Ronson Development SE
Consolidated Financial Statements
for the year ended 31 December 2021
Ronson Development SE
Management Board
Boaz Haim, President of the Management Board
Yaron Shama, Vice-President of the Management Board, Chief Financial Officer
Andrzej Gutowski, Vice-President of the Management Board, Sales Director
Karolina Bronszewska, Member of the Management Board, Marketing and Innovation Director
Supervisory Board
Amos Luzon, Chairman
Alon Kadouri
Ofer Kadouri
Przemysław Kowalczyk
Piotr Palenik
Shmuel Rofe
Registered office
Al. Komisji Edukacji Narodowej 57
02-797 Warsaw
Poland
Auditors
PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k.
ul. Polna 11
00-633 Warsaw
Poland
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
Contents
Page
Consolidated Financial Statements for the year ended 31 December 2021
Consolidated Statement of Comprehensive Income for the year ended 31 December 2021 1
Consolidated Statement of Financial Position as at 31 December 2021 2
Consolidated Statement of Changes in Equity for the year ended 31 December 2021 3
Consolidated Statement of Cash Flows for the year ended 31 December 2021 4
Notes to the Consolidated Financial Statements 5
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
1
Consolidated Statement of Comprehensive Income
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Note
Revenue from residential projects
6
457,677
400,257
Revenue from the sale of land
6
22,500
-
Revenue from sale of services
6
722
976
Revenue
480,899
401,233
Cost of sales residential projects
6
(371,223)
(315,023)
Cost of sales of land
6
(24,976)
-
Cost of sales
(396,199)
(315,023)
Gross profit
84,700
86,210
Changes in the value of investment property
1
3
(
29
7)
(307)
Selling and marketing expenses
7
(
4
,
760
)
(5,928)
Administrative expenses
8
(2
3,676
)
(22,542)
Share of profit/(loss) from joint ventures
1
4
5,763
(803)
Other expenses
9
(
4,
857
)
(3,401)
Other income
1
0
2
,
363
1,923
Result from operating activities
59,236
55,152
Finance income
600
558
Finance expense
(
4,412
)
(5,168)
Net finance income
(3,812)
(4,610)
Profit/(loss) before taxation
55,424
50,542
Income tax
charges
1
1
(1
5
,
077
)
(10,399)
Profit/(loss) for the year
40,347
40,143
Other comprehensive income
-
-
Total comprehensive income for the year, net of tax
40,347
40,143
Total profit/(loss) for the year attributable to:
E
quity holders of the parent
2
2
40,
347
40,143
N
on
-
controlling interests
-
-
Total profit/(loss) for the year
40,347
40,143
Total comprehensive income attributable to:
E
quity holders of the parent
40,
347
40,143
Non
-
controlling interests
-
-
Total comprehensive income for the year, net of tax 40,347
40,143
Weighted average number of ordinary shares (basic and
diluted
)
2
2
16
2
,
445
,
075
163,103,163
In Polish Zlotys (PLN)
Net earnings per share attributable to the equity holders of the parent
(basic)
2
2
0.248
0.246
Net earnings per share attributable to the equity holders of the parent
(dilluted)
2
2
0.248
0.246
The notes on pages 5 to 71 are an integral part of these consolidated financial statements
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
2
Consolidated Statement of Financial Position
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Note
Assets
Non-current assets
Property and equipment
12
7,558
8,797
Investment
property
13
28,596
8,956
Intangible fixed assets
1,016
39
Investments in joint ventures
14
3,846
8,902
Deferred tax assets
15
8,195
9,037
Land designated for development
16
10,041
45,486
Total non-current assets
59,251
81,217
Current assets
Inventory
16
655,542
664,761
Trade and other receivables and prepayments
17
58,180
37,374
Advances for Land
18
48,453
3,700
Income tax receivable
1,002
338
Loan
s granted
to third parties
1,621
-
Loans granted to joint ventures
14
319
1,039
Other current financial assets
19
8,794
14,239
Cash and cash equivalents
20
133,434
135,099
Total current assets
907,345
856,550
Total assets
966,597
937,767
Equity and liabilities
Equity
Shareholders’ equity
2
1
Share capital
12,503
12,503
Share premium
150,278
157,905
Treasury shares
(1,732)
(1,613)
Retained earnings
258,996
211,022
Total Equity attributable to equity holders of the parent
420,045
379,817
Liabilities
Non-current liabilities
Floating rate bond loans
23
196,991
175,382
Deferred tax liability
15
13,513
9,562
Lease liabilities related to perpetual usufruct of
investment property
2
4
553
590
Total non-current liabilities
211,057
185,534
Current liabilities
Trade and other payables and accrued expenses
25
61,086
58,347
Floating rate bond
loans
23
49,770
52,625
Other payables
-
accrued interests on bonds
23
2,477
2,065
Secured bank loans
23
1,568
-
Interest bearing deferred trade payables
-
8,482
Advances
received
26
198,227
224,267
Income tax payable
2,716
11,734
Provisions
2,128
994
Lease liabilities related to perpetual usufruct of land
2
4
17,523
13,902
Total current liabilities
335,495
372,416
Total liabilities
546,552
557,950
Total equity and liabilities
966,597
937,767
The notes on pages 5 to 71 are an integral part of these consolidated financial statements
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
3
Consolidated Statement of Changes in Equity
Attributable to the Equity holders of parent
In thousands of Polish Zlotys (PLN)
Share
capital
Share
premium
Treasury
shares
Retained
earnings
Total Equity
attributable to
the Equity
holders of the
parent
Balance at 1 January 2021 12,503
157,905
(1,613)
211,022
379,817
Comprehensive income:
Profit for the year ended 31
December 202
1
-
-
-
40,
347
40,
347
Other comprehensive income
-
-
-
-
-
Total comprehensive income/(expense) -
-
-
40,347
40,347
Own shares acquired
-
-
(1
19
)
-
(
119
)
Reclassification of 2019 net result from Share
premium to
retained earnings
(1)
-
(
7,627
)
-
7
,627
-
Balance at 31 December 2021 12,503
150,278
(1,732)
258,996
420,045
(1)
change of presentation of allocation of net result for the year 2019 from Share premium to Retained earnings
Attributable to the Equity holders of parent
In thousands of Polish Zlotys (PLN)
Share
capital
Share premium
Treasury
shares
Retained
earnings
Total Equity
attributable to
the Equity
holders of the
parent
Balance at 1 January 2020 12,503
150,278
(580)
188,293
350,494
Comprehensive income:
Profit for the period ended 31 December
2020
-
-
-
40
,
143
40
,
143
Other comprehensive income
-
-
-
-
-
Total comprehensive income/(expense) -
-
-
40,143
40,143
Own shares acquired
-
-
(1
,
033)
-
(1
,
033)
Dividend
-
-
-
(9
,
787)
(9
,
787)
Allocation of 2019 result - share premium
increase
-
7,
627
-
(7
,
627)
-
Balance at 31 December 2020 12,503
157,905
(1,613)
211,022
379,817
The notes on pages 5 to 71 are an integral part of these consolidated financial statements
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
4
Consolidated Statement of Cash Flows
2021
2020
For the year ended 31 December
In thousands of Polish Zlotys (PLN)
Note
Cash flows from/(used in) operating activities
Profit/(loss) for the period
40,
347
40,143
Adjustments to reconcile profit for the period to net cash used in operating activities
Depreciation
731
1,029
Decrease/(increase) in the value of
investment property
297
(163)
Write
-
down/(reversal) of inventory
4,351
1,326
Finance expense
4,412
5,168
Finance income
(843)
(558)
Land purchase
(1
1
3
,
784
)
(25,500)
Loss/(profit) on sale of property and equipment
-
60
Share of loss /(profit) from joint ventures
(5,763)
803
Income tax expense/(benefit)
11
1
5,
076
10,399
Decrease/(increase) in inventory and land designated for
development
3
3
16
7
,
37
6
71,762
Acquisition
of Nova Królikarnia project
5
-
(46,914)
Decrease/(increase) in advances for land
(36,553)
(3,700)
Decrease/(increase) in trade and other receivables and prepayments
3
3
(2
8
,
937
)
(11,669)
Decrease/(increase) in other current financial assets
5,445
7,918
Increase/(decrease) in trade and other payables and accrued expenses
3
3
1,50
2
17,580
Increase/(decrease) in provisions
1,134
(1,022)
Increase/(decrease) in advances received
(26,040)
(30,703)
Interest paid
(
10
,
7
2
9
)
(8,331)
Interest received
2
473
Income tax received/(paid)
11
(
19,971
)
(2,118)
Net cash from/(used in) operating activities
(1,948)
25,983
Cash flows from/(used in) investing activities
Acqu
i
stion of new
rel
a
ted party (
entity
)
-
(1,000)
Acquisition of property and equipment
(
173
)
(70)
Acquisition of
investment properties
(19,937)
-
Proceeds from loans
granted
to JV
11,808
3,127
Loans granted to joint ventures
-
(1,126)
Loans granted to third parties
(
1,621
)
-
Proceeds from
sale of property and equipment
-
146
Net cash from/(used in) investing activities
(9,922)
1,077
Cash flows (used in)/from financing activities
Proceeds from bank loans, net of bank charges
2
3
19,223
26,029
Repayment of bank loans
2
3
(18,497)
(39,217)
Proceeds from bond loans, net of issue costs and of bonds replacement
2
3
95,105
96,223
Repayment of bond loans
2
3
(77,929)
(55,000)
Repayment of loans from other
parties
(6,674)
(3,500)
Payment of dividend
-
(9,787)
Payment of
perpetual usufruct rights
2
4
(904)
(1,268)
Buy
-
back of shares
2
1
(119)
(1,033)
Net cash from/(used in) financing activities
10,205
12,447
Net change in cash and cash equivalents
(1,665)
39,508
Cash and cash equivalents at beginning of
period
135,099
95,591
Cash and cash equivalents at end of period
*
133,434
135,099
* Including restricted cash that amounted to PLN 58,526 thousand and PLN 17,606 thousand as 31 December 2021 and as 31 December 2020, respectively.
The notes on pages 5 to 71 are an integral part of these consolidated financial statements.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
5
Notes to the Consolidated Financial Statements
1. Background and business of the Company
(a) Ronson Development SE (‘the Company’), formerly named Ronson Europe N.V., is an European Company with
its statutory seat in Warsaw, Poland. The registered office is located at al. Komisji Edukacji Narodowej 57 in
Warsaw. The Company was incorporated in the Netherlands on 18 June 2007 as Ronson Europe N.V. with
statutory seat in Rotterdam. During 2018, the Company changed its name and was transformed into an European
Company (SE) and, effectively as of 31 October 2018, transferred its registered office of the Company from the
Netherlands to Poland. Address of the Company’s registered office is the same as domicile of the Company (Al.
Komisji Edukacji Narodowej 57 in Warsaw).
The Company (together with its subsidiaries, ‘the Group’) is active in the development and sale of residential
units, primarily apartments, in multi-family residential real-estate projects to individual customers in Poland. In
2021 the Management Board of the Company decided to start developed of a new activity, so-called Private Rent
Sector (PRS). The Company prepared Consolidated Financial Statements for the year ended 31 December 2021,
which was authorized for issue on 16 March 2022.
The shares of the Company are traded on the Warsaw Stock Exchange since 5 November 2007. According to
publicly available information, as at 31 December 2021:
- 66.06% of the shares are indirectly controlled by A. Luzon Group (via I.T.R. Dori B.V.) and 27.98% of the
shares are directly controlled by A. Luzon Group (Ultimate Parent). The Ultimate Controlling Party is
Mr Amos Luzon, member of the Supervisory Board;
- 0.96% of the shares are held by the Company;
- 5.00% of the outstanding shares are held by other investors.
The number of shares held by the investors is equal to the number of votes, as there are no privileged shares
issued by the Company. It shall be noted that as at 31 December 2021 and as at 15 March 2022 the Company
held 1,567,954 own shares (0.96%) and, in accordance with art. 364 § 2 of the Code of Commercial Companies,
it does not exercise voting rights from own shares.
As of publication date of the financial statements, 66.06% of the shares are are indirectly controlled by A. Luzon
Group (via I.T.R. Dori B.V.) and 32.98% of the shares are directly owned by Amos Luzon Development and
Energy Group Ltd. (Ultimate Parent).
As of 15 March 2022, the closing price of one share amounted to PLN 2.46, giving a total market capitalization
of the Company at the level of PLN 403,5 million.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
6
Notes to the Consolidated Financial Statements
1. Background and business of the Company (continued)
(b) The details of the entities whose financial statements have been included in these Consolidated Financial
Statements, the year of incorporation and the percentage of ownership and voting rights directly or indirectly
held by the Company as at 31 December 2021 and as at 31 December 2020, are presented below and on the
following page.
The projects managed by the entities are in various stages of development ranging from being in the process of
acquiring land for development to projects which are completed or near completion.
Entity name
Year of
incorporation
Share of ownership & voting
rights at the end of
Share of ownership & voting rights at the end of
31 December
2021
31 December
2020
a. held directly by the Company:
1
Ronson Development Management Sp. z o.o.
1999
100%
100%
2
Ronson Development Warsaw Sp. z o.o.
2000
100%
100%
3
Ronson Development Investment Sp. z o.o.
2011
100%
100%
4
Ronson Development Metropol Sp. z o.o.
2011
100%
100%
5
Ronson Development Creations Sp. z o.o.
2005
100%
100%
6
Ronson Development Sp. z o.o.
2006
100%
100%
7
Ronson Development Construction Sp. z o.o.
2006
100%
100%
8
City 2015 Sp. z o.o.
2006
100%
100%
9
Ronson Development Village Sp. z o.o.
(1)
2007
100%
100%
10
Ronson Development Skyline Sp. z o.o.
2007
100%
100%
11
Ronson Development Universal Sp. z o.o.
(1)
2007
100%
100%
12
Ronson Development South Sp. z o.o.
2007
100%
100%
13
Ronson Development Partner 5 Sp. z o.o.
2007
100%
100%
14
Ronson Development Partner 4 Sp. z o.o.
2007
100%
100%
15
Ronson Development North Sp. z o.o.
2007
100%
100%
16
Ronson Development Providence Sp. z o.o.
2007
100%
100%
17
Ronson Development Finco Sp. z o.o.
2009
100%
100%
18
Ronson Development Partner 2 Sp. z o.o.
2009
100%
100%
19
Ronson
Development Partner 3 Sp. z o.o.
2012
100%
100%
20
Ronson Development Studzienna Sp. z o.o.
2019
100%
100%
21
Ronson Development SPV1 Sp. z o.o.
(2)
2021
100%
-
22
Ronson Development SPV2 Sp. z o.o.
(2)
2021
100%
-
23
Ronson Development SPV3 Sp. z o.o.
(2)
2021
100%
-
24
Ronson Development SPV4 Sp. z o.o.
(2)
2021
100%
-
25
Ronson Development SPV5 Sp. z o.o.
(3)
2021
100%
-
26
Ronson Development SPV6 Sp. z o.o
. (3)
2021
100%
-
27
Ronson Development SPV7 Sp. z o.o.
(4)
2021
100%
-
28
Ronson Development SPV8 Sp. z o.o.
(4)
2021
100%
-
29
Ronson Development SPV9 Sp. z o.o.
(4)
2021
100%
-
30
Ronson Development SPV10 Sp. z o.o.
(
7
)
2021
100%
-
31
Ronson Development SPV11 Sp. z o.o.
(
7
)
2021
100%
-
b.
held indirectly by the Company :
32
Nova Królikarnia B.V. (Company with the registered office in the Netherlands)
(6)
2016
-
100%
33
AGRT Sp. z o.o.
2007
100%
100%
34
Ronson
Development Partner 4 Sp. z o.o.
–
Panoramika Sp.k.
2007
100%
100%
35
Ronson Development Sp. z o.o.
-
Estate Sp.k.
2007
100%
100%
36
Ronson Development Sp. z o.o.
-
Home Sp.k.
2007
100%
100%
37
Ronson Development Sp. z o.o.
-
Horizon Sp.k.
2007
100%
100%
38
Ronson Development Partner 3 Sp. z o.o.
-
Sakura Sp.k.
2007
100%
100%
39
Ronson Development Partner 3 sp. z o.o.
–
Viva Jagodno sp. k.
2009
100%
100%
40
Ronson Development Sp. z o.o.
-
Apartments 2011 Sp.k.
2009
100%
100%
41 Ronson Development Sp. z o.o. - Idea Sp.k. 2009 100% 100%
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
7
Notes to the Consolidated Financial Statements
1. Background and business of the Company (continued)
Entity name
Year of
incorporation
Share of ownership & voting rights at
the end of
31 December
2021
31 December
2020
b. held indirectly by the Company :
42
Ronson Development Partner 2 Sp. z o.o.
–
Destiny 2011 Sp.k.
2009
100%
100%
43
Ronson Development Partner 2 Sp. z o.o.
-
Enterprise 2011 Sp.k.
2009
100%
100%
44
Ronson Development Partner 2 Sp. z o.o.
-
Retreat 2011 Sp.k.
2009
100%
100%
45
Ronson Development Partner 5 Sp. z o.o
-
Vitalia Sp.k.
2009
100%
100%
46
Ronson Development Sp. z o.o.
-
2011 Sp.k.
2009
100%
100%
47
Ronson Development Sp. z o.o.
-
Gemini 2 Sp.k.
2009
100%
100%
48
Ronson Development Sp. z o.o.
-
Verdis Sp.k.
2009
100%
100%
49
Ronson Espresso Sp. z o.o.
2006
100%
100%
50
Retreat Sp. z o.o
.(5)
2010
-
100%
51
Ronson Development Nautica 2010 Sp. z o.o
.(5)
2010
-
100%
52
Ronson Development Sp. z o.o.
-
Naturalis Sp.k.
2011
100%
100%
53
Ronson Development Sp. z o.o.
-
Impressio Sp.k.
2011
100%
100%
54
Ronson Development Partner 3 Sp. z o.o.
-
Nowe Warzymice Sp. k
2011
100%
100%
55
Ronson Development Sp. z o.o.
-
Providence 2011 Sp.k.
2011
100%
100%
56
Ronson Development Partner 2 Sp. z o.o.
-
Capital 2011 Sp. k.
2011
100%
100%
57
Ronson Development Partner 5 Sp. z o.o.
-
Miasto Marina Sp.k.
2011
100%
100%
58
Ronson Development Partner 5 Sp. z o.o.
-
City 1
Sp.k.
2012
100%
100%
59
Ronson Development Partner 2 Sp. z o.o.
-
Miasto Moje Sp. k.
2012
100%
100%
60
Ronson Development sp. z o.o.
–
Ursus Centralny Sp. k.
2012
100%
100%
61
Ronson Development Sp. z o.o.
-
City 4 Sp.k.
2016
100%
100%
62
Ronson Development Partner 2 Sp. z o.o.
–
Grunwald Sp.k.
2016
100%
100%
63
Ronson Development Sp. z o.o. Grunwaldzka” Sp.k
.
2016
100%
100%
64
Ronson Development Sp. z o.o.
-
Projekt 3 Sp.k.
2016
100%
100%
65
Ronson Development Sp. z o.o.
-
Projekt 4 Sp.k.
2017
100%
100%
66
Ronson Development Sp. z o.o.
-
Projekt 5 Sp.k.
2017
100%
100%
67
Ronson Development Sp. z o.o.
-
Projekt 6 Sp.k.
2017
100%
100%
68
Ronson Development Sp. z o.o.
-
Projekt 7 Sp.k.
2017
100%
100%
69
Ronson
Development Sp. z o.o.
-
Projekt 8 Sp.k.
2017
100%
100%
70
Bolzanus Limited
(Company with the registered office in Cyprus)
2013
100%
100%
71
Park Development Properties Sp. z o.o.
-
Town Sp.k.
2007
100%
100%
72
Tras 2016 Sp. z o.o.
2011
100%
100%
73
Park Development Properties Sp. z o.o.
2011
100%
100%
74
Jasminova 2016 Sp. z o.o.
2016
100%
100%
75
Town 2016 Sp. z o.o.
2016
100%
100%
76
Enterprise 2016 Sp. z o.o.
2016
100%
100%
77
Wrocław 2016 Sp. z o.o.
2016
100%
100%
78
Darwen Sp. z o.o.
2017
100%
100%
79
Truro Sp. z o.o.
2017
100%
100%
80
Tregaron Sp. z o.o.
2017
100%
100%
81
Totton Sp. z o.o.
2017
100%
100%
82
Tring Sp. z o.o.
2017
100%
100%
83
Thame Sp. z o.o.
