TIDMDCI
RNS Number : 1068E
Dolphin Capital Investors Limited
04 May 2017
4 May 2017
DOLPHIN CAPITAL INVESTORS LIMITED
("DCI" or "Dolphin" or the "Company" and together with its
subsidiaries the "Group")
Annual Financial Results for the year ended 31 December 2016 and
Trading Update
Dolphin Capital, an investor in high-end residential resorts in
the eastern Mediterranean, announces results for the year ended 31
December 2016 and trading update on the first quarter of the
current financial year.
Financial Highlights:
-- Gross Assets of EUR466 million (2015: EUR911 million)
-- Total Group Net Asset Value ("NAV") of EUR265 million and
EUR234 million before and after Deferred Tax Liabilities ("DTL")
respectively. This represents a decrease of EUR255 million and
EUR248 million (49% and 51.4%) respectively, against the year-end
2015 figures.
-- NAV reduction principally due to:
o A reduction in the carrying value of DCI's shareholding in
Aristo by a total of EUR144 million resulting from: the EUR35
million impact of the debt restructuring agreement reached with
Bank of Cyprus in June 2016; operating losses; and, a further
EUR109 million write-down on sale based on the EUR45 million sales
price which had been agreed with Mr. Aristodemou but which has now
been terminated by the Company effective 3 May 2017 due to Mr.
Aristodemou's failure to settle the deferred payments as they
became due. The Company received EUR1.8 million from this
transaction and has retained a 47.9% stake in Aristo.
o The loss from the sale of Playa Grande of EUR25 million.
o A writedown in the carrying value of Pearl Island by EUR25
million reflecting the post year end disposal of DCI's 60%
shareholding for EUR27 million.
o Year-end valuation writedowns and impairment charges of EUR21 million on assets retained.
o Other operational, corporate, finance and management expenses.
-- Sterling NAV per share as at 31 December 2016 stood at 25p
before DTL and 22p after DTL, a 40.8% and 43.6% decrease before and
after DTL respectively compared to 31 December 2015. The decrease,
mainly reflecting the factors mentioned above, was partially offset
by a 16.2% appreciation of the Euro versus the Sterling.
-- Total Debt of EUR101 million (2015: EUR232 million) with a
Group total debt to gross asset ratio of 22% (2015: 26%). Following
the completion of the Playa Grande project disposal on 8 December
2016 which included the retirement of all of the Company's EUR50
million and US$9.17 million 2018 convertible bonds, and the
repayment of the 2016 convertible bonds in 31 March 2016, DCI
itself does not have any further recourse loans or guarantees and
the remaining Group debt is at project level on a non-recourse
basis.
-- Total Group cash as of 31 March EUR17.8 million (31 December 2016: EUR4.7 million).
Divestments:
-- New Asset Strategy adopted by the Board:
o shareholder approval on 19 December 2016
o all remaining assets to be sold in a controlled, orderly and
timely manner in order to realise their value
o target is to dispose of all assets by 31 December 2019
-- Completion of sale of the Company's 100% interest in the
Playa Grande Golf and Resort project, including the Amanera resort
in the Dominican Republic, for a consideration of EUR64 million,
comprising cash of EUR4.6 million and debt repayment of EUR59.4
million (equating to a EUR140 million enterprise value) on 15
November 2016.
-- Following the year end, completion of the sale of the
Company's 60% interest in Pearl Island, Panama Republic for a cash
consideration of EUR27 million (equating to a EUR63 million
enterprise value).
Operations:
-- Amanzoe performance improved by increasing occupancy to 62%
(2015: 57%) and generating an average daily rate ("ADR") of
EUR1,242 (2015: EUR1,229). Two residential units were sold,
bringing the total number of units sold in the project to 14.
-- Residential masterplan filed allowing the sale of freehold
units at Kilada Hills. Founders Program launched, targeting the
sale of 40 Kilada Hills Founders' Memberships, each including a
golf course lot and golf course membership.
-- Discussions progressing with a renowned international resort
and real estate investor for a joint venture transaction involving
a EUR20 million equity investment to fund the construction of the
Kea resort, in exchange for a 50% shareholding in the project.
-- Additional sales agreements signed for the sale of one
Seafront Villa in Kilada Hills and for three residences at La
Vanta, Turkey.
-- Residential zoning in Sitia Bay achieved which provides legal
entitlement for the sale of residential lots independently from the
already permitted resort development.
Commenting, Andrew Coppel, the chairman of Dolphin's Board of
Directors, said:
"Following the adoption of the New Asset Strategy, we are
focussed on maximising value for shareholders and our objective is
to have disposed of all assets no later than 31 December 2019.
Whilst market conditions for disposals in our geographic areas of
operation remain challenging, we are encouraged by the disposals to
date."
Miltos Kambourides, Founder of Dolphin and Managing Partner of
DCP, said:
"We are pleased with the successful disposal of our assets in
the Carribean and Central America region. The momentum of the
continuously improving performance of Amanzoe, if combined with a
positive shift in the Greek political and economic environment,
should allow for further asset sales."
For further information, please contact:
Dolphin Capital Investors
Andrew M. Coppel, CBE +44 (0) 7785 577023
Dolphin Capital Partners
Miltos E. Kambourides miltos@dolphincp.com
Panmure Gordon
(Broker)
Richard Gray / Andrew Potts +44 (0) 20 7886 2500
Grant Thornton UK LLP
(Nominated Adviser)
Philip Secrett +44 (0) 20 7383 5100
Instinctif
(PR Communications Adviser)
Mark Garraway +44 20 7457 2020
A. Chairman's Statement
The year under review was a landmark year for the Company. We
achieved a successful full divestment from our assets in the
Caribbean and Central American region, and received approval to
implement the New Asset Strategy which is designed to maximise
returns to shareholders.
The key components of the New Asset Strategy are the orderly and
controlled disposal of the Company's asset portfolio by no later
than 31 December 2019, the implementation of a revised remuneration
agreement with DCP aimed at incentivising the management towards
the timely execution of sales at the maximum possible pricing, and
the adoption of a distribution policy directed to maximising the
return of disposal proceeds to shareholders and not building
significant cash balances at the Company level, except for
short-term working capital purposes.
Although shareholders approved the New Asset Strategy only in
December 2016, the Company had already been making significant
advances with the divestment of certain key assets, including the
Playa Grande Golf and Resort and its 60% interest in Pearl Island.
Whilst we had also agreed to sell our 49.75% shareholding in
Aristo, with the cash consideration payable on an instalment basis
over three years, we have now terminated this agreement as the
deferred payments were not settled in accordance with its terms. We
have received EUR1.8 million from this transaction and have
therefore retained a 47.9% stake in Aristo. The Board and the
Investment Manager are considering the options to realise value
from the Aristo holding.
During 2016 the Company repaid the total Euro and US Dollar 2018
Convertible Bonds, as well as the remaining 2016 Convertible Bonds,
with an aggregate face value of EUR75 million, through existing
cash balances and on disposal of the Playa Grande project. In
addition, as a result of the Playa Grande disposal, all of the
Company's guarantees with respect to the construction project loan,
and the mezzanine financing facility provided by Melody Capital,
have been released. Consequently, at the end of 2016, Dolphin had
no debt at the Company level and no corporate or other guarantees
on project loans.
As at 31 December 2016, the audited NAV before DTL was EUR265
million, representing a 49% decrease from 31 December 2015. This
was mainly due to the writedowns on disposal of Aristo, Playa
Grande and Pearl Island, as they were sold at prices below their
respective carrying values. The NAV per share before DTL in Euro
terms was EUR0.29 compared to EUR0.57 at 31 December 2015.
The Company continues to market specific assets to select groups
of potential investors. In parallel, we are undertaking targeted
development initiatives for two of our more advanced projects. For
Kea Resort, we are in JV funding discussions with a reputable
international investor in order to secure the third party equity
financing required for the project's development, and in relation
to Kilada Hills by bringing to the market the Founders' Program
which is targeted to facilitate the development funding of the
Kilada Hills project's golf course and related infrastructure.
Despite the divestments to date, taking into consideration
Dolphin's liabilities and working capital requirements, no
distribution to Shareholders is proposed at this time but this will
be kept under close review following further disposals.
The Board is encouraged by the continued Shareholder support for
its initiatives and the recent disposals of two key assets. We
remain focused on the execution of the Company's New Asset Strategy
working closely with the Investment Manager in order to enable the
Company to dispose of its investment portfolio within the
divestment period set and deliver cash distributions to
Shareholders.
Andrew M. Coppel CBE
Chairman
Dolphin Capital Investors
4 May 2017
B. Investment Manager's Report
B.1. Business Overview
During 2016, in parallel to managing the overall DCI business
including the hotel operations in Amanzoe and Nikki Beach in Greece
and Amanera in the Dominican Republic, we progressed the
entitlement status and development potential of the project
portfolio with notable permitting progress achieved at Kilada Hills
Golf Resort and Sitia Bay.
In parallel, we pursued disposal opportunities to realise the
portfolio's value and arranged, agreed and executed two major
divestments as follows:
- the entire Playa Grande Golf and Resort project to a joint
venture comprising an affiliate of Third Point LLC, an affiliate of
Discovery Land Company and others, for a EUR64 million
consideration comprising principally repayment of outstanding debt
(equating to an enterprise value of EUR140 million); and,
- the 60% interest in Pearl Island to Grivalia Hospitality S.A.
for a EUR27 million cash consideration (equating to a EUR63 million
enterprise value).
The Company also agreed the sale of its 49.75% stake in Aristo
Developers Ltd to Mr. Theodoros Aristodemou and has received to
date EUR1.8 million of the total cash consideration of EUR45
million due in instalments before the end of 2019. However, as the
remaining deferred payments have not been received in line with the
provisions of the Agreement, the Company terminated on 3 May 2017
the share purchase agreement and has therefore retained a 47.9%
stake in Aristo. The Company and the Investment Manager are
considering options to realise value from the Aristo stake.
Working closely with the Board, we formulated the New Asset
Strategy and agreed a revised Investment Management Agreement that
further aligns the Investment Manager with shareholders to execute
the Company's New Asset Strategy. The execution of the two
significant asset disposals over the past 12 months provided
additional cash to Dolphin and eliminated all debts at the Company
level.
Separately, we are actively pursuing discussions regarding
funding of the development of the Kea Resort project through a
joint venture transaction with an international resort operator and
investor, which if concluded will provide the equity funding
required for the development of the project. We have also launched
the sale of the Founders Program at Kilada Hills Golf resort that
will facilitate the funding of the development of the project's
golf course and infrastructure from third party sources. These
development initiatives are structured in a way to externally fund
the projects' initial phase of the development without requiring
additional DCI funding and with the aim of enhancing the underlying
projects' value and disposal potential within the divestment period
set out by our New Asset Strategy.
B.2. Continuation Vote and New Asset Strategy
The Company was admitted to trading on AIM on 8 December 2005 as
a newly incorporated, BVI registered, closed-end investment
company. At the time of admission, the Directors of the Company
undertook that shortly before the tenth anniversary of the initial
admission of the Company's share capital to trading on AIM (8
December 2015), the Board would convene a Shareholders' meeting at
which a resolution would be proposed to determine the future of the
Company. The timing for the convocation of the Shareholders'
meeting to assess the life of the Company was then considered in
the context of the Company's June 2015 capital raise, when the
Board committed to convene and hold an Extraordinary General
Meeting of Shareholders ("EGM") prior to 31 December 2016 at which
an ordinary resolution for the continuation of the Company would be
proposed.
The Board, following this commitment and working together with
the Company's Investment Manager, proposed a New Asset Strategy
which was put to Shareholders at the EGM on 19 December 2016. The
New Asset Strategy, as further detailed in the circular issued on 2
December 2016, comprised changes to the Company's investment
policy, distribution policy and the remuneration structure for the
Investment Manager.
More specifically, the New Asset Strategy was designed to effect
the orderly sale of both the Company's Core Projects and the
Non-Core Assets in a controlled and timely manner in order to
realise their value by 31 December 2019. Consequently, the
distinction between Core Projects and Non-Core Assets was no longer
considered relevant as the Board and DCP, working with the
Company's advisers, explored the best manner in which the orderly
sale of the entire Company's portfolio could be achieved on an
asset by asset basis, in the light of prevailing market conditions
and circumstances. The allocation of any additional capital
investment into any of the Company's projects is targeted to be
sourced from joint venture agreements with third party capital
providers and project level debt, and with the sole objective of
enhancing the respective asset's realisation potential and value
within the divestment period of 31 December 2019.
With respect to the distribution policy, the Board has indicated
that it intends to distribute to Shareholders at least 50% of the
net proceeds of asset disposals, approximately three months after
the completion of each disposal, subject to consideration of the
Company's existing liabilities (including any borrowings) and
general working capital requirements.
B.3. Portfolio Review
B.3.1. Projects
-- Amanzoe, Greece (www.amanzoe.com)
- Amanzoe commenced operations for the 2016 season on 1 April
2016, as scheduled, with seven Villas in the rental programme, and
ended on 1 November 2016. The 2016 Amanzoe hotel performance
continued to improve compared to 2015. Occupancy for the season was
62% (2015: 57%), representing a five percentage points increase
compared to 2015, with an ADR of EUR1,242 (2015: EUR1,229), while
the NOI improved more than doubled on a year-on-year basis.
- Amanzoe continues to receive outstanding reviews and
publicity. The hotel opened on 1 April 2017 for the current season
with hotel occupancy and rates higher than last year.
- During 2016, two additional Aman Villas sales were completed
bringing the total number of sold units in Amanzoe to 14. In an
effort to diversify our Villa offerings and increase the pace of
sales, we have introduced for the 2017 season a limited number of
2-bedroom Amanzoe Villas, which appear to be in high demand in the
rental market. The enhanced relationship with Sotheby's Greece is
expected to further boost the demand in Amanzoe villas.
-- Amanera, Dominican Republic (www.amanera.com)
- The Amanera Golf Resort at Playa Grande, in the Dominican
Republic, was delivered as scheduled and formally opened for paying
guests on 23 November 2015. The Amanera Hotel achieved occupancy of
43.5% and and ADR of US$1,549 during January to August 2016 for
which period it was open and under the Dolphin ownership.
- On 15 November 2016 the Company entered into an agreement for
the disposal of the project to a joint venture comprising an
affiliate of Third Point LLC, an affiliate of Discovery Land
Company and others. The disposal was agreed at an enterprise value
of EUR140 million which represented a 10% discount to the project's
carrying gross asset value as at 30 June 2016 and resulted in a
loss on sale of EUR25 million.
- The disposal was completed on 8 December 2016, when DCI
received EUR4.6 million cash consideration (of which EUR0.9 million
remained in escrow to cover certain potential post completion
claims and liabilities) and all of the Company's EUR50 million and
US$9.17 million 2018 Convertible Bonds which were held by Third
Point LLC were cancelled.
- This disposal reduced the aggregate DCI Group loans from
EUR215 million as at 30 June 2016 to EUR102 million resulting in a
pro forma debt/asset ratio for the Group of 18.5%.
-- Kilada Hills Golf Resort, Greece
- The next phase of the Kilada Hills strategic permitting
progress entails the issuance of final construction permits for the
project's private residential masterplan comprising 170,000m(2) .
The masterplan was submitted for approval to the competent zoning
authorities on 8 June 2016 and the issuance of final permits that
are necessary for the commencement of infrastructure works are
expected to be in place by the end of 2017.
- Dolphin has soft-launched the Founders Program proposal, which
comprises 40 founders' memberships in the Kilada Hills golf resort
community which will comprise a new Jack Nicklaus Signature Golf
Course, a Clubhouse, a Beach Club and other sports amenities. The
Founders memberships are competitively priced at EUR500,000 each,
offering founding members freehold title to a 2,000m(2) lot
overlooking the Kilada Hills golf course with the right to build a
villa of up to 800m(2) , lifetime golf memberships and additional
privileges.
- The funds raised through the Founders Program will be placed
in escrow until the project's golf course, clubhouse and related
infrastructure are completed and the golf lots are delivered to the
Founders Program members. The Company is in the process of
arranging development bridge-financing through a local bank which
will be repaid from the Founders' Program escrowed proceeds.
-- Pearl Island ("Pearl Island" - www.pearlisland.com), Panama
- In Pearl Island, a private island located in the Archipelago
de las Perlas, the Ritz Carlton Reserve detailed design phase and
value engineering were completed during 2016 to ensure that the
development budget could be achieved.
- In November 2016, the project also secured a debt financing of
US$33 million with a regional bank (Banistmo S.A.) to be used in
the development of the Ritz Carlton phase of the project which to
date has not been drawn down.
- Following the permitting and financing developments, on 17
January 2017, the Company entered into a sale agreement for the
disposal of its 60% interest in Pearl Island to Grivalia
Hospitality S.A. ("Grivalia").
- The cash consideration on disposal (before related taxes and
fees) of EUR27 million represented a discount of 7% on the
Company's EUR29 million cost of investment in Pearl Island. The
implied transaction enterprise value of EUR63 million was at a 32%
discount to DCI's gross asset carrying value as at 30 June 2016 and
resulted in a loss on sale of EUR25 million.
- The disposal was completed on 13 March 2017 and Dolphin
received the EUR26 million cash consideration balance. Of the total
consideration, EUR2 million will remain in escrow for a period of
12 months post completion to cover any potential tax liabilities,
breach of warranties or undisclosed indebtedness.
-- Kea Resort, Greece
- The Company continues to advance discussions with an
international resort and real estate investor for a joint venture
transaction involving an equity investment, for the monies required
for the construction of the Kea Resort, for a 50% shareholding in
the project.
-- Aristo Developers Ltd ("Aristo", a 47.9% affiliate)
Operating Performance
- Aristo sold 107 homes and plots during 2016, representing
total sales of EUR44.4 million, up 44.5% compared to 2015.
- There was a strong sales momentum from overseas countries
during 2016. A new office initiated operations in Egypt and several
agreements were signed in H1 2016 with new agents aiming to
establish Aristo as a major provider of Cyprus residential permit
related product in those countries.
- This sales momentum has continued in 2017, with 27 homes and
plots sales during the first three months of 2017, representing
total sales of EUR17.7 million, up 110% compared to the respective
period in 2016.
Q1 2017 Q1 2016 Twelve months to Twelve months to
31 December 2016 31 December 2015
------------------------ ------------- ------------- ----------------- ------------------
RETAIL SALES
New sales booked EUR17,693,066 EUR 8,406,120 EUR 44,436,273 EUR 30,746,867
% change 110% 44.5%
Units sold 27 22 107 70
% change 22.7% 53%
CLIENT ORIGIN
China 55.6% 45% 43% 76.21%
Russia 14.8% 5% 4.6% 12.73%
Other overseas 25.9% 9% 32.7% 5.25%
Cyprus 3.7% 41% 15.8% 4.50%
UK - - 1% 1.30%
Central & North Europe - - 2.80% -
Termination of Agreement for the disposal of DCI's stake in
Aristo
- On 29 September 2016 the Company signed an agreement to sell
its 49.75% stake in Aristo to a legal entity owned by Mr. Theodore
Aristodemou and his family for a EUR45 million cash consideration.
This represented a 70% discount to the carrying value as at 31
December 2015 on a pro-forma basis, reflecting Aristo's debt
restructuring agreed with Bank of Cyprus. The EUR45 million cash
consideration was agreed to be payable in quarterly instalments
over three years and bearing annual interest of 4% in the first
year, increasing to 5% and 6% respectively for each of the ensuing
two years.
- The Company has received to date EUR1.8 million of the cash
consideration out of the EUR45 million due under the sale
agreement. Mr. Aristodemou had indicated to the Company that
payment of the instalments due under the sale agreement would be
uncertain whilst he remains involved in on-going litigation in
Cyprus relating to his tenure as the Bank of Cyprus Chairman and
until there is more clarity and certainty on the expected outcome
of the respective court proceedings. In that regard, and due to Mr.
Aristodemou's failure to settle the deferred payments as they
became due, the Company decided on 3 May 2017 to terminate the
existing agreement and retain the unpaid portion of its Aristo
shares which corresponds to 47.9%. The Company will provide a
further update on its plans to realise value from its shareholding
in Aristo in due course.
-- Sitia Bay Resort, Crete (www.sitiabayresort.com)
- The Presidential decree for the residential zoning in Sitia
Bay was issued on 20 July 2016; this provided legal entitlement for
the sale of residential lots independently from the resort
development for which the permits are already in place.
-- Nikki Beach, Porto Heli (a 25% DCI affiliate)
- The operations improved during 2016 compared to 2015.
Occupancy for the 2016 operational period was 50% (163 days)
compared to 48% for 2015 (169 days), with a net ADR up
approximately 25% at EUR253.
- The Company reached on 23 February 2017 a commercial
co-operation agreement with a local group active in hotel
consultancy and operations, regarding the commercial exploitation
of the Nikki Beach Porto Heli, as a result of which the Company
will have no financial exposure from the day-to-day operational
performance of the hotel and will receive an annual revenue-linked
payment. This agreement will not affect the operating agreement
with Nikki Beach Hotels EMEA which remains in place.
-- Apollo Heights , Cyprus
- Publication of the long-awaited proposed zoning by the Cyrpus
Government was expected to take place by the end of the first
quarter of 2017, but is now expected to take place in the second
quarter of 2017.
.3.2. Market Dynamics
According to the Wealth Report 2017 by Knight Frank, the number
of ultra-wealthy people worldwide is expected to grow by 43% by
2026. There may be widespread uncertainty on a global, regional and
national level, but there are also strong fundamentals in many
economies, with signs of real progress being made around regulation
and policy which will help economic growth to flourish in some
places.
The main observations of the regions of interest to the Company
are as follows:
- In Greece 2016 was a fruitful year for tourism, according to
the data released from the Greek Tourism Confederation (SETE), with
a 9% rise in international air arrivals for the year with 16.9
million total air arrivals. The message for 2017 is positive as
well where tourism revenues are expected to rise by 8% to EUR14.5
billion compared to EUR13.2 billion in 2016.
- In Cyprus the latest available data for the tourism industry
highlighted, once again, that tourism was amongst one of the key
catalysts to the country's 2016 economic performance, as revenues
reached EUR2.36 billion at the end of the year surpassing 2015
(EUR2.1 million) by 11.9%. Total arrivals amounted to 3.2 million
in 2016 versus 2.65 million in the previous year. Cyprus expects to
hit another record number of tourists during 2017, with visits
expected to increase by 5% over last year.
- In Turkey the number of foreign tourists was 36.2 million in
2015 and fell to 25.4 million in 2016. This 30% drop can be
explained by a 31% drop in European tourists due an increase in
terrorism by ISIS/PKK and the tension with Russia. The January and
February 2017 figures show that the slowdown is continuing this
year with a 8% drop compared to the same months in 2016.
- In Croatia tourism enjoyed a record year in 2016. According to
the country's official statistics, a record 16.3 million tourists
visited Croatia in 2016. The 16.3 million arrivals, around 2.2
million more than 2015, created a record 91.3 million overnight
stays, 11 million more than in 2015.
C. Group Assets
A summary of Dolphin's current investments is presented below.
As at 31 December 2016, the net invested amount stood at EUR514*
million.
PROJECT Land DCI's Investment Debt Real Loan
site stake cost* (EURm) estate to real
(hectares) (EURm) ** value estate
(EURm) asset
value
(%)
--- ---------------- ------------ ------- ------------------- ------------------ --------- ---------
1 Amanzoe 93 100% 38 76
Kilada Hills
2 Golf Resort 235 100% 94 -
3 Kea Resort 65 67% 9 -
4 Pearl Island*** 1323 60% 29
TOTAL 1.716 170 76 260 29%
--- ---------------- ------------ ------- ------------------- ------------------ --------- ---------
The Nikki
Beach Resort
5 & Spa 1 25% 6 -
Sitia Bay
6 Golf Resort 270 78% 17 -
Scorpio Bay
7 Resort 172 100% 15 -
Lavender Bay
8 Resort 310 100% 25 -
Plaka Bay
9 Resort 442 100% 13 -
10 Triopetra 11 100% 4 -
Apollo Heights
11 Polo Resort 461 100% 23 16
Livka Bay
12 Resort 63 100% 28 8
La Vanta -
Mediterra
13 Resorts 8 100% 17 < 1
TOTAL 1.738 148 24 150 16%
--- ---------------- ------------ ------- ------------------- ------------------ --------- ---------
ARISTO CYPRUS* 1.448 48.7% 194 - 43
Itacaré
Investment n/a 13% 2 - 1
GRAND TOTAL 4.902 514 101 455 22%
--- ---------------- ------------ ------- ------------------- ------------------ --------- ---------
*Residual investment cost, including amounts paid in shares.
**Further details on debt maturities are set out under note 25
of the financial statements.
*** Sold in March 2017
A breakdown of Dolphin's portfolio, as at 31 December 2016, for
certain key metrics is provided below:
Real % Loan
Investment Estate to real
Land Cost * Debt Value estate Net
size (EUR (EUR (EUR asset Asset
COUNTRY (hectares) million) million) million) value Value
--------- ---------------- ------------------- ----------------- ----------------- ------------ -----------------
1 Greece 1.599 221 76 287 26% 57%
2 Cyprus** 1.909 216 16 73 22% 21%
3 Americas 1.323 31 - 55 0% 10%
4 Other 71 46 9 41 22% 12%
Grand
Total 4.902 514 101 455 22% 100%
--------- ---------------- ------------------- ----------------- ----------------- ------------ -----------------
*Residual investment cost, including amounts paid in shares.
**DCI' s portfolio in Cyprus includes its equity investment in
Aristo Developers Ltd, which owns assets in Cyprus that are subject
to Aristo's debt and other obligations.
D. Future Objectives
Our main objectives for 2017 are to:
1. Maximise value for shareholders and generate additional
liquidity through the monetisation of assets;
2. Secure third party funding for the development of Kea and
Kilada Hills so that they become more attractive to potential
investors and acquirers;
3. Increase the sales velocity of villas at Amanzoe; and
4. Where appropriate, advance the zoning, permitting, design and
branding of certain assets to improve their sales potential and
value.
Miltos Kambourides Pierre Charalambides
Managing Partner Founding Partner
Dolphin Capital Partners Dolphin Capital Partners
4 May 2017 4 May 2017
E. Financial Position for the year ended 31 December 2016
E1. Consolidated statement of profit or loss and other
comprehensive income for the year ended 31 December 2016.
-- Financial Results
Loss after tax for the period ended 31 December 2016
attributable to owners of the Company amounted to EUR(244) million
compared to EUR(145) million for the year ended 31 December 2015.
Loss per share was EUR0.27 in 2016 and EUR0.18 in 2015. The
reduction was principally due to:
- the reduction in the carrying value of Aristo by a total of
EUR144 million during the year; which is made up of EUR35 million
as a result of the debt restructuring agreement reached with Bank
of Cyprus in June 2016 and operating losses, and a further EUR109
million write-down to reflect the agreed EUR45 million sales
price;
- the loss from the sale of Playa Grande amounting to EUR25 million;
- the reduction in the carrying value of Pearl Island by EUR25
million to the EUR27 million sales price;
- the year-end net valuation losses and impairment charges of EUR21 million;
- the Group's other operational, corporate, finance and management expenses.
