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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Lewis Charles (See LSE:SPFL) | LSE:LCSS | London | Ordinary Share | GB00B0BV8078 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.75 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
23 June 2008 AIM : LCSS Lewis Charles Sofia Property Fund ("Lewis Charles" or "the Company" or "the Fund") Preliminary results for the year ended 31st December 2007 2007 Financial highlights - Value of the Lewis Charles Sofia Property Fund portfolio at 31st December 2007 is EUR 83.9 million compared to an acquisition cost of EUR 43.9 million - NAV of 116 pence - increase of 18% on the year before (2006 NAV: 98 pence) - Construction permit received and construction began at one of the Razlog/Bankso project sites in October 2007 - Sales on phase one at the Govedarci project commenced mid April 2008 - phase one is expected to be completed by the end of Q4 2008 - Construction at the disused tobacco factory in Plovdiv, Bulgaria's second most populous city, is expected to commence by early 2009 - Necessary permits for planning and construction at the Banya projects anticipated to be received by the beginning of 2009 - Charles Burton appointed as Chairman - The Fund's maiden sale, 10.3% of the BuySell project, to a Greek Insurance Company for EUR1,891,966 Commenting today, Loraine Pinel, Fund Manager of Lewis Charles Sofia Property Fund said "2007 was a year of steady progress for the Fund and we are pleased that this has continued into 2008. This progress has ranged from the granting of planning permission and the starting of construction right through to the sale of properties in Sofia. Despite this, the disappointing drop in share price has been a key concern. The Fund Managers and Board will nevertheless continue to focus on delivering projects on schedule in order to optimise shareholder value. We thank the shareholders for their continued support. Finally, the Fund welcomes Charles Burton as Chairman of the Board whose contribution I am sure will be exceedingly valuable." For further enquires - Loraine Pinel, Mark Anderson - Lewis Charles Securities Limited +44 (0) 20 7456 9100/+44 (0) 7876 560 787 Dominic Morley, Stuart Gledhill - Panmure Gordon +44 (0) 20 7459 3600 Ed Portman, Leesa Peters - Conduit PR +44 (0) 207 429 6607/+44 (0) 7733 363 501 Chairman's Statement It is with pleasure that I welcome shareholders to the 3rd financial report of The Lewis Charles Sofia Property Fund Limited. The reporting period covers the Company's operations for 2007. The fair value of these developments at 31st December 2007 is Euro 83.9 million (versus an acquisition cost of Euro 43.9 million). International Accounting Standards (IAS) dictates the basis on which investment properties are valued within financial statements. To comply with the IAS standards certain of our investments are treated as "properties under development" on the balance sheet and are recorded at the lower of cost and net realisable value. This is contrary to our policy for the calculation of the published valuation NAV where we record the fair value of property based on the valuations prepared by King Sturge and by Forton International; independent valuers not connected to the Company. A full reconciliation between the accounting NAV and our published valuation NAV is included in the notes to the financial statements. At the Balance Sheet date the published valuation NAV was 116 pence per share in comparison to the accounting NAV of 101 pence. I am also pleased to report that the published valuation NAV has risen to 116 pence compared to 101 pence as at the end of June 2007. An increase of 15 per cent. As announced in April my predecessor, Lord Howard of Penrith, has stepped down as Chairman and as a Director of the Company. I am honoured to have been appointed to this role and I would like to thank Lord Howard for his great contribution during the very important formative years of the Company. I am confident that the Company will continue to do well. The Company has acquired some valuable plots of land and is well-diversified in terms of location and project maturity (from unregulated agricultural land through to project construction and sales). Several of the projects are now either being developed or are in the process of obtaining final planning permits. Charles Burton 23rd June 2008 Investment Manager's Report Property Market 2007 was yet another good year for the Bulgarian property market (residential and commercial). The two most expensive cities in terms of residential properties are Sofia and Varna. Average prices at the end of 2007 were Euro927 per square metre for Sofia and Euro901 per square metre for Varna. The market in Sofia has become more competitive with approximately 1.4 million square metres of build area scheduled for completion during 2009. Most of these residential projects are being sold off plan. New supply is concentrated outside the city centre, particularly in the south and west. This is because it is now difficult to obtain large land plots in the city centre. In addition, transport has improved with the extension to the Sofia subway expected to be finished sometime in 2009. There has also been an increase in interest in new build houses (as opposed to apartments) around Sofia (Bistritsa, Marchaevo and Klanitsa) and other cities. Demand remains strong, particularly on the quality projects, both in Sofia and on the outskirts. Bank lending on commercial and residential projects is still strong. However, banks are becoming more selective on the projects they choose to lend to. Mortgage borrowing is also up on the year. This upward trend in prices is expected to continue as infrastructure around Sofia improves. Prices in second tier cities are also expected to rise and may even exceed the rate of increase of those in Sofia. The Economy After rapid growth, at above 6%, in both 2006 and 2007, the economy is expected to slow slightly, in both this year and the next. The growth rate is expected to remain close to 6% (ref: Oxford Economics). This compares very favourably with, for example, the Euro zone average, where growth is expected to be below 2% in both 2008 and 2009. This slowdown in the rate of expansion in the economy reflects the impact of the credit crunch on developed countries in Europe. Already Bulgaria's increase in consumer spending and import growth has fallen back, as seen in the data for final quarter of 2007. Export volumes, though, have kept up well and should continue to stimulate the economy. This suggests a better and sustainable balance in the economy. At a time of fragility in global financial markets, the large external gap is a concern. The last few years have seen the increasingly large current account deficit effectively covered by FDI inflows, but this will need to continue. Rising inflation has also been a concern. In March, Bulgarian inflation rose to 14.2%. However, this is expected to abate, providing there is a better harvest this year, after last year's drought. The continuing budget surplus is a healthy feature and provides a strong underpinning to the future performance of the economy. Overall, therefore, the economy appears to be in relatively good shape and this is likely to support the continued development of the property market, especially relative to those economies in the Euro zone. Strategy The Company's strategy is to own a portfolio of real estate projects in varying stages of maturity, from unregulated agricultural land through to projects ready for sale, and in different parts of the country. The backbone of the portfolio is the land bank. This has been selected by the Fund Managers because we believe that over time there should be a significant increase in the value of the land. For example, the area may be about to benefit from a significant upgrade in infrastructure (Kambanite Bistritsa and Govedarci); located on a junction of two Pan European Transnational Corridors (leading to a natural increase in employment) such as in Veliko Tarnovo and Plovdiv; or expected to benefit from an increase in disposable income (Dolna Banya, Banya and Plovdiv). The Investment Managers have attempted to reduce and spread risk by diversifying across the country. This allows the portfolio to benefit from the fact that increases in residential property prices are not synchronized across the country; they rise at different speeds at different times in different regions. This should allow a steady increase in profits over time as we can concentrate development on the next region most likely to benefit. The Directors are of the opinion that the Company is now well placed to benefit from the careful application of this strategy. Portfolio Overview Investments as of 31 December 2007 Area Build Area Cost Valuation M2 M2 (Euro) (Euro) 1 Govedarci 35,934 34,604 3,563,084 7,751,685 2 Razlog / Bansko 18,354 26,823 7,761,791 10,971,607 3 Plovdiv 12,151 12,712 3,890,334 4,475,000 4 Sofia Vetz Simeonovo 50,814 109,744 10,721,769 20,178,527 5 Veliko Tarnovo 13,443 26,886 2,494,253 3,353,584 6 Dolna Banya 48,548 57,621 1,661,755 1,962,446 7 Sofia Kambanite Bistritsa100,713 100,713 9,230,852 25,093,741 8 Banya 121,420 182,130 3,579,456 8,702,598 9 Other 16,357 16,357 975,228 1,457,902 ________ ________ ________ ________ Total 417,734 567,590 43,878,522 83,947,090 ________ ________ ________ ________ Options on these properties have been exercised and full ownership will be transferred to the Fund on satisfactory completion of projects by the developer. N.B. Some build areas are estimated subject to planning approval. Because of the provisions of IAS 2 some of these values may not be fully reflected in the balance sheet. A full reconciliation between the accounting NAV and the published value NAV is included in the notes to the Financial Statements. 1. Sofia (Buysell - VitoshaVets, Simeonovo and Krustova Vada) As reported on 16 May 2008, the Fund sold 10.3% of the total project with our first developer BuySell. This is equal to 11,272 square metres out of the project's 109,744 square metres of build area. The sold properties comprise 61 apartments, 10 offices, 6 shops and 31 underground parking spaces. The properties sold are part of the original options that were exercised in 2005 when the Fund was established. The price achieved in this sale is an average of Euro930 per square metre (excluding VAT) for the total build area. As the Fund originally invested a deposit equivalent to 24% of estimated total costs the proceeds of this transaction return a proportionate profit to the Fund (the total deposit paid was Euro10,252,971 million of which this sale has recouped Euro1,038,961). This sale results in the Fund receiving gross proceeds of Euro1,891,966 of which Euro1,038,961 represents the initial deposit on the property, which will be repaid immediately. The balance of Euro853,005 has been offset against the Fund's outstanding liability on completion of the total project with BuySell. The buyer is an International Insurance Company based in Greece. There remains strong interest from other institutional buyers and we expect to see more sales in the near future. We are also in the process of retaining one or two local agents to sell the apartments. Meantime, construction on all of the buildings of the BuySell project is well advanced with delivery expected in 2009. 