Annual Financial Report

Treveria plc

("Treveria", the "Group" or the "Company")

Final results for the year ended 31 December 2014 and investment update

Treveria plc (AIM: TRV), the German retail focused real estate investment company, today announces its audited results for the year ended 31 December 2014. The Company also announces that its Annual Report and Accounts for the year ended 31 December 2014 are available on the Company's website www.treveria.com.

Further the Company announces that the Fiscal Court of Berlin-Brandenburg has rejected Treveria's application for a withdrawal of the basic assessment in the Real Estate Transfer Tax ("RETT") matter. The Company is considering its options, which may include an appeal to the Federal Fiscal Court.

For further information, please contact:

Chairman's statement

Portfolio and financing

Silos G and J

Since repayment of the Silo G loan facility in full on 12 July 2013, both Silos G and J have been debt free. The Company is focusing efforts on disposing of the assets in these Silos to maximize the amount of unrestricted cash. The asset management function and sales process is carried out by ATOS Asset Management.

Four properties were sold during the year, generating gross sales proceeds of €13,400,000. In addition, between 31 December 2014 and the date of this report, two further investment properties have been notarized for sale, which is expected to generate aggregate proceeds of €2,100,000 (of which €1,550,000 has been received already). As of 25 June 2015, the two Silos hold six unsold properties with a valuation of €4,800,000.

The results of Silos G and J are consolidated in the Group's accounts. 

Silos D and F/K

Treveria reached agreements with the respective lenders and loan servicers in 2013, whereby third party asset managers are responsible for the implementation of a business plan involving the orderly disposal of the property portfolios over time. The lenders have continued to provide loan extensions to the debt facilities. The Company remains the beneficial owner of the equity value in the Silos, and in the meantime it receives cash fees on any disposals. The cash sales fee is 1.8% of each asset sold in Silo D and 1.0% in Silos F/K.

The Company has explored a small number of unsolicited indications of interest from third parties with regard to the potential acquisition of some or all of the portfolios, but none have reached a successful outcome. Any such deal requires the agreement of the lenders as well as Treveria as beneficial owner of the equity.

Silos D and F/K do not fulfil all necessary accounting standards criteria for the consolidation in the Company's accounts, but instead the Company carries them as investments at the estimated fair value.

Situs Asset Management is the servicer of the Silo D loan, and ATOS Asset Management was recently appointed as asset manager for Silo D. Hypothekenbank is the lender to the Silo F and K property portfolio, with ATOS Asset Management and Corpus Sireo Asset Management acting as asset managers.

Financial results

We report a loss for the year of €8,300,000 (compared with a loss in the previous year of €60,397,000), which equates to a loss of 1.37 Eurocents per share, (2013: loss €10.02 Eurocents per share).

Total net assets fell from €48,000,000 in 2013 to €30,700,000 in 2014. This equals a movement from €0.079 per share to €0.051.

Net cash-flows from operating activities were negative €5,200,000 (2013: positive €7,500,000). Group cash stood at €5,900,000 at the year-end (2013: €13,300,000), of which €300,000 was held by the parent company.

Real estate transfer tax

As reported in previous years, Treveria Holdings Ltd through which the property subsidiaries are indirectly held, has been assessed by the German tax authorities for Real Estate Transfer Tax ("RETT"), and the assessments amount to approximately €45,000,000 (including late payment fees and interest). The Group challenged the assessment of the RETT on various legal grounds and initiated relief procedures with the relevant German tax authorities. The relief procedures are continuing.

In addition, in 2013 the Group applied to the fiscal court in Berlin-Brandenburg (the state which issued the original basic assessment) for a ruling on the matter, and the court heard the matter on 24/25 June 2015. The court rejected Treveria's application for the assessment to be withdrawn, although at the time of writing, the written judgement which explains the reasoning behind the judgement has not been issued. Upon receipt of the written judgement, the Company will consider its options, which may include an appeal to the Federal Fiscal Court.

The Board, together with the Board of Treveria Holdings, has also initiated legal proceedings against two of its former professional advisors for alleged negligent advice which, if successful, will lead to a recovery of some or all of the tax amount ultimately payable and of the costs incurred to date.

However, at this stage the outcome of such legal action and relief procedures remains uncertain.

Going concern

The Group continues to adopt a going concern basis for the preparation of these financial statements.

