Preliminary Results

RNS Number : 9977B

Carpathian PLC

25 April 2012

Date:	25 April 2012
On behalf of:	Carpathian PLC ("Carpathian", the "Company" or the "Group")
Embargoed until:	0700hrs

Carpathian PLC

Preliminary results for the year ended 31 December 2011

Carpathian PLC (AIM: CPT), the commercial property investment company focused on retail properties within Central and Eastern Europe, today announces its preliminary results for the year ended 31 December 2011.

Financial Highlights

- Loss after tax of €3.5 million (2010: profit after tax of €15 million)

- Loss per share of 1.4 euro cents for the period (2010: earnings per share of 6.5 euro cents)

- Net asset value per share of 0.6 euro cents (39.1 euro cents as at 31 December 2010)

- Net rental income of €8.9 million (2010: €22.2 million)

- Total Group cash as at 31 December 2011 was €49.9 million (as at 31 December 2010: €26.8 million) and as at 29 February 2012 was approximately €5.4 million (reflecting the post year-end Distributed Capital Payment to the Property Adviser and distribution to shareholders).

Operational Highlights

- All of the key objectives defined as part of the Strategic Review in January 2010 have been completed.

- As at 31 December 2011, the total distribution to shareholders following the Strategic Review was 41.5 euro cents per share (€96.3 million in total). In comparison, the weighted average share price was 16.2 euro cents during the period of the Strategic Review between November 2008 and April 2009.

- The property transactions completed in 2011 recovered €96.4 million equity from the core portfolio representing 99% of their latest year end valuations as described below.

- The corporate restructuring of the Company has enabled a reduction of €21 million tax liability, while management charges were also below allowable budget by €0.6 million.

- In Poland, the four properties in the Blue Knight portfolio of assets were sold in two separate transactions for a gross consideration of €74.7 million. The net equity amount realised from the partial Blue Knight sale was approximately €26.3 million.

- The most valuable asset of the Company, the Promenada shopping centre in Warsaw, Poland was sold for a gross consideration of €169.5 million as announced on 6 May 2011. The net equity realised from the sale after transaction costs was approximately €59.5 million.

- On 20 March 2012, the Group disposed of its various interests held in the Galleria shopping centre in Riga, Latvia for a cash consideration of €2.3 million.

- Carpathian disposed of the non-core Plaza property portfolio in Hungary for a nominal sum to the financing bank in Hungary on 19 April 2011.

- New arrangements have now been entered into with the existing property investment adviser, CPT LLP and Carpathian Asset Management Limited (together "CAM") for the provision of corporate and asset management services in 2012 and for the amendment of certain provisions of the existing Portfolio Management Agreement.

- The Company has also entered into a Settlement Deed and Release, which deals with all outstanding profit re-investment obligations of various members and affiliates of Dawnay, Day Group by paying out approximately €4.4 million net. As a consequence, the Net Asset Value of the Company has increased by €1.7 million.

Rory Macnamara, Non-executive Chairman of Carpathian, said:

"The Board is very pleased with the results achieved since the completion of the Strategic Review. We will continue to focus on the timely and orderly wind down of the Company with the intention to return any excess cash to shareholders from further realisations (after allowing for actual and contingent liabilities) and expect to be in a position to make a further announcement on the timing of these steps within the next few weeks."

-Ends-

Enquiries:

Carpathian PLC
Rory Macnamara, Non-executive Chairman	Via Redleaf Polhill

Carpathian Asset Management Limited	020 7529 6413
Paul Rogers/Balazs Csepregi	ir@carpathianam.com
Canaccord Genuity Limited Bruce Garrow	020 7523 8350


Redleaf Polhill	020 7566 6720
Henry Columbine / Luis Mackness	carpathian@redleafpolhill.com

Notes to Editors

-	Carpathian was created in 2005 for the purpose of investing in Central and Eastern European commercial real estate.
-	Carpathian's primary focus was on shopping centres, supermarkets and retail warehousing in the Czech Republic, Hungary, Romania, Lithuania and Latvia. The Company intends to de-list from AIM during 2012.
-	Carpathian was admitted to trading on AIM in July 2005.
-	Carpathian Asset Management Limited ("CAM") is the Property Investment Adviser to Carpathian. CAM is responsible for managing the core portfolio of assets and transactions within Central and Eastern Europe.

Chairman's Statement

I am pleased to announce that the Strategic Review's key objectives set out in January 2010 have been successfully achieved.

During the period of the Strategic Review from November 2008 to April 2009, the weighted average share price was approximately 16.2 euro cents. Since then, the Board has been able to announce three distributions totalling 41.5 euro cents per share (4.5 cents on 17 December 2009, 25 cents on 21 September 2011 and 12 cents on 15 December 2011).

This is the result of successful sales and delivering operational costs targets within the agreed timescale.

Financial results

As a consequence of the substantial disposals during 2011 and the going concern note below, the Company has presented its Consolidated Statement of Comprehensive Income in accordance with International Financial Reporting Standard 5 ('IFRS 5'), with all operations now classified as discontinuing.

The loss after tax for the year is €3.5 million, while the Group generated a profit of €15.0 million during 2010. Losses per share are 1.4 euro cents (2010: earnings per share of 6.5 euro cents). All expected liquidation costs and other expenses expected to be incurred post year end and up to the completion of the liquidation have been provided for in the Consolidated Balance Sheet as at 31 December 2011 - the total amount accrued is some €2.0 million.

During 2011, the Group's net rental and related income was €8.9 million (2010: €22.2 million). The decrease is the direct result of the property sales completed.

Administrative expenses for the year were €6.8 million (2010: €6.0 million). As mentioned above, administrative expenses for the year include liquidation costs and one-off items relating to the sold assets as well as corporate restructuring costs of approximately €0.8 million. The restructuring of various Group companies has delivered reductions in corporate income tax liabilities of approximately €21.6 million from the sales of the core property portfolio as shown in the movement of the net deferred tax liabilities (described below).

On a cumulative basis, the operational expenses relating to the Property Investment Adviser are €0.6 million below the maximum amount set out in the Property Management Agreement signed in February 2010. This expense is allocated substantially within property operating expenses in the Consolidated Statement of Comprehensive Income. The Distributed Capital Payout of €10.5 million, based on performance measures set out in the Strategic Review, payable to the Property Investment Adviser has been fully accrued for as at 31 December 2011 and paid in 2012.

The Group's net asset value per share is 0.6 euro cents as at 31 December 2011 (as at 31 December 2010: 39.1 euro cents) based on the latest independent property valuations as at 31 December 2011.

Total Group cash as at 31 December 2011 was €49.9 million (as at 31 December 2010: €26.8 million) and €5.4 million as at 29 February 2012 post the payment of dividends and the Distributed Capital Payout. As at 31 December 2011, the Group had approximately €47.5 million cash at holding company level including its entities in Isle of Man and Luxembourg and €4 million as at 29 February 2012.

The Group has reclassified all of its long-term assets to current assets as they are held for sale during 2012. The Group has no long-term liabilities.

During the year the Group took the decision to derecognise the non-core MID portfolio with effect from 1 October 2011 as all the risks and rewards of ownership are no longer retained by the Group. The overall accounting profit on derecognition was €3.4 million.

The Group has no assets and liabilities relating to non-core assets recognised in the financial statements as at 31 December 2011.

The Group had no consolidated debt position as at 31 December 2011, compared to €221.3 million as at 31 December 2010. All outstanding bank facilities have either been repaid from sales or, in the case of the non-core MID portfolio, derecognised.

The Group had no deferred tax liabilities as at 31 December 2011 (as at 31 December 2010: €21.6 million).

The Group also had no goodwill as at 31 December 2011 (as at 31 December 2010: €6.6 million).

Key operational matters for the period

The Promenada shopping centre in Warsaw, Poland was sold for a gross consideration of €169.5 million as announced on 6 May 2011. This price was subject to a net deduction of €1 million arising principally from payments for warranty insurance and modification of the trademark licence. An escrow account was established of €0.6 million, all of which has been released. Carpathian also received an additional consideration of €1.5 million in August 2011 when the purchaser reclaimed the relevant VAT. Total bank debt and related fees payable to DPB were approximately €108.1 million, which included a loan repayment of approximately €1 million against the Gdansk property, an additional €2.1 million against the Babilonas shopping centre in Lithuania and a further €0.2 million repayment in relation to the corporate restructuring. The initial net closing payment was €59.8 million, while the net equity realised from the sale after transaction costs was approximately €59.5 million.

As announced on 9 March 2011, three out of the four properties in the Blue Knight portfolio of assets in Poland were sold for a gross consideration of €40.2 million. The initial net equity amount realised from the partial Blue Knight sale was approximately €7.6 million. The financing bank, Deutsche Pfandbriefbank ('DPB') retained approximately €9.4 million in addition to the allocated loan amount of approximately €22 million to cover an additional loan repayment against the fourth property in Gdansk of €7.9 million and the Babilonas shopping centre of €0.9 million, as originally agreed during the DPB debt restructuring in June 2009. A further loan repayment of €0.6 million has also been agreed in connection with obtaining DPB's consent for the corporate restructuring which has delivered substantial tax benefits to the Group.

On 18 May 2011, the sale of the fourth and last remaining asset in the Blue Knight portfolio - Osowa shopping centre in Gdansk - was completed for a consideration of €34.5 million in cash. The sale price included a €3 million retention to be released to the Company if questions related to the occupancy permit were resolved before the end of 2011. As these questions have not yet been resolved, the retention has now decreased to €1.5 million with a final deadline of 30 June 2012 after which, if there is no resolution, the retention will reduce to nil. At this stage, realisation of this retention is uncertain. The initial net equity released after transaction costs was approximately €9.8 million. Further to this, DPB released retained funds of €8.9 million previously held from the sale of the first three assets in the Blue Knight portfolio and Promenada.

