CONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2018

Transcription

1 UNAUDITED

2 CONTENTS Pages CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME 3 CONSOLIDATED INTERIM BALANCE SHEET 4 CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY 5 6 CONSOLIDATED INTERIM STATEMENT OF CASH FLOW 7 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION 8 22 CONFIRMATION OF RESPONSIBLE PERSONS 23

3 CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME April-June January-June Note Revenue 3 8,626 7,195 14,644 13,398 14,309 11,818 23,879 22,071 Interest income on loans , Costs of aircraft sold (350) (289) - - (350) (289) - - Costs of services rendered (93) (78) (8,198) (7,571) (206) (170) (8,645) (7,991) Aircraft maintenance and servicing (2,476) (2,060) (1,171) (1,063) (3,705) (3,060) (2,540) (2,348) expenses Depreciation and amortisation (1,957) (1,625) (1,905) (1,725) (2,674) (2,208) (4,262) (3,939) Employee-related expenses 4 (405) (339) (339) (309) (763) (630) (628) (581) Other operating expenses 5 (956) (800) (752) (686) (1,703) (1,407) (1,325) (1,224) Gain on sale of property, plant and ,158 10,310 7,846 6,480 11,158 10,314 equipment (net) Other gain (losses) net (690) (570) Operating profit 3,010 2,614 14,153 13,014 13,243 10,938 18,766 17,346 Finance income ,861 2,637 1,799 1,486 3,387 3,131 Finance costs 6 (3,238) (2,680) (961) (878) (3,524) (2,913) (1,694) (1,566) Finance costs net (2,915) (2,395) 1,900 1,759 (1,725) (1,427) 1,693 1,565 Share of profit of associates (579) (535) 1,397 1,154 (579) (535) Profit (loss) before income tax ,474 14,238 12,915 10,665 19,880 18,376 Income tax 7 (90) (83) (2,453) (2,268) (819) (676) (2,441) (2,256) Profit (loss) for the period ,021 11,970 12,096 9,989 17,439 16,120 Profit (loss) for the period from assets held (22) (18) - - for sale Profit (loss) for the period ,021 11,970 12,074 9,971 17,439 16,120 Other comprehensive income Currency translation differences on - 7,031 - (5,097) - 3,819 - (7,606) translation to presentation currency Total other comprehensive income - 7,031 - (5,097) - 3,819 - (7,606) Total comprehensive income 864 7,883 13,021 6,873 12,074 13,790 17,439 8,514 Basic and diluted earnings per share (USD/EUR)

4 CONSOLIDATED INTERIM BALANCE SHEET Note ASSETS Non-current assets Property, plant and equipment 9 90,276 77,437 39,462 32,904 Investment property 10 2,302 1,975 1,833 1,528 Intangible assets Investments in joint venture 42,000 36,027 40,603 33,855 Available-for-sale financial assets 1,746 1,498 1,746 1,456 Loans granted 12 39,056 33,502 37,119 30, , , , ,695 Current assets Inventory 11 1,475 1,264 1,476 1,231 Loans granted 12 15,042 12,902 17,269 14,400 Trade and other receivables 13 10,567 9,064 12,344 10,292 Cash and cash equivalents 14 6,358 5,454 15,774 13,153 33,442 28,684 46,863 39,076 Assets classified as held for sale 20 6,848 5,874 6,518 5,435 Total assets 215, , , ,206 EQUITY Equity attributable to the Group s equity shareholders Share capital 15 16,804 12,559 16,804 12,559 Share premium 27,972 20,878 27,972 20,878 Legal reserve 1,740 1,254 1,740 1,254 Revaluation reserve (deficit) of financial assets (905) (777) (905) (754) Cumulative translation reserve - 7,090-3,248 Retained earnings 109,816 92,317 97,742 82,345 Total equity 155, , , ,530 LIABILITIES Non-current liabilities Borrowings 16 1,878 1,611 3,092 2,578 Security deposits received 18 5,966 5,117 4,233 3,530 Trade and other payables Deferred income tax liabilities 2,877 2,468 2,978 2,485 10,758 9,228 10,503 8,760 Current liabilities Borrowings 16 7,395 6,343 2,303 1,920 Trade and other payables 17 17,595 15,093 9,015 7,517 Security deposits received Advances received 17 16,306 13, Current income tax liabilities 7,318 6,278 6,948 5,793 48,614 41,701 19,306 16,097 Total liabilities 59,372 50,929 29,809 24,857 Total equity and liabilities 214, , , ,387 Liabilities classified as held for sale Total equity and liabilities 215, , , ,206 4