Silo D and Silo F&K have mortgage debt facilities secured at the local company level and without any performance or payment guarantees from the Group. As noted earlier, these silos are the subject of restructuring agreements, under which the lenders or their agents carry the primary responsibility to implement the respective business plans in order to meet debt commitments. In the event of a financing default, each lender has recourse only to the local company borrower and cannot seek recourse from the Company. Therefore the risk of these Silos not being able to fulfil their debt obligations has no bearing on the Company's ability to continue as a going concern.

After repayment in full of the loan on Silo G in 2013, the subsidiaries consolidated by the Group no longer have any external borrowings.

The Group's legal advisers have confirmed that, in the event that RETT is deemed payable, the likelihood of the authorities having any actual recourse to the assets of Treveria plc is remote. Consequently, the Board does not consider that the adverse ruling on the RETT matter by the fiscal court or a failure to obtain RETT relief would impact the Company's going concern status.

After making enquiries and examining major areas which could give rise to significant financial exposures, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue its operations. With respect to the Company's cash position, the Board has a reasonable expectation that sufficient liquidity will be available to meet current expenses from a combination of existing cash reserves, net sales proceeds arising from the disposal program, and cash flow from normal operations.

The Directors therefore believe the Group will be able to manage its business risks for the foreseeable future despite the continued challenging economic conditions, and accordingly they continue to adopt the going concern basis in preparing the consolidated financial statements for the year ended 31 December 2014.

Outlook

The Board will seek to return capital to shareholders as and when sufficient liquidity is available, which is largely dependent on the success in completing sales, the implementation of the restructuring agreements, and dealing with the RETT issue in an appropriate manner. As the Group's assets are being realised, the Board will also consider alternative options for the future management of the Company, which may include a de-listing of the shares from AIM.

Eitan Milgram

Chairman

29 June 2015

Directors' report

The Directors submit their report with the audited financial statements for the year ended 31 December 2014. A review of the Group's business and results for the year is contained in the Chairman's statement, which should be read in conjunction with this report.

Business of the Group

Treveria plc is the Group holding company. The principal activity of its operating subsidiaries is the business of investing in and managing German commercial real estate, with a primary focus on retail assets.

Investment policy

At the AGM in July 2013, shareholders voted to adopt an investment policy as follows:

"The investment objective of the Company is to carry out an orderly realisation of the portfolio of property assets over the medium term, to distribute the net proceeds to shareholders, and then undertake a voluntary winding up of the Company. No new investments will be made except where the Board considers it necessary to provide follow-on capital to enhance the value of an existing investment."

Results for the year and dividends

The results are set out in the Statements of Comprehensive Income.

The total comprehensive loss attributable to the equity holders of the parent company for the year was €8,300,000 (2013: loss of €60,397,000).

The Company paid a distribution of 1.50 Eurocents per share on 5 September 2014, amounting to €9,075,000 in total. The distribution was financed from the distributable reserve created by the cancellation in 2007 of the share premium account which had arisen on the placing of shares on AIM at the Company's launch and was funded from funds available at Treveria Plc level.

Directors

The Directors who held office during the year and to the date of this report were:

Details of Directors' earnings are given in note 24 to the accounts.

All of the Directors are non-executive. David Malpica has a controlling interest in Kewbridge Capital Limited ("Kewbridge") which provides advisory and management services to the Company. Details of fees payable to Kewbridge are given in note 24. 

Directors' interests

Eitan Milgram is a portfolio manager and Executive Vice President at Weiss Asset Management LP, the manager of certain investment funds which hold an interest in the shares in the Company as shown under "Substantial shareholders". 

David Malpica holds a beneficial interest in Richmond Invest BV which acquired the shareholding as shown below, under "Substantial shareholders" section.

Substantial shareholders

At the date of this report, the following shareholders had substantial interests in the issued share capital of the Company:

Treasury operations and financial instruments

The Group's policy in relation to financial risk management and use of financial instruments is set out in notes 19 and 20 to the financial statements.

Auditors and disclosure of information to auditors

So far as the Directors are aware, there is no relevant audit information of which the auditors are unaware and each Director has taken all reasonable steps to make himself aware of any relevant audit information and to establish that the auditors are aware of that information.

The Company's auditors, KPMG Audit LLC, being eligible, have expressed their willingness to continue in office, in accordance with Section 12 (2) of the Isle of Man Companies Act 1982.

On behalf of the Board

Graham Smith

Director29 June 2015

Statement of Directors' responsibilities in respect of the Directors report and the financial statements

The Directors are responsible for preparing the Directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year, which meet the requirements of Isle of Man company law. In addition, the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards, as adopted by the EU.

The financial statements are required by law to give a true and fair view of the state of affairs of the Group and the parent company and of the profit or loss of the Group and the parent company for that period.

