Alina Holdings PLC:Annual Financial Report

(Reuters: ALNA.L, Bloomberg: ALNA:LN)

(“Alina”, “ALNA” or the “Company”)

AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023

The Company today announces its audited results for the year ended 31 December 2023.

The information set out below is extracted from the Company's Report and Accounts for the year ended 31 December 2023, which will be published today on the Company's website www.alina-holdings.com. A copy has also been submitted to the National Storage Mechanism where it will be available for inspection. Cross-references in the extracted information below refer to pages and sections in the Company's Report and Accounts for the year ended 31 December 2023.

REPORT FOR THE YEAR TO 31 DECEMBER 2023

Alina Holdings PLC (“Alina” or the “Company”) is a company registered on the Main Market of the London Stock Exchange. The group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”).

CHAIRMAN’S STATEMENT

Writing one’s own report card is always a time for self-reflection, particularly when the conclusion is “could have done better”.

In 2023 we…read I…definitely could have done better. Following the Q3 correction, the NASDAQ 100 (NDX) staged a remarkable recovery and, from 27 October to 29 December, surged 27.6%. Driven by the Magnificent 7, which contributed nearly half of the broader market’s 2023 performance, and its poster child Nvidia (NVDA), which rose 239%, the NDX registered a 54.9% for the year when many, including ourselves, had anticipated a recession due to higher interest rates and sticky inflation. The irony is not lost on us as we have since been proven right and the anticipated Fed Pivot has not yet happened, as inflation has proven stickier that most had predicted.

Alina’s portfolio of assets is a mixture of Operating, financial (including cash) assets, and a limited number of hedge positions. Clearly hedging doesn’t always work, and on occasion it backfires and increases risk. In 2023, our hedging activities were a small drag on our results but, as with any insurance policy, there is always a price for protection. I am pleased to report that since the end of the year, our largest short position in Tesla (TSLA) generated a realised gain of $731k (£587K at £/$ 1.2437) or a return on average capital employed (ROACE) of 258%. The TSLA short position was closed out on 23 April 2024, the morning before TSLA reported Q1 earnings.

Property Assets

Brislington, Bristol: Currently underperforming our expectations due to tenant problems, partially caused by scaffolding erected for work on the Landlord’s adjacent building that are currently moribund.

Castle Court, Hastings: Former Argos unit has now been refurbished and asbestos removed. Claim for expenditure plus costs will now be submitted to Sainsbury’s, the new owner’s of Argos per the ‘full repairing lease’ that they have ignored.

Former Italian Way (restaurant) unit has now been recovered from illegal tenant that had taken occupation without even bothering to apply for a lease. Refurbishment will be undertaken and application to expand the unit will be sought from Hastings Council, the Freehold owner.

Shaw, Suffolk: Small unit, in the process of being sold.

Outlook

Sadly, I do not believe that Geo-political risk is properly reflected in current US share prices. Therefore, the likelihood of the correction we anticipated last year, but which turned into an enormous AI infused rally, still exists. Whilst we will always be substantially skewed to the long side, we will continue to try and protect downside risk.

Duncan Soukup

Chairman

Alina Holdings plc 29 April 2024

FINANCIAL REVIEW

The financial statements contained in this report have been prepared in accordance with UK Adopted International Accounting Standards.

Result

The Group recorded an IFRS loss for the year to 31 December 2023 of £1,123,000, or 4.95p/shr (2022: loss

£136,000, or 0.60p/shr). The majority of the losses were associated with the decline in value of the Company’s HEIQ investment, and losses on hedges, partially offset by the increase in value (on a mark to market basis) of Dolphin Capital Advisors (DCI).

Operating income is still substantially below Group target due to continued vacancy of the former Argos unit in the Company’s Hastings property. Further clouding the picture was the ongoing problem that we encountered in Hastings with an illegal occupant who had taken occupancy illegally. The offending party had the temerity to blame us for not extending them a lease, notwithstanding the fact that they had moved in without ever applying for a lease. We are pleased to report that they have since departed.

Refurbishment of the former Argos unit is now complete, and we will now seek to relet both the Argos unit, and once extended, the end restaurant unit at prevailing rates, whilst also commencing the refurbishment and conversion of the first floor from office to residential. Unfortunately, building costs are currently in Lala-land ,such that finding a builder to work at a reasonable price is somewhat akin to finding a needle in a haystack.

Key Performance Indicators (“KPI’s”)

Throughout the reporting period the Group had no borrowings and held cash reserves at 31 December 2023 of

£1.117 million (31 December 2022: £1.721 million). The KPI’s relating to Interest Cover, Loan to Value and Gearing, shown in previous reports, are therefore no longer applicable. The Net Asset Value per Share at 31 December 2023 was 21.9p (31 December 2022: 26.9p).

Property Operating Expenses

Property operating expenses for the year to 31 December 2023 were £298,000 (2022: £300,000). This was predominantly caused by the property rates increases and the vacancy of a larger floorspace in Hastings. There was a release of bad debt provision in the comparable period which increases the variance.

Administrative Expenses

Administrative expenses were £743,000 during the year to 31 December 2023 (2022: £604,000).

Net Asset Value (“NAV”)

The NAV at 31 December 2023 was £4.97 million or 21.9p per share, based on 22.7 million shares in issue, excluding those held in treasury (31 December 2022: £6.10 million, 26.9p per share, based on 22.7 million shares in issues).

At 31 December 2023 the Group held £1.117 million of cash (31 December 2022: £1.721 million). At 31 December 2023 the Group had no banking debt (31 December 2022: £nil).

At 31 December 2023, investment properties were held at an assessed fair value of £2,371,000 (2022: £2,504,000). The fair value has been assessed with reference to a third party valuation performed in 2020. The Board’s assessment of the carrying value remains unchanged, pending finding new tenants for vacant units.

One residential property in Stafford is considered to be held for sale at 31 December 2023, valued in the Company’s accounts at that date at its anticipated sale price.

The 2020 external valuation was undertaken in accordance with the Royal Institute of Chartered Surveyors Appraisal and Valuation Standards on the basis of market value.. Market value is defined as the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Financing

The Group had no borrowings during the year and the Group’s operations were financed from its property income.

During the reporting period the Group held some of its cash in foreign currencies. These holdings generated a small unrealised loss at the end of the period, principally from the reduction in USD value against GBP across the period. The risk associated with foreign currency holdings is described in Note 16 to the financial statements.

Dividend

In line with the Group’s current dividend distribution policy no dividend will be paid in respect of the reporting period. The directors will continue to review the dividend policy in line with progress with the Group’s investment strategy.

Risk Management & Operational Controls

The directors recognize that commercial activities invariably involve an element of risk. A number of the risks to which the business is exposed, such as the condition of the UK domestic economy and sentiment in the UK property market, are beyond the Company’s influence. However, such risk areas are monitored and appropriate mitigating action, such as reviewing the substance and timing of the Company’s operational plans, is taken wherever practicable in response to significant changes. The directors consider the risk areas the Company is exposed to in the light of prevailing economic conditions and the risk areas set out in this section are subject to review.

