Annual Report • Oct 13, 2017
Annual Report
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The Board of Directors of the Public Company "The Mall of Cyprus (MC) Plc (the "Company") on the 12 October 2017, approved the audited financial statements for the period ended on the 30 June 2017. The Board further resolved that no final dividend be declared for the aforementioned period.
Furthermore, the Board of Directors decided to convene the annual general meeting of the Company on the 6th November 2017 at 8:30 am, at the offices of PriceWaterhouseCoopers Limited in Nicosia, at 43, Demostheni Severi Avenue.
The full and complete text of the audited financial statements (together with the Director's Report, and the Auditors' Report thereon) for the period ended 30 June 2017 and the instrument appointing proxy are available on the website www.atterbury.eu and the Cyprus Stock Exchange website www.cse.com.cv. Copies of the documents referred to can also be obtained from the Registered Office of the Company at the Mall of Cyprus 3, Vergina str., Strovolos, Nicosia. Cyprus, or by sending request by email at [email protected] without any charge. The invitation to the Annual General Meeting will be mailed to all shareholders of the Company.
The Mall of Cyprus (MC) Plc
Montrago Services Limited Secretary
Date: 12 October 2017
$\hat{\mathcal{A}}$
$\sim$
| Page | |
|---|---|
| Board of Directors and other officers | 1 |
| Declaration of the members of the Board of Directors and of other officers of the company for the financial statements |
$\mathbf{2}$ |
| Management Report | $3 - 8$ |
| Independent auditor's report | $9 - 14$ |
| Statement of comprehensive income | 15 |
| Balance sheet | 16 |
| Statement of changes in equity | 17 |
| Statement of cash flows | 18 |
| Notes to the financial statements | $19 - 52$ |
Takis Christodoulou John George Mavrokordatos George Mouskides Martin Oliver (appointed 5 July 2017)
195, Arch. Makariou III Str Neocleous House 3030, Limassol Cyprus
3 Verginas Str The Mall of Cyprus Strovolos 2025, Nicosia Cyprus
Elias Neocleous & Co LLC
Antonia Constantinou
According to Article 9, subsections (3) (c) and (7) of the Transparency Requirements (Traded Securities on a Regulated Market) Law of 2007 ('Law'), we the members of the Board of Directors and other officers responsible for the financial statements of The Mall of Cyprus Plc for the year ended 30 June 2017, we confirm that, according to our knowledge:
a) The annual financial statements presented on pages 15 to 52 were:
(i) prepared in accordance with International Financial Reporting Standards as adopted by the European Union and in accordance with the provisions of subsection (4) of the Act, and
(ii) give a true and fair view of assets and liabilities, financial position and profit of The Mall of Cyprus (MC) Plc, and
b) The Management Report provides a fair overview of the developments and performance of the business and financial position of The Mall of Cyprus Plc, together with a description of the principal risks and uncertainties faced by the Company.
John George Mavrokordatos - Director
George Mouskides - Director
Takis Christodoulou - Director
Martin Oliver - Director
Antonia Constantinou - Financial Controller
Nicosia, 12 October 2017
$(2)$
According to Article 9, subsections (3) (c) and (7) of the Transparency Requirements (Traded Securities on a Regulated Market) Law of 2007 ('Law'), we the members of the Board of Directors and other officers responsible for the financial statements of The Mall of Cyprus Plc for the year ended 30 June 2017, we confirm that, according to our knowledge:
a) The annual financial statements presented on pages 15 to 52 were:
(i) prepared in accordance with International Financial Reporting Standards as adopted by the European Union and in accordance with the provisions of subsection (4) of the Act. and
(ii) give a true and fair view of assets and liabilities, financial position and profit of The Mall of Cyprus (MC) Plc, and
b) The Management Report provides a fair overview of the developments and performance of the business and financial position of The Mall of Cyprus Plc, together with a description of the principal risks and uncertainties faced by the Company.
John George Mavrokordatos - Director
George Mouskides - Director
Takis Christodoulou - Director
Martin Oliver - Director
Responsible for Preparation of Financial Statements
Antonia Constantinou -- Financial Controller
Nicosia, 12 October 2017
The Board of Directors presents its report together with the audited financial statements of the Company for the year ended 30 June 2017.
The principal activity of the Company is the leasing/granting of rights of use of $\mathcal{P}$ space of its property, the Shacolas Emporium Park which includes a Shopping Mall, an IKEA store and other building developments for retail/commercial purposes.
At the Company's Board of Directors meeting held on 30 November 2015, the 3 Board of Directors decided to change the financial year end of the Company from 31 December to 30 June of each respective year.
Due to the change of financial year end from 31 December to 30 June, the $\overline{4}$ Company's comparative financial information presented in these financial statements cover the fifteen month period from 1 April 2015 to 30 June 2016. The reason for the change is the fact that the Company's new shareholders' financial year end is 30 June. Therefore, the numbers related to the results and cash flows of the comparative period (15 months) as presented in these financial statements are not comparable to the current vear's figures (12 month period).
During the year, the shareholders of Atterbury Cyprus Limited, the parent 5 company, changed, whereby Atterbury Europe bought AIH International Holding Limited's shares in Atterbury Cyprus on 31 March 2017. Atterbury Europe BV moved from a non controlling 48,75% shareholder in Atterbury Cyprus to a 97,50% shareholder.
The Company does not intend to proceed with any acquisitions or mergers. 6
The operating profit of the Company for the year ended 30 June 2017 was $\overline{7}$ €10.884.825 (period 1 April 2015 to 30 June 2016: profit of €3.544.852). The finance costs for the period were €3.234.076 (period 1 April 2015 to 30 June 2016: €2.265.394). The tax charge for the twelve months ended 30 June 2017 amounted to €870.926 (period 1 April 2015 to 30 June 2016: tax credit €350.205) which includes deferred tax charge of €358.126 (period 1 April 2015 to 30 June 2016: deferred tax credit €867.994).
The profit after tax of the Company for the period ended was €6.788.714 $\mathbf{R}$ (period 1 April 2015 to 30 June 2016: profit of €1.629.893).
The total assets of the Company were €172.975.840 (30 June 2016: $\Omega$ €172.224.879) and the net assets were €70.110.392 (30 June 2016: €78.321.678).
The financial position, development and performance of the Company as $10$ presented in these financial statements is considered satisfactory.
The principal risks and uncertainties faced by the Company are disclosed in $11$ Notes 1, 3 and 4 of the financial statements. Following a long and relatively deep economic recession, the Cyprus economy began to record positive growth in 2015 which accelerated during 2016. The restrictive measures and capital controls which were in place since March 2013 were lifted in April 2015 and on the back of the strength of the economy's performance and the strong implementation of required measures and reforms, Cyprus exited its economic adjustment programme in March 2016. In recognition of the progress achieved on the fiscal front and the economic recovery, as well as the enactment of the foreclosure and insolvency framework, the international credit rating agencies have proceeded with a number of upgrades of the credit ratings for the Cypriot sovereign, and although the rating continues to be "non-investment grade", the Cyprus government has regained access to the capital markets. The outlook for the Cvprus economy over the medium term remains positive, however, there are downside risks to the growth projections emanating from the high levels of non performing exposures, uncertainties in the property markets, as well as potential deterioration in the external environment for Cyprus, including continuation of the recession in Russia in conditions of protracted declines in oil prices; weaker than expected growth in the euro area as a result of worsening global economic conditions; slower growth in the UK with a weakening of the pound as a result of uncertainty regarding the result of the Brexit referendum; and political uncertainty in Europe in view of Brexit and the refugee crisis.
This operating environment, could affect (1) the ability of the Company to obtain $12$ new borrowings or re-finance its existing borrowings at terms and conditions similar to those applied to earlier transactions, (2) the ability of the Company trade and other debtors to repay the amounts due to the Company (3) the ability of the company to generate sufficient turnover from its investment properties and/or offer its services to tenants, and (4) the cash flow forecasts of the Company's management in relation to the impairment assessment for financial and non-financial assets.
The Company's activities expose it to a variety of financial risks: market risk 13 (including fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk.
The Company's risk management programme focuses on the unpredictability of 14 financial markets and seeks to minimise potential adverse effects on the Company's financial performance. Risk management is carried out by Management and approved by the Board of Directors. Management identifies, evaluates and hedges financial risks in close co operation with the Company's operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk, and investment of excess liquidity.
The Company's interest rate risk arises from long-term borrowings. Borrowings 15 issued at variable rates expose the Company to cash flow interest rate risk. Borrowings at fixed rates expose the Company to fair value interest rate risk. All borrowings are issued at variable rates.
