@CONSOLIDATED COMPANY · 160000 Loans to Individuals-Mortgage loans 0,00 160001 Accrued interest on mortgage loans 0,00 160002 Fair Value Adjustment at initial recognition of POCI

AGI-RRE ZEUS SRL

IFRS FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2019

AGI-RRE ZEUS SRL


AS OF DECEMBER 31, 2019

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CONTENTS

INDEPENDENT AUDITOR’S REPORT 1 – 3

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 4

STATEMENT OF FINANCIAL POSITION 5

STATEMENT OF CHANGES IN EQUITY 6

STATEMENT OF CASH FLOWS 7

NOTES TO THE IFRS FINANCIAL STATEMENTS 8 – 28

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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

In thousands of RON

For the year

ended December 31,

2019

For the year ended

December 31, 2018

Notes

Depreciation expenses 4 (1) (2) Other direct property operating expenses 13 (1,541) (476) Other expenses 13 (285) (122)

(Loss) / Gain from the sales of investment property 12 (4,237) 43

Operating profit/(loss) (6,064) (557)

Gains from foreign exchange 132 772 Finance income 14 141 5

Finance costs 14 - (1,039)

Profit/(loss) before income tax (5,791) (819)

Income tax expense 15 - - Profit/(loss) for the year (5,791) (819)

Other comprehensive income - -

Total comprehensive income for the year (5,791) (819)

Drafted by: Approved by:

ESPECIAL AUDIT SRL Aristeidis Mathiopoulos Ana Nicolescu Administrator Alexandros Mengos Administrator

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STATEMENT OF FINANCIAL POSITION

In thousands of RON

Notes December 31,

2019 December 31,

2018

Assets

Non-Current assets

Investment property 4 - 63,207

Total non-current assets - 63,207

Current assets

Trade receivables 6 22,833 6,056

Other assets 5 731 441

Cash and cash equivalents 7 55,006 14,597

Total current assets 78,570 21,094

Total assets 78,570 84,301

Equity

Share capital 8 165,865 165,865

Accumulated losses (87,460) (81,669)

Total equity 78,405 84,196

Liabilities

Trade and other payables 9 165 105

Total current liabilities 165 105

Total liabilities 165 105

Total equity and liabilities 78,570 84,301

Drafted by: Approved by: ESPECIAL AUDIT SRL Aristeidis Mathiopoulos Ana Nicolescu Administrator

Alexandros Mengos Administrator

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STATEMENT OF CHANGES IN EQUITY

In thousands of RON

Share

Reserves Retained earnings

Total

capital equity

Balance at January 01, 2018 - - (80,850) (80,850)

Loss for the year - - (819) (819) Other comprehensive income for

the year - - - -

Total comprehensive income

for the year - - (819) (819)

Share capital increase 165,865 - - 165,865

Balance at December 31,2018 165,865 - (81,669) 84,196

Share Reserves

Retained earnings

Total Capital equity

Balance at January 01, 2019 165,865 - (81,669) 84,196

Loss for the year - - (5,791) (5,791)

Other comprehensive income for the year - - - -

Total comprehensive income for the year - - (5,791) (5,791)

Balance at December 31,2019 165,865 - (87,460) 78,405

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STATEMENT OF CASH FLOWS In thousands of RON 2019 2018

Cash flows from operating activities Losses before income tax (5,791) (819)

Depreciation expense

1

2

Finance income (141) (5)

Gain from foreign differences - (772) Finance costs - 1,039 (Gain)/Loss from sales of investment property 4,237 (43) Adjustment related to borrowings currency conversion - (379)

Other adjustments 189 9 Changes in working capital (Increase)/decrease in trade receivables and other assets (570) (100) Increase/(Decrease) in trade and other payables 60 24

Cash generated from operations (2,015) (1,044)

Income tax paid - -

Net cash used in operating activities (2,015) (1,044)

Cash flows from investing activities Proceeds from sale of investment property 42,283 9,317 Interest received 141 -

Net cash from investing activities 42,424 9,317

Cash flows from financing activities Issue of share capital - 167,011

Repayments of borrowings and interest - (162,781)

Net cash from financing activities - 4,230

Net increase in cash and cash equivalents 40,409 12,503

Cash and cash equivalents at December 31, 2018 14,597 2,094

Cash and cash equivalents at December 31, 2019 55,006 14,597

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1. REPORTING ENTITY

AGI-RRE ZEUS SRL (“The Company”) is a company registered in Romania. The address of the

Company’s registered office is Bucharest, district 1, Grigore Alexandrescu Street, no. 85, floor. 1.