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with International Financial Reporting Standards, as adopted by the EU; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent company will continue in business.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that its financial statements comply with the Companies Acts 1931 to 2004. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another.

Report of the Independent Auditors, KPMG Audit LLC,to the members of Treveria plc

We have audited the financials of Treveria plc for the year ended 31 December 2014 which comprise the Consolidated and the Company Statements of Comprehensive Income, the Consolidated and the Company Statements of Financial Position, the Consolidated and the Company Statements of Cash Flows and the Consolidated and the Company Statements of Changes in Equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS), as adopted by the EU.

This report is made solely to the Company's members, as a body, in accordance with Section 15 of the Companies Act 1982. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditors

As explained more fully in the Statement of Directors' responsibilities, the Directors are responsible for the preparation of financial statements that give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements.

In addition we read the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on the financial statements

In our opinion the financial statements:

· give a true and fair view of the state of the Group's and the Company's affairs as at 31 December 2014 and of the Group's and the Company's loss for the year then ended;

· have been properly prepared in accordance with IFRS, as adopted by the EU; and

· have been properly prepared in accordance with the provisions of Companies Acts 1931 to 2004.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Acts 1931 to 2004 require us to report to you if, in our opinion:

· proper books of account have not been kept by the Company and proper returns adequate for our audit have not been received from branches not visited by us;

· the Company's Statement of Comprehensive Income and Statement of Financial Position are not in agreement with the books of account and returns;

· certain disclosures of Directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit.

Report of the Independent Auditors, KPMG Audit LLC,to the members of Treveria plc (continued)

Emphasis of Matter - provision for RETT and contingent liability

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures in notes 17 and 25 concerning the Group's provision and contingent liability in respect of Real Estate Transfer Tax ("RETT"). As detailed in notes 17 and 25, Treveria Holdings Ltd. a wholly owned subsidiary of Treveria plc has received assessments from the German tax authorities for RETT as a result of the acquisition of shares in Treveria Properties S.à r.l. by Treveria Holdings S.à r.l. in 2009. The Group continues to challenge the assessment of the RETT on various legal grounds. In addition the Group had applied to the German fiscal court for a ruling on the matter. The court heard the ruling on 25 June 2015 and rejected the Company's application for lifting of the assessment. The Company is considering its options, which may include an appeal to the Federal Fiscal Court. Meanwhile, the relief procedures are continuing. The outcome of such legal action and relief proceduresis typically hard to predict. .

The maximum possible liability for RETT (including late payment fees and interest) is estimated to be €45,392,000. The Directors have assessed that it is not probable that an outflow of resources embodying economic benefits will be required to settle this liability but, due to the uncertainties surrounding the matter, this amount is shown as a contingent liability. The Company continues to make a provision of €1,000,000 in relation to the case.

Emphasis of matter - valuation of investments at fair value through profit or loss and investment property held for disposal

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in notes 12 and 13 to the financial statements concerning the valuation of investments at fair value through profit or loss of €8,300,000 and investment property held for disposal of €6,870,000. As detailed in those notes, these are stated at Directors' valuation. Due to the inherent uncertainty associated with the determination of the valuations, the amount realised on disposal may differ materially from the carrying amount in the financial statements. The impact of such uncertainty cannot be quantified.

KPMG Audit LLC

Chartered Accountants

Heritage Court

41 Athol Street

Douglas

Isle of Man IM99 1HN

29 June 2015

Statements of Comprehensive Income

for the year ended 31 December 2014

Dividends of €9,075,000 (2013: €27,225,000) were paid during the year (see note 22).

The notes below form an integral part of the financial statements

Statements of Financial Position

as at 31 December 2014

The financial statements were approved by the Board of Directors on 29 June 2015 and were signed on its behalf by:

Graham Smith David Malpica

Director Director

The notes below form an integral part of the financial statements

Statements of Changes in Equity

for the year ended 31 December 2014

The notes below form an integral part of the financial statements

Statements of Changes in Equity

for the year ended 31 December 2014

The notes below form an integral part of the financial statements

Statements of Cash Flows

for the year ended 31 December 2014

The notes below form an integral part of the financial statements

Notes to the Consolidated Financial Statements

for the year ended 31 December 2014

Treveria plc (the Company) is a company incorporated and domiciled in the Isle of Man whose shares are publicly traded on the AIM.

The consolidated financial statements of Treveria plc comprise the Company and its subsidiaries (together referred to as the Group). The parent company financial statements present information about the Company as a separate entity. The financial statements for the Group and the parent company have been prepared for the year ended 31 December 2014.