5 CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY USD Share capital Share premium Legal reserve Reserve for own Revaluation reserve Retained earnings Total equity shares (deficit) of financial assets Balance at 1 January ,804 27,972 1,740 1,315 (613) 66, ,339 Comprehensive income Revaluation of financial assets (379) - (379) available for sale Deferred income tax on revaluation of financial assets available for sale Other comprehensive income (292) - (292) (loss) Profit for the year ,306 30,306 Total comprehensive income (292) 30,306 30,014 Transactions with owners Transfer from reserve for own (1,315) - 1,315 - shares Total transactions with owners (1,315) - 1,315 - Balance at 31 December 2017 / 1 January ,804 27,972 1,740 - (905) 97, ,353 Comprehensive income Other comprehensive income (loss) Profit for the period ,074 12,074 Total comprehensive income ,074 12,074 Transactions with owners Transfer to reserve for own shares Total transactions with owners Balance at 30 June ,804 27,972 1,740 - (905) 109, ,427 5

6 CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY (CONTINUED) EUR Share capital Share premium Legal reserve Reserve for own Revaluati on Cum. trans. Retained earnings Total equity shares reserve (deficit) of financial assets Balance at 1 January ,559 20,878 1,254 1,204 (587) 18,459 54, ,072 Comprehensive income Revaluation of financial assets (316) - - (316) available for sale Deferred income tax on revaluation of financial assets available for sale Currency translation (15,211) - (15,135) differences Other comprehensive income (167) (15,211) - (15,378) (loss) Profit for the year ,837 26,837 Total comprehensive income (167) (15,211) 26,837 11,459 Transactions with owners Dividends Currency translation (1,204) - - 1,204 - differences Total transactions with (1,204) - - 1,204 - owners Balance at 31 December 2017/ 1 January ,559 20,878 1,254 - (754) 3,248 82, ,531 Comprehensive income Currency translation (23) 3,842-3,819 differences Other comprehensive income (23) 3,842-3,819 (loss) Profit for the period ,971 9,971 Total comprehensive income (23) 3,842 9,971 13,790 Transactions with owners Transfer to reserves for own shares Total transactions with owners Balance at 30 June ,559 20,878 1,254 - (777) 7,090 92, ,321 6

7 CONSOLIDATED INTERIM STATEMENT OF CASH FLOW 6 months ended 30 June Note Operating activities Profit (loss) before income tax 12,915 10,665 19,880 18,376 Adjustments for: Depreciation and amortisation 2,674 2,208 4,262 3,939 Discounting effect Finance costs net (335) (277) 1,412 1,305 Share of loss from associates (1,397) (1,154) Profit /loss from sale of fixed assets (7,846) (6,480) (11,158) (10,314) Changes in working capital: Trade and other receivables 2,902 2,397 (19,634) (18,147) Trade and other payables 19,656 16,234 12,895 11,919 Security deposits and advances received 17,548 14,493 37,017 34,214 Inventory (439) (362) (9) (8) Cash generated from operations 45,751 37,784 45,717 42,256 Interest paid (348) (287) (1,003) (927) Income tax paid (329) (272) (1,050) (971) Net cash generated from operating activities 45,074 37,225 43,664 40,358 Investing activities Purchase of property, plant and equipment and intangible assets (53,200) (43,938) (2,448) (2,262) Purchase of investment property (5,362) (4,429) (1,619) (1,496) Prepayments for property plant and equipment Sale of property plant and equipment and intangible assets ,952 48,943 Investments in other entities - - (4,610) (4,261) Loans granted (5,853) (4,834) (3,601) (3,329) Loans repaid 5,224 4, Interest received Net cash generated from (used in) investing activities (58,363) (48,202) 42,504 39,285 Financing activities Borrowings 5,007 4,135 (41,849) (36,681) Lease (finance lease) payments (1,134) (937) (1,268) (1,172) Net cash generated from (used in) financing activities 3,873 3,198 (43,117) (39,853) Increase (decrease) in cash and cash equivalents (9,416) (7,779) 43,051 39,790 Movement in cash and cash equivalents At the beginning of the year 15,774 13,153 28,916 27,663 Increase (decrease) in cash and cash equivalents (9,416) (7,779) 43,051 39,790 Foreign translation differences (4,396) At the end of the period 6,358 5,454 71,967 63,057 7