The Company is part of the Alpha Bank Group. The Company is 100% owned by ZERELDA LIMITED, with

headquarter in Cyprus.

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

property.

2. BASIS OF PREPARATION a) Statement of compliance

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

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

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

Council of the European Union on 19 July 2002.

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

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

statement of comprehensive income, the statement of changes in equity and the statement of cash flows.

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

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

accounts. Accordingly, RAS accounts were adjusted, if necessary, to harmonize, in all material respects,

with IFRS as adopted by the European Union.

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

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

- grouping more elements into more comprehensive categories;

- disclosure requirements in accordance with IFRSs.

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

indicated.

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

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

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

b) Functional and presentation currency

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

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

in RON, rounded at the closest RON value, which the Company’s management has chosen as

presentation currency. c) Going Concern Principle

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

Company will continue in the next 12 months.

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

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

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

operates.

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2. BASIS OF PREPARATION (continued)

The main factors that cause uncertainties regarding the application of this principle relate to the economic

environment in Romania and abroad, as well as to the effects of the spread of coronavirus (Covid-19) in

Europe in the first quarter of 2020.

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

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

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

to adversely affect the ability of the clients to repay their debts towards the Company.

However even in case of small decreases in land prices we expect the demand for plots of land in Bucharest

area to remain strong.

Based on the above and taking into account:

- the company’s high capital

- significant cash available in the bank accounts which can cover operating expenses for long periods of

time

- the decisions of the European union countries to adopt a series of fiscal and other measures to stimulate

the economy

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

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

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

and assumptions that affect the application of accounting policies and the reported amounts of assets and

liabilities. Actual results may differ from these estimates. Estimates and underlying assumptions are

reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which

the estimates are revised and in any future periods affected.

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

below:

- Impairment Provision for Expected Credit Losses of Financial Assets

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

balances using simplified approach.

3. SIGNIFICANT ACCOUNTING POLICIES

a) Accounting policies

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

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

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

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

➢ Amendment to International Financial Reporting Standard 9 “Financial Instruments”:

Prepayment Features with Negative Compensation (Regulation 2018/498/22.3.2018)

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

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

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

other comprehensive income. The amendment to IFRS 9 clarifies that a financial asset passes the SPPI

criterion regardless of the event or circumstance that cause the early termination of the contract and

irrespective of which party pays or receives reasonable compensation for the early termination of the

contract.

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

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3. SIGNIFICANT ACCOUNTING POLICIES (continued)

➢ International Financial Reporting Standard 16 “Leases” (Regulation 2017/1986/31.10.2017)

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

• IAS 17 “Leases”

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

• SIC 15 “Operating Leases – Incentives” and

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

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

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

the classification of leases as either operating or finance is eliminated. A lessee is required to recognize,

for all leases with term of more than 12 months, the right-of-use asset as well as the corresponding

obligation to pay the lease payments. The above treatment is not required when the asset is of low value.

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

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

estimate of dismantling costs.

At initial recognition, the lease liability is equal to the present value of the lease payments that are not paid

at that date.

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

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

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

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

occur. In case that an amendment, curtailment or settlement takes place IAS 19 requires a company to

remeasure its net defined benefit liability or asset.

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

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

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

curtailment or settlement on the requirements regarding the asset ceiling.

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

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

Long-term Interests in Associates and Joint Ventures

(Regulation 2019/237/8.2.2019)

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

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

or joint venture —to which the equity method is not applied—should be accounted for using IFRS 9,

including its impairment requirements. In applying IFRS 9, the entity does not take account of any

adjustments to the carrying amount of long-term interests that arise from applying IAS 28.

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

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➢ Improvements to International Accounting Standards – cycle 2015-2017

(Regulation 2019/412/14.3.2019)

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

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

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

➢ IFRIC Interpretation 23 “Uncertainty over Income Tax Treatments”

(Regulation 2018/1595/23.10.2018)

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

application of recognition and measurement requirements in IAS 12 when there is uncertainty over income

tax treatments. The Interpretation specifically clarifies the following:

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

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

the uncertainty.