At 30 June 2017, if interest rates on Euro-denominated borrowings had been 0.5% 16 higher/lower with all other variables held constant, post-tax profit year ended 30 June 2017 would have been €332.218 (30 June 2016: €364.551) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings.
The Company's management monitors the interest rate fluctuations on a 17 continuous basis and acts accordingly.
Credit risk arises from cash and cash equivalents, deposits with banks and 18 financial institutions, as well as credit exposures to wholesale and retail customers. including outstanding receivables and committed transactions.
For banks and financial institutions, only those that are highly rated by the Board of 19 Directors are accepted. Management assesses the credit quality of the users of space, taking into account its financial position, past experience and other factors.
The Company's credit risk arises from trade receivables amounting to €711.214, 20 other receivables amounting to €761.538 and bank balances amounting to €913.285. As of 30 June 2017, trade receivables of €135.569 (30 June 2016: €46.984) were impaired and provided for. The amount of the provision was €322.084 as of 30 June 2017 (30 June 2016: €186.515). The individually impaired receivables relate to tenants, which are in an unexpectedly difficult economic situation. It was assessed that a portion of the receivables is expected to be recovered.
Management monitors the current liquidity position of the Company based on 21 expected cash flows and expected revenue receipts. On a long-term basis, liquidity risk is defined based on the expected future cash flows at the time of entering into new credit facilities or loans and based on budgeted forecasts. Management believes that it is successful in managing the Company's liquidity risk.
The Company commenced the project for the expansion of the Mall of Cyprus by 22 about an additional area of 5.500 m2 on the first floor, which will be used for retail. entertainment and cultural purposes in order to meet the demands of its customers/visitors and also increase the variety of offerings at the mall, for which space there is high demand from local and international retailers and users. With the expansion about an additional 200 parking places shall be created. The Company has secured the necessary planning and building permits for the expansion.
The visitors traffic at The Mall of Cyprus for the year ended 30 June 2017 23 amounted to 5.227.240 people.
The Company's results for the period are set out on page 15. The Board of 24 Directors, following consideration of the availability of profits for distribution as well as the liquidity position of the Company, recommends the payment of a dividend as detailed below and the remaining profit for the year is retained.
On 7 April 2017, an interim dividend of 15 cents per share, amounting to 25 €15,000,000 was paid in relation to the profit for the current and previous years.
There were no changes in the share capital of the Company. 26
The members of the Board of Directors at 30 June 2017 and at the date of this 27 report are shown on page 1. All of them were members of the Board throughout the year ended 30 June 2017, except Mr Martin Olivier, who was appointed as Director on 5 July 2017.
In accordance with the Company's Articles of Association Messrs Takis 28 Christodoulou, John George Mavrokordatos, George Mouskides and Martin Olivier, retire at the next Annual General Meeting and, being eligible, offer themselves for re-election.
There were no material post balance sheet events, which have a bearing on the 29 understanding of the financial statements.
The Company did not operate through any branches during the period. 30
The members of the Board of Directors did not control directly or indirectly any part $31$ of the share capital of the Company, at 30 June 2017 and as at the date of this report.
Except from the balances and transactions disclosed in Note 27 of the financial 32 statements, there were no other significant contracts with the Company or its subsidiaries or related companies, in which a Director or related parties had a significant interest.
At the date of this report, the following shareholders of the Company held directly 33 or indirectly over 5% of the Company's issued share capital:
| Percentage of shareholding % |
|
|---|---|
| Direct shareholder: | |
| Atterbury Cyprus Limited | 99.67 |
| Indirect shareholders: | |
| Atterbury Onroerend Goed Houdster Europa Cooperatief U.A. (Netherlands) and Steinhoff International Holdings N.V equally through Atterbury Europe BV (Netherlands) |
97,18 |
The Independent Auditors, PricewaterhouseCoopers Limited, have expressed their 34 willingness to continue in office. 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
Montrago Services Limited Company Secretary
Nicosia, 12 October 2017
MONTRAGO SERVICES LIMITED
$(MC)$ Plc
In our opinion, the accompanying financial statements of The Mall of Cyprus (MC) Plc ("the Company") give a true and fair view of the financial position of the Company as at 30 June 2017. and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.
We have audited the financial statements which are presented in pages 15 to 51, which comprise:
The financial reporting framework that has been applied in the preparation of the financial statements is International Financial Reporting Standards 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code.
PricewaterhouseCoopers Ltd, Julia House, 3 Themistocles Dervis Street, CY-1066 Nicosia, Cyprus P O Box 21612, CY-1591 Nicosia, Cyprus
$T: +357 - 22555000$ , $F: +357 - 22555001$ , www.pwc.com/cu
PricewaterhouseCcopers Ltd is a member firm of PricewaterhouseCcopers International Ltd, each member firm of which is a separate legal entity.
PricewaterhouseCcopers Ltd is a private company registered in Cyprus (Reg. No.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the Board of Directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we considered the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality. including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
| Overall materiality | €383.000 |
|---|---|
| How we determined it | 5% on profit before income tax, rounded to the nearest thousand |
| Rationale for the materiality benchmark applied |
We chose profit before income tax as the benchmark, because in our view, it is the benchmark against which the value of the Company is most commonly measured by the users, as they are interested in the operational results of the Company, and is a generally accepted benchmark. We chose 5,0% which based on our experience is within the range of acceptable quantitative materiality thresholds. |
We agreed with those charged with governance that we would report to them individual misstatements identified during our audit above $\epsilon$ 19.150 on the financial statements respectively as well as misstatements below that amounts that, in our view, warranted reporting for qualitative reasons.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements of the Company taken as a whole, taking into account the management structure of the Company, the accounting processes and the industry in which the Company operates.
The Company's principal activity is the leasing/granting of rights of use of space of its property, the Shacolas Emporium Park which includes a Shopping Mall, an IKEA store and other building developments for retail/commercial purposes. The Company is represented by only one business reporting unit, on which we undertook a full scope audit.
Overall, we have obtained sufficient and appropriate audit evidence regarding the financial information of the Company to provide a basis for our audit opinion on the financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of Investment Properties at fair value
Refer to Note 2, Summary of Significant Accounting Policies, Note 4, Critical Accounting Estimates and Judgements and Note 18 Investment Properties.
How our audit addressed the Key Audit Matter
Our audit procedures in relation to Management's valuation of Investment Properties included an evaluation of the Management's independent external valuer's competency, capabilities and objectivity.
| Key Audit Matter | How our audit addressed the Key Audit Matter |
|---|---|
| Management has estimated the fair value of the Investment Properties to be €170.345.648 as at 30 June 2017 representing approximately 98% of the Company's total assets. The investment property valuations are dependent on certain key assumptions that require significant management judgement including terminal capitalisation rates, discount rate and fair market rents. Some of these estimates and judgements are subject to market forces and will change over time. Independent external valuations were obtained by Management in order to support the estimates. |
We have also assessed the mathematical accuracy, methodologies used and the appropriateness of the key assumptions used, by comparing with general economic and market specific expectations and engaging our in-house valuation experts to assess whether the assumptions used were within a reasonable range of acceptable assumptions. Furthermore, we evaluated the adequacy of the Company's disclosures in the financial statements regarding the valuation of Investment Properties. |
The Board of Directors is responsible for the other information. The other information comprises the Management report. Other information 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 and will 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 identified above 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 on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Board of Directors is responsible for the preparation of the 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.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
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 judgment and maintain professional scepticism throughout the audit. We also:
We communicate with those charged with governance 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.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable. related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:
This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 69 of the Auditors Law of 2017 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.
The engagement partner on the audit resulting in this independent auditor's report is Nicos A. Theodoulou.
