Final Results

Aisi Realty Public Limited 08 May 2008 8 May 2008 Aisi Realty Public Limited ('Aisi or 'the Company') Aisi, a property investment company focusing on development projects and related investments in Ukraine, announces its results for the year ended 31 December 2007. Financial Highlights • Raised $33.1m through a share placing on London's AIM market in August 2007 in addition to over $67m raised prior to the IPO • Adjusted net assets of $116.1m at December 2007 • Cash balance at December 31 2007 of $43.7m • Adjusted net assets per share amounted to $0.70 as at 31 December 2007 Operating Highlights •Acquired Aisi Outdoor LLC, an outdoor advertising real estate business, in September 2007 •Commenced construction of its first logistics development in Brovary with completion on schedule for H2 2008 •Sold 60.6% interest in Tarasovskaya residential project for $3.0m realising Internal Rate of Return of 43% Post-Year End Highlights •Agreement signed with general contractor to commence construction at Bela Logistics Park in Odessa following receipt of building approval Commenting on the results, Beso Sikharulidze, Director of Aisi, said: 'I am pleased that Aisi has quickly established itself as a prominent investor in the fast growing real estate market of Ukraine. The results demonstrate the successful execution of our investment strategy and show significant value creation through the effective management of the development process. We have a strong pipeline of eight development projects across Ukraine and remain very positive on the market fundamentals in all segments in which Aisi is a participant.' A copy of the full audited financial statements may be found on the Company's website: www.aisicapital.com. Enquiries: Aisi Realty: Beso Sikharulidze 0038 044 459 3000 Corfin Communications: Neil Thapar, William Cullum 020 7977 0020 Libertas Capital: Andrew Hardy, Aamir Quraishi 020 7569 9650 Overview The Board of Aisi is pleased to report its maiden full year results since its admission to AIM on 1 August 2007. During 2007, the Company made good progress in consolidating its position as a major investor in the Ukrainian real estate market. The placing and admission to AIM in August 2007, in which an additional $33.1m was raised from institutional investors, has enabled the Company to advance its portfolio of development projects as well as execute on its strategy of concentrating on attractive office, residential and warehouse developments in Ukraine. At 31 December 2007, the Company's interest in the portfolio projects was valued at $57.6m. Operational Review The Ukrainian property market continues to benefit from strong long-term fundamentals driven by high economic growth, urbanisation, and a shortage of high quality commercial and residential property. In particular, the demand for quality logistics facilities is high and the Company has seen considerable interest in its two logistics projects. Overall, the Company currently has investments in five development projects and an outdoor advertising business, all of which were advanced significantly during 2007 with respect to local planning. In addition the Investment Manager has progressed its other pipeline opportunities. A summary of the status of each of the existing five projects and Aisi Outdoor is given below: Terminal Brovary Currently under construction, this is Aisi's most advanced project. As one of Ukraine's first Class A logistics warehouses situated approximately 30 kilometres north-east of Kiev it will feature some 42,800 square metres of modern warehouse space. In November 2007, building approval was received from Brovary City Council of Kiev Region, allowing the commencement of construction. A building contractor has been chosen and construction work is now in progress, with completion expected during H2 2008. In addition, Aisi increased its shareholding to 100% in Terminal Brovary through the acquisition of the 40% stake owned by the original vendors for a total of $1.7m in accordance with the sales and purchase agreement entered into in September 2006. Bela Logistics Park, Odessa A logistics complex situated approximately 15km from Odessa and comprising three independent warehouse buildings