CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS. for the six month period ended June 30, 2015

Transcription

1 CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS for the six month period ended June 30, 2015

2 CONTENT 2

3 Board of Directors report 2 19 Interim consolidated statement of comprehensive income Interim consolidated statement of financial position Interim consolidated statement of changes in equity Interim consolidated statement of cash flows Condensed notes to the interim consolidated financial statements

4 1. BOARD OF DIRECTORS REPORT BOARD OF DIRECTORS REPORT 2

5 KEY FINANCIALS OPERATIONAL RESULTS REVENUE H1 10,542 17,082 62% ADJUSTED EBITDA H1 8,778 H ,657 CHANGE 67% NET PROFIT H1 49,327 H ,147 CHANGE 137% EPS (BASIC) H H CHANGE 76% CASH FLOW FROM OPERATIONS H1 8,112 H ,691 CHANGE 69% FFO I H1 4,815 H ,053 CHANGE 88% FFO I PER SHARE H1 H CHANGE () () () (In euro) () () (In euro cent) H CHANGE % DEC 14 JUNE % 40% JUNE 2015 ASSUMING CONVERSION* 21% DEC 14 JUNE 2015 CHANGE KEY FINANCE RATIOS LOANTOVALUE EPRA NAV () 564,096 56% 361,942 * The convertible bond is in the money ASSET DATA HOTEL ASSETS DEC 14 MAR 15 JUN 15 JUL 15 HOTEL ROOMS DEC 14 MAR 15 JUN 15 JUL ,000 5,800 8,000 8,300 3

6 HIGHLIGHTS & ACHIEVEMENTS Portfolio growth to 52 hotels as of July from 41 in March 2015 and hotel rooms rising by 43% to 8,300 since March 15 EPRA NAV increased from 362 million at the end of December to 564 million at the end of June 2015 Strong rise in lease revenue with July 2015 run rate growing to 44 million Growth reflected in FFO I run rate as of July 2015 of 24 million Conservative capital structure with an LTV of 40% and an ICR of 3.7 Increased visibility and continuous trading through the listing on the Euronext stock market segment Alternext HOTEL ASSET & ROOM GROWTH Hotel Assets 34 8,000 5,800 5,000 2,700 Hotel Rooms CAGR Hotel Rooms +103% 8,300 FINANCIAL POSITION HIGHLIGHTS Mar 15 Jun 15 LEASE REVENUE (in millions) 44 Jul 15 As of June 2015 Dec Total Assets 801, ,244 Investment Property 1) 740, ,128 Total Equity 345, ,079 EPRA NAV 564, ,942 Loans and borrowings 206, ,544 Convertible bonds 138,487 96,728 Loan To Value 40% 40% Loan To Value assuming conversion 2) 21% 18% Equity Ratio 43% 42% Equity Ratio assuming conversion 2) 61% 60% 1) including advanced payment 2) The convertible bond is in the money and has started to be converted BOARD OF DIRECTORS REPORT FY 14 4 Annualized H1 15 Jul 15 run rate Philipp von Bodman (CEO) at the Bell Ceremony, inaugurating PCI s trading on Alternext

7 THE COMPANY Primecity Investment PLC ( PCI or the Company ) and its investees (the Group ) Board of Directors hereby submits the interim report as of June 30, Stralsund/Rügen The figures presented in this Board of Directors Report are based on the condensed interim consolidated financial statements as of June 30, 2015, unless stated otherwise. PCI is a specialist hotel investment company with main focus on investing in and repositioning of underperforming hotel properties in key German locations. As of July 2015, PCI s total portfolio includes approximately 8,300 hotel rooms in 52 hotel properties (the Portfolio ). The hotel properties are located in German key locations which benefit from strong demand through tourism, business and exhibitions, such as Berlin, Munich, Hamburg, Frankfurt, Dresden, Düsseldorf, Mannheim and Leipzig. Hamburg Bremen Berlin Hanover Osnabrück Potsdam Braunschweig Bielefeld Dortmund Duisburg Neuss Düsseldorf Dessau Halle Mettmann Leipzig Kassel Cologne Dresden Frankfurt Mainz Mannheim Saarbrücken BadenBaden Stuttgart Munich Bad Reichenhall 5

8 6 1. BOARD OF DIRECTORS REPORT

9 VALUE DRIVERS 01 Proven business model and successful trackrecord Highly cash generative existing portfolio resulting from successful repositioning through accretive capital deployment Proven ability to drive operational performance and expand lease multiples showcased in profitable exits Significant upside potential in the existing hotel portfolio 02 Strong pipeline 03 Structural niche position with high barriers to entry 04 Financially sound with a strong balance sheet 05 Unique play on the sector with distinct return profile Capital appreciation opportunities through appropriate asset selection and acquisitions at attractive valuations Incumbent preferred buyer status gives access to offmarket transactions away from auction pressures Strong links to leading hotel management companies Structural supply of assets in the most liquid hotel investment market segment (34 stars) Significant asset base Conservative capital structure with no legacy balance sheet issues Pure play and active ownership business model Distinct return profile and investment merits 7

