@CONSOLIDATED COMPANY · @consolidated company @ code company name 1149 asmita gardens srl @table :...

ASMITA GARDENS SRL

IFRS FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2019

ASMITA GARDENS SRL


AS OF DECEMBER 31, 2019

CONTENTS

INDEPENDENT AUDITOR’S REPORT 1 – 3

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 4

STATEMENT OF FINANCIAL POSITION 5

STATEMENT OF CHANGES IN EQUITY 6

STATEMENT OF CASH FLOWS 7

NOTES TO THE IFRS FINANCIAL STATEMENTS 8 –34

ASMITA GARDENS SRL



ASMITA GARDENS SRL



4

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

In thousands of RON

Notes

For the

year ended December 31,

2019

For the

year ended December 31,

2018

Rental revenues 14 114 996

Revenue from other services 14 - 4 Gains from sale of investment property and fixed assets 4 1,600 1,231

Depreciation expenses 4,5 (208) (955)

Other direct property operating expenses 16 (1,593) (2,496)

Operating profit/(loss) (87) (1,220)

Net impact of impairment on investment property 540 (1,356)

Net impairment of trade receivables 7 (652) (334)

Other income 399 301

Other expenses 16 (368) (442)

Gains from foreign exchanges 914 433

Finance income 17 1,443 1,218

Profit/(loss) before income tax 2,189 (1,400)

Income tax expense 18 - -

Profit/(loss) for the period 2,189 (1,400)

Other comprehensive income - -

Total comprehensive income for the year 2,189 (1,400)

Drafted by: Approved by: ESPECIAL AUDIT SRL Alexandros Mengos Ana Nicolescu Administrator

Chrysoula Doudesi

Administrator

ASMITA GARDENS SRL



5

STATEMENT OF FINANCIAL POSITION

In thousands of RON

Notes December 31,

2019 December 31,

2018

Assets

Non-Current assets

Investment property 4 4,232 30,164

Property plant and equipment 5 10 698

Trade receivables 7 12,203 20,165

Total non-current assets 16,445 51,027

Current assets

Trade receivables 7 13,270 15,767

Other assets 6 220 270

Cash and deposits 8 78,925 48,144

Total current assets 92,415 64,181

Total assets 108,860 115,208

Equity

Share capital 9 147,750 147,750

Reserves 9 134 103

Retained earnings/ (losses) (42,045) (44,203)

Total equity 105,839 103,650

Liabilities

Trade and other payables 10 852 9,389

Provisions 11 2,169 2,169

Total current liabilities 3,021 11,558

Total liabilities 3,021 11,558

Total equity and liabilities 108,860 115,208

Drafted by: Approved by: ESPECIAL AUDIT SRL Alexandros Mengos Ana Nicolescu Administrator Chrysoula Doudesi Administrator

ASMITA GARDENS SRL



6

STATEMENT OF CHANGES IN EQUITY

In thousands of RON

Notes Share

capital Reserves Retained

earnings Total

Equity

Balance at January 01, 2018 13,439 103 (42,803) (29,261)

Profit for the year - - (1,400) (1,400)

Total comprehensive income for the year -

- (1,400) (1,400)

Share capital increase 134,311 - - 134,311

Balance at December 31, 2018 147,750 103 (44,203) 103,650

Balance at January 01, 2019 147,750 103 (44,203) 103,650

Profit for the year - - 2,189 2,189

Total comprehensive income for the year -

- 2,189 2,189

Transfer to legal reserves 31 (31) -

Balance at December 31, 2019 147,750

134 (42,045) 105,839

ASMITA GARDENS SRL



7

STATEMENT OF CASH FLOWS

In thousands of RON December 31,

2019 December 31,

2018

Cash flows from operating activities: Profit/(Loss) before income tax 2,189 (1,400)

Depreciation expense 208 955

Finance income (1,443) (1,218)

Net impairment of trade receivable 652 334 Impairment of investment property (Gains)/Losses from sale of investment property and fixed assets

(540) (1,600)

1,356 (1,231)

Gain from foreign exchange Adjustments related to share capital increase

- -

(433) 1,016

Other adjustments (842) 260 Changes in working capital:

(Increase)/Decrease in trade receivables and other assets 10,284 1,219

Increase/(Decrease) in trade and other payables (8,540) 7,764

Cash generated from operations

368

8,622

Interest paid

-

-

Interest received Income tax paid

455 -

83 -

Net cash generated from operating activities

823

8,705

Cash flows from investing activities:

Proceeds from sale of investment property 29,478 29,150

Proceeds from sale of Property Plant and Equipment 480 2,870

Net cash from investing activities

29,958

32,020

Cash flows from financing activities:

Share capital increase - 135,327

Repayments of borrowings - (132,738)

Net cash from financing activities

-

2,589

Net increase/(decrease) in cash and cash equivalents 30,781 43,314

Cash and cash equivalents at January 01

48,144

4,830

Cash and cash equivalents at December 31

78,925

48,144

ASMITA GARDENS SRL



8

1. REPORTING ENTITY

ASMITA GARDENS SRL (“The Company”) is a company registered in Romania.

The address of the Company’s registered office is Bucharest, Gladitei Street, no. 42, building T6,

floor 20, ap. 2003.

The Company is part of the Alpha Bank Group. The majority of shares is owned by AGI-RRE

PARTICIPATIONS LIMITED, a Cyprus company with its registered office at Lemesou Avenue 11,

Galatariotis Building, 2nd floor, office 201, 2112 Nicosia, Cyprus.

The Company is primarily involved in real estate development and renting out of its property.

2. BASIS OF PREPARATION a) Statement of compliance

These Financial Statements relate to 2019 financial year and they have been prepared:

- in accordance with International Financial Reporting Standards (IFRS), as adopted by the

European Union, in accordance with Regulation 1606/2002 of the European Parliament and

the Council of the European Union on 19 July 2002.

- on the historical cost conventions for all financial and non-financial assets and liabilities.

The comparatives are presented as at December 31, 2019 for the statement of financial position,

the statement of comprehensive income, the statement of changes in equity and the statement of

cash flows.

The Company’s statutory accounting records are maintained in accordance with the Romanian

Accounting Standards (RAS). These accounts have been restated to reflect the differences between

RAS and IFRS accounts. Accordingly, RAS accounts were adjusted, if necessary, to harmonize, in

all material respects, with IFRS as adopted by the European Union.

The most important changes to the Financial Statements prepared in accordance with RAS in order

to bring them into line with IFRS requirements adopted by European Union are:

- grouping more elements into more comprehensive categories;

- disclosure requirements in accordance with IFRSs.

The Financial Statements are presented in RON, rounded to the closest thousand, unless otherwise

indicated.

