Annual Report • Apr 25, 2017
Annual Report
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REPORT AND FINANCIAL STATEMENTS 31 December 2016
| ï | ٦ |
|---|---|
| Board of Directors and other officers | |
|---|---|
| Management Report | $\overline{2}$ |
| 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 |
| Cash flow statement | 9 |
| Notes to the financial statements | $10 - 24$ |
| Additional information to the statement of profit or loss and other comprehensive income | $25 - 29$ |
Board of Directors:
Alexandros Sinos Serapheim Charalampidis Panagiotis Brouskaris Stephanos Kazantzis Evangelos Drympetas Gloria Chrysafi Mark Clerides (resigned on 18th of January 2016)
Gloria Chrysafi (appointed on 21st January 2016)
Company Secretary:
Independent Auditors:
C&N AUDITORS LTD Certified Public Accountants 10 Yianni Kranidioti 1065 Nicosia
Registered office:
Bankers:
3085, Limassol
Andrea Kalvou 5 Elladio Building, Flat 201
Pireos Bank (Greece) Alpha Bank (Greece) Hellenic Bank Public Company Ltd Eurobank Cyprus Ltd
Registration number:
HE 304867
$\overline{1}$
The Board of Directors presents its report and audited financial statements of the Company for the year ended 31 December 2016.
The Company is a Cyprus Investment Firm ("C.I.F") and in accordance with the license no.177/12 granted by the Cyprus Securities and Exchange Commission ("CySEC") on 4 September 2012.
The principal activities of the company comprise the provision of investment services, including reception and transmission of orders in relation to one or more financial instruments and execution of orders on behalf of clients in relation to one or more financial instruments.
In addition, the Company provides ancillary services, which comprise the safekeeping and administration of financial instruments, including custondianship and related services, advice to undertakings on capital structure, industrial strategy and related matters and advice and services related to mergers and the purchase of undertakings, foreign exchange services where these are connected to the provision of investment services, services related to underwriting, and investment services and activities as well as ancillary services where these are connected to the provision of investment or ancillary services.
The Company's development to date, financial results and position as presented in the financial statements are considered satisfactory.
The Company's results for the year are set out on page 6. The net profit for the year attributable to the shareholders of the Company amounted to €26.937 (2015: €28.440). On 31 December 2016 the total assets of the Company were €1.824.663 (2015: €1.717.262) and the net assets of the Company were €391.454 (2015: €364.517).
There were no changes in the share capital of the Company during the year under review.
The members of the Company's Board of Directors as at 31 December 2016 and at the date of this report are presented on page 1. All of them were members of the Board of Directors throughout the year ended 31 December 2016.
In accordance with the Company's Articles of Association all Directors presently members of the Board continue in office.
There were no significant changes in the assignment of responsibilities and remuneration of the Board of Directors.
The Independent Auditors, C&N AUDITORS LTD, have expressed their willingness to continue in office and a resolution giving authority to the Board of Directors to fix their remuneration will be proposed at the Annual General Meeting.
By order of the Board of Directors.
Secretary
Nicosia, 20 April 2017
Auditors, Accountants & Business Advisors
FrimeGlobal
An Association of Independent Accounting Firms
We have audited the financial statements of AEONIC SECURITIES C.I.F. PLC (the "Company"), which are presented in pages 6 to 24 and comprise the statement of financial position as at 31 December 2016, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2016, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.
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 Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Cyprus, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
The Board of Directors is responsible for the other information. The other information comprises the information included in the management 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 and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, 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.
The Board of Directors is responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reporting process.
C&N Auditors Ltd $\overline{\mathcal{L}}$ NICOSIA HEAD OFFICE: Office 201, 10 Yianni Kranidioti Str., 1065 Nicosia, Cyprus f: +357 22460760, f: +357 22767067, P.O. Box 28949, 2084 Nicosia, Cyprus e: [email protected] w: www.cn-c.com
Accounting & Audit Services Consulting & Advisory Services Taxation & Vat Services Software Solutions Trust Services Financial Services Advisory International Corporate Services Wealth Management
$\cdot \cdot \cdot$ $\cap \cdot \cdot \cdot$
Auditors, Accountants & Business Advisors
An Association of Independent Accounting Firms
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 is a high level of 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 skepticism throughout the audit. We also:
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Pursuant to the additional requirements of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 to 2016, we report the following:
$\overline{4}$
NICOSIA HEAD OFFICE: Office 201, 10 Yianni Kranidioti Str., 1065 Nicosia, Cyprus f: +357 22460760, f: +357 22767067, P.O. Box 28949, 2084 Nicosia, Cyprus e: [email protected] $W: WWW, C.0 - C. C.0 m$
Consulting & Advisory Services Taxation & Vat Services Software Solutions Trust Services Financial Services Advisory International Corporate Services Wealth Management
Auditors, Accountants
& Business Advisors
PrimeGlobal
An Association of
Independent Accounting Firms
This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 34 of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 to 2016 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.
