International Hotel Investments Plc

Annual / Quarterly Financial Statement • May 10, 2019

COMPANY ANNOUNCEMENT

Information on audited financial statements of IHI Magyarország Zrt for 2018 as Guarantor

The audited financial statements for year ended 31 December 2018 of IHI Magyarország Zrt as guarantor of the International Hotel Investments p.l.c. secured bond (ISIN MT0000111303) are attached to the company announcement and are also available on http://www.ihiplc.com/investors/bond-issue-guarantor.

Alfred Fabri Company Secretary

Encl.

10 May 2019

Report and financial statements prepared in accordance with International Financial Reporting Standards

IHI Magyarország Zrt. Year ended 31 December 2017

Contents

Contents	।
Directors' report	2
Independent auditor's report	3 - 5
Statement of profit or loss and other comprehensive income	6
Statement of financial position	7
Statement of changes in equity	8
Statement of cash flows	0

Directors' report

The directors present their report together with the audited financial statements of IHI Magyarorszag Zrt. (the 'Company') for the year ended 31 December 2017.

Mission and Strategy

The Company's mission is to maximise shareholders' wealth by owning and operating assets at the top end of the market within which it operates.

Principal activities

The Company operates the Corinthia Hotel Budapest, a landmark five-star deluxe hotel located in the heart of Budapest drawing on an unrivalled 110-year history of excellence and tradition. The Company also ovens and operates the Royal Residence and the Royal Spa.

The Company's sole shareholder is IHI plc, a company domiciled in Malta.

Result for the year

The results for the year are set out in the statement of profit or loss and other comprehensive income on page 6 of the financial statements. During the year, the hotel's operating performance continue on positive.

The profit for the year of €4.959 million (2016: €4.128 million) will be added to the retained earnings.

Equity

The statement of changes in equity is set out on page 8 of the financial statements.

Directors

The board of directors is made up as follows:

Frank Xerri de Caro Joseph Galea Joseph Pisani

The company's Articles of Association do not require any directors to retire.

Approved by the Board of Directors on 12 June 2018 and signed on its behalf by:

Frank Xerri de Caro Chairperson

Joseph Galea Director Erzsébet krt 43-49 1073 Budapest Hungary

Independent auditor's report

To the Shareholders of IHI Magyarorszag Zrt.

Report on the audit of the financial statements

Our opinion

In our opinion:

· IHI Magyarorszag Zrt's financial statements give a true and fair view of the company's financial position as at 31 December 2017, and of the company's financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the EU; and

What we have audited

IHI Magyarorszag Zrt's financial statements, set out on pages 6 to 33, comprise:

• · the statement of profit or loss and other comprehensive income for the year ended 31 December 2017;
• · the statement of financial position as at that date;
• · the statement of changes in equity for the year then ended;
• · the statement of cash flows for the year then ended; and
• · the notes to the financial statements, which include a summary of significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code.

Independent auditor's report - continued

To the Shareholders of IHI Magyarorszag Zrt.

Other information

The directors are responsible for the other information comprises the Directors' report (but does not include the financial statements and our auditor's report thereon).

Our opinion on the financial statements does not cover the other information, including the directors' report.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the the other materially incollisem with

If based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial statements

The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with IFRSs as adopted by the EU, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misether, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to lignited to company or to cease operations, or have no realistic alternative but to do so.

Independent auditor's report - continued

To the Shareholders of IHI Magyarorszag Zrt.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance, but is assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• · Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or eufficient and perform audit procedures responsive to those risks, and obtain audit evidence that or sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.
• · Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• · Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.
• · Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiences in internal control that we identify during our audit.

PricewaterhouseCoopers

78, Mill Street Qormi Malta Simon Partner

15 June 2018

Statement of profit or loss and other comprehensive income

	Notes	2017 € 000	2016 € 000
Revenue	6	26,041
Direct costs		(12,199)	23,659 (10,980)
Gross profit
Marketing costs		13,842 (1,632)	12,679
Administrative expenses		(4,222)	(1,555) (4,024)
Depreciation		(1,465)	(1,896)
Results from operating activities	7	6,523	5,204
Finance income		143
Finance costs		(1,049)	81
Net finance costs	9	(906)	(405) (324)
Profit before tax		5,617	4,880
Tax expense	10	(658)
Profit for the year		4,959	(752) 4,128
Other comprehensive income:
Impairment revaluation of hotel property	11		18,613
Income tax relating to components of
other comprehensive income	20		(1,675)
Other comprehensive income for the year, net of tax			16,938
Total income for the year		4,959	21,066

Statement of financial position

		2017	2016
Assets	Notes	€'000	€2000
Non-current
Property, plant and equipment	11	121,617
		121,617	122,458 122,458
Current
Inventories	12	986	985
Trade and other receivables	13	2,233	1,660
Cash and cash equivalents	14	1,929	1,722
		5,148	4,367
Total assets		126,765	126,825
Equity
Called-up share capital
Capital reserve	15	3,862	3,862
Revaluation reserve	16	15,038	15,038
Retained earnings	17	39,855	39,855
Total equity		5,156 63,911	197 58,952
Liabilities
Non-current
Other long term loans Deferred tax liabilities	19	50,729	57,229
	20	5,591	5,513
		56,320	62,742
Current
Other loans	19	401	241
Trade and other payables	21	5,699	4,361
Current taxation		434	529
		6,534	5,131
Total liabilities		62,854	67,873
Total equity and liabilities		126,765	126,825

