ARRICANO REAL ESTATE PLC
Cash flows used in investing activities (4,031) (10,342)
Six months ended Six months ended
Note
30 June 2021 30 June 2020
(unaudited) (unaudited)
(in thousands of USD)
Cash flows from financing activities
Proceeds from borrowings 3,192 8,000
Repayment of borrowings (6,398) (5,991)
Cash flows from/ (used in) financing activities (3,206) 2,009
Net increase in cash and cash equivalents 2,730 (1,793)
Cash and cash equivalents at 1 January 12,062 6,905
Effect of movements in exchange rates on cash and cash equivalents 196 (217)
Cash and cash equivalents at 30 June 14,988 4,895
Attributable to equity holders of the parent
Non-reciprocal Foreign
Share Share shareholders Retained Other currency Total
capital premium contribution earnings reserves translation
differences
(in thousands of USD)
Balances at 1 January 2020 67 183,727 59,713 46,962 (61,983) (100,581) 127,905
Total comprehensive income for the period
Profit for the period (unaudited) 22,083 22,083
Foreign exchange gains on monetary items that
form part of net investment in the foreign (33,427) (33,427)
operation, net of tax effect (unaudited)
Foreign currency translation differences 14,397 14,397
(unaudited)
Total other comprehensive income (19,030) (19,030)
Total comprehensive income for the period 22,083 (19,030) 3,053
Balances at 30 June 2020 (unaudited) 67 183,727 59,713 69,045 (61,983) (119,611) 130,958
Attributable to equity holders of the parent
Non-reciprocal Foreign
Share Share shareholders Retained Other currency Total
capital premium contribution earnings reserves translation
differences
(in thousands of USD)
Balances at 1 January 2021 67 183,727 59,713 67,142 (61,983) (129,272) 119,394
Total comprehensive income for the period
Profit for the period (unaudited) (386) (386)
Foreign exchange gains on monetary items that
form part of net investment in the foreign 11,322 11,322
operation, net of tax effect (unaudited)
Foreign currency translation differences (5,096) (5,096)
(unaudited)
Total other comprehensive income 6,226 6,226
Total comprehensive income for the period (386) 6,226 5,840
Balances at 30 June 2021 (unaudited) 67 183,727 59,713 66,756 (61,983) (123,046) 125,234
1. Background a. Organisation and operations Arricano Real Estate PLC (Arricano, the Company or the Parent Company) is a public company that was incorporated in Cyprus and is listed on the AIM Market of the London Stock Exchange. The Company's registered address is office 1002, 10th floor, Nicolaou Pentadromos Centre, Thessalonikis Street, 3025 Limassol, Cyprus. Arricano and its subsidiaries are referred to as the Group, and their principal place of business is in Ukraine.
The main activities of the Group are investing in the development of new properties in Ukraine and leasing them out. As at 30 June 2021, the Group operates shopping centres in Kyiv, Simferopol, Zaporizhzhya and Kryvyi Rig with a total leasable area of over 148,100 square meters and is in the process of development of two new investment projects in Kyiv and Odesa, with one more project to be developed. b. Business environment
The Group's operations are primarily located in Ukraine. Consequently, the Group is exposed to the economic and financial markets of Ukraine, which display characteristics of an emerging market. The political and economic situation in Ukraine has been subject to significant turbulence in recent years. The legal, tax and regulatory frameworks continue development, but are subject to varying interpretations and frequent changes which, together with other legal and fiscal impediments, contribute to the challenges faced by entities operating in Ukraine. Additionally, an armed conflict in certain parts of Lugansk and Donetsk regions, which started in spring 2014, has not been resolved and part of the Donetsk and Lugansk regions remains under control of the self-proclaimed republics, and Ukrainian authorities are not currently able to fully enforce Ukrainian laws on this territory. Various events in March 2014 led to the accession of the Republic of Crimea to the Russian Federation, which was not recognised by Ukraine and many other countries. Consequently, operations in the country involve risks that do not typically exist in other markets.
Despite this, the world's economy was significantly affected by COVID-19 pandemic. After the economic crisis held in 2020, in the first half-year 2021 there was a strengthening of the Ukrainian, Russian Federation and Cyprus operating environments. The local authorities are introducing some operating restrictions from time to time, however, these restrictions allow the businesses to operate at least at the minimum level.
During 6 months period ended 30 June 2021, the Ukrainian hryvnia and the Russian Ruble have strengthened against US dollar, a positive indicator of the economic situation in the areas of operations of the Group's shopping centres.
The management of the company is already seeing consumer confidence returning, evidenced by the gradual increase in visitor numbers across Company's portfolio. As before, the strategy remains centred around improving customer experiences. Management seeks innovative ways to influence and stimulate consumers, encouraging them to visit the shopping centres and once inside focus on creating the right balance between retail, leisure and socialising.
These consolidated interim condensed financial statements reflect management's current assessment of the impact of the business environment on the operations and the financial position of the Group. The future business environment may differ from management's assessment.
2 Basis of preparation
(a) Statement of compliance
These consolidated interim condensed financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union (EU) and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 31 December 2020 ("last annual financial statements"). Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual financial statements as at and for the year ended 31 December 2020. These consolidated interim condensed financial statements do not include all the information required for full annual financial statements prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU).
The results for the six-month period ended 30 June 2021 are not necessarily indicative of the results expected for the full year.
(b) Judgements and estimates
Preparing the consolidated interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense and the disclosure of contingent assets and liabilities. Actual results may differ from these estimates.
In preparing these consolidated interim condensed financial statements, significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2020. c. Functional and presentation currency
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