TIDMDCI
RNS Number : 9561A
Dolphin Capital Investors Limited
07 June 2021
7 June 2021
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 2020
and Trading Update
Dolphin, an investor in high-end resort developments in the
eastern Mediterranean, announces results for the year ended 31
December 2020 and a trading update.
Financial Highlights:
-- Gross Assets of EUR205 million (31 December 2019: EUR226 million).
-- Total Group Net Asset Value ("NAV") of EUR157 million and
EUR149 million before and after Deferred Tax Liabilities ("DTL")
respectively. This represents a decrease of EUR24 million and EUR21
million (13.2% and 12.3%) respectively, against the 2019 year-end
figures.
-- NAV reduction is principally due to valuation write-downs on
certain portfolio assets and other operational, corporate, finance
and management expenses as detailed in section F below.
-- Sterling NAV per share as at 31 December 2020 stood at 16p
before DTL and 15p after DTL, versus 17p and 16p, a 8.1% and 7.1%
decrease before and after DTL respectively, compared to 31 December
2019. The Sterling NAV per share reduction mainly reflects the
factors mentioned above and was counterbalanced by a 6%
depreciation of Sterling versus the Euro during the period.
-- Total debt of EUR6.2 million with a Group total debt to gross asset ratio of 3 %.
-- Total Group cash as of 31 December 2020 stood at EUR1.7 million.
Operations, Finance and Divestments:
-- The COVID-19 pandemic has had a significant adverse impact on
our overall business activities, restricting our ability to market
and sell plots and villas in our development projects, and at
Aristo. Most importantly, it has caused a material disruption to
our efforts to divest our asset portfolio in an orderly manner.
This is mainly due to both the reduced investor interest in the
acquisition of large-scale greenfield development projects in the
hospitality and leisure sector as well as to the continued
international travel restrictions preventing potential investors
from visiting our projects.
-- Despite the adverse market backdrop, the Company realized the
sale of the LaVanta project in Turkey for a total consideration of
EUR4.3 million, a figure marginally exceeding its book value. More
specifically, on 3 September 2020, a c. 11,000 m(2) land plot in
the northern border of LaVanta was sold to a local developer for
EUR0.8 million and on 10 March 2021, DCI agreed the sale of all its
remaining land holdings in LaVanta to another local investor for a
net consideration of EUR3.5 million, which is in line with the YE
2020 valuation. An amount of EUR1 million has already been
received, while the balance is due by the end of June 2021.
-- Construction works at One&Only at Kea Island ("OOKI")
continue based on the new timeline agreed with our partners at
One&Only and targets commencement of resort operations in time
for the 2022 season. To date, all internal roads have been
constructed, site infrastructure has advanced, and vertical
construction is progressing with the lower levels of the main
building being complete and the majority of guest room foundations
and superstructure frame having advanced as well as the internal
works in both guest rooms and support buildings. In addition, the
resort mock-up room was completed within Q4 2020. Meanwhile, via
agents, contacts through our network, as well as dedicated social
media campaigns and related PR activities in co-operation with
One&Only, we have been able to source significant demand for
the Private Homes available at the project. We have already signed
and received deposits during the financial year and subsequently
from eight sales reservations on an off-plan basis, with prices
ranging from EUR1 to EUR7.5 million, for an aggregate value of
EUR26.4 million. We are in advanced discussions with several other
potential purchasers.
-- At our Kilada Country Club, Golf and Residences development,
rough earthworks and shaping of the front nine holes have been
completed by the earthworks contractor. The golf contractor has
also been appointed and is working on site. Residential
infrastructure works have begun and the country club contractor has
been appointed and will commence works within Q3 2021. An agreement
with the European PGA was signed to brand Kilada as the PGA
National Golf Club of Greece, effective from 1 January 2021. In
addition to the above, the final notarial Deed for the acquisition
of 24 founder lots in Kilada against a EUR10 million consideration
is expected to be concluded imminently, which, together with the
preferred equity investment agreement entered into on 19 December
2019, fully cover the Kilada first phase development costs.
Additionally, during 2020, we executed the sale of a land plot
which fell outside the project development perimeter at a price of
EUR1.5 million.
-- As announced on 15 October 2020, the Cyprus government
cancelled the Cyprus citizenship investment programme with effect
from 1 November 2020. The programme allowed foreign investors to
apply for Cypriot citizenship upon making a minimum EUR2 million
investment in, inter alia, Cyprus property. The termination of the
Cypriot citizenship investment programme exacerbated the already
adverse trading conditions caused by the COVID-19 pandemic for
Aristo, which ended the year with total sales revenue of EUR17
million, a decline of 66% on a year-on-year basis.
-- On 9 June 2020, following a process that lasted several years
and involved negotiations between the governments of the United
Kingdom and Cyprus an agreement was reached on the regulations for
the development in the non-military Sovereign Base Areas where the
largest part of our 447 hectare Apollo project is located. This
agreement has already resulted in provisional zoning permissions
allowing for the development of tourist real estate and hospitality
developments in c. 26 hectares, while c. 415 hectares would fall
under Z1-Z2-Z3 protection zones with building ratios ranging from
1% to 6%. We remain in discussions with the relevant authorities to
enhance the overall development potential of the project by
achieving higher coefficients. In parallel, we have been advancing
the sale of our interests in Apollo with an interested party.
-- Dolphin has also received within the period a total of c.
EUR150,000 in distributions from its investment in Itacare.
-- In line with our continued efforts to reduce overhead costs,
the Group's professional and administrative expenses for the year
declined by EUR1 million (approximately 26%) compared to 2019.
-- As no material disposals were completed during the year
(other than our LaVanta divestment and the sale of a land plot in
our Kilada project), the Group's cash position was impacted. Whilst
the Board expects material progress on certain transactions in the
coming weeks, it has taken the prudent step of securing a bridge
loan facility of EUR15 million with two institutional private
credit providers. The Company drew EUR1.75 million from this loan
on 4 June 2021, with the balance remaining available for 45 days
post completion should it be required. Further details on the loan
facility and its basic terms are set out below in section B.2.
The Board's strategy remains to optimise the disposal of the
Company's asset portfolio in order to return capital to
shareholders. The Board is implementing an actionable plan to
accelerate the Company's divestment objectives which were delayed
due to COVID-19, further reduce the Company's operating overheads,
amend the management fee structure to further decrease materially
its fixed component and capitalise on the expected investment
market recovery. Furthermore, Board fees, having been reduced by
25% with effect from 1 April 2020, will be reduced by a further 25
% with effect from 1 July 2021.
The Board believes that it is appropriate that shareholders
should have the opportunity to review the results achieved by the
Board and the Investment Manager and discuss its proposals for the
future of the Company at an early date, taking into account the
results of current asset disposal negotiations. Accordingly, and
following the shareholders' resolution that was passed at the
extraordinary general meeting dated 2 May 2019, the Board will
convene in August 2021 a meeting of shareholders to take place no
later than September 2021, to consider its recommended course of
action and propose an ordinary resolution for the continuation of
the Company. This will enable shareholders to take a holistic view
on the position of the Company and assess the asset monetisation
prospects based on updated information relating to current
discussions.
Commenting, Andrew Coppel CBE, Chairman of Dolphin's Board of
Directors, said:
"The impact of the COVID-19 pandemic to our business has been
material. International travel restrictions and repetitive regional
lockdowns meant that we were unable to complete any significant
portfolio asset disposals. Retail sales and development works were
also greatly impacted.
As restrictions are gradually lifted we expect to resume our
sales initiatives. Development works at OOKI and Kilada will gain
momentum, enhancing their sales potential and enabling us to
deliver better value to shareholders.
We look forward to presenting our plans and proposals to our
shareholders and hold an EGM no later than September 2021 so that
they are provided with the opportunity to consider the future of
the Company."
Miltos Kambourides, Founder of Dolphin and Managing Partner of
Dolphin Capital Partners said:
"Our focus during this difficult year was to progress
construction at OOKI and Kilada, generate retail sales, advance
asset disposals discussions and manage the overall operational
challenges to our business. Although we have been successful in
maintaining a good development pace at both OOKI and Kilada, which
enhances their value and divestment potential, in selling LaVanta
and in closing eight villa sales at OOKI on an off-plan basis, the
execution of our project divestment programme was significantly
impacted. Our recent conclusion of a bridge facility addresses our
medium-term liquidity requirements and will enable us to continue
our plans to monetize our project portfolio in accordance with our
divestment strategy from a position of financial strength when
market conditions permit."
For further information, please contact:
Dolphin Capital Investors
Andrew M Coppel, CBE +44 (0) 7785 577023
Dolphin Capital Partners miltos@dolphincp.com
Miltos E Kambourides
Panmure Gordon (Broker)
Dominic Morley +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 2020 and to provide a trading update.
A.1. Results
Total Group NAV as at 31 December 2020 was EUR157 million and
EUR149 million before and after DTL respectively. This represents a
decrease of EUR24 million (13.2%) and EUR21 million (12.3%),
respectively, from the 31 December 2019 figures.
The loss for the year was mainly due to the EUR10 million
year-end net valuation reduction, EUR9 million share of losses on
equity-accounted investees (primarily Aristo) 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.
A.2. Portfolio
During 2020 the Board and the Investment Manager have focused
their efforts on resuming and progressing construction at OOKI,
commencing works at Kilada and dealing with the effects of the
COVID-19 outbreak on our business. The pandemic resulted in a
slow-down to our ongoing asset-disposal program, weaker Aristo
sales, challenges to our cashflow position, as well as the need to
redefine our sales and marketing strategy in view of the lockdown
measures and travel restrictions.
In spite of these adverse market conditions, we have been able,
within the period, to:
-- divest LaVanta for an aggregate consideration of EUR4.3
million, which is marginally higher than its book value;
-- advance the development of our OOKI and Kilada projects;
-- agree the sale of eight OOKI Private Homes on an off-plan
basis for an aggregate value of EUR26.4 million;
-- complete the sale of a land plot outside the project
perimeter at Kilada for EUR1.5 million; and
-- receive provisional zoning permissions in our Apollo Heights
project and achieve permitting advances in our remaining asset
portfolio.
A.3. Bridge Financing
The ongoing COVID-19 pandemic, and the respective governmental
measures implemented to contain it, have materially impacted our
ability to market and sell our assets over and above the already
challenging market conditions for greenfield real estate
developments in the geography where DCI operates. Given that DCI's
revenue generation capacity is dependent on its ability to sell its
projects, this prolonged situation has impacted the Company's cash
position and reserves.
In order to restore the financial resources available to the
Company and safeguard our ability to continue our operations and
execute our divestment strategy in an orderly manner, we entered
into a EUR15 million facility agreement.
This facility was initiated earlier this year to provide a
fall-back position in the event that no additional sales
materialize by mid-July and with the following factors in mind:
(a) the continued COVID-19 related market uncertainty;
(b) our desire to continue the orderly liquidation process from
a position of financial strength;
(c) our desire not to seek dilutive equity from shareholders at
a time when we are committed to returning capital to them; and
(d) the accounting going-concern requirements of the
Company.
The liquidity that is secured through this facility will enable
us to move forward with our disposal programme without facing cash
constraints, which could otherwise undermine our aim to realize the
maximum possible value for our shareholders. Our intention is to
fully repay any drawn portion of the facility as soon as we are
able to generate adequate sales proceeds from our projects.
A.4. Strategy
Our asset portfolio comprises two basic categories:
-- OOKI, Kilada and Aristo, our three major projects which
constitute in aggregate 73% of the Group's NAV; and,
-- our remaining asset portfolio, which we intend to
opportunistically monetise as soon as practicable taking into
account, inter alia, permitting and zoning status as well as
overall market conditions.
The prospects of generating meaningful distributions to our
shareholders are intrinsically linked to the sale of the Company's
three major projects. The first two of these require an additional
year of development so that they are either operational (in the
case of OOKI) or close to completion (in the case of Kilada). The
development of both these projects is fully financed from presales,
third-party equity and senior bank loans, and works are currently
progressing under turn-key construction contracts. We have explored
the market for potential divestment opportunities with the
assistance of professional advisers engaged on a success basis fee
and have found that the vast majority of both real estate and
private equity investors approached were reluctant to assume any
development risk in view of the construction and operational
challenges caused by the COVID-19 pandemic. Most importantly, they
were unable to visit our projects and perform the required
commercial, technical and legal diligence that would allow them to
proceed with offers. As hospitality investment turnover fell
sharply in 2020, our divestment efforts were also met with
competition from hotel companies disposing of assets in order to
recapitalise, as well as the local secondary non-performing-loan
market in which both private equity funds and family office
investors were active.
Following an analysis of prevailing market conditions with our
advisers, who see a material improvement in sentiment for
investment in the Greek leisure and hospitality market, we believe
that, given the significant sales interest that we have been able
to generate at OOKI, the construction advances in both these assets
during 2021 and the gradual lifting of the COVID-19 travel
restrictions, investor interest will be renewed and we will be in a
position to appeal to a larger investment audience and transact at
valuations reflecting the projects' maturity and intrinsic
value.
In relation to Aristo, its overall sales performance in 2020 has
been adversely impacted by COVID-19 as well as the cancellation of
the Cyprus citizenship investment programme with effect from 1
November 2020. As its main market is China, Aristo has felt the
impact of the pandemic from the beginning of the year due to travel
restrictions imposed on Chinese residents which further culminated
in the global inbound travel ban enacted by the Cyprus government
from March 2020 onwards. The resulting 66% drop in sales revenue on
a year-on-year basis demonstrates the gravity of the situation and
the financial and operational challenges Aristo has had to
face.
Our efforts, in close co-operation with Aristo management, are
to:
-- maximize Aristo's reach to international customers beyond its main, Chinese, market;
-- redesign and redeploy its residential product offering, which
was skewed towards high-end properties appealing to clients
applying for Cypriot passports under the, now defunct, local
citizenship investment program;
-- ensure that we take advantage to the fullest extent possible
of the COVID-19 business relief measures introduced by the Cyprus
government;
-- monitor Aristo's cashflows to meet its expenses without
derailing its ongoing construction activities and the delivery of
sold units to existing clients; and
-- explore potential divestment opportunities in cooperation
with the majority shareholder of the company.
Our remaining portfolio includes Scorpio Bay, Lavender Bay and
Plaka Bay in Greece, Apollo Heights in Cyprus and Livka Bay in
Croatia. All these assets remain essentially greenfield projects.
Our main focus is on monetizing our investments in Apollo Heights
and Livka Bay which are more mature in terms of permitting. There
are currently discussions with interested parties for both these
projects, which, in the case of Apollo, have matured into
negotiations of a share purchase agreement for the full disposal of
our interests in the project.
A.5. Outlook
2020 has been a particularly challenging year for Dolphin and
tested our business resilience, financial management and
operational capabilities on multiple levels. Though we have not
been able to achieve the quantum of disposals we were targeting at
the beginning of the year which would have allowed us to return
funds to our shareholders in line with our divestment strategy, we
were able to make progress in our development works at OOKI and
Kilada, in spite of the pandemic headwinds. We generated a total of
EUR5.8 million from the sale of land in LaVanta and Kilada (of
which EUR2.5 million is due to be paid in June) and sold eight
homes on an off-plan basis at OOKI both during the financial year
and subsequently.