The principal activities of the Group are described in note 4.

The Company acts as the investment holding company of the Group.

(a) Basis of preparation

These financial statements have been prepared in accordance with the Isle of Man Companies Acts 1931 to 2004, International Financial Reporting Standards ("IFRS"), as adopted by the EU and IFRIC interpretations. The consolidated financial statements have been prepared on a going concern basis and on a historical cost basis as amended by the revaluation of investment property held for disposal and financial assets and financial liabilities at fair value through profit or loss. Comparative information for the Group and Company financial statements is presented for the year ended 31 December 2013. The financial statements are presented in Euro and all values are rounded to the nearest thousand (€000) except when otherwise indicated.

The preparation of financial statements in conformity with IFRS, as adopted by the EU, requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

Specifically, the Directors have prepared the consolidated financial statements on a going concern basis. This is a key judgement of the Board, and is discussed further below:

Going concern

The Group continues to adopt a going concern basis for the preparation of these financial statements. The Directors believe the Group will be able to manage its business risks for the foreseeable future despite the continued challenging economic conditions. After making enquiries and examining major areas which could give rise to significant financial exposures, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue their operations.

The Group has primarily mortgage debt facilities secured at the local company level and without any performance or payment guarantees from the Group. In the event of a financing default, each lender has recourse only to the local company borrower and cannot seek recourse from the Company. In a distress situation, to limit the financial damage to the Group, underperforming assets could be released back to the appropriate lender, or sold for a nominal value. The Board has considered all the relevant facts and circumstances including the various restructuring agreements to assess the accounting treatment of the local companies and concluded to de-consolidate Silo D and Silo F&K with effect from 2013 as Treveria no longer met all the conditions for doing so as set out by IFRS10, Consolidated Financial Statements. The remaining subsidiaries consolidated by the Group no longer have external interest-bearing debt loans and borrowings.

With respect to the Company's cash position, the Board has a reasonable expectation that sufficient liquidity will be available to meet current expenses from a combination of existing cash reserves, net sales proceeds arising from the disposal program, and cash flow from normal operations.

Accordingly the Directors continue to adopt the going concern basis in preparing the consolidated financial statements for the year ended 31 December 2014.

(b) Basis of consolidation

The consolidated financial statements comprise the financial statements of Treveria plc and its subsidiaries as at 31 December 2014. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets and liabilities are eliminated in full.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Non-controlling interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the Statement of Comprehensive Income and within equity in the Consolidated Statement of Financial Position, separately from parent shareholders' equity.

(c) Changes in accounting policy and disclosure

The accounting policies applied to the consolidated financial statements are consistent with those of the previous year.

(d) Acquisitions

Acquisitions of corporate interests in property are accounted for on consolidation as if the Group had acquired the underlying property asset directly. Accordingly no goodwill arises on such acquisitions as any difference between the fair values of the assets acquired and the acquisition consideration are allocated to the investment property asset, which is subject to subsequent revaluation under IAS 40, Investment Properties to its market value.

(e) Foreign currency translation

The consolidated financial statements are presented in Euro, which is the Company's functional and presentation currency and is the functional currency for the majority of subsidiaries within the Group.

Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the reporting date. All differences are taken to the Statement of Comprehensive Income.

The assets and liabilities of foreign operations are translated into Euro at the rate of exchange ruling at the reporting date and their Statements of Comprehensive Income are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of a foreign operation, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the Statement of Comprehensive Income.

(f) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. In particular:

Rental income

Rental income from operating leases is recognised on a straight-line basis over the term of the lease.

Fixed or determinable rental increases are recognised on a straight-line basis over the term of the lease or over the period until the next market review date.

Contingent rents, such as turnover rent and market rent adjustments, are recognised as income in the financial period in which they are earned.

Lease incentives granted are recognised in the Statement of Comprehensive Income as an integral part of rental income.

Interest income

Interest income is recognised as interest accrues, using the effective interest method which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

Service charges

In relation to amounts receivable in respect of service charges, such income is not treated as revenue, rather it is set off against the costs to which such income relates.

(g) Disposals

Investment property disposals are recognised in the financial statements on the date of completion. Profits or losses arising on disposal of investment properties are calculated by reference to the carrying value of the asset at the beginning of the year, adjusted for subsequent capital expenditure and the proceeds received from the disposal.

(h) Leases

Group as lessor

Leases where the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases.