In relation to asset management, the Company’s approach to risk reflects the Company’s granular business model and position in the market and involves the expertise of its directors, management and third-party advisers. Operational progress and key investment and disposal decisions are considered in regular management team meetings as well as being subject to informal peer review.

Higher level risks and financial exposures are subject to constant monitoring. Major investment and disposal decisions are subject to review by the directors in accordance with a protocol set by the Board.

The Board’s approach in this area is further explained in the Governance section, under Risk & Internal Control.

Principal Risks and Uncertainties

Operational Controls

During the year, the directors continued to recognize that the Company’s ability to operate successfully is largely dependent on the maintenance of its straightforward approach to doing business and its reputation for integrity. All those who act on the Company’s behalf are required to behave and transact business in accordance with the highest professional standards. As well as compliance with all relevant regulatory requirements, this extends to customer care and external complaint guidelines. The Company has adopted a Code, Policy and Procedures under the Market Abuse Regulation. The majority of the operations were contracted to Eddisons Property Management. Eddisons have looked after the property management for previous years and include the provision of all applicable compliance procedures. The directors were satisfied that the governance procedures adopted by Eddisons in relation to its clients were appropriate and protected the Company’s interests. The Company’s corporate governance regime is underpinned by a whistle-blowing procedure, enabling perceived irregularities to be notified to members of the Board, principally the senior independent non-executive director.

The Board has overall responsibility for the Company’s internal control systems and for monitoring its effectiveness. The Board’s approach is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable assurance against material misstatements or loss. The directors have not considered it appropriate to establish a separate internal audit function, having regard to the Company’s size. The Board’s approach to internal controls covers all companies within the Group and there are no associate or joint venture entities which it does not cover.

The principal foundations of the Company’s internal control framework during the reporting period were:

statements of areas of responsibility reserved to the directors, with prescribed limits to executive authority to commit to expenditure and borrowing;

effective committee structure with terms of reference and reporting arrangements to the Board;

clear remits for the delegation of executive direction and internal operational management functions;

framework for independent directors to provide advice and support to executive directors on an individual basis;

top-level risk identification, evaluation and management framework;

effective systems for recognized capital expenditure and significant revenue items and monitoring actual cost incurred;

ongoing reporting to the Board of operational activity and results;

regular review of operational forecasts and consideration by the directors;

ongoing reporting to the directors on health, safety and environmental matters.

The Board reviews the effectiveness of the Company’s risk management systems against the principal risks facing the business and their associated mitigating factors, taking account of the findings and recommendations of the auditors at the Company’s half-year and year-end. Following its review of the auditors’ findings during the reporting period, the Board considers that the Company’s approach remains effective and appropriate for a business of the Company’s size and complexity.

Key Contracts

There are currently no contracts which require third party approval for any change to the nature, constitution, management or ownership of the business. The appointment agreements of directors do not contain any provisions specifically relating to a change of control.

Charitable and Political Donations

During the reporting period the Group made £650 donations for charitable purposes and no donations for political purposes (2022: nil).

Section 172 Companies Act 2006

The Directors acknowledge their duty under s.172 of the Companies Act 2006 and consider that they have, both individually and together, acted in the way that, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing so, they have had regard (amongst other matters) to:

the likely consequences of any decision in the long term. The Group’s long-term investment strategy is shown in the Chairman’s Report, with associated risks highlighted in the Strategic report.

the impact of the Group’s operations on the community and the environment. The Group operates honestly and transparently. We consider the impact on the environment on our day-to-day operations and how we can recognize this.

the desirability of the Group maintaining a reputation for high standards of business conduct. Our intention is to behave in a responsible manner, operating within the high standard of business conduct and good corporate governance, as highlighted in the Corporate Governance Statement on page 12.

the need to act fairly as between members of the Group. Our intention is to behave responsibly towards our shareholders and treat them fairly and equally so that they may benefit from the successful delivery of our strategic objectives.

This Financial Review was approved by the directors on 26 April 2024.

Duncan Soukup, Chairman

CORPORATE RESPONSIBILITY STATEMENT

During the year we continued to focus on the three principal contributors to the success of our business:

the talent and commitment of our executives;

our relationships with national and local advisers, partners and clients; and

the well-being of the businesses that occupy our properties and the communities in which they operate.

The directors remain conscious that the Group’s ability to operate effectively rests on our reputation for fairness and a straightforward and honest approach to conducting business. We therefore strive to transact business in accordance with the highest professional standards and all those who act on our behalf are expected to do the same. Besides complying with all relevant legislation and professional guidelines, this includes customer care and external complaint procedures.

We have again considered whether it is appropriate to report on relevant human rights issues. In the context of our business and the reduced size of our investment portfolio, we do not believe that the provision of detailed information in this area would provide any meaningful enhancement to the understanding of the performance of our business. However, we are confident that our approach to doing business does not contravene any human rights principles or applicable legislation.

Our approach to corporate responsibility matters is underpinned by a whistle-blowing procedure, enabling perceived irregularities to be notified to directors, principally the independent non-executive directors.

DIVERSITY

The Group has a formal diversity and equal opportunities policy in place and is committed to a culture of equal opportunities for all regardless of age, race or gender. The Board currently comprises three male directors.

HEALTH, SAFETY AND WELFARE

The directors were responsible for ensuring that the Group discharged its obligations for health, safety and welfare during the reporting period, including matters delegated to the Group’s managing agents and other contractors. No material health, safety and welfare incidents were notified during the period. Our property managers and contractors continued to be required to ensure that property management, maintenance and construction activities conform to all relevant regulations, with due consideration being given to the welfare of occupants and neighbours.

ANTI-CORRUPTION AND ANTI-BRIBERY

The Company has in place an Anti-Bribery and Anti-Corruption Policy which the directors consider fulfils UK Government guidelines for compliance with UK Bribery Act 2010.

GOVERNANCE

REGULATORY COMPLIANCE

In the prior period the Company adopted the Corporate Governance Code of the Quoted Companies Alliance (the “QCA Code”). The directors consider that the QCA Code provides a corporate governance framework proportionate to the risks inherent to the size and complexity of the Company’s operations. The directors apply the QCA Code in the ways set out below.

BOARD LEVEL RESPONSIBILITY

The Company’s directors are ultimately responsible for the effective stewardship of the business, with the Chairman holding specific responsibility for corporate governance and effective leadership of the Board. In discharging this obligation, the Chairman regularly consults the Company’s Independent Non-Executive Directors (who are qualified by background and experience to assist in this sphere), as well as the Company’s legal advisers and the Company Secretary.

CONFLICTS OF INTEREST

The Company’s Articles of Association provide a framework for directors to report actual or potential situational conflicts, enabling the Board to give such situational conflicts appropriate and early consideration. All directors are aware of the importance of consulting the Company Secretary regarding possible situational conflicts.

BOARD LEADERSHIP

The Company is led by its Board, which is responsible for determining the strategy of the business and its effective stewardship. All major strategic and investment decisions are taken by the Board as a whole, which monitors the resources available to the Company, to ensure that they are sufficient to enable its goals to be achieved. The Board meets regularly to review the Company’s operations and progress with its strategy. The directors are in regular liaison outside formal meetings. Risk management and controls are reviewed in the light of advice from the external auditors, who have access to all the directors.