8 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION 1 General information AviaAM Leasing AB (referred to as the Company) is a public limited liability company incorporated at State Enterprise Centre of the Republic of Lithuania as at 17 April 2009 (Company code ). The Company is domiciled in Vilnius, the capital of Lithuania. The address of its registered office is at Smolensko g. 10, LT Vilnius, Lithuania. The shareholders structure of the Company as at 30 June 2018 and 31 December 2017 was as follows: As at 30 June 2018 As at 31 December 2017 Number of % Number of % shares shares HAIFO Limited 13,717, % % ALH Aircraft Leasing Holdings Limited 12,994, % 12,994, % Mesotania Holdings Limited 9,817, % 9,857, % Aurimas Sanikovas 294, % 294, % Tadas Goberis 147, % 147, % Nationale-Nederlanden Otwarty Fundusz Emerytalny (Open pension fund) % 2,500, % Other shareholders 6,334, % 17,511, % Total 43,305, ,305, The Company and its subsidiaries (together, the Group) are engaged in the business of aircraft leasing, trading and management. The principal activity of the Group is operating leasing, management and trading of mid-life narrow body and regional jet aircraft. As of 30 June 2018 the Group owned 16 aircraft: 4 Airbus A321, 1 Boeing , 1 Boeing and 10 Bombardier CRJ200 aircraft. All aircraft were leased out under operating lease contracts. The subsidiaries and joint ventures, which are included in the Group s consolidated financial statements are indicated below: The Group s companies Country of establishment As at 30 June 2018 Share of equity, % As at 31 December 2017 Date of acquiring (establishment) / activity / address of establishment AviaAM B01 UAB Lithuania Date of acquiring: 4 January 2010 / Smolensko g. 10, Vilnius AviaAM B02 UAB Lithuania Date of acquiring: 4 January 2010 / Smolensko g. 10, Vilnius AviaAM B04 UAB Lithuania Date of establishment: 22 February 2007 / Smolensko g. 10, Vilnius AviaAM B05 UAB Lithuania Date of establishment: 28 June 2011 / Smolensko g. 10, Vilnius 8

9 1 General information (continued) The Group s companies Country of establishment As at 30 June 2018 Share of equity, % As at 31 December 2017 Date of acquiring (establishment) / activity / address of establishment AviaAM B06 UAB Lithuania Date of establishment: 15 July 2011 / Smolensko g. 10, Vilnius AviaAM B07 UAB Lithuania Date of establishment: 30 September 2011 / Smolensko g. 10, Vilnius DG21 UAB Lithuania Date of establishment: 7 August 2015 / Real estate management / Smolensko g. 10, Vilnius DG AVIA UAB Lithuania Date of establishment: 17 February 2017 / Real estate management / Smolensko g. 10, Vilnius AviaAM B10 Ltd Ireland Date of establishment: 17 December 2015 / AAL Aircraft Investment Ltd AAL Capital Aircraft Holdings Ltd AviaAM Leasing Bermuda Ltd Suite 10, The Mall, Beacon Court, Sandyford, Dublin 18, Ireland Cyprus Date of establishment: 8 November 2016 / Jacovides Tower, Georgiou Griva Digeni Ave ,1st floor, Office No. 122, 1090, Nicosia, Cyprus Cyprus Date of establishment: 29 September 2011 / Engomi Business Center, 28th of October Avenue No. 1, Block E, 1st floor, Office 111, 2414 Engomi, Nicosia, Cyprus Bermuda 100* 100* Date of establishment: 16 September 2011 / Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda AviaAM B08 Ltd Bermuda 100* 100* Date of establishment: 26 April 2014 / Crawford House, 50 Cedar Avenue, Hamilton HM11, Bermuda AviaAM B09 Ltd Bermuda 100* 100* Date of acquiring: 27 June 2013 / Ice Aircraft Management Ltd Boulevard Two Aircraft Ltd Dikkys Investments Ltd Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda Bermuda 100* 100* Date of establishment: 23 October 2013 / Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda Ireland 100* 100* Date of acquiring: 20 December 2013 / 70 Sir John Rogerson s Quay, Dublin 2, Ireland Cyprus 100* 100* Date of acquiring: / 24 March 2016 Engomi Business Center, 28th of October Avenue No. 1, Block E, 1st floor, Office 111, 2414 Engomi, Nicosia, Cyprus 9

