KPMG - IERE

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13. Revenue Rental income is derived from operating leases. The average unexpired term of these leases equates to 10.5 years with an average unexpired term to break option of 6 to 9 years. As indicated in note 2.3, the Group’s investment properties are spread across property sectors within Continental Europe and are managed on a single European basis; as these segments are substantially similar, no further segment reporting is required. 14. Fees and expenses INVISTA EUROPEAN REAL ESTATE TRUST SICAF Notes to the Consolidated Financial Statements as at 30 September 2006 14.1 Professional fees These include legal, tax advisory, notarial, accounting and audit fees. These also include fees paid to advisors in respect of aborted property transactions. The initial organisational expenses of the Group, largely legal and other professional fees, were expensed when incurred and are included in professional fees, amounting to A 758,791. 14.2 Investment Management Fees Invista Real Estate Investment Management Limited (‘‘Invista REIM’’), the Investment Manager, is paid an annual asset management fee (the ‘‘Investment Management Fee’’) by the underlying property companies. The Investment Management Fee is payable after the end of each fiscal quarter, at a rate of 0.25 per cent. of gross assets. 14.3 General and administration expenses General and administration expenses consist mainly of accounting, administration and monitoring fees. Initial organisational expenses of the Group included in general administration expenses amount to A 32,939. 15. Impairment of goodwill On 9 December 2005 the Company acquired 100 per cent. of Canal Business Park N.V. and Solingen Logistik Zentrum GmbH at a total cost of A 13,452,065. The fair value exercise gave rise to goodwill of A 4,603,616 as follows: 2006 B Cost 13,452,065 Net assets acquired Investment properties 31,020,000 Other net assets (17,567,935) Deferred tax liabilities (4,603,616) 8,848,449 Goodwill arising 4,603,616 The above goodwill arises primarily from the difference between how deferred tax is calculated for accounting purposes and the value ascribed to it in negotiations. The former is based on the difference between the values of the assets and liabilities concerned for accounts purposes and those applying for taxation. The latter is based on tax payments likely to be made. In the Group’s opinion, the carrying amount of this goodwill cannot be justified by reference to future cash flows and it has accordingly been impaired and written off to the income statement. 95
16. Finance expenses 2006 B Amortised finance costs 3,956,810 Debt interest expenses 5,088,853 Other interest expenses 271,311 Commitment fees and other financing fees 1,990,639 Net foreign exchange loss 21,970 17. Taxation INVISTA EUROPEAN REAL ESTATE TRUST SICAF Notes to the Consolidated Financial Statements as at 30 September 2006 11,329,583 2006 B Current income tax 451,211 Deferred tax charge 6,796,259 Deferred tax asset (812,687) Net wealth tax 132,636 Capital taxes 315,434 Total tax charge 6,882,853 Reconciliation of effective tax rate Profit before tax 6,875,074 Add back goodwill impairment 4,603,616 11,478,690 Tax charge at average corporate rate of 29.82 per cent. 3,423,141 Losses not available for utilisation in Luxembourg 2,649,119 Minimum taxable net margin under Luxembourg tax agreement 67,779 Other 567,306 Difference in tax rates (272,562) Capital taxes 315,434 Net wealth tax 132,636 Total tax charge 6,882,853 18. Earnings per share The basic and diluted earnings per share for the Group is based on the net loss of the period of A 7,779 and the weighted average number of ordinary shares in issue during the period of 527,457. The Company has no dilutive potential ordinary shares, therefore the diluted earnings per share is the same as the earnings per share for the Group. 19. Net asset value per ordinary share The net asset value per ordinary share is based on the net assets of A 7,766,652 and 692,151 ordinary shares in issue at the balance sheet date. 96 2006 B
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Invista European Real Estate Trust
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JPMorgan Cazenove and Citigroup, ea
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Summary This summary should be read
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The Group currently owns, and inten
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Risk Factors Investing in the Share
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If actual financial data differ fro
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assumptions or flawed assessments u
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loss of revenue, which could materi
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The Group’s performance is depend
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less than the costs of the leverage
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Future Share issues could dilute th
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The holding company structure for t
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Important Information Investment in
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investors in Germany are urged to c
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made by broker-dealers who are regi
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* the tax treatment of the Group an
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Directors and Advisers Directors To
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Part I Information on the Company I
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and expanding analysis of property
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Where properties have achieved thei
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payable. To the extent that the Net
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The Company will also publish semi-
Page 45 and 46: Part II Directors, Management & Adm
Page 47 and 48: Mark Long* - Director, Strategy, Re
Page 49 and 50: The Custodian may entrust the safek
Page 51 and 52: Part III The Offer The Offer A tota
Page 53 and 54: period of 180 days from Admission,
Page 55 and 56: Part IV Background to the Continent
Page 57 and 58: Continental European Listed Propert
Page 59 and 60: The 5 largest properties account fo
Page 61 and 62: 10 Largest Tenants Tenant Net Annua
Page 63 and 64: 4 Purpose of the valuation report W
Page 65 and 66: 7.3 Environmental matters We have r
Page 67 and 68: German Properties C104,700,000: Pro
Page 69 and 70: Property Sector Description, Age &
Page 73 and 74: Belgian Properties C18,500,00: Prop
Page 77 and 78: French Properties C22,100,000: Prop
Page 79 and 80: Czech Republic Properties C12,900,0
Page 81 and 82: Polish Properties A8,750,000: Prope
Page 83 and 84: INVISTA EUROPEAN REAL ESTATE TRUST
Page 93 and 94: ecognised in the financial statemen
Page 95: INVISTA EUROPEAN REAL ESTATE TRUST
Page 101 and 102: We planned and performed our work s
Page 103 and 104: (2) No account has been taken of th
Page 105 and 106: * a logistics property in Nanteuil,
Page 107 and 108: important to an understanding of th
Page 109 and 110: Availability of financing During th
Page 111 and 112: The Group’s diversification by ma
Page 113 and 114: higher immediately following Admiss
Page 115 and 116: At 30 September 2006 the Group had
Page 117 and 118: temporary difference is controlled
Page 119 and 120: currency swaps and foreign exchange
Page 121 and 122: (q) where voids currently exist or
Page 123 and 124: in the Group carries on a trade in
Page 125 and 126: taxable as a corporation) organised
Page 127 and 128: PFIC - Default Excess Distribution
Page 129 and 130: these proposed Treasury Regulations
Page 131 and 132: Part XII General Information 1. Inc
Page 133 and 134: 2.11 All of the Shares will be in r
Page 135 and 136: Name Current Directorships and Part
Page 137 and 138: Name Current Directorships and Part
Page 139 and 140: The general meeting of Shareholders
Page 141 and 142: (a) Shares of the Company to be red
Page 143 and 144: The Company will be bound towards t
Page 145 and 146: Every Shareholder may take part in
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which fall within the scope of the
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The Bank Facility also provides for
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performance by the Depositary of it
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The primary tasks of the Company’
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In relation to the investment restr
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doubt as to whether courts outside
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Part XIII Definitions The following
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‘‘Invista Group’’ Invista a
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‘‘uncertificated’’ or ‘
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1.6 1.5.2 pending investigation of
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transfer or other taxes due in conn
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contravention of any registration o
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Notes On How To Complete The Applic
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I I I I I I I I I I I I I I I I I I
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I I I I I I I I I I I I I I I I I I
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KPMG - IERE

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