2017
100%
100%
84
Troon Sp. z o.o.
2017
100%
100%
85
Tywyn Sp. z o.o.
2018
100%
100%
86
Semela Sp. z o.o
. (8)
2021
100%
n/a
c.
other not subject to full consolidation:
87
Coralchief sp. z o.o.
2018
50%
50%
88
Coralchief sp. z o.o.
-
Projekt 1 sp. k.
2016
n/a
n/a
89
Ronson IS sp. z o.o.
2009
50%
50%
90
Ronson IS sp. z o.o. sp.
k.
2012
n/a
n/a
(1) The Company has the power to govern the financial and operating policies of this entity and to obtain benefits from its activities, whereas Kancelaria Radcy
Prawnego Jarosław Zubrzycki holds the legal title to the shares of this entity.
(2) Companies created and registered in KRS in first quarter of 2021
(3) Companies created and registered in KRS in second quarter of 2021
(4) Companies created and registered in KRS in third quarter of 2021
(5) Companies merged with Ronson Development South Sp. z o.o. on 28 September 2021
(6) Company merged with Tras 2016 Sp. z o.o. on 1 October 2021
(7) Companies created and registered in KRS in fourth quarter of 2021
(8) Company acquired on 14 December 2021 indirectly by Ronson Development SPV7 Sp. z o.o.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
8
Notes to the Consolidated Financial Statements
2. Basis of preparation and measurement
(a) Basis of preparation and statement of compliance
These Consolidated Financial Statements have been prepared in accordance with International Financial
Reporting Standards as adopted by the EU (‘IFRS’). In light of the nature of the Group’s activities, the IFRSs
applied by the Group are not different from the IFRSs endorsed by the European Union, which are effective for
the financial year ended 31 December 2021. The Group is aware about new standards and interpretations that
have been issued but have not yet become effective. Information about standards and interpretations were
presented below.
The Consolidated Financial Statements were authorized by the Boards of Directors of Ronson
Development SE on 16 March 2022. These Consolidated Financial statements have been prepared on the
assumption that the Group is a going concern, meaning it will continue in operation for the foreseeable future
and will be able to realize assets and discharge liabilities in the normal course of its operations. The Company
prepared Consolidated Financial Statements for the year ended 31 December 2021 in both English and Polish
languages, while the Polish version is binding.
New and amended standards adopted by the Group
The Company has applied the following standards and amendments for the first time for their annual reporting
period commencing 1 January 2021:
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS4 and IFRS 16 due to IBOR reform - the changes refer to
the accounting issues that will arise when the financial instruments based on IBOR switch to the new interest
rates. The amendments introduce a number of guidelines and exemptions, in particular, a practical simplification
in case of changes in contracts that are required by the reform, which will be recognized by updating interest
rates, exemption from the obligation to terminate hedge accounting, temporary exemption from the need to
identify the risk component, and the obligation to include additional disclosures.
The changes mentioned above have been analyzed by the Management Board of the Company and concluded
that the impact on Consolidated Statement of Financial Position, results from the operation activity of the Group
or the range of information presented in this Consolidated Annual Financial Statement. All Group’s financial
instruments are based on WIBOR, which reform is conducted by the GPW Benchmark S.A. Company ( Warsaw
Stock Exchange) under the supervision of Komisja Nadzoru Finansowego and Komitet Stabilności Finansowej.
Detailed information regarding assets and liabilities basing on variable rates are presented in Note 31.
WIBOR is already BMR compliant.
Amendments to IFRS4: Implementation of IFRS 9 “Financial instruments”. The amendment has no apply
to the Group’s operations.
The impact of the above amendments and improvements to IFRSs has been analyzed by the Management. Based
on the assessment the amendments do not impact the Annual Financial Statements of the Company.
Amendments to IFRS16: “Leasing”.
Due to COVID-19 pandemic, in 2020 the amendments were introduced which provided lessees (but not lessors)
with relief in the form of an optional exemption from assessing whether a rent concession related to COVID-19
is a lease modification. Lessees can elect to account for rent concessions in the same way as they would if they
were not lease modifications. As any reduction in lease payments affects only payments due on or before 30 June
2021, in March 2021 the EU Commission extended the availability of the practical solution until June 2022. The
amendment is effective from 1 April 2021 with the possibility of earlier application.
The mentioned above changes did not affect the amounts reported in previous periods and are not expected to
have a material impact on the current or future periods.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
9
Notes to the Consolidated Financial Statements
2. Basis of preparation and measurement (cont’d)
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for
31 December 2021 reporting periods and have not been early adopted by the Group. These standards are not
expected to have a material impact on the entity in the current or future reporting periods and on foreseeable
future transactions.
(b) Basis of measurement
The Consolidated Financial Statements have been prepared on the historical cost basis, except for investment
property which was measured at fair value. The methods used to measure fair values for the purpose of preparing
the Consolidated Financial Statements are discussed further in Note 3(q), Note 13 and Note 27.
(c) Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency of the
primary economic environment in which the entity operates (the ‘functional currency’) being Polish Zloty
(‘PLN’). Polish Zloty is the presentation currency of the Consolidated Financial Statements of the Group, and is
also the functional currency of the parent company.
The Consolidated Financial Statements are presented in thousands of Polish Zloty, except when otherwise
indicated.
(d) Use of estimates and judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and
expenses during the reported period. Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing-basis. Revisions to accounting estimates are recognized in the period
in which the estimate is revised. In particular, information about significant areas of estimation, uncertainty and
critical judgments in applying accounting policies that have the most significant effect on the amounts
recognized in the financial statements, are described in the following notes:
Note 13 – Investment property
Note 15 – Deferred tax asset recognition
Note 16 – Inventory and residential land bank
Note 29 – Commitments and contingencies
The Company conducts residential units projects and developing activities in dedicated SPVs. The Company
reflects in its Consolidated Financial Statements the activities and transactions related to such projects based on
the substance rather than legal form. Such transactions are accounted for in accordance with IAS 2 and IFRS 15,
whereby inventory is sold and revenue should be recognized after the criteria are met.
Recognition of revenue
The revenue from the sale of real estate (residential units, commercial units, etc.) is recognised at the moment
when control over the real estate is transferred to the customer of said real estate together with the transfer of
significant risks and rewards typical to the ownership rights. According to the Company’s judgement this occurs
at the moment of handover of the real estate to the customer, which is based on a handover document signed by
both parties and subject to the condition that the customer has paid 100% of the sale price for the real estate.
More information in presented in the Note 6 to the Consolidated Financial Statements.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
10
Notes to the Consolidated Financial Statements
2. Basis of preparation and measurement (cont’d)
(d) Use of estimates and judgments (cont’d)
Estimation of net realizable value for inventory and residential land bank
Inventory and residential land bank is stated at the lower of cost and net realizable value (NRV). NRV for
completed inventory property (Finished goods) is assessed with reference to market conditions and prices
existing at the reporting date and is determined by the Group having taken suitable external advice and in the
light of recent market transactions. NRV in respect of work in progress and residential land bank is assessed
with reference to market prices at the reporting date for similar completed property, less estimated costs to
complete construction and less an estimate of the time value of money to the date of completion. More
information in presented in the Note 16 to the Consolidated Financial Statements.
Valuation of investment property
The fair value of the investment property is determined by independent real estate valuation experts based on
the discounted cash flow approach. The determination of the fair value of the investment property requires the
use of estimates such as future cash flows from assets (such as lettings, tenants’ profiles, future revenue streams,
capital values of fixtures and fittings, any environmental matters and the overall repair and condition of the
property) and discount rates applicable to those assets. More information in presented in the Note 13 to the
Consolidated Financial Statements.
Valuation of lease liability
According to the IFRS 16 standard the Company the lease payments shall be discounted using the rate implicit
in the lease contract, or if this rate cannot be readily determined, the Company’s incremental borrowing rate. The
Company decided to use incremental borrowing rate (‘IBR’) that was determined based on reference rate
adjusted by margin. The IBR rate was built based on reference rate (30 years state bonds quotation) increased by
margin which represents higher credit risk of the Company due to worse ratios, risk related to unusual length of
potential financing and no possibility to establish security for such long-term financing. More information in
presented in the Note 24 to the Consolidated Financial Statements.
Deferred tax asset recognition
Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent that
it is probable that taxable profit will be available against which the losses and deductible temporary differences
can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that
can be recognized, based upon the likely timing and the level of future taxable profits together with future tax
strategies. More information in presented in the Note 15 to the Consolidated Financial Statements.
Uncertain tax treatment
Regulations regarding VAT, corporate profits tax and social security contributions are subject to frequent
changes. These changes result in there being little point of reference and few established precedents that may be
followed. The binding regulations also contain uncertainties, resulting in differences in opinion regarding the
legal interpretation of tax regulations both between government bodies, and between government bodies and
companies.
Tax and other settlements may be subject to inspection by administrative bodies authorized to impose high
penalties and fines, and any additional taxation liabilities calculated as a result must be paid together with high
interest. The above circumstances mean that tax exposure is greater in Poland than in countries that have a more
established taxation system. Accordingly, the amounts shown in the financial statements may change at a later
date as a result of the amend to the final decision of the tax authorities.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
11
Notes to the Consolidated Financial Statements
2. Basis of preparation and measurement (cont’d)
(d) Use of estimates and judgments
Uncertain tax treatment continued
On 15 July 2016, amendments were made to the Tax Ordinance to introduce the provisions of General Anti-
Avoidance Rules (GAAR). GAAR are targeted to prevent origination and use of fictitious legal structures set up
to avoid payment of tax in Poland. GAAR define tax evasion as an activity performed mainly with a view to
realising tax gains, which is contrary, under given circumstances, to the subject and objective of the tax law. In
accordance with GAAR, an activity does not bring about tax gains, if its modus operandi was false. Any instances
of (i) unreasonable division of an operation (ii) involvement of agents despite lack of economic rationale for
such involvement, (iii) mutually exclusive or mutually compensating elements, as well as (iv) other activities
similar to those referred to earlier may be treated as a hint of artificial activities subject to GAAR. New
regulations will require considerably greater judgment in assessing tax effects of individual transactions.
The GAAR clause should be applied to the transactions performed after clause effective date and to the
transactions which were performed prior to GAAR clause effective date, but for which after the clause effective
date tax gains were realised or continue to be realised. The implementation of the above provisions will enable
Polish tax authority challenge such arrangements realised by tax remitters as restructuring or reorganization.
The Group accounts for current and deferred tax assets and liabilities based on the requirements of IAS 12
Income taxes, based on taxable profit (tax loss), taxable base, carry-forward of unused tax losses and carry-
forward of unused tax credits, and tax rates, while considering the assessment of uncertainty related to tax
settlements. If uncertainty exists as to whether and to what extent tax authority will accept individual tax
treatments of made transactions, the Group discloses these settlements while accounting for uncertainty
assessment. No such cases occurred in 2021 and 2020, further details on taxes are disclosed in Note 11 and Note
15.
(e) Basis of consolidation
These Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries
as at 31 December 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee);
exposure, or rights, to variable returns from its involvement with the investee;
the ability to use its power over the investee to affect its returns.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of
the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests
having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and
liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are
eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control,
is accounted for as an equity transaction.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
12
Notes to the Consolidated Financial Statements
2. Basis of preparation and measurement (cont’d)
(e) Basis of consolidation (cont’d)
If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity while any resultant gain or loss is recognized in profit
or loss. Any investment retained is recognized at fair value.
The financial statements of subsidiaries are prepared for the same period as the financial statement of parent.
The Group entities keep books of accounts in accordance with accounting policies specified in the Accounting
Act dated 29 September 1994 (‘the Accounting Act’) with subsequent amendments and the regulations issued
based on that Act (all together: ‘Polish Accounting Standards’). These consolidated financial statements include
a number of adjustments not included in the books of account of the Group entities, which were made in order
to bring the financial statements of those entities in conformity with IFRSs as adopted by EU.
Where property is acquired, via corporate acquisitions or otherwise, the management considers the substance of
the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition
of a business or assets. Where such acquisitions are not judged to be an acquisition of a business, they are not
treated as business combinations. Rather, the cost to acquire the corporate entity is allocated between the
identifiable assets and liabilities of the entity based on their relative fair values at the acquisition date.
Accordingly, no goodwill or additional deferred taxation arises. Otherwise, acquisitions are accounted for as
business combinations.
3. Significant accounting policies
The accounting policies set out below have been applied consistently in all periods presented in these
Consolidated Financial Statements.
(a) Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at
exchange rates prevailing at the dates of the transactions using:
the purchase or selling rate of the bank whose services are used by the Group – in case of foreign currency
sales, as well in the case as of the debt or liability payment transactions;
the average rate specified for a given currency by the National Bank of Poland as on the transaction date,
unless a customs declaration or other binding document indicates another rate – in case of other transactions.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot
rate of exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.
(b) Revenue from contracts with customers
Revenues from the sale of residential units are recognized when (or as) the Group has satisfied a performance
obligation by transferring a promised good to a customer, i.e. the revenues are recognized at point in time. A
residential unit is transferred when (or as) the customer obtains control of the residential unit (i.e. upon signing
of the protocol of technical acceptance and transfer of the key to the unit and payment of the entire amount
resulting from the sale agreement), after receiving valid occupancy permit for the building based on hand-over
protocol signed between the Group representatives and the customer and provided that the entire amount
resulting from the sale agreement has been paid by the customer.
Advances received related to pre-sales of residential units, which represent deferred income, are deferred when
they do not meet the criteria to be recognized as revenue. When they subsequently meet these criteria, they are
recognized as revenue.
The Group recognizes the provision for the warranties separately. Warranty is treated as a separate performance
obligation.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
13
Notes to the Consolidated Financial Statements
3. Significant accounting policies (cont’d)
(c) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument to another entity.
Financial assets
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has applied the practical expedient, the
Group initially measures a financial asset at its fair value plus transaction costs. In the case of a financial asset
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue
of the financial asset or the financial liability. Trade receivables that do not contain a significant financing
component or for which the Group has applied the practical expedient are measured at the transaction price
determined under IFRS 15.
In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs
to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The classification and subsequent measurement of debt financial assets also depends on the Group’s business
model for managing the related assets portfolio.
The business model reflects how the Group manages the assets in order to generate cash flows – whether the
Group’s objective is: (i) solely to collect the contractual cash flows from the assets (“hold to collect contractual
cash flows”,) or (ii) to collect both the contractual cash flows and the cash flows arising from the sale of assets
(“hold to collect contractual cash flows and sell”) or, if neither of (i) and (ii) is applicable, the financial assets
are classified as part of “other” business model and measured at FVTPL.
For purposes of subsequent measurement, financial assets are classified in four categories:
Financial assets at amortised cost (debt instruments);
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments);
Financial assets at fair value through profit or loss.
For the Group the first category is most relevant. Financial assets at amortised cost are subsequently measured
using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired. Assets to which above policy applies:
- Cash and cash equivalents,
- Cash on escrow classified as “other current financial asset”,
- Loan receivables,
- Trade receivables.
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate. The expected cash flows will include cash flows from the
sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two steps. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
14
Notes to the Consolidated Financial Statements
3. Significant accounting policies (cont’d)
(c) Financial instruments (cont’d)
Financial assets
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
Loans and borrowings is the category most relevant to the Group. After initial recognition, interest-bearing loans
and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
or loss.
The financial instruments of the Group are classified into one of the following categories:
Category Statement of financial position item Measurement
Assets measured at
amortized costs
Other current financial assets
Amortized cost method
Loans granted to joint ventures Amortized cost method
Cash and cash equivalent Amortized cost method
Trade and other receivables and prepayments Amortized cost method
Liabilities measured at
amortized costs
Bond loans Amortized cost method
Secured bank loans Amortized cost method
Trade and other payables and accrued expenses
Amortized cost method
(d) Property and equipment
(i) Recognition and measurement
Items of property and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-
constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing
the asset to a working condition for its intended use, and the costs of dismantling and removing the items and
restoring the site on which they are located.
When significant parts of property, plant and equipment are required to be replaced in intervals, the Group
recognizes such parts as individual assets with specific useful lives and depreciation, respectively. Likewise,
when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized
in the statement of comprehensive income as incurred.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
15
Notes to the Consolidated Financial Statements
3. Significant accounting policies (cont’d)
(d) Property and equipment (cont’d)
(ii) Depreciation
Depreciation is calculated on the straight-line basis over the estimated useful life of each component of an item
of property and equipment.
The estimated useful life of property and equipment, depending on the class of asset, ranges as below:
- Buildings: from 5 to 40 years.
- Equipment: from 2,5 to 10 years
- Cars: approximately up to 5 years
- Other tangible assets: from 2 to 5 years
- Intangible assets: from 2 to 5 years
Leased assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.
When parts of an item of property and equipment have different useful lives, they are accounted for as separate
items (major components) of property and equipment.
Depreciation methods, useful lives and residual values are reassessed at the reporting date, and adjusted
prospectively since the beginning of the following year, if appropriate.
(e) Leases
The Group recognizes assets and liabilities resulting from leases with a period exceeding 12 months, unless the
underlying asset is of low value. The only material lease agreements with a period exceeding 12 months into
which the Group has entered, are the rights of perpetual usufruct of real estate properties.
The method of valuation and presentation of lease in the Group's financial statements
The Group recognizes a lease liability, measured at the present value of the remaining lease payments, discounted
using the lessee’s incremental borrowing rate at the date of signing the lease contract. The Group recognizes the
respective right-of-use asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or
accrued lease payments recognized immediately before the commencement date. The Group has decided to
present right-of-use assets under the same item in the Consolidated Statement of Financial Position, under which
the relevant underlying assets would be presented if they were owned by the Group. The lease liabilities are
presented separately from other liabilities in long term liabilities with respect to lease of investment properties
and short term liabilities with respect to lease of inventory.
The right of perpetual usufruct of land related to residential projects:
Assets - was recognized in the Consolidated Statement of Financial Position under "Inventory".
Liabilities - was presented in the Consolidated Statement of Financial Position as a short term under "Lease
liabilities related to perpetual usufruct of land".
Costs - the Group depreciates the right of use asset on straight line basis over the lease period. On the other hand
the Group recognizes finance expense to reflect interest expense on lease liability. Those costs are capitalized to
Inventory as long as development project qualifies for capitalization.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
16
Notes to the Consolidated Financial Statements
3. Significant accounting policies (cont’d)
(e) Leases (cont'd)
The right of perpetual usufruct of land related to residential projects (cont’d):
Derecognition – at the moment occupancy permit is issued the Group becomes the owner of the land (based on
The Act of July 20, 2018 on transformation of the right of perpetual usufruct of land built for housing purposes
into the ownership right of these lands). Since then the Group is no longer liable for perpetual usufruct fees but
pays conversion fees. At the moment occupancy permit is issued and revenue from the sale of residential units
is recognized (when the performance obligations are satisfied and when the customer obtains control of the good,
i.e. upon signing of the protocol of technical acceptance and the transfer of the key to the buyer of the residential
unit and total payment obtained) the liability for conversion fee and related asset are reclassified to other payables
and other receivables and are presented under "Trade and other payables and accrued expenses" and "Trade and
other receivables and prepayments" respectively. The Group is legally released from the obligation to pay
conversion fees only upon signing the final notary deed for transferring the ownership of unit together with share
in the land to the client. Carrying amounts of receivables and payables are derecognized from Consolidated
Statement of Financial Position once final notary deeds are signed with clients.
Despite the fact that based on the Group’s core business the operating cycle of inventory is on average 5 years
i.e. plots of land are purchased for the purpose of the development of residential projects and transferring the
ownership of the units together with share in the land to the client. Under IFRS 16 the Group is not allowed to
consider the period for which the Group expects to be the usufructuary despite the fact that the period is quite
precisely known. Therefore once lease liabilities are recognized, the Group is required to discount all future
payments resulting from the right of perpetual usufruct for the period for which the right is granted to individual
properties (it can be up to 99 years). Following the requirements of IFRS 16 the Group recognize lease liabilities
of which majority will not be paid by the Group.
The right of perpetual usufruct of investment properties:
Assets - was recognized in the statement of financial position under "Investment properties".
Liabilities - was presented in the statement of financial position as a long term under "Lease liabilities related to
perpetual usufruct of investment property".
Costs - the Group fair values the right of use asset at each balance sheet date and recognizes finance expense to
reflect interest expense on lease liability.
Other leases
Assets – the right of use assets (cars) was recognized in the statement of financial position under "Property and
equipment” less accrued depreciation.