Nicos A. Theodoulou Certified Public Accountant and Registered Auditor for and on behalf of
PricewaterhouseCoopers Limited Certified Public Accountants and Registered Auditors
Nicosia, 12 October 2017
| Note | 2017 € |
For the period from 1 April 2015 to 30 June 2016 € |
|
|---|---|---|---|
| Rights for use of space and other income Administrative expenses Other income Other losses - net Operating profit |
5 8 6 $\overline{7}$ |
11.747.633 (1.202.265) 421,257 (81.800) 10.884.825 |
14.562.527 (1.831.951) 529.124 (9.714.848) 3.544.852 |
| Finance costs Finance income Profit before income tax |
10 11 |
(3.234.076) 8.891 7.659.640 |
(2.265.394) 230 1.279.688 |
| Income tax (expense)/credit Profit and total comprehensive income for the year |
12 | (870.926) 6.788.714 |
350.205 1.629.893 |
| Earnings per share attributable to the Company's shareholders (cents per share): | |||
| Note | 2017 | 2016 | |
| Basic and fully diluted - cents | 13 | 6,8 | 1,6 |
| Note | 2017 € |
2016 € |
|
|---|---|---|---|
| Assets | |||
| Non-current assets Property, plant and equipment Investment property |
17 18 |
176.136 170.345.648 170.521.784 |
240.295 170.000.000 170.240.295 |
| Current assets Trade and other receivables Cash and bank balances |
19 20 |
1.540.771 913.285 2.454.056 |
1.409.256 575.328 1.984.584 |
| Total assets | 172.975.840 | 172.224.879 | |
| Equity and liabilities Capital and reserves Share capital Retained earnings Total equity |
21 | 50.000.000 20.110.392 70.110.392 |
50.000.000 28.321.678 78.321.678 |
| Non-current liabilities Borrowings Deferred income tax liabilities Trade and other payables |
22 23 24 |
63.149.549 17.006.394 2.492.803 82.648.746 |
66.380.102 16.648.268 2.750.895 85.779.265 |
| Current liabilities Trade and other payables Current income tax liabilities Borrowings |
25 22 |
5.038.132 247.610 14.930.960 20.216.702 |
4.354.241 149.181 3.620.514 8.123.936 |
| Total liabilities | 102.865.448 | 93.903.201 | |
| Total equity and liabilities | 172.975.840 | 172.224.879 |
On 12 October 2017 the Board of Directors of The Mall of Cyprus (MC) Plc authorised these financial statements for issue.
John George Mavrokordatos, Director
hlit.
George Mouskides, Director
| Note | Share capital € |
Retained earnings (1) € |
Total € |
|
|---|---|---|---|---|
| Balance at 1 April 2015 | 50.000.000 | 26.691.785 | 76.691.785 | |
| Comprehensive income Profit for the year |
1.629.893 | 1.629.893 | ||
| Balance at 30 June 2016 / 1 July 2016 | 50.000.000 | 28.321.678 | 78.321.678 | |
| Comprehensive income Profit for the year |
6.788.714 | 6.788.714 | ||
| Transactions with owners Dividend relating to 2017 and previous years paid in April 2017 |
14 | (15.000.000) | (15.000.000) | |
| Balance at 30 June 2017 | 50.000.000 | 20.110.392 | 70.110.392 |
Companies which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the $(1)$ Defence of the Republic Law, by the end of the two years after the end of the year of assessment to which the profits refer, will be deemed to have distributed this amount as dividend. Special contribution for defence at 15% will be payable on such deemed dividend to the extent that the shareholders for deemed dividend distribution
purposes at the end of the period of two years from the end of the year of assessment to which the profits refer, are Cyprus tax residents. The special contribution for defence rate increased to 17% in respect of profits of year of assessment 2009 and to 20% in respect of profits of years of assessment 2010 and 2011 and is reduced back to 17% in respect of profits of years of assessment 2012 onwards. The amount of this deemed dividend distribution is reduced by any actual dividend paid out of the profits of the relevant year by the end of the period of two years from the end of the year of assessment to which the profits refer. This special contribution for defence is paid by the Company for the account of the shareholders.
| Note | 2017 € |
For the period from 1 April 2015 to 30 June 2016 € |
|
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit before income tax | 7.659.640 | 1.279.688 | |
| Adjustments for: Depreciation of property, plant and equipment |
17 | 64.159 | 272.457 |
| Loss on sale of property, plant and equipment | 17 | 3.704 | |
| Fair value losses on investment property | 18 11 |
81.800 (8.891) |
9.711.144 (230) |
| Interest income Interest expense |
10 | 3.233.551 | 2.265.377 |
| 11.030.259 | 13.532.140 | ||
| Changes in working capital: | |||
| Trade and other receivables | (131.515) | 442.646 | |
| Trade and other payables | 425.799 | (1.185.180) | |
| Cash generated from operations | 11.324.543 | 12.789.606 | |
| Income tax paid | (414.371) | (1.031.417) | |
| Net cash generated from operating activities | 10.910.172 | 11.758.189 | |
| Cash flows from investing activities | |||
| Purchases of property, plant and equipment | 17 | (30.869) | |
| Purchases of investment property | 18 | (427.448) | (160.965) |
| Interest received | 8.891 | 230 | |
| Net cash used in investing activities | (418.557) | (191.604) | |
| Cash flows from financing activities | |||
| Proceeds from bank borrowings | 69.439.326 | ||
| Repayments of bank borrowings | 27(vi) | (3.430.462) 450,392 |
(59.100.000) 1.503.445 |
| Proceeds from loans from related parties Repayments of loans from related parties |
27(vi) | (4.222.230) | (16.673.570) |
| Interest paid | (2.902.596) | (2.265.377) | |
| Dividends paid to Company's shareholders | 14 | (48.762) | |
| Net cash used in financing activities | (10.153.658) | 7.096.176) | |
| Net increase in cash and cash equivalents | 337.957 | 4.470.409 | |
| Cash and cash equivalents at beginning of year | 575.328 | (3.895.081) | |
| Cash and cash equivalents at end of year | 20 | 913.285 | 575.328 |
$\bar{\mathcal{L}}$
A dividend of €14.951.238 was distributed to the parent entity, Atterbury Cyprus Ltd, which was not paid but instead credited to a loan account (Note 27(vi)).
The Company is incorporated and domiciled in Cyprus as a private limited liability company in accordance with the provisions of the Cyprus Companies Law, Cap. 113 and listed on the (unregulated) Emerging Companies Market of the Cyprus Stock Exchange. Its registered office is at 3 Verginas Street, The Mall of Cyprus, Strovolos, 2025, Nicosia, Cyprus.
The principal activity of the Company is the leasing/granting of rights of use of space of its property, the Shacolas Emporium Park which includes a Shopping Mall, an IKEA store and other building developments for retail/commercial purposes.
At the Company's Board of Directors meeting held on 30 November 2015, the Board of Directors decided to change the financial year end of the Company from 31 December to 30 June of each respective year.
Due to the change of financial year end from 31 December to 30 June, the Company's comparative financial statements are for a fifteen month period from 1 April 2015 to 30 June 2016. The reason for the change is the fact that the new shareholders financial year end is 30 June. The numbers related to the results and cash flows of the comparative period (15 months) as presented in these financial statements are not comparable to the current year's figures (12 month period).
Following a long and relatively deep economic recession, the Cyprus economy began to record positive growth in 2015 which accelerated during 2016. The restrictive measures and capital controls which were in place since March 2013 were lifted in April 2015 and on the back of the strength of the economy's performance and the strong implementation of required measures and reforms. Cyprus exited its economic adjustment programme in March 2016.
In recognition of the progress achieved on the fiscal front and the economic recovery, as well as the enactment of the foreclosure and insolvency framework, the international credit rating agencies have proceeded with a number of upgrades of the credit ratings for the Cypriot sovereign, and although the rating continues to be "non-investment grade", the Cyprus government has regained access to the capital markets. The outlook for the Cyprus economy over the medium term remains positive, however, there are downside risks to the growth projections emanating from the high levels of non performing exposures, uncertainties in the property markets, as well as potential deterioration in the external environment for Cyprus, including continuation of the recession in Russia in conditions of protracted declines in oil prices; weaker than expected growth in the euro area as a result of worsening global economic conditions; slower growth in the UK with a weakening of the pound as a result of uncertainty regarding the result of the Brexit referendum; and political uncertainty in Europe in view of Brexit and the refugee crisis.
This operating environment, could affect (1) the ability of the Company to obtain new borrowings or re-finance its existing borrowings at terms and conditions similar to those applied to earlier transactions, (2) the ability of the Company trade and other debtors to repay the amounts due to the Company (3) the ability of the company to generate sufficient turnover from its investment properties and/or offer its services to tenants. and (4) the cash flow forecasts of the Company's management in relation to the impairment assessment for financial and non-financial assets.
The Company's management has assessed whether any impairment allowances are deemed necessary for the Company's financial assets carried at amortized cost by considering the economic situation and outlook at the end of the reporting period. Impairment of trade receivables is determined using the "incurred loss" model required by International Accounting Standard 39 "Financial Instruments: Recognition and Measurement". This standard requires recognition of impairment losses for receivables that arose from past events and prohibits recognition of impairment losses that could arise from future events, no matter how likely those future events are.
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.
The Company's management believes that it is taking all the necessary measures to maintain the viability of the Company and the development of its business in the current business and economic environment.
The principal accounting policies applied 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 of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), and the requirements of the Cyprus Companies Law. Cap. 113.
As of the date of the authorisation of the financial statements, all International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) that are effective as of 1 July 2016 have been adopted by the EU through the endorsement procedure established by the European Commission, with the exception of certain provisions of IAS 39 "Financial Instruments: Recognition and Measurement" relating to portfolio hedge accounting.