The Board comprises an executive Chairman and two independent non-executive directors, as set out below.

Duncan Soukup

Executive Chairman, aged 69

Duncan Soukup is the founder and Executive Chairman of Thalassa Holdings Ltd (“Thalassa”), a company listed on the London Stock Exchange, and has over 35 years of investment experience. Prior to establishing Thalassa, Mr Soukup worked in investment banking for 10 years, including as managing director in charge of the non-US equity business of Bear Sterns. Thereafter, he established the AIM-listed investment management business Acquisitor plc.

As the executive chairman with a beneficial interest in the Company’s shares, Mr Soukup is not considered to be independent.

Martyn Porter (Appointed May 2022)

Non-Executive Director, aged 53

Martyn has over 25 years’ experience in international banking and financial services with the HSBC Group. He has held senior leadership positions in the UK, Malta, the Philippines, Hong Kong, Vietnam, Luxembourg and latterly Monaco, where he served as Chief Executive Officer of the HSBC Private Bank and Asset Management companies. As a board director and regulated officer of HSBC companies in Ireland, Luxembourg and Monaco, Mr. Porter has significant knowledge and understanding of corporate governance and regulatory compliance. He also has a highly successful track record in the leadership of businesses undergoing complex strategic change and transformation. During his career, Mr. Porter has built a wide and diverse network of business relationships, as well as demonstrating strong values and business ethics.

Tim Donell (Appointed February 2022)

Non-Executive Director, aged 42

A certified chartered accountant, Tim has over 15 years’ experience in finance, accounting and management roles within growth companies across travel, e-commerce and web technology and has a demonstrated track record of developing and improving financial processes to drive business performance.

DIVISION OF RESPONSIBILITIES

The responsibilities of each director are set out clearly in the director’s letter of appointment, which is available for inspection by members of the Company at its registered office during normal office hours. All directors ensure that they provide sufficient time to fulfil their obligations. All directors have access to the advice and services of the Company Secretary and to independent legal advice at the Company’s expense.

During the reporting period the directors monitored the Company’s operational progress and the activities of the executive management. The Chairman is responsible for ensuring that due consideration is given to key items of business both at formal meetings of the directors and liaison outside these. The independent non-executive directors provide a separate communication channel for shareholders and other interested parties and has a remit under the Company’s “whistle-blowing” arrangements.

Nomination, Audit and Remuneration Committees were in place throughout the reporting period, with responsibility for specific areas within the Company’s overall corporate governance structure. During the reporting period there was no requirement for either of the Remuneration Committee or the Nomination Committee to meet.

The Board met and held discussions throughout the year. The frequency of the meetings fluctuated as required. The meetings consisted of discussion to agree strategy and the handling of the assets. The majority of the meetings were on an informal and operational basis with the conclusions appropriately documented.

Aside from the meetings described above each director’s attendance record at Board and Committee meetings during the reporting period is set out in the table below:

Under the Company’s Articles one-third of the directors are subject to retirement at each Annual General Meeting. Additionally, the Articles require that director appointments made by the Board directors are ratified at the subsequent General Meeting of the Company.

Arrangements are made to provide new directors with an induction programme into the Company’s activities. Non- executive directors also meet with management on an informal basis. Arrangements are made for directors to inspect investment properties.

RISK & INTERNAL CONTROL

In addressing its responsibilities in this area, the Board pays particular attention to:

monitoring the integrity of the Company’s financial statements and formal announcements relating to its financial performance and reviewing significant financial reporting judgements contained in them;

reviewing the adequacy and effectiveness of the Company’s internal financial controls, internal control and risk management systems, fraud detection, regulatory compliance and whistle-blowing arrangements;

making recommendations for the approval of shareholders on the appointment, re- engagement or removal of the external Auditors and approving the Auditors’ terms of engagement and remuneration;

overseeing the Company’s relationship with the external Auditors, reviewing and monitoring the Auditors’ independence and objectivity and effectiveness;

approving the annual audit plan and reviewing the Auditors’ findings and the effectiveness of the audit programme.

The Company’s approach to risk management is set out on pages 9 and 10.

DIRECTORS’ REMUNERATION POLICY AND REMUNERATION IMPLEMENTATION REPORT

There was no requirement for the Remuneration Committee to meet during the reporting period. The Company had no employee directors during the year and no share-related incentive schemes were in operation. Although it is not currently required, the remuneration policy for employee directors recognized below was approved by shareholders at the annual general meeting held in March 2020:

within a competitive market, enabling the recruitment and retention of individuals whose talent matches the entrepreneurial and leadership needs of the business, enabling the Company to fulfil its investment objectives for its shareholders; and

placing emphasis on performance-related rewards and focusing on incentive targets that are closely aligned with the interests of shareholders.

In applying the remuneration policy, the Board will use its discretion to provide a tailored mix of benefits that encourages individuals to maximise their efforts in the best interests of shareholders. In particular, the remuneration policy would be subject to any special considerations that may arise in relation to the execution of any revised investment policy approved by the Company’s shareholders.

NON-EXECUTIVE PAY

The Company’s policy has been to provide remuneration to its non-executive directors commensurate with the need to attract and retain individuals with levels of skill and experience appropriate to the Company’s needs. No non-executive directors have participated in any bonus or share-based arrangements of the Company.

DIRECTORS’ REMUNERATION

The below table highlighted total directors’ remuneration in the period.

The aggregate directors’ remuneration during the reporting period was £176,716 (2022: £142,391). Of Martyn Porter’s 2023 remuneration, £7,032 related to 2022 and was under-accrued at 2022 year-end.

DIRECTORS’ SERVICE CONTRACTS

DIRECTORS’ INTERESTS IN THE COMPANY’S SHARES (AUDITED)

The interests during the reporting period of the directors who held office during the reporting period in the issued share capital of the Company as at the date of this report are set out below:

Ordinary 1p Shares*

In addition to the direct interest shown above, Duncan Soukup has an indirect interest in 4,618,001 and 1,734 Ordinary Shares arising from his interests in entities of Thalassa Discretionary Trust, and Thalassa Holdings Ltd.

DIRECTORS’ INDEMNITIES AND INSURANCE COVER

To the extent permitted by law, the Company indemnifies its directors and officers against claims arising from their acts and omissions related to their office. The Company also maintains an insurance policy in respect of claims against directors.

AUDIT COMMITTEE REPORT

The Audit Committee, consisted of the independent non-executive directors. The key functions of the audit committee are for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported on and for reviewing reports from the Company’s auditors relating to the Company’s accounting and internal controls, in all cases having due regard to the interests of Shareholders. The Committee has formal terms of reference.

The financial statements attached to this report have been prepared on the Going Concern basis. In deciding that the Going Concern basis is appropriate, the directors reviewed projections of future activity over the 12 months following the date of this report. The Directors concluded that there were no identifiable material uncertainties, and present cash reserves were sufficient to meet all liabilities as they fall due, up to and beyond that date.