10 COMPANY STRATEGY REPOSITIONING UNDERPERFORMING HOTEL PROPERTIES IN ATTRACTIVE LOCATIONS PRIMARILY IN GERMANY PCI targets investments in underperforming assets which are located in touristic and commercially attractive locations primarily in Germany. PCI believes these markets offer favorable fundamentals that will support profits and growth in the foreseeable future. The Portfolio is located in attractive tourism and business locations such as Berlin, Munich, Hamburg, Frankfurt, Dresden, Düsseldorf, Mannheim and Leipzig. PCI believes its business platform benefits from its skilled personnel and reliable practices that enable the Company to perform strongly and to further expand in the hotel property market. The Company also believes that the business environment will provide abundant acquisition opportunities in the attractive markets it targets, to support its external growth strategy in the medium to long term. 1. BOARD OF DIRECTORS REPORT PCI puts emphasis on optimizing its value chain starting from the acquisition stage, whereby it benefits from strong connections to deal sources, through forming the most advantageous management and operational structure for each individual hotel asset. PCI is an asset owner which performs intensive active asset management and does not participate in the daily operations of hotels. 8 Deal Sourcing and Acquisition The Company has established a strong deal sourcing network, based on over 11 years experience and its reputation as a reliable deal maker, from more than 120 turnaround projects. The sourcing network includes among others, banks, investment funds, brokers and other real estate companies. Having been active in the market for a decade, the Company has positioned itself as a preferred buyer, resulting in a vivid and diverse deal flow of off market deals. The Company has developed the ability to identify and cherry pick the properties with the highest potential. For its acquisitions the Company is applying the following specific criteria: Low acquisition price Significant upside potential High cash flow generation Repositioning potential Branding opportunities Due Diligence and Execution As part of the due diligence phase, the Company measures and analyzes the compatibility of the potential acquisition with the entire portfolio and seeks synergy effects. In parallel, the due diligence team examines both the financial and legal aspects of the deal carefully and thoroughly. Once the deal is approved, PCI has the capability to execute rapidly and smoothly. PCI is not bound by any investment mandates. Thus, PCI has established itself as a reliable and responsive deal partner with a proven trackrecord.

11 Deal sourcing Due diligence Continuous through various channels Assessment of all value drivers Asset cherrypicking Careful analysis of opportunities Turnaround process Repositioning of product Optimal branding Targeted capex Execution Professional and smooth takeover Asset & portfolio management Benefit from highyielding property Turnaround Process After the takeover stage, the Company repositions the asset, by fitting each property with a detailed tailormade business plan. PCI has strong expertise in property modernisation and optimal brand repositioning. Thus, the turnaround process starts with selecting the ideal market position such as the brand and star category, following a comprehensive demand and supply analysis of the specific location. The turnaround includes targeted capex and refurbishment activities, which on one hand support the implementation of the repositioning plan and on the other enable the reduction of nonrecoverable costs in the future. During the repositioning phase, PCI integrates the asset into its network with advanced inhouse proprietary IT software, which was developed to adapt to every asset s specific needs. The unique platform is a deciding component in enabling the hotel operator to exceed market averages in cost savings, revenue generation and thus profitability. The turnaround process is facilitated by the access to synergies from extensive accumulated experience and market knowledge with regard to highpotential underperforming properties, which is the Company s most unique sustainable competitive advantage Asset & Portfolio Management During the repositioning process the Company leases out the hotel to external operators. The hotel operators are carefully selected according to their capabilities and track record. An integral component of the business plan is a long term fixed rental lease, which increases the cash flow visibility and decreases the dependency on the operational business. PCI keeps tight relations with the operators and monitors their performance on an ongoing basis, making use of its tailor made IT system. PCI continuous to support the operator with cost saving measures, mainly derived from economy of scale benefits and bargaining power of the Company. 9

12 COMPANY STRATEGY A UNIQUE VALUE CREATION APPROACH The Company s management believes it is well positioned in this exclusive niche, benefitting from the demand gap, where it can most efficiently tap into its strongest competitive advantages. Throughout the turnaround process the Company produces significant value by achieving the optimal positioning of the property, reflecting the stabilizations and high cash flow yields of the repositioned properties. PCI creates value through a repositioning process based on proprietary market intelligence and tacit industry knowledge built up over 11 years. The repositioning process involves influencing many different value creation levers. PCI s area of expertise and operational focus is in responding to the growing demand for hotels of 3 to 4 star categories, by efficiently utilizing abundantly available distressed and underperforming properties, from all brands and star categories. These properties attract little investor attention because of the profound knowhow and experience required to correctly address their unique challenges. Additionally, PCI s reputation and track record have rooted the Company s connection to the strongest international hotel brands, enabling PCI to select the most suitable brand for each asset. ASSET REPOSITIONING Distressed Assets 1 2 Initial capex & rebranding Cost and top line synergies from network integration Optimal operator Upgraded marketing platform 1. BOARD OF DIRECTORS REPORT Optimal brand 10 Demand Gap Proprietary Market Intelligence Stabilised Assets 3 Repositioning of asset Optimal size and room count Optimal category Reduced cost structure

13 TRADING DATA AND ANALYST COVERAGE PCI was listed in October and trades on the stock market segment Alternext on the Paris Stock Exchange Euronext. Listing significantly increased visibility and broadened the investor pool, particularly enabling private investors to participate in the Company s success. Several equity research analysts follow the Company s growth on a continuous basis. Placement Euronext Paris Stock market segment Alternext First listing Number of shares (as of 30 June 2015) 103,266,661 Number of shares on a fully diluted basis (as of 30 June 2015) 150,000,000 Free float (June 2015) 44% Symbol ALPCI Recommendation Buy Target Price 5.60 Last updated Recommendation Buy Target Price 4.40 Last updated Recommendation Buy Target Price 7.50 Last updated

14 KEY STRENGTHS HIGHLY DIVERSIFIED PORTFOLIO WITH SIGNIFICANT REPOSITIONING POTENTIAL BRANDING PARTNERS The current Portfolio enables the Company on one hand to benefit from economy of scale and on the other provides a diverse and well allocated portfolio throughout Germany with different brands and operators. PCI s assets are branded with international brands such as Wyndham, Radisson Blu and Mercure, and the majority consists of 4 star hotels, responding to the highest market demand of star category. PCI s hotels are branded through leading franchising partners offering numerous subbrands, which provides PCI with economy of scale benefits as well as flexibility and bargaining power with each franchisor. The choice of franchisor plays an integral part in the turnaround success of the assets. Thus PCI chooses franchisors with strong brands, a competitive booking platform and a large scale of categories which provides high flexibility for the branding of PCI s assets. HOTEL STAR CATEGORY (BY VALUE) 4 Stars, 80% 3 Stars, 15% 2 Stars, 5% LOGO Nº dossier : E Date : 31/05/11 Validation DA/DC : 1. BOARD OF DIRECTORS REPORT Validation Client

