Aisi Realty Public Limited Half Yearly Report -5-
September 05 2012 - 2:00AM
UK Regulatory
For the six months ended 30 June 2012
Note 30 June 30 June
2012 2011
US$ US$
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax and non-controlling interest (2.231.859) (16.593.611)
Adjustments for:
Loss on revaluation of investment property 7 - 7.833.811
Impairment loss/(reversal) of prepayments
and current assets 10 (54.881) 4.802.851
Depreciation of property, plant and equipment 8.125 19.921
Other expenses/(income) (48.200) 504.409
Interest expense 9 570.563 547.768
Interest income 9 (767) (2.299)
Effect of foreign exchange difference 9 12.709 120.683
Cash flows used in operations before working (1.744.310) (2.766.467)
capital changes
(Increase)/Decrease in prepayments
and other current assets 13 329.767 (103.914)
Increase in trade and other payables 20 15.694 927.980
Decrease in financial lease liabilities 23 (11.594) (28.147)
Increase in payables due to related parties 20 139.134 1.221.904
473.001 2.017.823
Net cash flows used in operating activities (1.271.309) (748.644)
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in VAT receivable 141.622 43.035
Decrease in payables to constructors 20 (300.384) (10.671)
Additions to investment property 12 (80.133) (90.157)
Changes of property, plant and equipment (1.204) 50.035
Net cash flows used in investing activities (240.099) (7.758)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 16 1.351.965 -
Proceeds from Shareholder's Advances 16 130.000 -
Proceeds from other borrowings - 471.999
Interest paid (570.481) -
Net cash flow used in financing activities 911.484 471.999
Effect of foreign exchange rates on cash (44) 11.854
Net decrease in cash at banks 15 (599.968) (272.549)
Cash:
At beginning of the period 754.640 291.053
At end of the period 154.672 18.504
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
For the six months ended 30 June 2012
1. General Information
Country of incorporation
AISI Realty Public Ltd (the "Company") was incorporated in
Cyprus on 23 June 2005 and is a public limited liability company,
listed on the London Stock Exchange (AIM). Its registered office is
at Kyriakou Matsi 16, Eagle House, 10th floor, Agioi Omologites,
1082 Nicosia, Cyprus.
Principal activities
The principal activities of the Group are directly or indirectly
to invest in and/or manage real estate properties as well as real
estate development projects in Central and South East Europe (the
"Region"). These include the acquisition, development, operation
and selling of property assets, in major population centres in the
Region.
The Group maintains offices in Kiev, Ukraine and Nicosia,
Cyprus, while it has an affiliate in Bucharest, Romania.
As at the reporting date, the Group has 16 Full Time Equivalent
(FTEs) employed persons, including the CEO and the CFO (30/6/2011 -
21, 31/12/2011 - 19).
2. Adoption of new and revised Standards and Interpretations
The Group has adopted all the new and revised Standards and
Interpretations issued by the International Accounting Standards
Board (the IASB) and the International Financial Reporting
Interpretations Committee (the IFRIC) of the IASB, which are
relevant to its operations and are effective for accounting periods
commencing on 1 January 2012.
The accounting policies adopted for the preparation of the
Interim Condensed Financial Statements for the six months ended 30
June 2012 are consistent with those followed for the preparation of
the annual financial statements for the year ended 31 December
2011, except for the adoption by the Group of standards, amendments
and interpretations as of 1 January 2012, which did not have any
material impact on the Group's financial statements.
The Group has not early adopted any other standard,
interpretation or amendment that was issued but is not yet
effective.
3. Significant accounting policies
3.1 Statement of compliance
The Interim Condensed Financial Statements have been prepared
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union (EU) and the requirements
of the Cyprus Companies Law, Cap.113.
The Interim Condensed Financial Statements have been prepared
under the historical cost convention as modified by the revaluation
of investment property and investment property under construction
to fair value.
3.2 Basis of preparation
The principal accounting policies adopted in the preparation of
these Interim Condensed Financial Statements are set out below.
These policies have been consistently applied to all years presented
in these consolidated financial statements unless otherwise stated.
Items included in the Group's financial statements are measured
applying the currency of the primary economic environment in which
the entities operate ("the functional currency"). The national
currency of Ukraine, the Ukrainian Hryvnia, is the functional
currency for all the Group's entities, except for the parent company
and its subsidiaries Aisi Capital Ltd and Aisi Logistics Ltd for
which the United States Dollar is the functional currency.
Ukrainian statutory accounting principles and procedures differ
from those generally accepted under IFRS. Accordingly, the consolidated
financial information, which has been prepared from the Ukrainian
statutory accounting records for the entities of the Group domiciled
in Ukraine, reflects adjustments necessary for such consolidated
financial information to be presented in accordance with IFRS.
3.3 Going Concern
These Interim Condensed Financial Statements have been prepared
on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course
of business.
The Group incurred a loss of US$ 2.225.695 for the six months
ended 30 June 2012 and as at that date its current liabilities
exceed its current assets by US$ 16.161.038, out of which US$15.813.857
is related to the EBRD loan (note 19) whose repayment schedule
begins at the end of September 2012.
The directors have prepared these Interim Condensed Financial
Statements on the going concern basis, based on the fact that
the Group has turned operationally wise cash flow positive but
nevertheless for the immediate future the Group is still dependent
on the continuing financial support of its shareholders and its
bankers.
3.4 Basis of consolidation
The Interim Condensed Financial Statements incorporate the financial
statements of the Company and entities (including special purpose
entities) controlled by the Company (its subsidiaries). Control
is achieved where the Company has the power to govern the financial
and operating policies of an entity so as to obtain benefits from
its activities.
Income and expenses of subsidiaries acquired or disposed of during
the year are included in the statement of comprehensive income
from the effective date of acquisition and up to the effective
date of disposal, as appropriate. Total comprehensive income of
subsidiaries is attributed to the owners of the Company and to
the non-controlling interests even if this results in the non-controlling
interests having a deficit balance.
The financial statements of all the Group companies are prepared
using uniform accounting policies. When necessary, adjustments
are made to the financial statements of subsidiaries to bring
their accounting policies into line with those used by other members
of the Group.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
3.4.1 Changes in the Group's ownership interests in existing
subsidiaries
Changes in the Group's ownership interests in subsidiaries that
do not result in the Group losing control over the subsidiaries
are accounted for as equity transactions. The carrying amounts
of the Group's interests and the non-controlling interests are
adjusted to reflect the changes in their relative interests in
the subsidiaries. Any difference between the amount by which
the non-controlling interests are adjusted and the fair value
of the consideration paid or received is recognized directly
in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, the profit or loss
on disposal is calculated as the difference between (i) the aggregate
of the fair value of the consideration received and the fair
value of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), and liabilities of
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