Liabilities - was presented in the statement of financial position as a long term under "Lease liabilities related to
perpetual usufruct of investment property" less repayment of capital part of the lease.
Costs - the Group depreciates the right of use asset on straight-line basis for the full duration of the lease at each
balance sheet date and recognizes finance expense to reflect interest expense on lease liability.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
17
Notes to the Consolidated Financial Statements
3. Significant accounting policies (cont’d)
(f) Investment property
Investment properties are measured initially at cost, including transaction costs. Subsequently to initial
recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date.
Gains or losses arising from changes in the fair values of investment properties are included in the statement of
comprehensive income in the period in which they arise.
Investment properties are derecognized when either they have been disposed of or when the investment property
is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference
between the net disposal proceeds and the carrying amount of the asset is recognized in the statement of
comprehensive income in the period of derecognition.
Transfers are made to or from investment property only when there is a change in use. For a transfer from
investment property to owner occupied property, the deemed cost for subsequently accounting is the fair value
at the date of change in use. If owner occupied property becomes an investment property, the Group accounts
for such property in accordance with the policy stated under property, plant and equipment up to the date of
change in use.
(g) Residential land bank and Inventories
The Group estimates that an operating cycle for projects/stage of a big project lasts for about 5 years. The
operating cycle is divided into two phases: (i) the pre-construction preparation phase lasting about 3 years
(obtaining necessary site permits, environmental decisions or construction permits, designing, etc.), and (ii)
construction phase lasting also about 2 years.
When a project is within the operating cycle the project presented as short-term assets under inventory, in other
cases the project presented as long-term under Residential land bank.
Inventories are valued at the purchase price plus capitalized costs incurred during preparation for project
implementation, however, not higher than the net realizable value from the sale. The purchase price includes
costs incurred in connection with construction of the project.
Inventories consists of real estate projects related to realization of multi-family block of flats or detached houses
for individual clients.
(i) Inventory
Inventory is measured at cost increased by capitalized costs incurred relating to the preparation of the projects
for construction, in the value not higher than the net realizable value. The cost of inventory includes expenditure
incurred relating to the construction of a project.
Inventory comprises residential real estate projects to individual customers.
Costs relating to the construction of a project are included in inventory of residential units as follows:
costs incurred relating to projects or a stage of a project which are not available for sale (work in progress),
costs incurred relating to units unsold associated with a project.
Project construction costs include:
a) land or leasehold rights for land,
b) construction costs paid to the general contractor building the residential project,
c) planning and design costs,
d) perpetual usufruct fees and real estate taxes incurred during the period of construction,
e) borrowing costs to the extent they are directly attributable to the development of the project,
f) professional fees attributable to the development of the project,
g) construction overheads and other directly related costs.
h) lease assets, see note 3 (e).
Inventory is recognized as a cost of sales in the statement of comprehensive income when the sale of residential
units is recognized.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
18
Notes to the Consolidated Financial Statements
3. Significant accounting policies (cont’d)
(g) Residential land bank and Inventories
(ii) Residential land bank
Long-term part of the land bank (if a commencement of construction phase is not planned within the period of
3 years from the reporting date) is presented in non-current assets of the consolidated statement of financial
position, as “Residential land bank”, whereas short-term part of the land bank is presented in current assets of
the consolidated statement of financial position, in inventory balance. Residential land bank is measured at cost
increased by capitalized costs incurred relating to the preparation of the projects for construction, in the value
not higher than the net realizable value.
(h) Equity
(i) Share capital
Share capital includes the proceeds received from the issue of ordinary shares on the nominal value in exchange
for cash.
(ii) Share premium
Share premium includes the excess of proceeds received from the issue of shares over the nominal value of
shares. Shares issuance costs are deducted from the share premium.
(iii) Treasury shares
Own shares that are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or
loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity
instruments.
(i) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. The computations of
the basic earnings per share are determined on the basis of the weighted average number of shares outstanding
during the year. The diluted earnings per share are determined by adjusting the statement of comprehensive
income and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares, which comprise share options granted and rights to obtain shares by employees.
(j) Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets, are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists then the asset’s or a cash generating
unit’s recoverable amount is estimated.
An impairment loss is recognized if the carrying amount of an asset or a cash generating unit exceeds its
recoverable amount.
The recoverable amount of an asset or a cash generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss
has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortization, if no impairment loss had been recognized.
(k) Provisions
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
19
Notes to the Consolidated Financial Statements
3. Significant accounting policies (cont’d)
(l) Borrowing costs
Borrowing costs directly attributable to the inventory of properties which necessarily take a substantial period
of time to get ready for their intended use or sale, are capitalized as part of the cost of the respective assets.
The interest capitalized is calculated using the Group’s weighted average cost of borrowings after adjusting for
borrowings associated with specific developments. Where borrowings are associated with specific
developments, the amount capitalized equals the gross interest incurred on those borrowings. Interest is
capitalized as from the commencement of the development work until the date of completion. The capitalization
of borrowing costs is suspended if there are prolonged periods when development activity is interrupted.
(m) Income tax expense
Income tax expense comprises current and deferred tax. Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment
to tax payable in respect of previous years. Current tax expense is calculated according to tax regulations in
effect in the jurisdiction in which the individual companies are domiciled.
Deferred income tax is provided, using the balance sheet method, for all temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, and for tax
losses carried forward, except for the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax
asset is recognized only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilized. At each reporting date deferred tax assets are reduced to the extent that it is no longer
probable that the related tax benefit will be realized. Deferred tax assets and deferred tax liabilities are offset, if
a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred
taxes relate to the same taxable entity and the same taxation authority.
(n) Other current financial assets
Other current financial assets in the statement of financial positions comprise only of funds deposited on escrow
accounts. The separate line was created due to new legal regulations “Act on the Protection of Rights of a
Dwelling Unit or House Buyer” which resulted in the need to open individual escrow accounts for advances paid
by the customers of the Group for the purchases of apartments. Amounts collected on individual escrow accounts
are measured at amortised cost less expected credit losses.
(o) Cash and cash equivalents
Cash and cash equivalents in the statement of financial positions comprise cash at banks and on hand and short-
term deposits with an original maturity of three months or less, except for collateralized deposits.
For the purpose of the consolidated statement cash flows, cash and cash equivalents consist of cash and short-
term deposits as defined above, net of outstanding bank overdrafts. Cash and cash equivalents are measured at
amortised costs less expected credit losses.
(p) Employee benefits
Obligations for contributions to defined contribution pension plans are recognized as an expense in the statement
of comprehensive income as incurred.
The Company’s subsidiaries are required, under applicable regulations, to pay, on a monthly basis, social
security contributions for the employees’ future pension benefits. These benefits, according to IAS 19
‘Employee Benefits’, are state plans and are characterized as defined contribution plans. Therefore, the
Company’s subsidiaries have no legal or constructive obligation to pay future pension benefits and their
obligation is limited to payment of contributions as they fall due.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
20
Notes to the Consolidated Financial Statements
3. Significant accounting policies (cont’d)
(q) Investment in joint ventures
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
Under the equity method, the investment in a joint venture is initially recognized at cost. The carrying amount
of the investment is adjusted to recognize changes in the Group’s share of net assets of the joint venture since
the acquisition date. Upon making an investment in an associate or joint venture, the amount by which the costs
of such investment exceed the value of the Group’s share in the net fair value of identifiable assets and liabilities
of this entity is recognized as goodwill and included in the carrying amount of the underlying investment.
The statement of profit or loss reflects the Group’s share of the results of operations of the joint venture. Any
change in Other comprehensive income of joint ventures are presented as part of the Group’s Other
comprehensive income. In addition, when there has been a change recognized directly in the equity of the joint
venture, the Group recognizes its share of any changes, when applicable, in the statement of changes in equity.
Unrealized gains and losses resulting from transactions between the Group and the joint venture are eliminated
to the extent of the interest in the joint venture.
The financial statements of the joint venture are prepared for the same reporting period as the Group. When
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognize an impairment
loss on its investment in joint venture. At each reporting date, the Group determines whether there is objective
evidence that the investment in the joint venture is impaired. If there is such evidence, the Group calculates the
amount of impairment as the difference between the recoverable amount of the joint venture and its carrying
value, and then recognizes the loss as ‘Share of profit/(loss) of a joint venture’ in the statement of profit or loss.
Upon loss of joint control over the joint venture, the Group measures and recognizes any retained investment at
its fair value. Any difference between the carrying amount of the joint venture upon loss of joint control and the
fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
(r) Fair Value
The Group measures investment properties at fair value at each balance sheet date. In addition, fair values of
financial instruments measured at amortized cost are disclosed in Note 13 and Note 28.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
- in the principal market for the asset or liability, or
- in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
21
Notes to the Consolidated Financial Statements
3. Significant accounting policies continued
(r) Fair Value (cont’d)
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
- 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).
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
4. Segment reporting
The Group’s operating segments are defined as separate entities developing particular residential projects, which
for reporting purposes were aggregated. The aggregation for reporting purpose is based on geographical locations
(Warsaw, Poznań, Wrocław and Szczecin) and type of activity (development of apartments, development of
houses). Moreover, for one particular assets the reporting was based on type of income: rental income from
investment property or from so-called Private Rent Sector. The segment reporting method requires also the
Company to present separately joint venture within Warsaw segment. There has been no changes in the basis of
segmentation or in the basis of measurement of segment profit or loss from the last annual financial statements.
There is no aggregation of the services to one Client, the revenue is distracted to many clients, mostly individual
clients.
According to the Management Board’s assessment, the operating segments identified have similar economic
characteristics. Aggregation based on the type of development within the geographical location has been applied
since primarily the location and the type of development determine the average margin that can be realized on
each project and the project’s risk factors. Considering the fact that the construction process for apartments is
different from that for houses and considering the fact that the characteristics of customers buying apartments
slightly differ from those of customers interested in buying houses, aggregation by type of development within
the geographical location has been used for segment reporting and disclosure purposes.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated indirectly based on reasonable criteria. Unallocated assets comprise mainly unallocated cash and cash
equivalents and income tax assets. Unallocated liabilities comprise mainly income tax liabilities and Bond loans.
The unallocated result (loss) comprises mainly head office expenses. IFRS adjustments represents the
elimination of the Joint venture segment for reconciliation of the profit (loss), assets and liabilities to the
consolidated numbers. Joint ventures are accounted using the equity method.
The results of activities in the individual segments are assessed mainly on the basis of sale revenues, cost of sales
of residential projects, assigned marketing costs and others operating costs/income assigned to each segment.
Additionally the Group analyses the profit and gross margin on sales as well as result before tax (including
financial costs and income assigned to the segment) generated by the individual markets.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
22
Notes to the Consolidated Financial Statements
4. Segment reporting (cont’d)
Data presented in the table below are aggregated by type of development within the geographical location:
In thousands of Polish Zlotys (PLN)
As at 31 December 2021
Warsaw
Poznań
Wrocław
Szczecin
Unallocated
IFRS
adjustments
Total
Apartments Houses
Joint
venture Rental
Apartments Houses
Apartments Houses
Apartments Houses
Segment
assets
546,714
85,181
19,914
30,449
116
,
951
-
45
,
403
-
97
,
797
-
-
(15
,
749)
926
,
660
Unallocated
assets
-
-
-
-
-
-
-
-
-
-
39
,
937
-
39
,
937
Total assets 546,714 85,181 19,914 30,449
116,951 -
45,403 -
97,797 - 39,937 (15,749) 966,597
Segment
liabilities 218,314 952 547 1,329 6,064 - 11,413 - 28,594 - - (547) 266,666
Unallocated
liabilities
-
-
-
-
-
-
-
-
-
-
279
,
886
-
279
,
886
Total
liabilities 218,314 952 547 1,329
6,064 -
11,413 -
28,594 - 279,886 (547) 546,552
In thousands of Polish Zlotys (PLN)
As at 31 December 2020
Warsaw
Poznań
Wrocław
Szczecin
Unallocated
IFRS
adjustments
Total
Apartments Houses
Joint
venture Rental
Apartments Houses
Apartments Houses
Apartments Houses
Segment
assets
417,474
224,241
57,143
9,797
39,602
-
86,106
-
72,486
-
-
(47,202)
859,648
Unallocated
assets - - - - - - - - - - 78,119 - 78,119
Total assets 417,474 224,241 57,143 9,797
39,602 -
86,106 -
72,486 - 78,119 (47,202) 937,767
Segment
liabilities
187,191
64,058
48,937
1,552
5,601
-
45,123
-
11,047
-
-
(48,937)
314,572
Unallocated
liabilities
-
-
-
-
-
-
-
-
-
-
243,378
-
243,378
Total
liabilities 187,191 64,058 48,937 1,552
5,601 -
45,123 -
11,047 - 243,378 (48,937) 557,950
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
23
Notes to the Consolidated Financial Statements
4. Segment reporting (cont’d)
In thousands of Polish Zlotys (PLN)
For the year ended 31 December 2021
Warsaw Poznań
Wrocław
Szczecin
Unallocated
IFRS
adjustments
Total
Apartments Houses
Joint
venture Rental
Apartments Houses
Apartments Houses
Apartments Houses
Revenue/R
evenue
from
Clients
(1)/(2)
275,389
29,166
67,639
697
19,322
-
92,739
-
63,586
-
-
(67,639)
480,899
Segment
result
50,088
5,540
14,600
(82)
(244)
-
18,751
-
2,547
-
-
(14,600)
76,600
Unallocated
result
-
-
-
-
-
-
-
-
-
-
(17,365)
-
(17,365)
Result from
operating
activities 50,088 5,540
14,600 (82) (244) - 18,751 - 2,547 - (17,365) (14,600) 59,235
Net finance
income/
(expenses)
(145)
(85)
(151)
25
(33)
-
(52)
-
(118)
-
(3,403)
151
(3,812)
Profit/(loss)
before tax 49,943 5,455
14,449 (57) (277) - 18,699 - 2,429 - (20,768) (14,449) 55,424
Income tax
expenses
(15,077)
Profit for
the year
40,347
(1) Revenues are recognised at the moment when control over the real estate is transferred to the buyer, which is based on a signed technical acceptance protocol, handover the keys
to the buyer and reception of full payment.
(2) Revenues from the sale of land and from the sale of services are appropriately allocated to a given segment, i.e. the sale of the Naturalis project was allocated to the Warsaw
segment - apartments in accordance with the land development conditions, revenues from services were allocated to the Warsaw - Apartments segment as they relate to the re-
invoicing of services provided for JV Wilanów Tulip, which investment concerns apartments in Warsaw
In thousands of Polish Zlotys (PLN)
For the year ended 31 December 2020
Warsaw Poznań
Wrocław
Szczecin
Unallocated
IFRS
adjustments
Total
Apartments Houses
Joint
venture Rental
Apartments Houses
Apartments Houses
Apartments Houses
Revenue/R
evenue
from
Clients
(1)/(2)
186,290
28,027
2,065
747
82,924
-
46,600
-
56,645
-
-
(2,065)
401,233
Segment
result 62,931 4,405
(911) (260) 17,648 -
(395) - 994 - - 911 85,322
Unallocated
result
-
-
-
-
-
-
-
-
-
-
(30,169)
-
(30,169)
Result from
operating
activities 62,931 4,405
(911) (260) 17,648 - (395) - 994 - (30,169) 911 55,153
Net finance
income/
(expenses)
(275)
(450)
(533)
(49)
(44)
-
(414)
-
(110)
-
(3,269)
533
(4,611)
Profit/(loss)
before tax 62,655 3,955
(1,444) (309) 17,604 - (809) - 884 - (33,438) 1,444 50,542
Income tax
expenses
(10,399)
Profit for
the year
40,143
(1) Revenues are recognised at the moment when control over the real estate is transferred to the buyer, which is based on a signed technical acceptance protocol, handover the keys
to the buyer and reception of full payment.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
24
Notes to the Consolidated Financial Statements
5. Acquisition of the Nova Królikarnia project
During the year 2019, the Company (via its subsidiary) exercised first and second call option under the Call
Option Agreements for the total price of PLN 33.9 million and PLN 35.1 million, respectively. Additionally, on
9 April 2020, the Company (via its subsidiary) exercised that last (third) call option under the Call Option
Agreement in total amount of PLN 9.9 million. All payments concerning realization of all three call options were
made according to the abovementioned schedule. As at 31 December 2020 and 31 December 2021 all payables
related to Acquisition of Nova Królikarnia Project were settled.
6. Sales revenue and cost of sales
The majority of Group’s revenues are generated through development and sale of units, primarily apartments,
in residential real-estate projects to individual customers in Poland (“residential units”). The Group recognizes
revenues at the moment performance obligations are satisfied. According to Group’s policy the performance
obligation is satisfied at the moment, the residential unit is handed over to the customer, which happens only
after construction process is finalized and issuance of occupancy permit, based on hand-over protocol signed
between the Group representatives and the customer and provided that the entire amount resulting from the sale
agreement has been paid by the customer. The agreements with the customers do not contain variable
considerations. The agreements, in the opinion of the Group, do not contain a significant financing component.
Based on such characteristics of revenues, the Group, as a rule, does not present any receivables or other contract
assets, except for costs to obtain the contract, capitalized to prepayments. Contract liabilities, are reflected by
advances received, which are disclosed in the Note 26.
For the year ended 31 December 2021
2020
In thousands of Polish Zlotys (PLN)
Sales revenue
Revenue from residential projects
457
,
677
400
,
257
Revenue from the sale of land
22
,
500
-
Revenue from sale of services
722
976
Total sales revenue 480,899
401,233
Cost of sales
Cost of sales residential projects
(
369
,
299
)
(
313
,
698
)
Cost of sales of land
(
24
,
976
)
-
Inventory write down to
the net realisable value
(
1
,
924
)
(
1
,
325
)
Total cost of sales (396,199)
(315 023)
Gross profit on sales 84,700
86,210
Gross profit on sales % 18%
21%
Land for sale
On 28 September 2021 Management Board decided to sale the real estate property. The reason for selling the
plot was due to the analysis made on the profitability of project and based on the investigation made by the
Company during execution of next stages of the project, additional costs and difficulties may appear that may
result in executing this project with a loss. The selling price was set for PLN 22,500,000 based on the offer
received from the Buyer. As at 31 December 2021 full price has been paid by the Buyer.