2. Govedarci (Crystal Vale) The Crystal Vale development will consist of a main building containing 22 apartments and nine lodges each containing 13 apartments (a total of 139 apartments). The total build area will be approximately 13,600 square metres. Crystal Vale will also contain its own leisure facilities including a swimming pool, restaurant, bar, spa and tennis courts. The developer for the Crystal Vale project is Anglo-Bulgarian Real Estate Limited (A-BRE) (www.a- bre.com). A feature of the development is the construction of the lodges. These will be a prefabricated Canadian timber based construction. This system incorporates a very high degree of thermal insulation together with a heat recovery ventilation system to produce accommodation that is cheap to heat and eco-friendly. Construction began in autumn 2007 and the entire project is expected to be completed towards the end of 2009 or early 2010. The first phase is expected to be finished towards the end of 2008. Sales on phase 1 had been expected to start in March 2008 but did not commence until the end of April 2008. Detailed information on the project can be found on (www.crystal-vale.com). The sales strategy is to promote this development as a premium product both by virtue of location, year round lifestyle and very high quality of construction and finish. Agents have been carefully selected in various countries in order to expose the product to the widest selection of appropriate potential purchasers. 3. Razlog/Bansko The Fund appointed Westhill Investments (www.westhilluk.com) to develop the sites. Construction of the first project (four phases) started in October 2007 and rough construction has now been completed on Phase 1. The Fund has now received the construction permit for Phase 2 which will allow two more buildings comprising a total of a further 33 apartments. Phases 3 and 4 of the development will not commence until sales on phases 1 and 2 have reached a satisfactory level. The project will ultimately consist of 152 apartments and six houses. To date 28% of the build area of phase 1 has been sold off plan. Now that rough construction has been completed, the next off plan payment stage has been triggered bringing the deposits to 50% of purchase price. The sales team for the next stage of sales has been appointed and the launch of the main marketing campaign will be timed to coincide with the September ski season. The second project has a construction permit and envisages the development of a six-storey residential apartment building with fitness and spa areas. Currently we are leaving this project in our land bank as we do not wish to develop too many properties in the same area at the same time. 4. Plovdiv The Fund currently holds planning permission to build a total of 12,712 square metres over two projects. The larger project comprises a disused tobacco factory located in the heart of the city centre with views towards the old town. The development of eight floors will provide a mixture of luxury apartments and commercial facilities. Construction is expected to start in Q4 2008 or Q1 2009. The Fund holds design visas on both sites and is continuing to work with the architects and the developer, Westhill, in order to progress planning permission on the two projects. We are expecting to make further announcements in relation to the tobacco factory later this year. The smaller project is located 2 kilometres from the city centre and is situated close to the historic national rowing club. 5. Veliko Tarnovo This is a large centrally located plot on which all relevant construction permits for a residential complex have already been granted. This prime site is currently being held in the land bank in order to benefit from rising land prices in the area. Veliko Tarnovo has become a more attractive location for investment following accession of Bulgaria and Romania to the EU as it is located on the crossroads of two pan European international corridors and is the first major town south of the only bridge across the Danube between Romania and Bulgaria. Growth prospects for the city continue to improve. With prices having moved up strongly in other cities, Veliko is now starting to attract more investor attention. We will continue to hold this land in the land bank until the timing is right and we can maximize the return to shareholders by either selling or developing. 6. Dolna Banya These four sites will be kept in the land bank until further notice. As mentioned previously the four sites are well positioned and were bought to take advantage of the modernization and marketing of Dolna Banya as a modern spa centre. There are several factors that make Dolna Banya an especially attractive location. Apart from the fact that it possesses some of Bulgaria's largest thermal springs, Dolna Banya is just thirty minutes away from Borovecs (the country's second largest mountain and ski resort) and 60-80 kilometres from Bulgaria's two largest cities - Sofia, the nation's capital and Plovdiv. Dolna Banya has been chosen for several large scale projects, including Wellness Island and a 5 star hotel positioned beside the Jack Nicklaus 18 hole golf course. The Wellness Island Group is talking to the German Health Insurance authorities over the possibility of sending patients across for therapy at the centre. Given this backdrop and with continued expected economic growth and increased disposable income to spend on entertainment, health and relaxation activities, we think it makes sense to continue to hold the land plots in order to maximise the eventual return to shareholders. 7. Sofia (Kambanite Bistritsa) The Manager is continuing to work with the Fund's architects to submit final development plans for the site in order to identify the best scheme for future development. It is the Manager's intention to apply for a construction permit before the end of 2008 and sales and building to commence in 2009. In the Manager's opinion, there are few plots of this size in Sofia that are as well located and the Manager believes that sales prices in this area have now reached levels which would make development of the site a highly attractive option. Nikmi Bulgaria, a local developer, has just sold a nearby development of 52 large luxury houses (Belle Valley) and has also commenced development of a hotel and leisure complex with a retail element. The Sofia subway extension to the Sofia Business Park is expected to be finished in 2009 and will be within walking distance of the site. In addition, the widening of the ring road and construction of two bridges over the ring road in this area is nearly complete. The two bridges offer easy access to the Business Park and make it easier to drive to the centre of town. Kambanite Bistritsa has now become a very desirable location in which to live and prices have adjusted accordingly. This is borne out by the success of the Belle Valley project. Buyers have become more discerning in terms of location, quality of life and accessibility to transport without being in the centre of town. The Anglo American school is also situated close by. 8. Banya (Razlog) The Fund own 122,000 square metres in a stunning location with views towards the three mountain ranges surrounding the Bansko/Razlog resort area. For planning purposes the site has been divided into three plots for ease of phasing. The Fund expects to have the necessary permits to commence construction on the first plot in early 2009. The process is proceeding well and the land has already been taken out of agricultural use. The Fund appointed Winslow Developments to regulate and develop the project in due course. The Banya project is expected to involve the building of a first-class holiday village consisting of chalets and upscale apartments. The village is expected to provide all the necessary facilities to ensure the maximum comfort of its residents such as tennis courts, swimming pools, spa centre, restaurant and bars. Apart from being within 5 kilometres of Bansko, Banya is famous throughout Bulgaria for its hot mineral springs, of which the town has more than ten. Because of its location close to the ski slopes and the spa and medical facilities which specialize in rheumatic and skin diseases, Banya is now starting to see significant international investment. An example of this is the new Pirinea Hotel and Spa project. 9. Other The Fund also owns 16,357 square metres of land in relatively close proximity to one of the Fund's existing projects. The cost of acquiring the land purchased to date is approximately Euro1 million. Once the purchase of the remaining land intended for the plot is complete, the Fund will make a full announcement as to the location. Company income statement for the year ended 31 December 2007 31 Dec 2006 Revenue Capital Total Total Notes ______ __________ __________ __________ __________ EUR EUR EUR EUR Expenditure Administration fees 3 129,612 - 129,612 105,316 Management fees 4 1,035,092 - 1,035,092 1,021,447 Performance fees 5 - 2,376,955 2,376,955 3,016,255 Directors' fees and expenses 6 91,907 - 91,907 78,543 Foreign exchange loss 19,270 - 19,270 8,093 Other expenses 7 1,056,837 - 1,056,837 803,835 ______ __________ __________ __________ __________ Total expenditure 2,332,718 2,376,955 4,709,673 5,033,489 ______ __________ __________ __________ __________ Operating loss (2,332,718) (2,376,955) (4,709,673) (5,033,489) Finance income 9 408,577 - 408,577 809,505 __________ __________ __________ __________ Net loss before taxation (1,924,141) (2,376,955) (4,301,096) (4,223,984) Tax on profit on ordinary activities 10 - - - - __________ __________ __________ __________ Loss for the year (1,924,141) (2,376,955) (4,301,096) (4,223,984) __________ __________ __________ __________ __________ __________ __________ __________ The total column of this statement represents the Company's Income Statement, prepared in accordance with IFRS. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies. All income is attributable to the equity holders of the parent company. There are no minority interests. All items in the above statement derive from continuing operations. Consolidated income statement for the year ended 31 December 2007 31 Dec 2006 Revenue Capital Total Total Notes ______ __________ __________ __________ __________ EUR EUR EUR EUR Income Sundry income - - - 574 Net change in gains on revaluation of investment property - 12,387,151 12,387,151 14,491,706 __________ __________ __________ __________ Total income - 12,387,151 12,387,151 14,492,280 __________ __________ __________ __________ Expenditure Administration fees 3 206,295 - 206,295 105,316 Management fees 4 1,035,092 - 1,035,092 1,021,447 Performance fees 5 - 2,376,955 2,376,955 3,016,255 Directors' fees and expenses 6 91,907 - 91,907 78,543 Foreign exchange loss 21,220 - 21,220 15,130 Other expenses 7 1,310,024 - 1,310,024 1,007,368 __________ __________ __________ __________ Total expenditure 2,664,538 2,376,955 5,041,493 5,244,059 __________ __________ __________ __________ Operating (loss) / profit (2,664,538) 10,010,196 7,345,658 9,248,221 Finance income 9 423,929 - 423,929 813,407 __________ __________ __________ __________ Net (loss)/profit before taxation (2,240,609) 10,010,196 7,769,587 10,061,628 Taxation 10 - (1,238,715) (1,238,715) (1,449,171) __________ __________ __________ __________ (Loss)/Profit for the year (2,240,609) 8,771,481 6,530,872 8,612,457 __________ __________ __________ __________ __________ __________ __________ __________ Earnings per share - basic and diluted (cents per share) 11 13.51 17.82 The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies. All income is attributable to the equity holders of the parent company. There are no minority interests. All items in the above statement derive from continuing operations. Company balance sheet as at 31 December 2007 Company Company Notes 2007 2006 ______ _________________________ _________________________ EUR EUR EUR EUR Non-current assets Investment in subsidiaries 14 41,775,362 27,367,233 ____________ ____________ 41,775,362 27,367,233 Current assets Trade and other receivables 15 18,564 58,674 Cash and cash equivalents 16 6,229,149 22,514,641 ____________ ____________ 6,247,713 22,573,315 ____________ ____________ Total assets 48,023,075 49,940,548 ____________ ____________ Current liabilities Trade and other payables 17 (107,246) (100,578) ____________ ____________ (107,246) (100,578) Non-current liabilities Trade and other payables 17 (5,393,210) (3,016,255) (5,393,210) (3,016,255) ____________ ____________ Total liabilities (5,500,456) (3,116,833) ____________ ____________ Net assets 42,522,619 46,823,715 ____________ ____________ ____________ ____________ Represented by Share capital 18 - - Special reserve 19 56,956,985 56,956,985 Capital reserve 20 (6,052,011) (3,675,056) Revenue reserve 20 (8,382,355) (6,458,214) ____________ ____________ Total Equity 42,522,619 46,823,715 ____________ ____________ Consolidated balance sheet as at 31 December 2007 Company Company Notes 2007 2006 ______ _________________________ _________________________ EUR EUR EUR EUR Non-current assets Investment properties 12 55,127,208 27,981,983 ____________ ____________ 55,127,208 27,981,983 Current assets Properties under development 13 15,625,171 11,382,006 Property options 5 5 Trade and other receivables 15 22,802 113,872 Non-group receivables 490,098 1,853,792 Cash and cash equivalents 16 7,209,621 23,046,407 ____________ ____________ 23,347,697 36,396,082 ____________ ____________ Total assets 78,474,905 64,378,065 ____________ ____________ Current liabilities Trade and other payables 17 (764,630) (237,964) ____________ ____________ (764,630) (237,964) Non-current liabilities Trade and other payables 17 (8,816,842) (3,016,255) Deferred taxation 10 (2,687,886) (1,449,171) ____________ ____________ (11,504,728) (4,465,426) ____________ ____________ Total liabilities (12,269,358) (4,703,390) ____________ ____________ Net assets 66,205,547 59,674,675 ____________ ____________ ____________ ____________ Represented by Share capital 18 - - Special reserve 19 56,956,985 56,956,985 Capital reserve 20 18,138,960 9,367,479 Revenue reserve 20 (8,890,398) (6,649,789) ____________ ____________ Total Equity 66,205,547 59,674,675 ____________ ____________ ____________ ____________ NAV per share (Euro per share) 21 1.3694 1.2344 NAV per share at launch (Euro per share) 1.1781 1.1781 These financial statements were approved by the Board of Directors on 23 June 2008. Signed on behalf of the Board Clive Simon Gerald Williams Director Director Statements of changes in equity for the year to 31 December 2007 Consolidated Share Special Capital Revenue 31 December Capital Reserve Reserve Reserve Total 2006 EUR EUR EUR EUR EUR EUR As at 31 December 2006 - 56,956,985 9,367,479 (6,649,789) 59,674,675 51,062,218 Issue of ordinary shares - - - - - - Profit/(loss) for the year - - 8,771,481 (2,240,609) 6,530,872 8,612,457 _______________________________________________________________________ Total recognised income and expenses for the year - - 8,771,481 (2,240,609) 6,530,872 8,612,457 _______________________________________________________________________ As at 31 December 2007 - 56,956,985 18,138,960 (8,890,398) 66,205,547 59,674,675 _______________________________________________________________________ _______________________________________________________________________ Company Share Special Capital Revenue 31 December Capital Reserve Reserve Reserve Total 2006 EUR EUR EUR EUR EUR EUR As at 31 December 2006 - 56,956,985 (3,675,056) (6,458,214) 46,823,715 51,047,699 Issue of ordinary shares - - - - - - Loss for the year - - (2,376,955) (1,924,141) (4,301,096) (4,223,984) _______________________________________________________________________ Total recognised income and expenses for the year - - (2,376,955) (1,924,141) (4,301,096) (4,223,984) _______________________________________________________________________ As at 31 December 2007 - 56,956,985 (6,052,011) (8,382,355) 42,522,619 46,823,715 _______________________________________________________________________ _______________________________________________________________________ Company cash flow statement for the year ended 31 December 2007 2007 2006 __________ _________ EUR EUR Loss for the year (4,301,096) (4,223,984) Adjustment for: Bank interest receivable (4,965) (20,020) __________ _________ Operating cash flows before movements in working capital (4,306,061) (4,244,004) Decrease in receivables 40,110 32,720 Increase in payables 2,383,623 3,097,746 __________ _________ (1,882,328) (1,113,538) Interest received 4,965 20,020 __________ _________ Net cash outflow from operating activities (1,877,363) (1,093,518) Investing activities Investment in subsidiary (14,408,129)(27,324,677) Repayment of loan by property developer - 9,150,471 __________ _________ Net cash outflow from investing activities (14,408,129)(18,174,206) Cash and cash equivalents at start of year 22,514,641 41,782,365 __________ _________ Cash and cash equivalents at end of year 6,229,149 22,514,641 __________ _________ __________ _________ Consolidated cash flow statement for the year ended 31 December 2007 2007 2006 __________ _________ EUR EUR Profit for the year 6,530,872 8,612,457 Adjustment for: Bank interest receivable (20,317) (23,922) Revaluation of investments (12,387,151)(14,491,706) Adjustment for deferred tax 1,238,715 1,449,171 __________ _________ Operating cash flows before movements in working capital (4,637,881) (4,454,000) Decrease / (increase) in receivables 91,070 (22,478) Increase in payables 6,327,253 3,230,935 __________ _________ 1,780,442 (1,245,543) Interest received 20,317 23,922 __________ _________ Net cash inflow / (outflow) from operating activities 1,800,759 (1,221,621) __________ _________ Investing activities Repayment of loan to property developer 1,363,694 9,150,471 Advances of loan to property developer - (1,853,792) Purchases of investment properties (19,001,239)(24,872,283) __________ _________ Net cash outflow from investing activities (17,637,545)(17,575,604) __________ _________ Cash and cash equivalents at start of year 23,046,407 41,843,632 __________ _________ Cash and cash equivalents at end of year 7,209,621 23,046,407 __________ _________ __________ _________ Notes to the consolidated financial statements as at 31 December 2007 1 CORPORATE INFORMATION Lewis Charles Sofia Property Fund Limited (the "Company") and its subsidiaries (together the "Group") is an investment fund with a major investment portfolio in Bulgaria. The aim of the Fund is to generate capital gains through investing in residential property primarily in Sofia and the adjacent ski resorts. The investment strategy of the Company is to work with developers at the earliest possible stage. The company is a limited company incorporated in Guernsey. The address of the registered office is shown on page 2. The Company is listed on the London Stock Exchange, Alternative Investment Market (AIM). These financial statements were authorised by the Board for publication on 23 June 2008 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") which comprise standards and interpretations issued by the International Accounting Standards Board ("IASB"), and International Accounting Standards and Standing Interpretations approved by the International Accounting Standards Committee that remain in effect. 2.1 Basis of preparation The financial statements have been prepared on the historical cost basis, except for the revaluation of investments. Financial assets and financial liabilities (including derivative financial instruments) are held at fair value through profit and loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise its judgement in the process of applying the Company's accounting policies. