TIDMDCI
RNS Number : 7363U
Dolphin Capital Investors Limited
02 April 2019
2 April 2019
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 2018
and Trading Update
Dolphin, an investor in high-end residential resort developments
in the eastern Mediterranean, announces results for the year ended
31 December 2018 and a trading update.
Financial Highlights:
-- Gross Assets of EUR244 million (31 December 2017: EUR395 million).
-- Total Group Net Asset Value ("NAV") of EUR178 million and
EUR165 million before and after Deferred Tax Liabilities ("DTL")
respectively. This represents a decrease of EUR45 million and EUR30
million (20.2% and 15.2%) respectively, against the 2017 year-end
figures.
-- NAV reduction principally due to:
o year-end valuation write-downs and impairment charges of EUR19
million on the DCI asset portfolio; and,
o depreciation charges and other operational, corporate, finance
and management expenses as detailed in section F below.
-- Sterling NAV per share as at 31 December 2018 stood at 18p
before DTL and 16p after DTL, versus 22p and 19p, a 19.1% and 14.0%
decrease before and after DTL respectively, compared to 31 December
2017. The decrease, mainly reflecting the factors mentioned above,
was partially offset by a 1.4% appreciation of the Euro versus
Sterling during the period.
-- Total Debt of EUR25 million with a Group total debt to gross
asset ratio of 10% (2017: 25%). DCI itself does not have any
borrowings. The Group debt is at project level on a non-recourse
basis.
-- Total Group cash as of 22 March 2019 was EUR9.9 million (31 December 2018: EUR8.6 million).
Divestments:
-- On 18 January 2018, Dolphin entered into an agreement for the
disposal of its 77.8% interest in the Sitia Bay Resort project for
a total cash consideration of EUR14 million. The full consideration
was received by the Company and the disposal was completed on 3
April 2018.
-- On 5 February 2018, Dolphin sold its 100% interest in
Triopetra for a total consideration of EUR4.1 million.
-- On 1 August 2018 the Company entered into an agreement with
Grivalia Hospitality S.A for the disposal of its 100% interest in
Amanzoe and the conditional sale of 20 Kilada Hills Golf plots for
a EUR10 million cash consideration. The disposal of Amanzoe
completed on 27 September 2018 and the full EUR5.8 million cash
consideration for Amanzoe was paid to Dolphin, whilst the acquirers
also assumed all existing liabilities of Amanzoe which amounted to
EUR117 million as at 30 June 2018. The EUR10 million cash
consideration for the purchase of the 20 Kilada Hills plots will be
paid in instalments, commencing when the funding for the
development of the first phase of the project is secured.
-- On 26 October 2018, DCI disposed of its 25% interest in the
Nikki Beach Resort & Spa project for a total cash consideration
of EUR1.65 million which was received on the date of the
transaction.
-- On 27 December 2018, Dolphin agreed the sale of the remaining
five Seafront Villas in Kilada through a wholesale transaction for
a total cash consideration of EUR4.05 million, of which an amount
of EUR3.4 million has been received while the balance will remain
in an escrow account as security for potential project related
contingent liabilities.
Operations:
-- The revised construction permits for the One&Only Kea
Island project were issued on 7 July 2018 and the redesign of the
resort to meet the One&Only standards has been completed. The
bidding process for the appointment of a construction company is
underway. Following these developments, and the finalization of the
definitive documentation for the project's senior bank loan which
is underway, we expect that all the pending conditions precedent
for the finalization of the joint venture with One&Only for the
development of the project will be met within Q2 2019. The
commencement of the project development is expected within 2019, so
that the resort opens in time for the 2021 season.
-- The planning and zoning process of Kilada Hills Golf Resort
was completed on 22 August 2018, when the Joint Ministerial
Decision granting approval for the Environmental Conditions and
Urban Study for the project was published in the Greek Government
Gazette, making Kilada the first ever private project in Greece to
receive an approval under the Strategic Project Legislation.
Discussions with a major local bank for a senior development
facility are underway together with the project tendering process
so that construction works can commence during the year.
-- Aristo sold 115 homes during the twelve months to December
2018, representing total sales revenue of EUR67.2 million, an
increase of 2% compared to the same period in 2017.
-- Sales agreements were signed for two residences at La Vanta,
Turkey in 2018 and one more followed in early 2019.
Strategy:
The Board's strategy is to optimise the disposal of the
Company's asset portfolio in order to return capital to
shareholders.
The Board has been encouraged by the success of the asset and
project disposals achieved since the adoption of the New Asset
Strategy in December 2016, which have enabled the Company to
significantly reduce its overall leverage levels and meet all its
operational expenses. However, the Board considers that the
timeline for the full disposal, in an orderly manner, of the
remaining assets of the Company by the end of 2019 to be
unachievable and will not allow the Board to optimise realized
returns and cash distributions to shareholders.
Accordingly, the Board plans to present proposals to
shareholders in the near future for an extension to the current
timetable of two years, combined with an amendment to the
management fee structure which will align such fees to the level of
distributions to shareholders.
Commenting, Andrew Coppel, Chairman of Dolphin's Board of
Directors said:
"We made significant progress in disposing a number of portfolio
assets during the year. Our attention is now focussed on the
commencement of construction at the One&Only at Kea Resort and
the first phase of the Kilada Hills Golf Resort within 2019 which,
together with the Company's strategic shareholding in Aristo
Developers, we consider critical in our efforts to realize tangible
value for our shareholders."
Miltos Kambourides, Founder of Dolphin and Managing Partner of
Dolphin Capital Partners said:
"Whilst market conditions for disposals in our geographic area
of operation remain challenging, we are encouraged by the disposals
realized in 2018 and the continued improvement in the economic
landscape in both Greece and Cyprus. We are working closely with
the board to formulate a realistic exit strategy for each remaining
asset."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (MAR).
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/Fabien Holler +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 (0) 20 7457 2007
A. Chairman's Statement
I am pleased to report Dolphin's financial results for the year
ended 31 December 2018 and to provide a trading update.
Results
Total Group NAV as at 31 December 2018 was EUR178 million and
EUR165 million before and after DTL respectively. This represents a
decrease of EUR45 million (20.2%) and EUR30 million (15.2%),
respectively, from the 31 December 2017 figures.
The loss for the year was mainly due to the EUR19 million
year-end net valuation reduction and impairment charges, as well as
the Company's ongoing overhead and finance expenses.
Further details on the financial performance of the Company
during the period are included in the Financial Position section F
of the report.
Portfolio
During 2018, we completed the divestment of a large portion of
our Greek asset portfolio following the strategy of the orderly and
controlled disposal of the Group's assets. Namely, we were able to
realize:
-- the sale of Dolphin's investments in Sitia Bay and Triopetra;
-- the disposal of our 100% interest in Amanzoe and the
conditional sale of 20 Kilada Hills Golf plots;
-- the disposal of our 25% shareholding in the Nikki Beach Resort & Spa project; and,
-- the sale of all the remaining five Seafront Villas at Kilada.
Following these disposals, the expected completion of the JV
agreement with One&Only for their cash equity investment into
the Kea project, as well as the expected finalization of the senior
development facility for Kilada, our remaining asset base can be
divided into two major categories:
-- our three major assets, Kilada Hills and One&Only Kea,
where development progress is needed to maximize their saleability
and realizable value in a realistic timetable, and Aristo
Developers; and
-- our remaining asset portfolio, which we intend to
opportunistically monetize as soon as practicable taking into
account, inter alia, permitting and zoning status and
requirements.
Strategy
The Board's strategy is to optimise the disposal of the
Company's asset portfolio in order to return capital to
shareholders.
The Board has been encouraged by the success of the asset and
project disposals achieved since the adoption of the New Asset
Strategy, in December 2016, which have enabled the Company to
significantly reduce its overall leverage levels and meet all its
operational expenses. However, the Board considers that the
timeline for the full disposal, in an orderly manner, of the
remaining assets of the Company by the end of 2019 to be
unachievable and will not allow the Board to optimise realized
returns and cash distributions to shareholders.
In particular, the Board expects that the generation of
meaningful distributions for the shareholders will be linked to the
sale of the Company's three major projects: the Kilada Hills Golf
Resort, the Kea Resort and its strategic shareholding position in
Aristo Developers. The first two of these projects require up to
two years of development to maximize sale proceeds to facilitate
material distributions to shareholders, whilst the Company's
divestment from Aristo requires the ability to structure and
implement an exit transaction for a minority position, which is
significantly hindered by the existing hard sale deadline.
Accordingly, the Board plans to present proposals to
shareholders in the near future for an extension to the current
timetable of two years, combined with an amendment to the
management fee structure which will align such fees to the level of
distributions to shareholders.
Notwithstanding the proposal for a two year extension of the
divestment period, the Board and the Investment Manager will
nevertheless work towards selling these assets earlier, if
feasible, and will always take advantage of any opportunistic deals
for the disposal of all assets, whilst at the same time minimising
operating costs.
Board
Sue Farr and Rob Heller stepped down from the Board in January
2018. Their contribution was much appreciated and we wish them much
success in their other ventures.
Outlook
We made significant progress in disposing a number of portfolio
assets during the year. Our attention is now focussed on the
commencement of construction at the One&Only at Kea Resort and
the first phase of the Kilada Hills Golf Resort within 2019 which,
together with the Company's strategic shareholding in Aristo
Developers, we consider critical in our efforts to realize tangible
value for our shareholders.
The completion of Greece's third financial assistance programme
in August 2018 and the issuance for the first time since 2010 of a
10-year Greek State Bond in March 2019, marked the termination of
the country's 8-year reliance on EU financial stability funds and
its return to a stronger economic footing. This steadily improving
economic backdrop, together with the record tourist arrivals
recorded during 2018 in both Greece and Cyprus, provide significant
tailwinds in our continued divestment efforts.
Andrew M Coppel CBE
Chairman
Dolphin Capital Investors
2 April 2019
B. Investment Manager's Report
B.1. Asset realizations
Our divestments in 2018 and Q1 2019 can be summarised as
follows:
-- Completed the disposal of Sitia Bay Resort in Q1 2018 for a
total cash consideration of EUR14 million.
-- Completed the disposal of Triopetra project in Q1 2018 for a
total cash consideration of EUR4.1 million.
-- Completed the disposal of the Amanzoe project in Q3 2018 for
an enterprise value of EUR116 million and for a total cash
consideration of EUR5.8 million.
-- Agreed the forward conditional sale of 20 land plots in
Kilada Hills in Q3 2018 for a total cash consideration of EUR10
million.
-- Completed the disposal of our 25% interest in Nikki Beach
Resort and Spa at Porto Heli in Q4 2018 for a total cash
consideration of EUR1.65 million.
-- Agreed the sale of the last five Seafront Villas at Kilada in
Q4 2018 for a total cash consideration of EUR4.05 million.
B.2. Portfolio Review
-- Kea Resort, Greece
o The Company is working on finalizing the pending conditions
precedent under the joint venture agreement with One&Only,
including the redesign of the resort to meet the One&Only brand
standards, the finalization of the senior loan and the finalization
of the turn-key construction contract so that its completion is
achieved within Q2 2019.
o The additional EUR4 million equity injection in the resort
project in consideration for a 10% stake in the project has been
committed by third party investors, including the Investment
Manager, and will be injected as soon as the joint venture
agreement with One&Only completes.
o The Company is negotiating a turn-key construction contract
with a major local contractor which is expected to be completed
within Q2 2019, with respective work due to commence during 2019,
so that the resort can open in time for the 2021 season.
o The promotional material for the One & Only Homes has been
prepared, and formal PR / Sales and Marketing actions are expected
to commence late spring 2019.
-- Kilada Hills Golf Resort, Greece
o The planning process of Kilada Hills Golf Resort was completed
on 22 August 2018 when the Joint Ministerial Decision granting
approval for the Environmental Conditions and Urban Study for the
project was published in the Greek Government Gazette.
o The infrastructure drawings of the master residential
components and of the irrigation of the golf course are in progress
and expected to be completed by Q2 2019.
o Discussions with a major local bank for a senior development
facility are progressing for a EUR23 million long term facility
that would finance the project development cost and construction
cost input VAT, together with the EUR10 million proceeds from the
sale of 10 Kilada Hills Golf Lots.
o The project tendering process is underway so that construction
works can commence within the year with an aim to be concluded in
2021.
o Formal initiation of the project's PR, sales and marketing
activities is expected to start once financing is in place.
Nevertheless, we have begun to take in some reservations for the
Golf plots and one off-plan sale was signed in November 2018.
-- LaVanta, Turkey
o Two residences were sold during 2018, and one more in January
2019 for a total gross consideration of EUR0.75 million.
-- Aristo (a 47.9% affiliate)
o Operating Performance
-- 115 homes and plots were sold, representing total sales of
EUR67.2 million, up 2% compared to EUR66.2 million for 2017, driven
by higher prices per m(2) .
-- Strong sales momentum continued from China during 2018,
representing more than 50% of sales.
-- This sales momentum has continued in 2019, with 24 homes and
plots sales during the first two months of 2019, representing total
sales of EUR17 million, up 58% compared to the corresponding period
in 2018.
-- The Company received a EUR2 million distribution from Aristo
during Q4 2018.
Twelve months Twelve months
to 31 December to 31 December 2017
2018
RETAIL SALES
------------------ ---------------- ---------------------
New sales booked EUR67.2m EUR66.2m
% change 2%
Units sold 115 127
% change -9%
CLIENT ORIGIN
------------------ ---------------- ---------------------
China 59% 71%
Other Asia 15% 10%
MENA 12% 10%
Russia 6% 4%
UK 1% --
Cyprus & Other
EU 4% 3%
Other 2% 2%
-- The vast majority of Aristo's sales are under the Cyprus
citizenship investment programme, which offers Cypriot citizenship
to foreign nationals investing EUR2 million into real estate.
Consequently, the bulk of the relevant sales proceeds remains in
escrow until the citizenship is awarded to the applying customer
and the construction of the property sold (for off-plan sales)
progresses; the full sales proceeds release typically ranges
between 8 to 20 months from the signing of each sale transaction.
Aristo had a total of EUR21.5 million in blocked/escrowed funds as
at YE 2018 (EUR19.6 million in YE 2017). As the relevant
applications mature and properties are being delivered, its
available cash balances are expected to significantly increase.
-- We are encouraged by the sustained improvement in Aristo
operations and cashflow generation and the continued strong sales
during 2018, alongside the significant reduction in Aristo's bank
debt burden achieved during 2017.
-- On the back of this operational momentum, we are actively
considering divestment alternatives for the realization of our
holding in Aristo, as well as extracting some value in the form of
additional shareholder distributions from Aristo's operating
profits.
C. Group Assets
A summary of Dolphin's current investments is presented
below.
PROJECT Land site DCI's Investment Debt Real Loan
(hectares) stake cost (EURm) estate to real
(EURm) value estate
(EURm) asset
value
(%)
------------------------ ------------ ------- ----------- -------- -------- ---------
1 Kea Resort 65 67% 10 -
Kilada Hills Golf
2 Resort 235 100% 91 -
3 Scorpio Bay Resort 172 100% 15 -
4 Lavender Bay Resort 310 100% 27 -
5 Plaka Bay Resort 442 100% 13 -
Apollo Heights
6 Resort 461 100% 25 17.4
7 Livka Bay Resort 63 100% 31 7.1
8 La Vanta 8 100% 18 -
TOTAL 1,756 230 24.5 188 13%
------------------------ ------------ ------- ----------- -------- -------- ---------
Aristo Cyprus 1,448 47.9% 192 - 43
Itacaré Investment n/a 13% 2 - 1
------------------------ ------------ ------- ----------- -------- -------- ---------
GRAND TOTAL 3,204 424 24.5 232 11%
------------------------ ------------ ------- ----------- -------- -------- ---------
*Residual investment cost, including amounts paid in shares.
**Further details on debt maturities are set out under note 23
of the financial statements.
A breakdown of Dolphin's portfolio, as at 31 December 2018, with
certain key metrics is provided below:
COUNTRY Land size Investment Debt Real Estate % Loan Net Asset
(hectares) Cost (EUR million) Value to real Value
(EUR million) (EUR million) estate
asset
value
------------ ------------ --------------- --------------- --------------- --------- ----------
1 Greece 1,224 156 - 132 - 56%
2 Cyprus** 1,909 217 17.4 66 26% 29%
3 Other 71 51 7.1 34 21% 15%
Grand Total 3,204 424 24.5 232 11% 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. Market Dynamics
o Greece
The completion of Greece's third financial assistance programme
in August 2018 and the issuance for the first time since 2010 of a
10-year Greek State Bond in March 2019, marked the termination of
the country's 8-year reliance on EU financial stability funds and
its return to a stronger economic footing.
Furthermore, tourist arrivals and revenues posted new records in
Greece during 2018. According to the provisional data issued by the
Bank of Greece, more than 30 million tourists arrived in Greece in
2018, recording a rise of 10.8%, while travel revenues exceeded
EUR16 billion for the year, up 10% compared to 2017.
The vast majority of tourists, amounting to 21.4 million out of
the 30 million who travelled to Greece, were European citizens from
another EU member state. Another 8.7 million tourists came from
countries outside of the EU.
The increase in the number of tourists over the past year came
mainly from inside the EU, as the number of EU nationals visiting
the country increased by 15.1 per cent over the previous year. The
number of non-EU tourists over that same period increased by only
1.3 percent compared to 2017's numbers.