The below table presents the net result on the sale of the plot:
As at 31 December
In thousands of Polish Zlotys (PLN)
2021
2020
Selling price of the plot 22,500
-
Carrying amount of net assets sold 24,976
-
Net result on the sale (2,476)
-
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
25
Notes to the Consolidated Financial Statements
6. Sales revenue and cost of sales (cont’d)
The table below presents breakdown of revenue from residential units per project
For the year ended 31 December
2021 2020
In thousands of Polish
Zlotys (PLN)
Panaromika VI
15,675
-
Vitalia III
45,816
-
Ursus Centralny Ia
56,951
-
Viva Jagodno I
43,887
-
Nova Królikarnia 3a
35,691
-
Nova Królikarnia 3b
26,435
-
Nova Królikarnia 3c
26,712
-
Nowe Warzymice I
16,537
-
Ursus
Centralny IIa
24,114
-
Miasto Moje IV
46,863
-
City Link III
15,467
149,448
Grunwald2
15,923
80,916
Miasto Marina
2,132
46,485
Panoramika IV
786
28,888
Miasto Moje III
34,893
33,388
Panoramika V
8,064
27,757
Nova Królikarnia 2c
27,095
18,584
Miasto Moje I&II
1,704
1,446
Nova Królikarnia 2b
2,071
4,074
Nova Królikarnia 1d
-
2,237
Młody Grunwald I & II
2,449
1,248
Other
8,41
2
5,786
Total revenue from residential
projects 457,677 400,257
The table below presents breakdown of costs of sales allocated to projects:
For the year ended 31 December
2021 2020
In thousands of Polish Zlotys (PLN)
Panaromika VI
14,5
7
3
-
Vitalia III
37,533
-
Ursus Centralny Ia
47,106
-
Viva
Jagodno I
32,857
-
Nova Królikarnia 3a
30,255
-
Nova Królikarnia 3b
23,432
-
Nova Królikarnia 3c
22,661
-
Nowe Warzymice I
13,507
-
Ursus Centralny IIa
18,245
-
Miasto Moje IV
32,301
-
City Link III
9,204
91,999
Grunwald2
12,088
62,265
Miasto Marina
2,015
46,472
Panoramika IV
780
28,639
Miasto Moje III
29,049
27,546
Panoramika V
7,386
27,034
Nova Królikarnia 2c
23,945
16,856
Miasto Moje I&II
1,246
1,127
Nova Królikarnia 2b
1,862
3,676
Nova Królikarnia 1d
-
1,845
Młody Grunwald I & II
2,534
1,199
Other
6,719
5,041
Total cost of sales 369,299 313,698
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
26
Notes to the Consolidated Financial Statements
7. Selling and marketing expenses
For the year ended 31 December
2021
2020
In thousands of Polish
Zlotys (PLN)
Advertising
3,403
4,
684
Depreciation
464
385
Other
8
92
859
Total selling and marketing expenses
4,760
5,928
8. Administrative expenses
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Note
Personnel expenses
17,035
15,762
- Wages
14,974
13,746
- Social security and other employee benefits
2,061
2,016
External services
3,085
3,007
Consulting fees to main shareholder
862
865
Materials and energy
735
628
Depreciation
436
644
Taxes and charges
1,036
1,336
Other
487
300
Total administrative expenses
23,676
22,542
Average number of employees during the year
78
74
9. Other expenses
For the year ended 31 December
2021
2020
In
thousands of Polish Zlotys (PLN)
Maintenance expense of unsold units
1,
430
1,463
Cost of repairs and defects
1,704
548
Expense for contractual penalties and compensation
435
106
Write
-
down of trade receivables
344
1,081
Cost of research and due diligence of new projects
624
-
Other expenses
321
202
Total other expenses 4,857
3,401
10. Other income
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Revenues from contractual penalties and compensation
184
299
Rental income from inventory
518
455
Net profit on sale of property and equipment
39
321
Reversal of accruals
606
-
Income from participation of other developers in roads
development (Skanska)
722
-
Other income
294
847
Total other income 2,363
1,923
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
27
Notes to the Consolidated Financial Statements
11. Income tax charges
For the year ended 31 December
2021 2020
In thousands of
Polish Zlotys (PLN)
Current tax
Current period
1
0,
475
12
,
8
92
Taxation in respect of previous periods
(192)
(334)
Total current tax expense
10,283 12,558
Deferred tax
Origination and reversal of temporary
differences
5
,
5
8
9
(792)
Tax losses utilized/(recognized)
(
795
)
(1
,
367)
Total deferred tax expense/(benefit)
4,794 (2,159)
Total income tax expense
15,077 10,399
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys
(PLN)
Profit for the year
40
,34
7
40
,143
Total income tax
charge
15,07
7
10,399
Profit before income tax
55,424
50,542
Expected income tax using the Polish tax rate (19%)
10,531
9,603
Tax effect on:
Taxes in respect of
previous periods
(192)
(334)
Non
-
deductible expenses, net
1,818
368
Movement in unrecognized deferred tax assets on loss
carry forward in Poland
119
315
Movement in unrecognized deferred tax in previous years
127
-
Change on deferred tax asset in connection with the
organizational restructuring of the Group
2,603
(452)
Reversal of surplus in Nova Transaction
(1)
-
735
Impact o
n
JV result
(1,095)
-
Deferred tax asset write
-
off
on tax losses
947
506
Other differences
219
(342)
Tax expense/(benefit) for the period
15,077
10,399
Effective tax rate
27.20%
20.57%
(1) The surplus between the purchase price (including transaction cost) and the net assets value of Nova Group as the transaction date, was allocated
to the inventory, in relation to which the provision for deferred income tax was not recognized on the basis of an exception (IAS 12 par. 15 (b)).
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
28
Notes to the Consolidated Financial Statements
12. Property and equipment
For the year ended 31 December 2021
Vehicles Equipment Building Total
In thousands of Polish Zlotys (PLN)
Cost or deemed cost
Balance at 1 January
1,030
3,444
10,105
14,579
Rights of use
of assets
(
cars
)
353
-
-
353
Transfer to Inventory
(944)
(944)
Sales and disposals
(
106
)
-
-
(
106
)
Closing balance
1,277
3,444
9,161
13,882
Depreciation and impairment losses
Balance at 1 January
608
2,
960
2
,
214
5,782
Depreciation for the period
129
430
285
844
Transfer to Inventory
-
-
(196)
(196)
Sales and disposals
(
106
)
-
-
(106
)
Closing balance
631
3,390
2,303
6,324
Carrying amounts
At 1 January
422
484
7,891
8,
797
Closing balance
646
54
6,858
7,558
For the year ended 31 December 2020
Vehicles Equipment Building Total
In thousands of Polish Zlotys (PLN)
Cost or deemed cost
Balance at 1 January
1,510
3,374
8,632
13,516
Additions
-
70
1,473
1,54
3
Sales and disposals
(
48
0)
-
-
(
480
)
Closing balance
1,030 3,444 10,105 14,579
Depreciation
Balance at 1 January
582
2,435
1,947
4,964
Depreciation for the period
237
525
267
1,029
Sales and disposals
(211)
-
-
(211)
Closing balance
608 2,960 2,214 5,782
Carrying amounts
At 1 January
928
939
6,685
8,552
Closing balance
422 484 7,891 8,797
As at 31 December 2020, the Property for the amount of PLN 6,489 thousands was used to secure bond loans
series R. As at 31 December 2021 none of the Property and equipment was secured for bond loans or secured bank
loans.
Impairment loss
In the years ended 31 December 2021 and 31 December 2020, the Group did not recognize any impairment loss with
respect to property and equipment.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
29
Notes to the Consolidated Financial Statements
13. Investment property
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Balance at 1 January
8,956
10,098
Perpetual usufruct
(IFRS16)
movements
(8)
(8)
Purchase of
investment property
land
19,944
-
Transfer to Property
and
equipment
-
(827)
Change in fair value during the year
(297)
(307)
Balance as at 31 December, including:
28,596
8,956
Cost
23,590
3,646
Perpetual usufruct (IFRS16)
537
545
Fair value adjustments
4,468
4,765
As at 31 December 2021, the investment property included:
- property held for long-term rental yields and capital appreciation, and were not occupied by the Group;
- investment land purchased to build investment property for long-term so-called institutional rental and capital
appreciation.
Investment property at Gwiaździsta street (Office building)
The investment property consists of a plot of land located in Warsaw (71, Gwiaździsta Street) and an office
building with an aggregate usable floor space of 1,318 m
2
located on this plot that is leased to third parties under
lease agreements with an indefinite term subject to a three-month notice period for termination (“Bielany IP”).
Investment property is valued at fair value determined as at 31 December 2021 by an independent appraiser,
having an appropriate recognized professional qualification using the method of discounted cash flows. As at 31
December 2020, the fair value of Investment property was determined by the Management.
As at 31 December 2021, the Bielany IP was valued based on the discounted cash flow approach, including the
assumption as to an annual discount rate of 7% (during a 6 year forecast period), a capitalization exit yield of
7%, a monthly rate of PLN 43,89 per m
2
. If the yields used for the appraisals of investment property on 31
December 2021, had been 100 basis points higher than was the case at that time, the value of the investments
would have been 4.8% lower. In this situation, the Company’s shareholders’ equity would have been PLN 390
thousand lower.
During the year ended 31 December 2021 and 2020 the rental income from investment property amounted to
PLN 559 thousand and PLN 502 thousand, respectively. The investment properties are currently occupied. In
2021, direct operating expenses (including repairs and maintenance) arising from investment property that
generated rental income during the period amounted to PLN 277 thousands and direct operating expenses
(including repairs and maintenance) arising from investment property that did not generate rental income during
the period amounted to PLN 100 thousand.
The investment properties were used to secure bond loans series R in the year ended 31 December 2020. As at
31 December 2021 the above investment property was used to secure none bond loans.
Investment property – land
In 2021, the Group purchased two lands which, by the decision of the Management Board, will be used for the
construction and development of the Group’s new activity, the so-called institutional rental:
1) land located at ul. Gallop 9 in Warsaw – land was purchased on 29 November 2021 for PLN 7.5 million;
2) land located at ul. Poleczki 5 in Warsaw – land was purchased on 25 November 2021 for the amount of
PLN 11.2 million.
The lands were bought under market conditions. The Group made an independent assessment and concluded
that the transaction price reflects the market value as at 31 December 2021.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
30
Notes to the Consolidated Financial Statements
14. Investments in joint ventures
As at 31 December
In thousands of Polish
Zlotys (PLN)
2021
2020
Loans granted
319
11,634
Share in net equity value of joint ventures
3,846
(1,693)
The Company's carrying amount of the investment 4,165
9,941
Presented as Loans granted to joint ventures (current
assets)
(319)
(1,039
)
Investment in joint ventures 3,846
8,902
Share of profit/(loss) from joint ventures
The Investment in joint ventures comprise the Company’s 50% interest in four joint ventures companies:
- Ronson IS sp. z o.o. and in Ronson IS Sp. z o.o. Sp.k., both involved in the development and sale of residential
units in Warsaw known as City Link I and II,
- Coralchief Sp. z o.o. and Coralchief Sp. z o.o. – Projekt 1 Sp.k. which are running the Wilanów Tulip project.
The investments in joint ventures are accounted for using the equity method.
The table below present the movements in the share in net equity value of joint ventures:
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Opening balance
(1,693)
(572)
Net result from joint venture during the period
5,579
(1,121)
Cancelling of net results of the joint venture with inter-
company interest during the period
184
318
Share of profit/(loss) of joint ventures
5,763
(803)
Dividend paid
-
-
Closing balance before offsets 4,070
(1,375)
Cancelling of the offset of intercompany interest accrued
during the period
(
224
)
(318)
Total closing balance 3,846
(1,693)
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
31
Notes to the Consolidated Financial Statements
14. Investments in joint ventures continued
Share of profit/(loss) from joint ventures
Summarised financial information of the joint ventures is presented below:
For the year ended 31 December 2021
2020
In thousands of Polish Zlotys (PLN)
Assets
Fixed assets
-
40
Inventory
14,239
52,026
Cash and cash equivalents
4,441
1,942
Other current financial assets
1,262
3,177
Liabilities
Loans from shareholders
(
6
31
)
(28,476)
Advances received
(
5,116
)
(24,760)
Other
liabilities
(
6,504
)
(7,335)
Equity 7,691
(3,386)
Company share 3,846
(1,693)
The summarised statement of comprehensive income of the joint ventures in aggregate is as follows:
For the year ended 31 December 2021
2020
In
thousands of Polish Zlotys (PLN)
Revenue
67,639
2,065
Cost of sales
(
52,315
)
(1,511)
Gross profit 15,324
554
Administrative expenses
(1)
(
775
)
(1,123)
Selling and marketing expenses
(
434
)
(627)
Other income/(cost)
114
(215)
Finance income
5
12
Finance expense
(
454)
(843)
Profit/(loss) before taxation
13,780
(2,242)
Income tax benefit/(expense)
(2,62
2
)
-
Profit for the year (continuing operations) 11,158
(2,242)
Total comprehensive income for the year (continuing
operations) 11,158
(2,242)
The Company’s share of profit/(loss) for the year 5,579
(1,121)
(1) Including management fee to the Group amounting to 720 thousand and PLN 976 thousand during the year ended 31 December 2021
and 31 December 2020, respectively.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
32
Notes to the Consolidated Financial Statements
14. Investments in joint ventures continued
Loans granted to the joint ventures
The table below present the movements of the loans granted to the joint ventures.
As at 31 December
In thousands of Polish Zlotys (PLN)
2021
2020
Opening balance
11,634
13,166
Loans granted
1
17
1,126
Loans repaid
(
10,564
)
(3,107)
Accrued interest
377
595
Interest paid
(
1,244
)
(146)
Total closing balance 319
11,634
As at 31 December 2021 the amount of loans granted to joint ventures were presented as short-term assets in the
aggregate amount of PLN 319 thousand. The short term loans granted to joint ventures cannot be regarded as a
part of the investment in joint ventures and are presented in the Consolidated Statement of the Financial Position
under current assets as Loans granted to joint ventures.
The loans granted to joint venture bear a variable rate of WIBOR 3M plus 4% margin.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
33
Notes to the Consolidated Financial Statements
15. Deferred tax assets and liabilities
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities as at the beginning and end of the financial periods are attributable to the
following:
Opening
balance
1 January
202
1
Recognized in the
statement of
comprehensive
income
Closing balance
31 December
202
1
In thousands of Polish Zlotys (PLN)
Deferred tax assets
Tax loss carry forward
3,491
79
5
4,285
Difference between tax and accounting basis of inventory
16,454
3,965
20,420
Accrued interest
3,126
(1,240)
1,885
Accrued expense
719
41
760
Write
-
down of inventory and residential land bank
2,041
56
9
2,610
Other*
4
,66
3
(2,710)
1,953
Total deferred tax assets 30,494
1,419
31,913
Deferred tax liabilities
Difference between tax and accounting revenue
recognition
20,666
6
,
887
27
,
553
Difference between tax base and carrying value of
capitalized finance costs on inventory
8,573
(965)
7
,
608
Accrued interest
166
469
635
Fair value gain on investment property
1,031
(56)
975
Other
582
(121)
461
Total deferred tax liabilities 31,018
6,213
37,231
Total deferred tax benefit (see Note 11)
4,794
Deferred tax assets
30,494
31,913
Deferred tax liabilities
31,018
37,231
Offset of deferred tax assets and liabilities for individual
companies
(
21
,
457
)
(
23,718
)
Deferred tax assets reported
in the Consolidated Statement of Financial Position 9,037
8,195
Deferred tax liabilities reported
in the Consolidated Statement of Financial Position 9,562
13,513
* Including deferred tax asset from contributions.
From the above amounts before offset PLN 28,812 thousand of deferred tax liability and PLN 21,388 thousand
of deferred tax asset will be realized in the next 12 months.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
34
Notes to the Consolidated Financial Statements
15. Deferred tax assets and liabilities continued
Opening
balance
1 January
2020
Recognized in the
statement of
comprehensive
income
Closing balance
31 December
2020
In thousands of Polish Zlotys (PLN)
Deferred tax assets
Tax loss carry forward
2,124
1,367
3,491
Accrued interest
3,704
856
4,560
Accrued expense
657
62
719
Write
-
down of inventory and residential land
bank
2,452
(850)
1,602
Other*
4,106
(438)
3,668
Total deferred tax assets 13,043 997 14,040
Deferred tax liabilities
Difference between tax base and carrying value of inventory
13,732
(947)
12,785
Accrued interest
437
(271)
166
Fair value gain on investment property
1,042
(11)
1,031
Other
515
67
582
Total deferred tax liabilities 15,726 (1,162) 14,564
Total deferred tax benefit
(2,159)
Deferred tax assets
13,043
14,040
Deferred tax liabilities
1
5
,
726
14
,
564
Offset of deferred tax assets and liabilities for individual
companies
(6
,
108)
(5,003)
Deferred tax assets reported in the
Consolidated Statement of Financial Position 6,935 9,037
Deferred tax liabilities reported in the
Consolidated Statement of Financial Position 9,618 9,562
* Including deferred tax asset from contributions.
Realization of deferred tax assets
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that
some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled reversal of deferred tax liabilities,
projected future taxable income and tax strategies in making this assessment. In order to fully realize the deferred
tax asset (before offsetting against deferred tax liability), the Group will need to generate future taxable income
of approximately PLN 167,962 thousand. Based upon the level of historical taxable income and projections for
future taxable income over the periods in which the deferred tax assets are deductible. The management believes
there is a higher probability that the Group will realize the benefits of these deductible differences. The amount
of the deferred tax asset which is considered realizable, could however be reduced in the near term if estimates
of future taxable income during the tax loss carry-forward period are reduced.
Tax losses in Poland are required to be utilized within 5 years following the period in which they originated,
subject to the limitation that a maximum of 50% of the loss carry-forward can be used in one year.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
35
Notes to the Consolidated Financial Statements
15. Deferred tax assets and liabilities continued
Tax losses carry forward
As as 31 December 2021
2020
In thousands of Polish Zlotys (PLN)
Recognized
tax losses
Unrecognized
tax losses
Total tax
losses
Recognized
tax losses
Unrecognized
tax losses
Total tax
losses
Tax loss 201
6
carried forward
-
-
-
2
126
129
Tax loss 201
7
carried forward
1
,
596
4
,
817
6
,
413
6,318
87
6,405
Tax loss 201
8
carried forward
2
,
865
414
3
,
278
3,228
222
3,450
Tax loss 201
9
carried forward
1
,
642
1
,
375
3
,
017
2,894
610
3,504
Tax loss 20
20
carried forward
3
,
634
2
,
386
6
,
020
5,931
2,880
8,811
Tax loss 202
1
carried forward
12
,
813
477
13
,
290
-
-
-
Total tax losses carried
forward 22,550
9,469
32,019
18,373
3,926
22,299
The deferred tax assets on tax losses carried forward expire in the following years as at 31 December 2021:
In thousands of Polish Zlotys (PLN)
Recognized tax losses
Unrecognized tax losses
2022
303
915
2023
544
79
2024
312
261
2025
691
453
2026
2 434
91
Total tax losses carried forward
4 284
1 799
Movement in unrecognized deferred tax assets on tax losses carried forward
Unrecognized deferred tax assets on tax losses carried forward in Poland are presented in the table below:
Balance 1
January 20
20
Tax
losses
expired
Additions/
(Realizations)
Balance 31
December
20
20
Tax
losses
expired
Additions/
(Realizations)
Balance 31
December
20
2
1
In thousands of Polish
Zlotys (PLN)
Tax losses
1,070
(
9
)
(315)
746
(
24
)
(
1,077
)
1,
7
99
Total
1
,070
(
9
)
(315)
746
(
24
)
(
1,077
)
1,
7
99
Unrecognized deferred tax assets
A deferred tax asset is recognized only to the extent that it is more likely than not that future taxable profits will
be available against which the asset can be utilized. Unrecognized deferred tax assets relate primarily to tax loss
carry-forwards, which are not considered probable of realization prior to their expiration.
The Company did not recognize the entire deferred tax asset at consolidation level resulting from contributions
as the recoverability of such assets is uncertain. Total unrecognized deferred tax assets as at
31 December 2021 are estimated to be PLN 1,799 thousand (31 December 2020: PLN 4,548 thousand).
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
36
Notes to the Consolidated Financial Statements
16. Inventory and Residential land bank
For the year ended 31 December 2021:
Inventory
As at
1 January 2021
Transferred from/to
land designated for
development
Transferred to
finished units
Additions
As at
31 December
2021
In thousands of Polish
Zlotys (PLN)
Land and related expense
294,430
7,240
(64,281)
121,585
358,975
Construction costs
194,539
-
(277,942)
198,959
115,557
Planning and permits
16,760
-
(7,403)
7,774
17,131
Borrowing costs
(2)
34,844
496
(7,215)
10,30
7
38,43
2
Borrowing costs on lease and deprecation
perpetual
u
se
fruct
right
(1)
2,758
-
(632)
913
3,039
Other
3,839
30
(3,618)
3,396
3,647
Work in progress
547,170
7,766
(
361,090
)
342
,9
3
3
5
36
,
78
0
As at
1 January 2021
Transferred
from work in
progress
Recognized in the
statement of
comprehensive
income
As at
31 December
2021
In thousands of Polish Zlotys (PLN)
Transferred from
fixed assets
Finished goods
109,419
747
361,090
(3
65
,
575
)
10
5,681
As at
1 January 2021
Revaluation write-down recognized in
statement of comprehensive income
As at
31 December
2021
In thousands of Polish Zlotys (PLN)
Reversal
Utilization
Write-down
(5,503
)
-
1,385
-
(
4
,
118
)
As at
1 January 2021
Recalculation
adjustment
(3)
Depreciation
Transfer to Other
receivables
As at
31 December
2021
In thousands of Polish Zlotys (PLN)
Perpetual usefruct right
13,675
6,379
(
1
6
7
)
(
2,688
)
1
7,199
Inventory, valued at lower of - cost and
net realisable value
664,761
6
55
,
54
2
(1) For additional information see Note 24.
(2) Borrowing costs are capitalized to the value of inventory with 4.4241% average effective capitalization interest rate.