constructed with a gross area of 108,000 sq. m. incorporating approximately 11,000 sq. m. of chilled storage. All the necessary permissions and approvals have been obtained and an agreement with a general contractor for the building construction has recently been signed. Construction should commence imminently and it is expected that it will be completed within 18 months. Kiyanivsky Lane Kiyanivsky Lane, a residential development overlooking the historic Podil district of Kiev, is in the final permitting stage and is expected to commence construction in the second half of 2008. Tsimliansky Lane Tsimlyansky Lane, a residential development in the Podil district of Kiev, is also in the final permitting stages and expects to be breaking ground in the second half of 2008. Podil Residential A residential development situated in the Podil district of Kiev. The Company has extended the term of the loan for this project till June 30, 2008, by which date it anticipates that the loan will convert to equity once all necessary permits are obtained and confirmed by the legal due diligence or that the loan will be repaid with interest. Aisi Outdoor In September 2007, Aisi acquired an outdoor advertising business and its property assets in Kiev for a total consideration of $2.1m for the business and associated property assets. Aisi intends to grow this business organically through the addition of suitable advertising sites and improving utilization of existing assets. Since acquisition, the Company has met utilization targets, and has continued its growth from adding new sites from its internally generated cash flow. Completed Investments In May 2007, the company sold Aisi Taurus with its 60.6% interest in Tarasovskaya residential project for $3m, realizing net gain of $1.2m, and Internal Rate of Return of 43%. Board In October 2007, Dr Franz Hoerhager was appointed to the Board as a non-executive director of the Company. He has extensive experience in Central and Eastern Europe and is a founding partner and executive director of Mezzanine Management GmbH, the manager of Accession Mezzanine Capital, which is the leading fund provider of subordinated debt to businesses in Central and Eastern Europe. Outlook and Pipeline The Company's current portfolio projects continue to make good progress and the real estate market in Ukraine, particularly for development projects, remains strong. The Company has a strong pipeline of potential new projects which include two office sites for construction in Kiev, two office sites in Odessa, and six industrial sites in Donetsk, Brovary, Kharkiv, Dnipropetrovsk and Hlivaha. Preliminary agreements have been entered into on four of these pipeline projects, as described below, and definitive sale and purchase agreements should be entered into during 2008. Consistent with the strategy of the Fund, all pipeline developments are in the vicinity of major metropolitan areas with a population of one million or more. In addition, many of the metropolitan areas are host cities for the European Football Championships in 2012. Prime City Centre Office Development - Odessa The Company has the opportunity to participate with a local partner on an 80:20 basis in the refurbishment of an existing factory in Odessa. The existing factory comprises 4 floors totalling 6,000 sq. m. on a 20,000 sq. m. of land plot and is situated on a main road with access to public transport and adequate parking. The project design is well advanced and the designers estimate that the conversion will provide 15, 178 sq. m. of class A offices over 8 floors. The estimated development cost is $22m with an equity capital commitment of $9m which is 100% of the equity capital required for the project. As part of the preliminary agreement, Aisi has provided an advance of $4.8m secured on mortgaged land which will be deducted from the total purchase price once the vendor has satisfied various conditions. City Centre Retail and Office Development - Odessa The Company has the opportunity to participate with a local partner on an 80:20 basis in the development of a retail and office development on a major thoroughfare near the centre of Odessa. The project is to involve the development of 13,175 sq. m. over