiary Euclide S.r.l, in Italy is taxed on its income based on a rate equal to 27.9%, No significant foreign income tax expense was incurred for the six-month period ended June 30, 2021 and June 30, 2020.

The unaudited tax years of the subsidiaries and the investments in joint ventures of the Group are described in Notes 9 and 10 above.

NOTE 30: Earnings per Share

Basic Earnings per share ratio is calculated by dividing the profit for the period attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

Group
Period ended June 30 2021 2020
Profit attributable to equity shareholders from continuing operations 107,379 28,263
Profit / (Loss) from discontinued operations 377 (8,337)
Profit attributable to equity shareholders from continuing and discontinued
operations
107,756 19,926
Weighted average number of ordinary shares in
issue (thousands) 255,495 255,495
Earnings per share (expressed in
€ per share) - basic and diluted from continuing operations
0.42 0.11
Earnings per share (expressed in
€ per share) - basic and diluted from discontinuing operations - 0.03
Earnings per share (expressed in
€ per share) - basic and diluted from continuing and discontinued operations
0.42 0.08

Τhe dilutive Earnings per share are the same as the basic Earnings per share for the six month period ended June 30, 2021 and 2020, as there were no dilutive potential ordinary shares.

NOTE 31: Contingent Liabilities and Commitments

Tax Liabilities

Group companies have not been audited yet for tax purposes for certain financial years and consequently their tax obligations for those years may not be considered final. Additional taxes and penalties may be imposed as a result of such tax audits however, the amount cannot be determined. As at June 30, 2021 and December 31, 2020 the Group has not accounted for provisions for unaudited tax years. It is estimated that additional taxes and penalties that may be imposed will not have a material effect on the financial position of the Group and the Company.

The financial years 2011 - 2014 of NBG Pangaea REIC, which was absorbed by the Company, have been audited by the elected, under C.L. 2190/1920, statutory auditor, in accordance with article 82 of L. 2238/1994 and article 65A of L. 4174/2013 and the relevant tax audit certificates were issued with no qualifications. Especially for the year 2012, it is noted that within 2018 the tax audit was completed by the competent tax authorities with no findings and therefore no additional taxes were imposed.

The years 2013 – 2019 of the Company have been audited by the elected, under C.L. 2190/1920, statutory auditor, in accordance with article 82 of L. 2238/1994 and article 65A of L. 4174/2013 and the relevant tax audit certificates were issued with no qualifications.

The tax authorities have not audited the books and records of KARELA S.A., which was absorbed by the Company, for the financial years 2010, 2011 and 2012. Therefore, the right of the State to notify and audit and impose tax, fees, contributions and fines for the purpose of tax imposition until the year 2012 has expired on December 31, 2018. Furthermore, the fiscal year 2013 is considered tax terminated, according to decision 320/2020 of the Council of State. The financial years 2014 and 2015 have been audited by the elected, under C.L. 2190/1920, statutory auditor, in accordance with article 82 of L. 2238/1994 and article 65A of L. 4174/2013 and the relevant tax audit certificates were issued with no qualifications.

For the fiscal years 2015 and beyond, it is noted that according to POL. 1006/05.01.2016, the companies for which a tax certificate with no qualifications is issued, are not exempted from tax audit for offenses of tax legislation by the tax authorities. Therefore, the tax authorities may come back and conduct their own tax audit. However, Management estimates that the results of future tax audits may conducted by the tax authorities, will not have a material effect on the financial position of the Group and the Company.

Until the date of approval of the Interim Financial Statements, the tax audit for the year 2020 has not been completed by the statutory auditor of the Company and it is not expected to arise significant tax liabilities other than those already recorded and presented in the financial statements.

Capital Commitments

As of June 30, 2021, Group's capital expenditure relating to improvements on investment property amounted to €16,859 (excluding VAT). In addition, as of June 30, 2021 the Group has capital commitments for improvements in third parties' properties amounting to €1,980 (excluding VAT). Finally, Group's capital expenditure relating to the development of land plot of Aphrodite Springs Public Limited amounted to €4,330 (excluding VAT) as of June 30, 2021.

Legal Cases

There are no pending lawsuits against the Group nor other contingent liabilities resulting from commitments at June 30, 2021, which would affect the Group's financial position.