(3) Relates to change in the perpetual usufruct payments from 2022
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
37
Notes to the Consolidated Financial Statements
16. Inventory and Residential land bank continued
For the year ended 31 December 2020:
Inventory
As at
1 January 2020
Transferred
from/to land
designated for
development
Transferred to
finished units Additions
As at
31 December
2020
In thousands of Polish Zlotys (PLN)
Land and related expense
293,592
1,443
(34,804)
34,199
294,430
Construction costs
131,467
(1,640)
(158,306)
223,018
194,539
Planning and permits
20,408
(1,507)
(4,036)
1,895
16,760
Borrowing costs
(1)
32,291
3,312
(7,633)
6,875
34,844
Borrowing costs on lease and
deprecation of the perpetual usefruct
right
(2)
1,656 - (164) 1,266 2,758
Other
4,426
64
(2,320)
1,669
3,839
Work in progress
483,840
1,672
(207,263)
268,921
547,170
As at
1 January 2020
Transferred from
work in progress
Recognized in the
statement of
comprehensive
income
As at
31 December
2020
In thousands of Polish Zlotys (PLN)
Finished goods
217,123
-
207,263
(314,967)
109,419
As at
1 January 2020
Transferred
from/to land
designated for
development
Revaluation write-down recognized in
statement of comprehensive income
As at
31 December
2020
In thousands of Polish Zlotys (PLN)
Reversal Utilization
Write-down
(6,023)
(4,330)
680
4,170
(5,503)
As at
1 January 2020
Depreciation
Transfer to Other
receivables
As at
31 December
2020
In thousands of Polish Zlotys (PLN)
Perpetual usufruct rights
23,120
-
(268)
(9,177)
13,675
Inventory, valued at lower of - cost
and net realisable value
718,060
664,761
(1) Borrowing costs are capitalized to the value of inventory with 4.50% average effective capitalization interest rate.
(2) Detailed information in Note 24.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
38
Notes to the Consolidated Financial Statements
16. Inventory and Residential land bank continued
Residential land bank
In December 2021, plots of land purchased for development purposes on which construction is not planned
within a period of three years has been reclassified as Residential land bank presented within non-current assets.
The table below presents the movement in the Residential land bank:
For the year ended 31 December 2021
2020
In thousands of Polish Zloty (PLN)
Opening balance 45,486
44,321
Moved from
Inventory
-
31,920
Sold land
(24,976)
-
Moved to inventory
(7,766)
(28,750)
Write
-
down adjustment
(2,
7
03
)
(2,005)
Total closing balance 10,041
45,486
Closing balance includes:
Book value
17,
301
50,043
Write
-
down
(
7,
260
)
(4,557)
Total Closing balance 10,041
45,486
In the period ended 31 December 2021 the Company decided to move to Inventory project Vivaldi in the total
amount of PLN 7,766 thousand due to the fact that the Management plans to start the project in the next 3 years
and the planning process has started. In the period ended 31 December 2020 the Company transferred to
Inventory project Falenty which the Management Board planned to starts in the next 3 years and intensive
planning process started. On the other hand the Company moved to Residential bank projects Chilli and Naturalis
which the Management Board stopped to developed due to low profitability of the project. Detailed information
regarding sale of land in Note 6.
Write-down revaluating the inventory and residential land bank:
The Management internally assessing the net realizable value of the inventory and residential land bank and
decrease the value when the net realizable value is lower than the cost amount. In view of the situation in the
property market in which the Group operates, during the year ended 31 December 2021
and
31December 2020 the Group performed an inventory and residential land bank review with regard to its
valuation to net realizable value based on the most reliable evidence available to the Group.
During the year ended 31 December 2021 the Group reversed a write-down adjustment made during previous
periods of PLN 1,685 thousand (PLN 1,385 thousand reversal of the impairment recognized in line Inventory,
PLN 300 thousand reversal of impairment recognized in line Residential land bank). The reversal of the
impairment was made due to sale realization of the projects with showed in the past negative margin, as well as
increase in selling prices on the projects designated for development where the impairment was recognized in
the past. On the other hand the Company created a write-down adjustment of PLN 3,052 thousand was made,
which is included as part of cost of sales in the Consolidated Statement of Comprehensive Income. The reason
for write down creation was due to the increase in general contractors costs. During the year ended 31 December
2020 the Group made a net write-down adjustment of PLN 2,005 thousand. The Group examined a possible
write-down on inventory for each project separately, according to the projection of revenues net of cost of sales.
The valuation of inventory and residential land bank is as follows:
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Valued at cost
619,19
7
640,348
Valued at net realizable value
46,386
69,899
Total Inventory and residential land bank
665,583
710,247
For information about future commitments to the general contractor for construction services related to inventory
construction, see Note 2.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
39
Notes to the Consolidated Financial Statements
17. Trade and other receivables and prepayments
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Value added tax (VAT) receivables
31,800
12,748
Trade and other receivables
2,
82
4
8,649
Trade and other receivables
-
IFRS 16
(impact of perpetual usufruct)
809
1,377
Bid bond
1,437
1,437
Notary’s deposit
14,7
4
2
6,765
Prepayments
(1)
6,569
6,398
Total trade and other receivables and prepayments 58,180
37,374
(1) Capitalized costs related to the receipt of contracts were presented in this line and amounted to PLN 2.4 million for the year ended December 31, 2021 and
PLN 3.7 million for the year ended December 31, 2020.
During the year ended 31 December 2021 and 31 December 2020, the Group booked allowance for doubtful
accounts in the amount of PLN 1,043 thousand and PLN 936 thousand, respectively as irrecoverable debts included
in trade and other receivables.
Notary’s deposits represents paid amount for the preliminary purchase agreements of lands. Bid bond balance
relates to the tender for a potential purchase of land which was cancelled by the court. The Company expects to
receive the bid bond in first quarter of 2022.
18. Advances for land
The table below presents the lists of advances for land paid as at 31 December 2021 and 31 December 2020:
Investment Location
As at 31
December 2021
As at 31
December 2020
In thousands of Polish Zlotys (PLN)
Warsaw,
Białołęka
7
,
500
1
,
000
Warsaw,
Ursynów
9
,
000
-
Warsaw, Ursus
10
,
000
-
Warsaw,
Targówek
4
,
000
-
Warsaw,
Wola
-
2
,
700
Warsaw,
Ursynów
2
,
100
-
Warsaw,
Ochota
7
,
100
-
Warsaw,
Białołęka
3
,
753
-
Warsaw,
Bemowo
5
,
000
-
Total
48,453
3,700
19. Other current financial assets
Other current financial assets comprise escrow accounts only. The regulations related to the activity of the
residential developers imposed on all residential developers in Poland. This is an obligation to open an escrow
account for all customers purchasing residential units during the construction period. According to these
regulations, all amounts paid by the customers have to be paid directly to the escrow account. The developer is
entitled to receive the money only once certain conditions – related mainly to progress of the construction process
– are met or the upon the transfer of the ownership of the apartment to the customer.
As long as the money is kept in the escrow account, the Company cannot dispose of the cash in any way.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
40
Notes to the Consolidated Financial Statements
20. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits freely available for the Group.
Cash at bank comprises of overnight deposits, the short-term deposits have an original maturity varying from one
day to three months.
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Cash at bank and in hand
72,597
112,127
Short
-
term deposit
2,312
5
,
366
Restricted cash
58,526
17
,
606
Total cash and cash equivalents 133,434
135,099
Cash at bank earns interest at floating rates based on daily bank deposit rates. As at 31 December 2021 and
31 December 2020 the Group held in saving accounts amounting to PLN 2,312 thousand and PLN 5,366
thousand, respectively. As at 31 December 2021 and 31 December 2020 the saving accounts that earn interest
rates varying between 0.35% - 0,40% and 0.25% - 1.16%, respectively.
Short-term deposits have a duration varying between one day and three months depending on the immediate
cash requirements of the Group. As at 31 December 2021 and 31 December 2020, they earn interest at the
respective short-term deposit rates varying between 0.35% - 0.40% and 0.00% - 0.44%, respectively.
Restricted cash are pledge to the benefit of banks for securing construction loans.
For information about the fair value of cash and cash equivalents see Note 27.
21. Shareholders’ equity
Share capital
The authorized share capital of the Company consists of 800,000,000 shares of EUR 0.02 par value each. The
number of issued and outstanding ordinary shares as at 31 December 2021 amounted to 164,010,813
(as at 31 December 2020: 164,103,813 shares issued and outstanding). The number of outstanding shares equals
the number of votes, as there are no privileged shares issued by the Company. As at 31 December 2021, the
Company held 1,567,954 own shares (0.96%) in treasury (see below) and, in accordance with art. 364 § 2 of the
Code of Commercial Companies, it does not exercise voting rights from own shares.
There are no restrictions regarding dividend payments, future dividends may be proposed and paid.
Distribution of the net profit for year 2020
Ordinary General Meeting of the Company held on 30 June 2021 decided to divide the net profit of the Company
for the year 2020 in the amount of PLN 40,143 thousand in such a way that the entire profit is allocated to the
supplementary capital (presented in the retained earnings). The decision to allocate the net profit to
supplementary capital as due to the uncertain economic situation resulting from the still unknown economic
effects of the COVID-19 pandemic and increasing prices of plots as well as the intention of the Management
Board to continue the development of the Company.
Proposed profit appropriation
The Management Board, in line with the prevailing dividend policy, will evaluate the possibility to recommend
to the Ordinary General Meeting of the Company to be held in 2022 to distribute the dividend for year 2021,
after the examination of the current and expected balance sheet of the Company, expected operating, financial
and cash-flow position of the Company and taking into consideration: (i) the close observance of all balance-
sheet linked debt covenants, (ii) ability of future repayment of debts, (iii) financial needs of the Company aiming
to be ranked amongst leading residential developers and (iv) changing market environment.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
41
Notes to the Consolidated Financial Statements
21. Shareholders’ equity
Treasury shares
During the Extraordinary General Meeting of Shareholders held on 24 January 2019, the shareholders of the
Company resolved to approve a share buyback program and the establishment of a capital reserve for the purpose
of such program, whereby the Management Board of the Company is authorized to purchase ordinary bearer
shares in the Company. In order to fund the purchase of own shares under the buyback program a capital reserve
(within retained earnings) is established for an amount of PLN 2.0 million. The capital reserve is subsequently
reduced by the amount of the consideration paid for the shares bought back.
The table below presents the Treasury shares owned by the Company as at 31 December 2021 and
31 December 2020:
As at 31 December
In polish zloty (PLN)
2021
2020
Number of shares
164,010,813
164,010,813
Share Capital
12,503,000
12,503,000
Treasury shares
1,567,954
1,489,235.00
Value of treasury shares
(1,731,716)
(1,613,110)
% of total shares 0.96%
0.91%
22. Net earnings per share
Basic and diluted earnings per share
Basic earnings per share amounts are calculated by dividing net profit/(loss) attributable to equity holders of the
parent company for the year by the weighted average number of ordinary shares outstanding and in circulation
during the year. Diluted earnings per share amounts are calculated by dividing the net profit/(loss) attributable
to equity holders of the parent company for the year by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of ordinary shares that would be issued on
conversion of all the dilutive instruments into ordinary shares, no such instruments exists as at
31 December 2021 and 2020.
Weighted average number of ordinary shares (basic):
For the year ended 31 December
2021
2020
(in thousands of Polish Zlotys)
Net income attributable to the equity holders of
the parent company
40,347
40,143
Balance at beginning of the period
162,521,578
163,335,913
Weighted average per share during the year
(76,503)
(232,750)
Weighted average number of ordinary
shares (basic) 162,445,075
163,103,163
Basic earnings per share 0.248
0.246
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
42
Notes to the Consolidated Financial Statements
23. Financial liabilities
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Note
Floating rate bonds
249,238
230,072
Secured bank loans
1,568
-
Total loans and borrowings 250,806
230,072
Information about the contractual terms of the Group’s interest-bearing loans and borrowings is presented in the
table below. For more information about the Group’s exposure to interest rate, see Note 31.
Bond loans
The table below presents the movement in bond loans during the year ended 31 December 2021 and 31 December
2020:
For the year ended
31 December 2021
For the year ended 31
December 2020
In thousands of Polish Zloty (PLN)
Opening balance 230,072 187,969
Repayment of bond loans
(77,929)
(55,000)
Redemption of bonds (non
-
cash)
(2,247)
(2,141)
Proceeds from bond loans (nominal value)
100,000
100,000
Issue cost
(2,648)
(1,636)
Issue cost amortization
1,576
783
Accrued interest
10,775
8,429
Interest repayment
(10,362)
(8,331)
Total closing balance 249,238 230,072
Closing balance includes:
Current liabilities
52,247
54,690
Non
-
current liabilities
196,991
175,382
Total Closing balance 249,238 230,072
Bond loans as at 31 December 2021:
In thousands of Polish Zlotys (PLN)
Currency
Nominal interest rate
Year of
maturity
Capital
Accrued
interest
Charges
and fees
Carrying
value
Bonds loans series T PLN
6 month Wibor +
3.50%
2022 50,000
332
(230)
50,102
Bonds loans series V
(1)
PLN
6 month Wibor +
4.30%
2024 100,000
1,136
(1,467)
99,669
Bonds loans series W
(2)
PLN
6 month Wibor +
4.00%
2025 100,000
1,009
(1,542)
99,466
Total
250,000
2,477
(3,239)
249,238
1) The series V bonds are subject to repayment in 2 tranches 40% (PLN 40 million) of the amount together with accumulated interest to be repaid by October 2023 and the
remaining amount of 60% (PLN 60 million) together with accumulated interest to be paid by April 2024.
2) The series W bonds are subject to repayment in 2 tranches 40% (PLN 40 million) of the amount together with accumulated interest to be repaid by October 2024 and
the remaining amount of 60% (PLN 60 million) together with accumulated interest to be paid by April 2025.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
43
Notes to the Consolidated Financial Statements
23. Financial liabilities (cont’d)
Bond loans as at 31 December 2020:
In thousands of Polish Zlotys (PLN)
Currency
Nominal interest rate
Year of
maturity
Capital
Accrued
interest
Charges
and fees
Carrying
value
Bonds loans series R PLN
6 month Wibor +
2.85%
2021 47,859
151
(81)
47,929
Bonds loans series T PLN
6 month Wibor +
3.50%
2022 50,000
277
(233)
50,045
Bonds loans series U
(1)
PLN
6 month Wibor +
3.50%
2023 32,317
512
(334)
32,495
Bonds loans series V
(2)
PLN
6 month Wibor +
4.30%
2024 100,000
1,124
(1,521)
99,604
Total
230,176
2,065
(2,168)
230,072
1) The series U bonds are subject to mandatory depreciation at the end of the 4th and the 6th interest period (on 31 January 2021 and 31 January 2022, respectively) by
reducing the nominal value of each Bond each time in the amount of PLN 150 for each bond.
2) The series V bonds are subject to repayment in 2 tranches 40% (PLN 40 million) of the amount together with accumulated interest to be repaid by October 2023 and the
remaining amount of 60% (PLN 60 million) together with accumulated interest to be paid by April 2024.
On 1 February 2021, the Company repaid 15% of outstanding series U bonds with value of PLN 4,848 thousand.
After this repayment, the nominal value was set as PLN 850 per bond and the total amount of outstanding
series U bonds amounted to PLN 27,469 thousand.
On 15 April 2021 the Company issued 100,000 series W non-secured bonds with a nominal value and issue price
of PLN 1.0 thousand per bond and an aggregate nominal value and issue price of PLN 100.0 million. The bonds
shall be redeemed through the payment in two installments: at the end of the 7th interest period, on 15 October
2024 (redeeming 40% of the nominal value) and the second on 15 April 2025 by redeeming the remaining part of
the nominal value.
Together with issuance of series W bonds the Company:
purchased for redemption series R bonds with a nominal value of PLN 10,000,000 from the bondholders who
purchased the bonds for at least the same amount. In addition the Company paid interest accrued on those bonds
until the date of the transaction,
purchased for redemption series U bonds with a nominal value of PLN 2,247,400 from the bondholders who
purchased the bonds for at least the same amount. These transactions were settled without cash
(by set-off), except for accrued interest on those bonds until the date of the transaction, which were paid by the
Company.
On 24 May 2021, the Company repaid all outstanding 37,859 series R bonds with total nominal value of
PLN 37,859 thousand. After this repayment, the total number of outstanding bonds series R amounted to nil.
On 31 July 2021 the Company performed the early redemption of series U bonds through the payment of the
redemption amount equal to the nominal value of the Bonds plus accrued interest and an additional cash benefit in
the form of a premium. The early redemption refers to all series U bonds with total value of PLN 25.2 million.
The early redemption was carried out in connection with the Company's plans to carry out real estate development
projects on certain plots, the mortgage of which secures the Bonds. After this repayment, the total number of
outstanding bonds series U amounted to nil.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
44
Notes to the Consolidated Financial Statements
23. Financial liabilities (cont’d)
Bond loans
Financial ratio covenants:
Based on the conditions of bonds T, V and W in each reporting period the Company shall test the ratio of Net
debt to Equity (hereinafter “Net Indebtedness Ratio”). The Ratio shall not exceed 80% on the Check Date.
Until the publication date, as at 31 December 2021 and as at 31 December 2020 the Company did not breach
any bonds loan covenants, which will expose the Company or the Group for risk of obligatory and immediate
repayment of any loan.
The table presenting the Net Indebtedness Ratio as at 31 December 2021 and 31 December 2020:
As at
31 December 2021
As at
31 December 2020
In thousands of Polish Zlotys (PLN)
Loans and borrowings
249,238
230,072
Secured bank loans
1
,568
-
Interest bearing liabilities
-
8,482
Less: cash on individual escrow accounts (other current
financial assets)
(8
,794
)
(14,239)
Less: Cash and cash equivalents
(
133,43
4
)
(135,099)
Net Debt 108,578
89,216
Equity
4
20,045
379,817
Ratio 25.8%
23.5%
Max Ratio 80.0%
80.0%
On 5 November 2021 the Meetings of bondholders of series T, V and W were held, where resolutions regarding
the change of the Terms and conditions of issuance of Bonds were taken. According to the adopted resolutions the
following points from the catalogue of Relative Grounds for Early Redemption of Bonds were removed:
1. point regarding the Excessive investment in land with an unclear legal status (for series T, V and W).
In connection with adoption of those resolutions, the Company was obligated to make additional payment for
the account of bondholders in the amount of 0.4% of the nominal value of bonds. The abovementioned
premium was paid on 25 November 2021(in total PLN 1.0 million),
2. Point regarding no limitations on the issuer regarding Delisting of shares of the Issuer from the WSE (for series
T only).
Impact of IFRS 16 on financial ratios in bond covenants:
Terms and conditions of issuance of Bonds of the Company (“T&C’s”) provide that only certain, specified types
of financial indebtedness should be taken into account when determining the level of financial indebtedness for
the purpose of calculating financial ratios in accordance with T&C’s. In particular, certain T&C’s require that
financial indebtedness resulting from finance lease agreements (in Polish: umowy leasingu finansowego) should
be included in calculation of the financial indebtedness. Those T&C’s do not provide that the indebtedness
resulting from finance lease agreements shall also include other financial indebtedness which is recognized as
lease liability in accordance with IFRS 16.
Given the above, and taking into account the type of activities carried out by the Group, despite changes in the
IFRS in this respect, the Company concluded that inclusion of other type of financial indebtedness, in particular
liabilities from annual fees for perpetual usufruct, for the purposes of calculations of financial ratios would not
be in line with T&C’s and therefore the Company does not include such finance lease alike items in such
calculations.
Additional information regarding IFRS 16 are in Note 24.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
45
Notes to the Consolidated Financial Statements
23. Financial liabilities (cont’d)
Bond loans
Other covenants:
Series T, V and W:
Based on the conditions of bonds T, V and W transactions with related-parties (shareholders holding more than
25% of the shares in the Company “within the meaning of IAS 24 or with related parties “including with entities
controlling the Company whether jointly or individually, whether directly or indirectly or with their subsidiaries
which are not members of the Group) shall not exceed the aggregate amount of PLN 1.0 million during any given
calendar year.
During the year ended 31 December 2021, the consulting fees related to A. Luzon Group amounted to
PLN 862 thousand. For additionally information see Note 30.
Secured bank loans
The table below presents the movement in Secured bank loans:
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Opening balance
-
12,875
New bank loan drawdown
20,031
26,096
Bank loans repayments
(18,497)
(39,217)
Bank charges paid
(809)
(67)
Bank
charges
presented as prepayments
5
71
323
Bank charges amortization (capitalized on Inventory)
23
8
-
Accrued
interest/(interest repayment) on bank loans, net
3
4
(10)
Total closing balance
1,568
-
Closing balance includes:
Current liabilities
1,568
-
Non
-
current liabilities
-
-
Total Closing balance 1,568
-
Bank loans as at 31 December 2021:
Investment Currency
Nominal
interest rate
Year of
maturity
Credit line
amount in
(‘000 PLN)
Unpaid amount as at
31 December 2021
(‘000 PLN)
Accrued
interest
(‘000 PLN)
Balance as at
31 December
2021
(‘000 PLN)
Ursus IB
PLN
3 month Wibor
+ 3.00%
2023
26,700
639
10
6
49
Miasto Moje V
PLN
3 month Wibor
+ 3.00%
2023
35,300
4
49
12
4
61
Nowe Warzymice II
PLN
3 month Wibor
+ 2.70%
2022
15,
3
00
4
4
6
1
2
4
58
Grunwaldzka
PLN
3 month Wibor
+ 2.
