2024 Interim Results

Secure Property Development & Investment PLC, the AIM quoted Southern Eastern European focused property company, is pleased to announce its full year unaudited interim results for the period ended 30 June 2024.

Overview

• SPDI's portfolio consists of prime commercial and industrial real estate investments in Southeastern Europe, leased to blue-chip tenants.
• In H1 2024, management worked to close the sale of Ukrainian assets as part of Stage 2 of the transaction with Arcona Property Fund N.V., aiming to finalise in 2024.
• The Arcona transaction, aims to merge SPDI's assets with Arcona's Central European properties, benefiting shareholders of both companies.
• SPDI externalised HR and office costs in 2023, resulting in a 35%-50% cost reduction compared to 2020-2021 levels.
• Net operating income increased by 1.7% to €0.4 million in H1 2024, while administration costs, adjusted for one-off non-recurring elements decreased by 30%, turning recurring EBITDA positive at €0.01 million.

Micheal Beys, Chairman of the Board, said: "I am pleased to report progress during the first half of 2024. Despite the challenges posed by external factors including the ongoing war in Ukraine, we have advanced the sale of our Ukrainian assets as part of the broader transaction with Arcona Property Fund. We are on track to complete this deal within the year, establishing a larger company that will deliver for our shareholders.

Financially, we are seeing positive results, with a 1.7% increase in operating income, a 30% reduction in administrative expenses, and a return to positive recurring EBITDA.

I would like to take this opportunity to thank my fellow directors and the management team for their continued efforts and our shareholders for their continued support, and I look forward to providing positive updates in the future"

Copies of the Interim Report and Accounts are available on the Company's website at www.secure-property.eu.

This announcement contains inside information for the purpose of Article 7 of EU Regulation 596/2014

Management Report

1.1 Corporate Overview & Financial Performance

SPDI's core property asset portfolio consists of South Eastern European prime commercial and industrial real estate, the majority of which is let to blue chip tenants on long leases. During H1 2024, management in line with the Company's strategy to maximise value for shareholders, worked towards closing the sale of the Ukrainian assets included in Stage 2 of the transaction with Arcona Property Fund N.V (Arcona) as part of the conditional implementation agreement for the sale of Company's property portfolio, excluding its Greek logistics property (which has now also separately been sold), in an all-share transaction to Arcona, an Amsterdam and Prague listed company that invests in commercial property in Central Europe. Arcona originally held high yielding real estate investments in Czech Republic, Poland and Slovakia, the combination of two complementary asset portfolios is expected to create a significant European property company, benefiting both the Company's and Arcona's respective shareholders.

Following the completion of Stage 1 of the transaction in 2019, which involved the sale of two land plots in Ukraine and residential and land assets in Bulgaria and resulted in Company receiving a total of 593.534 Arcona shares and 144.084 warrants over Arcona shares, in June 2021, the two parties signed SPA agreements for Stage 2 of the Arcona transaction. This stage includes the transfer of the EOS and Delenco assets in Romania and the Kiyanovskiy and Rozny land plots in Ukraine with a total net asset value of €8,2 million, in exchange for approximately 560.000 new ordinary shares in Arcona and approximately 135.000 warrants over shares in Arcona, as well as €1m in cash, subject to, inter alia, standard form adjustment and finalisation in accordance with the relevant agreements.

During March and June 2022, the transactions for the sale of EOS and Delenco concluded in exchange for the issue to the Company of 479.376 new shares in Arcona and 115.543 warrants over shares in Arcona. However, due to the Russian invasion of Ukraine in February 2022, transfer process of the Ukrainian assets included in Stage 2 of the transaction, was suspended. In H1 2024, management worked intensively to resolve all relevant issues for the sale to be concluded, and as at today the transactions are expected to close during 2024.

Furthermore, during 2023, as part of the cost optimisation process adopted by the Board, the Company has implemented the externalisation of all existing HR and office costs in all its operating jurisdictions, except Ukraine. As already announced, the cost optimisation plan involves the agreement with a Cyprus based advisory company wholly owned by the Company's CEO Lambros Anagnostopoulos, which has assumed all direct individual personnel contracts, all service contracts with local real estate service providers and all HR and office costs in Romania, against a fixed monthly fee of EUR 24.000 plus VAT. All relevant agreements have been signed during the period, and currently the Company has externalised all HR costs. It is expected that the plan will result in an annual reduction of 35% and 50% vis a vis similar costs incurred by the group in 2021 and 2020 respectively. The agreed monthly fee has been set to reflect effectively the reduced personnel time/cost and office expenses of the Company during the current phase of the transformation of the Company.

Moreover, during H1 2024 and as part of the joint venture agreement with Myrian Nes Limited for converting EUR 2,5 million of a loan into equity for developing logistics properties in Romania, the parties have reached an agreement involving the development of two different properties for the same tenant in two regional Romanian cities. To that end, the joint venture vehicle has been set up in Cyprus, head of terms with the tenant have been signed, relevant formal agreements are currently in draft, and the permitting process has also been initiated.

Operating income increased marginally by 1,7% at €0,7m during H1 2024, driven by the increase in rental income due to indexation.

Administration expenses, adjusted for one-off non-recurring costs decreased by approximately 30% to €0,39m. As a result, recurring EBITDA turned positive to €0,01m from losses €0,49m in the comparative period. Net finance cost decreased to €0,02m from €0,18m in H1 2023 and the operating result after finance and taxes improved to a marginal loss of €0,01m, as compared to a loss of €0,67m in the comparative period in 2023.

Table 1

Regional Economic Developments[1]

Following a growth reduction in 2023 to 2,1%, real GDP growth in Romania is expected to increase by 3% in 2024, driven by strong private consumption as a result of higher real disposable incomes. The government deficit is forecasted to increase to 6,9% of GDP from 6,6% in 2023. This will be the result of increased government expenditure, which will be driven by expected double-digit increases in public sector wages.

The downward trend in inflation is expected to continue in 2024-2025, but will remain slightly above the pre-2022 levels. The average inflation rate is expected to decline to 5,9% this year and further down to 4% in 2025, compared with 9,7% in 2023. Employment is expected to grow in 2024, with the unemployment rate projected to decline marginally to below 5,5%.

Since February 2022, full-scale war and related security threats have posed a significant systemic risk to the Ukrainian economy. Due to substantial military spending, the Ukrainian economy will remain highly dependent on international financial aid. According to preliminary estimates, Ukraine's GDP grew by 5% in 2023 after falling by 28.8% in 2022.

Since 2022, the Ukrainian hryvnia significantly depreciated against major foreign currencies. Since the beginning of the war in Ukraine, a fixed rate regime has operated. However, in the fourth quarter of 2023, the National Bank of Ukraine (NBU) introduced a regime of managed flexibility of the exchange rate, under which the official rate will be determined by operations on the interbank foreign exchange market with the active participation of the NBU. Risks to the stability of the currency market and the financial sector did not materialise. In beginning of 2024, the NBU further eased a number of currency restrictions.

During the period, Fitch Rating confirmed the long-term sovereign rating of Ukraine in foreign and national currencies at the level of "ССС/ССС" and the short-term sovereign rating of Ukraine in foreign and national currencies at the level of "C/C".

Operating income increased marginally by 1,7% at €0,7m during H1 2024, driven by the increase in rental income due to indexation.

Administration expenses, adjusted for one-off non-recurring costs decreased by approximately 30% to €0,39m. As a result, recurring EBITDA turned positive to €0,01m from losses €0,49m in the comparative period. Net finance cost decresed to €0,02m from €0,18m in H1 2023 and the operating result after finance and taxes improved to a marginal loss of €0,01m, as compared to a loss of €0,67m in the comparative period in 2023.