six floors - consisting of 5,360 sq. m. of retail space, 5,535 sq. m. of office space and 2,280 sq. m. of parking space. The estimated development cost is $26m with an equity capital commitment of $10.2m which is 100% of the equity capital required for the project. As part of the preliminary agreement, Aisi has provided an advance of $0.6m secured on mortgaged land which will be deducted from the total purchase price once the vendor has satisfied various conditions. Prime City Centre Office Development - Kiev The Company has the opportunity to purchase a 2,700 sq. m. land plot with the possibility of constructing 20,000 sq. m. of office space. It is envisaged that the ground floor will be used for retail banking. The land plot is situated on a main road, close to the Ukraine parliament and with easy access to the city transport system. The estimated development cost is $66m with a capital commitment of $20m. As part of the preliminary agreement, Aisi has signed an Escrow Agreement and deposited $1 million with the Bank of Cyprus which is acting as a Custodian in this transaction. Warehouse - Donetsk A 228,000 sq. m. site within 5km of the city boundary and close to a major intersection of the proposed new ring road suitable for the provision of approximately 108,000 sq. m. of class 'A' warehouse and office space. The estimated development cost is $101m with an equity capital commitment of $40m. As part of the preliminary agreement, Aisi has provided an advance of $0.9m secured by bank guarantee which will be deducted from the total purchase price once the vendor has satisfied various conditions. CONSOLIDATED INCOME STATEMENT Year ended 31 December 2007 2007 2006 Note US$ US$ Income Fair value gains on investment property 7.700.6022 14.110.0877 Miscellaneous income 106.3200 50.0400 7.806.922 14.160.127 Other income 2.984 (5.481) Expenditure Administration expenses 1 (4.576.062) (3.532.597) Net finance costs 5 (158.521) (46.046) Net profit from investing activities 6 1.905.564 - Profit before tax 2 4.980.887 10.576.003 Tax 7 (2.299.572) (4.511.103) Net profit for the year 2.681.315 6.064.900 --- --- Attributable to: --- --- Equity holders of the parent 2.555.372 3.252.010 Minority interest 125.943 2.812.890 2.681.315 6.064.900 ------------- ------------- Earnings per share attributable to equity holders of the parent (cent) 8 2,13 23,35 CONSOLIDATED BALANCE SHEET 31 December 2007 2007 2006 Note US$ US$ ASSETS Non-current assets Property, plant and equipment 9 295.376 64.418 Property under construction 10 6.722.135 - Investment properties 11 32.830.000 25.176.948 Intangible assets 12 1.999.388 - ------------- ----- 41.846.899 25.241.366 -------------- -------------- Current assets Trade and other receivables 13 23.206.636 342.388 Cash at bank and in hand 14 43.708.552 373.473 -------------- ----------- 66.915.188 715.861 -------------- ----------- Total assets 108.762.087 25.957.227 ============== ============== EQUITY AND LIABILITIES Equity and reserves attributable to equity holders of the parent Share capital 15 1.881.092 332.508 Share premium 92.683.930 14.288.867 Retained earnings net of minority interest 5.100.870 2.545.498 Notes payable by shareholders - (1.499.981) ----- -------------- 99.665.892 15.666.892 Minority interest 754.053 2.867.265 ----------- ------------- Total equity 100.419.945 18.534.157 -------------- -------------- Non-current liabilities Obligations under finance leases 16 94.455 47.540 Deferred tax liabilities 17 6.423.314 4.433.642 ------------- ------------- 6.517.769 4.481.182 ------------- ------------- Current liabilities Trade and other payables 18 1.708.039 2.854.123 Obligations under finance leases 16 23.695 10.304 Current tax liabilities 19 92.639 77.461 ---------- ---------- 1.824.373 2.941.888 ------------- ------------- --- --- Total liabilities 8.342.142 7.423.070 ------------- ------------- Total equity and liabilities 108.762.087 25.957.227 ============== ============== On 24 April 2008 the Board of Directors of Aisi Realty Public Ltd authorised the issue of these financial statements. Paul Robert Ensor Besik Sikharulidze Director Director CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 December 2007 Attributable to