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods. a) Adoption of new and revised Standards In the current year, the Group has adopted IFRS7 Financial Instruments: Disclosures which is effective for annual reporting periods beginning on or after 1 January 2007, and the related amendment to IAS 1 Presentation of Financial Statements . The impact of the adoption of IFRS7 and the changes to IAS 1 has been to expand the disclosures provided in these financial statements regarding the Group's financial instruments and management of capital (see note 22). Four interpretations issued by the International Financial Reporting Interpretations Committee are effective for the current year. These are : IFRIC 7 Applying the Restatement Approach under IAS29, Financial Reporting in Hyperinflationary Economies : IFRIC 8 Scope of IFRS 2 : IFRIC 9 Reassessment of Embedded Derivatives ; and IFRIC 10 Interim Financial Reporting and Impairment . The adoption of these Interpretations has not led to any changes in the Group's accounting policies. b) Standards and Interpretations in issue and not yet effective At the date of authorisation of these financial statements, the following standards and interpretations, which have not been applied in these financial statements, were in issue but not yet effective:- New Standards IFRS 8: Operating segments - for accounting periods commencing on or after 1 January 2009. Revised and amended standards IFRS 2:Share based payments - for accounting periods commencing on or after 1 January 2009. IFRS 3:Business Combinations - for accounting periods commencing on or after 1 July 2009. IAS 1:Presentation of Financial Statements - for accounting periods commencing on or after 1 January 2009. IAS 23:Borrowing costs - for accounting periods commencing on or after 1 January 2009. IAS 27:Consolidated and Separate Financial Statements - for accounting periods commencing on or after 1 July 2009. IAS 32:Financial Instruments: Presentation - for accounting periods commencing on or after 1 January 2009. Interpretations IFRIC 11: IFRS 2 - Group and Treasury Share Transactions - for accounting periods commencing on or after 1 March 2007. IFRIC 12: Service Concession Arrangements - for accounting periods commencing on or after 1 January 2008. IFRIC 13: Customer Loyalty Programmes - for accounting periods commencing on or after 1 July 2008. IFRIC 14: IAS 19- The limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction - for accounting periods commencing on or after 1 January 2008. The Directors anticipate that the adoption of these standards and interpretations in future periods will not have material impact on the financial statements of the Group. The principal accounting policies adopted are set out below. 2.2 Significant accounting estimates and judgements In applying the Group's accounting policies, the Directors make judgements in the following areas The Group makes estimates and assumptions concerning the future. The resulting accounting estimate will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. (a) Investment property The gross property value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction without deduction for any associated transfer taxes, sales taxes, or other costs normally borne by the seller. Transaction costs normally borne by the seller are not deducted in arriving at gross property value, in accordance with IAS 40. The fair value is calculated by deducting the costs normally borne by the purchaser from the gross property value. Fair value is not intended to represent the liquidation value of the property, which would be dependent upon the price negotiated at the time of sale less any associated selling costs. The fair value is largely based on estimates using property appraisal techniques and other valuation methods as outlined below. Such estimates are inherently subjective and actual values can only be determined in a sales transaction. The Group's valuers derive the fair value by applying the methodology and valuation guidelines as set out by the Royal Institution of Chartered Surveyors in the United Kingdom in accordance with IAS 40. This approach is based on discounting the future net income receivable from properties to arrive at the net present value of that future income stream. Future net income comprises the rent secured under existing leases, less any known or expected non-recoverable costs and the current market rent attributable to future vacancy years. The consideration basis for this calculation excludes the effects of any taxes. The discount factors used to calculate fair value are consistent with those used to value similar properties, with comparable leases in each of the respective markets. (b) Business combinations Significant judgement is required when determining the appropriate method of accounting for acquisitions of shares of a company owning property. During the year the Group acquired 100% of the issued share capital of VT Developments EOOD through the entire issued share capital of Fumero Properties SA. In the opinion of the Directors, the special purpose vehicle which itself owns the investment property (the property at Veliko Tarnova) does not qualify as a business combination under the definition of IFRS 3 as the acquired entity did not carry out any trade other than the ownership/operation of the property. Accordingly this has been accounted for as a direct purchase of investment property and associated net assets. It is possible that an alternative interpretation would result in goodwill arising on the acquisition of the investment property owning company. 2.3 Accounting policies The principal accounting policies are set out below. Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts issued by the Association of Investment Trusts ("AITC") in December 2005 is consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. (a) Consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (and its subsidiaries) made up to 31 December. Control is achieved where the Company has the power to govern the financial and operating activities of an investee entity so as to obtain benefits from its activities. The results of subsidiaries acquired during the period are included in the consolidated statements from the date control passes. All intra-group transactions, balances, income and expenses are eliminated on consolidation (b) Presentation of income statement In order to reflect the activities of an investment trust company and in accordance with guidance issued by the Association of Investment Trust Companies, supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. (c) Income Investment income is recognised on a time apportioned basis using the effective interest method Interest income on debt securities and bank balances is accrued for on a day-to-day basis. Interest accrued on the purchase and sale of debt securities is excluded from the cost / proceeds and is included as investment income. (d) Expenses Expenses are measured at the fair value of the consideration paid or payable and are recognised in the Income Statement on an accruals basis. (e) Cash and cash equivalents Cash and cash equivalents are defined as cash on hand and short term deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Any cash held by the Company may be held in Euro-denominated government bonds with maximum maturities of the lesser of two years or the remaining life of the Company and/or invested in AAA rated liquid funds. Such investments will be fair valued to closing bid price, with movements in fair value being taken to the Income Statement. (f) Options over property Options over property are treated as current assets and included in the balance sheet at cost. Cost is deemed to be the fair value of consideration given. No depreciation is provided on these assets, however the Directors review each option for impairment annually. (g) Investment property Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost being the fair value of consideration given including related transaction costs. After initial recognition at cost, investment properties are carried at their fair values based on quarterly professional valuations made by Forton International JSCo and King Sturge Kft. The valuations are in accordance with standards complying with the Royal Institution of Chartered Surveyors Approval and Valuation manual and the International Valuation Standards Committee. Gains or losses arising from changes in fair value of investment property are included in the income statement for the period in which they arise. Properties are treated as acquired when the Group assumes the significant risks and returns of ownership and as disposed of when these are transferred to the buyer. When the Group redevelops an existing investment property for continued future use as an investment property, the property remains an investment property and is not reclassified. Transfers are made to investment property when there is a change in use, evidenced by the end of owner occupation, commencement of an operating lease to another party or completion of construction or development. Transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of owner occupation or commencement of development with a view to sale. For a transfer from investment property to owner occupied property, the deemed cost of property for subsequent accounting is its fair value at the date of change in use. If the property occupied by the Group as an owner occupied property becomes an investment property, the Group accounts for such property in accordance with the treatment under IAS 16 Property, Plant and Equipment up to the date of change in use. For a transfer from development to investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the income statement. When the Group completes the construction or development of a self-constructed investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the income statement. Development Property Development property which comprises buildings under construction includes capitalised interest where applicable and is carried at cost or, if lower, net realisable value. Cost includes all directly attributable third party expenditure incurred. (h) Segmental reporting The Directors are of the opinion that the Company is engaged in a single segment of business, being property investment business, and in one geographical area, Bulgaria. (i) Taxation The Company is exempt from taxation under the provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989. As such, the Company is only liable to pay a fixed annual fee, currently GBP600. The subsidiaries, Lewis Charles Sofia Propert Fund Bulgaria EOOD, Black Sea Properties EOOD and VT Developments Bulgaria EOOD will be liable for Bulgarian Corporation Tax. With effect from 1 January 2007 the Bulgarian Corporate Tax rate reduced to 10%.The subsidiaries are not liable for any further local taxes, however withholding taxes may be payable on repatriation of assets and income to the Company, as currently there is no double tax treaty between Guernsey and Bulgaria. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. (j) Foreign currency translation a) Functional and reporting currency The functional currency of the Company is Euros as substantially all expenses relating to the investments are made in Euros. The reporting currency of the Company for accounting purposes is also the Euro. The financial statements are converted into Sterling in accordance with International Financial Reporting Standards, for information purposes only. (b) Transactions and balances Foreign currency balances are translated into Euro at the rate of exchange ruling on the last day of the company's financial period. Foreign currency transactions are translated at the rate of exchange ruling on the date of transaction. Gains and losses arising on currency translation are included in the Consolidated Income Statement. Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). (c) Group companies The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; (ii) income and expenses for each income statement are translated at average interest rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and (iii) all resulting exchange differences are recognised as a separate component of equity (k) Financial instruments Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. The Group shall offset financial assets and financial liabilities if the Group has a legally enforceable right to off set the recognised amounts and interests and intends to settle on a net basis. (a) Financial assets The Group's financial assets fall into the category of loans and receivables. The Group has not classified any of its financial assets as held at fair value through profit or loss, held to maturity or as available for sale. Unless otherwise indicated, the carrying amounts of the Group's financial assets are a reasonable approximation of their fair values. (a)(i) Loans and receivables These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through trade receivables and cash and cash equivalents, but also incorporate other types of contractual monetary assets. They are initially recognised at fair value plus transaction costs that are directly attributable to the acquisition or issue and subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. The effect of discounting on these financial instruments is not considered to be material. Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, such impairments directly reduce the carrying amount of the impaired asset and are recognised against the relevant income category in the income statement. Cash in banks and short term deposits are carried at cost and consist of cash in hand and short term deposits in banks with an original maturity of three months or less. (a) (ii) De-recognition of financial assets A financial asset (in whole or in part) is derecognised either: * when the group has transferred substantially all the risks and rewards of ownership; or * when it has transferred nor retained substantially all the risks and rewards and when it no longer has control over the asset or a portion of the asset; or * when the contractual right to receive cash flow has expired. (b) Financial liabilities The Group classifies its financial liabilities as other financial liabilities at amortised cost. Unless otherwise indicated, the carrying amounts of the Group's financial liabilities are a reasonable approximation of their fair values. (b)(i) Financial liabilities measured at amortised cost Other financial liabilities include trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. (b) (ii) De-recognition of financial liabilities A financial liability (in whole or in part) is derecognised when the Company or Group has extinguished its contractual obligations, it expires or is cancelled. Any gain or loss on de-recognition is taken to the income statement. (c) Share Capital Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Company's ordinary shares are classified as equity instruments. For the purposes of the disclosures given in Note 18 the Group considers all its share capital, share premium and all other reserves as equity. The Company is not subject to any externally imposed capital requirements. (d) Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset or liability and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or liability, or, where appropriate, a shorter period. (l) Investment in subsidiary undertakings Investment in subsidiary undertakings are stated at cost less, where appropriate, provisions for impairment 3 ADMINISTRATION FEES Under the Administration Agreement the Administrator is entitled to receive an annual administration fee at a rate as may be agreed in writing from time to time between the Company and the Administrator. The present fee is 0.09% per annum of the Net Asset Value of the Company up to GBP50 million and 0.07% of the Net Asset Value of the Company above GBP50 million, subject to a minimum fee during the year of GBP65,000 per annum (2006:GBP45,000) plus disbursements. The fees quoted above include an allowance for Directors' Fees for Gerald Williams and Clive Simon, which are reported as Director'' Fees within the Income Statement and the Directors' Report. 4 MANAGEMENT FEES The Company will pay the Manager, a Management Fee of 2% per annum of the Net Proceeds of the Placing, calculated and payable quarterly in advance. The Manager is also entitled to a Management Fee of 2% of any realised but undistributed capital gains on the sale of Properties, calculated and payable quarterly in arrears. 5 PERFORMANCE FEES The Manager will receive a performance fee calculated and payable in Sterling from the Company based on 20% of the excess of the net cash proceeds from the sale of property over the 7% Property Hurdle. The Manager will also receive a performance fee of 5% over the 23% Property Hurdle. For these purposes, the 7% Property Hurdle is a 7% compound per annum return on the amount of the deposit paid on the relevant investment property and the 23% Property Hurdle is a 23% compound per annum return on the amount of the deposit paid on the relevant property. In the event that the Company does not sell on the property prior to completion on an off-plan basis and instead completes on a property, the Property Hurdles shall be calculated by reference to the aggregate of the deposit and the completion balance. 80% of the performance fees calculated will be payable to the Manager within 30 days of the receipt of the proceeds of the sale of a property. The balance will be paid at the same time into a Reserve Account and be invested in Sterling money market deposits, unless otherwise agreed between the Manager and the Company. The performance fee shown within these financial statements is a provision based on the uplift shown in the fair value adjustment of the investment properties. 6 DIRECTORS' FEES AND EXPENSES The Chairman receives GBP15,000 per annum, with all other Directors receiving GBP12,000 per annum. The Chairman and Directors are reimbursed other expenses properly incurred by them in attending meetings and other business of the Company. 7 OTHER EXPENSES Consolidated Consolidated Company Company 2007 2006 2007 2006 Total Total Total Total _______ _______ _______ _______ EUR EUR EUR EUR Registrar's fees (see note 8) 14,846 15,770 14,846 15,770 Audit fees 44,527 21,527 39,995 21,527 Legal and professional fees 905,020 700,055 905,020 670,726 Consultancy fees 169,798 106,966 - - Insurance costs 22,610 26,683 22,610 26,683 Statutory fees 5,096 13,969 5,096 1,058 Travel expenses 43,326 44,848 43,326 44,848 Bank charges 13,050 53,035 6,695 5,791 Other fees and expenses 91,751 24,515 19,249 17,432 _______ _______ _______ _______ 1,310,024 1,007,368 1,056,837 803,835 _______ _______ _______ _______ _______ _______ _______ _______ 8 REGISTRAR'S FEES Under the Registrar's Agreement the Registrar is entitled to receive an annual fee at the rate of whichever shall be the greater of the amount of the minimum Annual Basic Fee, currently GBP4,400 per annum, or the amount per shareholder, currently GBP2.20, on the Register of Shareholders at the commencement of the fee year. The Company's fee year commenced on the date of Admission and on each anniversary of that date whilst this Agreement shall continue. 9 FINANCE INCOME 2007 2006 2007 2006 Consolidated Consolidated Company Company EUR EUR EUR EUR Bank interest 423,929 813,407 408,577 809,505 ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ The above interest arises from financial assets classified as loans and receivables, including cash and cash equivalents, and has been calculated using the effective interest method. 10 TAXATION (a) Analysis of tax charge for the year 2007 2006 2007 2006 Consolidated Consolidated Company Company EUR EUR EUR EUR The tax expense for the year comprises:- Current taxation - - - - - Deferred taxation 1,238,715 1,449,171 ____________ ____________ ____________ ____________ Income tax expense 1,238,715 1,449,171 - - ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ 2007 2006 Consolidated Consolidated EUR EUR Profit/(Loss) before tax 7,769,587 10,061,628 ____________ ____________ ____________ ____________ Tax at the domestic corporate tax rate applicable to profits in the country concerned 1,199,072 1,414,023 Tax effect of non deductible expenses and effect of foreign exchange 39,643 35,148 ____________ ____________ Tax charge 1,238,715 1,449,171 ____________ ____________ ____________ ____________ (b)Deferred taxation Deferred taxation is calculated, in full, on all temporary timing differences under the liability method using a principal Bulgarian tax rate of 10% (2006: 10%). The movement on the deferred tax account is as follows: At start of year Charge to income At end of year EUR EUR EUR Deferred tax liabilities Investment properties - revaluation 1,449,171 1,238,715 2,687,886 ______________ ______________ ______________ ______________ ______________ ______________ Deferred tax assets have not been recognised on tax losses carried forward due to lack of certainty of availability of future taxable profits against which such losses will be utilised. 11 EARNINGS PER SHARE - BASIC AND DILUTED The consolidated earnings per Ordinary Share of 13.51 cents are based on the net income loss of EUR2,240,609 and the net capital gain for the period of EUR8,771,481. Both calculations are made based on 48,345,000 Ordinary Shares, being the weighted average number of shares in issue during the year. 12 INVESTMENT PROPERTIES Group 2007 2006 EUR EUR Market value of investment properties at 1 January 27,981,983 - Acquisitions during the year at cost 14,758,074 13,490,277 Fair value adjustment in the year 12,387,151 14,491,706 ___________ ___________ Market value of investment properties at 31 December 55,127,208 27,981,983 ___________ ___________ ___________ ___________ The fair value of the Group's investment properties at 31 December 2007 has been arrived at on the basis of valuations carried out at that date by Forton International JSCo and King Sturge Kft, independent valuers not connected to the Group. The valuation basis has been market value as defined by the Royal Institute of Chartered Surveyors (RICS). The approved RICS definition of market value is the ''estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion". 