The Committee considered the following items:

ensuring that the format of the financial statements and the information supplied meets the standards set by the International Accounting Standards Board;

reviewing the accounting treatment of receivables and ensuring effective co-ordination between the Company’s records and those of its managing agents;

ensuring that the audit scope properly reflected the risk profile of the business;

ensuring that the Committee’s terms of reference continued to accord with regulatory requirements.

The Committee considered the independence of external auditors, seeking to ensure that any non-audit services provided, by external auditors do not impair the auditors’ objectivity or independence. The Company’s auditors, RPG Crouch Chapman, did not supply any non-audit services to the Company during the period.

Having assessed the performance, objectivity and independence of the auditors, as well as the audit process and approach taken, the Committee recommended the re-appointment RPG Crouch Chapman at the Company’s annual general meeting in 2024.

Duncan Soukup

Chairman 29 April 2024

The directors of Alina Holdings Plc (“the Company”) present their report and the audited financial statements of the Company together with its subsidiaries and associated undertakings (“the Group”) for the year ended 31 December 2023.

The following directors held office during the reporting period:

Duncan Soukup (appointed 4 October 2019)

Tim Donell (appointed 7 February 2022)

Martyn Porter (appointed 20 May 2022)

The Directors’ Report also includes the information set out on pages 5 to 22, together with the description of the Company’s investment policy and business model described on page 5.

GROUP RESULT AND DIVIDEND

The loss for the Group attributable to shareholders for the period was £1,123,000 (2022: loss £136,000). In accordance with the investment policy, no dividend has been or will be distributed in respect of the financial year. The directors continue to keep the dividend distribution policy under review.

POST BALANCE SHEET EVENTS

Sale of Stafford property classified as an asset held for sale at the year-end (see note 10);

Settlement of legal action against The Italian Way, a tenant in Hastings, for breach of lease covenants.

GOING CONCERN BASIS

The financial statements attached to this report have been prepared on the Going Concern basis. In deciding that the Going Concern basis is appropriate, the directors reviewed projections of future activity over the 12 months following the date of this report. The Directors concluded that there were no identifiable material uncertainties, and present cash reserves were sufficient to meet all liabilities as they fall due, up to and beyond that date.

SHARE CAPITAL

Details of the Company’s issued share capital are set out in note 17 to the financial statements. All of the Company’s issued shares are listed on the London Stock Exchange. The Company’s share capital comprises one class of Ordinary Shares of 1p each. All issued shares are fully paid up and rank equally and there are no restrictions on the transfer of shares or the size of holdings. The directors are not aware of any agreements between shareholders in relation to the Company’s shares.

SUBSTANTIAL INTERESTS

As at 24 April 2023, the last practicable reporting date before the production of this document, the Company’s share register showed the following major interests (of 3% or more, excluding shares held in treasury) in its issued share capital:

* Included within Vidacos Nominees Limited are shares of 5,418,857 owned by C D Soukup and 4,618,001 held by Thalassa Discretionary Trust.

** The Company has also been notified that 6,391,223 (28.16%) shares are beneficially owned by Peter Gyllenhammar AB.

Subject to regulatory constraints, the directors are keen to engage with the Company’s shareholders, placing considerable emphasis on effective communications with the Company’s investors. Directors are happy to comply with shareholder requests for meetings as soon as practicable, subject to regulatory constraints. The Board is provided with feedback on such meetings, as well as regular commentary from investors and the Company’s bankers and advisers. The Board provides reports and other announcements via the regulatory news service in accordance with regulatory requirements. Regulatory announcements and key publications can also be accessed via the Company’s website. The Company’s Annual General Meeting provides a further forum for investors to discuss the Company’s progress. The Company complies with relevant regulatory requirements in relation to convening the meeting, its conduct and the announcement of voting on resolutions. The Annual Report and Notice of the Annual General Meeting are made available to shareholders at least 21 working days prior to the meeting and are available on the Company’s website. The results of resolutions considered at the Annual General Meeting are announced to the Stock Exchange and are also published on the website and lodged with the National Storage Mechanism. Investors may elect to receive communications from the Company in electronic form and be advised by email that communications may be accessed via the Company’s website.

WHISTLEBLOWING POLICY

The Group has in place a whistleblowing policy which sets out the formal process by which an employee of the Group may in confidence raise concerns about possible improprieties in the Group’s affairs, including financial reporting.

ESG

The Group has not complied with the recommendations of the Taskforce for Climate-related Financial Disclosures (“TCFD”) in the current year, as required by LR14.3.27R issued by the Financial Conduct Authority. The Board recognises the importance of climate-related matters and, as a relatively small development stage property business, intends to develop a plan to adopt the TCFD recommendations in full over the next few years. With reference to the four pillars of the TCFD recommendations, matters of governance, risk assessment, and strategy are covered in this report, and the further development of metrics and targets is under consideration.

We have always believed that our local asset model is by its nature supportive of reducing the carbon impact of retail shopping. Our past development activity has been aimed at returning to profitable use redundant space that would otherwise remain vacant, potentially relieving development pressure on greenfield sites elsewhere. Any development activity undertaken is carried out in accordance with applicable energy and resource saving standards, noise impact reduction requirements, and, where relevant, the need to preserve the character of buildings, including listed properties. Our contractors are required to dispose of waste in accordance with best practice. We continue to take action to upgrade the energy performance of our letting units wherever required.

It is our policy to seek to deal constructively with all stakeholders in relation to any community issues that arise in relation to our properties. Our policy is to prefer to use local advisers, agents and contractors whenever appropriate to do so.

It is our intention to review our response to environmental, social and governance factors in line with the development of our investment policy to ensure that our policies are appropriate to the revised strategy and operational profile. This review will take account of related issues, such as modern slavery.

EMISSIONS AND ENERGY CONSUMPTION REPORTING

The directors believe that the Company’s outsourced business model, which focusses on the employment of agents, advisers and contractors who are local to our property assets, is inherently environmentally friendly. However, the collection of consumption data from such businesses is not practicable. It is also not possible for our national agents and advisers to separately identify such data in relation to the proportion of their work devoted to the Company’s activities, particularly given the increase in staff working from home during the COVID-19 lockdown. It is not possible to measure the energy consumed by the Company’s tenants (nor is this consumption within the Company’s control). The consumption of water, waste output and greenhouse gases other than CO2 within the Company’s control is negligible.

For previous reporting periods the Company has supplied environmental reporting information focused on energy consumed by the Company and its wholly owned subsidiaries through the activities of its office base, shared facilities provided by the Company within its property portfolio and activities within vacant properties within the Company’s control.

In relation to Scope 1 Carbon Emissions (consumption of gas and fuel), since the termination of the Company’s third-party investment advisory agreement and the relocation of its registered office it has not been possible to separately identify the energy consumed on the Company’s activities. An element of the Company’s administration activity is carried out at its registered office. However, this is a de minimis element of the overall activity and energy consumption at that site. Other activity is undertaken by the Company’s directors and management working at home. In both cases, it has not been possible to separately identify the energy consumed on the Company’s activities at those locations. In previous years, data has been supplied relating to fuel consumed on journeys on Company activities. As the Company does not operate company cars, all such journeys are made in employees’ private vehicles or on public transport. The reduction in the Company’s property portfolio has significantly reduced the requirement for such journeys, which were then further restricted during the reporting period by the COVID-19 lockdown regime. Accordingly, the directors do not consider that any meaningful Scope 1 data can be supplied.

