Hili Properties Plc

Annual Report • Jun 25, 2021

Company Announcement

The following is a Company Announcement issued by Hili Properties plc (the "Company") in terms of the Listing Rules

QUOTE

The Board of Directors wishes to inform the general public that the 2021 Financial Analysis Summary of the Company has been approved.

A copy of the Financial Analysis Summary is attached herewith and is also available on the Company's website:

www.hiliproperties.com

UNQUOTE

BY ORDER OF THE BOARD

Dr. Melanie Miceli Demajo Company Secretary

25 June 2021

FINANCIAL ANALYSIS SUMMARY Hili Properties p.l.c. 25 th June 2021

The Directors Nineteen Twenty Three, Valletta Road, Marsa, MRS3000, Malta

25 th June 2021

Dear Sirs,

In accordance with your instructions, and in line with the requirements of the Listing Authority Policies, we have compiled the Financial Analysis Summary (the "Analysis") set out on the following pages and which is being forwarded to you together with this letter.

The purpose of the financial analysis is that of summarising key financial data appertaining to Hili Properties p.l.c. (the "Issuer") as well as Harbour (APM) Investments Limited and Hili Estates Ltd (the "Guarantors") as explained in part 1 of the Analysis. The data is derived from various sources or is based on our own computations as follows:

(a) Historical financial data for the three years ended 31 December 2018, 2019 and 2020 has been extracted from the audited financial statements of the Issuer for the three years in question.

(b) The forecast data for the financial year ending 2021 has been provided by management.

(c) Our commentary on the Issuer's results and financial position is based on the explanations provided by management

(d) The ratios quoted in the Financial Analysis Summary have been computed by us applying the definitions set out in Part 4 of the Analysis.

(e) The principal relevant market players listed in Part 3 of the document have been identified by management. Relevant financial data in respect of competitors has been extracted from public sources such as the web sites of the companies concerned or financial statements filed with the Registrar of Companies or websites providing financial data.

The Analysis is meant to assist potential investors by summarising the more important financial data of the Group. The Analysis does not contain all data that is relevant to investors or potential investors. The Analysis does not constitute an endorsement by our firm of any securities of the Issuer and should not be interpreted as a recommendation to invest in any of the Issuer's securities. We shall not accept any liability for any loss or damage arising out of the use of the Analysis. As with all investments, potential investors are encouraged to seek professional advice before investing in the Issuer's securities.

Yours sincerely,

_____________ Nick Calamatta Director

Part 1 -	Information about the Group3
1.1	Issuer and Group's Subsidiaries Key Activities and Structure 3
1.2	Directors and Key Employees4
1.3	Major Assets owned by the Group5
1.4	Operational Developments 9
1.4.1	Strategy9
1.4.2	Harbour (APM) Investments Limited10
1.4.3	Property Disposals11
1.4.4	Properties held for sale 11
1.4.5	Acquisitions11
1.5	COVID-19 impact on the Group's operational and financial performance 11
1.6	Related Party Debt Securities12
1.7	Bond Guarantee 12
Part 2 -	Historical Performance and Forecasts13
2.1	Issuer's Consolidated Statement of Comprehensive Income 13
2.1.1	Variance Analysis14
2.2	Issuer's Consolidated Statement of Financial Position15
2.2.1	Variance Analysis17
2.3	Issuer's Consolidated Statement of Cash Flows18
2.3.1	Variance Analysis18
2.4	Harbour (APM) Investments Ltd19
2.5	Hili Estates Limited 20
Part 3 -	Key Market and Competitor Data 23
3.1	General Market Conditions23
3.2	Comparative Analysis 27
Part 4 -	Glossary and Definitions29

Part 1 - Information about the Group

1.1 Issuer and Group's Subsidiaries Key Activities and Structure

The Group structure is as follows:

Hili Properties p.l.c. (the "Issuer" or "Group") was incorporated on 23 October 2012 as a holding company and forms part of the Hili Ventures Group. The Issuer has an authorised share capital of €60,000,000 divided into 60,000,000 ordinary shares of €1 each. The issued share capital is of €41,592,000 divided into 41,952,000 ordinary shares fully paid up. The Issuer is, except for 2 ordinary shares which are held by APM Holdings Ltd and La Toc Ltd, a subsidiary of Hili Ventures Limited, and is the parent company of the property division of the Hili Ventures Group. The principal objective of the Issuer is to purchase or otherwise acquire, under any title whatsoever, to hold and manage, by any title, movable and immovable property or other assets, both locally and overseas.

Harbour (APM) Investments Limited ("HIL") was incorporated on 4 December 2012 as a private limited liability company and is a fully-owned subsidiary of APM Holdings Limited. The main objective of HIL is to purchase or

otherwise acquire, under any title whatsoever, to hold and manage, by any title, movable and immovable property or other assets, both locally and overseas.

HIL owns a property consisting of a parcel of land measuring circa 92,000m² in Bengħajsa, Malta. On 25 August 2015, the Issuer entered into a promise of share purchase agreement whereby it undertook to accept, purchase and acquire, 100% shareholding in HIL for a total consideration of €25m. In 2015, a 50% deposit (€12.5m) was paid. In 2017, €12m of the renaming balance was settled, of which €5m was settled in cash and €7m was settled pursuant to an assignment of debt to Hili Ventures Limited and subsequently capitalised in the share capital of the Issuer. Both the Issuer and the vendor have the unilateral and unconditional right to rescind the agreement, in which case the deposit already paid of €24.5m becomes repayable on the demand by the Issuer. As at FY20, the agreement was expected to be executed by 2022.

Hili Estates Limited ("HEL") was incorporated on 30 August 1996 as a private limited liability company and forms part of the Hili Properties Group. HEL is principally involved in holding movable and immovable property and currently owns and manages one property; Nineteen-twenty three building situated in Marsa, Malta, comprising of 5,635m² of office space and warehousing facilities. As at May 2021, management confirmed that this property is currently fully leased to companies forming part of the Hili Ventures Group and other related parties.

HIL and HEL serve as "Guarantors" for the Issuer's bond currently listed on the Official List of the Malta Stock Exchange, i.e. €37,000,000 4.5% Hili Properties plc 2025. This is explained further in section 1.7 of the Analysis.

In July 2020, the Group acquired the remaining shareholding (10%) in Premier Assets Romania SRL for a consideration of €0.2m. Moreover, in November 2020, the Group disposed of its 100% interest in Tukuma projekts Ltd for a total consideration of circa €1.8m. Further details concerning these developments is found in section 1.4 of this Analysis.

1.2 Directors and Key Employees

Board of Directors - Issuer

As at the date of this Analysis, the board of directors of the Issuer is constituted by the following persons:

Name	Office Designation
Mr Pier Luca Demajo	Chairman and Independent Non-Executive Director
Mr Georgios Kakouras	Executive Director
Mr Peter Hili	Non-Executive Director
Mr Eddy Vermeir	Non-Executive Director
Mr David Aquilina	Independent Non-Executive Director
Dr Laragh Cassar	Independent Non-Executive Director

The senior management team of the Group consists of:

Name	Office designation
Mr Georgios Kakouras	Chief Executive Officer
Ms Daniela Pavia	Chief Financial Officer

The business address of all the directors is the registered office of the Issuer. Dr Melanie Miceli Demajo is the company secretary of the Issuer.

The board is composed of Mr Pier Luca Demajo acting as chairman, Mr Georgios Kakouras acting as executive director, and four non-executive directors; Mr Peter Hili, Mr Eddy Vermeir, Mr David Aquilina and Dr Laragh Cassar. The board is responsible for the overall long-term direction of the Group, in particular in being actively involved in overseeing the systems of control and financial reporting and that the Group communicates effectively with the market.

The board meets regularly, with a minimum of four times annually, and is currently composed of six members, three of which are independent of the Issuer. As at the date of this Analysis, Mr Pier Luca Demajo, Mr David Aquilina and Dr Laragh Cassar are independent non-executive directors of the Issuer.

Mr Richard Abdilla Castillo and Mr Geoffrey Camilleri resigned in Q3 2020 and Q1 2021. Mr Pier Luca Demajo and Mr Eddy Vermeir were appointed in their seats in Q4 2020 and Q1 2021 respectively. The board meetings are attended by the Chief Financial Officer of the Group in order for the board to have direct access of the financial operation of the Group.

As at the date of this Analysis, the Issuer has a total of 3 employees and, in aggregate, the Group currently has approximately 12 employees, with an average ratio of 92:8 between operational employees and administrational employees.

Board of Directors – Guarantors

As at the date of this Analysis, the board of directors of the Guarantors is constituted by the following persons:

Harbour (APM) Investments Limited

Name	Office designation
Mr Carmelo sive Melo Hili	Director

Hili Estates Limited

Name	Office designation
Dr Annabel Hili	Director
Mr Georgios Kakouras	Director

1.3 Major Assets owned by the Group

The Group's major assets are comprised of the following:

Real Estate Portfolio

The Group owns 24 ¹ properties as at the date of this Analysis, as presented in the table below. These are valued at circa €113m. In view of the fact that these properties are held by the Group for long-term rental yields or for capital appreciation (or both), these are classified as investment property in the Group's statement of financial position. The Group's property portfolio comprises of an aggregate rental space of 82,498m² , which generates an annualised rental income of circa €8m. The contracted gross rental yield is estimated at 6.8%.

The Group's occupancy level as at this date of this Analysis is 95% with a weighted average unexpired lease term (WALT) of 9.3 years. As noted through the graphical charts presented below, the Group's property portfolio is diversified across a number of asset types and geographical regions.

FY20 Geographical Analysis of Investment Property Value

FY20 Investment Property by Category of Asset

¹ Apart from the above-mentioned 24 properties, the below table also includes one property which was sold during 2020

Hili Properties p.l.c.

