Filing of 2018 Annual Report & Accounts
Amsterdam, the Netherlands - April 30, 2019
Trader Media East Limited (the "Company" or "TME" or "Group") announces that it has sent its Annual Report 2018, and Audited Consolidated Financial Statements for the year ending December 31, 2018.
A copy of the Company's Annual Report 2018 containing audited financial statements is available on the Company's website at www.tmeast.com.
CHAIRMAN'S STATEMENT
2019 Overview & 2018 Financial Results
During the first two quarters of 2018, we have offered our clients through IRR.ru an optimized usage experience in all segments. In the meantime, our restructuring process in CIS and the Russian Federation kept going and we have closed down our printing business in Kazakhstan.
In 2018, we received some approach from strategic partners and potential investors for our digital brand IRR.ru running under our main subsidiary PMH which had ceased its digital operations in Russian Federation in 2017, followed by the termination of PMH's branch in Tambov. Strategic options are still being evaluated by the top management of TME-PMH Group.
We still continue negotiations for the remaining digital assets within our Group and in 2019 we are committed to minimizing and covering our costs.
Dividend
TME Board of Directors is not recommending a distribution.
Fatih Berber
Chairman
30 April 2019
MESSAGE FROM THE CEO OF PMH
In 2018, we continued to focus on reducing our costs and we decreased our headcount from 163 to 106. It is our goal to find out strategic options for our remaining assets in order to create cash inflow and minimize losses.
On behalf of Top Management, I would like to thank the Shareholders and Board of Directors of the Group for their belief and support in our initiatives throughout the year 2018.
Ömür Sürenkök
Chief Executive Officer of PMH, CEO
30 April 2019
REPORT OF THE BOARD OF DIRECTORS
The Directors of the Group present their report and the audited consolidated financial statements for the year ended 31 December 2018.
Incorporation
The Company was incorporated in Jersey, Channel Islands in November 2005 and it was re-registered on 6 February 2006.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the financial statements in accordance with any applicable law and regulations.
Under Article 105(11) of the Companies (Jersey) Law 1991 the directors of a holding company need not prepare separate financial statements (i.e. Company only financial statements) if consolidated accounts for the Company are prepared, unless required to do so by the members of the Company by ordinary resolution. The members of the Company had not passed a resolution requiring separate financial statements and, in the Directors' opinion, the Company meets the definition of a holding company. As permitted by law, the Directors have elected not to prepare separate financial statements.
The Companies (Jersey) Law 1991 requires the Directors to prepare the financial statements for each financial year. Under that law, the Directors have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). The consolidated financial statements are required by law to give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period.
International Accounting Standard 1 requires that the consolidated financial statements present fairly for each financial year the Group's financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's "Framework for the preparation and presentation of financial statements". In virtually, all circumstances, a fair presentation will be achieved by compliance with all applicable IFRSs. However, the Directors are also required to:
· properly select and apply accounting policies;
· present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
· provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
· make an assessment of the Group's ability to continue as a going concern.
The Directors confirm they have complied with all the above requirements in preparing the consolidated financial statements.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
So far as the Directors are aware, there is no relevant audit information of which the Company's auditors are unaware, and each Director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
The maintenance and integrity of the website is the responsibility of the Directors, the work carried out by the auditors does not involve consideration of these matters and accordingly, the auditors accept no responsibility for any changes that may have occurred to the information contained in the consolidated financial statements since they were initially presented on the website.
The Directors are also required by the Disclosure and Transparency Rules (DTR) of the United Kingdom Listing Authority (UKLA) to include a Management Report containing a fair review of the business and a description of the principal risks and uncertainties facing the Group.
Directors' Statement pursuant to the Disclosure and Transparency Rules (DTR)
Each of the Directors, whose names and functions are listed on page 7 confirm that, to the best of each person's knowledge and belief:
· the Consolidated Financial Statements, prepared in accordance with IFRS as adopted by EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and the undertakings included in the consolidation taken as a whole;
· the Directors' Report contained in the Annual Report includes a review of the development and performance of the business and the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
· the Annual Report and the Consolidated Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for the shareholders to assess the Group's performance, business model and strategy.
Principal Activities
The Group is one of the leading marketplace for communities of generalist, real estate, auto, goods and services, with strong local brands, serving local markets in the Russian Federation and Belarus.
Results and Dividends
The profit and loss account of the Group for the year ended 31 December 2018 is set out in the audited consolidated financial statements. No dividends were paid during the year 2018.
Directors
The composition of the Board of Directors as at 31 December 2018 is as follows:1
Mr. Fatih Berber as Chairman, Senior Director;
Mr. Turhan Cemal Beriker as Vice-Chairman & Senior Director;
Mrs. Özlem Mertoğlu-Munanoğlu, Senior Director was replaced by Mr. Erik Reijnierse, Senior Director
Directors' Interests
No options were granted to or exercised by any director of TME in the period between 31 December 2018 and the signing date of these audited consolidated financial statements. None of the directors had a material interest in any contract of significance to which the Group was a party during the year.
Policy on Payment of Creditors
It is Group policy, in respect of all of its suppliers, to settle the terms of payment when agreeing each transaction, to ensure that suppliers are made aware of the terms of payment and to abide by those terms. The average number of creditor days in relation to trade creditors outstanding depends on each country where we generally apply local practices.
