Secure Prop Regulatory News (SPDI)

The following amends the Secure Property Development & Investment PLC announcement released at 1629 on 30 June 2016 under RNS number 8718C.

In the above announcement, the NAV per share was reported as EURO 0.35 and 0.75 for 2015 and 2014 respectively instead of the correct denomination of GBP 0.35 and 0.75 for 2015 and 2014 respectively. All other details remain unchanged. The full amended text is shown below.

Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate

Secure Property Development & Investment PLC ('SPDI' or 'the Company')

Final Results

Secure Property Development & Investment PLC, the AIM quoted South Eastern European focused property company, is pleased to announce its full year financial results for the year ended 31 December 2015.

Financial Highlights

· 87% increase in total asset value to €125 million (2014: €67million) reflecting the acquisition of prime real estate with blue chip tenants in the South Eastern European region

· 64% increase in net operating income to €5.9 million (2014: €3.6 million)

· 31% increase of net assets to €42.5 million (2014: €32.5 million), while NAV per share was GBP0.35 from GBP0.75, principally as a result of dilution created by the issuance of new shares (from the Open Offer in March 2015 and as consideration for certain of the acquisitions and, to a lesser extent, revaluation of the Ukraine assets

· €8 million cash raised via Open Offer in March 2015

Operational Highlights

· Continued to successfully implement strategy to expand geographic spread of the portfolio

· Acquisition of three income producing properties let to blue chip tenants located in South Eastern European countries which offer high yields and capital growth, bringing the total portfolio to seven as at year end

· Strengthened Board with appointments of Calypso Nomikos and Vagharshak Barseghyan - two highly qualified entrepreneurial members with extensive investment and real estate knowledge in the region

Post Balance Sheet Highlights

· Proposed sale of the Brovary Terminal in Ukraine with fixed four-year lease agreement (with an affiliate of the prospective buyer) raising the warehouse occupancy rate to 100% generating ~US$150,000 of Net Operating Income ('NOI') per month until the sale is concluded

· Sale of the Linda residential portfolio in Bucharest for €660,000 (gross of debt)

· In discussions with Nestle in Romania relating to the termination of its rental contract in the Innovations Logistics Park, which is expected to result in a settlement being payable to SPDI by Nestle

Lambros G. Anagnostopoulos, Chief Executive Officer, said, "2015 saw us delivering on our strategy of expanding our portfolio in the South Eastern European region with properties let to blue chip tenants in countries which offer high yields and capital growth. The injection of three more income producing properties into our portfolio increased our total asset value by an impressive 87% to €125 million and boosted our revenues by 64% to €5.9 million. The year witnessed strong shareholder support demonstrated by the €8 million Open Offer in March 2015, a bolstering of our highly competent Board, and this, coupled with the significant growth of our solid income producing portfolio, puts us in a strong position to continue this progress in 2016 and beyond."

* * ENDS * *

Copies of the Annual report and Accounts are being posted to Shareholders and are available on the Company's website at www.secure-property.eu

For further information please visit www.secure-property.eu or contact:

1. Chairman's Statement

2015 saw significant momentum build behind our strategy: to turn SPDI into the leading London listed property company focused on South East European region, and during the year under review we have doubled the number of our income producing properties. SPDI has undergone a structural shift, which has seen us build a portfolio of prime real estate properties with a broad geographic spread, highly attractive yields and significant capital growth potential. To put the year into context, SPDI has gone from having just one income producing property in 2012, to a portfolio of seven properties in four South Eastern European countries at the end of 2015.

The acquisitions we completed in 2015 lie behind the financial performance we have reported today, specifically a 50% increase in the asset value of our property portfolio to €117 million; and a 52% step-up in our revenues from income producing assets to €5.5 million. Our acquisition-led strategy is overlain with a strict risk management policy that requires all potential targets match our stated investment criteria. It is with risk management very much in mind that we look to invest in prime real estate that: benefits from excellent addresses and transport links; is let out to blue chip customers on long leases with strong covenants; generates visible income streams, and offers scope for significant capital appreciation by providing exposure to the on-going European yield convergence play.

All acquisitions made in 2015 are representative of what we look for: a fully let logistics park west of Athens predominantly let to Kuehne + Nagel generating a ~€1.5 million net operating income ('NOI'); a fully let office building in Sofia let to one of Bulgaria's largest insurance companies, generating €2.9 million gross rental income; a fully let retail property in Craiova, Romania rented to Praktiker with ~€1 million of gross rental income, and a fully let office building in Bucharest mostly let to Romania's Telecom Regulatory Authority generating ~€1.85 million of gross rental income. As well as providing a cash flow generative platform that we can use to acquire additional properties in our area of interest, by acquiring these assets we have proven our ability to source, identify, and execute transactions at attractive yields in South Eastern Europe, a market that continues to offer the right dynamics for the execution of our strategy. Furthermore, the commencement of the European Central Bank's (ECB) quantitative easing programme early in 2015 provides a significant tailwind to the on-going European yield compression play, which in our view has a long way to run, particularly in the exciting emerging European countries which are our core area of focus.

To be able to successfully navigate these markets requires a first rate management team and Board. SPDI has both and it is the team's vision and direction, which has not only been key to the turnaround of the Company, but is also a key differentiating factor for the Company. We have strengthened our team further this year and welcomed Kalypso Maria Nomikou and Vagharshak Barseghyan to the Board, two highly qualified entrepreneurial members with extensive investment and real estate knowledge in the region. They have already enhanced the capabilities of our highly skilled team and will help the Board identify and secure future acquisitions which offer material and sustainable cash flows.

As well as acquiring assets, the management team is also focused on actively managing our growing portfolio of real estate to ensure we maximise value for our shareholders. The performance of each asset as well as that of the local and regional property markets are all constantly monitored to ascertain the optimal strategy for each asset. All options are considered, including development and sale. With this in mind post period end we announced the proposed sale of the Brovary Terminal in Ukraine, as well as the sale of the Linda residential portfolio in Bucharest. Subject to the completion of the transactions, the proceeds will be reinvested both into growing our portfolio further as well as potentially returning some cash to our shareholders.

Having de-risked our portfolio through the acquisition of prime real estate, we now have an excellent platform from which to access further opportunities and in the process capitalise on the huge potential across the region. Our portfolio is our competitive advantage and having expanded our income-producing assets this year we aim to continue to grow, as we look to generate value by taking advantage of the highly positive regional macro and property market fundamentals. It is clear however that our current share price, which is trading at a significant discount to the net asset value of our existing properties, has not kept pace with SPDI's transformation into a diversified revenue-generative property company focused on the dynamic SEE region. We are confident this disconnect will narrow as the income generating capability of our existing portfolio becomes apparent and we move closer to the point at which we are in a position to sustainably distribute a portion of our earnings as dividends. In the meantime, we will continue to identify and invest in highly attractive growth opportunities in the real estate market whilst maintaining our focus on efficient asset management, as we look to repeat the successes of 2015 in the year ahead and beyond.

At the tail end of the period as well as in the first part of 2016 the Company faced some challenges created mainly by the continuing turmoil in the Ukrainian Economy as well as the recapitalization of the Greek banks that took place in December 2015. Those factors resulted in the reduction of the occupancy of the Terminal Brovary in Kiev and substantially prolonged transaction times, respectively. As our Auditor's Report notes in an emphasis of the matter, at the end of 2015 our current liabilities in effect exceeded current assets by €21.1m, but this is qualified by Notes 36.7 and 37 of the accounts that explain the two current liabilities that create this imbalance (which relate to our residential business in Romania and Terminal Brovary in Ukraine) are either long term liabilities reclassified as short term or reflect an agreed but yet to be contractually approved practice to repay certain loans in tandem with the residential sales progress and as such there is every indication that these debts will be repaid in 2016 in the normal course of business. In parallel both tenant issues (Nestle replacement following the expression of their intent to vacate the Innovation Terminal, and Praktiker's tenancy extension for an additional five years) as well as the potential sale of Terminal Brovary have taken longer than originally expected which made it necessary for management to very carefully, and successfully, manage our cash position and banking relationships in 2016.