In particular, our ability to execute eight off-plan residential
sales at OOKI with a total value of EUR26.4 million, validates the
quality of the project as well as the resilience of the high-end
integrated hospitality and residential resort model. In the new
social-distancing and remote working landscape that prevails post
the COVID-19 outbreak, we have witnessed that the demand for
quality second-homes remains healthy, as affluent and increasingly
mobile individuals seek fully serviced properties, offering privacy
and longer term use potential. We believe that this theme will
continue and help both our OOKI and our Kilada projects which are
significantly reliant on quality second-home sales.
From a more general market perspective, we note an increasing
number of private equity funds and family offices, actively looking
to expand their exposure to variable hotel income, in resort
locations through the acquisition of properties which are branded
and/or managed by operating partners, thus reducing direct
operational risks. Moreover, the post-pandemic uplift in global
travel and rising proportion of consumer spending on experiences
looks set to endure, and this should further support hospitality
investment volumes and valuations going forward.
In light of the above trends, moving forward into 2021, we
expect that opportunities to acquire newly developed luxury branded
residential resorts, such as OOKI and Kilada, could be scarce due
to the lack of a material development pipeline. Both these core
development projects and our remaining asset portfolio are uniquely
positioned to capitalize on the expected growing investor demand in
our local markets as they combine both the branded/operated
hospitality component and the real estate capital appreciation
aspect.
The Board has been working closely with the Investment Manager
to formulate and implement an actionable plan in order to navigate
the medium-term challenges, further reduce the Company's operating
overheads and capitalise on the expected recovery so as to achieve
tangible divestment results. We will present proposals to
shareholders and hold an EGM no later than September 2021 so that
they are provided with the opportunity to consider the future of
the Company well before the end of the current divestment
period.
Andrew M Coppel CBE
Chairman
Dolphin Capital Investors
7 June 2021
B. Investment Manager's Report
B.1. Business Overview
During the period we focused on enhancing the value of our
portfolio assets, while addressing the day-to-day challenges
presented by COVID-19:
-- progressing construction works at OOKI and Kilada;
-- adjusting our retail and project sales and marketing
strategies at a time of travel restrictions and social distancing
measures;
-- securing liquidity at the DCI level to meet all our operational expenses in the medium-term;
-- making permitting advances across our asset portfolio; and
-- monitoring our operational budgets and reducing overhead costs.
B.2. Bridge Financing
On 3 June 2021, Dolphin entered into a bridge loan facility of
up to EUR15 million with two institutional private credit providers
acting on behalf of their managed and advised funds. The first
tranche of EUR1.75 million has been drawn down while the second
tranche of EUR13.25 million will remain available for 45 days post
signature of the Loan Agreement.
The basic terms of the facility agreement are as follows:
-- interest rate set to 12.5% per annum, payable semi-annually in arrears in equal instalments;
-- initial maturity date falls 18 months from the first loan
draw-down and is subject to a 6-month extension at DCI's option
with a 2% interest step-up;
-- security package includes a fixed and floating charge on DCI
as well as share pledge over DCI's shares in holding companies
owning interests in Kilada, OOKI, Aristo and Apollo;
-- DCI's proceeds from the disposals of any portfolio assets as
well as from any distributions from its direct or indirect
subsidiaries will be used to repay any outstanding debt under the
facility agreement until its full repayment; and
-- standard acceleration and event of default provisions include
illegality, change of control, delisting, fund and manager
termination events, LTNAV covenants and similar terms customary
under bridge facility agreements.
B.3. Major Assets Review
-- One&Only at Kea Island, Greece - www.oneandonlyresorts.com/kea-island
o Construction works continued on the project with the
contractor making considerable progress in all key areas. All
internal access roads have been opened and a large portion of
under-road site infrastructure has been installed. The main
building's lower level which includes kitchens and other back of
house facilities is progressing with internal works, whilst upper
level structural works are being constructed. The 75 guest rooms of
the project are laid out as individual buildings with private
pools. All are currently under construction with the majority
already having their foundations and structural columns built and
approximately one third having all structural works complete.
Mechanical, electrical, stone masons and other works are in
progress in all structurally complete rooms.
o The completion of the mock-up room was an important milestone
which was met in early December 2020. The mock-up room was reviewed
by One&Only and constitutes a tangible blueprint for the
further development of the project as well as a showcase for our
private home clients.
o Due to the COVID-19 impact on the progress of works and the
projected hotel performance, we have decided with our partners at
One&Only to commence the hotel operation in the 2022
season.
o The raising of the profile of the project and more
specifically the One&Only Kea Island Private Homes ("OOKI PHs")
continues in close co-operation with the One&Only sales and
marketing teams and through a number of marketing activities. A
website has been created within the general One&Only website,
including online enquiries, alongside a series of marketing
collateral (printed and digital) showcasing the OOKI PHs available
for sale as well as the destination. An international PR campaign
commenced in October 2019 and this has resulted in extensive
publicity in a number of highly prestigious international
publications including The Times, Vogue and Tatler. Sotheby's
Realty UK has been appointed as an advisor and a number of
initiatives are underway in collaboration with them. The focus has
shifted to online targeted promotional sales actions, including
social media promotion of the OOKI PHs, newsletters, webinars with
journalists and digital meetings with potential clients.
Furthermore, several promotional activities for the PH are underway
in collaboration with One&Only and their resorts which are
currently in operation.
-- Kilada, Greece - www.mykilada.com
o Construction of the Kilada golf course is progressing with
completion of the project targeted in Q3 2022. Despite significant
delays caused by the archaeological department, good progress was
achieved with rough earthworks and shaping of the front nine holes
now complete. In addition, the main road subbase has been built
allowing vehicular access to all first phase lots while the
construction of the secondary road network is under way.
o The infrastructure and golf contractors have mobilized and
commenced works. The Club House works were also tendered in late
2020 and the Contractor has been appointed and will begin works
within Q3 2021. Five sample villa designs were prepared by
prominent Greek architects and are included in the sales materials
of the project.
o The notarial Deed for the acquisition of founder lots in
Kilada by Grivalia Hospitality is expected to be executed
imminently , for a consideration of EUR10 million. Together with
the EUR12 million preferred equity investment into Kilada injected
by an international family office, these are expected to fully meet
all project development costs for phase one.
o The project's PR, sales and marketing planning is underway
with the assistance of branding and marketing consultants. A series
of specific sales activities will commence once the project sales
campaign is officially launched depending on COVID-19 related
travel restrictions.
-- Aristo (a 47.9% affiliate) - www.aristodevelopers.com
o Operating Performance
-- 58 homes and plots were sold during 2020, representing total
sales of EUR17.8 million, down 66% compared to EUR53million in
2019.
-- 37 homes and plots were sold in total up to the end of May
2021, representing total sales of EUR7.5 million, down 17% compared
to EUR9million for the same period in 2020.
-- The main source of clients were China and Other Asia during
2020, representing c. 84% of sales.
Twelve months Twelve months
to 31 December to 31 December 2019
2020
RETAIL SALES
------------------ ---------------- ---------------------
New sales booked EUR17.8m EUR53m
% change (66%)
Units sold 58 98
% change (41%)
CLIENT ORIGIN
------------------ ---------------- ---------------------
China & Other
Asia 84% 76%
MENA 12% 20%
Russia 4% --
Cyprus & Other
EU -- 4%
o As announced on 15 October 2020, the Cyprus government
cancelled the Cyprus citizenship investment programme with effect
from 1 November 2020. The programme allowed foreign investors to
apply for Cypriot citizenship upon making a minimum EUR2 million
investment in, inter alia, Cyprus property. Aristo had a total of
EUR9.6 million in blocked/escrowed funds as at 31 December 2020
(EUR18.2 million at YE 2019) relating to the sale of properties
under the Cyprus citizenship investment programme and expects to
deliver the respective properties to purchasers so that it can draw
on these funds within the next 12 to 18 months.
o Although the Cypriot authorities initially signalled that they
would explore the introduction of alternative investment incentives
to replace the existing citizenship programme, no tangible action
has yet been taken and with the upcoming elections in Cyprus we do
not currently estimate that such a new policy will be implemented
within 2021.
o In order to effectively deal with the combined effect of the
pandemic and the citizenship program cancellation on its sales
revenue, Aristo's management has invested in marketing to
international customers beyond its main Chinese market, and has
undertaken a full redesign of its residential product offering in
order to appeal to a larger client audience by introducing
properties at different pricing points.
o DCI has received in total EUR5.5 million from the deferred
consideration due to it, from the sale of its Venus Rock related
preferred shares to Aristo Ktimatiki (an entity controlled by
Theodore Aristodemou, Chairman of Aristo) which was executed on 23
August 2019. However the outstanding consideration of EUR3.5
million, which was expected to be settled within Q4 2020, was not
received. The Company is exploring all options and is in
discussions with Aristo Ktimatiki with regard to the timing for the
overdue settlement of this receivable.
o The Company is in ongoing discussions in relation to the
structuring and implementation of a potential divestment
transaction for its shareholding in Aristo and will provide further
updates to the market as appropriate.
C. Group Assets
A summary of Dolphin's current investments is presented
below.
PROJECT Land site DCI's Debt Real estate value Loan to real estate
(hectares) stake (EURm) * (EURm) asset value (%)
--------------- ------------ ------- ---------- ------------------ --------------------
1 OOKI 65 33% --
2 Kilada 224 97% --
3 Scorpio Bay 172 100% --
4 Lavender Bay 310 100% --
5 Plaka Bay 442 100% --
6 Apollo Heights 447 100% --
7 Livka Bay 63 100% 6.2
8 LaVanta** 7 100% --
TOTAL 1,730 6.2 158 4%
--------------- ------------ ------- ---------- ------------------ --------------------
Aristo 474 47.9% -- 43
Itacaré n/a 13% -- 1
--------------- ------------ ------- ---------- ------------------ --------------------
GRAND TOTAL 2,204 6.2 202*** 3%
--------------- ------------ ------- ---------- ------------------ --------------------
* Further details on debt maturities are set out under note 23
of the financial statements.
** LaVanta was sold on 10 March 2021, to a local investor for a
net consideration of EUR3.2 million.
***Total real estate value includes equity investments in OOKI.
Aristo and Itacare.
A breakdown of Dolphin's portfolio, as at 31 December 2020, with
certain key metrics is provided below:
COUNTRY Land size (hectares) Debt Real Estate Value % Loan to real estate Net Asset Value
(EUR million) (EUR million) asset value
------------ --------------------- --------------- ------------------ ---------------------- ----------------
1 Greece 1,213 - 121 - 54%
2 Cyprus**** 921 - 55 - 34%
3 Other 70 6.2 26 24% 12%
Grand Total 2,204 6.2 202 3% 100%
------------ --------------------- --------------- ------------------ ---------------------- ----------------
****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
The COVID-19 pandemic continues to present a major adverse
effect on the travel, real estate and hospitality industry. During
2020, we have witnessed a significant reduction in foreign travel
intent, international travel restrictions, governmental lock-down
measures imposed on hotels and resorts in Greece and Cyprus and
supply chain delays which impacted our ongoing construction
activities.
According to the 2021 European Hotel Valuation Index (HVS, April
2021), the spread of the pandemic put a virtual halt to
transactional activity, which achieved less than EUR10 billion in
Europe in 2020 (c. 33% of the 2019 comparable figure).
Similarly hotel revenues have been materially impacted during
2020 albeit are expected to recover somewhat in 2021, posing acute
challenges of paying debt and rent for many owners and operators.
The relatively small hotel development pipeline in Greece, compared
to other European countries, as well as the fact that many pipeline
projects entered the pandemic in the design or planning stage, and
were therefore either deferred or abandoned, is expected to result
in a limited new hospitality project supply in the medium-term thus
creating divestment opportunities for newly completed developments,
especially to the extent that these are branded and include
residential components. Actual transaction quantum and pricing may
vary depending on the physical and operational characteristics of
each asset; however, we expect that luxury residential resorts and
second home development projects will be resilient in terms of
capital value, especially for private equity and family office
investors who are expected to be active in that space.
As the pace of the international vaccination programs picks up,
in spite of the logistical challenges that these have created
within the EU in particular, a number of countries have started
opening up to tourism. Expectations are that the effect of the
pandemic outbreak on the hospitality industry will start to fade
towards the end of the year.
We continue to closely monitor developments in this sphere and
will adjust our operational processes and divestment strategies
accordingly so that we can successfully navigate our business
through the coming months.
E. Future Objectives
The Company's main objectives for 2021 are to:
1. execute further portfolio asset disposals;
2. advance construction at OOKI and achieve more residential sales;
3. progress construction at Kilada and generate plot/villa sales;
4. progress planning and permitting selectively for the remaining portfolio; and
5. effectively manage COVID-19 related challenges.
Miltos Kambourides Pierre Charalambides
Managing Partner Founding Partner
Dolphin Capital Partners Dolphin Capital Partners
7 June 2021 7 June 2021
F. Financial Position for the year ended 31 December 2020
F.1. Consolidated statement of profit or loss for the year ended
31 December 2020
Financial Results
Loss after tax for the period ended 31 December 2020
attributable to owners of the Company amounted to EUR21 million
(2019: Profit of EUR4 million). (Loss)/Profit per share was
EUR(0.02) and EUR0.01 in 2020 and 2019 respectively.
The principal factors affecting the 2020 result were EUR10
million year-end net valuation reduction, EUR9 million share of
losses on equity-accounted investees as well as the Company's 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 2020
31 December 31 December
2020 2019 (Restated)
EUR'000 EUR'000
------------------------------------------ ------------ -----------------
CONTINUING OPERATIONS
------------------------------------------ ------------ -----------------
Revenue 3,570 6,364
------------------------------------------- ------------ -----------------
Cost of sales (2,717) (1,013)
------------------------------------------- ------------ -----------------
Gross profit 853 5,351
------------------------------------------- ------------ -----------------
Disposal of investments 336 630
------------------------------------------- ------------ -----------------
Change in valuations (10,229) (3,386)
------------------------------------------- ------------ -----------------
Other gains 1,654 11,316
------------------------------------------- ------------ -----------------
Investment Manager remuneration (3,600) (4,000)
------------------------------------------- ------------ -----------------
Directors' remuneration (379) (496)
------------------------------------------- ------------ -----------------
Professional fees (2,199) (2,956)
------------------------------------------- ------------ -----------------
Administrative and other expenses (756) (1,027)
------------------------------------------- ------------ -----------------
Depreciation charge (44) (38)
------------------------------------------- ------------ -----------------
Total operating and other expenses (15,217) 43
------------------------------------------- ------------ -----------------
Results from operating activities (14,364) 5,394
------------------------------------------- ------------ -----------------
Finance costs (822) (1,255)
------------------------------------------- ------------ -----------------
Share of losses on equity-accounted
investees, net of tax (8,892) (173)
------------------------------------------- ------------ -----------------
(Loss)/profit before taxation (24,078) 3,966
------------------------------------------- ------------ -----------------
Taxation 2,985 255
------------------------------------------- ------------ -----------------
(Loss)/profit (21,093) 4,221
------------------------------------------- ------------ -----------------
Other comprehensive income
------------------------------------------ ------------ -----------------
Items that are or may be reclassified
subsequently to profit or loss
------------------------------------------ ------------ -----------------
Foreign currency translation differences 104 667
------------------------------------------- ------------ -----------------
Share of revaluation on equity-accounted
investees 208 72
------------------------------------------- ------------ -----------------
Other comprehensive income, net
of tax 312 739
------------------------------------------- ------------ -----------------
Total comprehensive income (20,781) 4,960
------------------------------------------- ------------ -----------------
(Loss)/profit attributable to:
------------------------------------------ ------------ -----------------
Owners of the Company (21,142) 4,317
------------------------------------------- ------------ -----------------
Non-controlling interests 49 (96)
------------------------------------------- ------------ -----------------
(21,093) 4,221
------------------------------------------ ------------ -----------------
Total comprehensive income attributable
to:
------------------------------------------ ------------ -----------------
Owners of the Company (20,899) 5,031
------------------------------------------- ------------ -----------------
Non-controlling interests 118 (71)
------------------------------------------- ------------ -----------------
(20,781) 4,960
------------------------------------------ ------------ -----------------
(Loss)/ EARNINGS per share
------------------------------------------ ------------ -----------------
Basic and diluted (loss)/earnings
per share (EUR) (0.02) 0.01
------------------------------------------- ------------ -----------------
Further analysis of individual revenue and expense items is
provided below.