31 December 31 December
2016 2015
EUR'000 EUR'000
------------------------------------- ------------ ------------
Continuing operations
------------------------------------- ------------ ------------
Revenue 18,148 47,680
-------------------------------------- ------------ ------------
Cost of sales (17,357) (46,779)
-------------------------------------- ------------ ------------
Gross profit 791 901
-------------------------------------- ------------ ------------
Disposal of investments 785 823
-------------------------------------- ------------ ------------
Change in valuations (136,512) (61,862)
-------------------------------------- ------------ ------------
Investment Manager remuneration (11,406) (13,128)
-------------------------------------- ------------ ------------
Directors' remuneration (1,509) (904)
-------------------------------------- ------------ ------------
Depreciation charge (2,284) (2,241)
-------------------------------------- ------------ ------------
Professional fees (5,480) (4,873)
-------------------------------------- ------------ ------------
Administrative and other
expenses (2,232) (5,132)
-------------------------------------- ------------ ------------
Total operating and other
expenses (158,638) (87,317)
-------------------------------------- ------------ ------------
Results from operating
activities (157,847) (86,416)
-------------------------------------- ------------ ------------
Finance income 29 87
-------------------------------------- ------------ ------------
Finance costs (15,099) (17,731)
-------------------------------------- ------------ ------------
Net finance costs (15,070) (17,644)
-------------------------------------- ------------ ------------
Share of losses on equity-accounted
investees, net of tax (34,389) (44,553)
-------------------------------------- ------------ ------------
Loss before taxation (207,306) (148,613)
-------------------------------------- ------------ ------------
Taxation 3,584 15,359
-------------------------------------- ------------ ------------
Loss from continuing operations (203,722) (133,254)
-------------------------------------- ------------ ------------
DISContinuED operation
------------------------------------- ------------ ------------
Loss from discontinued
operation, net of tax (57,268) (14,741)
-------------------------------------- ------------ ------------
Loss (260,990) (147,995)
-------------------------------------- ------------ ------------
Other comprehensive income
------------------------------------- ------------ ------------
Items that will not be
reclassified to profit
or loss
------------------------------------- ------------ ------------
Revaluation of property,
plant and equipment 5,796 (15,181)
-------------------------------------- ------------ ------------
Share of revaluation on
equity-accounted investees 17 27
-------------------------------------- ------------ ------------
Related tax (1,682) 1,791
-------------------------------------- ------------ ------------
4,131 (13,363)
------------------------------------- ------------ ------------
Items that are or may be
reclassified subsequently
to profit or loss
------------------------------------- ------------ ------------
Foreign currency translation
differences (7,458) 17,221
-------------------------------------- ------------ ------------
Change in fair value of (256) -
available-for-sale financial
assets
------------------------------------- ------------ ------------
(7,714) 17,221
------------------------------------- ------------ ------------
Other comprehensive income,
net of tax (3,583) 3,858
-------------------------------------- ------------ ------------
Total comprehensive income (264,573) (144,137)
-------------------------------------- ------------ ------------
Loss attributable to:
------------------------------------- ------------ ------------
Owners of the Company (243,762) (145,360)
-------------------------------------- ------------ ------------
Non-controlling interests (17,228) (2,635)
-------------------------------------- ------------ ------------
(260,990) (147,995)
===================================== ============ ============
Total comprehensive income
attributable to:
------------------------------------- ------------ ------------
Owners of the Company (247,481) (144,228)
-------------------------------------- ------------ ------------
Non-controlling interests (17,092) 91
====================================== ============ ============
(264,573) (144,137)
===================================== ============ ============
Loss per share
------------------------------------- ------------ ------------
Basic and diluted loss
per share (EUR) (0.27) (0.18)
-------------------------------------- ------------ ------------
Basic and diluted loss
per share - Continuing
operations (EUR) (0.22) (0.16)
-------------------------------------- ------------ ------------
Basic and diluted loss
per share - Discontinued
operation (EUR) (0.05) (0.02)
-------------------------------------- ------------ ------------
Further analysis of individual revenue and expense items is
provided below.
-- Revenue
Revenues from continuing operations of EUR18.1 million (31
December 2015: EUR47.7 million), were derived from the following
sources:
31 December 31 December
2016 2015
EUR million EUR million
-------------------------------- -------------- --------------
Income from hotel operations 11.5 10.3
Income from construction
contracts 0.0 2.3
Sale of trading and investment
properties 6.2 34.6
Rental income 0.0 0.3
Other income 0.4 0.2
TOTAL 18.1 47.7
The significant reduction in the sale of trading and investment
properties relates primarily to the lower number of villas
delivered in 2016 in the Amanzoe project, whereas in 2015 four
villas were delivered while in 2016 the deliveries fell to one
cabana and one plot.
-- Cost of sales
Cost of sales from continuing operations comprises the following
basic categories:
31 December 31 December
2016 2015
EUR million EUR million
-------------------------- -------------- --------------
Cost of sales related
to:
Hotel operations 4.0 3.5
Construction contracts 0.0 2.5
Sales of trading and
investment properties 5.3 29.9
Commission to agents and
others 0.4 0.4
Electricity and fuel 0.1 0.1
Personnel expenses 5.6 5.5
Branding management fees 1.6 3.5
Other operating expenses 0.4 1.4
TOTAL 17.4 46.8
-------------------------- -------------- --------------
The charge of cost of sales from continuing operations for the
period amounted to EUR17.4 million (31 December 2015: EUR46.8
million). The decrease is largely attributable to cost of Villas
sold reflecting the above mentioned reduction in Villa
deliveries.
-- Professional Fees
The charge for the period from continuing operations was EUR5.5
million (31 December 2015: EUR4.9 million) and comprises the
following:
31 December 2016 31 December 2015
EUR million EUR million
------------------------------------- ------------------ ------------------
Legal fees 0.9 0.7
Auditors' remuneration 0.7 0.8
Accounting expenses 0.3 0.3
Appraisers' fees 0.1 0.1
Project design and development fees 1.9 1.5
Consultancy fees 0.7 0.2
Administrator fees 0.1 0.3
Other professional fees 0.8 1.0
------------------------------------- ------------------ ------------------
TOTAL 5.5 4.9
------------------------------------- ------------------ ------------------
Increase in consultancy fees is mainly attributable to the
Houlihan Lokey fees incurred during the period.
-- Administrative and other expenses
The administrative and other expenses from continuing operations
amounted to EUR2.2 million (31 December 2015: EUR5.1 million) and
are analysed as follows:
31 December 31 December
2016 2015
EUR million EUR million
---------------------------------- -------------- --------------
Travelling and accommodation 0.4 0.5
Insurance 0.1 0.1
Repairs and maintenance 0.1 0.1
Marketing and advertising
expenses 0.3 0.4
Litigation liability provisions* 0.0 2.0
Immovable property and
other taxes 0.5 0.7
Rents 0.2 0.2
Other 0.6 1.1
---------------------------------- -------------- --------------
TOTAL 2.2 5.1
*EUR1.9 million in 2015 related to Zoniro
(Greece) S.A. which was divested in
2015.
-- Change in valuations
Change in valuations from continuing operations amounted to
EUR136.5 million (31 December 2015: EUR61.9 million) and are
analysed as follows:
31 December 31 December
2016 2015
EUR million EUR million
------------------------------------- -------------- --------------
Net change in fair value
of investment property 22.1 53.2
Impairment loss on trading
properties 0.7 3.4
Impairment loss on re-measurement
on disposal groups 4.2 0.8
Impairment loss on equity-accounted
investees 109.3* 0.0
Reversal of Impairment
loss and write-offs of
property, plant and equipment (0.1) 1.9
Concession/write off of
land 0.3 2.6
TOTAL 136.5 61.9
-------------- --------------
*Amount reflects the write-down
in Aristo's carrying amount
to the EUR45 million agreed
sales price
------------------------------------- -------------- --------------
E.2. Consolidated statement of financial position as at 31
December 2016
31 December 31 December
2016 2015
EUR'000 EUR'000
------------------------------- ------------ ------------
Assets
------------------------------- ------------ ------------
Property, plant and equipment 87,647 187,015
-------------------------------- ------------ ------------
Investment property 176,548 340,853
-------------------------------- ------------ ------------
Equity-accounted investees - 188,637
-------------------------------- ------------ ------------
Available-for-sale financial
assets - 2,201
-------------------------------- ------------ ------------
Deferred tax assets 996 997
-------------------------------- ------------ ------------
Trade and other receivables - 1,178
-------------------------------- ------------ ------------
Non-current assets 265,191 720,881
-------------------------------- ------------ ------------
Trading properties 29,763 37,387
-------------------------------- ------------ ------------
Trade and other receivables 4,001 15,002
-------------------------------- ------------ ------------
Cash and cash equivalents 4,698 41,990
-------------------------------- ------------ ------------
Assets held for sale 162,435 70,240
-------------------------------- ------------ ------------
Current assets 200,897 164,619
-------------------------------- ------------ ------------
Total assets 466,088 885,500
================================ ============ ============
Equity
------------------------------- ------------ ------------
Share capital 9,046 9,046
-------------------------------- ------------ ------------
Share premium 569,847 569,847
-------------------------------- ------------ ------------
Retained deficit (365,689) (121,706)
================================ ============ ============
Other reserves 20,683 24,402
================================ ============ ============
Equity attributable to
owners of the Company 233,887 481,589
-------------------------------- ------------ ------------
Non-controlling interests 17,993 34,939
-------------------------------- ------------ ------------
Total equity 251,880 516,528
-------------------------------- ------------ ------------
Liabilities
------------------------------- ------------ ------------
Loans and borrowings 79,521 191,152
-------------------------------- ------------ ------------
Finance lease liabilities 2,934 2,956
-------------------------------- ------------ ------------
Deferred tax liabilities 24,255 30,129
-------------------------------- ------------ ------------
Trade and other payables 6,479 6,698
-------------------------------- ------------ ------------
Deferred revenue 7,230 17,846
-------------------------------- ------------ ------------
Non-current liabilities 120,419 248,781
-------------------------------- ------------ ------------
Loans and borrowings 12,749 32,528
-------------------------------- ------------ ------------
Finance lease liabilities 48 77
-------------------------------- ------------ ------------
Trade and other payables 43,112 58,241
-------------------------------- ------------ ------------
Deferred revenue 10,683 11,220
-------------------------------- ------------ ------------
Liabilities held for sale 27,197 18,125
-------------------------------- ------------ ------------
Current liabilities 93,789 120,191
-------------------------------- ------------ ------------
Total liabilities 214,208 368,972
-------------------------------- ------------ ------------
Total equity and liabilities 466,088 885,500
-------------------------------- ------------ ------------
Net asset value ('NAV')
per share (EUR) 0.26 0.53
-------------------------------- ------------ ------------
The reported NAV as at 31 December 2016 is presented below:
As at Variation since
31 December 2016 31 December 2015
EUR GBP EUR GBP
--------------------------------- ---------- --------- ---------- ---------
Total NAV before DTL (million) 265 227 (49.0%) (40.8%)
--------------------------------- ---------- --------- ---------- ---------
Total NAV after DTL (million) 234 200 (51.4%) (43.6%)
--------------------------------- ---------- --------- ---------- ---------
NAV per share before DTL 0.29 0.25 (49.0%) (40.8%)
--------------------------------- ---------- --------- ---------- ---------
NAV per share after DTL 0.26 0.22 (51.4%) (43.6%)
___________
Notes:
1. Euro/GBP rate 0.85637 as at 31 December 2016 and 0.73693 as at 31 December 2015.
2. Euro/USD rate 1.0541 as at 31 December 2016 and 1.0887 as at 31 December 2015.
3. NAV per share has been calculated on the basis of 904,626,856
issued shares as at 31 December 2016 and as at 31 December
2015.
Total Group NAV as at 31 December 2016 was EUR265 million and
EUR234 million before and after DTL respectively. This represents a
decrease of EUR255 million (49.0%) and EUR248 million (51.4%),
respectively, from the 31 December 2015 figures. This NAV reduction
is mainly due to the valuation writedowns relating to the Company's
assets, impairment charges relating to its shareholding in Aristo
and Pearl Island to reflect their agreed sales price, losses from
the Playa Grande sale, as well as Dolphin's regular fixed
operational, corporate, finance and management expenses.
Sterling NAV per share as at 31 December 2016 was 25p before DTL
and 22p after DTL and decreased by 40.8% and 43.6%, before and
after DTL respectively compared to the 31 December 2015 figures.
The valuation decreases and operational expenses mentioned above,
were counter-balanced by a 16.2% appreciation of Euro versus the
Sterling.
The Company's consolidated assets include EUR294 million of real
estate assets, EUR162 million of assets held for sale, EUR5million
of other assets (trade and other receivables and deferred tax
asset) and EUR5 million in cash.
The balance of EUR294 million of real estate assets (property,
plant and equipment, investment property and trading properties)
represents the independent property valuations conducted as at 31
December 2016 by American Appraisal (for the Greek and Cypriot
projects) for both freehold and long leasehold interests.
The EUR162 million of assets held for sale includes EUR115
million of real estate assets, EUR44 million of investment in
equity accounted investees (the Company's 48.7% and 25% interest in
Aristo and Nikki beach respectively as at 31 December 2016), EUR1
million of available-for-sale financial assets which represents the
Company's investment in Itacare and EUR2 million of other assets.
The EUR115 million figure comprises the appraised value of Sitia
Bay, Livka Bay and La Vanta (Colliers International conducted the
independent property valuation for Croatia and Turkey), as well as
the writedown in value of Pearl Island's assets, based on the sale
agreement with Grivalia.
The Company's consolidated liabilities (excluding DTL) total
EUR182 million and mainly comprise EUR103 million of interest
bearing loans and finance lease obligations (of which EUR8 million
are classified as liabilities held for sale). All loans are held by
Group subsidiaries and are non-recourse to Dolphin. The EUR79
million of trade and other payables and deferred revenue (including
EUR11 million of trade and other payables held for sale) comprise
mainly EUR25 million of option contracts to acquire land in the
Company's Lavender Bay project, EUR7 million deferred income from
government grants and EUR11 million of client advances from villa
sales.
Consolidated statement of profit or loss and other comprehensive
income
For the year ended 31 December 2016
31 December 31 December
2016 2015
(Restated)
Note EUR'000 EUR'000
-------------------------------------------- ----- ------------ ------------
Continuing operations
-------------------------------------------- ----- ------------ ------------
Revenue 6 18,148 47,680
-------------------------------------------- ----- ------------ ------------
Cost of sales 7 (17,357) (46,779)
-------------------------------------------- ----- ------------ ------------
Gross profit 791 901
-------------------------------------------- ----- ------------ ------------
Disposal of investments 8A 785 823
-------------------------------------------- ----- ------------ ------------
Change in valuations 8B (136,512) (61,862)
-------------------------------------------- ----- ------------ ------------
Investment Manager remuneration 31.2 (11,406) (13,128)
-------------------------------------------- ----- ------------ ------------
Directors' remuneration 31.1 (1,509) (904)
-------------------------------------------- ----- ------------ ------------
Depreciation charge 16 (2,284) (2,241)
-------------------------------------------- ----- ------------ ------------
Professional fees 11 (5,480) (4,873)
-------------------------------------------- ----- ------------ ------------
Administrative and other
expenses 12 (2,232) (5,132)
-------------------------------------------- ----- ------------ ------------
Total operating and other
expenses (158,638) (87,317)
-------------------------------------------- ----- ------------ ------------
Results from operating activities (157,847) (86,416)
-------------------------------------------- ----- ------------ ------------
Finance income 13 29 87
-------------------------------------------- ----- ------------ ------------
Finance costs 13 (15,099) (17,731)
-------------------------------------------- ----- ------------ ------------
Net finance costs (15,070) (17,644)
-------------------------------------------- ----- ------------ ------------
Share of losses on equity-accounted
investees, net of tax 21 (34,389) (44,553)
-------------------------------------------- ----- ------------ ------------
Loss before taxation (207,306) (148,613)
-------------------------------------------- ----- ------------ ------------
Taxation 14 3,584 15,359
-------------------------------------------- ----- ------------ ------------
Loss from continuing operations (203,722) (133,254)
-------------------------------------------- ----- ------------ ------------
DISContinuED operation
-------------------------------------------- ----- ------------ ------------
Loss from discontinued operation,
net of tax 10 (57,268) (14,741)
-------------------------------------------- ----- ------------ ------------
Loss (260,990) (147,995)
-------------------------------------------- ----- ------------ ------------
Other comprehensive income
-------------------------------------------- ----- ------------ ------------
Items that will not be reclassified
to profit or loss
-------------------------------------------- ----- ------------ ------------
Revaluation of property,
plant and equipment 16 5,796 (15,181)
-------------------------------------------- ----- ------------ ------------
Share of revaluation on equity-accounted
investees 21 17 27
-------------------------------------------- ----- ------------ ------------
Related tax 14 (1,682) 1,791
-------------------------------------------- ----- ------------ ------------
4,131 (13,363)
-------------------------------------------- ----- ------------ ------------
Items that are or may be
reclassified subsequently
to profit or loss
-------------------------------------------- ----- ------------ ------------
Foreign currency translation
differences 13 (7,458) 17,221
-------------------------------------------- ----- ------------ ------------
Change in fair value of available-for-sale
financial assets 20 (256) -
-------------------------------------------- ----- ------------ ------------
(7,714) 17,221
-------------------------------------------- ----- ------------ ------------
Other comprehensive income,
net of tax (3,583) 3,858
-------------------------------------------- ----- ------------ ------------
Total comprehensive income (264,573) (144,137)
-------------------------------------------- ----- ------------ ------------
Loss attributable to:
-------------------------------------------- ----- ------------ ------------
Owners of the Company (243,762) (145,360)
-------------------------------------------- ----- ------------ ------------
Non-controlling interests (17,228) (2,635)
-------------------------------------------- ----- ------------ ------------
(260,990) (147,995)
============================================ ===== ============ ============
Total comprehensive income
attributable to:
-------------------------------------------- ----- ------------ ------------
Owners of the Company (247,481) (144,228)
-------------------------------------------- ----- ------------ ------------
Non-controlling interests (17,092) 91
============================================ ===== ============ ============
(264,573) (144,137)
============================================ ===== ============ ============
Loss per share
-------------------------------------------- ----- ------------ ------------
Basic and diluted loss per
share (EUR) 15 (0.27) (0.18)
-------------------------------------------- ----- ------------ ------------
Basic and diluted loss per
share - Continuing operations
(EUR) 15 (0.22) (0.16)
-------------------------------------------- ----- ------------ ------------
Basic and diluted loss per
share - Discontinued operation
(EUR) 15 (0.05) (0.02)
-------------------------------------------- ----- ------------ ------------
Consolidated statement of financial position
As at 31 December 2016
31 December 31 December
2016 2015
Note EUR'000 EUR'000
------------------------------- ----- ------------ ------------
Assets
------------------------------- ----- ------------ ------------
Property, plant and equipment 16 87,647 187,015
------------------------------- ----- ------------ ------------
Investment property 17 176,548 340,853
------------------------------- ----- ------------ ------------
Equity-accounted investees 21 - 188,637
------------------------------- ----- ------------ ------------
Available-for-sale financial
assets 20 - 2,201
------------------------------- ----- ------------ ------------
Deferred tax assets 26 996 997
------------------------------- ----- ------------ ------------
Trade and other receivables 22 - 1,178
------------------------------- ----- ------------ ------------
Non-current assets 265,191 720,881
------------------------------- ----- ------------ ------------
Trading properties 19 29,763 37,387
------------------------------- ----- ------------ ------------
Trade and other receivables 22 4,001 15,002
------------------------------- ----- ------------ ------------
Cash and cash equivalents 23 4,698 41,990
------------------------------- ----- ------------ ------------
Assets held for sale 18 162,435 70,240
------------------------------- ----- ------------ ------------
Current assets 200,897 164,619
------------------------------- ----- ------------ ------------
Total assets 466,088 885,500
=============================== ===== ============ ============
Equity
------------------------------- ----- ------------ ------------
Share capital 24 9,046 9,046
------------------------------- ----- ------------ ------------
Share premium 24 569,847 569,847
------------------------------- ----- ------------ ------------
Retained deficit (365,689) (121,706)
=============================== ===== ============ ============
Other reserves 20,683 24,402
=============================== ===== ============ ============
Equity attributable to
owners of the Company 233,887 481,589
------------------------------- ----- ------------ ------------
Non-controlling interests 17,993 34,939
------------------------------- ----- ------------ ------------
Total equity 251,880 516,528
------------------------------- ----- ------------ ------------
Liabilities
------------------------------- ----- ------------ ------------
Loans and borrowings 25 79,521 191,152
------------------------------- ----- ------------ ------------
Finance lease liabilities 27 2,934 2,956
------------------------------- ----- ------------ ------------
Deferred tax liabilities 26 24,255 30,129
------------------------------- ----- ------------ ------------
Trade and other payables 29 6,479 6,698
------------------------------- ----- ------------ ------------
Deferred revenue 28 7,230 17,846
------------------------------- ----- ------------ ------------
Non-current liabilities 120,419 248,781
------------------------------- ----- ------------ ------------
Loans and borrowings 25 12,749 32,528
------------------------------- ----- ------------ ------------
Finance lease liabilities 27 48 77
------------------------------- ----- ------------ ------------
Trade and other payables 29 43,112 58,241
------------------------------- ----- ------------ ------------
Deferred revenue 28 10,683 11,220
------------------------------- ----- ------------ ------------
Liabilities held for sale 18 27,197 18,125
------------------------------- ----- ------------ ------------
Current liabilities 93,789 120,191
------------------------------- ----- ------------ ------------
Total liabilities 214,208 368,972
------------------------------- ----- ------------ ------------
Total equity and liabilities 466,088 885,500
------------------------------- ----- ------------ ------------
Net asset value ('NAV')
per share (EUR) 30 0.26 0.53
------------------------------- ----- ------------ ------------
Consolidated statement of changes in equity
For the year ended 31 December 2016
Attributable to owners
of the Company
----------------------------------------------------------
Share Share Translation Revaluation Retained Non-controlling Total
capital premium reserve reserve deficit Total interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Balance at
1 January
2015 6,424 498,933 10,695 12,575 28,821 557,448 30,364 587,812
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total comprehensive
income
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Loss - - - - (145,360) (145,360) (2,635) (147,995)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Other comprehensive
income
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Revaluation
of property,
plant and
equipment,
net of tax - - - (12,993) - (12,993) (397) (13,390)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Foreign currency
translation
differences - - 13,244 854 - 14,098 3,123 17,221
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Share of
revaluation
on
equity-accounted
investees - - - 27 - 27 - 27
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total other
comprehensive
income - - 13,244 (12,112) - 1,132 2,726 3,858
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total comprehensive
income - - 13,244 (12,112) (145,360) (144,228) 91 (144,137)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Transactions
with owners
of the Company
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Contributions
and distributions
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Issue of ordinary
shares 2,193 60,527 - - - 62,720 - 62,720
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Placement
costs - (1,464) - - - (1,464) - (1,464)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Bond conversions 429 11,851 - - - 12,280 - 12,280
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Equity-settled
share-based
payment
arrangements - - - - 375 375 - 375
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Non-controlling
interests
on capital
increases
of subsidiaries - - - - (545) (545) 545 -
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total contribution
and distributions 2,622 70,914 - - (170) 73,366 545 73,911
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Changes in
ownership
interests
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Acquisition
of non-controlling
interests
without a
change in
control - - - - (4,997) (4,997) 3,236 (1,761)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Other movement
in non-controlling
interests - - - - - - 703 703
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total changes
in ownership
interests - - - - (4,997) (4,997) 3,939 (1,058)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total transactions
with owners
of the Company 2,622 70,914 - - (5,167) 68,369 4,484 72,853
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Balance at
31 December
2015 9,046 569,847 23,939 463 (121,706) 481,589 34,939 516,528
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Balance at
1 January
2016 9,046 569,847 23,939 463 (121,706) 481,589 34,939 516,528
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total comprehensive
income
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Loss - - - - (243,762) (243,762) (17,228) (260,990)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Other comprehensive
income
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Revaluation
of property,
plant and
equipment,
net of tax - - - 4,114 - 4,114 - 4,114
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Foreign currency
translation
differences - - (7,594) - - (7,594) 136 (7,458)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Share of
revaluation
on equity
accounted
investees - - - 17 - 17 - 17
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Fair value
adjustment
on
available-for-sale
financial
asset - - - (256) - (256) - (256)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total other
comprehensive
income - - (7,594) 3,875 - (3,719) 136 (3,583)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total comprehensive
income - - (7,594) 3,875 (243,762) (247,481) (17,092) (264,573)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Transactions
with owners
of the Company
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Contributions
and distributions
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Equity-settled
share-based
payment
arrangements - - - - (221) (221) - (221)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total contribution
and distributions - - - - (221) (221) - (221)
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Changes in
ownership
interests
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Other movement
in non-controlling
interests - - - - - - 146 146
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Total transactions
with owners
of the Company - - - - - - 146 146
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Balance at
31 December
2016 9,046 569,847 16,345 4,338 (365,689) 233,887 17,993 251,880
-------------------- -------- -------- ------------ ------------ ---------- ---------- ---------------- ----------
Consolidated statement of cash flows
For the year ended 31 December 2016
31 December 31 December
2016 2015
EUR'000 EUR'000
--------------------------------------- ------------ ------------
Cash flows from operating
activities
--------------------------------------- ------------ ------------
Loss (260,990) (147,995)
--------------------------------------- ------------ ------------
Adjustments for:
--------------------------------------- ------------ ------------
Net change in fair value
of investment property 64,584 45,047
======================================= ============ ============
Impairment loss on trading
properties 724 3,431
--------------------------------------- ------------ ------------
Loss/(gain) on disposal
of investment in subsidiaries 23,932 (823)
--------------------------------------- ------------ ------------
Gain on disposal of investment
in equity-accounted investees (151) -
--------------------------------------- ------------ ------------
Share of losses on equity-accounted
investees, net of tax 34,389 44,553
--------------------------------------- ------------ ------------
Equity-settled share-based
payment arrangements (221) 375
--------------------------------------- ------------ ------------
Impairment loss on equity-accounted
investees 109,265 -
--------------------------------------- ------------ ------------
Impairment loss on re-measurement
of disposal groups 4,197 763
--------------------------------------- ------------ ------------
Impairment loss on available-for-sale
financial assets 995 -
--------------------------------------- ------------ ------------
(Reversal of) impairment
loss and write offs of
property, plant and equipment (92) 15,247
--------------------------------------- ------------ ------------
Concession/write off of
land 292 2,607
--------------------------------------- ------------ ------------
Depreciation charge 2,780 2,919
--------------------------------------- ------------ ------------
Interest income (30) (106)
--------------------------------------- ------------ ------------
Interest expense 15,314 19,700
--------------------------------------- ------------ ------------
Exchange difference (13,922) 2,590
--------------------------------------- ------------ ------------
Taxation (4,857) (15,296)
--------------------------------------- ------------ ------------
(23,791) (26,988)
--------------------------------------- ------------ ------------
Changes in:
--------------------------------------- ------------ ------------
Receivables 9,380 810
--------------------------------------- ------------ ------------
Payables 3,286 16,495
--------------------------------------- ------------ ------------
Cash used in operating
activities (11,125) (9,683)
======================================= ============ ============
Tax paid (74) (160)
--------------------------------------- ------------ ------------
Net cash used in operating
activities (11,199) (9,843)
--------------------------------------- ------------ ------------
Cash flows from investing
activities
--------------------------------------- ------------ ------------
Proceeds/(outflow) from
disposal of subsidiaries,
net of cash disposed of 61,239 (299)
--------------------------------------- ------------ ------------
Proceeds from disposal
of investment in equity-accounted
investees 1,101 -
--------------------------------------- ------------ ------------
Net acquisitions of investment
property (11) (308)
--------------------------------------- ------------ ------------
Net acquisitions of property,
plant and equipment (2,515) (42,260)
--------------------------------------- ------------ ------------
Net change in trading properties 3,200 16,189
--------------------------------------- ------------ ------------
Net change in equity-accounted
investees - (286)
======================================= ============ ============
Net change in net assets
held for sale 291 -
======================================= ============ ============
Interest received 30 106
======================================= ============ ============
Net cash from/(used in)
investing activities 63,335 (26,858)
--------------------------------------- ------------ ------------
Cash flows from financing
activities
--------------------------------------- ------------ ------------
Proceeds from issue of
share capital - 61,256
--------------------------------------- ------------ ------------
Acquisition of non-controlling
interests without a change
in control - (1,761)
--------------------------------------- ------------ ------------
Change in loans and borrowings (78,643) 3,892
--------------------------------------- ------------ ------------
Change in finance lease
obligations (51) 1,100
--------------------------------------- ------------ ------------
Interest paid (10,652) (13,183)
======================================= ============ ============
Net cash (used in)/from
financing activities (89,346) 51,304
--------------------------------------- ------------ ------------
Net (decrease)/increase
in cash and cash equivalents (37,210) 14,603
--------------------------------------- ------------ ------------
Cash and cash equivalents
at 1 January 41,990 28,739
--------------------------------------- ------------ ------------
Effect of movement in exchange
rates on cash held 101 (587)
--------------------------------------- ------------ ------------
Cash and cash equivalents
reclassified to assets
held for sale (183) (765)
======================================= ============ ============
Cash and cash equivalents
at 31 December 4,698 41,990
======================================= ============ ============
For the purpose of the
consolidated statement
of cash flows, cash and
cash equivalents consist
of the following:
--------------------------------------- ------------ ------------
Cash in hand and at bank
(see note 23) 4,698 41,990
--------------------------------------- ------------ ------------
Cash and cash equivalents
at the end of the year 4,698 41,990
======================================= ============ ============
1. REPORTING ENTITY
Dolphin Capital Investors Limited (the 'Company') was
incorporated and registered in the British Virgin Islands ('BVIs')
on 7 June 2005. The Company is a real estate investment company
focused on the early-stage, large-scale leisure-integrated
residential resorts in south-east Europe and the Americas, and
managed by Dolphin Capital Partners Limited (the 'Investment
Manager'), an independent private equity management firm that
specialises in real estate investments, primarily in south-east
Europe. The shares of the Company were admitted to trading on the
AIM market of the London Stock Exchange ('AIM') on 8 December
2005.