According to the Greek Tourism Confederation, tourism traffic
and revenues are expected to remain similar for 2019.
o Cyprus
Cyprus welcomed 3.93 million tourists in 2018, an increase of
7.8% compared to 2017 which was also a record year. The UK and
Russia constitute the main sources of tourism for Cyprus, with
visitor proportions at 33.7% and 19.9% respectively. Cyprus Tourism
Organisation forecasts for 2019 anticipate another successful
year.
In addition, according to "Cyprus Real Estate Market Report- The
Insights" (KPMG, December 2018), the Cypriot economy continued its
positive growth in 2018 and the positive economic performance over
the past years has led to a series of upgrades of Cyprus' sovereign
rating by various international credit rating agencies. With
regards to the latest update by S&P, Fitch and DBRS, Cyprus
sovereign rating was upgraded to "Investment Grade" with stable
outlook, signalling the strong performance and improvement of the
Cypriot economy.
Real estate activity continued its upward trend in 2018, with
residential sales contracts showing an increase of 21%, while
non-nationals in 2018 bought 103% more properties compared with
Q1-Q3 2017, reaching a 48% share of the overall market.
o Croatia
A record of almost 20 million tourists visited Croatia in 2018,
demonstrating a 6.5% uplift compared to 2017, while 106 million
overnight stays were recorded representing 4% more than the
previous year, according to the Ministry of Tourism. Istria was the
most popular region this year, followed by Split.
In addition, more than EUR1 billion was invested in tourism
during 2018 and the investment in 2019 is expected at a similar
level.
Demand for luxury real estate was up by 25% compared to 2017 and
the prices of luxury real estate rose by 10-15%, reaching EUR5,000
to EUR6,000 per m(2) as reported by Sotheby's. Positive market
trends are expected to continue in 2019, with an expected price
growth of up to 10%, followed by an even greater growth in demand
for luxury real estate.
o Turkey
After the end of the crisis connected to heightened alarm over
security, Turkey registered a boom in tourism in 2018 as more than
39.5 million tourists visited the country, with a nearly 22%
year-on-year increase according to the Ministry of Tourism. The
majority of foreign visitors were from Russia (+26.5% on 2017).
Tourism revenues rose to US$29.5 billion in 2018, with a 12.3%
increase compared to the previous year.
The boom was also supported by the depreciation of the Turkish
lira compared to euro and dollar, mainly driven by the Fed's
tightening monetary policy, the widening of the current account
deficit and political uncertainty.
The tourism and hotel market in Turkey has shown great
resilience to the crisis of the past two years as the market
recovered after seeing a sharp decline in performance measures.
However, foreign investors' interest in the Turkish real estate
market has shown a significant decrease over the last three years
due to political and economic uncertainty, as reported by JLL
research.
E. Future Objectives
The Company's main objectives for the remainder of 2019 are
to:
1. Execute further asset disposals;
2. Initiate construction at the One&Only Kea Island and
Kilada Hills Golf Resort developments; and,
3. Progress planning and permitting selectively for the
remaining portfolio to maximize sales proceeds and expedite
divestment timing.
Miltos Kambourides Pierre Charalambides
Managing Partner Founding Partner
Dolphin Capital Partners Dolphin Capital Partners
2 April 2019 2 April 2019
F. Financial Position for the year ended 31 December 2018
F.1. Consolidated statement of profit or loss for the year ended
31 December 2018
-- Financial Results
Loss after tax for the period ended 31 December 2018
attributable to owners of the Company amounted to EUR41 million
compared to EUR32 million for the year ended 31 December 2017. Loss
per share was EUR0.05 in 2018 and EUR0.04 in 2017. The loss was
principally due to:
- the year-end net valuation losses and impairment charges of EUR19 million; and,
- the Group's depreciation costs and other operational,
corporate, finance and management expenses as further explained
below.
Consolidated statement of profit or loss and other comprehensive
income for the year ended 31 December 2018
31 December 2018 31 December 2017
(Restated)
EUR'000 EUR'000
------------------------------------------------------------------------------- ----------------- -----------------
Continuing operations
-------------------------------------------------------------------------- ---- ----------------- -----------------
Revenue 4,387 1,273
-------------------------------------------------------------------------------- ----------------- -----------------
Cost of sales (2,099) (1,969)
-------------------------------------------------------------------------------- ----------------- -----------------
Gross profit/(loss) 2,288 (696)
-------------------------------------------------------------------------------- ----------------- -----------------
Disposal of investments (2,229) 4
-------------------------------------------------------------------------------- ----------------- -----------------
Change in valuations (19,015) (17,450)
-------------------------------------------------------------------------------- ----------------- -----------------
Investment Manager fixed remuneration (5,000) (6,000)
-------------------------------------------------------------------------------- ----------------- -----------------
Directors' remuneration (561) (701)
-------------------------------------------------------------------------------- ----------------- -----------------
Professional fees (3,874) (4,516)
-------------------------------------------------------------------------------- ----------------- -----------------
Administrative and other expenses (1,793) (6,558)
-------------------------------------------------------------------------------- ----------------- -----------------
Depreciation charge (45) (35)
-------------------------------------------------------------------------------- ----------------- -----------------
Total operating and other expenses (32,517) (35,256)
-------------------------------------------------------------------------------- ----------------- -----------------
Results from operating activities (30,229) (35,952)
-------------------------------------------------------------------------------- ----------------- -----------------
Finance income - 4,069
-------------------------------------------------------------------------------- ----------------- -----------------
Finance costs (6,963) (8,071)
-------------------------------------------------------------------------------- ----------------- -----------------
Net finance costs (6,963) (4,002)
-------------------------------------------------------------------------------- ----------------- -----------------
Loss before taxation (37,192) (39,954)
-------------------------------------------------------------------------------- ----------------- -----------------
Taxation 1,614 2,893
-------------------------------------------------------------------------------- ----------------- -----------------
Loss from continuing operations (35,578) (37,061)
-------------------------------------------------------------------------------- ----------------- -----------------
DISContinuED operation
-------------------------------------------------------------------------- ---- ----------------- -----------------
(Loss)/profit from discontinued operation, net of tax (5,593) 9,792
-------------------------------------------------------------------------------- ----------------- -----------------
Loss (41,171) (27,269)
-------------------------------------------------------------------------------- ----------------- -----------------
Other comprehensive income
-------------------------------------------------------------------------- ---- ----------------- -----------------
Items that will not be reclassified to profit or loss
-------------------------------------------------------------------------- ---- ----------------- -----------------
Revaluation of property, plant and equipment 11,942 4,515
-------------------------------------------------------------------------------- ----------------- -----------------
Related tax (2,985) (1,309)
-------------------------------------------------------------------------------- ----------------- -----------------
8,957 3,206
------------------------------------------------------------------------------- ----------------- -----------------
Items that are or may be reclassified subsequently to profit or loss
-------------------------------------------------------------------------- ---- ----------------- -----------------
Foreign currency translation differences 2,201 (11,561)
-------------------------------------------------------------------------------- ----------------- -----------------
2,201 (11,561)
------------------------------------------------------------------------------- ----------------- -----------------
Other comprehensive income, net of tax 11,158 (8,355)
-------------------------------------------------------------------------------- ----------------- -----------------
Total comprehensive income (30,013) (35,624)
-------------------------------------------------------------------------------- ----------------- -----------------
Loss attributable to:
-------------------------------------------------------------------------- ---- ----------------- -----------------
Owners of the Company (40,706) (31,986)
-------------------------------------------------------------------------------- ----------------- -----------------
Non-controlling interests (465) 4,717
-------------------------------------------------------------------------------- ----------------- -----------------
(41,171) (27,269)
=============================================================================== ================= =================
Total comprehensive income attributable to:
-------------------------------------------------------------------------- ---- ----------------- -----------------
Owners of the Company (29,551) (39,757)
-------------------------------------------------------------------------------- ----------------- -----------------
Non-controlling interests (462) 4,133
================================================================================ ================= =================
(30,013) (35,624)
=============================================================================== ================= =================
(Loss)/EARNINGS per share
-------------------------------------------------------------------------- ---- ----------------- -----------------
Basic and diluted loss per share (EUR) (0.05) (0.04)
-------------------------------------------------------------------------------- ----------------- -----------------
Basic and diluted loss per share - Continuing operations (EUR) (0.04) (0.05)
-------------------------------------------------------------------------------- ----------------- -----------------
Basic and diluted (loss)/earnings per share - Discontinued operation (EUR) (0.01) 0.01
-------------------------------------------------------------------------------- ----------------- -----------------
Further analysis of individual revenue and expense items is
provided below.
Revenue
Revenues from continuing operations of EUR4.4 million (31
December 2017: EUR1.3 million), were derived from the following
sources:
31 December 2018 31 December 2017
EUR million EUR million
----------------------------------------- ----------------- -----------------
Sale of trading & investment properties 2.0 0.2
Other income 2.4 1.1
TOTAL 4.4 1.3
Professional Fees
The charge for the period from continuing operations was EUR3.9
million (31 December 2017: EUR4.5 million) and comprises the
following:
31 December 2018 31 December 2017
EUR million EUR million
------------------------------------- ----------------- -----------------
Legal & Administrator fees 0.7 0.9
Auditors' remuneration 0.4 0.6
Accounting expenses 0.3 0.3
Appraisers' fees 0.1 0.1
Project design and development fees 1.8 1.8
Consultancy fees 0.1 0.2
Other professional fees 0.5 0.6
------------------------------------- ----------------- -----------------
TOTAL 3.9 4.5
Administrative and other expenses
The administrative and other expenses from continuing operations
amounted to EUR1.8 million (31 December 2017: EUR6.5 million) and
are analysed as follows:
31 December 2018 31 December 2017
EUR million EUR million
------------------------------------ ----------------- -----------------
Travelling and accommodation 0.1 0.3
Insurance 0.1 0.1
Repairs and maintenance 0.1 0.3
Marketing and advertising expenses 0.2 0.3
Immovable property and other taxes 0.5 0.5
Rents 0.1 0.2
Litigation provision 0.0 4.0
Other 0.7 0.8
------------------------------------ ----------------- -----------------
TOTAL 1.8 6.5
Change in valuations
Change in valuations from continuing operations amounted to
EUR19.0 million (31 December 2017: EUR17.4 million) and are
analysed as follows:
31 December 2018 31 December 2017
EUR million EUR million
-------------------------------------------------------------------------------- ----------------- -----------------
Net change in fair value of investment property 13.0 12.5
Impairment loss on trading properties 3.8 0.7
Impairment loss on re-measurement of disposal groups 3.0 3.4
Net reversal of (impairment loss) and write offs of property, plant and
equipment) (0.8) 1.0
Reversal of concession/write off of land 0.0 (0.2)
TOTAL 19.0 17.4
Net finance costs
The charge for the period from continuing operations was EUR7.0
million (31 December 2017: EUR4.0 million) and comprises the
following:
31 December 2018 31 December 2017
EUR million EUR million
---------------- ----------------- ----------------
Finance income 0.0 4.1
Finance costs 7.0 (8.1)
TOTAL 7.0 (4.0)
In 2017, the Company entered into new contracts in connection
with the deferred purchase of land at Lavender Bay. The revised
interest rate agreed on the outstanding consideration is lower than
the one reflected in the previous contracts. As the new contracts
have a retroactive effect, the interest accrued in prior years of
c. EUR4 million was reversed during the year ended 31 December
2017, resulting into corresponding finance income.
F.2. Consolidated statement of financial position as at 31
December 2018
31 31
December December
2018 2017
EUR'000 EUR'000
---------------------------------------------- ---------- ------------
Assets
---------------------------------------------- ---------- ----------
Property, plant and equipment 12,267 87,551
----------------------------------------------- ---------- ----------
Investment property 116,391 138,672
----------------------------------------------- ---------- ----------
Deferred tax assets - 994
----------------------------------------------- ---------- ----------
Non-current assets 128,658 227,217
----------------------------------------------- ---------- ----------
Trading properties - 30,572
----------------------------------------------- ---------- ----------
Receivables and other assets 1,863 5,374
----------------------------------------------- ---------- ----------
Cash and cash equivalents 7,938 2,444
----------------------------------------------- ---------- ----------
Assets held for sale 105,600 129,131
----------------------------------------------- ---------- ----------
Current assets 115,401 167,521
----------------------------------------------- ---------- ----------
Total assets 244,059 394,738
=============================================== ========== ==========
Equity
---------------------------------------------- ---------- ----------
Share capital 9,046 9,046
----------------------------------------------- ---------- ----------
Share premium 569,847 569,847
----------------------------------------------- ---------- ----------
Retained deficit (422,222) (397,746)
=============================================== ========== ==========
Other reserves 7,845 12,912
=============================================== ========== ==========
Equity attributable to owners of the Company 164,516 194,059
----------------------------------------------- ---------- ----------
Non-controlling interests 5,752 4,769
----------------------------------------------- ---------- ----------
Total equity 170,268 198,828
----------------------------------------------- ---------- ----------
Liabilities
---------------------------------------------- ---------- ----------
Loans and borrowings - 68,544
----------------------------------------------- ---------- ----------
Finance lease liabilities 3,005 2,990
----------------------------------------------- ---------- ----------
Deferred tax liabilities 8,444 19,561
----------------------------------------------- ---------- ----------
Trade and other payables 20,647 20,858
----------------------------------------------- ---------- ----------
Deferred revenue - 6,985
----------------------------------------------- ---------- ----------
Non-current liabilities 32,096 118,938
----------------------------------------------- ---------- ----------
Loans and borrowings 17,326 21,171
----------------------------------------------- ---------- ----------
Finance lease liabilities 8 8
----------------------------------------------- ---------- ----------
Trade and other payables 6,374 16,193
----------------------------------------------- ---------- ----------
Deferred revenue - 13,834
----------------------------------------------- ---------- ----------
Liabilities held for sale 17,987 25,766
----------------------------------------------- ---------- ----------
Current liabilities 41,695 76,972
----------------------------------------------- ---------- ----------
Total liabilities 73,791 195,910
----------------------------------------------- ---------- ----------
Total equity and liabilities 244,059 394,738
----------------------------------------------- ---------- ----------
Net asset value ('NAV') per share (EUR) 0.18 0.21
----------------------------------------------- ---------- ----------
The reported NAV as at 31 December 2018 is presented below:
As at Variation since
31 December 2018 31 December 2017
EUR GBP EUR GBP
--------------------------------- ---------- --------- ---------- ---------
Total NAV before DTL (million) 178 160 (20.2%) (19.1%)
--------------------------------- ---------- --------- ---------- ---------
Total NAV after DTL (million) 165 148 (15.2%) (14.0%)
--------------------------------- ---------- --------- ---------- ---------
NAV per share before DTL 0.20 0.18 (20.2%) (19.1%)
--------------------------------- ---------- --------- ---------- ---------
NAV per share after DTL 0.18 0.16 (15.2%) (14.0%)
___________
Notes:
1. Euro/GBP rate 0.90053 as at 31 December 2018 and 0.88773 as at 31 December 2017.
2. NAV per share has been calculated on the basis of 904,626,856
issued shares as at 31 December 2018 and as at 31 December
2017.
Total Group NAV as at 31 December 2018 was EUR178 million and
EUR165 million before and after DTL respectively. This represents a
decrease of EUR45 million (20.2%) and EUR30 million (15.2%),
respectively, from the 31 December 2017 figures. This NAV reduction
is mainly due to the valuation write-downs relating to the
Company's assets as well as Dolphin's regular fixed operational,
corporate, finance and management expenses.
Sterling NAV per share as at 31 December 2018 was 18p before DTL
and 16p after DTL and decreased by 19.1% and 14.0%, before and
after DTL respectively compared to the 31 December 2017 figures.
The valuation decreases and operational expenses mentioned above,
were counter-balanced by a 1.4% appreciation of the Euro versus
Sterling.
The Company's consolidated assets of EUR244 million include
EUR128 million of real estate assets, EUR106 million of assets held
for sale, EUR2 million of other assets (trade and other
receivables) and EUR8 million in cash.
The figure of EUR128 million of real estate assets (property,
plant and equipment and investment property) represents the
independent property valuations conducted as at 31 December 2018 by
American Appraisal (for the Greek and Cypriot projects) for both
freehold and long leasehold interests of Kilada Hills, Scorpio Bay,
Lavender Bay, Apollo Heights and Plaka Bay projects.
The EUR106 million of assets held for sale includes EUR60
million of real estate assets (property, plant and equipment,
investment property and trading properties), EUR43 million of
investment in equity accounted investees (the Company's 47.9%
interest in Aristo as at 31 December 2018), EUR1 million of
available-for-sale financial assets which represents the Company's
investment in Itacare and EUR2 million of other assets. The EUR60
million figure comprises the appraised value of Kea Resort, Livka
Bay and La Vanta (Colliers International conducted the independent
property valuation for Croatia and Turkey) as well as the value of
the Seafront villas based on the respective sale agreement.
The Company's consolidated liabilities (excluding DTL) total
EUR60 million and mainly comprise EUR27 million of interest bearing
loans and finance lease obligations (of which EUR7 million are
classified as liabilities held for sale). All loans are held by
Group subsidiaries and are non-recourse to Dolphin. The EUR33
million of trade and other payables (including EUR6 million of
trade and other payables held for sale) comprise mainly EUR21
million of option contracts to acquire land in the Company's
Lavender Bay project.
The consolidated financial statements have been audited by
KPMG.