Group as lessee

The Group's investment properties held under a lease are accounted for as finance leases and are recognised as an asset and an obligation to pay future minimum lease payments. The investment property asset is included in the Statement of Financial Position at fair value, gross of the recognised finance lease liability. Lease payments, where material, are allocated between the liability and finance charges so as to achieve a constant financing rate.

(i) Income tax

Current income tax

Current income tax assets and liabilities are measured at the reporting date at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

A 0% rate of corporate income tax applies to the Company and certain of its subsidiaries which are resident in the Isle of Man.

Certain subsidiaries may be subject to foreign taxes in respect of sources of income arising in those foreign countries.

Deferred income tax

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions:

· where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;

· in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and

· deferred tax assets are disclosed net of deferred tax liabilities and are only recognised to the extent that:

· it is probable that taxable profits will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised; and

· there are deferred tax liabilities within a property-owning subsidiary in which the deferred tax asset may be offset against the deferred tax liability in the same company.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply to the year when the related asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the date of the Statement of Financial Position.

(j) Investment properties

Investment properties are properties owned or leased under finance leases by the Group which are held either for long-term rental income or for capital appreciation or both.

Investment properties are initially recognised at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met, and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date. Surpluses or deficits 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 property held under a finance lease is stated gross of the recognised finance lease liability.

(k) Financial assets and financial liabilities

i. Classification

Equity and preference share investments have been designated at fair value through profit and loss.

Financial assets that are designated as loans and receivables comprise loans and accrued interest and other receivables.

ii. Recognition

The Group recognises financial assets and financial liabilities on the date it becomes a party to the contractual provisions of the instrument.

iii. Measurement

Equity and preference share investments are stated at fair value. Loans and receivables are stated at amortised cost less any impairment losses.

The Directors determine asset values using guidelines and other valuation methods with reference to the valuation principles of IFRS 13, Fair Value Measurement. As all investments are unquoted, the valuation principles adopted are classified as Level 3 in the IFRS 7 fair value hierarchy.

'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 in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk.

When available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as 'active' if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The Group measures instruments quoted in an active market at mid-price.

If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction, including the selling price realised for investment properties sold after the yearend, and expected selling prices as per latest sales negotiations.

The Group recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the change has occurred.

The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity amount, minus any reduction for impairment. Financial assets that are not carried at fair value through profit and loss are subject to an impairment test.

iv. Impairment

Financial assets that are stated at cost or amortised cost are reviewed at each reporting date to determine whether there is objective evidence of impairment. If any such indication exists, an impairment loss is recognised in the profit or loss as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate.

If in a subsequent period the amount of an impairment loss recognised on a financial asset carried at amortised cost decreases, and the decrease can be linked objectively to an event occurring after the write-down, the write-down is reversed through the profit or loss.

v. Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition in accordance with IAS 39. A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expired.

(l) Investments in subsidiaries

Investments in subsidiaries are stated at cost less any provision for impairment in value.

Investments in subsidiaries are reviewed for impairment whenever there is any indication that these assets may be impaired. If any such indication exists, the recoverable amount (i.e. the higher of the fair value less cost to sell and value in use) of the asset is estimated to determine the amount of impairment loss.

If the recoverable amount is estimated to be less than its carrying amount, the carrying amount is reduced to its recoverable amount. The impairment loss is recognised in the Statement of Comprehensive Income.

(m) Investment property held for disposal

Investment property is transferred to non-current assets held for disposal when it is expected that the carrying amount will be recovered principally through sale rather than from continuing use. For this to be the case, the property must be available for immediate disposal in its present condition subject only to terms that are usual and customary for disposals of such property and its disposal must be highly probable.

For a sale to be highly probable:

· the Board of Directors must be committed to a plan to sell the property and an active programme to locate a buyer and complete the plan must have been initiated;

· the property must be actively marketed for sale at a price that is reasonable in relation to its current fair value; and

· the disposal should be expected to qualify for recognition as a completed sale within one year from the date of classification.

On re-classification, investment property that is measured at fair value continues to be so measured. Therefore properties held for disposal are stated at fair value.

(n) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less an allowance for impairment. An allowance for impairment is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

(o) Amounts due from subsidiaries

Amounts due to the Company from subsidiaries are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for impairment. An allowance for impairment is made when there is objective evidence that the Company will not be able to recover the amounts in full.