The consolidated financial statements of the Company as at 31
December 2016 comprise the financial statements of the Company and
its subsidiaries (together referred to as the 'Group') and the
Group's interests in associates.
2. basis of preparation
a. Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
('IFRS') as adopted by the European Union ('EU').
The consolidated financial statements were authorised for issue
by the Board of Directors on 3 May 2017.
b. Basis of preparation
The consolidated financial statements of the Company for the
year ended 31 December 2016 have been prepared taking into account
the Company's intention to dispose of all of its assets by 31
December 2019, as further explained below. The basis of preparation
used continues to be in accordance with International Financial
Reporting Standards as adopted by the European Union.
Based on the Company's new asset strategy approved by its
shareholders in December 2016, the Company's objective is to
dispose of all of the Company's assets by 31 December 2019. The
allocation of any additional capital investment into any of the
Company's projects will be substantially sourced from third party
capital providers and with the sole objective of enhancing the
respective asset's realisation potential until 31 December 2019.
The Board expects to return the proceeds from asset disposals to
shareholders, as the orderly realisation of the Company's assets
progresses and taking into account the Company's liquidity position
and working capital requirements. In the event that any assets are
still held by the Company shortly before 31 December 2019, the
Board will convene a shareholders' meeting at which appropriate
resolutions for the future of the Company will be proposed.
c. Basis of measurement
The consolidated financial statements have been prepared under
the historical cost convention, with the exception of property
(investment property, property, plant and equipment),
available-for-sale financial assets, which are stated at their fair
values, assets and liabilities held for sale, which are stated at
their fair value less costs to sell and investments in associates,
which are accounted for in accordance with the equity method of
accounting.
d. Adoption of new and revised standards and interpretations
As from 1 January 2016, the Group adopted all changes to IFRS
which are relevant to its operations. This adoption did not have a
material effect on the consolidated financial statements of the
Company.
The following standards, amendments to standards and
interpretations have been issued but are not yet effective for
annual periods beginning on 1 January 2016. Those which may be
relevant to the Group are set out below. The Group does not plan to
adopt these standards early. The Group continues to assess the
potential impact on its consolidated financial statements resulting
from the application of the following standards.
(i) Standards and interpretations adopted by the EU
IFRS 15 'Revenue from contracts with customers' (effective for
annual periods beginning on or after 1 January 2018).
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. It replaces
existing revenue recognition guidance, including IAS 18 Revenue,
IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty
Programs.
(ii) Standards and interpretations not adopted by the EU
IAS 7 (Amendments) 'Disclosure Initiative' (effective for annual
accounting periods beginning on or after 1 January 2017).
The amendments require disclosures that enable users of
financial statements to evaluate changes in liabilities arising
from financing activities, including both changes arising from cash
flow and non-cash changes.
IAS 12 (Amendments) 'Recognition of Deferred Tax Assets for
Unrealised Losses' (effective for annual accounting periods
beginning on or after 1 January 2017).
The amendments clarify the accounting for deferred tax assets
for unrealised losses on debt instruments measured at fair
value.
Annual Improvements to IFRSs 2014-2016 Cycle (effective for
annual periods beginning on or after 1 January 2017 (IFRS 12) and 1
January 2018 (IFRS 1 and IAS 28)).
The annual improvements impact three standards. The amendments
to IFRS 1 remove the outdated exemptions for first-time adopters of
IFRS. The amendments to IFRS 12 clarify that the disclosure
requirements for interest in other entities also apply to interests
that are classified as held for sale or distribution. The
amendments to IAS 28 clarify that the election to measure at fair
value through profit or loss an investment in associate or a joint
venture that is held by an entity that is a venture capital
organisation, or other qualifying entity, is available for each
investment in an associate or joint venture on an
investment-by-investment basis, upon initial recognition.
IFRS 15 (Clarifications) 'Revenue from Contracts with Customers'
(effective for annual periods beginning on or after 1 January
2018).
The amendments in Clarifications to IFRS 15 address three of the
five topics identified i.e. identifying performance obligations,
principal versus agent considerations, and licensing. The
clarifications provide some transition relief for modified
contracts and completed contracts. Additionally, the IASB concluded
that it was not necessary to amend IFRS 15 with respect to the
collectability or measuring non-cash consideration.
IFRS 16 'Leases' (effective for annual periods beginning on or
after 1 January 2019).
IFRS 16 introduces a single, on-balance lease sheet accounting
model for lessees. A lessee recognises a right-of-use asset
representing its right to use the underlying asset and a lease
liability representing its obligation to make lease payments. There
are optional exemptions for short-term leases and leases of low
value items. Lessor accounting remains similar to the current
standard - i.e. lessors continue to classify leases as finance or
operating leases.
IFRS 16 replaces existing leases guidance including IAS 17
Leases, IFRIC 4 Determining whether an Arrangement contains a
Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the
Substance of Transactions Involving the Legal Form of a Lease.
e. Use of estimates and judgements
The preparation of consolidated financial statements in
accordance with IFRS requires from Management the exercise of
judgement, to make estimates and assumptions that influence the
application of accounting principles and the related amounts of
assets and liabilities, income and expenses. The estimates and
underlying assumptions are based on historical experience and
various other factors that are deemed to be reasonable based on
knowledge available at that time. Actual results may deviate from
such estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected. In particular, information about significant areas of
estimation, uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the
amounts recognised in the consolidated financial statements are
described below:
Work in progress
Work in progress is stated at cost plus any attributable profit
less any foreseeable losses and less amounts received or receivable
as progress payments. The cost of work in progress includes
materials, labour and direct expenses plus attributable overheads
based on a normal level of activity. The Group uses its judgement
to select a variety of methods and make assumptions that are mainly
based on market conditions existing at each statement of financial
position date.
Revenue recognition
The Group applies the provisions of IAS18 for accounting for
revenue from sale of developed property, under which income and
cost of sales are recognised upon delivery and when substantially
all risks have been transferred to the buyer.
Provision for bad and doubtful debts
The Group reviews its trade and other receivables for evidence
of their recoverability. Such evidence includes the customer's
payment record and the customer's overall financial position. If
indications of irrecoverability exist, the recoverable amount is
estimated and a respective provision for bad and doubtful debts is
made. The amount of the provision is charged through profit or
loss. The review of credit risk is continuous and the methodology
and assumptions used for estimating the provision are reviewed
regularly and adjusted accordingly.
Taxation
Significant judgement is required in determining the provision
for taxation. There are transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course
of business. The Group recognises liabilities for anticipated tax
audit issues based on estimates of whether additional taxes will be
due. Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will
impact the income tax and deferred tax provisions in the period in
which such determination is made.
Going concern assumptions
The Group's cash flow forecasts for the foreseeable future
involve uncertainties related primarily to the exact disposal
proceeds and timing of disposals of the assets expected to be
disposed of. Management believes that the proceeds from forecasted
asset sales will be sufficient to maintain the Group's cash flow
forecasts at a positive level. Should the need arise, management is
confident that it can secure additional banking facilities and/or
obtain waivers on existing ones, until planned asset sales are
realised and proceeds received. If for any reason the Group is
unable to continue as a going concern, then this could have an
impact on the Group's ability to realise assets at their recognised
values and to extinguish liabilities in the normal course of
business at the amounts stated in the consolidated financial
statements.
Measurement of fair values
A number of the Group's accounting policies and disclosures
require the measurement of fair values, for both financial and
non-financial assets and liabilities.
The Group has an established control framework with respect to
the measurement of fair values. This includes a valuation team that
has overall responsibility for overseeing all significant fair
value measurements, including Level 3 fair values.
When measuring the fair value of an asset or a liability, the
Group uses market observable data as far as possible. Significant
unobservable inputs and valuation adjustments are regularly
reviewed and changes in fair value measurements from period to
period are analysed.
Fair values are categorised into different levels in a fair
value hierarchy based on the inputs used in the valuation
techniques as follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
-- Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
-- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a
liability might be categorised in different levels of the fair
value hierarchy, then the fair value measurement is categorised in
its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire
measurement.
The Group recognises transfers between levels of the fair value
hierarchy at the end of the reporting period during which the
change has occurred.
When applicable, further information about the assumptions made
in measuring fair values is included in the notes specific to that
asset or liability.
f. Functional and presentation currency
These consolidated financial statements are presented in Euro
(EUR), which is the Company's functional currency. All amounts have
been rounded to the nearest thousand, unless otherwise
indicated.
3. Determination of fair values
Properties
The fair value of investment property and land and buildings
classified as property, plant and equipment is determined at the
end of each reporting period. External, independent valuation
companies, having appropriate recognised professional
qualifications and recent experience in the location and category
of the properties being valued, value the Group's properties at the
end of each year and where necessary, semi-annually.
The Directors have appointed Colliers International, American
Appraisal (Hellas) and PKF Consulting USA (the latter for 2015),
three internationally recognised firms of surveyors, to conduct
valuations of the Group's acquired properties to determine their
fair value. These valuations are prepared in accordance with
generally accepted appraisal standards, as set out by the American
Society of Appraisers (the 'ASA'), and in conformity with the
Uniform Standards of Professional Appraisal Practice of the
Appraisal Foundation and the Principles of Appraisal Practice and
Code of Ethics of the ASA and the Royal Institute of Chartered
Surveyors ('RICS'). Furthermore, the valuations are conducted on an
'as is condition' and on an open market comparative basis.
The valuation analysis of properties is based on all the
pertinent market factors that relate both to the real estate market
and, more specifically, to the subject properties. The valuation
analysis of a property typically uses four approaches: the cost
approach, the direct sales comparison approach, the income approach
and the residual value approach. The cost approach measures value
by estimating the Replacement Cost New or the Reproduction Cost New
of property and then determining the deductions for accrued
depreciation that should be made to reflect the age, condition and
situation of the asset during its past and proposed future economic
working life. The direct sales comparison approach is based on the
premise that persons in the marketplace buy by comparison. It
involves acquiring market sales/offerings data on properties
similar to the subject property. The prices of the comparables are
then adjusted for any dissimilar characteristics as compared to the
subject's characteristics. Once the sales prices are adjusted, they
can be reconciled to estimate the fair value for the subject
property. Based on the income approach, an estimate is made of
prospective economic benefits of ownership. These amounts are
discounted and/or capitalised at appropriate rates of return in
order to provide an indication of value. The residual value
approach is used for the valuation of the land and depends on two
basic factors: the location and the total value of the buildings
developed on a site. Under this approach, the residual value of the
land is calculated by subtracting the development cost from the
estimated sales value of the completed development.
Each of the above-mentioned valuation techniques results in a
separate valuation indication for the subject property. Then a
reconciliation process is performed to weigh the merits and
limiting conditions of each approach. Once this is accomplished, a
value conclusion is reached by placing primary weight on the
technique, or techniques, that are considered to be the most
reliable, given all factors.
Financial assets
The fair value of financial assets that are listed on a stock
exchange is determined by reference to their quoted bid price at
the reporting date. If the market for a financial asset is not
active (and for unlisted securities), the Group establishes fair
value by using valuation techniques. These include the use of
recent arm's length transactions, reference to other instruments
that are substantially the same and discounted cash flow analysis,
making maximum use of market inputs and relying as little as
possible on entity specific inputs. Equity investments for which
fair values cannot be measured reliably are recognised at cost less
impairment.
Trade and other receivables
The fair value of trade and other receivables, excluding
construction work in process, is estimated as the present value of
future cash flows, discounted at the market rate of interest at the
reporting date.
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is
calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at
the reporting date. For finance leases, the market rate of interest
is determined by reference to similar lease agreements.
Equity-settled share-based payment arrangements
The fair value of equity-settled share-based payment
arrangements are measured at grant date using the Trinomial Tree
Option Pricing Model and Monte Carlo simulations. Service and
non-market performance conditions attached to the arrangements are
not taken into account in measuring fair value.
4. PRINCIPAL subsidiaries
As at 31 December 2016, the Group's most significant
subsidiaries were the following:
Country
of Shareholding
Name Project incorporation interest
----------------------------- --------------------- --------------- -------------
Scorpio Bay Holdings Scorpio Bay
Limited Resort Cyprus 100%
============================= ===================== =============== =============
Scorpio Bay Resorts Scorpio Bay
S.A. Resort Greece 100%
============================= ===================== =============== =============
Latirus Enterprises Sitia Bay Golf
Limited Resort Cyprus 80%
============================= ===================== =============== =============
Iktinos Techniki Touristiki Sitia Bay Golf
S.A. ('Iktinos') Resort Greece 78%
============================= ===================== =============== =============
Lavender Bay
Xscape Limited Resort Cyprus 100%
============================= ===================== =============== =============
Golfing Developments Lavender Bay
S.A. Resort Greece 100%
============================= ===================== =============== =============
MindCompass Overseas Kilada Hills
Limited Golf Resort Cyprus 100%
============================= ===================== =============== =============
MindCompass Overseas Kilada Hills
S.A. Golf Resort Greece 100%
============================= ===================== =============== =============
MindCompass Overseas Kilada Hills
Two S.A. Golf Resort Greece 100%
============================= ===================== =============== =============
MindCompass Parks Kilada Hills
S.A. Golf Resort Greece 100%
============================= ===================== =============== =============
Dolphin Capital Greek Kilada Hills
Collection Limited Golf Resort Cyprus 100%
============================= ===================== =============== =============
DCI Holdings One Limited
('DCI H1') Aristo Developers BVIs 100%
============================= ===================== =============== =============
D.C. Apollo Heights
Polo and Country Resort Apollo Heights
Limited Resort Cyprus 100%
============================= ===================== =============== =============
Apollo Heights
Symboula Estates Limited Resort Cyprus 100%
============================= ===================== =============== =============
DolphinCI Fourteen
Limited ('DCI 14') Amanzoe Cyprus 100%
============================= ===================== =============== =============
Eidikou Skopou Dekatessera
S.A. ('ES 14') Amanzoe Greece 100%
============================= ===================== =============== =============
Eidikou Skopou Dekaokto
S.A. ('ES 18') Amanzoe Greece 100%
============================= ===================== =============== =============
Single Purpose Vehicle
Two Limited ('SPV
2') Amanzoe Cyprus 64%
============================= ===================== =============== =============
Eidikou Skopou Eikosi
Ena S.A. Amanzoe Greece 64%
============================= ===================== =============== =============
Azurna Uvala D.o.o.
('Azurna') Livka Bay Resort Croatia 100%
============================= ===================== =============== =============
Eastern Crete Development
Company S.A. Plaka Bay Resort Greece 100%
============================= ===================== =============== =============
La Vanta- Mediterra
DolphinLux 2 S.a.r.l. Resorts Luxembourg 100%
============================= ===================== =============== =============
Kalkan Yapi ve Turizm La Vanta- Mediterra
A.S. ('Kalkan') Resorts Turkey 100%
============================= ===================== =============== =============
Dolphin Capital Americas
Limited - BVIs 100%
============================= ===================== =============== =============
DCA Pearl Holdings
Limited Pearl Island BVIs 100%
============================= ===================== =============== =============
Single Purpose Vehicle
Eight Limited Triopetra Cyprus 100%
============================= ===================== =============== =============
Eidikou Skopou Dekapente
S.A. Triopetra Greece 100%
============================= ===================== =============== =============
Single Purpose Vehicle
Ten Limited ('SPV
10') Kea Resort Cyprus 67%
============================= ===================== =============== =============
Eidikou Skopou Eikosi
Tessera S.A. Kea Resort Greece 67%
============================= ===================== =============== =============
Pearl Island Limited Panama
S.A. Pearl Island Republic 60%
============================= ===================== =============== =============
Panama
Zoniro (Panama) S.A. Pearl Island Republic 60%
============================= ===================== =============== =============
The above shareholding interest percentages are rounded to the
nearest integer.
As at 31 December 2016 and 31 December 2015, all or part of the
shares held by the Company in some of its subsidiaries are pledged
as a security for loans (see note 25).
5. Significant accounting policies
The principal accounting policies adopted in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all periods presented in
these consolidated financial statements unless otherwise
stated.
5.1 Subsidiaries
Subsidiaries are those entities, including special purpose
entities, controlled by the Group. The financial statements of
subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control
ceases.
5.2 Transactions eliminated on consolidation
Intra-group balances and any unrealised gains and losses arising
from intra-group transactions are eliminated in preparing the
consolidated financial statements. Unrealised gains arising from
transactions with associates are eliminated to the extent of the
Group's interest in the entity. Unrealised losses are eliminated in
the same way as unrealised gains, but only to the extent that there
is no evidence of impairment.
5.3 Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group. Control is the power to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities. In assessing control, the Group takes
into consideration potential voting rights that currently are
exercisable.
The Group measures goodwill at the acquisition date as the fair
value of the consideration transferred, plus the recognised amount
of any non-controlling interests in the acquiree, plus if the
business combination is achieved in stages, the fair value of the
existing equity interest in the acquiree, less the net recognised
amount (generally fair value) of the identifiable assets acquired
and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss. The consideration
transferred does not include amounts related to the settlement of
pre-existing relationships. Such amounts are generally recognised
in profit or loss. Costs related to the acquisition, other than
those associated with the issue of debt or equity securities, that
the Group incurs in connection with a business combination are
expensed as incurred. Any contingent consideration payable is
recognised at fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not remeasured and
settlement is accounted for within equity. Otherwise, subsequent
changes to the fair value of the contingent consideration are
recognised in profit or loss. The interest of non-controlling
shareholders in the acquiree is initially measured at the
non-controlling shareholders' proportion of the net fair value of
the assets, liabilities and contingent liabilities recognised.
5.4 Interest in equity-accounted investees
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
policies. Significant influence is presumed to exist when the Group
holds between 20% and 50% of the voting power of another entity.
Associates are accounted for using the equity method (equity
accounted investees) and are initially recognised at cost. The
Group's investment includes goodwill identified on acquisition, net
of any accumulated impairment losses. The consolidated financial
statements include the Group's share of the income and expenses and
equity movements of equity accounted investees, after adjustments
to align the accounting policies with those of the Group, from the
date that significant influence commences until the date that
significant influence ceases. When the Group's share of losses
exceeds its interest in an equity accounted investee, the carrying
amount of that interest (including any long-term investments) is
reduced to nil and the recognition of further losses is
discontinued except to the extent that the Group has an obligation
or has made payments on behalf of the investee.
5.5 Investment property
Investment property is property held either to earn rental
income or for capital appreciation or for both, but not for sale in
the ordinary course of the business, use in the production or
supply of goods or services or for administration purposes.
Investment property is initially measured at cost and subsequently
at fair value with any change therein recognised in profit or
loss.
Cost includes expenditure that is directly attributable to the
acquisition of the investment property. The cost of
self-constructed investment property includes the cost of materials
and direct labour, any other costs directly attributable to
bringing the investment property to a working condition for their
intended use and capitalised borrowing costs.
Any gain or loss on disposal of an investment property
(calculated as the difference between the net proceeds from
disposal and the carrying amount of the item) is recognised in
profit or loss. When an investment property that was previously
classified as property, plant and equipment is sold, any related
amount included in the revaluation reserve is transferred to
retained earnings.
When the use of property changes such that it is reclassified as
property, plant and equipment, its fair value at the date of
reclassification becomes its cost for subsequent accounting.
A property interest under an operating lease is classified and
accounted for as an investment property on a property-by-property
basis when the Group holds it to earn rentals or for capital
appreciation or both. Any such property interest under an operating
lease classified as an investment property is carried at fair
value. Lease payments are accounted for as described in accounting
policy 5.10.
5.6 Property, plant and equipment
Land and buildings are carried at fair value, based on
valuations by external independent valuers, less subsequent
depreciation for buildings. Revaluations are carried out with
sufficient regularity such that the carrying amount does not differ
materially from that which would be determined using fair value at
the statement of financial position date. All other property, plant
and equipment are stated at cost less accumulated depreciation and
impairment losses.
Increases in the carrying amount arising on revaluation of
property, plant and equipment are credited to fair value reserve in
shareholders' equity. Decreases that offset previous increases of
the same asset are charged against that reserve; all other
decreases are recognised in profit or loss.
The cost of self-constructed assets includes the cost of
materials, direct labour, the initial estimate, where relevant, of
the costs of dismantling and removing the items and restoring the
site on which they are located, and appropriate proportion of
production overheads.
Depreciation charge is recognised in profit or loss on a
straight-line basis over the estimated useful lives of items of
property, plant and equipment, unless it constitutes part of the
cost of another asset in which case is included in this asset's
carrying amount. Freehold land is not depreciated.
The annual rates of depreciation are as follows:
Buildings 3%
Machinery and equipment 10% - 33.33%
Motor vehicles and other 10% - 20%
The Group recognises in the carrying amount of an item of
property, plant and equipment the cost of replacing part of such an
item when that cost is incurred if it is probable that the future
economic benefits embodied with the item will flow to the Group and
the cost of the item can be measured reliably. All other costs are
recognised in profit or loss as incurred.
5.7 Assets held for sale
Non-current assets, or disposal groups comprising assets and
liabilities, are classified as held for sale if it is highly
probable that they will be recovered primarily through sale rather
than through continuing use.
Such assets, or disposal groups, are generally measured at the
lower of their carrying amount and fair value less costs to sell.
Any impairment loss on a disposal group is allocated first to
goodwill, and then to the remaining assets and liabilities on a pro
rata basis. Impairment losses on initial classification as held for
sale and subsequent gains and losses on re-measurement are
recognised in profit or loss.
Once classified as held for sale, property, plant and equipment
is no longer depreciated, and any equity-accounted investee is no
longer equity accounted.
5.8 Trading properties
Trading properties (inventory) are shown at the lower of cost
and net realisable value. Net realisable value is the estimated
selling price in the ordinary course of the business less the
estimated costs of completion and the estimated costs necessary to
make the sale. Cost of trading properties is determined on the
basis of specific identification of their individual costs and
represents the fair value paid at the date that the land was
acquired by the Group.
5.9 Work in progress
Work in progress is stated at cost plus any attributable profit
less any foreseeable losses and less amounts received or receivable
as progress payments. The cost of work in progress includes
materials, labour and direct expenses plus attributable overheads
based on a normal level of activity.
5.10 Leased assets
Leases under the terms of which the Group assumes substantially
all the risks and rewards of ownership are classified as finance
leases. Property held under operating leases that would otherwise
meet the definition of investment property may be classified as
investment property on a property-by-property basis. Such property
is accounted for as if it were a finance lease and the fair value
model is used for the asset recognised. Minimum lease payments on
finance leases are apportioned between the finance charge and the
reduction of the outstanding liability. The finance charge is
allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the
liability.
5.11 Trade and other receivables
Trade and other receivables are stated at their cost less
impairment losses (see accounting policy 5.22).
5.12 Financial assets
The classification of the Group's investments in equity
securities depends on the purpose for which the investments were
acquired. Management determines the classification of investments
at initial recognition and re-evaluates this designation at every
statement of financial position date.
Available-for-sale financial assets
Investments intended to be held for an indefinite period of
time, which may be sold in response to needs for liquidity or
changes in interest rates, are classified as available for sale.
