OREANDA-NEWS. April 30, 2015. 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 of 31 December 2014 Acme Corporation was the parent for four Latvian registered limited liability companies – Apex Investments SIA (grocery anchored retail real estate), Neatkar?g? patentu a?ent?ra SIA (office anchored real estate), Tukuma Projekts SIA (DIY anchored retail real estate) and Big Truck SIA (property development). As of the date of approval of this report Acme Corporation no longer holds shares of Apex Investments SIA and Tukuma Projekts SIA.

Results for the year

Acme Corporation during the year continued the holding company operations.

During the financial year 2014 subsidiary Tukuma Projekts paid an accumulated dividend of EUR 500 000 to the Company. Acme Corporation used 100% of the dividend received to increase the share capital of Neatkar?g? patent a?ent?ra, being a large step in the correction of its negative equity.

During the financial year Acme Corporation entered into and concluded a share purchase agreement with Apex Investments for 100% of the shares in Neatkar?g? patent a?ent?ra owned by Apex Investments. Further, Acme Corporation entered into and concluded a share purchase agreement with Apex Investments for 100% of the shares in Big Truck owned by Apex Investments. The transactions were undertaken at arm’s length. Acme Corporation paid for the shares of Neatkar?g? patentu a?ent?ra and Big Truck by entering into netting off agreement with Apex Investments. As part of the netting off agreement Acme Corporation reversed in full a bad debt provision of the Apex Investment debt outstanding.

For the year ended 31 December 2014, overall Acme Corporation has experienced significant improvements. The year saw Acme Corporation significantly beat prior year 2013 net loss of EUR 1 144 to a profit in 2014 of EUR 3 689 521. The reported profit includes reversal of impairment on assets of EUR 3 214 267. When the impairment reversal is removed from the profit figure a more comparable profit of operations emerges of EUR 475 254 for the year ended 2014.

A separate company SIA Slokas 161 for the Slokas property was established early in January 2015 since management does 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.

Bond

Whilst the bond is listed, it continued to demonstrate a significant level of illiquidity in 2014.

Acme Corporation has made the first repayment of principal to bondholders of record with the January 2015 payment. The Company has made all coupon payments on the bonds to date. Funds have been reserved for settlement of coupon and principal due on 30 April 2015.

Sale of investments

In October 2015 management signed a share purchase agreement for the sale of Apex Investments SIA and Tukuma Projekts SIA to Hili Properties BV. Management believes that the sale offers a significant monetary benefit to the Group. Management intends to use the majority of proceeds to deleverage from Swedbank. The delivering will greatly reduce an asymmetrical risk associated with the current portfolio bondholders and equity positions that is amplified in the event of increased interest rates and reductions in gross revenue. The sale was closed on 30 January 2015.

Risk Management

The Company seeks to minimise potential adverse effects of identified financial risks. For the largest part of the year the terms and conditions of the loan to a subsidiary mirrored those of the bond. Financial assets which expose the Company to high credit risk concentration are cash held at bank and receivables under loan to the subsidiary. The latter was repaid in full in 2015. The Company’s counterparties in banking transactions are reputable local banks with adequate credit history.

Events after the balance sheet date

Except for events described in Note 17 to the financial statements, there have been no other events since the last date of the reporting year, which would have a significant effect on the financial position of the Company as at 31 December 2014.

Profit distribution

The management proposes to retain all the profit at the Company’s disposal.

 

 

  Notes     2014 2013
        EUR EUR
           
Net sales 2     500 000 -
Gross profit       500 000 -
Administrative expenses 3     (28 480) (905)
Other operating expenses 4     (443) (239)
Gain on reversal of impairment on equity investments in subsidiaries 6(c)     28 457 -
Gain on reversal of bad debt provisions on loan to a subsidiary 12(a)     3 185 810 -
Interest and similar income 12(a)     237 905 227 099
Interest expense and similar charges 11     (183 641) (227 099)
Profit/ (loss) before taxation       3 739 608 (1 144)
Corporate income tax 5     (50 087) -
Deferred tax 5     - -
Profit/ (loss) for the financial year       3 689 521 (1 144)

 

 

 

  

  Notes     31.12.2014 31.12.2013
        EUR EUR
Assets          
           
Non-current assets          
Non-current financial investments          
Equity investments in subsidiaries 6(b)     4 805 499 1 423
Loan to a subsidiary 12(a)     - 2 795 004
Other securities and investments 7     455 341 -
        5 260 840 2 796 427
Current assets          
Non-current assets held for sale 8     29 880 -
Loan to a subsidiary 12(a)     1 292 787 37 488
Receivables from related companies       121 9 530
Other securities and investments 7     32 213 -
Cash at bank 9     15 631 35 928
        1 370 632 82 946
           
Total assets       6 631 472 2 879 373
           
Liabilities and Shareholders’ Equity          
           
Shareholders’ equity          
Share capital 10     2 844 2 846
Retained earnings/ (accumulated loss)          
a) accumulated loss       (3 323 300) (3 322 157)
b) profit/ (loss) for the current financial year       3 689 521 (1 144)
        369 065 (3 320 455)
Creditors: amounts falling due after one year          
Non-convertible bonds 11     5 678 461 5 980 814
Borrowings from related parties 12(b)     - 96 755
Payables to related companies 12(c)     - 76 000
        5 678 461 6 153 569
Creditors: amounts falling due within one year          
Non-convertible bonds 11     347 975 37 488
Borrowings from related parties 12(b)     96 755 -
Payables to suppliers       4 257 218
Payables to related companies      12(c)     76 000 687
Tax liabilities 13     50 087 -
Accrued expenses       8 872 7 866
        583 946 46 259
           
Total liabilities and shareholders’ equity       6 631 472 2 879 373