Another perennial challenge for the Company was that operating in Ukraine showed up in our accounts in 2015 with a €5m (2014: €7.5m) foreign exchange loss related to the EBRD loan and a €13.6m unrealized foreign exchange loss (2014: loss €19.7m) stemming from intercompany loans. This was due to the continued weakness of the Ukrainian currency, both of which are expected to be mitigated upon the Terminal Brovary sale completion. In light of the continued problems in that country, the agreed sale of Terminal Brovary in June 2016 at a substantial profit to its Net Asset Value is all the more impressive. The 53% fall in NAV per share during 2015 is the result of a combination of factors: share issuance from the Open Offer and purchase of properties, and revaluation of assets caused by the continuing difficulties faced by the Ukrainian economy.

I would like to take this opportunity to thank our shareholders for their continued support throughout the year. This was further demonstrated by the raising of €8 million via an open offer in March 2015 which has helped facilitate our progress. Thanks to their support, we are delivering on our objective to position SPDI as the go to publicly traded vehicle for institutional and retail investors looking to gain exposure to the attractive yields available in SEE, a region that is increasingly gaining the recognition it deserves for its favourable supply and demand dynamics and attractive yields.

Paul Ensor

Chairman of the Board

2 Letter to the Shareholders

29 June 2016

Dear Shareholders,

During 2015 the Company continued its growth trajectory thanks to a number of acquisitions of high yielding income producing assets in South East Europe (the "Region") resulting in a substantial increase in our Assets Under Management ("AUM"). In parallel our strategy of diversifying regionally also continued with the Company entering one more SEE country. By the end of 2015, SPDI was present in four emerging economies of SEE owning seven income producing assets in the Region.

During the first quarter of the year in order to strengthen our acquisition capacity, the directors of SPDI offered its shareholders the opportunity to participate in a rights issue (open offer) that generated €8m new cash in March 2015. The Company used the capital raised to acquire assets, it also issued new shares for the same reason. In August 2015 we raised a further €2m of new capital through the execution of warrants bringing the total new equity raised for the year to €10m.

During the year, SPDI acquired three income producing assets: a) 20% of the Autounion office building situated in a very prominent location close to the international airport of Sofia, Bulgaria, which is fully let to one of the country's largest insurance companies, Eurohold until 2027, b) the Praktiker big box retail unit in Craiova, Romania, in exchange for SPDI redeemable convertible shares, and c) 24% of the Delea Nuova office building, a well located property facing three main roads in the city center of Bucharest almost fully let with the main tenant being the country's telecommunications regulator, in exchange for SPDI ordinary shares. Together with the latter the Company acquired also a residential portfolio in Bucharest and Sofia. The three income producing assets generate a combined €2m of gross rental income.

The macroeconomic environment in the Region and throughout Europe stabilised even further in 2015 with most of our countries of interest showing strong economic growth and signs that the property markets were picking up after years of stagnation. New international investors made their presence felt in Romania, where acquisition yields dropped across property types while transaction volumes increased. In Greece an agreement with the country's lenders, which was reached in extremis in August, followed by fresh elections that confirmed the government in place, signalled a period of lower political uncertainty. The country reached year end with a new €14bn recapitalisation of Greece's systemic financial institutions, the majority of which the Company has business relationships with. Ukraine experienced yet further foreign exchange destabilisation in H1, but the Hryvnia rate stabilised by Q4 offering a rare stability in the country's economy. At the same time, Europe as a whole experienced sluggish growth with the ECB expanding its QE package.

On the heels of a successful 2014, the 2015 accounts show an even better and more effective operational picture. If we disregard asset revaluation and Ukrainian related FX losses, the operating results as presented in the Management Report (excluding financial costs, that are high in our region) show positive numbers across the board. Our revenues topped €5,9m, while our EBITDA surpassed €2,4m, 3 times more than the 2014 figure, while cash generation improved on the back of the income producing asset acquisitions.

SPDI has been successfully put on a solid foundation, both financially and operationally, against the backdrop of the global economic and financial sector issues between 2010-2014, having successfully averted any substantial effects from the war in Ukraine and sheltered the Company and its assets from the financial trouble that have hit both Greece and to a lesser extent Cyprus in the last few years, even though none of the above have been put squarely in the past. While 2014 was a turnaround year for the Company, the progress made in 2015 has served to confirm that the implementation of our growth strategy of acquiring quality income producing assets that generate strong cash flows is bearing fruit. As the economic fundamentals in the Region improve (not unlike our stated expectations) we are striving to position the Company in the centre of the growth story of the Region that would lead to substantial positive results for our shareholders. Having experienced in practice the firm support of our shareholders through the success of the open offer, management will continue being guided by our vision, and exerting every effort in achieving our common goals.

Best regards,

Lambros G. Anagnostopoulos

Chief Executive Officer

3 Management Report

3.1 Corporate Overview & Financial Performance

In 2015 the Company's management focused on further acquiring income producing assets with a view to increase and diversify its income generating base. More specifically, during the reporting period the Company acquired:

· 20% of Autounion, a 19.000 sqm office building in Sofia, fully let to one of Bulgaria's largest insurance companies, generating a gross rental income of ~€2,9m annually;

· 24,35% of Delea Nuova office building, an almost fully let 10.000 sqm office building in Bucharest mostly let to Romania's Telecom Regulatory Authority ANCOM. Delea Nuova generates a gross rental income of ~€1,85m annually;

· A portfolio of residential properties in Bucharest and Sofia, partly let and partly intended for sale, generating ~€0,3m annual rental revenues;

· A fully let 9.000 sqm retail property in Craiova, Romania, rented to Praktiker until 2020, generating a gross rental income of ~€1m.

In addition in July 2015 following intensive legal battle which started in 2011, we have finally been able to register ownership over Rozny land plot in Kiev Oblast, destined for residential development. The ownership of Rozny plot was under contention by an Ukrainian third party even though the claims were unsubstantiated (as finally proven).

While the Company continued on the 2014 trend of adding assets to its portfolio resulting in an 52% increase in rental income for the year to €5,5m, it maintained its overall lean and strict operations management, keeping the recurring annual operating and administrative costs to below €2,7m, an increase of ~17% compared to 2014, even though the size of the Company almost doubled. At the same time, management continued the implementation of the Company's strategy through spending time and resources to identify further acquisition opportunities for potential future transactions.

In parallel, the Company's Board of Directors was strengthened with the addition of two new Directors with extensive experience in investing in real estate as well as in other markets in our region of focus. Ms. Kalypso Nomikou and Mr. Vago Barseghyan, have a long and successful entrepreneurial and business track record, focusing in shipping and corporate finance respectively, both globally and in South East Europe where they have been involved in various investments.

The political instability in Ukraine continued throughout 2015 albeit at an abating rate. As the crisis and the war have taken a heavy toll on the country's economy, the trend offers hopes of stability returning to the country in the not too distant future. Despite efforts to avert the effects of the crisis, Terminal Brovary, the Company's logistic complex in Kiev, has not been spared with many of its tenants experiencing substantial financial concerns. Consequently, the Terminal saw its occupancy decrease to 55% as a result of many tenants deciding to downsize their Ukrainian operations, or moving to other cheaper alternatives, as the market has become denominated in local currency (UAH) from US$ following the substantial devaluation vis a vis the US$ in the last 18 months. Such evolution increases the FX exposure of the Company.

During the reporting period the Greek government continued discussions with the creditor institutions (EU/ECB/IMF/ESM) for extending the 2010 financial assistance program. The prolongation of the negotiation for yet another six months resulted in maintaining of a higher political and economic risk profile for the country. Following a referendum in July 2015 amidst a capital controls environment instigated in June 2015, a preliminary agreement signed in August 2015 and snap elections in September 2015, Greece has finally managed to conclude a deal with the creditors that was eventually ratified in May 2016 but the implementation of the agreement and the reforms attached to it are still to come. Such political and economic turmoil has not had a substantial effect on the operation of the Company in the country where its logistics terminal is fully let.