The single tenanted property in Slupsk, Poland was sold for a consideration of €0.75 million on 18 April 2011 delivering net equity proceeds of approximately €0.7 million.

In Lithuania, the local holding company of the Babilonas shopping centre in Panevezys was sold for a gross sales price of €24.1 million on 7 December 2011. The net equity released from the transaction was approximately €5 million.

In Romania, the Company sold two assets in November 2011. The Macromall shopping centre in Brasov, Romania was sold for €1.3 million and the Satu Mare development land plot was sold for €1.1 million and both were received as equity proceeds.

On 20 March 2012, the Group disposed of its various interests held in the Galleria shopping centre in Riga, Latvia for a cash consideration of €2.3 million.

The only remaining core property asset of the Company is the Baia Mare development land plot in Romania that is also in a preliminary stage of a sales process.

Carpathian transferred its ownership of the non-core Plaza property portfolio in Hungary to the financing bank in Hungary for a nominal sum on 19 April 2011. This portfolio was derecognised from our Balance Sheet in 2010.

In December 2011, the Group entered into a Settlement Deed and Release, which dealt with all outstanding profit re-investment obligations of various members and affiliates of Dawnay, Day Group. These arrangements completed in January 2012 and included a net cash payment by the Company of €4.4 million, the transfer to the Company of 1,190,202 Ordinary Shares, which were subsequently cancelled for a nominal sum, the acquisition by the Group of a loan note in respect of deferred consideration payable and the novation of a put and call option to the Group. These arrangements were fully provided for at 31 December 2011.

New arrangements have now been entered into with the existing property investment adviser, Carpathian Asset Management Limited for the provision of corporate and asset management services in 2012 and for the amendment of certain provisions of the existing Portfolio Management Agreement.

Note on going concern and outlook

The financial statements of the Group and Company have been prepared under the historical cost convention. The Company intends to seek shareholders' approval to de-list its shares from the Alternative Investment Market of the London Stock Exchange and to implement a members' voluntary liquidation. The Directors will provide further detail on these proposals in due course. Adequate cash reserves will be retained for all applicable actual and contingent liabilities. Any net surplus from sales and other recoveries in 2012 and cash released as a result of unrealised liabilities will be distributed to shareholders.

The Directors therefore do not consider the Company to be a going concern and have prepared the financial statements on a break up basis. There has been no financial impairment of the Group's and Company's assets as a result of a break up basis of valuation, as remaining assets held for sale are carried at fair value less expected sales costs. All expected liquidation costs and expenses expected to be incurred post year end until eventual liquidation have been accrued for, in line with management's best estimates.

Rory Macnamara

Chairman

24 April 2012

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2011


		2011		2010	2010	2010
	Note	Discontinuing		Continuing	Discontinued	Total
		€'000		€'000	€'000	€'000
Gross rental income	5	12,470		26,768	3,891	30,659
Service charge income	7	4,267		10,942	345	11,287
Service charge expense	7	(5,208)		( 13,619)	(69)	( 13,688)
Property operating expenses	7	(3,809)		( 6,136)	(346)	(6,482)

Other property income	8	1,217		420	-	420
Net rental and related income		8,937		18,375	3,821	22,196

Changes in fair value of investment property	14	(2,960)		7,872	-	7,872

Profit on derecognition of investment properties	14	3,421		-	5,296	5,296

Profit on disposal of investment properties	14	6,396		-	21,574	21,574
Legal settlement	33	3,382		-	-	-
Distributed capital payout	31	(10,507)		-	-	-
Impairment of goodwill	16	60		1,011	-	1,011

Impairment of other investments	17	-		(11,372)	-	( 11,372)
Impairment of loans receivable	18	(150)		(2,000)	-	( 2,000)

Changes in fair value of derivative assets and liabilities	23	(566)		(3,877)	( 19)	( 3,896)
Net foreign exchange gain / (loss)		136		2,884	( 1,331)	1,553
Administrative expenses	9	(6,835)		( 5,550)	(424)	( 5,974)

Net operating profit before net financing expense		1,314		7,343	28,917	36,260
Financial income	11	840		323	2	325
Financial expense	11	(7,673)		( 13,409)	(2,554)	( 15,963)
Changes in fair value of interest rate swaps	11	2,977		(104)	751	647
Net financing expense		(3,856)		( 13,190)	( 1,801)	( 14,991)
Net (loss) / profit before tax		(2,542)		(5,847)	27,116	21,269
Tax expense	12	(1,000)		( 5,245)	(1,003)	( 6,248)

(Loss) / profit for the year and total comprehensive income for the year		(3,542)		( 11,092)	26,113	15,021

Attributable to:
Equity holders of the Company	13		(3,542)			15,032
Non-controlling interest	13		-			( 11)

Basic and diluted earnings per share for (loss) / profit attributable
to the equity holders of the Company during the year
(expressed as cents per share)
Basic (loss) / earnings per share	13		(1.4) c			6.5 c
Diluted (loss) / earnings per share	13		(1.4) c			6.5 c

Company Statement of Comprehensive Income

for the year ended 31 December 2011

		2011	2010
	Note	€'000	€'000

Revenue		-	-

Changes in fair value of derivative assets and liabilities	23	-	( 4,003)

Legal settlement	33	(8,211)	-

Impairment of loans to subsidiary	15	(42,945)	94,930


Impairment of interest receivable from subsidiary		(22,024)	-

Loss on disposal of investments		-	( 28,958)

Net foreign exchange gain		242	431

Administrative expenses	9	(3,373)	( 1,938)

Net operating (loss) / profit before net financing income		(76,311)	60,462

Financial income	11	21,134	21,566

Net (loss) / profit before tax		(55,177)	82,028

Tax expense	12	-	-

(Loss) / profit for the year and total comprehensive income for the year		(55,177)	82,028

Consolidated Statement of Changes in Equity

for the year ended 31 December 2011

GROUP	Note	Share Capital €'000	Share Premium €'000	Non-Controlling Interest €'000	Retained Earnings €'000		Total €'000

Balance as at 1 January 2010		2,321	91,477	11	( 18,091)		75,718
Total comprehensive income for the year
Profit for the year		-	-	-	15,021		15,021

Transactions with owners recorded directly to equity
Profit allocation to non-controlling interest		-	-	( 11)	11	-

Balance as at 31 December 2010		2,321	91,477	-	( 3,059)		90,739

Balance as at 1 January 2011		2,321	91,477	-	(3,059)		90,739
Total comprehensive income for the year
Loss for the year		-	-	-	(3,542)		(3,542)

Transactions with owners recorded directly to equity
Dividends declared	24	-	-	-	(36,928)		(36,928)
Issue of shares	24	46	(46)	-	---	-
Repurchase of shares	24	(58)	(48,909)	-	---	(48,967)

Balance as at 31 December 2011		2,309	42,522	-	( 43,529)		1,302

Company Statement of Changes in Equity

for the year ended 31 December 2011



COMPANY	Note	Share Capital €'000	Share Premium €'000	Retained Earnings €'000	Total €'000

Balance as at 1 January 2010		2,321	91,477	(21,397)	72,401
Total comprehensive income for the year
Profit for the year		-	-	82,028	82,028

Balance as at 31 December 2010		2,321	91,477	60,631	154,429

Balance as at 1 January 2011		2,321	91,477	60,631	154,429
Total comprehensive income for the year
Loss for the year		-	-	(55,177)	(55,177)

Transactions with owners recorded directly to equity
Dividends declared	24	-	-	(36,928)	(36,928)
Issue of shares	24	46	(46)	-	-
Repurchase of shares	24	(58)	(48,909)	-	(48,967)

Balance as at 31 December 2011		2,309	42,522	(31,474)	13,357

Statements of Financial Position

As at 31 December 2011

		2011	2011	2010	2010
	Note	Group	Company	Group	Company
		€'000	€'000	€'000	€'000
ASSETS
Non-current assets
Investment property	14	-	-	89,250	-
Loan to subsidiary	15	-	-	-	118,700
Goodwill	16	-	-	6,564	-
Deferred tax assets	19	-	-	618	-
		-	-	96,432	118,700
Current assets
Loan to subsidiary	15	-	2,950	-	-
Trade and other receivables	20	6,995	395	7,126	17,795
Assets held for sale	21	2,790	-	237,900	-
Cash and cash equivalents	22	49,948	44,656	26,773	14,391
Financial assets	23	-	-	3,823	3,820
		59,733	48,001	275,622	36,006

TOTAL ASSETS		59,733	48,001	372,054	154,706

EQUITY
Issued capital	24	2,309	2,309	2,321	2,321
Share premium	24	42,522	42,522	91,477	91,477
Retained earnings		( 43,529)	(31,474)	( 3,059)	60,631
TOTAL EQUITY		1,302	13,357	90,739	154,429
TOTAL EQUITY
LIABILITIES
Non-current liabilities
Other payables	26	-	-	19,160	-
Deferred tax liabilities	19	-	-	21,647	-
		-	-	40,807	-
Current liabilities
Trade and other payables	26	30,510	6,786	14,812	277
Bank loans	25	-	-	221,308	-
Provisions	27	63	-	997	-
Dividends payable	28	13,793	13,793	-	-
Repurchase of shares	24	14,065	14,065	-	-
Financial liabilities	23	-	-	3,391	-
		58,431	34,644	240,508	277

TOTAL LIABILITIES		58,431	34,644	281,315	277

TOTAL EQUITY AND LIABILITIES		59,733	48,001	372,054	154,706

Statements of Cash Flows

for the year ended 31 December 2011

		2011		2011	2010	2010
	Note		Group	Company	Group	Company
			€'000	€'000	€'000	€'000

Cash flows from operating activities
Cash (used in) / generated from operations	29		(15,239)	15,228	18,273	( 30,511)
Income taxes paid			(818)	-	( 1,014)	-
Net cash (used in) / generated from operating activities			(16,057)	15,228	17,259	( 30,511)

