REG-Alina Holdings PLC Alina Holdings PLC: Audited results for the year ended 31 December 2022
05/06/2023 17:15
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Alina Holdings PLC (ALNA)
Alina Holdings PLC: Audited results for the year ended 31 December 2022
05-Jun-2023 / 17:05 GMT/BST
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Alina Holdings PLC
Alina Holdings PLC
(Reuters: ALNA.L, Bloomberg: ALNA:LN)
(“Alina”, “ALNA” or the “Company”)
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2022
The Company today announces its audited results for the year ended 31
December 2022.
The information set out below is extracted from the Company's Report and
Accounts for the year ended 31 December 2022, which will be published
today on the Company's website 1 www.alina-holdings.com. A copy has also
been submitted to the National Storage Mechanism where it will be
available for inspection. Cross-references in the extracted information
below refer to pages and sections in the Company's Report and Accounts for
the year ended 31 December 2022.
The Company will liaise with the FCA and seek to have the temporary
suspension of trading of its shares lifted imminently.
Report for the Year to 31 December 2022
Alina Holdings PLC (“Alina” or the “Company”) is a company registered on
the Main Market of the London Stock Exchange. The group financial
statements consolidate those of the Company and its subsidiaries (together
referred to as the “Group”).
Chairman’s Statement
The Board of Alina apologise for the delay in presenting the Company’s
Accounts for the year ended 31 December 2022, due to the untimely and
unforeseen resignation of the Company’s previous auditor.
2022 was a year of transition for ALNA. Significant Board time was spent
on repositioning the Company’s property assets in Brislington, Bristol,
for which development plans for a substantial mixed commercial and
residential development have been prepared and where preliminary planning
discussions with Bristol Council have been initiated. In Hastings, the
Company is still in dispute with Argos (now part of Sainsbury), which had
a ‘full-repairing’ lease but vacated the property without completing their
contractually obligated repairs. Nonetheless, repair of the vacated
property is now nearing completion despite the discovery of asbestos in
some of the floor and ceiling tiles. The Board is confident that once
building works have been completed that the company will achieve a
substantial uplift on the rent previously received from Argos.
The Company’s holdings in HEIQ and Dolphin Capital (DCI) went in opposite
directions. HEIQ is guilty of over promising and under delivering, and
suffering from cyclical weakness in the retail sector, which resulted in a
substantial fall in the Company’s share price. DCI, on the other hand
announced the disposal of one of its assets at a premium to BV, which was
well received by the market.
Notwithstanding the political chaos across the Western Hemisphere,
stretching from Russia and Turkey to the USA, your Board is confident that
the Company is well positioned to benefit from the initiatives commenced
in 2022 and being implemented in 2023.
Duncan Soukup
Chairman
Alina Holdings plc
31 May 2023
Financial Review
The financial statements contained in this report have been prepared in
accordance with UK Adopted International Accounting Standards.
Result
The Group recorded an IFRS loss for the year to 31 December 2022 of
£136,000, or 0.60 pps (2021: loss £294,000, or 1.30 pps).
Key Performance Indicators (“KPI’s”)
Throughout the reporting period the Group had no borrowings and held cash
reserves at 31 December 2022 of £0.873 million (31 December 2021: £1.767
million). The KPI’s relating to Interest Cover, Loan to Value and Gearing,
shown in previous reports, are therefore no longer applicable. The Net
Asset Value per Share at 31 December 2022 was 26.9p (31 December 2021:
27.5p).
Property Operating Expenses
Property operating expenses for the year to 31 December 2022 were £300,000
(2021: £136,000). This was predominantly caused by the property rates
increases and the vacancy of a larger floorspace in Hastings. There was a
release of bad debt provision in the comparable period which increases the
variance.
Administrative Expenses
Administrative expenses were £604,000 during the year to 31 December 2022
(2021: £540,000).
Net Asset Value (“NAV”)
The NAV at 31 December 2022 was £6.10 million or 26.9p per share, based on
22.7 million shares in issue, excluding those held in treasury (31
December 2021: £6.23 million, 27.5p per share, based on 22.7 million
shares in issues
At 31 December 2022 the Group held £0.873 million of cash (31 December
2021: £1.767 million). At 31 December 2022 the Group had no banking debt
(31 December 2021: £nil).
At 31 December 2022, investment properties were held at an assessed fair
value of £2,504,000 (2021: £2,784,000). The fair value has been assessed
with reference to a third party valuation performed in 2020. The Board
has, however, assessed that the rental yield resulting for the recent sale
of the Group’s Oldham property suggests that its two largest properties
were undervalued and has revised the carrying value to reflect this most
recent market data.
The Oldham property considered to be held for sale at 31 December 2022 is
valued in the Company’s accounts at that date at its anticipated sale
price less sales costs.
The 2020 external valuation was undertaken in accordance with the Royal
Institute of Chartered Surveyors Appraisal and Valuation Standards on the
basis of market value. Market value is defined as the estimated amount for
which a property should exchange on the date of valuation between a
willing buyer and a willing seller in an arm’s length transaction, after
proper marketing wherein the parties had each acted knowledgeably,
prudently and without compulsion.
Financing
The Group had no borrowings during the year and the Group’s operations
were financed from its property income.
During the reporting period the Group held some of its cash in foreign
currencies. These holdings generated a small unrealised profit at the end
of the period, principally from the reduction in GBP value against USD
across the period. The risk associated with foreign currency holdings is
described in Note 16 to the financial statements.
Dividend
In line with the Group’s current dividend distribution policy no dividend
will be paid in respect of the reporting period. The directors will
continue to review the dividend policy in line with progress with the
Group’s investment strategy.
Risk Management & Operational Controls
The directors recognise that commercial activities invariably involve an
element of risk. A number of the risks to which the business is exposed,
such as the condition of the UK domestic economy and sentiment in the UK
property market, are beyond the Company’s influence. However, such risk
areas are monitored and appropriate mitigating action, such as reviewing
the substance and timing of the Company’s operational plans, is taken
wherever practicable in response to significant changes. The directors
consider the risk areas the Company is exposed to in the light of
prevailing economic conditions and the risk areas set out in this section
are subject to review.
In relation to asset management, the Company’s approach to risk reflects
the Company’s granular business model and position in the market and
involves the expertise of its directors, management and third-party
advisers. Operational progress and key investment and disposal decisions
are considered in regular management team meetings as well as being
subject to informal peer review.
Higher level risks and financial exposures are subject to constant
monitoring. Major investment and disposal decisions are subject to review
by the directors in accordance with a protocol set by the Board.
The Board’s approach in this area is further explained in the Governance
section, under Risk & Internal Control.
Principal Risks and Uncertainties
Potential Risk Impact Mitigation
Property and
Investment Portfolio
Performance
• Actual and prospective
voids and rental
arrears continually
monitored.
• Early identification
of / discussions with
tenants in
difficulties
• Regular review of all
properties for lease
terminations and
tenant risk, with
• Tenant defaults early action to take
• Reduced rental control of units as
income appropriate
Effect of downturn in • Increased void costs • Limited requirement
• Reduction in Net for tenant incentives
macroeconomic Asset Value and within sub-sector
environment realisation value of • Close liaison with
assets local agents enables
swift decisions on
individual properties
• Tendency of small
traders to take early
action in response to
economic conditions
• Diverse tenant base
• Sustainable location
and property use
• Ensuring positions are
sufficiently hedged to
ensure long and short
positions are in place
to take advantage of
the market movements
• All material
Higher than • Income insufficient expenditure subject to
anticipated property to cover costs authorisation regime
maintenance costs • Decline in property • Capital expenditure
value subject to regular
review
• Monitoring of UK
• Adverse impact on property environment
Changes to legal portfolio and regulatory
environment, • Loss of development proposals
opportunity • Close liaison with
planning law or local • Reduction in agents and advisers
planning policy realisation value of
assets • Membership of and
dialogue with relevant
industry bodies
• Guidance on regulatory
requirements provided
by managing agents and
professional advisers
• Individual properties
Failure to comply with monitored by asset
regulatory managers and agents
requirements in • Tenant and • Managing agents
connection with third-party claims operate formal
resulting in regulatory
property portfolio, financial loss certification process
including health, for residential
• Reputational damage accommodation
safety and • Ongoing programme of
environmental risk assessments for
key multi-tenanted
sites
• Key risks covered by
insurance policies
Corporate Governance &
Management
• Impact on operations
and reporting • Provision of effective
Non-availability of ability security regime with
information technology • Financial claims automatic off-site
systems or failure of arising from data and systems
data security back-up
• leak of confidential
information
• Insufficient finance
available at
acceptable rates to
fulfil business • The Group is debt-free
plans and debt finance has
• Inability to execute not been required.
investment property • Finance risks reduced
Financial and property disposal strategy with provision of cash
market conditions owing to fall in reserve
property market
values • Impact of interest
• Financial impact of rates on property
debt interest yields monitored
• Breach of banking
covenants
Operational Controls
During the year, the directors continued to recognise that the Company’s
ability to operate successfully is largely dependent on the maintenance of
its straightforward approach to doing business and its reputation for
integrity. All those who act on the Company’s behalf are required to
behave and transact business in accordance with the highest professional
standards. As well as compliance with all relevant regulatory
requirements, this extends to customer care and external complaint
guidelines. The Company has adopted a Code, Policy and Procedures under
the Market Abuse Regulation. During the period the employee responsible
for operations reduced working hours and the majority of the operations
were contracted to Eddisons Property Management. Eddisons have looked
after the property management for previous years and include the provision
of all applicable compliance procedures. The directors were satisfied that
the governance procedures adopted by Eddisons in relation to its clients
were appropriate and protected the Company’s interests. The Company’s
corporate governance regime is underpinned by a whistle-blowing procedure,
enabling perceived irregularities to be notified to members of the Board,
principally the senior independent non-executive director.
The Board has overall responsibility for the Company’s internal control
systems and for monitoring its effectiveness. The Board’s approach is
designed to manage rather than eliminate the risk of failure to achieve
business objectives and can only provide reasonable assurance against
material misstatements or loss. The directors have not considered it
appropriate to establish a separate internal audit function, having regard
to the Company’s size. The Board’s approach to internal controls covers
all companies within the Group and there are no associate or joint venture
entities which it does not cover.
The principal foundations of the Company’s internal control framework
during the reporting period were:
• statements of areas of responsibility reserved to the directors, with
prescribed limits to executive authority to commit to expenditure and
borrowing;
• effective committee structure with terms of reference and reporting
arrangements to the Board;
• clear remits for the delegation of executive direction and internal
operational management functions;
• framework for independent directors to provide advice and support to
executive directors on an individual basis;
• top-level risk identification, evaluation and management framework;
• effective systems for authorising capital expenditure and significant
revenue items and monitoring actual cost incurred;
• ongoing reporting to the Board of operational activity and results;
• regular review of operational forecasts and consideration by the
directors;
• ongoing reporting to the directors on health, safety and environmental
matters.
The Board reviews the effectiveness of the Company’s risk management
systems against the principal risks facing the business and their
associated mitigating factors, taking account of the findings and
recommendations of the auditors at the Company’s half-year and year-end.