Consolidated statement of profit or loss and other comprehensive
income
For the year ended 31 December 2018
31 December 2018 31 December 2017
(Restated)
Note EUR'000 EUR'000
------------------------------------------------------------------------- ----- ----------------- -----------------
Continuing operations
------------------------------------------------------------------------- ----- ----------------- -----------------
Revenue 6 4,387 1,273
------------------------------------------------------------------------- ----- ----------------- -----------------
Cost of sales 7 (2,099) (1,969)
------------------------------------------------------------------------- ----- ----------------- -----------------
Gross profit/(loss) 2,288 (696)
------------------------------------------------------------------------- ----- ----------------- -----------------
Disposal of investments 8A (2,229) 4
------------------------------------------------------------------------- ----- ----------------- -----------------
Change in valuations 8B (19,015) (17,450)
------------------------------------------------------------------------- ----- ----------------- -----------------
Investment Manager fixed remuneration 29.2 (5,000) (6,000)
------------------------------------------------------------------------- ----- ----------------- -----------------
Directors' remuneration 29.1 (561) (701)
------------------------------------------------------------------------- ----- ----------------- -----------------
Professional fees 11 (3,874) (4,516)
------------------------------------------------------------------------- ----- ----------------- -----------------
Administrative and other expenses 12 (1,793) (6,558)
------------------------------------------------------------------------- ----- ----------------- -----------------
Depreciation charge 16 (45) (35)
------------------------------------------------------------------------- ----- ----------------- -----------------
Total operating and other expenses (32,517) (35,256)
------------------------------------------------------------------------- ----- ----------------- -----------------
Results from operating activities (30,229) (35,952)
------------------------------------------------------------------------- ----- ----------------- -----------------
Finance income 13 - 4,069
------------------------------------------------------------------------- ----- ----------------- -----------------
Finance costs 13 (6,963) (8,071)
------------------------------------------------------------------------- ----- ----------------- -----------------
Net finance costs (6,963) (4,002)
------------------------------------------------------------------------- ----- ----------------- -----------------
Loss before taxation (37,192) (39,954)
------------------------------------------------------------------------- ----- ----------------- -----------------
Taxation 14 1,614 2,893
------------------------------------------------------------------------- ----- ----------------- -----------------
Loss from continuing operations (35,578) (37,061)
------------------------------------------------------------------------- ----- ----------------- -----------------
DISContinuED operation
------------------------------------------------------------------------- ----- ----------------- -----------------
(Loss)/profit from discontinued operation, net of tax 10 (5,593) 9,792
------------------------------------------------------------------------- ----- ----------------- -----------------
Loss (41,171) (27,269)
------------------------------------------------------------------------- ----- ----------------- -----------------
Other comprehensive income
------------------------------------------------------------------------- ----- ----------------- -----------------
Items that will not be reclassified to profit or loss
------------------------------------------------------------------------- ----- ----------------- -----------------
Revaluation of property, plant and equipment 16 11,942 4,515
------------------------------------------------------------------------- ----- ----------------- -----------------
Related tax 14 (2,985) (1,309)
------------------------------------------------------------------------- ----- ----------------- -----------------
8,957 3,206
------------------------------------------------------------------------- ----- ----------------- -----------------
Items that are or may be reclassified subsequently to profit or loss
------------------------------------------------------------------------- ----- ----------------- -----------------
Foreign currency translation differences 13 2,201 (11,561)
------------------------------------------------------------------------- ----- ----------------- -----------------
2,201 (11,561)
------------------------------------------------------------------------- ----- ----------------- -----------------
Other comprehensive income, net of tax 11,158 (8,355)
------------------------------------------------------------------------- ----- ----------------- -----------------
Total comprehensive income (30,013) (35,624)
------------------------------------------------------------------------- ----- ----------------- -----------------
Loss attributable to:
------------------------------------------------------------------------- ----- ----------------- -----------------
Owners of the Company (40,706) (31,986)
------------------------------------------------------------------------- ----- ----------------- -----------------
Non-controlling interests (465) 4,717
------------------------------------------------------------------------- ----- ----------------- -----------------
(41,171) (27,269)
========================================================================= ===== ================= =================
Total comprehensive income attributable to:
------------------------------------------------------------------------- ----- ----------------- -----------------
Owners of the Company (29,551) (39,757)
------------------------------------------------------------------------- ----- ----------------- -----------------
Non-controlling interests (462) 4,133
========================================================================= ===== ================= =================
(30,013) (35,624)
========================================================================= ===== ================= =================
(Loss)/EARNINGS per share
------------------------------------------------------------------------- ----- ----------------- -----------------
Basic and diluted loss per share (EUR) 15 (0.05) (0.04)
------------------------------------------------------------------------- ----- ----------------- -----------------
Basic and diluted loss per share - Continuing operations (EUR) 15 (0.04) (0.05)
------------------------------------------------------------------------- ----- ----------------- -----------------
Basic and diluted (loss)/earnings per share - Discontinued operation
(EUR) 15 (0.01) 0.01
------------------------------------------------------------------------- ----- ----------------- -----------------
Consolidated statement of financial position
As at 31 December 2018
31 December 2018 31 December 2017
Note EUR'000 EUR'000
---------------------------------------------- ----- ----------------- -----------------
Assets
---------------------------------------------- ----- ----------------- -----------------
Property, plant and equipment 16 12,267 87,551
---------------------------------------------- ----- ----------------- -----------------
Investment property 17 116,391 138,672
---------------------------------------------- ----- ----------------- -----------------
Deferred tax assets 24 - 994
---------------------------------------------- ----- ----------------- -----------------
Non-current assets 128,658 227,217
---------------------------------------------- ----- ----------------- -----------------
Trading properties 19 - 30,572
---------------------------------------------- ----- ----------------- -----------------
Receivables and other assets 20 1,863 5,374
---------------------------------------------- ----- ----------------- -----------------
Cash and cash equivalents 21 7,938 2,444
---------------------------------------------- ----- ----------------- -----------------
Assets held for sale 18 105,600 129,131
---------------------------------------------- ----- ----------------- -----------------
Current assets 115,401 167,521
---------------------------------------------- ----- ----------------- -----------------
Total assets 244,059 394,738
============================================== ===== ================= =================
Equity
---------------------------------------------- ----- ----------------- -----------------
Share capital 22 9,046 9,046
---------------------------------------------- ----- ----------------- -----------------
Share premium 22 569,847 569,847
---------------------------------------------- ----- ----------------- -----------------
Retained deficit (422,222) (397,746)
============================================== ===== ================= =================
Other reserves 7,845 12,912
============================================== ===== ================= =================
Equity attributable to owners of the Company 164,516 194,059
---------------------------------------------- ----- ----------------- -----------------
Non-controlling interests 5,752 4,769
---------------------------------------------- ----- ----------------- -----------------
Total equity 170,268 198,828
---------------------------------------------- ----- ----------------- -----------------
Liabilities
---------------------------------------------- ----- ----------------- -----------------
Loans and borrowings 23 - 68,544
---------------------------------------------- ----- ----------------- -----------------
Finance lease liabilities 25 3,005 2,990
---------------------------------------------- ----- ----------------- -----------------
Deferred tax liabilities 24 8,444 19,561
---------------------------------------------- ----- ----------------- -----------------
Trade and other payables 27 20,647 20,858
---------------------------------------------- ----- ----------------- -----------------
Deferred revenue 26 - 6,985
---------------------------------------------- ----- ----------------- -----------------
Non-current liabilities 32,096 118,938
---------------------------------------------- ----- ----------------- -----------------
Loans and borrowings 23 17,326 21,171
---------------------------------------------- ----- ----------------- -----------------
Finance lease liabilities 25 8 8
---------------------------------------------- ----- ----------------- -----------------
Trade and other payables 27 6,374 16,193
---------------------------------------------- ----- ----------------- -----------------
Deferred revenue 26 - 13,834
---------------------------------------------- ----- ----------------- -----------------
Liabilities held for sale 18 17,987 25,766
---------------------------------------------- ----- ----------------- -----------------
Current liabilities 41,695 76,972
---------------------------------------------- ----- ----------------- -----------------
Total liabilities 73,791 195,910
---------------------------------------------- ----- ----------------- -----------------
Total equity and liabilities 244,059 394,738
---------------------------------------------- ----- ----------------- -----------------
Net asset value ('NAV') per share (EUR) 28 0.18 0.21
---------------------------------------------- ----- ----------------- -----------------
Consolidated statement of changes in equity
For the year ended 31 December 2018
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 2017 9,046 569,847 16,345 4,338 (365,689) 233,887 17,993 251,880
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total
comprehensive
income
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Loss - - - - (31,986) (31,986) 4,717 (27,269)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Other
comprehensive
income
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Revaluation of
property, plant
and equipment,
net of tax - - - 3,206 - 3,206 - 3,206
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Foreign currency
translation
differences - - (10,977) - - (10,977) (584) (11,561)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total other
comprehensive
income - - (10,977) 3,206 - (7,771) (584) (8,355)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total
comprehensive
income - - (10,977) 3,206 (31,986) (39,757) 4,133 (35,624)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Transactions with
owners of the
Company
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Contributions and
distributions
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Non-controlling
interests on
capital
increases of
subsidiaries - - - - - - 95 95
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Equity-settled
share-based
payment
arrangements - - - - (71) (71) - (71)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total contribution
and distributions - - - - (71) (71) 95 24
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Changes in
ownership
interests
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Disposal of
subsidiary with
non-controlling
interests - - - - - - (17,452) (17,452)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total changes in
ownership
interests - - - - - - (17,452) (17,452)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total transactions
with owners of
the Company - - - - (71) (71) (17,357) (17,428)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Balance at 31
December 2017 9,046 569,847 5,368 7,544 (397,746) 194,059 4,769 198,828
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Balance at 1
January 2018 9,046 569,847 5,368 7,544 (397,746) 194,059 4,769 198,828
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total
comprehensive
income
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Loss - - - - (40,706) (40,706) (465) (41,171)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Other
comprehensive
income
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Revaluation of
property, plant
and equipment,
net of tax - - - 8,957 - 8,957 - 8,957
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Foreign currency
translation
differences - - 2,198 - - 2,198 3 2,201
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Transfer of
revaluation
reserve to
retained
earnings due to
disposal - - - (16,222) 16,222 - - -
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total other
comprehensive
income - - 2,198 (7,265) 16,222 11,155 3 11,158
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total
comprehensive
income - - 2,198 (7,265) (24,484) (29,551) (462) (30,013)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Transactions with
owners of the
Company
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Contributions and
distributions
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Non-controlling
interests on
capital
increases of
subsidiaries - - - - - - 6,639 6,639
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Equity-settled
share-based
payment
arrangements - - - - 8 8 - 8
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total contribution
and distributions - - - - 8 8 6,639 6,647
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Changes in
ownership
interests
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Disposal of
subsidiaries
with
non-controlling
interests - - - - - - (5,194) (5,194)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total changes in
ownership
interests - - - - - - (5,194) (5,194)
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Total transactions
with owners of
the Company - - - - 8 8 1,445 1,453
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Balance at 31
December 2018 9,046 569,847 7,566 279 (422,222) 164,516 5,752 170,268
------------------- -------- -------- ------------ ------------ ---------- --------- ---------------- ---------
Consolidated statement of cash flows
For the year ended 31 December 2018
31 December 2018 31 December 2017
EUR'000 EUR'000
----------------------------------------------------------------------------- ----------------- -----------------
Cash flows from operating activities
----------------------------------------------------------------------------- ----------------- -----------------
Loss (41,171) (27,269)
------------------------------------------------------------------------------ ----------------- -----------------
Adjustments for:
----------------------------------------------------------------------------- ----------------- -----------------
Net change in fair value of investment property 13,039 12,486
============================================================================== ================= =================
Impairment loss on trading properties 3,763 680
------------------------------------------------------------------------------ ----------------- -----------------
Loss on disposal of investment in subsidiaries 10,003 1,307
------------------------------------------------------------------------------ ----------------- -----------------
Gain on disposal of investment in equity-accounted investees held for sale (516) (4)
------------------------------------------------------------------------------ ----------------- -----------------
Equity-settled share-based payment arrangements 8 (71)
------------------------------------------------------------------------------ ----------------- -----------------
Impairment loss on re-measurement of disposal groups 2,954 3,409
------------------------------------------------------------------------------ ----------------- -----------------
(Reversal of)/impairment loss and write offs of property, plant and
equipment (741) 2,456
------------------------------------------------------------------------------ ----------------- -----------------
Reversal of concession/write off of land - (193)
------------------------------------------------------------------------------ ----------------- -----------------
Depreciation charge 1,141 2,308
------------------------------------------------------------------------------ ----------------- -----------------
Interest income - (4,069)
------------------------------------------------------------------------------ ----------------- -----------------
Interest expense 5,633 7,865
------------------------------------------------------------------------------ ----------------- -----------------
Exchange difference 2,205 (11,560)
------------------------------------------------------------------------------ ----------------- -----------------
Taxation (1,614) (2,893)
------------------------------------------------------------------------------ ----------------- -----------------
(5,296) (15,548)
----------------------------------------------------------------------------- ----------------- -----------------
Changes in:
----------------------------------------------------------------------------- ----------------- -----------------
Receivables (1,080) (1,778)
------------------------------------------------------------------------------ ----------------- -----------------
Payables 3,694 972
------------------------------------------------------------------------------ ----------------- -----------------
Cash used in operating activities (2,682) (16,354)
============================================================================== ================= =================
Tax received 97 10
------------------------------------------------------------------------------ ----------------- -----------------
Net cash used in operating activities (2,585) (16,344)
------------------------------------------------------------------------------ ----------------- -----------------
Cash flows from investing activities
----------------------------------------------------------------------------- ----------------- -----------------
Net proceeds from disposal of subsidiaries, net of cash disposed of 10,786 24,687
------------------------------------------------------------------------------ ----------------- -----------------
Net proceeds from disposal of investment in equity-accounted investees held
for sale 1,541 700
------------------------------------------------------------------------------ ----------------- -----------------
Net acquisitions of investment property (51) (203)
------------------------------------------------------------------------------ ----------------- -----------------
Net acquisitions of property, plant and equipment (119) (153)
------------------------------------------------------------------------------ ----------------- -----------------
Net change in trading properties 42 (1,079)
------------------------------------------------------------------------------ ----------------- -----------------
Net change in net assets held for sale (7,830) 193
------------------------------------------------------------------------------ ----------------- -----------------
Net cash from investing activities 4,369 24,145
------------------------------------------------------------------------------ ----------------- -----------------
Cash flows from financing activities
----------------------------------------------------------------------------- ----------------- -----------------
Funds received from non-controlling interests 6,639 95
------------------------------------------------------------------------------ ----------------- -----------------
Change in loans and borrowings - (2,728)
------------------------------------------------------------------------------ ----------------- -----------------
Change in finance lease obligations 15 16
------------------------------------------------------------------------------ ----------------- -----------------
Interest paid (2,930) (7,401)
============================================================================== ================= =================
Net cash from/(used in) financing activities 3,724 (10,018)
------------------------------------------------------------------------------ ----------------- -----------------
Net increase/(decrease) in cash and cash equivalents 5,508 (2,217)
------------------------------------------------------------------------------ ----------------- -----------------
Cash and cash equivalents at 1 January 2,444 4,698
------------------------------------------------------------------------------ ----------------- -----------------
Cash and cash equivalents reclassified to assets held for sale (14) (37)
============================================================================== ================= =================
Cash and cash equivalents at 31 December 7,938 2,444
============================================================================== ================= =================
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 21) 7,938 2,444
------------------------------------------------------------------------------ ----------------- -----------------
Cash and cash equivalents at the end of the year 7,938 2,444
============================================================================== ================= =================
Notes to the consolidated financial statements
For the year ended 31 December 2018
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 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 2018 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 1 April 2019.
Details of the Group's accounting policies are included in note
5.
This is the first set of the Group's annual financial statements
in which IFRS 15 'Revenue from Contracts with Customers' and IFRS 9
'Financial Instruments' have been applied. Changes to significant
accounting policies are described in note 2(g).
b. Basis of preparation
The consolidated financial statements of the Company for the
year ended 31 December 2018 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. 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. The Board is committed to convene a shareholders'
meeting before 31 December 2019, so that shareholders have an
opportunity to review the life of the Company and consider its
strategy. The Board is in the process of formulating its proposal
to the Company's shareholders and this will be announced in the
near future.
c. Basis of measurement
The consolidated financial statements have been prepared under
the historical cost convention, with the exception of property
(investment property and property, plant and equipment), which are
stated at their fair values and assets and liabilities held for
sale, which are stated at their fair value less costs to sell.
d. Adoption of new and revised standards and interpretations
As from 1 January 2018, 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, except for the adoption of IFRS 9 'Financial Instruments'
and IFRS 15 'Revenue from Contracts with Customers' (see note
2(g)).
The following standards, amendments to standards and
interpretations have been issued but are not yet effective for
annual periods beginning on 1 January 2018. 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 16 'Leases' (effective for annual periods beginning on or
after 1 January 2019)
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'.
The standard introduces a single, on-balance sheet lease accounting
model for lessees. IFRS 16 applies a control model to the
identification of leases, distinguishing between leases and service
contracts on the basis of whether there is an identified asset
controlled by the customer. The previous distinction between
operating and finance leases is removed for lessees. Instead, 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 recognition 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. Based
on assessments undertaken to date, the adoption of IFRS 16 is not
expected to have a material impact on the Group's financial
statements.