These are included in non-current assets unless management has the
express intention of holding the investment for less than 12 months
from the reporting date or unless they will need to be sold to
raise operating capital, in which case they are included in current
assets. Unrealised gains and losses arising from changes in the
fair value of available-for-sale financial assets are recognised in
other comprehensive income and then in equity. When
available-for-sale financial assets are sold or impaired, the
accumulated fair value adjustments are included in profit or loss.
In respect of available-for-sale equity securities, impairment
losses previously recognised in profit or loss are not reversed
through profit or loss. Any increase in fair value subsequent to an
impairment loss is recognised in other comprehensive income and
accumulated under the heading of fair value reserve.
5.13 Cash and cash equivalents
Cash and cash equivalents comprise cash deposited with banks and
bank overdrafts repayable on demand. Cash equivalents are
short-term, highly-liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant
risk of changes in value. Bank overdrafts that are repayable on
demand and form an integral part of the Group's cash management are
included as a component of cash and cash equivalents for the
purpose of the consolidated statement of cash flows.
5.14 Share capital and premium
Share capital represents the issued amount of shares outstanding
at their par value. Any excess amount of capital raised is included
in share premium. External costs directly attributable to the issue
of new shares, other than on a business combination, are shown as a
deduction, net of tax, in share premium from the proceeds. Share
issue costs incurred directly in connection with a business
combination are included in the cost of acquisition.
5.15 Own shares
When share capital recognised as equity is repurchased, the
amount of the consideration paid, which includes directly
attributable costs, net of any tax effects, is recognised as a
reduction from equity. Repurchased shares are classified as own
shares and are presented as a reduction from total equity. When own
shares are sold or reissued subsequently, the amount received is
recognised as an increase in equity, and the resulting surplus or
deficit on the transaction is transferred to share premium.
5.16 Dividends
Dividends are recognised as a liability in the period in which
they are declared and approved and are subtracted directly from
retained earnings.
5.17 Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair
value, less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised
cost with any difference between cost and redemption value being
recognised in profit or loss over the period of the borrowings on
an effective interest basis.
5.18 Trade and other payables
Trade and other payables are stated at their cost.
5.19 Prepayments from clients
Payments received in advance on development contracts for which
no revenue has been recognised yet, are recorded as prepayments
from clients as at the statement of financial position date and
carried under creditors. Payments received in advance on
development contracts for which revenue has been recognised, are
recorded as prepayments from clients to the extent that they exceed
revenue that was recognised in profit or loss as at the statement
of financial position date.
5.20 Provisions
A provision is recognised in the consolidated statement of
financial position when the Group has a legal or constructive
obligation as a result of a past event, and it is probable that an
outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
5.21 Expenses
Investment Manager remuneration, directors' remuneration,
operational expenses, professional fees, administrative and other
expenses are accounted for on an accrual basis. Expenses are
charged to profit or loss, except for expenses incurred on the
acquisition of an investment property, which are included within
the cost of that investment. Expenses arising on the disposal of an
investment property are deducted from the disposal proceeds.
5.22 Impairment
The carrying amounts of the Group's assets, other than
investment property (see accounting policy 5.5) and deferred tax
assets (see accounting policy 5.32), are reviewed at each statement
of financial position date to determine whether there is any
indication of impairment. If any such indication exists, the
assets' recoverable amount is estimated. The recoverable amount is
the greater of the net selling price and value in use of an asset.
In assessing value in use of an asset, the estimated future cash
flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset.
An impairment loss is recognised whenever the carrying amount of
an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-generating units
are allocated first to reduce the carrying amount of any goodwill
allocated to cash-generating units and then, to reduce the carrying
amount of the other assets in the unit on a pro rata basis.
5.23 Discontinued operation
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group. A discontinued operation has either
been disposed of, or is classified as held for sale, and:
(a) represents a separate major line of business or geographical
area of operations;
(b) is part of a single co-ordinated plan to dispose of a
separate major line of business or geographical area of operation;
or
(c) is a subsidiary acquired exclusively with a view to
resale.
When an operation is classified as a discontinued operation, the
comparative statement of profit or loss and other comprehensive
income is re-presented as if the operation had been discontinued
from the start of the comparative year.
5.24 Revenue recognition
Revenue comprises the invoiced amount for the sale of goods and
services net of value added tax, rebates and discounts. Revenues
earned by the Group are recognised on the following bases:
Income from land and buildings under development
The Group applies IAS 18 'Revenue' for income from land and
buildings under development, according to which revenue and the
related costs are recognised in profit or loss when the building
has been completed and delivered and all associated risks have been
transferred to the buyer.
Construction contracts
Where the outcome of a construction contract can be estimated
reliably, revenue and costs are recognised by reference to the
stage of completion of the contract activity at the statement of
financial position date, as measured by the proportion that
contract costs incurred for work performed to date compared to the
estimated total contract costs, except where this would not be
representative of the stage of completion. Variations in contract
work, claims and incentive payments are included to the extent that
they have been agreed with the customer.
Where the outcome of a construction contract cannot be estimated
reliably, contract revenue is recognised to the extent of contract
costs incurred that it is probable they will be recoverable.
Contract costs are recognised as expenses in the period in which
they are incurred. When it is probable that total contract costs
will exceed total contract revenue, the expected loss is recognised
as an expense immediately.
5.25 Equity-settled share-based payment arrangements
The grant-date fair value of equity-settled share-based
arrangements is generally recognised as an expense, with a
corresponding increase in equity, over the vesting period of the
awards. The grant-date fair value is measured to reflect market
performance conditions and there is no true-up for differences
between expected and actual outcomes. The amount recognised as an
expense, is adjusted to reflect the number of awards for which the
related service and non-market performance conditions are expected
to be met, such that the amount ultimately recognised is based on
the number of awards that meet the related service and non-market
performance conditions at the vesting date. For share-based payment
awards with non-vesting conditions, the grant-date fair value is
measured to reflect such conditions and there is no true-up for
differences between expected and actual outcomes.
5.26 Finance income and costs
Finance income comprises interest income on funds invested,
dividend income and gains on the disposal of and increase in the
fair value of financial assets at fair value through profit or
loss. Interest income is recognised as it accrues in profit or
loss, using the effective interest method.
Finance costs comprise interest expense on borrowings, unwinding
of the discount on provisions and losses on the disposal of and
reduction in the fair value of financial assets at fair value
through profit or loss.
The interest expense component of finance lease payments is
recognised in profit or loss using the effective interest
method.
5.27 Foreign currency translation
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at exchange
rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date
are retranslated to the functional currency at the exchange rate at
that date. The foreign currency gain or loss on monetary items is
the difference between amortised cost in the functional currency at
the beginning of the period, adjusted for effective interest and
payments during the period, and the amortised cost in foreign
currency translated at the exchange rate at the end of the period.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair
value was determined. Foreign currency differences arising on
retranslation are recognised in profit or loss.
5.28 Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are
translated to Euro at exchange rates at the reporting date. The
income and expenses of foreign operations, excluding foreign
operations in hyperinflationary economies, are translated to Euro
at exchange rates at the dates of the transactions.
The income and expenses of foreign operations in
hyperinflationary economies are translated to Euro at the exchange
rate at the reporting date. Prior to translating the financial
statements of foreign operations in hyperinflationary economies,
their financial statements for the current period are restated to
account for changes in the general purchasing power of the local
currency. The restatement is based on relevant price indices at the
reporting date.
Foreign currency differences are recognised directly in equity
in the foreign currency translation reserve. When a foreign
operation is disposed of, in part or in full, the relevant amount
in the foreign currency translation reserve is transferred to
profit or loss.
5.29 Segment reporting
A segment is a distinguishable component of the Group that is
engaged either in providing products or services (operating
segment), or in providing products or services within a particular
economic environment (geographical segment), which is subject to
risks and rewards that are different from those of other segments.
Segment results that are reported to the Group's chief operating
decision maker include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis.
5.30 Earnings per share
The Group presents basic and diluted (if applicable) earnings
per share ('EPS') data for its shares. Basic EPS is calculated by
dividing the profit or loss attributable to shareholders of the
Company by the weighted average number of shares outstanding during
the period. Diluted EPS is determined by adjusting the profit or
loss attributable to shareholders and the weighted average number
of shares outstanding for the effects of all dilutive potential
shares.
5.31 NAV per share
The Group presents NAV per share by dividing the total equity
attributable to owners of the Company by the number of shares
outstanding as at the statement of financial position date.
5.32 Taxation
Taxation comprises current and deferred tax. Taxation is
recognised in profit or loss, except to the extent that it relates
to items recognised directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantially enacted at
the statement of financial position date, and any adjustment to tax
payable in respect of previous years.
Deferred tax is recognised using the statement of financial
position method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for the following temporary differences: the
initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting
nor taxable profit, and differences relating to investments in
subsidiaries and jointly controlled entities to the extent that it
is probable that they will not reverse in the foreseeable future.
In addition, deferred tax is not recognised for taxable temporary
differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the
reporting date. Deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax
credits and deductible temporary differences to the extent that it
is probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be
realised.
In determining the amount of current and deferred tax, the Group
takes into account the impact of uncertain tax positions and
whether additional taxes and interest may be due. This assessment
relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become
available that causes the Group to change its judgement regarding
the adequacy of existing tax liabilities; such changes to the tax
liabilities will impact tax expense in the period that such a
determination is made.
5.33 Government grants
Government grants are recognised when there is reasonable
assurance that the Group will comply with the conditions attaching
to them and that the grants will be received. Government grants
related to non-current assets are recognised as deferred income
that is recognised in profit or loss on a systematic basis over the
useful life of the asset. Government grants that relate to expenses
are recognised in profit or loss as revenue.
5.34 Comparatives
Where necessary, comparative figures have been adjusted to
conform to changes in presentation in the current year.
6. revenue
From 1 January From 1 January
2016 2015
to 31 December to 31 December
2016 2015
Continuing Discontinued Continuing Discontinued
operations operation Total operations operation Total
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------------------------- ------------ ------------- -------- ------------ ------------- -----------
Income from hotel
operations 11,498 4,354 15,852 10,291 524 10,815
-------------------------- ------------ ------------- -------- ------------ ------------- -----------
Income from operation
of golf courses - 126 126 - 155 155
-------------------------- ------------ ------------- -------- ------------ ------------- -----------
Income from construction
contracts - 1,032 1,032 2,273 3,427 5,700
-------------------------- ------------ ------------- -------- ------------ ------------- -----------
Sale of trading
and investment
properties 6,223 3,614 9,837 34,629 - 34,629
-------------------------- ------------ ------------- -------- ------------ ------------- -----------
Rental income 56 - 56 329 - 329
-------------------------- ------------ ------------- -------- ------------ ------------- -----------
Other income 371 1,478 1,849 158 120 278
-------------------------- ------------ ------------- -------- ------------ ------------- -----------
Total 18,148 10,604 28,752 47,680 4,226 51,906
-------------------------- ------------ ------------- -------- ------------ ------------- -----------
7. COST OF SALES
From 1 January From 1 January
2016 2015
to 31 December to 31 December
2016 2015
Continuing Discontinued Continuing Discontinued
operations operation Total operations operation Total
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Cost of sales related
to:
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Hotel operations 4,046 2,145 6,191 3,513 484 3,997
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Golf course operations - 144 144 - 470 470
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Construction contracts - - - 2,486 661 3,147
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Sales of trading
and investment
properties 5,257 1,735 6,992 29,926 - 29,926
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Commission to agents
and other 384 - 384 358 - 358
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Electricity and
fuel 97 10 107 80 227 307
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Personnel expenses
(see below) 5,592 3,500 9,092 5,508 3,467 8,975
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Branding management
fees 1,585 661 2,246 3,552 - 3,552
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Other operating
expenses 396 25 421 1,356 320 1,676
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Total 17,357 8,220 25,577 46,779 5,629 52,408
------------------------- ------------ ------------- -------- ------------ ------------- -----------
Personnel expenses
Continuing operations
From 1 January 2016
to 31 December 2016
=======================================
Hotel Project
& leisure maintenance
operations & development Total
--------------------------------- ------------ --------------- --------
EUR'000 EUR'000 EUR'000
--------------------------------- ------------ --------------- --------
Wages and salaries 3,858 493 4,351
--------------------------------- ------------ --------------- --------
Compulsory social security
contributions 948 103 1,051
--------------------------------- ------------ --------------- --------
Other personnel costs 167 23 190
--------------------------------- ------------ --------------- --------
Total 4,973 619 5,592
--------------------------------- ------------ --------------- --------
The average number of employees
employed by the Group during
the year was 172 25 197
--------------------------------- ------------ --------------- --------
Discontinued operation
From 1 January 2016
to 31 December 2016
=======================================
Hotel Project
& leisure maintenance
operations & development Total
--------------------------------- ------------ --------------- --------
EUR'000 EUR'000 EUR'000
--------------------------------- ------------ --------------- --------
Wages and salaries 842 1,514 2,356
--------------------------------- ------------ --------------- --------
Compulsory social security
contributions 95 559 654
--------------------------------- ------------ --------------- --------
Other personnel costs 367 123 490
--------------------------------- ------------ --------------- --------
Total 1,304 2,196 3,500
--------------------------------- ------------ --------------- --------
The average number of employees
employed by the Group during
the year was 134 104 238
--------------------------------- ------------ --------------- --------
Continuing operations
From 1 January 2015
to 31 December 2015
=========================================================
Hotel Project
& leisure maintenance Construction
operations & development Total in progress
(Restated) (Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000
---------------------------- ------------ --------------- ----------- -------------
Wages and salaries 3,369 772 4,141 74
---------------------------- ------------ --------------- ----------- -------------
Compulsory social security
contributions 832 160 992 3
---------------------------- ------------ --------------- ----------- -------------
Contributions to defined
contribution plans - 29 29 -
---------------------------- ------------ --------------- ----------- -------------
Other personnel costs 155 191 346 -
---------------------------- ------------ --------------- ----------- -------------
Total 4,356 1,152 5,508 77
---------------------------- ------------ --------------- ----------- -------------
The average number of
employees employed by
the Group during the
year was 140 37 177 2
---------------------------- ------------ --------------- ----------- -------------
Discontinued operation
From 1 January 2015
to 31 December 2015
=========================================================
Hotel Project
& leisure maintenance Construction
operations & development Total in progress
(Restated) (Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000
---------------------------- ------------ --------------- ----------- -------------
Wages and salaries 541 1,710 2,251 -
---------------------------- ------------ --------------- ----------- -------------
Compulsory social security
contributions 59 640 699 -
---------------------------- ------------ --------------- ----------- -------------
Contributions to defined
contribution plans - - - -
---------------------------- ------------ --------------- ----------- -------------
Other personnel costs 267 250 517 -
---------------------------- ------------ --------------- ----------- -------------
Total 867 2,600 3,467 -
---------------------------- ------------ --------------- ----------- -------------
The average number of
employees employed by
the Group during the
year was 89 120 209 -
---------------------------- ------------ --------------- ----------- -------------
Personnel expenses in relation to operating expenses are
expensed as incurred in profit or loss. Personnel expenses in
relation to construction in progress are capitalised on the
specific projects and transferred to profit or loss through cost of
sales when the specific property is disposed of.
8. INCOME AND EXPENSES
A. DISPOSAL OF INVESTMENTS
From 1 January 2016 From 1 January 2015
to 31 December 2016 to 31 December 2015
Continuing Discontinued Continuing Discontinued
Note operations operation Total operations operation Total
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------- ------- ------------ ------------- --------- ------------ ------------- -----------
Gain/(loss)
on disposal
of investment
in subsidiaries 33 634 (24,566) (23,932) 823 - 823
---------------------- ------- ------------ ------------- --------- ------------ ------------- -----------
Gain on
disposal
of investment
in equity-accounted
investees 21 151 - 151 - - -
---------------------- ------- ------------ ------------- --------- ------------ ------------- -----------
Total 785 (24,566) (23,781) 823 - 823
---------------------- ------- ------------ ------------- --------- ------------ ------------- -----------
B. CHANGE IN VALUATIONS
From 1 January 2016 From 1 January 2015
to 31 December 2016 to 31 December 2015
Continuing Discontinued Continuing Discontinued
Note operations operation Total operations operation Total
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
Net change
in fair
value of
investment
property 17 (22,126) (42,458) (64,584) (53,163) 8,116 (45,047)
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
Impairment
loss on
trading
properties 19 (724) - (724) (3,431) - (3,431)
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
Impairment
loss on
re-measurement
of disposal
groups 18 (4,197) - (4,197) (763) - (763)
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
Impairment
loss on
equity-accounted
investees 21 (109,265) - (109,265) - - -
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
Impairment
loss on
available-for-sale
financial
assets 20 - (995) (995) - - -
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
Reversal
of (impairment
loss) and
write offs
of property,
plant and
equipment 16 92 - 92 (1,898) (13,349) (15,247)
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
Concession/write
off of land (292) - (292) (2,607) - (2,607)
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
Total (136,512) (43,453) (179,965) (61,862) (5,233) (67,095)
--------------------- ------- ------------ ------------- ---------- ------------ ------------- -----------
9. SEGMENT REPORTING
Operating segments
The Group has two reportable operating segments, the 'Hotel
& leisure operations' and 'Construction & development'
segments. Information related to each operational reportable
segment is set out below. Segment profit/(loss) before tax is used
to measure performance as management believes such information is
the most relevant in evaluating the results of the respective
segments relative to other entities that operate in the same
industries.
Hotel & leisure Construction Reportable segments'
operations & development Other totals
-------------------- -------------------------- -------------------------- -------------------------- --------------------------
Continuing Discontinued Continuing Discontinued Continuing Discontinued Continuing Discontinued
operations operation operations operation operations operation operations operation
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
31 December
2016
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Revenue 11,498 4,480 6,237 6,038 413 86 18,148 10,604
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Cost of
sales (10,458) (4,254) (6,273) (3,933) (626) (33) (17,357) (8,220)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Investment
Manager
remuneration - - - - (11,406) - (11,406) -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Directors'
remuneration - - - - (1,509) - (1,509) -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Depreciation
charge (2,269) (117) (15) (379) - - (2,284) (496)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Professional
fees - - (210) (1,920) (5,270) (118) (5,480) (2,038)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Administrative
and other
expenses - - (234) (1,003) (1,998) (504) (2,232) (1,507)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Gain/(loss)
on disposal
of investments
in subsidiaries - (24,566) (563) - 1,197 - 634 (24,566)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Gain on
disposal
of investments
in
equity-accounted
investees - - 151 - - - 151 -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Net change
in fair
value of
investment
property - - - - (22,126) (42,458) (22,126) (42,458)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
mpairment
loss on
trading
properties - - (724) - - - (724) -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Impairment
loss on
re-measurement
of disposal
groups (666) - (1,496) - (2,035) - (4,197) -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
mpairment
loss on
equity accounted
investees - - (109,265) - - - (109,265) -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
mpairment
loss on
available-for-sale
financial
assets - - - - - (995) (995)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Reversal
of (impairment
loss) and
write offs
of property,
plant and
equipment 238 - - - (146) - 92 -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Concession/write
off of land - - - - (292) - (292) -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Results
from operating
activities (1,657) (24,457) (112,392) (1,197) (43,798) (44,022) (157,847) (69,676)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Finance
income - - - - 29 13,557 29 13,557
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Finance
costs (2,903) - (3,007) (2,399) (9,189) (23) (15,099) (2,422)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Net finance
(costs)/income (2,903) - (3,007) (2,399) (9,160) 13,534 (15,070) 11,135
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Share of
losses on
equity-accounted
investees,
net of tax - - (34,389) - - - (34,389) -
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Loss before
taxation (4,560) (24,457) (149,788) (3,596) (52,958) (30,488) (207,306) (58,541)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Taxation - - (1,546) 1,273 5,130 - 3,584 1,273
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Loss (4,560) (24,457) (151,334) (2,323) (47,828) (30,488) (203,722) (57,268)
-------------------- ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Reportable
Hotel & leisure Construction segments'
operations & development Other totals
------------------ -------------------------- -------------------------- -------------------------- --------------------------
Continuing Discontinued Continuing Discontinued Continuing Discontinued Continuing Discontinued
operations operation operations operation operations operation operations operation
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
31 December
2015 (Restated)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Revenue 10,291 679 37,223 3,427 166 120 47,680 4,226
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Cost of
sales (8,959) (1,821) (35,971) (3,339) (1,849) (469) (46,779) (5,629)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Investment
Manager
remuneration - - - - (13,128) - (13,128) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Directors'
remuneration - - - - (904) - (904) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Depreciation
charge (2,227) (238) (14) - - (440) (2,241) (678)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Professional
fees - - (981) (1,772) (3,892) (1,519) (4,873) (3,291)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Administrative
and other
expenses - - (2,258) - (2,874) (968) (5,132) (968)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Gain on
disposal
of investments
in subsidiaries - - 823 - - - 823 -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Net change
in fair
value of
investment
property - - - - (53,163) 8,116 (53,163) 8,116
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Impairment
loss on
trading
properties - - (3,431) - - - (3,431) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Impairment
loss on
measurement
of disposal
groups (76) - - - (687) - (763) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Impairment
loss and
write offs
of property,
plant and
equipment (1,113) (13,349) - - (785) - (1,898) (13,349)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Concession/write
off of
land - - (2,607) - - - (2,607) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Results
from operating
activities (2,084) (14,729) (7,216) (1,684) (77,116) 4,840 (86,416) (11,573)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Finance
income 1 - - 1 86 18 87 19
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Finance
costs (2,682) - (1,750) (2,868) (13,299) (256) (17,731) (3,124)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Net finance
costs (2,681) - (1,750) (2,867) (13,213) (238) (17,644) (3,105)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Share of
profit
on
equity-accounted
investees,
net of
tax (1,011) - (43,542) - - - (44,553) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Loss before
taxation (5,776) (14,729) (52,508) (4,551) (90,329) 4,602 (148,613) (14,678)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Taxation - - 633 - 14,726 (63) 15,359 (63)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Loss (5,776) (14,729) (51,875) (4,551) (75,603) 4,539 (133,254) (14,741)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Geographical segments
Information in relation to the geographical regions in which the
Group operates, is set below:
Americas(1) Consolidated
Reportable
South-East segment
(Discontinued) Europe(2) Other(3) totals totals
Adjustments(4)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
========================= =============== ========== ======== ========== ============== ==============
31 December 2016
========================= ===============================================================================
Property, plant
and equipment - 87,647 - 87,647 - 87,647
========================= =============== ========== ======== ========== ============== ============
Investment property - 176,548 - 176,548 - 176,548
========================= =============== ========== ======== ========== ============== ============
Trading properties - 29,763 - 29,763 - 29,763
========================= =============== ========== ======== ========== ============== ============
Cash and cash
equivalents - 3,415 1,283 4,698 - 4,698
========================= =============== ========== ======== ========== ============== ============
Assets held for
sale 55,909 106,526 - 162,435 - 162,435
========================= =============== ========== ======== ========== ============== ============
Intra-group debit
balances 15,277 51,899 589,489 656,665 (656,665) -
========================= =============== ========== ======== ========== ============== ============
Other assets - 4,681 316 4,997 - 4,997
========================= =============== ========== ======== ========== ============== ============
Total assets 71,186 460,479 591,088 1,122,753 (656,665) 466,088
========================= =============== ========== ======== ========== ============== ============
Loans and borrowings - 92,270 - 92,270 - 92,270
========================= =============== ========== ======== ========== ============== ============
Finance lease
liabilities - 2,982 - 2,982 - 2,982
========================= =============== ========== ======== ========== ============== ============
Deferred tax liabilities - 24,255 - 24,255 - 24,255
========================= =============== ========== ======== ========== ============== ============
Liabilities held
for sale 10,800 16,397 - 27,197 - 27,197
========================= =============== ========== ======== ========== ============== ============
Intra-group credit
balances 170,031 425,771 60,863 656,665 (656,665) -
========================= =============== ========== ======== ========== ============== ============
Other liabilities - 64,678 2,826 67,504 - 67,504
========================= =============== ========== ======== ========== ============== ============
Total liabilities 180,831 626,353 63,689 870,873 (656,665) 214,208
========================= =============== ========== ======== ========== ============== ============
Revenue - 18,148 - 18,148 - 18,148
========================= =============== ========== ======== ========== ============== ============
Cost of sales - (17,357) - (17,357) - (17,357)
========================= =============== ========== ======== ========== ============== ============
Disposal of investments - 785 - 785 - 785
========================= =============== ========== ======== ========== ============== ============
Change in valuations - (136,512) - (136,512) - (136,512)
========================= =============== ========== ======== ========== ============== ============
Share of losses
on equity-accounted
investees, net
of tax - (34,389) - (34,389) - (34,389)
========================= =============== ========== ======== ========== ============== ============
Investment Manager
remuneration - (1,390) (10,016) (11,406) - (11,406)
========================= =============== ========== ======== ========== ============== ============
Other operating
expenses - (6,172) (5,333) (11,505) - (11,505)
========================= =============== ========== ======== ========== ============== ============
Net finance cost - (11,466) (3,604) (15,070) - (15,070)
========================= =============== ========== ======== ========== ============== ============
Loss before taxation - (188,353) (18,953) (207,306) - (207,306)
========================= =============== ========== ======== ========== ============== ============
Taxation - 3,584 - 3,584 - 3,584
========================= =============== ========== ======== ========== ============== ============
Loss from continuing
operations - (184,769) (18,953) (203,722) - (203,722)
------------------------- --------------- ---------- -------- ---------- -------------- ------------
Loss from discontinued
operation, net
of tax (57,268) - - (57,268) - (57,268)
------------------------- --------------- ---------- -------- ---------- -------------- ------------
Loss (57,268) (184,769) (18,953) (260,990) - (260,990)
------------------------- --------------- ---------- -------- ---------- -------------- ------------
Americas(1) Consolidated
Reportable
South-East segment
(Discontinued) Europe(2) Other(3) totals totals
Adjustments(4)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
========================= =============== ========== ========= ========== =============== ============
31 December 2015
(Restated)
========================= =============== ========== ========= ========== =============== ============
Property, plant
and equipment 102,920 84,095 - 187,015 - 187,015
========================= =============== ========== ========= ========== =============== ============
Investment property 141,906 198,947 - 340,853 - 340,853
========================= =============== ========== ========= ========== =============== ============
Trading properties 2,052 35,335 - 37,387 - 37,387
========================= =============== ========== ========= ========== =============== ============
Equity-accounted
investees - 188,637 - 188,637 - 188,637
========================= =============== ========== ========= ========== =============== ============
Available-for-sale
financial assets 2,201 - - 2,201 - 2,201
========================= =============== ========== ========= ========== =============== ============
Cash and cash
equivalents 2,117 6,218 33,655 41,990 - 41,990
========================= =============== ========== ========= ========== =============== ============
Assets held for
sale - 70,240 - 70,240 - 70,240
========================= =============== ========== ========= ========== =============== ============
Intra-group debit
balances 14,195 291,448 555,516 861,159 (861,159) -
========================= =============== ========== ========= ========== =============== ============
Other assets 3,141 13,195 841 17,177 - 17,177
========================= =============== ========== ========= ========== =============== ============
Total assets 268,532 888,115 590,012 1,746,659 (861,159) 885,500
========================= =============== ========== ========= ========== =============== ============
Loans and borrowings 57,550 92,395 73,735 223,680 - 223,680
========================= =============== ========== ========= ========== =============== ============
Finance lease
liabilities 28 3,005 - 3,033 - 3,033
========================= =============== ========== ========= ========== =============== ============
Deferred tax liabilities 2,432 27,697 - 30,129 - 30,129
========================= =============== ========== ========= ========== =============== ============
Liabilities held
for sale - 18,125 - 18,125 - 18,125
========================= =============== ========== ========= ========== =============== ============
Intra-group credit
balances 144,154 417,371 299,634 861,159 (861,159) -
========================= =============== ========== ========= ========== =============== ============
Other liabilities 27,865 65,260 880 94,005 - 94,005
========================= =============== ========== ========= ========== =============== ============
Total liabilities 232,029 623,853 374,249 1,230,131 (861,159) 368,972
========================= =============== ========== ========= ========== =============== ============
Revenue - 47,680 - 47,680 - 47,680
========================= =============== ========== ========= ========== =============== ============
Cost of sales - (46,779) - (46,779) - (46,779)
========================= =============== ========== ========= ========== =============== ============
Disposal of investments - 823 - 823 - 823
========================= =============== ========== ========= ========== =============== ============
Change in valuations - (61,862) - (61,862) - (61,862)
========================= =============== ========== ========= ========== =============== ============
Share of losses
on equity-accounted
investees, net
of tax - (44,553) - (44,553) - (44,553)
========================= =============== ========== ========= ========== =============== ============
Investment Manager
remuneration - (2,032) (11,096) (13,128) - (13,128)
========================= =============== ========== ========= ========== =============== ============
Other operating
expenses - (8,888) (4,262) (13,150) - (13,150)
========================= =============== ========== ========= ========== =============== ============
Net finance costs - (12,826) (4,818) (17,644) - (17,644)
========================= =============== ========== ========= ========== =============== ============
Loss before taxation - (128,437) (20,176) (148,613) - (148,613)
========================= =============== ========== ========= ========== =============== ============
Taxation - 15,359 - 15,359 - 15,359
========================= =============== ========== ========= ========== =============== ============
Loss from continuing
operations - (113,078) (20,176) (133,254) - (133,254)
------------------------- --------------- ---------- --------- ---------- --------------- ------------
Loss from discontinued
operation, net
of tax (14,741) - - (14,741) - (14,741)
------------------------- --------------- ---------- --------- ---------- --------------- ------------
Loss (14,741) (113,078) (20,176) (147,995) - (147,995)
------------------------- --------------- ---------- --------- ---------- --------------- ------------
1 Americas comprises the Group's activities in the Dominican
Republic and the Republic of Panama. Also, includes the investment
in Itacare Capital Investments Ltd ('Itacare') (see note 20).