Following its review of the auditors’ findings during the reporting
period, the Board considers that the Company’s approach remains effective
and appropriate for a business of the Company’s size and complexity.
Key Contracts
There are currently no contracts which require third party approval for
any change to the nature, constitution, management or ownership of the
business. The appointment agreements of directors do not contain any
provisions specifically relating to a change of control.
Charitable and Political Donations
During the reporting period the Group made no donations for charitable or
political purposes (2021: nil)
Section 172 Companies Act 2006
The Directors acknowledge their duty under s.172 of the Companies Act 2006
and consider that they have, both individually and together, acted in the
way that, in good faith, would be most likely to promote the success of
the Company for the benefit of its members as a whole. In doing so, they
have had regard (amongst other matters) to:
• the likely consequences of any decision in the long term. The Group’s
long-term investment strategy is shown in the Chairman’s Report, with
associated risks highlighted in the Strategic report.
• the impact of the Group’s operations on the community and the
environment. The Group operates honestly and transparently. We
consider the impact on the environment on our day-to-day operations
and how we can minimise this.
• the desirability of the Group maintaining a reputation for high
standards of business conduct. Our intention is to behave in a
responsible manner, operating within the high standard of business
conduct and good corporate governance, as highlighted in the Corporate
Governance Statement on page 12
• the need to act fairly as between members of the Group. Our intention
is to behave responsibly towards our shareholders and treat them
fairly and equally so that they may benefit from the successful
delivery of our strategic objectives.
This Financial Review was approved by the directors on 26 May 2023.
Duncan Soukup, Chairman
31 May 2023
Corporate Responsibility Statement
During the year we continued to focus on the three principal contributors
to the success of our business:
• the talent and commitment of our executives;
• our relationships with national and local advisers, partners and
clients; and
• the well-being of the businesses that occupy our properties and the
communities in which they operate.
The directors remain conscious that the Group’s ability to operate
effectively rests on our reputation for fairness and a straightforward and
honest approach to conducting business. We therefore strive to transact
business in accordance with the highest professional standards and all
those who act on our behalf are expected to do the same. Besides complying
with all relevant legislation and professional guidelines, this includes
customer care and external complaint procedures.
We have again considered whether it is appropriate to report on relevant
human rights issues. In the context of our business and the reduced size
of our investment portfolio, we do not believe that the provision of
detailed information in this area would provide any meaningful enhancement
to the understanding of the performance of our business. However, we are
confident that our approach to doing business does not contravene any
human rights principles or applicable legislation.
Our approach to corporate responsibility matters is underpinned by a
whistle-blowing procedure, enabling perceived irregularities to be
notified to directors, principally the independent non-executive
directors.
Employees
On 7 February 2022, Gareth Edwards resigned as a director and was replaced
by Tim Donell.
Diversity
The Group has a formal diversity and equal opportunities policy in place
and is committed to a culture of equal opportunities for all regardless of
age, race or gender. The Board currently comprises three male directors.
Health, Safety and Welfare
The directors were responsible for ensuring that the Group discharged its
obligations for health, safety and welfare during the reporting period,
including matters delegated to the Group’s managing agents and other
contractors. No material health, safety and welfare incidents were
notified during the period. Our property managers and contractors
continued to be required to ensure that property management, maintenance
and construction activities conform to all relevant regulations, with due
consideration being given to the welfare of occupants and neighbours.
Environmental, Social and Governance
We have always believed that our local asset model is by its nature
supportive of reducing the carbon impact of retail shopping. Our past
development activity has been aimed at returning to profitable use
redundant space that would otherwise remain vacant, potentially relieving
development pressure on greenfield sites elsewhere. Any development
activity undertaken is carried out in accordance with applicable energy
and resource saving standards, noise impact reduction requirements, and,
where relevant, the need to preserve the character of buildings, including
listed properties. Our contractors are required to dispose of waste in
accordance with best practice. We continue to take action to upgrade the
energy performance of our letting units wherever required.
It is our policy to seek to deal constructively with all stakeholders in
relation to any community issues that arise in relation to our properties.
Our policy is to prefer to use local advisers, agents and contractors
whenever appropriate to do so.
It is our intention to review our response to environmental, social and
governance factors in line with the development of our investment policy
to ensure that our policies are appropriate to the revised strategy and
operational profile. This review will take account of related issues, such
as modern slavery.
Anti-Corruption and Anti-Bribery
The Company has in place an Anti-Bribery and Anti-Corruption Policy which
the directors consider fulfils UK Government guidelines for compliance
with UK Bribery Act 2010.
Governance
Regulatory Compliance
The Company is subject to, and seeks to comply with, the Financial Conduct
Authority’s (“FCA”) Listing Rules (“Listing Rules”), the Market Abuse
Regulation and the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority. The Company is also subject to the UK City
Code on Takeovers and Mergers.
In the prior period the Company adopted the Corporate Governance Code of
the Quoted Companies Alliance (the “QCA Code”). The directors consider
that the QCA Code provides a corporate governance framework proportionate
to the risks inherent to the size and complexity of the Company’s
operations. The directors apply the QCA Code in the ways set out below.
Board Level Responsibility
The Company’s directors are ultimately responsible for the effective
stewardship of the business, with the Chairman holding specific
responsibility for corporate governance and effective leadership of the
Board. In discharging this obligation, the Chairman regularly consults the
Company’s Independent Non-Executive Directors (who are qualified by
background and experience to assist in this sphere), as well as the
Company’s legal advisers and the Company Secretary.
Conflicts of Interest
The Company’s Articles of Association provide a framework for directors to
report actual or potential situational conflicts, enabling the Board to
give such situational conflicts appropriate and early consideration. All
directors are aware of the importance of consulting the Company Secretary
regarding possible situational conflicts.
Board Leadership
The Company is led by its Board, which is responsible for determining the
strategy of the business and its effective stewardship. All major
strategic and investment decisions are taken by the Board as a whole,
which monitors the resources available to the Company, to ensure that they
are sufficient to enable its goals to be achieved. The Board meets
regularly to review the Company’s operations and progress with its
strategy. The directors are in regular liaison outside formal meetings.
Risk management and controls are reviewed in the light of advice from the
external auditors, who have access to all the directors.
The Board comprises an executive Chairman and two independent
non-executive directors, as set out below.
Duncan Soukup
Executive Chairman, aged 67
Duncan Soukup is the founder and Executive Chairman of Thalassa Holdings
Ltd (“Thalassa”), a company listed on the London Stock Exchange, and has
over 35 years of investment experience. Prior to establishing Thalassa, Mr
Soukup worked in investment banking for 10 years, including as managing
director in charge of the non-US equity business of Bear Sterns.
Thereafter, he established the AIM-listed investment management business
Acquisitor plc.
As the executive chairman with a beneficial interest in the Company’s
shares, Mr Soukup is not considered to be independent.
Martyn Porter (Appointed May 2022)
Non-Executive Director, aged 52
Martyn has over 25 years' experience in international banking and
financial services with the HSBC Group. He has held senior leadership
positions in the UK, Malta, the Philippines, Hong Kong, Vietnam,
Luxembourg and latterly Monaco, where he served as Chief Executive Officer
of the HSBC Private Bank and Asset Management companies. As a board
director and regulated officer of HSBC companies in Ireland, Luxembourg
and Monaco, Mr. Porter has significant knowledge and understanding of
corporate governance and regulatory compliance. He also has a highly
successful track record in the leadership of businesses undergoing complex
strategic change and transformation. During his career, Mr. Porter has
built a wide and diverse network of business relationships, as well as
demonstrating strong values and business ethics.
Tim Donell (Appointed February 2022)
Non-Executive Director, aged 41
A certified chartered accountant, Tim has over 15 years' experience in
finance, accounting and management roles within growth companies across
travel, e-commerce and web technology and has a demonstrated track record
of developing and improving financial processes to drive business
performance.
Division of Responsibilities
The responsibilities of each director are set out clearly in the
director’s letter of appointment, which is available for inspection by
members of the Company at its registered office during normal office
hours. All directors ensure that they provide sufficient time to fulfil
their obligations. All directors have access to the advice and services of
the Company Secretary and to independent legal advice at the Company’s
expense.
During the reporting period the directors monitored the Company’s
operational progress and the activities of the executive management. The
Chairman is responsible for ensuring that due consideration is given to
key items of business both at formal meetings of the directors and liaison
outside these. The independent non-executive directors provide a separate
communication channel for shareholders and other interested parties and
has a remit under the Company’s “whistle-blowing” arrangements.
Nomination, Audit and Remuneration Committees were in place throughout the
reporting period, with responsibility for specific areas within the
Company’s overall corporate governance structure. During the reporting
period there was no requirement for either of the Remuneration Committee
or the Nomination Committee to meet.
The Board met and held discussions throughout the year. The frequency of
the meetings fluctuated as required. The meetings consisted of discussion
to agree strategy and the handling of the assets. The majority of the
meetings were on an informal and operational basis with the conclusions
appropriately documented.
Aside from the meetings described above each director’s attendance record
at Board and Committee meetings during the reporting period is set out in
the table below:
Director Board Audit Remuneration Nomination
Duncan Soukup 3 1 n/a n/a
Tim Donell 3 1 n/a n/a
Martyn Porter 3 n/a n/a n/a
Under the Company’s Articles one-third of the directors are subject to
retirement at each Annual General Meeting. Additionally, the Articles
require that director appointments made by the Board directors are
ratified at the subsequent General Meeting of the Company.
Arrangements are made to provide new directors with an induction programme
into the Company’s activities. Non-executive directors also meet with
management on an informal basis. Arrangements are made for directors to
inspect investment properties.
Risk & Internal Control
In addressing its responsibilities in this area, the Board pays particular
attention to:
• monitoring the integrity of the Company’s financial statements and
formal announcements relating to its financial performance and
reviewing significant financial reporting judgements contained in
them;
• reviewing the adequacy and effectiveness of the Company’s internal
financial controls, internal control and risk management systems,
fraud detection, regulatory compliance and whistle-blowing
arrangements;
• making recommendations for the approval of shareholders on the
appointment, re- engagement or removal of the external Auditors and
approving the Auditors’ terms of engagement and remuneration;
• overseeing the Company’s relationship with the external Auditors,
reviewing and monitoring the Auditors’ independence and objectivity
and effectiveness;
• approving the annual audit plan and reviewing the Auditors’ findings
and the effectiveness of the audit programme.
The Company’s approach to risk management is set out on pages 9 and 10.
Directors’ Remuneration Policy and Remuneration Implementation Report
There was no requirement for the Remuneration Committee to meet during the
reporting period. The Company had no employee directors during the year
and no share-related incentive schemes were in operation. Although it is
not currently required, the remuneration policy for employee directors
summarised below was approved by shareholders at the annual general
meeting held in March 2020:
• within a competitive market, enabling the recruitment and retention of
individuals whose talent matches the entrepreneurial and leadership
needs of the business, enabling the Company to fulfil its investment
objectives for its shareholders; and
• placing emphasis on performance-related rewards and focusing on
incentive targets that are closely aligned with the interests of
shareholders.