(p) Cash and short-term deposits

Cash and short-term deposits comprise cash at bank and on hand, demand deposits and other short-term highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

(q) Bank borrowings

Interest-bearing bank loans are initially recorded at fair value, net of direct issue costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

(r) Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

(s) Standards issued but not yet effective

IASB (International Accounting Standards Board) and IFRIC (International Financial Reporting Interpretations Committee) have issued the following standards and interpretations with an effective date after the date of these financial statements:

• IFRS 9 Financial Instruments: Classification and Measurement (effective 1 January 2018)

• IFRS 15 revenue from contracts with customers (effective 1 January 2017).

The Directors do not expect the adoption of the standards and interpretations to have a material impact on the Group's financial statements in the period of initial application.

Judgements

In the process of applying the Group's accounting policies, which are described in note 2, the Directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements:

Operating lease commitments - Group as lessor

The Group has entered into commercial property leases on its investment property portfolio. The Group has determined that it retains all the significant risks and rewards of ownership of these properties and so accounts for them as operating leases.

Provisions

A provision is only recognised when:

· an entity has a present obligation (legal or constructive) as a result of a past event;

· it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

· a reliable estimate can be made of the amount of the obligation.

Contingent liability

A contingent liability is recorded by way of note to the consolidated financial statements when there is:

· a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or

· a present obligation that arises from past events but is not recognised because:

· it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

· the amount of the obligation cannot be measured with sufficient reliability.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Valuation of investment properties & investment property held for disposal

The Group's investment properties, consisting of properties held in Silos G and J, have been reclassified as investment property held for disposal since 2013. The fair value of investment property held for disposal of €6,870,000 (2013: €36,831,000) as at 31 December 2014 was determined by the Directors with support from the Asset Managers. Each of the valuations is based upon assumptions about the expected disposal prices from the ongoing negotiations or intended sales programme. Reference is made to market evidence of transaction prices for similar properties.

Valuation of investment at fair value through profit and loss

As of 31 December 2014, the Group held €8,300,000 (2013: €15,500,000) investment at fair value through profit and loss as detailed in note 12. The Directors consider the most appropriate indication of the fair value of the investments held by Silo D to be the disposal fee due on the expected selling price as per the relevant business plan and of the investments held by Silos F&K to be the most recent sales negotiations and interests shown from third parties.

Provision for RETT

As disclosed in more detail in note 17, the Company retains the provision of €1,000,000 set up in its 2010 Annual Report and Accounts, in relation to RETT.

The Directors are of the opinion that the Group is engaged in a single segment of business, being property investment business, in one geographical area, namely Germany. This is consistent with the internal reporting provided to the Board who act chief operating decision-makers and are responsible for allocating resources and assessing performance. Accordingly the Directors consider it no longer appropriate or necessary to report on the results of each Silo.

The following items have been charged or (credited) in arriving at operating profit:

Details of Directors' emoluments are set out in note 24 related parties.

Staff costs and numbers

No persons were employed by the Group at any time during the year (2013: 32).

In February 2013, Treveria reached a consensual agreement with the servicer of Silo D loan, Situs Asset Management Limited, regarding the implementation of a business plan which involves the orderly disposal of the Silo D property portfolio over time. Treveria continues to be the 100% beneficiary of any value remaining in the Silo after the repayment of the debt plus all the costs and fees incurred and is providing full support to the realisation process. Treveria receives a sales fee for each asset.

On 6 September 2013, Treveria signed a similar restructuring agreement with Hypothekenbank Frankfurt with regard to the Silo F& K loan facility.

The Board considered all the relevant facts and circumstances and concluded that the Company should de-consolidate Silo D and Silo F&K as Treveria no longer meet all the conditions to be able to consolidate as set out by IFRS10 Consolidated Financial Statements. Accordingly, the remaining investments in Silo D and Silo F&K are carried as a single line on the Group's statement of financial position under "Investment at fair value through profit and loss" -see note 12.

Consequently, in 2013 the Group recorded a loss on derecognition of subsidiaries for the year of €60,136,000, but with no further loss in 2014.

The calculation of the basic, diluted and adjusted loss per share is based on the following data:

As of 31 December 2014, the Group held €8,300,000 (€2013: €15,500,000) investments at fair value through profit and loss as detailed in note 3.

Fair values of financial instruments

The fair values of financial assets and financial liabilities that are traded in an active market are based on quoted market prices. For all other financial instruments, the Group determines fair values using other valuation techniques.

For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

• Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical instruments;

• Level 2: Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using; quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data;

• Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation.

Various valuation techniques may be applied in determining the fair value of investments held as level 3 in the fair value hierarchy. The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for the selection of the appropriate valuation model to be used. The Directors consider the most appropriate indication of the fair value of the investments held by Silo D to be the disposal fee due on the expected selling price as per the relevant business plan and the fair value of the investments held by Silos F&K to be the most recent sales negotiations and interests shown from third parties.  