equity holders of the Company -------------------- --------- ---------- ---------- Share capital Share premium Notes Retained payables earnings, from net of shareholders minority interest US$ US$ US$ US$ Balance - 1 January 2006 42.000 2.058.000 (192.280) (706.512) Net profit for the year - - - 3.252.010 Shares issued 290.508 12.634.473 - - Capital raising costs - (403.606) - - Payments for shares issued in 2005 - - 192.280 - Minority interest - - - - from purchase of subsidiaries Notes payable from shareholders - - (1.499.980) - At 31 December 2006/ 1 January 2007 332.508 14.288.867 (1.499.980) 2.545.498 Net profit for the year - - - 2.555.372 Shares issued 1.548.584 83.590.413 - - Capital raising costs - (5.195.350) - - Minority interest - - - - from subsidiaries Payments for shares issued in 2006 - - 1.499.980 - At 31 December 2007 1.881.092 92.683.930 - 5.100.870 Attributable to equity holders of the Company -------- Total Minority interest Total US$ US$ US$ Balance - 1 January 2006 1.201.208 - 1.201.208 Net profit for the year 3.252.010 2.812.890 6.064.900 Shares issued 12.924.981 - 12.924.981 Capital raising costs (403.606) - (403.606) Payments for shares issued in 2005 192.280 - 192.280 Minority interest from purchase of subsidiaries - 54.375 54.375 Notes payable from shareholders (1.499.980) - (1.499.980) --------------- ----- --------------- At 31 December 2006/ 1 January 15.666.893 2.867.265 18.534.158 2007 Net profit for the year 2.555.372 125.943 2.681.315 Shares issued 85.138.997 - 85.138.997 Capital raising costs (5.195.350) - (5.195.350) Minority interest from subsidiaries - (2.239.155) (2.239.155) Payments for shares issued in 2006 1.499.980 - 1.499.980 --------------- ----- --------------- At 31 December 2007 99.665.892 754.053 100.419.945 =============== =============== =============== CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December 2007 2007 2006 Note US$ US$ CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES Profit before tax 4.980.887 10.576.003 Adjustments for: Depreciation of property, plant and equipment 9 85.526 14.316 (Increase)/decrease in advances for investments (10.000.000) 1.244.000 (Increase)/decrease in accounts (19.714) - receivable (Increase)/decrease to advances to related 120.000 (120.000) parties (Increase)/decrease in prepayments and other current assets (9.868.062) (184.188) Advances under investment contracts (3.096.473) - Increase in intangible assets (1.999.388) - Increase/(decrease) in trade and other payables 18 (1,283,906) 2.102.080 Increase/(decrease) in amounts due to related parties 20.2 137,822 608.824 Increase in taxes payable 15.177 - Purchase and development of property 47.551 (11.066.862) Gain on revaluation of investment (7.700.602) (14.110.087) property Purchase of property plant and equipment (256.181) (20.888) Increase in deferred tax liability (309.900) - Increase in minority shareholders' liability (2.239.152) 54.375 Increase in properties under (6.722.135) - construction --------------- ----- Net cash used in operating activities (38.108.549) (10.902.427) ---------------- --------------- --- --- - - ----- ----- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share capital 81.443.629 11.213.674 -------------- -------------- Net cash from financing activities 81.443.629 11.213.674 -------------- -------------- Net increase in cash and cash 43.335.079 311.247 equivalents Cash and cash equivalents: At beginning of the year 14 373.473 62.228 ----------- ---------- At end of the year 14 43.708.552 373.473 ============== =========== 1. Administration expenses 2007 2006 US$ US$ Directors remuneration 139.841 - Wages & Administrator 300.424 90.313 Lease expenses 204.792 99.152 VAT, taxes & duties 66.922 17.307 Management fee 1.751.944 198.007 Public group expenses 191.247 - Transaction costs 96.645 138.735 Office expenses 349.844 125.677 Bad debts expenses - 134.007 Accounting fees 380.111 311.389 Legal fees 159.743 314.413 Travelling expenses 505.168 497.344 Marketing fees 2.938 30.973 Consulting fees 495.848 - Litigation (230.000) 1.510.000 Other expenses 75.069 50.964 Depreciation 85.526 14.316 ---------- ---------- 4.576.062 3.532.597 ============= ============= 2. Profit before tax 2007 2006 