15 KEY STRENGTHS UNIQUE BUSINESS PLATFORM SUPPORTS INTERNAL AND EXTERNAL GROWTH PCI s business platform provides efficient inhouse asset management of its existing portfolio while supporting the Company s strategy for further growth. In particular, its advanced proprietary IT/software system enables the Company s management to closely monitor its portfolio and the performance of the operators and their adherence to the business plans set forth, as well as to constantly analyze growth opportunities in different schemes. The management believes that the platform has the capacity to grow the Portfolio at marginal costs, and further create economies of scale. The integrated nature of its platform also means that PCI is well positioned to make business decisions swiftly, responding efficiently to market opportunities. ACQUISITION, OPPORTUNITIES AND DEAL FLOW PCI s established reputation in various local markets as well as on the national level provides access to multiple investment opportunities often before they are widely promoted or publicized, and frequently at appealing conditions, reflecting the Company s perceived quality as counterparty and its proven trackrecord. The advantage has also extended to improved access to financing and helped creating strong relationships with debt providers. The Company benefits from a strong pipeline of deals which are already in different stages of the due diligence and acquisition process. PCI constructs a specific financing structure for each asset fitting to the property s business plan. The financial conditions are based on a stable and operational asset with a long term fixed lease agreement, providing a low cost of debt. PCI s cost of bank debt is 3% and 90% of the total debt is hedged against interest rate risks, bringing volatility and uncertainty to a minimum. In November, PCI issued a convertible bond (ISIN: XS ) with a principle amount of 100 million and a 5 year maturity which is listed on the Frankfurt Stock Exchange. In February 2015, PCI tapped up its convertible bond by an additional 50 million. The February issuance was oversubscribed and placed at a 5% premium to the nominal value. The convertible bond is in the money and as of June % has been converted into equity. The current loan to value ratio of 40%, an Interest Coverage Ratio of 3.7 and an unencumbered ratio of 30% reflect PCI s conservative leverage with a high headroom and financial flexibility for further external growth. The LTV financial headroom on each loan increases over time with the continuous value creation. UNENCUMBERED RATIO TRACK RECORD OF RAPID DEAL EXECUTION Certainty of execution guaranteed through a solid funding structure and extensive execution experience provide PCI with a competitive advantage in the distressed deal market. The seller is looking to execute the deal as fast as possible as rapid liquidity injections are needed. Quick and effective execution capabilities enable PCI to avoid public auctions and bid up costs. unencumbered, 30% encumbered, 70% STRONG TRACK RECORD OF VALUE CREATION AND REPOSITIONING OF ASSETS PCI has steadily demonstrated its skill in acquiring properties with significant potential, and in designing and implementing specific strategies for each asset. PCI s continuous asset management efforts result not only in improved portfolio yields, but also in tangible long term value creation that is immediately captured in PCI s financial performance. Moreover, PCI has proven its ability to realize capital gains and provide shareholders with high returns. LTV 40% HEALTHY CAPITAL STRUCTURE PROVIDING FINANCIAL FLEXIBILITY FOR FUTURE GROWTH PCI s ability to finance its assets, which either were distressed or could not be refinanced under the previous management, with favourable conditions demonstrates the Company s competitive strength. PCI has established a strong financing network and its Portfolio is currently financed by 9 banks through 18 separate loans. The loans are nonrecourse, noncrosscollateral and noncrossdefault. 21% June 15 June 15 assuming conversion 13

16 NOTES ON BUSINESS PERFORMANCE QUARTERLY REVENUE DEVELOPMENT (in 000 ) CONSOLIDATED PROFIT AND LOSS KEY FIGURES for the 6 months ended June 30, 9, ,415 Revenue 17,082 10,542 Capital gains, property revaluations and other income 114,893 45,424 Property operating expenses (1,064) (671) Administrative & other expenses (1,392) (1,093) Operating profit 129,519 54,202 Adjusted EBITDA 14,657 8,778 5,293 5, JanuaryMarch 2015 AprilJune ANNUALIZED REVENUE DEVELOPMENT (in 000 ) 44,000 42,000 Finance expenses (4,009) (2,873) Other financial results 8,845 (2,120) Current tax expenses (1,595) (1,090) Deferred tax expenses (15,613) 1,208 Profit for the period 117,147 49,327 REVENUE 34,164 H annualized June 15 run rate July 15 run rate CAPITAL GAINS, PROPERTY REVALUATIONS AND OTHER INCOME for the 6 months ended June 30, for the 6 months ended June 30, Total 17,082 10, BOARD OF DIRECTORS REPORT Total 14 Compared to the first six months of, lease rental income increased by 62% to 17.1 million in H This significant growth stems to a large extent from new additions made to the portfolio as well as the organic progression of the Company s turnaround activities and repositioning of its hotel assets which resulted in higher contractual leases. The vast majority of the acquisitions during the period were executed towards the second quarter of 2015 and naturally could not contribute to the Company s revenue to their full extent. Thus, the revenue figure for the first six months of 2015 does not represent the full impact of the portfolio held at the end of the period. This lagged effect was less present in the comparable period of as the acquisitions occurred in the beginning of the first quarter. A better indication provides the monthly annualized lease run rate as of the end of the reporting period which amounted to 42 million and 44 million as of July Run rate figures reflect the current portfolio s lease generation while excluding any further operational improvements and potential uplifts. 114,893 45,424 Capital gains, property revaluations and other income amounted in the first half of 2015 to million compared to 45.4 million in H1. Property revaluations, which are based on value assessments by independent professionally qualified valuators, mirror the Company s ability for value creation through its repositioning activities of its assets. PCI s competitive advantage lies in its unique turnaround expertise paired with extensive market knowledge, placing its hotels into the optimal star category, equipping each individual property with an appropriate branding partner and using the suitable operator to perform the value creation strategy. This is directly reflected in the growing and executed lease potential which leads to significant value extraction that unfolds during and after repositioning takes place and continuously over the term of the lease agreement. As various steps of the turnaround strategy are implemented immediately after acquisition the value creation starts also right after the takeover was executed. As no assets were sold in the first 6 months of 2015, the increase stems solely from value creation arising from property revaluations and business combination profits. Profits arising from business combinations, which occur when the fair value of the net assets of an entity acquired through a share deal exceed the purchase price, also contributed to the increase and verify the Company s sourcing capabilities and available supply of hotel assets for entities with a preferred buyer status in the distressed hotel market.