The financial statements on pages 6 to 33 were authorised for issue by the board of directors ga 12 June

2018 and signed on its behalf by:

Frank Xerri de Caro

Chairperson

Joseph Galea

Director

Statement of changes in equity

	Share capital	Capital reserve	Revaluation reserve®	Retained earnings	Total
	€ 000	Croop	€ 000	€ 000	€ 000
Balance at 1 January 2016 Total comprehensive income for the	3,862	15,038	22,917	(3,931)	37,886
year Profit for the year			16,938		16,938
				4,128	4,128
Balance at 31 December 2016	3,862	15,038	39,855	197	58,952
Balance at 1 January 2017 Other comprehensive income for the year	3,862	15,038	39,855	197	58,952
Profit for the year				4,959	4,959
Balance at 31 December 2017	3,862	15,038	39,855	5,156	63,911

* Not available for distribution

Statement of cash flows

	Notes	2017 ۼ000	2016 € 000
Profit before tax		5,617
			4,880
Adjustments Working capital changes:	22	1,479	2,093
Inventories		(1)	(20)
Trade and other receivables		(588)	(264)
Trade and other payables		1,552	(121)
Cash from operating activities		8,059	6,568
Tax paid		(675)	(245)
Net cash from operating activities		7,384	6,323
Cash from investing activities Payments to acquire property, plant and equipment Interest received Net cash used in investing activities Cash from financing activities		(674) (3) (677)	(970) 8 (962)
Bank loan/IC loan repayments*		(6,500)
Interest paid			(33,798) (269)
IC loan received**			25,869
Net cash used in financing activities		(6,500)	(8,198)
Net (decrease) / increase in cash
and cash equivalents		207	(2,837)
Cash and cash equivalents at 1 January		1,722	4,559
Cash and cash equivalents at 31 December	14
		1,929	1,722

* During the year the company repaid €6.5 million in shareholders loans. During 2016, the company repaid €6,354,686 parent company loan and €26,937,153 bank loan **The company received €25,868,660 EUR loan from IHI PLC to repay the total bank loan

Notes to the financial statements

1. Nature of operations

The Company's main business is connected with the ownership and operation of a hotel and adjacent apartments and spa in Budapest, Hungary.

2. General information

IHI Magyarország Ztt., (the 'Company'), is a limited liability company incorporated in Budapest, Hungary. The Company's registered address is Erzsébet krt. 43-49, 1073 Budapest, Hungary.

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

The financial statements are presented in thousands of euro (€700) which is also the functional currency of the Company.

3. Change in accounting policies

3.1. Standards, interpretations and amendments to published standards effective in 2017

In 2017, the Company adopted amendments to existing standards that are mandatory for the Company's accounting period beginning on 1 January 2017, comprising:

Recognition of Deferred Tax Assets for Unrealised Losses – Amendments to IAS 12; and Disclosure initiative - Amendments to IAS 7.

The adoption of these revisions to the requirements of IFRSs as adopted by the EU did not result in changes to the Company's accounting policies impacting the Company's financial performance and position. The amendments to IAS 7 require disclosure of changes in liabilities arising from financing activities a disclosed in Note 22.1.

3.2. Standards, interpretations and amendments to published standards that are not yet effective

Certain new standards, amendments and interpretations to existing standards have been published by the date of authorisation for issue of these financial statements but are mandatory for accounting periods beginning after 1 January 2017. The Company has not early adopted these revisions to the requirements of IFRSs as adopted by the EU and the directors are of the opinion that there are no tequirements that vill have a possible significant impact on the Company's financial statements in the period of nitial application, which except for IFRS 9 'Financial instruments', IFRS 15 'Revenue from contracts with customers' and IRS 16 'Leases'.

IFRS 9, 'Financial instruments', addresses the classification and measurement of financial assets, and replaces the multiple classification and measurement models in IAS 39 with a single model that has only thee classification categories: amortised cost, fair value through other comprehensive income (FVOC') and fair value through profit or loss (FVTPL). Classification under IFRS 9 is driven by the reporting senting s business model for managing the financial assets and the contractual characteristics of the financial assets. IFRS 9 also addresses the classification and measurement of financial liabilities, and verains the mayority of the requirements in IAS 39 in relation to financial liabilities. IFRS 9 introduces a new expected credit loses model that replaces the incurred loss impairment model used in IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018.

Management have started assessing IFRS 9's impact on its financial assets and liabilities.

3. Change in accounting policies - continued

3.2. Standards, interpretations and amendments to published standards that are not yet effective - continued

Financial assets mainly comprise trade receivable. IFRS 9 also introduces a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. This amendment impacts the Cosss nover to the extent of their trade receivables and deposits held with credit institutions. Management has not yet been able to quantify the provision required as at the date of transition to IFRS 9. However, it does not expect a significant impact on the Company as a result of this amendment. This is after considering the following

• · Trade and lease receivables will qualify for the simplifications afforded by IFRS 9 and management will apply a provisions matrix in order to calculate the loss allowance on these asses. Different less rates will be determined based on the different ageing buckets of receivables, and management will use historical experience (adjusted by more forward-looking information where relevant), in order to determine such loss rates. Based on the Company's history of bad debts, the divectors anticipate that the provision required on transition will not be significant.
• · The Company will avail of the low credit risk exemption under IFRS 9 for the majority of its balances held with banks and hence calculate their provision using 12-month expected credit losses. The provision emanating from this calculation is expected to be immaterial.