US$ US$ Profit before tax is stated after charging the following items: Depreciation of property, plant and equipment (Note 13) 85.526 14.316 Staff costs including directors in their executive capacity 440.265 90.313 =========== ========== 3. Stock based compensation for directors Share Option for Directors On 25 July, 2007, the Company adopted a share option scheme for each of the Directors as at that date. Under the Option scheme, which was approved by the members on 31 March 2008, each director is entitled to subscribe for 263.158 Ordinary shares exercisable as set out below: Exercise Price Amount of US$ Shares Exercisable from admission of the Company to AIM till 1 August 2017 0,57 175.439 Exercisable from 1st anniversary to AIM till 1 August 2017 0,83 87.719 On 12 October, 2007, the Company adopted a share option scheme for its Director Franz M. Hoerhager which entitles him to subscribe for 182.917 Ordinary shares exercisable as set out below: Exercise Price Amount of US$ Shares Exercisable immediately after the Appointment till 1 August 2017 0,40 121.929 Exercisable from 1st anniversary to AIM till 1 August 2017 0,50 60.988 If a director resigns from the Board any unvested options lapse, unless the Directors resolve otherwise. The above options were approved, verified and adopted in every respect by the members of the Company in General Meeting on 31 March 2008. 4. Shareholder Warrants Founding Shareholder Warrants The Board of Directors approved the issue of warrants to the Founding Shareholders of the Company, entitling them to subscribe at par value per ordinary share, for such a number of ordinary shares which when multiplied by US$0.57 equals 100% of the difference between the market value of the Company's interest in its Investment Portfolio at the date of Admission to AIM (1 August 2007) and six months following admission to AIM (1 February 2008), net of direct project cash costs, and net gain proceeds from the sale of Tarasovskaya project. The Board of Directors have approved the valuation of the Investment Portfolio of February 2008 of the Company at 31 March 2008. The exercise date of the warrants is within 30 days of the Board approval and announcement of the number of warrants to be issued to the Founding Shareholders. Tudor BVI Global Portfolio Ltd Warrants The Company granted to a shareholder, Tudor BVI Global Portfolio Ltd, warrants to subscribe for 10.937.500 Ordinary shares at the exercise price of US$0.64 per share. The exercise day is within 30 days following the first anniversary of admission to AIM (1 August 2008). The above warrants were approved, verified and adopted in every respect by the members of the Company in General Meeting on 31 March 2008. 5. Finance costs 2007 2006 US$ US$ Net foreign exchange transaction losses 158.521 12.404 Interest payable - 33.642 ----- ---------- 158.521 46.046 =========== ========== 6. Profit from investing activities 2007 2006 US$ US$ Profit from sale of investments in subsidiaries 1.210.492 - Interest income 695.072 - ----------- ----- 1.905.564 - ============= ===== The profit from sale of investment in subsidiary arose from the sale of LLC Aisi Taurus. 7. Tax 2007 2006 US$ US$ Corporation tax - current year 233.544 77.462 Defence contribution - current year 76.356 - Deferred tax - charge (Note 21) 1.989.672 4.433.641 ------------- ------------- Charge for the year 2.299.572 4.511.103 ============= ============= The tax on the Group's profit before tax differs from the theoretical amount that would arise using the applicable tax rates as follows: 2007 2006 US$ US$ Profit before tax 4.980.887 10.576.003 Tax calculated at the applicable tax rates 1.245.222 2.644.000 Deferred tax asset not recognised 127.006 883.522 Defence contribution current year 76.356 - Other movements in deferred tax 850.988 983.581 Tax charge 2.299.572 4.511.103 8. Earnings and net assets per share attributable to equity holders of the parent Weighted average number of ordinary shares Weighted average number of ordinary shares 2007 2006 Number Number Issued ordinary shares capital at 1 January 26,293,717 3,675,000 Ordinary shares 139,898,112 22,618,717 ----------- ----------- Issued Ordinary shares capital at 31 December 166,191,829 