17 NOTES ON BUSINESS PERFORMANCE PROPERTY OPERATING EXPENSES TAXATION for the 6 months ended June 30, for the 6 months ended June 30, 2015 Total (1,064) (671) The sum of the property operating expenses, which are mainly comprised of maintenance and refurbishment costs related to the upkeep of the properties and of purchased services, was 1.1 million in the first 6 months of the year, compared to 0.67 million in the respective period of. The 59% increase is a direct result of the Company s growth, but increased less compared to the 62% revenue rise due to operational efficiencies which have offset the increase in property operating expenses. The operational efficiencies are a result of economy of scale benefits PCI has been able to generate through its advanced operating platform, the turnaround of the properties and restructuring the cost structure of newly acquired properties. The property operating expenditures are relatively low since they are covered by the operator as part of the lease agreement and PCI is only responsible for the external maintenance of the building ( roof and structures ). Current tax expenses (1,595) (1,090) Deferred tax expenses (15,613) 1,208 Total (17,208) 118 Total tax expenses rose to 17.2 million in the first half of 2015, primarily as a result of the increase in deferred tax provisions to 15.6 million, a noncash item relating to the rise in revaluation profits over the period as pointed out in the capital gains, property revaluations and other income section. This figure reflects the conservative approach PCI follows for its deferred taxes, as it accounts for the theoretical property disposal through asset deals subject to the full German real estate tax of %. Current tax expenses, which include corporate and property taxes, increased by 46% due to the growth of the Company s operating profits. PROFIT FOR THE PERIOD for the 6 months ended June 30, ADMINISTRATIVE & OTHER EXPENSES 2015 (1,392) (1,093) Administrative and other expenses, including audit, legal and marketing costs, rose by 27% to 1.4 million in H in comparison to the respective 6 month period in. This item increased only marginally compared to the Company s growth, which is reflected in the higher increase of revenues, increasing amount of acquisitions and larger portfolio base as it consists primarily of well allocated fixed costs. This modest growth also reflects PCI s strong administrative infrastructure established over the previous periods which enable economies of scale and the Company to further grow at marginal costs. NET FINANCE INCOME (EXPENSES) for the 6 months ended June 30, 2015 Finance expenses 2015 for the 6 months ended June 30, Total 2015 (4,009) (2,873) Other financial results 8,845 (2,120) Total 4,836 (4,993) Profit for the period 117,147 49,327 Basic earnings per share in Diluted earnings per share in Weighted average basic shares (in '000) 101, ,000 Weighted average basic shares (diluted) (in '000) 146, ,000 Total basic amount of shares (in '000) 103, ,000 Fully diluted amount basic shares (in '000) 150, ,000 The profit for the 6month period soared in relation to the same period in by 137% to 117 million. Main drivers of the positive result on the bottom line were a sharp rise in lease rental income and capital gains, property revaluations and other income. Basic earnings per share rose accordingly to The increase in diluted earnings per share was offset to 0.62, due to the effect of the convertible bond issuances in November and February 2015, which increased the fully diluted amount of shares by around 50%. Net finance expenses reversed from a 5.0 million expense in H1 to an income of 4.8 million in H This outcome stems from a positive development in other financial results and a relatively lower increase in finance expenses. Main drivers behind the positive result were uplifts of derivatives and gains from the sale of traded securities. These were partially offset by a rise in finance expenses, which rose by 40% between the first 6 months in 2015 and the comparable period of, significantly below the growth of the portfolio and of the total debt. 15

18 NOTES ON BUSINESS PERFORMANCE CASH FLOW ADJUSTED EBITDA AND FFO (FUNDS FROM OPERATIONS) for the 6 months ended June 30, for the 6 months ended June 30, 2015 EBITDA 129,550 Capital gains, property revaluations and other income 54,202 (114,893) (45,424) Adjusted EBITDA 14,657 8,778 Finance expenses (4,009) (2,873) Tax (1,595) (1,090) 9,053 4,815 FFO I FFO I per share in cent Adjusted EBITDA increased by 67%, comparing the first 6 months of 2015 to the same period in. The result is directly related to the strong rise in lease rental income and improved operational profitability. The significant improvement does not reflect the full contribution of the newly acquired properties which were acquired during the first half of the year. Resulting from the rise in adjusted EBIDTA the FFO I, indicating the materialized profits from operations, increased by 88% to 9.1 million in H Apart from the higher operational profits, the marginally lower increase in finance and current tax expenses in relation to the revenue growth led to a higher rise in FFO I. The FFO I increase of 88% in comparison to the revenue increase of 62% demonstrates PCI s ability to implement its efficiency measures on its operational cost structure and on its financing expenses. The FFO I run rate as of July 2015, including the operational profits from hotels acquired during 2015, amounted to 24 million. The slightly lower increase in FFO I per share of 85% is a result of the dilutive effect from conversions of the convertible bond during the first half of the year. As illustrated below PCI s accretive acquisitions and turnaround strategy result in strong and steady FFO growth. 23,000 24,000 19,996 16, BOARD OF DIRECTORS REPORT 13, Q1 15 Q2 15 annualized annualized Net cash provided by operating activities Net cash used in investing activities 13,691 8,112 (56,337) (5,289) Net cash provided by (used in) financing activities 62,180 (3,228) Increase (decrease) in cash and cash equivalents 19,534 (405) Cash and cash equivalents increased in the first 6 months of 2015 by 20 million. The 69% increase yearoveryear to 13.7 million in net cash provided by operating activities is the result of the increased revenue generation of the larger portfolio and its successful turnaround activities. The Company s growth is also reflected in the increase in net cash used for investing activities to 56.4 million in H which was offset by the sale of traded securities. The increase in net cash provided by financing activities increased to 62.2 million mainly from the tap up of the convertible bond of 50 million in Q ASSETS June 2015 Dec Noncurrent assets 747, ,174 Investment property* 740, ,128 53,975 65, , ,244 Current assets Total assets *including advanced payment for investment properties FFO I DEVELOPMENT (IN 000 ) FY Jun 15 run rate Jul 15 run rate Total assets increased in the first 6 months of 2015 by 56% from 513 million to 801 million. The bulk of the rise stems from the growth in investment property, with 16 further hotels in the first six months of 2015 totaling to 50 hotel assets as of the end of the period. The increase in investment property is in line with PCI s growth strategy, which is based on acquisitions made on an opportunistic basis. The increase in investment property was strongly supported by property revaluations of 110 million in the past six months, resulting from the turnaround activities.