2 South-East Europe comprises the Group's activities in Cyprus, Greece, Croatia and Turkey.
3 Other comprises the parent company, Dolphin Capital Investors Limited.
4 Adjustments consist of intra-group eliminations.
Country risk developments
The general economic environment prevailing in the south-east
Europe area and internationally may affect the Group's operations.
Factors such as inflation, unemployment, public health crises,
international trade and development of the gross domestic product
directly impact to the economy of each country and variation in
these and the economic environment in general affect the Group's
performance to a certain extent.
The global fundamentals of the sector remained strong during
2016, with both international tourism and wealth continuing to
grow, even though economic activity in two of the Group's primary
markets, Greece and Cyprus, continued to face significant
challenges. The business climate is steadily improving in Cyprus,
assisted by the legislative reforms implemented during the last two
years by the Cypriot Government.
Greece
After the escalation of the sovereign debt crisis in Greece in
mid-2012 and further in mid-June 2015, when capital controls were
imposed and the banking system was closed for more than two weeks,
on 15 July 2015, the Greek parliament ratified legislation of
reforms that the Greek Government needed to implement in order to
unlock a fresh EUR82 billion to EUR86 billion bail-out package. The
conclusion of this agreement and its implementation by the Greek
Government so far is expected to restore the sustainability of the
Greek economy on a long term basis. Throughout 2016 the Greek
economic growth has been essentially flat. However, the tourism
sector has continued to outperform with official data released by
the Greek Tourism Confederation confirming that 2016 was an
all-time record year for Greek tourism as the number of tourism
arrivals in Greece increased 9% compared to 2015.
The outlook to 2017 remains positive and 2017 tourism revenues
are expected to reach EUR14.5 billion (US$15.36 billion) compared
to EUR13.2 billion (US$13.99 billion) in 2016.
Cyprus
Cyprus successfully concluded its three-year European Stability
Mechanism ('ESM') financial assistance programme on 31 March 2016.
The ESM disbursed EUR6.3 billion, in addition to around EUR1
billion in loans from the IMF, out of a loan package of up to EUR10
billion. The Cypriot authorities did not need the remaining EUR2.7
billion.
The latest available data for the tourism industry highlighted,
once again, that tourism was amongst one of the key catalysts to
the country's 2016 economic performance, as revenues reached EUR2.4
billion at the end of the year surpassing the total tourism
revenues recorded throughout 2015 (EUR2.1 million) by 11.9%. Total
arrivals amounted to 3.2 million in 2016 versus 2.7 million in the
previous year. Cyprus expects to hit another record number of
tourists during 2017, with visits to the east Mediterranean island
expected to increase 5% over last year.
Significant value is also estimated to be unlocked through the
expected zoning of DCI's Apollo Heights Resort, following the
agreement reached by the Cypriot and UK governments to permit
development of such projects falling within the Sovereign British
Areas.
10. DISCONTINUED OPERATION
In 2016, the Group sold Playa Grande (owner of 'Amanera,
Dominican Republic'), and Group's management committed to a plan to
sell Pearl (owner of 'Pearl Island, Republic of Panama'). Playa and
Pearl constitute the operations of the Group in the geographical
area of Americas which are presented as a discontinued operation.
Pearl group is also classified as a disposal group held for
sale.
Americas segment was not previously classified as held for sale
or as a discontinued operation. The comparative consolidated
statement of profit or loss and other comprehensive income has been
restated to show the discontinued operation separately from
continuing operations.
Results of discontinued operation
From From
1 January 1 January
2016 2015
to 31 to 31
December December
2016 2015
(Restated)
Note EUR'000 EUR'000
------------------------------------ ----- ----------- -----------
Revenue 6 10,604 4,226
------------------------------------ ----- ----------- -----------
Expenses
------------------------------------ ----- ----------- -----------
Cost of sales 7 (8,220) (5,629)
------------------------------------ ----- ----------- -----------
Change in valuations 8B (43,453) (5,233)
------------------------------------ ----- ----------- -----------
Depreciation charge 16 (496) (678)
------------------------------------ ----- ----------- -----------
Professional fees 11 (2,038) (3,291)
------------------------------------ ----- ----------- -----------
Administrative and other expenses 12 (1,507) (968)
------------------------------------ ----- ----------- -----------
Net finance income/(costs) 13 11,135 (3,105)
------------------------------------ ----- ----------- -----------
Results from operating activities (33,975) (14,678)
------------------------------------ ----- ----------- -----------
Taxation 14 1,273 (63)
------------------------------------ ----- ----------- -----------
Results from operating activities,
net of tax (32,702) (14,741)
------------------------------------ ----- ----------- -----------
Loss on disposal of discontinued
operation 8A (24,566) -
------------------------------------ ----- ----------- -----------
Loss from discontinued operation,
net of tax (57,268) (14,741)
------------------------------------ ----- ----------- -----------
Cash flows used in discontinued operation
From From
1 January 1 January
2016 2015
to 31 to 31
December December
2016 2015
EUR'000 EUR'000
----------------------------------- ----------- -----------
Net cash (used in)/from operating
activities (57,452) 13,047
------------------------------------ ----------- -----------
Net cash from/(used in) investing
activities 60,394 (40,222)
------------------------------------ ----------- -----------
Net cash (used in)/from financing
activities (4,945) 6,418
------------------------------------ ----------- -----------
Net cash flows for the year (2,003) (20,757)
------------------------------------ ----------- -----------
11. PROFESSIONAL FEES
From 1 January 2016 From 1 January 2015
to 31 December 2016 to 31 December 2015
Continuing Discontinued Total Continuing Discontinued
operations operation operations operation Total
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Legal fees 940 73 1,013 722 70 792
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Auditors' remuneration
(see below) 683 30 713 756 54 810
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Accounting expenses 294 6 300 287 7 294
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Appraisers'
fees 92 - 92 140 - 140
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Project design
and development
fees 1,863 1,008 2,871 1,494 2,877 4,371
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Consultancy
fees 741 86 827 142 52 194
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Administrator
fees 117 26 143 308 - 308
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Other professional
fees 750 809 1,559 1,024 231 1,255
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Total 5,480 2,038 7,518 4,873 3,291 8,164
------------------------ ------------ ------------- -------- ------------ ------------- -----------
From 1 January 2016 From 1 January 2015
to 31 December 2016 to 31 December 2015
Continuing Discontinued Total Continuing Discontinued Total
operations operation operations operation
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Auditors' remuneration
comprises the
following fees:
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Audit and other
audit related
services 650 30 680 714 43 757
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Tax and advisory 33 - 33 42 11 53
------------------------ ------------ ------------- -------- ------------ ------------- -----------
Total 683 30 713 756 54 810
------------------------ ------------ ------------- -------- ------------ ------------- -----------
12. ADMINISTRATIVE AND OTHER EXPENSES
From 1 January From 1 January
2016 2015
to 31 December to 31 December
2016 2015
Continuing Discontinued Continuing Discontinued
operations operation Total operations operation Total
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Travelling and
accommodation 432 85 517 461 90 551
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Insurance 122 32 154 113 154 267
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Repairs and maintenance 83 56 139 123 - 123
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Marketing and advertising
expenses 281 164 445 435 368 803
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Litigation liability
provisions - - - 2,039 - 2,039
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Immovable property
and other taxes 467 - 467 645 - 645
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Rents 189 156 345 238 147 385
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Site housing expenses - 601 601 - 24 24
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Other 658 413 1,071 1,078 185 1,263
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
Total 2,232 1,507 3,739 5,132 968 6,100
--------------------------- ------------ ------------- -------- ------------ ------------- -----------
13. NET Finance costS
From 1 January
2015
From 1 January 2016 to 31 December
to 31 December 2016 2015
Continuing Discontinued Continuing Discontinued
operations operation Total operations operation Total
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------------- ------------ ------------- ---------- ------------ ------------- -----------
Recognised in profit
or loss
---------------------------- ------------ ------------- ---------- ------------ ------------- -----------
Interest income 29 1 30 87 19 106
---------------------------- ------------ ------------- ---------- ------------ ------------- -----------
Exchange difference - 13,556 13,556 - - -
---------------------------- ------------ ------------- ---------- ------------ ------------- -----------
Finance income 29 13,557 13,586 87 19 106
============================ ============ ============= ========== ============ ============= ===========
Interest expense (12,928) (2,386) (15,314) (16,632) (3,068) (19,700)
---------------------------- ------------ ------------- ---------- ------------ ------------- -----------
Bank charges (571) (36) (607) (438) (55) (493)
---------------------------- ------------ ------------- ---------- ------------ ------------- -----------
Exchange difference (1,600) - (1,600) (661) (1) (662)
============================ ============ ============= ========== ============ ============= ===========
Finance costs (15,099) (2,422) (17,521) (17,731) (3,124) (20,855)
============================ ============ ============= ========== ============ ============= ===========
Net finance (costs)/income
recognised in profit
or loss (15,070) 11,135 (3,935) (17,644) (3,105) (20,749)
============================ ============ ============= ========== ============ ============= ===========
From 1 From 1
January January
2016 2015
to 31 December to 31 December
2016 2015
EUR'000 EUR'000
Recognised in other comprehensive
income
========================================== ================ ================
Foreign currency translation differences (7,458) 17,221
------------------------------------------ ---------------- ----------------
Finance (costs)/income recognised
in other comprehensive income (7,458) 17,221
------------------------------------------ ---------------- ----------------
14. Taxation
From From
1 January 1 January
2016 2015
to 31 to 31
December December
2016 2015
(Restated)
EUR'000 EUR'000
RECOGNISED IN PROFIT OR LOSS
-------------------------------------------- ----------- -----------
TAXATION ON CONTINUING OPERATIONS
-------------------------------------------- ----------- -----------
Income tax (26) 55
-------------------------------------------- ----------- -----------
Net deferred tax (3,558) (15,414)
-------------------------------------------- ----------- -----------
Taxation recognised in profit or
loss - continuing operations (3,584) (15,359)
-------------------------------------------- ----------- -----------
TAXATION ON DISCONTINUED OPERATION
-------------------------------------------- ----------- -----------
Income tax - 17
-------------------------------------------- ----------- -----------
Net deferred tax (1,273) 46
-------------------------------------------- ----------- -----------
Taxation recognised in profit or
loss - discontinued operation (1,273) 63
-------------------------------------------- ----------- -----------
Total (4,857) (15,296)
-------------------------------------------- ----------- -----------
RECOGNISED IN OTHER COMPREHENSIVE
INCOME
-------------------------------------------- ----------- -----------
Revaluation of property, plant
and equipment (see note 26) 1,682 (1,791)
-------------------------------------------- ----------- -----------
Taxation recognised in other comprehensive
income 1,682 (1,791)
-------------------------------------------- ----------- -----------
Reconciliation of taxation based on taxable loss and taxation
based on accounting loss:
From From
1 January 1 January
2016 2015
to 31 to 31
December December
2016 2015
(Restated)
EUR'000 EUR'000
---------------------------------------- ----------- -----------
Loss before taxation (207,306) (148,613)
---------------------------------------- ----------- -----------
Taxation using domestic tax rates (13,470) (25,305)
---------------------------------------- ----------- -----------
Effect of valuation loss on properties (3,017) (18,283)
---------------------------------------- ----------- -----------
Non-deductible expenses 8,252 22,140
---------------------------------------- ----------- -----------
Tax-exempt income (591) (2,158)
---------------------------------------- ----------- -----------
Current year losses for which no
deferred tax is recognised 5,334 4,839
---------------------------------------- ----------- -----------
Effect of tax losses utilised (6) (259)
---------------------------------------- ----------- -----------
Effect of tax rate changes - 3,715
---------------------------------------- ----------- -----------
Effect of losses surrendered to
group companies (19) (10)
---------------------------------------- ----------- -----------
Other (67) (38)
---------------------------------------- ----------- -----------
Total (3,584) (15,359)
---------------------------------------- ----------- -----------
As a company incorporated under the BVI International Business
Companies Act (Cap. 291), the Company is exempt from taxes on
profits, income or dividends. Each company incorporated in BVI is
required to pay an annual government fee, which is determined by
reference to the amount of the company's authorised share
capital.
The profits of the Cypriot companies of the Group are subject to
a corporation tax rate of 12.50% on their total taxable profits.
Tax losses of Cypriot companies are carried forward to reduce
future profits for a period of five years. In addition, the Cypriot
companies of the Group are subject to a 3% special contribution on
rental income. Under certain conditions, interest income may be
subject to a special contribution at the rate of 30%. In such
cases, this interest is exempt from corporation tax.
In Greece, the corporation tax rate applicable to profits is
29%. Tax losses of Greek companies are carried forward to reduce
future profits for a period of five years. In Turkey, the
corporation tax rate is 20%. Tax losses of Turkish companies are
carried forward to reduce future profits for a period of five
years. In Croatia, the corporation tax rate is 20%. Effective from
1 January 2017, the corporation tax rate will be 18%. Tax losses of
Croatian companies are carried forward to reduce future profits for
a period of five years.
The Group's subsidiary in the Dominican Republic, which was
disposed of during the year 2016, has been granted a 100% exemption
on local and municipal taxes by the Dominican Republic's Confotur
(Tourism Promotion Council), for a period of fifteen years,
effective from the finalisation of the construction of the project.
In the Republic of Panama, the corporation tax rate is 25% and the
capital gains tax rate is 10%. The Panamanian tax legislation
further contemplates a method of taxation which involves a 3%
advance on the tax, which is not calculated on the actual gain, but
on the total value of the transfer or on the registered value of
the property (whichever may be higher). In some instances, this 3%
may be considered by the taxpayer as the final tax payable. Tax
losses of companies in the Republic of Panama are carried forward
to reduce future profits for a period of five years.
15. LOSS per share
Basic loss per share
Basic loss per share is calculated by dividing the loss
attributable to owners of the Company by the weighted average
number of common shares outstanding during the year.
From 1 January 2016 From 1 January 2015
to 31 December 2016 to 31 December 2015
----------------------------------- ------------------------------------------------------------
Continuing Discontinued Continuing Discontinued
operations operation Total operations operation Total
(Restated) (Restated) (Restated)
'000 '000 '000 '000 '000 '000
----------------- ----------------- ---------------- ---------- ----------------- ---------------- -----------
Loss
attributable to
owners of the
Company (EUR) (203,363) (40,399) (243,762) (131,133) (14,227) (145,360)
----------------- ----------------- ---------------- ---------- ----------------- ---------------- -----------
Number of
weighted
average common
shares
outstanding 904,627 904,627 904,627 788,860 788,860 788,860
----------------- ----------------- ---------------- ---------- ----------------- ---------------- -----------
Basic loss per
share (EUR) (0.22) (0.05) (0.27) (0.16) (0.02) (0.18)
----------------- ----------------- ---------------- ---------- ----------------- ---------------- -----------
Loss attributable to owners of the Company
From 1 January
2016
to 31 December From 1 January 2015
2016 to 31 December 2015
--------------------------------------- ----------------------------------------
Continuing Discontinued Total Continuing Discontinued Total
operations operation operations operation
(Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------------- ------------ ------------- ---------- ------------ ------------- -----------
Loss attributable
to owners of
the Company (203,363) (40,399) (243,762) (131,133) (14,227) (145,360)
--------------------- ------------ ------------- ---------- ------------ ------------- -----------
Loss attributable
to non-controlling
interests (359) (16,869) (17,228) (2,121) (514) (2,635)
--------------------- ------------ ------------- ---------- ------------ ------------- -----------
Total (203,722) (57,268) (260,990) (133,254) (14,741) (147,995)
--------------------- ------------ ------------- ---------- ------------ ------------- -----------
Weighted average number of common shares outstanding
From From
1 January 1 January
2016 2015
to 31 to 31
December December
2016 2015
(Restated)
'000 '000
-------------------------------------------- ----------- -----------
Outstanding common shares at the beginning
of the year 904,627 642,440
-------------------------------------------- ----------- -----------
Effect of shares issued during the
year - 122,544
-------------------------------------------- ----------- -----------
Effect of Bond Conversion shares - 23,876
-------------------------------------------- ----------- -----------
Weighted average number of common
shares outstanding 904,627 788,860
-------------------------------------------- ----------- -----------
Diluted loss per share
Diluted loss per share is calculated by adjusting the loss
attributable to owners and the number of common shares outstanding
to assume conversion of all dilutive potential shares. As of 31
December 2016 and 31 December 2015, the diluted loss per share is
the same as the basic loss per share, due to the fact that no
dilutive potential ordinary shares were outstanding during these
years.
The average market value of the Company's shares for the purpose
of calculating the dilutive effect of warrants and Convertible
Bonds was based on quoted market prices. The Convertible Bonds were
repaid on scheduled maturing date in March 2016 and all warrants
expired on 3 January 2017.
16. Property, plant and equipment
Under Land &
construction buildings Machinery & equipment Other Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
=========================================== ============== =========== ====================== ========= =========
2016
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Cost or revalued amount
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
At beginning of year 12,227 176,426 28,421 2,088 219,162
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Direct acquisitions 1,041 153 1,794 81 3,069
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Direct disposals - (576) (146) (780) (1,502)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Disposals through disposal of subsidiary
companies (see note 33) - (69,101) (23,742) (478) (93,321)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Reclassification to assets held for sale (2,294) (20,291) (5,076) (103) (27,764)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Transfers to trading property (see note
19) - (2,266) (252) - (2,518)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Transfer (to)/from other assets (11,311) 8,078 3,233 - -
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Revaluation adjustment - 5,796 - - 5,796
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Exchange difference 337 1,342 362 7 2,048
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
At end of year - 99,561 4,594 815 104,970
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Depreciation and impairment losses
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
At beginning of year - 26,126 4,620 1,401 32,147
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Direct disposals - - (121) (728) (849)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Disposals through disposal of subsidiary
companies (see note 33) - (12,363) (2,377) (281) (15,021)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Reclassification to assets held for sale - (1,420) (275) (55) (1,750)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Transfer to trading property (see note 19) - - (103) - (103)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Depreciation charge for the
year-continuing operations - 1,614 532 138 2,284
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Depreciation charge for the year -
discontinued operation - 358 132 6 496
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Impairment loss - 780 - - 780
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Reversal of impairment loss - (872) - - (872)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Exchange difference - 158 48 5 211
=========================================== ============== =========== ====================== ========= =========
At end of year - 14,381 2,456 486 17,323
=========================================== ============== =========== ====================== ========= =========
Carrying amounts - 85,180 2,138 329 87,647
=========================================== ============== =========== ====================== ========= =========
2015
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Cost or revalued amount
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
At beginning of year 31,273 146,826 13,687 2,506 194,292
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Direct acquisitions 35,483 2,156 4,856 78 42,573
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Direct disposals - (35) (367) (661) (1,063)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Disposals through disposal of subsidiary
company (see note 33) - (1,578) (3) - (1,581)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Reclassification to assets held for sale - (5,343) (162) - (5,505)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Transfers to trading property (see note
19) - - (198) - (198)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Transfer (to)/from other assets (58,131) 48,492 9,639 - -
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Revaluation adjustment - (15,181) - - (15,181)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Write offs - discontinued operation - (1,513) - - (1,513)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Exchange difference 3,602 2,602 969 165 7,338
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
At end of year 12,227 176,426 28,421 2,088 219,162
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Depreciation and impairment losses
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
At beginning of year - 12,102 4,041 1,384 17,527
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Direct disposals - - (338) (412) (750)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Disposals through disposal of subsidiary
company (see note 33) - (156) (3) - (159)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Reclassification to assets held for sale - (10) (65) - (75)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Transfer to trading property (see note 19) - - (104) - (104)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Depreciation charge for the
year-continuing operations - 1,611 487 143 2,241
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Depreciation charge for the year -
discontinued operation - 321 217 140 678
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Impairment loss - 1,898 - - 1,898
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Impairment loss - discontinued operation - 12,252 17 - 12,269
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Write offs - discontinued operation - (433) - - (433)
------------------------------------------- -------------- ----------- ---------------------- --------- ---------
Exchange difference - (1,459) 368 146 (945)
=========================================== ============== =========== ====================== ========= =========
At end of year - 26,126 4,620 1,401 32,147
=========================================== ============== =========== ====================== ========= =========
Carrying amounts 12,227 150,300 23,801 687 187,015
=========================================== ============== =========== ====================== ========= =========
The carrying amount at year end of land and buildings, if the
cost model was used, would have been EUR79 million (2015: EUR132
million).
As at 31 December 2016 and 31 December 2015, part of the Group's
immovable property is held as security for bank loans (see note
25).
Fair value hierarchy
The fair value of land and buildings, amounting to EUR85,180
thousand (2015: EUR150,300 thousand), has been categorised as a
Level 3 fair value based on the inputs to the valuation techniques
used.
The following table shows a reconciliation from opening to
closing balances of Level 3 fair value.
31 December 31 December
2016 2015
EUR'000 EUR'000
--------------------------------------------- ------------ ------------
At beginning of year 150,300 134,724
Acquisitions 153 2,156
Disposals (57,314) (1,457)
Transfers from other assets 5,812 48,492
Reclassification to assets held
for sale (18,871) (5,333)
Losses recognised in profit or loss
Reversal of (impairment loss) and
write offs in 'Change in valuations' 92 (1,898)
Impairment loss and write offs in
'Loss from discontinued operation,
net of tax' - (13,332)
Depreciation in 'Depreciation charge' (1,614) (1,611)
Depreciation in 'Loss from discontinued
operation, net of tax' (358) (321)
Losses recognised in comprehensive
income
Revaluation adjustment in 'Revaluation
on property, plant and equipment' 5,796 (15,181)
Unrealised exchange difference in
'Foreign currency translation differences' 1,184 4,061
At end of year 85,180 150,300
--------------------------------------------- ------------ ------------
The following table shows the valuation techniques used in
measuring land and buildings, as well as the significant
unobservable inputs used.
During 2015, the valuation technique used in measuring the fair
value of properties in Greece and the Americas changed to Income
approach or an approach combining Income approach, in cases where
the property construction was fully completed or nearly completed
in the year and hence, more reliance could have been placed on cash
flow data.
Valuation
technique
(see Inter-relationship between
Property note Significant unobservable key unobservable inputs
location 3) inputs and fair value measurement
------------ ------------ ---------------------------------------------- --------------------------------------
Property Income Room occupancy 2016: 21% to The estimated fair value
in approach rate (annual): 62% would increase/(decrease)
Greece if:
- Resorts
------------ ------------
(weighted average:
26%-60%)
------------ ------------
(2015: 20% Room occupancy rate was
to 57% ) higher/(lower);
(weighted average: Average daily rate per occupied
26%-56%) room was higher/(lower);
Average daily 2016: EUR399 Gross operating margin was
rate per occupied to EUR1,742 higher/(lower);
room:
(weighted average: Terminal capitalisation
EUR593-EUR1,471) rate was lower/(higher);
(2015: EUR528 Risk-adjusted discount rate
to EUR1,742) was lower/(higher).
(weighted average:
EUR600-EUR1,470)
Gross operating 2016: 9% to
margin rate: 45%
(weighted average:
36%-38%)
(2015: 23%
to 47% )
(weighted average:
36%-44%)
Terminal capitalisation 2016: 8% (2015:
rate: 8%)
Risk-adjusted 2016: 11% to
discount rate: 12%
(2015: 11%
to 13%)
Property Combined Market approach The estimated fair value
in approach (for land components) would increase/(decrease)
Greece (Market if:
- and
Hotel Cost)
complexes
------------
Premiums/(discounts) Premiums were higher/(lower);
on the following:
------------
Location: 2016: -10% Discounts were lower/(higher);
to 0%
(2015: -20% Weights on comparables with
to 0%) premiums were higher/(lower);
Asking vs transaction: 2016: -30% Weights on comparables with
to -10% discounts were lower/(higher);
(2015: -25% Replacement cost (new) per
to -15%) m(2) was higher/(lower);
Frontage sea 2016: 0% to Enterpreneurial profit rate
view: +20% was higher/(lower);
(2015: 0% to Depreciation rate was lower/(higher).