26,293,717 ------------ ----------- Weighted average number of ordinary shares 119,813,838 13,925,805 ------------ ----------- Diluted weighted average number of ordinary shares 119,813,838 13,925,805 ======================================= The per-share computations below retroactively reflect the changes in number of shares occurred as a result of conversions in March 2006 and April 2007 for all periods presented. Basic, diluted and adjusted 2007 2007 2006 2006 earnings per share Profit Earnings Profit Earnings after tax per share after tax per share US$ US$ US$ US$ Basic 2,555,372 0.02 3,252,009 0.23 Diluted 2,555,372 0.02 3,252,009 0.23 Market value of investment 9,427,865 0.08 - - property under construction Deferred tax on revaluation 6,423,313 0.05 4,433,641 0.32 of investment properties Ligation accrual - - 1,510,000 0.11 Minority interest, net 600,165 0.00 700,000 0.05 Adjusted 19,006,715 0.16 9,895,650 0.71 ============== ================ ============= ============= The deferred tax adjustment above has been made on the basis that the Group would dispose of shares in subsidiary companies, rather than assets, and would not expect to crystallise a tax charge on disposal. Net assets per share Net assets per 2007 2007 2007 2006 2006 2006 share Net Net assets Number assets Net Number Net assets of shares per assets of shares per share share Basic 99,665,892 166,191,829 0.60 15,666,891 26,293,717 0.60 Diluted 99,665,892 166,191,829 0.60 15,666,891 26,293,717 0.60 Deferred tax on revaluation of 6,423,313 166,191,829 0.04 4,433,641 26,293,717 0.17 investment properties Market value of investment property 9,427,865 166,191,829 0.06 26,293,717 - under construction Litigation accrual 1,510,000 26,293,717 0.06 Minority interest 600,165 166,191,829 0.00 700,000 26,293,717 0.03 Adjusted 116,117,235 166,191,829 0.70 22,310,532 26,293,717 0.85 ============================================================================== 9. Property, plant and equipment Leasehold Citylights Motor Furniture, Software Total vehicles fixtures and and equipment hardware US$ US$ US$ US$ US$ US$ Cost Additions - - 66.265 12.275 - 78.540 At 31 December 2006/ 1 January 2007 - - 66.265 12.275 - 78.540 Additions 42.017 99.542 77.178 58.130 39.618 316.485 At 31 December 2007 42.017 99.542 143.443 70.405 39.618 395.025 Depreciation Charge for the year - - 11.053 3.069 - 14.122 At 31 December 2006/ 1 January 2007 - - 11.053 3.069 - 14.122 Charge for the year 7.003 29.863 23.501 15.255 9.905 85.527 At 31 December 2007 7.003 29.863 34.554 18.324 9.905 99.649 Net book amount At 31 December 2007 35.014 69.679 108.889 52.081 29.713 295.376 At 31 December 2006 - - 55.212 9.206 - 64.418 10. Property under construction 2007 2006 US$ US$ At 1 January - - Transfer from investment properties 6.124.000 - Construction costs 598.135 - ----------- ----- At 31 December 6.722.135 - ============= ===== 11. Investment properties 2007 2006 US$ US$ At 1 January 25.176.948 - Additions 6.000.001 10.481.808 Disposals (2.413.334) - Transfer to property under construction (6.124.000) - Investment property related costs 2.489.783 585.053 Revaluation gain on investment property 7.700.602 14.110.087 ------------- -------------- At 31 December 32.830.000 25.176.948 ============== ============== On acquisitions dates and as at December 31, 2007, the property was valued by DTZ Kiev B.V ('DTZ'), an external valuer. All valuations were carried out by appropriately qualified valuers. The valuers' opinion of the Market Value of each property has been primarily derived using comparable recent market transactions on an arm's length basis and an estimate of the future potential net income generated by use of the properties because their specialised nature means that there is no market based evidence available. Project related prepayments include advances for contractors and consultants on works preceding development of properties. In May 2007 the Group sold its interest in Tarasovskaya project. In October 2007 the Group obtained building permit for one of its projects which was reclassified from Investment Property to in Property under development according to IAS 40. 