9
0%
202
3
20,880
-
-
-
Total
98,180
1,534
34
1,568
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
46
Notes to the Consolidated Financial Statements
23. Financial liabilities (cont’d)
Secured bank loans
As at 31 December 2020 there were no bank loans received by the Group.
On 30 March 2021 the Company signed agreements for bank loans for Miasto Moje V project in amount up to
PLN 35,3 million and for Ursus Centralny Ib in amount up to PLN 26,7 million.
On 17 August 2021 the Company signed agreement for bank loans for Nowe Warzymice II projekt in amount
up to PLN 15,3 million.
On 26 November 2021 the Company signed agreement for bank loans for Grunwaldzka projekt in amount up to
PLN 20,9 million.
All credit bank loans are secured.
Covenants on secured bank loans:
As at 31 December 2021 and 2020, the Company has not breached any loan covenant, which would expose the
Company for risk of obligatory and immediate repayment of any loan.
For the bank loans the following collateral was given:
Ordinary and floating mortgages on Inventory, see Note 16.
Pledge over bank accounts which are presented in the Consolidated Statement of Financial Position as Cash
and cash equivalents (Restricted cash), see Note 20.
Assignment of receivables arising from insurance agreements and from agreements concluded with clients.
Subordination agreement on loans from related parties.
Blank promissory note drawn by particular subsidiary companies with a promissory note declaration up to
the amount of the loan plus interest.
Advance payments of dividends by the borrowers until full repayment of loans are not allowed.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
47
Notes to the Consolidated Financial Statements
24. Lease liabilities and right of use asset
The movement on the right of use assets and lease liabilities during the period ended 31 December 2021 and
31 December 2020 is presented below:
In thousands of Polish
Zlotys (PLN)
1 January
202
1
Additions
Depreciatio
n charge
Fair value
adjustment
Recalculation
adjustment
(1)
Transfer to
trade
receivables
31 December
202
1
Right of use assets
related to inventory
13,675 - (167) - 6,379 (2,688) 17,199
Right of use assets
related to investment
property
553 - (8) - - n.a 545
Right of use assets
related to fixed assets
- 353 (57) - - n.a 296
In thousands of Polish
Zlotys (PLN)
1 January
202
1
Additions
Finance
expense
Payments
Recalculation
adjustment
(1)
Transfer to
trade payables
31 December
202
1
Lease liabilities related
to inventory
13,902
292
746
(903)
6,204
(2,718)
17,523
Lease liabilities related
to investment property
590
-
-
(37)
-
n.a
5
53
In thousands of Polish Zlotys
(PLN)
1 January 20
20
Depreciation
charge
Fair value
adjustment
Recalculation
adjustment
(1)
Transfer to trade
receivables
31 December
20
20
Right of use assets related to
inventory
23,120
(268)
-
-
(9,177)
13,675
Right of use assets related to
investment property
553
n.a
-
-
n.a
553
In thousands of Polish Zlotys
(PLN)
1 January
2020
Finance
expense
Payments
Recalculation
adjustment
(1)
Transfer to trade
payables
31 December
2020
Lease liabilities related to
inventory
23,549
912
(1,268)
-
(9,291)
13,902
Lease liabilities related to
investment property
552
37
-
-
n.a
590
(1) relates to change in the perpetual usufruct payments from 2022
25. Trade and other payables and accrued expenses
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Trade payables
2
2,90
9
26,994
Accrued expenses
2
5,121
22,215
Contractors guarantees for construction work
8,007
5,310
Value added tax (VAT) and other tax payables
2,061
1,087
Non
-
trade payables
2,165
1,343
Other trade payables - IFRS 16 (perpetual usufruct transfer
to trade
payables)
823
1,398
Total trade and other payables and accrued expenses 61,086
58,347
Trade and non-trade payables are non-interest bearing and are normally settled on 30-day terms.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
48
Notes to the Consolidated Financial Statements
26. Advances received
Payments from customers on account of the purchase of apartments and parking spaces are recorded as deferred income
until the time that they are delivered to the buyer and are recognised in the income statement as “sales revenue”. This
balance sheet item is closely dependent over time on the relationship between the sales rate (which as it increases,
increases this item) and the deliveries rate (which as it decreases, decreases this item).
As at 31 December
2021
2020
In t
housands of Polish Zlotys (PLN)
Deferred income related to the payments received from customers
for the purchase of products, not yet included as income in the
statement of comprehensive income
Opening balance
219,645
254,970
-
increase
(advances received)
43
6,
80
1
364,932
-
decrease (revenue recognized)
(
45
8,399
)
(400,256)
Total advances received 198,047
219,645
Other (deferred income)*
180
4,622
Total 198,227
224,267
* deferred income due to issued invoices for delivered apartments but not fully paid as at 31 December 2020 and 31 December 2021.
Additional information regarding contingent receivables which are a result of signed agreements with the clients, please
see Note 29.
Revenues from contracts will be recognized at the time of handover the apartment to the client, completion of
construction process and obtaining all necessary administrative decisions ( occupancy permit), which usually takes from
1 to 3 months from the completion of construction stage.
27. Fair value estimation of financial assets and liabilities
The fair values of financial assets and liabilities, together with the carrying amounts shown in the Consolidated
Statement of Financial Position, are as follows:
.
In thousands of Polish Zlotys (PLN)
Category Note
As at 31 December 2021
Carrying amount
Fair value
Assets:
Trade and other receivables
Assets measured at amortized costs
1
7
2
,8
24
2
,8
24
Other current
financial assets
Assets measured at amortized costs
19
8,794
8,794
Cash and cash equivalents
Assets measured at amortized costs
2
0
133,43
4
133,43
4
Loans granted to third parties
Assets measured at amortized costs
1
,
621
1
,
621
Loans granted to
joint ventures
Assets measured at amortized costs
14
319
319
Liabilities:
Bond loans
Liabilities measured at amortized costs
2
3
249,238
235,60
3
Secured bank loans
Liabilities measured at amortized costs
2
3
1,568
1,554
Trade and other payables and accrued
expenses
Liabilities measured at amortized costs
2
5
4
8
,
030
4
8
,
030
Unrecognized profit/(loss)
13,648
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
49
Notes to the Consolidated Financial Statements
27. Fair value estimation of financial assets and liabilities (cont’d)
In thousands of Polish Zlotys (PLN)
Category Note
As at 31 December
2020
Carrying amount
Fair value
Assets:
Trade and other receivables
Assets measured at amortized costs
1
7
8,649
8,649
Other current
financial assets
Assets measured at amortized costs
1
9
14,239
14,239
Cash and cash equivalents
Assets measured at amortized costs
2
0
135,099
135,099
Loans granted to joint ventures
Assets measured at amortized costs
14
11,634
12,028
Liabilities:
Bond loans
Liabilities measured at amortized costs
2
3
230,072
229,412
Interest bearing deferred trade payables
Liabilities measured at amortized costs
8,482
8,575
Trade and other payables and accrued
expenses
Liabilities
measured at amortized costs
2
5
49,209
49,209
Unrecognized profit/(loss)
961
Estimation of fair values
The following methods and assumptions were used to estimate the fair value of each class of financial
instruments:
trade and other receivables, cash and cash equivalents, other current financial assets and trade and other
payables and accrued expenses: the carrying amounts approximate fair value because of the short maturity
of these instruments;
loans and borrowings and loans granted to joint ventures: the fair value is estimated by discounting the future
cash flows of each instrument using discount rates offered to the Group for similar instruments of comparable
maturities by the Group’s bankers. The own non-performance risk as at 31 December 2021 was assessed as
insignificant.
Interest rates used for determining fair value
The interest rates used to discount estimated cash flows (PLN denominated), where applicable, are based on
WIBOR plus margin as at 31 December 2021 and 31 December 2020 and are as follows:
As at 31 December
2021 2020
Loans
received
5
.
4
-
6.8
%
2
.
9
-
4
.
3
%
Loans granted
4.23%
-
6%
4.3%
Lease liabilities related to perpetual usufruct of land, investment property and
fixed assets
0.44%
-
6.9%
6.9%
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
50
Notes to the Consolidated Financial Statements
28. Fair value measurement hierarchy
The table below provides the fair value measurement hierarchy of the Group’s assets and liabilities:
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).
Quantitative disclosures fair value hierarchy for assets and liabilities as at 31 December 2021:
Fair value measurement using:
In thousands of Polish Zlotys (PLN)
Date of
valuation
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable inputs
(Level 1)
(Level 2)
(Level 3)
Assets measured at fair value:
Investment property
31
-
Dec
-
2
1
-
19,944
8,114
Loans granted to
third parties
31
-
Dec
-
2
1
-
-
1,621
Loans granted to joint ventures
31
-
Dec
-
2
1
-
319
-
Liabilities for which fair values are disclosed:
Bond loans
31
-
Dec
-
2
1
-
235
,600
-
Secured bank loans
31
-
Dec
-
2
1
-
1,554
-
Quantitative disclosures fair value hierarchy for assets and liabilities as at 31 December 2020:
Fair value measurement using:
In thousands of Polish Zlotys (PLN)
Date of
valuation
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable inputs
(Level 1)
(Level 2)
(Level 3)
Assets measured at fair value:
Investment property
31
-
Dec
-
20
-
-
8,4
1
1
Loans granted to joint ventures
31
-
Dec
-
20
-
1
2
,
028
-
Liabilities for which fair values are
disclosed:
Bond loans
31
-
Dec
-
20
-
229,412
-
Interest bearing deferred trade payables
31
-
Dec
-
20
-
8,575
-
Secured bank loans
31
-
Dec
-
20
-
-
-
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
51
Notes to the Consolidated Financial Statements
29. Commitments and contingencies
Investment commitments:
The amounts in the table below present uncharged investment commitments of the Group in respect of
construction services to be rendered by the general contractors:
Commitments
In thousands of Polish Zlotys (PLN)
Contracted amount as
at 31 December 2021
As at 31 December
2021
Contracted amount
as at 31 December 2020
As at 31 December
2020
Karmar S.A.
167
,
567
129
,
300
116
,
351
48
,
297
Hochtief polska S.A.
50
,
242
34
,
792
105
,
857
37
Mostostal Warszawa S.A.
-
-
37
,
636
11
,
478
Danya
Cebus Poland Sp. z o.o.
58
,
547
18
,
759
130
,
211
77
,
254
Glif Sp. z o. o.
-
-
11
,
515
1
,
643
EBUD
-
Przemysłówka Sp. z o.o.
25
,
155
11
,
087
13
,
008
1
,
945
Erbud S.A.
-
-
27
,
457
3
,
300
Totalbud S.A.
27
,
305
27
,
305
19
,
835
-
Total
328
,
816
221
,
243
461
,
870
143
,
954
Unutilized construction loans:
The table below presents the list of the construction loan facilities, which the Group arranged for in conjunction
with entering into loan agreements with the banks in order to secure financing of the construction and other
outstanding costs of the ongoing projects. The amounts presented in the table below include the unutilized part
of the construction loans available to the Group:
As at 31 December 2021
2020
In thousands of Polish Zlotys (PLN)
Nova
Królikarnia 2c (Wrocław 2016)
-
20,725
Miasto Moje
V
29,791
-
Ursus Centralny IB
19,1
58
-
Nowe Warzymice II
8,
3
70
-
Grunwaldzka
20
,880
-
Total (excluding JV) 78,199 20,725
Wilanów Tulip
-
28,324
Total (including JV)
78,199
49,049
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
52
Notes to the Consolidated Financial Statements
29. Commitments and contingencies (cont’d)
Contingent receivables - contracted sales not yet recognized:
The table below presents amounts to be received from the customers having bought apartments from the Group
and which are based on the value of the sale and purchase agreements signed with the clients until
31 December 2021 after deduction of payments received at reporting date (such payments being presented in
the Consolidated Statement of Financial Position as Advances received):
As at 31 December 2021
As at 31 December 202
0
In thousands of Polish Zlotys
(PLN)
Completion
of the
project*
Total value of
preliminary
sales
agreements
signed with
clients
Advances
received
from Clients
until 31
December
2021
Contracted
payments not
received yet as
at 31 December
2021
Total value of
preliminary sales
agreements signed
with clients
Advances
received
from
Clients
until 31
December
2020
Contracted
payments not
received yet
as at 31
December
2020
Ursus IIa
Q
4
202
1
80
,
911
75
,
349
5
,
562
78
,
726
28
,
158
50
,
569
Ursus Ia
Q1 2021
642
648
(
6
)
56
,
257
41
,
748
14
,
509
Ursus IIb
Q4 2022
64
,
510
18
,
367
46
,
143
-
-
-
Ursus Ib
Q3 2022
41
,
720
23
,
438
18
,
282
14
,
763
1
,
704
13
,
059
Ursus IIc
Q2 2023
1
,
521
-
1
,
521
-
-
-
Miasto Moje III
Q4 2020
-
74
(
74
)
29
,
301
26
,
071
3
,
230
Miasto Moje IV
Q4 2021
15
,
571
15
,
330
241
38
,
027
15
,
333
22
,
694
Miasto Moje V
Q4 2022
57
,
945
30
,
701
27
,
244
15
,
531
1
,
661
13
,
870
Miasto Moje VI
Q2 2023
16
,
803
2
,
280
14
,
523
-
-
-
Vitalia III
Q1 2021
-
38
(
38
)
37
,
570
27
,
760
9
,
809
Viva Jagodno I
Q3 2021
-
13
(
13
)
22
,
731
7
,
945
14
,
786
Viva Jagodno IIa
Q4 2022
18
,
302
3
,
257
15
,
045
-
-
-
Panoramika VI
Q4 2021
7
,
464
6
,
914
549
13
,
280
2
,
466
10
,
814
Panoramika V
Q3 2020
1
,
104
513
591
1
,
465
590
874
Nowe Warzymice (Chopin)
Q2 2021
0
56
(
56
)
9
,
119
2
,
332
6
,
787
Nowe Warzymice II (Chopin)
Q2 2022
20
,
859
10
,
193
10
,
666
-
-
-
Nowe Warzymice III (Chopin)
Q4 2022
18
,
547
3
,
828
14
,
719
-
-
-
Totton 3c
Q2 2021
1
,
401
1
,
415
(
15
)
20
,
018
9
,
592
10
,
426
Wrocław 2016
Q3 2020
-
-
-
19
,
000
9
,
423
9
,
577
Truro 3a
Q2 2021
3
,
325
332
2
,
992
26
,
010
17
,
912
8
,
097
Darwen 3b
Q1 2021
-
-
-
23
,
230
17
,
239
5
,
992
City Link 4
Q4 2019
344
344
-
9
,
868
3
,
497
6
,
371
Grunwald2
Q2 2020
624
312
312
7
,
260
1
,
281
5
,
979
Grunwaldzka
Q1 2023
12
,
636
2
,
579
10
,
057
-
-
-
Other
projects
4
,
919
2
,
063
2 856
7 484
4 931
2
,
553
Total (excluding JV)
369
,
148
198
,
047
171
,
101
429
,
640
219
,
645
209
,
995
Wilanów Tulip
8
,
833
5
,
023
3
,
810
47
,
865
26
,
967
20
,
898
Total
377,981
203,069
174,911
477
,
505
246
,
612
230
,
894
*From the completion date the assumed recognition of the advances as revenue is between 3- 6 months
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
53
Notes to the Consolidated Financial Statements
30. Related parties
Parent company
The Company enters into various transactions with its subsidiaries and with its directors and executive officers.
For a list of subsidiaries reference is made to Note 1(b).
The main related parties’ transactions arise on:
agreement with the major shareholder for remuneration of Management Board and Supervisory Board
member;
transactions with key management personnel;
loans granted to related parties;
other.
Outstanding balances with related parties as at 31 December 2021 and as at 31 December 2020 are unsecured,
interest free and settlement occurs in cash. The Group did not record any impairment of receivables relating to
amounts owed by related parties in either year. This assessment is undertaken each financial year through
examining the financial position of the related party and the market in which the related party operates. All
transactions with related parties were performed based on market conditions.
Agreement with the major shareholder for remuneration of Board member
During the year ended 31 December 2017, the subsidiary of the Company entered into a consulting agreement
with its major (indirect) shareholder, A. Luzon Group for total monthly amount of PLN 70 thousand and
covering travels and out of pocket expenses incurred in connection with rendering services. In the year 2020 and
2021 the agreement was continued and the total amount of expenses incurred amounted PLN 864 thousand and
PLN 862 thousand, respectively.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
54
Notes to the Consolidated Financial Statements
30. Related parties continued
Transactions with key management personnel
During the year ended 31 December 2021 and the year ended 31 December 2020, key management personnel
of the Company included the following members of the Management Board:
Boaz Haim - President, Chief Executive Officer
Yaron Shama - Member, Chief Financial Officer
Andrzej Gutowski - Member, Sales Director
Karolina Bronszewska( since 1 June 2021) - Member, Marketing and Innovation Director
Alon Haver (until 31 December 2021) - Member of the Management Board
Key Management Board personnel compensation
Apart from the compensation listed below, there were no further benefits granted/paid to key management
personnel. Key management personnel compensation can be presented as follows:
As at 31 December
2021
2020
In thousands of
Polish Zlotys (PLN)
Salary and other short time benefit
352
292
Management bonus
95
83
Other
218
204
Subtotal - Mr Yaron Shama
665
579
Salary and other short time benefit
175
-
Management bonus
50
-
Other
(1)
13
-
Subtotal – Mrs Karolina Bronszewska 238
-
Salary and other short time benefit
-
66
Termination fee
-
241
Subtotal - Mr Rami Geris -
307
Salary and other short time benefit
384
429
Incentive plan linked to financial results
4
25
445
Other
(1)
41
21
Subtotal - Mr Andrzej Gutowski 850
895
Salary and other short time benefit
1,5
31
1,549
Management bonus
7
54
736
Other
(1)
7
49
728
Subtotal - Mr Boaz Haim 3,034
3,013
Total 4,787
4,793
(1) Mainly related to car expenses, flights and accommodation and an American school.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
55
Notes to the Consolidated Financial Statements
30. Related parties continued
Key Management Board personnel compensation
On 23 November 2021 Mr. Alon Haver submitted his resignation from the position of the Member of the
Management Board of the Company, with effective date as of 31 December 2021. During 2021 Mr. Alon Haver
was also a Management Board member of the indirect major shareholder of the Company (A. Luzon Group) and
due to the above fact he was not receiving any remuneration from Ronson Development SE nor from any of the
Company’s subsidiaries. The Company was covering expenses related to his activity as a Company’s
Management Board member, such as travel and accommodation expenses.
Loans to directors
As at 31 December 2021 and 31 December 2020, there were no loans granted to directors.
Other transactions with directors and management personnel
During the year ended 31 December 2021 the Group sold one Apartment to Mr Boaz Haim for a total net amount
(excluding VAT) of PLN 369.1 thousand and one Apartment to the Company 100% owned by Alon Haver for
a total net amount (excluding VAT) of PLN 378.3 thousand. Those transactions were executed at arm’s length
and was in adherence to the Group’s policy in respect of related-party transactions.
During the year ended 31 December 2020 the Group sold three Apartment and one Parking Place to Mr Andrzej
Gutowski for a total net amount (excluding VAT) of PLN 764 thousand. Those transactions were executed at
arm’s length and was in adherence to the Group’s policy in respect of related-party transactions.
Supervisory Board remuneration
The supervisory directors are entitled to an annual fee of EUR 8,900 plus an amount of EUR 1,500 per board
meeting (EUR 750 if attendance is by telephone). The total amount due in respect of Supervisory Board fees
during 2021 and 2020 amounted to PLN 294 thousand (EUR 64.7 thousand) and PLN 333 thousand (EUR 75
thousand), respectively. In additional the Company paid social security contributions at the amount of PLN 40
thousand in the year ended 31 December 2020.
Mr Amos Luzon did not receive any direct remuneration from the Company nor from any of the Company’s
subsidiaries.
Loans granted to related parties
All loans granted to the joint venture (Coralchief Sp. z o.o. – Projekt 1 Sp.k. and Ronson IS sp. z o.o. Sp.k.). For
additional information see Note 14.