Base Salary To be pitched at market median for the role, with
advice taken from independent consultants.
Termination Service contracts to be capable of termination at
not more than one year’s notice
Future scheme to be based on the achievement of
profitability and cash generation targets based on
the Company’s annual budget.
Annual Bonus Scheme
Individual awards to be capped at 100% of base
salary.
Scheme to be based on the award of shares or cash
equivalent.
Share Based Performance
Scheme
Awards to vest on the achievement of medium-term
and long-term targets derived from the Company’s
investment strategy.
Pension Company contribution to individuals’ pension plans
of up to 10% of base salary.
Health Plan Individuals may participate in private healthcare
arrangements supplied by the Company.
In applying the remuneration policy, the Board will use its discretion to
provide a tailored mix of benefits that encourages individuals to maximise
their efforts in the best interests of shareholders. In particular, the
remuneration policy would be subject to any special considerations that
may arise in relation to the execution of any revised investment policy
approved by the Company’s shareholders.
Non-Executive Pay
The Company’s policy has been to provide remuneration to its non-executive
directors commensurate with the need to attract and retain individuals
with levels of skill and experience appropriate to the Company’s needs. No
non-executive directors have participated in any bonus or share-based
arrangements of the Company.
Directors’ Remuneration
The below table highlighted total directors’ remuneration in the period.
Director Salary Short term Long term Pension Benefits Total
incentives incentives contributions in kind
Duncan - - - - - -
Soukup
Tim Donell 4,000 4,000
Martyn 3,438 3,438
Porter
Total 7,438 - - - - 7,438
The aggregate directors’ remuneration during the reporting period was
£7,438 (2021: £10,000).
Directors’ Service Contracts
Date of initial Date of current
Non-executive directors
appointment appointment letter
Duncan Soukup 4 October 2019 27 Feb 2021
Tim Donell 7 February 2022 21 October 2022
Martyn Porter 20 May 2022 20 May 2022
Directors’ Interests in the Company’s Shares (audited)
The interests during the reporting period of the directors who held office
during the reporting period in the issued share capital of the Company as
at the date of this report are set out below:
Ordinary 1p Shares*
Director 2022 2021
Duncan Soukup 5,418,857 5,418,857
Tim Donell - -
Martyn Porter - -
In addition to the direct interest shown above, Duncan Soukup has an
indirect interest in 4,618,001 and 1,734 Ordinary Shares arising from his
interests in entities of Thalassa Discretionary Trust, and Thalassa
Holdings Ltd.
Directors’ Indemnities and Insurance Cover
To the extent permitted by law, the Company indemnifies its directors and
officers against claims arising from their acts and omissions related to
their office. The Company also maintains an insurance policy in respect of
claims against directors.
Audit Committee Report
The Audit Committee, consisted of the independent non-executive directors.
The key functions of the audit committee are for monitoring the quality of
internal controls and ensuring that the financial performance of the Group
is properly measured and reported on and for reviewing reports from the
Company’s auditors relating to the Company’s accounting and internal
controls, in all cases having due regard to the interests of Shareholders.
The Committee has formal terms of reference.
The financial statements attached to this report have been prepared on the
Going Concern basis. In deciding that the Going Concern basis is
appropriate, the directors reviewed projections of future activity over
the 12 months following the date of this report. The Directors concluded
that there were no identifiable material uncertainties, and present cash
reserves were sufficient to meet all liabilities as they fall due, up to
and beyond that date.
The Committee considered the following items:
• ensuring that the format of the financial statements and the
information supplied meets the standards set by the International
Accounting Standards Board;
• reviewing the accounting treatment of receivables and ensuring
effective co-ordination between the Company’s records and those of its
managing agents;
• ensuring that the audit scope properly reflected the risk profile of
the business;
• ensuring that the Committee’s terms of reference continued to accord
with regulatory requirements.
The Committee considered the independence of external auditors, seeking to
ensure that any non-audit services provided, by external auditors do not
impair the auditors’ objectivity or independence. The Company’s auditors,
RPG Crouch Chapman, did not supply any non-audit services to the Company
during the period.
Having assessed the performance, objectivity and independence of the
auditors, as well as the audit process and approach taken, the Committee
recommended the re-appointment RPG Crouch Chapman at the Company’s annual
general meeting in 2023.
Duncan Soukup
Executive Director acting as Audit Committee Chairman 31 May 2023
Directors’ Report
The directors of Alina Holdings Plc (“the Company”) present their report
and the audited financial statements of the Company together with its
subsidiaries and associated undertakings (“the Group”) for the year ended
31 December 2022.
The following directors held office during the reporting period:
Gareth Edwards (appointed 4 October 2019 and resigned 7 February 2022)
Duncan Soukup (appointed 4 October 2019)
Tim Donell (appointed 7 February 2022)
Martyn Porter (appointed 20 May 2022)
The Directors’ Report also includes the information set out on pages 5 to
25, together with the description of the Company’s investment policy and
business model described on page 5.
Group Result and Dividend
The loss for the Group attributable to shareholders for the period was
£136,000 (2021: loss £294,000). In accordance with the investment policy,
no dividend has been or will be distributed in respect of the financial
year. The directors continue to keep the dividend distribution policy
under review.
Post Balance Sheet Events
• Sale of Oldham property classified as an asset held for resale at the
year-end (see note 11);
• Commencement of legal action against The Italian Way, a tenant in
Hastings, for breach of lease covenants.
Going Concern Basis
The financial statements attached to this report have been prepared on the
Going Concern basis. In deciding that the Going Concern basis is
appropriate, the directors reviewed projections of future activity over
the 12 months following the date of this report. The Directors concluded
that there were no identifiable material uncertainties, and present cash
reserves were sufficient to meet all liabilities as they fall due, up to
and beyond that date.
Share Capital
Details of the Company’s issued share capital are set out in note 17 to
the financial statements. All of the Company’s issued shares are listed on
the London Stock Exchange. The Company’s share capital comprises one class
of Ordinary Shares of 1p each. All issued shares are fully paid up and
rank equally and there are no restrictions on the transfer of shares or
the size of holdings. The directors are not aware of any agreements
between shareholders in relation to the Company’s shares.
Substantial Interests
As at 19 May 2023, the last practicable reporting date before the
production of this document, the Company’s share register showed the
following major interests (of 3% or more, excluding shares held in
treasury) in its issued share capital:
Shareholder Ordinary Shares %
Vidacos Nominees Limited* 10,036,857 44.22
HSBC Global Custody Nominee (UK) Limited** 6,718,785 29.60
Ferlim Nominees Limited 1,220,000 5.38
*Included within Vidacos Nominees Limited are shares of 5,418,857 owned by
C D Soukup and 4,618,001 held by Thalassa Discretionary Trust.
**The Company has also been notified that 6,391,223 (28.16%) shares are
beneficially owned by Peter Gyllenhammar AB.
Investor Relations
Subject to regulatory constraints, the directors are keen to engage with
the Company’s shareholders, placing considerable emphasis on effective
communications with the Company’s investors. Directors are happy to comply
with shareholder requests for meetings as soon as practicable, subject to
regulatory constraints. The Board is provided with feedback on such
meetings, as well as regular commentary from investors and the Company’s
bankers and advisers. The Board provides reports and other announcements
via the regulatory news service in accordance with regulatory
requirements. Regulatory announcements and key publications can also be
accessed via the Company’s website. The Company’s Annual General Meeting
provides a further forum for investors to discuss the Company’s progress.
The Company complies with relevant regulatory requirements in relation to
convening the meeting, its conduct and the announcement of voting on
resolutions. The Annual Report and Notice of the Annual General Meeting
are sent to shareholders at least 21 working days prior to the meeting and
are available on the Company’s website. The results of resolutions
considered at the Annual General Meeting are announced to the Stock
Exchange and are also published on the website and lodged with the
National Storage Mechanism. Investors may elect to receive communications
from the Company in electronic form and be advised by email that
communications may be accessed via the Company’s website.
Whistleblowing Policy
The Group has in place a whistleblowing policy which sets out the formal
process by which an employee of the Group may in confidence raise concerns
about possible improprieties in the Group’s affairs, including financial
reporting.
Emissions and Energy Consumption Reporting
The directors believe that the Company’s outsourced business model, which
focusses on the employment of agents, advisers and contractors who are
local to our property assets, is inherently environmentally friendly.
However, the collection of consumption data from such businesses is not
practicable. It is also not possible for our national agents and advisers
to separately identify such data in relation to the proportion of their
work devoted to the Company’s activities, particularly given the increase
in staff working from home since the COVID-19 lockdowns. It is not
possible to measure the energy consumed by the Company’s tenants (nor is
this consumption within the Company’s control). The consumption of water,
waste output and greenhouse gases other than CO2 within the Company’s
control is negligible.
For previous reporting periods the Company has supplied environmental
reporting information focused on energy consumed by the Company and its
wholly owned subsidiaries through the activities of its office base,
shared facilities provided by the Company within its property portfolio
and activities within vacant properties within the Company’s control.
In relation to Scope 1 Carbon Emissions (consumption of gas and fuel),
since the termination of the Company’s third-party investment advisory
agreement and the relocation of its registered office it has not been
possible to separately identify the energy consumed on the Company’s
activities. An element of the Company’s administration activity is carried
out at its registered office. However, this is a de minimis element of the
overall activity and energy consumption at that site. Other activity is
undertaken by the Company’s directors and management working at home. In
both cases, it has not been possible to separately identify the energy
consumed on the Company’s activities at those locations. In previous
years, data has been supplied relating to fuel consumed on journeys on
Company activities. As the Company does not operate company cars, all such
journeys are made in employees’ private vehicles or on public transport.
The reduction in the Company’s property portfolio has significantly
reduced the requirement for such journeys, which were then further
restricted during the reporting period by the COVID-19 lockdown regime.
Accordingly, the directors do not consider that any meaningful Scope 1
data can be supplied.
Similar limitations apply to Scope 2 data, which in previous reports
comprised an estimate of consumption for vacant property units for which
the Company is responsible. The number of these and the related energy
consumption has been de minimis throughout the reporting period.
Similarly, it has not been practicable to measure Scope 3 emissions.
The Company’s direct usage and emissions of water is also minimal.
Although a small element of utility supply charges within vacant premises
relate to water and to gas, this largely relates to standing charges and
consumption is negligible.
In relation to The Companies (Directors’ Report) and LLP Partnerships
(Energy and Carbon Report) Regulations 2018, the Company consumes less
than 40,000 kWh of energy per annum and therefore qualifies as a low
energy user and therefore does not come within the scope of those
regulations.
Statement of Disclosure to Auditors
The directors who were in office at the date of the approval of the
financial statements have confirmed that, as far as they are aware, there
is no relevant audit information of which the auditors are unaware. Each
of the directors has confirmed that they have taken all necessary steps
that they ought to have taken as directors in order to make themselves
aware of any relevant audit information and to establish that this has
been communicated with the auditors.