Name of Property	Location	Description	Main Tenant	Rentable Area (m2 )	Valuation as at 31.12.2020 (€'000)	Occupancy rate (%) as at 31.12.20	WALT (in years)	Ownership
Imanta Restaurant	Riga, Latvia	McDonald's restaurant (with drive thru)	McDonald's	2,709	2,200	100	11.8	Freehold
Vienibas Restaurant	Riga, Latvia	McDonald's restaurant (with drive thru)	McDonald's	3,497	2,200	100	12.3	Freehold
Ulmana Restaurant	Riga, Latvia	McDonald's restaurant (with drive thru)	McDonald's	2,000	1,700	100	15.4	Freehold
Dainava Restaurant	Kaunas, Lithuania	McDonald's restaurant (with drive thru)	McDonald's	3,021	2,200	100	11.0	Freehold
Svajone Restaurant	Vilnius, Lithuania	McDonald's restaurant (in a building complex) McDonald's	McDonald's	580	2,660	100	11.3	Land is leased, building is freehold
Parnu Restaurant	Parnu, Estonia	restaurant (with drive thru)	McDonald's	1,803	1,700	100	10.5	Freehold
M DIY Retails Centre	Tukums, Latvia	Retail	Kesko Senukai	3,370	-	100	2.3	Freehold
Supermarket and Retail Centre	Nicgales Street 2, Riga, Latvia Augusta	Retail	Rimi Latvia	2,890	6,500	100	4.3	Freehold
Supermarket and Retail Centre	Dombrovska Street 23, Riga, Latvia	Retail	Rimi Latvia	4,365	5,400	97	3.0	Freehold
Supermarket and Retail Centre	Vienibas Ave. 95, Riga, Latvia	Retail	Rimi Latvia	1,343	1,424	94	3.7	Freehold
Supermarket and Retail Centre	Kremienu Street 4A, Riga, Latvia	Retail	Rimi Latvia	953	911	100.0	5.5	Land 700m2 is leased, building is freehold
Shopping Centre	Dzelzavas Street 78, Riga, Latvia	Retail	Rimi Latvia	3,448	6,600	100	8.3	Freehold
Vecmīlgrāvja 3. līnija	Riga, Latvia	Land	N/A	N/A	19	N/A	N/A	Freehold Land 734m2 is
Maskavas Street 357	Riga, Latvia	Retail	Rimi Latvia & Eliza K	8,039	11,054	98.0	3.1	leased, other land and building is freehold
Maskavas Street 357	Riga, Latvia	Land	N/A	N/A	145	N/A	N/A	Freehold
Nineteen-twenty three building	Marsa, Malta	Office space/ Warehousing facilities	Hili Ventures	5,535	16,900	100	9.65	Freehold
Transport House	Floriana, Malta	Office space	Ministry of Energy	900	2,500	100	8.88	Freehold
Villa Marika	Madliena, Malta	Private residence		N/A	2,950	N/A	N/A	Freehold
McDonald's Sliema	Sliema, Malta	Restaurant and office space McDonald's	McDonald's	1,518	8,200	100	11.7	Freehold
Selgros Restaurant	Bucharest, Romania	restaurant (with drive thru)	McDonald's	1,499	2,238	100	19.8	Freehold
Bragadiru Restaurant	Bucharest, Romania	McDonald's restaurant (with drive thru)	McDonald's	2,700	1,947	100	20.0	Freehold
Albu	Bucharest, Romania	McDonald's restaurant (with drive thru)	McDonald's	1,185	1,292	100	20.0	Freehold

Hili Properties p.l.c.

Santu Mare	Bucharest, Romania	McDonald's restaurant (with drive thru)	McDonald's	1,346	1,337	100	20.0	Freehold
Art Business Centre 7	Bucharest, Romania	Hospital and Office space	Delta Health Care and Delta Health Trade	24,065	29,910	100	11.5	Freehold
Brasov-Coresi Mc Donalds DT	5 Turnului Street, Distric Brasov, City Brasov	Minute of commissioning on 26th of February, Opening on 30th of March	Premier Restaurants Romania	2,070	856	N/A	20.0	Freehold
	Total			75,466	112,934	95%	9.3

An overview of each property is set out below:

(i) McDonald's Imanta, Riga, Latvia

The Imanta property consists of a plot of land and a building constructed thereon. The site is located in Kurzemes Prospekts 3, Imanta, a residential neighbourhood of Riga inhabited by approximately 44,000 residents.

(ii) McDonald's Vienibas, Riga, Latvia

The Vienibas property consists of a plot of land and a building constructed thereon. The site is located at 115A Vienibas Avenue, which is situated outside the centre of Riga and on one of the busiest exit streets (A8/E77), and is around 7km away from the centre and old town of Riga.

(iii) McDonald's Ulmana, Riga, Latvia

The Ulmana property consists of a plot of land and a building constructed thereon. The site is located at 88, Karla Ulmana Street, which is situated outside the centre of Riga and on one of the busiest exit streets (A10/E22), and is around 7 km away from the centre and old town of Riga.

(iv) Mc Donald's Dainava, Kaunas, Lithuania

The Dainava property consists of a plot of land, a building structure constructed thereon, and an ancillary building that operates as a car park. The site is located in Pramones Ave. 8B, Kaunas, which is in the vicinity of three shopping centres, a petrol station, and a fast food restaurant.

(v) Mc Donald's Svajone, Vilnius, Lithuania

The Svajone property consists of a property located within a larger building complex with the intended use of providing catering services. The building is constructed on a state-owned land plot and is located at 15, Gedimino Avenue, a favourable and prestigious location in the centre of Vilnius in V. Kurika's square.

(vi) Mc Donald's Parnu, Estonia

The Parnu property consists of a plot of land and a building constructed thereon. The property is located at 74, Tallinna Maante, Parnu, an area outside the city centre next to a two-lane road at the entrance to Parnu from Tallinn.

(vii) Wholesale & retail trade building, Nicgales Street, Riga, Latvia

The property is constructed on a 16,785m² plot. The property is located in a zone of the largest district of the Riga called Purvciems, on the east bank of the Paugava River and by approximately 60,000 residents. The property is currently used as a retail and shopping centre.

(viii) Supermarket and Retail Centre, Augusta Dombrovska Street, Riga, Latvia

The property is constructed on an 8,368m2 plot. The property is located in a part of Riga known as Vecmīlgravīs in the northern part of the city, near the mouth of the Daugava River. The property is currently used as a retail and shopping centre with 33 tenants and enjoys significant footfall.

(ix) Supermarket and Retail Centre, Vienibas Street, Riga, Latvia

The property is constructed on a 6,670m² plot. The property is located in Atgāzene in the south of Riga, on the west bank of the Daugava River.

(x) Supermarket and Retail Centre, Kreimeņu Street, Riga, Latvia

The property is constructed on a 3,733m² plot and land plot leased 422m² . The property is located in Vecmīlgrāvis, a town in the North of Riga near the mouth of the Daugava River.

(xi) Shopping Centre, Dzelzavas Street, Riga, Latvia

The footprint of the property measures 8,062m² and is located in Purvciems, in the west of Riga on the east bank of the Daugava River. During FY2018, the property was demolished and re-development works commenced to construct a shopping centre at an estimated cost of circa €4.3 million.

(xii) Dole, Retail Centre, Maskavas Street 357, Riga, Latvia

The property is a four-storey building having 8,000m2 of gross intended leasable area and is occupied by more than 60 tenants. Dole is situated in the Kengarags neighbourhood, one of Riga's southern suburbs with an extensive catchment area and by approximately 50,000 residents.

(xiii) Nineteen Twenty Three, Valletta Road, Luqa, Malta

The property, built on a plot area of 2,585m² , is developed mainly as an office block with part of the premises at ground and intermediate levels used as a warehouse/storage area. The building is sited at the periphery of the industrial park in Luqa/Marsa. The property is 100% leased out, predominantly to a number of subsidiary companies forming part of the Hili Ventures Group.

(xiv) Transport House, Triq San Frangisk, Floriana, Malta

The property is located in a central area in Floriana and comprises of a three-storey building, a receded penthouse, and two interconnected apartments on the first and second floors, all for use as office space.

(xv) Villa Marika, High Ridge, Madliena

The property consists of a fully-detached bungalow located in a prime location in High Ridge, Madliena with a superficial area of circa 1,250m² .

(xvi) McDonald's Restaurant and overlying office, Sliema, Malta

The property in Sliema is leased as a McDonald's outlet at ground and mezzanine levels, and the first floor is completed as office space and rented out to a third party. The premises form part of a development block overlooking two streets, namely The Strand, Sliema at the waterfront and Sqaq il- Fawwara, Sliema at the back of the property.

(xvii) Selgros Restaurant, Bucharest, Romania

The McDonald's Berceni Selgros restaurant commenced operations on 21 November 2018. It is a drive-thru restaurant located in a busy area in the 4 th district of Bucharest.

(xviii) Bragadiru, Bucharest, Romania

The McDonald's Bragadiru restaurant is a drive-thru restaurant located on a busy road in a town called Bragadiru, which is 10km from Bucharest. The restaurant initiated operations on 31 December 2018.

(xix) Alba lulia Restaurant, Alba, Romania

The McDonald's Alba lulia restaurant commenced operations on 21 December 2019. It is a drive-thru restaurant located near the city center of Alba lulia, in the premises of Kaufland parking area, in the central part of the country, in Alba County.

(xx) Satu Mare Restaurant, Satu Mare, Romania

The McDonald's Satu Mare restaurant commenced operations on 30 December 2019. It is a drive-thru restaurant located near the city center of Satu Mare in the northern part of the country, in Satu Mare County.