12. Intangible assets Advertising Total rights US$ US$ Cost Additions 1.999.388 1.999.388 ------------- ------------- Net book amount At 31 December 2007 1.999.388 1.999.388 ============= ============= 13. Trade and other receivables 2007 2006 US$ US$ Trade receivables 19.714 - Advances for investments 13.096.473 - Receivables from related companies - 120.000 Deposits and prepayments 205.406 87.286 VAT and other taxes receivable 604.832 135.102 Contractors advances 9.280.211 - ------------- ----- 23.206.636 342.388 ============== =========== In October 2007, the Group entered into a Preliminary agreement with the intention to subsequently enter on a Definitive Agreement for the purchase of all the equity of an English property holding Group. A condition precedent for concluding the above Agreement is the receipt of a satisfactory due diligence report on compliance on UK and Ukrainian legislation. As part of this transaction the Group has signed an Escrow Agreement and deposited US$1million with the Bank of Cyprus who is acting as a Custodian in this transaction. VAT is levied at a 20% rate on Ukrainian domestic sales and imports of goods, works and services. A VAT credit is the amount that a taxpayer is entitled to offset against its VAT liability in the reporting period. Rights to VAT credit arise on the earlier of the date of payment to the supplier or from the date when good are received. 14. Cash and cash equivalents For the purposes of the cash flow statement, the cash and cash equivalents include the following: 2007 2006 US$ US$ Cash at bank and in hand 43.708.552 373.473 -------------- ----------- 43.708.552 373.473 ============== =========== 15. Share capital 2007 2007 2007 2006 2006 2006 Number of Share Share Number of Share Share shares Capital Premium shares Capital Premium US$ US$ US$ US$ Authorised Ordinary shares of CY£0.01 each converted into 875.000.000 - - 500.000.000 - - EUR0.01 each Issued and fully paid At 1 15.024.981 332.508 14.288.867 21.000 42.000 2.058.000 January Issue of shares 94.879.365 1.548.584 78.395.063 12.924.981 290.508 12.230.867 Conversion of 56.287.483 - - 2.079.000 - - shares At 31 166.191.829 1.881.092 92.683.930 15.024.981 332.508 14.288.867 December During the year the following increases in the issued share capital of the Company took place: Number of Issued Price shares US$ 2 March 2007 45.000.000 1,00 Conversion into Euro (Note 14.1) - - 22 June 2007 10.937.500 0,64 24 July 2007 50.210.601 0,66 15.1 Conversion into Euro On 30 April 2007, the nominal share capital of the Company was converted into EUR8.75 million divided into 875 million new ordinary shares of EUR0.01 each by the cancellation of the existing ordinary shares and the issuance of 7 new ordinary shares for every 4 ordinary shares held at the above date by the shareholders of the Company. 16. Obligations under finance leases Minimum lease Interest Principal Minimum lease Interest Principal payments payments 2007 2007 2007 2006 2006 2006 US$ US$ US$ US$ US$ US$ Less than 42.936 19.241 23.695 8.878 2.932 5.946 one year Between two 103.893 9.438 94.455 48.966 7.372 41.594 and ----------- --------- ---------- ---------- --------- ---------- five years 146.829 28.679 118.150 57.844 10.304 47.540 =========== ========== =========== ========== ========== ========== All lease obligations are denominated in United States Dollars. The fair values of lease obligations approximate to their carrying amounts as presented above. The Group's obligations under finance leases are secured by the lessors' title to the leased assets. 17. Deferred tax Deferred tax is calculated in full on all temporary differences under the liability method using the applicable tax rates (Note 11). The applicable corporation tax rate in the case of tax losses is 10%. The movement on the deferred taxation account is as follows: Deferred tax liability Fair value Total gains on investment property US$ US$ Balance - 1 January 2006 - - Charged / (credited) to: Income statement (Note 11) 4.433.642 4.433.642 ------------- ------------- At 31 December 2006/ 1 January 2007 4.433.642 4.433.642 Charged / (credited) to: Income statement (Note 11) 1.989.672 1.989.672 ------------- ------------- At 31 December 2007 6.423.314 6.423.314 ============= ============= 18. Trade and other payables 2007 2006 US$ US$ Capital raising fees due - 338.748 VAT and other taxes payable 167.775 - Audit and accounting fees due 252.840 105.000 Accruals 240.571 151.001 Other creditors 300.208 140.550 Litigation accrual - 1.510.000 Payables to related companies (Note 24) 746.645 608.824 ----------- ----------- 1.708.039 2.854.123 ============= ============= The fair values of trade and other payables due within one year approximate to their carrying amounts as presented above. 