Pro Kapital Grupp: Auditud annual report 2020

Pro KapitalOn 11 June 2021, the Supervisory Council of AS Pro Kapital Grupp has approved the company’s 2020 audited annual report.

Prior period errors

When determining the fair value of investment property, double counting of assets or liabilities that are separately recognised in the balance sheet should be avoided. When making the adjustment to the fair value of investment property in the balance sheet as at 31 December 2019, the Management did not take into account the fact that a receivable had already been recognised for a portion of the future cash flows. The carrying amount of the T1 Mall of Tallinn investment property is therefore 108.6 million euros as at 31 December 2019, restated by 2.3 million euros already recognised in the balance sheet.

The following table summarises the impact of the prior period error on the financial statements of the Group.

Consolidated statement of profit and loss and other comprehensive income

in thousands of euros 2019 (Restated) 2019
Other operating expenses -26 602 -24 341
Including net result from fair value adjustments from investment property -26 497 -24 236
Operating profit/ loss -17 439 -15 178
Profit/ loss before income tax -31 454 -29 193
Profit/ loss from continuing operations -31 433 -29 172
Total comprehensive loss for the year -31 433 -29 172
Attributable to:
     Owners of the Company -29 078 -26 981
     Non-controlling interests -2 355 -2 191
Earnings per share
     Basic (euros per share) -0.51 -0.48
     Diluted (euros per share) -0.51 -0.48

Consolidated statement of financial position

in thousands of euros 31.12.2019 (Restated) 31.12.2019
Non-current assets
Investment property 145 104 147 365
Total non-current assets 155 438 157 699
TOTAL ASSETS 208 560 210 821
Equity attributable to owners of the Company
Profit/ loss for the financial year -29 078 -26 981
Total equity attributable to owners of the Company 69 042 71 139
Non-controlling interest 263 427
TOTAL EQUITY 69 305 71 566
TOTAL LIABILITIES AND EQUITY 208 560 210 821

Differences between comparative information of unaudited financial results for the year ended 31 December 2020 presented in this report and interim financial results of 2020, which were published on 26 February 2021

Consolidated statement of comprehensive income

in thousands of euros 2020 12M (Unaudited) 2020 12M
Administrative expenses -6 154 -5 587
Other expenses -43 586 -41 978
    Including net result from fair value adjustments from investment property -43 128 -41 902
Operating profit/ loss -43 108 -40 933
Profit/ loss before income tax -59 102 -56 927
Profit/ loss for the period -59 456 -57 281
Attributable to:
               Equity holders of the parent                         -55 678 -53 648
               Non-controlling interest -3 778 -3 633
Items that will not be reclassified subsequently to profit or loss
Net change in properties revaluation reserve -278 0
Total comprehensive income/ loss for the year -59 734 -57 281
Attributable to:
               Equity holders of the parent -55 956 -53 648
               Non-controlling interest -3 778 -3 633
Earnings per share for the period (EUR) -0.98 -0.95

In the course of auditing process, the amendments have been made to administrative expenses and other expenses in relation to the subsidiary AS Tallinna Moekombinaat. Administrative costs increased by 567 thousand euros due to recording additional credit losses for expected rental revenues. Changes in other expenses are related to the fair value adjustment by 1 226 thousand euros and recording penalties of 382 thousand euros which have been accounted for off balance sheet and were recognised due to adjusting event (Note 18). Non-controlling interest has changed accordingly. Net change in properties revaluation reserve has decreased by 278 thousand euros and is related to the German hotel fair value. Total effect of changes in the statement of comprehensive income is 2 453 thousand euros additional loss for the period.

Consolidated statement of financial position

In thousands of euros 31.12.2020 (Unaudited) 31.12.2020
Non-current assets
Non-current receivables 3 517 4 085
Property, plant and equipment 6 745 7 023
Investment property 98 512 101 998
Total non-current assets 109 506 113 838
TOTAL ASSETS 179 048 183 380
Current liabilities
Current debt                                                         107 581 79 939
Current payables 22 211 21 829
Total current liabilities 138 575 110 551
Non-current liabilities
Long-term debt 27 255 54 897
Total non-current liabilities 30 902 58 544
TOTAL LIABILITIES 169 477 169 095
Equity attributable to owners of the Company
Revaluation reserve 2 984 3 262
Retained earnings 47 647 49 744
Profit/ loss for the period -55 678 -53 648
Total equity attributable to owners of the Company 13 086 17 491
Non-controlling interest -3 515 -3 206
TOTAL EQUITY 9 571 14 285
TOTAL LIABILITIES AND EQUITY 179 048 183 380

In the course of auditing process, the amendments have been made to non-current assets, liabilities and equity. Non-current receivables decreased by 567 thousand euros due to recording additional credit losses on expected rental revenues. PPE and revaluation reserve have been influenced by change in fair value of the German hotel in amount of 278 thousand euros. The value of investment property has decreased by 3 486 thousand euros, of which 2 261 thousand euros is the effect from 2019 as described above and the rest from 2020 for similar adjustment. Current payables have increased by penalties in amount of 382 thousand euros which have been accounted for off-balance sheet and recorded due to adjusting event. Long-term debt has decreased and current debt has increased as per reclassification of secured bonds balance sheet value because of the event of not meeting financial covenants due to adjusting event (Notes 9 and 19). Total effect of net changes in the statement of financial position is a decrease of 4 332 thousand euros of which 2 261 is related to restatement in 2019.

The audited annual report of AS Pro Kapital Grupp for the financial year of 2020 is available at the headquarter of the company, located at Sõjakooli 11, Tallinn. The report can also be found on the company’s webpage www.prokapital.com.

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