(xxii) Brasov-Coresi Restaurant, Turnului, Romania

The McDonald's Coresi Brasov restaurant commenced operations on 31 March 2021. It is a drive-thru restaurant near the city center of Brasov, in the center part of the country, in Coresi District, in Brasov County.

(xxi) ART Business Centre, Bucharest, Romania

The property is located in the affluent Nordului neighbourhood in northern Bucharest. The nine-storey property has a footprint of 3,400m² and comprises of circa 24,000m² of gross leasable area, (circa 5,000m² ) of which is storage space. The three underground floors accommodate 407 parking spaces. The property is fully leased out and its anchor tenant is Ponderas Academic Hospital which was recently taken over by the Regina Maria Private Healthcare Network, Romania's largest private health care network.

Harbour (APM) Investments Limited

As further explained in section 1.1 of this Analysis, HIL owns land in Benghajsa, Malta, valued at €25.5m. The property, which measures circa 92,000m² , comprises a number of sites at Benghajsa and is flanked by the Freeport and its service road to the Northeast, by Hal Far Road to the Northwest, by the new LPG depot & Fort Benghajsa to the South and by agricultural fields, Benghajsa Village and Hal Far Industrial Estate beyond to the South. The sites are mainly composed of undeveloped agricultural fields. Further detail on the operational developments concerning this property may be found in section 1.4.2 of this Analysis.

1.4 Operational Developments

1.4.1 Strategy

The principal objective of the Issuer is to act as the property holding vehicle of the Hili Ventures Group. In this respect, the Issuer's ultimate business goal is to continue managing the existing properties presented above, and to acquire and dispose of properties as necessary with the aim of meeting the needs of its business operations. The rents chargeable by the Issuer to the Hili Ventures Group companies are based on commercial rental rates and respective lease agreements and are entered into on an arms-length basis.

In terms of the Issuer's strategic expansion strategy, it aims to build a property portfolio consisting primarily of attractively-located, institutional and high quality, income-producing investment properties to deliver income and capital growth through active asset management.

The Issuer believes that its Board of Directors, in addition to the support of external advisors and property experts, has the sufficient and appropriate knowledge and competence to capitalise on the opportunities presented by both the current and forward-looking market conditions.

Based on its long standing experience within the industry, the intention of the Issuer is to source its investment opportunities mainly through the Board of Directors' extensive network of relationships, which includes the corporate and private landlords, brokers, domestic banks and others. The Board of Directors expects to create both sustainable income and strong capital returns for the Group.

The investment decisions carried out by the Board of Directors in relation to investment property acquisitions are primarily based on a number of property characteristics which are deemed to be aligned to the aforementioned strategic goals of the Group. A number of these characteristics are as set out below:

• Retail properties in city centres and certain suburban areas including shopping retail malls and high street retail outlets;
• Office properties situated in sought-after prime locations with a high potential of attracting interest from tenants;
• Commercial real estate properties, including warehousing, industrial and distribution facilities; and

Other type of buildings or properties which are deemed by the Board of Directors to result into an attractive investor return.

It is crucial to point out that, in carrying out investment decisions, the Board of Directors concentrate on assets priced at significant discounts to fair value or assets with active asset management opportunities, for example through repositioning, rental extension or rental optimisation, and keep monitoring the market with regards to development opportunities in the context of the whole portfolio as the Company's primary focus is on cash flow and active asset management.

Where appropriate, the intention of the Board of Directors is to implement improvements to the Group's property portfolio through proactive asset management techniques which include:

• Renegotiating or surrendering leases;
• Improving lease terms duration and tenant profile;
• Carrying out structural improvements to the building when and where considered appropriate;
• Improving layouts and space efficiency of specific assets;
• Ensuring an appropriate mix and well-structured tenant mix within certain properties;
• Maintaining dialogue with tenants to assess their requirements;
• Taking advantage of planning opportunities where appropriate; and
• Repositioning and upgrading assets.

Upon implementing the aforementioned business strategy, the Issuer might possibly utilise prudent levels of leverage in order to enhance equity returns over the long-term. Management noted that the indicative aggregate borrowing as a percentage of gross asset value of the Group is expected not to exceed 70%. Nevertheless, the Group may possibly modify the leverage policy from time to time in light of then current economic conditions, the relative costs of debt and equity capital, the fair value of the Group's assets, growth and acquisition opportunities or other factors it deems appropriate.

In view of the Group's current property portfolio available for rent which presently reflects an overall average occupancy rate of 95%, the Board of Directors aims to maintain the same high level of occupancy rates for future investment properties.

1.4.2 Harbour (APM) Investments Limited

In addition to the overview of the Bengħajsa land described in section 1.1 above, management noted that two sites have been approved for the development of a solar farm as per Planning Authority permit PA10665/17. The proposed solar farm covers a larger area of land partly owned by two other third parties. This land is being leased to a third party to develop and operate a solar farm.

Planning Considerations and Site Potential

The sites at Bengħajsa are predominantly located within a 'Reserve Site' area in accordance to the respective Marsaxlokk Bay Local Plan. The strategy for this zone is outlined in the respective local plan issued in 1995, receated below:

"The area between Ħal Far and the Freeport was designated as a Primary Development Area in the sixties for possible eventual industrial use. The Structure Plan confirms the designation subject however to Policy IND1 which delays the use of this land until needs arise which cannot be accommodated elsewhere. On available evidence, it is unlikely that the area will be required for such purpose within the ten-year period of the Local Plan. It is therefore proposed that the current status of the area is retained and is also to be referred to as a Reserved Area."

Recent research stipulates that over the past 25 years, more specifically since the date of issuance of the aforementioned plan, the footprint of the Freeport has generally been developed to its full capacity with respect to its key activities that comprise the container terminal, the oil terminal and the ancillary warehousing facilities.

The location of the Bengħajsa sites that fall within this 'Reserve Site', particularly those contiguous to the Freeport, form a natural extension of the Freeport area as envisaged by both the Structure 'Local Plans'. It was also noted that

apart from the more recent solar farm permit noted above, an LPG terminal has already been developed within the said 'Reserved Area' duly covered by Malta Environment & Planning Authority ("MEPA") permit PA 867/09.

In view of the above considerations, it is therefore apparent that, while currently schemed as a 'Reserve Site', the areas concerned offer significant medium to long-term commercial and investment opportunities for the Group.

1.4.3 Property Disposals

In November 2020, the Group disposed of its shareholding in SIA Tukuma Projekts for a total consideration of circa €1.8m. The said company owns a property known as M DIY Retails Centre, located in Tukums in Latvia.

1.4.4 Properties held for sale

As at 31 December 2020, property held for sale amounted to circa €7.7m and included the following retail centres: (i) Augusta Dombrovska Street 23, Riga, Latvia, (ii) Vienibas Ave. 95, Riga, Latvia and (iii) Kremienu Street 4A, Riga, Latvia.

1.4.5 Acquisitions

In September 2020, the Group acquired a plot of land measuring 2,070m² located in Romania for a consideration of €0.636m. In view of the fact that this property is currently used as a McDonald's restaurant, this property has been classified as investment property and the value of the property was uplifted to €1.5 following construction carried out on the property between FY20 and FY21. Construction works carried out on this property was concluded at the end of March 2021 and the restaurant started operating from 30th March 2021 onwards.

1.5 COVID-19 impact on the Group's operational and financial performance

Following the outbreak of the COVID-19 pandemic, the directors are monitoring the situation to safeguard the interests of the Group and its stakeholders. Notwithstanding the implications brought about by the pandemic, the Group's operations have not been materially impacted during the year, with the results being relatively in line with the projections set out in the 2020 Financial Analysis Summary.

The directors have continued to actively monitor all pandemic-related developments taking place both locally and internationally in order to assess the impact that the pandemic might have on the profitability, liquidity and going concern of the Group.

Although these events have had a significant impact on the economy during 2020 and although a number of tenants may be in difficult financial circumstances, there has not been any significant impact on the recoverability of its receivables from its customers.

In view of the Group's robust business model, the Group has not experienced any significant adverse impact on its income. Tenants have successfully managed to honour their commitments during 2020, with management reporting that only non-material discounts were granted throughout the year. In view of this, the Group is cautiously optimistic about the current financial year.

Liquidity Measures

Management explained that the Group's capital and liquidity position remained strong and sustainable as revenue during the year was collected in full (apart from the above-mentioned temporary non-material discounts). All legal obligations were honoured in full, including its yearly interest payments. Management noted that, in view of the pandemic related developments last year, the 2021 liquidity projections are more valuable to assess the potential impact that the pandemic might possibly have on the profitability and liquidity of the Group. These projections indicate that the Group has a robust level of cash generation at its disposal to honour all of the Group's commitments.

Costs Containment Measures

As part of a cost mitigation procedure undertaken by the Group throughout the pandemic, management teams across the Group's operating regions were invited to revise their respective market operating cost, with this ultimately resulting into additional operational efficiencies across the Group in general.

Assumptions undertaken in projections utilised for the purpose of this document

The 2021 projections were based on the contractual rental agreements that the Group currently has in place with its tenants, specifically in relation to the properties discussed in section 1.4 above. Management explained that these projections were based on the actual 2020 financial performance of the Group and on the Group's knowledge and understanding of the potential implications brought about by the pandemic which might possibly arise in the remaining months of the current financial year.

Concluding remarks

2020 is considered to be the most challenging for the Group in terms of pandemic related risks. Nevertheless, the Group expects the situation to improve in the current financial year. The Group has proven to be resilient and successful in the navigating both the tenants' and the Group's requirements. Management has compiled cash flow projections primarily based on the expected revenues and receipts from their tenants, and are confident that these are adequate to support the Group in the foreseeable future. Management confirmed that the Issuer has sufficient resources at its disposal to honour its existing bond interest payment obligations.