19. Current tax liabilities 2007 2006 US$ US$ Special contribution for defence 92.639 77.461 ---------- ---------- 92.639 77.461 ========== ========== 20. Related party transactions The following transactions were carried out with related parties: 20.1 Management fees 2007 2006 US$ US$ Aisi Capital LLC 1.751.944 186.100 ------------- ----------- 1.751.944 186.100 ============= =========== 20.2 Payables to related parties (Note 22) 2007 2006 Name Nature of transactions US$ US$ ------ ------------------------ Aisi Capital LLC Trade 233.400 427.927 Former shareholders of the acquired 513.245 116.745 companies Services outsourced to - 50.141 administrator Others - 14.011 ----- ---------- 746.645 608.824 =========== =========== 21. Contingencies The Group is a party to a litigation matter related to complaints filed by the Group's former employee. As at 31 December 2007 there were several litigation cases which indirectly involve Aisi Realty Public Limited as a shareholder of Aisi Taurus LLC and Aisi Ukraine LLC. Since the outcome of this litigation and the range of any possible loss cannot be estimated, no accrual has been in the Group's financial statements. Management does not believe the results of legal proceedings will have a material effect on the Group's financial position or results of operations. Under certain conditions, as defined in the respective purchase and sale agreement, the Group has a put option that would allow the Group to sell its interest back to seller at the price higher than the original purchase price. The fair value of this option is not considered to be material. The Group has an obligation to purchase the remaining minority interests in the event that certain conditions, as defined in the relevant sale and purchase agreement, arise. The directors have considered the likelihood of these conditions arising and consider them to be remote. A number of the land leases are held for relatively short term and place an obligation upon the lessee to commence development prior to expiration date of the lease agreement. In the event that a development has not commenced upon the expiry of a lease the City Authorities are entitled not to extend lease agreement on the basis that the land is not used in accordance with its designation. Furthermore, in order to extend lease agreement all necessary permissions and consents for development have to be presented to the authorities. However the management believes that the possibility of such action is remote and was made only under limited circumstances in the past. In undertaking the valuations reported herein, DTZ Kiev have made the assumption that no such circumstances will arise to permit the City to rescind the land lease or to not grant a renewal. 22. Commitments Operating lease commitments The future aggregate minimum lease payments under non-cancellable operating leases are as follows: 2007 2006 US$ US$ Within one year 310.968 144.116 Between one and five years 441.185 592.878 After five years 42.945 57.260 ---------- ---------- 795.098 794.254 =========== =========== 23. Post balance sheet events In December 2007 the Company entered into 2 preliminary agreements for the acquisition of 80% of the charter capital of two Ukrainian Companies, for the total consideration of US$4.8 million and US$3.12 million respectively. Subject to conditions precedent the Company expects to complete those acquisitions by mid 2008. In accordance with the Annual General Meeting held on 3 March 2008, the directors express their plans to increase the Share Capital of the Company in the near future. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Secure Property Development & Investment (DI) (SPDI)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today