C&N AUDITORS LTD
Costas Constantinou Certified Public Accountant and Registered Auditor for and on behalf of C&N AUDITORS LTD Certified Public Accountants
Nicosia, 20 April 2017
C&N Auditors Ltd $\overline{5}$ NICOSIA HEAD OFFICE: Office 201, 10 Yianni Kranidioti Str., 1065 Nicosia, Cyprus 1: +357 22460760. f: +357 22767067. P.O. Box 28949. 2084 Nicosia. Cyprus e: office@cn+c.com w: www.cn-c.com
Accounting & Audit Services Consulting & Advisory Services Taxation & Vat Services Software Solutions Trust Services Financial Services Advisory International Corporate Services Wealth Management
| 2016 | 2015 | ||
|---|---|---|---|
| Note | € | € | |
| Revenue | 5 | 737.487 | 427,563 |
| Cost of sales | 6 | (393.290) | (173.952) |
| Gross profit | 344.197 | 253.611 | |
| Other operating income | 7 | 9.623 | 346 |
| Selling and distribution expenses | $\frac{8}{9}$ | (8.566) | (9.721) |
| Administration expenses | (308.980) | (201.874) | |
| Other expenses | 10 | (1.032) | |
| Operating profit | 35.242 | 42.362 | |
| Finance costs | 12 | (8.305) | (13.922) |
| Profit before tax | 26.937 | 28,440 | |
| Net profit for the year | 26.937 | 28,440 | |
| Other comprehensive income | |||
| Total comprehensive income for the year | 26.937 | 28.440 |
| 2016 | 2015 | ||
|---|---|---|---|
| ASSETS | Note | € | € |
| Non-current assets | |||
| Property, plant and equipment | 14 | 47.493 | 39.961 |
| Intangible assets | 15 | 3.415 | 7.284 |
| Investors Compensation Fund | 18 | 73.056 | 73.056 |
| 123.964 | 120.301 | ||
| Current assets | |||
| Trade and other receivables/Clients | 16 | 1,444,022 | 1.307.776 |
| Other investments (own) | 17 | 33,480 | |
| Cash at bank and in hand | 19 | 223.197 | 289,185 |
| 1.700.699 | 1,596.961 | ||
| Total assets | 1.824.663 | 1.717.262 | |
| EQUITY AND LIABILITIES | |||
| Equity Share capital |
20 | 600.000 | |
| Accumulated losses | 600,000 | ||
| (208.546) | (235.483) | ||
| Total equity | 391.454 | 364.517 | |
| Current liabilities | |||
| Trade and other payables/Clients | 21 | 1.433.209 | 1.352.745 |
| 1.433.209 | 1.352.745 | ||
| Total equity and liabilities | 1.824.663 | 1.717.262 |
On 20 April 2017 the Board of Directors of AEONIC SECURITIES C.I.F. PLC authorised these financial statements for issue.
Alexandros Sinos Director
Seraptiem Charalampidis
| Note | Share capital € |
Accumula- ted losses € |
Total € |
|
|---|---|---|---|---|
| Balance at 1 January 2015 | 420.000 | (263.923) | 156.077 | |
| Comprehensive income Net profit for the year |
28,440 | 28,440 | ||
| Transactions with owners Issue of share capital |
20 | 180.000 | 180.000 | |
| Balance at 31 December 2015 | 600,000 | (235.483) | 364.517 | |
| Balance at 31 December 2015/ 1 January 2016 | 600.000 | (235.483) | (364.517) | |
| Comprehensive income Net profit for the year |
26.937 | 26.937 | ||
| Balance at 31 December 2016 | 600,000 | (208.546) | 391.454 |
Companies which do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits. Special contribution for defence at 17% will be payable on such deemed dividends to the extent that the ultimate shareholders are both Cyprus tax resident and Cyprus domiciled. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defence is payable by the Company for the account of the shareholders.