1.6 Related Party Debt Securities

Hili Properties p.l.c. is a member of the Hili Ventures Group. Within the same group, 1923 Investments p.l.c., Premier Capital p.l.c. and Hili Finance p.l.c. (all sister companies of Hili Properties p.l.c.) have the following outstanding debt securities. The below table also includes Hili Properties p.l.c.'s current outstanding bond.

Security ISIN	Security name	Amount Listed	Currency
MT0000941204	4.5% Hili Properties plc 2025	37,000,000	EUR
MT0000841206	5.1% 1923 Investments plc Unsecured € 2024	36,000,000	EUR
MT0000511213	3.75% Premier Capital plc Unsecured € 2026	65,000,000	EUR
MT0001891200	3.85% Hili Finance Company plc 2028	40,000,000	EUR
MT0001891218	3.8% Hili Finance Company plc 2029	80,000,000	EUR

1.7 Bond Guarantee

As per the prospectus dated 18 September 2015 published by the Issuer for its 2015 bond issue, the Issuer's bond amounting to €37m is jointly and severally guaranteed by HIL and HEL. The Guarantors undertook that, as long as the bond remains outstanding, the Guarantors shall collectively ensure that their aggregate net asset value will amount to not less that €37m at each financial reporting date. As at 31 December 2020, the aggregate net assets of both Guarantors together amounted to €40.1m (2019: €38.6M) and, therefore, covers the bonds in issue.

Part 2 - Historical Performance and Forecasts

The financial information below (section 2.1 to 2.3) is extracted from the audited consolidated financial statements of Hili Properties plc for the financial years ended 31 December 2018, 2019 and 2020. The projected financial information for the year ending 31 December 2021 has been provided by the Group's management.

The said projected financial information relate to events in the future and are based on assumptions which the Group believes to be reasonable. Consequently, the actual outcome may be adversely affected by unforeseen situations and the variation between forecast and actual results may be material.

2.1 Issuer's Consolidated Statement of Comprehensive Income

Hili Properties p.l.c.
Statement of Comprehensive Income	2018A	2019A	2020A	2021F
For the year ended 31 December
	€'000s	€'000s	€'000s	€'000s
Revenue	7,6792	9,1532	8,112	8,051
Net operating expenses	(2,250)	(2,954)	(2,973)	(3,230)
EBITDA	5,429	6,199	5,139	4,821
Depreciation and amortisation	(113)	(150)	(158)	(60)
EBIT	5,316	6,049	4,981	4,761
Net investment income	724	3,942	3,575	1,005
Net finance costs	(3,496)	(3,758)	(3,344)	(3,502)
Profit before tax	2,544	6,233	5,212	2,264
Income tax	(434)	(779)	(1,116)	(779)
Profit after tax	2,110	5,454	4,096	1,485
Other comprehensive income
Exchange differences - foreign operations	(27)	-	(5)	(33)
Total Comprehensive income	2,083	5,454	4,091	1,452

EBITDA Derivation	2018A	2019A	2020A	2021F
	€'000s	€'000s	€'000s	€'000s
EBITDA has been calculated as follows:
Operating profit (EBIT)	5,316	6,049	4,982	4,761
Adjustments:
Depreciation and amortisation	113	150	158	60
EBITDA	5,429	6,199	5,140	4,821
Ratio Analysis3	2018A	2019A	2020A	2021F
Profitability
Growth in Revenue (YoY Revenue Growth)	21.2%	19.2%	-11.4%	-0.7%
EBITDA Margin (EBITDA / Revenue)	70.7%	67.7%	63.4%	59.9%
Operating (EBIT) Margin (EBIT / Revenue)	69.2%	66.1%	61.4%	59.1%
Net Margin (Profit for the year / Revenue)	27.5%	59.6%	50.5%	18.4%
Return on Common Equity (Net Income / Average Equity)	4.7%	9.9%	6.8%	2.3%

Return on Assets (Net Income / Average Assets) 1.5% 3.6% 2.7% 1.0%

² Historic revenue figures do not agree with those reported in the 2020 Financial Analysis Summary (FAS) due to the reclassification of other operating income from net operating expenses to total revenue.

³ Ratio Analysis may not agree to prior FASs due to a change in the calculation methodology (refer to section 4 of this Analysis) and also due to the above-mentioned reclassification

As could be noted from the above financial data, the Group's total revenue during FY20 declined by 11.4% or €1m to €8.1m (FY19:€9.2m). Management attributes the decline in revenue due to the assets generating income sold in 2019 which were not replaced in FY20, mainly through the disposal of Hili Properties Swatar property. In addition, during the year, the Group also disposed of another asset towards the end of the year, which also was not replaced. Discounts have been provided to some tenants over the course of 2020, which also contributed to a marginal decline in revenues for FY20 over the preceding year.

In view of the property acquisitions and disposals expected to take place during 2021, the Group is anticipating total rental income to remain relatively unchanged and amount to €8.1m during FY21.

Notwithstanding the above-mentioned decline in revenue, the Group's net operating expenditure during FY20 amounted to circa €3m, with management reporting that this marginal increase in operating expenditure is mainly attributable to higher professional fees incurred by the Group during the year (FY20).

The Group reported an EBIDTA of €5.1m in FY20 (FY19: €6.2m). EBITDA during FY21 is projected to decline to around €4.8m. This is attributable to the timing between asset disposal and acquisitions, and also due to the marginal increase in costs attributable to routine maintenance.

Net investment income amounted to €3.6m during FY20 and mainly relates to net increases in fair value gains on the properties located in Malta, Romania and the Baltics Countries. This is expected to amount to around €1m during FY21 and primarily relates to an uplift in fair value of a property in Latvia, following the issuance of an extension permit post to the year end.

As the loss on derivative financial instruments incurred during FY19 was of a non-recurring nature, the Group incurred a lower level of finance costs during FY20 amounting to €3.3m. These are expected to amount to €3.5m in FY21.

Tax incurred by the Group during FY20 amounted to €1.1m, a substantial portion of which relate to the aforementioned positive movement in investment property. The Group is anticipating to incur €0.8m in taxation costs for FY21.

The Group reported a profit after tax of €4.1m during FY20 (FY19: €5.5m). This has been projected at €1.5m for FY21, on account of the above-mentioned decline in EBITDA as well as lower amounts of fair value uplifts expected to take place in FY21.

2.1.1 Variance Analysis

Hili Properties p.l.c.	FY20	FY20
Statement of Comprehensive Income For the year ended 31 December 2020	Forecast	Audited	Variance
	€'000s	€'000s	€'000s
Revenue	8,019	8,112	93
Net operating expenses	(3,063)	(2,973)	90
EBITDA	4,956	5,139	183
Depreciation and amortisation	(186)	(158)	28
EBIT	4,770	4,981	211
Net investment income	1,539	3,575	2,036
Net finance costs	(3,378)	(3,344)	34
Profit before tax	2,931	5,212	2,281
Income tax	(602)	(1,116)	(514)
Profit after tax	2,329	4,096	1,767
Other comprehensive income
Exchange differences - foreign operations	-	(5)	(5)
Total Comprehensive income	2,329	4,091	1,762

In view of the minor positive variances recorded by the Group in terms of revenue generation and net operating expenditure during FY20, the Group registered an overall improvement in EBITDA of €0.2m over previous projections.

The net investment income reported in the Group's audited results amounted to €3.6m, whereas the comparable amount reported in the 2020 Financial Analysis Summary was €1.5m. Following an independent evaluation of the Group's entire property portfolio, the difference of €1.8m mainly relates to higher net fair value gains on properties located in Malta, Romania and the Baltics, which values were re-assessed after the previous projections were completed. Consequently, the Group's income tax varied proportionally.

In conclusion, actual total comprehensive income amounted to €4.1m, implying an overall improvement of €1.8m over previous expectations.

2.2 Issuer's Consolidated Statement of Financial Position

Hili Properties p.l.c.
Statement of Financial Position	2018A	2019A	2020A	2021F
For the year ended 31 December
	€'000s	€'000s	€'000s	€'000s
Assets
Non-current assets
Goodwill and other intangibles	17	16	16	45
Property, plant and equipment	316	194	80	58
Investment properties	113,016	109,904	105,199	123,775
Property held for sale	6,478	3,774	7,735	-
Other financial assets	26,800	24,500	24,500	24,500
Loans and receivables	1,226	1,232	5,231	4,831
Other non-current assets	1,286	1,635	2,151	2,521
Total non-current assets	149,139	141,255	144,912	155,731
Current assets
Loans and other receivables	291	140	53	73
Other assets	2,395	1,942	1,616	1,270
Cash and cash equivalents	2,917	7,141	3,058	181
Total current assets	5,603	9,223	4,727	1,524
Total assets	154,742	150,478	149,639	157,254
Equity
Called up share capital	40,400	40,400	41,592	41,592
Other reserves	597	638	633	440
Retained earnings	10,937	16,083	20,055	21,491
Non-controlling interests	308	514	395	444
Total equity	52,242	57,635	62,675	63,968
Liabilities
Non-current liabilities
Borrowings and bonds	83,659	78,423	72,188	81,970
Other financial liabilities	2,518	3,778	2,235	2,024
Deferred tax & other non-current liabilities	3,497	2,536	3,271	3,356
Total non-current liabilities	89,674	84,737	77,694	87,350
Current liabilities
Bank loans	3,487	3,487	5,285	3,485
Other financial liabilities	4,205	552	11	65
Other current liabilities	5,134	4,067	3,974	2,387
Total current liabilities	12,826	8,106	9,270	5,937
Total liabilities	102,500	92,843	86,964	93,287
Total equity and liabilities	154,742	150,478	149,639	157,254

Ratio Analysis4	2018A	2019A	2020A	2021F
Financial Strength
Gearing 1 (Net Debt / Net Debt and Total Equity)	63.3%	57.7%	54.9%	57.7%
Gearing 2 (Total Liabilities / Total Assets)	66.2%	61.7%	58.1%	59.3%
Gearing 2 (Net Debt / Total Equity)	172.6%	133.7%	121.7%	135.6%
Net Debt / EBITDA	16.6x	12.7x	14.9x	18.1x
Current Ratio (Current Assets / Current Liabilities)	0.4x	1.1x	0.5x	0.3x
Interest Coverage level 1 (EBITDA / Cash interest paid)	1.6x	1.8x	1.4x	1.4x
Interest Coverage level 2 (EBITDA / Finance costs)	1.6x	1.6x	1.5x	1.4x

As per FY20 results, the Group's total assets amounted to €149.6m (FY19: 150.5m) and primarily consisted of investment properties and property held for sale, which on aggregate amounted to circa 75.5% of total assets. These are discussed in further detail in section 1.3 and sub-section 1.4.4 of this Analysis. While investment property is expected to increase to €123.8m during FY21, mainly as a result of additional investment carried out on the Group's properties in general, all properties held for sale as at December 2020 are expected to be sold during FY21.

