HIBERNIA REIT PLC
Profit/(loss) before income tax 56,816 18,229 10,769 (4,495) (20,456) 60,863
Income tax - - - 152 28 180
Profit for the financial year
attributable to owners of the parent
56,816 18,229 10,769 (4,343) (20,428) 61,043
Total segment assets 1,209,584 48,000 159,969 61,868 37,381 1,516,802
Investment property 1,196,925 47,999 159,459 60,800 - 1,465,183 4.c Geographic information All of the Group's assets, revenue, and costs are based in the Dublin area, mainly in central Dublin. 4.d Major customers
The Group closely monitors its tenants, and in particular its largest tenants, by contribution to its contracted rent roll. The top 10 tenants are presented below based on contracted rents as at the financial year end. This is concentrated on office tenants as the next largest segment, residential, consists mainly of private individuals and therefore contains no major concentration of credit risk.
The Group's top 10 tenants are as follows, expressed as a percentage of Group contracted rent:
As at 31 March 2021
Tenant Business sector Contracted rent (EUR'm)
%
HubSpot Ireland Limited Technology 10.5 15.4%
OPW State entity 6.0 8.8%
Twitter International Company Technology 5.1 7.5%
Zalando Technology 2.9 4.2%
Autodesk Ireland Operations Technology 2.8 4.1%
Informatica Ireland EMEA Technology 2.1 3.1%
Riot Games Technology 2.0 2.9%
Travelport Digital Limited Technology 1.8 2.6%
Deloitte & Touche Professional services 1.7 2.5%
BNY Mellon Fund Services (Ireland) Insurance and investment 1.6 2.3%
DAC management
Top 10 tenants 36.5 53.4%
Remaining tenants 31.8 46.6%
Whole portfolio 68.3 100.0% 1. Contracted rent includes residential rents on a gross basis. As at 31 March 2020
Tenant Business sector Contracted rent (EUR'm)
%
HubSpot Ireland Limited Technology 10.5 15.6%
OPW State entity 6.0 8.9%
Twitter International Company Technology 5.1 7.6%
Zalando Technology 2.9 4.3%
Autodesk Ireland Operations Technology 2.8 4.2%
Informatica Ireland EMEA Technology 2.1 3.1%
Riot Games Technology 2.0 3.0%
Electricity Supply Board State entity 1.9 2.8%
Travelport Digital Limited Technology 1.8 2.7%
BNY Mellon Fund Services (Ireland) Insurance and investment 1.6 2.4%
DAC management
Top 10 tenants 36.7 54.6%
Remaining tenants 30.4 45.4%
Whole portfolio 67.1 100.0% 5. Revenue and net rental and related income Accounting policy The Group recognises revenue from the following major sources: ? Rental income; ? Service charge income; and ? Other ad-hoc income such as surrender premia and fees from other activities associated with the Group's property
business.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.
Rental income
Rental income is the Group's major source of income and arises from properties under operating leases. Rental income, including fixed rental uplifts, is recognised in the consolidated income statement on a straight-line basis over the period of the lease until the next break or expiry. All incentives given to tenants under lease arrangements are recognised as an integral part of the net consideration agreed for the use of the leased asset and are therefore recognised on the same straight-line basis. Contingent rents, being lease payments that are not fixed at the inception of a lease, such as turnover rents, are recorded as income in the period in which they are earned.
Lease modifications, a change in the scope or consideration for the lease, result in the commencement of a new lease and rental income is recognised including any changes to the lease terms, from the date of the modification over the remaining period of the lease.
Service charge income
The Group manages the majority of its multi-let buildings under service contracts. These contracts operate for rolling one-year periods over which the Group provides communal services such as security, cleaning, waste and other occupation services to the tenants in its buildings. The tenants pay a service charge, based on the area they occupy, which is collected in advance based on budgeted costs. This income stream is recognised as revenue in accordance with the policy described under 'Property-related income and expenses' below.
Other income
All other income is recognised in accordance with the following model:
1. Identify the contract with a customer.
2. Identify all the individual performance obligations within the contract.
3. Determine the transaction price.
4. Allocate the price to the performance obligations.
5. Recognise revenue as the performance obligations are fulfilled.
Property-related income and expenses
Property-related income and expenses comprise service charge income (revenue from contracts with customers) and service charge expenses (costs of goods and services) as well as other property expenses. The Group enters into property management arrangements with tenants as part of its activities. These arrangements constitute a separate performance obligation to the obligations under the rental leases. Buildings with multiple tenants share the costs of common areas and pooled services under these arrangements. The Group manages these costs for tenants and earns a management fee for the provision of shared services on a cost-plus basis. As a landlord, costs of vacant areas are absorbed by the Group and included in other property expenses.
The service charge income stream is accounted for as a single performance obligation which is satisfied over time because the tenant simultaneously receives and consumes the benefits of the Group's activities in providing services under the agreement. Service charge income and expenditure is therefore recognised on an input basis. Tenants reimburse expenses in advance based on budgets, with over and under spends reconciled and settled annually. Service charge accounts are maintained for each managed building and the application and management of funds are independently reviewed on the tenants' behalf.
Property operating expenses comprise expenses relating to properties that are not recharged to tenants, i.e. void costs, residential management costs and other related property expenses. Revenue can be analysed as follows:
Financial year ended Financial year ended
31 March 2021 31 March 2020
EUR'000 EUR'000
Gross rental income1 66,157 59,937
Rental incentives 330 1,875
Rental income 66,487 61,812
Revenue from contracts with customers2 6,225 6,118
Total revenue 72,712 67,930
1. Gross rental income includes EUR0.9m relating to variable rents (March 2020: EUR1.1m). 2. Revenue from contracts with customers is service charge income. Net rental and related income
Financial year ended 31 March 2021 Financial year ended 31 March 2020
EUR'000 EUR'000
Total revenue 72,712 67,930
Costs of goods and services1 (6,150) (6,183)
Property expenses (3,256) (3,162)
Net rental and related income 63,306 58,585 1. Costs of goods and services are service charge expenses. Further information on the sources and characteristics of revenue and rental income is provided in note 6.
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