Revenue
Revenues of EUR3.6 million (31 December 2019: EUR6.4 million),
were derived from the following sources:
31 December 2020 31 December 2019
EUR million EUR million
----------------------------------------- ----------------- -----------------
Sale of trading & investment properties 3.0 0.7
Other income 0.6 5.7
TOTAL 3.6 6.4
Sale of trading & investment properties is attributable to a
sale of a land plot situated outside the Kilada development
perimeter at a price of EUR1.5 million and the remainder to LaVanta
sales.
Other income in 2020 is mainly attributable to EUR0.5 million
proceeds from the sale of Venus Rock related preferred shares to
Aristo Ktimatiki while in 2019 the respective figure was EUR5
million.
Cost of sales
Cost of sales comprises the following:
31 December 31 December
2020 EURmillion 2019 EURmillion
---------------------------------- ----------------- -----------------
Cost of sales related to:
Sales of trading and investment
properties 2.2 0.7
Personnel expenses 0.5 0.3
TOTAL 2.7 1.0
Professional Fees
The charge for the period was EUR2.2 million (31 December 2019:
EUR3 million) and comprises the following:
31 December 2020 31 December 2019
EUR million EUR million
------------------------------------- ----------------- -----------------
Legal and Administrator fees 0.5 0.6
Auditors' remuneration 0.4 0.4
Accounting expenses 0.2 0.2
Project design and development fees 0.7 1.3
Consultancy fees 0.1 0.1
Other professional fees 0.3 0.4
------------------------------------- ----------------- -----------------
TOTAL 2.2 3.0
Administrative and other expenses
The administrative and other expenses amounted to EUR0.8 million
(31 December 2019: EUR1 million) and are analysed as follows:
31 December 2020 31 December 2019
EUR million EUR million
------------------------------------ ----------------- -----------------
Travelling and accommodation 0.1 0.1
Marketing and advertising expenses 0.1 0.1
Immovable property and other taxes 0.2 0.3
Rents 0.1 0.1
Other 0.3 0.4
------------------------------------ ----------------- -----------------
TOTAL 0.8 1.0
Change in valuations
Change in valuations amounted to EUR10.2million (31 December
2019: EUR3.4 million) and are analysed as follows:
31 December 2020 31 December 2019
EUR million (restated) EUR million
-------------------------------------------------------------- ----------------- ------------------------
(Loss)/gain in fair value of investment property (18.3) 8.5
Impairment loss on trading properties (1.2) (0.8)
Reversal of/ (impairment loss) on equity-accounted investees 9.4 (1.3)
Impairment loss of property, plant and equipment (0.1) (9.8)
TOTAL (10.2) (3.4)
F.2. Consolidated statement of financial position as at 31
December 2020
31 December 31 December
2020 2019
(Restated)
EUR'000 EUR'000
---------------------------------------- ------------ ------------
Assets
----------------------------------- ---- ------------ ------------
Property, plant and equipment 4,855 2,647
----------------------------------------- ------------ ------------
Investment property 76,303 96,601
----------------------------------------- ------------ ------------
Equity-accounted investees 60,674 59,943
----------------------------------------- ------------ ------------
Other investments 655 -
----------------------------------- ---- ------------ ------------
Non-current assets 142,487 159,191
----------------------------------------- ------------ ------------
Trading properties 59,769 60,826
----------------------------------------- ------------ ------------
Receivables and other assets 1,330 1,452
----------------------------------------- ------------ ------------
Cash and cash equivalents 1,661 2,854
----------------------------------------- ------------ ------------
Assets held for sale - 2,139
----------------------------------------- ------------ ------------
Current assets 62,760 67,271
========================================= ============ ============
Total assets 205,247 226,462
----------------------------------------- ------------ ------------
Equity
----------------------------------- ---- ------------ ------------
Share capital 9,046 9,046
----------------------------------------- ------------ ------------
Share premium 569,847 569,847
========================================= ============ ============
Retained deficit (439,047) (417,905)
========================================= ============ ============
Other reserves 8,802 8,559
----------------------------------------- ------------ ------------
Equity attributable to owners of
the Company 148,648 169,547
----------------------------------------- ------------ ------------
Non-controlling interests 6,523 5,681
----------------------------------------- ------------ ------------
Total equity 155,171 175,228
----------------------------------------- ------------ ------------
Liabilities
----------------------------------- ---- ------------ ------------
Loans and borrowings 2,802 -
----------------------------------- ---- ------------ ------------
Lease liabilities 3,376 3,028
----------------------------------------- ------------ ------------
Deferred tax liabilities 8,000 11,027
----------------------------------------- ------------ ------------
Trade and other payables 20,366 20,529
----------------------------------------- ------------ ------------
Deferred revenue 109 433
----------------------------------------- ------------ ------------
Non-current liabilities 34,653 35,017
----------------------------------------- ------------ ------------
Loans and borrowings 6,244 6,644
----------------------------------------- ------------ ------------
Lease liabilities 29 8
----------------------------------------- ------------ ------------
Trade and other payables 9,150 6,289
----------------------------------------- ------------ ------------
Liabilities held for sale - 3,276
----------------------------------------- ------------ ------------
Current liabilities 15,423 16,217
----------------------------------------- ------------ ------------
Total liabilities 50,076 51,234
----------------------------------------- ------------ ------------
Total equity and liabilities 205,247 226,462
----------------------------------------- ------------ ------------
Net asset value ('NAV') per share
(EUR) 0.16 0.19
----------------------------------------- ------------ ------------
The reported NAV as at 31 December 2020 is presented below:
As at As at Variation since
31 December 2020 31 December 2019 31 December 2019
EUR GBP EUR GBP EUR% GBP%
--------------------------------- ---------- --------- --------------------- ----------- --------
Total NAV before DTL (million) 157 142 181 154 (13.2)% (8.1%)
--------------------------------- ---------- --------- ---------- --------- ----------- --------
Total NAV after DTL (million) 149 135 170 145 (12.3)% (7.1)%
--------------------------------- ---------- --------- ---------- --------- ----------- --------
NAV per share before DTL 0.17 0.16 0.20 0.17 (13.2)% (8.1%)
--------------------------------- ---------- --------- ---------- --------- ----------- --------
NAV per share after DTL 0.16 0.15 0.19 0.16 (12.3)% (7.1)%
___________
Notes:
1. Euro/GBP rate 0.90453 as at 31 December 2020 and 0.85369 as at 31 December 2019.
2. NAV per share has been calculated on the basis of 904,626,856
issued shares as at 31 December 2020 and as at 31 December
2019.
Total Group NAV as at 31 December 2020 was EUR157 million and
EUR149 million before and after DTL respectively. This represents a
decrease of EUR24 million (13.2%) and EUR21 million (12.3%),
respectively, from the 31 December 2019 figures.
Sterling NAV per share as at 31 December 2020 was 16p before DTL
and 15p after DTL and decreased by 8.1% and 7.1%, before and after
DTL respectively compared to the 31 December 2019 figures. The
depreciation of Sterling versus the Euro during the period of
approximately 6% has partially offset the valuation write-downs on
certain portfolio assets and other operational, corporate, finance
and management expenses of the Group.
The Company's consolidated assets of EUR205 million include
EUR141 million of real estate assets, EUR60 million of equity-
accounting investees (which represents the 33% investment in Kea
Resort as well as the Company's 47.9% interest in Aristo), EUR1
million of other assets (trade and other receivables), EUR1 million
of other
investments which represents the Company's investment in Itacare and EUR2 million in cash.
The figure of EUR141 million of real estate assets (property,
plant and equipment, trading properties and investment property)
represents the independent property valuations conducted as at 31
December 2020 by American Appraisal (for the Greek and Cypriot
projects) for both freehold and long leasehold interests of Kilada,
Scorpio Bay, Lavender Bay, Apollo Heights and Plaka Bay projects as
well as the appraised value of LaVanta and Livka Bay (Colliers
International conducted the independent property valuation for
Turkey and Croatia).
The Company's consolidated liabilities (excluding DTL) total
EUR42 million and mainly comprise EUR12 million of interest bearing
loans and finance lease obligations. All loans are held by Group
subsidiaries and are non-recourse to Dolphin. The EUR30 million of
trade and other payables 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 2020
31 December 31 December
2020 2019
(Restated)
Note EUR'000 EUR'000
------------------------------------------ ------ ------------ ------------
Continuing operations
------------------------------------------ ------ ------------ ------------
Revenue 6 3,570 6,364
------------------------------------------ ------ ------------ ------------
Cost of sales 7 (2,717) (1,013)
------------------------------------------ ------ ------------ ------------
Gross profit 853 5,351
------------------------------------------ ------ ------------ ------------
Disposal of investments 8A 336 630
------------------------------------------ ------ ------------ ------------
Change in valuations 8 B (10,229) (3,386)
------------------------------------------ ------ ------------ ------------
Other gains 8C 1,654 11,316
------------------------------------------ ------ ------------ ------------
Investment Manager remuneration 29.2 (3,600) (4,000)
------------------------------------------ ------ ------------ ------------
Directors' remuneration 29 .1 (379) (496)
------------------------------------------ ------ ------------ ------------
Professional fees 10 (2,199) (2,956)
------------------------------------------ ------ ------------ ------------
Administrative and other expenses 11 (756) (1,027)
------------------------------------------ ------ ------------ ------------
Depreciation charge 15 (44) (38)
------------------------------------------ ------ ------------ ------------
Total operating and other expenses (15,217) 43
------------------------------------------ ------ ------------ ------------
Results from operating activities (14,364) 5,394
------------------------------------------ ------ ------------ ------------
Finance costs 12 (822) (1,255)
------------------------------------------ ------ ------------ ------------
Share of losses on equity-accounted
investees, net of tax 18 (8,892) (173)
------------------------------------------ ------ ------------ ------------
(Loss)/profit before taxation (24,078) 3,966
------------------------------------------ ------ ------------ ------------
Taxation 13 2,985 255
------------------------------------------ ------ ------------ ------------
(Loss)/profit (21,093) 4,221
------------------------------------------ ------ ------------ ------------
Other comprehensive income
------------------------------------------ ------ ------------ ------------
Items that are or may be reclassified
subsequently to profit or loss
------------------------------------------ ------ ------------ ------------
Foreign currency translation differences 12 104 667
------------------------------------------ ------ ------------ ------------
Share of revaluation on equity-accounted
investees 18 208 72
------------------------------------------ ------ ------------ ------------
Other comprehensive income, net
of tax 312 739
------------------------------------------ ------ ------------ ------------
Total comprehensive income (20,781) 4,960
------------------------------------------ ------ ------------ ------------
(Loss)/profit attributable to:
------------------------------------------ ------ ------------ ------------
Owners of the Company (21,142) 4,317
------------------------------------------ ------ ------------ ------------
Non-controlling interests 49 (96)
------------------------------------------ ------ ------------ ------------
(21,093) 4,221
========================================== ====== ============ ============
Total comprehensive income attributable
to:
------------------------------------------ ------ ------------ ------------
Owners of the Company (20,899) 5,031
------------------------------------------ ------ ------------ ------------
Non-controlling interests 118 (71)
========================================== ====== ============ ============
(20,781) 4,960
========================================== ====== ============ ============
(Loss)/ EARNINGS per share
------------------------------------------ ------ ------------ ------------
Basic and diluted (loss) / earnings
per share (EUR) 14 (0.02) 0.01
------------------------------------------ ------ ------------ ------------
Consolidated statement of financial position
As at 31 December 2020
31 December 31 December
2020 2019
(Restated)
Note EUR'000 EUR'000
----------------------------------- ----- ------------ ------------
Assets
----------------------------------- ----- ------------ ------------
Property, plant and equipment 15 4,855 2,647
----------------------------------- ----- ------------ ------------
Investment property 16 76,303 96,601
----------------------------------- ----- ------------ ------------
Equity-accounted investees 18 60,674 59,943
----------------------------------- ----- ------------ ------------
Other investments 17 655 -
----------------------------------- ----- ------------ ------------
Non-current assets 142,487 159,191
----------------------------------- ----- ------------ ------------
Trading properties 19 59,769 60,826
----------------------------------- ----- ------------ ------------
Receivables and other assets 20 1,330 1,452
----------------------------------- ----- ------------ ------------
Cash and cash equivalents 21 1,661 2,854
----------------------------------- ----- ------------ ------------
Assets held for sale 17 - 2,139
----------------------------------- ----- ------------ ------------
Current assets 62,760 67,271
----------------------------------- ----- ------------ ------------
Total assets 205,247 226,462
=================================== ===== ============ ============
Equity
----------------------------------- ----- ------------ ------------
Share capital 22 9,046 9,046
----------------------------------- ----- ------------ ------------
Share premium 22 569,847 569,847
----------------------------------- ----- ------------ ------------
Retained deficit (439,047) (417,905)
=================================== ===== ============ ============
Other reserves 8,802 8,559
=================================== ===== ============ ============
Equity attributable to owners of
the Company 148,648 169,547
----------------------------------- ----- ------------ ------------
Non-controlling interests 6,523 5,681
----------------------------------- ----- ------------ ------------
Total equity 155,171 175,228
----------------------------------- ----- ------------ ------------
Liabilities
----------------------------------- ----- ------------ ------------
Loans and borrowings 23 2,802 -
----------------------------------- ----- ------------ ------------
Lease liabilities 25 3,376 3,028
----------------------------------- ----- ------------ ------------
Deferred tax liabilities 24 8,000 11,027
----------------------------------- ----- ------------ ------------
Trade and other payables 2 7 20,366 20,529
----------------------------------- ----- ------------ ------------
Deferred revenue 26 109 433
----------------------------------- ----- ------------ ------------
Non-current liabilities 34,653 35,017
----------------------------------- ----- ------------ ------------
Loans and borrowings 23 6,244 6,644
----------------------------------- ----- ------------ ------------
Lease liabilities 2 5 29 8
----------------------------------- ----- ------------ ------------
Trade and other payables 2 7 9,150 6,289
----------------------------------- ----- ------------ ------------
Liabilities held for sale 17 - 3,276
----------------------------------- ----- ------------ ------------
Current liabilities 15,423 16,217
----------------------------------- ----- ------------ ------------
Total liabilities 50,076 51,234
----------------------------------- ----- ------------ ------------
Total equity and liabilities 205,247 226,462
----------------------------------- ----- ------------ ------------
Net asset value ('NAV') per share
(EUR) 28 0.16 0.19
----------------------------------- ----- ------------ ------------
Consolidated statement of changes in equity
For the year ended 31 December 2020
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 2019 9,046 569,847 7,566 279 ( 422,222 ) 164,516 5, 752 170,268
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Total comprehensive
income
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Profit/(loss) - - - - 4,317 4,317 (96) 4,221
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Other comprehensive
income
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Share of
revaluation on
equity-accounted
investees - - - 47 - 47 25 72
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Foreign currency
translation
differences - - 667 - - 667 - 667
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Total other
comprehensive
income - - 667 47 - 714 25 739
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Total comprehensive
income - - 667 47 4,317 5,031 (71) 4,960
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Balance at 31
December 2019 9,046 569,847 8,233 326 (417,905) 169,547 5,681 175,228
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Balance at 1
January 2020 9,046 569,847 8,233 326 (417,905) 169,547 5,681 175,228
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Total comprehensive
income
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
(Loss)/profit - - - - (21,142) (21,142) 49 (21,093)
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Other comprehensive
income
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Share of
revaluation on
equity-accounted
investees - - - 139 - 139 69 208
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Foreign currency
translation
differences - - 104 - - 104 - 104
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Total other
comprehensive
income - - 104 139 - 243 69 312
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Total comprehensive
income - - 104 139 (21,142) (20,899) 118 (20,781)
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
TRANSACTIONS WITH
OWNERS OF THE
COMPANY
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Changes in
ownership interests
in subsidiaries
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Disposal of
interests without
a change in
control - - - - - - 724 724
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Total transactions
with owners of the
Company - - - - - - 724 724
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Balance at 31
December 2020 9,046 569,847 8,337 465 (439,047) 148,648 6,523 155,171
-------------------- -------- -------- ------------ ------------ ------------ --------- ---------------- ---------
Consolidated statement of cash flows
For the year ended 31 December 2020
31 December 2020 31 December 2019
(Restated)
Note EUR'000 EUR'000
------------------------------------------------------------------------- ----- ----------------- -----------------
Cash flows from operating activities
------------------------------------------------------------------------- ----- ----------------- -----------------
(Loss)/profit (21,093) 4,221
------------------------------------------------------------------------- ----- ----------------- -----------------