Real Estate Market Devlopments

3.1 Romania

During the first half of 2024, real estate investment volume in Romania increased almost two and a half times, compared to the same period in 2023, to ~€420 million. Market participants expect this figure to reach €1 billion by the end of 2024, marking a strong recovery during the year for domestic real estate market.

Retail properties accounted for 48% of total investment volume, followed closely by industrial properties which had a 44% share. On the other hand, the hotel sector secured a 6% share of total investment volume, outperforming office properties which accounted just for 2% of total investment volume, due to the significant increase in foreign tourism during the last years.

During the first half of the year, prime yields observed in retail properties saw a decrease to 8%, while industrial yields remained stable at 7,75%.

By the end of 2024, it is expected that ~400.000 sq m of modern spaces will be added to industrial stock, leading total prime stock in Romania well above the 7 million sq m level mark. Bucharest remains the main destination with 3,6 million sq m. Vacancy rate of Romania's industrial/ logostics prime stock stands at 5,6%, headline rent stands at 4,5 EUR sq m/month, while net effective rent at 4,1 EUR sq m/month.

3.2 Ukraine

The real estate market in Ukraine remains severely disrupted since the invasion of the country by Russia in February 2022. Given the ongoing conflict, any relevant real estate market activity during the period is severely depressed. The country is operating under martial law, so there are no available statistics and/or publications, and therefore no meaningful statements and inferences can be made for the local real estate market.

Propert Assets

4.1 Innovations Logistics Park, Romania

As at the end of current period the terminal was 82% leased. The anchor tenant with 46% share is Favorit Business Srl, a large Romanian logistics operator, which accommodates in the terminal their new business line which involves as end user Carrefour. Following the last relevant agreement, Favorit's leases extended until 2026. During 2023, the Company signed a new lease agreement with Baustoff + Metall for 3.000 sq m ambient storage space plus office space.

4.2 Residential portfolio

Greenlake, Bucharest, Romania

This residential compound of 40.500 sqm GBA, which consists of apartments and villas, situated on the banks of Grivita Lake, in the northern part of the Romanian capital, is the only residential property in Bucharest with a 200 meters frontage to a lake. The compound also includes facilities such as one of Bucharest's leading private schools (International School for Primary Education), outdoor sports courts and a mini-market.

During 2023 all units of the complex were sold.

4.3 Land Assets

Kiyanovskiy Residence - Kiev, Ukraine

The Kiyanovskiy Residence consists of 0,55 Ha of freehold and leasehold land located at Kiyanovskiy Lane, near Kiev city center. It is destined for the development of businesses and luxury residences with beautiful, protected views overlooking the scenic Dnipro River, St. Michaels' Spires and historic Podil. Leasehold has been recently extended for a 10-year period.

The asset is part of Stage 2 of the Arcona transaction and relevant SPA for its disposal has already been signed in June 2021. However, closing has been postponed due to the invasion of Russia in Ukraine, and the relevant parties are trying to conclude the transaction in 2024.

Tsymlyanskiy Residence - Kiev, Ukraine

The extension of the lease, originally expected during 2021, was delayed and currently is on hold due to the invasion of Russia in Ukraine. The asset is planned to be part of Stage 3 of the Arcona transaction.

Rozny Lane - Kiev Oblast, Kiev Ukraine

The asset is part of Stage 2 of the Arcona transaction and relevant SPA for its disposal has already been signed in June 2021 while closing has been postponed due to the invasion of Russia in Ukraine, with the parties trying to conclude the transaction during 2024.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2024

Profit/ (Loss) for the period from continued operations attributable to:

Profit/(Loss) for the period from discontinued operations attributable to:

Profit/ (Loss) for the period from continued operations attributable to:

Profit/(Loss) for the period from discontinued operations attributable to:

1 Share premium is not available for distribution.

2 Companies, which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the Republic Law, within two years after the end of the relevant tax year, will be deemed to have distributed this amount as dividend on the 31 of December of the second year. The amount of the deemed dividend distribution is reduced by any actual dividend already distributed by 31 December of the second year for the year the profits relate. The Company pays special defence contribution on behalf of the shareholders over the amount of the deemed dividend distribution at a rate of 17% (applicable since 2014) when the entitled shareholders are natural persons tax residents of Cyprus and have their domicile in Cyprus. In addition, from 2019 (deemed dividend distribution of year 2017 profits), the Company pays on behalf of the shareholders General Healthcare System (GHS) contribution at a rate of 2,65% (31.12.2019: 1,70%), when the entitled shareholders are natural persons tax residents of Cyprus, regardless of their domicile.

4 Exchange differences related to the translation from the functional currency of the Group's subsidiaries are accounted for directly to the foreign currency translation reserve. The foreign currency translation reserve represents unrealised profits or losses related to the appreciation or depreciation of the local currencies against the euro in the countries where the Group's subsidiaries own property assets.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2024

Notes to the Condensed Consolidated Interim Financial Statements

while its principal place of business is in Cyprus while its principal place of business is in Cyprus at 6 Nikiforou Foka Street, 1060 Nicosia, Cyprus.

Principal activities

The Group maintains offices in Nicosia, Cyprus, and Kiev, Ukraine.

As at the reporting date, the companies of the Group employed and/or used the services of 2 full time equivalent people, (2023: 2 full time equivalent people).

General Information

Country of incorporation

SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC (the ''Company'') was incorporated in Cyprus on 23 June 2005 and is a public limited liability company, listed on the London Stock Exchange (AIM): ISIN CY0102102213. Its registered office is at Kyriakou Matsi 16, Eagle House, 10th floor, Agioi Omologites, 1082 Nicosia, Cyprus

• Basis of preparation
• Adoption of new and revised Standards and Interpretations
• Significant accounting policies

4.1 Basis of consolidation

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39, either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured and its subsequent settlement is accounted for within equity.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date.

Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group's accounting policies.

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

4.2 Functional and presentation currency

Items included in the Group's financial statements are measured applying the currency of the primary economic environment in which the entities operate (''the functional currency''). The national currency of Ukraine, the Ukrainian Hryvnia, is the functional currency for all the Group's entities located in Ukraine, the Romanian leu is the functional currency for all Group's entities located in Romania, and the Euro is the functional currency for all the Cypriot subsidiaries.

• All assets and liabilities are translated at closing rate;
• Equity of the Group has been translated using the historical rates;
• All resulting exchange differences are recognised as a separate component of equity;
• Monetary items receivable from foreign operations for which settlement is neither planned nor likely to occur in the foreseeable future and in substance are part of the Group's net investment in those foreign operations are recongised initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the foreign operation.

4.3 Discontinued operations

• represents a separate major line of business or geographic area of operations;
• is a subsidiary acquired exclusively with a view to resale.

4.4 Investment Property at fair value

Investment property, comprising freehold and leasehold land, investment properties held for future development, warehouse and office properties, as well as the residential property units, is held for long term rental yields and/or for capital appreciation and is not occupied by the Group. Investment property and investment property under construction are carried at fair value, representing open market value as determined annually by external valuers and reviewed by Management who finally decides on reported values. Changes in fair values are recorded in the statement of comprehensive income and are included in other operating income.

A number of the land leases (all in Ukraine) are held for relatively short terms and place an obligation upon the lessee to complete development by a prescribed date. It is important to note that the rights to complete a development may be lost or at least delayed if the lessee fails to complete a permitted development within the timescale set out by the ground lease.

Management believes that rescinding or non-renewal of the ground lease is remote if a project is on the final stage of development or on the operating cycle. In undertaking the valuations reported herein, the valuer of Ukrainian properties CBRE has made the assumption that no such circumstances will arise to permit the City Authorities to rescind the land lease or not to grant a renewal.

Initial measurement and recognition

Investment property is measured initially at cost, including related transaction costs. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the consolidated statement of comprehensive income in the period of retirement or disposal.