This report was approved by the directors on 31 May 2023
Alasdair Johnston
Company Secretary 31 May 2023
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Annual Report and the
Group and parent Company financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare Group and parent Company
financial statements for each financial year. Under that law they are
required to prepare the Group financial statements in accordance with UK
Adopted International Accounting Standards and applicable law and have
elected to prepare the parent Company financial statements in accordance
with UK accounting standards, including FRS 102 The Financial Reporting
Standard applicable in the UK.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state
of affairs of the Group and parent Company and of their profit or loss for
that period. In preparing each of the Group and parent Company financial
statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant, reliable
and prudent;
• for the Group financial statements, state whether they have been
prepared in accordance with UK Adopted International Accounting
Standards;
• for the parent Company financial statements, state whether applicable
UK accounting standards have been followed, subject to any material
departures disclosed and explained in the parent company financial
statements;
• assess the Group and parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern;
and
• use the going concern basis of accounting unless they either intend to
liquidate the Group or the parent Company or to cease operations or
have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the parent Company’s transactions and
disclose with reasonable accuracy at any time the financial position of
the parent Company and enable them to ensure that its financial statements
comply with the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due
to fraud or error, and have general responsibility for taking such steps
as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible
for preparing a Strategic Report, Directors’ Report, Directors’
Remuneration Report and Corporate Responsibility Statement that complies
with that law and those regulations.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company’s website.
Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Responsibility statement of the directors in respect of the annual
financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the company and
the undertakings included in the consolidation taken as a whole; and
• the strategic report/directors’ report includes a fair review of the
development and performance of the business and the position of the
issuer and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the group’s position and performance, business
model and strategy.
The foregoing reports were approved by the directors on 31 May 2023
Alasdair Johnston
Company Secretary 31 May 2023
Independent Auditors’ Report to the members of Alina Holdings PLC
Opinion
We have audited the financial statements of Alina Holdings Plc (the
‘Company’) and its subsidiaries (the ‘Group’) for the year ended 31
December 2022 which comprise the Consolidated Statement of Income,
Consolidated Statement of Comprehensive Income, Consolidated Statement of
Financial Position, Consolidated Statement of Cash Flows, Consolidated
Statement of Changes in Equity, Company Balance Sheet , and notes to the
financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards as adopted in the United Kingdom (IFRS) for the Group and UK
accounting standards, including FRS 102 The Financial Reporting Standard
applicable in the UK (UK GAAP).
In our opinion, the financial statements:
• give a true and fair view of the state of the Group’s and of the
Company’s affairs as at 31 December 2022 and of the Group’s loss for
the year then ended;
• have been properly prepared in accordance with IFRS for the Group, and
UK GAAP for the Company; and;
• have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We are
independent of the group in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the entity’s ability to
continue to adopt the going concern basis of accounting included review of
the expected cashflows for a period of 18 months from the balance sheet
date compared with the liquid assets held by the Group.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's or the Company's
ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of this
report.
Independent Auditors’ Report to the members of Alina Holdings PLC
(continued)
Our approach to the audit
In planning our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular, we
looked at where the directors made subjective judgements, for example in
respect of significant accounting estimates. As in all of our audits, we
also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors
that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed sufficient
work to be able to issue an opinion on the financial statements as a
whole, taking into account the structure of the group and the parent
company, the accounting processes and controls, and the industry in which
they operate.
We performed the audits of the Company and its subsidiaries.
Key audit matters
Key audit matters are those matters that, in our professional judgement,
were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material
misstatement we identified (whether or not due to fraud), including those
which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of the
engagement team. The matter identified was addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our work addressed this matter
Our work included:
Carrying value of property
• Reviewing the recognition and fair
The Group held £3.3m (2021: £3.1m) value measurement of investment
of properties, including £0.8m properties in accordance with IAS
(2021: £0.3m) of properties held 40 Investment Property and IFRS13
for sale. Fair Value Measurement;
• Agreeing assumed rates of rent per
Investment properties are held at square foot to actual rates
fair value, which represents a achieved in adjacent units;
significant are of management • Reviewing management estimates for
judgement. Properties held for sale occupancy and timing of renovation
are held at net realisable value. works;
• Reviewing management’s assessment
Given the subjectivity of estimates of the range of values for
involved, we consider the carrying property held for development; and
value of property to be a key audit • Reviewing sales and associated
matter. costs subsequent to the balance
sheet date.
Carrying value of investment in
subsidiaries
The Company held £3.1m (2021:
£3.1m) of investments in
subsidiaries. Our work included:
The directors are required to • Reviewing the underlying valuation
review the carrying value of of assets held by subsidiaries;
investments for impairment and
annually. • Reviewing rental yields calculated
by management.
Given the subjective nature of the
related estimates and judgements,
we consider the carrying value of
available for sale investments to
be a key audit matter.
Independent Auditors’ Report to the members of Alina Holdings PLC
(continued)
Our application of materiality
We apply the concept of materiality both in planning and performing our
audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users that
are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of
identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a
whole.
We consider gross assets to be the most significant determinant of the
Group’s financial performance used by the users of the financial
statements. We have based materiality on 1.5% of gross assets for each of
the operating components. Overall materiality for the Group was therefore
set at £0.1m. For each component, the materiality set was lower than the
overall group materiality.
We agreed with the Audit Committee that we would report on all
differences in excess of 5% of materiality relating to the Group financial
statements. We also report to the Audit Committee on financial statement
disclosure matters identified when assessing the overall consistency and
presentation of the consolidated financial statements.
Other information
The directors are responsible for the other information. The other
information comprises the information included in the annual report, other
than the financial statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. In connection with
our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information
is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If
we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
Independent Auditors’ Report to the members of Alina Holdings PLC
(continued)
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the
parent company and its environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in our
opinion:
• adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches
not visited by us; or
• the parent company financial statements are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are
not made; or
• we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set
out on page 25 the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group’s and the parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's
financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is detailed below:
• We obtained an understanding of the legal and regulatory frameworks
within which the Group operates focusing on those laws and regulations
that have a direct effect on the determination of material amounts and
disclosures in the financial statements.
• We identified the greatest risk of material impact on the financial
statements from irregularities, including fraud, to be the override of
controls by management. Our audit procedures to respond to these risks
included enquiries of management about their own identification and
assessment of the risks of irregularities, sample testing on the
posting of journals and reviewing accounting estimates for biases.
Independent Auditors’ Report to the members of Alina Holdings PLC
(continued)
Auditor’s responsibilities for the audit of the financial statements
(continued)
Because of the inherent limitations of an audit, there is a risk that we
will not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or
regulation is removed from the events and transactions reflected in the
financial statements, as we will be less likely to become aware of
instances of non-compliance. The risk is also greater regarding
irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council's
website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our Auditor's Report.
Other matters that we are required to address
We were appointed on 12 April 2023 and this is the first year of our
engagement as auditors for the Group.
We confirm that we are independent of the Group and have not provided any
prohibited non-audit services, as defined by the Ethical Standard issued
by the Financial Reporting Council.
Our audit report is consistent with our additional report to the Audit
Committee explaining the results of our audit.
Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the
company’s members, as a body, for our audit work, for this report, or for
the opinions we have formed.
Paul Randal ACA (Senior Statutory Auditor)
For and on behalf of RPG Crouch Chapman LLP
Chartered Accountants
Registered Auditor
5th Floor, 14-16 Dowgate Hill
London
EC4R 2SU
31 May 2023
Consolidated Statement of Income
For the year ended 31 December 2022
Year ended 31 Year ended 31
December 2022 December 2021
Note £000 £000
Gross rental income 351 437
Property operating expenses 4 (300) (136)
Net rental income 51 301
Profit/Loss on disposal of investment 5 4 -
properties
Gain from change in fair value of 11 563 -
investment properties
Administrative expenses including 6 (604) (540)
non-recurring items
Operating loss before net financing costs 14 (239)
Depreciation 11 (3) (3)
Financing income 8 318 23
Financing expenses 8 (470) (75)
Share of profits of associated entities 23 5 -
Loss before tax (136) (294)
Taxation - -
Loss for the period from continuing (136) (294)
operations
Loss for the year (136) (294)
Attributable to:
Equity shareholders of the parent (136) (294)
Non-controlling interest - -
(136) (294)
Earnings per share - GBP pence (using
weighted average number of shares)
Basic and Diluted - GBP pence 10 (0.60) (1.30)
The notes on pages 32 to 51 form an integral part of this consolidated
financial information.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
Loss for the financial year (136) (294)
Other comprehensive income:
- -
Total comprehensive income (136) (294)
Attributable to:
Equity shareholders of the (136) (294)
parent
Non-Controlling interest - -
Total Comprehensive income (136) (294)
The notes on pages 32 to 51 form an integral part of this consolidated
financial information.
Consolidated Statement of Financial Position
As at 31 December 2022
Year Ended 31 Year Ended 31
December 2022 December 2021
Note £000 £000
Assets
Non-current assets
Investment properties 11 2,504 2,784
Investments in associated 23 5 -
entities
Total non-current assets 2,509 2,784
Current assets
Investment property held for 11 800 330
sale
Available for sale financial 12 2,597 1,819
assets
Trade and other receivables 13 233 255
Cash and cash equivalents 14 873 1,767
Total current assets 4,503 4,171
Liabilities
Current liabilities
Trade and other payables 15 591 398
Total current liabilities 591 398
Net current assets 3,912 3,773
Non-current liabilities
Finance lease liabilities 16 324 324
Total non-current 324 324
liabilities
Net assets 6,097 6,233
Shareholders’ Equity
Share capital 21 319 319
Capital redemption reserve 21 598 598
Retained earnings 5,180 5,316
Total shareholders' equity 6,097 6,233
The notes on pages 32 to 51 form an integral part of this consolidated
financial information.
These financial statements were approved by the board on 31 May 2023.
Signed on behalf of the board by:
Duncan Soukup
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
Notes Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
Cash flows from operating activities
Profit/(Loss) for the year before 14 (239)
taxation
Gain from change in fair value of 11 (563) -
investment properties
(Profit)/Loss from change in fair value (3) 26
of head leases
(Profit)/Loss on disposal of investment (4) -
properties
Net financing loss/(income) - (3)
Decrease/(Increase) in trade and other 13 22 (27)
receivables
(Decrease)/Increase in trade and other 15 164 (168)
payables
Loss on foreign exchange 126 (44)
Lease liability interest (23) (22)
Interest received 1 -
Interest paid (19) (6)
Profit from change in fair value of 191 (4)
investments held for sale
Cash generated by operations (94) (487)
Taxation - -
Net cash flow from operating activities (94) (487)
Purchase of investments held for sale 12 (1,206) (1,993)
Sale of investments held for sale 12 - 200
Unrealised Gain or (Loss) on Investment - -
Net Proceeds from sale of investment 403 -
properties
Net cash flow in investing activities (803) (1,793)
Cash flows from financing activities
(Increase)/reduction on head lease 16 3 (26)
liabilities
Net cash flow from financing activities - 3 (26)
continuing operations
Net increase in cash and cash (894) (2,306)
equivalents
Cash and cash equivalents at the start 1,767 4,073
of the year
Effects of exchange rate changes on cash and - -
cash equivalents
Cash and cash equivalents at the end of 873 1,767
the year
The notes on pages 32 to 51 form an integral part of this consolidated
financial information.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Capital
Share Redemption Retained
Capital Reserves Reserves Earnings Total
£000 £000 £000 £000 £000
Balance as at 31 December 2020 319 - 598 5,610 6,527
Total comprehensive income for - (294) (294)
the year
Balance as at 31 December 2021 319 - 598 5,316 6,233
Total comprehensive income for - - - (136) (136)
the year
Balance as at 31 December 2022 319 - 598 5,180 6,097
The notes on pages 32 to 51 form an integral part of this consolidated
financial information.