CASH FLOW STATEMENT 31 December 2016
| € 28,440 4.707 120 |
|---|
| (346) |
| 32.922 |
| (1.088.424) |
| (109.304) |
| 1.005.209 |
| (159.597) |
| (1.299) |
| (19.329) |
| 346 |
| (20.282) |
| 180,000 |
| (120) |
| (1) |
| 179.879 |
| 289.185 |
| 289.185 |
The Company AEONIC SECURITIES C.I.F. PLC (the "Company") was incorporated in Cyprus on 19th of April 2012 as a private limited liability company under the provisions of the Cyprus Companies Law, Cap. 113. On 18th of December 2015, the Company changed from being a private limited liability company to public limited company. Its registered office is at Andrea Kalvou 5, Elladio Building, Flat 201, 3085. Limassol.
The Company is a Cyprus Investment Firm ("C.I.F") and in accordance with the license no.177/12 granted by the Cyprus Securities and Exchange Commission ("CySEC") on 4 September 2012.
The principal activities of the company comprise the provision of investment services, including reception and transmission of orders in relation to one or more financial instruments and execution of orders on behalf of clients in relation to one or more financial instruments.
In addition, the Company provides ancillary services, which comprise the safekeeping and administration of financial instruments, including custondianship and related services, advice to undertakings on capital structure, industrial strategy and related matters and advice and services related to mergers and the purchase of undertakings, foreign exchange services where these are connected to the provision of investment services, services related to underwriting, and investment services and activities as well as ancillary services where these are connected to the provision of investment or ancillary services.
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented in these financial statements unless otherwise stated.
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap.113. The financial statements have been prepared under the historical cost convention.
During the current year the Company adopted all the new and revised International Financial Reporting Standards (IFRS) that are relevant to its operations and are effective for accounting periods beginning on 1 January 2016. This adoption did not have a material effect on the accounting policies of the Company.
At the date of approval of these financial statements, standards and interpretations were issued by the International Accounting Standards Board which were not yet effective. Some of them were adopted by the European Union and others not vet. The Board of Directors expects that the adoption of these accounting standards in future periods will not have a material effect on the financial statements of the Company.
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable products provided in the normal course of business, net of discounts and sales related taxes. Revenues earned by the Company are recognised on the following bases:
Sales of products are recognised when significant risks and rewards of ownership of the products have been transferred to the customer, which is usually when the Company has sold or delivered the products to the customer, the customer has accepted the products and collectability of the related receivable is reasonably assured.
Sales of services are recognised in the accounting period in which the services are rendered by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Dividend from investments in securities is recognised when the right to receive payment is established. Withheld taxes are transferred to profit or loss. Interest from investments in securities is recognised on an accruals hasis
Profits or losses from the sale of investments in securities represent the difference between the net proceeds and the carrying amount of the investments sold and is transferred to profit or loss.
The difference between the fair value of investments at fair value through profit or loss as at 31 December 2016 and the mid cost price represents unrealised gains and losses and is included in profit or loss in the period in which it arises. Unrealised gains and losses arising from changes in the fair value of available-forsale financial assets are recognised in equity. When available-for-sale financial assets are sold or impaired, the accumulated fair value adjustments are included in profit or loss as fair value gains or losses on investments, taking into account any amounts charged or credited to profit or loss in previous periods.
Commission income is recognised when the right to receive payment is established.
Interest income is recognised on a time-proportion basis using the effective interest method.
The Company and its employees contribute to the Government Social Insurance Fund based on employees' salaries. The Company's contributions are expensed as incurred and are included in staff costs. The Company has no legal or constructive obligations to pay further contributions if the scheme does not hold sufficient assets to pay all employees benefits relating to employee service in the current and prior periods.
Interest expense and other borrowing costs are charged to profit or loss as incurred.
31 December 2016
Items included in the Company's financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in Euro $(\epsilon)$ , which is the Company's functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Translation differences on non-monetary items such as equities held at fair value through profit or loss are reported as part of the fair value gain or loss.
Current tax liabilities and assets are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and laws that have been enacted, or substantively enacted, by the reporting date.
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on the straight-line method so as to write off the cost of each asset to its residual value over its estimated useful life. The annual depreciation rates used are as follows: $\alpha$
| $\gamma_0$ | |
|---|---|
| Motor vehicles | |
| Furniture, fixtures and office equipment | |
| Computer Software | 33,33 |
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Where the carrying amount of an asset is greater than its estimated recoverable amount, the asset is written down immediately to its recoverable amount.