Similar limitations apply to Scope 2 data, which in previous reports comprised an estimate of consumption for vacant property units for which the Company is responsible. The number of these and the related energy consumption has been de minimis throughout the reporting period. Similarly, it has not been practicable to measure Scope 3 emissions.

The Company’s direct usage and emissions of water is also minimal. Although a small element of utility supply charges within vacant premises relate to water and to gas, this largely relates to standing charges and consumption is negligible.

In relation to The Companies (Directors’ Report) and LLP Partnerships (Energy and Carbon Report) Regulations 2018, the Company consumes less than 40,000 kWh of energy per annum and therefore qualifies as a low energy user and therefore does not come within the scope of those regulations.

STATEMENT OF DISCLOSURE TO AUDITORS

The directors who were in office at the date of the approval of the financial statements have confirmed that, as far as they are aware, there is no relevant audit information of which the auditors are unaware. Each of the directors has confirmed that they have taken all necessary steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that this has been communicated with the auditors.

This report was approved by the directors on 26 April 2024

Alasdair Johnston

Company Secretary

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with UK Adopted International Accounting Standards and applicable law and have elected to prepare the parent Company financial statements in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK.

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable, relevant, reliable and prudent;

Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Responsibility Statement that complies with that law and those regulations.

The foregoing reports were approved by the directors on 26 April 2024

Duncan Soukup

Chairman

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ALINA HOLDINGS PLC

OPINION

We have audited the financial statements of Alina Holdings Plc (the ‘Company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2023 which comprise the Consolidated Statement of Income, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows, Consolidated Statement of Changes in Equity, Company Balance Sheet , and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as adopted in the United Kingdom (IFRS) for the Group and UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK (UK GAAP).

In our opinion, the financial statements:

have been properly prepared in accordance with IFRS for the Group, and UK GAAP for the Company; and;

have been prepared in accordance with the requirements of the Companies Act 2006.

BASIS FOR OPINION

CONCLUSIONS RELATING TO GOING CONCERN

Our evaluation of the Directors’ assessment of the entity’s ability to continue to adopt the going concern basis of accounting included review of the expected cashflows for a period of 18 months from the balance sheet date compared with the liquid assets held by the Group.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are recognized for issue.

OUR APPROACH TO THE AUDIT

We performed the audits of the Company and its subsidiaries.

KEY AUDIT MATTERS

OUR APPLICATION OF MATERIALITY

We consider gross assets to be the most significant determinant of the Group’s financial performance used by the users of the financial statements. We have based materiality on 1.5% of gross assets for each of the operating components. Overall materiality for the Group was therefore set at £0.1m. For each component, the materiality set was lower than the overall group materiality.

OTHER INFORMATION

OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

In our opinion, based on the work undertaken in the course of the audit:

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

certain disclosures of directors’ remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF DIRECTORS

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

OTHER MATTERS THAT WE ARE REQUIRED TO ADDRESS

USE OF OUR REPORT

Paul Randal FCA

(Senior Statutory Auditor)

For and on behalf of

RPG Crouch Chapman LLP Chartered Accountants Registered Auditor

40 Gracechurch Street London

EC3V 0BT

CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR ENDED 31 DECEMBER 2023

Earnings per share – GBP pence (using weighted average number of shares)

The notes on pages 33 to 49 form an integral part of this consolidated interim financial information. These financial statements were approved by the board on 29 April 2024.

Signed on behalf of the board by:

Duncan Soukup

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2023

Prior year comparatives have been reclassified to conform to the current year presentation.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

Alina Holdings PLC (“Alina” or the “Company”) is a company registered on the Main Market of the London Stock Exchange. It is incorporated, domiciled and registered in England. The Company’s registered number is 05304743 and the address of its registered office is Eastleigh Court, Bishopstrow, Warminster, BA12 9HW

2 SIGNIFICANT ACCOUNTING POLICIES

The Group prepares its accounts in accordance with applicable UK Adopted International Accounting Standards.

The group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”). The parent company financial statements present information about the Company as a separate entity and not about its group.

Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed later in this note under the heading “Use of Estimates and Judgements”.

The financial statements are prepared in pounds sterling. They have been prepared under the historical cost convention except for the following assets which are measured on the basis of fair value: investment properties, investment properties held for sale and available for sale financial assets.

2.1 SEGMENTAL REPORTING

IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly reported to the chief operating decision maker to allocate resources to the segments and to assess their performance. Since the strategy review in July 2013 the Group has identified one operation and one reporting segment, being rental income in the UK, which is reported to the Board of directors on a quarterly basis. The Board of directors is considered to be the chief operating decision maker.

2.2 BASIS OF PREPARATION

The consolidated financial statements include the financial statements of the Company and all its subsidiary undertakings up to 31 December 2023. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights. The acquisition date is the date on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The financial statements of subsidiaries are prepared using consistent accounting policies. Inter-company transactions and balances are eliminated in full on consolidation.

2.3 GOING CONCERN

2.4 INVESTMENT PROPERTIES

Investment properties are those properties owned by the Group that are held to earn rental income or for capital appreciation or both and are not occupied by the Company or any of its subsidiaries.

During 2023 the Company sold a property for £727k net of fees (book value £800k). Since the Balance Sheet date, one property in Stafford has been sold.

A full external valuation of the Group’s property portfolio was performed in 2020 in accordance with the the Royal Institute of Chartered Surveyors Appraisal and Valuation Standards on the basis of market value. For the year ended 31 December 2023 the fair value has been assessed with reference to a third party valuation performed in 2020. The Board’s assessment of the carrying value remains unchanged, pending finding new tenants for vacant units.

The Company’s objective is still to liquidate the current portfolio of property assets, which currently show a Gross Initial Yield of 15%, but as and when a sale can achieve a sensible return to shareholders.

The Directors obtained pricing and yields of similar transactions made within the accounting period and compared them to the Gross Initial Yield stated above. In all cases the transactions that were measured came in at a lower value than that currently being achieved. As stated, although the data is below the Yield being achieved it was felt prudent to leave the valuations as they stand.

Investment properties are treated as acquired at the point the Group assumes the significant risks and returns of ownership. Subsequent expenditure is charged to the asset’s carrying value only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of each item can be reliably measured. All other repairs and maintenance costs are charged to the Income Statement during the period in which they are incurred.

Rental income from investment properties is accounted for as described below.

2.5 INVESTMENT PROPERTIES HELD FOR SALE

Investment properties held for sale are included in the Balance Sheet at their fair value less estimated sales costs. In determining whether assets no longer meet the investment criteria of the Group, consideration has been given to the conditions required under IFRS 5.

An investment property is classified as an asset as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.

The asset must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets and its sale must be highly probable as at the year end.