19 NOTES ON BUSINESS PERFORMANCE LIABILITIES EPRA NAV June 2015 June 2015 Dec Total Equity 345,729 Fair Value measurements of derivative financial instruments 213,079 4,195 4,995 73,102 46,614 Convertible bond* 141,070 97,254 EPRA NAV 564, ,942 Deferred tax liabilities Dec * The convertible bond is in the money. The amount includes accrued interest and deferred income balance EPRA NAV rose by 56% from 362 million to 564 million over the first 6 months of the year. The significant increase is due to a similar strong increase of total equity, which has increased by 62% and is the result of the strong profits generated in the first half of 2015, as well as the increase in deferred tax liabilities, which are a direct result of property revaluation gains during the period. Further, the 50 million tap up of the convertible bond in February 2015, which is deep in the money and conversions have begun, added to the rise in EPRA NAV. EPRA NAV (in 000 ) 564,096 Total loans and borrowings 206, ,544 Convertible bonds 138,487 96,728 Deferred tax liabilities 73,102 46,614 Other long term liabilities 27,146 6,338 Other current liabilities Total 9,873 5, , ,165 In line with PCI s conservative leverage and the portfolio growth total liabilities rose from 300 million at the end of to 456 million as of June The rise is mainly related to the increase in bank loans of 62.4 million and a larger balance of outstanding convertible bonds, which rose as a result of the 50 million tap up in Q which was partially offset by conversions of 10 million over the period. The lower increase in financial debt in relation to the growth of the portfolio results in an increased amount of unencumbered assets which is at the end of June % of the total portfolio. Unencumbered assets provide an additional source of financial flexibility and headroom as the ability for further mortgages provides more liquidity. As PCI is in an extensive growth phase, each acquisition is carefully evaluated among many other aspects on its impact on leverage and credit metrics. During its growth, the Company has kept its leverage conservative with an LTV of 40%, or 21% assuming full conversion, and its credit metrics strong with an ICR of 3.7. Other items including deferred tax liabilities, other long term liabilities and current liabilities rose by 87% due to the growth of the Company and PCI s conservative approach in regards to deferred taxes, for which it assumes the full effect of the German real estate tax of %. 361,942 NET DEBT June ,044 Total loans and borrowings Cash and liquid assets Dec 13 Dec Dec 14 Jun , ,544 49,815 63,404 Total net debt without convertible bond 157,151 81,140 Convertible bonds 138,487 96,728 Total net debt with convertible bond 295, ,868 17

20 NOTES ON BUSINESS PERFORMANCE LTV (LOANTOVALUE) June 2015 Dec Investment property* 740, ,128 Total Debt 345, ,272 49,815 63, , ,868 40% 40% Cash and liquid assets Net Debt LTV *including advanced payment for investment properties Total Net Debt without convertible bond LTV assuming conversion 157,151 81,140 21% 18% 1. BOARD OF DIRECTORS REPORT PCI s LTV amounted to 40% in June 2015 and assuming conversion of the convertible bond, which is in the money, the LTV amounted to 21%. Having maintained the LTV in the first 6 months of 2015 while the portfolio increased by 68% illustrates the Company s commitment to its conservative financing structure and access to a diverse funding mix. The exceptionally low LTV implies a large extent of financing flexibility in the future and will enable PCI to pursue its opportunistic acquisition strategy. 18

21 DISCLAIMER The financial data and results of the Group are affected by financial and operating results of its subsidiaries. Significance of the information presented in this report is examined from the perspective of the Company including its portfolio with the joint ventures. In several cases, additional information and details are provided in order to present a comprehensive representation of the subject described, which in the Group s view is essential to this report. By order of the Board of Directors, Larnaca, Cyprus, August 10, 2015 Elena Koushos Director Philipp von Bodman Director, CEO Jelena Afxentiou Director 19

22 2. INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 20 FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2015 The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements.

23 For the six months ended June 30, 2015 Note Revenue Capital gains, property revaluations and other income 4, 6 For the three months ended June 30, ,082 10,542 9,667 5, ,893 45,424 83,909 9,388 Property operating expenses (1,064) (671) (520) (356) Administrative and other expenses (1,392) (1,093) (785) (708) Operating profit 129,519 54,202 92,271 13,617 Finance expenses (4,009) (2,873) (2,569) (1,519) Other financial results 8,845 (2,120) 516 (1,027) Net finance income (expenses) 4,836 (4,993) 2,053 (2,546) 134,355 49,209 90,218 11,071 Profit before tax Current tax expenses 5 (1,595) (1,090) (810) (691) Deferred tax (expenses) income 5 (15,613) 1,208 (12,501) 594 Tax and deferred tax (expenses) income (17,208) 118 (13,311) (97) Profit for the period 117,147 49,327 76,907 10, ,147 49,327 76,907 10,974 87,251 49,293 47,759 10,779 Other comprehensive income for the period Total comprehensive income for the period Profit attributable to: Owners of the Company Noncontrolling interests 29, , ,147 49,327 76,907 10,974 Basic earnings per share Diluted earnings per share Net earnings per share attributable to the owners of the Company (in euro): The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements. 21

24 3. INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION 22 AS AT JUNE 30, 2015 The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements.