The Group's total non-current assets are also composed of other financial assets and loans and other receivables which as at FY20 amounted to €24.5m and €5.2m respectively. The increase in loans and other receivables in FY20 is attributable to cash advanced to related parties within the Group. The loans and receivables are expected to amount to €4.8m during FY21, mainly on account of a partial repayment of the above-mentioned inter-company loan. The Group's non-current assets are expected to increase to €155.7m during FY21, mainly as a result of the aforementioned expected increase in investment property.

Moreover, the Group's non-current assets amounted to €4.7m during FY20 and mainly consist of other assets and cash and cash equivalents. Following the disposal of Hili Properties Swatar in FY19, the Group utilised part the said proceeds to settle its short-term outstanding bank loans and other financial liabilities. Cash and cash equivalents are expected to further decline to €0.2m during FY21 mainly on account of the property acquisitions expected to be carried out during the year. Overall, the Group is anticipating total assets to amount to €157.3m during FY21.

In line with previous expectations, the Group's share capital increased by circa €1.2m during FY20 to €41.6m, primarily through capitalisation of a loan advanced from the ultimate parent company of the Group. Total equity is expected to amount to circa €64m during FY21.

Other than equity, the Group is financed through bank loans and bonds which, as at FY20, amounted to €77.4m (FY19: €81.9). The Group's bank borrowings are secured by general hypothecs, pledges and guarantees provided by Group companies. The bonds constitute unsecured obligations of the Company, and rank equally without priority or preference with all other present and future unsecured and unsubordinated obligations of the Company. Moving into FY21, the Group's total borrowings and bonds listed under non-current assets are expected to increase to circa €82m, mainly due to the above-mentioned anticipated property acquisitions. Total liabilities during FY21 are projected to increase to €93.3m.

⁴ Ratio Analysis may not agree to prior FASs, due to a change in the calculation methodology or rounding differences (refer to section 4 of this Analysis)

2.2.1 Variance Analysis

Hili Properties p.l.c.	Dec-20	Dec-20
Statement of Financial Position	Forecast	Audited	Variance
For the year ended 31 December
	€'000s	€'000s	€'000s
Assets
Non-current assets Goodwill and other intangibles	16	16	-
Property, plant and equipment	214	80	(134)
Investment properties	112,553	105,199	(7,354)
Property held for sale	-	7,735	7,735
Other financial assets	24,500	24,500	-
Loans and receivables	5,352	5,231	( 121)
Other non-current assets	1,883	2,151	268
Total non-current assets	144,518	144,912	394
Current assets
Loans and other receivables	322	53	(269)
Other assets	1,256	1,616	360
Cash and cash equivalents	2,837	3,058	221
Total current assets	4,415	4,727	312
Total assets	148,933	149,639	706
Equity
Called up share capital	41,592	41,592	-
Other reserves	744	633	(111)
Retained earnings	18,612	20,055	1,443
Non-controlling interests	250	395	145
Total equity	61,198	62,675	1,477
Liabilities
Non-current liabilities
Borrowings and bonds	74,429	72,188	(2,241)
Other financial liabilities	2,087	2,235	148
Deferred tax & other non-current liabilities	3,305	3,271	(34)
Total non-current liabilities	79,821	77,694	(2,127)
Current liabilities
Bank loans	4,383	5,285	902
Other financial liabilities	548	11	(537)
Other current liabilities	2,983	3,974	991
Total current liabilities	7,914	9,270	1,356
Total liabilities	87,735	86,964	(771)
Total equity and liabilities	148,933	149,639	706

The main variances arising within the Group's total equity during FY20 relate to an actual increase in retained earnings of €1.4m, which is attributable to a higher than expected fair value gain on investment property registered by the Group during the year. The drop in borrowings and bonds under non-current liabilities is attributable to the Group repaying a larger portion of its debt in comparison to previous expectations.

2.3 Issuer's Consolidated Statement of Cash Flows

Hili Properties p.l.c.
Cash Flows Statement	2018A	2019A	2020A	2021F
For the year ended 31 December
	€'000s	€'000s	€'000s	€'000s
Cash flows from operating activities	5,901	4,724	4,529	5,021
Interest paid	(3,447)	(3,458)	5 (3,340)	(3,390)
Income tax paid	(334)	(1,061)	(520)	(621)
Net cash flows generated from operating activities	2,120	205	669	1,010
Net cash flows generated from / (used in) investing activities	(9,529)	8,053	4,588	(10,818)
Net cash flows generated from / (used in) financing activities	9,469	(4,003)	5 (9,334)	6,931
Movement in cash and cash equivalents	2,060	4,255	(4,077)	(2,878)
Cash and cash equivalents at start of year	853	2,886	7,141	3,059
Foreign exchange adjustment	(27)	-	(5)	-
Cash and cash equivalents at end of year	2,886	7,141	3,059	181
Ratio Analysis	2018A	2019A	2020A	2021F
Cash Flow
Free Cash Flow (Net cash from operations + Interest - Capex)	€(69)	€(11)	€2,905	€3,597

The issuer incurred a lower tax charge during FY20 amounting to circa €0.5m. This in addition to favourable movement in working capital resulted into an improved net cash generated from operating activities amounting to €0.7m.

With respect to investing activities, net cash inflows in FY20 amounted to €4.6m and mainly include proceeds of €5.8m received from sale of investment property and subsidiary company, less capital expenditure amounting to €1.1m. Moving forward, net cash used in investing activities is expected to amount to circa €10.8m, mainly on account of the planned acquisitions to be undertaken in FY21.

Net cash used in financing activities amounted to €9m during FY20 (FY19: €4m). As noted in prior sections of this Analysis, during the year under review, the Group repaid €4.6m in bank loans, while amounts transferred to related parties and restricted cash amounted to €4.5m. In addition, total net cash flow generated from financing activities is expected to amount higher at €6.9m during FY21. Management noted that this is mainly attributable to the planned bank financing to be received, in line with the acquisitions planned for 2021.

2.3.1 Variance Analysis

Hili Properties p.l.c.	Dec-20	Dec-20
Statement of Cash Flows For the year ended 31 December	Forecast	Audited	Variance
	€'000s	€'000s	€'000s
Cash flows from operating activities	4,474	4,529	4,529
Interest paid	(601)	5 (3,340)	(3,686)
Income tax paid	(3,217)	(520)	(520)
Net cash flows generated from operating activities	656	669	(333)
Net cash flows generated from investing activities	2,209	4,588	2,379
Net cash flows generated used in financing activities	(7,169)	5 (9,334)	(1,819)
Movement in cash and cash equivalents	(4,304)	(4,077)	227
Cash and cash equivalents at start of year	7,141	7,141	-
Foreign exchange adjustment	-	(5)	(5)
Cash and cash equivalents at end of year	2,837	3,059	222

⁵ Management noted that FY20 interest paid includes circa €0.3m which relates to bank charges incurred on the sale of a property. As a result, these were re-classified from operating activities to financing activities.

Actual net movement in cash and cash equivalents was higher by €0.2m when compared to previous. Net operating cash flow was lower by €0.3m, mainly as a result of lower expenses incurred in FY20 as compared to the forecasted amounts.

The main variance in relation to investing activities of €2.4m relates to the fact the sale of Tukuma property was not factored in previous projections. Following aforementioned sale, the Group subsequently settled a bullet loan repayment on the Tukuma property during FY20 amounting to circa €1.4m. As a result, the main variance in terms of the Group's financing activities is specifically related to this bullet loan repayment not being factored in previous projections.

2.4 Harbour (APM) Investments Ltd

The following financial information is extracted from the audited financial statements of HIL for the financial years ended 31 December 2018 to 2020. The projected financial information for the year ending 31 December 2021 has been provided by Group management.