The amounts presented in the financial statements prepared and approved based on local GAAP

may be different from the amounts presented above, due to timing recognition and other

adjustments which are not related to the adoption of IFRS accounting policies.

b) Functional and presentation currency

The Company’s management considers that the functional currency, as defined by IAS 21 “Effects

of changes in foreign exchange rates”, is the Romanian Leu (RON). The financial statements are

presented in RON, rounded at the closest thousand RON, which the Company’s management has

chosen as presentation currency.

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9

2. BASIS OF PREPARATION (continued) c) Going Concern Principle

These Financial Statements have been prepared on a going concern basis which assumes that the

Company will continue in the next 12 months.

The Company applied the going concern principle for the preparation of the financial statements as

at 31.12.2019. For the application of this principle, the Company takes into consideration current

economic developments in order to make projections for future economic conditions of the

environment in which it operates.

For the application of this principle, the Company takes into consideration current economic

developments in order to make projections for future economic conditions of the environment in which

it operates. The main factors that cause uncertainties regarding the application of this principle relate

to the economic environment in Romania and abroad, as well as to the effects of the spread of

coronavirus (Covid-19) in Europe in the first quarter of 2020.

The emergence of coronavirus in Europe in the first quarter of 2020, which soon received pandemic

features, is adding a major uncertainty in terms of both macroeconomic developments and the ability

of businesses to operate under the regime of the restrictive measures imposed. This development is

expected to adversely affect the ability of the clients to repay their debts towards the Company. However considering that the buyers of residential units from the Company have already paid significant amounts in advance and a breach under the sale agreement could lead to a total loss for

the buyers, we expect that most of the receivables will be collected by the Company, with some delays however, or the Company will retake possession of the sold residential units and resell them again taking into account that the initial sale down-payment was withheld by the Company as penalty.

Based on the above and taking into account:

- the company’s high capital - significant cash available in the bank accounts which can cover operating expenses for

long periods of time - the decisions of the European union countries to adopt a series of fiscal and other

measures to stimulate the economy

the Company estimates that, at least for the next 12 months, the conditions for the application of the

going concern principle for the preparation of its financial statements are met. d) Use of estimates and judgments

The preparation of the IFRS Financial statements requires management to make judgements,

estimates and assumptions that affect the application of accounting policies and the reported

amounts of assets and liabilities. Actual results may differ from these estimates. Estimates and

underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimates are revised and in any future periods affected.

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10

2. BASIS OF PREPARATION (continued)

Information about assumptions and estimation uncertainties that are used by the company are

analysed below:

Impairment allowance for Expected Credit Losses of Financial Assets

For trade receivables, the Company recognised impairment taking into consideration the ageing of

the balances using simplified approach.

Impairment losses on non- financial assets

The most important category of non-financial assets for which fair value is estimated is real estate

property

To derive the fair value of the real estate property, the valuer chooses the following valuation

technique- Market approach (or sales comparison approach), which measures the fair value by

comparing the property to other identical ones for which information on transactions is available.

It is noted that the fair value measurement of a property takes into account a market’s participant

ability to generate economic benefits by using the asset in it’s highest and best use or by selling it

to another market participant that would use the asset in it’s highest and best use.

3. SIGNIFICANT ACCOUNTING POLICIES

a) Accounting policies

The accounting policies for the preparation of the financial statements have been consistently

applied by the Company to the years 2018 and 2019 after taking into account the following new

standards and amendments to standards as well as IFRIC 23 which were issued by the International

Accounting Standards Board (IASB), adopted by the European Union and applied on 1.1.2019:

➢ Amendment to International Financial Reporting Standard 9 “Financial

Instruments”: Prepayment Features with Negative Compensation (Regulation

2018/498/22.3.2018)

On 12.10.2017 the International Accounting Standards Board issued an amendment to IFRS 9 that

permits some prepayable financial assets with negative compensation features, that would otherwise

been measured at fair value through profit or loss, to be measured at amortised cost or at fair value

through other comprehensive income.

The amendment to IFRS 9 clarifies that a financial asset passes the SPPI criterion regardless of the

event or circumstance that cause the early termination of the contract and irrespective of which

party pays or receives reasonable compensation for the early termination of the contract.

The adoption of the above amendment had no impact on the financial statements of the Company.

➢ International Financial Reporting Standard 16 “Leases” (Regulation

2017/1986/31.10.2017)

On 13.1.2016 the International Accounting Standards Board issued IFRS 16 “Leases” which

supersedes:

• IAS 17 “Leases”

• IFRIC 4 “Determining whether an arrangement contains a lease”

• SIC 15 “Operating Leases – Incentives” and

• SIC 27 “Evaluating the substance of transactions involving the legal form of a lease”.

ASMITA GARDENS SRL



11

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

The new standard significantly differentiates the accounting of leases for lessees while essentially

maintaining the existing requirements of IAS 17 for the lessors. In particular, under the new

requirements, the classification of leases as either operating or finance is eliminated. A lessee is

required to recognize, for all leases with term of more than 12 months, the right-of-use asset as

well as the corresponding obligation to pay the lease payments. The above treatment is not required

when the asset is of low value.

At initial recognition, the right-of-use asset comprises the amount of the initial measurement of the

lease liability, any initial direct costs, any lease payments made before the commencement date as

well as an estimate of dismantling costs.

At initial recognition, the lease liability is equal to the present value of the lease payments that are

not paid at that date.

There was no effect from IFRS16 implementation because the Company acted only as a lessor and

not as a lessee in leasing contracts as at 01.01.2019.

➢ Amendments to International Accounting Standard 19 “Employee Benefits”: Plan

Amendment, Curtailment or Settlement (Regulation 2019/402/13.3.2019)

On 7.2.2018 the International Accounting Standards Board issued an amendment to IAS 19 with

which it specified how companies determine pension expenses when changes to a defined benefit

pension plan occur. In case that an amendment, curtailment or settlement takes place IAS 19

requires a company to remeasure its net defined benefit liability or asset.

The amendments to IAS 19 require specifically a company to use the updated assumptions from this

remeasurement to determine current service cost and net interest for the remainder of the reporting

period after the change to the plan. In addition, the amendment to IAS 19 clarifies the effect of a

plan amendment, curtailment or settlement on the requirements regarding the asset ceiling.

The adoption of the above amendment had no impact on the financial statements of the Company.

➢ Amendment to International Accounting Standard 28 “Investments in Associates”:

Long-term Interests in Associates and Joint Ventures

(Regulation 2019/237/8.2.2019)

On 12.10.2017 the International Accounting Standards Board issued an amendment to IAS 28 to

clarify that long-term interests in an associate or joint venture that form part of the net investment

in the associate or joint venture —to which the equity method is not applied—should be accounted

for using IFRS 9, including its impairment requirements. In applying IFRS 9, the entity does not take

account of any adjustments to the carrying amount of long-term interests that arise from applying

IAS 28.