Borrowings

In the context of the bridge loan of the Company with Alpha Bank S.A., the Company provided special and irrevocable power of attorney, mandate and right to lawyers acting for Alpha Bank S.A. so that they can appear and represent the Company before any competent court for the purpose of registering a consensual mortgage notice on fifty-four (54) properties of the Company in Greece, in favour of Alpha Bank S.A. for an amount of €65,000. The power of attorney expires automatically, either with the full and complete repayment of all the obligations of the Company under the credit agreement.

In the context of the bridge loan of the Company with Eurobank S.A., the Company provided special and irrevocable power of attorney, mandate and right to lawyers acting for Eurobank S.A. so that they can appear and represent the Company before any competent court for the purpose of registering a consensual mortgage notice on ten (10) properties of the Company in Greece, in favour of Eurobank S.A. for an amount of €30,000. The power of attorney expires automatically, either with the full and complete repayment of all the obligations of the Company under the credit agreement.

In the context of the loan agreement of Flowpulse Ltd, shareholder of MHV Mediterranean Hospitality Venture Limited, with Bank of Cyprus Public Company Limited, the properties of the company CTDC are burdened with mortgage for an amount of €4,400 and the assets of CTDC are burdened with floating charge for an amount of €4,800 in favour of Bank of Cyprus Public Company Limited. Finally, CTDC has given a corporate guarantee up to the amount of €4,800 for Flowpulse Ltd liabilities arising from the abovementioned loan agreement.

Guarantees

In the context of the loan agreement signed by the subsidiary Quadratix Ltd. with the Bank of Cyprus Ltd. on January 31, 2018 (Note 19), the Company has given a corporate guarantee up to the amount of €5,000 thousand for liabilities of Quadratix Ltd. under the abovementioned loan agreement.

Moreover, The Company has given corporate guarantee up to the amount of €2,450 and up to the amount of €875 for liabilities of the companies Panterra S.A. and Rinascita S.A., respectively, under their bridge loans. The companies are investments in joint ventures.

Finally, the Company has guaranteed in favor of the company PIRAEUS TOWER A.E., which is an investment in joint venture, for the issuance of a letter of guarantee of good execution of the terms of the concession arrangement up to the amount of €813.

NOTE 32: Related Party Transactions

The Company's shareholding structure as of June 30, 2021 is presented below:

% participation
Invel Real Estate (Netherlands) II B.V.: 63.39%
Invel Real Estate BV 29.81%
CL Hermes Opportunities L.P. 2.85%
Anthos Properties S.A. (a subsidiary of Invel Real Estate
(Netherlands) II B.V.)
2.10%
Other shareholders: 1.85%

It should be noted that the above percentages arise in accordance with the disclosures received by the above persons under existing legislation.

In accordance with the TR1 notification of Law 3556/2007 dated 23.05.2019 submitted to the Company, the company Castlelake Opportunities Partners LLC is the ultimate shareholder of the Company owning 98.15%. Castlelake Opportunities Partners LLC is not controlled by any natural or legal person.

There is no natural person that holds more than 10% of the Company's share capital.

All amounts expressed in € thousand, unless otherwise stated

All transactions with related parties have been carried out on the basis of the "arm's length" principle, i.e., under normal market conditions for similar transactions with third parties. The transactions with related parties are presented below:

i. Balances arising from transactions with related parties

Group Company
Trade receivables from related parties 30.06.2021 31.12.2020 30.06.2021 31.12.2020
Anthos Properties S.A. 3 2 3 2
Companies related to other shareholders 2 2 2 2
Total 5 4 5 4
Group Company
Other receivables from related parties 30.06.2021 31.12.2020 30.06.2021 31.12.2020
Piraeus Tower A.E. (joint venture) 360 - 360 -
Panterra A.E. (joint venture) 3,920 - 3,920 -
EP Chanion S.A. (joint venture) 260 - 260 -
Rinascita S.A. (joint venture) 560 - 560 -
Aphrodite Springs, Company's Subsidiary - - 4,958 -
Lasmane Properties Ltd., Company's
Subsidiary
- - 300 -
I&B Real Estate EAD, Company's
Subsidiary
- - 2,500 -
Total 5,100 - 12,858 -
Group Company
Other long-term assets 30.06.2021 31.12.2020 30.06.2021 31.12.2020
PNG Properties EAD, Company's
subsidiary
- - 11,162 10,966
Aphrodite Hills Resort Limited,
Company's Subsidiary
- - 20,890 20,040
Total - - 32,052 31,006
Group Company
Trade payables 30.06.2021 31.12.2020 30.06.2021 31.12.2020
The Aphrodite Tennis and Spa Limited,
Company's Subsidiary
- - 10 -
Companies related to other
shareholders
- - - -
Total - - 10 -
Group Company
Other Liabilities 30.06.2021 31.12.2020 30.06.2021 31.12.2020
Companies related to other
shareholders
770 2,151 471 931