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment property.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.
During the current period 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 1 July 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 a number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 July 2016, and have not been applied in preparing these financial statements. None of these is expected to have a significant 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 for the sale of services in the ordinary course of the Company's activities, net of value added taxes, returns and discounts.
The Company recognises revenue when the amount of revenue can be reliably measured, when it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Company's activities as described below. The Company bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenues earned by the Company are recognised on the following bases:
The income from rights for use of space is recognised on an accrual basis according to the substance of the relevant adjustments.
Interest income is recognised using the effective interest method.
Income arising on operating leases is recognised on a straight-line basis over the lease term.
The Company and the employees contribute to the Government Social Insurance Fund based on employees' salaries. In addition, the Company operates a defined contribution scheme the assets of which are held in a separate trustee-administered fund. The scheme is funded by payments from employees and by the Company. The Company's contributions are expensed as incurred and are included in staff costs. The Company has no further payment obligations once the contributions have been paid. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
Items included in the financial statements of each of the Company's entities 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 or valuation where items are re-measured. 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.
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
The current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the country in which the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax requiation is subject to interpretation. If applicable tax regulation is subject to interpretation, it establishes provision where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
The deferred tax liability in relation to investment property that is measured at fair value is determined assuming the property will be recovered entirely through sale.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on the Company where there is an intention to settle the balances on a net basis.
Dividend distribution to the Company's shareholders is recognised as a liability in the financial statements in the year in which the dividends are appropriately authorised and are no longer at the discretion of the Company. More specifically, interim dividends are recognised as a liability in the period in which these are authorised by the Board of Directors and in the case of final dividends, these are recognised in the period in which these are approved by the Company's shareholders.
All plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of plant and equipment.
Depreciation on plant and equipment is calculated using the straight-line method to allocate their cost to their residual values, over their estimated useful lives. The annual depreciation rates are as follws:
| % | |
|---|---|
| Plant and machinery | $10 - 20$ |
| Motor vehicles | 20 |
| Signs | 15 |
| Furniture, fixtures and office equipment | $15 - 20$ |
| Computers | 331/3 |
| Improvements of leasehold property | 50 |
| Art works | Nil |
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Expenditure for repairs and maintenance of plant and equipment is charged to the profit or loss of the year in which they were incurred. The cost of maior renovations and other subsequent expenditure are included in the carrying amount of the asset or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
Gains and losses on disposal of plant and equipment are determined by comparing proceeds with carrying amount and are recognised in "other gains/(losses) - net" in profit or loss.
Investment property is held for long-term rental yields and capital appreciation and is not occupied by the Company. Investment property is carried at fair value, representing open market value determined annually by the Company's management, after taking into consideration all relevant available information, including valuations of independent valuers, market conditions and other factors. Changes to fair value are recognised as gains or losses in the Income Statement.
Intangibles that have an indefinite useful life, including goodwill, are not subject to amortisation and are tested annually for impairment or more frequently if events and changes in circumstances indicate that they might be impaired. 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 (cashgenerating units). Non-financial assets, other than goodwill, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and for which there is no intention of trading the receivable. They are included in current assets, except for maturities greater than twelve months after the balance sheet date. These are classified as non current assets. The Company's loans and receivables comprise "trade and other receivables" and "cash and cash equivalents" in the balance sheet.
Loans and receivables are initially recognised at fair value plus transaction costs. Loans and receivables are derecognised when the rights to receive cash flows from the loans and receivables 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.
The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. An allowance for loan impairment is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original contractual terms of loans. Significant financial difficulties of the borrower, probability that the borrower will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of estimated future cash flows, discounted at effective interest rate. The amount of the provision is recognised in profit or loss.
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of estimated future cash flows, discounted at the effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within "selling and marketing costs". When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against "selling and marketing costs" in profit or loss.
Ordinary shares are classified as equity.
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset.
The carrying amount of the bank borrowings of the Company is adjusted to reflect revised estimated cash flows. The Company recalculates the carrying amount of the borrowings, by computing the present value of estimated future cash flows at the financial instrument's original effective interest rate. The adjustment is recognised in profit or loss within finance cost.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment (for liquidity services) and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
A substantial modification of the terms of an existing financial liability or a part of it is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Any gain or loss on extinguishment is recognised in profit or loss except to the extent that it arises as a result of transactions with shareholders acting in their capacity as shareholders when it is recognised directly in equity. The terms are considered to be substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. Any costs or fees incurred are recognised as part of the gain or loss on the extinguishment.
Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premium relating to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings, finance lease charges and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use or sale, are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Company and the costs can be measured reliably.
Borrowings are classified as current liabilities, unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade and other payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
In the statement of cash flows, cash and cash equivalents include cash in hand, deposits held at call with banks with original maturity of three months or less and bank overdrafts. In the balance sheet bank overdrafts are shown within borrowings in current liabilities.
Deferred income represents payments made by the various tenants for additional construction work and alterations made to the leased premises and which are recognised in the comprehensive income during the lease term.
The Company believes that there are no separate operating segments under IFRS8 'Operating Segments' for which there is a discrete financial information for making decisions on allocating resources and evaluating their performance. The Management of the Company (Board of Directors) (upper body for making operational decisions) take decisions for resource allocation and assessing their performance based on internal reports at Company level. These reports are consisent with IFRS which were used for the preparation of the financial statements. There is no additional information on the performance of individual segments.
The corresponding figures presented in these financial statements relating to the statement of comprehensive income, statement of changes in equity and statement of cash flows for the period 1 April 2015 to 30 June 2016 are not entirely comparable to current period's figures.
The Company's activities expose it to a variety of financial risks: market risk (including fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk.
The Company's risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance. Risk management is carried out by Management under policies approved by the Board of Directors. Management identifies, evaluates and hedges financial risks in close co-operation with the Company's operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk, and investment of excess liquidity.
As the Company has no significant interest-bearing assets, the Company's income and operating cash flows are substantially independent of changes in market interest rates.
The Company's interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. Borrowings at fixed rates expose the Company to fair value interest rate risk. All borrowings are issued at variable rates.
At 30 June 2017, if interest rates on Euro-denominated borrowings had been 0.5% higher/lower with all other variables held constant, post-tax profit year ended 30 June 2017 would have been €332.218 (15 month period ended 30 June 2016: €364.551) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings.
The Company's management monitors the interest rate fluctuations on a continuous basis and acts accordingly.
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions.
For banks and financial institutions, only those that are highly rated by the Board of Directors are accepted. Management assesses the credit quality of the users of space, taking into account its financial position, past experience and other factors. See Note 16 for further disclosure on credit risk.
The table below analyses the Company's financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows, except for the balances of trade and other payables that are presented using their accounting value.
| Less than 1 year € |
Between 1 and 2 vears € |
Between 2 to 5 years € |
Over 5 vears € |
|
|---|---|---|---|---|
| At 30 June 2016 Borrowings Trade and other payables |
6.060.000 4.114.057 |
6.060.000 | 19.540.000 | 60.773.371 |
| 10.174.057 | 6.060.000 | 19.540.000 | 60.773.371 | |
| Less than 1 year € |
Between 1 and 2 years € |
Between $2$ to 5 years € |
Over 5 years € |
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The management maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Company's liquidity reserve (comprises undrawn borrowing facility (Note 22) and cash and cash equivalents (Note 20) on the basis of expected cash flow. Based on their experience, management considers that the bank overdraft will continue to be renewed normally on an annual 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 the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including 'current and non-current borrowings' as shown in the balance sheet) less cash and cash equivalents. Total capital is calculated using 'equity' as shown in the balance sheet plus net debt.
During the period ended 30 June 2017, the Company's strategy, which was unchanged from prior period, was to maintain the gearing ratio within 50% to 70%. The gearing ratios at 30 June 2017 and 30 June 2016 were as follows:
| 2017 € |
2016 € |
|
|---|---|---|
| Total borrowings (Note 22) Less: cash and cash equivalents (Note 20) Net debt |
78.080.509 (913.285) 77.167.224 |
70.000.616 (575.328) 69.425.288 |
| Total equity | 70.110.392 | 78.321.678 |
| Total capital as defined by management | 147.277.616 | 147.746.966 |
| Gearing ratio | 52% | 47% |
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available for similar financial instruments.
Refer to Note 18 for disclosure of fair value for Investment Properties carried at fair value.
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 Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Income taxes
Significant judgment is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.
The fair value of investment property is determined using valuation techniques which entail a significant degree of judgement and uncertainty. Refer to Note 18 for the relevant disclosure of valuation technique used for the determination of the fair value of the Company's investment properties.