There will be no impact on the Company's accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the Company do not have any such liabilities. The derecognition rules have been transferred from IAS 39 and have not been changed.

for for and from contracts with customers' deals with revenue recognition and establishes principles vecessing useful information to users of finacial statements about the nature, amount, iming and uncertainty of revenue and cash flows arisins from an entity's contracts with customers. Revenue is and obtain the houser obtains control of a good or service and thus has the edstomes." Revelite is and obtain the benefits from the good or service. The standard replaces IAS 18 Revenue' and IAS 11 'Construction contracts' and related interpretations, and is effective for accural periods beginning on or after 1 January 2018.

Management has analysed the Company's revenue streams in assessing the impact of IFRS 15 on their contracts with customers. The majority of the Company's revenue arises from the hotel and creter business. In view of the short-term nature of such contracts, management do not anticipate any changes between the accounting under IAS 18 and that under IFRS 15.

IFRS 16, Leases', was issued in January 2016 and is effective for annual periods beginning on or after 1 January 2019. Earlier application is permitted, subject to IFRS 15 also being adopted, however, the Company will not be early adopting the standard. Under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of connants, hange for a consideration. The standard mainly impacts lessee accounting as it requires lessees to recognise I lorse liability reflecting future lease payments and a fright-of-use asset for virtually all lease contracts; an optional exemption is available for certain short-term leases and leases of low-value assess. The Company's noncancellable operating leases as at 31 December 2017 amount to €43 thouvand.

The present value of non-cancellable leases as at 1 January 2019 will be recognised as a lease liability, with a corresponding amount in right of use assets. However, management has not yet assessed what other adjustments, if any, are necessary, for example because of the change in the definition of the lease term and the different it ease payments and of extension and termination options. It in the textile of the threefere not yet possible to estimate the amount of right-of-use assets and lease liabilities that will lave to be recognised on adoption of the new standard and bo user affect the Company's profit or hoss and classification of cash flows going forward.

3. Change in accounting policies - continued

3.2. Standards, interpretations and amendments to published standards that are not yet effective - continued

For all standards issued but not yet effective, the Company intends to apply the transitional simplifications afforded by each standard and will not restate comparative amounts for the year prior to first adoption.

4. Summary of accounting policies

4.1. Overall considerations

The significant accounting policies that have been used in the preparation of these financial statements are summarised below.

The financial statements have been prepared using the measurement bases specified by IFRS as adopted by the EU for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below.

The preparation of financial statements in conformity with IFRS as adopted by the EU requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and assumptions are based on hillouins experience and various other factors that are believed to be reasonable and reliable in the circumsances, she results of which form the basis of making the judgements about carrying amounts of assets and liadlities that are not readily apparent from other sources. Actual results may differ from theme of assess.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revisions to accounts to accounting or in the period of revision and future periods if the revision affects both current and fitture priods.

Judgements made by management in the application of IFRS as adopted by the EU that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the following notes:

Note 13: Property, plant and equipment

The accounting policies have been consistently applied by Company and are consistent with those used in previous years.

4.2. Interest-bearing loans

Interest-bearing loans are stated at their amortised cost, being the net proceeds received. Loan interest is recognized on an accrual basis and expensed when incurred. Loans denominated in foreign currences at the balance sheet date are translated at the year-end rates of exchange.

4.3. Foreign currency translation

Foreign currency transactions are translated into the functional currency of the Company using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and loses resulting from the settlement of such transactions and from the remeasurement of monetary items at yestend exchange rates are recognised in income statement.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exhange rates at the date when fair value was determined.

4.4. Revenue

Revenue comprises revenue from sale of goods and rendering of services.

Revenue is measured by reference to the fair value of consideration receivable by the Company for goods supplied and services provided, excluding VAT, rebates, and trade discounts.

Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity, the costs incurred or to be incurred can be measured reliably, and when the criteria for each of the Company's different activities has been met. Rental income from property is recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total income.

Interest income is recognized in the income statement as it accrues, taking into account the effective yield.

4.5. Lease payments

Payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred.

4.6. Operating expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.

4.7. Retirement benefit costs

The Company is required to pay defined employer contributions to the State in accordance with local legislation. Pension costs are charged against profit in the period in which the contributions are payable.

4.8. Property, plant and equipment

Land and building held for use in production or administration are stated at revalued amounts. Revalued amounts are fair market values determined in appraisals by external professional valuer on a periodic basis.

Any revaluation surplus is recognised in other comprehensive income and credited to the 'revaluation reserve'. To the extent that any revaluation decrease or impairment loss has previously been recognised in profit or loss, a revaluation increase is credited to profit or loss with the remaining part of the increase recognised in other comprehensive income. Downward revaluations are recognised or impairment testing, with the decrease being charged to other comprehensive income to the extent of any revaluation surplus in equity relating to this asset and any remaining decrease recognised in profit or loss. Any revaluation surplus remaining in equity on disposal of the asset is transferred to retained earnings.