Other
As a result of requirements pertaining to A. Luzon Group, one of the Company’s larger (indirect) shareholders,
whose shares are listed on the Tel Aviv stock exchange, the first quarter reports, semi-annual reports and third
quarter reports are subject to a full scope review by the Company’s auditors. For the Company itself that is listed
on the Warsaw Stock Exchange, only the semi-annual report is subject to required review by the auditor. The
Company has agreed with A. Luzon Group that the costs for the first and third quarter auditors’ reviews will be
shared between the Company and its shareholder.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
56
Notes to the Consolidated Financial Statements
31. Financial risk management, objectives and policies
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, price risk
and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on
the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial
performance. The Management Board reviews and agrees policies for managing each of these risks and they are
summarized below. The Group also monitors the market price risk arising from all financial instruments.
The Group does not use derivative financial instruments to hedge currency or interest rate risks arising from the
Group’s operations and its sources of finance. It is, and has been throughout the year ended 31 December 2021
and 2020, the Group’s policy that no trading in (derivative) financial instruments shall be undertaken.
The Group’s principal financial instruments comprise cash balances, other current financial assets, loans granted
to JVs and third parties, bank loans, bonds, trade receivables and trade payables. The main purpose of these
financial instruments is to manage the Group’s liquidity and to raise finance for the Group’s operations.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counter party to a financial instrument fails
to meet its contractual obligations. Financial instruments that potentially expose the Group to concentrations of
credit risk consist principally of cash and cash equivalents and receivables, loans granted to JV and third parties,
as well as other current financial asset.
The Group is making significant cash payments as security for preliminary land purchase agreements. The Group
minimizes its credit risk arising from such payments by registering advance repayment obligations in the
mortgage register of the respective property. Management has a credit policy in place and the exposure to credit
risk is monitored on an ongoing basis (analysis of overdue receivables from Clients, monitoring of the financial
institutions credit risk, control of the liquidity situation of the JV and third parties). The Group does not expect
any counter parties to fail in meeting their obligations. The carrying amounts of the financial assets represent
the maximum credit risk exposure. The maximum exposure to credit risk at the reporting date was as follows:
As at 31 December
2021
2020
In thousands of Polish Zloty (PLN)
Trade and other
receivables and prepayments
10,8
3
0
16,484
Loans granted to third parties
1,621
-
Loans granted to joint ventures
319
11,634
Cash and cash equivalents
133,43
4
135,099
Other current financial assets
8,794
14,239
Total 154,997
177,456
The Group places its cash and cash equivalents and other current financial assets in financial institutions with
high credit ratings. Management does not expect any counterparty to fail to meet its obligations. Concentrations
of credit risk with respect to trade receivables are limited due to the large number of customers comprising the
Group’s customer base. The credit quality of cash at banks and short-term bank deposits can be assessed by
reference to external credit ratings. The Group uses the EuroRating Agency for the below analysis of credit risks
of financial institutions.
Cash and cash equivalents
As at 31 December
2021
As at 31 December
2020
In thousands of Polish Zloty (PLN)
Rating
A
84,26
3
69,008
BBB
6,080
5,937
BB
43,091
60,155
Total cash at banks and short-term bank deposits 133,434
135,099
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
57
Notes to the Consolidated Financial Statements
31. Financial risk management, objectives and policies
Credit risk
Other current financial assets
As at 31 December
2021
As at 31 December
2020
In thousands of Polish Zloty (PLN)
Rating
A
7,608
2,605
BBB
1,
051
-
BB
135
11,63
4
Total other current financial assets 8,794
14,239
The Group keeps cash and cash equivalents and other financial assets in four financial institutions.
Cash and cash equivalents and escrow accounts presented in Other financial assets in SoFP are considered to
have low credit risk. The company holds the accounts in financial institutions with investment grade credit rating
published by at least one major rating agency.
While Other financial assets and Cash and cash equivalents are also subject to the impairment requirements of
IFRS 9, the identified impairment loss was immaterial.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income or the
value of its holdings of financial instruments, such as bond loans, bank loans, cash and cash equivalents. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimizing return.
(i) Foreign currency risk
The Group is exposed to foreign currency risk on receivables and payables denominated in a currency other than
PLN to a limited extent only. As at 31 December 2021 and 2020, trade receivables and payables denominated in
foreign currencies were insignificant.
(ii) Price risk
The Group’s exposure to marketable and non-marketable securities price risk does not exists because the
Group has not invested in securities as at 31 December 2021 and as at 31 December 2020.
(iii) Interest rate risk
Except for Interest bearing deferred trade payables, the Group did not enter into any fixed-rate borrowings
transaction. The Group’s variable-rate borrowings are exposed to a risk of change in cash flows due to changes
in interest rates. Short-term receivables and payables are not exposed to interest rate risk.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
58
Notes to the Consolidated Financial Statements
31. Financial risk management, objectives and policies continued
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 is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses
or risking damage to the Group’s reputation.
The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers
the maturity of both its financial investments and financial assets (e.g. accounts receivable, other financial assets)
and projected cash flows from operations. The Group's objective is to maintain a balance between continuity of
funding and flexibility through the use of bank overdrafts, bank loans and bond loans.
Interest rate risk and liquidity risk analyzed
In respect of income-earning financial assets and interest-bearing financial liabilities, the following tables
indicate their average effective interest rates at the reporting date and the periods in which they mature or, if
earlier, re-price.
As at 31 December 2021
In thousands of Polish Zlotys (PLN)
Average
effective interest
rate
Total
6 months
or less
6-12
months
1-2
years
2-5
years
More
than
5 years
Note
Fixed rate instruments
Cash and cash equivalents
2
0
0,0%
1
31
,
121
131
,
121
-
-
-
-
Other current financial
assets
19
0,0%
8,794
8,794
-
-
-
-
Loan
s
granted to third parties
6,00
%
1
,
621
-
1
,
621
-
-
-
Variable rate instruments
Cash and cash equivalents
2
0
Wibor
ON
2
,
3
12
2
,
3
12
-
-
-
-
Secured bank loans
2
3
Wibor 3M+
2,70%
-
3,00%
(1
,
56
8
)
(1
,
568)
-
-
-
-
Floating rate bonds
2
3
Wibor 6M +
3,5
%
-
4,3%
(2
49
,
238
)
(
52
,
247
)
-
(
140
,
000
)
(
56
,
991
)
-
Loans granted to joint ventures
1
4
Wibor 6M +
3,2
%
31
9
-
31
9
-
-
-
As at 31 December 2020
In thousands of Polish Zlotys (PLN
)
Average
effective
interest rate
Total
6 months
or less
6-12
months
1
-
2 years
2-5
years
More
than 5
years
Note
Fixed rate instruments
Cash and cash equivalents
2
0
0.0%
-
0.1%
129,733
129,733
-
-
-
-
Other current financial assets
19
0,0%
14,239
14,239
-
-
-
-
Interest bearing deferred trade
payables
4.90%
(8,482)
-
(8,482)
-
-
-
Variable rate instruments
Cash and cash equivalents
2
0
Wibor ON
5,366
5,366
-
-
-
-
Floating rate bonds
2
3
Wibor 6M +
2.85%
-
4.3%
(230,072)
(54,640)
-
(116,345)
(59,087)
-
Loans granted to joint ventures
14
Wibor 3M +
4%
11,634
-
-
11,634
-
-
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
59
Notes to the Consolidated Financial Statements
31. Financial risk management, objectives and policies continued
Interest rate risk and liquidity risk analyzed
It is estimated that a general increase of one percentage point in interest rates at the reporting date would
increase/(decrease) the net assets and the statement of comprehensive income by the amounts listed in the table
below. The analysis prepared for 12-month periods assumes that all other variables remain unchanged.
31 December 2021
31 December 2020
In thousands of Polish Zlotys (PLN
)
Increase by
1%
decrease by
1%
Increase by
1%
decrease by
1%
Income statement
Variable interest rate assets
8
(8)
18
(18)
Variable interest rate liabilities*
(
836
)
836
(767)
767
Total
(
828
)
828
(749)
749
Net assets
Variable interest rate assets
8
(8)
18
(18)
Variable interest rate liabilities*
(
836
)
836
(767)
767
Total
(
828
)
828
(749)
749
* The financial costs which are related to loans and borrowing are capitalized by the Group to work-in-progress. Such costs are gradually
recognized in the statement of comprehensive income based on the proportion of residential units sold. It has been assumed in the above
analysis that one third of the financial costs calculated and capitalized in a given period is disclosed in the statement of comprehensive
income based on the proportion of residential units sold of a given period and the remaining part of the costs remains in the inventories
and will be disclosed in the statement of comprehensive income in the following accounting periods.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
60
Notes to the Consolidated Financial Statements
31. Financial risk management, objectives and policies continued
Liquidity risk
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the
remaining period from reporting date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows.
Year ended 31 December 202
1
In thousands of
Polish Zlotys (PLN)
Less
than 1
year
Between 1
and 2 years
Between 3
and 5 years
Over
5
years
Total
Liabilities
Bond
loans
62,847
54,025
211,019
-
327,891
Secured bank loans
1
,
568
-
-
-
1,568
Lease liabilities related to perpetual usufruct of land and
investment property
1
,
131
2
,
398
3,389
11
,
158
18,076
Trade and other payables
60
,
263
-
-
-
60,263
Total
125,809
56,423
214,408
11,
158
407,798
Year ended 31 December 202
0
In thousands of Polish Zlotys (PLN)
Less
than 1
year
Between 1
and 2 years
Between 3
and 5 years
Over
5
years
Total
Liabilities
Bond
loans
61
,
059
128
,
908
61
,
372
-
251
,
339
Secured bank loans
-
-
-
-
-
Interest bearing deferred trade payables
8
,
482
-
-
-
8,462
Lease liabilities related to perpetual usufruct of land and
investment property
958
838
2
,
201
10
,
495
14,492
Trade and other payables
56
,
949
-
-
-
56
,
949
Total
127,985
130,
1
7
5
64,
000
1
0
,
495
332,635
Real-estate risk
The Company’s and the Group’s business activities are significantly affected by global developments, and in particular
by their impact on the Polish economy in addition to the COVID 19 effect which the company experiencing in the last
2 years. The most important macroeconomic factors effecting the Company and the Group are: the level of
development of the Polish economy, the level of interest rates in Poland, the performance of banks and their ability to
provide financing to developers and their customers as well as the ability of other financial institutions to invest in
corporate bonds.
In terms of risks specific for the sector, in which the Group operates, a potential increase in construction costs and the
challenge of securing lands for reasonable prices and the significant impact of increased costs and land prices on the
margins of new phases and projects, a prolongation of administrative procedures and an increasing competition in the
market are considered to be the most significant uncertainties for the financial year ending 31 December 2021 and
they will have an important influence on Group’s operations in the future.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
61
Notes to the Consolidated Financial Statements
31. Financial risk management, objectives and policies continued
Real-estate risk (cont’d)
Construction cost risk
Construction costs increased significantly over the last 2 years, and high increase especially in the 4
th
quarter of the
2021. There is a high risk that building costs may still be rising during 2022. The increase was mainly related to
increase of raw materials and energy costs influencing directly and indirectly the costs of production adding to that
the pandemic situation with a 4
th
wave and shortage of construction employees. The Company and the Group do not
operate in a construction business, but, instead, for each project an agreement is concluded with a third-party general
contractor, who is responsible for running the construction and for finalizing the project including obtaining all permits
necessary for safe use of the apartments. In the year 2021 there were many changes in the constructions law, which
impacted the cost of constructions as well as sharp increase in inflation rate, costs of raw materials and energy costs.
In terms of construction law, the biggest change refers to the increase in fire safety in case of a change in the use of
the building or its part. The notification should be accompanied by an expert's opinion on fire safety, which by the
end might be reflected in the construction costs offered by the general contractor. On the 19
th
of October 2021 a new
regulations regarding the participation of Developers on costs of building roads and infrastructure was adopted the
new local law (at this stage in Warsaw) will enter into force on 1
st
January 2022 , the new regulation forces developers
where building residential or commercial development to invest money in rebuilding or building public roads required
or in the vicinity of the developed projects as well as all related infrastructures base on certain charges related to the
location of the development.
New building law introduced Eco solutions in new buildings is enforced by the new construction law which require
the developer to implement some obligatory Eco Solutions elements in the Buildings in particular solar panels,
charging stations for electric cars and other issues which might cause an increase in the total costs of construction.
In order to mitigate the risk of the increase in construction costs, the Group are signing a lump-sum contract with the
general contractor, which will allow the Group to complete the project based on the estimated budget.
Risk of non-performance by General Contractors
In each project or stage of the project, the Group has concluded and will conclude contracts for the construction and
implementation of development projects with one general contractor. There is a risk that non-performance of the
agreement by the general contractor may cause delays in the project or significantly impact the business, financial
condition or results of the Group. The Group sees a potential risk for non-performance of obligations by the general
contractor in the availability of qualified workforce, in the increase of salaries and cost of construction materials and
the increase of energy costs. Non-performance may result in claims against general contractor with the risk that general
contractor may also fail to fully satisfy possible claims of the Company and the Group. The Company and the Group
Implement selection criteria when hiring a general contractor, which include, experience, professionalism, financial
strength of the general contractor (with the obligation to provide bank or insurance guarantee) as well as the quality
of the insurance policy covering all risks associated with the construction process.
Financing risk
The real estate development business, in which the Company and the Group operates, requires significant initial
expenditures to purchase land and to cover construction, infrastructure, and design costs. As such, the Company and
the Group, in order to continue and develop its business, require significant amounts of cash through external financing
banks and issuance of bonds. The Company’s and Group’s ability to obtain such financing depend on many factors, in
particular, on market conditions which are beyond the Company’s and the Group’s control. In the event of difficulties
to obtain the required financing, there is a risk that the scale of the Company’s and Group’s development and pace of
achieving its strategic objectives may differ from what was originally planned. In such situation as described above,
there is no certainty whether the Company and the Group will be able to obtain the required financing, nor whether
financial resources will be obtained under conditions that are favourable to the Company and the Group.
In order to mitigate the risk of insufficient financial resources, the company is continuously exploring other
possibilities of financial resources which will provide the necessary required financing and favourable conditions.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
62
Notes to the Consolidated Financial Statements
31. Financial risk management, objectives and policies (cont’d)
Real-estate risk (cont’d)
Availability of mortgages
The demand for residential real estate largely depends on the availability of credits and loans for financing the purchase
of apartments and houses by individuals. Possible increase in interest rates, deterioration of the economic situation in
Poland or administrative restrictions on lending activities of the banks may cause a drop in demand for apartments and
houses, and therefore a decrease in interest from potential buyers in the Group's development projects, which in turn
may have a significant adverse impact on activities, financial standing or performance of the Company and the Group.
In 2021, access to mortgages was selectively monitored by financing banks and was relatively available to selective
customers according to bank qualifications. The Covid-19 pandemic had a negative effect on bank financing in terms
of conditions and length for obtaining banks approvals. Interest rates in the beginning of the year ware at levels around
their historic minimum. A sharp increase in interest rates in particularly banks internal rates impacted significantly and
will impact big portion of mortgage users to be eligible for residential mortgage financing and in most cases decrease
the availability of mortgages due to creditworthy of individuals. The Company is continuously observing the situation
and offering administrative help to its clients for obtaining required credits.
Interest rate risk
A vast majority of loans and borrowings obtained by the Group is against variable interest rates that are based on
WIBOR rates plus a margin. Therefore, changes in the WIBOR rates will have impact on the cash flow and the
profitability of the Group.
Administration
The nature of real estate development projects requires a number of licenses, approvals and arrangements to be obtained
by the Company and the Group at every stage of the development process. Despite significant caution applied in the
project execution schedules, there is always a risk of delay in their obtainment. In addition there is always the risk of
protests made against permits decisions which have already been issued (also due to appeals with no consequences for
the appellants) or in the worse scenario failing to obtain the relevant permits. Additional risk might rise with respect to
properties under perpetual usufruct. During the year 2020 and 2021 the company and the Group identify additional
negative factor of COVID 19 which influences significantly on the way the Group cooperate with local authorities were
certain offices were closed to public or ware not accessible. All the above factors may affect the ability to conduct and
complete its executed and planned projects.
Changes in legislation
Potential future changes in the legislation (contemplated deletion of open escrow accounts as well as the possible
introduction of compulsory contributions to the developer guarantee fund), the new construction law and the new local
regulations related to Road and instruction participation costs, also constitute a risk that could directly or indirectly
affect the Company’s and the Group's activities and results. The Management Board is in the opinion, that the possible
introduction of such changes might have a negative impact on the Group's activities. In spite of that and taking under
consideration the Company and the Group long term experience in the market it’s ability to adjust quickly to the new
market conditions, its financial situation and its reputation in the market. The management Board is in the opinion that
these changes are of a lesser extent than on other market operators.
Frequent amendments, incoherence and lack of unified interpretation of legislation entail risks related to the legal and
environment in which the Company and the Group operate. In particular the regulations and interpretations of tax
legislations are subject to frequent changes. The practice of tax authorities, issued tax interpretations as well as judicial
decisions in this area is not unified. In cases that Tax Authorities will adopt different interpretation of tax regulations
from that of the Company, negative consequences can be expected with negative impact on the Company’s business,
its performance, its financial standing and Company’s and Group’s development prospects.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
63
Notes to the Consolidated Financial Statements
31. Financial risk management, objectives and policies (cont’d)
Real-estate risk (cont’d)
Changes in legislation (cont’d)
Below are main changes in law regulations which can affects the company operations:
Entry into force on 1 January 2022 of the new Polish Order which according to its assumptions, assumes
resignation from the possibility of including depreciation charges on houses and flats in tax costs was especially
important tax benefit to individuals and companies planning to purchase a property for rent.
new local regulations regarding the participation of Developers on costs of building roads and infrastructure
was adopted the new local law (at this stage in Warsaw) will enter into force on 1st January 2022 , the new
regulation forces developers where building residential or commercial development to invest money in
rebuilding or building public roads required or in the vicinity of the developed projects well as all related
infrastructures base on certain charges related to the location of the development.
Act on the Protection of rights of buyers of residential premises and single family houses an implementation
of the Developer Guarantee Fund, which will take hold starting on 1
st
July 2022.
New regulations regarding building permit and design standards which may increase the costs of construction.
COVID-19
Following the second year of the COVID-19 pandemic, the Company witnessed the effect of the pandemic on the Polish
market and believe that will continue effecting it probably for quite some time. During the reporting period the Company
had experienced in some of its projects, delays related to administrative proceedings with obtaining permits which
translated to delay in starting of projects, as direct result of COVID-19 restrictions, as well as in some cases delays by
clients with obtaining Credit loans for purchasing of apartments.
The management Board will continue monitoring the situation on on-going basis, and adopt further actions, if necessary,
in order to reduce as much as it possible the effect of the pandemic on the Company’s operations and strategy.
Inflation risk
Poland's inflation for December 2021 was up 8.6% Year-on-Year. The price of consumer goods (the Consumer Price
Index) jumped by 9% YoY, while the price of services increased by 7.6% YoY.
High inflation pressure is generated by energy (electricity, gas, heating, gasoline, diesel), which was about 20% more
expensive than in December of 2020. This increase is adding up into the prices of other goods and services. Following
this sharp increase in the inflation rate, Poland shifted its monetary policy by lifting its main interest rates from nearly
zero % to almost 3% in the end of the reporting period.
The inflation growth and with it the interbank interest growth will affect the polish economy in many aspects and the
real estate residential sector in the following
- the risk of average mortgage rates increases which might result in decline in volume of mortgages lending
which will influence reduce the demand from individual clients.
- risk of Increase in construction costs, related to problems of manufacturing and energy and transportation.
- risk in delay or withholding of starting new projects due to high costs.
- Significantly increase in Bonds interest rates which directly affects the Group cash flow.
The management Board will continue monitoring the situation, and adopt further actions, if necessary, in order to reduce
as much as it possible the effect of the inflation and interest rates increase on the Company’s operations and strategy.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
64
Notes to the Consolidated Financial Statements
32. Capital management
When managing capital, it is the Group’s objective to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Group may adjust the profit appropriation, return capital to shareholders, issue new shares or sell assets to reduce
debt. Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio and
leverage. The Group’s policy is to keep the gearing ratio of the Group lower than 60%, and a leverage of the
Group lower than 50%.
Banking covenants vary according to each loan agreement, but typically are not related directly to the gearing
ratio of the Company but to the proportion of loan to value of the mortgage collateral which usually is required
not to cross the limit of 70% or 75%. Moreover the Company is obliged to monitor its indebtedness according
to the conditions of the bond issuance, which require, amongst others, that in each reporting period the Company
shall test the ratio between Net debt to Equity. The Ratio shall not exceed 80% (for additional information see
Note 23).