IFRIC 23 'Uncertainty over Income Tax Treatments' (effective for
annual periods beginning on or after 1 January 2019)
IFRIC 23 clarifies the accounting for income tax treatments that
have yet to be accepted by tax authorities, whilst also aiming to
enhance transparency. The key test is whether it is probable that
the tax authority will accept the chosen tax treatment, on the
assumption that tax authorities will have full knowledge of all
relevant information in assessing a proposed tax treatment. The
uncertainty is reflected using the measure that provides the better
prediction of the resolution of the uncertainty being either the
most likely amount or the expected value. The interpretation also
requires companies to reassess the judgements and estimates applied
if facts and circumstances change. IFRIC 23 does not introduce any
new disclosures but reinforces the need to comply with existing
disclosure requirements in relation to judgements made, assumptions
and estimates used, and the potential impact of uncertainties that
are not reflected. The Group is currently evaluating the expected
impact of adopting the interpretation on its financial statements.
As such, the expected impact of the interpretation is not yet known
or reasonably estimable.
(ii) Standards and interpretations not adopted by the EU
Annual Improvements to IFRSs 2015--2017 Cycle (effective for
annual periods beginning on or after 1 January 2019)
In December 2017, the IASB published Annual Improvements to
IFRSs 2015-2017 Cycle, containing the following amendments to
IFRSs:
- IFRS 3 'Business Combinations' and IFRS 11 'Joint
Arrangements'. The amendments to IFRS 3 clarify that when an entity
obtains control of a business that is a joint operation, then the
transaction is a business combination achieved in stages and the
acquiring party remeasures the previously held interest in that
business at fair value. The amendments to IFRS 11 clarify that when
an entity maintains (or obtains) joint control of a business that
is a joint operation, the entity does not remeasure previously held
interests in that business.
- IAS 12 'Income Taxes': the amendments clarify that all income
tax consequences of dividends (i.e. distribution of profits) are
recognised consistently with the transactions that generated the
distributable profits - i.e. in profit or loss, other comprehensive
income ('OCI') or equity.
- IAS 23 'Borrowing Costs': the amendments clarify that if any
specific borrowing remains outstanding after the related asset is
ready for its intended use or sale, that borrowing becomes part of
the funds that an entity borrows generally when calculating the
capitalisation rate on general borrowings.
The Group is currently evaluating the expected impact of
adopting the amendments on its financial statements. As such, the
expected impact of the amendments is not yet known or reasonably
estimable.
Amendments to References to the Conceptual Framework in IFRS
Standards (effective for annual periods beginning on or after 1
January 2020)
In March 2018 the IASB issued a comprehensive set of concepts
for financial reporting, the revised "Conceptual Framework for
Financial Reporting" (Conceptual Framework), replacing the previous
version issued in 2010. The main changes to the framework's
principles have implications for how and when assets and
liabilities are recognised and derecognized in the financial
statements, while some of the concepts in the revised Framework are
entirely new (such as the "practical ability" approach to
liabilities". To assist companies with the transition, the IASB
issued a separate accompanying document "Amendments to References
to the Conceptual Framework in IFRS Standards". This document
updates some references to previous versions of the Conceptual
Framework in IFRS Standards, their accompanying documents and IFRS
Practice Statements. The Group is currently evaluating the expected
impact of adopting the amendment on its financial statements. As
such, the expected impact of the amendment is not yet known or
reasonably estimable.
IFRS 3 'Business Combinations' (amendments): Definition of a
Business (effective for annual periods beginning on or after 1
January 2020)
The amendments narrow and clarify the definition of a business.
They also permit a simplified assessment of whether an acquired set
of activities and assets is a group of assets rather than a
business. The amended definition emphasises that the output of a
business is to provide goods and services to customers, whereas the
previous definition focused on returns in the form of dividends,
lower costs or other economic benefits to investors and others. In
addition to amending the wording of the definition, the Board has
provided supplementary guidance. Distinguishing between a business
and a group of assets is important because an acquirer recognises
goodwill only when acquiring a business. The Group is currently
evaluating the expected impact of adopting the amendment on its
financial statements. As such, the expected impact of the amendment
is not yet known or reasonably estimable.
IAS 1 and IAS 8 (amendments): Definition of Material (effective
for annual periods beginning on or after 1 January 2020)
The amendments clarify and align the definition of 'material'
and provide guidance to help improve consistency in the application
of that concept whenever it is used in IFRS Standards. The
amendments include definition guidance that until now has featured
elsewhere in IFRS Standards. In addition, the explanations
accompanying the definition have been improved. Finally, the
amendments ensure that the definition of material is consistent
across all IFRS Standards.
- Old definition: Omissions or misstatements of items are
material if they could, individually or collectively, influence the
economic decisions that users make on the basis of the financial
statements (IAS 1 'Presentation of Financial Statements').
- New definition: Information is material if omitting,
misstating or obscuring it could reasonably be expected to
influence the decisions that the primary users of general purpose
financial statements make on the basis of those financial
statements, which provide financial information about a specific
reporting entity.
The Group is currently evaluating the expected impact of
adopting the amendments on its financial statements. As such, the
expected impact of the amendments is not yet known or reasonably
estimable.
e. Use of estimates and judgements
In preparing these consolidated financial statements, management
has made judgements, estimates and assumptions that affect 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.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to estimates are recognised prospectively
- that is, in the period during which the estimate is revised, if
the estimate affects only that period, or in the period of the
revision and future periods, if the revision affects the present as
well as future periods. 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:
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 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.
Further information about judgements, estimates and assumptions
made in applying accounting policies that have the most material
effects on the amounts recognised in the financial statements is
included in the following notes:
- Note 5.9 - work in progress;
- Note 5.23 - revenue recognition;
- Note 5.31 - taxation.
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.
g. Changes in significant accounting policies
The Group has initially applied IFRS 15 (see 2(g)(A)) and IFRS 9
(see 2(g)(B)) from 1 January 2018. A number of other new standards
are also effective from 1 January 2018 but they do not have a
material effect on the Group's financial statements.
Due to the transition methods chosen by the Group in applying
these standards, comparative information throughout these financial
statements has not been restated to reflect the requirements of the
new standards, except for separately presenting impairment loss on
trade receivables and contract assets (see 2(g)(B)).
A. IFRS 15 'Revenue from Contracts with Customers'
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. It replaced IAS
18 'Revenue' and related interpretations. Under IFRS 15, revenue is
recognised when a customer obtains control of the goods or
services. Determining the timing of the transfer of control - at a
point in time or over time - requires judgement.
The Group has adopted IFRS 15 using the cumulative effect method
(without practical expedients), with the effect of initially
applying this standard recognised at the date of initial
application (i.e. 1 January 2018). Accordingly, the information
presented for 2017 has not been restated - i.e. it is presented, as
previously reported, under IAS 18 and related interpretations.
Additionally, the disclosure requirements in IFRS 15 have not
generally been applied to comparative information.
As a result of adopting IFRS 15, there was no material impact on
the Group's statement of financial position as at 31 December 2018,
and its statements of profit or loss and other comprehensive income
and cash flows for the year then ended.
IFRS 15 did not have a significant impact on the Group's
accounting policies with respect to revenue recognition (see note
6).
B. IFRS 9 'Financial Instruments'
IFRS 9 sets out requirements for recognising and measuring
financial assets, financial liabilities and some contracts to buy
or sell non--financial items. This standard replaces IAS 39
'Financial Instruments: Recognition and Measurement'.
As a result of the adoption of IFRS 9, the Group has adopted
consequential amendments to IAS 1, which require impairment of
financial assets to be presented in a separate line item in the
statement of profit or loss and other comprehensive income.
Previously, the Group's approach was to include the impairment of
trade receivables in other expenses. Impairment losses on other
financial assets are presented under 'finance costs', similar to
the presentation under IAS 39, and not presented separately in the
statement of profit or loss and other comprehensive income due to
materiality considerations.
Additionally, the Group has adopted consequential amendments to
IFRS 7 'Financial Instruments: Disclosures' that are applied to
disclosures about 2018 but have not been generally applied to
comparative information.
Classification and measurement of financial assets and financial
liabilities:
IFRS 9 contains three principal classification categories for
financial assets: measured at amortised cost, fair value through
other comprehensive income ('FVOCI') and fair value through profit
or loss ('FVTPL'). The classification of financial assets under
IFRS 9 is generally based on the business model in which a
financial asset is managed and its contractual cash flow
characteristics. IFRS 9 eliminates the previous IAS 39 categories
of held to maturity, loans and receivables and available for sale.
Under IFRS 9, derivatives embedded in contracts where the host is a
financial asset in the scope of the standard are never separated.
Instead, the hybrid financial instrument as a whole is assessed for
classification.
IFRS 9 largely retains the existing requirements in IAS 39 for
the classification and measurement of financial liabilities.
The adoption of IFRS 9 has not had a significant effect on the
Group's accounting policies related to financial liabilities.
For an explanation of how the Group classifies and measures
financial instruments and accounts for related gains and losses
under IFRS 9, see note 5.
Trade and other receivables that were classified as loans and
receivables under IAS 39 are now classified at amortised cost.
Impairment of financial assets:
IFRS 9 replaces the 'incurred loss' model in IAS 39 with an
'expected credit loss' (ECL) model. The new impairment model
applies to:
- financial assets measured at amortised cost;
- debt investments at FVOCI;
- contract assets;
- lease receivables;
- loan commitments and financial guarantee contracts issued.
The new impairment model does not apply to investments in equity
instruments.
Under IFRS 9, credit losses are recognised earlier than under
IAS 39 - see note 5.21.
Transition:
Changes in accounting policies resulting from the adoption of
IFRS 9 have been applied retrospectively, except as described
below.
- The Group has used an exemption not to restate comparative
information for prior periods with respect to classification and
measurement (including impairment) requirements. Therefore,
comparative periods have been restated only for retrospective
application of the cost of hedging approach for forward points (see
below). Differences in the carrying amounts of financial assets and
financial liabilities resulting from the adoption of IFRS 9 are
recognised in retained earnings and reserves as at 1 January 2018.
Accordingly, the information presented for 2017 does not generally
reflect the requirements of IFRS 9, but rather those of IAS 39.
- The following assessments have been made on the basis of the
facts and circumstances that existed at the date of initial
application.
- The determination of the business model within which a financial asset is held.
- The designation and revocation of previous designations of
certain financial assets and financial liabilities as measured at
FVTPL.
- The designation of certain investments in equity instruments
not held for trading as at FVOCI.
- If an investment in a debt security had low credit risk at the
date of initial application of IFRS 9, then the Group has assumed
that the credit risk on the asset had not increased significantly
since its initial recognition.
IFRS 9 largely retains the existing requirements in IAS 39 for
the classification and measurement of financial liabilities.
Following the assessments and analyses performed by the Group
with respect to the first time application, there were no
adjustments to the statement of financial position as at 1 January
2018.
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 and American
Appraisal, two 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 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. A
reconciliation process is then 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.
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 2018, the Group's most significant
subsidiaries were the following:
Country of Shareholding
Name Project incorporation interest
----------------------------------------------------- ----------------------------- --------------- -------------
Scorpio Bay Holdings Limited Scorpio Bay Resort Cyprus 100%
===================================================== ============================= =============== =============
Scorpio Bay Resorts S.A. Scorpio Bay Resort Greece 100%
===================================================== ============================= =============== =============
Xscape Limited Lavender Bay Resort Cyprus 100%
===================================================== ============================= =============== =============
Golfing Developments S.A. Lavender Bay Resort Greece 100%
===================================================== ============================= =============== =============
MindCompass Overseas S.A. Kilada Hills Golf Resort Greece 100%
===================================================== ============================= =============== =============
MindCompass Overseas Two S.A. Kilada Hills Golf Resort Greece 100%
===================================================== ============================= =============== =============
MindCompass Parks S.A. Kilada Hills Golf Resort Greece 100%
===================================================== ============================= =============== =============
Dolphin Capital Greek Collection Limited Kilada Hills Golf Resort Cyprus 100%
===================================================== ============================= =============== =============
DCI Holdings One Limited Aristo Developers BVIs 100%
===================================================== ============================= =============== =============
D.C. Apollo Heights Polo and Country Resort Limited Apollo Heights Resort Cyprus 100%
===================================================== ============================= =============== =============
Symboula Estates Limited ('Symboula') Apollo Heights Resort Cyprus 100%
===================================================== ============================= =============== =============
Azurna Uvala D.o.o. ('Azurna') Livka Bay Resort Croatia 100%
===================================================== ============================= =============== =============
Eastern Crete Development Company S.A. Plaka Bay Resort Greece 100%
===================================================== ============================= =============== =============
DolphinLux 2 S.a.r.l. La Vanta- Mediterra Resorts Luxembourg 100%
===================================================== ============================= =============== =============
Kalkan Yapi ve Turizm A.S. ('Kalkan') La Vanta- Mediterra Resorts Turkey 100%
===================================================== ============================= =============== =============
Single Purpose Vehicle Ten Limited ('SPV 10') Kea Resort Cyprus 67%
===================================================== ============================= =============== =============
Eidikou Skopou Eikosi Tessera S.A. Kea Resort Greece 67%
===================================================== ============================= =============== =============
Therissos Hills S.A. Kea Resort Greece 67%
===================================================== ============================= =============== =============
The above shareholding interest percentages are rounded to the
nearest integer.
As at 31 December 2018 and 31 December 2017, all or part of the
shares held by the Company in some of its subsidiaries are pledged
as a security for loans (see note 23).
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 (equity-accounted investees) are accounted for using the
equity method (unless they are classified as assets held for sale -
see accounting policy 5.7) 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. In 2017, the cost of work in progress
includes materials, labour and direct expenses plus attributable
overheads based on a normal level of activity. On adoption of IFRS
15, revenue and the associated costs for these contracts are
recognised over time. The Group uses its judgement to select a
variety of methods and make assumptions that are mainly based on
market conditions existing at each reporting date.
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
Policy applicable after 1 January 2018
Trade receivables and debt securities issued are initially
recognised when they are originated. All other financial assets and
financial liabilities are initially recognised when the Group
becomes a party to the contractual provisions of the
instrument.
A financial asset (unless it is a trade receivable without a
significant financing component) or financial liability is
initially measured at fair value plus, for an item not at FVTPL,
transaction costs that are directly attributable to its acquisition
or issue. A trade receivable without a significant financing
component is initially measured at the transaction price.
Policy applicable before 1 January 2018
Trade and other receivables are stated at their cost less
impairment losses (see accounting policy 5.21).
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.
5.12 Financial assets
Policy applicable after 1 January 2018
On initial recognition, a financial asset is classified as
measured at: amortised cost; FVOCI - debt investment; FVOCI -
equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their
initial recognition unless the Group changes its business model for
managing financial assets, in which case all affected financial
assets are reclassified on the first day of the first reporting
period following the change in the business model.
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the
following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is achieved
by both collecting contractual cash flows and selling financial
assets; and
- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
On initial recognition of an equity investment that is not held
for trading, the Group may irrevocably elect to present subsequent
changes in the investment's fair value in OCI. This election is
made on an investment--by--investment basis.
All financial assets not classified as measured at amortised
cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets (see note 33). On initial
recognition, the Group may irrevocably designate a financial asset
that otherwise meets the requirements to be measured at amortised
cost or at FVOCI as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise
arise.
Business model assessment:
The Group makes an assessment of the objective of the business
model in which a financial asset is held at a portfolio level
because this best reflects the way the business is managed and
information is provided to management. The information considered
includes:
- the stated policies and objectives for the portfolio and the
operation of those policies in practice. These include whether
management's strategy focuses on earning contractual interest
income, maintaining a particular interest rate profile, matching
the duration of the financial assets to the duration of any related
liabilities or expected cash outflows or realising cash flows
through the sale of the assets;
- how the performance of the portfolio is evaluated and reported
to the Group's management;
- the risks that affect the performance of the business model
(and the financial assets held within that business model) and how
those risks are managed;
- how managers of the business are compensated - e.g. whether
compensation is based on the fair value of the assets managed or
the contractual cash flows collected; and
- the frequency, volume and timing of sales of financial assets
in prior periods, the reasons for such sales and expectations about
future sales activity.
Transfers of financial assets to third parties in transactions
that do not qualify for derecognition are not considered sales for
this purpose, consistent with the Group's continuing recognition of
the assets.
Financial assets that are held for trading or are managed and
whose performance is evaluated on a fair value basis are measured
at FVTPL.
Assessment whether contractual cash flows are solely payments of
principal and interest:
For the purposes of this assessment, 'principal' is defined as
the fair value of the financial asset on initial recognition.
'Interest' is defined as consideration for the time value of money
and for the credit risk associated with the principal amount
outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative
costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely
payments of principal and interest, the Group considers the
contractual terms of the instrument. This includes assessing
whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it
would not meet this condition. In making this assessment, the Group
considers:
- contingent events that would change the amount or timing of
cash flows;
- terms that may adjust the contractual coupon rate, including
variable--rate features;
- prepayment and extension features; and
- terms that limit the Group's claim to cash flows from
specified assets (e.g. non--recourse features).
A prepayment feature is consistent with the solely payments of
principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest
on the principal amount outstanding, which may include reasonable
additional compensation for early termination of the contract.