Expenditure for repairs and maintenance of property, plant and equipment is charged to profit or loss of the year in which it is incurred. The cost of major renovations and other subsequent expenditure are included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Company. Major renovations are depreciated over the remaining useful life of the related asset.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profit or loss in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed to be either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.
Costs that are directly associated with identifiable and unique computer software products controlled by the Company and that will probably generate economic benefits exceeding costs beyond one year are recognised as intangible assets. Subsequently computer software is carried at cost less any accumulated amortisation and any accumulated impairment losses. Expenditure which enhances or extends the performance of computer software programs beyond their original specifications is recognised as a capital improvement and added to the original cost of the computer software. Costs associated with maintenance of computer software programs are recognised as an expense when incurred. Computer software costs are amortised using the straight-line method over their useful lives, not exceeding a period of three years. Amortisation commences when the computer software is available for use.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to depreciation or amortisation are reviewed 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 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Financial assets and financial liabilities are recognised in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument.
Trade receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.
The Company classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at initial recognition.
Regular way purchases and sales of financial assets are recognised on trade-date which is the date on which the Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Loans and receivables are carried at amortised cost using the effective interest method.
Gains or losses arising from changes in the fair value of the "financial assets at fair value through profit or loss" category are presented in profit or loss in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the profit or loss when the Company's right to receive payments is established.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same and discounted cash flow analysis, making maximum use of market inputs and relying as little as possible on entity specific inputs. Equity investments for which fair values cannot be measured reliably are recognised at cost less impairment.
Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences on monetary securities are recognised in profit or loss, while translation differences on non-monetary securities are recognised in other comprehensive income. Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in other comprehensive income are included in profit or loss as gains and losses on available-for-sale financial assets.
Interest on available-for-sale securities calculated using the effective interest method is recognised in the profit or loss. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Company's right to receive payments is established.
The Company assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets the cumulative loss which is measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is removed from equity and recognised in profit or loss.
For financial assets measured at amortised cost, if in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of available for sale equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve. In respect of available for sale debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.
For the purpose of the cash flow statement, cash and cash equivalents comprise cash at bank and in hand.
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method.
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the statement of financial position.
Ordinary shares are classified as equity.
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.
The Company is exposed to interest rate risk, credit risk, liquidity risk, currency risk and capital risk management arising from the financial instruments it holds. The risk management policies employed by the Company to manage these risks are discussed below:
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Company's income and operating cash flows are substantially independent of changes in market interest rates as the Company has no significant interest-bearing assets. The Company is exposed to interest rate risk in relation to its non-current borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. Borrowings issued at fixed rates expose the Company to fair value interest rate risk. The Company's management monitors the interest rate fluctuations on a continuous basis and acts accordingly.
Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. The Company has no significant concentration of credit risk. The Company has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and monitors on a continuous basis the ageing profile of its receivables.
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Company has procedures with the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company's measurement currency. The Company is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the US Dollar and the Euro. The Company's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.
Sensitivity analysis
The legal and regulatory framework under which the Company operates stipulates that the Company must maintain a minimum capital adequacy ratio of 8%. The method of calculation is set up by the regulatory authority based on Interntional Basell II capital adequacy requirement directives. The Company aims to always maintain a high capital adequacy ratio well above the required minimum. The capital adequacy ratio is reported to the Company's requlatory authority on a quarterly basis.
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce cost of capital.
The capital adequacy ratio for the year ended 31 December 2016 was 34,66% (2015: 22.15%)
Capital requirements are derived from credit risk, operational risk and counterparty risk considerations.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates and requires Management to exercise its judgement in the process of applying the Company's accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on Management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each reporting date. The fair value of the financial assets available for sale has been estimated based on the fair value of these individual assets.
The impairment test is performed using the discounted cash flows expected to be generated through the use of non-financial assets, using a discount rate that reflects the current market estimations and the risks associated with the asset. When it is impractical to estimate the recoverable amount of an asset, the Company estimates the recoverable amount of the cash generating unit in which the asset belongs to.
Intangible assets are initially recorded at acquisition cost and are amortized on a straight line basis over their useful economic life. Intangible assets that are acquired through a business combination are initially recorded at fair value at the date of acquisition. Intangible assets with indefinite useful life are reviewed for impairment at least once per year. The impairment test is performed using the discounted cash flows expected to be generated through the use of the intangible assets, using a discount rate that reflects the current market estimations and the risks associated with the asset. When it is impractical to estimate the recoverable amount of an asset, the Company estimates the recoverable amount of the cash generating unit in which the asset belongs to.