Notes to the Consolidated Financial Statements
1. General information
Alina Holdings PLC (“Alina” or the “Company”) is a company registered on
the Main Market of the London Stock Exchange. It is incorporated,
domiciled and registered in England. The Company’s registered number is
05304743 and the address of its registered office is Eastleigh Court,
Bishopstrow, Warminster, BA12 9HW
2. Significant Accounting policies
The Group prepares its accounts in accordance with applicable UK Adopted
International Accounting Standards.
The group financial statements consolidate those of the Company and its
subsidiaries (together referred to as the “Group”). The parent company
financial statements present information about the Company as a separate
entity and not about its group.
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these group financial
statements.
Judgements made by the directors, in the application of these accounting
policies that have significant effect on the financial statements and
estimates with a significant risk of material adjustment in the next year
are discussed later in this note under the heading “Use of Estimates and
Judgements”.
The financial statements are prepared in pounds sterling. They have been
prepared under the historical cost convention except for the following
assets which are measured on the basis of fair value: investment
properties, investment properties held for sale and available for sale
financial assets.
1. Segmental reporting
IFRS 8 requires operating segments to be identified on the basis of
internal reports that are regularly reported to the chief operating
decision maker to allocate resources to the segments and to assess their
performance. Since the strategy review in 2020 the Group has identified
two reporting segments, being investment in a portfolio of UK properties
and other investment assets that are held by the Group with the objective
or adding capital appreciation in addition to our property holdings. The
results of both segments are reported to the Board of directors on a
quarterly basis. The Board of directors is considered to be the chief
operating decision maker.
2. Basis of preparation
The consolidated financial statements include the financial statements of
the Company and all its subsidiary undertakings up to 31 December 2022.
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. In assessing control, the Group takes
into consideration potential voting rights. The acquisition date is the
date on which control is transferred to the acquirer. The financial
statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that
control ceases. The financial statements of subsidiaries are prepared
using consistent accounting policies. Inter-company transactions and
balances are eliminated in full on consolidation.
3. Going concern
The financial information has been prepared on the going concern basis as
management consider that the Group has sufficient cash to fund its current
commitments for the foreseeable future.
Notes to the Consolidated Financial Statements continued
4. Investment Properties
Investment properties are those properties owned by the Group that are
held to earn rental income or for capital appreciation or both and are not
occupied by the Company or any of its subsidiaries.
Investment properties are held at fair value, which is determined with
reference to the estimated amount for which a property should exchange on
the date of valuation between a willing buyer and a willing seller in an
arm’s length transaction.
A full external valuation of the Group’s property portfolio was performed
in 2020 in accordance with the
the Royal Institute of Chartered Surveyors Appraisal and Valuation
Standards on the basis of market value. This valuation reflected the state
of the commercial property market resulting from the uncertainty caused by
Covid-19, which continued to have an impact on the carrying value in 2021.
During 2022 the Company sold two of its smaller properties for aggregate
value of £400k. Since the Balance Sheet date, one property has been sold.
For the year ended 31 December 2022 the Board has assessed that the fair
value of its two largest properties should be increased, as a result of
the positive metrics achieved upon the recent sale of the Group’s property
in Oldham, Manchester. This resulted in increases to the carrying value of
Brislington (currently yielding ~23%) by 50% and Hastings by 25%,
currently yielding~10% but with the imminent potential for the rental
income to more than double. The Board has not applied the entirety of the
valuation multiples from the sale of Oldham, leaving room for further
increases on both properties.
The Company's objective is still to liquidate the current portfolio of
property assets which currently show a Gross Initial Yield of more than
16%, but as and when a sale can achieve a sensible return to shareholders.
The Directors obtained pricing and yields of similar transactions made
within the accounting period and compared them to the Gross Initial Yield
stated above. In all cases the transactions that were measured came in at
a lower value than that currently being achieved. As stated, although the
data is below the Yield being achieved it was felt prudent to leave the
valuations as they stand.
Investment properties are treated as acquired at the point the Group
assumes the significant risks and returns of ownership. Subsequent
expenditure is charged to the asset’s carrying value only when it is
probable that future economic benefits associated with the expenditure
will flow to the Group and the cost of each item can be reliably
measured. All other repairs and maintenance costs are charged to the
Income Statement during the period in which they are incurred.
Rental income from investment properties is accounted for as described
below.
5. Investment Properties Held for Sale
Investment properties held for sale are included in the Balance Sheet at
their fair value less estimated sales costs. In determining whether
assets no longer meet the investment criteria of the Group, consideration
has been given to the conditions required under IFRS 5.
An investment property is classified as an asset as held for sale if its
carrying amount will be recovered principally through a sale transaction
rather than through continuing use.
The asset must be available for immediate sale in its present condition
subject only to terms that are usual and customary for sales of such
assets and its sale must be highly probable as at the year end.
Notes to the Consolidated Financial Statements continued
6. Head Leases
Where a property is held under a head lease and is classified as an
investment property, it is initially recognised as an asset based on the
sum of the premium paid on acquisition and if the remaining life of the
lease at the date of acquisition is considered to be material, the net
present value of the minimum ground rent payments. The corresponding rent
liability to the leaseholder was included in the Balance Sheet as a
finance obligation in current and non-current liabilities.
The payment of head rents has been expensed through the Income Statement.
7. Trade and Other Receivables
Trade and other receivables are initially recognised at fair value and
subsequently held at amortised cost less impairment. Impairment is made
where it is established that there is objective evidence that the Group
will not be able to collect all amounts due according to the original
terms of the receivable. The impairment is recorded in the Income
Statement.
8. Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and deposits held on
call. Cash equivalents are short-term, highly liquid investments with
original maturities of three months or less.
9. Financial Assets
Financial assets are impaired when there is objective evidence that the
cash flows from the financial asset are reduced.
Notes to the Consolidated Financial Statements continued
10. Financial Instruments
Financial assets and financial liabilities are initially classified as
measured at amortised cost, fair value through other comprehensive income,
or fair value through profit and loss when the Company becomes a party to
the contractual provisions of the instrument. Financial assets are
derecognised when the contractual rights to the cash flows expire, or the
Company no longer retains the significant risks or rewards of ownership of
the financial asset. Financial liabilities are derecognised when the
obligation is discharged, cancelled or expires.
Financial assets are classified dependent on the Company’s business model
for managing the financial and the cash flow characteristics of the asset.
Financial liabilities are classified and measured at amortised cost except
for trading liabilities, or where designated at original recognition to
achieve more relevant presentation. The Company classifies its financial
assets and liabilities into the following categories:
Financial assets at amortised cost
The Company’s financial assets at amortised cost comprise trade and other
receivables. These represent debt instruments with fixed or determinable
payments that represent principal or interest and where the intention is
to hold to collect these contractual cash flows. They are initially
recognised at fair value, included in current and non-current assets,
depending on the nature of the transaction, and are subsequently measured
at amortised cost using the effective interest method less any provision
for impairment.
Impairment of trade and other receivables
In accordance with IFRS 9 an expected loss provisioning model is used to
calculate an impairment provision. We have implemented the IFRS 9
simplified approach to measuring expected credit losses arising from trade
and other receivables, being a lifetime expected credit loss. This is
calculated based on an evaluation of our historic experience plus an
adjustment based on our judgement of whether this historic experience is
likely reflective of our view of the future at the balance sheet date. In
the previous year the incurred loss model is used to calculate the
impairment provision.
Financial liabilities at amortised cost
Financial liabilities at amortised cost comprise loan liabilities,
including convertible loan note liability elements, and trade and other
payables. They are classified as current and non- current liabilities
depending on the nature of the transaction, are subsequently measured at
amortised cost using the effective interest method. All convertible loan
notes are held at amortised cost and no election has been made to hold
them as fair value through profit and loss.
Financial assets at fair value through profit and loss
Financial assets at fair value are recognized and measured at fair value
using the most recent available market price with gains and losses
recognised immediately in the profit and loss.
The fair value measurement of the Company’s financial and non- financial
assets and liabilities utilises market observable inputs and data as far
as possible. Inputs used in determining fair value measurements are
categorised into different levels based on how observable the inputs used
in the valuation technique utilised are (the ‘fair value hierarchy’).
Level 1 – Quoted prices in active markets
Level 2 – Observable direct or indirect inputs other than Level 1 inputs
Level 3 – Inputs that are not based on observable market data
Notes to the Consolidated Financial Statements continued
11. Trade and Other Payables
Trade and other payables are initially recognised at fair value and
subsequently held at amortised cost.
12. Ordinary Share Capital
External costs directly attributable to the issue of new shares are shown
in equity as a deduction from the proceeds.
Shares which have been repurchased are classified as treasury shares and
shown in retained earnings. They are recognised at the trade date for the
amount of consideration paid, together with directly attributable costs.
This is presented as a deduction from total equity. Shares held by the
Employee Benefit Trust are treated as being those of the Group until such
time as they are distributed to employees, when they are expensed in the
profit and loss account.
The nominal value of shares cancelled has been taken to a capital
redemption reserve.
13. Rental Income
Rental income from investment properties leased out under operating leases
is recognised in the Income Statement on a straight-line basis over the
term of the lease. When the Group provides lease incentives to its tenants
the cost of incentives are recognised over the lease term, on a
straight-line basis, as a reduction to income.
14. Taxation
Corporation tax on the profit or loss for the year comprises current and
deferred tax. Corporation tax is recognised in the Income Statement except
to the extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the
year, using tax rates enacted or substantively enacted at the balance
sheet date and any adjustment to tax payable in respect of previous
years. Deferred tax is provided using the balance sheet liability
method. Provision is made for temporary differences between the carrying
amounts of assets and liabilities in the financial statements for
financial reporting purposes and the amounts used for taxation purposes.
Deferred income tax is calculated after taking account of any indexation
allowances and capital losses on an undiscounted basis. The amount of
deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities using tax
rates enacted or substantially enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that it is probable that
future profits will be available against which the asset can be utilised.
Deferred tax assets are reduced to the extent that it is no longer
probable that the related tax benefit will be realised. Deferred tax
assets and liabilities are only offset if there is a legally enforceable
right of set-off.
15. Pensions
The Company has contribution only pension arrangements in operation for
certain employees.
Notes to the Consolidated Financial Statements continued
16. Use of Estimates and Judgements
To be able to prepare accounts according to generally accepted accounting
principles, management must make estimates and assumptions that affect the
asset and liability items and revenue and expense amounts recorded in the
financial statements. These estimates are based on historical experience
and various other assumptions that management and the Board of directors
believe are reasonable under the circumstances. The results of these
considerations form the basis for making judgements about the carrying
value of assets and liabilities that are not readily available from other
sources.