13 PROPERTIES UNDER DEVELOPMENT Group 2007 2006 EUR EUR At 1 January 11,382,006 - Additions 4,243,165 11,382,006 ___________ ___________ At 31 December 15,625,171 11,382,006 ___________ ___________ ___________ ___________ At valuation 28,819,882 20,590,696 ___________ ___________ ___________ ___________ The development properties were revalued on an open market basis as at 31 December 2007 by Forton International JSCo and King Sturge Kft, independent valuers not connected to the Group. The carrying value has been set as the lower of cost and net realisable value as set out under the requirements of IAS 2, Inventories. 14 INVESTMENT IN SUBSIDIARIES Share capital Loans Total EUR EUR EUR At 1 January 2007 9,257,057 18,110,176 27,367,233 Additions in year 1,264,252 13,143,877 14,408,129 __________ __________ __________ At 31 December 2007 10,521,309 31,254,053 41,775,362 __________ __________ __________ __________ __________ __________ The loans are interest free and have no set repayment terms as they provided for the purpose of long term financing of the subsidiaries. The Directors consider the loans to be additional capital contributions and have therefore been accounted for as investment in subsidiary undertakings. Details of the Company's subsidiary undertaking are as follows: Country of Principal Name of subsidiary undertaking Holding incorporation activity Lewis Charles Sofia Property Fund Bulgaria EOOD 100% Bulgaria Property Investment Splendid Investments S.A. 100% Luxembourg Holding Company Black Sea Properties EOOD 100% Bulgaria Property Investment Fumero Properties S.A. 100% Luxembourg Holding Company VT Developments Bulgaria EOOD 100% Bulgaria Property Investment On 23 February 2007 the company acquired VT Developments Bulgaria EOOD through the acquisition of the entire share capital of Fumero Properties S.A. an investment property holding company registered and incorporated in Luxembourg, funded mainly by cash. 15 TRADE AND OTHER RECEIVABLES Consolidated Consolidated Company Company 2007 2006 2007 2006 ____________ ____________ ____________ ____________ EUR EUR EUR EUR Dividends receivable 680 38,685 680 38,685 Debtors 4,238 55,198 - - Prepayments 17,884 19,989 17,884 19,989 ____________ ____________ ____________ ____________ 22,802 113,872 18,564 58,674 ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ The aging of these receivables is as follows: Less than 3 months 4,920 93,883 682 38,685 3 to 6 months 3,587 1,605 3,587 1,605 Over 6 months 14,295 18,384 14,295 18,384 ____________ ____________ ____________ ____________ 22,802 113,872 18,564 58,674 Trade receivables are not considered impaired and relate to receivables for which there is no recent history of default and as such it is assessed that all of the receivables will be recovered. The allocation of the carrying amount of the Group's trade and other receivables by foreign currency is presented in Note 22. 16 CASH AND CASH EQUIVALENTS Consolidated Consolidated Company Company 2007 2006 2007 2006 ____________ ____________ ____________ ____________ EUR EUR EUR EUR Lehman Euro Liquidity Fund 3,840,410 9,275,834 3,840,410 9,275,834 Merrill Lynch Institutional Liquidity Fund - 13,045,400 - 13,045,400 Blackrock Euro Liquidity Fund 179,229 - 179,229 - Cash at Bank 3,189,982 725,173 2,209,510 193,407 ____________ ____________ ____________ ____________ 7,209,621 23,046,407 6,229,149 22,514,641 ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ The cash equivalent investments are considered to be highly liquid, so that book cost is considered equivalent to book value. The weighted average interest rate on cash balances at 31 December 2007 was 1.13%.(2006: 3.40%). The Company has no material interest bearing liabilities. 17 TRADE AND OTHER PAYABLES Consolidated Consolidated Company Company 2007 2006 2007 2006 ____________ ____________ ____________ ____________ EUR EUR EUR EUR Current liabilities Taxation payable - 136 - - Audit fee payable 27,196 20,355 27,196 20,355 Legal fee payable 77,450 78,170 77,450 78,170 Sundry creditors 659,984 139,303 2,600 2,053 ____________ ____________ ____________ ____________ 764,630 237,964 107,246 100,578 ____________ ____________ ____________ ____________ Non - current liabilities Performance fee accrual 5,393,210 3,016,255 5,393,210 3,016,255 Sundry creditors 3,423,632 - - - ____________ ____________ ____________ ____________ 8,816,842 3,016,255 5,393,210 3,016,255 ____________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ There is no difference between the carrying value of trade and other payables and their fair value. 18 AUTHORISED SHARE CAPITAL Consolidated Company 2007 2007 ____________ ____________ EUR EUR 62,500,000 ordinary shares of nil par value - - ____________ ____________ ____________ ____________ Issued and fully paid 48,345,000 ordinary shares of nil par value - - ____________ ____________ ____________ ____________ The Company has one class of ordinary share which carries no right to fixed income. The Company will have a maximum life of seven years expiring on 2012. The Manager intends to arrange the Property Portfolio so that it can be realised in an orderly way by the end of six years. If this is achieved the Company will be liquidated at the end of the six year period. The life of the Company may be extended by no more than a year (to seven years in total) at the discretion of the Directors, on the advice of the Manager, if it is necessary for an orderly realisation of the Company's assets. 19 SHARE PREMIUM AND SPECIAL RESERVE Consolidated Company 2007 2007 ____________ ____________ EUR EUR Share premium - - Special reserve 56,956,985 56,956,985 ____________ ____________ At 31 December 2007 56,956,985 56,956,985 ____________ ____________ ____________ ____________ On 8 July 2005 the Royal Court of Guernsey approved the reduction of capital by way of a cancellation of the Company's share premium account. The amount cancelled, being EUR56,956,985, has been credited as a distributable reserve established in the Company's books of account. This shall be available as distributable profits to be used for all purposes permitted under Guernsey Company Law including the buy back of shares and the payment of dividends. 20 CAPITAL AND REVENUE RESERVE Balances reflected in the capital reserve reflect cumulative unrealised gains on the revaluation of properties, provision for performance fees that will become payable as a result of the uplift in property values and the notional loss on foreign currency dating back to the conversion of the initial subscription proceeds. The balance on the revenue reserve reflects cumulative operational expenditure in excess of the non-property related operational income. The Company does not have any external imposed capital requirements. 21 NAV PER SHARE Consolidated Consolidated 2007 2007 ____________ ____________ Net Asset Value 66,205,547 59,674,675 Average number of shares in issue 48,345,000 48,345,000 Net asset value per share 1.3694 1.2344 The Net Asset Value per Ordinary Share is based on the Net Asset Value at the Balance Sheet date and on 48,345,000 Ordinary Shares, being the average number of shares in issue during the year. 22 FINANCIAL RISK MANAGEMENT Financial risk factors The Company's activities expose it to a variety of risks from its use of financial instruments - - market risk (including price risk, interest rate risk and currency risk) - liquidity risk - credit risk The accounting policy with respect to these financial instruments are disclosed in note 2. The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. This note presents information about the Company's exposure to each of the above risks and the Board of Directors' objectives, policies and processes for measuring and managing these risks. Market risk Market risk is the risk that changes in the market prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters. Price risk The Company is exposed to price risk as a result of any change in the values of underlying property. The Company is not exposed to the market risk with respect to financial instruments as it does not hold any equity securities. Investments in Bulgarian property may be difficult, slow or impossible to realise. The shares will be subject to general risks incidental to the ownership of real or heritable property, including changes in the supply of or demand for competing investment properties in an area, changes in interest rates and the availability of mortgage funds, changes in property tax rates and landlord/tenant or planning laws, credit risks of tenants and borrowers and environmental factors. The marketability and value of any investment properties owned by the Company will, therefore, depend on many factors beyond the control of the Company and there is no assurance that there will be either a ready market for any investment properties of the Company or that such investment properties will be sold at a profit or will yield a positive cash flow. Changes in Bulgarian law relating to foreign ownership of property might have an adverse effect on the net returns from the Property Portfolio. If property prices in the Bulgarian property market fall by more than the discounts to current market value achieved by the Company when it exchanges contracts, investment properties held in the Property Portfolio may only be realisable at a loss and may prove difficult to sell at all. In these circumstances, the Company may complete on the purchase of investment properties and let them. The ability of the Company to complete on purchases is dependent on the amount of equity available at the time, which may not be the same as is currently available. A combination of higher interest rates, a deteriorating economy (with higher unemployment) and prolonged deflationary conditions, may result in falling capital values combined with falling rents and/or void periods. Interest rate risk The majority of the Company's financial assets are non-interest bearing. Interest-bearing financial assets and interest- bearing financial liabilities mature or reprice in the short- term, no longer than twelve months. As a result the Company is subject to limited exposure to fair value interest rate risk due to fluctuations in the prevailing levels of market interest rates. At any time that the Company is not fully invested the Company may invest in Euro denominated government