Additionally, for a financial asset acquired at a discount or
premium to its contractual par amount, a feature that permits or
requires prepayment at an amount that substantially represents the
contractual par amount plus accrued (but unpaid) contractual
interest (which may also include reasonable additional compensation
for early termination) is treated as consistent with this criterion
if the fair value of the prepayment feature is insignificant at
initial recognition.
Subsequent measurement and gains and losses:
-- Financial assets at FVTPL: These assets are subsequently
measured at fair value. Net gains and losses, including any
interest or dividend income, are recognised in profit or loss.
-- Financial assets at amortised cost: These assets are
subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment
losses. Interest income, foreign exchange gains and losses and
impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
-- Debt investments at FVOCI: These assets are subsequently
measured at fair value. Interest income calculated using the
effective interest method, foreign exchange gains and losses and
impairment are recognised in profit or loss. Other net gains and
losses are recognised in OCI. On derecognition, gains and losses
accumulated in OCI are reclassified to profit or loss.
-- Equity investments at FVOCI: These assets are subsequently
measured at fair value. Dividends are recognised as income in
profit or loss unless the dividend clearly represents a recovery of
part of the cost of the investment. Other net gains and losses are
recognised in OCI and are never reclassified to profit or loss.
Policy applicable before 1 January 2018
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.
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.
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 Dividends
Dividends are recognised as a liability in the period in which
they are declared and approved and are subtracted directly from
retained earnings.
5.16 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.
5.17 Trade and other payables
Trade and other payables are stated at their cost.
5.18 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 deferred income. 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.
5.19 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.
5.20 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.
5.21 Impairment
Policy applicable after 1 January 2018
-- Financial instruments and contract assets
The Group recognises loss allowances for expected credit losses
('ECLs') on:
- financial assets measured at amortised cost;
- debt investments measured at FVOCI; and
- contract assets.
The Group measures loss allowances at an amount equal to
lifetime ECLs, except for the following, which are measured at
12--month ECLs:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk
(i.e. the risk of default occurring over the expected life of the
financial instrument) has not increased significantly since initial
recognition.
Loss allowances for trade receivables and contract assets are
always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset
has increased significantly since initial recognition and when
estimating ECLs, the Group considers reasonable and supportable
information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information
and analysis, based on the Group's historical experience and
informed credit assessment and including forward--looking
information.
The Group assumes that the credit risk on a financial asset has
increased significantly if it is more than 30 days past due.
The Group considers a financial asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the
Group in full, without recourse by the Group to actions such as
realising security (if any is held); or
- the financial asset is more than 90 days past due.
The Group considers a debt security to have low credit risk when
its credit risk rating is equivalent to the globally understood
definition of 'investment grade'. The Group considers this to be
Baa3 or higher per Moody's rating agency.
Lifetime ECLs are the ECLs that result from all possible default
events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default
events that are possible within the 12 months after the reporting
date (or a shorter period if the expected life of the instrument is
less than 12 months).
The maximum period considered when estimating ECLs is the
maximum contractual period over which the Group is exposed to
credit risk.
-- Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the
Group expects to receive).
ECLs are discounted at the effective interest rate of the
financial asset.
-- Credit-impaired financial assets
At each reporting date, the Group assesses whether financial
assets carried at amortised cost and debt securities at FVOCI are
credit--impaired. A financial asset is 'credit--impaired' when one
or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit--impaired includes the
following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default or being more than 90 days past due;
- the restructuring of a loan or advance by the Group on terms
that the Group would not consider otherwise;
- it is probable that the borrower will enter bankruptcy or
other financial reorganisation; or
- the disappearance of an active market for a security because of financial difficulties.
-- Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets. For debt
securities at FVOCI, the loss allowance is charged to profit or
loss and is recognised in OCI.
-- Write-off
The gross carrying amount of a financial asset is written off
when the Group has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof. For
individual customers, the Group has a policy of writing off the
gross carrying amount when the financial asset is 180 days past due
based on historical experience of recoveries of similar assets. For
corporate customers, the Group individually makes an assessment
with respect to the timing and amount of write--off based on
whether there is a reasonable expectation of recovery. The Group
expects no significant recovery from the amount written off.
However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the
Group's procedures for recovery of amounts due.
Policy applicable before 1 January 2018
The carrying amounts of the Group's assets, other than
investment property (see accounting policy 5.5) and deferred tax
assets (see accounting policy 5.31), 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.
5.22 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.
5.23 Revenue recognition
Policy applicable after 1 January 2018
Revenue is measured based on the consideration specified in a
contract with a customer and excludes amounts collected on behalf
of third parties. The Group recognises revenue when it transfers
control over a product or service to a customer.
Under IFRS 15, revenue is recognised when a customer obtains
control of the goods or services. Determining the timing of the
transfer of control - at a point in time or over time - requires
judgement.
Policy applicable before 1 January 2018
Revenue comprised the invoiced amount for the sale of goods and
services net of value added tax, rebates and discounts.
The Group applied IAS 18 for income from land and buildings
under development, according to which revenue and the related costs
were recognised in profit or loss when the building was completed
and delivered and all associated risks were transferred to the
buyer.
5.24 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.
5.25 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.
5.26 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.
5.27 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.
5.28 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.
5.29 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.
5.30 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.
5.31 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
significant judgements about future events. There are transactions
and calculations for which the ultimate tax determination is
uncertain during the ordinary course of business. 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 the income tax and deferred tax
expense in the period that such a determination is made.
5.32 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.
5.33 Comparatives
Comparative figures have been adjusted to reflect the required
changes in presentation in relation to the agreement to dispose
DolphinCI Fourteen Limited ('DCI 14') (owner of 'Amanzoe' project
in Greece) and the presentation of its 'Hotel & Leisure'
segment as a discontinued operation (see note 10).
6. revenue
The effect of initially applying IFRS 15 on the Group's revenue
from contracts with customers - that is, sale of trading and
investment properties, is described in note 2(g). Due to the
transition method chosen in applying IFRS 15, comparative
information has not been restated to reflect the new
requirements.
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
---------------------------------------------- ---------------------------------------------------
Continuing Continuing Discontinued
operations Discontinued operations operation Total
operation Total (Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Income from
hotel
operations - 11,861 11,861 - 18,229 18,229
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Sale of trading
and investment
properties 1,989 - 1,989 220 - 220
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Rental income 9 - 9 18 - 18
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Other income 2,389 - 2,389 1,035 - 1,035
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Total 4,387 11,861 16,248 1,273 18,229 19,502
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
7. COST OF SALES
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
---------------------------------------------- --------------------------------------------------
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
------------------ ----------------- ----------------- -------- ----------------- ----------------- ------------
Cost of sales
related to:
------------------ ----------------- ----------------- -------- ----------------- ----------------- ------------
Hotel operations - 4,545 4,545 - 6,320 6,320
------------------ ----------------- ----------------- -------- ----------------- ----------------- ------------
Sales of trading
and investment
properties 1,358 - 1,358 248 - 248
------------------ ----------------- ----------------- -------- ----------------- ----------------- ------------
Personnel
expenses (see
below) 638 2,914 3,552 669 5,931 6,600
------------------ ----------------- ----------------- -------- ----------------- ----------------- ------------
Branding
management fees 30 268 298 326 1,196 1,522
------------------ ----------------- ----------------- -------- ----------------- ----------------- ------------
Other operating
expenses 73 26 99 726 143 869
------------------ ----------------- ----------------- -------- ----------------- ----------------- ------------
Total 2,099 7,753 9,852 1,969 13,590 15,559
------------------ ----------------- ----------------- -------- ----------------- ----------------- ------------
Personnel expenses
Continuing operations
From 1 January 2018
to 31 December 2018
----------------------------------------------------------------------------
Construction & development & other
Hotel & leisure operations
Total
EUR'000 EUR'000 EUR'000
---------------------------------------- ----------------------------- ----------------------------------- --------
Wages and salaries - 496 496
---------------------------------------- ----------------------------- ----------------------------------- --------
Compulsory social security
contributions - 112 112
---------------------------------------- ----------------------------- ----------------------------------- --------
Other personnel costs - 30 30
---------------------------------------- ----------------------------- ----------------------------------- --------
Total - 638 638
---------------------------------------- ----------------------------- ----------------------------------- --------
The average number of employees
employed by the Group during the year
was - 29 29
---------------------------------------- ----------------------------- ----------------------------------- --------
Discontinued operation
From 1 January 2018
to 31 December 2018
----------------------------------------------------------------------------
Construction & development & other
Hotel & leisure operations
Total
EUR'000 EUR'000 EUR'000
---------------------------------------- ----------------------------- ----------------------------------- --------
Wages and salaries 2,298 - 2,298
---------------------------------------- ----------------------------- ----------------------------------- --------
Compulsory social security
contributions 573 - 573
---------------------------------------- ----------------------------- ----------------------------------- --------
Other personnel costs 43 - 43
---------------------------------------- ----------------------------- ----------------------------------- --------
Total 2,914 - 2,914
---------------------------------------- ----------------------------- ----------------------------------- --------
The average number of employees
employed by the Group during the year
was 202 - 202
---------------------------------------- ----------------------------- ----------------------------------- --------
Continuing operations
From 1 January 2017
to 31 December 2017
(Restated)
--------------------------------------------------------------------------
Hotel & leisure operations Construction & development & other Total
EUR'000 EUR'000 EUR'000
------------------------------------------ --------------------------- ----------------------------------- --------
Wages and salaries - 531 531
------------------------------------------ --------------------------- ----------------------------------- --------
Compulsory social security contributions - 116 116
------------------------------------------ --------------------------- ----------------------------------- --------
Other personnel costs - 22 22
------------------------------------------ --------------------------- ----------------------------------- --------
Total - 669 669
------------------------------------------ --------------------------- ----------------------------------- --------
The average number of employees employed
by the Group during the year was - 26 26
------------------------------------------ --------------------------- ----------------------------------- --------
Discontinued operation
From 1 January 2017
to 31 December 2017
(Restated)
--------------------------------------------------------------------------
Hotel & leisure operations Construction & development & other Total
EUR'000 EUR'000 EUR'000
------------------------------------------ --------------------------- ----------------------------------- --------
Wages and salaries 4,466 174 4,640
------------------------------------------ --------------------------- ----------------------------------- --------
Compulsory social security contributions 1,062 37 1,099
------------------------------------------ --------------------------- ----------------------------------- --------
Other personnel costs 149 43 192
------------------------------------------ --------------------------- ----------------------------------- --------
Total 5,677 254 5,931
------------------------------------------ --------------------------- ----------------------------------- --------
The average number of employees employed
by the Group during the year was 169 33 202
------------------------------------------ --------------------------- ----------------------------------- --------
8. INCOME AND EXPENSES
A. DISPOSAL OF INVESTMENTS
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
-------------------------------------------- -------------------------------------------
Continuing Discontinued Continuing Discontinued
Note operations operation Total operations operation Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------ ------- ---------------- --------------- --------- ---------------- --------------- --------
Loss on disposal
of investment in
subsidiaries 31 (2,229) (7,774) (10,003) - (1,307) (1,307)
------------------ ------- ---------------- --------------- --------- ---------------- --------------- --------
Gain on disposal
of investment in
equity-accounted
investees held
for sale 18 - 516 516 4 - 4
------------------ ------- ---------------- --------------- --------- ---------------- --------------- --------
Total (2,229) (7,258) (9,487) 4 (1,307) (1,303)
------------------ ------- ---------------- --------------- --------- ---------------- --------------- --------
B. CHANGE IN VALUATIONS
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
------------------------------------------- -------------------------------------------
Continuing Discontinued Continuing Discontinued
Note operations operation Total operations operation Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------- ------- --------------- --------------- --------- --------------- --------------- ---------
Net change in fair
value of
investment
property 17 (13,039) - (13,039) (12,486) - (12,486)
------------------- ------- --------------- --------------- --------- --------------- --------------- ---------
Impairment loss on
trading
properties 19 (3,763) - (3,763) (680) - (680)
------------------- ------- --------------- --------------- --------- --------------- --------------- ---------
Impairment loss on
re-measurement of
disposal groups 18 (2,954) - (2,954) (3,409) - (3,409)
------------------- ------- --------------- --------------- --------- --------------- --------------- ---------
Net reversal of
(impairment loss)
and write offs of
property, plant
and equipment 16 741 - 741 (1,068) (1,388) (2,456)
------------------- ------- --------------- --------------- --------- --------------- --------------- ---------
Reversal of
concession/write
off of land 19 - - - 193 - 193
------------------- ------- --------------- --------------- --------- --------------- --------------- ---------
Total (19,015) - (19,015) (17,450) (1,388) (18,838)
------------------- ------- --------------- --------------- --------- --------------- --------------- ---------
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 & Other Reportable segments'
operations development 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 2018
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Revenue - 11,861 2,001 - 2,386 - 4,387 11,861
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Cost of sales - (7,753) (1,794) - (305) - (2,099) (7,753)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Investment
Manager fixed
remuneration - - - - (5,000) - (5,000) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Directors'
remuneration - - - - (561) - (561) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Depreciation
charge - (1,096) - - (45) - (45) (1,096)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Professional fees - - (358) - (3,516) - (3,874) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Administrative
and other
expenses - - (192) - (1,601) - (1,793) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
(Loss)/gain on
disposal of
investments in
subsidiaries - (7,774) 460 - (2,689) - (2,229) (7,774)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Gain on disposal
of investments
in
equity-accounted
investees held
for sale - 516 - - - - - 516
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Net change in
fair value of
investment
property - - - - (13,039) - (13,039) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
mpairment loss on
trading
properties - - (3,763) - - - (3,763) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Impairment loss
on
re-measurement
of disposal
groups - - (768) - (2,186) - (2,954) -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Reversal of
impairment loss
and write offs
of property,
plant and
equipment - - - - 741 - 741 -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Results from
operating
activities - (4,246) (4,414) - (25,815) - (30,229) (4,246)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Finance costs - (1,347) (3,001) - (3,962) - (6,963) (1,347)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Net finance costs - (1,347) (3,001) - (3,962) - (6,963) (1,347)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Loss before
taxation - (5,593) (7,415) - (29,777) - (37,192) (5,593)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Taxation - - (22) - 1,636 - 1,614 -
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Loss - (5,593) (7,437) - (28,141) - (35,578) (5,593)
------------------ ----------- ------------- ----------- ------------- ----------- ------------- ----------- -------------
Hotel & leisure Construction Other Reportable segments'
operations & development 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 2017
(Restated)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Revenue - 18,229 235 - 1,038 - 1,273 18,229
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Cost of sales - (13,222) (1,747) (368) (222) - (1,969) (13,590)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Investment
Manager fixed
remuneration - - - - (6,000) - (6,000) -
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Directors'
remuneration - - - - (701) - (701) -
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Depreciation
charge - (2,273) - - (35) - (35) (2,273)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Professional fees - - (200) (29) (4,316) (53) (4,516) (82)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Administrative
and other
expenses - - (4,144) (80) (2,414) (853) (6,558) (933)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Loss on disposal
of investments
in subsidiaries - - - - - (1,307) - (1,307)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Gain on disposal
of investments
in
equity-accounted
investees
held for sale - - 4 - - - 4 -
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Net change in
fair value of
investment
property - - - - (12,486) - (12,486) -
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
mpairment loss on
trading
properties - - (680) - - - (680) -
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Impairment loss
on
re-measurement
of disposal
groups - - (1,081) - (2,328) - (3,409) -
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Impairment loss
and write offs
of property,
plant and
equipment - (1,388) - - (1,068) - (1,068) (1,388)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Concession/write
off of land - - - - 193 - 193 -
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Results from
operating
activities - 1,346 (7,613) (477) (28,339) (2,213) (35,952) (1,344)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Finance income - - - - 4,069 13,471 4,069 13,471
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Finance costs - (2,335) (3,695) - (4,376) - (8,071) (2,335)
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Net finance
(costs)/income - (2,335) (3,695) - (307) 13,471 (4,002) 11,136
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
(Loss)/profit
before taxation - (989) (11,308) (477) (28,646) 11,258 (39,954) 9,792
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
Taxation - - 5 - 2,888 - 2,893 -
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
(Loss)/profit - (989) (11,303) (477) (25,758) 11,258 (37,061) 9,792
------------------ ----------- ------------- ------------ ------------- ----------- ------------- ----------- -------------
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 the economy of each country. Variations in those
factors and the economic environment in general affect the Group's
performance to a certain extent.
The global fundamentals of the hospitality sector remained
strong during 2017 and 2018, 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.
Greece
Gross Domestic Product (GDP) of Greece grew 1.4% in 2017
compared to 2016. The country also realized a 1.9% year-on-year GDP
increase in 2018. In addition, macroeconomic indicators have been
quite encouraging about the country's economic perspectives.
S&P, Fitch and Moody's upgraded the country's credit rating in
2018 and made very favourable assessments of the Greek economy's
progress. In August 2018 Greece successfully exited its final,
three-year bailout program that had been agreed in August 2015 to
help it cope with the continued fallout from a debt crisis.
The tourism sector is expected to have a significant impact on
the recovery of the country's economy and on curbing the external
trade deficit. According to the provisional data issued by the Bank
of Greece, more than 30 million tourists arrived in Greece in 2018,
recording a rise of 10.8%, while travel revenues exceeded 16
billion euros for the year, up 10% compared to 2017 posting a new
record. According to the Greek Tourism Confederation, tourism
traffic and revenues are expected to stay the same for 2019.