The areas requiring the use of estimates and judgements that may
significantly impact the Group’s earnings and financial position include
the estimation of the fair value of investment properties.
The valuation basis of the Group’s investment properties is set out above.
17. Adoption of new and revised standards
Standards issued but not yet effective:
There were a number of standards and interpretations which were in issue
during the current period but were not effective at that date and have not
been adopted for these Financial Statements. The Directors have assessed
the full impact of these accounting changes on the Company. To the extent
that they may be applicable, the Directors have concluded that none of
these pronouncements will cause material adjustments to the Group’s
Financial Statements. They may result in consequential changes to the
accounting policies and other note disclosures. The new standards will not
be early adopted by the Group and will be incorporated in the preparation
of the Group Financial Statements from the effective dates noted below.
The new standards include:
IFRS 17 Insurance contracts 1
IAS 1 Presentation of financial statements and IFRS Practice Statement 2 1
IAS 8 Accounting policies, changes in accounting estimates and errors 1
IAS 12 Income Taxes 1
IFRS 16 Leases 2
IAS 1 Presentation of financial statements (Amendment – Classification of
Liabilities as
Current or Non-Current) 2
IAS 1 Presentation of financial statements (Amendment – Non-current
Liabilities with
Covenants) 2
1 Effective for annual periods beginning on or after 1 January 2023
2 Effective for annual periods beginning on or after 1 January 2024
Notes to the Consolidated Financial Statements continued
3. Operating Segments
As described in note 2.1, the Group’s reportable segments under IFRS8 are:
• A portfolio of UK property; and
• Other investment assets.
The disclosures by segment required by IFRS8 are as follows:
Year ended 31 December Year ended 31 December
2022 2021
UK Property Other UK Property Other
£000 £000 £000 £000
Revenue 351 - 437 -
Net rental income 51 - 301 -
Finance income - 191 - 23
Other gains and 567 - -
losses
Finance costs (22) (428) (23) (47)
Depreciation (3) - (3) -
Segment assets 3,304 2,597 3,114 1,819
The remaining overheads and assets are not directly attributable to either
of the operating segments.
4. Property Operating Expenses
Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
Bad debt charge (22) (7)
Repairs (43) (21)
Business rates and council tax (40) (35)
Irrecoverable service charge (61) 18
Utilities (4) (2)
Insurance 23 -
Managing agent fees (65) (26)
Legal & professional (63) (48)
EPC amortisation, Abortives, (25) (15)
and Misc
Total property operating (300) (136)
expenses
Notes to the Consolidated Financial Statements continued
5. Property Disposals
Year ended 31 Year ended 31
December 2022 December 2021
Number Number
Number of Sales 2 -
£000 £000
Average Value 201 -
Sales
Total sales 403 -
Carrying value (370) -
Profit/(Loss) on disposals before transaction 33 -
costs
Transaction costs
Legal fees (23) -
Agent fees, marketing and brochure costs (6) -
Total Transaction Costs (29) -
Profit/(Loss) on disposals after transaction 4 -
costs
Transaction costs as percentage of sales value 7% -
6. Administrative Expenses
Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
Legal and professional (59) (48)
Tax and audit (35) (44)
Remuneration Costs* (351) (315)
Other (142) (117)
Irrecoverable VAT on Administration expenses (9) (16)
**
Total administrative expenses (596) (540)
*Within the tax and audit figure are £30,000 (2021: £30,000) accrued for
auditors remuneration.
**During the year remuneration related solely to contractors (2021:
contractors and 1 employee).
7. Employees
Year ended 31 December 2022 Year ended 31 December 2021
Admin 0 1
0 1
Notes to the Consolidated Financial Statements continued
8. Net Financing (Loss)/Income
Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
Interest receivable - -
Gain on foreign exchange 127 -
Realised Gain or (Loss) on 191 -
Investment
Unrealised Gain or (Loss) on - 23
Investment
Financing income 318 23
Interest paid (20) (5)
Loss on foreign exchange - (44)
Unrealised Gain or (Loss) on (428) -
Investment
Realised Gain or (Loss) on - (3)
Investment
Finance lease depreciation (3) (3)
Head rents treated as finance (22) (23)
leases (note 2)
Financing expenses (473) (78)
Net financing (loss)/income (155) (55)
9. Taxation
Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
Loss before tax (136) (294)
Corporation tax in the UK of 19% (2021: 19%) (26) (56)
Effects of:
Revaluation deficit and other non-deductible - -
items
Deferred tax asset not recognised 28 28
Total tax - -
Following the Company’s adoption of its new investment policy in September
2020, the Group is considered by HM Customs & Revenue to have exited the
REIT tax regime with effect from 1 October 2018 and, from that date, is
fully subject to corporation tax.
However, the Board believes that the Group’s activities since then and
the availability of tax losses means that the Company’s activities are
unlikely to have generated any material corporation tax liability for
periods since 1 October 2018. Accordingly, no provision for corporation
tax has been made in these accounts. The deferred tax asset not recognised
relating to these losses can be carried forward indefinitely. It is not
anticipated that sufficient profits from the residual business will be
generated in the foreseeable future to utilise the losses carried forward
and therefore no deferred tax asset has been recognised in these accounts.
Notes to the Consolidated Financial Statements continued
10. Earnings per share
The calculation of basic earnings per share was based on the profit
attributable to ordinary shareholders and a weighted average number of
ordinary shares outstanding.
Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
The calculation of earnings per share is based
on the loss and number of shares:
Loss for the period (£'000) (136) (294)
Weighted average number of shares of the 22,697 22,697
Company ('000)
Earnings per share:
Basic and Diluted (GBP - pence) (0.60) (1.30)
11. Investment Properties
Freehold Leasehold Investment
Investment Investment Properties
Properties Properties Held for sale Total
£000 £000 £000 £000
At 31 December 2020 40 2,722 330 3,092
Fair value adjustment - head - 25 - 25
leases
Depreciation - head leases - (3) - (3)
At 31 December 2021 40 2,744 330 3,114
Depreciation - head leases - (3) - (3)
Fair value adjustment - property - 563 - 563
Reclassification of property for - (800) 800 -
sale
Sale of property (40) - (330) (40)
At 31 December 2022 - 2,504 800 3,304
A reconciliation of the portfolio valuation at 31 December 2022 to the
total value for investment properties given in the Consolidated Balance
Sheet is as follows:
As at 31 December As at 31 December
2022 2021
£000 £000
Portfolio valuation 2,968 2,775
Head leases treated as investment 336 339
properties per IFRS 16
Total property portfolio 3,304 3,114
Investment Properties held for sale (800) (330)
Investment properties held for 2,504 2,784
development and ongoing rental
The basis for determining fair value is described in note 2.4.
Notes to the Consolidated Financial Statements continued
12. Available for sale financial assets
The Group classifies the following financial assets at fair value through
profit or loss (FVPL):-
Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
Available for sale investments
At the beginning of the period 1,783 -
Additions 5,532 1,957
Unrealised gain/(losses) (211) 23
Disposals (5,355) (197)
At 31 December 1,749 1,783
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT
OR LOSS
Year ended 31 Year ended 31
December 2022 December 2021
£000 £000
Non-current assets
Available for sale financial assets 1,749 1,783
Investments in associated entities - -
Portfolio Holdings 848 36
At 31 December 2,597 1,819
*These assets are formed of equity instruments held on quoted markets
globally, they comprise both long and short positions as per the
disclosures in the Strategic Report.
**These holdings comprise foreign currency balances held for short periods
from the sale and purchase of financial assets through the broker
AFS investments have been valued incorporating Level 1 inputs in
accordance with IFRS7. They are a combination of cash and securities held
with the listed broker.
Financial instruments require classification of fair value as determined
by reference to the source of inputs used to derive the fair value. This
classification uses the following three-level hierarchy:
• Level 1 — quoted prices (unadjusted) in active markets for identical
assets or liabilities;
• Level 2 — inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices);
• Level 3 — inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
Notes to the Consolidated Financial Statements continued
13. Trade and Other Receivables
Year ended 31 December Year ended 31 December
2022 2021
£000 £000
Trade receivables 88 145
Other receivables 35 9
Prepayments 110 101
Total trade and other 233 255
receivables
14. Cash and cash equivalents
Year ended 31 December Year ended 31 December
2022 2021
£000 £000
Cash in the Statement of 873 1,767
Cash Flows
15. Trade and Other Payables
Year ended 31 December Year ended 31 December
2022 2021
£000 £000
Trade payables 144 25
Other payables 245 188
Accruals and deferred income 179 163
Head lease liabilities 23 23
Total trade and other 591 398
payables
16. Lease liabilities
Lease liabilities on head rents are payable as Minimum Net
follows: Lease Implicit Present
Payment Interest Value
£000 £000 £000
At 31 December 2020 2,734 (2,413) 321
Annual head lease payment increase 317 (292) 25
Movement in value (22) 23 0
At 31 December 2021 3,029 (2,682) 346
Movement in value (23) 22 (0)
At 31 December 2022 3,006 (2,660) 346
In the above table, the net present value of future lease payments has
been determined using the cost of capital at the time each of the head
leases were acquired. All leases expire in more than five years.
Notes to the Consolidated Financial Statements continued
17. Financial Instruments and Risk Management
The Board of directors has overall responsibility for the establishment
and oversight of the Group’s risk management framework.
As described in the Corporate Governance report, this responsibility has
been assigned to the executive directors with support and feedback from
the Audit Committee. The Audit Committee oversees how management monitors
compliance with the Group’s risk management policies and procedures and
reviews the adequacy of the risk management framework in relation to the
risks faced by the Group.
The Group has identified exposure to the following financial risks from
its use of financial instruments: capital management risk, market risk,
credit risk and liquidity risk.
Capital Management Risk
The Group’s capital consists of cash and equity attributable to the
shareholders. The Board do not consider there is any material capital
management risk exposure.
Market Risk
Market risk is the risk that changes in market conditions, such as
interest rates, foreign exchange rates and equity prices, will affect the
Group’s profit or loss and cash flows.
Equity risk is mitigated using a combination of long and short positions
to ensure that fluctuations in the market are hedged against.
As at As at
31 Dec 22 31 Dec 21
£000 £000
Market Risk on Available for Sale Investments
Increase by 1% 17 18
Decrease by 1% (17) (18)
Increase by 5% 87 89
Decrease by 5% (87) (89)
Sensitivity Analysis
IFRS 7 requires an illustration of the impact on the Group’s financial
performance of changes in interest rates. The following sensitivity
analysis has been prepared in accordance with the Group’s existing
accounting policies and considers the impact on the Income Statement and
on equity of an increase of 100 basis points (1%) in interest rates. Any
consequential tax impact is excluded.
Notes to the Consolidated Financial Statements continued
Actual results in the future may differ materially from these assumptions
and, as such, these tables should not be considered as a projection of
likely future gains and losses.