2.6 HEAD LEASES

Where a property is held under a head lease and is classified as an investment property, it is initially recognized as an asset based on the sum of the premium paid on acquisition and if the remaining life of the lease at the date of acquisition is considered to be material, the net present value of the minimum ground rent payments. The corresponding rent liability to the leaseholder was included in the Balance Sheet as a finance obligation in current and non-current liabilities.

The payment of head rents has been expensed through the Income Statement.

2.7 TRADE AND OTHER RECEIVABLES

Trade and other receivables are initially recognized at fair value and subsequently held at amortised cost less impairment. Impairment is made where it is established that there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. The impairment is recorded in the Income Statement.

2.8 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash balances and deposits held on call. Cash equivalents are short-term, highly liquid investments with original maturities of three months or less.

2.9 FINANCIAL ASSETS

Financial assets are impaired when there is objective evidence that the cash flows from the financial asset are reduced.

2.10 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are initially classified as measured at amortised cost, fair value through other comprehensive income, or fair value through profit and loss when the Company becomes a party to the contractual provisions of the instrument. Financial assets are recognized when the contractual rights to the cash flows expire, or the Company no longer retains the significant risks or rewards of ownership of the financial asset. Financial liabilities are recognized when the obligation is discharged, cancelled or expires.

Financial assets are classified dependent on the Company’s business model for managing the financial and the cash flow characteristics of the asset. Financial liabilities are classified and measured at amortised cost except for trading liabilities, or where designated at original recognition to achieve more relevant presentation. The Company classifies its financial assets and liabilities into the following categories:

Financial assets at amortised cost

The Company’s financial assets at amortised cost comprise trade and other receivables. These represent debt instruments with fixed or determinable payments that represent principal or interest and where the intention is to hold to collect these contractual cash flows. They are initially recognized at fair value, included in current and non-current assets, depending on the nature of the transaction, and are subsequently measured at amortised cost using the effective interest method less any provision for impairment.

Impairment of trade and other receivables

In accordance with IFRS 9 an expected loss provisioning model is used to calculate an impairment provision. We have implemented the IFRS 9 simplified approach to measuring expected credit losses arising from trade and other receivables, being a lifetime expected credit loss. This is calculated based on an evaluation of our historic experience plus an adjustment based on our judgement of whether this historic experience is likely reflective of our view of the future at the balance sheet date. In the previous year the incurred loss model is used to calculate the impairment provision.

Financial liabilities at amortised cost

Financial liabilities at amortised cost comprise loan liabilities, including convertible loan note liability elements, and trade and other payables. They are classified as current and non- current liabilities depending on the nature of the transaction, are subsequently measured at amortised cost using the effective interest method. All convertible loan notes are held at amortised cost and no election has been made to hold them as fair value through profit and loss.

Financial assets at fair value through profit and loss

Financial assets at fair value are recognized and measured at fair value using the most recent available market price with gains and losses recognized immediately in the profit and loss.

The fair value measurement of the Company’s financial and non-financial assets and liabilities recognize market observable inputs and data as far as possible. Inputs used in determining fair value measurements are recognized into different levels based on how observable the inputs used in the valuation technique are (the ‘fair value hierarchy’).

Level 1 – Quoted prices in active markets

Level 2 – Observable direct or indirect inputs other than Level 1 inputs Level 3 – Inputs that are not based on observable market data

2.11 TRADE AND OTHER PAYABLES

Trade and other payables are initially recognized at fair value and subsequently held at amortised cost.

2.12 ORDINARY SHARE CAPITAL

External costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.

Shares which have been repurchased are classified as treasury shares and shown in retained earnings. They are recognized at the trade date for the amount of consideration paid, together with directly attributable costs. This is presented as a deduction from total equity. Shares held by the Employee Benefit Trust are treated as being those of the Group until such time as they are distributed to employees, when they are expensed in the profit and loss account.

The nominal value of shares cancelled has been taken to a capital redemption reserve.

2.13 RENTAL INCOME

Rental income from investment properties leased out under operating leases is recognized in the Income Statement on a straight-line basis over the term of the lease. When the Group provides lease incentives to its tenants the cost of incentives are recognized over the lease term, on a straight-line basis, as a reduction to income.

2.14 TAXATION

Corporation tax on the profit or loss for the year comprises current and deferred tax. Corporation tax is recognized in the Income Statement except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method. Provision is made for temporary differences between the carrying amounts of assets and liabilities in the financial statements for financial reporting purposes and the amounts used for taxation purposes. Deferred income tax is calculated after taking account of any indexation allowances and capital losses on an undiscounted basis. The amount of deferred tax provided is based on the expected manner of recognized or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that it is probable that future profits will be available against which the asset can be recognized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be recognized. Deferred tax assets and liabilities are only offset if there is a legally enforceable right of set-off.

2.15 PENSIONS

The Company has contribution only pension arrangements in operation for certain employees.

2.16 USE OF ESTIMATES AND JUDGEMENTS

To be able to prepare accounts according to generally accepted accounting principles, management must make estimates and assumptions that affect the asset and liability items and revenue and expense amounts recorded in the financial statements. These estimates are based on historical experience and various other assumptions that management and the Board of directors believe are reasonable under the circumstances. The results of these considerations form the basis for making judgements about the carrying value of assets and liabilities that are not readily available from other sources.

The areas requiring the use of estimates and judgements that may significantly impact the Group’s earnings and financial position include the estimation of the fair value of investment properties.

The valuation basis of the Group’s investment properties is set out above.

2.17 ADOPTION OF NEW AND REVISED STANDARDS

Standards issued but not yet effective:

There were a number of standards and interpretations which were in issue during the current period but were not effective at that date and have not been adopted for these Financial Statements. The Directors have assessed the full impact of these accounting changes on the Company. To the extent that they may be applicable, the Directors have concluded that none of these pronouncements will cause material adjustments to the Group’s Financial Statements. They may result in consequential changes to the accounting policies and other note disclosures. The new standards will not be early adopted by the Group and will be incorporated in the preparation of the Group Financial Statements from the effective dates noted below.

The new standards include:

IFRS 17 Insurance contracts 1

IAS 1 Presentation of financial statements and IFRS Practice Statement 2 1

IAS 8 Accounting policies, changes in accounting estimates and errors 1

IAS 12 Income Taxes 1

IFRS 16 Leases 2

IAS 1 Presentation of financial statements (Amendment – Non-current Liabilities with Covenants) 2

IAS 21 Lack of Exchangeability 3

1 Effective for annual periods beginning on or after 1 January 2023

2 Effective for annual periods beginning on or after 1 January 2024

3 Effective for annual periods beginning on or after 1 January 2025

3 OPERATING SEGMENTS

As described in note 2.1, the Group’s reportable segments under IFRS8 are:

A portfolio of UK property; and

Other investment assets.

The disclosures by segment required by IFRS8 are as follows:

Year ended 31 December 2023 Year ended 31 December 2022

The remaining overheads and assets are not directly attributable to either of the operating segments.

4 PROPERTY OPERATING EXPENSES

*Within the tax and audit figure are £33k (2022: £30k) accrued for auditors remuneration.

**During the period remuneration consisted of contractors within which £177k related to directors’ remuneration (2022: £153k). From the end of the year ended 31 December 2023, there were no employees.