+20%)
Maturity/development 2016: 0% to
potential: +10%
(2015: 0% to
+10%)
Weight allocation: 2016: +10%
to +15%
(2015: +10%
to +20% )
Cost approach
(for building
components)
Replacement 2016: EUR500
cost (new) per - EUR1,100
m(2) :
(2015: EUR500
- EUR1,100)
Enterpreneurial 2016: 20% (2015:
profit rate: 20%)
Depreciation 2016: 32% (2015:
rate: 30%)
Useful life 2016: 60 (2015:
(years): 60)
------------ ------------------------- ------------------- --------------------------------------
Combined Market approach The estimated fair value
approach would increase/(decrease)
(Market if:
and
Income)
Premiums/(discounts) Premiums were higher/(lower);
on the following:
Location: 2016: 0% Discounts were lower/(higher);
(2015: -20% Weights on comparables with
to +30%) premiums were higher/(lower);
Site size: 2016: -20% Weights on comparables with
to +10% discounts were lower/(higher);
(2015: -20% Room occupancy rate was
to +10%) higher/(lower);
Asking vs transaction: 2016: -20% Average daily rate per occupied
to 0% room was higher/(lower);
(2015: -20% Gross operating margin was
to 0%) higher/(lower);
Frontage sea 2016: 0% to Terminal capitalisation
view: +10% rate was lower/(higher);
(2015: 0%) Risk-adjusted discount rate
was lower/(higher)..
Maturity/development 2016: -50%
potential: to 0%
(2015: -50%
to 0%)
Premium due 2016: 15% (2015:
to being part 15%)
of strategic
investment:
Weight allocation: 2016: +10%
to +40%
(2015: +10%
to +60%)
Cost approach
Room occupancy 2016: 18% to
rate (annual): 33%
(weighted average:
30%)
(2015: 18%
to 33%)
(weighted average:
30%)
Average daily 2016: EUR1,305
rate per occupied to EUR1,700
room:
(weighted average:
EUR1,538)
(2015: EUR1,305
to EUR1,700)
(weighted average:
EUR1,538)
Gross operating 2016: 9% to
margin rate: 37%
(weighted average:
33%)
(2015: 9% to
37%)
(weighted average:
33%)
Terminal capitalisation 2016: 8% (2015:
rate: 8%)
Risk-adjusted 2016: 11% (2015:
discount rate: 11%)
=================================================== =================== ======================================
Valuation
technique Inter-relationship
(see between key unobservable
Property note inputs and fair value
location 3) Significant unobservable inputs measurement
---------- ----------- ---------------------------------------------- ---------------------------------
Property Income Room occupancy 2015: 36% to 48% The estimated fair
in approach rate (annual): (weighted average: value would increase/(decrease)
Americas 39%) if:
-
Resort
and
golf
course
---------- -----------
Average daily 2015: $1,314 to Occupancy rate was
rate per occupied $2,463 (weighted higher/(lower);
room: average: $2,062)
---------- -----------
Gross operating 2015: 3% to 46% Average daily rate
margin rate: (weighted average: per occupied room
38%) was higher/(lower);
Terminal capitalisation 2015: 9% Gross operating margin
rate: was higher/(lower);
Risk-adjusted 2015: 11% Terminal capitalisation
discount rate: rate was lower/(higher);
Risk-adjusted discount
rate was lower/(higher).
------------------------ -------------------- ---------------------------------
Annual membership 2015: $8,400 to The estimated fair
dues per member: $10,960 (weighted value would increase/(decrease)
average: $9,600) if:
Membership 2015: $60,000 Membership fees per
initiation member were higher/(lower);
fees per member:
Gross operating 2015: 30% to 53% Gross operating margin
margin rate: (weighted average: was higher/(lower);
43%)
Terminal capitalisation 2015: 11% Terminal capitalisation
rate: rate was lower/(higher);
Risk-adjusted 2015: 13% Risk-adjusted discount
discount rate: rate was lower/(higher).
---------- ----------- ------------------------ -------------------- ---------------------------------
17. Investment property
31 December 31 December
Note 2016 2015
EUR'000 EUR'000
-------------------------------------- ----- ------------ ------------
At beginning of year 340,853 451,880
-------------------------------------- ----- ------------ ------------
Direct acquisitions 11 1,064
-------------------------------------- ----- ------------ ------------
Direct disposals - (756)
-------------------------------------- ----- ------------ ------------
Disposals through disposal of
subsidiary companies 33 (74,644) (10,979)
-------------------------------------- ----- ------------ ------------
Transfers to trading properties 19 (273) (14,290)
-------------------------------------- ----- ------------ ------------
Reclassification to assets held
for sale (28,135) (52,507)
-------------------------------------- ----- ------------ ------------
Concession/write off of land 8B - (2,607)
-------------------------------------- ----- ------------ ------------
Exchange difference 3,320 14,095
-------------------------------------- ----- ------------ ------------
Fair value adjustment - continuing
operations 8B (22,126) (53,163)
-------------------------------------- ----- ------------ ------------
Fair value adjustment - discontinued
operation 8B (42,458) 8,116
-------------------------------------- ----- ------------ ------------
At end of year 176,548 340,853
-------------------------------------- ----- ------------ ------------
As at 31 December 2016 and 31 December 2015, part of the Group's
immovable property is held as security for bank loans (see note
25).
Changes in fair values are recognised as gains/(losses) in
profit or loss and included in 'Change in valuations' or 'Loss from
discontinued operation, net of tax' if they relate to the
discontinued operation. All such gains/(losses) are unrealised.
Concession/write off of land is included in 'Changes in
valuations'. Exchange differences are unrealised, recognised in
comprehensive income and included in 'Foreign currency translation
differences'.
Fair value hierarchy
The fair value of investment property, amounting to EUR176,548
thousand (2015: EUR340,853 thousand), has been categorised as a
Level 3 fair value based on the inputs to the valuation techniques
used.
Valuation techniques and significant unobservable inputs
The following table shows the valuation techniques used in
measuring the fair value of investment property, as well as the
significant unobservable inputs used.
During 2015, the valuation technique used in measuring the fair
value of properties in Greece and the Americas changed to Income
approach, in cases where there was significant improvement in the
level of completion of the relevant projects.
Valuation
technique Inter-relationship
(see between key unobservable
Property note Significant unobservable inputs and fair value
location 3) inputs measurement
-------------- ------------ -------------------------------------------- ---------------------------------
Property Income Room occupancy 2016: 29% The estimate fair
in approach rate (annual): to 42% value would increase/(decrease)
Greece if:
(weighted Occupancy rate was
average: higher/(lower);
38%)
(2015: 29% Average daily rate
to 42%) per occupied room
was higher/(lower);
(weighted Gross operating margin
average: was higher/(lower);
38%)
Average daily 2016: EUR823 Terminal capitalisation
rate per occupied to EUR1,708 rate was (lower)/higher;
room:
(weighted Quantity of villas
average was higher/(lower);
EUR1,455)
(2015: EUR818 Selling price per
to EUR1,723 m(2) was higher/(lower);
)
(weighted Expected annual growth
average in selling price
EUR1,432) was higher/(lower);
Gross operating 2016: 12% Cash flow velocity
margin rate: to 35% was shorter/(longer);
(weighted Risk-adjusted discount
average rate was lower/(higher).
28%)
(2015: 16%
to 33%)
(weighted
average
29%)
Terminal capitalisation 2016: 10%
rate: (2015: 10%)
Quantity of 2016: 35
villas: (2015: 35)
Selling price 2016: EUR5,500
per m(2) : to EUR6,000
(2015: EUR5,500
to EUR6,000)
Expected annual 2016: 0%
growth in selling to 5%
price:
(2015: 0%
to 5%)
Cash flow velocity 2016: 8
(years): (2015: 6)
Risk-adjusted 2016: 12%
discount rate: (2015: 13%)
------------- ------------------------- ----------------- ---------------------------------
Combined Market approach - 60% The estimated fair
approach weight (2015: 60%) value would increase/(decrease)
(Market if:
and
Income)
---------------------------
Premiums/(discounts) Premiums were higher/(lower);
on the following:
------------ ------------
Location: 2016: -10% Discounts were lower/(higher);
to +10%
(2015: 0% Weights on comparables
to +10%) with premiums were
higher/(lower);
Site size: 2016: -20% Weights on comparables
to 0%) with discounts were
lower/(higher);
(2015: -30% Quantity of villas
to 0%) was higher/(lower);
Asking vs transaction: 2016: -30% Selling price per
to -10% m(2) was higher/(lower);
(2015: -30% Expected annual growth
to 0%) in selling price
was higher/(lower);
Frontage sea 2016: 0% Cash flow velocity
view: to +30% was shorter/(longer);
(2015: 0% Risk-adjusted discount
to +20%) rate was lower/(higher).
Maturity/development 2016: -20%
potential: to +30%
(2015: +10%
to +30%)
Weight allocation: 2016: +10%
to +20%
(2015: +5%
to +30%)
Income approach
- 40% weight
(2015: 40%)
Quantity of 2016: 447
villas: (2015: 447)
Selling price 2016: EUR2,900
per m(2) :
(2015: EUR3,000)
Expected annual 2016: 0%
growth in selling to 3%
price:
(2015: 0%
to 3%)
Cash flow velocity 2016: 13
(years): (2015: 11)
Risk-adjusted 2016: 15%
discount rate: (2015:15%)
Discount on
combined approach
value:
Legal status 2016: -10%
(2015: -10%)
--------------------------------------------------- ----------------- ---------------------------------
Valuation
technique
(see Inter-relationship between
Property note Significant unobservable key unobservable inputs
location 3) inputs and fair value measurement
----------- ------------ ---------------------------------------- ------------------------------------
Market Premiums/(discounts) The estimated fair value
approach on the following: would increase/(decrease)
if:
Location: 2016: -40% Premiums were higher/(lower);
to +40%
(2015: -50% Discounts were lower/(higher);
to +40%)
Site size: 2016: -50% Weights on comparables
to +10% with premiums were higher/(lower);
(2015: -50% Weights on comparables
to +10%) with discounts were
lower/(higher).
Asking vs 2016: -30%
transaction: to -5%
(2015: -30%
to 0%)
Frontage sea 2016: -10%
view: to +30%
(2015: -20%
to +40%)
Maturity/development 2016: -45%
potential: to +40%
(2015: -30%
to +35%)
Zoning uniqueness: 2016: -30%
to 0%
(2015: -30%
to +40%)
Other: 2016: -10%
to 0%
(2015: -10%
to 0%)
Strategic 2016: 0%
investment to +25%
approval:
(2015: 0%
to +25%)
Weight allocation: 2016: +5%
to +40%
(2015: +5%
to +40%)
------------------------------------------------- -------------- ------------------------------------
Property Market Premiums/(discounts) The estimated fair value
in approach on the following: would increase/(decrease)
Cyprus if:
Location: 2016: -10% Premiums were higher/(lower);
to +20%
(2015: -10% Discounts were lower/(higher);
to +20%)
Site size: 2016: -30% Weights on comparables
to -10% with premiums were higher/(lower);
(2015: -30% Weights on comparables
to -20%) with discounts were
lower/(higher).
Asking vs 2016: -30%
transaction: to 0%
(2015: -20%
to 0%)
Frontage sea 2016: 0%
view: to +30%
(2015: 0%
to +30%)
Maturity/development 2016: -30%
potential: (2015: -30%)
Weight allocation: 2016: +10%
to +20%
(2015: +5%
to +25%)
------------------------------------------------- -------------- ------------------------------------
Property Income Quantity of 2015: 30 The estimated fair value
in approach villas/ condominiums/ to 42 would increase/(decrease)
Americas lots : if:
------------
Selling price 2015: $600 Quantities of villas
per buildable to $775 and/or condominiums
sq. ft: and/or lots was higher/(lower);
Average selling 2015: $19 Selling price per buildable
price per sq. ft was higher/(lower);
lot sq. ft:
Expected annual 2015: 0% Average selling price
growth in per sq. ft was higher/(lower);
selling price
:
Cash flow 2015: 5 Expected annual growth
velocity (years): to 8 in selling price was
higher/ (lower);
Risk-adjusted 2015: 15% Cash-flow velocities
discount rate: to 25% were shorter/(longer)
;
Risk-adjusted discount
rate was lower/(higher).
------------------------------------------------- -------------- ------------------------------------
Market Premiums/(discounts) The estimated fair value
approach on the following: would increase/(decrease)
if:
------------
Location: 2015: 0% Premiums were higher/(lower);
to +20%
Site size: 2015: -50% Discounts were lower/(higher);
to +25%
Asking vs 2015: -35% Weights on comparables
transaction: with premiums were higher/(lower);
Frontage sea 2015: -25% Weights on comparables
view: to +15% with discounts were
lower/(higher).
Development 2015: Nil
potential:
Condition 2015: -10%
quality: to +15%
18. DISPOSAL GROUPS HELD FOR SALE
In 2016, the Company committed to the sale of two properties and
their associated liabilities, through the sale of their holding
companies. Accordingly, the assets and liabilities of each of these
holding companies are presented as separate disposal groups held
for sale. The disposal groups are: Pearl (owner of 'Pearl Island')
in the Republic of Panama and DCI Holdings Two Limited ('DCI H2')
(owner of Aristo Developers Limited ('Aristo') in Cyprus. Pearl is
part of the discontinued geographical operation of Americas and is
also included in the operating segments of 'Construction &
development' and 'Other'. DCI H2 is included in the geographical
segment of 'South-East Europe' and in the operating segment of
'Construction & development'. Efforts to sell the disposal
groups have commenced and their sale has either been completed or
expected to be completed within 2017.
The Company also remains committed to its plan commenced in 2015
to sell four additional disposal groups which are presented as
separate disposal groups held for sale. These disposal groups are:
Iktinos (owner of 'Sitia Bay') and Porto Heli (owner of 'Nikki
Beach') in Greece, Azurna (owner of 'Livka Bay') in Croatia and
Kalkan (owner of 'La Vanta') in Turkey. All of the disposal groups
are included in the geographical segment of 'South-East Europe' and
in the operating segments of 'Hotel & Leisure operations'
(Porto Heli), 'Construction & Development' (Kalkan) and 'Other'
(Iktinos and Azurna) operating segments.
Impairment losses relating to the disposal group
Impairment losses of EUR4,197 thousand (2015: EUR763 thousand)
for write-downs of the disposal groups to the lower of their
carrying amount and their fair value less costs to sell have been
recognised and included in Other Expenses (see note 8B).
Assets and liabilities of disposal groups held for sale
Porto DCI
Iktinos Azurna Kalkan Heli H2 Pearl
disposal disposal disposal disposal disposal disposal
group group group group group group Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Property, plant
and equipment 6,699 - 23 - - 26,014 32,736
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Investment property 14,541 32,937 - - - 28,135 75,613
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Equity-accounted
investees - - - 783 43,391 - 44,174
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Trading properties - - 6,850 - - - 6,850
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Trade and other
receivables - 7 1,269 - - 627 1,903
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Cash and cash
equivalents 11 8 7 - - 183 209
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
21,251 32,952 8,149 783 43,391 54,959 161,485
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Available-for-sale
financial assets
(see note 20) - - - - - - 950
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Assets held for
sale 162,435
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Loans and borrowings - 8,165 94 - - - 8,259
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Deferred tax
liabilities 3,062 3,633 - - - 1,239 7,934
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Trade and other
payables 274 959 210 - - 9,561 11,004
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
Liabilities held
for sale 3,336 12,757 304 - - 10,800 27,197
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- --------
As at 31 December 2015, the disposal groups comprised the
following assets and liabilities:
Porto
Iktinos Azurna Kalkan Heli
disposal disposal disposal disposal
group group group group Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------- ---------- ---------- ---------- ---------- --------
Property, plant
and equipment 4,439 - 23 - 4,462
---------------------- ---------- ---------- ---------- ---------- --------
Investment property 17,901 34,606 - - 52,507
---------------------- ---------- ---------- ---------- ---------- --------
Equity-accounted
investees - - - 1,450 1,450
---------------------- ---------- ---------- ---------- ---------- --------
Deferred tax
assets - - 1,628 - 1,628
---------------------- ---------- ---------- ---------- ---------- --------
Trading properties - - 7,960 - 7,960
---------------------- ---------- ---------- ---------- ---------- --------
Trade and other
receivables - 9 1,459 - 1,468
---------------------- ---------- ---------- ---------- ---------- --------
Cash and cash
equivalents 86 282 397 - 765
---------------------- ---------- ---------- ---------- ---------- --------
Assets held for
sale 22,426 34,897 11,467 1,450 70,240
---------------------- ---------- ---------- ---------- ---------- --------
Loans and borrowings - 8,162 538 - 8,700
---------------------- ---------- ---------- ---------- ---------- --------
Deferred tax
liabilities 3,380 4,405 25 - 7,810
---------------------- ---------- ---------- ---------- ---------- --------
Trade and other
payables 252 970 393 - 1,615
---------------------- ---------- ---------- ---------- ---------- --------
Liabilities held
for sale 3,632 13,537 956 - 18,125
---------------------- ---------- ---------- ---------- ---------- --------
Cumulative income or expenses included in other comprehensive
income
An amount of EUR5,720 thousand (2015: EUR182 thousand) relating
to the disposal groups, is included in other comprehensive
income.
Measurement of fair values
i. Fair value hierarchy
The fair value measurement for the disposal groups before costs
to sell has been categorised as a Level 3 fair value based on the
inputs to the valuation techniques used.
ii. Valuation techniques and significant unobservable inputs
The fair value of each disposal group is significantly based on
the valuation of the immovable property in each group. The
following table shows the valuation techniques and significant
unobservable inputs used in measuring the fair values of Iktinos,
Azurna, Kalkan and Porto Heli properties. The fair values of Pearl
and DCI H2 properties are based on selling agreements signed for
their disposal.
Valuation
technique
(see
note
Property 3) Significant unobservable inputs
--------- ----------------------------------- ----------------------------------------------------------------------
Iktinos, Combined approach (Market and Market approach (50% weight)
Greece Income)
Premiums/(discounts) on the
following:
Location: 2016: -30% to +30% (2015: -30% to
+30%)
Site size: 2016: -20% to 0% (2015: -20% to
0%)
Asking vs transaction: 2016: -30% to -20% (2015:-30% to
-15%)
Frontage sea view: 2016: -20% to +15% (2015: 0% to
+15%)
Maturity/development potential: 2016: +20% to +90% (2015:+20% to
+90%)
Weight allocation: 2016: +15% to +30% (2015:+20% to
+30%)
Income approach (50% weight)
Quantity of villas: 2016: 102 (2015:102)
Selling price per m(2) : 2016: EUR2,400 (2015:EUR2,600)
Expected annual growth in selling 2016: 0% to 3% (2015:0% to 6%)
price:
Cash flow velocity (years): 2016: 7 (2015: 7)
Risk-adjusted discount rate: 2016: 13% (2015: 13%)
Income approach Room occupancy rate (annual): 2016: 32% to 46%) (weighted
average: 43%)
(2015: 32% to 46%) (weighted
average: 43%)
Average daily rate per occupied 2016: EUR372 to EUR496 (weighted
room: average: EUR452)
(2015: EUR372 to EUR496 (weighted
average: EUR452)
Gross operating margin rate: 2016: 5% to 40% (weighted average:
34%)
(2015: 5% to 40% (weighted
average: 34%)
Terminal capitalisation rate: 2016: 9% (2015: 9%)
Risk-adjusted discount rate: 2016: 13% (2015: 13%)
Market approach Premiums/(discounts) on the
following:
Location: 2016: -30% to +30% (2015: -30% to
+30%)
Site size: 2016: -20% to 0% (2015: -20% to
0%)
Asking vs transaction: 2016: -30% to -10% (2015: -30% to
-15%)
Frontage sea view: 2016: -20% to +20% (2015: 0% to
+15%)
Maturity/development potential: 2016: -20% to +50% (2015: -20% to
+50%)
Weight allocation: 2016: +5% to +30% (2015: +15% to
+30%)
Property Valuation technique (see note 3) Significant unobservable inputs
Azurna, Croatia Market approach Premiums/(discounts) on the
following:
Location: 2016: 0% to +5% (2015: 0%)
Site size: 2016: -20% to -3% (2015: 0%)
Asking vs transaction: 2016: -10% to 0% (2015: -10% to
0%)
Weight allocation: 2016: +17% to +28% (2015: +15%
to +50%)
Kalkan, Turkey Income approach Quantity of residential units: 2016: 1 to 54 (2015: 1 to 54)
Selling price per m(2) : 2016: EUR1,100 to EUR1,850
(2015: EUR1,050 to EUR2,050)
Expected annual growth in 2016: 0% to 5% (2015: 0% to 5%)
selling price:
Cash flow velocity (years): 2016: 1 to 3 (2015: 1 to 3)
Risk-adjusted discount rate: 2016: 5% to 38% (2015: 5% to
40%)
Porto Heli, Greece Income approach Room occupancy rate (annual): 2016: 25% to 35% (weighted
average: 33%)
(2015: 30% to 40% (weighted
average: 38%)
Average daily rate per occupied 2016: EUR265 to EUR369
room: (weighted average: EUR330)
(2015: EUR232 to EUR403
(weighted average: EUR339)
Gross operating margin rate: 2016: 17% to 36% (weighted
average: 32%)
(2015: 18% to 43% (weighted
average: 37%)
Terminal capitalisation rate: 2016: 10% (2015: 10%)
Risk-adjusted discount rate: 2016: 11% (2015: 12%)
19. Trading properties
Note 31 December 2016 31 December 2015
EUR'000 EUR'000
At beginning of year 37,387 52,323
Net direct disposals (3,200) (16,189)
Concession/write off of land (193) -
Net transfers from investment property 17 273 14,290
Net transfers from property, plant and equipment 16 2,415 94
Disposals through disposal of subsidiary companies 33 (6,205) (1,952)
Impairment loss 8B (724) (3,431)
Reclassification to assets held for sale - (7,960)
Exchange difference 10 212
At end of year 29,763 37,387
As at 31 December 2016 and 31 December 2015, part of the Group's
immovable property is held as security for bank loans(see note
25).
20. AVAILABLE-FOR-SALE FINANCIAL ASSETS
On 15 July 2013, the Company acquired 9.6 million shares,
equivalent to 10% of Itacare's share capital, for the amount of
EUR1.9 million. Itacare is a real estate investment company that
was listed on AIM until 16 May 2014, when the admission of its
ordinary shares to trading on AIM was cancelled following a
decision of its shareholders at the Extraordinary General Meeting
that took place on 6 May 2014. Itacare's shareholders have decided
to dispose of all assets and after a series of asset sales/swaps
Itacare now owns two development sites with the Company's
shareholding being 13%. The Company is currently in advanced
discussions for the sale of its shareholding in Itacare, for a US$1
million payment in cash, with the transaction expected to close in
mid-2017.
31 December 2016 31 December 2015
EUR'000 EUR'000
At beginning of year 2,201 2,201
Change in fair value (256) -
Impairment loss (see note 8B) (995) -
Reclassification to assets held for sale (see note 18) (950) -
At end of year - 2,201
Fair value hierarchy
The fair value of this available-for-sale financial asset has
been categorised as Level 3 at the fair value hierarchy.
21. equity-accounted investees
Porto
DCI H2 Progressive Business Advisors S.A. Heli Total
EUR'000 EUR'000 EUR'000 EUR'000
Balance as at 1 January 2016 188,637 - - 188,637
Share of losses, net of tax (34,389) - - (34,389)
Impairment loss (see note 8B) (109,265) - - (109,265)
Disposals (950) - - (950)
Share of revaluation reserve 17 - - 17
Reclassification to assets held for sale (44,050) - - (44,050)
Balance as at 31 December 2016 - - - -
Balance as at 1 January 2015 231,972 24 2,227 234,223
Additions - - 310 310
Disposals - (24) - (24)
Share of translation reserve 180 - - 180
Share of losses, net of tax (43,542) - (1,011) (44,553)
Share of revaluation reserve 27 - - 27
Reclassification to assets held for sale - - (1,526) (1,526)
Balance as at 31 December 2015 188,637 - - 188,637
The details of the above investments, as at 31 December 2016 are
as follows:
Principal place of business/Country Shareholding interest
Name of incorporation Principal activities 2016 2015
Acquisition and holding of investments in
DCI H2 BVIs Cyprus 49% 50%
Acquisition and holding of investments in
Porto Heli BVIs Greece 25% 25%
The above shareholding interest percentages are rounded to the
nearest integer.
During 2016, the Company's investment in DCI H2, owner of Aristo
Developers Limited ('Aristo'), decreased significantly, as a result
of a share of loss and an impairment loss amounting to EUR34,389
thousand and EUR109,265 thousand, respectively. The share of losses
comprises the result of the loan restructuring arrangement between
Aristo and Bank of Cyprus, whereby a loss from the redemption of
such bank loans emerged through their settlement with property
swapped. The impairment loss has been recognised to bring the DCI
H2 investment to its recoverable amount of EUR45 million, which
represents the agreed proceeds of the Company from the disposal of
its investment, as further described below.
On 29 September 2016, the Company reached an agreement to
dispose of its 49.75% shareholding in DCI H2 to an entity
controlled by Theodoros Aristodemou ('TA'), DCI H2' s current
controlling shareholder. The disposal would be effected by way of a
sale to TA of 49.75% of the shares in DCI H2 held by DCI Holdings
One Ltd, a wholly-owned subsidiary of the Company, for a total cash
consideration of EUR45 million, payable in quarterly instalments
over three years and bearing annual interest of 4% in the first
year, increasing to 5% and 6%, respectively, for each of the
subsequent years. The Company would also be entitled to a 25% share
of any gross proceeds in excess of an implied company equity
valuation of EUR100 million from the sale of any shares of DCI H2
(or of its subsidiaries) sold by the acquirer until the earlier of
six months from the settlement of the full consideration (to the
extent such settlement occurred by 29 December 2016 and the second
anniversary from the transaction). The acquisition shares would be
kept in escrow and transferred to the acquirer in line with the
collection of the consideration by the Company, apart from a
percentage which will remain escrowed until the final settlement of
the consideration. In the event that any payment became overdue for
more than three months either party would have the right to
terminate the sales agreement, in which case all the shares kept
in
escrow together with any corresponding dividend distributions
would be retained by the Company. On 6 September 2016, the Company
received EUR1.1 million in exchange for 105 DCI H2 shares,
resulting to a gain on disposal of EUR151 thousand and to a
reduction in the Company's holding in DCI H2 to 48.7%.
On 13 February 2017, the Company signed a supplementary
agreement amending the date of execution of the agreement to the
earlier of a) 30 April 2017 and b) the 'Stay Period', the date
falling 5 Business days after the issuance of the Court verdict for
the current trial between the Attorney General and the Bank of
Cyprus Ltd (in which TA is a defendant). Completion will take place
upon the expiration of the Stay Period, subject to the full receipt
by the Company of any outstanding amount from the consideration.