In the normal course of business the Company enters into transactions with its related parties. Judgement is applied in determining if transactions are priced at market or non-market rates, where there is no active market for such transactions.
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, including costs or fees incurred for the modification, is recognised in profit or loss.
In assessing whether a modification in the terms of a financial liability is substantial, management considers whether the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability.
Critical judgements in applying the Company's accounting policies (continued)
During the prior period, the terms of the Company's bank loan agreement were amended prior resulting into a change in the bank margin from 1,25% to 0,95%. Management has assessed whether the modification in the terms of the bank loan was substantial and concluded that this was not on the basis of the fact that the discounted present value of the cash flows under the new terms and discounted using the original effective interest rate was less that 10% different from the discounted present value of the remaining cash flows of the original financial liability. As a result, the existing bank loan was not derecognised.
The gain resulting from this modification was recognised in the Company's income statement within Finance costs, as a reduction in interest expense, since management considers that this treatment more appropriately reflects the substance of the arrangement.
| For the period from 1 April 2015 to 30 June |
||
|---|---|---|
| 2017 € |
2016 € |
|
| Rights for use of space Lease income |
11.006.287 741.346 11.747.633 |
13.633.880 928.647 14.562.527 |
| For the | ||
|---|---|---|
| period from | ||
| 1 April 2015 | ||
| to 30 June | ||
| 2017 | 2016 | |
| € | € | |
| Other operating income | 421.257 | 529.124 |
| For the | ||
|---|---|---|
| period from | ||
| 1 April 2015 | ||
| to 30 June | ||
| 2017 | 2016 | |
| € | € | |
| Investment property: | ||
| Fair value loss (Note 18) | (81.800) | (9.711.144) |
| Property, plant and equipment: | ||
| Profit/(loss) on sale (Note 17) | (3.704) | |
| Total other losses - net | (81.800) | (9.714.848) |
| 2017 € |
For the period from 1 April 2015 to 30 June 2016 € |
|
|---|---|---|
| Depreciation (Note 17) | 64.159 | 272.457 |
| Repairs and maintenance | 9.281 | |
| Insurance | 7.107 | |
| Auditors' remuneration | 25.000 | 20.000 |
| Auditors' remuneration-prior year | 8.000 | (3.131) |
| Trade receivables - impairment charge for receivables (Note 19) | 135.569 | 46.984 |
| Advertising and promotion | 634 | |
| Transportation expenses | 552 | |
| Other expenses | 6.875 | 174 |
| Professional fees | 55.675 | 87.184 |
| Directors' fees | 2.500 | 6.250 |
| Immovable property tax | 108.694 | |
| Stamps duty | 1.429 | 2.968 |
| Bank charges | 3.259 | 4.514 |
| Common expenses | 204.574 | 288.837 |
| Licenses and taxes | 70.112 | |
| Write off of receivables | 22.612 | 93.348 |
| Management fees | 491.173 | 993.026 |
| Donations | 2.000 | 2.400 |
| Total administrative expenses | 1.202.265 | 1.831.951 |
The total fees charged by the Company's statutory auditor for the statutory audit of the financial statements of the Company for the year ended 30 June 2017 amounted to €25,000 (30 June 2016: €20,000). The total fees charged by the Company's statutory auditor for the year ended 30 June 2017 for tax advisory services amounted to $\epsilon$ 7.900 (30) June 2016: €10.550), for other assurance services €23.243 (30 June 2016: €12.000).
| For the period from 1 April 2015 to 30 June |
||
|---|---|---|
| 2017 | 2016 | |
| € | € | |
| Wages and salaries | 304.158 | 347.709 |
| Social insurance costs | 34,308 | 41.198 |
| Provident fund contributions | 2.377 | 2.860 |
| Transferred to common expenses | (340.843) | (391.767) |
| Average number of staff employed during the year | 14 | 14 |
| For the period from 1 April 2015 to 30 June |
||
|---|---|---|
| 2017 | 2016 | |
| € | € | |
| Interest expense: Bank borrowings Loans from parent entity and minority shareholder (Note 27(vi)) Other interest expense |
3.064.726 168.825 |
1.878.515 384.412 2.450 |
| Total interest expense | 3.233.551 | 2.265.377 |
| Net foreign exchange loss | 525 | 17 |
| 3.234.076 | 2.265.394 |
| For the period from 1 April 2015 to 30 June |
||
|---|---|---|
| 2017 € |
2016 € |
|
| Interest income: Bank balances |
5.128 | 230 |
| Loan to parent entity (Note 27(vi)) | 3.763 | |
| 8.891 | 230 |
$\frac{1}{\sqrt{2}}\sqrt{2}$
| For the period from 1 April 2015 to 30 June |
||
|---|---|---|
| 2017 € |
2016 € |
|
| Current tax: | ||
| Corporation tax | 492.284 | 495.131 |
| Defence contribution | 16.680 | 20.895 |
| Under provision of prior years' taxes: | ||
| Defence contribution | 3.836 | 1.763 |
| Total current tax | 512.800 | 517.789 |
| Deferred tax (Note 23): | ||
| Origination and reversal of temporary differences | 358.126 | (867.994) |
| Total deferred tax | 358.126 | (867.994) |
| Income tax expense/(credit) | 870.926 | (350.205) |
The tax on the Company's profit before tax differs from the theoretical amount that would arise using the applicable tax rate as follows:
| 2017 € |
2016 € |
|
|---|---|---|
| Profit before tax | 7.659.640 | 1.279.688 |
| Tax calculated at the applicable corporation tax rate of 12,5% Tax effect of expenses not deductible for tax purposes Tax effect of allowances and income not subject to tax Special contribution for defence Difference between capital gains tax rate and income tax rate and effect of |
957.455 26.557 (700) 20.517 |
159.961 2.906 (201.487) 22.658 |
| inflation Income tax charge/(credit) |
(132.903) 870.926 |
(334.243) (350.205) |
The Company is subject to income tax on taxable profits at the rate of 12,5% as from 1 January 2013.
As from tax year 2012 brought forward losses of only five years may be utilised.
From 1 January 2009 onwards, under certain conditions, interest may be exempt from income tax and be subject only to special contribution for defence at the rate of 10%; increased to 15% as from 31 August 2011, and to 30% as from 29 April 2013.
The basic and fully diluted earnings per share are calculated by dividing the profit attributable to the Company's shareholders by the weighted average number of issued shares during the year.
| 2017 € |
2016 € |
|
|---|---|---|
| Profit for the year attributable to shareholders | 6,788.714 | 1.629.893 |
| Weighted average number of issued shares | 100.000.000 | 100.000.000 |
| Basic and diluted earnings per share - cents | 6.8 | 1.6 |
$(36)$
On 7 April 2017, an interim dividend of 15 cents per share was paid in respect of the profit for the year ended 30 June 2017 and previous years. The total dividend paid amounted to €15.000.000.
Dividends paid to individuals who are Cyprus tax residents are subject to a deduction of special contribution for defence at the rate of 17%. Consequently the dividends proposed in respect of the year 2017 will be subject to defence contribution amounting to €2.356 at the time the dividend is declared.
| Loans and receivables € |
|
|---|---|
| 30 June 2017 Assets as per balance sheet Trade and other receivables (excluding prepayments) Cash and cash equivalents |
1.472.752 913.285 |
| Total | 2.386.037 |
| Other financial liabilities € |
|
| Liabilities as per balance sheet Borrowings Trade and other payables (excluding statutory liabilities) |
78.080.509 6.829.476 |
| Total | 84.909.985 |
| Loans and receivables € |
|
| 30 June 2016 Assets as per balance sheet Trade and other receivables (excluding prepayments) Cash and cash equivalents |
1.341.659 575.328 |
| Total | 1.916.987 |
| Other financial liabilities € |
|
| Liabilities as per balance sheet Borrowings Trade and other payables (excluding statutory liabilities) |
70.000.616 7.105.136 |
| Total | 77.105.752 |
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:
| 2017 € |
2016 € |
|
|---|---|---|
| Trade receivables | ||
| Counterparties without external credit rating | ||
| Group 1 | 35.151 | 17.506 |
| Group 2 | 676.063 | 521.150 |
| Group 3 | 761.538 | 803.003 |
| 1.472.752 | 1.341.659 | |
| 2017 € |
2016 € |
|
| Cash at bank and short-term bank deposits (as per Moody's report on 30 June $2017$ (1) |
||
| Caa2 (30 June 2016: Caa3) | 912.898 | 575.100 |
(1) The rest of the balance sheet item 'cash and cash equivalents' is cash in hand.