Income Statement	2018A	2019A	2020A	2021F
	€'000s	€'000s	€'000s	€'000s
Rental Income	-	-	-	23
Administrative expenses	(7)	(8)	(18)	(11)
Finance and other income	-	86	86	57
Net finance costs	34	(44)	(29)	(2)
Profit before tax	27	34	39	67
Taxation	(12)	(14)	(20)	(23)
Profit after tax	15	20	19	44
Statement of Financial Position	2018A	2019A	2020A	2021F
	€'000s	€'000s	€'000s	€'000s
Assets
Non-current assets
Investment property	25,007	25,507	25,507	25,507
Loans and other receivables	1,721	1,722	1,722	722
Total non-current assets	26,728	27,229	27,229	26,229
Current assets
Loans and other receivables	323	405	491	548
Other receivables	-	-	6	-
Cash and cash equivalents	1	2	1	1
Total current assets	324	407	498	549
Total assets	27,052	27,636	27,727	26,778
Equity
Equity and reserves	23,005	23,485	23,504	23,548
Total equity	23,005	23,485	23,504	23,548
Liabilities
Non-current liabilities
Bank borrowings and other financial liabilities	1,039	289	289	289
Deferred tax liabilities	2,000	2,040	2,040	2,040
Total non-current liabilities	3,039	2,329	2,329	2,329
Current liabilities
Other payables	762	1,072	1,659	901
Bank loans	246	750	235	-
Total current liabilities	1,008	1,822	1,894	901
Total liabilities	4,047	4,151	4,223	3,230
Total equity and liabilities	27,052	27,636	27,727	26,778

Cash Flows Statement	2018A	2019A	2020A	2021F
	€'000s	€'000s	€'000s	€'000s
Net cash flows generated from / (used in) operating activities	15	(63)	(69)	5
Net cash flows generated from investing activities	-	-	-	1,000
Net cash flows generated from / (used in) financing activities	(15)	64	68	(1,004)
Movement in cash and cash equivalents	-	1	(1)	1
Cash and cash equivalents at start of year	1	1	2	2
Cash and cash equivalents at end of year	1	2	2	3

Ratio Analysis	2018A	2019A	2020A	2021F
Financial Strength
Gearing 1 (Net Debt / Net Debt and Total Equity)	5.3%	4.2%	2.2%	1.2%
Gearing 2 (Total Liabilities / Total Assets)	15.0%	15.0%	15.2%	12.1%

As noted in section 1 of the Analysis, HIL owns land at Bengħajsa, Malta which, as at 31 December 2020, was valued at €25.5m. An agreement has been signed where the Issuer is to acquire HIL by FY22. The FY21 results incorporate minimal rental income concerning a portion of the land which is currently being leased out to a third party. No other significant activities occurred during FY20 and no material movements are forecasted for FY21.

2.5 Hili Estates Limited

The projected financial statements detailed below relate to events in the future and are based on assumptions which the Group believes to be reasonable. Consequently, the actual outcome may be adversely affected by unforeseen situations and the variation between forecast and actual results may be material.

The following financial information is extracted from the audited financial statements of HEL for the financial years ended 31 December 2018 to 2020. The projected financial information for the year ending 31 December 2021 has been provided by Group management.

Income Statement	2018A	2019A	2020A	2021F
	€'000s	€'000s	€'000s	€'000s
Revenue	940	994	1,001	1,035
Net operating expenses	66	(58)	(75)	(96)
EBITDA	1,006	936	926	939
Depreciation and amortisation	(95)	(95)	(95)	-
EBIT	911	841	831	939
Net investment income	215	(13)	1,066	-
Net finance costs	70	69	91	30
Profit before tax	1,196	897	1,988	969
Income tax	(258)	(290)	(413)	(265)
Profit after tax	938	607	1,575	704

Hili Properties p.l.c.

Statement of Financial Position	2018A	2019A	2020A	2021F
	€'000s	€'000s	€'000s	€'000s
Assets
Non-current assets
Investment properties	15,650	15,731	16,900	16,900
Property, plant and equipment Right of use of assets	190 -	95 30	- 1
Loans and other receivables	2,520	3,070	3,070	5,528
Total non-current assets	18,360	18,926	19,971	22,428
Current assets
Loans and other receivables	1,163	3,713	4,245	5,951
Cash and cash equivalents	108	240	119	34
Total current assets	1,271	3,953	4,364	5,985
Total assets	19,631	22,879	24,335	28,412
Equity
Equity and reserves	14,468	15,075	16,650	17,348
Total equity	14,468	15,075	16,650	17,348
Liabilities
Non-current liabilities
Bank Borrowings and loans	1,464	3,834	3,373	7,027
Deferred tax & other non-current liabilities	1,252	1,260	1,352	1,352
Total non-current liabilities	2,716	5,094	4,725	8,379
Current liabilities
Bank overdraft and loans	195	452	462	234
Other financial liabilities	1,865	1,716	1,838	2,017
Other payables	387	542	660	434
Total current liabilities	2,447	2,710	2,960	2,685
Total liabilities	5,163	7,804	7,685	11,064
Total equity and liabilities	19,631	22,879	24,335	28,412

Cash Flows Statement	2018A	2019A	2020A	2021F
	€'000s	€'000s	€'000s	€'000s
Cash flows from operating activities	(124)	1,198	466	1,134
Interest paid	(194)	(164)	(167)	(268)
Income tax paid	(111)	(216)	(323)	(200)
Net cash flows generated from / (used in) operating activities	(429)	818	(24)	666
Net cash flows generated from / (used in) investing activities	4,718	(3,084)	520	(239)
Net cash flows generated from / (used in) financing activities	(4,296)	2,398	(617)	(512)
Movement in cash and cash equivalents	(7)	132	(121)	(85)
Cash and cash equivalents at start of year	115	108	240	119
Cash and cash equivalents at end of year	108	240	119	34

Hili Properties p.l.c.

Ratio Analysis	2018A	2019A	2020A	2021F
Financial Strength
Gearing 1 (Net Debt / Net Debt and Total Equity)	9.7%	21.2%	18.2%	29.7%
Gearing 2 (Total Liabilities / Total Assets)	26.3%	34.1%	31.6%	38.9%

During the year under review, HEL was principally engaged in the management of the Nineteen-twenty three building in Marsa, Malta.

Rental income generated in FY20 amounted to €1m, an increase of 0.7% when compared to the prior year. Notwithstanding the elevated level of operating expenditure incurred by HEL during FY20, the Company reported an improved profit after tax of €1.6m (FY19: €0.6m). This improvement is mainly attributable to a fair value uplift of €1.1m. While no movement in fair value of investment property is projected to take place in FY21, HIL's net income is expected to amount to €0.7m.

Total bank borrowings and loans during FY21 are planned to increase by €4m. HEL is planned to borrow additional funds in order for the Group to be able to finance its planned acquisitions during the course of FY21.

Part 3 - Key Market and Competitor Data

3.1 General Market Conditions

European Economic Update ⁶

After the historic drop in activity recorded in the first part of 2020 and the rebound in the summer, the EU economy faced another setback in late 2020 as the resurgence of the pandemic prompted a new round of containment measures. With output falling again in the last quarter of 2020 and the first of 2021, by a cumulative 0.9%, the EU was pushed back into recession.

However, considering the stringency of the restrictions, the decline in activity was far milder than the downturn in the first half of 2020. Better adaptation of firms and households to the constraints of the pandemic environment, stronger support from global growth and trade, and continued strong policy support helped economic agents cope with the economic challenges.

Economic developments in 2021 and 2022 will be largely determined by how successfully vaccination programmes will tame the pandemic and how quickly governments will lift restrictions. For the EU, the forecast assumes that following a marginal easing of restrictions in the course of the second quarter, progress in vaccinations will enable a more marked easing of restrictions in the second half of the year. In 2022, COVID-19 will remain a public health concern, despite the high share of the population being vaccinated (including refreshed protection when needed, for example due to new variants). It is therefore assumed that some limited containment measures will be in place as needed.

All in all, the EU economy is forecast to grow by 4.2% in 2021 and to strengthen to around 4.4% in 2022 (4.3% and 4.4%, respectively, in the euro area). A stronger-than-previously expected rebound in global activity and trade, help to explain the brighter outlook for all countries compared to previous expectations. However, differences across countries in the pace of the recovery from the crisis remain substantial.

The risks surrounding the GDP forecast are high and will remain so as long as the pandemic hangs over the economy. On the epidemiological front, developments concerning the pandemic and the efficiency and effectiveness of vaccination programmes could turn out better or worse than assumed in the central scenario of this forecast. On the economic side, this forecast may underestimate the propensity of households to spend, or, on the opposite, consumers' desire to maintain high levels of precautionary savings. The impact of alternative paths for the evolution of household savings is assessed in the model-based analysis presented in this publication. Another risk to the outlook is the timing of policy support withdrawal, which if premature could jeopardise the recovery. On the downside, the impact of corporate distress on the labour market and the financial sector could prove worse than anticipated.

On the upside, stronger than projected global growth, particularly in the US, could have a more positive impact on the European economy than expected. Stronger US growth, however, risks pushing up US sovereign bond yields, which could interact with the materialisation of idiosyncratic risks (stemming from e.g. the slow vaccination rollout) in highly indebted emerging market economies with high foreign currency debts, causing disorderly adjustments in financial markets. Inflation in EU could turn out higher if the rebound in the European and global economies is stronger than expected, or if current supply constraints turn out more persistent. Overall, the risks surrounding the outlook are broadly balanced.

Malta Economic Update ⁷

In May, business conditions were positive, reflecting the fact that most macroeconomic variables are improving from the very low levels observed in 2020. It is important to take the latter factor into consideration when considering yearon-year growth rates. European Commission data show that sentiment was positive across all sectors – bar the retail

⁶ European Economic Forecast – Spring 2021

⁷ CBM – Economic Update 6/2021

sector, which stood marginally negative. Overall economic sentiment edged down in May, but remained above its long-term average.

In April, annual growth in industrial production turned positive after five consecutive negative readings. The volume of retail trade rebounded strongly in annual terms. The number of registered unemployed fell compared with March, while the unemployment rate remained unchanged. The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) remained unchanged at 0.1% in April, while inflation based on the Retail Price Index (RPI) accelerated to 0.9%. Maltese residents' deposits expanded at an annual rate of 7.4% in April, following an increase of 7.0% in the previous month, while annual growth in credit to Maltese residents decelerated to 9.4%, from 11.6% a month earlier. In April, the deficit on the cash-based Consolidated Fund narrowed considerably when compared with a year earlier, reflecting a strong increase in government revenue, coupled with a decline in government expenditure.

Latvian Real Estate Retail Market⁸

2020 was a year of challenges and changes in the retail space segment. With the spread of the COVID-19 pandemic, national restrictions on trade and services have hit restaurants and cafes, hotels, sports clubs, beauty salons and virtually all non-food stores particularly hard.