Cash flows from investing activities
Capital expenditure on investment properties			-	-	( 178)	-
Cash received on disposal of investment property			274,024	-	2,924	-
Cash conceded on derecognition			( 367)	-	( 2,866)	-
Interest received			840	269	283	3,873
Loans to unconsolidated entities			(150)	-	-	-
Loan repayment from subsidiary			-	72,805	-	22,985
Net cash generated from investing activities			274,347	73,074	163	26,858

Cash flows from financing activities
Interest paid			(7,673)	-	( 16,884)	-
Repayments of borrowings			( 169,405)	-	( 3,263)	-
Repurchase of share capital			(34,901)	(34,901)	-	-
Dividends paid			( 23,136)	( 23,136)	( 10,446)	( 10,446)
Net cash used in financing activities			(235,115)	( 58,037)	( 30,593)	( 10,446)

Net decrease in cash and cash equivalents			23,175	30,265	( 13,171)	( 14,099)
Cash and cash equivalents at the beginning of the year			26,773	14,391	39,944	28,490
Cash and cash equivalents at the end of the year	22		49,948	44,656	26,773	14,391

Notes to the financial statements

for the year ended 31 December 2011

1 General information

Carpathian PLC (the "Company") is a company domiciled and incorporated in the Isle of Man on 2 June 2005 for the purpose of investing in the retail property market in Central and Eastern Europe. On 24 July 2009 the Company re-registered as a company governed by the Isle of Man Companies Act 2006 and redenominated the par value of it's Ordinary Shares from pounds Sterling 0.01 to Euro 0.01.

The consolidated financial statements include the share capital of the Company denominated in Euro. As from 24 July 2009 the share capital was converted from pounds Sterling, based on the exchange rate prevailing on that date.

The Company's registered address is IOMA House, Hope Street, Douglas, Isle of Man IM1 1AP.

The Company was admitted to the AIM of the London Stock Exchange and commenced trading its shares on 26 July 2005. The Company raised approximately £140 million at listing and a further £100 million in May 2007 (before admission costs).

2 Significant accounting policies

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS's") and its interpretations adopted by the International Accounting Standards Board ("IASB").

The consolidated financial statements were authorised for issue by the Board on 24 April 2012.

(b) New standards and interpretations

As of the date of authorisation of these financial statements, the following Standards and Interpretations, which have not been applied in these financial statements, were in issue but not yet effective:

IAS 1 Presentation of Financial Statements - amendments to revise the way other comprehensive income is reported

IAS 12 Income Taxes - limited scope amendment

IAS 19 Employee Benefits - amendment resulting from Post Employment Benefits and Termination Benefits projects

IAS 27 Consolidated and Separate Financial Statements

IAS 28 Investments in Associates

IAS 32 Financial Instruments Presentation - amendments to the offsetting of financial assets and liabilities

IFRS 7 Financial Instruments - Disclosures

IFRS 9 Financial Instruments - classification and measurement and derecognition of financial liabilities

IFRS 10 Consolidated Financial Instruments

IFRS 11Joint Arrangements

IFRS 12 Disclosure of Interests in Other Entities

IFRS 13 Fair Value Measurement

IFRIC Interpretation

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

The Directors do not expect the adoption of the standards and interpretations to have a material impact on the Group's financial statements in the period of initial application.

The functional currency of the consolidated financial statements is the Euro as it is the currency of the primary economic environment in which the Group operates.

The Group applies revised IAS 1 Presentation of Financial Statements (2007), which became effective as of 1 January 2009. As a result, the Group presents in the consolidated statement of changes in equity all owner changes in equity, whereas non-owner changes in equity are presented in the consolidated statement of comprehensive income.

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain assets including the revaluation of investment property and financial instruments. The accounting policies have been consistently applied to the results, gains and losses, assets, liabilities and cash flows of all entities included in the consolidated financial statements.

The preparation of financial statements in conformity with IFRS requires the Directors to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various other factors which are believed to be reasonable under the circumstances, and are reviewed on an ongoing basis; they may have a significant impact on the financial statements, and actual results may differ from these estimates. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

The financial statements of the Group and Company have been prepared under the historical cost convention. The Company intends to seek shareholders' approval to de-list the Company from the Alternative Investment Market of the London Stock Exchange and in due course thereafter to commence and implement an orderly members voluntary liquidation. As explained in the Directors' Report, the Directors therefore do not consider the Company to be a going concern and have prepared the financial statements on a break up basis and therefore all operations are presented as discontinuing operations. There has been no financial impairment of the Group's and Company's assets as a result of a break up basis of valuation, as remaining assets held for sale are carried at fair value less expected sales costs. All expected liquidation costs and expenses expected to be incurred post year end until eventual liquidation have been accrued for, in line with management's best estimates.

(d) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the minority's share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the non-controlling interest in the subsidiary's equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to ensure uniformity with the accounting policies adopted by the Group.

The Company does not continue to consolidate entities where effective control over the company's assets has been asserted by another party. The Company will recognise the deconsolidation on the date at which control and any rights to significant risk and reward is transferred to the superseding party. The results of subsidiaries deconsolidated during the year are included in the consolidated Statement of Comprehensive Income up to the effective date of disposal.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

(e) Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised provisionally at the best estimate of their fair value at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for resale in accordance with IFRS 5: Non-current assets held for sale and discontinued operations are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. Goodwill is subject to an impairment review by the Directors at a minimum of an annual basis.

The non-controlling interest in the acquiree is initially measured at the non-controlling interest's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

The revenue and profit of the subsidiaries in relation to all business combinations effected during the year has not been disclosed as the information is not readily available.

(f) Jointly controlled entities

A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership or other entity in which each venturer has an interest and contractual arrangements between the venturers establish joint control over the economic activity of the entity.

Jointly controlled entities are accounted for using the equity method. They are recognised initially at cost and adjusted thereafter for the post acquisition change in the Group's share of net assets of the joint controlled entity. The Group Statement of Comprehensive Income includes the Group's share of the profit or loss of the jointly controlled entity from the date that joint control commences until the date that joint control ceases. When the Group's share of losses exceeds its interest in a jointly controlled entity, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the jointly controlled entity.

(g) Goodwill

Goodwill is allocated as described in note 16. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. This impairment review is performed at least annually. Any impairment is recognised immediately in the Statement of Comprehensive Income and is not subsequently reversed. Since goodwill is calculated and attributed to the purchase of property portfolios rather than individual companies, negative goodwill is not credited to the Statement of Comprehensive Income, but offset against positive goodwill generated by the purchase of the portfolio as a whole.

(h) Revenue recognition

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts over the expected life of the financial asset to that asset's net carrying amount.

Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.

(i) Leases

Leases are classified as finance leases whenever the terms of the lease substantially transfer the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Group only has operating leases where it is the lessor (note 2h). Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

(j) Foreign currencies

The functional currency of the Group and the Company is considered to be the Euro. It is the currency of the primary economic environment in which it operates. For the purpose of the financial statements, the results and financial position of the Company and Group are presented in Euros as the Company is listed on the London Stock Exchange and its share price is quoted in Euros.

In preparing the financial statements of the individual companies, transactions (other than those in the functional currency) are recorded in foreign currency. The functional currency equivalent is also recorded where the underlying transaction is not denominated in functional currency. At each Balance Sheet date, all monetary assets and liabilities denominated in foreign currency are translated to functional currency at the rate prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Income and expense items are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during that year, in which case the exchange rates at the date of transactions are used.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the Statement of Comprehensive Income for the year. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included the Statement of Comprehensive Income for the year except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

In order to hedge its exposure to certain foreign exchange risks, the Group reviews its position to enter into forward contracts and options (see note 2(m) for details of the Group's accounting policies in respect of such derivative financial instruments).

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's operations are translated at exchange rates prevailing on the Balance Sheet date. Income and expense items are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during that year, in which case the exchange rates at the date of transactions are used. Such translation differences are recognised as income or as expenses in the year in which the operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(k) Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax represents the tax expected to be payable or recoverable arising on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the Statement of Financial Position liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the accounting profit nor the tax profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off, when they relate to income taxes levied by the same taxation authority and the Group intends to settle its tax on a net basis.

(l) Investment property

Investment properties are properties held for long term rental income or for capital appreciation or both.

Acquisitions through direct asset purchases are initially stated at cost, including related transaction costs. Acquisitions through business combinations are stated at fair value at the date of acquisition. Additions to investment properties consist of costs of a capital nature.

Acquisitions through long term leases which substantially transfer the risks and rewards of ownership to the lessee are treated as finance leases, and are initially stated at the lower of fair value or the present value of minimum lease payments. Where finance lease payments are subsequently adjusted, the present value of the minimum lease payments are adjusted accordingly.

The Group applies revised IAS 40 Investment Property (2008), which became effective as of 1 January 2009. As a result, the Group's development properties are now classified as Investment Property and are recognised initially at cost and subsequently at fair value. Cost includes all costs directly associated with the purchase and construction of development properties and attributable interest. Fair value is independently determined by professionally qualified valuers at market value at the Statement of Financial Position date. Gains or losses arising from changes in fair value of investment properties are included in the Statement of Comprehensive Income in the year in which they arise. This presentation has been applied in these financial statements as of and for the year ended 31 December 2009.

Borrowing costs relating to development properties are capitalised to the asset on which they are incurred.

(m) Financial instruments

Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument in accordance with IAS 39 Financial Instruments Recognition and Measurement.

Trade receivables

Trade receivables are classified under the loans and receivable category and are measured at initial recognition at fair value. Subsequently, they are measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in the Statement of Financial Position when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the carrying amount of the asset and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Investments

Investments are classified as available for sale financial assets and recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract which terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost, including transaction costs.

Loans to subsidiaries

Loans are initially measured at fair value. After initial recognition, loans are measured net of any accumulated impairment losses. This impairment review is performed at least annually. Any impairment is recognised immediately in the Statement of Comprehensive Income.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and other short-term, highly liquid investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities, except for borrowing costs incurred in respect of development projects which are capitalised as per note 2(l).