Adjustments for:
------------------------------------------------------------------------- ----- ----------------- -----------------
Loss/(gain) in fair value of investment property 18,295 (8,528)
========================================================================= ===== ================= =================
Impairment loss on trading properties 1,269 813
------------------------------------------------------------------------- ----- ----------------- -----------------
Gain on disposal of investment in subsidiaries (336) (630)
------------------------------------------------------------------------- ----- ----------------- -----------------
Impairment loss property, plant and equipment 80 9,796
------------------------------------------------------------------------- ----- ----------------- -----------------
(Reversal of)/impairment loss on equity-accounted investees (9,415) 1,305
------------------------------------------------------------------------- ----- ----------------- -----------------
Gain on extinguishment of loan payable - (9,576)
------------------------------------------------------------------------- ----- ----------------- -----------------
Depreciation charge 44 38
------------------------------------------------------------------------- ----- ----------------- -----------------
Interest expense 649 460
------------------------------------------------------------------------- ----- ----------------- -----------------
Exchange difference 352 806
------------------------------------------------------------------------- ----- ----------------- -----------------
Share of losses on equity-accounted investees, net of tax 8,892 173
------------------------------------------------------------------------- ----- ----------------- -----------------
Taxation (2,985) (255)
------------------------------------------------------------------------- ----- ----------------- -----------------
(4,248) (1,377)
------------------------------------------------------------------------- ----- ----------------- -----------------
Changes in:
------------------------------------------------------------------------- ----- ----------------- -----------------
Receivables 122 1,298
------------------------------------------------------------------------- ----- ----------------- -----------------
Payables 1,027 (1,327)
------------------------------------------------------------------------- ----- ----------------- -----------------
Deferred revenue (324) 433
------------------------------------------------------------------------- ----- ----------------- -----------------
Cash used in operating activities (3,423) (973)
========================================================================= ===== ================= =================
Tax received 15 23
------------------------------------------------------------------------- ----- ----------------- -----------------
Interest paid (217) (162)
------------------------------------------------------------------------- ----- ----------------- -----------------
Net cash used in operating activities (3,625) (1,112)
------------------------------------------------------------------------- ----- ----------------- -----------------
Cash flows from investing activities
------------------------------------------------------------------------- ----- ----------------- -----------------
Net p roceeds from disposal of subsidiaries, net of cash disposed of (1) 3,577
------------------------------------------------------------------------- ----- ----------------- -----------------
Net disposals of investment property 1,605 671
------------------------------------------------------------------------- ----- ----------------- -----------------
Net acquisitions of property, plant and equipment (1,979) (119)
------------------------------------------------------------------------- ----- ----------------- -----------------
Net change in trading properties (212) (424)
------------------------------------------------------------------------- ----- ----------------- -----------------
Net proceeds from other investments 160 -
------------------------------------------------------------------------- ----- ----------------- -----------------
Net change in net assets held for sale - 588
------------------------------------------------------------------------- ----- ----------------- -----------------
Net cash (used in)/from investing activities (427) 4,293
------------------------------------------------------------------------- ----- ----------------- -----------------
Cash flows from financing activities
------------------------------------------------------------------------- ----- ----------------- -----------------
Repayment of loans and borrowings (250) (8,024)
------------------------------------------------------------------------- ----- ----------------- -----------------
Proceeds from issue of redeemable preference shares 3,500
------------------------------------------------------------------------- ----- ----------------- -----------------
Transaction costs related to loans and borrowings (105)
------------------------------------------------------------------------- ----- ----------------- -----------------
Payment of lease liabilities (8) (66)
------------------------------------------------------------------------- ----- ----------------- -----------------
Interest paid (278) (531)
========================================================================= ===== ================= =================
Net cash from/(used in) financing activities 23 2,859 (8,621)
------------------------------------------------------------------------- ----- ----------------- -----------------
Net decrease in cash and cash equivalents (1,193) (5,440)
------------------------------------------------------------------------- ----- ----------------- -----------------
Cash and cash equivalents at 1 January 2,854 8,294
------------------------------------------------------------------------- ----- ----------------- -----------------
Cash and cash equivalents at 31 December 1,661 2,854
========================================================================= ===== ================= =================
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) 1,661 2,854
------------------------------------------------------------------------- ----- ----------------- -----------------
Cash and cash equivalents at the end of the year 1,661 2,854
========================================================================= ===== ================= =================
Notes to the consolidated financial statements
For the year ended 31 December 2020
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 2020 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 04 June 2021.
b. Basis of preparation
The consolidated financial statements of the Company for the
year ended 31 December 2020 have been prepared taking into account
the Group's intention to dispose of all of its assets by 31
December 2021, as further explained below. The basis of preparation
used continues to be in accordance with IFRS as adopted by the
EU.
Based on the Group's asset strategy, the Company's objective is
to dispose of all of the Group's assets by 31 December 2021. The
allocation of any additional capital investment into any of the
Group's projects will be substantially sourced from third party
capital providers and with the sole objective of enhancing the
respective asset's realisation potential until 31 December 2021.
The Board expects to return the proceeds from asset disposals to
shareholders as the orderly realisation of the Group's assets
progresses after taking into account the Group's liquidity position
and working capital requirements. In the event that any assets are
still held by the Group shortly before 31 December 2021, the Board
will convene a shareholders' meeting at which appropriate
resolutions for the future of the Group will be proposed.
c. Basis of measurement
The consolidated financial statements have been prepared under
the historical cost convention, with the exception of property
(investment property and property, plant and equipment), which are
stated at their fair values.
d. Adoption of new and revised standards and interpretations
As from 1 January 2020, 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
Group.
The following standards, amendments to standards and
interpretations have been issued but are not yet effective for
annual periods beginning on 1 January 2020. 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 9 'Financial Instruments' (Amendments), IAS 39 'Financial
Instruments: Recognition and Measurement' (Amendments) and IFRS 7
'Financial Instruments: Disclosures' (Amendments): Interest Rate
Benchmark Reform - Phase 2 (effective for annual periods beginning
on or after 1 January 2021)
The objective of the amendments is to assist entities with
providing useful information to users of financial statements and
to support preparers in applying IFRS when changes are made to
contractual cash flows or hedging relationships, as a result of the
transition from an interbank offered rate (IBOR) benchmark rate to
alternative benchmark rates, in the context of the ongoing
risk-free rate reform (referred to as 'IBOR reform'). The Phase 2
amendments principally address the following issues:
-- The amendments introduce a practical expedient if a change
results directly from IBOR reform and occurs on an 'economically
equivalent' basis. In these cases, changes will be accounted for by
updating the effective interest rate.
-- The amendments also allow a series of exemptions from the
regular, strict rules around hedge accounting. For example, a
company will not need to discontinue existing hedging relationships
because of changes to hedge documentation required solely by IBOR
reform. Therefore, when a hedged risk changes due to benchmark
reform, a company may update the hedge documentation to reflect the
new benchmark rate and the hedge may be able to continue without
interruption. However, similar to the Phase 1 amendments, there is
no exception from the measurement requirements that apply for the
hedged items and hedging instruments under IFRS 9 or IAS 39. Once
the new benchmark rate is in place, the hedged items and hedging
instruments are remeasured based on the new rate and any hedge
ineffectiveness will be recognised in profit or loss.
-- Additional disclosure requirements were added to IFRS 7 with
the objective of enabling users of financial statements to assess
the nature and extent of risks arising from the IBOR reform to
which an entity is exposed, and how it manages those risks. In
addition, the disclosures should assist users in assessing an
entity's progress in completing the transition to alternative
benchmark rates, and how an entity is managing that transition.
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.
(ii) Standards and interpretations not adopted by the EU
IFRS 3 "Business Combinations" (Amendments), IAS 16 "Property,
Plant and Equipment" (Amendments), IAS 37 "Provisions, Contingent
Liabilities and Contingent Assets" (Amendments), Annual
Improvements 2018-2020 (effective for annual periods beginning on
or after 1 January 2022)
The amendments to IFRS 3 update a reference in IFRS 3 to the
Conceptual Framework for Financial Reporting without changing the
accounting requirements for business combinations. The amendments
to IAS 16 prohibit a company from deducting from the cost of
property, plant and equipment amounts received from selling items
produced while the company is preparing the asset for its intended
use. Instead, a company will recognise such sales proceeds and
related cost in profit or loss. The amendments to IAS 37 specify
which costs a company includes when assessing whether a contract
will be loss-making. Annual Improvements contain minor amendments
to IFRS 1, IFRS 9, IAS 41 and the Illustrative Examples
accompanying IFRS 16. 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 "Presentation of Financial Statements" (Amendments):
Classification of Liabilities as Current or Non-current (effective
for annual periods beginning on or after 1 January 2023)
IASB has amended IAS 1 to promote consistency in application and
clarify the requirements on determining if a liability is current
or non-current. Under existing IAS 1 requirements, companies
classify a liability as current when they do not have an
unconditional right to defer settlement of the liability for at
least twelve months after the end of the reporting period. As part
of its amendments, the IASB has removed the requirement for a right
to be unconditional and instead, now requires that a right to defer
settlement must have substance and exist at the end of the
reporting period. 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 10 "Consolidated Financial Statements" (Amendments) and IAS
28 "Investments in Associates and Joint Ventures" (Amendments):
Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture (effective date postponed
indefinitely)
The amendments address an acknowledged inconsistency between the
requirements in IFRS 10 and those in IAS 28, in dealing with the
sale or contribution of assets between an investor and its
associate or joint venture. The main consequence of the amendments
is that a full gain or loss is recognised when a transaction
involves a business (as defined in IFRS 3). A partial gain or loss
is recognised when a transaction involves assets that do not
constitute a business. In December 2015, the IASB postponed the
effective date of this amendment indefinitely pending the outcome
of its research project on the equity method of accounting. 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.
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 forecast
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
repayment extension on existing ones, until planned asset sales are
realised and proceeds received.
As stated in note 9, the slowdown in economic activity and
transportation restrictions in all the countries where the Group
operates due to COVID-19 outbreak, is expected to have a
significant impact on both its ability to complete the construction
of its ongoing projects in a timely manner as well as hinder its
efforts to realise transactions for the disposal of its portfolio
assets.
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 observable market 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 5.17 - revenue recognition;
- Note 5.25 - 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.
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 2020, 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 One Limited Kilada Hills Golf
('MCO 1') Resort Cyprus 96%
======================================= ===================== =============== =============
Kilada Hills Golf
MindCompass Overseas S.A. Resort Greece 96%
======================================= ===================== =============== =============
Kilada Hills Golf
MindCompass Overseas Two S.A. Resort Greece 100%
======================================= ===================== =============== =============
Kilada Hills Golf
MindCompass Parks S.A. Resort Greece 100%
======================================= ===================== =============== =============
Dolphin Capital Greek Collection Kilada Hills Golf
Limited Resort Cyprus 100%
======================================= ===================== =============== =============
DCI Holdings One Limited Aristo Developers BVIs 100%
======================================= ===================== =============== =============
D.C. Apollo Heights Polo and Apollo Heights
Country Resort Limited Resort Cyprus 100%
======================================= ===================== =============== =============
Apollo Heights
Symboula Estates Limited ('Symboula') 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%
======================================= ===================== =============== =============
La Vanta- Mediterra
DolphinLux 2 S.a.r.l. Resorts Luxembourg 100%
======================================= ===================== =============== =============
Kalkan Yapi ve Turizm A.S. La Vanta- Mediterra
('Kalkan') Resorts Turkey 100%
======================================= ===================== =============== =============
Single Purpose Vehicle Ten
Limited ('SPV 10 ' ) One&Only Kea Resort Cyprus 67%
======================================= ===================== =============== =============
The above shareholding interest percentages are rounded to the
nearest integer.
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 re-measured, 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 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.
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.
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 Leases
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration.
At commencement or on modification of a contract that contains a
lease component, the Group allocates the consideration in the
contract to each lease component on the basis of its relative
stand-alone prices. However, for the leases of property the Group
has elected not to separate non-lease components and account for
the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the
lease term, unless the lease transfers ownership of the underlying
asset to the Group by the end of the lease term or the cost of the
right-of-use asset reflects that the Group will exercise a purchase
option. In that case the right-of-use asset will be depreciated
over the useful life of the underlying asset, which is determined
on the same basis as those of property and equipment. In addition,
the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the
lease liability.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. Generally, the Group uses its incremental borrowing
rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining
interest rates from various external financing sources and makes
certain adjustments to reflect the terms of the lease and type of
the asset leased.
Lease payments included in the measurement of the lease
liability comprise the following:
- fixed payments, including in-substance fixed payments;
- variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement
date;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Group is
reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an
extension option, and penalties for early termination of a lease
unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the
effective interest method. It is re-measured when there is a change
in future lease payments arising from a change in an index or rate,
if there is a change in the Group's estimate of the amount expected
to be payable under a residual value guarantee, if the Group
changes its assessment of whether it will exercise a purchase,
extension or termination option or if there is a revised
in-substance fixed lease payment.
When the lease liability is re-measured in this way, a
corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced to
zero.
The Group presents right-of-use assets that do not meet the
definition of investment property in 'property, plant and
equipment' and lease liabilities in 'loans and borrowings' in the
statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and
lease liabilities for leases of low-value assets and short-term
leases, including IT equipment. The Group recognises the lease
payments associated with these leases as an expense on a
straight-line basis over the lease term.
5.10 Financial instruments
Recognition and initial measurement
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.
Classification and subsequent measurement
Financial assets
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. 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.
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.
Financial assets - 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.
Financial assets - 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.
Financial assets - 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.
Financial liabilities - Classification, subsequent measurement
and gains and losses
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as at FVTPL if
it is classified as held-for-trading, it is a derivative or it is
designated as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit or loss.