Items of plant and equipment comprising furniture and fittings, plant and equipment, are initially recognised at acquisition cost. Subsequently they are carried at acquisition cost less subsequent depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the asset. The cost of selfconstructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Borrowing costs related to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.

4.8. Property, plant and equipment - continued

Depreciation is recognised on a straight-line basis to write down the cost or valuation of assets less estimated residual value over their estimated useful lives. The periods generally evelicable are:

	Years
Freehold buildings	50
Hotel plant and equipment	3-15
Furniture, fixture and fittings	3-10
Motor vehicles

As no finite useful life for freehold land can be determined, related carrying amounts are not depreciated.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss for the year. When revalued assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings.

When the use of a property changes from owner-occupied to investment property, the property is rerecogniced directiving and reclassified as investment property. Any gain arising on re-measurement is recognised directly in equity. Any loss is recognised immediately in profit or loss. However, to the extent the comprehensive in the revaluation surplus for that property the decease is recognised in other comprehensive income and reduces the revaluation surplus within the equity.

4.9. Impairment testing of goodwill, other intangible assets and property, plant and equipment

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent and cash one of cash-generating units). As a result, some assess are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from the said goodwill and represent the lowest level within the Company at which management monitors goodwill.

Cash-generating units to which goodwill has been allocated are tested for impairment at least annually. All other individual assets or cash generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. Cash flows and discount factors are determined individually for each cash-generating unit and reflect their respective risk profiles.

Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assess in the cases in the cash import lose a suite the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash generating unit's recoverable amount exceeds its carrying amount.

4.10. Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred.

A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value profit or loss, which are measured initially at fair value.

Financial liabilities

The Company's financial liabilities include borrowings, trade and other payables and derivative financial instruments.

All derivative financial instruments that are not designated and effective as hedging instruments are accounted for at fair value through profit or loss.

All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within 'finance costs' or 'finance income'.

4.11. Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling excenses.

The cost of inventories is based on the weighted average principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.

4.12. Income taxes

Tax expense recognised in profit or loss comprise the sum of deferred tax and current tax not recognised directly in equity.

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reportug period and any adjustment to tax payable in respect of previous years.

Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, defered tax not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are always provided for in full.

4.12. Income taxes - continued

Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Defered tax assets and liabilities are offset only when the Company has a right and intention to set off current tax assets and liabilities from the same taxation authority.

Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income (such as the revaluation of land), in which case the related deferred tax is also recognised in other comprehensive income.

4.13. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

4.14. Equity and reserves

Share capital represents the nominal value of shares that have been issued.

When share capital recognised as equity is purchased, the amount of the consideration paid, which includes directly attributable costs, is net of any tax effects, and is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to/ from retained as anings.

The revaluation reserve within equity comprises gains and losses due to the revaluation of property, plant and equipment. Retained earnings include all current and prior period loses and recadined or of its.

4.15. Provisions, contingent liabilities and contingent assets

Provisions are recognised when present obligations as a result of a past event will probably lead to an outflow of economic resources from the Company and amounts can be estimated reliably. Timig of amount of the outflow may still be uncertain. A present obligation arises from the presence of a ligal or constructive commitment that has resulted from past events. Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and implemented, or management has t least announced the plan's main features to those affected by it. Provisions are not recognised for future operating an the most all like on the most reliable evidence available at the reporting date, including the risks are nonemalines association, associaed with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions as discounted to their present values, where the time value of money is material.

Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. In those cases where the possible outflow of economic resources as a result of present obligation is considered improbable or remote, no liability is recognised, unless it was assumed in the course of a business combination. In a business combination contingent liability are recognised in the nourse of the allocation of the purchase price to the assets and liabilities acquired in the breach in the rate on the are subsequency measured at the higher amount of a comparable provision as described above and the amount initially recognised, less any amortisation.

Possible inflows of economic benefits to the Company that do not yet meet the recognition criteria of an asset are considered contingent assets.

5. Critical accounting estimates and judgements

Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal actual results. The estimates, assumptions and management judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

The fair value of property, plant and equipment and investment properties is determined by using valuation techniques. Further details of the judgements and assumption made are disclosed in Note 11.

This note highlights information about the fair value estimation of land and buildings and investment property, together with a sensitivity analysis of the effects of shifts in unobservable inputs used in determining these fair values.

In the opinion of the directors, the accounting estimates and judgements made in the course of preparing these financial statements are, with the exception of the fair valuation of property, not difficult, subjective or complex to a degree which would warrant their description as critical in terms of the requirements of TAS 1.