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

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

information when making those examinations.

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

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

tax treatment.

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

information.

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

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

standards which are effective for annual periods beginning after 1.1.2019 and have not been early adopted

by the Company.

➢ Amendment to International Financial Reporting Standard 9 “Financial Instruments”, to

International Accounting Standard 39 “Financial Instruments” and to International

Financial Reporting Standard 7 “Financial instruments: Disclosures”: Interest rate

benchmark reform (Regulation 2020/34/15.1.2020)

Effective for annual periods beginning on or after 1.1.2020

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

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

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

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

that the interest rate benchmark is not altered as a result of the interest rate benchmark reform. Relief is

provided regarding the following requirements:

- the highly probable requirement in cash flow hedge,

- prospective assessments,

- separately identifiable risk components.

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➢ Amendments to International Accounting Standard 1 “Presentation of Financial

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

in Accounting Estimates and Errors: “Definition of material”

(Regulation 2019/2104/29.11.2019)


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

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

certain aspects of the definition.

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

be expected to influence decisions that the primary users of general-purpose financial statements make on

the basis of those financial statements, which provide financial information about a specific reporting entity.

The amendments include examples of circumstances that may result in material information being

obscured. The IASB has also amended the definition of material in the Conceptual Framework to align it

with the revised definition of material in IAS 1 and IAS 8.

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

statements.

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

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

been early applied by the Company.

➢ Amendment to International Financial Reporting Standard 3 “Business Combinations”:

Definition of a Business


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

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

of assets. The amendments:

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

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

based on current condition of acquired elements rather than on the market participant’s ability to

integrate them into his own processes,

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

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

from investment services,

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

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

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

a business or group of assets has been acquired.


statements.”

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➢ Amendment to International Financial Reporting Standard 10 “Consolidated Financial

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

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

venture.

Effective date: To be determined.

On 11.9.2014 the International Accounting Standards Board issued an amendment to IFRS 10 and IAS 28

in order to clarify the accounting treatment of a transaction of sale or contribution of assets between an

investor and its associate or joint venture. In particular, IFRS 10 was amended in order to be clarified that

in case that as a result of a transaction with an associate or joint venture, a parent loses control of a

subsidiary, which does not contain a business, as defined in IFRS 3, it shall recognise to profit or loss only

the part of the gain or loss which is related to the unrelated investor’s interests in that associate or joint

venture. The remaining part of the gain from the transaction shall be eliminated against the carrying

amount of the investment in that associate or joint venture. In addition, in case the investor retains an

investment in the former subsidiary and the former subsidiary is now an associate or joint venture, it

recognises the part of the gain or loss resulting from the remeasurement at fair value of the investment

retained in that former subsidiary in its profit or loss only to the extent of the unrelated investor’s interests

in the new associate or joint venture. The remaining part of the gain is eliminated against the carrying

amount of the investment retained in the former subsidiary.

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

only when the involved assets do not constitute a business. Otherwise, the total of the gain or loss shall be

recognised.

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

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

International Accounting Standards Board at a future date after taking into account the results of its project

relating to the equity method.

➢ International Financial Reporting Standard 14 “Regulatory deferral accounts”


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

limited-scope, addresses the accounting treatment and the disclosures required for regulatory deferral

accounts that are maintained in accordance with local legislation when an entity provides rate-regulated

goods or services. The scope of this standard is limited to first-time adopters that recognized regulatory

deferral accounts in their financial statements in accordance with their previous GAAP. IFRS 14 permits

these entities to capitalize expenditure that non-rate-regulated entities would recognize as expense.

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

the final standard.

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

➢ International Financial Reporting Standard 17 “Insurance Contracts”


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

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

the measurement of insurance contracts.

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The key principles in IFRS 17 are the following:

An entity:

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

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

if a specified uncertain future event adversely affects the policyholder;

• separates specified embedded derivatives, distinct investment components and distinct

performance obligations from the insurance contracts;

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

• recognises and measures groups of insurance contracts at:

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

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

is consistent with observable market information; plus (if this value is a liability) or minus

(if this value is an asset)

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

service margin);

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

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

loss-making, an entity recognises the loss immediately;

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

or expenses; and

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

within the scope of IFRS 17 have on the financial position, financial performance and cash flows

of an entity.