Upon execution of this agreement an amount of EUR700 thousand was
paid to the Company (received on 14 February 2017) in exchange for
77 shares in DCI H2. In the event that by 30 April 2017 a court
verdict has not been issued, then the Stay Period shall be extended
until 30 June of 2017, provided that TA makes by the 30 April 2017
a payment of EUR300 thousand in exchange for 33 DCIH2 shares.
As at 31 December 2016, the Company's holding of 48.7% has been
classified as asset held for sale.
During 2015, the Company disposed of its participation in
Progressive Business Advisors S.A. Also, on 24 April 2015, DCI
Holdings Fifty Ltd ('DCI H50') acquired a 100% participation in SPV
5, through the enforcement of the pledge over the whole issued
share capital of SPV 5 that existed in relation to a loan facility
provided by DCI H50 to SPV 5 on 11 February 2014. As the Company
has a 25% participation in DCI H50, its indirect holding in SPV 5
remains 25% at 31 December 2016. On 30 October 2015, there was a
restructuring in the Nikki Beach corporate holding structure
('Porto Heli'), with Heli Bay replacing DCI H50 as the common
holding company of the asset and Heli Bay Properties Ltd acting as
the intermediate holding company in Cyprus. The Company retains its
25% indirect shareholding participation in the Porto Heli project
which has not been affected by the above transactions.
Summary of financial information for equity-accounted investees
as at and for the year ended 31 December 2015, not adjusted for the
percentage ownership held by the Group:
Porto
DCI H2 Heli Total
EUR'000 EUR'000 EUR'000
2015
-----------------------------------------------------
Current assets 227,368 5,630 232,998
-----------------------------------------------------
Non-current assets 680,085 11,380 691,465
-----------------------------------------------------
Total assets 907,453 17,010 924,463
-----------------------------------------------------
Current liabilities 345,847 6,355 352,202
-----------------------------------------------------
Non-current liabilities 181,734 4,551 186,285
-----------------------------------------------------
Total liabilities 527,581 10,906 538,487
-----------------------------------------------------
Net assets 379,872 6,104 385,976
-----------------------------------------------------
Carrying amount of interest in
associate 188,637 - 188,637
-----------------------------------------------------
Revenues 21,860 2,170 24,030
-----------------------------------------------------
Loss (109,382) (6,212) (115,594)
Other comprehensive income 417 - 417
Total comprehensive income (87,105) (4,042) (91,147)
Group's share of loss and total comprehensive income (43,335) (1,011) (44,346)
22. trade and other RECEIVABLES
31 December 31 December
2016 2015
EUR'000 EUR'000
------------ ------------
Trade receivables 863 7,482
------------ ------------
VAT receivables 370 3,560
Other receivables 1,998 4,154
Total trade and other receivables (see note 35) 3,231 15,196
Prepayments and other assets 770 984
Total 4,001 16,180
------------ ------------
31 December 31 December
2016 2015
EUR'000 EUR'000
------------ ------------
Non-current - 1,178
------------ ------------
Current 4,001 15,002
------------ ------------
Total 4,001 16,180
------------ ------------
23. Cash and cash equivalents
31 December 31 December
2016 2015
EUR'000 EUR'000
------------ ------------
Bank balances (see note 35) 4,669 41,948
------------ ------------
Cash in hand 29 42
------------ ------------
Total 4,698 41,990
------------ ------------
During the period, the Group had no fixed deposits.
As at 31 December 2016, an amount of EUR3.2 million (2015:
EUR4.1 million) received through the Colony Luxembourg S.a.r.l.
loan facility is restricted for use only towards the development of
the Amanzoe project. In addition, funds in bank accounts of certain
Group companies are pledged as a security for loans (see note
25).
24. capital and reserves
Capital
Authorised share capital
31 December 2016 31 December 2015
'000 of shares EUR'000 '000 of shares EUR'000
Common shares of EUR0.01 each 2,000,000 20,000 2,000,000 20,000
-------
Movement in share capital and premium
Shares in Share capital Share premium
'000 EUR'000 EUR'000
Capital at 1 January 2015 642,440 6,424 498,933
Shares issued on 9 June 2015 219,257 2,193 60,527
Placement costs - - (1,464)
Bond conversion shares on 11 June 2015 42,930 429 11,851
Capital at 31 December 2015 904,627 9,046 569,847
Capital at 1 January 2016 and 31 December 2016 904,627 9,046 569,847
On 9 June 2015 and 11 June 2015, the Company issued 219,256,609
new common shares and 42,930,080 bond conversion shares,
respectively, at GBP 0.21 per share, for a total value of EUR75
million. The new shares rank pari passu with the existing common
shares of the Company.
Warrants
In December 2011, the Company raised EUR8.5 million through the
issue of new shares at GBP 0.27 per share (with warrants attached
to subscribe for additional Company shares equal to 25% of the
aggregate value of the new shares at the price of GBP 0.3105 per
share, subject to anti-dilution adjustments pursuant to the
warrant's terms and conditions - initial price of GBP 0.35 per
share). The warrants are exercisable within five years from the
admission date. The number of shares to be issued on exercise of
their rights will be determined based on the subscription price on
the exercise date. All warrants expired on 3 January 2017.
Reserves
Translation reserve
Translation reserve comprises all foreign currency differences
arising from the translation of the financial statements of foreign
operations.
Fair value reserve
Fair value reserve comprises the cumulative net change in fair
value of available-for-sale financial assets until the assets are
derecognised or impaired, and the revaluation of property, plant
and equipment from both subsidiaries and equity accounted
investees, net of any deferred tax.
25. loans AND BORROWINGS
Total Within one year Within two to five years More than five years
2016 2015 2016 2015 2016 2015 2016 2015
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------- -------- ------------ ---------- ----------
Loans in euro 92,270 92,395 12,749 10,578 67,146 61,707 12,375 20,110
-------- -------- ------------ ---------- ----------
Loans in United States
dollars - 57,550 - 6,638 - 50,912 - -
-------- -------- ------------ ---------- ----------
Convertible Bonds
payable - 73,735 - 15,312 - 58,423 - -
-------- -------- ------------ ---------- ----------
92,270 223,680 12,749 32,528 67,146 171,042 12,375 20,110
-------- -------- ------------ ---------- ----------
Loans in Euro within
disposal groups held
for sale 8,259 8,700 765 709 7,494 7,991 - -
-------- -------- ------------ ---------- ----------
Total 100,529 232,380 13,514 33,237 74,640 179,033 12,375 20,110
--------
Terms and Conditions
The terms and conditions of outstanding loans were as
follows:
31 December 2016 31 December 2015
Description Currency Interest rate Maturity dates EUR'000 EUR'000
Euribor plus
margins ranging
from margins from
4.25% to 6.5%
(2015: margins from From 2018 to 2026
4.25% to (2015: from 2018
Secured loans Euro 6.5%) to 2026) 58,065 41,744
Basic rate plus
Secured loans Euro 1.5% margin 2022 - 16,443
Fixed rates ranging
from 4.75% to 11% From 2017 to 2020
(2015: fixed rates (2015: from 2016
Secured loans Euro from 7.9% to 11%) to 2020 42,464 42,908
Libor plus margins
United States ranging from 2% to
Secured loans Dollars 8% From 2017 to 2020 - 57,550
Convertible Bonds
payable Euro 5.50% 2018 - 50,000
Convertible Bonds United States
payable Dollars 7% From 2016 to 2018 - 23,735
Total interest-bearing liabilities 100,529 232,380
Securities
As at 31 December 2016 and 31 December 2015, the Group's loans
and borrowings were secured as follows:
-- Mortgage against the immovable property of the Croatian
subsidiary, Azurna, with a carrying amount of EUR31.6 million
(2015: EUR33.3 million), two promissory notes, a debenture note and
a letter of support from its parent company Single Purpose Vehicle
Four Limited.
-- Mortgage against immovable property of the Turkish
subsidiary, Kalkan Yapi ve Turizm A.S., with a carrying amount of
EUR5.8 million (2015: EUR6.7 million).
-- Mortgage against the immovable property of the Cypriot
subsidiary, Symboula Estates Limited, with a carrying amount of
EUR30.1 million (2015: EUR34.4 million).
-- Mortgage against immovable property of the Cypriot associate,
Aristo, amounting to EUR2.8 million.
-- Lien up to EUR41.6 million on immovable properties of the
Greek subsidiaries of the Porto Heli project, with a carrying
amount of EUR139.8 million (2015: EUR149 million).
-- Pledge of 1,000 shares of DCI H2 for Symboula Estates Limited
bank loan (2015: pledge of 1,500 shares of DCI H2).
-- Pledge of all shares of the Cypriot subsidiary Symboula
Estates Limited, and all shares of two other Apollo group entities
for Symboula Estates Limited bank loan (2015: nil).
-- Pledge of 4,495 shares of the Cypriot subsidiary, DCI 14, and
all shares of six Cypriot and Greek subsidiaries of Amanzoe project
for DCI 14 loan received from Colony Luxembourg S.a.r.l. acting on
behalf of managed funds.
-- Fixed and floating charges over the rights, titles and
interests of DCI 14 and three Cypriot subsidiaries of Amanzoe
project, charge over their bank accounts and assignment of their
intra-group receivables for the loan from Colony Luxembourg
S.a.r.l.
-- Fixed and floating charges overs assets and undertakings of
Symboula Estates Limited, subordination and assignment of
intercompany loans between all companies of Apollo Group and
Dolphin Capital Investors Limited (2015: nil).
-- Corporate guarantees by DCI Holdings One Limited for the
serving of the bank loan of Cypriot subsidiary, Symboula Estates
Limited, amounting to EUR16 million (2015: guarantee of EUR16
million).
As at 31 December 2015, in addition to the above, the Group's
loans and borrowings were secured as follows:
-- Mortgage against immovable property of the subsidiary in
Dominican Republic, PGH, with a carrying amount of EUR34.8
million.
-- Pledge of all shares of PGH, its subsidiary, Playa Grande
Golf Resort Inc., and its parent, DCA Holdings Seven Limited for
the loan received by DCA Holdings Seven Limited's parent, DCA
Holdings Six Limited ('DCA H6'), from Melody Business Finance LLC,
acting as administrative agent of a group of lenders.
-- Pledge over the net loan proceeds related to the loan through Melody Business Finance LLC.
-- Pledge over funds in bank accounts of PGH and its subsidiary,
Playa Grande Golf Resort Inc., pledge over rights under insurance
policies, conditioned assignment over operation and promissory
notes for disbursements in connection with Playa Grande Golf Resort
Inc. bank loan.
-- Guarantee by Dolphin Capital Americas Limited, the parent of
DCA H6, on the payment and performance of guaranteed obligations in
connection with the loan from Melody Business Finance LLC.
-- Corporate guarantee by the Company on a PGH group bank loan
and convertible Bonds issued in 2011.
Convertible Bonds payable
On 5 April 2013, the Company issued 5,000 Bonds (the 'Euro
Bonds') at EUR10 thousand each, bearing interest of 5.5% per annum,
payable semi-annually, and maturing on 5 April 2018. On 23 April
2013, the Company issued 917 Bonds (the 'US$ Bonds') at US$10
thousand each, bearing interest of 7% per annum, payable
semi-annually, and maturing on 23 April 2018. The Euro Bonds and
the US$ Bonds may be converted prior to maturity (unless earlier
redeemed or repurchased) at the option of the holder into common
shares of EUR0.01 each. The conversion price is EUR0.5623,
equivalent of GBP 0.49 (initial conversion price GBP 0.50) and
US$0.6583, equivalent of GPB 0.4410 (initial conversion price GBP
0.45) per share for the Euro Bonds and the US$ Bonds, respectively.
The Euro Bonds and the US$ Bonds are not publicly traded.
Part of the Bonds, amounting to EUR41,004 thousand, was
subscribed for by Third Point LLC, a significant shareholder of the
Company. On 8 December 2016, both Euro Bonds and US Bonds were
cancelled and all accrued interest was waived as a result of the
Share Purchase Agreement entered into for the sale of Playa Grande
Golf & Resort (see note 33).
On 29 March 2011, DCI H7 issued 4,000 Bonds at US$10 thousand
each, bearing interest of 7% per annum, payable semi-annually, and
maturing on 29 March 2016. The Bonds were trading on the Open
Market of the Frankfurt Stock Exchange (the freiverkehr market)
under the symbol 12DD. On 23 April 2013, the Company purchased 891
Bonds at a consideration of US$10 thousand each (representing their
par value) plus corresponding accrued interest of approximately
US$200 thousand using the funds received from the issue of the US$
Bonds. On 10 June 2015, certain bondholders, including the
Investment Manager, opted to convert Bonds of total value US$14,420
thousand into 42,930,080 shares that were admitted on AIM on 11
June 2015. The Investment Manager converted Bonds of total value
US$420 thousand into 1,250,390 shares. The remaining amount of DCI
H7 Bonds including any accrued interest was repaid on scheduled
maturing date in March 2016.
26. Deferred tax assets and liabilities
31 December 2016 31 December 2015
Deferred Deferred Deferred Deferred
tax
assets tax liabilities tax assets tax liabilities
EUR'000 EUR'000 EUR'000 EUR'000
Balance at the beginning of the year 997 (30,129) 2,557 (55,180)
--------
From disposal of subsidiary (see note 33) - - - 314
--------
Recognised in profit or loss - continuing operations (1,549) 5,107 256 15,112
Recognised in profit or loss - discontinued operation - 1,273 - -
Recognised in other comprehensive income (see note 14) - (1,682) - 1,791
Reclassification to (assets)/liabilities held for sale 1,548 1,239 (1,628) 8,091
Exchange difference and other - (63) (188) (257)
--------
Balance at the end of the year 996 (24,255) 997 (30,129)
--------
Deferred tax assets and liabilities are attributable to the
following:
31 December 2016 31 December 2015
Deferred Deferred Deferred Deferred
tax tax
assets tax liabilities tax assets liabilities
EUR'000 EUR'000 EUR'000 EUR'000
-------- -------------
Revaluation of investment property - (15,268) - (23,819)
-------- -------------
Revaluation of trading properties - (1,905) - (1,926)
-------- -------------
Revaluation of property, plant and equipment - (6,449) - (6,007)
Other temporary differences - (633) - 1,623
Tax losses 996 - 997 -
-------- -------------
Total 996 (24,255) 997 (30,129)
--------
27. Finance lease LIABILITIES
31 December 2016 31 December 2015
---------------------------------
Present
Future Present value Future value
minimum of minimum minimum of minimum
lease lease lease lease
payments Interest payments payments Interest payments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------- --------- ------------- --------- --------- -----------
Less than one year 49 1 48 78 1 77
--------- --------- ------------- --------- --------- -----------
Between two and five years 195 8 187 197 8 189
--------- --------- ------------- --------- --------- -----------
More than five years 4,162 1,415 2,747 4,186 1,419 2,767
--------- --------- ------------- --------- --------- -----------
Total 4,406 1,424 2,982 4,461 1,428 3,033
--------- --------- ------------- --------- -----------
The major finance lease obligations comprise leases in Greece
with 99-year lease terms.
28. DEFERRED REVENUE
31 December 2016 31 December 2015
EUR'000 EUR'000
Prepayment from clients 10,683 21,713
Government grant 7,230 7,353
Total 17,913 29,066
31 December
2016 31 December 2015
EUR'000 EUR'000
------------
Non-current 7,230 17,846
------------
Current 10,683 11,220
------------
Total 17,913 29,066
------------
29. Trade and other payables
31 December 2016 31 December 2015
EUR'000 EUR'000
Trade payables 660 4,019
Land creditors 25,354 25,609
Investment Manager fees 4,221 467
Professional fees accrual 1,952 -
Deposit relating to Pearl disposal 1,000 -
Branding fees accrual 2,444 2,459
Other payables and accrued expenses 13,960 32,385
Total 49,591 64,939
31 December
2016 31 December 2015
EUR'000 EUR'000
------------
Non-current 6,479 6,698
------------
Current 43,112 58,241
------------
Total 49,591 64,939
------------
30. NAV per share
31 December 2016 31 December 2015
'000 '000
Total equity attributable to owners of the Company (EUR) 233,887 481,589
Number of common shares outstanding at end of year 904,627 904,627
NAV per share (EUR) 0.26 0.53
31. Related party transactions
31.1 Directors' interest and remuneration
Directors' interest
Miltos Kambourides is the founder and managing partner of the
Investment Manager.
The interests of the Directors as at 31 December 2016, all of
which are beneficial, in the issued share capital of the Company as
at this date were as follows:
Shares
'000
-------
Miltos Kambourides (indirect holding) 66,019
-------
Mark Townsend 282
-------
Andrew Coppel 150
-------
Save as disclosed, none of the Directors had any interest during
the year in any material contract for the provision of services
which was significant to the business of the Group.
From 1 January 2016 From 1 January 2015
to 31 December 2016 to 31 December 2015
EUR'000 EUR'000
Remuneration 1,415 844
Equity-settled share-based payment arrangements - Directors Awards (see
note 32) 94 60
Total remuneration 1,509 904
The Directors' remuneration details for the years ended 31
December 2016 and 31 December 2015 were as follows:
From 1 January 2016 From 1 January 2015
to 31 December 2016 to 31 December 2015
EUR'000 EUR'000
Laurence Geller *678 233
Robert Heller 205 175
Graham Warner 180 174
Mark Townsend 61 58
Justin Rimel 3 13
Andrew Coppel 232 34
David B. Heller 3 21
Sue Farr 53 -
Roger Lane-Smith - 122
Andreas Papageorghiou - 2
Cem Duna - 2
Antonios Achilleoudis - 2
Christopher Pissarides - 8
Total 1,415 844
*Comprises EUR636 thousand compensation for loss of office and
EUR42 thousand compensation for expenses.
Mr. Miltos Kambourides has waived his fees.
On 25 February 2015, the Company announced the following
Directorate changes. Andreas Papageorghiou, Cem Duna, Antonios
Achilleoudis and Christopher Pissarides stepped down from the
Board. Five new members joined the Board - Laurence Geller, who
also served as Chairman, Robert Heller, Graham Warner, Mark
Townsend and Justin Rimel. Miltos Kambourides and David B. Heller
remained on the new Board, as did Roger Lane Smith until his
retirement on 31 December 2015. On 6 October 2015, Andrew Coppel
also joined the Board.
On 1 March 2016, Laurence Geller, David B. Heller and Justin
Rimel resigned from the Company's Board with Andrew Coppel being
appointed as the Independent Chairman.
Laurence Geller no longer retains an interest in the stock
options issued pursuant to the Company's Stock Option Programme,
whilst Andrew Coppel does not participate in the Stock Option
Programme.
On 19 July 2016, Sue Farr joined the Board as a non-executive
Director.
31.2 Investment Manager remuneration
From
1 January
2016
to 31
December From 1 January 2015
2016 to 31 December 2015
EUR'000 EUR'000
-----------
Fixed management fee/Annual fee 7,500 12,813
-----------
Variable management fees/Performance fee 4,221 -
-----------
Equity-settled share-based payment arrangements - Investment Management Awards (see
note 32) (315) 315
-----------
Total remuneration 11,406 13,128
In 2016, the Investment Manager, fully waived any rights under
the Investment Manager Awards it was entitled to under the terms of
the previous Investment Management Agreement ('IMA') and the
Company's share incentive plan (see note 32).
In line with the Amended and Restated IMA, signed in December
2016, with retroactive effect from 1 July 2016, the following
arrangements came into effect:
i. Fixed management fee
The annual management fees for the second half of 2016 were
retrospectively reduced from EUR8.5 million to EUR6.5 million per
annum and have been set to a fixed declining annual amount equal to
EUR6 million for 2017, EUR5 million for 2018 and EUR4 million for
2019.
Additionally, the term of the IMA has been reduced and will
expire at the earlier of the end of the Divestment Period or 31
December 2019 rather than August 2020 as under the terms of the
previous IMA. There will be no fixed management fee due for
2020.
ii. Variable management fee
Variable management fee has been introduced which will become
payable solely upon the execution of each asset divestment by the
Company. The variable management fee will be equal to a percentage
of the enterprise value (i.e. the equity value of the asset plus
any loans or other liabilities assumed by its purchaser) of any
asset disposed by the Company during the Divestment Period at a
valuation at or in excess of 50% of its latest reported NAV.
The variable management fee percentage will be equal to 3% for
divestments executed within the second half 2016 and will be
reduced to 2.5%, 2.0% and 1.3% for those concluded in 2017, 2018
and 2019 respectively for disposals completed at 50% or more of
latest reported NAV. The variable management fee will increase in
respect of transactions executed at sales prices exceeding 50% of
their NAV.
The variable management fee will become payable to the
Investment Manager three months from the completion of the
respective disposal. Specifically in relation to the Playa Grande
disposal, EUR1 million of the variable management fee has been paid
upon the completion of the disposal and the balance will become
payable at the earlier of the date when the Company makes a
distribution of proceeds from asset sales to Shareholders or nine
months from the completion of the Playa Grande disposal.
With regard to the disposal of Aristo Developers Ltd and Pearl
Island, the Manager will be entitled to a Variable annual
management fee equal to 3%, 2.5%, 2% and 1.3% on the portion of
their corresponding Total Disposal Prices received by the Company
within 2016, 2017, 2018 and 2019 respectively.
Investment Manager was entitled to a performance fee payable
under the terms of the previous IMA. There is no change to this
entitlement. However, any performance fees earned under this
arrangement will be fully deducted from any future annual
management fees and variable management fees payable over the term
of the IMA.
Previous arrangements, in force until 30 June 2016
Annual fee
The Investment Manager is entitled to an annual management fee
defined as follows:
-- for the period from 1 July 2015 to and including 31 December
2016, the annual management fee shall be EUR1 million per calendar
month payable quarterly in advance; and
-- with effect from and including 1 January 2016, the annual
management fee shall be EUR8.5 million payable quarterly in
advance.
-- commencing on and with effect from 1 January 2017, the annual
management fee payable for the following annual periods will be
permanently reduced on 1 January in each year to an amount equal to
the lower of:
(i) 1.25% of the gross asset value of the Company calculated as
at the last preceding 31 December calculation date; and
(ii) EUR8.5 million.
In addition, the Company shall reimburse the Investment Manager
for any professional fees or other costs incurred on behalf of the
Company for the provision of services or advice.
Performance fee
i. Core asset incentive fee
The Investment Manager will be entitled to the core asset
incentive fee based on the net profits received by the Company from
the core assets or the disposal thereof.
Core assets comprise of the following projects: Amanzoe, Kilada
Hills, Kea, Pearl Island and Playa Grande. All other assets of the
company are characterized as non-core for the purpose of incentive
fee calculations.
The net proceeds will be divided between the Investment Manager
and the Company on the following basis:
-- first, 100% to the Company until the Company has received an
amount equal to EUR169.6 million (the 'Aggregate Core Asset Base
Value');
-- second, 100% to the Company until the Company has received an
amount equal to the core asset capital and costs;
-- third, 100% to the Company until the Company has received an
amount equal to the base cost compounded quarterly at the average
one-month Euribor rate plus 500 basis points (but capped at a
maximum interest rate of 6% per annum);
-- fourth, 60% to the Investment Manager and 40% to the Company
until the Investment Manager has received an amount equal to 20% of
the Net Profits then distributed; and
-- thereafter, 20% to the Investment Manager and 80% to the
Company such that the Investment Manager shall receive a total core
asset incentive fee equivalent to 20% of the Net Profits.
On the disposal of a core asset, the Investment Manager shall be
entitled to receive an advance of the core asset incentive fee on
the following basis:
-- where the disposal takes place prior to the date on which the
Company shall have first received an amount of net profits from the
disposal of core assets equal to, or in excess of, EUR113,055,360
(the 'Trigger Date'), an amount equal to 6.666% of the net profits
received by the Company on the disposal of such core asset; or
-- where the disposal takes place after the Trigger Date, an
amount equal to 10% of the net profits received by the Company on
the disposal of such core asset, (in each case a 'Core Asset
Incentive Fee Advance Payment').
The aggregate value of any Core Asset Incentive Fee Advance
Payments will at any time be set off against, and thereby reduce to
not less than zero, any liability of the Company to pay core asset
incentive fees.
ii. Non-core asset incentive fee
The Investment Manager will be entitled to the non-core asset
incentive fee based on the net profits received by the Company from
the disposal of any non-core assets. No non-core asset incentive
fee will be payable in respect of a non-core asset unless the
aggregate disposal proceeds actually received by the Company in
respect of such non-core asset exceeds the base value (the 'Payment
Condition'). The base value is defined as 65% of the non-core asset
value as at 31 December 2014. Subject to satisfaction of the
Payment Condition in respect of any non-core asset, the net
proceeds actually received by the Company from the disposal of such
non-core asset will be divided between the Investment Manager and
the Company on the following basis:
-- first, 100% to the Company until the Company has received an
amount equal to the base value;
-- second, 12.5% to the Investment Manager and 87.5% to the
Company until the net proceeds equal 80% of the base value;
-- third, 17.5% to the Investment Manager and 82.5% to the
Company until the net proceeds equal 100% of the base value;
and
-- thereafter, 25% to the Investment Manager and 75% to the Company.
50% of each non-core asset incentive fee will be placed in an
interest bearing escrow account to be operated by the Company's
administrator. Any funds held in this escrow account will be dealt
with as follows; commencing on 31 December 2016, in the event that,
as at 31 December in each year, the aggregate net proceeds received
by the Company in relation to all non-core assets disposed of
during the previous 12 month period (the 'Look-back Period'):
-- do not equal or exceed the aggregate of the base values of
any non-core assets disposed of during an applicable Look-back
Period (the 'Aggregate Base Value') then the Company's
administrator will be authorised to repay any escrowed funds to the
Company until such time as the Company has received an amount equal
to the Aggregate Base Value and thereafter any remaining escrowed
funds (if any) will be paid to the Investment Manager; or
-- equal or exceed the Aggregate Base Value then the Company's
administrator will be authorised to pay to the Investment Manager
the escrowed funds.
A clawback provision is in place with regard to incentive
(performance) fee payments in the event the aggregate proceeds from
the disposal of assets do not exceed a certain threshold.
Previous arrangements, in force until 30 June 2015
Annual fees
The Investment Manager was entitled to an annual management fee
of 2% of the equity funds defined as follows:
-- EUR890 million; plus
-- The gross proceeds of further equity issues, other than the
funds raised in respect of the proceeds of the equity issues as at
25 October 2012 and 30 December 2011; plus
-- Realised net profits less any amounts distributed to shareholders.
The equity funds as at 30 June 2015 comprised EUR681
million.
In addition, the Company reimbursed the Investment Manager for
any professional fees or other costs incurred on behalf of the
Company for the provision of services or advice.