6. Revenue

	2017 €'000	2016 ۼ000
Accommodation Food and beverages Other hotel revenue	17,702 6,719 1,620	16,197 5,622 1,840
	26,041	23,659

7. Results from operating activities

Results from operating activities are after the following charges:

	2017 € 000	2016 € 000
Operating lease costs	11	13
Depreciation of property, plant and equipment (Note 11)	1,465	1,897
Auditors' remuneration	31	25

8. Personnel expenses

	2017 € 000	2016 € 000
Wages and salaries	3,377	2,904
Casual workforce	1,464	1,121
Payroll related taxes	725	741
Other payroll related expenses	504	530
	6,070	5,296

8.1. Average number of employees

	2017	20167
Management and administrative Operating	ર્ણ રિ 322	64 307
	387	371

9. Finance income and finance costs

	2017 € 000	2016 € 000
Interest receivable on:
Bank deposits	1	4
Other financial income	5	5
Interest on Group Balances*	137	60
Finance income	143	રેને
Interest payable on:
Bank borrowings		(302)
Interest on group balances	(1,037)	(33)
Exchange loss-net	(11)	(56)
Other charges	(1)	(2)
Finance costs	(1,049)	(393)
Net finance costs	(906)	(324)

* The hotel building was pledged as collateral against a bond issued by the parent company amounting to €55 million. Interest receivable in relation to the collateral provided was accrued for at 0.25% or €137,500 (2016: €60,347).

10. Tax expense

	2017 € 000	2016 € 000
Current taxation Deferred taxation (note 20)	(580) (78)	798) 46
	(658)	(752)

In 2017 the corporate income tax rate in Hungary is 9% for taxable profit.

Refer to Note 20 for information on the entity's deferred tax assets and liabilities.

10.1. Tax expense reconciliation

	2017	2016
	ۼ000	ۼ000
Profit before tax	5,617	4,880
Income tax using the Company's
domestic tax rate	506	488
Tax effect of tax exempt profits
Tax effect of provision for exchange
differences		503
Tax effect of excess of capital
allowances over depreciation		78
Effect of other temporary differences	152	(317)
Tax expense	658	752

10.2. Tax recognised in other comprehensive income

	2017	2016
	€000	8,000
Deferred tax on revaluation of hotel
property		1,6/5)

IHI Magyarorszag Zrt. Report and financial statements Year ended 31 December 2017

11. Property, plant and equipment

	Land and	Hant and			Associe morine
	formatings	equipment	Furniture, fixtures and fromgs	Motor vehicles	(Comments (si
	Carolo	ਿਆ।	(3.0000	: THER	Elempion (Clore) (Clera) (3000)	Hotel (32000)
Cost/revalued amount
Balance at 1 January 2016 Additions	123,479	8,889	5,367		ઉદર્ણ	138,391
Reallocations					945	945
Disposals	702	435	5		(1,142)
Revaluation surplus		(76)	(୧୬)			(145)
Balance at 31 December 2016	18,613			-		18,613
	142,794	9,248	5,303	-	459	157,804
Balance at 1 January 2017	142,794	9,248	5,303
Additions					459	157,804
Reallocations	୧୦୫	317	51		624	624
Disposals					(976)
Revaluation surplus				-
Balance at 31 December 2017	143,402	9,565	5,354	-	107	158,428
Depreciation and impairment losses
Balance at 1 January 2016	20,545	8,451	4,595			33,591
Depreciation for the year	1,632	207	28			1,879
Disposals		(76)	(66)	-	-	(142)
Balance at 31 December 2016	22,177	8,582	4,587	-		35,346
Balance at 1 January 2017	22,177	8,582	4,587	-		35,346
Depreciation for the year	1,204	207	54			1,465
Disposals				-
Balance at 31 December 2017	23,381	8,789	4,641	-	ﺴﮯ	36,811
Carrying amounts
At 1 January 2016	102,934	438	772
At 31 December 2016	120,617	રેણ્વ	716	l	ર્ણ્ટ્સ્વ	104,800
At 1 January 2017	120,617	୧୯୧	716	ー	459	122,458
At 31 December 2017	120,021	776	713	-	459	122,458
				r	107	121,617

11.1. Fair valuation of property

In 2017, management has carried out an assessment for the property measured in accordance with the revaluation model under IAS 16, to determine whether a material shift in fair walue hall occurred. When on the basis of this assessment, management has concluded that there are no material changes ited in the independent valuation was not obtained, as was the case for this property. The fair value disclosures reported as at 31 December 2016 (disclosed further below), are still relevant as at 31 December 2017.

The Company is required to analyse non-financial assets carried at fair value by level of the fair value hierarchy within which, the recurring fair value measurements are categorised in their entrety (Level 1, 2 or 3). The different levels of the fair value hierarchy have been defined as fair value measurements using:

· Quoted prices (unadjusted) in active markets for identical assets (Level 1);

• Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2);

• Inputs for the asset that are not based on observable market data (that is, unobservable inputs) (Level 3).

The Company's land and buildings, within property, plant and equipment, consists principally of hotel property that is owned and managed by companies forming part of the Corinthia Group.

The Company's policy is to recognise transfers into and out of fair value hierarchy levels as of the beginning of the reporting period. There were no transfers between different levels of the fair value hiring by during the current and preceding financial years.

Valuation processes

Where management, through its assessment, concludes that the fair value of properties differs materially from its carrying amount, an independent valuation report prepared by third party qualified raluers, is performed. These reports are based on both:

· information provided by the Company which is derived from the Company's financial systems and is subject to the Company's overall control environment; and

· assumptions and valuation models used by the valuers, with assumptions being typically market related and based on professional judgement and market observation.

The information provided to the valuers, together with the assumptions and the valuation models used by the valuers, are reviewed by designated officers within the Company. This includes a review of fair vale movements over the period. When the designated officers consider that the valuation report is appropriale, the valuation report is recommended to the Audit Committee and Board of directors. The Committee and Board then consider the valuation report as part of their overall responsibilities.