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

the IFRS 17 effective date to 1.1.2022.

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

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

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


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

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

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

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

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

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


statements. b) Foreign currency transactions

Transactions in foreign currencies are translated into RON (functional currency) at the official closing exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into RON at the closing exchange rate of that date. Exchange differences arising on the settlement of monetary items or on translating monetary items at the closing exchange rate as of balance sheet date are recognized in the statement of comprehensive income

Non-monetary assets and liabilities are translated using the rate of exchange at the transaction date, except for non-monetary items denominated in foreign currencies that are measured at fair value which are

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translated at the exchange rate of the date that the fair value is determined. The exchange differences relating to these items are part of the change in fair value and they are recognized in the income statement or recorded directly in equity depending on the classification of the non-monetary item

The exchange rates of the main foreign currencies were:

Currency December 31,

2019 December 31,

2018

EUR 1: LEU 4.7793 1: LEU 4.6639

USD 1: LEU 4.2608 1: LEU 4.0736 c) Cash and cash equivalents Cash and cash equivalents include current accounts and deposits at banks.

In the preparation of the statement of cash flows, the Company considers the following as cash and cash equivalents: actual cash, current bank accounts, deposits with initial maturity up to 3 months and

interest thereon. d) Financial instruments

Initial recognition

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

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

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

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

and trade receivables

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

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

contractual cash flows,

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

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

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

tested for impairment based on the procedures described in note 2(h).

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

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

the rate that exactly discounts the estimated future cash payments or receipts to the gross carrying amount

of a financial asset and to the amortized cost of a financial liability through the contractual life of a financial

instrument or the next repricing date. When calculating the effective interest rate, the Company estimates

the expected cash flows by considering all the contractual terms of the financial instrument but does not

consider the expected credit losses. Business model assessment

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

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

cash flows, selling financial assets or both. The Company’s business model is determined at a level that

reflects how groups of financial assets are managed together to achieve a particular business objective.

Accordingly, business model does not depend on management’s intentions for an individual instrument but

it is determined on a higher level of aggregation.

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

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

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

For the purposes of applying the SPPI assessment:

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

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

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

principal amount outstanding during a particular period of time and for other basic lending risks

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

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

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

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

and interest on the principal amount outstanding.

Derecognition of financial assets

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

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

asset in a transaction in which it has transferred substantially all the risks and rewards of ownership.

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

- the carrying amount; and

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

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

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

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

recognized

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

that are part of a debt instrument interest) and the part transferred qualifies for derecognition in its

entirety, the previous carrying amount of the larger financial asset shall be allocated between the part

that continues to be recognized and the part that is derecognized, based on the relative fair values of

those parts on the date of the transfer. For this purpose, a servicing asset shall be treated as a part that

continues to be recognized.

Subsequent measurement of financial liabilities

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

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

Derecognition of financial liabilities

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

discharged, cancelled or expire.

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

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

new one.

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

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

substantially different if the discounted present value of the cash flows under the new terms (including

any fees paid net of any fees received), discounted using the original effective interest rate, is at least

10% different from the present value of the remaining cash flows of the original financial liability.

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In cases of derecognition, the difference between the carrying amount of the financial liability (or part of the financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in statement of profit or loss.

Offsetting financial assets and financial liabilities Financial assets and liabilities are offset, and the net amount is presented in the balance sheet, only in cases when the Company has both the legal right and the intention to settle them on a net basis, or to realize the asset and settle the liability simultaneously. e) Fair value

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

transaction between market participants at the measurement date, in the principal market for the asset

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

liability.

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

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

from an exchange, dealer, broker, pricing service or regulatory agency, and those prices represent actual

and regularly occurring market transactions on an arm’s length basis.

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

valuation techniques, appropriate in the circumstances, and for which sufficient data to measure fair

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

unobservable inputs. If observable inputs are not available, other model inputs are used which are based

on estimations and assumptions such as the determination of expected future cash flows, discount rates,

probability of counterparty default and prepayments. In all cases, the Company uses the assumptions

that ‘market participants’ would use when pricing the asset or liability, assuming that market participants

act in their economic best interest.