Other financial liabilities are subsequently measured at amortised
cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognised in profit or loss.
Any gain or loss on derecognition is also recognised in profit or
loss.
The financial liabilities of the Group are measured as
follows:
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.
Trade and other payables
Trade and other payables are stated at their cost.
Derecognition
Financial assets
The Group derecognises a financial asset when the contractual
rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks
and rewards of ownership and it does not retain control of the
financial asset.
The Group enters into transactions whereby it transfers assets
recognised in its statement of financial position, but retains
either all or substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred assets are not
derecognised.
Financial liabilities
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled, or expire. The
Group also derecognises a financial liability when its terms are
modified and the cash flows of the modified liability are
substantially different, in which case a new financial liability
based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference
between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed)
is recognised in profit or loss.
5.11 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.
5.12 Dividends
Dividends are recognised as a liability in the period in which
they are declared and approved and are subtracted directly from
retained earnings.
5.13 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.
5.14 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.
5.15 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.
5.16 Impairment
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.
5.17 Revenue recognition
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.
5.18 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.
5.19 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.
5.20 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.
5.21 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.
5.22 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.
5.23 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.
5.24 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.
5.25 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.
5.26 Comparatives
Comparative figures have been reclassified to reflect the
required changes in presentation in relation to the classification
of Azurna (owner of 'LivkaBay') in Croatia and DCI Holdings Two
Limited (owner of 'Aristo') out of disposal groups held for sale
(see note 17).
6. revenue
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
------------------------------------------- ---------------- ----------------
Sale of trading and investment properties 2,943 6 45
------------------------------------------- ---------------- ----------------
Income from DCI H2 (see note 18) 500 5, 000
------------------------------------------- ---------------- ----------------
Other income 127 719
------------------------------------------- ---------------- ----------------
Total 3,570 6,364
------------------------------------------- ---------------- ----------------
No revenue has been recognised during 2020, that was included in
deferred revenue at 31 December 2019.
7. COST OF SALES
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
-------------------------------------------- ---------------- ----------------
Sales of trading and investment properties 2,170 7 05
-------------------------------------------- ---------------- ----------------
Personnel expenses (see below) 547 284
-------------------------------------------- ---------------- ----------------
Other operating expenses - 2 4
============================================ ================ ================
Total 2,717 1,013
-------------------------------------------- ---------------- ----------------
Personnel expenses
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
------------------------------------------ ---------------- ----------------
Wages and salaries 398 223
------------------------------------------ ---------------- ----------------
Compulsory social security contributions 51 32
------------------------------------------ ---------------- ----------------
Other personnel costs 98 29
------------------------------------------ ---------------- ----------------
Total 547 284
========================================== ================ ================
The average number of employees employed
by the Group during the year was 20 6
========================================== ================ ================
8. INCOME AND EXPENSES
a. Disposal of investments
Note From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
------------------------------------------------ ----- ---------------- ----------------
Gain on disposal of investment in subsidiaries 31 336 630
------------------------------------------------ ----- ---------------- ----------------
Total 336 630
------------------------------------------------ ----- ---------------- ----------------
b. Change in valuations
Note From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
(Restated)
EUR'000 EUR'000
---------------------------------------------------- ----- ---------------- ----------------
(Loss)/gain in fair value of investment
property 16 (18,295) 8,528
---------------------------------------------------- ----- ---------------- ----------------
Impairment loss on trading properties 19 (1,269) (813)
---------------------------------------------------- ----- ---------------- ----------------
Reversal of/ (impairment loss) on equity-accounted
investees 18 9,415 (1,305)
---------------------------------------------------- ----- ---------------- ----------------
Impairment loss of property, plant and
equipment 15 (80) (9,796)
---------------------------------------------------- ----- ---------------- ----------------
Total (10,229) (3,386)
---------------------------------------------------- ----- ---------------- ----------------
c. Other gains
Note From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
------------------------------------- ----- ---------------- ----------------
Gain on settlement of Symboula loan 23 - 9,576
------------------------------------- ----- ---------------- ----------------
Other gains 1,654 1,740
------------------------------------- ----- ---------------- ----------------
Total 1,654 11,316
------------------------------------- ----- ---------------- ----------------
9. SEGMENT REPORTING
As at 31 December 2020 and 31 December 2019, the Group is not
considered to have reportable operating segments that require
disclosure. The Group has one business and geographical segment
focusing on achieving capital growth through investing in
residential resort developments primarily in south-east Europe.
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 2019 and 2020, with both international tourism and
wealth continuing to grow, even though economic activity in two of
the Group's primary markets, Greece and Cyprus, continued to face
significant challenges.
The above does not take into account the impact that the
COVID-19 outbreak will have on the travel and hospitality industry
in all these jurisdictions in 2020 and beyond.
On 11 March 2020, the World Health Organisation declared the
Coronavirus COVID-19 outbreak to be a pandemic in recognition of
its rapid spread across the globe. Many governments have been
taking increasingly stringent steps to help contain the spread of
the virus, including: requiring self-isolation/ quarantine by those
potentially affected, implementing social distancing measures, and
controlling or closing borders and 'locking-down' cities/regions or
even entire countries as well as actively trying to accelerate the
vaccination progress.
The COVID-19 outbreak had a major effect on the travel, real
estate and hospitality industries. The Group has witnessed a
significant reduction in foreign travel intent, complied with
governmental lock-down measures imposed on hotels and resorts in
Greece and been affected by supply chain delays which have impacted
the Group's ongoing construction activities.
The slowdown in economic activity and transportation
restrictions in all the countries where the Group operates has had
a significant impact on both its ability to complete the
construction of its ongoing projects in a timely manner as well as
hindered its efforts to realise transactions for the disposal of
its portfolio assets.
10. PROFESSIONAL FEES
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
------------------------------------- ---------------- ----------------
Legal fees 466 539
-------------------------------------- ---------------- ----------------
Auditors' remuneration (see below) 353 382
-------------------------------------- ---------------- ----------------
Accounting expenses 197 202
-------------------------------------- ---------------- ----------------
Appraisers' fees 19 21
-------------------------------------- ---------------- ----------------
Project design and development fees 738 1,273
-------------------------------------- ---------------- ----------------
Consultancy fees 120 97
-------------------------------------- ---------------- ----------------
Administrator fees 58 53
-------------------------------------- ---------------- ----------------
Other professional fees 248 38 9
-------------------------------------- ---------------- ----------------
Total 2,199 2,95 6
-------------------------------------- ---------------- ----------------
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
------------------------------------------------ ---------------- ----------------
Auditors' remuneration comprises the following
fees:
------------------------------------------------ ---------------- ----------------
Audit and other audit related services 353 354
------------------------------------------------- ---------------- ----------------
Tax and advisory - 28
================================================= ================ ================
Total 353 382
------------------------------------------------- ---------------- ----------------
11. ADMINISTRATIVE AND OTHER EXPENSES
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
------------------------------------ ---------------- ----------------
Travelling and accommodation 88 85
------------------------------------- ---------------- ----------------
Insurance 27 29
------------------------------------- ---------------- ----------------
Marketing and advertising expenses 104 110
------------------------------------- ---------------- ----------------
Immovable property and other taxes 222 285
------------------------------------- ---------------- ----------------
Rents 71 56
------------------------------------- ---------------- ----------------
Other 244 4 62
------------------------------------- ---------------- ----------------
Total 756 1, 027
------------------------------------- ---------------- ----------------
12. Finance cost S
From 1 From 1 January
January 2019
2020 to 31 December
to 31 December 2019
2020
EUR'000 EUR'000
--------------------------------------- ---------------- ----------------
Recognised in profit or loss
--------------------------------------- ---------------- ----------------
Interest expense 649 460
---------------------------------------- ---------------- ----------------
Bank charges 31 41
---------------------------------------- ---------------- ----------------
Exchange difference 142 754
======================================== ================ ================
Finance costs recognised in profit or
loss 822 1,255
---------------------------------------- ---------------- ----------------
From 1 From 1 January
January 2019
2020 to 31 December
to 31 December 2019
2020
EUR'000 EUR'000
------------------------------------------------- ---------------- ----------------
Recognised in other comprehensive income
Foreign currency translation differences (104) (667)
------------------------------------------------- ---------------- ----------------
Finance costs recognised in other comprehensive
income (104) (667)
------------------------------------------------- ---------------- ----------------
13. Taxation
From 1 From 1
January January
2020 2019
to 31 December to 31 December
2020 2019
(Restated)
EUR'000 EUR'000
--------------------------------------- ---------------- ----------------
RECOGNISED IN PROFIT OR LOSS
--------------------------------------- ---------------- ----------------
Income tax 5 23
--------------------------------------- ---------------- ----------------
Net deferred tax (see note 24) (2,990) (278)
--------------------------------------- ---------------- ----------------
Taxation recognised in profit or loss (2,985) (255)
--------------------------------------- ---------------- ----------------
Reconciliation of taxation based on taxable (loss)/profit and
taxation based on accounting (loss)/profit:
From 1 From 1 January
January 2019
2020 to 31 December
to 31 December 2019
2020 (Restated)
EUR'000 EUR'000
------------------------------------------------- ---------------- ----------------
(L oss)/profit before taxation (24,078) 3,966
------------------------------------------------- ---------------- ----------------
Taxation using domestic tax rates (3,859) 192
------------------------------------------------- ---------------- ----------------
Effect of valuation loss on properties (2,990) (280)
------------------------------------------------- ---------------- ----------------
Non-deductible expenses 4,252 450
------------------------------------------------- ---------------- ----------------
Tax-exempt income (388) (1,390)
------------------------------------------------- ---------------- ----------------
Current year losses for which no deferred
tax is recognised 5 559
------------------------------------------------- ---------------- ----------------
Effect of tax losses utilised - 187
------------------------------------------------- ---------------- ----------------
Other (5) 27
------------------------------------------------- ---------------- ----------------
Total (2,985) (255)
------------------------------------------------- ---------------- ----------------
13. Taxation CONtinued
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
24%. 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%. 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.
14. EARNINGS/(LOSS) per share
Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the
profit/(loss) attributable to owners of the Company by the weighted
average number of common shares outstanding during the year.
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
'000 '000
------------------------------------------ ---------------- ----------------
(Loss)/profit attributable to owners of
the Company (EUR) (21,142) 4,317
------------------------------------------- ---------------- ----------------
Number of weighted average common shares
outstanding 904,627 904,627
=========================================== ================ ================
Basic (loss)/earnings per share (EUR) (0.02) 0.01
------------------------------------------- ---------------- ----------------
(Loss)/profit attributable to owners of the Company
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
EUR'000 EUR'000
----------------------------------------------- ---------------- ----------------
(Loss)/profit attributable to owners of
the Company (21,142) 4,317
------------------------------------------------ ---------------- ----------------
Profit/(loss) attributable to non-controlling
interests 49 (96)
================================================ ================ ================
Total (21,093) 4,221
------------------------------------------------ ---------------- ----------------
Weighted average number of common shares outstanding
From 1 January From 1 January
2020 2019
to 31 December to 31 December
2020 2019
'000 '000
-------------------------------------------- ---------------- ----------------
Outstanding common shares at the beginning
and end of the year 904,627 904,627
-------------------------------------------- ---------------- ----------------
Diluted earnings/(loss) per share
Diluted earnings/(loss) per share is calculated by adjusting the
profit/(loss) attributable to owners and the number of common
shares outstanding to assume conversion of all dilutive potential
shares. As of 31 December 2020 and 31 December 2019, the diluted
earnings/(loss) per share is the same as the basic earnings/(loss)
per share, due to the fact that no dilutive potential ordinary
shares were outstanding during these years.
15. Property, plant and equipment
Under construction Land & Machinery & equipment Other Total
EUR'000 buildings EUR'000 EUR'000 EUR'000
EUR'000
====================================== =================== =========== ====================== ========= =========
2020
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
Cost or revalued amount
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
At beginning of year 117 20,064 350 36 20,567
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
Direct acquisitions 1,937 381 11 3 2,332
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
At end of year 2,054 20,445 361 39 22,899
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
Depreciation and impairment losses
====================================== =================== =========== ====================== ========= =========
At beginning of year - 17,550 340 30 17,920
====================================== =================== =========== ====================== ========= =========
Depreciation charge for the year - 35 9 - 44
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
Impairment loss (see note 8b) - 80 - - 80
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
At end of year - 17,665 349 30 18,044
====================================== =================== =========== ====================== ========= =========
Carrying amounts 2,054 2,780 12 9 4,855
2019
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
Cost or revalued amount
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
At beginning of year - 19,975 348 36 20,359
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
Direct acquisitions 117 - 2 - 119
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
Recognition of right-of-use asset on
initial application of IFRS 16 - 89 - - 89
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
At end of year 117 20, 064 350 36 20,567
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
Depreciation and impairment losses
====================================== =================== =========== ====================== ========= =========
At beginning of year - 7,720 336 30 8,086
====================================== =================== =========== ====================== ========= =========
Depreciation charge for the year - 34 4 - 38
====================================== =================== =========== ====================== ========= =========
Impairment loss (see note 8b) - 9,796 - - 9,796
====================================== =================== =========== ====================== ========= =========
At end of year - 17,550 340 30 17,920
====================================== =================== =========== ====================== ========= =========
Carrying amounts 117 2, 514 10 6 2,647
-------------------------------------- ------------------- ----------- ---------------------- --------- ---------
The carrying amount at year end of land and buildings, if the
cost model was used, would have been EUR2.8 million (2019: EUR2.6
million).
Land and buildings include right-of-use assets of EUR442
thousand (2019: EUR89 thousand) related to leased properties that
do not meet the definition of investment property.
Fair value hierarchy
The fair value of land and buildings, amounting to EUR2,780
thousand (2019: EUR2,514 thousand), has been categorised as a Level
3 fair value based on the inputs to the valuation techniques
used.
The following table shows a reconciliation from opening to
closing balances of Level 3 fair value.
31 December 31 December
2020 2019
EUR'000 EUR'000
---------------------------------------------- ------------ ------------
At beginning of year 2,514 12,255
Acquisitions 381 -
Recognition of right-of-use asset on initial
application of IFRS 16 - 89
Gains/(losses) recognised in profit or loss
Impairment loss and write offs in 'Change in
valuations' (80) (9,796)
Depreciation in 'Depreciation charge' (35) (34)
At end of year 2,780 2, 514
---------------------------------------------- ------------ ------------
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 2020: 45% to The estimated fair value
in Greece approach rate (annual): 52% would increase/(decrease)
- Hotel if:
complexes
------------
(weighted average:
51%)
------------
(2019: 45% to Room occupancy rate was
52% higher/(lower);
weighted average: Average daily rate per
51%) occupied room was higher/(lower);
Average daily 2020: EUR546 Gross operating margin
rate per occupied to EUR738 was higher/(lower);
room:
(weighted average: Terminal capitalisation
EUR673) rate was lower/(higher);
(2019: EUR546 Risk-adjusted discount
to EUR738 rate was lower/(higher).
weighted average:
EUR673)
Gross operating 2020: 24% to
margin rate: 38%
(weighted average:
36%)
(2019: 24% to
38%
weighted average:
36%)
Terminal capitalisation 2020: 8% (2019:
rate: 8%)
Risk-adjusted 2020: 11% (2019:
discount rate: 11%)
------------
Combined Income approach The estimated fair value
approach (for land components) would increase/(decrease)
(Income if:
and
Cost)
------------
Net operating 2020: EUR33 to
income per m(2) EUR205
:
------------
(2019: EUR33 Net operating income
to EUR205) per m2 was higher/(lower);
Cash flow velocity 2020: 11% (2019: Cash flow velocity was
(years): 11%) shorter/(longer);
Terminal capitalisation 2020: 11% (2019: Terminal capitalisation
rate: 11%) rate was lower/(higher);
Risk-adjusted 2020: 11% (2019: Risk-adjusted discount
discount rate: 11%) rate was lower/(higher);
Replacement cost (new)
per m2 was higher/(lower);
Cost approach Entrepreneurial profit
(for building rate was higher/(lower);
components)
Replacement cost 2020: EUR500 Depreciation rate was
(new) per m(2) - EUR1,100 lower/(higher).