Valuation techniques

In view of a limited number of similar or comparable property transactions, comprising sales or rentals in the respective market in which the properties are located, the valuations have been performed using unobservable inputs. The significant inputs to the approach used are generally those described over

The fair valuation as at 31 December 2016 of the Corinthia Hotel Budapest was determined on the basis of the adjusted sales comparison approach. The valuation technique considered by the external values to be be most appropriate for the respective property has been utilised to attain a more representative measurement at fair value.

· Adjusted sales comparison approach: a sales price per square metre or per room related to transactions in comparable properties located in proximity to the respective property, with adjustments for differences in size, age, exact location and condition of the property.

Information about fair value measurements using significant unobservable inputs (Level 3) as at 31 December 2017 and 2016.

Description by class highest and best use	Valuation technique	Fair value at 31 December € 0000	Significant unobservable inputs
Adjusted sales Comparison Approach			Sales price per room
2016		122,458	€1,769

With respect to the adjusted sales comparison approach, the higher the sales price per square metre, the resultant fair valuation.

As evidenced in the tables above, the highest and best use of the Company properties is equivalent to their current use as at 31 December 2016. The fair value disclosures as at 31 December 2016 are still relevant as at 31 December 2017.

A shift in unobservable inputs of +/- 0.5% would result in a shift in property valuation of +/- €720,000 (2016: €720k).

11.2. Adjustments to carrying amount of property

Revaluation surplus and impairment charges recognised on other comprehensive income (within revaluation reserve), gross of deferred tax:

	€ 000
At 1 January 2016 Revaluation of hotel property	27,483
carried out at year end At 31 December 2016	18,613 46,096
Revaluation of hotel property carried out at year end
At 31 December 2017	46,096

11.3. Carrying amount of hotel property

Following adjustments the hotel property carrying amount to reflect the outcome of the fair valuation process referred to above at each reporting period, the carrying amount of the hotel property is €121.617 million (2016: €122.458 million).

11.4. Historic cost of hotel property

The carrying amounts of the land and buildings that would have been included in these financial statements had these assets been carried at cost less accumulated depreciation in use mindical statements.
674.522 ... ill: €74.523 million).

11.5. Use as collateral

The hotel property is pledged as collateral against a bond issued by the parent company.

12. Inventories

	2017	2016
	€ 0000	€ 000
Food and beverages	151	147
Cleaning materials and consumables	145	140
Stationery and promotional material	36	62
Utensils, crockery, cutlery, chinaware
and linen	654	636
	986	985
13. Trade and other receivables

	2017	2016
	€ 000	ۼ000
Trade receivables	1,835	1,261
Amounts owed to:
Group company	14
Other related companies		47
Other debtors	120	30
Financial assets	1,976	1,338
Advance payments to contractors for
capital expenditure	61	24
Prepayments	196	298
Total receivables - current	2,233	1,660

Impairment losses

The ageing of trade receivables at the reporting date was:

	Gross	Impaired	Gross	Impaired
	amount	amount	amount	amount
	2017	2017	2016	2016
	€'000	€ 000	€'000	€°000
Not past due Past due 0-30 days Past due 31-120 days	1.055 385 240		905 238 124	2 1
Past due 121-360 days	114	13	157	2
More than one year	108	54		157
	1,902	67	1,424	163

13. Trade and other receivables - continued

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

	2017 ۼ000	2016 ۼ000
Balance at 1 January Amounts written off	163 (107)	166
Impairment losses recognised Impairment losses reversals	67 (56)	(10)
Balance at 31 December	67	163

The impairment loss at 31 December 2017 relates to specific provision for doubtful debtors that have been overdue for more than one year. Such balances were unsecured.

The provision accounts in respect of trade receivables are used to record impairment losses unless the Company deems that no recovery of the amount owing is possible; at that point, the amounts see annele ed irrecoverable and are written off against the financial asset directly.

The carrying amount of trade and other receivables is considered to be a reasonable approximation of fair value.

14. Cash and cash equivalents

Cash and cash equivalents include the following components:

	2017 €'000	2016 € 000
Bank accounts Cash in hand	1,819 110	1,644 78
Cash and bank balances	1,929	1,722
Cash and cash equivalents in the statement of cash flows	1,929	1,722

15. Share capital

15.1. Authorised and issued share capital

		Ordinary shares of €1 each
Note	2017 ۼ000	2016 € 000
On issue at 1 January (100,000 ordinary shares)	3,862	3,862
On issue at 31 December - fully paid up (100,000 ordinary shares)	3,862	3,862

15.2. Shareholders rights

Shareholders are entitled to vote at meetings of the shareholders of the Company on the basis of one vote for each share held. They are entitled to receive dividends as declared from time to time. The shares is isue

15. Share capital - continued

15.2. Shareholders rights - continued

shall, at all times, rank pari pass with respect to any distribution whether of dividends or capital, in a winding up or otherwise.

16. Revaluation reserve

Note	Revaluation surplus € 000	Deferred taxation € 000	Net € 000
At 1 January 2016	27,483	(4,566)	22,917
Revaluation of hotel property carried out at year end	18.613	(1,675)	16,938
At 31 December 2016	46,096	(6,241)	39,855
At 31 December 2017	46,096	(6,241)	39,855

17. Retained earnings

The gain for the year has been transferred to retained earnings as set out in the statement of changes in equity for the year ended 31 December 2017.