25 Note June 30 December Unaudited Audited Assets Equipment and intangible assets Investment property Advanced payment for investment property Deferred tax assets Other long term financial assets Noncurrent assets Cash and cash equivalents Short term deposits Trade securities at fair value through profit and loss Trade and other receivables Other financial assets Current assets Total assets 6 4,476 4, , ,995 3,613 20, , , ,174 24,226 4,692 2,768 1,718 22,821 56,994 3,624 1, ,975 65, , ,244 The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements. 23

26 INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED) June 30 Note December Unaudited Audited Equity Share capital 8 Premium and other capital reserves 8 1,033 1,002 11,096 1,747 Retained earnings 264, ,625 Equity attributable to the owners of the Company 276, ,374 69,485 33, , ,079 Noncontrolling interests Total equity Liabilities Loans and borrowings 7 199, ,689 Convertible bonds 7 138,487 96,728 Derivative financial instruments Deferred tax liabilities 22,951 1,343 Noncurrent liabilities 437, ,369 7,767 6,855 7 Trade and other payables 6,103 3,313 Provisions and current liabilities 3,770 2,628 17,640 12,796 Total liabilities 455, ,165 Total equity and liabilities 801, ,244 Current liabilities 3. INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION 4,995 46,614 Other long term liabilities Current portion of long term loans 24 4,195 73,102 The Board of Directors of Primecity Investment PLC authorized these condensed interim consolidated financial statements for issuance on August 10, 2015 Elena Koushos Director Nicosia The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements. Philipp von Bodman Director, CEO Berlin Jelena Afxentiou Director Larnaca

27 The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements. 25

28 4. INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 26 FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2015 The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements.

29 Attributable to the owners of the Company Premium and other capital reserves Share capital Retained earnings Noncontrolling interests Total Total equity 1,002 1, , ,374 33, ,079 Profit for the period 87,251 87,251 29, ,147 Other comprehensive income for the period Total comprehensive income for the period 87,251 87,251 29, ,147 Noncontrolling interests arising from initially consolidated companies and other transactions ,884 6,123 Equity component related to convertible bond issued Issuance of shares related to conversion of convertible bonds 31 8,863 8,894 8,894 Balance as at June 30, 2015 (Unaudited) 1,033 11, , ,244 69, ,729 Balance as at December 31, 2013 (Audited) 9 78,319 78,328 6,172 84,500 Profit for the period 49,293 49, ,327 Other comprehensive income for the period Total comprehensive income for the period 49,293 49, ,327 Noncontrolling interests arising from initially consolidated companies 7,694 7,694 Balance as at June 30, (Unaudited) 9 127, ,621 13, ,521 Balance as at December 31, (Audited) The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements. 27

30 5. INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS 28 FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2015 The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements.

31 For the six months ended June 30, 2015 Cash flows from operating activities Profit for the period 117,147 49, Adjustments for the profit: Depreciation and amortization Capital gains, property revaluations and other income (114,893) (45,424) Finance income (expenses), net (4,836) 4,993 Tax and deferred tax expenses 17,208 (118) 14,657 8,778 Changes in: Trade and other receivables Trade and other payables 753 (772) Provisions for other liabilities and charges (808) ,748 8,828 Tax paid (1,057) (716) Net cash provided by operating activities 13,691 8,112 Proceeds from disposal of (investments in) investment property, net (20,378) 7,717 Acquisition of subsidiaries, net of cash acquired (63,005) (5,546) 27,046 (*) (7,460) (56,337) (5,289) Cash flows from investing activities Proceeds from (purchase of) investment in trade securities and other financial assets Net cash used in investing activities Cash flows from financing activities Proceeds from issuance of convertible bonds, net 51,710 Proceeds (repayment) of loans from financial institutions 19,036 (3,522) Amortization of loans from financial institutions (3,484) (2,989) 5,885 Proceeds of loans from related companies and shareholders, net Finance expenses paid, net (5,082) (2,602) Net cash provided by (used in) financing activities 62,180 (3,228) Increase (decrease) in cash and cash equivalents 19,534 (405) Cash and cash equivalents at the beginning of the period 4,692 1,119 Cash and cash equivalents at the end of the period 24, (*) Reclassified. The notes on pages 30 to 41 form an integral part of these condensed notes to the interim consolidated financial statements. 29

32 6. CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 30 FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2015

33 1. GENERAL A. INCORPORATION AND PRINCIPAL ACTIVITIES Primecity Investment PLC ( the Company ) was incorporated on August 10, 2004 as a private limited liability company under the Cyprus Companies Law, Cap Its Registered Office is at Faros Avenue, Spyros Thalassines Alkyonides, Pervolia 7560, Larnaca, Cyprus. These condensed interim consolidated financial statements ( interim financial statements ) for the six month period ended June 30, 2015 consist of the financial statements of the Company and its subsidiaries ( the Group ). The Company is a holding company which holds, together with its investees real estate properties in Germany. Its vision is buying, redeveloping, turning around and optimizing the real estate properties. As of June 30, 2015, the Group s portfolio consists of more than 8,000 hotel rooms. B. LISTING ON THE PARIS STOCK EXCHANGE On October 31,, the Company was listed on the NYSE Euronext Paris Stock Exchange in the Marché Libre XMLI stock market segment. The Company registered 200,000,000 ordinary shares with a par value of euro 0.01 per share, out of which 100,000,000 and additional amounts from converted bond units were fully paid. C. CAPITAL AND BONDS INCREASES For information about capital and bonds increases, please see noted 8 and 7, respectively. D. DEFINITIONS The Company Primecity Investment PLC The Group The Company and its investees Subsidiaries Companies that are controlled by the Company (as defined in IFRS 10) and whose financial statements are consolidated with those of the Company Associates Companies over which the Company has significant influence (as defined in IAS 28) and that are not subsidiaries. The Company's investment therein is included in the consolidated financial statements of the Company using equity method of accounting Investees Subsidiaries, jointly controlled entities and associates Related parties As defined in IAS 24 The period The six months ended on June 30,