The above amendment does not apply to the financial statement of the Company.

➢ Improvements to International Accounting Standards – cycle 2015-2017

(Regulation 2019/412/14.3.2019)

As part of the annual improvements project, the International Accounting Standards Board issued,

on 12.12.2017, non- urgent but necessary amendments to various standards.

The adoption of the above amendments had no impact on the financial statements of the Company.

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12


➢ IFRIC Interpretation 23 “Uncertainty over Income Tax Treatments”

(Regulation 2018/1595/23.10.2018)

On 7.6.2017 the International Accounting Standards Board issued IFRIC 23. The Interpretation

clarifies application of recognition and measurement requirements in IAS 12 when there is

uncertainty over income tax treatments. The Interpretation specifically clarifies the following:

• An entity shall determine whether to consider each uncertain tax treatment separately or together

with one or more other uncertain tax treatments based on which approach better predicts the

resolution of the uncertainty.

• The estimations for the examination by taxation authorities shall be based on the fact that a

taxation authority will examine amounts it has a right to examine and have full knowledge of all

related information when making those examinations.

• For the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits

and tax rates, an entity shall consider whether it is probable that a taxation authority will accept

an uncertain tax treatment.

• An entity shall reassess an estimate if the facts and circumstances change or as a result of new

information.

The adoption of IFRIC 23 had no impact on the financial statements of the Company.

Except for the standards mentioned above, the European Union has adopted the following

amendments to standards which are effective for annual periods beginning after 1.1.2019 and have

not been early adopted by the Company.

➢ Amendment to International Financial Reporting Standard 9 “Financial

Instruments”, to International Accounting Standard 39 “Financial Instruments”

and to International Financial Reporting Standard 7 “Financial instruments:

Disclosures”: Interest rate benchmark reform (Regulation 2020/34/15.1.2020)

Effective for annual periods beginning on or after 1.1.2020

On 26.9.2019 the International Accounting Standards Board issued amendments to IFRS 9, IAS 39

and IFRS 7, according to which temporary exceptions from the application of specific hedge

accounting requirements are provided in the context of interest rate benchmark reform.

In accordance with the exceptions, entities applying those hedge accounting requirements may

assume that the interest rate benchmark is not altered as a result of the interest rate benchmark

reform. Relief is provided regarding the following requirements:

- the highly probable requirement in cash flow hedge,

- prospective assessments,

- separately identifiable risk components.

The above amendments do not apply to the financial statements of the Company.

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13


➢ Amendments to International Accounting Standard 1 “Presentation of Financial

Statements” and to International Accounting Standard 8 “Accounting Policies,

Changes in Accounting Estimates and Errors: “Definition of material”

(Regulation 2019/2104/29.11.2019)


On 31.10.2018 the International Accounting Standards Board, as part of the Disclosure Initiative,

issued amendments to IAS 1 and IAS 8 to align the definition of ‘material’ across the standards and

to clarify certain aspects of the definition.

The new definition states that information is material if omitting, misstating or obscuring it could

reasonably be expected to influence decisions that the primary users of general purpose financial

statements make on the basis of those financial statements, which provide financial information

about a specific reporting entity. The amendments include examples of circumstances that may

result in material information being obscured. The IASB has also amended the definition of material

in the Conceptual Framework to align it with the revised definition of material in IAS 1 and IAS 8.

The Company is examining the impact from the adoption of the above amendment on its financial

statements.

In addition, the International Accounting Standards Board has issued the following standards and

amendments to standards which have not yet been adopted by the European Union and they have

not been early applied by the Company.

➢ Amendment to International Financial Reporting Standard 3 “Business

Combinations”: Definition of a Business


On 22.10.2018 the International Accounting Standards Board issued an amendment to IFRS 3 aimed

at resolving the difficulties that arise when an entity determines whether it has acquired a business

or a group of assets. The amendments:

- clarify the minimum requirements required in order a business to have been acquired,

- the assessment for the acquisition of either a business or a group of assets is simplified, and

it is based on current condition of acquired elements rather than on the market participant’s

ability to integrate them into his own processes,

- the definition of outputs is amended so that apart from the revenue arising from ordinary

activities falling within the scope of IFRS 15, it also includes other income from main

activities such as income from investment services,

- guidance is added to assess whether a production process is substantive both in cases where

a product is produced at the date of acquisition and in cases where there is no product

produced,

- an optional exercise is introduced based on the fair value of the assets acquired to assess

whether a business or group of assets has been acquired.


statements.

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14


➢ Amendment to International Financial Reporting Standard 10 “Consolidated

Financial Statements” and to International Accounting Standard 28 “Investments in

Associates and Joint Ventures”: Sale or contribution of assets between an investor and its

associate or joint venture.

Effective date: To be determined.

On 11.9.2014 the International Accounting Standards Board issued an amendment to IFRS 10 and

IAS 28 in order to clarify the accounting treatment of a transaction of sale or contribution of assets

between an investor and its associate or joint venture. In particular, IFRS 10 was amended in order

to be clarified that in case that as a result of a transaction with an associate or joint venture, a

parent loses control of a subsidiary, which does not contain a business, as defined in IFRS 3, it shall

recognise to profit or loss only the part of the gain or loss which is related to the unrelated investor’s

interests in that associate or joint venture. The remaining part of the gain from the transaction shall

be eliminated against the carrying amount of the investment in that associate or joint venture. In

addition, in case the investor retains an investment in the former subsidiary and the former

subsidiary is now an associate or joint venture, it recognises the part of the gain or loss resulting

from the remeasurement at fair value of the investment retained in that former subsidiary in its

profit or loss only to the extent of the unrelated investor’s interests in the new associate or joint

venture. The remaining part of the gain is eliminated against the carrying amount of the investment

retained in the former subsidiary.

In IAS 28, respectively, it was clarified that the partial recognition of the gains or losses shall be

applied only when the involved assets do not constitute a business. Otherwise, the total of the gain

or loss shall be recognised.

On 17.12.2015, the International Accounting Standards Board deferred the effective date for the

application of the amendment that had been initially determined. The new effective date will be

determined by the International Accounting Standards Board at a future date after taking into

account the results of its project relating to the equity method.

➢ International Financial Reporting Standard 14 “Regulatory deferral accounts”


On 30.1.2014 the International Accounting Standards Board issued IFRS 14. The new standard,

which is limited-scope, addresses the accounting treatment and the disclosures required for

regulatory deferral accounts that are maintained in accordance with local legislation when an entity

provides rate-regulated goods or services. The scope of this standard is limited to first-time adopters

that recognized regulatory deferral accounts in their financial statements in accordance with their

previous GAAP. IFRS 14 permits these entities to capitalize expenditure that non-rate-regulated

entities would recognize as expense.