7 NET FINANCING (LOSS)/INCOME

Following the Company’s adoption of its new investment policy in September 2020, the Group is considered by HM Customs & Revenue to have exited the REIT tax regime with effect from 1 October 2018 and, from that date, is fully subject to corporation tax.

However, the Board believes that the Group’s activities since then and the availability of tax losses means that the Company’s activities are unlikely to have generated any material corporation tax liability for periods since 1 October 2018. Accordingly, no provision for corporation tax has been made in these accounts. The deferred tax asset not recognised relating to these losses can be carried forward indefinitely. It is not anticipated that sufficient profits from the residual business will be generated in the foreseeable future to utilise the losses carried forward and therefore no deferred tax asset has been recognised in these accounts.

9 EARNINGS PER SHARE

The calculation of basic earnings per share was based on the profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding.

The calculation of earnings per share is based on the loss and number of shares:

A reconciliation of the portfolio valuation at 31 December 2023 to the total value for investment properties given in the Consolidated Balance Sheet is as follows:

The basis for determining fair value is described in note 2.4.

11 AVAILABLE FOR SALE FINANCIAL ASSETS

The Group classifies the following financial assets at fair value through profit or loss (FVPL):-

Year Year

ended ended 31 December 31 December

£000 £000

Available for sale investments

*These assets are formed of equity instruments held on quoted markets globally, they comprise both long and short positions as per the disclosures in the Strategic Report.

**These holdings comprise foreign currency balances held for short periods from the sale and purchase of financial assets through the broker

AFS investments have been valued incorporating Level 1 inputs in accordance with IFRS7. They are a combination of cash and securities held with the listed broker.

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;

12 TRADE AND OTHER RECEIVABLES

15 LEASE LIABILITIES

Finance lease liabilities on head rents are payable as follows:

16 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

As described in the Corporate Governance report, this responsibility has been assigned to the executive directors with support and feedback from the Audit Committee. The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

The Group has identified exposure to the following financial risks from its use of financial instruments: capital management risk, market risk, credit risk and liquidity risk.

Capital Management Risk

The Group’s capital consists of cash and equity attributable to the shareholders. The Board do not consider there is any material capital management risk exposure.

Market Risk

Market risk is the risk that changes in market conditions, such as interest rates, foreign exchange rates and equity prices, will affect the Group’s profit or loss and cash flows.

Equity risk is mitigated using a combination of long and short positions to ensure that fluctuations in the market are hedged against.

Sensitivity Analysis

IFRS 7 requires an illustration of the impact on the Group’s financial performance of changes in interest rates. The following sensitivity analysis has been prepared in accordance with the Group’s existing accounting policies and considers the impact on the Income Statement and on equity of an increase of 100 basis points (1%) in interest rates. Any consequential tax impact is excluded.

Actual results in the future may differ materially from these assumptions and, as such, these tables should not be considered as a projection of likely future gains and losses.

Fair value measurements recognised in the statement of financial position

Investment properties and Investment properties held for sale are measured subsequent to initial recognition at fair value and have been group as Level 3 (2022: level 3) based on the degree to which fair value is observable.

Investment properties have been valued using the investment method which involves applying a yield to rental income streams.

Inputs include equivalent yield, tenancy information, and leasing assumptions. Valuation reports are based on both information provided by the Company e.g. tenancy information including current rents, which are derived from the Company’s financial and property management systems and are subject to the Company’s overall control environment, and assumptions applied by the valuers e.g. ERVs, and yields. These assumptions are based on market observation and the valuers’ professional judgement.

An increase/decrease in equivalent yields will decrease/increase valuations, and an increase or decrease in rental values will increase or decrease valuations. Other inputs include ERVs, and likely void and rent-free periods. There are interrelationships between these inputs as they are determined by market conditions. The valuation movement in a period depends on the balance of those inputs.

Below is a sensitivity analysis of the impact of a 1% increase or decrease in equivalent yields on income and equity. Actual results may differ materially from these assumptions and, as such, these tables should not be considered as a projection of likely future gains and losses.

Below is a sensitivity analysis of the impact of a 1% increase or decrease in foreign exchange rates on income and equity. Actual results may differ materially from these assumptions and, as such, these tables should not be considered as a projection of likely future gains and losses.

Credit Risk

Credit risk is the risk of financial loss to the Group if a tenant, bank or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from tenants, cash and cash equivalents held by the Group’s bankers and derivative financial instruments entered into with the Group’s bankers.

Trade and Other Receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each tenant. At 31 December 2023 the Group had over 30 letting units in three properties. There is no significant concentration of credit risk due to the large number of small balances owed by a wide range of tenants who operate across all retail sectors. There is no concentration of credit risk in any one geographic area of the UK. The level of arrears is monitored monthly by the Group on a tenant by tenant basis.

Cash, Cash Equivalents and Derivative Financial Instruments

The banking services used by the Group are split between a major UK bank and a Swiss private banking corporation for deposit purposes.

Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have adequate resources to meet its liabilities when they fall due for both the operational needs of the business and to meet planned future investments. This position is formally reviewed on a quarterly basis or more frequently should events require it.

The Group’s financial liabilities are classified and are shown with their fair value as follows:

For all classes of financial liabilities, the carrying amount is a reasonable approximation of fair value. The maturity profiles of the Group’s financial liabilities are as follows:

Contractual cash flows include the undiscounted committed interest cash flows and, where the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the year end

17 OPERATING LEASE AS LESSOR

18 CAPITAL COMMITMENTS

No capital expenditure was planned at the balance sheet date.

19 RELATED PARTY BALANCES AND TRANSACTIONS

Transactions with Key Management Personnel

The only transactions with key management personnel relate to remuneration which is set out in the Remuneration Report.

The key management personnel of the Group for the purposes of related party disclosures under IAS 24 comprise all executive and non-executive directors.

As at the year end the Group owed £18,505 (2022: £17,073) to Thalassa Holdings Limited (“Thalassa”), a company under common directorship. During the year services amounting to £74,166.39 (2022: £91,490) were charges from Thalassa.

The bulk of this sum related to administration fees settled by Thalassa but payable by the Group. The remained related to accounting and registered office services supplied to the Group by Thalassa at cost.

The company was accrued £144,213 (2022: £155,000), to Fleur De Lys Ltd, a company owned and controlled by the Chairman Duncan Soukup, for consultancy and administration services.

Athenium Consultancy Ltd, a company in which the Group owns shares invoiced the group for financial and corporate administration services totaling £181,500 for the period (Dec 2022: £165,000).

20 SHARE CAPITAL

During the year to 30 September 2019, the Company underwent a Court approved restructure of capital and buy back of shares. Under this action the issued 20p shares were converted to 1p; capital reserves were transferred to distributable reserves; 59,808,456 shares were repurchased, and a new Capital Redemption Reserve of £0.598m was established.

Investment in Own Shares

At the year-end, 9,164,017 shares were held in treasury (December 2022: 9,164,017).