Group 1 - existing customers (more than 6 months) with no defaults in the past.
Group 2 - existing customers (more than 6 months) with some defaults in the past. All defaults were fully recovered.
Group 3 - other receivables
None of the financial assets that are fully performing has been renegotiated in the last year.
| Hardware Ψ Computer |
Machinery € Plant and |
Ψ office equipment fixtures and Furniture, |
Φ Signs |
property Improvements of leasehold $\uppsi$ |
Art works Ψ |
Ψ Total |
|
|---|---|---|---|---|---|---|---|
| Accumulated depreciation At 1 April 2015 Cost |
(42.399) 51.120 |
(873.900) 1.169.697 |
(551.997) 574.886 |
(323.498) 341.188 |
(58.500) 58.500 |
140.490 | (1.850.294) 2.335.881 |
| Net book amount | 8.721 | 295.797 | 22.889 | 17.690 | 140.490 | 485.587 | |
| Period ended 30 June 2016 Depreciation charge (Note 8) Opening net book amount Disposals Additions |
(4.588) 959 8.721 |
(236.946) (3.704) 295.797 24.550 |
(16.609) 22.889 5.360 |
(14.314) 17,690 |
140.490 | (3.704) 485.587 30.869 (272.457) |
|
| Closing net book amount | 5.092 | 79.697 | 11.640 | 3.376 | 140.490 | 240.295 | |
| At 30 June 2016 / 1 July 2016 Accumulated depreciation Cost |
(46.987) 52.079 |
(1.110.018) 1.189.715 |
580.246 (568.606) |
341.188 (337.812) |
(58.500) 58.500 |
140.490 | (2.121.923) 2.362.218 |
| Net book amount | 5.092 | 79.697 | 11.640 | 3.376 | 140.490 | 240.295 | |
| Depreciation charge (Note 8) Year ended 30 June 2017 Opening net book amount Closing net book amount |
(3.555) 5.092 1.537 |
79.697 (54.346) 25.351 |
(2.882) 11.640 8.758 |
(3.376) 3.376 |
140.490 140.490 |
(64.159) 240.295 176.136 |
|
| Accumulated depreciation At 30 June 2017 Cost |
(50.542) 52.079 |
1.189.715 (1.164.364) |
(571.488) 580.246 |
(341.188) 341.188 |
(58.500) 58.500 |
140.490 | (2.186.082) 2.362.218 |
| Net book amount | 1.537 | 25.351 | 8.758 | 140.490 | 176.136 | ||
| Ψ 2017 |
2016 Ψ |
||||||
| Loss on sale of property, plant and equipment (Note 7) Net book amount |
(3.704) 3.704 |
The Mall of Cyprus (MC) Plc
Property, plant and equipment
17
$(39)$
$\begin{array}{c} \begin{array}{c} \begin{array}{c} \begin{array}{c} \end{array} \end{array} \ \begin{array}{c} \end{array} \end{array} \end{array}$
Proceeds from sale of property, plant and equipment $\overline{\phantom{a}}$ ig
Dini
Loss on sale of properly, pia
| 2017 € |
2016 € |
|
|---|---|---|
| At beginning of year | 170.000.000 | 179.550.179 |
| Additions | 427.448 | 160.965 |
| Fair value losses (Note 7) | (81, 800) | (9.711.144) |
| At end of year | 170.345.648 | 170.000.000 |
The investment properties are valued annually on 30 June at fair value comprising openmarket value based on valuations, by an independent, professionally qualified valuer. Fair value is based in active market process, adjusted, if necessary, for any differences in the nature, location or condition of the specific asset. If the information is not available, the Company uses alternative valuation methods such as recent prices or less active markets or discounted cash flow projections. These valuations are prepared annually by independent valuers and reviewed and adopted by management. Changes in fair value are recorded in profit or loss and are included in "other gains-net".
The Company's investment property is measured at fair value. The Company holds one class of investment property being the Shacolas Emporium Park which includes a Shopping Mall, an IKEA store, Annex 3 and Annex 4.
The following table analyses investment property carried at fair value, by valuation method. The different levels have been defined as follows:
The Company has classified its Investment property in Level 3 of the hierarchy.
| Cyprus Shopping |
30 June 2017 |
30 June 2016 |
|
|---|---|---|---|
| Mall | Total | Total | |
| € | € | ||
| Fair value hierarchy | 3 | 3 | 3 |
| Fair value at 1 July / 1 April | 170.000.000 | 170.000.000 | 179.550.179 |
| Additions (1) | 427.448 | 427.448 | 160.965 |
| Net loss from fair value adjustments on | |||
| investment property | (81.800) | (81.800) | (9.711.144) |
| Fair value at 30 June | 170.345.648 | 170.345.648 | 170.000.000 |
Bank borrowings are secured on the Company's investment property for €86.000.000 (30 June 2016: €86.000.000) (Note 22).
The Company's investment properties were valued at 30 June 2017 by indepenent professionally qualified valuers Landtourist Valuations LLC, who hold a recognised relevant professional qualification and have recent experience in the locations and segments of the investment properties valued. For all investment properties, their current use equates to the highest and best use. The Company's finance department reviews the valuations performed by the independent valuers for financial reporting purposes. Discussions of valuation processes and results are held between the CFO. Management. and the independent valuers at least once every year. At each financial year end the finance department:
Information about fair value measurement using
holds discussions with the independent valuer. $\bullet$
| significant unobservable inputs (Level 3) - 30 June 2017 | |||||||
|---|---|---|---|---|---|---|---|
| Property | Valuation € |
Valuation technique |
Discount rate | % | Terminal capitalisation rate % |
Revenue in year 1 € |
Revenue growth % |
| Cyprus | 169.942.000 | Income approach - Discounted cash flows |
$4 - 10$ | $4 - 8$ | 10.984.132 | 1 | |
| Information about fair value measurement using significant unobservable inputs (Level 3) - 30 June 2016 |
|||||||
| Terminal | |||||||
| Valuation | capitalisation | Revenue in | Revenue growth | ||||
| Property | Valuation € |
technique | Discount rate | % | rate % |
year 1 € |
% |
| Income approach - Discounted |
|||||||
| Cyprus | 170.000.000 | cash flows | $4 - 10$ | $4 - 8$ | 10.746.888 | 1 | |
| $-0.50%$ | Sensitivity of management's estimates - 30 June 2017 Change in discount rate 0,00% |
0,50% | |||||
| Cyprus Shopping Mall | Change in cap rate | $-0,50%$ $0,00\%$ 0,50% |
170.835.200 170.234.405 169.639.588 |
170.541.594 170.248.662 169.942.000 169.650.266 169.348.373 169.057.825 |
|||
| $-0.50%$ | Change in discount rate 0,00% |
0,50% | |||||
| Cyprus Shopping Mall | Change in revenue | $-10,00%$ $0,00\%$ 10,00% |
167.010.303 178.610.328 194.717.960 |
161.599.333 162.100.890 169.942.000 170.229.153 194.658.009 196.466.001 |
A change in the vacancy rate by 5%, ie the occupied spaces will be at 95%, will lead to a decrease of the fair value from the base scenario by €7.335.228, ie leading to a fair value of €162.606.772 at 30 June 2017.
| Sensitivity of management's estimates - 30 June 2016 Change in discount rate |
||||||
|---|---|---|---|---|---|---|
| $-0.50\%$ | $0.00\%$ | 0.50% | ||||
| Change in terminal | $-0.50%$ | 170.887.318 | 170.595.820 | 170.304.991 | ||
| Cyprus Shopping Mall | capitalisation rate | $0.00\%$ | 170.290.304 | 170.000.000 | 169.710.362 | |
| $0.50\%$ | 169.699.231 | 169.410.109 | 169.121.649 | |||
| Change in discount rate | ||||||
| $-0.05\%$ | $0.00\%$ | 0.50% | ||||
| $-10,00\%$ | 166.564.664 | 161.267.492 | 161.763.720 | |||
| Cyprus Shopping Mall | Change in revenue | $0.00\%$ | 177.859.916 | 170.000.000 | 169.710.362 | |
| 10,00% | 193.673.869 | 193.614.655 | 187.640.626 |
A change in the vacancy rate by 5%, ie the occupied spaces will be at 95%, will lead to a decrease of the fair value from the base scenario by €8.717.661, ie leading to a fair value of €161.282.339 at 30 June 2016.
Revenues are derived from a large number of tenants and no single tenant or group under common control contributes more than 25% of the Company's revenues.
There are inter-relationships between unobservable inputs. Increase/Decrease in the rental income per square meter results in higher/lower fair value. Increase/decrease in rental yield results in lower/higher fair value. For investment property under construction. increases in construction costs that enhance the property's features may result in an increase in future rental values. An increase in the future rental income may be linked with higher costs. If the remaining lease term increases the yield may decrease.