10 1 General information (continued) The Group s companies Country of establishment As at 30 June 2018 Share of equity, % As at 31 December 2017 Date of acquiring (establishment) / activity / address of establishment AviaAM B11 Ltd Ireland 100* - Date of establishment: 29 March 2018 / Regional Charter Capital Ltd AviaAM Financial Leasing China Co., Ltd*** Suite 10, The Mall, Beacon Court, Sandyford, Dublin 18, Ireland Bermuda 100** 100** Date of establishment: 31 October 2012 / People's Republic of China Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda Date of establishment: 4 August 2016 / 2401, Floor 24, No. 8, Shangwu Outer Ring Road, Zhengdong New Area, Zhengzhou City, Henan Province, People's Republic of China * Shareholding through AAL Capital Aircraft Holdings Ltd. which owns 100 per cent of the company. ** Shareholding through AviaAM Leasing Bermuda Ltd. *** Company has a 51% stake in a joint venture - AviaAM Financial Leasing China Co. Ltd 2 Accounting policies The consolidated interim financial information for the six month period ended 30 June 2018 (hereinafter, the Consolidated Interim Financial Information) is prepared in accordance with the International Financial Accounting Standards, as adopted by the European Union, includes IAS 34 Interim financial reporting. In all material respects, the same accounting principles have been followed as in the preparation of financial statements for The financial statements have been prepared on a going concern basis and under the historical cost convention. The consolidated financial statements are presented in US Dollars (USD) and Euro (EUR) and all values are rounded to the nearest thousand (USD 000 and EUR 000) except when otherwise indicated. The Consolidated Interim Financial Information for the six month period ended 30 June 2018 is not audited. Financial Statements for the year ended 31 December 2017 were audited by external auditor PricewaterhouseCoopers UAB. 3 Revenue 6 months ended 30 June Lease revenue 8,660 7,153 8,377 7,743 Supplemental maintenance rent 3,664 3,026 4,863 4,495 Commission income 1,528 1,262 10,501 9,706 Sales of aircraft Revenue from real estate Other revenue ,309 11,818 23,879 22,071 10

11 3 Revenue (continued) The chief operating decision maker of the Group has been identified as the General Manager, which is responsible for allocating resources and assessing performance of the Group. The General Manager has determined that the activities of the Company form a single operating segment aircraft leasing, trading and aircraft transaction management. The internal reporting provided to the General Manager has been prepared using the accounting policies and presentation consistent with those used in preparation of the financial statements. The General Manager monitors net profit and operating profit as a measure of profit. The segment s sales to external customers are derived from the following single customers (the customers whose sales revenue exceed 5 per cent of total sales revenue of that segment in any of the years): 6 months ended 30 June Lease, sale and aircraft transaction management customers Customer B 6,697 5,531 6,611 6,110 Customer C 2,347 1,938 9,753 9,015 Customer D 1,410 1, Customer S 1, Customer O Customer E Customer K Customer A Customer F Customer G Customer Z - - 4,550 4,206 Customer J Other customers ,309 11,818 23,879 22,071 4 Employee related expenses 6 months ended 30 June Salaries Social insurance expenses