Financial Risk Management
The Group finances its operations through the generation of cash from operating activities and bank borrowings. Moreover, the parent company management is able to provide financial support to Trader Media East Limited and its subsidiaries. Liquidity risk is managed through forecasting the future cash flow requirements of the business and maintaining sufficient cash at bank balances
Principal Risks and Uncertainties
The following risks and uncertainties could have an effect on the Group's performance. As at the date of this report, the Board considers the risks described below as the principal risks facing the Group. The Group has a risk management structure in place that is designed to identify, manage, and mitigate business risks. This forms part of the Group's system of internal control that is described in detail in Corporate Governance. The key risks identified through this risk management process, and how they are managed is detailed below.
General
The Group's activities expose it to a variety of operational and financial risks; these risks are market risk including the effects of changes in debt and equity market prices, foreign currency exchange rates, fair value interest rate risk, and cash flow interest rate risk, credit risk, and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets as well as changeable parameters of the Russian economy and seeks to minimize potential adverse effects on the financial performance of the Group. As the Group operates in different regions and countries, TME headquarters deal effectively with the coordination of management of different entities.
Risks relating to the Group's Business and Industry
According to Federal Statistics Service' report, Russia's economy grew by 2.8% in 2018 following a 1.6% growth in 2017. The Russian economy continues to be negatively impacted by ongoing political tension in the region and international sanctions against certain Russian companies and individuals. Firm oil prices, low unemployment and rising wages supported a modest growth of the economy in 2018.
In Belarus, the economy continued to grow in 2018. The increase in GDP was 3.0% in 2018, compared with a 2.5% in 2017. Inflation in the economy slowed, the Consumer Price Index was 104.9% in 2018 (106.0% in 2017).
Risks relating to the Group's Financial Condition
The Group is exposed to variety of financial risks due to its operations. These risks include liquidity risk, funding risk, credit risk and foreign currency 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 Group finances its operations through loan facilities provided by its controlling shareholder, Hürriyet Group and Demirören Medya, as well as bank loans, if needed. Liquidity risk is managed through forecasting the future cash flow requirements of the business.
Competitive Forces
The markets in which the Group operates are highly dynamic and competitive. The majority of its co-operation is long term in nature and access to the key platforms is critical to the success of the business. This requires sustained investment in technology, capability and infrastructure, which presents a high barrier to entry. However, these factors alone do not protect the Group from competition, such that price competition and technical advances made by competitors could adversely affect the Group's results. The Group has developed a balanced business portfolio and maintained a steady improvement in operational performance, which together with the establishment of long-term customer relationships and sustained investment in technology acquisition, allow the Group to respond to competitive pressure.
Foreign Currency
A high proportion of the Group's revenues from continuing operations (67%) and operating loss arise in the Russian Federation. As a result, the Group's reported results in 2018 have been negatively affected by the weakening of the Russian Rouble (RUB) against the US Dollar (US$) versus 2017.
Legal Risks
The Group operates internationally and is subject to applicable laws and regulations in a large number of jurisdictions. Combined with this, the large numbers of customers and suppliers to the Group result in a complex set of contractual obligations and a risk of non-compliance with the applicable laws and regulations.
The Group addresses this risk in a number of ways:
· through reviews, advice and opinions provided by the in-house legal department;
· monitoring and reporting of issues by the Internal Audit function;
· internal control processes requiring local and Group's Executive Management to report on areas of potential non-compliance; and
· controls on the levels of the Management required to approve proposed contractual arrangements.
Charitable and Political Donations
The Group did not make any material charitable or political donations during the year.
Intangible Assets
Historically, the Group has attributed value to its main tradenames and goodwill in allocating a part of the purchase price paid for its subsidiaries to these intangible assets. These intangible assets were fully impaired as at 31 December 2017 as a result of the decision to cease PMH's digital operations.
Purchase of Own Shares
The Group did not purchase any of its shares for cancellation during the year.
Secretary
E. Ekin Çayhan has been the Company Secretary since 13 May 2016.
Independent Auditors
AO PricewaterhouseCoopers Audit was appointed as External Auditor to the Group at the Annual General Assembly on 30 July 2018.
A resolution to appoint the auditors and to authorise the directors to fix their remuneration will be proposed at the Annual General Meeting (AGM), which will be held during 30 July 2019 at the Company's headquarter in Amsterdam, The Netherlands.
By order of the Board Registered office:
SANNE Corporate Service Limited
IFC 5, St Helier
Jersey, JE1 1ST
Channels Islands
E. Ekin Çayhan
General Secretary & Counsel
30 April 2019
RESPONSIBILITY STATEMENT
TME Annual Report & Consolidated Financial Statements of 2018 contain a "Responsibility Statement" in compliance with paragraph 4.1.12 of the DTR signed by order of the Board by Mr. Fatih Berber as Chairman of the Board & Senior Director, Mr. Turhan Cemal Beriker as Vice-Chairman & Senior Director, and Mr. Erik Reijnierse as Senior Director of the Company.
This statement is set out below in full and unedited text. This states that on 30 April 2019, the date of approval of the 2018 Annual Report & Consolidated Financial Statements (Accounts).
Each of the Directors hereby confirm:
"To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group".
Amsterdam, The Netherlands
30 April 2019
TRADER MEDIA EAST LIMITED
____________________
Fatih Berber
Chairman
____________________
Turhan Cemal Beriker
Vice-Chairman, Director
____________________
Erik Reijnierse
Director
1 Mrs. Özlem Mertoğlu-Munanoğlu resigned from her position effective of 31st January 2019 and Mr. Erik Reijnierse has been appointed.