Aisi Realty Public Limited Half Yearly Report -19-
September 05 2012 - 2:00AM
UK Regulatory
Currency risk arises when commercial transactions and recognized
financial assets and liabilities are denominated in a currency that
is not the Group's functional currency. Most of the Group's
financial assets are denominated in the functional currency.
Interest Rate Risk
The Group's income and operating cash flows are substantially
independent of changes in market interest rates as the Group has no
significant interest-bearing assets. On June 30(th) , 2012, cash
and cash equivalent financial assets amounted to US$154.672
(2011:US $18.504).
The Group is exposed to interest rate risk in relation to its
borrowings amounting to US$15.813.857 (2010: US$16.343.535) as they
are issued at variable rates tied to the Libor. Management monitors
the interest rate fluctuations on a continuous basis and evaluates
hedging options to align the Group's strategy with the interest
rate view and the defined risk appetite. Although no hedging has
been applied for the reporting period, such may take place in the
future if deemed necessary in order to protect the cash flow of a
property asset through different interest rate cycles.
The Group's exposures to financial risk are discussed also in
note 4.
27.6 Credit Risk Management
The Group has no significant credit risk exposure. The credit
risk emanating from the liquid funds is limited because the Group's
counterparties are banks with high credit-ratings assigned by
international credit rating agencies. The Credit risk of
receivables is reduced as the majority of the receivables represent
VAT to be offset through VAT income in the future.
27.7 Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with
the Board of Directors, which applies a framework for the Group's
short, medium and long term funding and liquidity management
requirements.The Treasury function of the Group manages liquidity
risk by preparing and monitoring forecasted cash flow plans and
budgets while maintaining adequate reserves. The following table
details the Group's contractual maturity of its financial
liabilities. The tables below have been drawn up based on the
undiscounted contractual maturities including interest that will be
accrued.
30 June 2012 Carrying Total Less than From one More than
amount one year to two years
two years
--------------------------- ----------- ----------- ----------- ----------- -----------
US$ US$ US$ US$ US$
--------------------------- ----------- ----------- ----------- ----------- -----------
Financial assets
--------------------------- ----------- ----------- ----------- ----------- -----------
Cash at Bank 154.672 154.672 154.672 - -
--------------------------- ----------- ----------- ----------- ----------- -----------
Financial liabilities
--------------------------- ----------- ----------- ----------- ----------- -----------
Interest bearing 15.813.857 15.813.857 15.813.857 - -
borrowings
--------------------------- ----------- ----------- ----------- ----------- -----------
Trade and other payables 4.257.618 4.257.618 3.893.586 - 364.032
--------------------------- ----------- ----------- ----------- ----------- -----------
Finance lease liabilities 668.311 2.583.658 116.609 2.467.050
--------------------------- ----------- ----------- ----------- ----------- -----------
Current and Provisional 1.167.227 1.167.227 1.167.227 - -
tax liabilities
--------------------------- ----------- ----------- ----------- ----------- -----------
30 June 2011 Carrying Total Less than From one More than
amount one year to two years
two years
--------------------------- ----------- ----------- ----------- ----------- -----------
US$ US$ US$ US$ US$
--------------------------- ----------- ----------- ----------- ----------- -----------
Financial assets
--------------------------- ----------- ----------- ----------- ----------- -----------
Accounts receivable 2.472.502 2.472.502 2.472.502 - -
--------------------------- ----------- ----------- ----------- ----------- -----------
Cash at Bank 18.504 18.504 18.504 - -
--------------------------- ----------- ----------- ----------- ----------- -----------
Financial liabilities
--------------------------- ----------- ----------- ----------- ----------- -----------
Interest bearing 16.343.535 16.343.535 1.128.296 2.338.824 12.876.415
borrowings
--------------------------- ----------- ----------- ----------- ----------- -----------
Accounts payable 16.077.102 16.077.102 15.408.783 668.319 -
--------------------------- ----------- ----------- ----------- ----------- -----------
Finance lease liabilities 608.067 2.453.703 92.199 92.199 2.269.305
--------------------------- ----------- ----------- ----------- ----------- -----------
Current and Provisional 1.133.571 1.133.571 1.133.571 - -
tax liabilities
--------------------------- ----------- ----------- ----------- ----------- -----------
28. Events after the end of the reporting period
Financial Restructuring-EBRD
As per the Terminal Brovary EBRD loan restructuring agreed by
the old management a month prior to the Company's restructuring in
H1 2011, several payments are coming due in the next couple of
months. The Group has entered into discussions with the Bank,
aiming at matching the revenue inflows with the loan payment
outflows.
Settlement Agreement-UVK
In late July 2012, the Group has proceeded with an amicable
settlement with UVK, a logistics company that had originally signed
a contract to rent out 100% of Terminal Brovary. Due to the fact
that the terminal was not delivered on time in July 2009, UVK
tabled several claims and following negotiations an agreement was
signed entitling them to a US$3m payment, while at the same time
UVK received as security a mortgage over AISI Bella Odessa plot.
Following a payment of US$1.500.000 in August and November 2009 the
Group did not proceed in paying the rest and thus UVK enforced the
mortgage on Bela, a fact that resulted in a protracted legal
battle. In July 2012 UVK and the Group agreed to settle out of
court for US$1.000.000 whilst the Group had provided for the whole
US$1.500.000 in its accounts. The Group paid US$300.000 in cash
whilst the rest is guaranteed via a bank guarantee letter, with the
letter itself being secured by mortgaging certain of the plots of
the Group a well as a cash collateral of US$200.000.
Liquidation request by AISI Realty Capital LLC
On 23/7/2012 the Company was notified that the ex manager, AISI
Realty Capital LLC, has initiated a liquidation process in Cyprus
claiming the remaining amount of US$225.000 resulting from the
settlement agreement signed in July 2011 as amended in April 2012.
In this claim, AISI Realty Capital LLC is being represented by Mr.
Besik Sikharulidze, who had been a member of the Board of Directors
of the Company until 30/8/2012. The Company has initiated its
defence strategy in respect thereof, and expects the issue to be
resolved prior to any court hearing.
Loan Repayment AISI Capital Ltd- AISI Bella LLC
As part of the Group's restructuring process, AISI Bella has
repaid the principal and interest of a loan (amounting in total to
US$26.851.335) granted by AISI Capital Ltd, the Group's financing
Company. As a result, outstanding loans to AISI Capital Ltd by the
Ukrainian subsidiaries at the end of August 2012 amount to
US$62.4m, including interest payable.
Taxes paid-AISI Bella LLC
In August AISI Bella has paid an amount of US$133.984 related to
property taxes for the period from 1 January 2008 till 30 March
2009, that had been previously provided in the Company's
accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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