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

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

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

• Level 2 inputs: directly or indirectly observable inputs

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

observable inputs are not available f) Investment property

The Company includes in this category land held for capital appreciation and expenses capitalized related

to residential project development.

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

the acquisition of the asset.

Subsequently investment property is measured at cost less accumulated depreciation and impairment

losses.

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

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

The estimated useful lives over which depreciation is calculated using the straight-line up to 50 years.

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

the “Investment Property” category occur.

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g) Impairment on non- financial assets

The Company assesses as at each balance sheet date its non-financial assets for impairment,

particularly, right of use assets and at least annually property, plant and equipment and investment

property.

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

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

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

of the passage of time or normal use.

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

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

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

- Significant unfavorable changes in foreign exchange rates.

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

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

value in use.

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

- The existence of leased properties that are neither used nor leased by the Company.

(specifically for right of use assets)

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

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

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

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

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

generating unit through their use and not from their disposal. h) Impairment

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

at amortised cost and recognizes the related loss allowance.

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

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

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

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

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

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

credit quality with respect to initial disbursement. Specifically:

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

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

having low credit risk (low credit risk exemption);

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

significantly deteriorating since initial recognition;

• stage 3: includes impaired credit exposures.

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

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

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

For receivables from customers derived from trades receivables, the loss

allowance is measured at an amount equal to the lifetime expected credit losses (there is no stage allocation) based on the simplified approach provided by IFRS

9.

AGI-RRE ZEUS SRL



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i) Provisions and contingent liabilities

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

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

economic benefits will be required to settle the obligation.

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

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

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

expected to settle the obligation.

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

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

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

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

recognized for future operating losses.

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

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

occur.

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

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

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

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

is presented net of the amount of the reimbursement.

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

relate to:

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

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

wholly within the control of the Company, or

• present obligations resulting from past events for which:

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

- the amount of liability cannot be measured reliably.

The Company provides disclosures for contingent liabilities taking into consideration their

materiality.

j) Share capital Ordinary shares are recognized in the share capital. Incremental costs directly attributable to an issuance of ordinary shares are deducted from capital, net of taxation effects. k) Revenue recognition

Revenue includes gains from the sale of investment property and is recognised in statement of profit or loss at the point in time of handing the ownership.

AGI-RRE ZEUS SRL



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l) Finance income and finance costs Financial revenues consist of revenue and expenses recognized in the income statement for all interest-bearing financial assets and liabilities.

Income and expense are recognized on an accrual basis and are measured using the effective interest rate. m) Tax

Income tax consists of current and deferred tax.

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

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

date.

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

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

taxation purposes.

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

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

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

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

sheet date.

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

be available against which the asset can be utilized.

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

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

the respective income tax is also recognized in equity.

n) Related parties definition

According to IAS 24, a related party is a person or entity that is related to the entity that is preparing its financial statements. For the Company, in particular, related parties are considered:

a) An entity is part of Alpha Bank Group. b) A person or an entity that have control, or joint control, or significant influence over

the Company.

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

AGI-RRE ZEUS SRL



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4. INVESTMENT PROPERTY

In thousands of RON Land and Land Improvements Total

Cost

Balance at January 01, 2018 133,115 133,115

Additions - -

Disposals 30,030 30,030

Transfers - -

Balance at December 31, 2018 103,085 103,085


Additions - -

Disposals 103,085 103,085

Transfers - -

Balance at December 31, 2019 - -

Depreciation and impairment loss Balance at January 01, 2018 54,578 54,578

Depreciation 2 2

Impairment (14,700) (14,700)

Disposals 2 2

Balance at December 31, 2018 39,878 39,874


Depreciation 1 1

Sale of investment property(see note 12) (39,868) (39,868)

Disposals (11) (11) Balance at December 31, 2019 - -

Balance value at January 01, 2018 78,537 78,537

Balance value at December 31, 2018 63,207 63,207

Balance value at December 31, 2019 - -

The company owns land held for capital appreciation, in surface of approx. 45,505 square meters

as of December 31, 2018 (formed of several plots) and land improvements located at 4 Circumvalatiunii Street, Timisoara. During the year, the Company sold the remaining land for the total value of 12,5 million EUR.