The gearing ratio is calculated as net debt divided by total equity. Net debt is calculated as total borrowings
(including ‘current and non-current borrowings’ as shown in the consolidated Statement of Financial Position)
less cash and cash equivalents and less Other current financial assets. Leverage is calculated as net debt divided
by total capital employed. Total capital employed is calculated as ‘equity’ as shown in the Consolidated
Statement of Financial Position plus net debt financing assets in operation.
The gearing ratios and leverage at 31 December 2021 and 31 December 2020 were as follows:
As at 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Loan and borrowings, including current portion
250,806
230,072
Interest bearing deferred trade payables
-
8,482
Less: cash and cash equivalents
(133,43
4
)
(135,099)
Less: other current financial assets
(8,794)
(14,239)
Net debt 108,578
89,216
Total equity
420
,
045
3
79,817
Total capital employed
528,623
469,033
Gearing ratio
25.8%
23.5%
Leverage
20.5%
19.0%
Neither the Company nor its subsidiaries are subject to externally imposed capital requirements. There were no
changes in the Groups approach to capital management during the year.
During the period the Group did not breach any of its loan and borrowings covenants, nor did it default on any
other of its obligations under its loan agreements.
33. Cash flow reconciliation
Inventory and Residential land bank
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Balance sheet change in inventory
43,298
52,134
Finance expense, net capitalized into inventory
10
,
174
6,875
Impa
ct of
perpetual usefruct recognition/transfer to trade receivables
3
,
480
(8,266)
Purchase of land
presented in separate line in
operating cash flow
11
3
,
784
25
,5
00
Transfer
of fixed asset to i
nventory
747
-
Aquisition of Studzienna
-
628
Write
-
down of inventory
(
3
,
793
)
(1,326)
Other
(
3
14
)
(3,7
83
)
Change in inventory in the consolidated statement of cash flows 167,376
71,762
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
65
Notes to the Consolidated Financial Statements
33. Cash flow reconciliation (cont’d)
Trade and other receivables and prepayments
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Balance sheet change in trade and other receivables and prepayments
(2
0,806
)
(12,
629
)
Impact of transferred perpetual usefruct to trade trade receivables
(delivered units)
(569)
960
Transfer to Intangible assets from prepayments
(1
,
458)
-
Notary deposit transferred to advances for land
(5
,
500)
-
Other
(604)
-
Change in Trade and other receivables and prepayments in the
consolidated statement of cash flows
(28,937)
(11,669)
Trade and other accounts payable
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Balance sheet
change in Trade and other accounts payable
(2,739)
(29,917)
Impact of transferred perpetual usefruct to trade payables (delivered
units)
576
409
Transfer from interest bearing trade payables
(1
,
698)
174
Unpaid invoices for tangible assets
(115)
-
Acquisition of the Nova Królikarnia project
-
46
,
914
Change in Trade and other payables and accrued expenses in the
consolidated statement of cash flows 1,502
17,580
34. Information about agreed-upon engagements of the Company’s auditor
Information about audit agreements and the values from those agreements is disclosed below:
For the year ended 31 December
2021
2020
In thousands of Polish Zlotys (PLN)
Audit and review remuneration
46
4
460
Other
services
77
46
Audit remuneration for prior periods
-
-
Reimbursed audit review costs
(1)
(1
1
7)
(127)
Total remuneration for the expense of the Company 424
379
(1) Costs in respect of the audit review of the Company’s first and third quarter reports have been reimbursed in 50% to Main Company’s
shareholder.
35. Events during the financial year
Commencements of new projects
The table below presents projects which have been commenced in the year ended 31 December 2021:
Project Name
Location
Number of units
Area of units (m2)
Ursus Centralny IIb
Warszawa
206
11
,
75
8
Viva Jagodno IIa
Wrocław
76
4
,
3
29
Grunwaldzka
Poznań
70
3
,
35
1
Miasto Moje VI
Warszawa
227
11
,
722
Nowe Warzymice III
Szczecin
6
2
3
,
535
Viva Jagodno IIb
Wrocław
152
8,875
Ursus Centralny IIc
Warszawa
219
11,124
Total
1,012
54,694
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
66
Notes to the Consolidated Financial Statements
35. Events during the financial year
Completions of projects
The table below presents projects which have been completed in the year ended 31 December 2021 and for which
the occupancy permit was received and the delivery process of apartments has started:
Project name Location Occupancy permit date
Number of
units
Area of units
(m
2
)
Nova Królikarnia 3b
Warszawa
16 February 2021
23
2
,
270
Vitalia III
Wrocław
2 March 2021
81
6
,
790
Ursus Centralny Ia
Warszawa
23 March 2021
138
7
,
542
Nova
Królikarnia 3a
Warszawa
27 April 2021
31
3
,
188
Nova Królikarnia 3c
Warszawa
14 May 2021
23
2
,
298
Nowe Warzymice I
Szczecin
21 May 2021
54
3
,
234
Viva Jagodno I
Wrocław
21 July 2021
121
6
,
241
Miasto Moje IV
Warszawa
29 October 2021
176
8,938
Ursus
Centralny IIa
Warszawa
8 November 2021
251
13,50
9
Panoramika VI
Szczecin
16 November 2021
75
3,59
1
Total (excluding JV)
973
57,601
Wilanów Tulip
(1)
Warszawa
21
September
2021
149
9
,
574
Total (including JV)
1,122
67,174
(1) Project is presented in Consolidated Financial Statement under investment in joint venture; the Company’s share is 50%.
Purchase of land
The table below presents the summary of the signed final purchase agreements of land during
the year ended 31 December 2021:
Location
Type of
agreement
Signed date
Agreement
net value
Paid net till
31 December
2021
Number
of units
Potential
PUM
(PLN million)
(PLN million)
Poznań, Grunwald final 11 Feb 2021 26.0
26.0
343
19,790
Warsaw, Wola final 29 June 2021 13.5
13.5
84
4,800
Warsaw, Białołęka final 11 Aug 2021 13.1
13.1
191
11,000
Szczecin, Północ final 27 Oct 2021 21.0
21.0
555
26,500
Warsaw, Ursynów* final 27 Oct 2021
11.2
11.2
86
3,500
Warsaw, Bemowo final 14 Dec 2021 12.7
12.7
64
3,860
Warsaw, Ursynów* final 21 Dec 2021 7.5
7.5
95
4,000
Warsaw, Białołęka final 28 Oct 2021 36,9
36,9
651
31,300
Total
141.9
141.9
2,069
104,750
* land designated for PRS activity and presented as Investment property in the Consolidated Financial Statements
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
67
Notes to the Consolidated Financial Statements
35. Events during the financial year (continued)
Purchase of land
The table below presents the summary of the signed final purchase agreements of land during
the year ended 31 December 2021:
Location
Type of
agreement Signed date
Agreement net
value
Paid net till 31
December 2021
Number of
units
Potential
PUM
(PLN million)
(PLN
million)
Warsaw, Białołęka* preliminary 23 Nov 2020 20.0
13.4
432
20,700
Warsaw, Ursus preliminary 17 Jan 2021 140.0
10.0
1,860
100,000
Warsaw, Ursynów preliminary 3 Mar 2021 16.0
9.0
94
5,700
Warsaw, Targówek preliminary 2 June 2021 14.0
4.0
125
6,875
Warsaw, Ochota preliminary 10 Aug 2021 10.0
7.1
67
3,700
Warsaw, Bemowo preliminary 16 Oct 2021 45.4
5.0
267
14,500
Warsaw, Białołęka preliminary 28 Oct 2021 14.5
11.9
219
11,300
Warsaw, Wola** preliminary 23 Dec 2021 23.0
-
570
18,790
Warsaw, Ursynów preliminary 29 Dec 2021 16.0
2.0
142
8,400
Total
298.9
62.4
3,776
189,965
* During the month of February 2021 the Company signed final agreement for 3 plots connected to Epopei project for the total net amount of PLN 5.9 million
which is part of the total purchase price for the project
** The agreement value is EURO 5 million converted to PLN as at 31.12.2021.
Conclusion of a material agreement for General contractors
Project name Location
Number
of units
General
contractor
Agreement
signing date
Agreement net
value
(in mio PLN)
Additional provisions
Viva Jagodno II Wrocław 228
Karmar S.A.
11 February
2021
53.0
- an increase of 1 million for additional
works
Ursus IIB and
IIC
Warsaw 401
Karmar S.A. 28 May 2021 93.8
- additional works for the amount of PLN
2.4 million
- remuneration may also be increased by
an amount up to PLN 1.5 million net, if
the conditions set out in the contract and
beyond the control of the parties are met
Grunwaldzka Poznań 70
Karmar S.A. 28 May 2021 18.0 none
Nowe
Warzymice III
Szczecin 63
Ebud S.A. 23 June 2021 12.9 none
Miasto Moje VI Warsaw 227
Hochtief S.A.
24 June 2021 51.4
- 400 thousand PLN relates to the costs of
work to future stages of Miasto Moje
investment
Siekierki I Warsaw 227
TOTALBUD
S.A.
23 December
2021
27.3
under the provision that the Building
permit will be obtained until 31 January
2022
Total
256.4
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
68
Notes to the Consolidated Financial Statements
35. Events during the financial year (continued)
Changes in the Management Board and Supervisory Board
On 27 May 2021 the Supervisory Board, acting pursuant to Article 8.1 of the articles of association of the
Company, appointed, effective as of 1 June 2021, Ms. Karolina Bronszewska to the position of Marketing and
Innovation Member of the Management Board of the Company for a five-year joint term of office of the
Management Board, which commenced on 1 April 2019.
At the same time, the Management Board informs that in connection with the appointment of Ms. Karolina
Bronszewska to the position of the Marketing and Innovation Management Board Member, the name of Mr.
Andrzej Gutowski's position has changed from "Sales and Marketing Vicepresident" to "Sales Vicepresident".
On 23 November 2021, the Management Board informs that Mr. Alon Haver submitted his resignation from the
position of the Member of the Management Board of the Company, with effective date as of 31 December 2021.
According to the submitted termination notice, the resignation is connected with his new professional plans as
well as the resignation covers all positions in the Luzon Group (the main indirect shareholder of the Company)
and the Ronson Group.
There were no changes in Supervisory Board during the year ended 31 December 2021.
Notifications from Amos Luzon Development and Energy Group Ltd. of the a change of the ownership interest
in the shares in Ronson Development SE
On 13 August 2021 the Company was notified by its indirect majority shareholder, Amos Luzon Development
and Energy Group Ltd., with its registered office in Ra’anana, Israel (the “Majority Shareholder”), that the
Majority Shareholder acquired as part of the block trades conducted on the regulated market maintained by the
Warsaw Stock Exchange a total of 41,505,074 shares in the share capital of the Company. After this transaction
A. Luzon Group owned directly and indirectly (via ITR Dori BV and via the Company who is holding own
shares) 92.32% of the share capital of the Company (151,422,215 shares in total). From 13 August to 31
December 2021 the Company was notified many times by the Majority Shareholder (also in connection with a
fact that he is a related party of Mr. A. Luzon – Chairmen of the Supervisory Board) about acquisition of
additional 4,383,800 Company’s shares, corresponding to 2.68 in the share capital of the Company. According
to those notifications, as at 31 December 2021 the Majority Shareholder owned (directly and indirectly)
94.9970% shares in the share capital of the Company (including own shares held by the Company – it shall be
noted that in accordance with art. 364 § 2 of the Code of Commercial Companies, the Company does not exercise
voting rights from own shares).
36. Subsequent events
Purchase of land
On 4 January 2022 the Company (via its subsidiary) signed an annex to the preliminary agreement concerning
the purchase of the ownership rights of a plot of land located in Warsaw, Białołęka district, with an area of c.a.
27,5 m2 on which basis the final agreement date was prolonged to 31 December 2022 the Company has been
granted the right to withdraw from the Preliminary Agreement by the date of the final agreement in any case and
without giving any reason. The remaining material provisions of the Preliminary Agreement did not change.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
69
Notes to the Consolidated Financial Statements
36. Subsequent events
Purchase of land (cont’d)
On 4 January 2022 the Company (via its subsidiary) signed an annex to the preliminary agreement concerning
the purchase of the perpetual usufruct right of a plot of land located in Warsaw, Ursynów district, from 3 March
2021, with a area 2.4 thousand m2 . Net price was preliminary established in amount of PLN 15.9 million. On
its basis, the price for the Property was lowered to amount PLN 11.9 million, while the remuneration for
obtaining and transferring to the Company by the Seller the decision on land development conditions for the
Property was raised, so that the entire amount to be paid by the Company for the Property and the decision on
land development conditions remained unchanged. According to the Company’s initial evaluation it shall be
feasible to construct on the property a multifamily residential building with underground car parks, commercial
areas and the necessary infrastructure with a total usable area of approx. 5.7 thousand m2 .
On 11 January 2022 the Company (via its subsidiary) entered into final agreement concerning the purchase of
the perpetual usufruct right of a plot of land located in Warsaw, Białołęka district, with an area of c.a. 14.9
thousand m
2
. The price of the property was set for 1.200 net for each square meters of the usable floor area of
the buildings that can be built on the property ( “PUM”) . According to Issuers initial evaluation it shall be
feasible to construct on the Property a development project with the total PUM area of approx. 10,000 sqm.
In connection with the receipt of a declaration of waiver of the pre-emption right from the State Forests, on 13
January 2022 the Company ( via its subsidiary) concluded final agreement for transfer of ownership of remaining
part of the real estate, with an area of 1.8 hectare and paid the net price for this real estate in the amount of PLN
12 million. Additionally, concluded also agreement for the purchase of a plot with an area of approx. 0.37
hectare for a net price of PLN 2.5 million. The Company plans to build on this plot a road for the development
project carried out on the Property.
On 16 February 2022 the Company ( via its subsidiary) entered into preliminary agreement concerning the
purchase of the perpetual usufruct right of a plot of land located in Warsaw, Bemowo district, with an area of
0.5447 hectare m
2
for amount of PLN 9 million. The sale agreement will be concluded on condition that National
Centre for Agricultural Support (Krajowy Ośrodek Wsparcia Rolnictwa), institution of Public Treasury (Skarb
Państwa) declared a waiver of the pre-emption right.
On 22 February 2022 the Company ( via its subsidiary) entered into final agreement concerning the purchase of
the perpetual usufruct right of a plot of land located in Warsaw, Bemowo district, with an area of 0.1323 hectare
m
2
for net amount of PLN 25.920 thousands.
Conclusion on investment agreements
On 1 February 2022 Ronson Development SE (the “Issuer”) and Amos Luzon Development and Energy Group
Ltd., the Issuer’s controlling shareholder, concluded SAFE agreements with Sphera Master Fund L.P., More
Provident Funds Ltd., Sphera Small Cap Fund L.P. and EJS Galatee Holdings (the “Investors”) pursuant to which
the Investors undertook, subject to certain conditions, to invest in the Issuer the total amount of ILS 45 million
(forty-five million Israeli shekels). The above amount will be received by the Issuer following the satisfaction of
certain conditions precedent set out in the agreements, such conditions to be satisfied within thirty days from the
conclusion of the respective agreement (such term may be extended by each party by additional 30 days). The
above agreements grant the Investors certain rights applicable after the Issuer is delisted from the regulated
market of the Warsaw Stock Exchange, including the right to subscribe for instruments convertible into shares
in the Issuer, as well as the right to convert their respective investments into shares in Amos Luzon Development
and Energy Group Ltd.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
70
Notes to the Consolidated Financial Statements
36. Subsequent events
Conclusion on investment agreements
On 20 February 2022 Ronson Development SE (the “Issuer”) and Amos Luzon Development and Energy Group
Ltd., the Issuer’s controlling shareholder, concluded SAFE agreements with Klirmark Opportunity Fund III L.P.
(the “Investor”) pursuant to which the Investor undertook, subject to certain conditions, to invest in the Issuer
the total amount of ILS15 million (fifteen million Israeli shekels). The above amount will be received by the
Issuer following the satisfaction of certain conditions precedent set out in the agreements, such conditions to be
satisfied within thirty days from the conclusion of the respective agreement (such term may be extended by each
party by additional 30 days). The above agreements grant the Investors certain rights applicable after the Issuer
is delisted from the regulated market of the Warsaw Stock Exchange, including the right to subscribe for
instruments convertible into shares in the Issuer, as well as the right to convert their respective investments into
shares in Amos Luzon Development and Energy Group Ltd.
Conclusion of a material agreement for General contractors
On the 1 February 2022 the Company (via its subsidiary) executed an option to mandate ‘EBUD’ Przemysłówka
Sp. z o.o. (the General contractor) with the execution of stage IV of Nowe Warzymice investment. The
construction works will commence on beginning of March 2022. Completion of substage IV is envisaged within
17 months as of commencement. Nowe Warzymice IV consists of residential building (75 units). The fee for the
General contractor under this agreement will amount to PLN 16.8 million.
On the 4 March 2022 the Company (via its subsidiary) executed an option to mandate TECHBAU
BUDOWNICTWO Sp. z o.o. (the General contractor) with the execution of Falenty I investment. The
construction works will commence in March 2022. Completion of the investment is envisaged within 19 months
as of commencement. Falenty I consists of 21 family houses, all the houses are 2 apartments buildings. The fee
for the General contractor under this agreement will amount to PLN 19.15 million, net of VAT.
New Building permits
On 22 January 2022 the Company has obtained a legally valid building permit for Nowe Warzymice IV project
in Szczecin comprising of 75 units with an aggregated floor space of 3,800 m
2
.
On 15 March 2022 the Company has obtained a legally valid building permit for Smardzewska project in Poznań
comprising of 96 units with an aggregated floor space of 5,500 m
2
.
Purchase of shares by the majority shareholder
After the 31 December 2021, the Company was informed several times by the majority shareholder about the
acquisition of additional shares of the Company. As a result of these transactions, on 17 January 2022, the
Majority Shareholder informed the Company about exceeding (together with its subsidiaries) 95% in the share
capital of the Company.
Due to the exceeding of the threshold referred to above, on 14 February 2022, the Company's shareholder, Amos
Luzon Development and Energy Group Ltd., announced a request for a compulsory buyout of the Company's
shares belonging to all its other shareholders. After the compulsory buyout (settlement was made on 17 February
2022), Luzon Group now holds, directly and indirectly, 100% of the share capital of the Company.
Withdrawal of the Company's shares from trading on the regulated market
On 8 March 2022, the General Meeting of the Company was held, at which the shareholders adopted a resolution
on withdrawing the Company's shares from trading on the regulated market. In connection with the adoption of
the above resolution, on 9 March 2022, the Company submitted an application to the Polish Financial
Supervision Authority for authorization to withdraw the Company's shares from trading on the regulated market.
Ronson Development SE
Consolidated Financial Statements for the year ended 31 December 2021
71
Notes to the Consolidated Financial Statements
36. Subsequent events
Effect of the War Conflict on the real estate industry
The security and political situation in Europe due to the War conflict between Russia and Ukraine directly affects
the real estate industry. At this point of time it is very hard to access how the effect of the War in Ukraine will
impact the European economy. A significant deterioration in the security situation may lead to certain
implications of the European economy, the Polish economy and thereafter Polish real estate sector.
The possible economic impact of the Crises in Ukraine on the European economy might have several possible
paths:
- Energy Supply disrupt/ shortage (oil and gas);
- Humanitarian Crises and refugees problem all over Europe;
- Energy price surge;
- Increase in inflation rates due to higher energy prices and product prices.
Each of the elements and the combination of them can impact dramatically on the global economy and in terms
of risks specific for the sector in which the Group operate, we can expect a decrease in the demand for housing,
disruption or change of monetary policy toward real estate projects by financing banks , a rise in labor costs,
shortage of construction employees, shortage in construction materials and further increase in costs of energy
and materials.
All the above factors may affect the ability of the company and the Group to conduct and complete its executed
and planned projects.
The Company is continuously observing the situation in order to asses it’s impact on the company operations. It
will help to mitigate as much as possible the impact of this crises on the Company Operations.
The Management Board
___________________ ___________________
Boaz Haim Yaron Shama
President of the Management Board Vicepresident of the Management Board, CFO
___________________ ___________________
Andrzej Gutowski Karolina Bronszewska
Vicepresident of the Management Board, Member of the Management Board,
Sales Director Marketing and Innovation Director
___________________
Anna Rzeczkowska
Person responsible for preparation of the
financial statements
Warsaw, 16 March 2022