Cyprus
The emerging economic recovery has been reinforced since the
conclusion of the three-year European Stability Mechanism financial
assistance programme on 31 March 2016, placing the island amongst
the highest accelerating economies in Europe. The economy expanded
by 3.4% year-on-year in 2017, driven mainly by improved levels of
private consumption and a record year for the tourism industry. GDP
growth rate in real terms during 2018 was also positive and
estimated at +3.9% compared to 2017.
In addition, according to "Cyprus Real Estate Market Report- The
Insights" (KPMG, December 2018), the Cypriot economy continued its
positive growth in 2018 and the positive economic performance over
the past years has led to a series of upgrades of Cyprus' sovereign
rating by various international credit rating agencies. In the
latest update by S&P, Fitch and DBRS, Cyprus sovereign rating
was upgraded to "Investment Grade" with stable outlook, signifying
the strong performance and improvement of the Cypriot economy.
The available data for the tourism industry highlighted, once
again, that tourism was amongst one of the key catalysts for the
country's 2017 economic performance. Tourist arrivals in Cyprus
recorded an impressive increase in 2017, according to the Cyprus
Tourism Organisation (CTO). For the period of January - December
2017 tourist arrivals totalled 3.7 million, recording an increase
of 14.6% and outnumbering the total arrivals ever recorded in
Cyprus during a year. In 2018 Cyprus welcomed 3.93 million
tourists, an increase of 7.8% compared to 2017. The UK and Russia
constitute the main sources of tourism for Cyprus, with visitor
proportions at 33.7% and 19.9% respectively. CTO forecasts for 2019
call for another successful year.
Real Estate activity continued its upward trend in 2018, with
Contracts of Sale exhibiting an increase of 21%, while
non-nationals in 2018 bought 103% more properties compared with
Q1-Q3 2017, reaching a 48% share of the overall market.
The acceleration was due to established incentives such as the
scheme for naturalisation of investors in Cyprus by exception,
which has attracted mainly non-EU buyers, as well as transactions
recorded by local banks in the context of implementing
Debt-for-Asset swaps for the restructuring of their Non-Performing
Exposures. Recognising the growing interest, Cyprus has focused on
modernising legislation, introducing tax incentives and speeding up
licensing procedures.
10. DISCONTINUED OPERATION
On 1 August 2018, as also mentioned in note 31, the Group
entered into an agreement for the disposal of Amanzoe' project, in
Greece. Part of Amanzoe constituted the 'Hotel & Leisure'
operations of the Group, which as at 31 December 2018, is presented
as a discontinued operation.
As at 31 December 2017, the 'Hotel & Leisure' operation
segment was not classified 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.
Also during the first quarter of 2017 the Group sold Pearl
Island project ('Pearl Island' in Republic of Panama). Pearl Island
constituted the operations of the Group in the geographical area of
Americas, which as at 31 December 2017, was presented as a
discontinued operation.
Results of discontinued operation
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
Note EUR'000 EUR'000
------------------------------------------------------- ----- --------------------- ---------------------
Revenue 6 11,861 18,229
------------------------------------------------------- ----- --------------------- ---------------------
Expenses
------------------------------------------------------- ----- --------------------- ---------------------
Cost of sales 7 (7,753) (13,590)
------------------------------------------------------- ----- --------------------- ---------------------
Change in valuations 8B - (1,388)
------------------------------------------------------- ----- --------------------- ---------------------
Depreciation charge 16 (1,096) (2,273)
------------------------------------------------------- ----- --------------------- ---------------------
Professional fees 11 - (82)
------------------------------------------------------- ----- --------------------- ---------------------
Administrative and other expenses 12 - (933)
------------------------------------------------------- ----- --------------------- ---------------------
Net finance (expense)/income 13 (1,347) 11,136
------------------------------------------------------- ----- --------------------- ---------------------
Results from operating activities 1,665 11,099
------------------------------------------------------- ----- --------------------- ---------------------
Taxation - -
------------------------------------------------------- ----- --------------------- ---------------------
Results from operating activities, net of tax 1,665 11,099
------------------------------------------------------- ----- --------------------- ---------------------
Loss on disposal of discontinued operation 8A (7,258) (1,307)
------------------------------------------------------- ----- --------------------- ---------------------
(Loss)/profit from discontinued operation, net of tax (5,593) 9,792
======================================================= ===== ===================== =====================
Cash flows from discontinued operation
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
EUR'000 EUR'000
----------------------------------------------- --------------------- ---------------------
Net cash from /(used in) operating activities 4,676 (22,258)
------------------------------------------------ --------------------- ---------------------
Net cash (used in) /from investing activities (102) 26,110
------------------------------------------------ --------------------- ---------------------
Net cash used in financing activities (1,100) (3,704)
------------------------------------------------ --------------------- ---------------------
Net cash flows for the year 3,474 148
------------------------------------------------ --------------------- ---------------------
11. PROFESSIONAL FEES
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
------------------------------------------------ ------------------------------------------------
Continuing Discontinued Total Continuing Discontinued
operations operation operations operation Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Legal fees 607 - 607 868 19 887
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Auditors'
remuneration
(see below) 397 - 397 618 28 646
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Accounting
expenses 275 - 275 333 - 333
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Appraisers' fees 48 - 48 71 - 71
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Project design
and development
fees 1,813 - 1,813 1,751 21 1,772
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Consultancy fees 154 - 154 216 - 216
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Administrator
fees 50 - 50 29 - 29
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Other
professional
fees 530 - 530 630 14 644
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
Total 3,874 - 3,874 4,516 82 4,598
------------------ ------------------ ------------------ -------- ------------------ ------------------ --------
12. ADMINISTRATIVE AND OTHER EXPENSES
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
---------------------------------------------- ---------------------------------------------------
Discontinued Total Continuing Discontinued
Continuing operation operations operation Total
operations (Restated) (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Travelling and
accommodation 155 - 155 247 - 247
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Insurance 41 - 41 133 - 133
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Repairs and
maintenance 134 - 134 278 5 283
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Marketing and
advertising
expenses 157 - 157 269 14 283
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Immovable
property and
other taxes 444 - 444 448 - 448
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Rents 106 - 106 250 23 273
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Litigation
liability
provision - - - 4,000 - 4,000
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Other 756 - 756 933 891 1,824
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
Total 1,793 - 1,793 6,558 933 7,491
----------------- ----------------- ----------------- -------- ----------------- ----------------- -------------
13. NET Finance costS
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
------------------------------------------------ -------------------------------------------------
Discontinued Total Total
operation Continuing Discontinued (Restated)
Continuing operations operation
operations (Restated) (Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
----------------- ----------------- ----------------- ---------- ----------------- ---------------- ------------
Recognised in
profit or loss
----------------- ----------------- ----------------- ---------- ----------------- ---------------- ------------
Interest income
(see note 27) - - - 4,069 - 4,069
----------------- ----------------- ----------------- ---------- ----------------- ---------------- ------------
Exchange
difference - - - - 13,471 13,471
----------------- ----------------- ----------------- ---------- ----------------- ---------------- ------------
Finance income - - - 4,069 13,471 17,540
================= ================= ================= ========== ================= ================ ============
Interest expense (4,580) (1,053) (5,633) (6,103) (1,762) (7,865)
----------------- ----------------- ----------------- ---------- ----------------- ---------------- ------------
Bank charges (44) (294) (338) (111) (573) (684)
----------------- ----------------- ----------------- ---------- ----------------- ---------------- ------------
Exchange
difference (2,339) - (2,339) (1,857) - (1,857)
================= ================= ================= ========== ================= ================ ============
Finance costs (6,963) (1,347) (8,310) (8,071) (2,335) (10,406)
================= ================= ================= ========== ================= ================ ============
Net finance
(costs)/income
recognised in
profit or loss (6,963) (1,347) (8,310) (4,002) 11,136 7,134
================= ================= ================= ========== ================= ================ ============
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
EUR'000 EUR'000
-------------------------------------------------------- --------------------- ---------------------
Recognised in other comprehensive income
Foreign currency translation differences 2,201 (11,561)
-------------------------------------------------------- --------------------- ---------------------
Finance costs recognised in other comprehensive income 2,201 (11,561)
-------------------------------------------------------- --------------------- ---------------------
14. Taxation
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
EUR'000 EUR'000
------------------------------------------------------------ --------------------- ---------------------
RECOGNISED IN PROFIT OR LOSS
------------------------------------------------------------ --------------------- ---------------------
Income tax 27 (48)
------------------------------------------------------------ --------------------- ---------------------
Net deferred tax (see note 24) (1,641) (2,845)
------------------------------------------------------------ --------------------- ---------------------
Taxation recognised in profit or loss (1,614) (2,893)
------------------------------------------------------------ --------------------- ---------------------
RECOGNISED IN OTHER COMPREHENSIVE INCOME
------------------------------------------------------------ --------------------- ---------------------
Revaluation of property, plant and equipment (see note 24) 2,985 1,309
------------------------------------------------------------ --------------------- ---------------------
Taxation recognised in other comprehensive income 2,985 1,309
------------------------------------------------------------ --------------------- ---------------------
Reconciliation of taxation based on taxable loss and taxation
based on accounting loss:
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
EUR'000 EUR'000
------------------------------------------------------------- --------------------- ---------------------
Loss before taxation (37,192) (42,435)
------------------------------------------------------------- --------------------- ---------------------
Taxation using domestic tax rates (6,399) (10,384)
------------------------------------------------------------- --------------------- ---------------------
Effect of valuation loss on properties (1,641) (2,845)
------------------------------------------------------------- --------------------- ---------------------
Non-deductible expenses 4,028 9,958
------------------------------------------------------------- --------------------- ---------------------
Tax-exempt income - (3)
------------------------------------------------------------- --------------------- ---------------------
Current year losses for which no deferred tax is recognised 2,389 1,018
------------------------------------------------------------- --------------------- ---------------------
Effect of tax losses utilised 4 (457)
------------------------------------------------------------- --------------------- ---------------------
Effect of losses surrendered to group companies - (133)
------------------------------------------------------------- --------------------- ---------------------
Other 5 (47)
------------------------------------------------------------- --------------------- ---------------------
Total (1,614) (2,893)
------------------------------------------------------------- --------------------- ---------------------
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%. According to a legislation enacted in 2018, the corporation
tax will be reduced to 28% in 2019, 27% in 2020, 26% in 2021 and
25% from 2022 onwards. 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 22% (2017: 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
18%. Tax losses of Croatian companies are carried forward to reduce
future profits for a period of five years.
15. (LOSS)/EARNINGS per share
Basic (loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the
(loss)/profit attributable to owners of the Company by the weighted
average number of common shares outstanding during the year.
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
------------------------------------------------ ------------------------------------------------
Continuing Discontinued Total Continuing Discontinued Total
operations operation operations operation
'000 '000 '000 '000 '000 '000
------------------ ------------------ ----------------- --------- ------------------ ----------------- ---------
(Loss)/profit
attributable to
owners of the
Company (EUR) (35,144) (5,562) (40,706) (36,878) 4,892 (31,986)
------------------ ------------------ ----------------- --------- ------------------ ----------------- ---------
Number of
weighted average
common shares
outstanding 904,627 904,627 904,627 904,627 904,627 904,627
------------------ ------------------ ----------------- --------- ------------------ ----------------- ---------
Basic
(loss)/earnings
per share (EUR) (0.04) (0.01) (0.05) (0.05) 0.01 (0.04)
------------------ ------------------ ----------------- --------- ------------------ ----------------- ---------
(Loss)/profit attributable to owners of the Company
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
------------------------------------------------ ------------------------------------------------
Continuing Discontinued Total Continuing Discontinued
operations operation operations operation Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------ ------------------ ----------------- --------- ------------------ ----------------- ---------
(Loss)/profit
attributable to
owners of the
Company (35,144) (5,562) (40,706) (36,878) 4,892 (31,986)
------------------ ------------------ ----------------- --------- ------------------ ----------------- ---------
(Loss)/profit
attributable to
non-controlling
interests (434) (31) (465) (183) 4,900 4,717
------------------ ------------------ ----------------- --------- ------------------ ----------------- ---------
Total (35,578) (5,593) (41,171) (37,061) 9,792 (27,269)
------------------ ------------------ ----------------- --------- ------------------ ----------------- ---------
Weighted average number of common shares outstanding
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
(Restated)
'000 '000
---------------------------------------------------------------- --------------------- ---------------------
Outstanding common shares at the beginning and end of the year 904,627 904,627
---------------------------------------------------------------- --------------------- ---------------------
Diluted (loss)/earnings per share
Diluted (loss)/earnings per share is calculated by adjusting the
(loss)/profit attributable to owners and the number of common
shares outstanding to assume conversion of all dilutive potential
shares. As of 31 December 2018 and 31 December 2017, the diluted
(loss)/earnings per share is the same as the basic (loss)/earnings
per share, due to the fact that no dilutive potential ordinary
shares were outstanding during these years.
16. Property, plant and equipment
Land & Machinery & equipment Other Total
buildings EUR'000 EUR'000 EUR'000
EUR'000
=========================================================== =========== ====================== ========= =========
2018
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Cost or revalued amount
----------------------------------------------------------- ----------- ---------------------- --------- ---------
At beginning of year 104,136 4,608 875 109,619
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Direct acquisitions 26 71 22 119
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Disposal through disposal of subsidiary companies (88,627) (4,331) (867) (93,825)
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Revaluation adjustment 4,440 - - 4,440
----------------------------------------------------------- ----------- ---------------------- --------- ---------
At end of year 19,975 348 30 20,353
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Depreciation and impairment losses
----------------------------------------------------------- ----------- ---------------------- --------- ---------
At beginning of year 18,608 2,847 613 22,068
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Depreciation charge for the year - continuing operations 30 15 - 45
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Depreciation charge for the year - discontinued operation 859 169 68 1,096
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Revaluation adjustment (7,502) - - (7,502)
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Disposals through disposal of subsidiary companies (3,534) (2,695) (651) (6,880)
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Impairment loss 167 - - 167
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Reversal of impairment loss (908) - - (908)
----------------------------------------------------------- ----------- ---------------------- --------- ---------
At end of year 7,720 336 30 8,086
=========================================================== =========== ====================== ========= =========
Carrying amounts 12,255 12 - 12,267
2017
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Cost or revalued amount
----------------------------------------------------------- ----------- ---------------------- --------- ---------
At beginning of year 99,561 4,594 815 104,970
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Direct acquisitions 60 55 69 184
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Direct disposals - (41) (9) (50)
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Revaluation adjustment 4,515 - - 4,515
----------------------------------------------------------- ----------- ---------------------- --------- ---------
At end of year 104,136 4,608 875 109,619
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Depreciation and impairment losses
----------------------------------------------------------- ----------- ---------------------- --------- ---------
At beginning of year 14,381 2,456 486 17,323
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Direct disposals - (14) (5) (19)
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Depreciation charge for the year - continuing operations 35 - - 35
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Depreciation charge for the year - discontinued operation 1,736 405 132 2,273
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Impairment loss 2,466 - - 2,466
----------------------------------------------------------- ----------- ---------------------- --------- ---------
Reversal of impairment loss (10) - - (10)
----------------------------------------------------------- ----------- ---------------------- --------- ---------
At end of year 18,608 2,847 613 22,068
=========================================================== =========== ====================== ========= =========
Carrying amounts 85,528 1,761 262 87,551
=========================================================== =========== ====================== ========= =========
The carrying amount at year end of land and buildings, if the
cost model was used, would have been EUR12.6 million (2017: EUR75
million).
As at 31 December 2017, part of the Group's immovable property
is held as security for bank loans (see note 23).
Fair value hierarchy
The fair value of land and buildings, amounting to EUR12,255
thousand (2017: EUR85,528 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 2018 31 December 2017
EUR'000 EUR'000
-------------------------------------------------------------------------- ----------------- -----------------
At beginning of year 85,528 85,180
Acquisitions 26 60
Disposals through disposal of subsidiary companies (85,093) -
Gains/(losses) recognised in profit or loss
Reversal of/(impairment loss) and write offs in 'Change in valuations' 741 (2,456)
Depreciation in 'Depreciation charge' (859) (1,771)
Depreciation in 'Loss from discontinued operation, net of tax' (30) -
Gains recognised in comprehensive income
Revaluation adjustment in 'Revaluation on property, plant and equipment' 11,942 4,515
At end of year 12,255 85,528
-------------------------------------------------------------------------- ----------------- -----------------
Valuation techniques and significant unobservable inputs
The following table shows the valuation techniques used in
measuring land and buildings, as well as the significant
unobservable inputs used.
Property Valuation Significant unobservable inputs Inter-relationship between
location technique key unobservable inputs
(see and fair value measurement
note
3)
Property Income Room occupancy rate 2018: 48% to The estimated fair value
in approach (annual): 62% would increase/(decrease)
Greece if:
-------------
(weighted average:
60%)
------------
(2017: 36% to Room occupancy rate was
62%) higher/(lower);
(weighted average: Average daily rate per
45%-59%) occupied room was
higher/(lower);
Average daily rate 2018: EUR399 Gross operating margin
per occupied room: to EUR655 was higher/(lower);
(weighted average: Terminal capitalisation
EUR601) rate was lower/(higher);
(2017: EUR399 Risk-adjusted discount
to EUR1,611) rate was lower/(higher).