Performance fees
The Investment Manager was entitled to a performance fee based
on the net profits made by the Company, subject to the Company
receiving the 'Relevant Investment Amount' which is defined as an
amount equal to:
I. The total cost of the investment reduced on a pro rated basis
by an amount of EUR160.1 million*; plus
II. A hurdle amount equal to an annualised percentage return
equal to the average one-month Euribor rate applicable in the
period commencing from the month when the relevant cost was
incurred compounded for each year or fraction of a year during
which such investment was held (the 'Hurdle'); plus
III. A sum equal to the amount of any realised losses and/or
write-downs in respect of any other investment which has not
already been taken into account in determining the Investment
Manager's entitlement to a performance fee.
In the event that the Company had received distributions from an
investment equal to the Relevant Investment Amount, any subsequent
net profits arising should have been distributed in the following
order or priority:
I. 60% to the Investment Manager and 40% to the Company until
the Investment Manager should had received an amount equal to 20%
of such profits; and
II. 80% to the Company and 20% to the Investment Manager, such
that the Investment Manager should had received a total performance
fee equivalent to 20% of the net profits.
* The total cost of investment was reduced in April 2014 by
EUR7.6 million, as compared to the base reduction of EUR167.7
million, to reflect the loss incurred by the Company through the
Pasakoy Yapi ve Turizm A.S. ('Pasakoy') sale transaction, as
calculated in accordance with the Investment Management Agreement
provisions and definitions.
The performance fee payment was subject to certain escrow and
clawback provisions. As at 31 December 2016, the funds held in
escrow, including accrued interest, were released (2015: funds in
escrow - EUR467 thousand).
31.3 Shareholder and development agreements
Shareholder agreements
DolphinCI Twenty Two Limited, a subsidiary of the Group, had
signed a shareholder agreement with the non-controlling shareholder
of Eastern Crete Development Company S.A., under which it had
acquired 60% of the shares of the Plaka Bay project by paying the
former majority shareholder a sum upon closing and a conditional
amount in the event the non-controlling shareholder was successful
in, among others, acquiring additional specific plots and obtaining
construction permits. On 23 August 2013, the parties signed a new
agreement for the purchase of the remaining 40% stake of the
entity. The base consideration for the purchase was EUR4.4 million
payable in three installments: EUR2.4 million by 10 September 2013,
EUR1 million by 30 September 2013 and EUR1 million by 31 October
2013. The last installment of EUR1 million was transferred in
February 2014. Consideration might be increased by the transfer of
plots of land in the project, to the seller, of total market value
equal to EUR4 million, subject to the project receiving permits for
building 40,000 m(2) , of freehold residential properties. The
conditional deferred consideration will be adjusted pro rata in
case the buildable properties are less than 40,000 m(2) but is also
subject to a 5% annual increase commencing from the second
anniversary from the signing of the agreement and until
implementation by the Company.
On 20 September 2010, the Group signed an agreement with
Archimedia, controlled by John Hunt, for the sale of a 14.29% stake
in Amanzoe for a consideration of EUR11 million. The agreement also
granted Archimedia the right to partially or wholly convert this
shareholding stake into up to three predefined Aman Villas (the
'Conversion Villas') for a predetermined value and percentage per
Villa. The first EUR1 million of the consideration was received at
signing, while the completion of the transaction and the payment of
the EUR10 million balance was subject to customary due diligence on
the project and the issuance of the construction permits for the
Conversion Villas prior to a longstop date set at 1 April 2011. On
28 March 2011, the Company reached an agreement with Archimedia to
vary the original terms of the sale agreement, which was followed
by the Company and Archimedia entering into an amended sale
agreement on 13 March 2012. The Company received US$12,422 thousand
and EUR1,300 thousand, while US$978 thousand and EUR800 thousand
due as at 31 December 2013, plus any additional consideration that
could be due depending on the exact size and features of the
Conversion Villas, would be received upon completion of the
Conversion Villas. On 2 July 2014, Archimedia remitted EUR904
thousand (EUR263 thousand and US$878 thousand) to the Company
towards this end. As of 31 December 2015 no receivable amount was
outstanding. On 3 August 2012, the Company received a Conversion
Notice from Archimedia to convert 6.43% of its shares in Amanzoe in
exchange for an Aman Villa and on 27 December 2012 a further Notice
for the conversion of the remaining 7.86% of its shares for two
other Aman Villas. As of 31 December 2015, all Villas Conversions
had been completed and Archimedia did not hold any shareholding
interest in Amanzoe.
Shareholder agreements
On 6 August 2012, the Company signed an agreement for the sale
of eight out of the nine remaining Seafront Villas, part of the
Mindcompass Overseas Limited group of entities. The total base net
consideration agreed for this sale was EUR10 million, with the
Company also entitled to 50% profit participation in the sale of
five Villas. It was also agreed that the Company would undertake
the construction contract for the completion of the Villas and a
EUR1 million deposit was paid upon signing. During 2013, the
Company received an additional amount of EUR990 thousand. The
construction of the two Villas is currently underway.
On 5 September 2012, the Company signed a sales agreement with a
regional investor group led by Mr. Alberto Vallarino for the sale
of its 60% shareholding in Peninsula Resort Holdings Limited, the
entity that indirectly holds the land for Pearl Island's Founders'
phase of the Pearl Island Project. The consideration for the sale
was a cash payment of US$6 million (50% paid at closing on 14
September 2012 and 50% one year from closing, collected on 17
September 2013) and a commitment to invest an additional circa
US$35 million of development capital within a maximum period of two
years in order to complete the aforementioned phase of the project.
Out of those funds, approximately US$13 million would be incurred
on development of components owned by Pearl Island Limited S.A.,
with the entire amount already invested by 31 December 2015.
Development agreements
Pursuant to the original Sale and Purchase Agreement of 10
December 2007, DCI H7 was obliged to make payments for the
construction of infrastructure on the land retained by DR
Beachfront Real Estate LLC ('DRB'), the former majority shareholder
of PGH. Pursuant to a restructuring agreement dated 5 November
2012, those obligations have been restructured with the material
provisions of that agreement already fulfilled. As at 31 December
2015, following cash payments of US$7.6 million and transfers of
land parcels valued at approximately US$11.7 million, no amount is
outstanding. As stated in note 33, the Company entered into a share
purchase agreement for the sale of the project on 14 November 2016
and completion took place on 8 December 2016.
Pedro Gonzalez Holdings II Limited, a subsidiary of the Group in
which the Company holds a 60% stake, has signed a Development
Management agreement with DCI Holdings Twelve Limited ('DCI H12')
in which the Group has a stake of 60%. Under its terms, DCI H12
undertakes, among others, the management of permitting,
construction, sale and marketing of the Pearl Island project. As
stated in note 38, the Company entered into a share purchase
agreement for the sale of its shareholding in the project on 17
January 2017 and completion took place on 13 March 2017.
31.4 Other related parties
During the years ended 31 December 2016 and 31 December 2015,
the Group entered into the following related party transactions
with the following parties:
2016
Related party name EUR'000 Nature of transaction
Project management services in relation to Sitia project and
Iktinos Hellas S.A. 40 rent payment
Third Point LLC, shareholder of the Company 1,200 Bond interest for the year
Third Point LLC, shareholder of the Company 24,566 Loss on disposal of DCA H6 (see note 33)
2015
Related party name EUR'000 Nature of transaction
Project management services in relation to Sitia project
Iktinos Hellas S.A. 48 and rent payment
Design fees in relation to Kea Resort project and Playa
John Heah, non-controlling shareholder of SPV 10 191 Grande project
Progressive Business Advisors S.A. 282 Accounting fees
Third Point LLC, shareholder of the Company 2,401 Bond interest for the year
32. EQUITY-SETTLED SHARE-BASED PAYMENT ARRANGEMENTS
From
1 January
2016
to 31
December From 1 January 2015
2016 to 31 December 2015
EUR'000 EUR'000
------------------------------------------------------ -----------
Investment Manager Awards (see note
31.2) (315) 315
------------------------------------------------------ -----------
Director Awards (see note 31.1) 94 60
------------------------------------------------------ -----------
Total equity-settled share-based payment arrangements (221) 375
Investment Manager Awards
On 9 June 2015, under a Stock Incentive Plan, the Company
granted two nil-cost share option awards to the Investment Manager
(the 'DCP Awards') as follows:
Number of Shares to which the DCP Awards relate:
-- DCP Award 1: 31,661,940 common shares of EUR0.01 each; and
-- DCP Award 2: 22,615,671 common shares of EUR0.01 each,
both subject to reductions in case that certain non-market
performance targets are not met.
These awards were to performance vest in various equal tranches
dependent upon the average closing price of the shares trading at
or above certain relevant target share prices for a continuous
period of 30 trading days. The relevant target share prices for the
purposes of these awards ranged from 35p to 80p.
In 2016, as stated in note 31.2, the Investment Manager fully
waived any rights under these Awards that it was entitled to under
the terms of the previous IMA and the Company's share incentive
plan.
Director Awards
On 9 June 2015, Mr. Laurence Geller, Mr. Robert Heller and Mr.
Graham Warner were granted nil-cost share option awards under a
Stock Incentive Plan (the 'Director Awards'). These awards will
performance vest in equal tranches dependent upon the average
closing price of the shares trading at or above certain relevant
target share prices for a continuous period of 30 trading days. The
relevant target share prices for the purposes of these awards are
35p, 40p, 45p, and 50p. Director Awards remain exercisable up until
the day before the fifth anniversary of the grant date of the
awards. On 1 March 2016, Mr. Laurence Geller, resigned from the
Company's Board and no longer retains an interest in the stock
options issued pursuant to the Company's Stock Option Programme.
The number of shares to which the Director Awards relate is
5,993,153 common shares of EUR0.01 each with reductions in the
event that certain non-market performance targets are not met.
The most significant inputs used in the measurement of the grant
date fair value of the Awards are as follows:
Awards
Fair value at grant date GBP0.0659
Share price at grant date GBP0.215
Exercise price Nil
Expected volatility (long run forecast) 31%
Risk-free rate (based on UK government 5 years Bonds) 1.523%
33. Business combinations
On 14 November 2016, the Company signed a share purchase
agreement with an investor group represented by Third Point LLC for
the sale of DCA H6, the entity that indirectly held the Playa
Grande Golf and Resort project. Completion of the sale was
conditional on the lapse of a Right of First Refusal in relation to
the project in favour of its prior owner. The consideration for the
sale comprised of a cash payment of US$5 million (of which
approximately US$ 1 million will remain in escrow to cover certain
potential post completion claims and liabilities) and the
retirement of all of the Company's EUR50 million and US$9.17
million 2018 Convertible Bonds together with any accrued interest
on the Bonds. Completion of the sale took place on 8 December 2016,
with the 2018 Convertible Bonds cancelled on the same date and the
Company having received US$4 million on 8 December 2016.
During 2016, the Group also disposed of its entire holding in
Infatran Limited ('Infatran') and DolphinCI Eleven Limited ('DCI
11').
Note DCA H6 Infatran DCI11 Total
EUR'000 EUR'000 EUR'000 EUR'000
--------- -------- -------- ---------
Investment property 17 (74,644) - - (74,644)
Property, plant and equipment 16 (78,300) - - (78,300)
Trading properties 19 (3,193) (1,413) (1,599) (6,205)
Other non-current assets (632) - - (632)
Receivables and other assets (1,540) - - (1,540)
Cash and cash equivalents (2,035) - - (2,035)
Loans and borrowings 56,024 - - 56,024
Deferred revenue 10,660 - - 10,660
Trade and other payables 6,665 5 16 6,686
Net assets disposed of (86,995) (1,408) (1,583) (89,986)
--------- -------- -------- ---------
Net proceeds on disposal 62,429 845 - 63,274
--------- -------- -------- ---------
Disposal consideration via settlement of liability - - 2,780 2,780
--------- -------- -------- ---------
(Loss)/gain on disposal recognised in profit or loss (24,566) (563) 1,197 (23,932)
--------- -------- -------- ---------
Cash effect on disposal:
--------- -------- -------- ---------
Net proceeds on disposal 62,429 845 - 63,274
--------- -------- -------- ---------
Cash and cash equivalents (2,035) - - (2,035)
--------- -------- -------- ---------
Net cash inflow on disposal 60,394 845 - 61,239
--------- -------- -------- ---------
During the year ended 31 December 2015, the Group increased its
ownership interest in DCI 14 by 7.86% to 100% as follows:
DCI 14
EUR'000
Non-controlling interests acquired (3,236)
Consideration transferred (5,108)
Less: receivables assignment 3,347
Net consideration transferred (1,761)
Acquisition effect recognised in equity (4,997)
The consideration transferred for the acquisition of the 7.86%
stake in DCI 14 relates to a Conversion Villa, per the relevant
agreement (see note 31.3).
On 2 October 2015, DCI H1 sold the shares of its wholly-owned
subsidiary DolphinCI Twenty Seven Ltd ('DCI 27') to DRG Development
Greece Ltd, as follows:
Note DCI 27
EUR'000
Investment property 17 (10,979)
Property, plant and equipment 16 (1,422)
Trading properties 19 (1,952)
Other non-current assets (24)
Receivables and other assets (5,242)
Cash and cash equivalents (299)
Loans and borrowings 9,055
Finance lease liabilities 6,162
Deferred tax liabilities 26 314
Other non-current liabilities 206
Trade and other payables 5,004
Net liabilities disposed of 823
----- --------
Proceeds on disposal -
----- --------
Gain on disposal recognised in profit or loss 823
----- --------
Cash effect on disposal:
----- --------
Proceeds on disposal -
----- --------
Cash and cash equivalents (299)
----- --------
Net cash outflow on disposal (299)
----- --------
The consideration was EUR1 along with profit sharing based on
the net proceeds that may be received by DCI 27 in respect of any
disposal of its subsidiary Aristo Developers S.A. or any of the
subsidiary's assets. Profit sharing is adjusted on a yearly basis
and is set to 50%, 35% and finally 20% in the period between the
second and third anniversary from the sale. The profit sharing
entitlement will lapse on the third anniversary from the sale
date.
34. Non-CONTROLLING INTERESTs
The following table summarises the information relating to each
of the Group's subsidiaries that has material non-controlling
interests, before any intra-group eliminations.
31 December 2016 SPV 10 SPV 2
(Kea Resort) (Amanzoe)
EUR'000 EUR'000
Non-controlling interests percentage 33.33% 35.60%
Non-current assets 21,124 217
Current assets 131 3,837
Non-current liabilities (21,921) (75)
Current liabilities (441) (349)
Net (liabilities)/assets (1,107) 3,630
Carrying amount of non-controlling interests (369) 1,293
Revenue 40 77
Loss (368) (91)
Other comprehensive income - -
Total comprehensive income (368) (91)
Loss allocated to non-controlling interests (123) (32)
Other comprehensive income allocated to non-controlling interests - -
Cash flow (used in)/from operating activities (77) 19
Cash flow from investing activities - -
Cash flow from financing activities - -
Net (decrease)/increase in cash and cash equivalents (77) 19
31 December 2015 DCI Holdings Eleven Limited Pedro Gonzalez Holdings I Limited Iktinos DCI 14 SPV 10 SPV 2
(Pearl Island) (Pearl Island) (Sitia Bay) (Amanzoe) (Kea Resort) (Amanzoe)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Non-controlling
interests percentage 40% 40% 22.18% 0%* 33.33% 31.68%
Non-current assets 1,040 91,508 21,160 82,494 21,012 248
Current assets 3,463 7,972 45 39,444 75 3,906
Non-current
liabilities (67) (2,432) (1,954) (137,688) (21,531) (75)
Current liabilities (5,564) (21,391) (334) (23,063) (294) (357)
Net
(liabilities)/assets (1,128) 75,657 18,917 (38,813) (738) 3,722
Carrying amount of
non-controlling
interests (451) 30,263 4,196 - (246) 1,179
Revenue 1,994 65 - 41,147 829 165
(Loss)/ profit (823) (463) (7,576) (8,156) 615 (7)
Other comprehensive
income - - - (5,057) - -
Total comprehensive
income (823) (463) (7,576) (13,212) 615 (7)
(Loss)/profit
allocated to
non-controlling
interests (329) (185) (1,680) (641) 205 (1)
Other comprehensive
income allocated to
non-controlling
interests - - - (397) - -
Cash flow (used
in)/from operating
activities (66) 3,248 (84) (43,122) (1,455) (4,247)
Cash flow from/(used
in) investing
activities 76 (3,393) 107 45,481 1,398 -
Cash flow from/(used
in) financing
activities - (121) - (2,331) - 4,253
Net
increase/(decrease)
in cash and cash
equivalents 10 (266) 23 28 (57) 6
*As mentioned in note 31.3, the Group during 2015 increased its
shareholding interest in DCI 14 to 100%.
35. FINANCIAL RISK MANAGEMENT
Financial risk factors
The Group is exposed to credit risk, liquidity risk and market
risk from its use of financial instruments. The Board of Directors
has overall responsibility for the establishment and oversight of
the Group's risk management framework. The Group's risk management
policies are established to identify and analyse the risks faced by
the Group, to set appropriate risk limits and controls, and monitor
risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and
the Group's activities. The Group's overall strategy remains
unchanged from last year.
(i) 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 statement of financial
position date. The Group has policies in place to ensure that sales
are made to customers with an appropriate credit history and
monitors on a continuous basis the ageing profile of its
receivables. The Group's trade receivables are secured with the
property sold. Cash balances are mainly held with high credit
quality financial institutions and the Group has policies to limit
the amount of credit exposure to any financial institution.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the end of
the reporting year was as follows:
Carrying amount
31 December
2016 31 December 2015
EUR'000 EUR'000
------------------------------------------ ------------ ----------------
Trade and other receivables (see note 22) 3,231 15,196
------------ ----------------
Cash and cash equivalents (see note 23) 4,669 41,948
------------ ----------------
Total 7,900 57,144
------------ ----------------
Trade and other receivables
Exposure to credit risk
The maximum exposure to credit risk for trade and other
receivables at the end of the reporting year by geographic region
was as follows:
Carrying amount
31 December
2016 31 December 2015
EUR'000 EUR'000
------------ ----------------
South-East Europe 2,662 12,464
------------ ----------------
Americas 569 2,732
------------ ----------------
Total trade and other receivables 3,231 15,196
------------ ----------------
Credit quality of trade and other receivables
The Group's trade and other receivables are unimpaired.
Cash and cash equivalents
Exposure to credit risk
The table below shows an analysis of the Group's bank deposits
by the credit rating of the bank in which they are held:
31 December 2016 31 December 2015
No.
of
Banks EUR'000 No. of Banks EUR'000
-------
Bank group based on credit ratings by Moody's
-------
Rating Aaa to A 1 1,281 3 69
-------
Rating Baa to B - - 1 5
-------
Rating Caa to C 5 3,387 5 6,188
-------
Bank group based on credit ratings by Fitch's
-------
Rating AAA to A- - - 1 572
-------
Rating BBB to B- 1 1 4 35,114
-------
Total bank balances 4,669 41,948
(ii) Liquidity risk
Liquidity risk is the risk that arises when the maturity of
assets and liabilities does 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.
The following tables present the contractual maturities of
financial liabilities. The tables have been prepared on the basis
of contractual undiscounted cash flows of financial liabilities,
and on the basis of the earliest date on which the Group might be
forced to pay.
Carrying Contractual Within One Three Over
amounts cash flows one year to two years to five years five years
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-----------------
31 December
2016
-----------------
Loans and
borrowings 92,270 (134,228) (17,587) (23,466) (78,796) (14,379)
-----------------
Finance lease
obligations 2,982 (4,406) (49) (49) (146) (4,162)
-----------------
Land creditors 25,354 (25,354) (25,354) - - -
-----------------
Trade and
other payables 15,110 (15,110) (8,632) (116) - (6,362)
-----------------
135,716 (179,098) (51,622) (23,631) (78,942) (24,903)
31 December
2015
-----------------
Loans and
borrowings 223,680 (313,641) (44,900) (24,931) (220,034) (23,776)
-----------------
Finance lease
obligations 3,033 (4,461) (78) (50) (148) (4,185)
-----------------
Land creditors 25,609 (25,609) (25,609) - - -
-----------------
Trade and
other payables 30,187 (30,187) (23,489) (455) - (6,243)
-----------------
282,509 (373,898) (94,076) (25,436) (220,182) (34,204)
(iii) Market risk
Market risk is the risk that changes in market prices, such as
interest rates, equity prices and foreign exchange rates, will
affect the Group's income or the value of its holdings of financial
instruments.
Interest rate risk
Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market interest rates.
The Group's income and operating cash flows are substantially
independent of changes in market interest rates as the Group has no
significant interest-bearing assets. Borrowings issued at variable
rates expose the Group to cash flow interest rate risk. Borrowings
issued at fixed rates expose the Group to fair value interest rate
risk. The Group's management monitors the interest rate
fluctuations on a continuous basis and acts accordingly.
Sensitivity analysis
An increase of 100 basis points in interest rates at 31 December
would have decreased equity and profit or loss by EUR499 thousand
(2015: EUR1,076 thousand). This analysis assumes that all other
variables, in particular foreign currency rates, remain constant.
For a decrease of 100 basis points there would be an equal and
opposite impact on the profit or loss and other equity.
Currency risk
Currency risk is the risk that the value of financial
instruments will fluctuate due to changes in foreign exchange
rates. Currency risk arises when future commercial transactions and
recognised assets and liabilities are denominated in a currency
that is not the Group's measurement currency. The Group is exposed
to foreign exchange risk arising from various currency exposures
primarily with respect to the United States dollar. The Group's
management monitors the exchange rate fluctuations on a continuous
basis and acts accordingly.
The Group's exposure to foreign currency risk for its use of
financial instruments was as follows:
31 December 2016 31 December 2015
Euro USD GBP Euro USD GBP
'000 '000 '000 '000 '000 '000
---------- -------- ----- ---------- ---------- ------
Trade and other receivables 2,662 600 - 12,467 2,973 -
---------- -------- ----- ---------- ---------- ------
Cash and cash equivalents 4,531 144 1 36,988 2,462 2,008
---------- -------- ----- ---------- ---------- ------
Loans and borrowings (92,270) - - (142,395) (88,495) -
---------- -------- ----- ---------- ---------- ------
Finance lease obligations (2,982) - - (3,004) (28) -
---------- -------- ----- ---------- ---------- ------
Land creditors (25,354) - - (24,746) (938) -
---------- -------- ----- ---------- ---------- ------
Trade and other payables (22,197) (2,149) - (24,255) (16,423) -
---------- -------- ----- ---------- ---------- ------
Net statement of financial position exposure (135,610) (1,405) 1 (144,945) (100,449) 2,008
---------- ---------- ----------
The following exchange rates applied at the date of financial
position:
Euro 1 equals to: 31 December 2016 31 December 2015
USD 1.05 1.09
TRY 3.71 3.18
---------------- ----------------
HRK 7.56 7.64
GBP 0.86 0.73
---------------- ----------------
Sensitivity analysis
A 10% strengthening of the Euro against the following currencies
at 31 December would affected the measurement of financial
instruments denominated in a foreign currency and
increased/(decreased) equity and profit or loss by the amounts
shown below. This analysis assumes that all other variables, in
particular interest rates, remain constant. For a 10% weakening of
the Euro against the relevant currency, there would be an equal and
opposite impact on the profit and other equity.
Equity Profit or loss
2016 2015 2016 2015
EUR'000 EUR'000 EUR'000 EUR'000
USD 121 8,388 121 8,388
TRY - - - -
HRK - - - -
GBP - (249) - (249)
Capital management
The Group manages its capital to ensure that it will be able to
continue as a going concern while improving the return to
shareholders. The Board of Directors is committed to implementing a
package of measures that is expected to focus on the achievement of
the Group's investment objectives, achieve cost efficiencies and
strengthen its liquidity. Notably, these measures include the
completion of certain Group asset divestment transactions, as well
as the conclusion of additional working capital facilities at the
Group and/or Company level.
36. Commitments
As of 31 December 2016, the Group had a total of EUR1,330
thousand contractual capital commitments on property, plant and
equipment (2015: EUR3,229 thousand).
Non-cancellable operating lease rentals are payable as
follows:
31 December 2016 31 December 2015
EUR'000 EUR'000
Less than one year 11 19
Between two and five years - 11
Total 11 30
37. Contingent liabilities
Companies of the Group are involved in pending litigations. Such
litigations principally relate to day-to-day operations as a
developer of second-home residences and largely derive from certain
clients and suppliers. Based on the Group's legal advisers, the
Company believes that there is sufficient defence against any claim
and they do not expect that the Group will suffer any material
loss. All provisions in relation to these matters which are
considered necessary have been recorded in these consolidated
financial statements.
A Company of the Group received an out-of-the court notice to
settle an amount of EUR3.97 million to a lending institution which
related to claims assigned by one of the relevant Group Company's
partners. The Company responded negatively to the lending
institution and the partner is currently in discussions with the
lending institution in order to resolve the issue. The Company's
position is that there are no existing obligations towards this
lending institution by the relevant Group Company as well as that,
in all cases, any such contingent liabilities can be claimed and
recovered from the partner.
If investment properties, trading properties and property, plant
and equipment were sold at their fair market value, this would have
given rise to a variable management fee to the Investment Manager,
which would be based on the relevant IMA provisions.
In addition to the tax liabilities that have already been
provided for in the consolidated financial statements based on
existing evidence, there is a possibility that additional tax
liabilities may arise after the examination of the tax and other
matters of the companies of the Group in the relevant tax
jurisdictions.
The Group, under its normal course of business, guaranteed the
development of properties in line with agreed specifications and
time limits in favor of other parties.
38. SUBSEQUENT EVENTS
On 17 January 2017, the Company signed a share purchase
agreement with Grivalia Hospitality S.A. for the sale of its 60%
shareholding in all entities related with the Pearl Island Project.
Completion of the disposal was subject to a corporate restructuring
and to the consent of the appointed hotel operator to modifications
of certain terms of the hotel management agreement. The
consideration for the sale comprised of a cash payment of EUR27
million, payable in the form of a EUR1 million non-returnable
deposit which was received on 19 October 2016, EUR24 million upon
completion of the sale and the remaining EUR2 million to be
retained in an escrow account for a period of 12 months post
completion to cover any tax liabilities, potential breach of the
Company's warranties or undisclosed indebtedness. Completion took
place on 13 March 2017 with EUR24 million received by the Company
on the same date.
On 3 May 2017, the Company decided to terminate the agreement
with TA to dispose of its Aristo shares, as a result of TA's
failure to settle deferred payments by 30 April 2017. The Company
will retain the unpaid portion of its Aristo shares, which
corresponds on 3 May 2017 to 47.9%. The Board remains committed to
dispose of its investment in Aristo and realize value from the
remaining shareholding.
There were no other material events after the reporting period,
which have a bearing on the understanding of the consolidated
financial statements as at 31 December 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKNDPPBKDPPK
(END) Dow Jones Newswires
May 04, 2017 02:00 ET (06:00 GMT)
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