But despite the changes brought about by the pandemic, the retail segment has been active in terms of newly opened retail space in 2020. Almost 100,000 sqm of retail space was added to the market in 2020 in Riga. At the end of 2020, Riga had 830,900 sqm of total leasable space in shopping centres or 1.27sqm of shopping area per capita (counting those over 5,000 sqm of gross leasable area "GLA" with over 10 tenants).

The largest shopping centre, Sāga, was opened in Q4 2020. Located in the Riga region on Biķeru Street, it comprises 57,000 sqm of shopping area, developed by Lithuanian developer VPH.

Expansion of the one of largest existing shopping centres, Origo, finished in Q1 2020. The centre's total area has increased from 35,500 sqm to 81,800 sqm, with a total of 35,700 sqm allocated for retail space, with 11,100 sqm occupied by A class offices and retail premises in the Origo One business centre.

In Q2 2020, the Aleja shopping centre was opened, located on Vienibas Street in Riga with a total area of 12,000 sqm, with its largest tenant Rimi. Moreover, in Q3 2020, the first stage of Via Jurmala Outlet Village with an area of 13,500 sqm was opened.

Restrictions on the spread of the virus affected the largest Latvian retail chains less than other retailers. The major retail chains Rimi and Maxima have continued their expansion throughout Latvia. Rimi still has 4 concepts (Rimi Hyper, Rimi Super, Rimi Mini and Rimi Express) and at the end of 2020 there were 131 stores in Latvia (3 new stores were opened during 2020). At the end of 2020, Maxima had 175 in Latvia (7 new stores opened in 2020).

As in the case of many other countries across the globe, the pandemic has introduced changes to the retail segment, where some companies have not withstood the imposed changes and closed their stores, but many of them were able to adapt and find suitable solutions, which were mostly related to the development of online sales. The vacancy rate of shopping centres in Riga increased from 3.2% in 2019 to 7.5% in 2020.

With the increasing size of shopping centres and the changing habits of shoppers in recent years, it has already been observed that many traders and service providers prefer to locate their sales or service outlets directly in shopping centres. 2020 was no exception to the development of this trend. With the spread of the virus and the development of e-commerce, this trend was observed even more intensively, as a result of which many outlets in individual stores not located in shopping centres remained empty, throughout the year. This trend is expected to continue during 2021 and beyond.

⁸ Real Estate Market Report 2021 (Ober-Haus, Sorainen)

Romanian Real Estate Investment Market⁹

Romania's total investment volume in 2020 amounted to €588.5m, a value which is almost half of the one registered in the record year 2019 but one which is also similar to the one registered in 2015. Capitalizing on the momentum gained in 2019, 68% of the total investment volume was transacted during the first six months of 2020.

Nonetheless, the second half of the year witnessed the largest transaction of 2020, comprising a single property and also marking the entrance on the Romanian investment market of a new Chinese investor. Fosun acquired Floreasca Park office building in Bucharest for €101.5m, which considering the overall circumstances reconfirmed the attractiveness of the Bucharest office investment market.

Only 6% of the total investment volume was distributed towards regional cities, while Bucharest attracted the overwhelming majority. Investors seemed to be more focused on the capital city in 2020 as demand became strongly polarised. Unlike the previous year, where the regional cities managed to attract 35% of the invested capital, in 2020 investors tried to remain on the safe side and focused mainly on the capital city.

The health crisis instituted form Q1-2020 caught the retail market on an upward trend benefiting from the yearly private consumption growth. Even though there were retail developers that considered to postpone the delivery of their ongoing projects, some of them kept the initial construction schedule. More specifically, retailers that embraced digitalisation softened their losses during 2020 while others put on hold their business.

As at December 2020, approx. 459,000 sq m were under construction and expected to be added to the modern retail stock by the end of 2022. Almost half of the pipeline, respectively 45%, is estimated to be delivered by the end of 2021, marking a new threshold achieved by the Romania modern retail stock.

With the real estate market slowly adjusting after the COVID-19 impact and trying to identify the new directions to follow, forecasts for 2021 are cautiously positive as a major office deal was already sealed and a number of large transactions are at the negotiation table. Investors are also keen on acquiring industrial properties and also in this sector several transactions are in various stages. Finally, also within the retail sector, especially in relation certain sub segments which are deemed more defensive, continue to attract interest while some transactions are expected to also possibly materialise in 2021 and beyond.

Maltese Real Estate Investment Market

Data specifically related to commercial property in Malta is limited, thus making it more challenging to identify the exact state of this sector. Nevertheless, it is evident that Malta has over recent years completely evolved and has attracted a numerous amount of foreign companies related to sectors within the financial services, gaming and IT related fields. It is therefore apparent that the demand for good commercial property has drastically increased, whereby Malta's property sector has been dominated by a situation of demand seemingly exceeding supply. The latter has resulted into the majority of high quality commercial developments being fully let.

However, in accordance to the economic turmoil caused by the COVID-19 outbreak, leases in Europe, Malta included experienced a higher level of volatility. Many businesses were forced to shut down throughout 2020 and 2021 and employees have been laid off or have had to suffer pay-cuts. The pandemic had overnight caused havoc in commercial as well as in residential leases. Retail outlets, whose revenues have ground to halt overnight as clearly explained within prior sections of the Analysis, are generally still bound to pay their rents, and without the government intervention would have resulted in a major crisis. The situation is no different in the housing sector (including both longer and shorter term lets); landlords have suddenly found themselves with vacant properties, especially properties targeted at tourism related short-let properties and others are attempting to evict defaulting tenants.

⁹ Romania Real Estate Market Outlook 2021 (CBRE Research)

At a general level, according to the Djar¹⁰ issued by EY Malta, the report concludes that the local real estate market has been fairly resilient to the turmoil created by pandemic. Most property listings have maintained their prices leading to low recorded average price changes. Asking prices appear to have generally remained stable and not suffered a major drop-downs. Positive average price changes remain in Gozo, although at a somewhat reduced rate. The number of online listings on the market registered a notable drop in 2020Q2, possibly reflecting a propensity in certain segments to withdraw properties from the market rather than negotiating at a reduced sale price. Volumes returned to previous levels over subsequent quarters, during which market supporting measures were provided by Government.

Furthermore, according to a leading Real Estate broker11, the pandemic automatically put a lot of people's business plans on hold. The movement in the office segment of the market, caused a reorganisation of their business with some relocating, others downsizing and others taking the opportunity to re-organise the way they work, before business becomes busy again and they won't have time to focus on these things.

According to the broker some may opt to retain an element of home-working. However, most businesses will eventually want to return to their normal operations as there is nothing that works as well as an office environment. On the other hand, as far as the local retail sector is concerned, the current COVID-19 pandemic, has undoubtedly had a negative impact on Malta's retail sector. In accordance to the restrictions implemented by the Government of Malta, all retail outlets were forced to close their doors for the end of March until the beginning of May 2020, and similarly again from March until early May 2021. Whether retail shops will be forced to shut down again remains an uncertainty, however Malta's extremely advanced vaccination program augers well that an extended period of shutdown can be avoided going forward, as virus cases remain manageable. As the current climate remains relatively fluid and uncertain, the full impact that the COVID-19 pandemic has had on the local retail industry, is still not completely known. Undoubtedly, the lower level of tourism numbers compared to the benchmark year 2019 will have a negative effect on the overall industry, and it will take time until full potential will be realised. The outlook for the industry has turned positive though, as the high level, and increasing numbers of vaccinated people originating from typically European countries that visit Malta will create greater confidence; cemented by newly introduced measures like a vaccine passport.

¹⁰ Djar EY report February 2021

¹¹ https://franksalt.com.mt/news/covid-19-effect-on-property-market

3.2 Comparative Analysis

The purpose of the table below compares the proposed debt issuance of the Group to other debt instruments. For consistency purposes we opted to maintain the same peers as per last year's Financial Analysis Summary. More importantly, we have included different issuers with similar maturity to the Issuer. One must note that given the material differences in profiles and industries, the risks associated with the Group's business and that of other issuers is therefore different.