It is noted that European Union has decided not to launch the endorsement of this standard and to

wait for the final standard.

The above standard does not apply to the financial statements of the Company.

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15


➢ International Financial Reporting Standard 17 “Insurance Contracts”


On 18.5.2017 the International Accounting Standards Board issued IFRS 17 which replaces IFRS 4

“Insurance Contracts”. In contrast to IFRS 4, the new standard introduces a consistent methodology

for the measurement of insurance contracts. The key principles in IFRS 17 are the following:

An entity:

• identifies as insurance contracts those contracts under which the entity accepts significant

insurance risk from another party (the policyholder) by agreeing to compensate the

policyholder if a specified uncertain future event adversely affects the policyholder;

• separates specified embedded derivatives, distinct investment components and distinct

performance obligations from the insurance contracts;

• divides the contracts into groups that it will recognise and measure;

• recognises and measures groups of insurance contracts at:

i. a risk-adjusted present value of the future cash flows (the fulfilment cash flows)

that incorporates all of the available information about the fulfilment cash flows in

a way that is consistent with observable market information; plus (if this value is a

liability) or minus (if this value is an asset)

ii. an amount representing the unearned profit in the group of contracts (the

contractual service margin);

• recognises the profit from a group of insurance contracts over the period the entity

provides insurance cover, and as the entity is released from risk. If a group of contracts is

or becomes loss-making, an entity recognises the loss immediately;

• presents separately insurance revenue, insurance service expenses and insurance finance

income or expenses; and

• discloses information to enable users of financial statements to assess the effect that

contracts within the scope of IFRS 17 have on the financial position, financial performance

and cash flows of an entity.

It is also noted that in November 2018 the International Accounting Standards Board proposed to

defer the IFRS 17 effective date to 1.1.2022.

The above standard does not apply to the financial statements of the Company.

➢ Amendment to the International Accounting Standard 1 “Presentation of Financial

Statements”: Classification of liabilities as current or non-current


On 23.1.2020, the International Accounting Standards Board issued amendments to IAS 1 relating

to the classification of liabilities as current or non-current. More specifically:

• The amendments specify that the conditions which exist at the end of the reporting period are

those which will be used to determine if the liability must be classified as current or non-

current.

• Management expectations about events after the balance sheet date must not be taken into

account.

• The amendments clarify the situations that are considered settlement of a liability.


statements.

ASMITA GARDENS SRL



16

b) Foreign currency transactions

Transactions in foreign currencies are translated into RON (functional currency) at the official closing

exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign

currencies at the balance sheet date are translated into RON at the closing exchange rate of that

date.

Exchange differences arising on the settlement of monetary items or on translating monetary items

at the closing exchange rate as of balance sheet date are recognized in the statement of

comprehensive income.

Non-monetary assets and liabilities are translated using the rate of exchange at the transaction date,

except for non-monetary items denominated in foreign currencies that are measured at fair value

which are translated at the exchange rate of the date that the fair value is determined. The exchange

differences relating to these items are part of the change in fair value and they are recognized in

the income statement or recorded directly in equity depending on the classification of the non-

monetary item. The exchange rates of the main foreign currencies were:

Currency December 31,

2019 December 31,

2018

EUR 1: LEU 4.7793 1: LEU 4.6639

USD 1: LEU 4.2608 1: LEU 4.0736

c) Cash and cash equivalents

Cash and cash equivalents include current accounts and deposits at banks. In the preparation of the statement of cash flows, the Company considers the following as cash and cash equivalents: actual cash, current bank accounts, deposits with initial maturity up to 3 months and interest thereon.

d) Financial instruments

Initial recognition

The Company recognizes financial assets or financial liabilities in its statement of financial position

when it becomes a party to the contractual conditions of the instrument.

Upon initial recognition the Company measures financial assets and liabilities at fair value.

The Company holds financial assets that are classified as current accounts with banks, bank term

deposits and trade receivables

These financial instruments are measured at amortised cost since they satisfy both of the following

criteria:

- they are held within a business model whose objective is to hold financial assets in order to

collect contractual cash flows,

- the contractual terms of the financial asset give rise on specified dates to cash flows that

are solely payments of principal and interest (SPPI) on the principal amount outstanding.

These assets are measured at amortized cost using the effective interest rate method and are

periodically tested for impairment based on the procedures described in note 3(j).

ASMITA GARDENS SRL



17

The effective interest rate method is a method of calculating the amortised cost of a financial

instrument and of allocating the interest income or expense during the relative period. The effective

interest rate is the rate that exactly discounts the estimated future cash payments or receipts to the

gross carrying amount of a financial asset and to the amortized cost of a financial liability through

the contractual life of a financial instrument or the next repricing date. When calculating the effective

interest rate, the Company estimates the expected cash flows by considering all the contractual

terms of the financial instrument but does not consider the expected credit losses.

Business model assessment

The business model reflects how the Company manages its financial assets in order to generate cash

flows. That is, the Company’s business model determines whether cash flows will result from

collecting contractual cash flows, selling financial assets or both. The Company’s business model is

determined at a level that reflects how groups of financial assets are managed together to achieve

a particular business objective. Accordingly, business model does not depend on management’s

intentions for an individual instrument but it is determined on a higher level of aggregation.

The Company, at each reporting date, reassesses its business models in order to confirm that there

has been no change compared to the prior period or application of a new business model.

Solely Payments of Principal and Interest (SPPI) assessment of the contractual cash flows

for the purposes of applying the SPPI assessment:

- Principal is the fair value of the asset at initial recognition, which may change over the

life of the financial asset, (for example if there are repayments of principal).

- Interest is the consideration for the time value of money, for the credit risk associated

with the principal amount outstanding during a particular period of time and for other

basic lending risks (i.e. liquidity risk) and costs, as well as a profit margin.

Contractual terms that introduce exposure to risks and volatility in the contractual cash flows that

are not related to a basic lending arrangement, such as exposure to changes in equity prices or

commodity prices, do not give rise to contractual cash flows that are solely payments of principal

and interest on the principal amount outstanding.

Derecognition of financial assets

The Company derecognizes a financial asset when the rights to the cash flows from the financial

asset expire, or when the Company has transferred the contractual rights to the cash flows from

the financial asset in a transaction in which it has transferred substantially all the risks and

rewards of ownership.

On derecognition of a financial asset in its entirety, the difference between:

- the carrying amount; and

- the amount of (i) the consideration received (including any new asset obtained less any new

liability assumed) and (ii) any cumulative gain or loss that had been recognized in other

comprehensive income shall be recognized in statement of profit or loss.