In view of the Open Offer and the exercise of the Warrants (March and August 2015 respectively), which resulted in 38.102.375 new ordinary shares being issued by SPDI, as well as the issuance of new redeemable shares for the acquisition of the Craiova asset, the Company's capital structure was 90.014.723 ordinary shares, 9.011.497 redeemable preference shares and 18.028.294 Class A warrants at the end of the year. At the end of the reporting period SPDI had ~€43m of equity and ~€82m of liabilities, out of which ~€65m is bank debt. As a result the debt to equity ratio was 1,51x. The Loan to overall Value ratio (debt as a % of Total Asset Value) was 52%.

Most of its income producing assets debt profiles follows the WALT of the tenancy agreements while the residential asset related debt is being repaid directly from sale proceeds. Whenever a need arises to re-profile debt, the Company enters into discussions with the relevant financial institutions to that effect, even though such discussions in the Region, and especially as far as Greek banks are concerned are time consuming and may take more than 6-9 months.

In 2015, the Company finalised the streamlining of the Ukrainian operating companies by merging most of them and eliminating others, ending with nine for the six assets it owns in the country. A similar exercise is being implemented in Romania and Cyprus.

The Company has also implemented an ERP system, based on Microsoft Dynamics (Navision). Upon full implementation by end 2016, the system will allow for the real time monitoring of income and expenses across all countries and assets resulting in operating efficiencies.

The Audit Committee monitors the integrity of the consolidated financial statements, potential conflicts of interest of the directors and senior managers as well reviews the effectiveness of the Company's internal controls. The Committee also supervises the relationship with the Auditor, providing relevant recommendations for maximizing the effectiveness of the external audit.

The Remuneration Committee has the responsibility to determine and periodically review the policy and implementation for the remuneration of the Directors and Executive Management of the Company so as to ensure that all are provided with appropriate, reasonable and fair incentives for an enhanced performance.

The Board is ultimately responsible for the Group's strategy, financial performance and risk management systems. As the Group grows, the Board is also responsible for the alignment of the implemented strategy with the vested interests of the shareholders, through annual budgets and cash flow preparation and their respective revisions when appropriate. Monitoring the on-going financial performance is a responsibility of the management which reports to the BoD in order to maintain a tight liquidity control.

2015 saw SPDI continue its growth trend which commenced the year before through the acquisition of new assets leading to the Company being by the end of the reporting period active in Romania, Bulgaria, Greece and Ukraine. Most notably, the Company's annual operating income increased by ~64% to €5,9m (excluding any property fair value adjustments to the cost of goods sold) from €3,6m in 2014. The operating income does not include the % participation by the Company of the operating income of the projects that the Company maintains a minority participation in, which is reported as dividend income, but includes net income resulting from on-going sales of residential assets (sales income minus the cost of the asset sold). Overall, EBITDA from operations has increased 3x to ~€2,4m (2014: €0,8m).

3.2 Property Holdings

The Company's portfolio consists of commercial income producing and residential properties in Romania, Greece, Bulgaria and Ukraine as well as land plots in Ukraine, Bulgaria and Romania.

Commercial 

Terminal Brovary Logistic Park consists of a 49.180 sqm gross leasable Class A warehouse and associated office space, situated on the junction of the main Kiev - Moscow highway and the Borispil road which was fully completed in 2012. Following the near collapse of the Ukraine economy and its currency (that saw a drop by 70%) the facility experienced an increased vacancy with tenants shrinking their warehousing needs as their bottom line sales were substantially affected. The Terminal was ~45% leased at the end of the reporting period.

Innovations Terminal Logistic Park consists of a 16.570 sqm gross leasable Class A warehouse 6.395 sqm of which is for cold storage. Innovations was 87% leased at the end of the reporting period, 61% to Nestle and 26% to other local companies. Post period end Nestle notified the Company of its intent to leave the warehouse and the Company is in the process of both negotiating a break agreement with Nestle on their three year remaining contract and receiving the approval for such agreement by the financing Bank. At the same time the Company is actively looking to find replacement tenants.

GED Logistics Terminal consists of a 17.756 sqm gross leasable area, industrial and associated office space, situated on the west side of Athens, close to the Port of Piraeus. The facility has been in operation since 2010 and as at the end of the reporting period was 100% leased, to Kuehne + Nagel (70%) and GE Dimitriou SA (30%). The park also has a photovoltaic energy production facility installed on its roof.

EOS Business Park which serves as the Danone Head Quarters in Romania, is a 3.386 sqm gross leasable Class A office building, situated in the North Eastern Part of Bucharest. The building is fully let to Danone until 2026.

Autounion consists of 19.476 sqm of gross leasable office area, situated in a prime business area near the International Airport of Sofia. The BREEAM-certified building was completed in 2008 and is fully leased to Eurohold, one of the largest Bulgarian insurance companies, until 2027.

Praktiker Craiova consists of 9.385 sqm of gross leasable retail area, situated on one of the main arteries of Craiova, the sixth biggest city in Romania in terms of population. The retail unit is fully leased to Praktiker, a regional DIY retailers in Europe, until 2020. Early in 2016 the tenant offered to extend the lease agreement for an additional five years until December 2025, in exchange for reducing the annual rent to the levels of the temporary reduction that tenant and the previous owner had agreed for the last few months of 2015, namely to ~€600k. Such offer is under discussion.

Delenco office building consists of 10.280 sqm of gross leasable office area, spread over 11 floors. The building was completed in 2007 and it is located in Bucharest's centre. At the end of the reporting period, the Delenco office building was 97% let, with ANCOM (the Romanian Telecommunications Regulator) being the anchor tenant (70% of GLA).

Residential portfolio

This consists of five distinct groups of residential units in Bucharest and one in Sofia. As the market prices for residential properties picked up in 2015, the Company sold a number of units and by the end of 2015 still manages a total of 228 apartments and villas. The Group acquired the portfolio in two stages, the first in August 2014 and the second in May 2015.

Land Assets

Bela Logistic Centre is a 22,4 Ha plot in Odessa situated on the main highway to Kiev. Following the issuance of permits in 2008, below ground construction for the development of a 103.000 sqm gross buildable area of logistic center commenced. Construction was put on hold in 2009 due to the global economic crisis.

Kiyanovskiy Lane consists of four adjacent plots of land, totaling 0,55 Ha earmarked for a residential development, which are well located, overlooking the scenic Dnipro River, St. Michael's Spires and historic Podil neighborhood.

Tsymlyanskiy Lane is a 0,36 Ha plot of land located in the historic Podil District of Kiev earmarked for the development of a residential complex.

Balabino project is a 26,38 Ha plot of land situated on the south entrance of Zaporozhye, a city in the south of Ukraine with a population of 800.000 people. Balabino is zoned for retail and entertainment development.

Rozny Lane is a 42 Ha land plot located in Kiev Oblast, destined for the development of a residential complex. It has been registered under the Company pursuant to a legal decision in July 2015.

Pantelimon Lake consists of a ~40.000 sqm plot of land in east Bucharest situated on the shore of Pantelimon Lake, opposite the prestigious Lebada Hotel. The Company is in negotiations with its co-owner of the plot and the lending bank to re-profile/restructure the loan. The construction permit, which allows for gross buildable area of~54.000 sqm residential space to be built, was renewed in April 2014.

Boyana Land The complex of Boyana Residence includes adjacent land plots with surface of 17.000 sqm with building permits to develop gross buildable area of 21.851 sqm.

Green Lake land The Green Lake residences complex includes adjacent land plots of 40.360 sqm. The Green Lake project is situated in the northern part of Bucharest on the bank of Grivita Lake in Bucharest. SPDI owns 44,24% of these plots.

In 2015, the Company maintained in position its RICS accredited valuers, namely CBRE Ukraine for the Ukrainian Assets, and Real Act for the Romanian, Bulgarian and Greek Assets. The valuations have been carried out by the appraisers on the basis of Market Value in accordance with the current Practice Statements contained within the Royal Institution of Chartered Surveyors ("RICS") Valuation - Professional Standards (2014) (the "Red Book") and is also compliant with the International Valuation Standards (IVS).

