KPMG - IERE

7. Prepayments
Prepayments represent fees that have been charged to the Group for future committed acquisitions
(see also note 23). These fees will eventually be added to the capitalized acquisition cost of the
properties once acquired.
8. Cash and cash equivalents
2006
B
Bank balances 4,257,200
Cash and cash equivalents in the statement of cash flows 4,257,200
Certain bank accounts have been pledged in favour of Bank of Scotland under the terms of account
pledge agreements. These are related to loan agreements concluded by subsidiaries of the Company
and Bank of Scotland for the purposes of financing acquisitions of investment property.
9. Capital and reserves
Share capital
Ordinary shares
Number of Number of
Total
Number of
A shares B shares shares
Issued at incorporation 3,299 1 3,300
Issued for cash during the period 458,135 230,716 688,851
Issued at September 30, fully paid 461,434 230,717 692,151
All shares have a par value of A 10.
INVISTA EUROPEAN REAL ESTATE TRUST SICAF
Notes to the Consolidated Financial Statements
as at 30 September 2006
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company. The difference in rights attached to the
class A and B shares relate to the power to propose A and B directors.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of
the cash flow hedging instruments, where the hedging transaction has not yet occurred, net of related
deferred taxation of A 359,131.
10. Interest bearing loans and borrowings
On 5 July 2005 the Company contracted a debt facility with Bank of Scotland for A 450 million.
Amounts drawn down under the Agreement are secured against the Group’s investment properties. At
the balance sheet date an amount of A 146,941,800 had been drawn down. The facility was converted
to a 364 day facility on 28 June 2006, extending the term for a further twelve months with a renewal
fee of 0.3 per cent. of the aggregate amount of undrawn commitments.
In addition, the Company borrowed from its shareholders amounts under Profit Participating Loan
arrangements. Interest on these loans is calculated as a function of the profit of the Company’s
underlying investments. For the current financial period no accrual for interest expense is necessary.
These loans have different maturity dates from 2010 to 2016.
It is in the intention of the Directors to extend the current maturity of the bank borrowings by at
least twelve months and also to convert the profit participating loans into equity before Admission;
hence the Directors consider it is appropriate to prepare these financial statements on a going concern
basis.
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