- for this purpose, a retained servicing asset shall be treated as a part that continues to be

recognized

If the transferred asset is part of a larger financial asset (e.g. when an entity transfers interest

cash flows that are part of a debt instrument interest) and the part transferred qualifies for

derecognition in its entirety, the previous carrying amount of the larger financial asset shall be

allocated between the part that continues to be recognized and the part that is derecognized,

based on the relative fair values of those parts on the date of the transfer. For this purpose, a

servicing asset shall be treated as a part that continues to be recognized.

ASMITA GARDENS SRL



18

Subsequent measurement of financial liabilities

The Company carries financial liabilities at amortized cost using the effective interest method.

Liabilities to credit institutions and other liabilities (such as trade payables) are classified in this

category.

Derecognition of financial liabilities

The Company derecognizes a financial liability (or part thereof) when its contractual obligations are

discharged, cancelled or expire.

In cases that a financial liability is exchanged with another one with substantially different terms,

the exchange is accounted for as an extinguishment of the original financial liability and the

recognition of a new one.

The same applies in cases of a substantial modification of the terms of an existing financial liability

or a part of it (whether or not attributable to the financial difficulty of the debtor). The terms are

considered substantially different if the discounted present value of the cash flows under the new

terms (including any fees paid net of any fees received), discounted using the original effective

interest rate, is at least 10% different from the present value of the remaining cash flows of the

original financial liability.

In cases of derecognition, the difference between the carrying amount of the financial liability (or

part of the financial liability) extinguished or transferred to another party and the consideration

paid, including any non-cash assets transferred or liabilities assumed, is recognised in statement of

profit or loss.

Offsetting financial assets and financial liabilities

Financial assets and liabilities are offset, and the net amount is presented in the balance sheet,

only in cases when the Company has both the legal right and the intention to settle them on a net

basis, or to realize the asset and settle the liability simultaneously. e) Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date, in the principal market

for the asset or liability or, in the absence of a principal market, in the most advantageous market

for the asset or liability.

The Company measures the fair value of assets and liabilities traded in active markets based on

available quoted market prices. A market is regarded as active if quoted prices are readily and

regularly available from an exchange, dealer, broker, pricing service or regulatory agency, and

those prices represent actual and regularly occurring market transactions on an arm’s length basis.

The fair value of financial instruments that are not traded in an active market is determined by the

use of valuation techniques, appropriate in the circumstances, and for which sufficient data to

measure fair value are available, maximizing the use of relevant observable inputs and minimizing

the use of unobservable inputs. If observable inputs are not available, other model inputs are used

which are based on estimations and assumptions such as the determination of expected future

cash flows, discount rates, probability of counterparty default and prepayments. In all cases, the

Company uses the assumptions that ‘market participants’ would use when pricing the asset or

liability, assuming that market participants act in their economic best interest.

ASMITA GARDENS SRL



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Assets and liabilities which are measured at fair value or for which fair value is disclosed are

categorized according to the inputs used to measure their fair value as follows:

• Level 1 inputs: quoted market prices (unadjusted) in active markets

• Level 2 inputs: directly or indirectly observable inputs

• Level 3 inputs: unobservable inputs used by the Company, to the extent that relevant

observable inputs are not available

Non-financial assets

The most important category of non-financial assets for which fair value is estimated is real estate

property

To derive the fair value of the real estate property, the valuer chooses the following valuation

technique- Market approach (or sales comparison approach), which measures the fair value by

comparing the property to other identical ones for which information on transactions is available.

It is noted that the fair value measurement of a property takes into account a market’s participant

ability to generate economic benefits by using the asset in it’s highest and best use or by selling it

to another market participant that would use the asset in it’s highest and best use.

f) Property, Plant and Equipment

This caption includes equipment and furniture used for administrative purposes.

Property, plant and equipment are initially recognised at cost which includes any expenditure directly

attributable to the acquisition of the asset.

Subsequently, property, plant and equipment are measured at cost less accumulated depreciation

and impairment losses.

Subsequent expenditure is recognized on the carrying amount of the item when it increases future

economic benefit.

Expenditure on repairs and maintenance is recognized in statement of profit or loss as an expense

as incurred.

Depreciation is charged on a straight-line basis over the estimated useful lives of property, plant

and equipment and it is calculated on the asset’s cost minus residual value.

The estimated useful lives are as follows:

• Furniture: up to 5 years;

• Equipment and vehicles: up to 10 years.

The residual value of property and equipment and their useful lives are periodically reviewed and

adjusted if necessary, at each reporting date.

Property, plant and equipment are reviewed at each reporting date to determine whether there is

an indication of impairment and if they are impaired, the carrying amount is adjusted to its

recoverable amount with the difference recorded in statement of profit profit or loss and other

comprehensive income.

Gains and losses from the sale of property and equipment are recognized in statement of profit or

loss and other comprehensive income.

ASMITA GARDENS SRL



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g) Investment property

The Company includes in this category buildings together with their respective portion of land that

are held to earn rental income or for capital appreciation purposes.

Investment property is initially recognised at cost which includes any expenditure directly

attributable to the acquisition of the asset.

Subsequently investment property is measured at cost less accumulated depreciation and

impairment losses.

Subsequent expenditure is recognized on the carrying amount of the item when it increases future

economic benefit. All costs for repairs and maintenance are recognized in statement of profit or

loss as incurred.

The estimated useful lives over which depreciation is calculated using the straight-line up to 40

years.

In case of a change in the Company’s intention regarding the use of property, reclassifications to

or from the “Investment Property” category occur.

The income from renting the investment property is recognized on a straight line basis. h) Leases

The Company enters into leases as a lessor.

At inception, the Company assesses whether a contract is or contains a lease. If the contract conveys

the right to control the use of an identified asset for a period of time for consideration, then the

contract is accounted as a lease. The lease term is determined as the non-cancellable period of a

lease, together with both periods covered by an option to extend the lease if the lessee is reasonably

certain to exercise that option and periods covered by an option to terminate the lease if the lessee

is reasonably certain not to exercise that option. The Company revises the lease term if there is a

change in the non-cancellable period of a lease.

When the risks and rewards incident to ownership of an asset are transferred to the lessee they are

classified as finance leases. All other lease agreements are classified as operating leases. The

Company is lessor of assets under operating lease. The leased asset is recognized and depreciation

is charged over its estimated useful life. Income arising from the leased asset is recognized as other

income on an accrual basis.

i) Impairment on non- financial assets

The Company assesses, at least annually, property, plant and equipment and investment property

for impairment.

In assessing whether there is an indication that an asset may be impaired both external and internal

sources of information are considered, of which the following are indicatively mentioned:

- The asset’s market value has declined significantly, more than would be expected as a result

of the passage of time or normal use.

- Significant changes with an adverse effect have taken place during the period or will take

place in the near future, in the technological, economic or legal environment in which the

entity operates or in the market to which the asset is dedicated.

- Significant unfavorable changes in foreign exchange rates.