Bank borrowings

Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs, which is considered to be its fair value. Finance charges, except for borrowing costs incurred in respect of development projects which are capitalised as per note 2(l), including premiums payable on settlement or redemption and direct issue costs, are accounted for in the Statement of Financial Position at amortised cost using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the year in which they arise.

Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost using the effective interest rate method.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs, which is considered to be its fair value.

Derivative financial instruments

The Group uses interest rate swap contracts to hedge all the interest on its external debt, and classifies these under the financial instruments at fair value though profit and loss on initial recognition.

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value. Derivatives are measured at initial recognition at fair value excluding transaction costs, and are subsequently measured at fair value. Fair value is the estimated amount that the Group would receive or pay to terminate the derivative at the Statement of Financial Position date, taking account of current interest rates. Gains or losses on the revaluation of derivatives are reported in the Statement of Comprehensive Income.

(n) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors best estimate of the expenditure required to settle the obligation at the Statement of Financial Position date, and are discounted to present value where the effect is material.

(o) Determination and presentation of operating segments

The Group determines and presents operating segments based on the information that internally is provided to the Board of Directors.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. An operating segment's operating results are reviewed regularly by the Board to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Board of Directors include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly income and expenditure associated with the various holding companies within the Group.

The operating segments frequently transact between themselves. The transactions include intra-group loans, associated interest and recharged expenses. Loan interest is charged at market rates and expenses are recharged at cost.

(p) Assets held for sale

A non-current asset is classified as held for sale if the Group has entered into a sale transaction with an expected date of completion within twelve months of the year end and if such asset meets the full criteria laid down in IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations'. A non-current asset classified as held for sale is measured at the value prescribed by the sales agreement to which it pertains less future costs to sell.

Non-current assets held for sale are shown separately on the face of the Statement of Financial Position.

3 Critical accounting judgments and key sources of estimation uncertainty

Critical judgments in applying the Group's accounting policies

In the process of applying the Group's accounting policies, which are described in note 2, the Directors have made the following judgments that have the most significant effect on the amounts recognised in the consolidated financial statements.

Investment and loan to subsidiary

Following a detailed review of the financial positions of the Company's subsidiaries, the Directors are satisfied that the carrying amount of investments and loans to subsidiaries, net of the impairment for the year, is justified. More details are available in note 15.

Impairment of goodwill

Following a detailed review of the business combinations acquired, the Directors are satisfied that the carrying amount of the goodwill, net of the impairment loss for the year, is justified. More details on goodwill are available in note 16.

Valuation of investment and development property

The fair value of the Group's investment and development property was determined by independent valuers. The valuation, which conforms to the appropriate sections of both the current Practice Statement and United Kingdom Practice Statements contained within the RICS Valuations Standards, 6th Edition (the "Red Book"), was arrived at by reference to market evidence of transaction prices for similar properties. Further details on investment and development property are available in note 14.

4 Operating segments

The Group has three reportable segments, as described below, which are the Groups business units. The business units are managed separately because they represent the varying strategic objectives of the Group. For each of these strategic business units the Board reviews internal management accounts on at least a quarterly basis.

The Fund segment comprises the holding companies in Isle of Man and Luxembourg.

Core assets are those which are considered to retain significant enduring equity value, to protect on a prudent basis. All other assets are classified as non-core.

Consolidated Statement of Comprehensive Income	2011	2011	2011	2011
	Fund	Core	Non-core	Total
	€'000	€'000	€'000	€'000

Gross rental income	-	8,810	3,660	12,470
Service charge income	-	3,611	656	4,267
Service charge expense	-	(4,470)	( 738)	( 5,208)
Property operating expenses	( 2,548)	( 994)	(267)	( 3,809)
Other property income	379	750	88	1,217
Net rental and related income	( 2,169)	7,707	3,399	8,937


Changes in fair value of investment property	-	(2,960)	-	(2,960)

Profit on derecognition of investment properties	-	-	3,421	3,421

Profit on disposal of investment properties	-	9,787	(9)	9,778

Distributed capital payout	(10,507)	-	-	(10,507)

Impairment of goodwill	-	60	-	60

Impairment of loans receivable	-	-	( 150)	( 150)

Changes in fair value of derivative assets and liabilities	-	( 566)	-	(566)

Net foreign exchange gain	(135)	498	(227)	136

Administrative expenses	( 4,559)	( 1,821)	( 455)	( 6,835)

Net operating (loss) / profit before net financing expense	( 17,370)	12,705	5,979	1,314

Financial income	305	534	1	840
Financial expense	( 373)	( 4,534)	( 2,766)	( 7,673)
Changes in fair value of interest rate swaps	-	1,311	1,666	2,977
Net financing expense	( 68)	(2,689)	( 1,099)	( 3,856)

Net (loss) / profit before tax	( 17,438)	10,016	4,880	(2,542)

Current tax	(279)	(534)	( 5)	( 818)
Deferred tax	-	355	( 537)	( 182)

(Loss) / profit for the year and total comprehensive income for the year	( 17,717)	9,837	4,338	(3,542)

Information for 2010 is not shown as it does not provide any meaningful comparison due to the current position of the Company as stated in note 1. This information is available on the Company website.

	Consolidated Statement of Financial Position				2011		2011			2011			2011
					Fund		Core			Non-core			Total
					€'000		€'000			€'000			€'000
	ASSETS
	Current assets
	Trade and other receivables				2,046		4,949			-			6,995
	Assets held for sale				-		2,790			-			2,790
	Cash and cash equivalents				47,491		2,457			-			49,948
					49,537		10,196			-			59,733

	TOTAL ASSETS				49,537		10,196			-			59,733


	LIABILITIES

	Current liabilities
	Trade and other payables				20,034		10,476			-			30,510
	Provisions				-		63			-			63
	Dividends payable				27,858		-			-			27,858
					47,892		10,539			-			58,431

	TOTAL LIABILITIES				47,892		10,539			-			58,431

	NET ASSETS				1,645		(343)			-			1,302

	EQUITY

	Issued capital												2,309
	Share premium												42,522
	Retained earnings												( 43,529)
	TOTAL EQUITY												1,302


	Geographical segments
	The Company is incorporated in the Isle of Man but operates in several jurisdictions in mainland Europe. In presenting information on geographical segments revenue is based on geographical location of property. Segment assets are based on the geographical location of the assets.

			Isle of Man	Poland	Hungary		Czech Republic			Other jurisdictions			Total
			€'000	€'000	€'000		€'000			€'000			€'000

	Revenue (all discontinuing)
	Gross rental income		-	6,105	1,468		2,193			2,704			12,470
	Service charge income		-	2,641	110		546			970			4,267
	Other property income		379	729	72		15			22			1,217
	Total		379	9,475	1,650		2,754			3,696			17,954

	The Group has no non-current assets.
										2011			2010
5	Gross rental income									Group			Group
										€'000			€'000

	Gross lease payments collected / accrued									12,470			30,659

	During 2011 and 2010 the Group leased out its investment property under operating leases, all for terms of 1 - 15 years. The assets held for sale at 31 December 2011 do not generate significant income.

6	Operating Leases

	Group as lessor
	All properties let by the Group are under operating leases and the future minimum lease payments receivable under non-cancellable leases are as follows:

										2011			2010
										Group			Group
										€'000			€'000

	Less than one year									-			13,046
	Between one and five years									-			40,660
	More than five years									-			52,794
										-			106,500

7	Net service charge income and property operating expenses

	Net service charge income					2011				2011	2011
						Vacant				Rented out	Total
	Net service charge income					€'000				€'000	€'000

	Service charge income					-				4,267	4,267
	Service charge expenses					( 945)				( 4,263)	( 5,208)
						(945)				4	( 941)


						2010				2010	2010
						Vacant				Rented out	Total
	Net service charge income					€'000				€'000	€'000

	Service charge income					4				11,283	11,287
	Service charge expenses					( 1,888)				( 11,800)	( 13,688)
						( 1,884)				( 517)	( 2,401)


	Property operating expenses									2011	2010
										€'000	€'000

	Portfolio management fees									2,548	3,464
	Property taxes and fees									70	106
	Bad debts (recovered) / written off									(21)	1,642
	Property maintenance and improvements									146	141
	Management agent fees									416	296
	Legal proceedings									235	252
	Leasing fees									80	314
	Valuation fees									62	28
	Marketing fees									1	96
	Other property operating expenses									272	143
										3,809	6,482

	Other property operating expenses comprise items such as building maintenance and agency
	commissions.

	Tabulated below are the amounts of property operating expenses arising from investment
	property that generated income and did not generate income during the year:									2011	2010
										€'000	€'000

	Generated rental income									3,747	5,321
	Did not generate income									62	1,161
										3,809	6,482


8	Other property income									2011	2010
										€'000	€'000

	Parking revenue									9	37
	Penalty interest									65	44
	Penalties on early termination of lease agreements									21	238
	Ice rink income									27	64
	Other property income									239	117
	Other corporate income									856	(80)
										1,217	420



9		Administrative expenses			2011		2011			2010			2010
					Group		Company			Group			Company
					€'000		€'000			€'000			€'000

		Accounting fees			824		-			1,122			-
		Legal fees			532		279			765			334
		Audit fees			437		281			482			211
		Non-audit services			34		8			14			14
		Abortive acquisition costs and irrecoverable debts			-		-			(45)			-
		Other administrative expenses			522		89			751			77
		Irrecoverable VAT			376		-			679			-
		Portfolio management fees			530		530			577			576
		Tax advisory fees			34		-			157			-
		Consultancy fees			193		-			803			272
		Non-executive Directors fees			902		842			391			319
		Liquidation costs			2,109		1,070			-			-
		Custody / trust fees			174		157			82			62
		Public relation fees			-		-			5			-
		Bank charges and fees			55		4			110			4
		Nominated adviser fees			113		113			81			69
					6,835		3,373			5,974			1,938

		Liquidation costs include all expected costs and expenses expected to be incurred post year end until eventual liquidation, in line with management's best estimates. Other administrative expenses include items of a general corporate nature.