AGI-RRE ZEUS SRL



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5. OTHER ASSETS

In thousands of RON December 31,

2019 December 31,

2018

VAT to be recovered VAT not due

Prepaid expenses

688 -

43

386 13

42

731 441

6. TRADE RECEIVABLES In thousands of RON December 31,

2019 December 31,

2018

Trade receivables from corporates Other trade receivables Less: Provision for impairment of

trade receivables

22,833 -

-

6,056 -

-

22,833 6,056

The receivable in balance is related to the selling of land plot situated in Timisoara, Calea Circumvalatiunii Street. The receivable was collected during 2020.

7. CASH AND CASH EQUIVALENTS

In thousands of RON

December 31,

2019

December 31,

2018

Cash in current accounts – RON 49,498 9,223

Cash in current accounts – EUR 5,508 5,374

55,006

14,597

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

8. SHARE CAPITAL AND RESERVES ZERELDA LIMITED is the Sole owner of the capital of AGI-RRE ZEUS SRL. As at December 31, 2019 the authorized capital of the company is 165.865 thousand RON distributed in 16.586.485 shares with nominal value of RON 10 each.

AGI-RRE ZEUS SRL



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9. TRADE AND OTHER PAYABLES


2019 December 31,

2018

Trade payables 154 80

Accruals 11 25

165 105

Trade payables represent outstanding balance of current suppliers and accrual represent invoices to be received from suppliers, related to management property services, accounting, audit and security services.

10. FINANCIAL RISK MANAGEMENT Overview The Company has exposure to the following risks from its use of financial instruments:

• credit risk • liquidity risk

• currency risk • interest rate risk.

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

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

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:


2019 December 31,

2018

Cash and cash equivalents 55,006 14,597

Trade and other receivables 22,833 6,056

Other assets 731 441

78,570 21,094

Credit risk TOTAL NOT RATED BB B

Cash and cash equivalents 55,006 -

49,499

5,507

Trade and other receivables 22,833 22,833 - -

Other assets 731 731 - -

78,570 23,564

49,499

5,507

All exposures are classified as stage 1.

AGI-RRE ZEUS SRL



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

have sufficient liquidity to meet its liabilities when due. The maturities of assets and liabilities are the following: December 31, 2019

In thousands of RON Total

Below 1 month

1-3 months

3-6 months

6-12 months

More

than 1 year

Trade receivables 22,833 - 22,833 - - -

Other assets 731 - 302 - - 386 Cash and cash

equivalents 55,006 31,006 24,000 - - - Trade and other

payable (165) (165) - - - -

NET POSITION 78,405 30,841 47,135 - - 386

December 31, 2018

In thousands of RON Total Below 1

month

1-3

months

3-6

months

6-12

months

More than 1

year

Trade receivables 6,056 - - - - 6,056

Other assets 441 42 13 - - 386 Cash and cash

equivalents 14,597 5,597 9,000 - - - Trade and other

payable (105) (105) - - - -

NET POSITION 20,989 5,534 9,013 - - 6,442

Interest rate risk

Interest rate risk is the risk that the value of financial instruments fluctuates due to changes in market interest rates. The company has short term bank deposits; the effect of the interest rate risk is marginal.

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

Cash and cash equivalents 55,006 49,498 5,508

Other assets 731 731 -

Trade receivables 22,833 22,833 -

Trade and other payables (165) (163) (2)

AGI-RRE ZEUS SRL



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In thousands of RON December 31, 2018 Total RON EUR

Cash and cash equivalents

14,597

9,223

5,374

Other assets 441 441 -

Trade receivables 6,056 - 6,056

Trade and other payables (105) (104) (1)

11. FAIR VALUE

The following table analyses within the fair value hierarchy the company’s financial assets and financial liabilities (by class) not measured at fair value:

December 31, 2019

December 31, 2019

December 31, 2018

December 31, 2018

Book Value Market Value Book Value Market Value

Trade receivables 22,833 22,833 6,056 6,056

Other assets 731 731 441 441 Cash and cash

equivalents 55,006 55,006 14,597 14,597

Total Assets 78,570 78,570 21,094 21,094

Trade payables 165 165 105 105

Total Liabilities 165 165 105 105

12. CASH PROCEEDS FROM THE SALE OF INVESTMENT PROPERTY

In thousands of RON 2019 2018

Revenue from sale of investment property 58,980 15,373

Cost of sales of investment property disposed (103,085) (30,030)

Reversal of investment property impairment sold 39,868 14,700

(4,237) 43

Impairment of investment property was recorded in order to adjust the value of investment property at its recoverable amount.