Subsequent measurement

If a valuation obtained for an investment property held under a lease is net of all payments expected to be made, any related liabilities/assets recognised separately in the statement of financial position are added back/reduced to arrive at the carrying value of the investment property for accounting purposes.

Basis of valuation

The fair values reflect market conditions at the financial position date. These valuations are prepared once a year by chartered surveyors (hereafter "appraisers"). The Group appointed valuers in 2014, which remain the same the period ending 30 June 2024:

• CBRE Ukraine, for all its Ukrainian properties,
• NAI Real Act for all its Romanian properties.

"Market Value" is defined as: "The estimated amount for which a property should be exchanged 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".

In expressing opinions on Market Value, in certain cases the appraisers have estimated net annual rentals/income from the sale. These are assessed on the assumption that they are the best rent/sale prices at which a new letting/sale of an interest in property would have been completed at the date of valuation assuming: a willing landlord/buyer; that prior to the date of valuation there had been a reasonable period (having regard to the nature of the property and the state of the market) for the proper marketing of the interest, for the agreement of the price and terms and for the completion of the letting/sale; that the state of the market, levels of value and other circumstances were, on any earlier assumed date of entering into an agreement for lease/sale, the same as on the valuation date; that no account is taken of any additional bid by a prospective tenant/buyer with a special interest; that the principal deal conditions assumed to apply are the same as in the market at the time of valuation; that both parties to the transaction had acted knowledgeably, prudently and without compulsion.

The valuation is exclusive of VAT and no allowances have been made for any expenses of realisation or for taxation which might arise in the event of a disposal of any property.

Valuation Approach

Pre Development

Development

Post Development

Rental values have been assessed as at the date of valuation but having regard to the existing occupational markets taking into account the likely supply and demand dynamics during the anticipated development period. The standard letting fees were assumed within the valuations. In arriving at their estimates of gross development value ("GDV"), the appraisers have capitalised their opinion of net operating income, having deducted any anticipated non-recoverable expenses, such as land payments, and permanent void allowance, which has then been capitalised into perpetuity.

The capitalisation rates adopted in arriving at the opinions of GDV reflect the appraisers' opinions of the rates at which the properties could be sold as at the date of valuation.

4.5 Goodwill

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss in the consolidated statement of comprehensive income. An impairment loss recognised for goodwill is not reversed in subsequent periods.

4.6 Property, Plant and equipment and intangible assets

Property, plant and equipment and intangible non-current assets are stated at historical cost less accumulated depreciation and amortisation and any accumulated impairment losses.

Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet determined and intangibles not inputted into exploitation, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Group's accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Depreciation and amortisation are calculated on the straight‑line basis so as to write off the cost of each asset to its residual value over its estimated useful life. The annual depreciation rates are as follows:

No depreciation is charged on land.

An item of tangible and intangible assets is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of comprehensive income.

4.7 Cash and Cash equivalents

4.8 Assets held for sale

4.9 Financial Instruments

4.9.1 Recognition and initial measurement

4.9.2 Classification and subsequent measurement

Financial assets

Financial assets - Business model assessment:

• how the performance of the portfolio is evaluated and reported to the Group's management;
• contingent events that would change the amount or timing of cash flows;
• terms that may adjust the contractual coupon rate, including variable-rate features;
• prepayment and extension features; and

Financial assets - Subsequent measurement and gains and losses:

Financial assets at amortised cost

Debt investments at FVOCI

Equity investments at FVOCI

4.9.3 Derecognition

Financial assets

Financial liabilities

4.9.4 Offsetting

4.9.5 Derivative financial instruments and hedge accounting

Derivative financial instruments and hedge accounting -

Cash flow hedges

Net investment hedges

4.10 Leases

the Company has the right to operate the asset; or

The Company as lessor

If an arrangement contains lease and non lease components, the Company applies IFRS 15 to allocate the consideration in the contract. The Company recognises lease payments received under operating leases as income om a straight line basis over the lease term as part of 'other income'.

The Company as lessee

Lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including in substance fixed payments;
• amounts expected to be payable under a residual value guarantee; and

Short term leases and leases of low value assets

The Company has elected not to recognise the right of use assets and lease liabilities for short term leases that have a lease term of 12 months or less and leases of low value assets (i.e. IT equipment, office equipment etc.). The Company recognises the lease payments associated with these leases as an expense on a straight line basis over the lease term.

4.11 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extend there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and amortised over the period of the facility to which it relates.

Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premium relating to borrowings, amortization of ancillary costs incurred in connection with the arrangement of borrowings, finance lease charges and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

4.12 Tenant security deposits

Tenant security deposits represent financial advances made by lessees as guarantees during the lease and are repayable by the Group upon termination of the contracts. Tenant security deposits are recognised at nominal value.

4.13 Impairment of tangible and intangible assets other than goodwill

If the recoverable amount of an asset (or cash‑generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash‑generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash‑generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash‑generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

4.14 Share Capital

Ordinary shares are classified as equity.

4.15 Share premium

4.16 Share-based compensation

The Group had in the past and intends in the future to operate a number of equity-settled, share-based compensation plans, under which the Group receives services from Directors and/or employees as consideration for equity instruments (options) of the Group. The fair value of the Director and employee cost related to services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted, excluding the impact of any non-market service and performance vesting conditions. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At each financial position date, the Group revises its estimates on the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in the statement of comprehensive income, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options are exercised.

4.17 Provisions

Provisions are recognised when the Group has a present obligation (legal, tax or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. As at the reporting date the Group has settled all its construction liabilities.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

4.18 Non‑current liabilities

4.19 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. It is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group and the revenue can be measured reliably. Revenue earned by the Group is recognised on the following bases:

4.19.1 Income from investing activities

4.19.2 Dividend income

Dividend income from investments is recognised when the shareholders' right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably).

4.19.3 Interest income

Interest income is recognised on a time-proportion (accrual) basis, using the effective interest rate method.

4.19.4 Rental income

4.20 Service charges and expenses recoverable from tenants

Income arising from expenses recharged to tenants is recognised on an accrual basis.

4.21 Other property expenses

4.22 Borrowing costs

All other borrowing costs are recognised in the statement of comprehensive income in the period in which they are incurred as interest costs which are calculated using the effective interest rate method, net result from transactions with securities, foreign exchange gains and losses, and bank charges and commission.

4.23 Asset Acquisition Related Transaction Expenses

4.24 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

4.24.1 Current tax

4.24.2 Deferred tax

4.24.3 Current and deferred tax for the year

Current and deferred tax are recognised in the statement of comprehensive income, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

4.24.4 Withholding Tax

4.24.5 Dividend distribution

4.25 Value added tax

4.26 Operating segments analysis

4.27 Earnings and Net Assets value per share

4.28 Comparative Period

• New accounting pronouncement
• Critical accounting estimates and judgments

Provision for impairment of receivables

Fair value of financial assets

Fair value of investment property

The fair value of investment property is determined by using various valuation techniques. The Group selects accredited professional valuers with local presence to perform such valuations. Such valuers use their judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at each financial reporting date. For the current period, the Group has used the same fair values as those determined for 31 December 2023. (Note 18.2).

Income taxes

Significant judgment is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Impairment of tangible assets

Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

Provision for deferred taxes

Deferred tax is not provided in respect of the revaluation of the investment property and investment property under development as the Group is able to control the timing of the reversal of this temporary difference and the Management has intention not to reverse the temporary difference in the foreseeable future. The properties are held by subsidiary companies in Ukraine, Greece and Romania. Management estimates that the assets will be realised through a share deal rather than through an asset deal. Should any subsidiary be disposed of, the gains generated from the disposal will be exempt from any tax.