(weighted average:
EUR593-EUR1,506)
Gross operating margin 2018: 9% to
rate: 42%
(weighted average:
39%)
(2017: 9% to
52%)
(weighted average:
38%-51%)
Terminal capitalisation 2018: 9% (2017:
rate: 8%)
Risk-adjusted discount 2018: 12% (2017:
rate: 11% to 13%)
------------
Property Combined Market approach (for The estimated fair value
in approach land components) would increase/(decrease)
Greece (Market if:
and
Cost)
-------------
Premiums/(discounts) Premiums were higher/(lower);
on the following:
------------
Location: 2018: -10% Discounts were
lower/(higher);
(2017: -10% Weights on comparables
to 0%) with premiums were
higher/(lower);
Site Size: 2018: 0% to Weights on comparables
+10% with discounts were
lower/(higher);
(2017: 0%) Replacement cost (new)
per m(2) was higher/(lower);
Asking vs transaction: 2018: -30% to Entrepreneurial profit
-20% rate was higher/(lower);
(2017: -30% Depreciation rate was
to -20% ) lower/(higher).
Frontage sea view: 2018: -10% to
+20%
(2017: 0% to
+20%)
Maturity/development 2018: 0% to
potential: +10%
(2017: 0% to
+10%)
Weight allocation: 2018: +15% to
+30%
(2017: +5% to
+20%)
Cost approach (for
building components)
Replacement cost (new) 2018: EUR500
per m(2) : - EUR1,100
(2017: EUR500
- EUR1,100)
Entepreneurial profit 2018: 20% (2017:
rate: 20%)
Depreciation rate: 2018: 35% (2017:
33%)
Useful life (years): 2018: 60 (2017:
60)
--------------------------------- ------------------- ------------------------------
Combined Market approach The estimated fair value
approach would increase/(decrease)
(Market if:
and
Premiums/(discounts) Premiums were higher/(lower);
on the following:
Location: 2017: -20% to Discounts were
0% lower/(higher);
Income) Site size: 2017: -20% to Weights on comparables
-10% with premiums were
higher/(lower);
Asking vs transaction: 2017: -30% to Weights on comparables
-20% with discounts were
lower/(higher);
Frontage sea view: 2017: 0% to Room occupancy rate was
+30% higher/(lower);
Maturity/development 2017: -50% to Average daily rate per
potential: -20% occupied room was
higher/(lower);
Premium due to being 2017: 15% Gross operating margin
part of strategic investment: was higher/(lower);
Weight allocation: 2017: +10% to Terminal capitalisation
+30% rate was lower/(higher);
Risk-adjusted discount
rate was lower/(higher).
Cost approach
Room occupancy rate 2017: 33% to
(annual): 37%
(weighted average:
36%)
Average daily rate 2017: EUR1,517
per occupied room: to EUR1,839
(weighted average:
EUR1,707)
Gross operating margin 2017: 32% to
rate: 42%
(weighted average:
41%)
Terminal capitalisation 2017: 8%
rate:
Risk-adjusted discount 2017: 11%
rate:
------------- --------------------------------- ------------------- ------------------------------
17. Investment property
Note 31 December 2018 31 December 2017
EUR'000 EUR'000
---------------------------------------------------- ----- ----------------- -----------------
At beginning of year 138,672 176,548
---------------------------------------------------- ----- ----------------- -----------------
Direct acquisitions 51 203
---------------------------------------------------- ----- ----------------- -----------------
Disposals through disposal of subsidiary companies (9,293) -
---------------------------------------------------- ----- ----------------- -----------------
Transfers to trading properties 19 - (217)
---------------------------------------------------- ----- ----------------- -----------------
Reclassification to assets held for sale - (25,376)
---------------------------------------------------- ----- ----------------- -----------------
Fair value adjustment - continuing operations 8B (13,039) (12,486)
---------------------------------------------------- ----- ----------------- -----------------
At end of year 116,391 138,672
---------------------------------------------------- ----- ----------------- -----------------
As at 31 December 2018 and 31 December 2017, part of the Group's
immovable property is held as security for bank loans (see note
23).
Changes in fair values are recognised as gains/(losses) in
profit or loss and included in 'Change in valuations' or 'Profit
from discontinued operation, net of tax' if they relate to the
discontinued operation. All such gains/(losses) are unrealised.
Fair value hierarchy
The fair value of investment property, amounting to EUR116,391
thousand (2017: EUR138,672 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.
Property Valuation Significant unobservable inputs Inter-relationship between
location technique key unobservable inputs
(see and fair value measurement
note
3)
Property Combined Market approach - 60% The estimated fair value
in approach weight would increase/(decrease)
Greece (Market if:
and
Income)
------------
Premiums/(discounts) Premiums were higher/(lower);
on the following:
------------
Location: 2018: -10% Discounts were lower/(higher);
to +10%
(2017: -10% Weights on comparables
to +10%) with premiums were higher/(lower);
Site size: 2018: -20% Weights on comparables
to 0% with discounts were lower/(higher);
(2017: -20% Quantity of villas was
to 0%) higher/(lower);
Asking vs transaction: 2018: -25% Selling price per m(2)
to -10% was higher/(lower);
(2017: -30% Expected annual growth
to -10%) in selling price was higher/(lower);
Frontage sea view: 2018: 0% to Cash flow velocity was
+20% shorter/(longer);
(2017: 0% to Risk-adjusted discount
+20%) rate was lower/(higher).
Maturity/development 2018: +10%
potential: to +40%
(2017: -20%
to +40%)
Weight allocation: 2018: +10%
to +20%
(2017: +10%
to +20%)
Income approach - 40%
weight
Quantity of villas: 2018: 447 (2017:
447)
Selling price per m(2) 2018: EUR2,800
:
(2017: EUR2,900)
Expected annual growth 2018: 0% to
in selling price: 3%
(2017: 0% to
3%)
Cash flow velocity 2018: 13 (2017:
(years): 13)
Risk-adjusted discount 2018: 15% (2017:16%)
rate:
Discount on combined
approach value:
Legal status 2018: -10%
(2017: -10%)
------------ ------------------------ --------------------- --------------------------------------
Market Premiums/(discounts) The estimated fair value
approach on the following: would increase/(decrease)
if:
Location: 2018: -40% Premiums were higher/(lower);
to +20%
(2017: -40% Discounts were lower/(higher);
to +30%)
Site size: 2018: -50% Weights on comparables
to +10% with premiums were higher/(lower);
(2017: -50% Weights on comparables
to +10%) with discounts were lower/(higher).
Asking vs transaction: 2018: -30%
to 0%
(2017: -30%
to 0%)
Frontage sea view: 2018: -10%
to +30%
(2017: -10%
to +30%)
Maturity/development 2018: -40%
potential: to +40%
(2017: -45%
to +50%)
Zoning uniqueness: 2018: -30%
to 0%
(2017: -30%
to 0%)
Other: 2018: -10%
to 0%
(2017: -10%
to 0%)
Strategic investment 2018: 0% to
approval: +25%
(2017: 0% to
+25%)
Weight allocation: 2018: +5% to
+30%
(2017: +5%
to +40%)
------------------------------------------------- --------------------- --------------------------------------
Property Market Premiums/(discounts) The estimated fair value
in approach on the following: would increase/(decrease)
Cyprus if:
Location: 2018: 0% to Premiums were higher/(lower);
+20%
(2017: 0% to Discounts were lower/(higher);
+20%)
Site size: 2018: -30% Weights on comparables
to -10% with premiums were higher/(lower);
(2017: -30% Weights on comparables
to -10%) with discounts were lower/(higher).
Asking vs transaction: 2018: -25%
to 0%
(2017: -35%
to 0%)
Frontage sea view: 2018: 0% to
+20%
(2017: 0% to
+30%)
Maturity/development 2018: -50%
potential: to 0% (2017:
-30%)
Weight allocation: 2018: +5% to
+20%
(2017: +5%
to +25%)
------------------------------------------------- --------------------- --------------------------------------
18. DISPOSAL GROUPS HELD FOR SALE
In 2018, the Company entered into a binding sale and purchase
agreement to sell the Collection Group (owner of 'Seafront villas'
in Greece) through the sale of the subsidiaries of Dolphin Capital
Greek Collection Limited. The completion of the respective sale
agreement of the disposal group and subsidiaries is expected during
2019.
The Company also remains committed to its plan to sell four
disposal groups which were presented as held for sale in 2017.
These disposal groups are: Kea (owner of 'Kea Resort'), Azurna
(owner of 'Livka Bay') in Croatia, Kalkan (owner of 'La Vanta') in
Turkey and DCI Holdings Two Limited ('DCI H2') (owner of Aristo
Developers Limited ('Aristo')) in Cyprus.
All of the above disposal groups are included in the operating
segments of 'Construction & Development' (Collection Group,
Kalkan and DCI H2) and 'Other' (Kea and Azurna).
As at 31 December 2017, Iktinos (owner of 'Sitia Bay Golf
Resort'), Triopetra (owner of 'Triopetra Bay') and Porto Heli
(owner of 'Nikki Beach') in Greece were also presented as held for
sale with their disposal being completed during 2018.
On 24 October 2018, the Company signed an agreement for the sale
of its 25% interest in the Nikki Beach to a company affiliated to
Invel Real Estate Management Ltd, for a consideration of EUR1,650
thousand, resulting in a gain on disposal of EUR516 thousand.
Impairment losses relating to the disposal group
Impairment losses of EUR2,954 thousand (2017: EUR3,409 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
As at 31 December 2018, the disposal groups comprised the
following assets and liabilities:
Azurna Kalkan Kea Collection disposal DCI H2 disposal Total
disposal disposal disposal group group
group group group
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Property, plant and
equipment - 6 10,437 - - 10,443
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Investment property 28,965 - 10,360 - - 39,353
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Equity-accounted
investees - - - - 42,694 42,694
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Trading properties - 4,699 - 5,638 - 10,337
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Trade and other
receivables 7 974 128 85 - 1,166
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Cash and cash
equivalents 218 138 336 14 - 706
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
29,190 5,817 21,261 5,737 42,694 104,699
--------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Available-for-sale
financial assets 901
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Assets held for sale 105,600
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Loans and borrowings 7,149 - - - - 7,149
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Deferred tax
liabilities 2,870 - 2,132 - - 5,002
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Trade and other
payables 969 110 1,514 3,243 - 5,836
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
Liabilities held for
sale 10,988 110 3,646 3,243 - 17,987
----------------------- ---------- ---------- ---------- -------------------- --------------------- --------
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%.
DCI H2 disposal group
As at 31 December 2018 and as at 31 December 2017, the Company's
holding of 47.9% has been classified as an asset held for sale. The
Company received within 2018 a total net dividend distribution of
EUR2 million from DCI H2, the owner of Aristo. The Board remains
committed to dispose of its holding in Aristo and realise value
from its investment in Aristo as well as maximize its distributions
potential from DCI H2.
As at 31 December 2017, the disposal groups comprised the
following assets and liabilities:
Iktinos Azurna Kalkan Kea Triopetra Porto Heli DCI H2 Total
disposal disposal disposal disposal disposal disposal disposal
group group group group group group group
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Property, plant and
equipment 6,699 - 9 - - - - 6,708
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Investment property 14,544 30,960 - 20,940 4,436 - - 70,880
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Equity-accounted
investees - - - - - 926 42,694 43,620
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Trading properties - - 5,615 - - - - 5,615
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Trade and other
receivables 139 6 980 62 36 - - 1,223
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Cash and cash
equivalents 4 181 29 36 1 - - 251
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
21,386 31,147 6,633 21,038 4,473 926 42,694 128,297
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Available-for-sale
financial assets - - - - - - - 834
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Assets held for
sale 129,131
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Loans and
borrowings - 8,165 - - - - - 8,165
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Deferred tax
liabilities 3,062 3,240 - 2,796 360 - - 9,458
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Trade and other
payables 311 965 79 6,775 13 - - 8,143
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Liabilities held
for sale 3,373 12,370 79 9,571 373 - - 25,766
-------------------- ---------- ---------- ---------- ---------- ---------- ----------- ------------- --------
Cumulative income or expenses included in other comprehensive
income
An amount of EUR2,198 thousand income (2017: EUR10,977 thousand
expense) 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 Azurna,
Kalkan and Kea properties. The fair value of DCI H2 properties as
at 31 December 2018, is based on the selling agreement signed for
its disposal, while the fair values of Iktinos and Triopetra, as at
31 December 2017, were also based on their respective selling
agreements.
Property Valuation technique (see note Significant unobservable inputs
3)
Azurna, Croatia Market approach Premiums/(discounts) on the
following:
--------------------------------
Location: 2018: -10% to 0% (2017: -5% to
+5% )
--------------------------------
Site size: 2018: -15% to -5% (2017: -20%
to -10% )
Asking vs transaction: 2018: -10% to 0% (2017: -10%
to 0%)
Capacity: 2018: -20% to 0% (2017: 0%)
Weight allocation: 2018: +20% to +40% (2017:
+20%)
-------------------------------- -------------------------------- -------------------------------
Kalkan, Turkey Income approach Quantity of residential units: 2018: 7 to 54 (2017: 1 to 54)
Selling price per m(2) : 2018: EUR950 to EUR1,500
(2017: EUR1,100 to EUR1,850)
Expected annual growth in 2018: 0% to 5% (2017: 0% to
selling price: 5%)
Cash flow velocity (years): 2018: 3 (2017: 1 to 3)
Risk-adjusted discount rate: 2018: 23% to 38% (2017: 5% to
38%)
-------------------------------- -------------------------------- -------------------------------
Kea, Greece Income approach Room occupancy rate (annual): 2018: 32% to 39%
(weighted average: 37%)
(2017: 22% to 31%)
(weighted average: 30%)
Average daily rate per occupied 2018: EUR990 to EUR1,378)
room:
(weighted average EUR1,237)
(2017: EUR823 to EUR1,203)
(weighted average EUR1,089)
Gross operating margin rate: 2018: 9% to 39%
(weighted average 30%)
(2017: 10% to 35%)
(weighted average 30%)
Terminal capitalisation rate: 2018: 11% (2017: 10%)
Quantity of villas: 2018: 40 (2017: 40)
Selling price per m(2) : 2018: EUR6,400 (2017:
EUR6,400)
Expected annual growth in selling price: 2018: 0% to 3% (2017: 0% to
4%)
Cash flow velocity (years): 2018: 10 (2017: 10)
Risk-adjusted discount rate: 2018: 12% (2017: 13%)
----------------------------------------------------------------------------------- -------------------------------
19. Trading properties
Note 31 December 2018 31 December 2017
EUR'000 EUR'000
---------------------------------------------------- ----- ----------------- -----------------
At beginning of year 30,572 29,763
---------------------------------------------------- ----- ----------------- -----------------
Net direct (disposals)/acquisitions (42) 1,079
---------------------------------------------------- ----- ----------------- -----------------
Reversal of/concession/write off of land 8B - 193
---------------------------------------------------- ----- ----------------- -----------------
Net transfers from investment property 17 - 217
---------------------------------------------------- ----- ----------------- -----------------
Disposals through disposal of subsidiary companies (21,129) -
---------------------------------------------------- ----- ----------------- -----------------
Impairment loss 8B (3,763) (680)
---------------------------------------------------- ----- ----------------- -----------------
Reclassification to assets held for sale (5,638) -
---------------------------------------------------- ----- ----------------- -----------------
At end of year - 30,572
---------------------------------------------------- ----- ----------------- -----------------
As at 31 December 2017, part of the Group's immovable property
was held as security for bank loans (see note 23).
20. RECEIVABLES AND OTHER ASSETS
The effect of initially applying IFRS 15 and IFRS 9 is described
in note 2(g).
31 December 31 December
2018 2017
EUR'000 EUR'000
--------------------------------------------- ------------ ------------
Trade receivables - 1,082
--------------------------------------------- ------------ ------------
VAT receivables 71 561
============================================= ============ ============
Other receivables 173 2,538
============================================= ============ ============
Total trade and other receivables (see note
33) 244 4,181
============================================= ============ ============
Prepayments and other assets 1,619 1,193
============================================= ============ ============
Total 1,863 5,374
--------------------------------------------- ------------ ------------
21. Cash and cash equivalents
31 December 31 December
2018 2017
EUR'000 EUR'000
----------------------------- ------------ ------------
Bank balances (see note 33) 7,930 2,421
----------------------------- ------------ ------------
Cash in hand 8 23
----------------------------- ------------ ------------
Total 7,938 2,444
----------------------------- ------------ ------------
During the year, the Group had no fixed deposits.
In 2017, funds in bank accounts of certain Group companies were
pledged as a security for loans (see note 23).
22. capital and reserves
Capital
Authorised share capital
31 December 2018 31 December 2017
------------------------- -------------------------
'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 2017 and up to 31 December 2018 904,627 9,046 569,847
------------------------------------------------------ ---------- -------------- --------------
Reserves
Translation reserve
Translation reserve comprises all foreign currency differences
arising from the translation of the financial statements of foreign
operations.
Revaluation reserve
Revaluation reserve relates to the revaluation of property,
plant and equipment from both subsidiaries and equity-accounted
investees, net of any deferred tax.