12 5 Other operating expenses 6 months ended 30 June Legal and translation expenses Other tax expenses Representation expenses Insurance expenses Office expenses Audit and accounting expenses Management services Bank fees Travelling expenses Marketing expenses Database usage expenses Other fixed assets depreciation Deductible VAT Charity expenses Expenses related to listing of shares Fuel costs Training expenses IT costs Communication (Public Relations) costs Trustee fees Transportation expenses Other administrative expenses ,703 1,407 1,325 1,224 6 Finance costs net 6 months ended 30 June Interest income on cash and cash equivalents Gain from disposal of investments Other finance income (3) (3) Foreign exchange gain on financing activities 1,775 1,466 2,818 2,605 Finance income 1,799 1,486 3,387 3,131 Interest expenses (348) (287) (1,003) (927) Foreign exchange loss on financing activities (2,911) (2,408) - - Unwinding of discount of security deposits received (73) (60) (473) (437) Other finance costs (192) (158) (218) (202) Finance costs (3,524) (2,913) (1,694) (1,566) Finance costs net (1,725) (1,427) 1,693 1,565 12

13 7 Income tax The tax expenses for the period comprise current and deferred tax. Income tax is calculated at 15 per cent of the annual profit for the year. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when deferred income taxes relate to the same fiscal authority. Deferred income tax asset and liability are calculated at 15% rate (2017: 15% rate). 6 months ended 30 June Current tax ,441 2,256 Total income tax expenses ,441 2,256 8 Earnings per share Earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares issued during the year. April June January June Net profit attributable to shareholders ,021 11,970 12,074 9,971 17,439 16,120 Weighted average number of ordinary 43,306 43,306 43,306 43,306 shares issued Basic earnings per share (USD/EUR) The Group has no dilutive potential ordinary shares, therefore, the diluted earnings per share are the same as basic earnings per share. 13

14 9 Property, plant and equipment USD Aircraft and engines Aircraft and engines under preparation for use Buildings and structure Other tangible fixed assets Total Opening net book amount 93, ,897 as at 1 January 2017 Additions 19, ,974 Disposals (67,329) (67,329) Reclassifications 1,494 (1,507) Depreciation charge (6,725) - - (50) (6,775) Impairment loss - net (1,305) (1,305) Closing net book amount as at 31 December , ,462 At 31 December 2017 Cost 65, ,654 Accumulated depreciation (26,066) - - (126) (26,192) and impairment Net book amount 39, ,462 Opening net book amount 39, ,462 as at 1 January 2018 Additions 62,511-4, ,506 Disposals (13,990) (13,990) Depreciation charge (2,674) - (7) (21) (2,702) Closing net book amount as at 30 June ,123-4, ,276 At 30 June 2018 Cost or valuation 113,863-4, ,170 Accumulated depreciation (28,740) - (7) (147) (28,894) Net book amount 85,123-4, ,276 14

15 9 Property, plant and equipment (continued) EUR Aircraft and engines Aircraft and engines under preparation for use Buildings and structure Other tangible fixed assets Total Opening net book amount 89, ,784 as at 1 January 2017 Additions 16, ,688 Disposals (59,620) (59,620) Reclassifications 1,323 (1,333) Depreciation charge (5,955) - - (44) (5,999) Impairment loss net (1,156) (1,156) Exchange differences (8,716) (57) - (22) (8,795) Closing net book amount as at 31 December , ,904 At 31 December 2017 Cost 54, ,743 Accumulated depreciation (21,734) - - (105) (21,839) and impairment Net book amount 32, ,904 Opening net book amount 32, ,904 as at 1 January 2018 Additions 51,628-4, ,753 Disposals (11,554) (11,554) Depreciation charge (2,208) - (6) (17) (2,231) Exchange differences 2, ,565 Closing net book amount as at 30 June ,017-4, ,437 At 30 June 2018 Cost or valuation 97,669-4, ,221 Accumulated depreciation (24,652) - (6) (126) (24,784) Net book amount 73,017-4, ,437 15

16 10 Investment property USD EUR Opening net book amount as at 1 January ,091 2,000 Additions 5,163 4,572 Reclassification to assets held for sale (5,425) (4,804) Revaluation surplus 10 9 Revaluation loss (6) (5) Exchange differences - (244) Closing net book amount as at 31 December ,833 1,528 At 31 December 2017 Cost or valuation 1,833 1,528 Net book amount 1,833 1,528 Opening net book amount as at 1 January ,833 1,528 Additions Disposals - - Reclassifications - - Depreciation charge - - Revaluation loss - - Exchange differences - 60 Closing net book amount as at 30 June ,302 1,975 At 30 June 2018 Cost or valuation 2,302 1,975 Accumulated depreciation - - Net book amount 2,302 1, Inventories Aircraft components 1,475 1,264 1,476 1,231 1,475 1,264 1,476 1,231 16