The valuation was determined using discounted cash flow projections based on significant unobservable inputs. These inputs include:
| Future rental cash inflows | based on the actual location, type and quality of the properties and supported by the terms of any existing lease, other contracts or external evidence such as current market rents for similar properties; |
|---|---|
| Discount rates | reflecting current market assessments of the uncertainty in the amount and timing of cash flows; |
| Estimated vacancy rates | based on current and expected future market conditions after expiry of any current lease |
| Maintenance costs | including necessary investments to maintain functionality of the property for its expected useful life; |
| Capitalisation rates | based on actual location; size and quality of the properties and taking into account market data at the valuation date; |
| Terminal value | taking into account assumptions regarding maintenance costs, vacancy rates and market rents |
For Cyprus land and buildings with a total carrying amount of €170.345.648 (2016: $\epsilon$ 170,000,000), the valuation was determined using discounted cash flow projections. Properties valued using the discounted cash flows model take into account future rental values, vacant spaces and maintenance costs discounted to the present value using an estimated discount rate. These values are adjusted for differences in the market conditions such as demand and finance affecting market sales. The most significant input into this valuation approach is license fees and discount rates.
(1) Investment Property includes an amount of €403.648 which relates to costs incurred for the extension of the Mall of Cyprus.
| 2017 € |
2016 € |
|
|---|---|---|
| Trade receivables Less: Provision for impairment of receivables |
1.033.298 (322.084) |
725.171 (186.515) |
| Trade receivables - net | 711.214 | 538.656 |
| Other Receivables Prepayments Advances |
761.538 63.224 4.795 1.540.771 |
803.003 62.802 4.795 1.409.256 |
The fair values of trade and other receivables approximate their carrying amounts.
As of 30 June 2016, trade receivables of €35.151 (30 June 2016: €17.506) were fully performing (outstanding 1 - 30 days).
Trade receivables that are less than six months past due are not considered impaired. As of 30 June 2017, trade receivables of €676.063 (30 June 2016: €521.150) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:
| 2017 € |
2016 € |
|
|---|---|---|
| Up to 3 months | 314.396 | 287.078 |
| 3 to 6 months | 361.667 | 234.072 |
| 676.063 | 521.150 |
Movements on the Company's provision for impairment of trade receivables are as follows:
| 2017 € |
2016 € |
|
|---|---|---|
| At 1 June / 1 April | 186.515 | 139.531 |
| Provision for receivables impairment (Note 8) | 135,569 | 46.984 |
| At end of year / period | 322.084 | 186,515 |
The creation and release of provision for impaired receivables have been included in 'administrative expenses' in profit or loss (Note 8). Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.
The other classes within trade and other receivables do not contain impaired or past due assets.
The maximum exposure to credit risk at the balance sheet date is the carrying value of each class of receivable mentioned above. The Company does not hold any collateral as security.
The carrying amounts of the Company's trade and other receivables are denominated in the following currencies:
| 2017 | 2016 € |
|
|---|---|---|
| Euro - functional and presentation currency | 1.540.771 | 1.409.256 |
| 2017 £ |
2016 € |
|
|---|---|---|
| Cash at bank and in hand | 913.285 | 575.328 _________ |
Cash and cash equivalents include the following for the purposes of the statement of cash flows:
| 2017 | 2016 | |
|---|---|---|
| ŧ | € | |
| Cash and bank balances | 913.285 | 575.328 |
Cash and cash equivalents are denominated in the following currencies:
| Euro - functional and presentation currency | 913.285 | 575.328 |
|---|---|---|
| Number of shares |
Share capital € |
|
|---|---|---|
| At 30 June 2016 and 30 June 2017 | 100 000 000 | 50.000.000 |
The total authorized number of ordinary shares is 171 000 000 shares (30 June 2016: 171 000 000 shares) with a par value of €0,50 per share. All issued shares are fully paid.
2017
$2016$
2016
| 2017 | 2016 | |
|---|---|---|
| € | € | |
| Current | 3.194.033 | 3.059.224 |
| Bank borrowings | ||
| Borrowings from parent entity and minority shareholder (Note 27(vi)) | 11.736.927 | 280.688 |
| Borrowings from related parties (Note 27(vi)) | 280,602 | |
| 14.930.960 | 3.620.514 | |
| Non-current | ||
| Bank borrowings | 63.149.549 | 66.380.102 |
| Total borrowings | 78.080.509 | 70,000.616 |
| Maturity of non-current borrowings | ||
| Between 1 and 2 years | 3.744.444 | 3.196.890 |
| Between 2 and 5 years | 12.535.821 | 11 925.804 |
| Over 5 years | 46.869.284 | 51.257.408 |
| 63.149.549 | 66.380.102 |
On 10 July 2015, the Company secured borrowings amounting to €84.000.000. The borrowings consist of two loans of €74,000,000 and €10,000,000 respectively. The total transaction fees amounted to €755.000 which were capitalised and are amortised over the period of the loan. These new borrowing facilities were used to repay all borrowings held at that date.
The Company's loan agreement for the existing loan amounting to €74.000.000, was amended on 6 April 2016, whereby the terms of payments were changed. The bank margin was changed from 1,25% to 0,95%.
The €10,000,000 loan was increased to an €18,000,000 loan in February 2017. The loan was increased for purposes of the expansion. Margin was also adiusted to 1.20%.
The loan of €18,000,000 bears interest at the rate of Business Bank Rate plus margin of 1,20% and is repayable by 30 May 2030. This loan has not yet been drawn by the Company and will be payable by the bank once certificate of completed work/work in progress are presented for the extension of the Mall of Cyprus.
The bank borrowings above include transaction fees amounting to €100.000 for a new loan which the company obtained on 5 May 2017, with amount of €18,000,000. The funds will be obtained once the contruction for the expansion of the mall will begin.
The bank loans are secured as follows:
By floating charge of €86.000.000 on the assets of The Mall of Cyprus (MC) Plc. $(vii)$
By lien on credit balances amounting to €253.453. $(viii)$
The weighted average effective interest rates at the balance sheet date were as follows:
| 2017 | 2016 | |
|---|---|---|
| % | % | |
| Bank borrowings | 4.61 | 2.70 |
| Borrowings from parent entity (Note 27(vi)) | 4.61 | 4.69 |
| Borrowings from related parties (Note 27(vi)) | 4.69 | 4.69 |
The Company's bank borrowings and bank overdrafts are arranged at floating rates. Borrowings at floating rates expose the Company to cash flow interest rate risk.
The exposure of the Company's borrowings to interest rate changes and the contractual repricing dates at the balance sheet dates are as follows:
| 2017 € |
2016 € |
|
|---|---|---|
| 6 months or less | 78.080.509 | 70.000.616 |
| The Company has the following undrawn borrowing facilities: | 2017 € |
2016 € |
| Floating rate: Expiring within one year |
20,000.000 | 2.000.000 |
The carrying amounts of borrowings approximate their fair value.
The carrying amounts of the Company's borrowings are denominated in the following currencies:
| 2017 | 2016 € |
|
|---|---|---|
| Euro - functional and presentation currency | 78.080.509 | 70.000.616 |
The gross movement on the deferred income tax account is as follows:
| At beginning of year | 16.648.268 | 17.516.262 |
|---|---|---|
| Credit included in profit or loss (Note 12) | 358,126 | (867.994) |
| At end of year | 17.006.394 | 16.648.268 |
The movement in deferred tax assets and liabilities during the period, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:
| Deferred tax habilities | Difference between depreciation and wear and tear allowance € |
Fair value gains on investment properties € |
Total € |
|---|---|---|---|
| At 1 April 2015 | 4.202.559 | 13.313.703 | 17.516.262 |
| Credited to: Profit or loss (Note 12) |
680.142 | (1.548.136) | (867.994) |
| At 30 June 2016/1 July 2017 | 4.882.701 | 11.765.567 | 16.648.268 |
| Charged to: Profit or loss (Note 12) |
491.244 | (133.118) | 358.126 |
| At 30 June 2017 | 5.373.945 | 11.632.449 | 17.006.394 |
| 2017 € |
2016 € |
|
|---|---|---|
| Operating lease advances Deferred Income Cash guarantee |
1.618.866 867.437 6.500 |
1.644.666 1.086.229 20,000 |
| 2.492.803 | 2.750.895 |
The carrying amounts of the Company's trade and other payables are denominated in Euro.
| 2017 € |
2016 € |
|
|---|---|---|
| Trade payables Payables to related parties (Note 27(v)) Other payables Accrued expenses Advances due to customers for contract work Deferred income |
439.699 1.180.208 2.807.539 199.744 170.759 240.183 5.038.132 |
502.011 40.404 2.817.228 589.372 165.042 240.184 4.354.241 |
The fair value of trade and other payables which are due within one year approximates their carrying amount at the balance sheet date.