23. loans AND BORROWINGS
Total Within one year Within two to five years More than five years
------------------ ------------------ --------------------------- -----------------------
2018 2017 2018 2017 2018 2017 2018 2017
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------ -------- -------- -------- -------- ------------- ------------ ----------- ----------
Loans in Euro 17,326 89,715 17,326 21,171 - 55,474 - 13,070
------------------ -------- -------- -------- -------- ------------- ------------ ----------- ----------
Loans in Euro
within disposal
groups held for
sale 7,149 8,165 7,149 8,165 - - - -
------------------ -------- -------- -------- -------- ------------- ------------ ----------- ----------
Total 24,475 97,880 24,475 29,336 - 55,474 - 13,070
------------------ -------- -------- -------- -------- ------------- ------------ ----------- ----------
Terms and conditions
The terms and conditions of outstanding loans were as
follows:
Description Currency Interest rate Maturity dates 31 December 2018 31 December 2017
EUR'000 EUR'000
==================== ============== ==================== ==================== ================= =================
2018: Euribor plus
margins ranging
from 4.25% to 5% 2019 (2017: From
Secured loans Euro (2017: 4.25% 6.5%) 2018 to 2026) 24,475 53,934
==================== ============== ==================== ==================== ================= =================
2017: Fixed rate
Secured loans Euro 11% 2017: 2020 - 43,946
==================== ============== ==================== ==================== ================= =================
Total interest-bearing liabilities 24,475 97,880
==================================== ========================================= ================= =================
Securities
As at 31 December 2018 and 31 December 2017, 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 EUR27.6 million
(2017: EUR29.6 million), two promissory notes, a debenture note and
a letter of support from its parent company Single Purpose Vehicle
Four Limited.
-- Mortgage against the immovable property of the Cypriot
subsidiary, Symboula, with a carrying amount of EUR22.9 million
(2017: EUR27.1 million).
-- Pledge of 1,000 shares of DCI H2 (representing 10% in Aristo) for Symboula's bank loan.
-- Pledge of all shares of the Cypriot subsidiary Symboula, and
all shares of two other Apollo group entities for Symboula bank
loan.
-- Fixed and floating charges over assets and undertakings of
Symboula, subordination and assignment of intercompany loans
between all companies of Apollo Group and Dolphin Capital Investors
Limited.
-- Corporate guarantees by DCI Holdings One Limited for the
serving of the bank loan of Cypriot subsidiary, Symboula, amounting
to EUR16 million.
The Symboula loan of EUR17,326 thousand is currently in the
process of being sold by the current banking lender to a third
party as part of a larger package transaction of loan liabilities
sold. As the transaction in question has not been finalized yet,
Symboula has refrained from settling the interest payments
contractually due under the respective loan terms and has entered
into negotiations with the loan acquirer in relation to the
repayment and/or restructuring of the respective loan. As of the
date of approval of the consolidated financial statements, no
official notification has been sent by the bank to Symboula or any
other company of the Apollo Group, of its intention to proceed with
enforcement measures.
As at 31 December 2017, in addition to the above, the Group's
loans and borrowings were secured as follows:
-- Lien up to EUR59 million on immovable properties of the Greek
subsidiaries of the Porto Heli project, with a carrying amount of
EUR151.6 million.
-- 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.
24. Deferred tax assets and liabilities
31 December 2018 31 December 2017
----------------------------- -----------------------------
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 994 (19,561) 996 (24,255)
------------------------------------------------------ ----------- ---------------- ----------- ----------------
Recognised in profit or loss - continuing operations
(see note 14) (1) 1,642 (2) 2,847
====================================================== =========== ================ =========== ================
Recognised in other comprehensive income (see note
14) (2,985) - (1,309)
====================================================== =========== ================ =========== ================
Reclassification to liabilities held for sale - 3,156
====================================================== =========== ================ =========== ================
Disposal of subsidiary companies (993) 12,460
====================================================== =========== ================ =========== ================
Balance at the end of the year - (8,444) 994 (19,561)
------------------------------------------------------ ----------- ---------------- ----------- ----------------
Deferred tax assets and liabilities are attributable to the
following:
31 December 2018 31 December 2017
----------------------------- -----------------------------
Deferred Deferred Deferred Deferred
tax assets tax liabilities tax assets tax liabilities
EUR'000 EUR'000 EUR'000 EUR'000
---------------------------------------------- ----------- ---------------- ----------- ----------------
Revaluation of investment property - (7,243) - (9,550)
---------------------------------------------- ----------- ---------------- ----------- ----------------
Revaluation of trading properties - - - (2,163)
---------------------------------------------- ----------- ---------------- ----------- ----------------
Revaluation of property, plant and equipment - (1,201) - (7,143)
============================================== =========== ================ =========== ================
Other temporary differences - - - (705)
============================================== =========== ================ =========== ================
Tax losses - - 994 -
---------------------------------------------- ----------- ---------------- ----------- ----------------
Total - (8,444) 994 (19,561)
---------------------------------------------- ----------- ---------------- ----------- ----------------
25. Finance lease LIABILITIES
31 December 2018 31 December 2017
--------------------------------- ---------------------------------
Future Present value Future Present 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 8 - 8 8 - 8
Between two and five years 244 12 232 154 6 148
More than five years 4,061 1,288 2,773 4,133 1,291 2,842
Total 4,313 1,300 3,013 4,295 1,297 2,998
The major finance lease obligations comprise leases in Greece
with 99-year lease terms.
26. DEFERRED REVENUE
31 December 2018 31 December 2017
EUR'000 EUR'000
----------------- -----------------
Prepayment from clients - 13,834
----------------- -----------------
Government grant - 6,985
----------------- -----------------
Total - 20,819
-----------------
31 December 2018 31 December 2017
EUR'000 EUR'000
---------------- -----------------
Non-current - 6,985
---------------- -----------------
Current - 13,834
-----------------
Total - 20,819
-----------------
27. Trade and other payables
31 December 2018 31 December 2017
EUR'000 EUR'000
----------------- -----------------
Trade payables - 814
----------------- -----------------
Land creditors 20,843 21,048
----------------- -----------------
Investment Manager fees 2,118 1,188
----------------- -----------------
Branding fees accrual - 2,684
----------------- -----------------
Litigation liability provision - 4,000
----------------- -----------------
Other payables and accrued expenses 4,060 7,317
----------------- -----------------
Total 27,021 37,051
-----------------
31 December 2018 31 December 2017
EUR'000 EUR'000
---------------- -----------------
Non-current 20,647 20,858
---------------- -----------------
Current 6,374 16,193
-----------------
Total 27,021 37,051
-----------------
During 2017, the Company entered into new contracts in
connection with the deferred purchase of land at Lavender Bay. The
amount outstanding as at 31 December 2017 was EUR21,048 thousand
and, should the relevant subsidiary opt to exercise its acquisition
right over the respective land parcels, payment will be due on 31
December 2025. As a result of a retroactive change in the interest
rate charged on the outstanding consideration, an accrued interest
payable amount of approximately EUR4 million has been reversed
during the year ended 31 December 2017 and included in finance
income in profit or loss.
28. NAV per share
31 December 2018 31 December 2017
'000 '000
Total equity attributable to owners of the Company (EUR) 164,516 194,059
Number of common shares outstanding at end of year 904,627 904,627
NAV per share (EUR) 0.18 0.21
29. Related party transactions
29.1 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 2018, 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.
Directors' remuneration
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
EUR'000 EUR'000
Remuneration 553 772
Equity-settled share-based payment arrangements - Directors Awards (see
note 30) 8 (71)
Total remuneration 561 701
The Directors' remuneration details for the years ended 31
December 2018 and 31 December 2017 were as follows:
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
EUR'000 EUR'000
---------------------
Andrew Coppel 230 229
---------------------
Graham Warner 172 171
---------------------
Robert Heller 30 200
---------------------
Sue Farr 38 115
---------------------
Mark Townsend 83 57
---------------------
Total 553 772
---------------------
Miltos Kambourides has waived his fees.
On 25 January 2018, Robert Heller and Sue Farr resigned from the
Company's Board. Robert Heller no longer retains an interest in the
stock options issued pursuant to the Company's Stock Option
Programme.
29.2 Investment Manager remuneration
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
EUR'000 EUR'000
Fixed management fee 5,000 6,000
Variable management fees 9,332 1,606
Total remuneration 14,332 7,606
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, subject to any extension of its term as may be agreed
with the Company.
ii. Variable management fee
A 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, to the extent these are completed at 50% of
relevant 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.
The 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.
29.3 Shareholder and development agreements
Shareholder agreements
On 6 August 2012, the Company signed an agreement for the sale
of eight out of the nine remaining Seafront Villas and their
construction. The Company received an EUR1 million deposit and an
additional amount of EUR990 thousand in 2013. The completion of
this transaction never materialized due to the purchaser's default
in making the deferred payments and as such the respective
agreements were terminated with the Company retaining the major
part of the consideration already received. The Company had already
received EUR0.7 million towards the sale of Ntekar from the
terminated agreement and on 30 November 2018, the sale was
completed through a new agreement upon receipt of the final payment
of EUR1.1 million. On 11 December 2018, the Company also entered
into a binding agreement for the sale of its interest in the
remaining Seafront Villas for a gross consideration of EUR4.05
million. The Group has received EUR3.4 million on 2 January 2019
whilst the balance will be retained in escrow to cover any
potential and contingent liabilities of the respective companies.
The completion of the transaction is pending the opening of the
escrow account where the balance consideration will be deposited
and is expected within 2019.
On 1 November 2017, the Company along with the project's current
minority shareholder entered into an agreement through its relevant
project subsidiary companies, for a EUR16 million equity investment
by One&Only Resorts Limited ('One&Only') in exchange for a
40% shareholding in Single Purpose Vehicle Fourteen Limited, 100%
holding company of Kea Resort. The consideration will be deployed
in the development of the Kea Resort, with the transaction
including the operation of the Kea Resort and its residences by
One&Only through long-term management and branding agreements.
Completion of the investment agreement is subject to the Company
meeting certain conditions including the revision of the
construction permits to reflect the redesign of the Kea Resort to
meet One&Only brand standards and the completion of a EUR30
million senior loan facility against the project together with the
finalisation of the turn-key construction contract. Completion and
commencement of the Kea Resort's construction is also subject to an
additional EUR4 million equity injection in the Kea Resort by third
party investors.
29.4 Other related parties
During the years ended 31 December 2018 and 31 December 2017 the
Group did not enter into any significant related party
transactions.
30. EQUITY-SETTLED SHARE-BASED PAYMENT ARRANGEMENTS
From 1 January 2018 From 1 January 2017
to 31 December 2018 to 31 December 2017
EUR'000 EUR'000
Director Awards (see note 29.1) 8 (71)
Total equity-settled share-based payment arrangements 8 (71)
Director Awards
On 9 June 2015, Robert Heller and 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 25 January
2018, Robert Heller 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 2,261,567 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%
31. Business combinations
On 18 January 2018, the Group entered into an agreement for the
disposal of its entire interest of 77.8% in the Sitia Bay Golf
Resort ('Project') to its minority partner in the Project, Iktinos
Hellas S.A., for a consideration of EUR14 million. The first
instalment of EUR1.4 million was received on 22 January 2018 while
the remaining EUR12.6 million was received on 3 April 2018.
On 5 February 2018, the Group entered into an agreement for the
disposal of its entire interest of 100% in the Triopetra project to
Deniage Ltd ('Deniage'). Deniage purchased the Group's entire
shareholding interest for a total cash consideration of EUR4.1
million. The amount of EUR4 million was received on 5 February 2018
while the remaining EUR100 thousand will be withheld until 30 June
2019 to cover any potential latent project liabilities.
On 1 August 2018, the Group signed a share purchase agreement
with Grivalia Hospitality S.A. for the disposal of its entire
interest in Amanzoe project through the acquisition of 100% of the
shares in DCI 14, the holding company owning the project, for a
total cash consideration of EUR5.8 million, which has been fully
settled on August 2018.
On 31 August 2018, the Group entered into an agreement for the
disposal of its entire interest of 100% in Ntekar-part of the
Collection Group ('Ntekar') to SPRL Carat, for a consideration of
EUR1.8 million, which was received on November 2018.
Amanzoe Triopetra Sitia Bay
Ntekar Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Property, plant and equipment (86,945) - (6,698) - (93,643)
Investment property (9,293) (4,436) (14,544) - (28,273)
Deferred tax asset (993) - - - (993)
Trading properties (19,830) - - (1,299) (21,129)
Receivables and other assets (4,505) (36) (138) - (4,679)
Cash and cash equivalents (3,888) - (4) - (3,892)
Loans and borrowings 74,720 - - - 74,720
Deferred tax liabilities 12,460 359 3,062 - 15,881
Deferred revenue 21,581 - - - 21,581
Trade and other payables 9,636 12 310 594 10,552
Net assets (7,057) (4,101) (18,012) (705) (29,875)
Net assets disposed of (5,857) (4,101) (14,018) (705) (24,681)
Net proceeds on disposal 5,800 3,497 13,440 1,164 23,901
Variable management fees (9,223)
Loss on disposal recognised in profit or loss (10,003)
Cash effect on disposal:
Net proceeds on disposal 5,800 3,497 13,440 1,164 23,901
Variable management fees - - - - (9,223)
Cash and cash equivalents (3,888) - (4) - (3,892)
Net cash inflow on disposal 10,786
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, 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 while the escrowed amount of EUR2
million was received in full on 16 March 2018.
EUR'000
---------
Investment property (28,108)
Property, plant and equipment (25,990)
Receivables and other assets (2,237)
Cash and cash equivalents (183)
Deferred tax liabilities 1,238
Trade and other payables 11,652
Net assets (43,628)
---------
Net assets disposed of - 60% shareholding (26,177)
---------
Net proceeds on disposal 26,476
---------
Variable management fees (1,606)
---------
Loss on disposal recognised in profit or loss (1,307)
---------
Cash effect on disposal:
---------
Net proceeds on disposal 26,476
---------
Variable management fees (1,606)
---------
Cash and cash equivalents (183)
---------
Net cash inflow on disposal 24,687
---------
32. 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 2018 SPV 10
(Kea Resort)
EUR'000
Non-controlling interests percentage
Non-current assets 20,891
Current assets 475
Non-current liabilities (2,132)
Current liabilities (1,961)
Net assets 17,273
Carrying amount of non-controlling interests 5,757
Revenue 21
Loss (1,039)
Other comprehensive income -
Total comprehensive income (1,039)
Loss allocated to non-controlling interests (346)
Other comprehensive income allocated to non-controlling interests -
Cash flow from operating activities 1,269
Cash flow used in investing activities (971)
Cash flow from financing activities -
Net increase in cash and cash equivalents 298
31 December 2017 SPV 10 Single Purpose Vehicle Two Limited
(Kea Resort) (Amanzoe)
EUR'000 EUR'000
Non-controlling interests percentage 33.33% 35.60%
Non-current assets 21,034 -
Current assets 118 3,929
Non-current liabilities (22,363) (84)
Current liabilities (396) (385)
Net (liabilities)/assets (1,607) 3,460
Carrying amount of non-controlling interests (535) 1,232
Revenue 23 -
Loss (501) (171)
Other comprehensive income - -
Total comprehensive income (501) (171)
Loss allocated to non-controlling interests (167) (61)
Other comprehensive income allocated to non-controlling - -
interests
Cash flow from/(used in) operating activities 41 (23)
Cash flow used in investing activities (43) -
Cash flow from financing activities - -
Net decrease in cash and cash equivalents (2) (23)
33. 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 2018 31 December 2017
EUR'000 EUR'000
Trade and other receivables (see note 20) 244 4,181
Cash and cash equivalents (see note 21) 7,930 2,421
Total 8,174 6,602
Trade and other receivables
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 2018 31 December 2017
No. of Banks EUR'000 No. of Banks EUR'000
----------------
Bank group based on credit ratings by Moody's
----------------
Rating Aaa to A - 7,570 2 1,380
----------------
Rating Caa to C 4 360 4 1,041
----------------
Total bank balances 7,930 2,421
(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 2018
--------------
Loans and borrowings 17,326 (18,377) (18,377) - - -
--------------
Finance lease obligations 3,013 (4,313) (8) (8) (236) (4,061)
--------------
Land creditors 20,843 (26,979) (712) (1,310) (3,841) (21,116)
--------------
Trade and other payables 4,383 (4,383) (4,383) - - -
--------------
45,565 (54,052) (23,480) (1,318) (4,077) (25,177)
--------------
31 December 2017
--------------
Loans and borrowings 89,715 (128,114) (13,064) (24,048) (74,619) (16,383)
--------------
Finance lease obligations 2,998 (4,295) (8) (8) (146) (4,133)
--------------
Land creditors 21,048 (27,695) (718) (710) (3,886) (22,381)
--------------
Trade and other payables 5,875 (5,875) (5,765) (110) - -
--------------
119,636 (165,979) (19,555) (24,876) (78,651) (42,897)
--------------
(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 EUR173 thousand
(2017: EUR458 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.
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.
34. Commitments
As of 31 December 2018, the Group had a total of EUR544 thousand
contractual capital commitments on property, plant and equipment
(2017: EUR2,695 thousand).
Non-cancellable operating lease rentals are payable as
follows:
31 December 2018 31 December 2017
EUR'000 EUR'000
---------------- ----------------
Less than one year 11 20
---------------- ----------------
Between two and five years - 11
---------------- ----------------
Total 11 31
35. Contingent liabilities
Companies of the Group are involved in pending litigations. Such
litigation principally relates to day-to-day operations as a
developer of second-home residences and largely derives from
certain clients and suppliers. Based on advice from the Group's
legal advisers, the Investment Manager believes that there is
sufficient defence against any claim and does 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.
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 favour of other parties.
36. SUBSEQUENT EVENTS
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 2018.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR CKDDNPBKDKQK
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