Application of IFRS 10

• not to be an Investment Management Service provider to Investors,
• Risk Management

7.1 Financial risk factors

7.1.1 Operating Country Risks

7.1.1.1 Ukraine

The risk associated with Company's interests in Ukraine has increased dramatically with the invasion of the country by Russia in February 2022. Since the invasion, the Ukrainian economy is being damaged heavily, exposing risks that are not typical and creating challenges for businesses located and operating in the country. Currently, the political and economic risks associated with Company's activities in the region do not really allow for any relevant assessment for the future.

Full-scale war and related security threats are a key systemic risk to the Ukrainian economy. Due to significant military expenditures, the economy will remain highly dependent on international financial aid. According to preliminary estimates, Ukraine's GDP grew by 5% in 2023 after falling by ~30% in 2022.

In 2022, the Ukrainian hryvnia significantly depreciated against major foreign currencies. Since the beginning of the full-scale war in Ukraine, a fixed rate regime has operated. And in the fourth quarter of 2023, the National Bank introduced a regime of managed flexibility of the exchange rate, under which the official rate will be determined by operations on the interbank foreign exchange market with the active participation of the NBU. Risks to the stability of the currency market and the financial sector did not materialise. Early this year, the National Bank once again eased a number of currency restrictions.

Moreover, during the current period, Fitch Ratings re-confirmed the long-term sovereign rating of Ukraine in foreign and national currencies at the level of "ССС/ССС-" and the short-term sovereign rating of Ukraine in foreign and national currencies at the level of "C/C". This followed earlier assessment in September 2023, when Standard & Poor's assessed the long-term sovereign rating of Ukraine in foreign and national currencies for the year at the level of "ССС/ССС+" and the short-term sovereign rating of Ukraine in foreign and national currencies at the level of "C/C".

The Company owns land plots in Ukraine, either in Kiev or close to the capital, reported at time of publishing still under Ukrainian control. The plots do not generate income and therefore the cash flow of the Group is not affected by the invasion.

The Management, given the associated uncertainty, has decided to value the Ukrainian assets lower than the last values as provided by the third-party valuers (CBRE Ukraine) at 2023 year end. As a result, the Ukrainian assets contribute €1,59 million in Group's assets, as compared to €3,09 million provided by the valuers as at 31 December 2023.

The Company will revert to inform investors upon having a clearer view on the developments associated with the conflict and its consequences on real estate assets.

7.1.1.2 Romania

Based on the performance during the first half of the year, Romanian economy is expected to grow by 2,9% in 2024 compared to 2,1% in 2023, continuing the positive upward trend that started in 2021 and is forecasted to be maintained during the following two years as well.

GDP growth results mainly due to robust domestic demand as a result of the increased average disposable income of the local citizens. The unemployment rate is expected to fall marginally to levels just above 5%, having also downward trends for the forthcoming years. Inflation overall 2024 in Romania is expected to decrease to 5,9%, almost 5% down from 2023 levels, influenced by adjustments to agri-food prices and the decreasing dynamics of import prices.

At the end of the first half of 2024, the National Bank of Romania maintained the monetary policy interest rate at 7.00%, the same value since January 2023. The NBR decisions are intended to align the annual inflation rate with the target of 2.5 percent 1 percentage point.

7.1.2 Risks associated with property holding and development associated risks

Several factors may affect the economic performance and value of the Group's properties, including:

• cyclical fluctuations in the property market generally;
• the attractiveness of the property to tenants or residential purchasers;
• decreases in capital valuations of property;
• covenants, conditions, restrictions and easements relating to the properties;

7.1.3 Property Market price risk

7.1.4 Interest rate risk

7.1.5 Credit risk

7.1.6 Currency risk

Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Group's functional currency. Excluding the transactions in Ukraine all of the Group's transactions, including the rental proceeds are denominated or pegged to EUR. In Ukraine, even though there is no recurring income stream, the fluctuations of UAH against EUR entails significant FX risk for the Group in terms of its local assets valuation. Management monitors the exchange rate fluctuations on a continuous basis and acts accordingly, although there are no available financial tools for hedging the exposure on UAH. It should be noted though that the current political uncertainty in Ukraine, and any probable currency devaluation may affect the Group's financial position.

7.1.7 Capital risk management

The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders through the optimisation of the debt and equity balance. The Group's core strategy is described in Note 40.1 of the consolidated financial statements.

7.1.8 Compliance risk

7.1.9 Litigation risk

7.1.10 Insolvency risk

Insolvency arises from situations where a company may not meet its financial obligations towards a lender as debts become due. Addressing and resolving any insolvency issues is usually a slow moving process in the Region. Management is closely involved in discussions with creditors when/if such cases arise in any subsidiary of the Group aiming to effect alternate repayment plans including debt repayment so as to minimise the effects of such situations on the Group's asset base.

7.2. Operational risk

7.3. Fair value estimation

Investment in subsidiaries

Holding %

As of November 2021, the Group had submitted properly the official request to the City of Kiev to extend the lease of Tsymlyanskiy Residence property for another 5 years, since the Group has first extension rights over any other interested party. The first step in the process whereby the presiding committee of the municipality, before the final approval by the City Council, did not place as too many other cases had accumulated which had time priority over Group's case. During the period between 15 December 2021 and 20 January 2022, the committee did not convene at all as is usual during holiday and vacation times. Once the holiday season was over, the main focus of the committee and the City Council unfortunately were on issues not related to property lease extensions, but rather more pressing matters for the interests and operational stability of the City of Kiev. From there on, all decisions have been put on hold due to the Russian insurgence of Ukraine. The Management remains confident that the Company will be awarded the lease extension once the war status permits.

During 2020 the Company initiated the process of striking off six holding subsidiaries in Cyprus, which became idle following recent disposals of local asset owning companies and properties. Bluehouse Accession Project IV Limited, Demetiva Holdings Limited, Diforio Holdings Limited and Mofben Investments Limited were already deleted from registrar of Companies. Jenby Ventures Limited and Ebenem Limited are still expected relevant official clearance from local Trade Registry and Tax Authorities in the following period. During 2022 the Group has also initiated strike off process for two additional Ukrainian entities, LLC Retail Development Balabino and LLC Interterminal.

During 2023 BlueBigBox 3 Srl, the SPV which used to hold Praktiker Craiova property that was sold back in 2018, was entered into an insolvency process initiated by a vendor. The case is associated with the Bluehouse litigation case (Note 38.3). Following the settlement made with BLUEHOUSE ACCESSION PROPERTY HOLDING III S.A.R.L. pursuant to a consensual order issued by the District Court of Nicosia in action no. 3362/2018, relevant legal motions against Bluebigbox3 Srl have been withdrawn. In relation to the insolvency procedure of the company, on 17 September 2024 the court postponed the scheduled hearing for 02 October 2024, when the judicial administrator will file the request to close the bankruptcy procedure before the court. Following this, SPDI will re-gain control and will start the process of an ordinary liquidation, since the entity does no longer hold any assets.

Discontinued operations

9.(a) Description

The Company announced on 18 December 2018 that it has entered into a conditional implementation agreement for the sale of its property portfolio, excluding its Greek logistics properties ('the Non-Greek Portfolio'), in an all-share transaction to Arcona Property Fund N.V. The transaction is subject to, among other things, asset and tax due diligence (including third party asset valuations) and regulatory approvals (including the approval of a prospectus required in connection with the issuance and admission to listing of the new Arcona Property Fund N.V. shares), as well as successful negotiating and signature of transaction documents. During 2019 and as part of the Arcona transaction the Company sold the Boyana Residence asset in Bulgaria, as well as the Bela and Balabino land plots in Ukraine, while in March and June 2021 has signed SPAs related to Stage 2 of the transaction, namely for the EOS and Delenco assets in Romania, as well as the Kiyanovskiy and Rozny assets in Ukraine. In March and June 2022, the Company sold effectively to Arcona the Delenco and EOS assets. Regarding the Ukrainian assets included in Stage 2 of the transaction, discussions for closing had been put on hold after the invasion of Russia in the country, however currently negotiations have re-emerged, a commercial agreement has been reached, and relevant closing documentation is drafted for execution which is expected during Q4 2024.