ASMITA GARDENS SRL



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- Market interest rates or other rates of return of investments have increased during the

period, and those increases are likely to affect the discount rate used in calculating an asset’s

value in use.

- Evidence is available of obsolescence or physical damage of an asset.

An impairment loss is recognized in profit or loss when the recoverable amount of an asset is less

than its carrying amount. The recoverable amount of an asset is the higher of its fair value less costs

to sell and its value in use. Fair value less costs to sell is the amount received from the sale of an

asset (less the cost of disposal) in an orderly transaction between market participants. Value in use

is the present value of the future cash flows expected to be derived from an asset or cash –

generating unit through their use and not from their disposal.

j) Impairment of financial assets

The Company, at each reporting date, estimates expected credit losses on financial assets measured

at amortised cost and recognizes the related loss allowance.

The loss allowance is based on expected credit losses related to the probability of default within the

next twelve months, unless there has been a significant increase in credit risk from the date of initial

recognition in which case expected credit losses are recognized over the life of the instrument. In

addition, if the financial asset falls under the definition of purchased or originated credit impaired

(POCI) financial assets, a loss allowance equal to the lifetime expected credit losses is recognized.

Financial assets are classified in stage 1, stage 2 or stage 3 according to their absolute or relative

credit quality with respect to initial disbursement. Specifically:

• stage 1: includes (i) newly issued or acquired credit exposures, (ii) exposures for

which credit risk has not significantly deteriorated since initial recognition, (iii)

exposures having low credit risk (low credit risk exemption);

• stage 2: includes credit exposures that, although performing, have seen their credit

risk significantly deteriorating since initial recognition;

• stage 3: includes impaired credit exposures.

For exposures in stage 1, impairment is equal to the expected loss calculated over a time horizon of

up to one year. For exposures in stages 2 or 3, impairment is equal to the expected loss calculated

over a time period corresponding to the entire duration of the exposure.

For receivables from customers derived from sales of investment property, the loss allowance is

measured at an amount equal to the lifetime expected credit losses (there is no stage allocation)

based on the simplified approach provided by IFRS 9.

k) Provisions and contingent liabilities

A provision is recognized if, as a result of a past event, the Company has a present legal or

constructive obligation that can be estimated reliably, and it is probable that an outflow of

economic benefits will be required to settle the obligation.

The amount recognized as a provision shall be the best estimate of the expenditure required to

settle the present obligation at the end of the reporting period. Where the effect of the time value

of money is material, the amount of the provision is equal to the present value of the expenditures

expected to settle the obligation.

Amounts paid for the settlement of an obligation are set against the original provisions for these

obligations. Provisions are reviewed at the end of each reporting period.

ASMITA GARDENS SRL



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If it is no longer probable that an outflow of resources embodying economic benefits will be

required to settle the obligation, the provision is reversed. Additionally, provisions are not

recognized for future operating losses.

Future events that may affect the amount required to settle the obligation, for which a provision

has been recognized, are taken into account when sufficient objective evidence exists that they will

occur.

Reimbursements from third parties relating to a portion of or all of the estimated cash outflow are

recognized as assets, only when it is virtually certain that they will be received. The amount

recognized for the reimbursement does exceed the amount of the provision. The expense

recognized in statement of profit or loss and other comprehensive income relating to the provision

is presented net of the amount of the reimbursement.

The Company does not recognize in the statement of financial position contingent liabilities which

relate to:

• possible obligations resulting from past events whose existence will be confirmed only

by the occurrence or non-occurrence of one or more uncertain future events not

wholly within the control of the Company, or

• present obligations resulting from past events for which:

- it is not probable that an outflow of resources will be required, or

- the amount of liability cannot be measured reliably.

The Company provides disclosures for contingent liabilities taking into consideration their

materiality. l) Share capital

Ordinary shares are recognized in the share capital. Incremental costs directly attributable to an

issuance of ordinary shares are deducted from capital.

m) Revenue

Revenue includes mainly:

- Revenue from sales of investment property elements which is recognized in statement of profit or loss at the point in time of handing the ownership

- Service charges represents utilities billed to owners who have not yet transferred ownership to utility providers and is recognized in statement of profit or loss when the obligation has been satisfied

- Rental income which is accounted on a straight-line basis over the lease term

n) Finance income and finance costs

Financial revenues consist of revenue and expenses recognized in the income statement for all

interest-bearing financial assets and liabilities.

Income and expense are recognized on an accrual basis and are measured using the effective

interest rate.

ASMITA GARDENS SRL



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o) Tax

Income tax consists of current and deferred tax.

Current tax for a period includes the expected amount of income tax payable in respect of the

taxable profit for the current reporting period, based on the tax rates enacted at the balance sheet

date.

Deferred tax is the tax that will be paid or for which relief will be obtained in future periods due to

the different period that certain items are recognized for financial reporting purposes and for

taxation purposes.

It is calculated based on the temporary differences between the tax base of assets and liabilities

and their respective carrying amounts in the opening IFRS statement of financial position.

Deferred tax assets and liabilities are calculated using the tax rates that are expected to apply

when the temporary difference reverses, based on the tax rates (and laws) enacted at the balance

sheet date.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will

be available against which the asset can be utilized.

Income tax, both current and deferred, is recognized in statement of profit or loss and other

comprehensive income except when it relates to items recognized directly in equity. In such cases,

the respective income tax is also recognized in equity.

p) Related parties definition

According to IAS 24, a related party is a person or entity that is related to the entity that is

preparing its financial statements. For the Company, in particular, related parties are considered:

a) An entity is part of Alpha Bank Group.

b) A person or an entity that have control, or joint control, or significant influence over the

Company.

c) A person and his close family members, if that person is a member of the key

management personnel.

4. INVESTMENT PROPERTY

In the category of investment property the Company included the project “Residential Complex

Asmita Gardens" located in the southern area of Bucharest, with 2 postal addresses, as follows:

Bucharest, district 4, 42 Gladitei Street (where the T5, T6 and T7 sections are built) and

Bucharest, district 4, 168 Splaiul Unirii, Blvd (where the sections T1, T2, T3 and T4 are built). In thousands of RON

Land Buildings Total

Cost Balance at January 01, 2018 3,394 58,695 62,089

Additions - 173 173

Disposals (182) (28,073) (28,255)

Transfers - - -

Balance at December 31, 2018

3,212 30,795 34,007

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Balance at January 01, 2019 3,212 30,795 34,007

Additions - - -

Disposals (3,212) (25,296) (28,508)

Transfers - - -

Balance at December 31, 2019 - 5,499 5,499

Depreciation and impairment loss

Balance at January 01, 2018 - 3,402 3,402

Depreciation - 914 914

Impairment - 1,356 1,356

Disposals - (1,829) (1,829)


Balance at January 01, 2019 - 3,843 3,843

Depreciation - 145 145

Reversal of impairment - (540) (540)

Disposals - (2,181) (2,181)


NBV at January 01, 2018 3,394 55,293 58,687

NBV at December 31, 2018 3,212 26,952 30,164

NBV at December 31, 2019 - 4,232 4,232

The fair value of investment property as at December 31, 2019 amounts to RON 4,141 thousand.