At the year-end, the Company's property assets (including its % participation in assets classified under associates and available for sale) were valued at €117m, an increase of ~50% compared to December 2014, due to acquisitions effected throughout the reporting period. It should be noted that the fair value of the Ukrainian assets has been reduced by 24% due to the continuing crisis in the country, while valuations in Romania, and Greece showed marginal increases.

During the year the Company's asset portfolio became even more diversified in terms of geography as well as asset class. At the end of the reporting period, ~80% of the Company's portfolio is outside Ukraine with Romania becoming the prime country of operations (49%) in terms of Gross Asset Value.

In respect of the income generation capacity of the Company's assets (excluding income resulting from asset sales) only 25% of expected annualized income comes from Ukraine, with Romania being the prime source with 45%.

Excluding a) the revaluation losses attributable mostly to the situation in Ukraine, b) the foreign exchange losses (related to the EBRD Terminal Brovary loan or the intercompany loans that have been affected on paper by the devaluation of the UAH) and c) any one off gains/losses, costs or impairments/provisions related to the properties acquired during the period the table below compares the performance of the last 2 operating periods, showing significant improvement.

The table below summarizes the main financial position of each of the Company's assets (representing the Company's participation at each asset) at the end of the reporting.

The Net Equity attributable to the shareholders as at 31 December 2015 stood at ~€43m representing a 31% increase over the 2014 Net Asset Value driven by the new assets acquired for shares during the year as well as the new equity raised.

The NAV per share as at 31 December 2015 stood at GBP0,35. To compare with the 2014 equivalent NAV per share, one needs to take into account the more than doubling of the ordinary shares the Company has on issue, as a result of the March 2015 Open Offer (rights issues) to its existing shareholders as well as the issuing of more shares in exchange of assets that have been acquired. Even though the open offer was effected at a much lower price than the 12 month average to that date, the discount of the Market Value vis a vis the Company's NAV increased to 29% by year end.

3.3 Financial and Risk Management

The Group's overall bank principal debt exposure at the end of the reporting period was at €65m (including property assets fully or partially owned by the Company):

a. the €12,2m construction debt to Terminal Brovary from EBRD. This loan is denominated in US$ and stands at $13,25m at the end of the reporting period.

b. the €3,9m finance lease of the EOS business park with Alpha Bank Romania.

c. the €7,4m finance lease of the Innovations park with Bank of Piraeus Romania.

d. the €12,3m debt financing of the GED Logistics park and photovoltaic with Eurobank.

e. the €4,8m debt financing of the Praktiker Craiova with Marfin Bank Romania.

f. the €0,9m (24% participation at the total of €3,7m) debt financing of the Delenco office building with CEC.

g. the €2,5m (20% participation at the total of €12,6m) debt financing of the Autounion office building with Unicredit.

h. the €14,8m being the Company's portion on the residential portfolio debt financing.

i. with the remaining €6,2m being the Company's portion on land plot related debt financing in Romania and Bulgaria.

Overall, the Group's Loan to Value ratio at the end of 2015 stands at 52%.

Throughout 2015 the Company continued to focus on generating and preserving liquidity and optimizing its cash flow in a credit environment that had not improved much from a year before. The Company raised cash, which it used to acquire more assets, keeping a tight cash flow schedule, and managing its liabilities in a way to limit the need to carry cash on its balance sheet to a minimum. The reduction of Terminal Brovary rental income (due to tenants leaving or accepting lower rent to stay), as well as temporary cash shortfalls linked with tenants leaving until new tenants sign up in other property assets, have caused some cash shortfalls to the Company.

3.4 2016 and beyond

Going into 2016, the Company is poised to follow its strategy by identifying new income producing assets in Romania, Bulgaria and/or Greece, as well as the capital sources necessary to effect such acquisitions. As the political turmoil in Greece is beginning to level off, and the economic growth of Romania shows signs of further improvement, the time is ripe for the Company to seek making yet another step towards its stated goal of becoming a leading income producing property company in the South East Europe region. At the same time, and as the markets pick up, the Company will not close its eyes to possibilities of realizing values through the sale of assets, should these opportunities materialise.

4 Regional Economic Developments

4.1 Romania

Romania's GDP registered a 3,7% growth y-o-y in Q4 2015, the second highest among EU28 countries after the Czech Republic. After this result, the country's economic growth for 2015 reached a real 3,8%, compared to 2014's 2,8%.

The year ended with CPI falling in negative territory (-0,7% y-o-y), mainly due to VAT rate decreasing for all food products from 24% to 9% as of June 2015. Unemployment rate fell slightly to 6,7% compared to 2014. The Romanian government and the trade unions have reached an agreement to increase the gross minimum wage to €276 from €232 per month, as of May 2016. Also, the government reduced VAT from 24% to 20% and dividend withholding tax from 16% to 5% as of 1 January 2016.

Romania's current account deficit widened to €1,76bln in 2015, from €0,69bln a year earlier. Foreign direct investments totaled €3,04bln in the period under review, approximately 25% higher than in 2014. Long-term external debt at end-2015 stood at €71bln down 6,3% from end 2014. Debt stands at ~44% of GDP.

In May 2015, the Romanian National Bank cut its key monetary policy rate to a record low of 1,75%. Exchange rates remained relatively stable throughout 2015 at RON 4,50 to the Euro.

In December 2015, Moody's changed the outlook on Romania's Baa3 government ratings to positive from stable and affirmed Romania's Baa3/P-3 ratings, the lowest investment grade level. Moody's said that the country's significant progress in correcting its macroeconomic imbalances is one of the key drivers for changing its outlook.

Romania is expected to continue as the Region's outperformer in 2016, with an accelerating growth of more than 4%, mainly driven by private consumption. Reforms in taxation are likely to attract even higher investment volumes, along with improved EU funds absorption rate and public investment spending. However, scheduled elections for late 2016 may be a cause for some political uncertainty.

4.2 Bulgaria

Bulgaria's economy registered a 2,9% annual growth rate in 2015 (2014: 1,5%), the highest rate since 2011, beating June's estimate of 1,1%. Growth in 2015 was higher than initially expected due to stronger exports to the EU stemming from lower energy prices, the recovery of investments as a result of improved implementation of EU-funded projects and better labour market performance.

The country's current account showed a surplus of €542m in 2015, compared to a surplus of €493m a year earlier, according to the Bulgarian Central Bank. FDI rose to €1,58bln in 2015, increasing by approximately 23% in comparison with the previous year's volume.

Annual EU-harmonized CPI stood at minus 1,1% y-o-y, while unemployment recorded a rate of 10%, lower than 2014 rate of 11,5%. Exchange rates remained stable throughout 2015 at BGN 1,96 to the Euro.

The Bulgarian government announced the increase of the minimum monthly wage to € 215 as of 1 January 2016, up from €195.

The low energy cost, the aforementioned wage rise and the low inflation rates in the country benefits consumers in terms of disposal income. The on-going Euro area recovery is also expected to boost Bulgaria's economic performance in 2016, due to the country's high exposure to the area via trade and capital flows.

4.3 Ukraine

The deep recession which was a result of the on-going conflict in the Eastern border and sharp depreciation of the national currency in H1 2015, seems to be fading out as also the decline of GDP continues to decelerate. In Q4 2015, GDP registered a drop of 3,2% y-o-y compared to declines of 7,2% in Q3 and 14,6% in Q2. Based on these results, the annual average contraction of GDP reached 9,9% in 2015.

In Q4 2015, important reforms were carried out. In particular, Ukrainian authorities concentrated efforts on further business deregulation, trade liberalization, deepening cooperation with the EU and privatization. The IMF has endorsed the government's fiscal budget for 2016 and it is expected that the third tranche from its programme is expected to be available within Q3 2016. Due to the successful public debt restructuring, Standard & Poor's increased the ratings of sovereign foreign debt from SC to B-.

The consolidated budget deficit for 2015 reached about 3,5% of GDP, including government transfers to Naftogaz, the Pension Fund, and for banking re-capitalization. Net FDI reached USD 2,3 bln mainly from bank recapitalization.

During the year, the sharp depreciation of the UAH and the resultant increase in prices for imported goods and increase of the state-regulated tariffs led to an inflation of 43,3%, compared to 12% in 2014. Unemployment rate eased down to 9,4% from 11% a year earlier. After reaching a record of 30 UAH/USD in February, exchange rate seemed to stabilize between 24-25 UAH/USD.