Security	Nom Value	Yield to Maturity	Interest coverage (EBITDA)	Total Assets	Total Equity	Tota Liabilities / Total Assets	Net Debt / Net Debt and Tota Equity	Net Debt / EBITDA	Current Ratio	Retum on Equity	Common Net Margin	Revenue Growth (YOY)
	€000's	(%)	(times)	(€ millions)	(€ millions)	(%)	(%)	(times) (times)		(%)	(%)	(%)
5.8% International Hotel Investments plc 2021	20,000	4.14%	(.2)x	1,544.1	773.2	49.9%		42.1% (149.9)x	0.9x	-9.1%	-82.3%	-65.7%
3.65% GAP Group plc Secured € 2022	29,812	1.08%	2.2x	103.9	15.1	85.4%	81.1%	7.2x	7.2x	31.2%	17.2%	-15.9%
6% Pendergardens Developments plc Secured € 2022 Series II	21,845	3.42%	1.6x	60.6	29.5	51.3%	36.4%	5.2x	2.2x	0.0x	0.0x	(.4)x
4.25% GAP Group plc Secured € 2023	19,247	2.62%	2.2x	103.9	15.1	85.4%	81.1%	7.2x	7.2x	31.2%	17.2%	-15.9%
5.8% International Hotel Investments plc 2023	10,000	4.44%	(.2)x	1,544.1	773.2	49.9%		42.1% (149.9)x	0.9x	-9.1%	-82.3%	-65.7%
6% AX Investments Plc € 2024	40,000	4.74%	0.8x	348.7	217.4	37.6%	25.5%	28.3x	0.8x	-3.5%	-27.5%	-44.7%
6% International Hotel Investments plc € 2024	35,000	4.13%	(.2)x	1,544.1	773.2	49.9%		42.1% (149.9)x	0.9x	-9.1%	-82.3%	-65.7%
5.3% Mariner Finance plc Unsecured € 2024 (xd)	35,000	2.03%	3.6x	100.4	50.3	49.9%	48.1%	5.8x	0.6x	6.6%	20.2%	-4.7%
5% Hal Mann Vella Group plc Secured € 2024	30,000	4.18%	2.4x	122.4	47.3	61.3%	52.9%	10.8x	1.2x	3.1%	6.1%	4.8%
5.1% 1923 Investments plc Unsecured € 2024	36,000	4.30%	4.8x	135.5	45.6	66.4%	52.1%	3.8x	1.2x	7.5%	2.3%	11.0%
4.25% Best Deal Properties Holding plc Secured € 2024	14,776	3.02%	14.7x	27.5	4.1	85.0%	82.4%	13.1x	3.7x	20.3%	7.0%	1140.2%
5.75% International Hotel Investments plc Unsecured € 2025	45,000	4.32%	(.2)x	1,544.1	773.2	49.9%		42.1% (149.9)x	0.9x	-9.1%	-82.3%	-65.7%
5.1% 6PM Holdings plc Unsecured € 2025	13,000	4.55%	(.7)x	0.5	(19.3)	-5156.2%	38.8%	12.2x	(.1)x	0.6%	-3.1%	-48.3%
4.5% Hili Properties plc Unsecured € 2025	37,000	3.96%	1.5x	149.6	62.7	58.1%	54.9%	14.9x	0.5x	6.8%	50.5%	11.4%
4.35% Hudson Malta plc Unsecured € 2026	12,000	4.18%	4.9x	43.4	5.5	87.3%	81.6%	8.3x	1.3x	-14.8%	-2.9%	-29.6%
4.25% Corinthia Finance plc Unsecured € 2026	40,000	3.74%	2.7x	1,784.7	908.9	49.1%	40.3%	8.7x	1.0x	2.2%	6.5%	3.9%
4% International Hotel Investments plc Secured € 2026	55,000	3.56%	(.2)x	1,544.1	773.2	49.9%		42.1% (149.9)x	0.9x	-9.1%	-82.3%	-65.7%
3.75% Premier Capital plc Unsecured € 2026	65,000	3.14%	6.8x	278.8	53.0	81.0%	75.2%	3.1x	1.0x	32.1%	5.5%	-6.5%
4% International Hotel Investments plc Unsecured € 2026	60,000	3.64%	(.2)x	1,544.1	773.2	49.9%		42.1% (149.9)x	0.9x	-9.1%	-82.3%	-65.7%
3.25% AX Group plc Unsec Bds 2026 Series	15,000	2.27%	0.8x	348.7	217.4	37.6%	25.5%	28.3x	0.8x	-3.5%	-27.5%	-44.7%
4.35% SD Finance plc Unsecured € 2027	65,000	3.96%	6.8x	324.4	137.6	57.6%	43.3%	4.1x	1.4x	9.0%	20.5%	5.7%
4% Eden Finance plc Unsecured € 2027	40,000	3.94%	(.5)x	190.5	108.5	43.1%	31.8%	(51.4)x	0.9x	-4.3%	-39.2%	-73.1%
4% Stivala Group Finance plc Secured € 2027	45,000	3.20%	2.6x	354.1	231.4	34.6%	26.5%	11.5x	5.0x	11.7%	229.8%	-46.9%
3.85% Hili Finance Company plc Unsecured € 2028	40,000	3.53%	4.2x	624.2	106.8	82.9%	78.5%	5.8x	1.0×	14.1%	3.2%	-1.5%
3.65% Stivala Group Finance plc Secured € 2029	15,000	3.35%	2.6x	354.1	231.4	34.6%	26.5%	11.5x	5.0x	11.7%	229.8%	-46.9%
3.8% Hili Finance Company plc Unsecured € 2029	80,000	3.87%	4.2x	624.2	106.8	82.9%	78.5%	5.8x	1.0×	14.1%	3.2%	-1.5%
3.75% AX Group plc Unsec Bds 2029 Series II	10,000	2.94%	0.8x	348.7	217.4	37.6%	25.5%	28.3x	0.8x	-3.5%	-27.5%	-44.7%
Average **		3.55%

Source: Latest available audited financial statements

* Last closing price as at 18/06/2021

**Average figures do not capture the financial analysis of the Issuer

Yield Curve Analysis

Source: Malta Stock Exchange, Central Bank of Malta and Calamatta Cuschieri Estimates

The above graph illustrates the average yearly yield of all local issuers as well as the corresponding yield of MGSs (Yaxis) vs the maturity of both Issuers and MGSs (X-axis), in their respective maturity bucket, to which the spread premiums can be noted. The graph also illustrates on a stand-alone basis, the yield of Hili Properties plc bond.

As at 18 June 2020, the average spread over the Malta Government Stock (MGS) for corporates with maturity range of 3 to 6 years (2024-2027) was 357 basis points. The current Hili Properties bond is trading at a YTM of 3.96%, translating into a spread of 381 basis points over the corresponding MGS. This means that this bond is trading at a premium of 24 basis points in comparison to the market.

Part 4 - Glossary and Definitions

Income Statement
Revenue	Total revenue generated by the Group/Company from its principal business activities during the financial year.
EBITDA	EBITDA is an abbreviation for earnings before interest, tax, depreciation and amortisation. It reflects the Group's/Company's earnings purely from operations.
Operating Income (EBIT)	EBIT is an abbreviation for earnings before interest and tax.
Depreciation and	An accounting charge to compensate for the decrease in the monetary value of an asset over time and
Amortisation	the eventual cost to replace the asset once fully depreciated.
Net Finance Costs	The interest accrued on debt obligations less any interest earned on cash bank balances and from
	intra-group companies on any loan advances.
Net Income	The profit made by the Group/Company during the financial year net of any income taxes incurred.
Profitability Ratios
Growth in Revenue (YoY)	This represents the growth in revenue when compared with previous financial year.
Gross Profit Margin	Gross profit as a percentage of total revenue.
EBITDA Margin	EBITDA as a percentage of total revenue.
Operating (EBIT) Margin	Operating margin is the EBIT as a percentage of total revenue.
Net Margin	Net income expressed as a percentage of total revenue.
Return on Common Equity	Return on common equity (ROE) measures the rate of return on the shareholders' equity of the
	owners of issued share capital, computed by dividing the net income by the average common equity
	(average equity of two years financial performance).
Return on Assets	Return on assets (ROA) is computed by dividing net income by the average total assets (average assets
	of two years financial performance).
Cash Flow Statement
Cash Flow from Operating
Activities (CFO)	Cash generated from the principal revenue producing activities of the Group/Company.
Cash Flow from Investing	Cash generated from the activities dealing with the acquisition and disposal of long-term assets and
Activities	other investments of the Group/Company.
Cash Flow from Financing	Cash generated from the activities that result in change in share capital and borrowings of the
Activities	Group/Company.
Capex	Represents the capital expenditure incurred by the Group/Company in a financial year.
	Free cash flow (FCF) represents the cash a Group/Company generates after accounting for cash
Free Cash Flows (FCF)	outflows to support operations and maintain its capital assets. It is calculated by taking Cash Flow
	from Operating Activities (before the payment of interest) less the Capex of the same financial year.
Balance Sheet
Total Assets	What the Group/Company owns which can be further classified into Non-Current Assets and Current
	Assets.
Non-Current Assets	Assets, full value of which will not be realised within the forthcoming accounting year
Current Assets	Assets which are realisable within one year from the statement of financial position date.
Cash and Cash Equivalents	Cash and cash equivalents are Group/Company assets that are either cash or can be converted into
	cash immediately.
	Total Equity is calculated as total assets less liabilities, representing the capital owned by the
Total Equity	shareholders, retained earnings, and any reserves.
Total Liabilities	What the Group/Company owes which can be further classified into Non-Current Liabilities and
	Current Liabilities.
Non-Current Liabilities	Obligations which are due after more than one financial year.
Total Debt	All interest-bearing debt obligations inclusive of long and short-term debt.
Net Debt	Total debt of a Group/Company less any cash and cash equivalents.
Current Liabilities	Obligations which are due within one financial year.
Financial Strength Ratios
Current Ratio	The Current ratio (also known as the Liquidity Ratio) is a financial ratio that measures whether or not a
	company has enough resources to pay its debts over the next 12 months. It compares current assets to
	current liabilities.

Quick Ratio (Acid Test Ratio)	The quick ratio measures a Group's/Company's ability to meet its short-term obligations with its most
	liquid assets. It compares current assets (less inventory) to current liabilities.
Interest Coverage Ratio	The interest coverage ratio measures how many times a Group/Company can cover its current interest
	payment with its available earnings.
Interest Coverage Level 1	Is calculated by dividing EBITDA by Cash Interest Paid.
Interest Coverage Level 2	Is calculated by dividing EBITDA by Finance Costs.
Gearing Ratio	The gearing ratio indicates the relative proportion of shareholders' equity and debt used to finance
	total assets.
Gearing Ratio Level 1	Is calculated by dividing Net Debt by Net Debt and Total Equity.
Gearing Ratio Level 2	Is calculated by dividing Total Liabilities by Total Assets.
Gearing Ratio Level 3	Is calculated by dividing Net Debt by Total Equity.
Net Debt / EBITDA	The Net Debt / EBITDA ratio measures the ability of the Group/Company to refinance its debt by
	looking at the EBITDA.
Other Definitions
Yield to Maturity (YTM)	YTM is the rate of return expected on a bond which is held till maturity. It is essentially the internal rate
	of return on a bond and it equates the present value of bond future cash flows to its current market
	price.