During 2023, the Company sold through a third-party transaction, SEC South East Continent Unique Real Estate (Secured) Investments Limited along with its subsidiaries, which no longer possessed any asset.

The companies that are classified under discontinued operations are the followings:

• Cyprus: Frizomo Holdings Limited and Ketiza Holdings Limited
• Romania: Best Day Real Estate Srl, Ketiza Real Estate Srl and Secmon SRL
• Ukraine: LLC Aisi Ukraine, LLC Almaz‑Pres‑Ukraine, LLC Trade Center, LLC Retail Development Balabino

9.(b) Results of discontinued operations

For the period ended 30 June 2024

9.(d) Assets and liabilities of disposal group classified as held for sale

The following assets and liabilities were reclassified as held for sale in relation to the discontinued operation as at 30 June 2024:

Liabilities directly related with assets classified as held for sale

Income

Income from continued operations for the period ended 30 June 2024 represents:

a) rental income, as well as service charges and utilities income collected from tenants as a result of the rental agreements concluded with tenants of Innovations Logistics Park (Romania). It is noted that part of the rental and service charges/ utilities income related to Innovations Logistics Park (Romania) is currently invoiced by the Company as part of a relevant lease agreement with the Innovations SPV and the lender, however the asset, through the SPV, is planned to be transferred as part of the transaction with Arcona Property Fund N.V. Upon a final agreement for such transfer, the Company will negotiate with the lender its release from the aforementioned lease agreement, and if succeeds, upon completion such income will be also transferred.

The increase in the rental income is a result of rent indexation and the decrease in service charges and utility income is a result of the de-escalation of energy and utility prices, which are re-invoiced to the tenants.

Income from discontinued operations for the period ended 30 June 2024 represents rental income, as well as service charges and utilities income collected from tenants as a result of the rental agreements concluded with tenants of Innovations Logistics Park (Romania).

Occupancy rates in the various income producing assets of the Group as at 30 June 2024 were as follows:

Income producing assets

Asset operating expenses

The Group incurs expenses related to the proper operation and maintenance of all properties in Kiev and Bucharest. Part of these expenses is recovered from the tenants through the service charges and utilities recharge process (Note 10).

Under continued operations there are no such expenses related to operation of the assets.

Under discontinued operations are all the expenses related to Innovations Logistics Park (Romania) and all Ukrainian properties.

Repairs and technical maintenance reflect the relevant works performed on properties during the period for facilitating their proper use, and/ or successful sale. Relevant increase reflects works conducted in Innovations terminal.

Utilities decrease resulted from de-escalation of energy prices associated with the Innovations terminal in Bucharest, matched effectively with the dencreased service charges and utilities income, as these were invoiced by the Company and included in continued operations.

Leasing expenses reflect expenses related to long term land leasing.

Administration Expenses

Salaries and wages include the remuneration of the CEO (H12024: €0, H12023: €0), and the administrators in Ukraine. The minimisation of these costs came as a result of the externalization of all HR costs after April 2023, except those in Ukraine, as part of the cost reduction plan adopted by the board.

Incentives provided in H1 2024 to personnel for the successful implementation of Group's plan pursuant to relevant Remuneration Committee proposal dated 7 May 2021 as approved by the BoD on 01 June 2021.

Accounting and related fees include fees from external accounting services.

Tax advisory fees in H1 2023 are related to ad-hoc fees paid to advisors for applying and succeeding a new tax ruling for the Company, which based on current structure of operations, is expected to produce significantly lower imposed taxes, while its application has produced beneficial retrospective results.

Legal fees represent legal expenses incurred by the Group in relation to asset operations (rentals, sales, etc.), ongoing legal cases in Ukraine, Cyprus and Romania, compliance with AIM listing, as well as one-off fees associated with legal services and advise in relation to due diligence processes and transactions.

Valuation gains / (losses) from investment properties

Discontinued operations (Note 9)

* As of November 2021, the Group had submitted properly the official request to the City of Kiev to extend the lease of Tsymlyanskiy Residence property for another 5 years, since the Group has first extension rights over any other interested party. The first step in the process whereby the presiding committee of the municipality, before the final approval by the City Council, did not place as many other cases had accumulated which had time priority over Group's case. During the period between 15 December 2021 and 20 January 2022, the committee did not convene at all as is usual during holiday and vacation times. Once the holiday season was over, the main focus of the committee and the City Council unfortunately were on issues not related to property lease extensions, but rather more pressing matters for the interests and operational stability of the City of Kiev. From there on, all decisions have been put on hold due to the Russian insurgence of Ukraine. We remain confident that we will be awarded the lease extension once the war status permits.

In relation to the Ukrainian assets excluding Tsymlyanskiy, and in view of the ongoing conflict in the country, the Management, although received updated third-party valuation reports to monitor effectively the underlying values, decided in H1 2022 accounts to impair the value of those assets at 50% of their value as at the end of 2021 and continues the same in every period since then.

Other operating income/(expenses), net

Continued operations

Other income in H1 2023 represents income from services to associate companies.

Discontinued operations

Other income in H1 2024 represents income regarding land tax recalculation In Ukrainian properties.

Finance costs and income

Continued operations

Continued operations

Interest income from non-bank loans, reflects interest on Loan receivables from 3rd parties provided as an advance payment for acquiring a participation in an investment property portfolio (Olympians portfolio) in Romania The funds provided initially with a convertibility option which was not exercised, and is currently treated as a loan. According to the last addendum of the loan agreement, part of the principal equal to €2,5 million will be contributed to a joint venture between the Company and the borrower for the development of logistics assets in Romania (Note 23). The remaining principal plus the interest is repaid in installments, expected to be fully repaid by the end of 2024. The loan is bearing a fixed interest rate of 10%.

Interest expenses represent interest charged on Bank and non-Bank borrowings (Note 29).

Discontinued operations

Interest income from non-bank loans, reflects income from loans granted by the Group for financial assistance of associates.

Interest expenses represent interest charged on Bank and non-Bank borrowings (Note 29).

• Foreign exchange profit / (losses)
• Non realised foreign exchange loss

Foreign exchange losses (non-realised) resulted from the loans and/or payables/receivables denominated in non EUR currencies when translated in EUR. The exchange profit for the year ended 30 June 2024 from continued operations amounted to €23.041 (30 June 2023: loss €34.386).

The exchange loss from discontinued operations for the year ended 30 June 2024 amounted to €45.001 (30 June 2023: loss €19.066) (Note 9).

Tax Expense

For the period ended 30 June 2024 the corporate income tax rate for the Group's subsidiaries are as follows: in Ukraine 18%, and in Romania 16%. The corporate tax that is applied to the qualifying income of the Company and its Cypriot subsidiaries is 12,5%.

Investment Property

18.1 Investment Property Presentation

Investment Property consists of the following assets:

Income Producing Assets

Residential Assets

• At the end of the reporting period the Company does not own any more residential units, having sold during the previous period the remaining residential portfolio.