A major development concerning international trade is that the Free Trade Agreement (FTA) between Ukraine and the EU has become effective on 1 January 2016. According to the government, the FTA will eliminate 97% of EU tariffs on Ukrainian exports and will reduce the average tariff on Ukrainian exports from 7,6% to 0,5%.

According to the latest forecasts, Ukraine is expected to return to a modest growth in 2016, if political reforms continue being implemented. Nevertheless, the conflict in eastern Ukraine remains a significant problem, as ceasefire violations from time to time jeopardize the country's stability.

4.4 Greece

After lengthy negotiations that started in February 2015, in August 2015 and among fears of "Grexit", Greece and the Eurozone stepped back from the brink and reached an agreement on a new three-year adjustment programme offering €86bln of financing in return for a number of reforms and measures to be implemented by the Greek government. This agreement led to the re-opening of the banks that had been closed for several weeks because of imposed capital controls in June 2015.

In September 2015, following a second snap election victory in less than 12 months the SYRIZA party remained in power so as to undertake the task of completing to pursue the implementation of the August agreement. A necessary step in this process being the formal evaluation by the lender technocrats of the political implementation of the required processes, political uncertainty lingers on in the country for as long as it is not completed, leading to deepening recession and lack of liquidity in the markets.

Greek GDP contracted by 0,2% in 2015 as a consequence of the aforementioned political uncertainty and also the capital controls' imposition, which reduced liquidity in the economy.

In autumn, another bank recapitalization - the third in as many years - took place for €14bn and proved to be successful, as systemic banks managed to find the necessary capital through mostly private (and foreign) investors.

Greek budget showed a primary surplus of €1,23bln in 2015 compared to a surplus of €0,53bln a year ago, while the general government deficit came to 7,2% of GDP compared to a 3,6% deficit in 2014.

Inflation rate remained in negative territory for the third consecutive year, being at minus 1,7% for 2015. Unemployment rate in the country eased slightly, standing at 24,6% at the end of 2015.

Political uncertainty mainly driven by the uncertainty of whether the government will proceed with the necessary economic reforms leading to a positive evaluations by the lenders, along with the on-going refugee crisis, are the two biggest issues that put the country's stability in question for 2016 and going forward.

5 Real Estate Market Developments

5.1 Romania

The total investment volume registered in Romania for 2015 recorded a 42% decrease, but the low level of investment volume can be explained by two major one-off transactions at the end of 2014.

Total industrial and logistics stock in Romania reached 2,1m sqm, of which 1m sqm is in Bucharest. Leasing demand in 2015 outpaced 2014 by 22%, reaching a total of 375.000 sqm. During the year, the investment volume reached approximately €300m, almost seven times higher than last year's volume. This number was achieved through portfolio acquisitions, distressed assets acquisitions and also sale-and-lease back transactions. Average prime rental rate remained at €3,8 per sqm, while vacancy rate in the country continued on its decreasing trend, reaching 5% from 11-12% in 2014. In Bucharest, vacancy rate dropped further to 3,3%, but the demand driven pressure is expected to ease after the delivery of projects under development. As a result of the high investment volume, yields compressed to 8,75% for prime properties, from last year's 9,5%.

Bucharest's office space stock recorded a 6,3% increase in 2015, compared to last year, reaching 2,37m sqm in total. Currently, approximately 0,41m sqm are under construction and scheduled for delivery in 2016. Adverse market conditions in 2009-2010, led to a significantly low number of signed contracts and with typical leases being signed for five years, the number of contracts expiring in 2015 was relatively small. Thus, total leasing activity in 2015 was 20% lower than a year earlier. The majority of lease agreements was signed by IT companies, continuing last year's trend. Prime headline rental rate recorded a slight increase by 2,8% during the year, reaching €18,5 per sqm (in CBD sub-market). Vacancy rate continued on its decreasing trend, reaching 11,9% from 13% in 2014. Yield for prime properties registered a 3,2% decrease to 7,5% in 2015.

The total modern retail supply in Romania reached approximately 3,2m sqm at the end of 2015 with Bucharest's stock currently standing at just over 1m sqm. Prime rental rates for shopping centers varies between €60-70 per sqm per month, for high street shops between €50-60 per sqm per month and for retail parks it is ~€8,5 per sqm per month. According to the national statistics office, retail sales rose by an annual 8,9% in 2015, mainly driven by food sales. Some of the most important retailers as Lidl, Mega Image, Rewe and Selgros have already expressed their intention to expand during 2016.

Romanian authorities issued a total of 39.112 building permits in 2015, a 3,8% increase in comparison with last year's numbers. In Bucharest, developers seem to adjust better to the existing demand, as the residential projects that target middle class buyers accounted for more than one third of the total stock delivered. Less than 50% of the transactions concluded on this segment are carried out by funding from the state guarantees programme Prima Casa (First Home), as the majority of middle class buyers already own a unit and are generally interested in moving into a house of higher quality. The purchase of a new house is now more feasible than before, due to the improved economic sentiment, the increase in the net average wage and also due to the successive decrease of the monetary policy interest rate by the National Bank, which allowed the banks to offer attractive mortgage loans in RON (Romanian local currency) with rates similar to Prima Casa. Prices have remained stable this year in Bucharest, standing at ~€1.000-1.100 per sqm.

5.2 Bulgaria

The total value of closed transactions on the investment market in Bulgaria in 2015 was €210 m, ~10% lower than in 2014. More than half of this volume stems from deals for development land.

During 2015, about 70.000 sqm of class A offices were delivered. As a consequence, the Sofia office stock increased slightly to 1,70m sqm. The pipeline of buildings, which are under construction, amounts to 160.000 sqm. Also, construction of 115.000 sqm of office space is suspended and if the trend of resuming such projects continues in 2016, office space supply will be even higher. The total class A and B vacant office space in Sofia decreased to 219.000 sqm. Thus the average vacancy rate for office space in the Bulgarian capital continued on its shrinking trend, reaching 12,9%, compared to 15,4% in the same period last year. Asking rents vary between €11-14 per sqm for Class A offices - depending on location, increased by almost 5% compared to 2014. At the same time, asking rents for Class B properties remained relatively stable between €6,5 and €8,5 per sqm.

In 2015, total modern retail stock in Bulgaria remained the same - approx. 844.000 sqm, as no new retail units were delivered. Shopping centers account for nearly 95% of the total stock. Vacancy rate in Sofia stood at 10% lower than last year's 12,4%, while in the other major cities it recorded a drop of 3% points to 12,4%. The situation in the Bulgarian retail market is not expected to change in 2016, as no new developments are planned for the time being, except for remodeling existing developments or resuming suspended construction projects.

Residential stock in Sofia showed a slight increase of 2% in newly completed projects in 2015. The high level of demand pushed the vacancy rates further down to 11% of the total stock. The number of transactions in 2015 showed a significant 25% y-o-y growth, while pre-sales accounted for 37% of all deals. As far as prices are concerned, a 5% y-o-y growth was registered. In addition, due to increasing demand and limited supply, the discount from the asking to the final price shrunk to 5% from 9% a year earlier.

5.3 Ukraine

Due to the deepening of the economic recession in Ukraine, many businesses were adopting a wait-and-see attitude in relation to further activity in the country, whilst the purchasing power of the country's population further decreased.

As of the end of 2015, total stock of modern warehousing and logistics space in the greater Kiev area amounted to 1,79m sqm, only a 3,5% increase in comparison with 2014, due to Ukraine's weak economic performance that led to a drop in demand from the occupier's side. The cumulative take-up reached 160.700 sqm, decreasing by around 25% compared to last year's performance. This number was generated mainly by logistics companies' relocation, cost cutting criteria being the driving force. As a result of Ukraine's weak economic performance vacancy rates generally increased, reaching 9,8% by the end of the year, from 6,1% a year earlier. Rental rates remained relatively stable at US$3-5 per sqm for Class A properties and US$2-3 for Class B. The majority of the new leases in 2015 were signed in the Ukrainian hryvnya without binding the rental payment to the US dollar.