:
(2019: EUR500
- EUR1,100)
Ent r epreneurial 2020: 20% (2019:
profit rate: 20%)
Depreciation rate: 2020: 37% (2019:
37%)
Useful life (years): 2020: 60 (2019:
60)
------------ ------------------------- ------------------- -----------------------------------
Property Income Number of members: 2020: 5 to 30 The estimated fair value
in Greece approach would increase/(decrease)
- Golf if:
course
------------
(weighted average:
20)
------------
(2019: 5 to 30 Number of members was
higher/(lower);
weighted average: Membership fees per year
20) per member was higher/(lower);
Membership fees 2020: EUR5,000 Number of rounds played
per year per member: to EUR11,046 by visitors was higher/(lower);
(weighted average: Average green fee was
EUR9,086) higher/(lower);
(2019: EUR5,000 Gross operating margin
to EUR11,046 was higher/(lower);
weighted average: Terminal capitalisation
EUR9,086) rate was lower/(higher);
Number of rounds 2020: 881 to Risk-adjusted discount
played by visitors: 6,793 rate was lower/(higher).
(weighted average:
5,319)
(2019: 881 to
6,793
weighted average:
5,319)
Average green 2020: EUR90 to
fee: EUR199
(average: EUR170)
(2019: EUR180)
Gross operating 2020: -2% to
margin rate: 1.4%
(weighted average:
0.6%)
(2019: -2% to
1.4%
weighted average:
0.6%)
Terminal capitalisation 2020: 11% (2019:
rate: 11%)
Risk-adjusted 2020: 11% (2019:
discount rate: 11%)
--------------------------------------------------- ------------------- -----------------------------------
16. Investment property
31 December 31 December
2020 2019
(Restated)
Note EUR'000 EUR'000
--------------------------------- ----- ------------ ------------
At beginning of year 96,601 145 , 356
--------------------------------- ----- ------------ ------------
Net direct disposals (1,605) (671)
--------------------------------- ----- ------------ ------------
Transfers to trading properties 19 - (56,516)
--------------------------------- ----- ------------ ------------
Fair value adjustment 8B (18,295) 8,528
--------------------------------- ----- ------------ ------------
Exchange differences (398) (96)
--------------------------------- ----- ------------ ------------
At end of year 76,303 96,601
--------------------------------- ----- ------------ ------------
As at 31 December 2020 and 31 December 2019, 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' (see note
8b). All such gains/(losses) are unrealised.
Fair value hierarchy
The fair value of investment property, amounting to EUR76,303
thousand (2019: EUR96,601 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 The estimated fair value
in approach - 60% weight would increase/(decrease)
Greece (Market if:
and
Income)
------------
Asking prices per 2020: EUR7 Asking prices per m(2)
m(2) : to EUR30 were higher/(lower);
------------
(2019: EUR7 Premiums were higher/(lower);
to EUR30)
Premiums/(discounts) D iscounts were lower/(higher)
on the following: ;
Location: 2020: 0% Weights on comparables
with premiums were higher/(lower);
(2019: -10% Weights on comparables
to +10%) with discounts were lower/(higher);
Site size: 2020: -10% Quantity of villas was
to 0% higher/(lower);
(2019: -20% Selling price per m(2)
to 0%) was higher/(lower);
Asking vs transaction: 2020: -30% Expected annual growth
to 0% in selling price was higher/(lower);
(2019: -25% Cash flow velocity was
to -10%) shorter/(longer);
Frontage sea view: 2020: 0% to Risk-adjusted discount
+20% rate was lower/(higher).
(2019: 0% to
+20%)
Maturity/development 2020: 0% to
potential: 50%
(2019: +10%
to +40%)
Weight allocation: 2020: 0% to
+20%
(2019: +10%
to +20%)
Income approach
- 40% weight
Quantity of villas: 2020: 447 (2019:
447)
Selling price per 2020: EUR2,800
m(2) :
(2019: EUR2,800)
Expected annual 2020: from
growth in selling year 3: 3%
price:
(2019: 0% to
3%)
Cash flow velocity 2020: 13 (2019:
(years): 13)
Risk-adjusted discount 2020: 14% (2019:14%)
rate:
Discount on combined
approach value:
Legal status: 2020: -10%
(2019: -10%)
------------------------------------------------- --------------------- --------------------------------------
Valuation techniques and significant unobservable inputs
continued
Property Valuation Significant unobservable inputs Inter-relationship between
location technique key unobservable inputs
(see and fair value measurement
note
3)
Property Market Asking prices per 2020: EUR1 to The estimated fair value
in approach m(2) : EUR69 would increase/(decrease)
Greece if:
------------
( 2019: EUR3 Asking prices per m(2)
to EUR449) were higher/(lower);
------------
Premiums/(discounts) P remiums were higher/(lower)
on the following: ;
Location: 2020: -40% to D iscounts were lower/(higher)
+10% ;
(2019: -40% Weights on comparables
to +20%) with premiums were higher/(lower);
Site size: 2020: -50% to Weights on comparables
+30% with discounts were lower/(higher).
(2019: -40%
to +50%)
Asking vs transaction: 2020: -30% to
0%
(2019: -30%
to 0%)
Frontage sea view: 2020: -10% to
+30%
(2019: -20%
to +30%)
Maturity/development 2020: -35% to
potential: +50%
(2019: -60%
to +50%)
Zoning: 2020: -30% to
0%
(2019: -30%
to 0%)
Other: 2020: -10% to
+50%
(2019: -10%
to +50%)
Strategic investment 2020: 0% to
approval: +20%
(2019: 0% to
+20%)
Weight allocation: 2020: 0% to
+40%
(2019: +10%
to +40%)
------------------------------------------------- -------------- -------------------------------------
Property Market Asking prices per 2020: EUR1 to The estimated fair value
in approach m(2) : EUR349 would increase/(decrease)
Cyprus if:
(2019: EUR1 Asking prices per m(2)
to EUR15) were higher/(lower);
Premiums/(discounts) Premiums were higher/(lower);
on the following:
Location: 2020: -10% to Discounts were lower/(higher);
+20%
(2019: 0% to Weights on comparables
+20%) with premiums were higher/(lower);
Site size: 2020: -40% to Weights on comparables
0% with discounts were lower/(higher).
( 2019: -40%
to 0%)
Asking vs transaction: 2020: -15% to
0%
(2019: -20%
to 0% )
Frontage sea view: 2020: -10% to
+30%
( 2019: -10%
to +20% )
Maturity/development 2020: -20% to
potential: 50%
(2019: -50%
to 0%)
Weight allocation: 2020: +5% to
50%
(2019: +5% to
+15%)
------------------------------------------------- -------------- -------------------------------------
Azurna, Market Asking prices per 2020: EUR3 to The estimated fair value
m(2) : EUR126 would increase/(decrease)
if:
Croatia approach (2019: EUR3 Asking prices per m(2)
to EUR126) were higher/(lower);
Premiums/(discounts) Premiums were higher/(lower);
on the following:
Location: 2020: -5% to Discounts were lower/(higher);
0%
(2019: -5% to Weights on comparables
0%) with premiums were higher/(lower);
Site size: 2020: -15% to Weights on comparables
0% with discounts were lower/(higher).
(2019: -15%
to 0%)
Asking vs transaction: 2020: 0%
(2019: 0%)
Quality factor: 2020: -5% to
15%
(2019: -5% to
15%)
Capacity: 2020: -5% to
+8%
(2019: -5% to
+8%)
Weight allocation: 2020: +15% to
+35%
( 2019: +25
% to +40%)
------------------------------------------------- -------------- -------------------------------------
17 . DISPOSAL GROUPS HELD FOR SALE
In 2019, the Group completed the sale of six out of seven
Seafront Villas in Greece (owned by the Collection Group) and was
in the process of finalising the sale of the one remaining Villa.
Accordingly, the remaining assets and liabilities of the Collection
Group as at 31 December 2019, were presented as a disposal group
held for sale. As shown in note 31, the Group as of 31 December
2020 has completed the disposal of the one remaining Seafront
Villa.
As at 31 December 2019, Azurna (owner of 'Livka Bay') in Croatia
and DCI Holdings Two Limited ('DCI H2') (owner of 'Aristo') were
also presented as held for sale, but as the disposals did not
materialise, they were classified out of held for sale as of 31
December 2020.
Impairment losses relating to the disposal group (Restated)
No impairment losses have been recognised during the year ended
31 December 2020 and 31 December 2019 for write-downs of the
disposal group to the lower of its carrying amount and its fair
value less costs to sell.
Assets and liabilities of disposal group held for sale
As at 31 December 2019, the disposal groups comprised the
following assets and liabilities:
Collection
disposal Total
group
(Restated) EUR'000 EUR'000
------------------------------ ----------- --------
Trading properties 1,124 1,124
------------------------------ ----------- --------
Trade and other receivables 110 110
------------------------------ ----------- --------
Cash and cash equivalents 54 54
------------------------------ ----------- --------
1,288 1,288
----------------------------- ----------- --------
Other investments 851
------------------------------ ----------- --------
Assets held for sale 2,139
------------------------------ ----------- --------
Trade and other payables 3,276 3,276
------------------------------ ----------- --------
Liabilities held for sale 3,276 3,276
------------------------------ ----------- --------
Other investments
Other investments consists of the valuation of the Company's
holding of 9.6 million shares, equivalent to 13% of Itacare's share
capital. Itacare is a real estate investment company formerly
listed on AIM. Itacare's shareholders have decided to dispose of
all its assets and after a series of asset sales/swaps, Itacare now
owns two development sites which it is seeking to sell. Itacare was
presented as held for sale as at 31 December 2019, but as the
disposal did not materialise, as of 31 December 2020 it was
classified out of held for sale.
Cumulative income or expenses included in other comprehensive
income (Restated)
No cumulative income or expenses relating to the disposal group
is included in other comprehensive income (31 December 2019: il
).
18. equity-accounted investees
Single
Purpose
Vehicle
Fourteen
DCI H2 Limited Total
('SPV
14')
Note EUR'000 EUR'000 EUR'000
------------------------------ ----- -------- ---------- --------
2020
------------------------------ ----- -------- ---------- --------
At beginning of year 42,694 17,249 59,943
------------------------------ ----- -------- ---------- --------
Share of (losses)/profits
, net of tax (9,415) 523 (8,892)
------------------------------ ----- -------- ---------- --------
Share of revaluation surplus - 208 208
------------------------------ ----- -------- ---------- --------
Reversal of impairment loss 8b 9,415 - 9,415
------------------------------ ----- -------- ---------- --------
At end of year 42,694 17,980 60,674
------------------------------ ----- -------- ---------- --------
20 19 (Restated)
------------------------------ ----- -------- ---------- --------
At beginning of year 42,694 - 42,694
------------------------------ ----- -------- ---------- --------
Additions 32 - 18,655 18,655
------------------------------ ----- -------- ---------- --------
Share of profits/( losses),
net of tax 1,305 (1,478) (173)
------------------------------ ----- -------- ---------- --------
Share of revaluation surplus - 72 72
------------------------------ ----- -------- ---------- --------
Impairment loss 8b (1,305) - (1,305)
------------------------------ ----- -------- ---------- --------
At end of year 42,694 17,249 59,943
------------------------------ ----- -------- ---------- --------
SPV14
As stated in note 31, in 2019, SPV 10 entered into a joint
venture agreement pursuant to which the Group's shareholding
interest in SPV 14 (owner of 'One&Only Kea Resort') was
decreased from 67% to 33%, as a result of dilution. The Group
accounted for the remaining 33% interest as an equity-accounted
investee.
DCI H2
As at 31 December 2020 and 31 December 2019, the Company's
holding of 47.9% in DCI H2, has been classified as an equity
accounted investee (as already stated in note 17). Pursuant to the
terms of the transaction executed in August 2019, for the sale of
37 hectares in the area referred to as 'Atlantis', in the north of
the Venus Rock project which was formerly owned by Aristo, to
Aristo Ktimatiki (an entity controlled by Mr. Theodoros
Aristodemou, chairman of Aristo), the Company as of 31 December
2020 received EUR0.5 million (31 December 2019: EUR5 million) cash
consideration from Aristo Ktimatiki. The remaining EUR3.5 million
that was due by 30 June 2020 is expected to be received during
2021. The corresponding preferred shares are being transferred by
the Company to Aristo Ktimatiki on a prorated basis in line with
the receipt of the commensurate instalment.
Following the impairment loss recognised in 2016, the investment
in DCI H2 as at 31 December 2020 is presented at its recoverable
amount of EUR42.7 million (2019: EUR42.7 million) which is equal to
its carrying amount.
The details of the above investments are as follows:
Country of Shareholding interest
Name incorporation Principal activities 31 December 31 December
2020 2019
-------- --------------- ----------------------------- -------------- ------------------
Development of Kea
SPV 14 Cyprus Resort 33% 33%
-------- --------------- ----------------------------- -------------- ------------------
Acquisition and holding
of real estate investments
DCI H2 BVIs in Cyprus 48% 48%
-------- --------------- ----------------------------- -------------- ------------------
The above shareholding interest percentages are rounded to the
nearest integer.