Land Assets

• Kiyanovskiy Residence consists of four adjacent plots of land, totaling 0,55 Ha earmarked for a residential development, overlooking the scenic Dnipro River, St. Michael's Spires and historic Podil neighborhood. The Company recently secured for the leashold part of the property a 10-year extension.
• Tsymlyanskiy Residence is a 0,36 Ha plot of land located in the historic Podil District of Kiev and is destined for the development of a residential complex. As of November 2021, the Group had submitted properly the official request to the City of Kiev to extend the lease of Tsymlyanskiy Residence property for another 5 years, since the Group has first extension rights over any other interested party. The first step in the process whereby the presiding committee of the municipality, before the final approval by the City Council, did not place as many other cases had accumulated which had time priority over Group's case. During the period between 15 December 2021 and 20 January 2022, the committee did not convene at all as is usual during holiday and vacation times. Once the holiday season was over, the main focus of the committee and the City Council unfortunately were on issues not related to property lease extensions, but rather more pressing matters for the interests and operational stability of the City of Kiev. From there on, all decisions have been put on hold due to the Russian insurgence of Ukraine. We remain confident that we will be awarded the lease extension once the war status permits.
• Rozny Lane is a 42 Ha land plot located in Kiev Oblast, destined for the development of a residential complex. It has been registered under the Group pursuant to a legal decision in 2015.

18.2 Investment Property Movement during the reporting period

Discontinued Operations

18.3 Investment Property Carrying Amount per asset as at the reporting date

18.4 Investment Property analysis

Investment Properties

The following assets are presented under Investment Property: Innovations Logistics park in Romania, and Kiyanovskiy, Tsymlyanskiy and Rozny Lane land assets in Ukraine.

• Investment Property Acquisitions, Goodwill Movement and Disposals

19.1 Acquisition and disposal of associate Equardo Holding Limited

The Company in 2023 acquired the remaining 50% of the share capital of Equardo Holdings Limited (Note 21) for the consideration price of €90.000 increasing its participation in the company to 100% having a NAV of €180.218. Equardo has an indirect investment in a large land plot in Bucharest with a substantially higher value, yet the monetisation of such invesment is of increased risk and is expected to take substantial time. As such the Company sold this investment to the subsidiary Sertland Properties Limited in exchange of intra group payables of € 2.205.145, i.e. generating a book profit on disposdal of €2.024.927.

19.2 Acquisition and disposal of Nottin Holdings Limited

The Company in 2023 acquired the 33,3% of Nottin Holding Limited and a receivable from the company amounting to €93.300 for a consideration of €1. Nottin Holdings Limited has an indirect investment in a large property and land plot in Belgrade with a substantially higher value, yet the monetisation of such invesment is of increased risk and is expected to take substantial time. As such the Company sold this investment to the subsidiary Zirimon Properties Limited in exchange of intra group payables of € 5.604.753, i.e. generating a book profit on disposdal of €5.604.752.

19.3 Disposal of SEC I

The Company in 2023 proceeded to the sale of SEC I group to a 3rd party.

Investments in associates

As at 30 June 2024, the Group has no associates, as they were all sold during 2023.

As at 31 December 2023, the Group's interests in its associates and their summarised financial information, including total assets at fair value, total liabilities, revenues and profit or loss, were as follows:

Tangible and intangible assets

As at 30 June 2024 the intangible assets were composed of the capitalised expenditure on the Enterprise Resource Planning system (Microsoft Dynamics-Navision) in the amount of €103.193 (31 Dec 2023: €103.193) which is under continued operations. Accumulated amortisation as at the reporting date amounts to €103.193 (31 Dec 2023: €103.193) and therefore net value amounts to €0 (31 Dec 2023: €0).

As at 30 June 2024 the tangible non-current assets under continued operations were comprised mainly by electronic equipment (mobiles, computers etc.) of a net value of €88 (31 Dec 2023: €164).

As at 30 June 2024 the tangible non-current assets under discontinued operations mainly consisted of the machinery and equipment used for servicing the Group's investment properties in Ukraine and Romania amount to €29.271 (31 Dec 2023 €29.998). Accumulated depreciation as at the reporting date amounts to €29.265 (31 Dec 2023: €29.973).

Long Term Receivables and prepayments

Long term receivables under discontinued operations mainly include the cash collateral existing in favor of Piraeus Leasing in relation to Innovations asset.

Prepayments and other current assets

Continued operations

Trade and other receivables mainly include receivables from tenants and prepayments made for services.

VAT receivable represent VAT which is refundable in Romania, Cyprus and Ukraine.

Deferred expenses include property taxes and insurance costs.

Loans receivables from 3rd parties include an amount of €2.853.625 (2023: €2.909.115) provided as an advance payment for acquiring a participation in an investment property portfolio (Olympians portfolio) in Romania. The accrued interest was €294.664 (2023: €243.335). The loan provided initially with a convertibility option which was not exercised. The loan is bearing a fixed interest rate of 10%. In August 2022 the Company signed with the borrower a Shareholders Agreement for a joint venture for developing logistics properties in Romania. As part of this agreement the Company will convert €2,5 million of the loan into a 50% equity stake of the joint venture company. The objective of this new company, in which borrower is contributing €2,5 million in equity funds too, is to develop a portfolio of logistics properties in Romania with a view of letting them to third party tenants in a market that has very low vacancy and has shown substantial strength and resilience in recent years. The conversion will take place upon identifying and agreeing on the specific project to be undertaken by the JV. The parties have evaluated many opportunities and currently are in the final negotiations stage with a tenant for developing two different properties in two different regional cities in Romania.The remaining part of the Olympians Loan is being repaid in regular intervals and is expected to be fully repaid to the Company by the end of 2024.

Discontinued operations

Trade and other receivables increased due to an increase the payables of the tenants.

VAT receivable represents VAT which is refundable in Romania, Cyprus and Ukraine.

Deferred expenses include legal, advisory, consulting and marketing expenses.

Financial Assets at FV through P&L

The Company received during 2019 and 2020 593.534 Arcona shares as part of the completion of Stage 1 of the transaction with Arcona, for the sale of Bella and Balabino assets in Ukraine, and the Boyana asset in Bulgaria. During 2022 the Company received 479.376 additional shares in Arcona as part of Stage 2 of the transaction with Arcona, for the sale of EOS and Delea Nuova assets in Romania.

At the end of the reporting period the shares are revalued at their fair value based on the NAV per share of Arcona at the same date, and as a result a relevant fair value gain of €104.797 (2023: loss €259.781) is recognised.

On top of the aforementioned shares, the Company received for the sale of Bella and Balabino assets, 67.063 warrants over shares in Arcona for a consideration of EUR 1, and 77.021 warrants over Arcona shares for the sale of Boyana for a consideration of EUR 1. The warrants are exercisable upon the volume weighted average price of Arcona shares traded on a regulated market at €8,10 or higher.

Moreover, during 2022, the Company received 28.125 warrants over shares in Arcona for the sale of EOS asset, and 87.418 warrants over shares in Arcona for the sale of Delea Nuova asset for a total consideration of €3. These warrants are exercisable upon the volume weighted average price of Arcona shares traded on a regulated market at €7,2 or higher.

At year end, the warrants are re-valued to fair value and as a result a relevant gain of €41.712 (2023: loss €132.429) is recognised. The terms and assumptions used for such warrant re-valuation are:

Current stock price (as retrieved from Amsterdam Stock Exchange): EUR 5,79 per share

• Strike price of the warrants: EUR 8,10 and EUR 7,20 per share
• Expiration date: 1 November 2024, 25 March 2027, 15 June 2027
• Standard deviation of stock price: 20,65%
• Estimated annualised dividend yield on shares for 2024: 0,00%
• 5 year Government Bond rate (weighted average rate of Government Bonds of countries that Arcona is exposed): 5,128%

During 2023, the Company realised dividend income from the shareholding in Arcona of the order of €160.937, as part of the dividend distribution policy of Arcona.

Cash and cash equivalents

Cash and cash equivalents represent liquidity held at banks.