13. OTHER EXPENSES & OTHER DIRECT PROPERTY 13.1. Other expenses


2019 December 31,

2018

Brokerage and consultancy services (8) (59) Audit and accounting services (64) (47) Other expenses (213) (16)

Total (285) (122)

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13.2. Other direct property operating expenses


2019 December 31,

2018

Property tax and fees (84) (48) Legal services (86) (108) Electricity, heating, cold water (2) (2) Property management services (170) (168) Security services (138) (150) Consultancy services (1,061) -

Total (1,541) (476)

14. FINANCE INCOME AND FINANCE COST In thousands of RON

December 31, 2019

December 31, 2018

Finance income 141 5

Interest Income 141 5

Finance costs - (1,039)

Interest Expense related to borrowings

-

(1,039)

As of December 31, 2019, the company has no borrowings due to fully reimbursement of the bank loans existed. Therefore, no finance cost for 2019.

15. TAXES As of December 31, 2019, the Company recorded a cumulated fiscal loss in amount of 68,010 thousand of RON, for which the Company decided not to recognize a deferred tax asset due to the

lack of future imposable profits through which the fiscal loss could be used. Also, the Company did not record deferred tax from temporary deductible and imposable differences due to the lack of future imposable profits. The breakdown of fiscal loss until the prescription year is the following:

Year Fiscal Loss

2020 (6,180)

2021 (3,434)

2025 (14,449)

2026 (43,947)

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A reconciliation between the effective and nominal tax rate is provided below: In thousands of RON

December 31,

2019

Profit / (Loss) before Taxes (5,791)

Income tax according to nominal tax rate (2019: 16%) (927) Increase/(decrease) due to: Non-taxable income 6,379

Non-deductible expenses

Other elements

-

5,452

Income tax -

16. RELATED PARTIES

The Company carries out transactions with the following related parties:

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

The Company has receivables from related parties as follows:

In thousands of RON December 31, 2019 December 31, 2018

ALPHA BANK ROMANIA – Cash and cash equivalents ALPHA BANK ATHENS - Cash and cash equivalents

49,499 5,507

9,223 5,374

ALPHA REAL ESTATE SERVICES – Other assets 43 42

55,049 14,639

The Company has liabilities to related parties as follows:

In thousands of RON December 31, 2019 December 31, 2018

ALPHA REAL ESTATE SERVICES – Trade and other payables 137 50

137 50

The income of Company from related parties are as follows:


2019 December 31,

2018

ALPHA BANK ROMANIA SA – FINANCE INCOME 142 5

142 5

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The expenses of Company to related parties are as follows:

December 31,

2019 December 31,

2018

ALPHA BANK A.E. LONDON BRANCH – Finance cost - 1,001

ALPHA BANK ROMANIA SA – Finance cost - 38

ALPHA BANK ROMANIA SA – Other expenses 1 1 ALPHA REAL ESTATE SERVICES - Other direct property operating expenses 242 168 ALPHA ASTIKA AKINITA A.E. - Other direct property operating expenses 10 -

253 1,208

During 2018 all borrowings from Alpha Bank have been repaid in full.

17. CONTINGENT LIABILITIES

There are no litigations as of December 31, 2019. The company had no tax audit by local tax authorities during the current year.

The Company does not have any contingent liabilities. 18. EVENTS AFTER REPORTING DATE

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

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

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

our customers in these harsh times.

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

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

entrepreneurship.

The company fully collected all the receivables on March 2020.

There are no other significant events after the reporting date which requires disclosure in the IFRS

Financial Statement as at December 31, 2019.

Documents

@CONSOLIDATED COMPANY · 160000 Loans to Individuals-Mortgage loans 0,00 160001 Accrued interest on mortgage loans 0,00 160002 Fair Value Adjustment at initial recognition of POCI