The Company uses various valuation methods to value non-listed investments. These methods are based on assumptions made by the Board of Directors which are based on market information at the reporting date.
| 2016 | 2015 | |
|---|---|---|
| Commissions receivable | € 732.487 |
€ 415.563 |
| Other income | 5.000 | 12.000 |
| 737.487 | 427.563 | |
| 6. Cost of sales | ||
| 2016 | 2015 | |
| Services received | € 393.290 |
€ 173.952 |
| 393.290 | 173.952 | |
| 7. Other operating income | ||
| 2016 | 2015 | |
| Interest income | € | € |
| Exchange profit | 1.518 | 346 |
| Commissions received | 1.345 62 |
|
| Sundry operating income | 6.698 | |
| 9.623 | 346 | |
| Interest income is analysed as follows: | ||
| 2016 | 2015 | |
| € | € | |
| Bank deposits | 1.518 | 346 |
| 1.518 | 346 |
| 2016 | 2015 | |
|---|---|---|
| € | ||
| Motor vehicle running costs | 970 | 2.052 |
| Inland travelling | 7.596 | 7.669 |
| 8.566 | 9.721 |
| 2016 | 2015 |
|---|---|
| € | € |
| Staff costs 149.241 |
80.290 |
| Rent 8.308 |
16.900 |
| Common expenses 500 |
790 |
| Licenses and taxes 3.315 |
198 |
| Municipality taxes 1.144 |
|
| Annual levy 350 |
350 |
| Electricity 2.800 |
3.250 |
| Water supply and cleaning 103 |
160 |
| Insurance 1.868 |
819 |
| Repairs and maintenance 434 |
|
| Sundry expenses 6.984 |
18.101 |
| Telephone and postage 5.401 |
3.412 |
| Stationery and printing 1.840 |
554 |
| Subscriptions and contributions 42.910 |
18.996 |
| Staff training 3.883 |
|
| Computer supplies and maintenance 3.216 |
3.255 |
| Auditors' remuneration 2.975 |
2.975 |
| Accounting fees 11.863 |
|
| Other professional fees 6.000 |
3.000 |
| Inland travelling and accommodation 9.397 |
6.713 |
| Irrecoverable VAT | 16.790 |
| Entertaining 11.049 |
9.388 |
| Motor vehicle running costs 1.829 |
476 |
| Other expenses 15.251 |
10.750 |
| Consulting 2.000 |
|
| Amortisation of computer software 3.869 |
|
| Depreciation 12.450 |
4.707 |
| 308.980 | 201.874 |
| 2016 | 2015 | |
|---|---|---|
| € | ||
| Net loss from operating activities | 32 | $\sim$ |
| Loss from insurance received | 1.000 | |
| 1.032 |
| 2016 | 2015 | |
|---|---|---|
| Salaries | 135.001 | € 72.718 |
| Social security costs | 11.696 | 6.195 |
| Social cohesion fund | 2.544 | 1.377 |
| 149.241 | 80.290 | |
| 12. Finance costs | ||
| 2016 | 2015 | |
| € | € | |
| Net foreign exchange losses | 2.228 | 1.965 |
| Interest expense | ||
| Sundry finance expenses | 6.076 | 11.956 |
| 8.305 | 13.922 | |
The tax on the Company's profit before tax differs from the theoretical amount that would arise using the applicable tax rates as follows:
| Profit before tax | 2016 26.937 |
2015 € 28.440 |
|---|---|---|
| Tax calculated at the applicable tax rates Tax effect of expenses not deductible for tax purposes Tax effect of allowances and income not subject to tax Tax effect of tax losses brought forward |
3.367 3.924 (569) (6.722) |
3.555 9.727 (14.708) |
| 10% additional charge | 1.426 | |
| Tax charge |
The corporation tax rate is 12,5%.
Under certain conditions interest income may be subject to defence contribution at the rate of 30%. In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 17%.