17 12 Loans granted Non-current loans Loans granted to related parties (weighted average interest 15,389 13,201 15,531 12,950 rate 4.3%) Loans granted to third parties (weighted average interest rate 21,152 18,143 19,126 15, %) Bonds acquired from related parties (interest rate 5.2%) 2,515 2,158 2,462 2,053 39,056 33,502 37,119 30,951 Current loans Loans granted to related parties (weighted average interest rate 4.3%) Less: provision for impairment of loans granted to related (112) (96) (112) (95) parties Loans granted to third parties (weighted average interest rate 3,949 3,388 5,028 4, %) Less: provision for impairment of loans granted to third (644) (553) (656) (547) parties Bonds acquired from third parties 11,729 10,061 12,854 10,718 15,042 12,903 17,269 14,400 Total loans granted 54,098 46,405 54,388 45, Trade and other receivables Trade receivables from third parties 11,081 9,505 12,665 10,561 Less: provision for impairment of trade receivables (2,661) (2,283) (2,661) (2,220) Trade receivables from third parties net 8,420 7,222 10,004 8,341 Receivables from related parties 1,504 1,290 1,453 1,212 Less: provision for impairment of trade receivables from (1,048) (899) (1,048) (874) related parties Receivables from related parties - net Other receivables Less: provision for impairment of other receivables (29) (25) (29) (24) Other receivables - net Deferred charges VAT receivables Prepayments 1, ,567 9,064 12,344 10,292 Non-current portion: Current portion: 10,567 9,064 12,344 10,292 17

18 14 Cash and cash equivalents Cash and cash equivalents are dominated in following currencies: USD 2,268 1,946 13,571 11,316 EUR 4,090 3,508 2,203 1,837 Total cash and cash equivalents 6,358 5,454 15,774 13, Share capital After euro adoption in 1 January 2015 and according to the Republic of Lithuania Law on redenomination to the euro of the capital and of the nominal value of securities of Public Limited Liability Companies and Private Limited Liability Companies and amendment of the Articles of Association of these Companies, the nominal value of the Company s shares were automatically converted from LTL 1 per share to EUR 0.29 per share in the Central Securities Depository of Lithuania. As at 30 June 2018 and 31 December 2017 the share capital of the Company amounted to EUR 12,588,622 (USD 16,804,002) and consisted of 43,305,593 ordinary registered shares with a nominal value of EUR 0.29 each. All shares were fully paid up. Since 28 June 2013 the ordinary registered shares of the Company (ISIN code LT ) were listed on the Main List of Warsaw Stock Exchange (symbol: AAL). 16 Borrowings Non-current Finance lease liabilities 1,878 1,611 3,092 2,578 1,878 1,611 3,092 2,578 Current Finance lease liabilities 2,381 2,042 2,300 1,918 Other borrowings 5,014 4, ,395 6,343 2,303 1,920 Total borrowings 9,273 7,954 5,395 4,498 The weighted average interest rates at the balance sheet date were as follows: Finance lease liabilities 9.53% 8.77% Other borrowings 3.00% - Weighted average interest rate 6.00% 8.77% 18

19 17 Trade and other payables and advances received Trade and other payables financial liabilities Trade payables to third parties 3,892 3,339 3,435 2,864 Trade payables to related parties 8,277 7, Salaries and social security payable, including vacation accrual Accruals 5,118 4,390 4,430 3,694 17,595 15,093 9,015 7,517 Advance payments received non-financial liabilities Advance payments from customers Advance payments from customers related to acquisition of 16,018 13, aircraft 16,306 13, Security deposits received Security deposits repayable after one year at nominal value 6,230 5,344 4,570 3,811 Less: discounting effect (264) (227) (337) (281) Security deposits repayable after one year 5,966 5,117 4,233 3,530 Security deposits repayable within one year Security deposits repayable within one year Security deposits 5,966 5,117 5,213 4,347 Average rates used for security deposits discounting are as follows: 2018: 4.67%; 2017: 4.53%. Security deposits serve as a security by a lessee for the performance of its obligations under the aircraft lease agreements and upon termination of lease lessor is obliged return it to lessee. All of the Group s security deposits are denominated in USD. Security deposits are not interest-bearing. 19