Fair value hierarchy - Financial instruments measured at fair value

The table below analyses the underlying investments held by the Group measured at fair value at the reporting date by the level in the fair value hierarchy into which the fair value measurement is categorised. There are no other financial assets or liabilities carried at fair value.

The following table shows a reconciliation of the opening balances to the closing balances for fair value measurements in Level 3 of the fair value hierarchy.

IFRS 13, Fair Value Measurement requires disclosure, by class of financial instrument, if the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. The information used in determination of the fair value of Level 3 investments is chosen with reference to the specific underlying circumstances and position of the investee company. On that basis, the Board believes that the impact of changing one or more of the inputs to reasonably possible alternative assumptions would not change the fair value significantly.

Financial instruments not measured at fair value

The carrying value of short-term financial assets and financial liabilities (cash, debtors and creditors) approximate their fair value.

The movement on the valuation of the investment property held for disposal at market value is as follows:

A reconciliation of the adjustments made to the carrying values shown in the Statement of Financial Position is as follows:

The Group's investment properties, consisting of properties held in Silos G and J, have been reclassified as investment property held for disposal since 2013. The fair value of investment property held for disposal of €6,870,000 (2013: €36,831,000) as at 31 December 2014 was determined by the Directors with support from the Asset Managers. Each of the valuations is based upon assumptions about the expected disposal prices from the ongoing negotiations or intended sales programme. Reference is made to market evidence of transaction prices for similar properties. All investment property is classified as Level 3 in the fair value hierarchy.

Since 2013, the Group's investment properties, consisting solely of properties held in Silos G and J, have been reclassified as investment property held for disposal.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and two months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. All the cash and short-term deposits are available for Group use and are not subject to any restrictions.

Treveria Holdings Limited, ("Holdings"), a wholly owned subsidiary of Treveria plc, received assessments from the German tax authorities for Real estate Transfer Tax ("RETT") as a result of the acquisition of shares in Treveria Properties Sàrl by Treveria Holdings Sàrl in 2009. The maximum possible liability for RETT (including late payment fees and interest) is estimated to be €45,392,000.

Holdings has sought to reduce or eliminate its liability for RETT through two separate channels. Firstly, it initiated relief proceedings with German tax authorities, and secondly it filed for a ruling by the relevant state fiscal court on the applicability of the RETT rules in the particular circumstances. The court heard the matter on 24/25 June 2015 and rejected Treveria's application for a lifting of the assessment. A "stay of execution" of the RETT assessments had been granted in November 2012 by the tax authorities at the request of the fiscal court, which meant that the RETT was not regarded as being due, and could not be enforced, nor could interest and penalties continue to accumulate. However, the stay of execution will shortly be lifted as a result of the court's rejection.

The Company is considering its options, which may include an appeal to the Federal Fiscal Court. Meanwhile, the relief proceedings are still continuing. Its legal advisers have confirmed that, in the event that RETT is deemed payable, the likelihood of the authorities having any actual recourse to the assets of Treveria plc is remote.

Separately, Treveria plc and Holdings have initiated legal proceedings against two of their former professional advisers, claiming damages for the loss caused by their alleged negligence - see note 25.

The Directors consider that it is not probable that a net outflow of resources will be required to settle this liability but, due to the uncertainties surrounding the matter, this amount is shown as a contingent liability - see note 25. In addition, the Company retains the provision of €1,000,000, set up in its 2010 Annual Report and Accounts, in relation to this case.

The Group leases certain of its investment properties. The leases were previously classified as finance leases. Since the properties are now held for sale, the Group has reclassified the leases as operating leases. The present value of minimum lease payments as at 31 December 2014 is €6,965,000 (2013: €15,521,000).

The Group's principal financial liabilities comprise bank loans, finance leases and trade payables. The main purpose of these financial instruments is to raise finance for the Group's operations. The Group has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations. It now also has investments at fair value, following the deconsolidation of Silos D and F&K.

The main risks arising from the Group's financial instruments are credit risk, liquidity risk and interest rate risk. The risk management policies employed by the Group to manage these risks are discussed below:

Credit risk

Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. In the event of a default by an occupational tenant, the Group will suffer a rental shortfall and may incur additional costs, including legal expenses in maintaining, insuring and re-letting the property until it is re-let. The asset manager monitors the tenants in order to anticipate, and minimise the impact of, defaults by occupational tenants, as well as ensuring that the Group has a diversified tenant base.

