ACM: Acme Corporation SIA consolidated annual accounts for the year 2015
OREANDA-NEWS. Acme Corporation SIA (hereinafter - ‘the Company’ or ‘Acme Corporation’) and its subsidiaries (hereinafter - ‘the Group’) invest in the operation and management of rental real estates (offices, retail and land development) in Latvia. As at 31 December 2015 Acme Corporation was the parent for three Latvian registered limited liability companies - Neatkar?g? patentu a?ent?ra SIA (office anchored real estate), Big Truck SIA (logistic development) and Slokas 161 SIA (retail anchored real estate).
In October 2014 management signed a share purchase agreement for the sale of subsidiaries Apex Investments SIA (Apex Investments) and Tukums Projekts SIA (Tukuma Projekts) to Hili Properties BV. The sale concluded on 30 January 2015.
Due to the fact that the Group has positive equity and positive net margin, there are no further doubts about its going concern position.
In both office and retail segments rents were stable. Delinquent rents are being well managed at the moment by our property manager.
For the year ended 2015 the Latvian statistics service report inflation at 0.2%. For this reason the Group will be in a position to upward revise rent charges in 2016, where applicable, only marginally.
Retail
At the end of January 2015 Apex Investments and Tukums Projekts were sold.
A separate company SIA Slokas 161 (Slokas 161) for the Slokas property was established early in January 2015 since management did not want to mix grocery anchored retail with other anchored retail. Transfer of Slokas property from Apex Investments to Slokas 161 took place in January 2015. During the year Slokas 161 signed a lease agreement with Lemon Gym for the development of 800 meters of space. The lease will require approximately EUR 150 000 of capital investment. This lease will have a positive impact on the cash flow.
Office
For our offices gross rent has settled to a market rate of EUR 11.00 to EUR 12.00 per square meter per month. There are some historical outliers to the current market rate pulling the offices average below current market. At Citadeles iela 12 the remaining 400 vacant meters have been leased. To prepare the space for occupancy EUR 80 000 will need to be invested.
Land
Management has engaged an architectural firm to prepare the detailed planning for the property. Detailed planning is expected to be complete during 2016.
Bond
Acme Corporation has made four quarterly repayment of principal to bondholders of record for 2015. Acme Corporation has made all coupon payments on the bonds to date.
During the year a subsidiary of Acme has purchased 3,805 bonds. Acme now directly or indirectly via a subsidiary owns 4,205 bonds. There remain 825 bonds outstanding and free floating on the Riga exchange at close of 2015.
Senior Debt
In March 2015 the debt pertinent to continuing operations was extended until February 2018.
At the time of writing one month EURIBOR is quoted at approximately minus 0.34%. Management has agreed with our Senior lender that our debt has a floor of zero percent. These rates are unprecedentedly low and have positive impact onto the cash flow.
The Group still is focused on conserving its cash flow and internally developing its portfolio. With this in mind, the group has agreed the purchase of Mui?as Parks SIA in order to gain 100% control of the development land in Kekava parish. Nevertheless, the Group is now positive about acquisitions that can add synergy and net positive results to the group as a whole.
Note | 2015 | 2014 | |
EUR | EUR | ||
CONTINUING OPERATIONS | |||
15 | Revenue | 1 280 068 | 1 220 469 |
16 | Cost of sales | (706 016) | (588 411) |
6 | (Impairment charge)/ reversal of impairment charge on non-financial assets | (391 500) | 2 331 654 |
Gross profit | 182 552 | 2 963 712 | |
Selling expenses | (23 023) | (15 098) | |
17 | Administrative expenses | (101 530) | (59 148) |
Other operating income | 8 181 | 618 | |
18 | Other operating expenses | (236 045) | (61 134) |
Operating profit/ (loss) | (169 865) | 2 828 950 | |
19 | Finance income | 2 762 562 | 228 029 |
20 | Finance costs | (332 840) | (531 214) |
Profit before income tax | 2 259 857 | 2 525 765 | |
21 | Income tax | (42 240) | (362 493) |
Profit for the year from continuing operations | 2 217 617 | 2 163 272 | |
DISCONTINUED OPERATIONS | |||
4 | Profit for the year from discontinued operations | 13 035 497 | 55 672 |
PROFIT FOR THE YEAR | 15 253 114 | 2 218 944 | |
Other comprehensive income | - | - | |
Total comprehensive income for the year | 15 253 114 | 2 218 944 | |
Attributable to: | |||
Equity holders of the Company | 15 253 114 | 2 218 944 | |
Note | 31.12.2015 | 31.12.2014 | |
EUR | EUR | ||
ASSETS | |||
Non-current assets | |||
5 | Property, plant and equipment | 144 647 | 104 492 |
6 | Investment property | 12 228 446 | 13 005 544 |
7 | Loans | - | 8 860 |
Other financial assets | - | 4 000 | |
12 373 093 | 13 122 896 | ||
Current assets | |||
4 | Assets held for sale | - | 10 070 803 |
Inventory | 56 | - | |
8 | Trade receivables | 16 697 | 8 543 |
Current income tax assets | 50 184 | - | |
7 | Loans | 9 125 | 3 876 |
9 | Other debtors | 482 401 | 49 660 |
10 | Cash and cash equivalents | 226 757 | 170 150 |
785 220 | 10 303 032 | ||
Total assets | 13 158 313 | 23 425 928 | |
EQUITY | |||
Capital and reserves attributable to equity holders of the Group | |||
11 | Share capital | 2 844 | 2 844 |
Accumulated deficit | (10 526 513) | (12 745 457) | |
Profit for the year | 15 253 114 | 2 218 944 | |
Total equity | 4 729 445 | (10 523 669) | |
LIABILITIES | |||
Non-current liabilities | |||
12 | Borrowings | 5 296 713 | 6 498 609 |
13 | Deferred income tax liabilities | 1 036 162 | 993 972 |
6 332 875 | 7 492 581 | ||
Current liabilities | |||
4 | Liabilities held for sale | - | 16 814 795 |
12 | Borrowings | 1 722 463 | 9 275 886 |
14 | Trade and other payables | 373 480 | 316 199 |
Current income tax liabilities | 50 | 50 136 | |
2 095 993 | 26 457 016 | ||
Total liabilities | 8 428 868 | 33 949 597 | |
Total equity and liabilities | 13 158 313 | 23 425 928 |
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