Total 770 2,151 471 931

Group Company
Borrowings 30.06.2021 31.12.2020 30.06.2021 31.12.2020
Companies related to other 1,292 1,264 - -
shareholders
Total 1,292 1,264 - -
ii.
Rental income
Group Company
From 01.01. to From 01.01. to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Anaptixi Fragokklisia S.A., Irinna Ktimatiki
S.A., ILDIM M.IKE and MILORA M.IKE - - 1 -
Company's subsidiaries
Anthos Properties S.A. 2 2 2 2
Companies related to other shareholders 2 1 2 1
Total 4 3 5 3
iii.
Direct property related expenses
Group Company
From 01.01. to From 01.01. to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
Companies related to other shareholders 3,393 2,301 2,696 1,081
Total 3,393 2,301 2,696 1,081
iv.
Other income
Group Company
30.06.2021 From 01.01. to
30.06.2020
From 01.01. to
30.06.2021
30.06.2020
I&B Real Estate EAD, Company's
subsidiary - - 2,500 2,000
Picasso Fund, Company's subsidiary - - - 3,100
Total - - 2,500 5,100
v.
Other expenses
Group Company
From 01.01. to From 01.01. to
30.06.2021 30.06.2020 30.06.2021 30.06.2020
The Aphrodite Tennis and Spa Limited,
Company's Subsidiary
- - 10 -
Invel Real Estate (Netherlands) II B.V. - 350 - 350
Companies related to other shareholders 205 175 - -
Total 205 525 10 350
Group
Company
From 01.01. to
From 01.01. to
30.06.2021
30.06.2020
30.06.2021
30.06.2020
PNG Properties EAD, Company's
-
-
196
197
subsidiary
Aphrodite Hills Resort Limited, Company's
-
-
852
857
Subsidiary
Total
-
-
1,048
1,054
vii.
Finance costs
Group
Company
From 01.01. to
From 01.01. to
30.06.2021
30.06.2020
30.06.2021
30.06.2020
Companies related to other shareholders
60
54
-
-
Total
60
54
-
-
Due to key management
Group
Company
30.06.2021
31.12.2020
30.06.2021
31.12.2020
Payables to the members of the BoD and
1,422
709
1,406
703
the Investment committee
Other liabilities to members of the BoD,
3,906
2,785
3,526
2,285
its committees and Senior Management
Retirement benefit obligations
25
22
25
22
Total
5,353
3,516
4,957
3,010
ix.
Key management compensation
Group
Company
From 01.01. to
From 01.01. to
30.06.2021
30.06.2020
30.06.2021
30.06.2020
BoD, its committees and Senior
2,933
4.623
2,553
4,280
Management compensation
Total
2,933
4,623
2,553
4,280
vi.
Interest income
viii.

x. Commitment and contingent liabilities

In the context of the loan agreement signed by the subsidiary Quadratix Ltd. with the Bank of Cyprus Ltd. on January 31, 2018 (Note 19), the Company has given a corporate guarantee up to the amount of €5,000 thousand for liabilities of Quadratix Ltd. under the abovementioned loan agreement.

Moreover, The Company has given corporate guarantee up to the amount of €2,450 and up to the amount of €875 for liabilities of the companies Panterra S.A. and Rinascita S.A., respectively, under their bridge loans. The companies are investments in joint ventures.

Finally, the Company has guaranteed in favor of the company PIRAEUS TOWER A.E., which is an investment in joint venture, for the issuance of a letter of guarantee of good execution of the terms of the concession arrangement up to the amount of €813.

xi. Dividends from Equity method investments

During the six-month period ended June 30, 2021, the company Aphrodite Hills Resort Limited received an amount of €95 as dividend from the company Aphrodite Hills Pantopoleion Ltd. in which participates with 45% (Six-month period ended June 30, 2020: Νil).