The valuation techniques and significant unobservable inputs
used in DCI H2 and Kea property valuation in years 2020 and 2019
are shown below:
Property Valuation Significant unobservable inputs
technique
(see note
3)
Kea, Greece Income Room occupancy rate 2020: 32% 39%
approach (annual):
(weighted average: 37%)
(2019: 32% to 39%
weighted average: 37%)
Average daily rate 2020: EUR990 t EUR1,378
per occupied room:
(weighted average EUR1,237)
( 20 19 : EUR990 to EUR1,378
weighted average EUR1,237)
Gross operating 2020: 9% 35%
margin rate:
(weighted average 27%)
(2019: 8% to 35%)
weighted average 27%)
Terminal capitalisation 2020: 11% (2019: 11%)
rate:
Quantity of villas: 2020: 39 (2019: 40)
Selling price per 2020: EUR 7 , 5 00 (2019:
m(2) : EUR6,400)
Expected annual 2020: 0% to 3% (2019: 0%
growth in selling to 3%)
price:
Cash flow velocity 2020: 10 (2019: 10)
(years):
Risk-adjusted discount 2020: 10 % (2019: 11%)
rate:
-------------------------------------------------------- ------------------------------
Property Market Asking prices per 2020: EUR24 to EUR106 (2019:
in approach m2: EUR24 to EUR176)
Famagusta, (sales Premiums/(discounts)
Cyprus comparison on the following:
approach) Location: 2020: 0% (2019: -20% to +20%)
Site size: 2020: 0% to +20% (2019: 0%
to +20%)
Asking vs transaction: 2020: -20% to +15% (2019:
-15% to 0%)
Frontage view: 2020: 0% to +30% (2019: only
0%)
Maturity/development 2020: only 0% (2019: 0% to
potential: +20%)
Weight allocation: 2020: +10% to +25% (2019:
+10% to +40%)
-------------------------------------------------------- ------------------------------
Property Market Asking prices per 2020: EUR71 to EUR281 (2019:
in Larnaka, approach m2: EUR45 to EUR274)
Cyprus (sales Premiums/(discounts)
comparison on the following:
approach) Location: 2020: 0% (2019: 0%)
Site size: 2020: 0% to +30% (2019: 0%
to +30%)
Asking vs transaction: 2020: -20% to -15% (2019:
-15% to 0%)
Frontage view: 2020: -20% to 0% (2019: -20%
to 0%)
Maturity/development 2020: only 0% (2019: 0% to
potential: +20%)
Weight allocation: 2020: +15% to +40% (2019:
+10% to +20%)
-------------------------------------------------------- ------------------------------
Property Market Asking prices per 2020: EUR1 to EUR294 (2019:
in Limassol, approach m2: EUR1 to EUR294)
Cyprus (sales Premiums/(discounts)
comparison on the following:
approach) Location: 2020: -50% to 20% (2019:
-50% to +30%)
Site size: 2020: -40% to +40% (2019:
-40% to +40%)
Asking vs transaction: 2020: -20% to +25% (2019:
-25% to 25%)
Frontage view: 2020: -20% to +50% (2019:
-30% to +50%)
Maturity/development 2020: -50% to +30% (2019:
potential: -50% to +30%)
Weight allocation: 2020: +5% to +30% (2019:
+5% to +40%)
-------------------------------------------------------- ------------------------------
Property Valuation Significant unobservable inputs
technique
(see note
3)
Property Market Asking prices per 2020: EUR2 to EUR54 (2019:
in Nicosia, approach m2: EUR2 to EUR46)
Cyprus (sales Premiums/(discounts)
comparison on the following:
approach) Location: 2020: -30% to +10% (2019:
-20% to +20%)
Site size: 2020: -20% to 0% (2019: -20%
to +20%)
Asking vs transaction: 2020: 0% to +25% (2019: -15%
to 25%)
Frontage view: 2020: -50% to +50% (2019:
-50% to +20%)
Maturity/development 2020: 0% to +50% (2019: 0%
potential: to +30%)
Weight allocation: 2020: +5% to +50% (2019:
+5% to +60%)
Property Market Asking prices per 2020: EUR1 to EUR1.233 (2019:
in Paphos, approach m2: EUR1 to EUR953)
Cyprus (sales Premiums/(discounts)
comparison on the following:
approach) Location: 2020: -30% to +30% (2019:
-30% to +40%)
Site size: 2020: -40% to +40% (2019:
-40% to +40%)
Asking vs transaction: 2020: -30% to +25% (2019:
-30% to 25%)
Frontage view: 2020: -50% to +50% (2019:
-40% to +50%)
Maturity/development 2020: -30% to +50% (2019:
potential: -20% to +50%)
Weight allocation: 2020: +5% to +60% (2019:
+10% to +50%)
Golf Resort, Income Quantity of villas: 2020: 676 (2019: 675)
Cyprus approach (174 sq.m each)
Quantity of appartments: 2020: 231 (2019: 231)
(100 sq.m each)
Expected annual 2020: 1% and 2% (2019: 1%
growth in selling and 2%)
price:
Cash flow velocity 2020: 11 (2019: 11)
(years):
Risk-adjusted discount 2020: 9,10% (2019: 9,30%)
rate:
Total NPV of project: 2020: EUR72.700.000 (2019:
EUR70.220.000)
average rate per 2020: EUR3.000 (2019: EUR3.000)
sq.m of Villas:
average rate per 2020: EUR2.400 (2019: EUR2.400)
sq.m of turist village:
average rate per 2020: EUR2.100 (2019: EUR2.100)
sq.m of Appartments
------------- ------------------------- --------------------------------
As at 31 December 2020, SPV 14 had EUR33,060 thousand (31
December 2019: EUR38,292 thousand) contractual capital commitments
on property, plant and equipment. Also, as at 31 December 2020, DCI
H2 had EUR3,500 thousand (31 December 2019: EUR3,500 thousand)
contractual capital commitments on investment property.
Summary of financial information for equity-accounted investees
as at 31 December 2020 and 31 December 2019, not adjusted for the
percentage of ownership held by the Group:
DCI H2 SPV 14 Total
EUR'000 EUR'000 EUR'000
----------------------------------------- --------- -------- ---------
31 December 2020
----------------------------------------- --------- -------- ---------
Current assets 142,254 5,713 147,967
------------------------------------------ --------- -------- ---------
Non-current assets 206,065 33,937 240,002
------------------------------------------ --------- -------- ---------
Total assets 348,319 39,650 387,969
------------------------------------------ --------- -------- ---------
Current liabilities 105,439 1,513 106,952
------------------------------------------ --------- -------- ---------
Non-current liabilities 49,803 2,178 51,981
------------------------------------------ --------- -------- ---------
Total liabilities 155,242 3,691 158,933
------------------------------------------ --------- -------- ---------
Net assets 193,077 35,959 229,036
------------------------------------------ --------- -------- ---------
Carrying amount of interest in investee 42,694 17,980 60,674
========================================== ========= ======== =========
Revenues 13,158 - 13,158
------------------------------------------ --------- -------- ---------
(Loss)/profit (19,643) 1,045 (18,598)
------------------------------------------ --------- -------- ---------
Other comprehensive income - 416 416
========================================== ========= ======== =========
Total comprehensive income (19,643) 1,461 (18,182)
========================================== ========= ======== =========
Group's share of (loss)/profit and
total comprehensive income (9,415) 731 (8,684)
========================================== ========= ======== =========
31 December 2019 (Restated)
----------------------------------------- --------- -------- ---------
14 5 15 7
Current assets , 439 11,692 , 131
------------------------------------------ --------- -------- ---------
2 18 24 3
Non-current assets , 885 24,981 , 866
------------------------------------------ --------- -------- ---------
3 64 40 0
Total assets , 324 36,673 , 997
------------------------------------------ --------- -------- ---------
1 03 1 03
Current liabilities , 207 258 , 465
------------------------------------------ --------- -------- ---------
Non-current liabilities 48, 397 1,916 50, 313
------------------------------------------ --------- -------- ---------
1 51 1 53
Total liabilities , 604 2,174 , 778
------------------------------------------ --------- -------- ---------
2 12 2 47
Net assets , 720 34,499 , 219
------------------------------------------ --------- -------- ---------
Carrying amount of interest in investee 42,694 17,249 59,943
========================================== ========= ======== =========
64 , 64 ,
Revenues 263 - 263
------------------------------------------ --------- -------- ---------
Profit/(loss) 2,723 (1,831) 892
------------------------------------------ --------- -------- ---------
Other comprehensive income - 139 139
========================================== ========= ======== =========
Total comprehensive income 2,723 (1,692) 1, 031
========================================== ========= ======== =========
Group's share of profit/( loss) and (1 01
total comprehensive income 1,305 (1,406) )
========================================== ========= ======== =========
19. Trading properties
Note 31 December 31 December
2020 2019
EUR'000 EUR'000
---------------------------------------- ----- ------------ ------------
At beginning of year 60,826 4,699
---------------------------------------- ----- ------------ ------------
Net direct additions 212 424
---------------------------------------- ----- ------------ ------------
Net transfers from investment property 16 - 56,516
---------------------------------------- ----- ------------ ------------
Impairment loss 8B (1,269) (813)
---------------------------------------- ----- ------------ ------------
At end of year 59,769 60,826
---------------------------------------- ----- ------------ ------------
Trading properties mainly comprise of land and construction
costs of villas and holiday homes, in Kilada Hills Golf Resort in
Peloponnese, Greece and La Vanta - Mediterra Resorts in
Antalya,Turkey.
20. RECEIVABLES AND OTHER ASSETS
31 December 31 December
2020 2019
(Restated)
EUR'000 EUR'000
--------------------------------------------- ------------ ------------
Trade receivables 122 75
--------------------------------------------- ------------ ------------
VAT receivables 771 1,215
============================================= ============ ============
Other receivables 425 141
============================================= ============ ============
Total trade and other receivables (see note
33) 1,318 1,431
============================================= ============ ============
Prepayments and other assets 12 21
============================================= ============ ============
1,4 5
Total 1,330 2
--------------------------------------------- ------------ ------------
21. Cash and cash equivalents
31 December 31 December
2020 2019
(Restated)
EUR'000 EUR'000
----------------------------- ------------ ------------
Bank balances (see note 33) 1,652 2, 846
----------------------------- ------------ ------------
Cash in hand 9 8
----------------------------- ------------ ------------
2, 85
Total 1,661 4
----------------------------- ------------ ------------
During the year, the Group had no fixed deposits.
22. capital and reserves
Capital
Authorised share capital
31 December 2020 31 December 2019
-------------------- --------------------
'000 of '000 of
shares EUR'000 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 Share Share
in issue capital premium
'000 EUR'000 EUR'000
---------- --------- ---------
Capital at 1 January 2019 and up to
31 December 2020 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 Within two
year to five years
----------------------- ----------------------- -----------------------
2020 2019 2020 2019 2020 2019
( Restated) ( Restated) ( Restated)
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------------------ -------- ------------- --- -------- ------------- --- -------- -------------
Loans in Euro 6,244 6 ,644 6,244 6,644 - -
------------------------------ -------- ------------- --- -------- ------------- --- -------- -------------
Redeemable preference shares 2,802 - - - 2,802 -
------------------------------ -------- ------------- --- -------- ------------- --- -------- -------------
Total 9,046 6,644 6,244 6,644 2,802 -
------------------------------ -------- ------------- --- -------- ------------- --- -------- -------------
On 18 December 2019, the Company signed an agreement with an
international investor for a EUR12 million investment in the Kilada
Hills Project. The investor has agreed to subscribe for both common
and preferred shares. The total EUR12 million investment is payable
in 24 monthly instalments of EUR500 thousand each. Under the terms
of the agreement, the investor will be entitled to a priority
return of the total investment amount from the net disposal
proceeds realised from the project and will retain a 15%
shareholding stake in Kilada. As of 31 December 2020, 4.38% of the
ordinary shares have been transferred to the investor.
As of 31 December 2020, 3,500 redeemable preference shares were
issued as fully paid with value of EUR1,000 per share (2019: nil).
The redeemable preference shares are issued with a zero-coupon rate
and are discounted with a 0.66% effective monthly interest rate, do
not carry the right to vote and are redeemable when net disposal
proceeds are realised from the Project. As at 31 December 2020, the
fair value of the redeemable preference shares was EUR2,802
thousand (2019: nil).
During the year, the maturity date of the outstanding loan of
Azurna has been extended to 31 December 2021.
Terms and conditions
The terms and conditions of outstanding loan were as
follows:
Description Currency Interest rate Maturity 31 December 31 December
dates 2020 2019
EUR'000 EUR'000
=============== ========== ====================== ============== ============ ============
2020: Euribor plus
Secured loan Euro 4.25% 2020:2021 6,244 6,644
(2019: Euribor plus
4.25% ) (2019: 2020)
================================================= ============== ============ ============
Total interest-bearing
liabilities 6,244 6,644
=========================== ====================== ============== ============ ============
Securities
As at 31 December 2020, 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 EUR20.9 million
(2019: EUR25.8 million), two promissory notes, a debenture note and
a letter of support from its parent company Single Purpose Vehicle
Four Limited.
-- Upon transfer of the entire amount of EUR12 million from the
investor in accordance with the terms of the agreement, a mortgage
will be set against the immovable property of the Kilada Hills
Project, in the amount of EUR15 million (2019: nil).
On 1 July 2019, Symboula (owner of Apollo Heights in Cyprus)
entered into an agreement for the full settlement of its loan
amounting to EUR15,726 thousand with the loan acquirer for a total
consideration of EUR6,150 thousand, creating a gain of EUR9,576
thousand (see note 8c).
Reconciliation of movements of liabilities to cash flows arising
from financing activities
Loans and borrowings Lease Non-controlling interests Total
EUR'000 liabilities EUR'000 EUR'000
EUR'000
========================================= ===================== ============= ========================== =========
2020
----------------------------------------- --------------------- ------------- -------------------------- ---------
Balance at the beginning of the year 6,644 3,036 5,681 15,361
----------------------------------------- --------------------- ------------- -------------------------- ---------
Changes from financing cash flows:
----------------------------------------- --------------------- ------------- -------------------------- ---------
Proceeds from issue of redeemable
preference shares 3,500 - - 3,500
----------------------------------------- --------------------- ------------- -------------------------- ---------
Transaction costs related to loans and
borrowings (105) - - (105)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Repayment of loans and borrowings (250) - - (250)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Payment of lease liability (8) - (8)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Interest paid (278) - - (278)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Other movements (724) - 724 -
----------------------------------------- --------------------- ------------- -------------------------- ---------
Total changes from financing cash flows 2,143 (8) 724 2,859
----------------------------------------- --------------------- ------------- -------------------------- ---------
Other changes- Liability-related
----------------------------------------- --------------------- ------------- -------------------------- ---------
New leases - 353 - 353
----------------------------------------- --------------------- ------------- -------------------------- ---------
Interest expense 408 24 - 432
----------------------------------------- --------------------- ------------- -------------------------- ---------
Other movements (149) - 118 (31)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Total liability-related other changes 259 377 118 754
----------------------------------------- --------------------- ------------- -------------------------- ---------
Balance at the end of the year 9,046 3,405 6,523 18,974
----------------------------------------- --------------------- ------------- -------------------------- ---------
2019 (Restated)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Balance at the beginning of the year 24,475 3,013 5,752 33,240
----------------------------------------- --------------------- ------------- -------------------------- ---------
Changes from financing cash flows:
----------------------------------------- --------------------- ------------- -------------------------- ---------
Repayment of loans and borrowings (8,024) - - (8,024)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Payment of lease liability - (66) - (66)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Interest paid (531) - - (531)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Total changes from financing cash flows (8,555) (66) - (8,621)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Other changes- Liability-related
----------------------------------------- --------------------- ------------- -------------------------- ---------
New leases - 89 - 89
----------------------------------------- --------------------- ------------- -------------------------- ---------
Interest expense 298 - - 298
----------------------------------------- --------------------- ------------- -------------------------- ---------
Gain on settlement of Symboula loan (9,576) - - (9,576)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Other movements 2 - (71) (69)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Total liability-related other changes (9,276) 89 (71) (9,258)
----------------------------------------- --------------------- ------------- -------------------------- ---------
Balance at the end of the year 6,644 3,036 5,681 15,361
----------------------------------------- --------------------- ------------- -------------------------- ---------
24. Deferred tax liabilities
31 December 31 December
2020 2019
(Restated)
EUR'000 EUR'000
-------------------------------------------- ------------ ------------
Balance at the beginning of the year 11,027 11,314
-------------------------------------------- ------------ ------------
Recognised in profit or loss (see note 13) (2,990) ( 278 )
============================================ ============ ============
Exchange differences (37) (9)
============================================ ============ ============
Balance at the end of the year 8,000 11,027
-------------------------------------------- ------------ ------------
Deferred tax liabilities are attributable to the following:
31 December 31 December
2020 2019
(Restated)
EUR'000 EUR'000
------------------------------- ------------ ------------
Investment properties 3,638 6,665
------------------------------- ------------ ------------
Trading properties 4,299 4,299
=============================== ============ ============
Property, plant and equipment 63 63
=============================== ============ ============
Total 8,000 11,027
------------------------------- ------------ ------------
25. lease LIABILITIES
31 December 2020 31 December 2019
--------------------------------- ---------------------------------
Future Present Future Present
value 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 30 1 29 8 - 8
---------------------- --------- --------- ----------- --------- --------- -----------
Between two and five
years 283 10 273 245 5 240
---------------------- --------- --------- ----------- --------- --------- -----------
More than five years 4,302 1,199 3,103 3,963 1,175 2,788
---------------------- --------- --------- ----------- --------- --------- -----------
Total 4,615 1,210 3,405 4,216 1,180 3,036
---------------------- --------- --------- ----------- --------- --------- -----------
The major lease obligations comprise leases in Greece with
99-year lease terms.