The maximum credit risk exposure relating to financial assets is represented by the carrying values as at the reporting date. There are no significant concentrations of credit risk within the Group.

The realisability of the amounts due from subsidiaries in the Company is based on the performance of the underlying subsidiaries.

Liquidity risk

Liquidity risk is the risk an entity will encounter in meeting its obligations associated with financial liabilities. This may arise when the realisation of assets and the maturity of liabilities do not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Group has procedures with the object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities. Cash and cash equivalents are placed with financial institutions on a short-term basis reflecting the Group's desire to maintain a high level of liquidity in order to enable timely completion of investment transactions.

The Group's financial liabilities at 31 December 2014 based on contractual undiscounted payments were €1,519,000 (2013: €2,791,000) and these are all payable within one year.

Currency risk

There is no significant foreign currency risk as the majority of the assets and liabilities of the Group are maintained in Euro.

Interest rate risk

Following deconsolidation of Silo D and Silo F&K as detailed in note 7, and the repayment in full of the Silo G loan facility (the JPMorgan loan), the Group no longer has interest bearing loans and therefore is not subject to significant interest risk.

Capital management

The Group monitors its capital structure through a combination of a rigorous investment appraisal and disposal process, management of finance costs, monitoring risks, controlling solvency and reviewing key financial ratios. The key financial measures include cash flow projections and ensuring contracted commitments are adequately funded. Following de-consolidation of Silo D and Silo F&K as detailed in note 7, the Group no longer has interest bearing loans and the current capital structure of the Group consists of 100% equity. Equity comprises issued capital, reserves and retained earnings as disclosed in the Statement of changes in equity and notes 20 and 21.

Holders of the ordinary shares are entitled to receive dividends and other distributions and to attend and vote at any general meeting.

Capital redemption reserve

The capital redemption reserve arose from the nominal value of shares purchased by the Company for cancellation and is €1,109,000 (2013: €1,109,000).

Retained earnings and other distributable reserve

The other distributable reserve was created by the cancellation in 2007 of the share premium account which had arisen on the placing of shares on AIM at the Company's launch, and is available for the payment of dividends and for the buyback of shares. The deficit on retained earnings has been deducted from this reserve. The balance at 31 December 2014 was €23,498,000 (2013: €40,873,000).

The Company paid a distribution of 1.5 Eurocents per share on 5 September 2014, amounting to €9,075,000 in total (2013: €27,225,000). The distributions were financed from the distributable reserve as described in note 21.

The table below lists all subsidiary companies. In every instance, the ownership interest is by a holding of ordinary shares.

The companies held by Treveria D, F and K are excluded from the table and are not consolidated in the accounts as detailed in note 7.

Terms and conditions of transactions with related parties

All of the related party transactions disclosed were carried out on an arm's length basis.

The following transactions took place between the Group and related parties during the financial year:

David Malpica has a controlling interest in Kewbridge Capital Limited ("Kewbridge"). Kewbridge was appointed to provide advisory and interim management services to the Company in May 2012, and receives a monthly retainer of €27,500. Kewbridge is entitled to receive a performance fee, designed to align Kewbridge's interests with those of shareholders, based on the aggregate amount of cash paid or payable to shareholders, as below. The monthly retainer is fully creditable against the performance fee.

During the year, Kewbridge received retainer fees of €330,000, of which €nil was outstanding at the year-end, and no performance fees. No provision for performance fees has been made in these accounts.

Graham Smith is a Director of the Company and the Administrator, IOMA Fund and Investment Management Limited, ("IOMAFIM"). During the year, IOMAFIM received fees of £125,000 (2013: £85,000). The amount outstanding as at year end is £21,250 (2013: £21,250).

David Malpica received director fees of €35,000 (2013: €35,000). All other directors are not paid any emoluments.

As disclosed in more detail in note 17, Treveria Holdings Limited is subject to a contingent liability of up to €45,392,000 (2013: €45,392,000) for German RETT.

The Board, together with the Board of Treveria Holdings, has also initiated legal proceedings against two of its former professional advisors for alleged negligent advice. This process could potentially lead either to a court award or settlement.

Two of the properties held for sale were notarised for sale after the year-end. Of the total expected cash proceeds of €2,100,000 out of these sales, an amount of €1,550,000 has already been received in Silo G.

On 24/25 June 2015, the Berlin-Brandenburg fiscal court heard and subsequently rejected Treveria's application for the basic RETT assessment to be withdrawn, as described in note 17.