As at As at
31 Dec 22 31 Dec 21
£000 £000
Interest Rate Risk
Increase by 1% 13 29
Decrease by 1% (13) (29)
Increase by 5% 66 146
Decrease by 5% (66) (146)
Fair value measurements recognised in the statement of financial position
Investment properties and Investment properties held for sale are measured
subsequent to initial recognition at fair value and have been group as
Level 3 (2019: level 3) based on the degree to which fair value is
observable.
• Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets and liabilities;
• Level 2 fair value measurements are those derived from inputs other
than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices); and
• Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
Investment properties have been valued using the investment method which
involves applying a yield to rental income streams.
Inputs include equivalent yield, tenancy information, and leasing
assumptions. Valuation reports are based on both information provided by
the Company e.g. tenancy information including current rents, which are
derived from the Company’s financial and property management systems and
are subject to the Company’s overall control environment, and assumptions
applied by the valuers e.g. ERVs, and yields. These assumptions are based
on market observation and the valuers’ professional judgement.
An increase/decrease in equivalent yields will decrease/increase
valuations, and an increase or decrease in rental values will increase or
decrease valuations. Other inputs include ERVs, and likely void and
rent-free periods. There are interrelationships between these inputs as
they are determined by market conditions. The valuation movement in a
period depends on the balance of those inputs.
Notes to the Consolidated Financial Statements continued
Below is a sensitivity analysis of the impact of a 1% increase or decrease
in equivalent yields on income and equity. Actual results may differ
materially from these assumptions and, as such, these tables should not be
considered as a projection of likely future gains and losses.
As at As at
31 Dec 22 31 Dec 21
£000 £000
Interest Rate Risk
Increase by 1% 33 28
Decrease by 1% (33) (28)
Below is a sensitivity analysis of the impact of a 1% increase or decrease
in foreign exchange rates on income and equity. Actual results may differ
materially from these assumptions and, as such, these tables should not be
considered as a projection of likely future gains and losses.
As at As at
31 Dec 22 31 Dec 21
£000 £000
Foreign Exchange Risk
Increase by 1% (0) 23
Decrease by 1% (8) (46)
Credit Risk
Credit risk is the risk of financial loss to the Group if a tenant, bank
or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from
tenants, cash and cash equivalents held by the Group’s bankers and
derivative financial instruments entered into with the Group’s bankers.
Trade and Other Receivables
The Group’s exposure to credit risk is influenced mainly by the individual
characteristics of each tenant. At 31 December 2022 the Group had over 40
letting units in four properties. There is no significant concentration of
credit risk due to the large number of small balances owed by a wide range
of tenants who operate across all retail sectors. There is no
concentration of credit risk in any one geographic area of the UK. The
level of arrears is monitored monthly by the Group on a tenant by tenant
basis.
Cash, Cash Equivalents and Derivative Financial Instruments
The banking services used by the Group are split between a major UK bank
and a Swiss private banking corporation for deposit purposes.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group’s approach to managing
liquidity risk is to ensure, as far as possible, that it will always have
adequate resources to meet its liabilities when they fall due for both the
operational needs of the business and to meet planned future investments.
This position is formally reviewed on a quarterly basis or more frequently
should events require it.
Notes to the Consolidated Financial Statements continued
The Group’s financial liabilities are classified and are shown with their
fair value as follows:
31 December 2022
At Amortised Total Carrying At
Cost Amount Fair Value
- - -
Finance lease liabilities 346 346 346
Trade payables 144 144 144
Other payables 246 246 246
Due to associated company - - -
Accruals 179 179 179
914 914 914
31 December 2021
At Amortised Total Carrying At
Cost Amount Fair Value
£0 £0 £0
Finance lease liabilities 346 346 346
Trade payables 25 25 25
Other payables 188 188 188
Due to associated company - - -
Accruals 163 163 163
722 722 722
For all classes of financial liabilities, the carrying amount is a
reasonable approximation of fair value.
The maturity profiles of the Group’s financial liabilities are as follows:
31 December 2022
Within One to Two Three Four Over
Carrying Contractual One Two to to to Five
Value Cash Flows Year Years Three Four Five Years
Years Years Years
£000 £000 £000 £000 £000 £000 £000 £000
Finance lease 346 3,006 23 23 23 23 23 2,893
liabilities
Trade payables 144 144 144
Other payables 246 246 246
Due to
associated - - -
company
Accruals 179 179 179
914 3,574 591 23 23 23 23 2,893
Notes to the Consolidated Financial Statements continued
31 December 2021
Within One to Two Three Four Over
Carrying Contractual One Two to to to Five
Value Cash Flows Year Years Three Four Five Years
Years Years Years
£000 £000 £000 £000 £000 £000 £000 £000
Finance lease 346 3,073 23 23 23 23 23 2,960
liabilities
Trade payables 25 25 25
Other payables 188 188 188
Due to
associated - - -
company
Accruals 163 163 163
722 3,448 398 23 23 23 23 2,960
Contractual cash flows include the undiscounted committed interest cash
flows and, where the amount payable is not fixed, the amount disclosed is
determined by reference to the conditions existing at the year end
18. Operating Lease as Lessor
Year ended 31 December Year ended 31 December
2022 2021
£000 £000
Within one year 273 309
After one year but not more 759 762
than five years
More than five years 513 369
1,545 1,440
19. Capital Commitments
No capital expenditure was planned at the balance sheet date.
Notes to the Consolidated Financial Statements continued
20. Related party balances and transactions
Transactions with Key Management Personnel
The only transactions with key management personnel relate to remuneration
which is set out in the Remuneration Report.
The key management personnel of the Group for the purposes of related
party disclosures under IAS 24 comprise all executive and non-executive
directors.
As at the year end the Group owed £17,073 (2021: £Nil) to Thalassa
Holdings Limited (“Thalassa”), a company under common directorship. During
the year services amounting to £91,490 (2021: £123,619) were charges from
Thalassa.
The bulk of this sum related to administration fees settled by Thalassa
but payable by the Group. The remained related to accounting and
registered office services supplied to the Group by Thalassa at cost.
The company was invoiced £155,000 (2021: £215,000), to Fleur De Lys Ltd, a
company owned and controlled by the Chairman Duncan Soukup, for
consultancy and administration services.
Athenium Consultancy Ltd, a company in which the Group owns shares
invoiced the group for financial and corporate administration services
totaling £165,000 for the period (Dec 2021: nil).
21. Share capital
As at As at
31 Dec 21 31 Dec 20
£ £
Allotted, issued and fully paid:
22,697,000 ordinary shares of £0.01 each 226,970 226,970
9,164,017 treasury shares of £0.01 each 91,640 91,640
Total Share Capital 318,610 318,610
During the year to 30 September 2019, the Company underwent a Court
approved restructure of capital and buy back of shares. Under this action
the issued 20p shares were converted to 1p; capital reserves were
transferred to distributable reserves; 59,808,456 shares were repurchased,
and a new Capital Redemption Reserve of £0.598m was established.
Investment in Own Shares
At the year-end, 9,164,017 shares were held in treasury (December 2021:
9,164,017).
Notes to the Consolidated Financial Statements continued
22. Group Entities
All the below companies are incorporated in the United Kingdom: -
Effective
Share holding
Name of subsidiary Place of incorporation 2022 2021
NOS 4 Limited** United Kingdom 100% 100%
NOS 5 Limited** United Kingdom 100% 100%
NOS 6 Limited** United Kingdom 100% 100%
NOS 7 Limited ** (Dissolved on 21 United Kingdom 100% 100%
Sep 2021)
Gilfin Property Holding Limited*** United Kingdom 100% 100%
NOS Holdings Limited** United Kingdom 100% 100%
** Registered office: Eastleigh Court, Bishopstrow,
Warminster, Wiltshire BA12 9HW
***In liquidation - Registered office: 4 Atlantic Quay, 70
York Street, Glasgow, G2 8JX
Subsidiaries NOS 4 Ltd (Registered number: 05707123), NOS 5 Ltd
(Registered number: 05707124) and NOS 6 Ltd (Registered number: 06188983)
are exempt from the requirements relating to the audit of accounts under
section 479A of the Companies Act 2006
23. Associated Entities
Athenium Consultancy Ltd in which the Group owns 30% shares was
incorporated on 12 October 2021. Movement on interests in associates can
be summarised as follows:
2022 2021
£000 £000
Cost as at 1 January - -
Additions 5 -
5 -
24. Contingent Liabilities
There are currently two potential repair obligations at two separate
Company properties currently under investigation, including the extent to
which the relevant group company may be required to underwrite such costs
as may arise and the extent to which the tenants or former tenants of the
properties are liable to contribute to such costs under the terms of their
tenancy agreements.
25. Subsequent events
• Sale of Oldham property classified as an asset held for resale at the
year-end (see note 11);
• Commencement of legal action against The Italian Way, a tenant in
Hastings, for breach of lease covenants.
Notes to the Consolidated Financial Statements continued
26. Controlling Party and copies of the Financial Statements
At 30 September 2019 the ultimate group in which the results were
consolidated was Thalassa Holdings Limited, which was also the controlling
party of the Company.
In October 2020 The Local Shopping REIT plc resolved to change its name to
Alina Holdings PLC and shortly thereafter Thalassa Holdings Limited
disposed of its controlling interest in Alina Holdings PLC.
Accordingly, as at 31 December 2022 the Company had no ultimate
controlling party.
The consolidated financial statements of Alina Holdings PLC are available
to the public and may be obtained from the Company’s website:
2 www.alina-holdings.com.
Company Balance Sheet
As at 31 December 2022
31 December 2022 31 December 2021
Note £000 £000
Assets
Non-current assets
Investments C2 3,105 3,105
Investments in associated entities 5 -
Total non-current assets 3,110 3,105
Current assets
Trade and other receivables C3 2,639 5
Available for sale financial assets - 1,819
Cash and cash equivalents 524 1,313
Total current assets 3,163 3,137
Liabilities
Current liabilities
Trade and other payables C4 199 112
Total current liabilities 199 112
Net current assets 2,964 3,025
Net assets 6,074 6,130
Shareholders’ Equity
Share capital C6 319 319
Capital redemption reserve C6 598 598
Retained earnings C6 5,157 5,213
Total shareholders' equity 6,074 6,130
The Company has taken advantage of Section 408 of the Companies Act 2006
and has not included its own profit and loss account in these financial
statements. The Company’s loss for the period was £0.06m (31 December
2021: £0.35m).
These financial statements were approved by the Board of directors on 31
May 2023 and were signed on its behalf by:
C D Soukup
Director
The registered number of the Company is 05304743.
Notes to the Financial Statements
C1. Accounting Policies
These financial statements were prepared in accordance with Financial
Reporting Standard 102 The Financial Reporting Standard applicable in the
UK (“FRS 102”) as issued in March 2018. The presentation currency of these
financial statements is sterling. All amounts in the financial statements
have been rounded to the nearest £1,000.