NOTE 33: Events after the Date of Interim Financial Statements

On July 2, 2021 the Board of Directors of the Company decided the issuance of a "green" common bond loan for a maximum amount €300,000 and minimum amount €250,000 with a duration of seven (7) years and the placement of the bonds through a public offer in Greece and the listing to trading of the bonds in the Fixed Income Segment of the Regulated market of the Athens Exchange. The purpose of the bond is mainly the financing of sustainable investments in real-estate as well as for the repayment of an existing lending facility in relation to a sustainable (green) real estate property, pursuant to the evaluation criteria of the Green Bond Framework adopted by the Company, based on the Green Bond Principles of the International Capital Market Association (ICMA) (as of June 2018) and within the context of article 22 of Law 2778/1999, as in force. Following the completion of the public offer on July 16, 2021, 300.000 dematerialized common bearer bonds of the Company with a nominal value of €1,000 each have been placed and as a result funds of €300,000 have been raised, which was disbursed on July 20, 2021. The bonds bear an interest of 2.3% p.a. According to the terms of the loan, on July 29, 2021 the Company proceeded with the fully repayment of the bond loan dated 20.02.2018 of an amount of €55,977.

As of July 5, 2021 the company Picasso Fund received the approval from the competent financial institution for the extension of the maturity date of its loans, which would expire on June 30, 2021, until the December 31, 2022, with effective date June 30, 2021.

On July 6, 2021 the Extraordinary General Meeting of the Company's shareholders resolved on the decrease of the share capital of the Company by €74,093 by means of the decrease of the nominal value of each of the 255,494,534 ordinary, registered, voting shares of the Company, from €3.00 to €2.71 nominal value per share, in order to return capital to shareholders by payment in cash.

On July 15, 2021 the subsidiary company Prodea Immobiliare acquired a 4* hotel in Milan, Italy, of a total area of €16 thousand sq.m. The consideration for the acquisition of the property amounted to €9,500 while its fair value at the date of the acquisition, according to the valuation performed by the independent statutory valuers, amounted to €9,110.

On July 16, 2021 the Company signed an agreement for the acquisition of a property with industrial and logistic use in Oinofyta, Viotia, with a total area of 28.2 thousand sq.m. The consideration for the acquisition amounted to €8,250 while its fair value at the date of acquisition, according to the valuatiuon performed by the independent statutory valuers, amounted to €8,288. The acquisition of the property was completed on August 5, 2021.

On July 23, 2021 the Company acquired the remaining 51% of the shares of Panterra S.A. for a consideration of €15,324. Upon completion of the acquisition, the Company owns 100% of the shares of Panterra.

Following the preliminary agreement dated June 1, 2020, on July 23, 2021 the Company concluded the acquisition of 100% of the units of New Metal Expert Μ.ΙΚΕ. The company owns two leased logistic centers of a total area of 23.8 thousand sq.m. located in Aspropyrgos, Attica. The consideration for the acquisition amounted to €12,449.

On July 29, 2021, the Company proceeded with the signing of a bond loan agreement for an amount up to €280,000 with Alpha Bank S.A. The bond loan has a six-years maturity bearing interest of 3-month Euribor plus a margin of 2.55% per annum. The proceeds of the loan will be used for the repayment of existing borrowings, to serve the general business needs of the Company and for new investments. On September 23, 2021, an amount of €222,000 was disbursed, out of which an amount of €170.357 was utilized the same for the repayment of existing borrowings.

On July 29, 2021, the Company proceeded with the signing of a bond loan agreement for an amount up to €100,000 with National Bank of Greece S.A. The bond loan has a five-years maturity bearing interest of 3-month Euribor plus a margin of 2.5% per annum. The proceeds of the loan will be used to serve the general business needs of the Company and for new investments. On August 6, 2021, an amount of €54,000 was disbursed.

On August 6, 2021, Prodea proceeded to the signing of an agreement for the acquisition of 35% of the shares of the companies OURANIA Investment M.AE and IQ HUB M.AE. The company Ourania Investment MAE is the owner of land plots in Thessaloniki in which a bioclimatic complex of offices with a total area of approximately 16.7 thousand sq.m. will be developed. The company IQ HUB M.A.E. is the owner of a plot of land in Maroussi in which a bioclimatic complex of offices with a total area of approximately 7.9 thousand sq.m. will be developed. The completion of the transfer of shares will be completed after the fulfilment of specific conditions provided in the agreement.

On August 11, 2021, the sale of 15% of the Company's investment in Aphrodite Hills Resort Limited was completed. The total consideration for the transfer of 15% of the shares and the proportion of the shareholder loan (15%) amounted to €8,000, of which an amount of €1,452 was received on the same day, an amount of €1,452 will be received in accordance with the terms of the sale and purchase agreement, and an amount of €5,095 relates to the transfer of 15% of the shareholder loan.

There are no other significant events subsequent to the date of the Interim Financial Statements relating to the Group or the Company for which disclosure is required by the IFRSs.

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