bonds with maximum maturities of the lesser of two years or the remaining life of the Company and/or invest in AAA rated liquidity funds. Any change to interest rates relevant for a particular security may result in income either increasing or decreasing. The Company has chosen to invest in high liquidity, floating rate instruments to mitigate the risk that similar returns would be unavailable on the expiry of contracts. At the balance sheet date the Company was not subject to significant interest rate risk. The instruments subject to interest rate movements are disclosed in note 16 and are all at variable rates. Currency risk Currency risk is the risk that the Income Statement and Balance Sheet can be affected by currency translation movements. The Board consider that the Company's exposure to currency risk is minimal as the majority of the Company's transactions are made in Euros and the books and records are kept in Euros. Where there are assets and liabilities recorded in Bulgarian Lev, the risk is considered minimal as the Lev is tied to the Euro in preparation for adoption of the Euro in Bulgaria. The Lev is expected to be replaced by the Euro on 1 January 2010. The tables below summarise exposure to foreign currency risk at 31 December 2007. Assets and liabilities at carrying amounts are included in the table, categorised by the currency at their carrying amount Group As at 31 December 2007 EUR GBP Total Investment properties 55,127,208 - 55,127,208 Properties under development 15,625,171 - 15,625,171 Receivables 495,023 17,882 512,905 Cash and cash equivalents 7,198,021 11,600 7,209,621 __________ ______ __________ Total assets 78,445,423 29,482 78,474,905 __________ ______ __________ Trade and other payables 9,554,276 27,196 9,581,472 Deferred taxation 2,687,886 - 2,687,886 __________ ______ __________ Total liabilities 12,242,162 27,196 12,269,358 __________ ______ __________ Net assets 66,203,261 2,286 66,205,547 __________ ______ __________ Group As at 31 December 2006 EUR GBP Total Investment properties 27,981,984 - 27,981,984 Properties under development 11,382,006 - 11,382,006 Receivables 1,947,679 19,989 1,967,668 Cash and cash equivalents 23,039,303 7,104 23,046,407 __________ ______ __________ Total assets 64,350,972 27,093 64,378,065 __________ ______ __________ Trade and other payables 3,233,864 20,355 3,254,219 Deferred taxation 1,449,171 - 1,449,171 __________ ______ __________ Total liabilities 4,683,035 20,355 4,703,390 __________ ______ __________ Net assets 59,667,937 6,738 59,674,675 __________ ______ __________ Company As at 31 December 2007 EUR GBP Total Investment in subsidiaries 41,775,362 - 41,775,362 Receivables 682 17,882 18,564 Cash and cash equivalents 6,217,549 11,600 6,229,149 __________ ______ __________ Total assets 47,993,593 29,482 48,023,075 __________ ______ __________ Trade and other payables 5,473,260 27,196 5,500,456 __________ ______ __________ Total liabilities 5,473,260 27,196 5,500,456 __________ ______ __________ Net assets 42,520,333 2,286 42,522,619 As at 31 December 2006 EUR GBP Total Investment in subsidiaries 27,367,233 - 27,367,233 Receivables 38,685 19,989 58,674 Cash and cash equivalents 22,507,537 7,104 22,514,641 __________ ______ __________ Total assets 49,913,455 27,093 49,940,548 __________ ______ __________ Trade and other payables 3,096,478 20,355 3,116,833 __________ ______ __________ Total liabilities 3,096,478 20,355 3,116,833 __________ ______ __________ Net assets 46,816,977 6,738 46,823,715 __________ ______ __________ The following significant exchange rates applied during the year: Average rate Reporting date spot rate 2007 2006 2007 2006 Euro 1 GBP 0.691 0.686 0.735 0.674 1 BGN * 1.956 1.956 1.956 1.956 * The Bulgarian Lev (BGN) was fixed to the Euro at 1.95583 BGN to 1 Euro on 5 July 1999. The sensitivity analysis below is based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur. The tables above present financial assets and liabilities denominated in foreign currencies held by the Group and the Company in 2007 and 2006 used to monitor foreign currency risk at the reporting dates. If the euro had strengthened by 10% against the UK pound as at 31 December, with all other variables held constant, post-tax Group and Company profit for the year would have been EUR229 (2006:EUR674) lower. Had the Euro weakened by 10% against the pound profits would have increased by the same amounts. As the Lev is fixed against the Euro this results in no additional exposure to any Euro movements Liquidity risk Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and will negotiate additional credit facilities as and when required. Cash and cash equivalents are placed with financial institutions on a short term basis reflecting the Group's desire to maintain a high level of liquidity to enable timely completion of investment transactions. An analysis of other financial assets is provided in notes 15 and 16. A summary table with maturity of financial liabilities is presented below: Consolidated Less than 6 to 12 Greater than Financial liabilities 2007 6 months months 12 months ____________ _________ _________ ___________ Trade and other payables 9,581,472 278,605 486,025 8,816,842 Deferred taxation 2,687,886 - - 2,687,886 ____________ _________ _________ ___________ 12,269,358 278,605 486,025 11,504,728 Consolidated Less than 6 to 12 Greater than Financial liabilities 2006 6 months months 12 months ____________ _________ _________ ___________ Trade and other payables 3,254,219 98,525 139,439 3,016,255 Deferred taxation 1,449,171 - - 1,449,171 ____________ _________ _________ ___________ 4,703,390 98,525 139,439 4,465,426 ____________ _________ _________ ___________ Company Less than 6 to 12 Greater than Financial liabilities 2007 6 months months 12 months ____________ _________ _________ ___________ Trade and other payables 5,500,456 104,646 2,600 5,393,210 ____________ _________ _________ ___________ 5,500,456 104,646 2,600 5,393,210 ____________ _________ _________ ___________ Company Less than 6 to 12 Greater than Financial liabilities 2006 6 months months 12 months ____________ _________ _________ ___________ Trade and other payables 3,116,833 98,525 2,053 3,016,255 ____________ _________ _________ ___________ 3,116,833 98,525 2,053 3,016,255 ____________ _________ _________ ___________ As per note 10 Deferred taxation is calculated, in full, on all temporary timing differences under the liability method using a principal Bulgarian tax rate of 10% (2006: 10%). This will not become payable until properties currently held with an unrealised profit are sold. This cannot be accurately forecast and as such have been presented as due after 12 months. Similarly, as per note 5, performance fees will become payable on the disposal of properties and as such these fees are also shown as due after 12 months. Credit risk Credit risk is the risk that a counterparty will be unwilling or unable to meet a commitment that it has entered into with the Company. The Company holds cash and liquid resources as well as having receivables and payables that arise directlyfrom its operations. The Company's investment activities expose it to various types of risk associated with theproperty market and the development of real estate projects. Such risks include the risk that the developer of a site may become insolvent and be unable to complete the project. Developments in which the Company will, and does, invest will be financed by a mixture of equity, deposits on pre-sales and bank financing. The release of bank financing will be staged and conditional on milestones in the development being reached. In the event that the development does not proceed as expected, due to unexpected factors, the bank may refuse to provide further financing. If the developer is unable to arrange alternative financing, it may not be possible to complete the development. This may result in the loss of a deposit paid by the Company. The Company also has exposure to credit risk relating to its cash and cash equivalents. The Company has tried to mitigate this risk by investing in high liquidity, AAA rated instruments. Fair Values Management deems that there is no significant difference between the fair values of financial assets and liabilities and their carrying value in the financial statements except as disclosed in the accounting policies. 23 RELATED PARTY DISCLOSURES The Company has taken advantage of the exemption within IAS 24 Related Party Disclosures and elected not to disclose details of intra-group transactions. Transactions with directors are as disclosed in the Directors' report, the Consolidated Income Statement and the notes to the financial statements. 24 CONTROLLING PARTY In the opinion of the Directors there is no controlling party as no one party has the ability to direct the financial and operating policies of the Company with a view to gaining economic benefits from their direction. 25 RECONCILIATION OF NAV PER THE FINANCIAL STATEMENTS TO PUBLISHED NAV EUR Cents per share Net Asset Value per financial statements 66,205,547 1.37 Add back: Adjustment to value of properties 8,319,285 0.17 Adjustment to performance fee (2,069,050) (0.04) Preliminary expenses 1,311,188 0.03 Adjustment to calculated deferred tax 2,687,886 0.06 ___________ ____ Published Net Asset Value 76,454,856 1.58 ___________ ____ An adjustment is required within the financial statements to record the value of the properties under development from fair value, as used for the published Net Asset Value, to cost as required to ensure compliance with International Accounting Standard 16 "Property, Plant and Equipment". The Company's principal documents require the dealing valuation of the Company's net assets to include preliminary expenses incurred in the establishment of the Company, such expenses to be amortised over the expected life of the Company. However, this accounting treatment is not permitted for financial reporting purposes and has been adjusted accordingly within these financial statements. 26 POST BALANCE SHEET EVENTS In May 2008 the Company sold its interest in 11,272 square metres built at VitoshaVets Simeonovo building 92 and VitoshaVets Simeonovo building 105 to International Life, a Greek Insurance company. This represents approx 10.3% of the total BuySell project. The total sale price was Euro 10,486,660 of which the Company received Euro 1,891,966; of this Euro 1,038,961 was an immediate refund of its deposit, plus a profit of Euro 853,005 which will be offset against the Company's liability to BuySell. 