The company recognised impairment based on the evaluation report as at December,31 2018 and

the reversal of the impairment is recorded when the items are sold.

As for Decemebr,31 2019 no additional impairment was necessary, the fair value is at an amount

of approximate value to the carrying amount.

Movements in the accumulated impairment losses on investment property were as follows: In thousands of RON

Balance at January 01, 2018

-

Additions, including increases in existing provisions

1,356

Reversal during the current year

-


1,356


1,356


-


(540)


816

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5. PROPERTY PLANT AND EQUIPMENT

In thousands of RON Land Building

Plant, Equipment furniture Total

Cost

Balance at January 01, 2018 291 1,993 419 2,703

Additions - - 30 30

Disposals (193) (1,329) (202) (1,724)

Transfers - - - -


98 664 247 1,009

Balance at January 01, 2019 98 664 247 1,009

Additions - - 7 7

Disposals (98) (664) (241) (1,003)

Transfers - - - -

Balance at December 31, 2019 - - 13 13

Depreciation and impairment loss

Balance at January 01, 2018 - 168 385 553

Depreciation for the year - 19 22 41

Transfers - - - -

Disposals - (113) (170) (283)

Balance at December 31, 2018 - 74 237 311

Balance at January 01, 2019 - 74 237 311

Depreciation for the year - 56 7 63

Transfers - - - -

Disposals - (130) (241) (371)

Balance at December 31, 2019 - - 3 3

NBV at January 01, 2018

291 1,825 34 2,150

NBV at December 31, 2018 98 590 10 698

NBV at December 31, 2019 - - 10 10

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6. OTHER ASSETS In thousands of RON December 31,

2019 December 31,

2018

Advances to suppliers 41 38

State Budget receivables 93 93

Prepaid expenses 14 51

Other assets 72 88

220 270

7. TRADE RECEIVABLES

In thousands of RON

December 31, 2019

December 31, 2018

CURRENT ASSETS

Rent receivables from lessees - 144

Receivables from selling investment property 14,805 17,148

Cost of finance (194) (265)

Less: Adjustment for impairment of trade receivables (1,341) (1,260)

TOTAL current assets 13,270 15,767

NON-CURRENT ASSETS

Receivables from selling investment property 12,834 21,201

Cost of finance (631) (1,036)

TOTAL non-current assets 12,203 20,165

TOTAL 25,473 35,932

Trade receivables represent outstanding balance of current customers. The cost of finance line represents the adjustment made on trade receivables with payment in instalments (up to three years) in order to reflect the effects of the time value of money.

For trade receivables, the Company recognised impairment taking into consideration the ageing of

the balances using simplified approach. Movements in the accumulated impairment losses on trade receivables were as follows:

In thousands of RON


1,055


336


(131)


1,260

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7. TRADE RECEIVABLES (continued)


1,260


939


(858)


1,341

Movements in the statement of profit or loss related to trade receivables were as follows:

In thousands of RON

December 31, 2019

December 31, 2018

Losses from write-off (571) (129)

Impairment of current trade receivables (939) (336)

Reversal of impairment of trade receivables 858 131

Net impact (652) (334)

8. CASH AND DEPOSITS

In thousands of RON

December 31, 2019

December 31, 2018

Cash in current accounts – RON 34,727 1,456

Cash in current accounts – EUR 5,161 3,420

Term deposits with banks below 3 months 39,037 43,268

TOTAL 78,925 48,144

All the cash held by the Company are in RON or EUR. The current accounts and deposits are open with ALPHA BANK ROMANIA and ALPHA BANK ATHENS.

9. SHARE CAPITAL AND RESERVES

As at December 31, 2019 the authorized capital of the company is RON 147,750 thousand

distributed in 14,775,027 shares with nominal value of RON 10 each.

On September 16, 2019, the shareholder Convergence Development (Cyprus) LTD ceded all its

shares to AGI RRE PARTICIPATIONS 1 LTD.

The structure of the capital of ASMITA GARDENS SRL is as follows: Shareholder No. of shares Nominal value %

Saiyad Muzaffar Hussain 10 100 0,00007%

AGI RRE Participations 1 LTD 14,775,017 147,750,170 99,99993%

Total 14,775,027 147,750,270 100%

As at December 31,2019 the company constituted legal reserves in amount of thousands RON 31, therefore the amount of legal reserves is RON 134 thousand.

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10. TRADE AND OTHER PAYABLES

In thousands of RON

December 31, 2019

December 31, 2018

Trade payables 12 71 Guarantees received 35 62 Other sundry creditors - 3 Advances received from clients 428 8,834 Accruals 63 189

Deferred income - 39 Social security and other taxes 314 191

852 9,389

Trade payables represent outstanding balance of current suppliers and accruals represent invoices to be received from suppliers, related to management property services, accounting, audit and real estate agency.

Advances received from clients represents amounts paid in advance by the clients who will acquire an investment property. This caption decreased in 2019 due to the fact that the Company closed an advance from Microfruits SRL for the acquisition of investment property in amount of 8,497 thousand of RON.

11. PROVISIONS

The outstanding balance of provision as at December 31, 2019 is in amount of 2,169 thousand of

RON. In this caption, the Company recorded as provision the estimated value of delay penalties to

the State Budget related to the corporate tax of year 2014, declared and paid with delay.

12. FINANCIAL RISK MANAGEMENT

Overview The Company has exposure to the following risks from its use of financial instruments:

• credit risk • liquidity risk • currency risk

• interest rate risk. This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company effectively implements procedures and controls in order to limit the associated risk. The procedures followed include a rigorous assessment of the credibility of each client and monitors, on an ongoing basis, the aging analysis of the balance.

ASMITA GARDENS SRL



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The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: In thousands of RON December 31,

2019 December 31,

2018

Cash and deposits 78,925 48,144

Trade and other receivables 25,473 35,932

Other assets 220 270

104,618 84,346

Credit risk – December 31, 2019 TOTAL NOT RATED

BB B

Cash and deposits 78,925 -

47,276

31,649

Trade and other receivables 25,473 25,473 - -

Other assets 220 220 - -

104,618 25,693

47,276

31,649

Credit risk- December 31, 2018 TOTAL NOT RATED

BB B

Cash and deposits 48,144 -

45,983

2,161

Trade and other receivables 35,932 35,932 - -

Other assets 270 270 - -

84,346 36,202

45,983

2,161

All exposures with banks are classified as stage 1.

