On 11 June 2021, the Supervisory Board approved the audited annual report of AS Pro Kapital Grupp for the financial year 2020.

Prior period errors

When estimating the fair value of investment property, double counting of assets and liabilities recognized in the balance sheet related to such investment property should be avoided. The adjustment to the fair value of investment property as at 31 December 2019 did not take into account the fact that part of the receivables recognized in the balance sheet also forms part of the future cash flows used to determine the fair value. Thus, the carrying amount of the T1 Mall of Tallinn investment property as at 31 December 2019 is 108.6 million euros after adjustment, which amounted to 2.3 million euros of double-recorded long-term receivables.

The following table shows the effect of the adjustment for the previous period on the Group’s financial statements.

Consolidated income statement and other comprehensive income

in thousands of euros 2019 (adjusted) 2019
Other operating expenses -26 602 -24 341
including losses from changes in the fair value measurement of investment property -26 497 -24 236
Business profit (loss -17 439 -15 178
Profit / loss before tax -31 454 -29 193
Profit / loss from continuing operations for the period -31 433 -29 172
Total comprehensive income / loss for the reporting period -31 433 -29 172
Distribution of comprehensive income / loss for the reporting period:
Shareholders of the parent company -29 078 -26 981
Non – controlling interest -2 355 -2 191
Earnings / loss per share
Basic earnings per share (EUR) -0,51 -0,48
Diluted earnings / loss per share (EUR) -0,51 -0,48

Consolidated statement of financial position

in thousands of euros 31.12.2019 (adjusted) 31.12.2019
Fixed assets
Real estate investments 145 104 147 365
Total fixed assets 155 438 157 699
TOTAL ASSETS 208 560 210 821
Equity attributable to equity holders of the parent
Net profit / loss for the period -29 078 -26 981
Total equity attributable to equity holders of the parent 69 042 71 139
Non – controlling interest 263 427
TOTAL EQUITY 69 305 71 566
TOTAL LIABILITIES AND EQUITY 208 560 210 821

Differences between the unaudited financial results for the year ended 31 December 2020 reported in this report and the financial results for the interim report for 2020 published on 26 February 2021

Consolidated income statement and other comprehensive income

in thousands of euros 2020 12 months (unaudited) 2020
12 months
General administrative expenses -6 154 -5 587
Other operating expenses -43 586 -41 978
including losses from changes in the fair value measurement of investment property -43128 -41 902
Business profit (loss -43 108 -40 933
Loss before income tax -59 102 -56 927
Net loss for the period -59 456 -57 281
Breakdown of net profit for the reporting period:
Share owned by the parent -55 678 -53 648
Non – controlling interest -3 778 -3 633
Items that are no longer classified in the income statement
Change in real estate revaluation reserve -278 0
Total comprehensive loss for the period -59 734 -57 281
Breakdown of net profit for the reporting period:
Share owned by the parent -55 956 -53 648
Non – controlling interest -3 778 -3 633
Earnings / loss per share for the period (euro) -0,98 -0,95

In the course of the audit, general administrative expenses and other business expenses related to AS Tallinna Moekombinaat have been improved. General and administrative expenses increased by 567 thousand euros due to the recognition of additional write-downs on long-term lease receivables. Other operating expenses increased due to the change in the fair value of the investment property in the amount of 1,226 thousand euros (Note 8) and in addition interest of EUR 382 thousand was recognized as off-balance sheet during the reorganization procedure but was recorded in the balance sheet as a result of a corrective event (Note 18). In line with the changes mentioned above, non-controlling interests have also changed. The real estate revaluation reserve has decreased due to a German hotel, the fair value of which decreased by 278 thousand euros (Note 7). The effect of the entire changes on the statement of comprehensive income for the period is an additional loss of 2,453 thousand euros.

Consolidated statement of financial position

in thousands of euros 31.12.2020 (unaudited) 31.12.2020
Fixed assets
Long – term receivables 3 517 4 085
Tangible assets 6 745 7 023
Real estate investments 98 512 101 998
Total fixed assets 109 506 113 838
TOTAL ASSETS 179 048 183 380
short term obligations
Short – term debt 107 581 79 939
Short – term trade payables 22 211 21 829
Total current liabilities 138 575 110 551
Long-term responsibilities
Long – term debt 27 255 54 897
Total long – term liabilities 30 902 58 544
TOTAL LIABILITIES 169 477 169 095
Equity attributable to equity holders of the parent
Revaluation reserve 2 984 3 262
Retained earnings 47 647 49 744
Net profit / loss for the period -55 678 -53 648
Total equity attributable to equity holders of the parent 13 086 17 491
Non – controlling interest -3 515 -3 206
TOTAL EQUITY 9 571 14 285
TOTAL LIABILITIES AND EQUITY 179 048 183 380

In the course of the audit, the items of fixed assets, liabilities and equity have been corrected. Long-term receivables decreased by 567 thousand euros due to the additional write-down of calculated lease receivables. Fixed assets and revaluation reserve have decreased due to the change in the fair value of a German hotel in the amount of 278 thousand euros (Note 7). The value of investment properties decreased by a total of 3,486 thousand euros, including the above-described adjustment to 2019 in the amount of 2,261 thousand euros and the remaining part reflects the effect of a similar adjustment in 2020 (Note 8). Current payables to suppliers increased by 382 thousand euros due to interest on arrears, which had previously been calculated off-balance sheet during the reorganization proceedings (Note 18). Long-term debt decreased and short-term debt increased by the carrying amount of covered bonds due to the reclassification because, as a result of the adjustment event, the financial covenants do not meet the requirements set out in the terms of the bonds (Notes 9 and 19). The total value of net changes to the balance sheet total is a decrease of 4,332 thousand euros, of which 2,261 thousand euros is related to the correction of an error in the 2019 financial results.

The audited annual report of AS Pro Kapital Grupp for 2020 is available at the company’s office at Sõjakooli 11, Tallinn. The report is also available on the company’s website www.prokapital.com.

Angelika Annus
Chief Financial Officer
AS Pro Kapital Grupp
tel: +372 614 4920
prokapital@prokapital.ee

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