18. Capital management policies and procedures

The board's policy is to maintain a strong capital base so as to maintain investor, creditor and market on sepital which the Can ruture development of the business. The board of directors monitors the return on capital, which the Company defines as the profit for the year divided by total equity.

The board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company seeks to maximise the return on shareholders' equity and to reduce the incidence of interest exence.

There were no changes in the Company's approach to capital management during the year. The Company is not subject to externally imposed capital requirements.

19. Intercompany loan

	2017	2016
	ۼ000	ۼ000
Amounts owed to:
Parent company (IHI PLC)
Group company	50,729	57,229
	401	241
	51,130	57,470
Non current liabilities
Amounts owed to:
Parent company	50,729	57,229
	50,729	57,229
Current liabilities
Amounts owed to:
Group company	401	241
	401	241

The terms of the amounts owed to the related parties are as follows:

	3000	Interest	Terms Repayable by	Security
IHI PLC IHI PLC Group company	25,869 24,860 401 51,130	4% (2016: 0.25%) 0% 6M EURIBOR + 1%	non-current non-current current	None None None

20. Deferred tax asset and liability

	2017	2016
	€ 000	€ 000
Excess of tax base over carrying amount of tangible fixed assets Tax effect on revaluation of land and buildings	(192)	(201)
Provision for exchange differences	(5,619) 220	(5,623) 311
	(5,591)	(5,513)
The movement in the deferred tax can be analysed as follows:
Recognised directly in other comprehensive income Deferred tax on revaluation of hotel
property carried out at year end		(1,675)
Recognised in profit or loss	(78)	46
	(78)	(1,629)

21. Trade and other payables

	2017	2016
	€ 000	€ 000
Trade payables Other payables	884	647
Parent company (IHI Plc)	892
Fellow subsidiary companies		16
Other related companies	16	42
Other creditors	714	603
Accruals	2,066	1,857
Financial liabilities	4,572	3,255
Advance payments	1,127	1,106
Total payables - current	5,699	4,361

22. Cash flow adjustments

	2017 €'000	2016 € 000
Adjustments:
Depreciation	1,465	1,897
Unrealized foreign exchange gain/loss net	11	(64)
Finance cost-net	3	261
	1.479	2.093

22.1. Reconciliation of financial liabilities

The Company
	Liabilities from financing activities Other
	financial
	liabilities ۼ000	Total €'000
As at 1 Jan 2017
- Principal	(57,229)	(57,229)
- Net	(57,229)	(57,229)
Cash flows	6,500	6,500
Other movements
As at 31 December 2017	(50,729)	(50,729)
Comprising:
- Principal - Accrued interest	(50,729)	(50,729)
As at 31 December 2017	(50,729)	(50,729)

Commitments 23.

	2017 € 000	2016/ ۼ000
Capital expenditure
Contracted Capital expenditure	196	54
Car lease	43
	239	54

24. Related parties

The Company's related parties include its associates, key management, fellow subsidiaries and shareholders of ultimate parent company. None of the transactions incorporates special terms and conditions and co guarantees were given or received. Transactions with related companies are generally affected on a cost plus basis or on the basis of pre agreed arrangements. Outstanding balances are usually settled by and payment. Amounts owed by/to related parties are shown separately in Notes 13, 19 and 21.

	2017 € 000	2016 € 000
Revenue
Services rendered to
Ultimate parent company Fellow subsidiaries	48	47
	40	13
Other related companies
	88	60
Expenses
Charged by Corinthia Hotels Limited (CHL)	363	349
Charged by Corinthia group members	3	44
	369	303
Marketing costs
Charged by CHL	354	322
Charged by Corinthia group members	54	45
	408	367
Administrative expenses
Management fee charged by:
Parent company	258	234
CHL	1,275	1,155
	1,533	1,389
	2,222	2,089
Financing
Interest payable - Parent company	1,035	32
Interest payable - Fellow subsidiaries	2
Interest receivable - Parent company	(138)	(60)
	899	(28)

24. Related parties - continued

24.1. Transactions with key management personnel - continued

In addition to the remuneration paid to the directors, in the course of its operations, the Company has a number of arrangements in place with its officers, executives and other related parties whereby concessions are made available for hospitality services rendered to them according to accepted industry norms.

25. Risk management objectives and policies

The Company is exposed to various risks through its use of financial instruments. The main types of risks are market risk, credit risk and liquidity risk, which result from both its operating and investing activities. The Company's risk management is coordinated at its head office, in close co-operation with the board of directors and the audit committee and focuses on actively securing the Company's short to medium term cash flows by minimising the exposure to financial markets. Long term financial investments are managed to generate lasting returns.

The board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework.

The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their toles and obligations.

The audit committee oversees how management monitors compliance with the Company's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The most significant financial risks to which the Company is exposed to are described below. See also 25.4 for a summary of the Company's financial assets and liabilities by category.

25.1. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers. The Company's exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date, as summarised below:

	2017 € 000	2016 € 000
Classes of financial assets - carrying amounts
Trade and other receivables	1,976	1,338
Cash and cash equivalents	1,929	1,722
	3,905	3,060

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Company's customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit risk.