The Company's chargeable income for the year amounted to €53.774 which has been set off against tax losses brought forward. Under current legislation, tax losses may be carried forward and be set off against taxable income of the five succeeding years.
| Motor vehicles fixtures and |
Furniture, | Total | |
|---|---|---|---|
| office | |||
| equipment | |||
| € | € | € | |
| Cost | |||
| Balance at 1 January 2015 Additions |
17.100 15.752 |
17.028 3.577 |
34.128 19.329 |
| Balance at 31 December 2015/1 January 2016 Additions |
32.852 18.766 |
20.605 1.216 |
53.457 19.982 |
| Balance at 31 December 2016 | 51.618 | 21.821 | 73.439 |
| Depreciation | |||
| Balance at 1 January 2015 | 2.428 | 6.361 | 8.789 |
| Charge for the year | 1.710 | 2.997 | 4.707 |
| Balance at 31 December 2015/1 January 2016 | 4.138 | 9.358 | 13.496 |
| Charge for the year | 10.323 | 2.127 | 12.450 |
| Balance at 31 December 2016 | 14.461 | 11.485 | 25.946 |
| Net book amount | |||
| Balance at 31 December 2016 | 37.157 | 10.336 | 47.493 |
| Balance at 31 December 2015 | 28.714 | 11.247 | 39.961 |
| 15. Intangible assets | |||
| Computer software |
|||
| € | |||
| Cost | |||
| Balance at 1 January 2015 Additions |
10.310 1.299 |
||
| Balance at 31 December 2015/ 1 January 2016 | 11.609 | ||
| Balance at 31 December 2016 | 11.609 | ||
| Amortisation | |||
| Balance at 1 January 2015 | 4.325 | ||
| Balance at 31 December 2015/ 1 January 2016 Amortisation for the year |
4.325 3.869 |
||
| Balance at 31 December 2016 | 8.194 | ||
| Net book amount | |||
| Balance at 31 December 2016 | 3.415 | ||
| Balance at 31 December 2015 | 7.284 |
| 2016 | 2015 € |
|
|---|---|---|
| Trade receivables | 1.427.780 | .298.391 |
| Deposits and prepayments | 3.435 | 4.500 |
| Other receivables | 2.289 | 4.885 |
| Refundable VAT | 10.518 | |
| 1.444.022 | 1.307.776 |
The Company does not hold any collateral over the trading balances.
The fair values of trade and other receivables due within one year approximate to their carrying amounts as presented above.
The exposure of the Company to credit risk and impairment losses in relation to trade and other receivables is reported in note 3 of the financial statements.
| 2016 | 2015 |
|---|---|
| € | |
| 33,480 | |
| 33,480 | |
| 2016 | 2015 | |
|---|---|---|
| Balance at 1 January | 73.056 | 73.056 |
| Balance at 31 December | 73.056 | 73.056 |
Cash balances are analysed as follows
| 2016 | 2015 | |
|---|---|---|
| € | ||
| Cash at bank and in hand | 223.197 | 289.185 |
| 223.197 | 289.185 |
The exposure of the Company to credit risk and impairment losses in relation to cash and cash equivalents is reported in note 3 of the financial statements.
| 2016 Number of shares |
2016 € |
2015 Number of shares |
2015 € |
|
|---|---|---|---|---|
| Authorised | ||||
| Ordinary shares of $E1,00$ each | 1.000.000 | 1.000.000 | 1.000.000 | 1.000.000 |
| Issued and fully paid | ||||
| Balance at 1 January | 600,000 | 600,000 | 420,000 | 420,000 |
| Issue of shares | 180.000 | 180.000 | ||
| Balance at 31 December | 600.000 | 600.000 | 600.000 | 600,000 |
| 21. Trade and other payables | ||||
| 2016 | 2015 |
| LU1J | |
|---|---|
| € | |
| 1.393.749 | 1.331.094 |
| 3.022 | 1.614 |
| 4.254 | 2.980 |
| 32.184 | 17.057 |
| 1.433.209 | 1.352.745 |
| zuiu |
The fair values of trade and other payables due within one year approximate to their carrying amounts as presented above
During the last years, the Cyprus economy has been adversely affected by the crisis in the Cyprus banking system and the inability of the Republic of Cyprus to secure financing from international markets. As a result, the Republic of Cyprus entered into negotiations with the European Commission, the European Central Bank and the International Monetary Fund (the "Troika"), for financial support of € 10 billion, which resulted into an agreement and the Eurogroup decision of 25 March 2013. The decision included the restructuring of the two largest banks in Cyprus through "bail in", safeguarding deposits below €100.000.
Since March 2013, Troika performed several reviews of the Cyprus' economic program with very positive outcomes which resulted in the disbursement of all scheduled tranches of financial assistance to Cyprus.