10		Directors' remunerations

		Details of Directors' remunerations are as follows:
					Fees		Bonus			Other			Total
					€'000		€'000			€'000			€'000
		Year to 31 December 2011

		R P Macnamara			98		390			-			488
		P R Cottrell			62		120			-			182
		P P Scales			-		-			-			-
		T G Walker			52		120			-			172
					212		630			-			842

					Fees		Bonus			Other			Total
					€'000		€'000			€'000			€'000
		Year to 31 December 2010

		R P Macnamara			196		-			-			196
		P R Cottrell			62		-			-			62
		P P Scales			-		-			-			-
		T G Walker			52		-			-			52
		A M Shepherd			9		-			-			9
					319		-			-			319


11		Net financing income and expenditure			2011		2011			2010	2010
					Group		Company			Group	Company
					€'000		€'000			€'000	€'000
		Financing income:
		Interest income from financial institutions			840		269			325	139
		Interest income from subsidiary			-		20,865			-	21,427
					840		21,134			325	21,566


		Financing expenditure:
		Net interest expenses on bank and other borrowings			(6,778)		-			(14,690)	-
		Finance costs amortised			(496)		-			(1,098)	-
		Unwinding of unrealised direct issue costs of borrowings			(399)		-			(175)	-
					(7,673)		-			(15,963)	-


		Fair value adjustment of interest rate swaps			2,977		-			647	-



12		Taxation
								2011			2010
		Recognised in the Statement of Comprehensive Income						Group			Group
								€'000			€'000
		Current tax expense
		Current year						617			766
		Adjustment for prior years						-			8
		Irrecoverable withholding tax						201			-
								818			774
		Deferred tax expense
		Origination of temporary differences							182			5,474

		Total tax expense in the Statement of Comprehensive Income						1,000			6,248

The current year tax expense arises in:

	2011	2010
	Group	Group
	€'000	€'000

Croatia (20%) Cyprus (10%) Latvia (2011 and 2010: 15%)	- - 355	534 39 -
Luxembourg (2011 and 2010: 29%) Poland (2011 and 2010: 19%)	128 134	78 115
	617	766

		The tax rate applicable to the Company in the Isle of Man is 0%. The tax expense of €0.6 million (2010: €0.8 million) in respect of current profits and adjustments for prior years represents tax charges on net profits arising in other jurisdictions, as shown, that are subject to corporate income tax in those jurisdictions at rates in the range 15% to 24% and a Municipal Business tax at the rate of 6.75% in Luxembourg. As all current year tax charges arise in jurisdictions outside the Isle of Man, a full tax rate reconciliation of the relationship between the tax expense and accounting profit has not been included within these financial statements.

13			Earnings per share

	Basic earnings per share

	The calculation of basic earnings per share for the year ended 31 December 2011 was based on the loss attributable to Ordinary Shareholders of €3.5 million (2010: profit €15.0 million) and a weighted average number of Ordinary Shares in issue of 248,048,735 (2010: 232,148,175), calculated as follows:
												2011	2010
	(Loss) / profit attributable to Ordinary Shareholders											Group	Group
												€'000	€'000
	(Loss) / profit for the year											(3,542)	15,021
	Non-controlling interest											-	11
	(Loss) / profit attributable to Ordinary Shareholders											(3,542)	15,032


	Weighted average number of Ordinary Shares
												2011	2010
	Shares in issue at 1 January											232,148,175	232,148,175
	Weighted average number of Ordinary Shares											248,048,735	232,148,175

	Basic (loss) / earnings per share											(1.4) €,c	6.5 €,c

	Diluted earnings per share
	The calculation of diluted earnings per share for the year ended 31 December 2011 was based on the diluted loss attributable to Ordinary Shareholders of €3.5 million (2010: profit €15.0 million) and a weighted average number of Ordinary Shares outstanding during the year ended 31 December 2011 of 248,048,735 (2010: 232,148,175), calculated as follows:

	(Loss) / profit attributed to Ordinary Shareholders (diluted)											2011	2010
												Group	Group
												€'000	€'000
	(Loss) / profit for the year											(3,542)	15,021
	Non-controlling interest											-	11
	(Loss) / profit attributable to Ordinary Shareholders											(3,542)	15,032

	Weighted average number of Ordinary Shares for the purposes of diluted earnings per share											2011	2010

	Weighted average number of Ordinary Shares for the purposes of diluted earnings per share											248,048,735	232,148,175

	Diluted (loss) / earnings per share											(1.4) €,c	6.5 €,c

14				Investment property and development property

						2011	2011		2011		2010	2010			2010
						Investment	Development				Investment	Development
						property	property		Total		property	property			Total
						Group	Group		Group		Group	Group			Group
						€'000	€'000		€'000		€'000	€'000			€'000

				Balance at 1 January		84,150	5,100		89,250		89,250	31,350			453,227
				Additions		-	-		-		-	177			177
				Disposals		(28,250)	(2,100)		(30,350)		(46,000)	(27,300)			(73,300)
				Derecognition of assets		(53,150)	-		(53,150)		( 46,950)	-			( 46,950)
				Finance lease obligations		-	-		-		817	-			817
				Movement in fair value		(50)	(2,910)		(2,960)		6,999	873			7,872
				Assets transferred to held for sale		(2,700)	(90)		(2,790)		(252,593)	-			(252,593)
				Balance at 31 December		-	-		-		84,150	5,100			89,250


	On 18 November 2011, the Company disposed of its investment in and loans receivable from Atrium Center Satu Mare Srl. The company owned the Group's development property at Satu Mare in Romania. The overall accounting loss on disposal was €1.1 million.

	On 7 December 2011 the Company disposed of its investment in and loans receivable from Mulga UAB. This company owned the Group's investment property at Babilonas in Lithuania. The overall accounting loss on disposal was €1.4 million.

	The net assets disposed of are detailed below:

											Satu Mare	Babilonas		Total
											€'000	€'000		€'000

					Assets
					Investment property						-	25,000		25,000
					Development property						2,100	-		2,100
					Trade and other receivables						15	390		405
					Cash and cash equivalents						-	1,311		1,311
					Total assets						2,115	26,701		28,816

					Liabilities
					Trade and other payables						75	550		625
					Bank loans						-	18,319		18,319
					Deferred tax liabilities						-	781		781
					Total liabilities						75	19,650		19,725

					Net assets						2,040	7,051		9,091

	During the year the Group took the decision to derecognise the MID portfolio with effect from 1 October 2011 as all the risks and rewards of ownership were no longer retained by the Group. The overall accounting profit on derecognition was €3.4 million.

	The individual statements of financial position of the derecognised entities, at the date of derecognition, are detailed below:


							DDC Eta	Carpathian Eta		DDC Gamma		Carpathian Gamma	DDC Znaim
							Kft	Kft		Kft		Kft	s.r.o
							€'000	€'000		€'000		€'000	€'000
					Assets
					Investment property		-	11,000		-		9,900	-
					Trade and other receivables		38	4		23			13
					Cash and cash equivalents		1	119		2		76	3
					Investments in subsidiaries		5,294	-		3,746		-	1,680
					Intercompany loans receivable		-	173		-		94	544
					Deferred tax assets		-	-		-		9	-
					Total assets		5,333	11,296		3,771		10,079	2,240

					Liabilities
					Bank loans		1,800	10,596		800		9,283	-
					Trade and other payables		6	209		6		151	18
					Inter-company loans payable		178	-		222		66	2,943
					Deferred tax liabilities		-	249		-		-	-
					Total liabilities		1,984	11,054		1,028		9,500	2,961

					Net assets / (liabilities)		3,349	242		2,743		579	(721)

	Carpathian Znaim	DDC Hradec Kralove	Carpathian Hradec Kralove
	s.r.o	s.r.o	s.r.o	Total
	€'000	€'000	€'000	€'000
Assets
Investment property	8,250	-	24,000	53,150
Trade and other receivables	35	69	104	286
Cash and cash equivalents	17	2	147	367
Investments in subsidiaries	-	3,076	-	13,796
Inter-company loans receivable	21	2,018	275	3,125
Deferred tax assets	-	-	-	9
Total assets	8,323	5,165	24,526	70,733

Liabilities
Bank loans	7,613	-	22,788	52,880
Trade and other payables	59	5	469	923
Inter-company loans payable	622	6,304	1,996	12,331
Deferred tax liabilities	398	-	1,354	2,001
Total liabilities	8,692	6,309	26,607	68,135

Net assets / (liabilities)	(369)	(1,144)	(2,081)	2,598



				The profit on disposal, after all accounting adjustments, was:-
										2011
										€'000

				Loss on disposal						( 6,198)
				Release of deferred tax						19,218
				Release of goodwill (note16)						( 6,624)
				Profit on disposal						6,396
				Further details on disposals during the year are provided in the Chairman's Statement.
15			Investment and loan to subsidiary
			The Company has lent € 236.4 million (2010: € 269.0 million) to Carpathian Holdings S.à. r.l at 31 December 2011. The loans mature on 31 December 2015. The loans carry interest at 1% per annum plus 100% of Carpathian Holdings S.à.r.l adjusted accounting profits for the relevant accounting period, which has been accrued at 31 December 2011 and has been accounted for within trade and other receivables within the Company financial statements. The Company owns 1,641 shares in Carpathian Holdings S.à. r.l, representing 100% of the share capital.

