PHU M&L Property

M&L Property & Assets Plc

Interim Report

For the six months ended 30^th June 2015 (Unaudited)

Key Highlights for the Period

Chairman's Statement

Following the approval at the 2015 Annual General Meeting, the Company has now changed its name from Pactolus Hungarian Property plc to M&L Property & Assets plc.

During the period to 30^th June 2015, the Group has managed to reduce its administrative expenses by 2 per cent to €94,527 compared to €96,119 reported in last year’s interim report.

Hungary’s residential property market has marginally recovered since 2014 however the outlook remains unclear to us.

The Group has seen an increase in rental income of 0.4 per cent relative to the same six monthly period in 2014, benefitting from an improved rent book in the second quarter of 2015.

As mentioned in previous reports, reduced revenue income as the Group sells further properties, coupled with relatively fixed direct costs makes it difficult for the group to make a positive contribution.

We have diversified from our main Hungarian property agent and are working with a further two agents, thus aiming to maximise the returns from our portfolio.

Working alongside more agents, we successfully completed the sale of seven properties in the 6 months to 30^th June 2015.

Reported net assets as at 30^th June 2015 were €5.1m, which equates to 35 pence per share.  This figure has been depreciated predominantly by the strengthening of Sterling.

Our strategy for the remainder of the year is to continue to work on reducing the Group’s costs and to sell further properties from the portfolio, using the sales proceeds to reduce debt.

B. Miller

Non–Executive Chairman

16^th September 2015.

Condensed Consolidated Income Statement

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Cash Flow Statement

Notes to the Interim Report

For the six months ended 30^th June 2015

1. Basis of preparation

These interim condensed consolidated financial statements for the six months to 30^th June 2015 have not been audited or reviewed and do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.  They have been prepared in accordance with the Group’s accounting policies as set out in the Group’s latest annual financial statements for the year ended 31^st December 2014 and are in compliance with IAS 34 “Interim Financial Reporting”.  These accounting policies are drawn up in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the Isle of Man Companies Acts 1931 to 2004.

The comparative figures for the financial year ended 31^st December 2014 are not the statutory accounts for that financial year but are a condensed version of those accounts prepared under IFRS which have been reported on by the Group’s auditors.

This interim report was approved for issue by the Board of Directors on 16^th September 2015.

2.  Going concern

The directors are satisfied that the Group has adequate resources in place to manage its risks after having reviewed its financial position and cash flow forecast.  The impact of any potential tenancy failures and the continued volatility in the economy has been taken into account.  The directors are satisfied that the Group will continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis in preparing this interim report.

3.  Operating segments

The Group operates in a single reporting segment under the classification of properties held for investment.  The entire Group’s revenue and property assets are derived from and located in a single geographical location, Hungary.

The profit to 30^th June 2015 of €13,654 (2014: profit €2,931) is materially all derived from the operations of managing the Group’s investment properties.  It is principally involved in acquiring, developing, selling and letting investment property under short to medium term contracts.

4.   Material agreements

Midas Investment Management Ltd (“MIM”) was appointed the Group's Asset Manager on 17 March 2006. The Asset Manager’s charges are summarised as follows:

• A flat annual fee of €55,000 per annum plus VAT;
• A quarterly fee on all property rented out of 12 per cent of the net rental income plus VAT; and
• A commission on sales of up to 4 per cent plus VAT of sales proceeds.  For the avoidance of doubt, MIM will only charge a fee on sales if it is involved in procuring the buyer and only if the commission charged by others when aggregated with MIM's commission does not exceed 5 per cent plus VAT.

5.   Other Loans

The Group's loan facility with M&M Investment Company plc (its parent company) has reduced from €2,284,901 to €1,274,360. The loan will be fully repaid once further properties are sold in line with the Group’s strategy.

6.    Share capital

The share buy back facility was renewed at the Company’s annual general meeting on 25^th June 2015 giving the directors a new authority to acquire up to a further 2,950,774 shares (29 per cent) of the Company’s then issued share capital.  There have been no further acquisitions since the AGM date.

7.     Events after the balance sheet date

There has been no significant events since the reporting period date.

       Interim report

This Interim Report and Accounts will be available from the Company’s registered address at Jubilee Buildings, Victoria Street, Douglas, Isle of Man, IM1 2SH and on the Company’s website www.mandlpaplc.com.

For further information, please contact:

Asset Manager:

Midas Investment Management Limited

Tel: +44 (0) 161 228 1709

Nominated Adviser:

Liam Murray/Jo Turner

Cairn Financial Advisers LLP

Tel: +44 (0) 20 7148 7900