Despite the adverse external economic environment in several European and international economies, the Cyprus economy shows signs of stabilization, evident by the upgrade of the credit rating and the future prospects of the Republic of Cyprus by all major international credit rating agencies. This assisted largely the efforts of the Republic of Cyprus to raise significant capital from international financial markets in the past few months. In addition, the Cypriot banks have been recapitalized and have reorganized their operations, leading to the full abolishment of all restrictive measures on deposits and transactions imposed during 2013.
However, the uncertain economic conditions in Cyprus, the unavailability of financing and the high percentage of non performing bank loans in combination with the high unemployment rates, have affected:
The Company's management is unable to predict all developments which could have an impact on the Cyprus economy and consequently, what effect, if any, they could have on the future financial performance, cash flows and financial position of the Company.
On the basis of the evaluation performed, the Company's management has concluded that no provisions or impairment charges are necessary. The Company's management believes that it is taking all the necessary measures to maintain the viability of the Company and the smooth conduct of its operations in the current business and economic environment.
The following transactions were carried out with related parties:
The remuneration of Directors and other members of key management was as follows:
| 2016 | 2015 | |
|---|---|---|
| € | ||
| Directors' remuneration | 98.715 | 44.183 |
| 98.715 | 44.183 |
The Company had no contingent liabilities as at 31 December 2016.
The Company had no capital or other commitments as at 31 December 2016.
For the provision of a true and fair view of the financial position of the company, the Board of Directors has decided to maintain all cash held by clients, off balance sheet. As a result, the trade and other receivables represent only the non-cash, invested positions of clients' assets. For comparability purposes, the balances of the previous comparative year have been amended accordingly, as shown in the Statement of Financial Position.
There were no material events after the reporting period, which have a bearing on the understanding of the financial statements.
Significant events that occurred after the end of the reporting period are described in note 22 to the financial statements.
| 2016 | 2015 | ||
|---|---|---|---|
| Page | € | € | |
| Revenue | |||
| Commissions receivable Other income Cost of sales |
732.487 5.000 (393.290) |
415.563 12.000 (173.952) |
|
| Gross profit | 344.197 | 253.611 | |
| Other operating income | |||
| Bank interest Unrealised foreign exchange profit |
1.518 1.345 |
346 | |
| Commissions received Sundry operating income |
62 6.698 |
||
| 353.820 | 253.957 | ||
| Operating expenses | |||
| Administration expenses | 26 | (308.980) | (201.874) |
| Selling and distribution expenses | 26 | (8.566) | (9.721) |
| 36.274 | 42.362 | ||
| Other operating expenses | |||
| Net loss from operating activities | (32) | ||
| Loss from insurance received | (1.000) | ||
| Operating profit Finance costs |
27 | 35.242 (8.305) |
42.362 (13.922) |
| Net profit for the year before tax | 26.937 | 28.440 |
OPERATING EXPENSES 31 December 2016
| 2016 € |
2015 € |
|
|---|---|---|
| Directors' remuneration | 98.715 | 44.183 |
| Staff salaries | 36.286 | 28.535 |
| Social insurance | 11.696 | 6.195 |
| Social cohesion fund | 2.544 | 1.377 |
| Rent | 8.308 | 16.900 |
| Common expenses | 500 | 790 |
| Licenses and taxes | 3.315 | 198 |
| Municipality taxes | 1.144 | |
| Annual levy | 350 | 350 |
| Electricity | 2.800 | 3.250 |
| Water supply and cleaning | 103 | 160 |
| Insurance | 1.868 | 819 |
| Repairs and maintenance | 434 | |
| Sundry expenses | 6.984 | 18.101 |
| Telephone and postage | 5.401 | 3.412 |
| Stationery and printing | 1.840 | 554 |