								2011			2010
								Loans			Loans
								€'000			€'000

			Balance at 1 January					118,700			46,755
			Additions					3,312			5,020
			Write off due to disposals					-			( 25,205)
			Repayments					(76,117)			( 2,800)
			Impairment (loss) / gain					(42,945)			94,930
			Balance at 31 December					2,950			118,700

			The Company has reduced the carrying value of its investments and loans, to equate to the underlying net asset value of its subsidiary.

			Following the annual review, a further impairment provision of €42.9 million was made during the year.

16		Goodwill
						2011			2010
						Group			Group
						€'000			€'000
		Cost
		Balance at 1 January				28,109			44,091

		Acquisitions through business combinations				-			5
		Write off of disposals				(21,610)			( 4,706)
		Write off of derecognised				(6,543)			( 11,281)
		Write off of remaining				44			-

		Balance at 31 December				-			28,109

		Impairment losses
		Balance at 1 January				(21,545)			( 36,194)

		Write off of disposals				14,986			3,368
		Write off of derecognised				6,543			11,281
		Write off of remaining				16			-

		Balance at 31 December				-			(21,545)

		Carrying amounts
		At 1 January				6,564			7,897
		At 31 December				-			6,564

	Disposals Net goodwill amounting to €6.6 million relating to assets disposed during the year has been written off. Derecognition In October 2011 the Group took the decision to derecognise the MID portfolio as all the risks and rewards of ownership are no longer retained by the Group.

	The net effect on goodwill of this derecognition was €nil as the goodwill on these non-core assets was fully provided against at 31 December 2010.

17			Other investments				2011			2010
							Group			Group
							€'000			€'000
			Investment in SIA Patollo:
			Balance at 1 January				-			7,452
			Recapitalisation of loan to cost of investment				-			3,920
			Impairment of investment				-			( 11,372)
			Balance at 31 December				-			-

			In April 2007 the Group acquired 17.95% of the issued share capital of SIA Patollo. In May 2010 a new shareholders agreement was signed to convert loans made to SIA Patollo to share capital and increase the Company's shareholding to 80%. SIA Patollo undertook the development of the Galleria Shopping Centre in Riga, Latvia which was completed in October 2010.

			The shares continue to confer 50% of the shareholder voting rights, dividend rights and rights upon a winding up. The Group has appointed 2 of the 4 directors to SIA Patollo; certain key decisions require the consent of at least 75% of those directors.

			The investment bears a return of 15% pa.

			The investment property held by SIA Patollo was valued at 31 December 2011 at €40.0 million (2010: €40.0 million). Bank financing on the asset at 31 December 2011 amounts to €56.8 million (2010: €55.8 million). The loans receivable from SIA Patollo have been impaired in full to ensure that the carrying value of the investment in and loans to SIA Patollo do not exceed the equity in the property.

			On 20 March 2012, the Group disposed of its investment in SIA Patollo, as part of the disposal of its various interests held in the Galleria shopping centre in Riga, Latvia. Further details are set out in note 33.

18			Loans receivable		2011	2011		2010			2010
					Group	Company		Group			Company
					€'000	€'000		€'000			€'000
			Non-current assets
			Loans to SIA Patollo		-	-		-			-

			Current assets
			Loans to SIA Bluebeech		-	-		-			-

			The loans to SIA Bluebeech bear interest at 25% pa and were repayable by 5 February 2010. The loans are secured by a first legal charge over that company's property and its shares and are further subject to a guarantee provided by SIA Patollo (secured by a third legal charge over that company's properties). As of 31 December 2011 the loan had been impaired in full.


			Loans to SIA Patollo
								2011			2010
								Group			Group
								€'000			€'000

			Balance at 1 January					-			3,920

			Advances Impairment Recapitalised to cost of investment					150 (150) -			- - ( 3,290)

			Balance at 31 December					-			-

			Loans to SIA Bluebeech
								2011			2010
								Group			Group
								€'000			€'000

			Balance at 1 January					-			2,000

			Impairment loss					-			( 2,000)

			Balance at 31 December					-			-

			The development asset held by SIA Bluebeech was valued at 31 December 2011 at €1.6 million (2010: €1.6 million). The loans receivable from SIA Patollo have been impaired in to ensure that the carrying value of the loans to SIA Bluebeech does not exceed the equity in the property and due to doubts over the recoverability of the loan.

On 20 March 2012, the Group disposed of its loans to SIA Patollo and SIA Bluebeech as part of the disposal of its various interests held in the Galleria shopping centre in Riga, Latvia. Further details are set out in note 33.


19	Deferred tax assets and liabilities

	Deferred tax assets & liabilities are attributable to the following items:
		2011 Group	2011 Group	2010 Group		2010 Group
		Assets	Liabilities	Assets		Liabilities
		€'000	€'000	€'000		€'000

	Investment property valuation	-	-	-		21,194
	Interest rate swap valuation	-	-	227		-
	Accrued interest payable	-	-	389		-
	Tax losses carried forward	-	-	2		-
	Other temporary differences	-	-	-		453
		-	-	618		21,647


	The movement in deferred tax in the year comprises:			2011	2010
				Group	Group
				€'000	€'000

	Net balance at 1 January			21,029	20,832
	Origination of temporary differences			182	5,474
	Disposals			(19,218)	( 2,680)
	Derecognitions			(1,993)	( 2,597)
	Net balance at 31 December			-	21,029

20		Trade and other receivables		2011		2011		2010		2010
				Group		Company		Group		Company
				€'000		€'000		€'000		€'000

		Trade receivables		105		-		1,307		-
		Other receivables		6,797		379		5,362		-
		Prepayments		93		16		371		104
		Accrued interest on loans		-		-		86		17,691
				6,995		395		7,126		17,795


		As at 31 December 2011, trade receivables at a nominal value of €3.3 million (2010: € 3.9 million) were impaired and fully provided for. Movements in the provision for impairment of receivables were as follows:

				2011		2011		2010		2010
				Group		Company		Group		Company
				€'000		€'000		€'000		€'000

		Balance at 1 January		3,906		-		3,761		-
		Amounts written off during the year		(304)		-		( 72)		-
		Amounts recovered		-		-		( 284)		-
		(Decrease) / increase in allowance recognised in Statement of Comprehensive Income		(21)		-		1,282		-
		Written off on disposal		(247)		-		( 781)		-
		Balance at 31 December		3,334		-		3,906		-


		At 31 December 2011 and 31 December 2010 the ageing analysis of trade receivables is as follows:

				2011		2011		2010		2010
				Group		Company		Group		Company
				€'000		€'000		€'000		€'000

		Less than 30 days		3		-		620		-
		30-60 days		96		-		212		-
		60-90 days		-		-		72		-
		90-120 days		-		-		102		-
		Greater than 120 days		6		-		301		-
				105		-		1,307		-


21		Assets held for sale
								2011		2010
								Group		Group
								€'000		€'000
		Investment property						2,700		237,900
		Development property						90		-
								2,790		237,900

		The fair value of the Group's assets held for sale at 31 December 2011 has been arrived at on the basis of a valuation carried out at that date by Colliers International UK PLC, qualified independent valuers with recent experience in the location and category of property being valued. Fair value represents the amount at which the assets could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arm's length transaction after proper marketing at the date of the valuation.
		On 20 March 2012, the Group disposed of its investment property, as part of the disposal of its various interests held in the Galleria shopping centre in Riga, Latvia. Further details are set out in note 33.


22		Cash and cash equivalents

		Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.

23		Risk Management

		The Board of Directors has overall responsibility for establishment and oversight of the Group's risk management framework. It oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group's risk management policies are established, in conjunction with the Property Adviser, to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group is exposed to the following risks: interest rate risk, currency risk, market risk, credit risk and liquidity risk. The Group uses derivative financial instruments to hedge its exposure to certain risks, or for capital management purposes, but does not use them for speculative purposes.
		Capital Management

		The Group manages its capital to maximise the return to the shareholders through the optimisation of the debt and equity balance.

		The capital structure of the Group at 31 December 2011 consists of equity attributable to equity holders of the Company, comprising issued capital, reserves and retained earnings as disclosed.

		The Group manages its capital structure and makes adjustments to it, in light of economic conditions and the strategy approved by shareholders. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares and release the Company's share premium account. No changes were made in the objectives, policies or processes during the years ended 31 December 2011 and 31 December 2010.


		Derivative assets and liabilities
		The Group and Company have no derivative assets and liabilities at 31 December 2011:	2011			2011		2010		2010
			Group			Company		Group		Company
			€'000			€'000		€'000		€'000
		Derivative assets:
		Put and call options	-			-		3,821		3,820
		Other financial assets	-			-		2		-
			-			-		3,823		3,820

		Derivative liabilities:
		Interest rate swaps	-			-		(3,391)		-

		Fair value hierarchy
		The table below analyses derivative assets and liabilities carried at fair value, by valuation method. The different levels have been defined as follows:

		· Level 1: Inputs that are observable for the assets or liabilities, either directly or indirectly.
		· Level 2: Inputs for the assets or liabilities that are not based on observable market data.

						Level 1		Level 2		Total
						€'000		€'000		€'000
		31 December 2011
		Interest rate swaps used for hedging				-		-		-
		Put and call options				-		-		-
		Other financial assets				-		-		-
						-		-


		31 December 2010
		Interest rate swaps used for hedging				(3,391)		-		(3,391)
		Put and call options				-		3,821		3,821
		Other financial assets				-		2		2
						(3,391)		3,823		432



		The movement in the year in derivative assets and liabilities comprises:
								2011		2011
								Group		Company
								€'000		€'000

		Balance at 1 January						432		3,820
		Movements during the year						(2,843)		(3,820)
		Fair value adjustments						2,411		-
		Balance at 31 December						-		-

		Per Statement of Comprehensive Income
		Changes in fair value of derivative assets and liabilities						(566)		-
		Changes in fair value of interest rate swaps						2,977		-
								2,411		-


	Put and call options: The Company had entered into a put and call option entitling and requiring Petalang Limited to subscribe for new ordinary shares in the Company for an aggregate amount equal to the deferred consideration actually receivable by Perriniana Limited, less an amount for its corporation tax as certified to be owed as a result of its disposal to the Group, at an effective exercise price of €1.04 per share. At 31 December 2010 it was estimated that the net deferred consideration payable amounted to €5.4 million, which would result in the issue of 5,036,904 new ordinary shares at the exercise price of €1.04 per share. The mark to market adjustment relative to the market price of the Company's shares at 31 December 2010 and the exercise price of €1.04 per share amounted to €3.8 million, which was disclosed as a financial asset. In December 2011 the Company entered into arrangements, which completed in January 2012, under which these reinvestment obligations were cancelled; further details are set out in note 33.