34 2. BASIS OF PREPARATION (A) STATEMENT OF COMPLIANCE These condensed interim consolidated financial statements have been prepared in accordance with IAS 34 interim financial reporting. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group s financial position and performance since the last annual consolidated financial statements as at and for the year ended December 31,. These condensed financial statements have not been reviewed by the auditor. For further information on the accounting and measurement policies used, please refer to the consolidated financial statements as at December 31,, which are the basis for these interim consolidated financial statements. These condensed interim consolidated financial statements were authorized to be issued by the Board of Directors on August 10, (B) JUDGMENTS AND ESTIMATES In preparing these condensed interim consolidated financial statements, management applies judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. 6. CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS The significant judgments made by management in applying the Group s accounting policies and the key sources of estimation uncertainty are consistent with those that applied to the consolidated financial statements as at and for the year ended December 31,. 32 (C) OPERATING SEGMENTS The Group meets the definition of operating in one operating segment. An operating segment is a component of the Group that meets the following three criteria: Is engaged in business activities from which it may earn revenues and incur expenses, including revenues and expenses relating to intragroup transactions; whose operating results are regularly reviewed by the Group s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and For which separate financial information is available. (D) SEASONALITY OF OPERATIONS Rental income, other revenues and costs are received and incurred smoothly over the accounting period. Therefore no additional disclosures are made in the condensed interim consolidated financial statements. (E) GOING CONCERN These condensed interim consolidated financial statements are prepared on a going concern basis.

35 33

36 3. SIGNIFICANT ACCOUNTING POLICIES (A) BASIS OF CONSOLIDATION 6. CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS The accounting policies adopted in the preparation of the condensed interim consolidated financial statements are consistent with those followed in the preparation of the Group s annual financial statements for the year ended on December 31,. The following standards, amendments to standards and interpretations have been issued but are not yet effective for annual periods beginning on January 1, Those which may be relevant to the Group are set out below. The Group does not plan to early adopt these standards ACQUISITION OF SUBSIDIARIES AND NONCONTROLLING INTERESTS During the reporting period the Group obtained control on several companies through business combination. The significant net impacts on the interim consolidated statement of comprehensive income and interim consolidated statements of financial position of the Group are as follows: In thousands of euro (I) IFRS 9 Financial Instruments (2009, 2010) IFRS 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2009), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. IFRS 9 (2010) introduces additional changes relating to financial liabilities. The IASB currently has an active project to make limited amendments to the classification and measurement requirements of IFRS 9 and to add new requirements to address the impairment of financial assets and hedge accounting. IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. Investment property (II) IFRS 15 Revenue from Contracts with Customers IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customers Loyalty Programs. IFRS 15 is effective for annual reporting periods beginning on or after January 1, 2017, with early adoption permitted. Total identifiable net assets 80,461 Noncontrolling interests arising from initial consolidation (6,122) Consideration paid regarding acquisition of subsidiaries (68,124) The Group has considered the above new standards, interpretations and amendments to published standards and will continue to evaluate the impact on the Group s consolidated financial statements. At this time, the impact of the above publications is not expected to be material to the Group s consolidated financial statements. Working capital, net Cash and Cash equivalents 132, , ,424 Loans from banks (46,869) Other liabilities, net (11,094) (57,963) Profit arising from business combination 6,215

37 5. TAXATION Tax and deferred tax expenses are recognized based on management s best estimate of the weighted average annual income tax rate expected for the full financial year multiplied by the pretax income of the interim reporting period. The Group tax and deferred tax expenses for the six months ended June 30, 2015, is euro 17,208 thousands (: income of euro 118 thousand). The Company recorded euro 1,048 thousands for corporation tax (: euro 748 thousand), euro 15,613 thousands for deferred tax and euro 547 thousands for property tax (: income of euro 1,208 thousand and expense of euro 342 thousand, respectively). 6. INVESTMENT PROPERTY Six months Year ended ended June 30 December Unaudited Audited Balance at the beginning of the period / year 421, ,870 Additions (disposals) and adjustments during the period / year 182,281 (20,258) Investment property arising from initial consolidations 132, ,383 Balance at the end of the period / year 737, ,995 35

38 7. LOANS AND BORROWINGS A. COMPOSITION B. CONVERTIBLE BONDS June 30 December Unaudited Audited Long term Bank loans 199, ,689 Convertible bonds (B) 138,487 96,728 Total long term 337, ,417 7,767 6,855 Short term 6. CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS Bank loans 36 On November 13,, the Company successfully completed with the placement of euro 100 million convertible bonds maturing in 2019 ( Convertible bond series A or the Bonds ), convertible into ordinary shares of the Company. Convertible bond series A bears a coupon of 4% p.a., payable semiannually in arrears. The initial conversion price was fixed at euro The Bonds were issued at 100% of their principle amount and will be redeemed at maturity in 110% of their principle amount. On February 13, 2015, the Company successfully tapped up Convertible bond series A with an additional principal amount of euro 50 million. The further Convertible bond series A was issued at 105% of its principal amount and has the same characteristics of the previous tranche issued in November described above.