26.1 Authorised share capital

• 989.869.935 Ordinary Shares of €0,01 nominal value each,
• 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each, (Note 26.3).

26.2 Issued Share Capital

As at the end of 30 June 2024, the issued share capital of the Company was as follows:

• 129.191.442 Ordinary Shares of €0,01 nominal value each,
• 8.618.997 Redeemable Preference Class B Shares of €0,01 nominal value each.

In respect of the Redeemable Preference Class B Shares, issued in connection to the acquisition of Craiova Praktiker, following the holders of such shares notifying the Company of their intent to redeem within 2016, the Company:

• in lieu of redemption transferred its 20% holding in Autounion (Note 27.3) in October 2016, to the Craiova Praktiker seller BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L., while final settlement has also been reached pursuant to a consensual order issued by the District Court of Nicosia in action no.3362/2018 (Note 39.3). As a result the Company has planned to cancel these shares and resolved accordingly during the Extraordinary General Meeting of the shareholders held on 10 July 2024.

26.3 Capital Structure as at the end of the reporting period

As at the reporting date the Company's share capital is as follows:

Redeemable Preference Class B Shares

The Redeemable Preference Class B Shares, issued to BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L. as part of the Praktiker Craiova asset acquisition do not have voting rights but have economic rights at par with ordinary shares. As at the reporting date all of the Redeemable Preference Class B Shares have been redeemed and the Company has initiated their cancellation process.

Foreign Currency Translation Reserve

Exchange differences related to the translation from the functional currency to EUR of the Group's subsidiaries are accounted by entries made directly to the foreign currency translation reserve. The foreign exchange translation reserve represents unrealized profits or losses related to the appreciation or depreciation of the local currencies against EUR in the countries where the Company's subsidiaries' functional currencies are not EUR. The Company had foreign exchange gain on translation due to presentation currency of €85.474 in 30 June 2024, compared to €1.080.634 in 30 June 2023.

Non-Controlling Interests

Continued Operations

Loans from other 3rd parties and related parties under continued operations include among others:

Α) Loan from one Director of €100k provided as bridge financing for future property acquisitions. The loan bears annual interest of 8% (Note 37.4).

• Loans from management of €182k as a result of the transformation of payable incentives to loans. The loans bear zero interest and mature in June 2025 (Note 37.4)
• Bonds

The Company in order to acquire up to a 50% interest in a portfolio of fully let logistics properties in Romania, the Olympians Portfolio, issued a financial instrument, 35% of which consists of a convertible bond and 65% of which is made up of a warrant. The convertible loan element of the instrument has been redeemed by 30% and at the end of the reporting period the balance stands at €723.690 (2023: €723.690). The instrument bears a 6,5% coupon, has a 7 year term, maturing in July 2024, and is convertible into ordinary shares of the Company at the option of the holder at 25p. starting from 1 January 2018. As at June 2024, the balance of the bonds with interest amounts to €894.154 (2023: €870.373). The Company is in discussions with the bondholders for the extension of the maturity and will provide a further update shortly. All the bondholders have already provided relevant consent having agreed that during the discussions for the extension and the preparation of the required documentation the bond loan should not be considered in default.

Trade and other payables

Continued Operations

Payables to third parties represents amounts payable to various service providers including auditors, legal advisors, consultants and third party accountants related to the current operations of the Group, and guarantee amounts collected from tenants.

Pre-sale advances reflect the advance received in relation to Kiyanovskiy Residence pre-sale agreement, which upon non closing of the said sale, part of which will be returned to the prospective buyer.

Discontinued Operations

Payables to related parties under discontinued operations represent payables to non-controlling interest shareholders.

Deposits from Tenants

Deposits from tenants appearing under non-current liabilities include the amounts received from the tenants in Innovations Logistics Park are to be reimbursed to those at the expiration of the lease agreements.

Provisions and Taxes Payables

Corporate income tax represents taxes payable in Cyprus and Romania.

Other taxes represent local property taxes and VAT payable in Romania.

During 2023, the prior year taxes due were re-assessed downwards by the tax authorities following relevant motion by the Company.

Finance Lease Liabilities

As at the reporting date the finance lease liabilities consist of the non-current portion of €5.745.375 and the current portion of €57.250 (31 December 2023: €5.885.895 and €57.306, accordingly).

Discontinued operations

34.1 Land Plots Financial Leasing

The Group holds land plots in Ukraine under leasehold agreements which in terms of the accounts are classified as finance leases. Lease obligations are denominated in UAH. The fair value of lease obligations approximate to their carrying amounts as included above. Following the appropriate discounting, finance lease liabilities are carried at €21.009 under current and non-current portion. The Group's obligations under finance leases are secured by the lessor's title to the leased assets. Regarding Tsymlyanskiy, as of November 2021, the Group had submitted properly the official request to the City of Kiev to extend the lease property for another 5 years, since the Group has first extension rights over any other interested party. The first step in the process, which involves the approval by a committee of the municipality, before the final approval by the City Council, has not been obtained yet as many other cases had accumulated which had time priority over Group's case. During the period between December 15th 2021 and January 20th of 2022, the committee did not convene at all as is usual during holiday and vacation times. Once the holiday season was over, the main focus of the committee and the City Council unfortunately were on issues not related to property lease extensions, but rather more pressing matters for the interests and operational stability of the City of Kiev. From there on, all decisions have been put on hold due to the Russian insurgence of Ukraine. We remain confident that we will be awarded the lease extension once the war status permits, and we continue calculate relevant future lease obligations.

34.2 Sale and Lease Back Agreements

Innovations Logistics Park

In May 2014 the Group concluded the acquisition of Innovations Logistics Park in Bucharest, owned by Best Day Real Estate Srl, through a sale and lease back agreement with Piraeus Leasing Romania SA. As at the end of the reporting period the balance is €5.781.617 (2023: €5.921.621), bearing interest rate at 3M Euribor plus 4,45% margin, being repayable in monthly tranches until 2026 with a balloon payment of €5.244.926. At the maturity of the lease agreement and upon payment of the balloon Best Day Real Estate Srl will become owner of the asset.

Under the current finance lease agreement the collaterals for the facility are as follows:

• Best Day Real Estate Srl pledged its future receivables from its tenants.
• Best Day Real Estate Srl pledged its shares.
• Best Day Real Estate Srl was obliged to provide cash collateral in the amount of €250.000 in Piraeus Leasing Romania, which had been deposited as follows, half in May 2014 and half in May 2015.
• Earnings and net assets per share attributable to equity holders of the parent
• Weighted average number of ordinary shares

• Basic diluted and adjusted earnings per share from discontinued operations

Segment information

Commercial-Industrial

Warehouse segment -Innovations Logistics Park,

Residential

Residential segment

Land Assets

Land assets

There are no sales between the segments.

Continued Operations

Profit and Loss for the period ended 30 June 2024

Continued Operations

Profit and Loss for the period ended 30 June 2023

* It is noted that part of the rental and service charges / utilities income related to Innovations Logistics Park (Romania) is currently invoiced by the Company, as part of a relevant agreement between the Company and the lender, with which the Company leases part of the terminal's space. However, the asset, through the SPV, is planned to be transferred as part of the transaction with Arcona Property Fund N.V. Upon a final agreement for such transfer, the Company will negotiate with the lender its release from the aforementioned lease agreement, and if succeeds, upon completion such income will be also transferred.

Discontinued Operations

Profit and Loss for the period ended 30 June 2024

Profit and Loss for the period ended 30 June 2023

* It is noted that part of the rental and service charges/ utilities income related to Innovations Logistics Park (Romania) is currently invoiced by the Company as part of a relevant agreement between the Company and the lender. However, the asset, through the SPV, is planned to be transferred as part of the transaction with Arcona Property Fund N.V. Upon a final agreement for such transfer, the Company will negotiate with the lender its release from the aforementioned lease agreement, and if successful, upon completion such income will be also transferred.