21 GROUP ENTITIES

All the below companies are incorporated in the United Kingdom: -

Effective Share holding

** Registered office: Eastleigh Court, Bishopstrow, Warminster, Wiltshire BA12 9HW

*** Registered office: 4 Atlantic Quay, 70 York Street, Glasgow, G2 8JX

Subsidiaries NOS 4 Ltd (Registered number: 05707123), NOS 5 Ltd (Registered number: 05707124) and NOS 6 Ltd (Registered number: 06188983) are exempt from the requirements relating to the audit of accounts under section 479A of the Companies Act 2006

22 ASSOCIATED ENTITIES

Athenium Consultancy Ltd in which the Group owns 30% shares was incorporated on 12 October 2021. Movement on interests in associates can be summarised as follows:

investigation, including the extent to which the relevant group company may be required to underwrite such costs as may arise and the extent to which the tenants or former tenants of the properties are liable to contribute to such costs under the terms of their tenancy agreements.

24 SUBSEQUENT EVENTS

Sale of Stafford property classified as an asset held for sale at the year-end (see note 10);

Settlement of legal action against The Italian Way, a tenant in Hastings, for breach of lease covenants.

Closed out our largest short position with a realised gain of $731k (£587K at £/$ 1.2437) in 2024 year-to- date.

25 CONTROLLING PARTY AND COPIES OF THE FINANCIAL STATEMENTS

As at 31 December 2023 the Company had no ultimate controlling party.

The consolidated financial statements of Alina Holdings PLC are available to the public and may be obtained from the Company’s website: www.alina-holdings.com.

COMPANY BALANCE SHEET

AS AT 31 DECEMBER 2023

The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account in these financial statements. The Company’s loss for the period was £0.48m (31 December 2022: £0.06m).

These financial statements were approved by the Board of directors on 29 April 2024 and were signed on its behalf by:

C D Soukup

Director

The registered number of the Company is 05304743.

NOTES TO THE FINANCIAL STATEMENTS

ACCOUNTING POLICIES

These financial statements were prepared in accordance with Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK (“FRS 102”) as issued in March 2018. The presentation currency of these financial statements is sterling. All amounts in the financial statements have been rounded to the nearest £1,000.

The consolidated financial statements of Alina Holdings PLC are prepared in accordance with UK Adopted Accounting Standards (IFRS) and are available to the public. In these financial statements, the company is considered to be a qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures:

Reconciliation of the number of shares outstanding from the beginning to end of the period;

Cash Flow Statement and related notes; and

Key Management Personnel compensation.

Certain disclosures required by FRS 102.26 Share Based Payments; and,

The disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1.

The Company proposes to continue to adopt the reduced disclosure framework of FRS 102 in its next financial statements.

There were no judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements, with a significant risk of material adjustment in the next year.

Measurement convention

The financial statements are prepared on the historical cost basis.

Classification of financial instruments issued by the Company

In accordance with FRS 102.22, financial instruments issued by the Company are treated as equity only to the extent that they meet the following two conditions:

they include no contractual obligations upon the company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the company; and

where the instrument will or may be settled in the company’s own equity instruments, it is either a non- derivative that includes no obligation to deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company’s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability.

Where the instrument so classified takes the legal form of the company’s own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.

Basic financial instruments

Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument.

Investments in subsidiaries

These are separate financial statements of the company. Investments in subsidiaries are carried at cost less impairment.

Judgements and Estimates

In testing for impairment, management assesses the recoverable amount of investments and inter-company debtors by reference to the subsidiaries’ net assets and their ability to recover these assets.

Provisions

A provision is recognised in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the amount required to settle the obligation at the reporting date.

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the company treats the guarantee contract as a contingent liability until such time as it becomes probable that the company will be required to make a payment under the guarantee.

Interest receivable and Interest payable

Interest payable and similar charges include interest payable, finance charges on shares classified as liabilities and finance leases recognized in profit or loss using the effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognized in the profit and loss account.

Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.

Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

FIXED ASSETS INVESTMENTS

An impairment review of the carrying value of the Company’s investments in its subsidiary undertakings has been performed. In carrying out this review, the directors had due regard to the nature of the property investments held, which is commensurate with the funding arrangements in place. On the basis of this review which included a review of the underlying assets of the individual subsidiaries the directors have written down the value of investments in subsidiary undertakings to their estimated realisable value.

The companies in which the Company’s interests at the period end were more than 20% are as follows:

** Registered office: Eastleigh Court, Bishopstrow, Warminster, Wiltshire BA12 9HW

*** Registered office: 4 Atlantic Quay, 70 York Street, Glasgow, G2 8JX

TRADE AND OTHER RECEIVABLES

Amounts owed by group undertakings are interest free and repayable on demand.

Amounts owed to group undertakings are interest free and repayable on demand.

RECONCILIATION OF SHAREHOLDERS’ FUNDS

Share Capital

31 December 2023 31 December 2022

Investment in Own Shares

At the year-end, 9,164,017 shares were held in treasury (2022: 9,164,017), and at the date of this report 9,164,017 were held in treasury.

Statement of Changes in Equity for the 12 months ended 31 December 2023

Capital

CONTROLLING PARTY

Please refer to note 25 in the Group Financial Statements

GLOSSARY

Earnings Per Share (“EPS”)

EPS is calculated as profit attributable to shareholders divided by the weighted average number of shares in issue in the year.

Equivalent Yield

Equivalent yield is a weighted average of the initial yield and reversionary yield and represents the return a property will produce based upon the timing of the income received. In accordance with usual practice, the equivalent yields (as determined by the Group’s external valuers) assume rent received annually in arrears and on gross values including prospective purchasers’ costs (including stamp duty, and agents’ and legal fees).

Head Lease

A head lease is a lease under which the Group holds an investment property.

Initial Yield

Initial yield is the annualised net rent generated by a property expressed as a percentage of the property valuation. In accordance with usual practice the property value is grossed up to include prospective purchasers’ costs.

Like-for-like Market Rent

This is the Market Rent for the Group’s investment properties at the end of the financial year compared with the Market Rent for the same properties at the end of the prior year, i.e. excluding the Market Rent of those properties disposed of during the interim period.

Like-for-like rental income

This is the rental income for the Group’s investment properties at the end of the financial year compared with the rental income for the same properties at the end of the prior year, i.e. excluding rental income of those properties disposed of during the interim period.

Market Value

Market value is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Market Rent

Market rent is the estimated amount for which a property should lease on the date of valuation between a willing lessor and a willing lessee on appropriate lease terms, in an arm’s length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Net Asset Value (“NAV”) per share

NAV per share is calculated as shareholders’ funds divided by the number of shares in issue at the year-end excluding treasury shares.

Real Estate Investment Trust (“REIT”)

A REIT is a listed property company which qualifies for and has elected to join the UK REIT tax regime, which exempts qualifying UK property rental income and gains on investment property disposals from corporation tax. The Group converted to REIT status on 11 May 2007 and left the REIT tax regime on 1 October 2018

Reversionary Yield

Reversionary yield is the annualised net rent that would be generated by a property if it were fully let at market rent expressed as a percentage of the property valuation. In accordance with usual practice the property value is grossed up to include prospective purchasers’ costs.

The issuer is solely responsible for the content of this announcement.