Interest rate risk
At 31 December 2011, the Group had no borrowings. The interest rate risk is the risk that changes in interest rates will result in a decrease in the income receivable from cash deposits by the Company and Group.

The Group's exposure to interest rates on financial assets is detailed in the liquidity risk management section of this note.

The following table demonstrates the sensitivity to a possible change in interest rates, with all other variables held constant, on the Group's net loss before tax (through the impact on floating rate deposits, taking into account the dividend of €27.9 million paid in January 2012.

							Group		Company
					Increase / (decrease) in basis points		effect on net loss before tax		effect on net loss before tax
							€'000		€'000
2011
Increase					100		22		17
Decrease					(100)		(22)		(17)

2010
Increase					100		(2,058)		144
Decrease					(100)		2,058		(144)

Currency risk

Currency risk is the risk that changes in the exchange rate will negatively affect the nets assets of the Company and Group when translating the value of assets and liabilities not accounted for in the functional currency, namely cash, trade and other receivables and trade and other payables.

The Group's activities expose it to currency risk, in the form of assets and liabilities denominated in currencies other than the functional currency, and changes between the functional currencies. The Group has a policy to review its foreign currency exposure half-yearly. The review evaluates the cost/benefit ratio of introducing foreign currency hedges or options to minimise the perceived risk.

The following table demonstrates the sensitivity of the presented net loss before tax to a possible change in currency rates, with all other variables held constant, through the impact on currency rate changes between the Euro and pounds Sterling on the Company's cash.
		Group	Company
	Increase / decrease in currency	Effect on net profit before tax	Effect on net profit before tax
		€'000	€'000
2011
Increase	10c	770	770
Decrease	(10c)	( 770)	( 770)

2010
Increase	10c	230	230
Decrease	(10c)	( 230)	( 230)

The table below shows the euro equivalent of material balances held in foreign currencies that are deemed subject to currency risk.

Pounds

Sterling

Polish Zloty

Latvian Lats

Romanian New Lei

€'000

Cash and cash equivalents

9,164

1,741

340

Trade and other receivables

4,742

159

Trade and other payables

(6,786)

( 301)

( 8,676)

( 507)

Market risk

As referred to in note 33, the Group disposed of its last remaining significant property asset in March 2012. Therefore market risk is no longer significant to the Group's income or the value of its net assets.

Credit risk

The credit risk on liquid funds is limited as the counterparties are banks which have been partly or wholly nationalised or have reasonable credit-ratings assigned by international credit-rating agencies.

The Group's credit risk is primarily attributable to its other receivables. The amounts presented in the Statement of Financial Position are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. Further details on other receivables are provided in note 20.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. The Group's principal financial liabilities comprise trade and other payables. Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity management framework for the management of the Group's short term funding and liquidity management requirements. The Group is highly liquid with 84% of total assets represented by cash, which is available on demand.

24 Share capital and share premium

Risk Management (continued)

	Number of Ordinary Shares of 1 euro cent each	Number of Unclassified Shares of 0.01 euro cent each	€'000
Authorised
At 1 January 2010	350,000,000	-	3,500
Increase on 6 August 2010	-	750,000,000	75

At 1 January 2011	350,000,000	750,000,000	3,575

Repurchase and cancellation (see below)	-	(464,296,350)	(46)

At 31 December 2011	350,000,000	285,703,650	3,529

	Number of Shares issued and fully paid	Share Capital	Share Premium
		€'000	€'000
Issued
At 1 January and 31 December 2010	232,148,175	2,321	91,477

Issue of B Shares	232,148,175	23	(23)

Repurchase and cancellation of B Shares (see below)	(232,148,175)	(23)	(34,878)

Issue of C Shares	232,148,175	23	(23)

Repurchase and cancellation of C Shares (see below)	(232,148,175)	(23)	(14,043)

Repurchase of Ordinary Shares (see below)	(1,190,202)	(12)	12

At 31 December 2011	230,957,973	2,309	42,522

A resolution was passed at the 2010 Annual General Meeting approving changes to the Articles of Association on 6 August 2010. In accordance with the Articles, the authorised share capital of the Company amounts to €3,575,000, comprising 350,000,000 Ordinary Shares of 1 euro cent each and 750,000,000 Unclassified Shares of 0.01 euro cent each.

The Board may, subject to satisfaction of the statutory solvency test, resolve to capitalise any sums standing to the credit of the share premium reserve and appropriate such sums to be capitalised to pay up in full Unclassified Shares, at a price equal to the aggregate par value of such shares, and allot and issue the Unclassified Shares as 'B, 'C' or 'D' Shares in proportion to the existing holdings of Ordinary Shares of the relevant shareholders of the Company. The Board may make up to three separate issues of shares.

On 5 October, 2011 the Company issued 232,148,175 'B' Ordinary Shares by way of a bonus issue and capitalised €23,215 standing to the credit of the share premium account.

On 26 October, 2011 the Company repurchased and cancelled 139,605,026 'B' Ordinary Shares at a price of 25 euro cents per share, amounting in total to €34.9 million. Holders of the remaining 92,543,149 'B' Ordinary Shares elected to receive a cash dividend of 25 euro cents per share, amounting in total to €23.1 million, following which their 'B' Ordinary Shares were automatically converted to 92,543,149 Deferred Shares and on 16 November repurchased and cancelled in full by the Company for an aggregate consideration of 1 euro cent.

On 29 December, 2011 the Company issued 232,148,175 'C' Ordinary Shares by way of a bonus issue and capitalised €23,215 standing to the credit of the share premium account.

On 19 January 2012 the Company repurchased and cancelled 117,210,611 'C' Ordinary Shares at a price of 12 euro cents per share, amounting in total to €14.1 million. Holders of the remaining 114,937,564 'C' Ordinary Shares elected to receive a cash dividend of 12 euro cents per share, amounting in total to €13.8 million, following which their 'C' Ordinary Shares were automatically converted to 114,937,564 Deferred Shares and on 20 January 2012 repurchased and cancelled in full by the Company for an aggregate consideration of 1 euro cent.

A further 1,190,202 Ordinary Shares were cancelled as part of the settlement arrangements with Dawnay, Day Group, as set out in note 33.

Holders of the Ordinary Shares are entitled to receive dividends and other distributions and to attend and vote at any general meeting.

Holders of all other shares are entitled to receive dividends and other distributions declared on those shares, but are not entitled to any further right of participation in the profits of the Company and are not entitled to attend and vote at any general meeting unless the business of the meeting includes the consideration of a resolution for the winding-up of the Company.

25	Interest-bearing loans and borrowings

	This note provides information about the contractual terms of the Group's interest-bearing loans and borrowings. For more information about the Group's exposure to interest and currency risk, see notes 2(m) and 23.

		2011	2011	2010	2010
		Group	Company	Group	Company
		€'000	€'000	€'000	€'000

	Bank loans due within one year	-	-	221,308	-


	The borrowings are repayable as follows:
	On demand within one year	-	-	221,308	-

	Less: Amount due for settlement within 12 months (shown under current liabilities)	-	-	(221,308)	-

	Amount due for settlement after 12 months	-	-	-	-

	The weighted average cost of debt for the year was 5.81% (2010: 5.49%).


26	Trade and other payables		2011		2011		2010		2010
			Group		Company		Group		Company
			€'000		€'000		€'000		€'000


	Trade payables		1,127		115		5,219		106
	Tenant deposits		101		-		2,295		-
	Accrued interest		-		-		902		-
	Distributed capital payout (note 31)		10,507		-		-		-
	Settlement of reinvestment obligations (note 33)		4,770		4,770		-		-
	Deferred consideration (note 33)		-		-		11,264		-
	Related party payables (note33)		8,676		-		8,369		-
	Finance lease		-		-		3,151		-
	Taxes payable		1,464		-		451		-
	Accrued expenses		3,865		1,901		1,930		171
	Income received in advance		-		-		391		-
			30,510		6,786		33,972		277

	Less: Amount due for settlement within 12 months (shown under current liabilities)		(30,510)		(6,786)		( 14,812)		(277)
	Amount due for settlement after 12 months		-		-		19,160		-

	The related party payables is repayable by 31 December 2013, is unsecured and bears interest at a rate of 3 month Euribor plus a margin of 1.95%. At 31 December 2011 and 31 December 2010 the ageing analysis of trade payables was as follows:

			2011		2011		2010		2010
			Group		Company		Group		Company
			€'000		€'000		€'000		€'000

	Less than 3 months		17,414		6,676		13,101		277
	3 to 12 months		13,096		110		1,711		-
	1-5 years		-		-		7,345		-
	Greater than 5 years		-		-		11,815		-
			30,510		6,786		33,972		277

27	Provisions							2011		2010
							Group		Group
							€'000		€'000

	Provisions at 1 January						997		2,398
	Increase in perpetual usufruct provision						-		99
	Decrease in other provisions						(934)		( 1,500)
	Provisions as at 31 December						63		997



	Provisions comprise an amount of €0.06 million (December 2010: €1.0 million) relating to the potential excess payable over amounts held on escrow on claims made by a contractor, which is subject to a legal dispute. The decrease during the year arises from a reclassification to a provision against trade receivables (note 20). Provisions are made on the best estimates of the Directors at the time and are expected to be realised within twelve months.