27 CAPITAL COMMITMENTS Under the terms of the property options entered into, where properties developed are not sold off-plan the Company is obliged to cover the costs of completion for any unsold property. This course of action will lead to the Company being geared, with associated finance costs. The total balance payable on completion of the development is EUR30,981,553. Under the terms of the Central Sofia Purchase Options the total balance payable on completion will be increased in line with any increase in the Bulgarian Consumer Price Index. The Board believe it unlikely that any significant proportion of this capital commitment will become payable because of the nature of the property market in and around the chosen development areas and the high level of demand for the type of properties being developed. Nevertheless the Board needs to ensure that it has sufficient liquidity to meet its liabilities. As at 31 December 2007 the Fund had EUR7.2 million of cash and cash equivalents available. The most significant potential liability is that under the Central Sofia Purchase Options as described above. If that situation was to arise, and to the extent that sales of property have not been made in the period to completion, the Fund would have a liability. The Board is confident that, in the current environment, the property will be sold prior to completion and to the extent that any property may be unsold on completion that adequate and suitable funding will be available. Accordingly the Directors are of the opinion that it is appropriate to prepare the financial statements on a going concern basis. Also as at 31 December 2007 the Company has committed to the rough construction, which constitutes excavation of the site and subsequent building of the concrete structure, at the Crystal Vale project and the Panorama Villas 1 project. The costs of performing this work are estimated at a total of EUR2,050,000. THE FOLLOWING PAGES DO NOT FORM PART OF THE AUDITED FINANCIAL STATEMENTS OF THE COMPANY AND ARE PRESENTED FOR INFORMATION PURPOSES ONLY Company income statement for the year ended 31 December 2007 Restated into Pounds Sterling for information purposes only 31 Dec 2006 Revenue Capital Total Total GBP GBP GBP GBP ________________________________ ___________ Expenditure Administration fees 89,562 - 89,562 71,636 Management fees 715,249 - 715,249 694,788 Performance fees - 1,642,476 1,642,476 2,051,657 Directors' fees and expenses 63,508 - 63,508 53,425 Foreign exchange loss 13,316 - 13,316 5,504 Other expenses 730,274 - 730,274 546,772 ___________ ___________ ___________ ___________ Total expenditure 1,611,909 1,642,476 3,254,385 3,423,782 ___________ ___________ ___________ ___________ Operating loss (1,611,909) (1,642,476) (3,254,385) (3,423,782) Finance income 282,327 - 282,327 550,626 ___________ ___________ ___________ ___________ Net loss before taxation (1,329,582) (1,642,476) (2,972,058) (2,873,156) Tax on profit on ordinary activities - - - - ___________ ___________ ___________ ___________ Loss for the year (1,329,582) (1,642,476) (2,972,058) (2,873,156) ___________ ___________ ___________ ___________ Consolidated income statement for the year ended 31 December 2007 Restated into Pounds Sterling for information purposes only 31 Dec 2006 Revenue Capital Total Total GBP GBP GBP GBP ____________________________________________ Income Sundry income - - - 394 Net change in gains on revaluation of investment property - 8,559,521 8,559,521 9,959,237 ___________ ___________ ___________ ___________ Total income - 8,559,521 8,559,521 9,959,631 ___________ ___________ ___________ ___________ Expenditure Administration fees 142,550 - 142,550 72,377 Management fees 715,249 - 715,249 701,976 Performance fees - 1,642,476 1,642,476 2,072,882 Directors' fees and expenses 63,508 - 63,508 53,978 Foreign exchange loss 14,663 - 14,663 10,398 Other expenses 905,227 - 905,227 692,300 ___________ ___________ ___________ ___________ Total expenditure 1,841,197 1,642,476 3,483,673 3,603,911 ___________ ___________ ___________ ___________ Net (loss)/profit from (1,841,197) 6,917,045 5,075,848 6,355,720 ordinary activities ___________ ___________ ___________ ___________ Finance income 292,935 - 292,935 559,004 Tax on profit on ordinary activities - (855,952) (855,952) (995,924) ___________ ___________ ___________ ___________ (Loss)/Profit for the year (1,548,262) 6,061,093 4,512,831 5,918,800 ___________ ___________ ___________ ___________ Earnings per share - basic and diluted (pence per share) 9.33 12.24 Company balance sheet as at 31 December 2007 Restated into Pounds Sterling for information purposes only Company Company 2007 2006 ________________________ ______________________ GBP GBP GBP GBP Non-current assets Investment in subsidiaries 30,704,891 18,842,613 __________ __________ 30,704,891 18,842,613 Current assets Trade and other receivables 13,645 40,398 Cash and cash equivalents 4,578,425 15,501,556 __________ __________ 4,592,070 15,541,954 __________ __________ Total assets 35,296,961 34,384,567 __________ __________ Current liabilities Trade and other payables (78,826) (69,250) __________ __________ (78,826) (69,250) Non-current liabilities Trade and other payables (3,964,009) (2,076,722) __________ __________ (3,964,009) (2,076,722) __________ __________ Total liabilities (4,042,835) (2,145,972) __________ __________ Net assets 31,254,126 32,238,595 __________ __________ Represented by Share capital - - Special reserve 38,676,000 38,676,000 Capital reserve (4,142,250) (2,499,774) Revenue reserve (3,279,624) (3,937,631) __________ __________ Total Equity 31,254,126 32,238,595 __________ __________ Consolidated balance sheet as at 31 December 2007 Restated into Pounds Sterling for information purposes only Consolidated Consolidated 2007 2006 ________________________ ______________________ GBP GBP GBP GBP Non-current assets Investment properties 40,518,498 19,368,704 __________ __________ 40,518,498 19,368,704 Current assets Properties under development 11,484,501 7,878,511 Property options 4 3 Trade and other receivables 16,758 78,760 Non-group receivables 360,222 1,283,176 Cash and cash equivalents 5,299,071 15,952,378 __________ __________ 17,160,556 25,192,828 __________ __________ Total assets 57,679,054 44,561,532 Current liabilities Trade and other payables (562,003) (165,234) __________ __________ (562,003) (165,234) Non-current liabilities Trade and other payables (6,480,379) (2,094,457) Deferred taxation (1,975,596) (995,924) __________ __________ (8,455,975) (3,090,381) __________ __________ Total liabilities (9,017,978) (3,255,615) __________ __________ Net assets 48,661,076 41,305,917 __________ __________ Represented by Share capital - - Special reserve 38,676,000 38,676,000 Capital reserve 12,503,407 6,442,314 Revenue reserve (2,518,331) (3,812,397) __________ __________ Total Equity 48,661,076 41,305,917 NAV per share (Pence per share) 100.65 85.44 NAV per share at launch (Pence per share) 72.80 72.80 Statements of changes in equity for the year to 31 December 2007 Restated into Pounds Sterling for information purposes only Consolidated Share Special Capital Revenue 31 December Capital Reserve Reserve Reserve Total 2006 GBP GBP GBP GBP GBP GBP As at 31 December 2006 - 38,676,000 6,442,314 (3,812,397) 41,305,917 35,156,848 Profit/(loss) for the year - - 6,061,093 (1,548,262) 4,512,831 5,918,800 Foreign exchange adjustment arising on translation to Sterling - - - 9,322,707 9,322,707 230,269 ________________________________________________________________ As at 31 December 2007 - 38,676,000 12,503,407 3,962,048 55,141,455 41,305,917 ________________________________________________________________ Company Share Special Capital Revenue 31 December Capital Reserve Reserve Reserve Total 2006 GBP GBP GBP GBP GBP GBP As at 31 December 2006 - 38,676,000 (2,499,774) (3,937,631) 32,238,595 35,176,152 Loss for the year - - (1,642,476) (1,329,582) (2,972,058) (2,873,156) Foreign exchange adjustment arising on translation to Sterling - - - 5,951,599 5,951,599 (64,401) ________________________________________________________________ As at 31 December 2007 - 38,676,000 (4,142,250) 684,385 35,218,135 32,238,595 ________________________________________________________________ Company cash flow statement for the year ended 31 December 2007 Restated into Pounds Sterling for information purposes only 2007 2006 ____________ ___________ GBP GBP Loss for the year (2,972,058) (2,873,156) Adjustment for: Bank interest receivable (3,431) (13,618) ____________ ___________ Operating cash flows before movements in working capital (2,975,489) (2,886,774) Decrease in receivables 26,753 22,528 Increase in payables 1,896,863 2,108,064 ____________ ___________ (1,051,873) (756,182) Interest received 3,431 13,618 ____________ ___________ Net cash outflow from operating activities(1,048,442) (742,564) Investing activities Investment in subsidiary (9,956,017)(18,813,313) Repayment of loan by property developer - 6,300,191 ____________ ___________ Net cash outflow from investing activities(9,956,017)(12,513,122) Exchange difference arising on translation to Sterling 81,328 (10,335) Cash and cash equivalents at start of year 15,501,556 28,767,577 ____________ ___________ Cash and cash equivalents at end of year 4,578,425 15,501,556 ____________ ___________ Consolidated cash flow statement for the year ended 31 December 2007 Restated into Pounds Sterling for information purposes only 2007 2006 ____________ ___________ GBP GBP Profit/(Loss) for the year 4,512,831 5,918,800 Adjustment for: Bank interest receiveable (14,039) (16,441) Revaluation of investments (8,559,521) (9,959,237) Adjustment for deferred tax 979,672 995,924 ____________ ___________ Operating cash flows before movements in working capital (3,081,057) (3,060,954) Decrease / (increase) in receivables 62,001 (15,834) Increase in payables 4,782,691 2,243,660 ____________ ___________ 1,763,635 (833,128) Interest received 14,039 16,441 ____________ ___________ Net cash inflow /(outflow) from operating activities 1,777,674 (816,687) Investing activities Repayment of loan by property developer 942,313 6,300,191 Advances of loan to property developer - (1,283,176) Purchases of investment properties (13,129,856) (17,287,978) ____________ ___________ Net cash outflow from investing activities(12,187,543) (12,270,963) Exchange difference arising on translation (243,438) 230,268 to Sterling Cash and cash equivalents at start of year 15,952,378 28,809,760 ____________ ___________ Cash and cash equivalents at end of year 5,299,071 15,952,378 ____________ ___________
1 Year Lewis Charles Sofia Prop Fund Chart |
1 Month Lewis Charles Sofia Prop Fund Chart |
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