39 7. LOANS AND BORROWINGS (CONTINUED) Six months ended June 30 Year ended December Unaudited Audited C. (1) SECURITY, NEGATIVE PLEDGE The obligations of the Company under the Bonds and any Further Secured Bonds are secured in favor of the Trustee for the benefit of the Trustee, the Bondholders and the holders of any Further Secured Bonds by: Balance at the beginning of the period Proceeds from issuance of convertible bond series A (1,000 notes at euro 100,000 par value each) Proceeds from issuance of convertible bond series A (500 notes at euro 100,000 par value each) (a) Transaction costs Net proceeds during the period / year Amount classified as equity (a) Expenses for the period / year (a) a firstranking charge, governed by the laws of Cyprus, over all ordinary shares held by the Company in its subsidiary, Zaplino Limited ( Zaplino ); 100,000 (b) a firstranking account pledge, governed by Luxembourg law, over the bank account held by the Company with Bank Hapoalim (Switzerland) Limited, Luxembourg branch, (the Lux Primecity Account ); 52,500 (c) a firstranking account pledge, governed by the laws of Cyprus, over the bank account held by the Company with Bank of Cyprus Public Co Ltd. (the Cyprus Primecity Account ); (790) (1,782) 51,710 98,218 (489) (1,067) 3, ,254 Expenses paid (2,328) Conversion to ordinary shares (b) (8,893) (700) Carrying amount of liability at the end of the period / year 141,070 97,254 Noncurrent portion of Convertible bond series A Accrued interest Total Convertible bond series A Deferred income (a) (e) an assignment by way of security, governed by the laws of Cyprus, of the Company s receivables and rights under, and claims against Zaplino for payment of principal and interest under, the loan agreements between the Company and Zaplino in an aggregate principal amount equal to the net issuance proceeds of the Bonds ( Primecity Loans ) and all other loan agreements (of whatever nature and for whatever purpose howsoever described) relating to any loan by the Company to Zaplino of the net issuance proceeds in respect of any Further Secured Bonds. (2) COVENANTS 138,487 96, ,218 97,254 1,852 (a) This amount includes additional euro 2.5 million that were received as part of the bond placement (reflects 5% of the par value), out of which euro 0.5 million were allocated as an equity component according to external economic valuer. The residual amount of euro 2 million was allocated as a deferred income and presented in other long term liabilities account balance. (b) For more information see note 8B(4,5). (d) firstranking account pledges, governed by Luxembourg law, over each bank account held by Zaplino with Bank Hapoalim (Switzerland) Limited, Luxembourg branch, (the Zaplino Luxembourg Accounts ); and procure that Net Debt shall not exceed (i) at any time, 65% of the Portfolio Value and (ii) 60% of the Portfolio Value for a period of more than six (6) months; not pay a dividend as long as the Net Debt of the Group exceeds 50% of the Portfolio value; not open, maintain or hold any interest in, and will procure that Zaplino will not open, maintain or hold any interest, in each case directly or indirectly, in any account whatsoever with any bank or financial institution except for the Charged Accounts, unless the Issuer or Zaplino, respectively, grant a firstranking security interest, satisfactory to the Trustee, over the respective account in favor of the Trustee, for the benefit of the Trustee and the Bondholders; and not, and will not permit any of its Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary of the Company to (i) make or pay dividends or any other distributions on its share capital to the Company or any of the Company s other Subsidiaries or grant to the Company or any of the Company s other Subsidiaries any other interest or participation in itself or (ii) (a) pay any indebtedness owed to the Company or any of the Company s other Subsidiaries (b) make loans or advances to the Company or any of the Company s other Subsidiaries or (c) transfer any of its properties or assets to the Company or any of the Company s other Subsidiaries. 37

40 8. EQUITY A. SHARE CAPITAL December 31, June 30, 2015 Unaudited Number of shares Audited In thousands of euro Number of shares In thousands of euro Authorized Ordinary shares of euro 0.01 each 200,000,000 2, ,000,000 2,000 Issued and fully paid Balance as at January 1 (euro 0.01 each, and euro 1.71 each in ) 100,233,332 1,002 5,000 9 Conversion of shares to nominal value euro 0.01 per share 850,000 Issuance and payment on authorized shares in July 99,145, Conversion bond units into shares during 233,332 2 Conversion bond units into shares during the first half of 2015 Balance at the end of the period / year 3,033, ,266,661 1, ,233,332 1,002 B. ISSUED CAPITAL 1. Upon incorporation on August 10, 2004, the total authorized, issued and fully paid ordinary share capital amounted to 5,000 units with a par value of euro 1.71 each. 2. In July, as a part of capital restructuring process, the Company increased its authorized ordinary shares to 200,000,000, out of which the issued and fully paid totaled to 100,000,000, with an adjusted par value of euro 0.01 for each share. 6. CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 3. On November 13, and on February 13, 2015, the Company successfully placed bond series, convertible into ordinary shares of the Company. For the convertible bonds terms and conditions see note 7B During December, a total amount of euro 0.7 million nominal values of the convertible bonds were converted into shares. According to the convertible bonds terms, 233,332 shares were issued. 5. During the first half of 2015, a total amount of euro 9.1 million nominal values of the convertible bonds were converted into shares. According to the convertible bonds terms, 3,033,329 shares were issued. C. PREMIUM AND OTHER RESERVES Comprised of the premium on ordinary shares arises from conversions of convertible bonds. The other reserve comprised of the equity component related to the convertible bonds.

41 9. RELATED PARTY TRANSACTIONS The transactions and balances with related parties are as follows: (I) Loans from shareholders and related companies (*) December 31 June Unaudited Audited (II) Interest income (expenses) on loans from shareholders and related companies For the six months ended June 30, (271) (*) Presented as part of the other long term liabilities in the consolidated statement of financial position. statement of financial position. 39

42 10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT FAIR VALUE HIERARCHY The table below analyzes financial instruments carried at fair value, by the levels in the fair value hierarchy. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Inputs for the asset or liabilities that are not based on observable market data (unobservable inputs). Level 1 Level 2 Level 3 Total June 30, 2015 (Unaudited) Trade securities at fair value through profit and loss 22,821 22,821 Total assets 22,821 22,821 Derivative financial instruments 4,195 4,195 Total liabilities 4,195 4, CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS December 31, (Audited) 40 Trade securities at fair value through profit and loss 56,994 56,994 Total assets 56,994 56,994 Derivative financial instruments 4,995 4,995 Total liabilities 4,995 4,995

43 11. COMMITMENTS The Group had no significant commitments as at June 30, CONTINGENT ASSETS AND LIABILITIES 13. EVENTS AFTER THE REPORTING PERIOD There were no material events after the balance sheet date. The Group had no significant contingent assets and liabilities as at June 30,

44 Primecity Investment PLC Faros Avenue Spyros Thalassines Alkyonides Pervolia, 7560, Larnaca Cyprus