The total office take-up in Kiev was around 174.000 sqm of GLA in 2015, twice as high as the figure registered during 2014. On the supply side, there was no major change in the office property market in Kiev and across Ukraine in 2015. The total office stock in Kiev reached around 1,8m sqm with approximately 70.000 sqm of offices delivered during 2015. The office vacancy rate in Kiev varied between 23-24% during Q1-Q3 2015, and decreased to around 21,5% by the end of the year. During 2015, a further downward correction in rental rates for classes B and C was witnessed, whilst rental rates for A-class properties remained in the range of USD 17-28 per sqm per month.

5.4 Greece

The property market is expected to recover gradually, once Greece emerges from the recession cycle. In terms of investment interest, the most dynamic sectors appear to be that of hospitality, as a result of a projected substantial growth in tourism.

The Industrial and Logistics market seemed stagnant in the first nine months of the year but in the last quarter investment activity started picking up. As a result, demand increased despite the fact that rents remained stable. Prime rental rates for industrial space are approximately €2,5 per sqm, while for logistics space they range from €3 to €4 per sqm. Demand for logistics space is expected to continue its increasing trend, especially after the successful privatization of Piraeus Port and the announcement for a tender regarding the Thriassio Freight Center in Attica Prefecture.

No major changes were observed in the office sector throughout 2015. Rental rates in prime office districts were stable through the whole year at €8-15/sqm depending on locations. This relatively large range is also a sign of market inefficiency due to the low transaction volume. Developers' unwillingness to commit to new constructions still exists, therefore there is no pipeline of new projects and this situation is not expected to change over the short or medium term.

6 Property Assets

6.1 Terminal Brovary Logistic Park, Ukraine

The Brovary Logistic Park consists of a 49.180 sqm GLA Class A warehouse and associated office space. The building has large facades to the Brovary ring road, at the intersection of the Brovary (Е-95/М-01 highway) and Borispol ring roads. It is located 10 km from Kiev city border and 5 km from Borispol international airport.

The building is divided into six independent sections (each at least 6.400 sqm), with internal clear ceiling of 12m height and industrial flooring constructed with an anti-dust overlay quartz finish. The terminal accommodates 90 parking spaces for cars and trucks, as well as 24 hour security.

As of the end of 2015, the Park was ~45% leased, representing a decrease of ~45% over the last year end numbers. This reduction was essentially driven by the on-going crisis of the Ukrainian economy, creating reduced warehouse storage needs.

Post period end, in May 2016 the Company fully leased the warehouse space while it also signed a letter of intent to sell the property to Rozetka, the leading Ukrainian internet retailer. Such sale is subject to EBRD approval as well as to various other conditions precedent.

6.2 Innovations Logistics Park, Romania

The Park incorporates approximately 8.470 sqm of multipurpose warehousing space, 6.395 sqm of cold storage and 1.705 sqm of office space. It is located in the area of Clinceni, south west of Bucharest center, 200m from the city's ring road and 6km from Bucharest-Pitesti (A1) highway. Its construction was completed in 2008 and was tenant specific. It comprises four separate warehouses, two of which offer cold storage.

In 2015 the warehouse was 87% leased with Nestle Ice Cream Romania being the anchor tenant. Following a request by Nestle Ice Cream, the Company has entered into discussions with Nestle and Bank of Piraeus to proceed with execution of an amicable settlement agreement, in breaking the remaining of Nestle's fix tenancy contract (until September 2018). In the meantime the Company has identified potential replacement tenants with whom it is having preliminary discussions.

6.3 EOS Business Park - Danone headquarters, Romania

The park consists of 5.000 sqm of land including a class "A" office building of 3.386 sqm GLA and 90 parking places. It is located next to the Danone factory, in the North-Eastern part of Bucharest with access to the Colentina Road and the Fundeni Road. The Park is very close to Bucharest's ring road and the DN 2 national road (E60 and E85) and is also serviced by public transportation. The park is highly energy efficient.

The Company acquired the asset in November 2014. The complex at the end of 2015 is fully let to Danone Romania, the French multinational food company, until 2026.

6.4 Praktiker Retail Center, Romania

The retail park consists of 21.860 sqm of land including a retail BigBox of 9.385 sqm GLA and 280 parking places. It is located in Craiova, on one of the main arteries of the city, along with most of the DIY companies.

The Company finalised the acquisition of the asset in July 2015. As at year-end, the complex is fully let to Praktiker Romania, a regional DIY retailer, until 2020 and the Company is negotiating the extension of the Praktiker lease agreement until December 2025 for an annual rent of ~€600.000

6.5 Delenco office building, Romania

The property is a 10.280 sqm office building, which consists of two underground levels, a ground floor and ten above-ground floors. The building is strategically located in the very center of Bucharest, close to three main squares of the city: Unirii, Alba Iulia and Muncii, only 300m from the metro station.

The Company acquired 24,35% of the property in May 2015. As of the end of 2015, the building is 97% let, with ANCOM (the Romanian Telecommunications Regulator) being the anchor tenant (70% of GLA).

6.6  Autounion office building, Bulgaria

A 19.476 sqm Class A office building which is located in a prime business area of Sofia, very close to the international airport and close to the city center. The building is BREEAM certified.

The Company acquired 20% of the property in April 2015. As at year-end 2015 Autounion is fully let to Eurohold Bulgaria, one of the largest Bulgarian insurance companies, on a long lease extending to 2027.

6.7 GED Logistics center, Athens Greece

The 17.756 sqm complex that consists of industrial and office space is situated on a 44.268 sqm land plot in the West Attica Industrial Area (Aspropyrgos). It is located at exit 4 of Attiki Odos (the Athens ring road) and is 10 minutes from the port of Piraeus (where COSCO runs two of the three piers of one of the biggest container port in the Mediterranean Sea) and the National Road connecting Athens to the north of the country. The roofs of the warehouse buildings house a photovoltaic park of 1.000KWp.

The buildings are characterized by high construction quality and state-of-the-art security measures. The complex includes 100 car parking spaces, as well as two central gateways (south and west).

The complex at the end of 2015 is 100% occupied, with the major tenant (approximately 70%) being the German transportation and logistics company Kuehne + Nagel.

6.8 Residential portfolio

· Romfelt Plaza (Doamna Ghica), Bucharest, Romania

Romfelt Plaza is a residential complex located in Bucharest, Sector 2, relatively close to the city center, easily accessible by public transport and nearby supporting facilities and green areas.

At the end of 2015, 20 apartments were available while 12 of them were rented, indicating an occupancy rate of 60%.

· Linda Residence, Bucharest, Romania

Linda Residence is a residential complex located in Bucharest, Sector 3, close to subway transportation which connects the project to all areas in Bucharest in less than 30 minutes.

At the end of 2015, 22 apartments were available with 4 of them being rented indicating an occupancy rate of approximately 18%.

In May 2016, the Company accepted an offer to sell in bulk most of the remaining units (16) it owned in Linda Residence.

· Monaco Towers, Bucharest, Romania

Monaco Towers is a residential complex located in South Bucharest, Sector 4, enjoying good car access due to the large boulevards, public transportation, and a shopping mall (Sun Plaza) reachable within a short driving distance or easily accessible by subway.

At the end of 2015, 26 units were available, 11 of them being rented indicating an occupancy rate of 42%.

· Blooming House, Bucharest, Romania

Blooming House is a residential development project located in Bucharest, Sector 3, a residential area with the biggest development and property value growth in Bucharest, offering a number of supporting facilities such as access to Vitan Mall, kindergartens, café, schools and public transportation (both bus and tram).

At the end of 2015, 22 units were available 11 of them being rented indicating an occupancy rate of 50%.

· Green Lake, Bucharest, Romania

A residential compound of 40.500 sqm GBA, which at the end of 2015 consisted of 40 unsold apartments plus 37 unsold villas, situated on the banks of Grivita Lake, in the northern part of the Romanian capital - the only residential project in Bucharest with a 200 meters frontage to a lake. The compound also includes facilities such as one of Bucharest's leading private schools (International School for Primary Education), outdoor sport courts and restaurants. Additionally Green Lake includes land plots totaling 40.360 sqm. SPDI owns ~43% of this property asset portfolio.