Interest income from loan to related parties represent interest income from GreenLake Development Srl (associate) in 2023. By the end of 2023 the Greenlake SRL was sold.

37.1.2 Expenses

Management remuneration includes the remuneration of the CEO, and that of the administrators in Ukraine pursuant to the decisions of the Remuneration Committee. During 2023 the Company externalized most of the related HR cost as part of the cost minimization plan adopted by the board.

Incentives provided to personnel for the sussessful implementation of Group's plan pursuant to relevant Remuneration Committee proposal dated 7 May 2021 as approved by the BoD on 1st June 2021.

37.2 Payables to related parties (Note 31)

37.2.1 Board of Directors & Committees and provision for director fees

The amounts payable represent remuneration and expenses payable to Non-Executive Directors until the end of the reporting period.

37.2.2 Management Remuneration

Management Remuneration represents deferred amounts payable to the CEO of the Company.

37.2.3 Sec South East Continet Unique Real Esate Management Limited

The amount payable represent fees to the company which has externalized the HR costs and is associated with the CEO of the company.

37.3 Loans from SC Secure Capital Limited to the Group's subsidiaries

A potential Ukrainian Hryvnia weakening/strengthening by 10% against the US dollar with all other variables held constant, would result in an exchange difference on I/C loans to foreign holdings of €64.464, estimated on balances held at 30 June 2024.

37.4 Loans from related parties (Note 29)

Loan from Directors and Management reflect: a) loan from one director of the order of € 100.000 as bridge financing for future property acquisitions, bearing interest 8% annually, b) loans from management of the order of € 182.000 as a result of the transformation of payable incentives into loans, bearing zero interest and maturing in June 2025.

Contingent Liabilities

38.1 Tax Litigation

The Group performed during the reporting and comparative periods part of its operations in Romania. In respect of Romanian tax system, many aspects are subject to varying interpretations and frequent changes, which in many cases have retroactive effects. In certain circumstances it is also possible that tax authorities may act arbitrarily.

38.2 Construction related litigation

There are no material claims from contractors due to the postponement of projects or delayed delivery other than those disclosed in the financial statements.

38.3 Bluehouse Accession case

BLUEHOUSE ACCESSION PROPERTY HOLDINGS III S.A.R.L. (Bluehouse) filed in Cypriot courts in December 2018 a lawsuit against the Company for the total amount of €5.042.421,87, in relation to the Praktiker Craiova acquisition in 2015, and the redemption of the Redeemable Preference Class A shares which were issued as part of the transaction to the vendor, plus special compensations of €2.500.000 associated with the related pledge agreement. The redemption of such shares was requested in 2016, and in lieu of such redemption the Company transferred to the vendor the 20% holding in Autounion asset which was used as a guarantee to the transaction for the effective redemption of the Redeemable Preference Class A shares. At the same time the Company posted in its accounts a relevant payable provision for Bluehouse in the amount of €2.521.211. On the other hand, the Company during 2019, as part of the judicial process, filed a claim against Bluehouse for concealing certain key information during the Praktiker Craiova transaction, which if revealed would have resulted in a significant reduction of the final acquisition price. Following relevant negotiations and taking into account the timeline and the costs associated with these legal motions, the Company proceeded to a settlement against a payment of €494.000, effected in 2023, pursuant to consensual order issued by the District Court of Nicosia in action no. 3362/2018.

38.4 Other Litigation

38.5 Other Contingent Liabilities

The Group had no other contingent liabilities as at 30 June 2024.

Commitments

The Group had no other commitments as at 30 June 2024.

Financial Risk Management

40.1 Capital Risk Management

The Group manages its capital to ensure adequate liquidity will be available to implement its stated growth strategy in order to maximise the return to stakeholders through the optimization of the debt-equity structure and value enhancing actions in respect of its portfolio of investments. The capital structure of the Group consists of borrowings (Note 29), bonds (Note 30), trade and other payables (Note 31) deposits from tenants (Note 32), financial leases (Note 34), taxes payable (Note 33) and equity attributable to ordinary or preferred shareholders.

Management reviews the capital structure on an on-going basis. As part of the review Management considers the differential capital costs in the debt and equity markets, the timing at which each investment project requires funding and the operating requirements so as to proactively provide for capital either in the form of equity (issuance of shares to the Group's shareholders) or in the form of debt. Management balances the capital structure of the Group with a view of maximising the shareholders' Return on Equity (ROE) while adhering to the operational requirements of the property assets and exercising prudent judgment as to the extent of gearing.

40.2 Categories of Financial Instruments

40.3 Financial Risk Management Objectives

The Group's Treasury function provides services to its various corporate entities, coordinates access to local and international financial markets, monitors and manages the financial risks relating to the operations of the Group, mainly the investing and development functions. Its primary goal is to secure the Group's liquidity and to minimise the effect of the financial asset price variability on the cash flow of the Group. These risks cover market risks including foreign exchange risks and interest rate risk, as well as credit risk and liquidity risk.

40.4 Economic Market Risk Management

Foreign Exchange Risk

Currency risk arises when commercial transactions and recognised financial assets and liabilities are denominated in a currency that is not the Group's functional currency. Most of the Group's financial assets are denominated in the functional currency. Management is monitoring the net exposures and adopts policies to encounter them so that the net effect of devaluation is minimised.

40.4 Economic Market Risk Management

Interest Rate Risk

The Group's income and operating cash flows are substantially independent of changes in market interest rates as the Group has no significant interest-bearing assets. On 30 June 2024, cash and cash equivalent (including continued and discontinued operations) financial assets amounted to € 397.211 (31 December 2023: € 497.389) of which approx. €435 in UAH and €270.379 in RON (Note 25) while the remaining are mainly denominated in either GBP, USD or €.

The Group is exposed to interest rate risk in relation to its borrowings (including continued and discontinued operations) amounting to € 300.834 (31 December 2023: €114.794) as they are issued at variable rates tied to the Libor or Euribor. Management monitors the interest rate fluctuations on a continuous basis and evaluates hedging options to align the Group's strategy with the interest rate view and the defined risk appetite. Although no hedging has been applied for the reporting period, such may take place in the future if deemed necessary in order to protect the cash flow of a property asset through different interest rate cycles.

As at 30 June 2024 the weighted average interest rate for all the interest bearing borrowings of the Group stands at 4,73% (31 December 2023: 4,70%).

The sensitivity analysis for EURIBOR changes applying to the interest calculation on the borrowings principal outstanding as at 30 June 2024 is presented below:

The Group's exposures to financial risk are also discussed in Note 7.

40.5 Credit Risk Management

40.6 Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which applies a framework for the Group's short, medium and long term funding and liquidity management requirements. The Treasury function of the Group manages liquidity

risk by preparing and monitoring forecasted cash flow plans and budgets while maintaining adequate reserves. The following table details the Group's contractual maturity of its financial liabilities. The tables below have been drawn up based on the undiscounted contractual maturities including interest that will be accrued.

40.6 Liquidity Risk Management

Continued Operations

• Events after the end of the reporting period
• Extraordinary General Meeting of the Shareholders

During the Extraordinary General Meeting (EGM) of the Company, held on 10 July 2024, all resolutions proposed to shareholders were duly passed. Following the approval of the resolutions at the EGM, the necessary changes to the Company's share capital structure, as set out in the Notice of EGM and described in the following RNS, https://www.investegate.co.uk/announcement/rns/secure-property-development-investment-di---spdi/result-of-egm-/8304309, will be undertaken.

[1] Sources: World Bank Group, Eurostat, EBRD, National Institute of Statistics- Romania, National Institute of Statistics - Ukraine, IMF, European Commission.