The consolidated financial statements of Alina Holdings PLC are prepared
in accordance with UK Adopted Accounting Standards (IFRS) and are
available to the public. In these financial statements, the company is
considered to be a qualifying entity (for the purposes of this FRS) and
has applied the exemptions available under FRS 102 in respect of the
following disclosures:
• Reconciliation of the number of shares outstanding from the beginning
to end of the period;
• Cash Flow Statement and related notes; and
• Key Management Personnel compensation.
As the consolidated financial statements include the equivalent
disclosures, the Company has also taken the exemptions under FRS 102
available in respect of the following disclosures:
• Certain disclosures required by FRS 102.26 Share Based Payments; and,
• The disclosures required by FRS 102.11 Basic Financial Instruments and
FRS 102.12 Other Financial Instrument Issues in respect of financial
instruments not falling within the fair value accounting rules of
Paragraph 36(4) of Schedule 1.
The Company proposes to continue to adopt the reduced disclosure framework
of FRS 102 in its next financial statements.
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these financial
statements.
There were no judgements made by the directors, in the application of
these accounting policies that have significant effect on the financial
statements, with a significant risk of material adjustment in the next
year.
Measurement convention
The financial statements are prepared on the historical cost basis.
Notes to the Financial Statements continued
Classification of financial instruments issued by the Company
In accordance with FRS 102.22, financial instruments issued by the Company
are treated as equity only to the extent that they meet the following two
conditions:
a. they include no contractual obligations upon the company to deliver
cash or other financial assets or to exchange financial assets or
financial liabilities with another party under conditions that are
potentially unfavourable to the company; and
b. where the instrument will or may be settled in the company’s own
equity instruments, it is either a non-derivative that includes no
obligation to deliver a variable number of the company’s own equity
instruments or is a derivative that will be settled by the company’s
exchanging a fixed amount of cash or other financial assets for a
fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are
classified as a financial liability.
Where the instrument so classified takes the legal form of the company’s
own shares, the amounts presented in these financial statements for called
up share capital and share premium account exclude amounts in relation to
those shares.
Basic financial instruments
Trade and other creditors are recognised initially at transaction price
plus attributable transaction costs. Subsequent to initial recognition,
they are measured at amortised cost, less any impairment losses in the
case of trade debtors. If the arrangement constitutes a financing
transaction, for example if payment is deferred beyond normal business
terms, then it is measured at the present value of future payments
discounted at a market rate of instrument for a similar debt instrument.
Investments in subsidiaries
These are separate financial statements of the company. Investments in
subsidiaries are carried at cost less impairment.
Judgements and Estimates
In testing for impairment, management assesses the recoverable amount of
investments and inter-company debtors by reference to the subsidiaries’
net assets and their ability to recover these assets.
Provisions
A provision is recognised in the balance sheet when the Company has a
present legal or constructive obligation as a result of a past event, that
can be reliably measured and it is probable that an outflow of economic
benefits will be required to settle the obligation. Provisions are
recognised at the best estimate of the amount required to settle the
obligation at the reporting date.
Where the Company enters into financial guarantee contracts to guarantee
the indebtedness of other companies within its group, the company treats
the guarantee contract as a contingent liability until such time as it
becomes probable that the company will be required to make a payment under
the guarantee.
Interest receivable and Interest payable
Interest payable and similar charges include interest payable, finance
charges on shares classified as liabilities and finance leases recognised
in profit or loss using the effective interest method, unwinding of the
discount on provisions, and net foreign exchange losses that are
recognised in the profit and loss account.
Notes to the Financial Statements continued
Taxation
Tax on the profit or loss for the year comprises current and deferred tax.
Tax is recognised in the profit and loss account except to the extent that
it relates to items recognised directly in equity or other comprehensive
income, in which case it is recognised directly in equity or other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable
income or loss for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is provided on timing differences which arise from the
inclusion of income and expenses in tax assessments in periods different
from those in which they are recognised in the financial statements. The
following timing differences are not provided for: differences between
accumulated depreciation and tax allowances for the cost of a fixed asset
if and when all conditions for retaining the tax allowances have been met;
and differences relating to investments in subsidiaries to the extent that
it is not probable that they will reverse in the foreseeable future and
the reporting entity is able to control the reversal of the timing
difference. Deferred tax is not recognised on permanent differences
arising because certain types of income or expense are non-taxable or are
disallowable for tax or because certain tax charges or allowances are
greater or smaller than the corresponding income or expense.
Deferred tax is measured at the tax rate that is expected to apply to the
reversal of the related difference, using tax rates enacted or
substantively enacted at the balance sheet date. Deferred tax balances are
not discounted.
Unrelieved tax losses and other deferred tax assets are recognised only to
the extent that is it probable that they will be recovered against the
reversal of deferred tax liabilities or other future taxable profits.
C2. Fixed Assets Investments
Shares in Group
Undertakings Total
£000 £000
Cost
At 31 December 2021 108,605 108,605
At 31 December 2022 108,605 108,605
Provisions
At 31 December 2021 105,500 105,500
At 31 December 2022 105,500 105,500
Net book value
At 31 December 2022 3,105 3,105
At 31 December 2021 3,105 3,105
An impairment review of the carrying value of the Company’s investments in
its subsidiary undertakings has been performed. In carrying out this
review, the directors had due regard to the nature of the property
investments held, which is commensurate with the funding arrangements in
place. On the basis of this review which included a review of the
underlying assets of the individual subsidiaries the directors have not
written down the value of investments in subsidiary undertakings. This was
concluded due to the underlying assets being undervalued as per the
valuation exercise undertaken within the Group.
Notes to the Financial Statements continued
The companies in which the Company’s interests at the period end were more
than 20% are as follows:
Name of subsidiary Place of incorporation 2022 2021
NOS 4 Limited** United Kingdom 100% 100%
NOS 5 Limited** United Kingdom 100% 100%
NOS 6 Limited** United Kingdom 100% 100%
NOS 7 Limited ** (Dissolved on 21 Sep United Kingdom 100% 100%
2021)
Gilfin Property Holding Limited*** United Kingdom 100% 100%
NOS Holdings Limited** United Kingdom 100% 100%
** Registered office: Eastleigh Court, Bishopstrow, Warminster,
Wiltshire BA12 9HW
***In liquidation - Registered office: 4 Atlantic Quay, 70 York
Street, Glasgow, G2 8JX
C3. Trade and other receivables
31 December 2022 31 December 2021
£000 £000
Amounts owed by 2,551
Group undertakings -
Other debtors 15 3
Prepayments 73 2
2,639 5
Amounts owed by group undertakings are interest free and repayable on
demand.
C4. Available for sale financial assets
Year ended 31 Year ended 31 December 2021
December 2022
£000 £000
Available for sale financial - 1,783
assets*
Investments in associated - -
entities**
Portfolio Holdings - 36
- 1,819
*These assets are formed of equity instruments held on quoted markets
globally, they comprise both long and short positions as per the
disclosures in the Strategic Report.
**These holdings comprise foreign currency balances held for short periods
from the sale and purchase of financial assets through the broker
AFS investments have been valued incorporating Level 1 inputs in
accordance with IFRS7. They are a combination of cash and securities held
with the listed broker.
Financial instruments require classification of fair value as determined
by reference to the source of inputs used to derive the fair value. This
classification uses the following three-level hierarchy:
• Level 1 — quoted prices (unadjusted) in active markets for identical
assets or liabilities;
• Level 2 — inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices);
• Level 3 — inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
Notes to the Financial Statements continued
C5. Trade and other payables
31 December 2022 31 December 2021
£000 £000
Trade creditors 117 12
Amounts owed to Group undertakings - 14
Amounts owed to related party - -
Other creditors - 4
Accruals 82 82
199 112
Amounts owed to group undertakings are interest free and repayable on
demand.
C6. Reconciliation of Shareholders’ Funds
Share Capital
31 December 2022 31 December 2021
Number Amount Number Amount
000 £000 000 £000
Allotted, called up and fully paid 31,861 319 31,861 319
31,861 319 31,861 319
Investment in Own Shares
At the year-end, 9,164,017 shares were held in treasury (2021: 9,164,017),
and at the date of this report 9,164,017 were held in treasury.
Statement of Changes in Equity for the 12 months ended 31 December 2022
Capital
Share Redemption Retained
Capital Reserves Reserves Earnings Total
£000 £000 £000 £000 £000
Balance as at 31 December 2020 319 - 598 5,563 6,480
Total comprehensive income for - - (350) (350)
the year
Balance as at 31 December 2021 319 - 598 5,213 6,130
Total comprehensive income for - - - (56) (56)
the year
Balance as at 31 December 2022 319 - 598 5,158 6,074
C7. Controlling Party
Please refer to note 26 in the Group Financial Statements
Glossary
Earnings Per Share (“EPS”)
EPS is calculated as profit attributable to shareholders divided by the
weighted average number of shares in issue in the year.
Equivalent Yield
Equivalent yield is a weighted average of the initial yield and
reversionary yield and represents the return a property will produce based
upon the timing of the income received. In accordance with usual practice,
the equivalent yields (as determined by the Group’s external valuers)
assume rent received annually in arrears and on gross values including
prospective purchasers’ costs (including stamp duty, and agents’ and legal
fees).
Head Lease
A head lease is a lease under which the Group holds an investment
property.
Initial Yield
Initial yield is the annualised net rent generated by a property expressed
as a percentage of the property valuation. In accordance with usual
practice the property value is grossed up to include prospective
purchasers’ costs.
Like-for-like Market Rent
This is the Market Rent for the Group’s investment properties at the end
of the financial year compared with the Market Rent for the same
properties at the end of the prior year, i.e. excluding the Market Rent of
those properties disposed of during the interim period.
Like-for-like rental income
This is the rental income for the Group’s investment properties at the end
of the financial year compared with the rental income for the same
properties at the end of the prior year, i.e. excluding rental income of
those properties disposed of during the interim period.
Market Value
Market value is the estimated amount for which a property should exchange
on the date of valuation between a willing buyer and willing seller in an
arm’s length transaction after proper marketing wherein the parties had
each acted knowledgeably, prudently and
without compulsion.
Market Rent
Market rent is the estimated amount for which a property should lease on
the date of valuation between a willing lessor and a willing lessee on
appropriate lease terms, in an arm’s length transaction, after proper
marketing wherein the parties had each acted knowledgeably, prudently and
without compulsion.
Net Asset Value (“NAV”) per share
NAV per share is calculated as shareholders’ funds divided by the number
of shares in issue at the year-end excluding treasury shares.
Real Estate Investment Trust (“REIT”)
A REIT is a listed property company which qualifies for and has elected to
join the UK REIT tax regime, which exempts qualifying UK property rental
income and gains on investment property disposals from corporation tax.
The Group converted to REIT status on 11 May 2007 and left the REIT tax
regime on 1 October 2018
Reversionary Yield
Reversionary yield is the annualised net rent that would be generated by a
property if it were fully let at market rent expressed as a percentage of
the property valuation. In accordance with usual practice the property
value is grossed up to include prospective purchasers’ costs.
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Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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ISIN: GB00B1VS7G47
Category Code: ACS
TIDM: ALNA
LEI Code: 213800SOAIB9JVCV4D57
Sequence No.: 248681
EQS News ID: 1649833
End of Announcement EQS News Service
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