During the period, eight apartments and villas were sold while at the end of 2015, 77 units were unsold with 26 of them being let (occupancy rate of ~34% - 53% for apartments and 14% for villas).

· Boyana Residence, Sofia, Bulgaria

A residential compound, which consisted at acquisition date (May 2015) of 67 apartments plus 83 underground parking slots developed on a land surface of 5.700 sqm, situated in the Boyana high end suburb of Sofia, at the foot of Vitosha mountain with GBA totaling to 11.400 sqm. The complex includes adjacent land plots with surface of 17.000 sqm with building permits under renewal to develop GBA of 21.851 sqm.

During 2015, six apartments were sold, with 61 units remaining unsold at the end of 2015.

6.9 Land Assets

· Aisi Bela - Bela Logistic Center, Odessa, Ukraine

The site consists of a 22,4 Ha plot of land with zoning allowance to construct up to 103.000 sqm GBA industrial properties and is situated on the main Kiev - Odessa highway, 20km from Odessa port, in an area of high demand for logistics and distribution warehousing.

The Company has hired a new security agency to safeguard the premise and does not intend to recommence construction in the near future.

· Kiyanovskiy Lane - Kiev, Ukraine

The project consists of 0,55 Ha of land located at Kiyanovskiy Lane, near Kiev city centre. It is destined for the development of business to luxury residences with beautiful protected views overlooking the scenic Dnipro River, St. Michaels' Spires and historic Podil.

Certain local developers have approached the Company in late 2015 in order to explore the possibility of co-development. Such proposals are being evaluated by the Company.

· Tsymlyanskiy Lane - Kiev, Ukraine

The 0,36 Ha plot is located in the historic and rapidly developing Podil District in Kiev. The Company owns 55% of the plot, with one local co-investor owning the remaining 45%.

During Q4 2015, a number of interested parties approached the Company with the intent to partnering in commencing the development of this property. Such proposals are being evaluated.

· Balabino- Zaporozhye, Ukraine

The 26,38 Ha site is situated on the south entrance of Zaporozhye city, three km away from the administrative border of Zaporozhye. It borders the Kharkov-Simferopol Highway (which connects eastern Ukraine and Crimea and runs through the two largest residential districts of the city) as well as another major artery accessing the city centre.

The site is zoned for retail and entertainment. Development has been put on hold.

· Rozny Lane - Kiev Oblast, Kiev, Ukraine

The 42 Ha land plot located in Kiev Oblast, destined for the development of a residential complex.

Following protracted legal battle it has been registered under the Company pursuant to a legal decision in July 2015.

· Delia Lebada, Romania

The site consists of a ~40.000 sqm plot of land in east Bucharest situated on the shore of Pantelimon Lake, opposite to a famous Romanian hotel, the Lebada Hotel. The lake itself, having a 360 Ha surface, is the largest lake of Bucharest and provides for many leisure activities like fishing, cycling, walking, etc. At the back of the property there is a forest which transforms the area into a very attractive habitat for families and adds value to the residential units to be developed.

The construction permit, which allows for ~54.000 sqm to be built, was renewed in April 2014 but the project has been on hold. As the lending bank (Bank of Cyprus) expressed the intent not to renew the land acquisition loan (that the Company inherited upon acquisition of the asset as part of a portfolio in 2015 and which was in default), the Company entered in negotiations with the co-owner and the financing bank either acquire the associated loan, or sell the property all together. In the meantime the SPV owning the plot has entered into an insolvency status.

7 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2015

8 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the year ended 31 December 2015

On 29 June 2016 the Board of Directors of SECURE PROPERTY DEVELOPMENT & INVESTMENT PLC authorised these financial statements for issue.

9 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2015

1Share premium is not available for distribution.

2Companies which do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant tax year, will be deemed to have distributed as dividends 70% of these profits. Special contribution for defense at 20% will be payable on such deemed dividends to the extent that the shareholders (companies and individuals) are Cyprus tax residents. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defense is payable on account of the shareholders.

3 Exchange differences on intercompany loans to foreign holdings arose as a result of devaluation of the Ukrainian Hryvnia during 2014 and 2015. The Group treats the mentioned loans as a part of the net investment in foreign operations (Note 11.28).

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

5 Available For Sale financial assets are measured at fair value. Fair value changes on AFS assets are recognized directly in equity, through other comprehensive income.

10 CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2015

11 Notes to the Consolidated Financial Statements

For the year ended 31 December 2015

11.1 Investment in subsidiaries

The Company has direct and indirect holdings in other companies, collectively called the Group, that were included in the consolidated financial statements, and are detailed below:

Within the reporting period the subsidiaries LLC Aisi Outdoor, LLC Merelium Investments and LLC Aisi Donetsk were merged to LLC Aisi Ilvo. The reorganization (merger) process was finished in June 2015. The Group is planning to further streamline its structure in Cyprus, Ukraine and Romania throughrout 2016-2017.

During the reporting period the Company realized a number of acquisitions: GED Warehouse, Praktiker Craiova and a part of the mixed portfolio including commercial, residential properties and land were categorized under "Investment Property" (Notes 11.10 & 11.11). Another part of the mixed portfolio (Delea Nuova office Building , Green Lake land has been categozied under "Associates" (Note 11.12). The 20% acquisition of Autounion has been recored under "Available for Sale Fianancial Assets" (Note 11.15).

11.2 Operating Income

Operating income in the net amount of €5.130.637 for the year ended 31 December 2015 represents:

a) rental income as well as service charges and utilities income collected from tenants as a result of the rental agreements concluded with tenants of the Terminal Brovary Logistic Park (Ukraine), Innovations Logistics Park (Romania), EOS Business Park (Romania), Praktiker Craiova (Romania), and GED Logistics (Greece),

b) income from the sale of electricity by GED Logistics to the Greek grid,

c) rental income and service charges by tenants of the Residential Portfolio, and

d) sales proceeds income from sale of several apartments and parking spaces from the Residential Portfolio minus the deduction of Cost of assets Sold, representing the fair value of the previous year of the apartments and parking spaces sold in 2015. The net income from sale of assets incudes both sales from Investment Property assets and Inventory assets.

Occupancy rates in the various income producing assets of the Group as at 31 December 2015 were as follows:

Valuation gains /(losses) from investment property for the reporting period, excluding foreign exchange translation differences which are incorporated in the table of Note 11.10, are presented in the table below.

11.3 Administration Expenses

Salaries and wages include the remuneration of the CEO, the CFO, the Group Commercial Director, the Group Investment Director and the Country Managers of Ukraine and Romania, as well as the salary cost of personnel employed in the region.

Legal fees represent legal expenses incurred by the Group in relation to asset operations (rentals, sales etc), ongoing legal cases in Ukraine, debt restructurings as well as its compliance with AIM listing.

Advisory fees are mainly related to outsourced human resources support on the basis of advisory contracts, capital raising advisory expenses and marketing expenses incurred by the Group in relation to Cypriot, Ukrainian, Romanian, Bulgarian and Greek operations.

Directors' remuneration represents the remuneration of all non-executive Directors and committee members (Note 11.28)

Audit and accounting expenses includes the audit fees and accounting fees for the Company and all the subsidiaries.

Public group expenses include among others fees paid to the AIM: LSE stock exchange and the Nominated Advisor of the Company as well as other expenses related to the listing of the Company.

Depreciation/Amortization expense is mainly related to amortization of software (ERP - Navision) and for the depreciation of the generator in Terminal Brovary.

Sundry expenses include office expenses, travel expenses, communication expenses, D&O insurance and all other general expenses for Cypriot, Romanian, Ukrainian, Bulgarian and Greek operations.

11.4 Investment property operating expenses

The Group incurs expenses related to the proper operation and maintenance of all the income generating properties in Kiev, Bucharest, Athens, Sofia and Craiova. A part of these expenses is recovered from the tenants through the rental agreements (11.2).

Property Management fees relate to Property Management Agreements for Terminal Brovary Logistics Park, Innovation Logistics Park, and Praktiker Craiova with third party Managers outsourcing the related services.