The carrying amounts of the Company's trade and other payables are denominated in the following currencies:
| 2017 | 2016 | |
|---|---|---|
| € | ||
| Euro - functional and presentation currency | 5.038.132 | 4.354.241 |
$\mathcal{L}$
Capital expenditure in respect of the expansion of the Mall of Cyprus, contracted for at the balance sheet date but not yet incurred is as follows:
| 2017 € |
2016 € |
|
|---|---|---|
| Investment property | 24.750.833 | $\overline{\phantom{0}}$ |
| 24.750.833 |
The Company's license fee/ operating lease income is derived from income from rights for use of space.
The Company entered into an agreement to lease out part of the land owned by it. The lessee constructed on this land a retail outlet (IKEA). The lease term signed is for a period of 14 years and 10 months. At the end of the lease period the lessee has the right to extend the lease term for another 14 years and 10 months and at the end of the first extension the lessee has the right for a second extension of 14 years and 10 months.
The total amount of the minimum future license fees/ rentals receivable in accordance with the non-cancellable operating lease commitments are as follows:
| 2017 | 2016 | |
|---|---|---|
| € | € | |
| No later than 1 year | 10.751.542 | 10.852.491 |
| Later than 1 year and no later than 5 years | 32.472.042 | 28.531.945 |
| Later than 5 years | 3.678.159 | 4.798.842 |
| 46.901.743 | 44.183.278 |
As at the date of this report the main shareholder of the Company is Atterbury Cyprus Limited which owns 99,67% of the Company's shares.
Atterbury Cyprus Limited is controlled by Atterbury Europe BV, incorporated in Netherlands, which owns 97,5% of the Company's shares.
On 23 July 2015, Woolworth (Cyprus) Properties Plc and Ermes Department Stores Plc sold the total share capital held in the Company, at that day, totalling 99,67% to Atterbury Cyprus Limited.
The ultimate parent entity which prepares the consolidated financial statements of the largest body of undertakings of which the Company forms part as a subsidiary undertaking, is Steinhoff International Holdings NV, incorporated in Netherlands and its consolidated financial statements are available at the website
www.steinhoffinternational.com. Atterbury Cyprus Limited, incorporated in Cyprus with registered office at Arch. Makariou III, 195, Neocleous House, 3030 Limassol. Cyprus, is the parent entity which prepares the consolidated financial statement of the smallest body of undertakings of which the Company forms part as a subsidiary undertaking.
| 2017 | 2016 | |
|---|---|---|
| € | € | |
| Rights for use of space/rental income: | ||
| CTC. Automotive Limited (Note 1) | 97.276 | |
| Ermes Department Stores Plc (Note 1) | 1.259.859 | |
| C.W. Artopolis Limited (Note 1) | 86.786 | |
| 1.443.921 | ||
| Sales of services: | ||
| The Mall of Engomi Plc (Note 1) | 5.000 | |
| Cyprus Trading Corporation Plc (Note 1) | 1.618 | |
| 6.618 |
Note 1: The related party transactions for the period from 1 April 2015 to 23 July 2015, have taken place with the related parties of Woolworth (Cyprus) Properties Plc, which up to 23 July 2015 owned 54,67% of the Company.
Note 2: The related party transactions from 23 July 2015 have taken place with the related parties of Atterbury Cyprus Limited, which as from 23 July 2015 owns 99.67% of the Company's shares.
| 2017 | 2016 | |
|---|---|---|
| € | € | |
| Purchases of goods: | ||
| Ermes Department Stores Plc (Note 1) | 298 | |
| Argosy Trading Company Ltd (Note 1) | 1.385 | |
| Super Home Centre (DIY) Limited (Note 1) | 2.653 | |
| CTC Automotive Limited (Note 1) | 60.809 | |
| 65.145 | ||
| Purchases of services: | ||
| Woolworth (Cyprus) Properties Plc (Note 1) | 18.182 | |
| Atterbury Cyprus Limited (Note 2) | 73.198 | 266,000 |
| Atterbury Asset Managers (Note 2) | 188.908 | |
| Atterbury Europe Services B.V (Note 2) | 379.904 | 356.362 |
| Atterbury Europe Services GmbH (Note 2) | 257.500 | |
| 710.602 | 829.452 |
Note 1: The related party transactions for the period from 1 April 2015 to 23 July 2015, have taken place with the related parties of Woolworth (Cyprus) Properties Plc, which up to 23 July 2015 owned 54,67% of the Company.
Note 2: The related party transactions from 23 July 2015 have taken place with the related parties of Atterbury Cyprus Limited, which as from 23 July 2015 owns 99,67% of the Company's shares.
The compensation of key management personnel is as follows:
| 40 I I € |
20 I V € |
|
|---|---|---|
| Salaries | 97.300 | 64.193 |
The total remuneration of the Directors was as follows:
| 2017 € |
2016 € |
|
|---|---|---|
| Fees | 2.500 | 6.250 |
| 2017 | 2016 | |
|---|---|---|
| € | ||
| Payables to related parties (Note 25): | ||
| Fliptype Holdings Ltd | 8.844 | |
| Atterbury Europe GmbH | $\blacksquare$ | 31.560 |
| Atterbury Cyprus Ltd | 1,180,208 | |
| 1.180.208 | 40.404 |
The above balances bear no interest and are repayable on demand.
The above companies are related due to common ownership.
$0.047$
Contractor
$2016$
| 2017 € |
2016 € |
|
|---|---|---|
| Borrowings from former parent entity: | ||
| At beginning of year | 11.918.630 | |
| Borrowings advanced during period | 49.051 | |
| Borrowings repaid during year | (11.494.096) | |
| Borrowings assigned to related paty | (651.608) | |
| Interest charged (Note 10) | 178.023 | |
| At end of year (Note 22) |
The above amount payable to former parent company, Woolworth (Cyprus) Properties Plc, was bearing interest at the rate of 5,00%. An amount of €651.608 was assigned to The Mall of Engomi Plc (previously Woolworth Commercial Centre Plc) on 23 July 2015. The amount payable was fully repaid during the prior year.
| 2017 | 2016 | |
|---|---|---|
| € | € | |
| Borrowings from parent entity: | ||
| At beginning of year | 280.688 | |
| Borrowings advanced during year | 93.192 | 1.147.560 |
| Borrowings assigned from related party | 3.610.130 | |
| Borrowings repaid during year | (3.784.761) | (2.770.700) |
| Dividends payable to related party capitalised | 14.951.238 | |
| Borrowings assigned to related party | (1.518.444) | |
| Transfer from/(to) current account | 43.553 | (300.000) |
| Interest charged (Note 10) | 156,780 | 112.142 |
| Interest income (Note 11) | (3.763) | |
| At end of year (Note 22) | 11.736.927 | 280.688 |
The amount payable to parent company, Atterbury Cyprus Limited bears interest at the rate of 4,54% (30 June 2016: 4,69%). No terms or conditions have been agreed for its repayment and security.
| 2017 | 2016 | |
|---|---|---|
| € | € | |
| Borrowings from related party: | ||
| At beginning of year | 280.602 | 3.812.785 |
| Borrowings advanced during year | 357.200 | 6.835 |
| Borrowings assigned from related party | 651.608 | |
| Borrowings repaid during year | (649.847) | (991.282) |
| Borrowings assigned to related party | (3.293.591) | |
| Interest charged (Note10) | 12.045 | 94.247 |
| At end of year (Note 22) | 280,602 | |
The above amount payable to related company, The Mall of Engomi (ME) Plc (formerly Woolworth Commercial Centre Plc) bears interest at the rate of 4,69% and was repaid during the year.
The following guarantees were provided to the Company by its parent Company and other related entities as security for its borrowings:
a) Atterbury Cyprus Limited guaranteed the loans of the Company for the amount of €76.400.000 (Note 22).
b) The Mall of Engomi (ME) Plc guaranteed the loans of the Company for the amount of €86.000.000 (Note 22).
c) Pledge of 52 300 000 shares held by Atterbury Cyprus Limited in The Mall of Cyprus (MC) Plc (Note 22).
The Company guarantees the loan of The Mall of Engomi (ME) Plc for the amount of €23,000,000. No liabilities are expected to arise.
There were no material events after the balance sheet date, which have a bearing on the understanding of the financial statements.
Independent auditor's report on pages 9 to 14.
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