IHI Magyarorszag Zrt. Report and financial statements Year ended 31 December 2017

25. Risk management objectives and policies

25.1. Credit risk - continued

The Company has, over the years, conducted business with various corporates, tour operators and individuals located in different jurisdictions and, due to the Spread of the Company's debtor bose, there is no concentration of credit risk.

The Company has a credit policy in place under which new customers are analysed individually for creditworthiness before the Company's standard payment and conditions are offeed. The Company's review includes external ratings, where available, and in some cases bank are onceres. Customers that fail to meet the Company's benchmark creditworthiness may only transact with he Company only on a cash basis.

In monitoring customer credit risk, customers are individually assessed. Customers that are graded as "bigh risk" are placed on a restricted customer list, and future sales are only made on a prepayment basis.

The Company does not ask for any collateral in respect of trade and other receivables. The Company establishes an allowance for doubtful recoveries that represents its estimate of losses in respect of trade and other receivables. See Note 13 for further information on impairment of financiol assets that are past dee.

The Company's cash is placed with quality financial institutions, such that management does not expect any institution to fail to meet repayments of amounts held in the vanning mining mithin the Company.

Management considers that all the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality, including those that are past due. See Note 13 for further information on impairment of financial assets that are past due.

25.2. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as fat as possible, that it will always have sufficient liquidity to meet its liabilities as they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

The Company actively manages its cash flow requirements. Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

At 31 December 2017, the Company has financial liabilities including estimated interest payments with contractual maturities which are summarised below:

31 December 2017	Current		Non-current
	Within 6 months ۼ000	6-12 months € 000	2-5 years € 000	More than 5 vears € 000
Parent company loan		1,035	4,139	54,868
Other interest bearing borrowings	401
Trade and other payables	4.572
	4,973	1,035	4.139	54.868

IHI Magyarorszag Zrt. Report and financial statements Year ended 31 December 2017

25. Risk management objectives and policies- continued

25.2. Liquidity risk - continued

This compares to the maturity of the Company's financial liabilities in the previous reporting period as follows:

31 December 2016	Current		Non-current
	Within / 6 months € 000	6-12 months € 000	2-5 years €70007	More than 5 years €000
Parent Company loan		62	248	57,477
Other interest bearing borrowings	241
Trade and other payables	3,255
	3,496	62	248	57,477

The above contractual maturities reflect the gross cash flows, which may differ from the carrying values of the liabilities at the balance sheet date.

25.3. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Company's income of the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameers, wile optimising the return on risk.

25.3.1. Foreign currency risk

The Company operates internationally and is exposed to currency risk on sales and purchases that are denominated in a currency other than its functional currency which is the euro. The currency giving rise to the highest risk is the Hungarian Forint (HUF).

In respect of monetary assets and liabilities denominated in foreign currencies, the Company ensures that its net exposure is kept to an acceptable level. The Company further manages its exposure by entering into short term forward contract with its bankers when deemed advantageous.

The company's revenues, purchase and operating expenditure, financial assets and liabilities, are mainly denominated in euro except for financial assets amounting to €537,000 and financial liabilities, are uning to €619,000 which are denominated in HUF.

At 31 December 2016, if the EUR had weakened/strengthened by 10% against the HUF with all other variables held constant, post-tax profit for the year would have been €26,785 lower/€26,785 lighter a a result of foreign exchange losses/gains on translation of the EUR denominated borrowings.

25. Risk management objectives and policies - continued

25.4. Summary of financial assets and liabilities by category

The carrying amounts of the Company's financial assets and liabilities as recognised at the balance sheet date of the reporting periods under review may also be categorised as follows. See Note 4.10 for explanations about how the category of financial instruments affects their subsequent measurement.

	2017	2016
	€ 000	€ 000
Current assets
Loans and receivables
- Amounts due from related companies	21	47
- Trade receivables	1,835	1,261
Other receivables -	120	30
Cash and cash equivalents	1,929	1,722
	3,905	3,060
Non-current liabilities
Financial liabilities measured at amortised cost
- Parent company loan	50,729	57,229
	50,729	57,229
Current liabilities
Financial liabilities measured at amortised cost
- Other interest bearing borrowings	401	241
- Trade payables	884	647
- Amounts due to related companies	908	58
- Other payables	714	693
Accruals
	2,066 4,973	1,857 3,496

26 Parent company

The Company is a subsidiary of International Hotel Investments plc (IHI), the registered office of which is situated at 22 Europa Centre, Floriana Malta. The Company's ultimate parent company is Corinthia Palace Hotel Company Limited, the registered office of which is the same as that of IHI.

The parent company prepares consolidated financial statements of which the Company forms part. These financial statements are filed and are available for public inspection at the Registry of Companies in Malta.

27 Directors

The Company has three directors, who received total remuneration of €20,000 for the current period compared to €22,500 the previous year.

28 Events after balance sheet date

No adjusting or significant non-adjusung events have occurred between the balance sheet date and the date of authorisation by the board.

Approved by the Board of Directors on 10 May 2019 and signed on its behalf by:

Frank Xerri de Caro Chairperson

Joseph Galea Director

Erzsébet krt 43-49 1073 Budapest Hungary