Property related taxes reflect local taxes related to land and building properties (in the form of land taxes, building taxes, garbage fees, etc).

Leasing expenses reflect expenses related to long term land leasing.

11.5 Other operating income/(expenses), net

Compensation received relates to the extraordinary income due to early break off tenancy agreements by tenants in Terminal Brovary.

Accounts payable written off represent a write off of management fees associated with SEC South East Continent Unique Estate Investments Ltd charged by a related party, SECURE Management Ltd, which has accepted to forgo any claim on such payable amount. 

Impairment of assets represents an amount paid by a subsidiary 8 years ago for acquiring an option to buy properties which has not been exercised.

Transaction costs represent due diligence costs for properties that were considered for acquisition which at the end were not acquired. Such expenses were presented previously as Deferred expenses.

Other income/(expenses) represents  mainly non recoverable VAT.

11. 6 Impairment allowance for inventory and provisions

Impairment of Inventory relates to Boyana residence (Note 11.14).

Provision reflects potential contigent liabilities from legal cases (Notes 11.24 and 11.29).

11.7 Finance costs and income

Borrowing interest expense represents interest expense charged on bank and non-bank borrowings.

Finance leasing interest expenses relate to the sale and lease back agreements of the Group.

Finance charges and commissions include regular banking commissions, and various fees paid to the banks, including a fee paid to EBRD for the restructuring of the Terminal Brovary loan amounting to €99.154.

Default interest relates to interest charged by Bank of Cyprus in relation to the loan over Delia Lebada Invest srl (Note 11.21).

11.8 Foreign exchange profit / (losses)

a. Foreign exchange loss - non realised

Foreign exchange losses (non-realised) resulted from the loans and/or payables/receivables denominated in non EUR currencies when translated in EUR, mainly the EBRD loan (Note 11.21). The exchange loss for the year ended 31 December 2015 amounted to €5.071.048 (2014: loss € 7.512.640).

b. Exchange difference on intercompany loans to foreign holdings

The intercompany loans provided by SC Secure Capital Limited to Ukrainian subsidiaries (Note 11.28) incurred an exchange loss (non-realised) of €13.653.402, due to the UAH devaluation which took place during the reporting period (2014: loss €19.746.111). Settlement of these loans is not planned to occur in the foreseeable future and in substance is part of the Group's net investment in its foreign operations.

11.9 Income Tax Expense

For the year ended 31 December 2015, the corporate income tax rate for the Company's subsidiaries are as follows: in Ukraine 19%, in Romania 16%, in Greece 26% and in Bulgaria 10%. The corporate tax that is applied to the qualifying income of the Company and its Cypriot subsidiaries is 12,5%.

The tax on the Group's results differs from the theoretical amount that would arise using the applicable tax rates as follows:

11.10 Investment Property

11.10.1 Investment Property Presentation

Investment Property consists of the following assets:

Income Producing Assets

· Terminal Brovary Logistic Park consists of a 49.180 sqm gross leasable Class A warehouse and associated office space, situated on the junction of the main Kyiv - Moscow highway and the Borispil road. The facility is in operation since Q1 2010 and as at the end of the reporting period its warehouse space is ~47% leased (~45% occupancy). 

· Innovations Logistic Park is a 16.570 sqm gross leasable area logistics park located in Clinceni in Bucharest, which benefits from being on the Bucharest ring road. Its construction was tenant specific, was completed in 2008 and is separated in four warehouses, two of which offer cold storage (freezing temperature), the total area of which is 6.395 sqm. Innovations was acquired by the Group in May 2014 and was 87% leased at the end of the reporting period.

· EOS Business Park is a 3.386 sqm gross leasable area and includes a Class A office Building in Bucharest, which is currently fully let to Danone Romania. EOS Business Park was acquired by the Group in October 2014.

· GED Logistics is a logistics park comprising 17.756 gross leasable sqm and has a net operating income ("NOI") of approximately €1,5 million per annum. It is fully let to the German multinational transportation and logistics company, Kuehne + Nagel (70%) and to a Greek commercial company trading electrical appliances GE Dimitriou SA (30%). The NOI also includes income from selling electric energy produced by the 1MW photovoltaic park installed on the roof of the property to the Greek Electric Grid.

· Praktiker Craiova, a DIY retail property was acquired by the Group in July 2015. Situated in a prime location in Craiova, Romania it is wholly let to Praktiker, a regional DIY retailer. The property has a Gross Lettable Area ('GLA') of 9.385 square meters and at the time the agreement to acquire the property was concluded, it produced an annualized gross rental income of ~€1 million. Early in 2016 the tenant offered to extend the lease agreement for an additional 5 years until 2025, in exchange of reducing the annual rent to the levels of the temporary reduction that the tenant and the previous owner had agreed for the last few months of 2015, namely to ~€600k. Such offer is under discussion.

Residential Assets

· The Company owns a residential portfolio, consisting at the end of the reporting period of partly let and income producing 104 apartments and villas across five separate complexes (Residential portfolio: Romfelt, Linda, Monaco, Blooming House, Green Lake Residential: Green Lake Parcel K) located in different residential areas of Bucharest and Sofia. The Group acquired the portfolio partly in August 2014 and partly May 2015. The aggregate residential portfolio is ~27% let at the end of the reporting period.

Land Assets

· Bela Logistic Center is a 22,4 Ha plot in Odessa situated on the main highway to Kyiv. Following the issuance of permits in 2008, below ground construction for the development of a 103.000 sqm GBA logistic center commenced. Construction was put on hold in 2009 following adverse macro-economic developments at the time.

· Kiyanivsky Lane consists of four adjacent plots of land, totaling 0,55 Ha earmarked for a residential development, overlooking the scenic Dnipro River, St. Michael's Spires and historic Podil neighborhood.

· Tsymlianskiy Lane, is a 0,36 Ha plot of land located in the historic Podil District of Kyiv and is destined for the development of a residential complex.

· Rozny Lane is a 42 Ha land plot located in Kiev Oblast, destined for the development of a residential complex. It has been registered under the Group pursuant to a legal decision (Note 11.10).

· Balabino project is a 26,38 Ha plot of land situated on the south entrance of Zaporizhia, a city in the south of Ukraine with a population of 800.000 people. Balabino is zoned for retail and entertainment development.

· Green Lake land is a 40.360 sqm plot and is adjacent to the Green Lake part of the Company's residential portfolio (classified under Associates). It is situated in the northern part of Bucharest on the bank of Grivita Lake in Bucharest. SPDI owns 44,24% of these plots, but has effective management control.

· Pantelimon Lake consists of a ~40.000 sq m plot of land in east Bucharest situated on the shore of Pantelimon Lake, opposite to a famous Romanian hotel, the Lebada Hotel. The construction permit, which allows for ~54.000 sqm residential space to be built, was renewed in April 2014.

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11.10.2 Investment Property Movement during the reporting period

The table below presents a reconciliation of the Fair Value movements of the investment property during the reporting period broken down by property and by local currency vs. reporting currency.

The two components comprising the fair value movements are presented in accordance with the requirements of IFRS in the consolidated statement of comprehensive income as follows:

a. The translation loss due to the devaluation of local currencies of €8.060.935 (a) is presented as part of the exchange difference on translation of foreign operations in other comprehensive income of the Profit and Loss Account and then carried forward in the Foreign currency translation reserve; and,

b. The fair value loss in terms of the local functional currencies amounting to €1.794.588 (b), is presented as Valuation gains/(losses) from investment properties under the Profit and Loss Account and is carried forward in Accumulated losses.

The fair value of the properties held by the Group in Ukraine has decreased overall, as a result of the political uncertainty, by €7.012.023. The reduction includes a €324.395 fair value loss for the Rozny property that the Group finally registered under its name in July 2015 following protracted legal actions (Note 11.10). 

The fair value of the unsold units of the Residential portfolio as at the end of the reporting period has increased by €251.500 compared to the 2014 valuation (which was used for discharging the units sold during the period).

11.10.3 Investment Property Valuations per asset

The table below presents the values of the individual assets as appraised by the appointed valuer.