| Subscriptions and contributions | 42.910 | 18.996 |
| Staff training | 3.883 | ш. |
| Computer supplies and maintenance | 3.216 | 3.255 |
| Auditors' remuneration | 2.975 | 2.975 |
| Accounting fees | 11.863 | $\overline{\phantom{a}}$ |
| Other professional fees | 6.000 | 3.000 |
| Inland travelling and accommodation | 9.397 | 6.713 |
| Irrecoverable VAT | 16.790 | |
| Entertaining | 11.049 | 9.388 |
| Motor vehicle running costs | 1.829 | 476 |
| Other expenses | 15.251 | 10.750 |
| Consulting | 2.000 | $\blacksquare$ |
| Amortisation of computer software | 3.869 | |
| Depreciation | 12.450 | 4.707 |
| 308.980 | 201.874 | |
| 2016 | 2015 | |
| € | € | |
| Selling and distribution expenses | ||
| Motor vehicle running costs | 970 | 2.052 |
Motor vehicle running costs
Inland travelling
$26$
7.596
8.566
$7.669$ $9.721$
| 2016 | 2015 | |
|---|---|---|
| € | € | |
| Finance costs | ||
| Interest expense | ||
| Bank overdraft interest | 1 | 1 |
| Sundry finance expenses | ||
| Bank charges | 6.076 | 3.511 |
| Other finance expenses | 8.445 | |
| Net foreign exchange losses | ||
| Realised foreign exchange loss | 2.152 | 1.845 |
| Unrealised foreign exchange loss | 76 | 120 |
| 8.305 | 13.922 |
COMPUTATION OF WEAR AND TEAR ALLOWANCES
31 December 2016
| COST | ANNUAL ALLOWANCES | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Year | 9 l o | Balance 1/2016 |
Additions Ψ for the year |
Disposals for the year |
Balance 31/12/2016 |
/1/2016 Balance |
Charge for the year |
$\overline{5}$ disposals Ψ |
Balance 31/12/2016 |
Net value 31/12/2016 Ψ |
|
| Furniture, fixtures and office equipment | |||||||||||
| Furniture & Fittings | 2012 | .384 | 346 | ||||||||
| Office Equipment | 2012 | 3.464 2.634 |
3.464 2.634 |
.052 | 263 | 1.731 | |||||
| Office Equipment | 2013 2015 2016 2016 2016 |
410 | 123 | $\overline{41}$ | 164 | 1.734 319 246 |
|||||
| Office Equipment | 410 2.735 |
2.735 | 822 | 274 | 1.096 | 1.639 | |||||
| Office Equipment | 731 546 |
731 | $\mathcal{F}$ | $\overline{r}$ | 146 | 585 | |||||
| Office Equipment | 546 406 155 |
55 | 110 | 436 | |||||||
| Telephones | 406 | $\overline{41}$ | $\frac{1}{4}$ | ||||||||
| Furniture & Fittings | 155 | $\frac{6}{5}$ | 365 | ||||||||
| Shredder | 78 | 78 | |||||||||
| Mobile phones | 136 | 136 | 222559 | ||||||||
| Earphones | 2016 | $\Xi$ | $\overline{2}$ | $\overline{2}$ | |||||||
| Dishwasher | 2016 | $\overline{10}$ | 399 | 399 | 40 | $^{40}$ | |||||
| Iron | 2016 | 10 | $\overline{z}$ | $\overline{z}$ | $^{19}$ | ||||||
| 10.520 | 1.217 | 11.737 | 3.509 | 1.175 | 4.684 | 7.053 | |||||
| Computer software | |||||||||||
| MS Office Pro 2010 | 2012 2013 |
33 | 1.810 | 1.810 | 1.810 | ||||||
| Solution ERP | 33 | 8.500 | 8.500 | 1.810 8.415 |
85 | 8.500 | |||||
| Advak Barracuda | 2015 | 33 | 1.299 | 1.299 | 429 | 433 | 862 | 437 | |||
| 11.609 | 11.609 | 10.654 | 518 | 11.172 | 437 |
28
| Page | € | € | ||
|---|---|---|---|---|
| Net profit per income statement | 25 | 26.937 | ||
| Add: | ||||
| Salaries with no contributions to the Social Insurance Fund | 7.822 | |||
| Depreciation | 16.319 | |||
| Loss from insurance received | 1.000 | |||
| Entertaining | 3.674 | |||
| Realised foreign exchange loss | 2.152 | |||
| Unrealised foreign exchange loss | 76 | |||
| Annual levy | 350 | |||
| 31.393 | ||||
| 58.330 | ||||
| Less: | ||||
| Annual wear and tear allowances | 28 | 1.693 | ||
| Interest income | 1.518 | |||
| Unrealised foreign exchange profit | 1.345 | |||
| (4.556) | ||||
| Chargeable income for the year | 53.774 | |||
| Loss brought forward | (272.085) | |||
| Loss carried forward | (218.311) | |||
In accordance with the Article 140, section (1)(c) of the Securities and Cyprus Stock Exchange Law, I Secretary of the company confirm to the best of my knowledge which is a result diligent work that the financial statements for the year ended 31 December 2016 have been prepared in accordance with IFRS as adopted by the EU, are true and complete.
Secretary of the Company
Gloria Chrysafi
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