26. DEFERRED REVENUE
31 December 31 December
2020 2019
EUR'000 EUR'000
------------------------- ------------ ------------
Prepayment from clients 109 433
------------------------- ------------ ------------
Total 109 433
------------------------- ------------ ------------
27. Trade and other payables
31 December 31 December
2020 2019
(Restated)
EUR'000 EUR'000
------------------------------------- ------------ ------------
Trade payables - 19
------------------------------------- ------------ ------------
Land creditors 20,758 20,740
------------------------------------- ------------ ------------
Investment Manager fees 3,498 1,932
------------------------------------- ------------ ------------
Other payables and accrued expenses 5,260 4,127
------------------------------------- ------------ ------------
Total 29,516 26,818
------------------------------------- ------------ ------------
31 December 31 December
2020 2019
(Restated)
EUR'000 EUR'000
------------- ------------ ------------
Non-current 20,366 20,529
------------- ------------ ------------
Current 9,150 6 , 289
------------- ------------ ------------
Total 29,516 26 , 818
------------- ------------ ------------
Land creditors relate to contracts in connection with the
purchase of land at Lavender Bay. The above outstanding amount
bears an annual interest rate equal to the inflation rate, which
cannot exceed 2%. Full settlement is due on 31 December 2025.
28. NAV per share
31 December 31 December
2020 2019
'000 '000
---------------------------------------------------- ------------ ------------
Total equity attributable to owners of the Company
(EUR) 148,648 169,547
---------------------------------------------------- ------------ ------------
Number of common shares outstanding at end of
year 904,627 904,627
---------------------------------------------------- ------------ ------------
NAV per share (EUR) 0.16 0.19
---------------------------------------------------- ------------ ------------
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 2020, 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 1,532
--------------------------------------- -------
Andrew Coppel 942
--------------------------------------- -------
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 From 1
January January
2020 2019
to 31 December to 31 December
2020 2019
EUR '000 EUR '000
-------------------- ---------------- ----------------
Remuneration 379 496
-------------------- ---------------- ----------------
Total remuneration 379 496
-------------------- ---------------- ----------------
The Directors' remuneration details for the years ended 31
December 2020 and 31 December 2019 were as follows:
From 1 From 1 January
January 2019
2020 to 31 December
to 31 December 2019
2020
EUR '000 EUR '000
--------------- ---------------- ----------------
Andrew Coppel 179 237
--------------- ---------------- ----------------
Graham Warner 134 174
--------------- ---------------- ----------------
Mark Townsend 66 85
--------------- ---------------- ----------------
Total 379 496
--------------- ---------------- ----------------
Directors have reduced 25% of their fees for the period 1 April
2020 to 31 December 2020.
Miltos Kambourides has waived his fees.
29.2 Investment Manager remuneration
From 1 From 1
January January
2020 2019
to 31 December to 31 December
2020 2019
EUR '000 EUR '000
---------------------- ---------------- ----------------
Fixed management fee 3,600 4,000
---------------------- ---------------- ----------------
Total remuneration 3,600 4,000
---------------------- ---------------- ----------------
On 9 April 2019, the Company signed an Amended and Restated
Investment Management Agreement ('IMA'), effective from 1 January
2019, as follows:
i. Fixed management fee
The annual management fees for the period from 1 January 2019 to
31 December 2019 were EUR4 million and have been further reduced to
EUR3.6 million per annum for 2020 and 2021.
Additionally, the IMA will expire at the earlier of 31 December
2021 or the sale of all of the Company's assets. There will be no
fixed management fee due after 31 December 2021.
ii. Variable management fee
The variable management fee for the period from 1 January 2020
to 31 December 2021 shall be equal to a percentage of the actual
distribution made by the Company to its shareholders, as shown
below:
Aggregate Shareholder Distributions % applied
on Distributions
Up to but excluding EUR30 million Nil
------------------------------------------------- ------------------
EUR30 million up to but excluding EUR50 million 2.0%
-------------------------------------------------- ------------------
EUR50 million up to but excluding EUR75 million 3.0%
-------------------------------------------------- ------------------
EUR75 million up to but excluding EUR100
million 4.0%
-------------------------------------------------- ------------------
EUR100 million up to but excluding EUR125
million 5.0%
-------------------------------------------------- ------------------
EUR125 million or more 6.0%
-------------------------------------------------- ------------------
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 Other related parties
During the years ended 31 December 2020 and 31 December 2019 the
Group did not enter into any significant related party
transactions.
30. EQUITY-SETTLED SHARE-BASED PAYMENT ARRANGEMENTS
Director Awards
On 9 June 2015, Graham Warner was granted nil-cost share option
awards under a Stock Incentive Plan (the 'Director Awards'). These
awards would have vested 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 were 35p, 40p, 45p, and 50p. Director Awards remained
exercisable up until the day before the fifth anniversary of the
grant date of the awards. The number of shares to which the
Director Awards related was 2,261,567 common shares of EUR0.01 each
with reductions in the event that certain non-market performance
targets were not met. During the year, the awards have lapsed since
the vesting conditions were not met.
The most significant inputs used in the measurement of the grant
date fair value of the Awards were 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 30 January 2020, the Group finalised the sale of the one
remaining Seafront Villa (owned by the Collection Group), creating
a net gain on disposal of EUR336 thousand (see note 17).
Collection
EUR'000
--------------------------------------- -----------
Trading properties (1,124)
----------------------------------------- -----------
Cash and cash equivalents (1)
----------------------------------------- -----------
Trade and other payables 1,461
----------------------------------------- -----------
Net liabilities 336
----------------------------------------- -----------
Net assets disposed of - 100 % 336
----------------------------------------- -----------
Net proceeds on disposal -
--------------------------------------- -----------
Gain on disposal recognised in profit
or loss 336
----------------------------------------- -----------
Cash effect on disposal:
--------------------------------------- -----------
Net proceeds on disposal -
--------------------------------------- -----------
Cash and cash equivalents (1)
----------------------------------------- -----------
Net cash outflow on disposal (1)
----------------------------------------- -----------
On 11 December 2018, the Company entered into a binding
agreement for the sale of its interest in five Seafront Villas
(owned by the Collection group) for a gross consideration of
EUR4.05 million. The Group received EUR3.4 million on 2 January
2019 whilst the balance has been retained in escrow to cover any
potential and contingent liabilities of the respective companies.
During 2019, the Group also completed the sale of another Seafront
Villa for a cash consideration of EUR0.4 million.
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 SPV 14, 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. In May 2019, following the
satisfaction of all relevant conditions precedent included in the
One&Only at Kea Island ('OOKI') Subscription Agreement, the
Group signed the completion documents with Kerzner International
Management FZ LLC (current owner of 40% of the project) and Kea
Assets Limited (current owner of 10% of the project). As a result,
the Company's percentage holding in the project fell from 67% to
33%, which is retained as an equity-accounted investee (see note
18) . The turn-key construction contract for the development of
OOKI was executed on 9 August 2019.
Collection Kea
Total
EUR'000 EUR'000 EUR'000
----------- --------- ---------
Investment property - (10,361) (10,361)
------------------------------------------ ----------- --------- ---------
Property, plant and equipment - (10,737) (10,737)
------------------------------------------ ----------- --------- ---------
Trading properties (4,489) - (4,489)
------------------------------------------ ----------- --------- ---------
Receivables and other assets - (28) (28)
------------------------------------------ ----------- --------- ---------
Cash and cash equivalents (11) (181) (192)
------------------------------------------ ----------- --------- ---------
Deferred tax liabilities - 2,132 2,132
------------------------------------------ ----------- --------- ---------
Trade and other payables 15 1,866 1,881
------------------------------------------ ----------- --------- ---------
Net assets (4,485) (17,309) (21,794)
------------------------------------------ ----------- --------- ---------
Net assets disposed of - 100 % (4,485) (17,309) (21,794)
------------------------------------------ ----------- --------- ---------
Net proceeds on disposal 3,769 - 3,769
------------------------------------------ ----------- --------- ---------
Investment in equity-accounted investee
(note 18) - 18,655 18,655
------------------------------------------ ----------- --------- ---------
(Loss)/gain on disposal recognised
in profit or loss (716) 1,346 630
------------------------------------------ ----------- --------- ---------
Cash effect on disposal:
----------------------------------------- ----------- --------- ---------
Net proceeds on disposal 3,769 - 3,769
------------------------------------------ ----------- --------- ---------
Cash and cash equivalents (11) (181) (192)
------------------------------------------ ----------- --------- ---------
Net cash inflow/(outflow) on disposal 3,758 (181) 3,577
------------------------------------------ ----------- --------- ---------
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 2020 MCO 1 SPV 10
(Kilada) (Kea Resort)
EUR'000 EUR'000
======================================================== === ========= =============
Non-controlling interests' percentage 4.38% 33.33%
============================================================= ========= =============
Non-current assets 7,869 17,980
============================================================= ========= =============
Current assets 57,658 16
============================================================= ========= =============
Non-current liabilities (47,694) -
======================================================== === ========= =============
Current liabilities (4,157) (212)
------------------------------------------------------------- --------- -------------
Net assets 13,676 17,784
------------------------------------------------------------- --------- -------------
Carrying amount of non-controlling interests 598 5,927
============================================================= ========= =============
Revenue - -
======================================================== === ========= =============
(Loss)/profit (3,594) 517
============================================================= ========= =============
Other comprehensive income - 208
------------------------------------------------------------- --------- -------------
Total comprehensive income (3,594) 725
------------------------------------------------------------- --------- -------------
(Loss)/profit allocated to non-controlling
interests (126) 172
============================================================= ========= =============
Other comprehensive income allocated to non-controlling
interests - 69
------------------------------------------------------------- --------- -------------
Cash flow used in operating activities (295) (1)
============================================================= ========= =============
Cash flow used in investing activities (2,330) -
-------------------------------------------------------- --- --------- -------------
Cash flow from financing activities 1,918 -
-------------------------------------------------------- --- --------- -------------
Net decrease in cash and cash equivalents (707) (1)
------------------------------------------------------------- --------- -------------
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 2019 SPV 10
(Kea Resort)
EUR'000
======================================================== === === =============
Non-controlling interests' percentage 33.33%
================================================================== =============
Non-current assets 17,249
================================================================== =============
Current assets 16
================================================================== =============
Non-current liabilities -
======================================================== === === =============
Current liabilities (207)
------------------------------------------------------------------ -------------
Net assets 17,058
------------------------------------------------------------------ -------------
Carrying amount of non-controlling interests 5,686
================================================================== =============
Revenue -
======================================================== === === =============
Loss (284)
================================================================== =============
Other comprehensive income 69
------------------------------------------------------------------ -------------
Total comprehensive income (215)
------------------------------------------------------------------ -------------
Loss allocated to non-controlling interests (71)
================================================================== =============
Other comprehensive income allocated to non-controlling -
interests
-------------------------------------------------------- --- --- -------------
Cash flow from operating activities 1
================================================================== =============
Cash flow used in investing activities -
-------------------------------------------------------- --- --- -------------
Cash flow from financing activities -
-------------------------------------------------------- --- --- -------------
Net increase in cash and cash equivalents 1
------------------------------------------------------------------ -------------
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 31 December
2020 2019
(Restated)
EUR'000 EUR'000
----------------------------------------- ------------ ------------
Trade and other receivables (see note
20) 1,318 1,431
------------------------------------------ ------------ ------------
Cash and cash equivalents (see note 21) 1,652 2,846
------------------------------------------ ------------ ------------
Total 2,970 4,277
------------------------------------------ ------------ ------------
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 31 December
2020 2019
(Restated)
No. No.
of Banks EUR'000 of Banks EUR'000
------------------------------------ ---------- ------------ ---------- ------------
Bank group based on credit ratings
by Moody's
------------------------------------ ---------- ------------ ---------- ------------
Rating Aaa to A 1 267 1 2,054
------------------------------------ ---------- ------------ ---------- ------------
Rating Baa to B 3 501 3 541
------------------------------------ ---------- ------------ ---------- ------------
Rating Caa to C 3 884 3 251
------------------------------------ ---------- ------------ ---------- ------------
Total bank balances 1,652 2,846
------------------------------------ ---------- ------------ ---------- ------------
(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 to five five
years years years
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------- --------- ------------ ---------- -------- --------- --------
31 December 2020
---------------------- --------- ------------ ---------- -------- --------- --------
Loans and borrowings 9,046 (9,983) (6,483) (2,400) (1,100) -
---------------------- --------- ------------ ---------- -------- --------- --------
Lease obligations 3,405 (4,615) (30) (71) (212) (4,302)
---------------------- --------- ------------ ---------- -------- --------- --------
Land creditors 20,758 (24,957) (1,295) (1,280) (22,382)
---------------------- --------- ------------ ---------- -------- --------- --------
Trade and other
payables 7,752 (7,752) (7,752) - - -
---------------------- --------- ------------ ---------- -------- --------- --------
40,961 (47,307) (15,560) (3,751) (23,694) (4,302)
---------------------- --------- ------------ ---------- -------- --------- --------
31 December 2019
(Restated)
---------------------- --------- ------------ ---------- -------- --------- --------
Loans and borrowings 6,644 (6,694) (6,694) - - -
---------------------- --------- ------------ ---------- -------- --------- --------
Lease obligations 3,036 (4,216) (8) (8) (237) (3,963)
---------------------- --------- ------------ ---------- -------- --------- --------
Land creditors 20,740 (26,266) (1,310) (1,295) (23,661) -
---------------------- --------- ------------ ---------- -------- --------- --------
Trade and other
payables 4,618 (4,618) (4,618) - - -
---------------------- --------- ------------ ---------- -------- --------- --------
35,038 (41,794) (12,630) (1,303) (23,898) (3,963)
---------------------- --------- ------------ ---------- -------- --------- --------
(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 EUR62 thousand
(2019: EUR66 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 2020, the Group had a total of EUR1,395
thousand contractual capital commitments on property, plant and
equipment (2019: EUR45 thousand).
35. Contingent liabilities
Companies of the Group are involved in pending litigation. This
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.
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
On 3 June 2021 the Company entered into a EUR15 million senior
secured term loan facility agreement with two institutional private
credit providers acting on behalf of their managed and advised
funds. The interest rate is 12.5% and the initial maturity date
falls 18 months from the loan draw-down and is subject to a
six-month extension at Company's option with a 2% interest step-up.
The facility agreement includes mandatory prepayment clauses with
regard to revenues realized by the Company from the disposal of its
asset as well as standard event of default provisions including,
inter alia, borrower change of control, termination of investment
management agreement and cancelation of existing borrower
securities listing.
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 2020.
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END
FR DKABDDBKBFAK
(END) Dow Jones Newswires
June 07, 2021 02:00 ET (06:00 GMT)
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