20 19 Related party transactions Related parties of the Group include entities having significant influence over the Group, key management personnel of the Group and other related parties. Entities having significant influence over the Company and the Group are ALH Aircraft Leasing Holdings Ltd, being the majority shareholder of the Company, and ZIA Valda AB (the shareholder of ALH Aircraft Leasing Holdings Ltd). Transactions with these companies are presented separately. Related parties also include other shareholders of the Company, associates and jointly controlled entities of the Group and subsidiaries of ZIA Valda AB group. They are presented as other related parties. The following transactions were carried out with related parties: 6 months ended 30 June Sales of services to: Entities having significant influence Other related parties 1,631 1, ,720 1, Total sales of assets and services 1,720 1, months ended 30 June Purchases of services from: Entities having significant influence Other related parties 3,673 3, ,673 3, Total purchases of assets and services 3,673 3, Period-end balances arising from sales/purchase of assets/services: Trade and other receivables from related parties Other related parties 1,504 1,290 1,453 1,212 Trade and other receivables at nominal value 1,504 1,290 1,453 1,212 Less: provision for impairment of receivables from other (1,048) (899) (1,048) (874) related parties Individually impaired receivable relates to the customer that is in bankruptcy proceedings. 20

21 19 Related party transactions (continued) Payables to and prepayments from related parties Other related parties 8,277 7, ,277 7, Loans granted to related parties Beginning of the year 18,036 15,039 15,480 14,811 Loans advanced during the year as monetary transactions 1, Loan repayments received as monetary transactions (1,012) (836) (32) (28) Interest charged Interest received (9) (7) (3) (3) Exchange rate differences (444) 10,124 1,952 (307) End of the period 17,912 25,427 18,036 15, Assets and liabilities classified as held for sale As at 31 December 2017, the Group classified one of its subsidiaries - DG21 UAB - as assets held for sale. The Group expects to sell it till the end of the year Assets classified as held for sale Investment property 6,210 5,327 5,767 4,809 Non-current and current trade and other receivables Deferred income tax asset Inventory Cash and cash equivalents Total, excluding IC transactions with the Group 6,848 5,874 6,518 5,434 IC transactions with the Group Total, including IC transactions with the Group 6,848 5,874 6,518 5,434 21

22 20 Assets and liabilities classified as held for sale (continued) Liabilities held for sale Borrowings Security deposits received Deferred income tax liabilities Trade and other payables Total, excluding IC transactions with the Group IC transactions with the Group 6,383 5,475 5,834 4,864 Total, including IC transactions with the Group 7,254 6,383 6,816 5,684 Statement of comprehensive income Revenue, cost of sales and income tax expenses of assets classified as held for sale Revenue Cost of sales Gross profit (loss) from assets held for sale Profit (loss) before income tax for the year from assets held (168) (149) for sale Income tax expenses (277) (229) (321) (284) Profit (loss) for the year from assets held for sale (22) (18) Events after the balance sheet date Effective as of 13 July 2018 the Company s shares were excluded from trading on the Warsaw Stock Exchange. 22

23 MANAGEMENT CONFIRMATION OF THE CONSOLIDATED INTERIM FINANCIAL INFORMATION Following Article 22 of the Law on Securities of the Republic of Lithuania and the Rules on Preparation and Submission of Periodic and Additional Information of the Lithuanian Securities Commission, we, Tadas Goberis, General Manager of AviaAM Leasing AB and Justinas Gilys, Executive Director of AviaAM Leasing AB, hereby confirm that, to the best of our knowledge, the unaudited AviaAM Leasing AB Consolidated Condensed Interim Financial Information for the six month period ended 30 June 2018, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position, profit or loss and cash flows of the Group. General Manager Tadas Goberis Executive Director Justinas Gilys 14 August