There is no significant concentration of credit risk with respect to trade receivables, as the company has a significant and diverse number of customers. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.

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The maturities of assets and liabilities are the following: December 31, 2019

In thousands of RON Total

Below 1 month

1-3 months

3-6 months

6-12 months

More

than 1 year

Cash and deposits 78,925 39,888 39,037 - - -

Trade receivables 25,473 - 2,460 4,602 6,208 12,203

Other assets 220 - 14 - - 206 Trade and other

payables (852) (852) - - - -

NET POSITION 103,766 39,036 41,511 4,602 6,208 12,409

December 31, 2018

In thousands of RON

Total

Below 1 month

1-3 months

3-6 months

6-12 months

More than

1 year

Trade receivables 35,932 144 7,587 4,527 3,509 20,165

Other assets 270 270 - - - -

Cash and deposits 48,144 4,876 43,268 - - - Trade and other

payable (9,389) (555) (8,834) - - -

NET POSITION 74,957 4,735 42,021 4,527 3,509 20,165

Interest rate risk Interest rate risk is the risk that the value of financial instruments fluctuates due to changes in market interest rates. Revenue and cash flow from the Company's operations are substantially independent of changes in market interest rates, since the Company does not have significant interest-bearing assets.

Currency risk In thousands of RON December 31, 2019 Total RON EUR

Cash and deposits 78,925 73,764 5,161

Other assets 220 220 -

Trade receivables 25,473 121 25,352

Trade and other payables (852) (852) -

ASMITA GARDENS SRL



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In thousands of RON December 31, 2018 Total RON EUR

Cash and cash equivalents

48,144

44,724

3,420

Other assets 270 270 -

Trade receivables 35,932 104 35,828

Trade and other payables 9,389 9,389 - 13. FAIR VALUE

The following table analyses within the fair value hierarchy the company’s financial assets and

financial liabilities (by class) not measured at fair value:

December 31, 2019

December 31, 2019

December 31, 2018

December 31, 2018

Book Value Market Value Book Value Market Value

Trade receivables 25,473 25,473 35,932 35,932

Other assets 220 220 270 270

Cash and deposits 78,925 78,925 48,144 48,144

Total Assets 104,618 104,618 84,346 84,346

Trade payables 852 852 9,389 9,389

Total Liabilities 852 852 9,389 9,389

14. REVENUES

In thousands of RON December 31,

2019 December 31,

2018

Rental revenue Revenue from other services

114 -

996 4

114 1,000

Asmita Gardens SRL recorded revenues as at December 31, 2019 in amount of 114 thousand RON representing building rented revenues to non-affiliated companies.

15. GAIN FROM THE SALE OF INVESTMENT PROPERTY

In thousands of RON

December 31, 2019

December 31, 2018

Cash consideration received from the sales of investment

property 29,453 31,110

Carrying amount of investment property sold (27,853) (29,879)

1,600 1,231

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16. OTHER EXPENSES & OTHER DIRECT PROPERTY OPERATING EXPENSES

16.1 Other expenses

In thousands of RON

December 31, 2019

December 31, 2018

Audit and accounting services (149) (135)

Other taxes expenses - (152)

Other administrative expenses (40) (18)

Other expenses (179) (137)

Total (368) (442)

16.2 Other direct property operating expenses

In thousands of RON

December 31, 2019

December 31, 2018

Property tax and fees (412) (539)

Maintenance expenses related to investment property (174) (327)

Legal services (41) (106)

Property management services (435) (326)

Brokerage and consultancy services (373) (993)

Other expenses (11) (60)

Advertising and promoting investment property (77) (145)

Insurance (70) -

Total (1,593)

(2,496)

17. FINANCE INCOME

In thousands of RON

December 31, 2019

December 31, 2018

Finance income 1,443 1,218

Interest income from bank deposits 455 146 Interest income from time value of money related to

receivables from sales in instalments 988 1,072

Total 1,443 1,218

18. TAXES

The company did not register income tax expense in the statement of profit and loss due to accumulated fiscal losses. As of December 31, 2019, the Company recorded an accumulated fiscal loss in quantum of 56,014 thousand of RON, for which the Company decided not to recognize a deferred tax asset due to the

lack of future imposable profits through which the fiscal loss could be used.

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The breakdown of fiscal loss until the prescription year is the following:

Year Fiscal Loss

2022 12,686

2023 15,570

2024 15,004

2025 6,996

2026 5,758

A reconciliation between the effective and nominal tax rate is provided below:

In thousands of RON

December 31, 2019

Profit before Taxes

2,189

Income tax according to nominal tax rate (2019: 16%)

350

Increase/(decrease) due to:

Non-taxable income

(224)

Non-deductible expenses

238

Use of tax losses of previous years

(364)

Income tax according to effective tax rate

-

19. RELATED PARTIES The Company carries out transactions with the following related parties:

• Alpha Bank Romania,

• Alpha Real Estate Services SRL, • Alpha Bank A.E • Alpha Astika Akinita AE

The Company has receivables from related parties as follows: In thousands of RON

December 31,

2019

December 31,

2018

Alpha Bank Romania SA – Cash and deposits 47,276 45,981

Alpha Bank Athens – Cash and deposits 31,649 2,161 Alpha Real Estate Services SRL – Other assets - 27

78,925 48,169

The Company has liabilities to related parties as follows:

In thousands of RON

December 31, 2019

December 31, 2018

Alpha Real Estate Services SRL – Trade and other

payables - 256

- 256

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The income of Company from related parties are as follows: In thousands of RON

December 31, 2019

December 31, 2018

Alpha Bank Romania– Finance Income

441

146

Alpha Bank Athens – Finance Income 14 - 455 146

The expenses of Company to related parties are as follows:

In thousands of RON

December 31, 2019

December 31, 2018

Alpha Bank Romania – Other Expenses 14 10 Alpha Real Estate Services SRL – Other direct property

operating expenses Alpha Astika Aknita AE – Other direct property operating

expenses

435

5

326

9

454 345

20. LITIGATIONS AND CONTINGENT LIABILITIES

As of December 31, 2019, the Company is not involved in litigations with third parties as

defendant. Based on the Company’s assessment, no provision for litigation is necessary to be

recorded as of December 31, 2019.

The company had no tax audit by local tax authorities during the current year. 21. EVENTS AFTER REPORTING DATE

The company management monitors the current situation regarding the rapid transmission of

COVID-19 and assesses the impact on the asset quality as well as the implementation of the

Business Plan. We also reassessed the ability to retain our business operations, in order to support

our customers in these harsh times.

The above efforts are being carried out concurrently with the actions of the Romanian Government

to address the economic impact of the coronavirus (COVID-19) and to support the economy and

entrepreneurship.

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