28	Dividends						2011		2010
							€'000		€'000

	Interim dividend, paid 2011 Interim dividend, paid January 2012						23,135 13,793		- -
							36,928		-
	Further details are set out in note 24.

29	Notes to the cash flow statement
				2011		2011	2010		2010
				Group		Company	Group		Company
	Cash (used in) / generated from operations	Note		€'000		€'000	€'000		€'000

	(Loss) / profit for the year			(3,542)		(55,177)	15,021		82,028
	Adjustments for:
	(Decrease) / increase in fair value of financial instruments			(2,411)		-	2,773		4,003
	Unwinding of unrealised direct issue costs of borrowings			-		-	1,215		-
	Net other finance income			6,833		(21,134)	15,463		( 21,566)
	Decrease / (increase) in fair value of investment property	14		2,960		-	( 7,872)		-
	Provisions			-		-	203		-
	Income tax	12		1,000		-	6,428		-
	Impairment of investments and loans receivable			150		64,969	13,372		(94,930)
	Legal settlement	33		(3,382)		8,590	-		-
	Impairment of goodwill			(60)		-	-		-
	Profit on disposal and derecognition of investment properties			(9,817)		-	(28,688)		-
	Operating cash flows before movements in working capital			(8,269)		(2,752)	17,915		( 30,465)
	(Increase) / decrease in receivables			(155)		16,241	216		( 90)
	(Decrease) / increase in payables			(6,815)		1,739	142		44
	Cash (used in) / generated from operations			(15,239)		15,228	18,273		( 30,511)

30	Group entities

		Business Unit	Country of incorporation	Ownership Interest
	Significant subsidiaries Carpathian Holdings S.à r.l.	Fund	Luxembourg	100%
	Carpathian Properties S.à r.l.	Fund	Luxembourg	100%
	Acacia S.à r.l.	Core	Luxembourg	100%
	Investpol S.A.	Core	Luxembourg	100%
	Sycamore S.à r.l.	Core	Luxembourg	100%
	Chesnut Holdings S.a.r.l	Non-core	Luxembourg	100%
	Framsden Holdings Ltd	Core	Cyprus	100%
	Carpathian Properties Poland Ltd	Core	Cyprus	100%
	Carpathian Properties Poland II Ltd	Core	Cyprus	100%
	Elas Torrido Investments S.K.A. Forum XXXI Investment Fund	Core Core	Poland Poland	100% 100%
	Savana Torrido Investments S.K.A	Core	Poland	100%
	Torrido Investments Sp. z o.o.	Core	Poland	100%
	Lanobis S.R.L.	Core	Romania	100%
	SC Atrium Centers BM Srl Disposed in 2012 ** Vilium Investments Sp. z o.o. Stringybark SIA In liquidation Carpathian and Dutch Holdings Cooperative	Core Core Core Core	Romania Poland Latvia Netherlands	76.25% 100% 100% 75 %
	Carpathian Dutch Holdings BV	Core	Netherlands	75%
	Poplar Holdings BV	Core	Netherlands	100%
	S.C.A.W.G. Macro S.R.L.	Core	Romania	100%
	Held on trust ** Darena Vilium Investments S.K.A. Magnor Vilium Investments S.K.A.	Core Core	Poland Poland	100% 100%
	Maine Vilium Investments S.K.A.	Core	Poland	100%
	Valora Vilium Investments S.K.A	Core	Poland	100%
	Poldrim Torrido Investment S.K.A	Core	Poland	100%

	Derecognised DDC Hradec Kralove s.r.o	Non-core	Czech Republic	100%*
	DDC Znaim s.r.o	Non-core	Czech Republic	100%*
	Carpathian Hradec Kralove s.r.o.	Non-core	Czech Republic	100%*
	Carpathian Znaim s.r.o	Non-core	Czech Republic	100%*
	A-Invest Kft	Non-core	Hungary	100%*
	DDC Eta Kft	Non-core	Hungary	100%*
	DDC Gamma Kft	Non-core	Hungary	100%*
	Carpathian ETA Kft	Non-core	Hungary	100%*
	ELEF Property Kft	Non-core	Hungary		100%*
	Ironbark Holding Kft	Non-core	Hungary		100%*
	Carpathian Gamma Kft	Non-core	Hungary		100%*
	Mallee Holding Kft	Non-core	Hungary		100%*
	Market-Estate Kft	Non-core	Hungary		100%*
	Marise Investments Sp. z o.o	Non-core	Hungary		100%*

* These subsidiaries, although owned by the Company at 31 December 2011, have been derecognised in the financial statements. The relevant financing bank bears the significant risks and rewards of ownership of the assets and asserts significant control over the entities

** Further details regarding subsidiaries are set out in Note 33.


31	Related Parties

	The Group has related party relationships with its subsidiaries (see note 30), companies it has an investment in, with one of the Non-executive Directors and transactions with companies that have common management. Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note.

	During the year, Group companies entered into the following transactions with related parties having certain common Directors and management:
		2011	2011	2010	2010
		Payables	Expenses	Payables	Expenses
		€'000	€'000	€'000	€'000
	Trading transactions

	Accounting and administration fee charged by IOMA Fund and Investment Management Ltd	111	160	-	62

	IOMA Fund and Investment Management Ltd acts as Secretary of the Company and delegates one Non-executive Director to the Board

	Loans payable

	Loan from SIA Patollo (note 26)	8,676	-	8,369	-
	Interest expense on loan from SIA Patollo (note 26)	-	272	-	498

	The loans relate to the financing of Blaumana 12 investment property
		8,787	432	8,369	560

	Carried interest
	The Company has acquired from Sanary Investments S.à.r.l. its right to a carried interest for a nominal consideration as part of the Dawnay, Day settlement (note 33).
	Bogol Management Ltd has the right to participate in the profits of certain of the Group's development properties, after certain rates of return have been achieved by the Group. As at 31 December 2011 the rates of return had not been reached and Bogol Management Ltd was not entitled to any participation (31 December 2010: €nil).

	Carpathian Asset Management Ltd replaced CPT LLP as the Company's Property Investment Adviser (''adviser'') on 30 December 2011. The adviser is entitled to a sales fee of 0.5% of the gross property sale value (including debt but as reduced by certain retentions and indemnity or warranty claims) for each asset within the core portfolio that is sold, rising to a maximum of 1.0% if no other brokers or agents are engaged on the sale. The sales fee is conditional on equity value being released for the benefit of the Company as part of any disposal and cash received on disposals being made available for distribution to shareholders. Additionally, any payment of the sales fee is pro rata to cash available for return to shareholders arising from the sale on a 50:50 basis until the entire sales fee has been paid in full. The total sales fee paid for the year amounted to €1.5 million (2010: €0.4 million). The sales fee payable upon the sale of the Group's remaining investment property in March 2012 (note 33) amounts to €0.3 million. In the event that the Group's remaining development property is disposed of at its value included in the Statement of Financial Position at 31 December 2011 without any material tax becoming payable, the total sales fee payable is estimated to be insignificant.
	The adviser is also entitled to receive a distributed capital payout, based upon actual cash available for return to shareholders. The adviser will receive 10% of any return above a distribution available to shareholders in excess of a hurdle of 17.25 euro cents per share and 25% of any returns available to shareholders above a hurdle of 34.5 euro cents per share. However, to avoid the distributed capital payout reducing the 34.5 euro cents hurdle below this level following payment, the effective hurdle is set at 36.4 euro cents in order to accommodate any distributed capital payout. The total distributed capital payout for the year amounted to €10.5 million and has been paid to CPT LLP in 2012. A reduced payout will apply to any sale in 2012 of the remaining assets, calculated using the net distributable reserves generated on disposal. The distributed capital payout payable upon the sale of the Group's remaining investment property in March 2012 (note 33) amounts to €0.5 million. In the event that the Group's remaining development property is disposed of at its value included in the Statement of Financial Position at 31 December 2011 without any material tax becoming payable, the total sales fee payable is estimated to be insignificant.

32	Capital Commitments

	The Group had no capital commitments at 31 December 2011 (2010: €nil).

33	Events after the balance sheet date

	On 19 January 2012, the Group disposed of its subsidiary Vilium Investments Sp. z o.o. for nominal consideration. As part of this disposal, the purchaser also holds on trust the shares in Darena Vilium Investments S.K.A., Magnor Vilium Investments S.K.A., Maine Vilium Investments S.K.A., Valora Vilium Investments S.K.A. and Poldrim Torrido Investment S.K.A. On 19 January 2012 the Company repurchased and cancelled 117,210,611 'C' Ordinary Shares at a price of 12 euro cents per share, amounting in total to €14.1 million. Holders of the remaining 114,937,564 'C' Ordinary Shares elected to receive a cash dividend of 12 euro cents per share, amounting in total to €13.8 million, following which their 'C' Ordinary Shares were automatically converted to 114,937,564 Deferred Shares and on 20 January 2012 repurchased and cancelled in full by the Company for an aggregate consideration of 1 euro cent. In December 2011, the Group entered into a Settlement Deed and Release which dealt with all outstanding profit re-investment obligations of various members and affiliates of Dawnay, Day Group. These arrangements completed in January 2012 and included a net cash payment by the Company of €4.4 million (note 26), the transfer to the Company of 1,190,202 Ordinary Shares (note 24), which were subsequently cancelled for a nominal sum, the acquisition by the Group of a loan note in respect of deferred consideration payable (note 26) and the novation of the associated put and call option to the Group (note 23).These arrangements were fully provided for at 31 December 2011 as set out in relevant notes.

	During 2012, several of the Group's subsidiaries have commenced liquidation proceedings as set out in note 30.

34	Financial Statements

	Copies of the 2011 financial statements will be sent to all shareholders as soon as practical. These documents will be available to the public at the offices of the company: IOMA House, Hope Street, Douglas, Isle of Man, as well as on our website www.carpathianplc.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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