REG - Dolphin Capital Inv - Final Results <Origin Href="QuoteRef">DOLC.L</Origin> - Part 2
30/06/2016 07:06
- Part 2: For the preceding part double click ID:nRSd7515Ca
E8 million DTL classified as liabilities held for sale) total
E331 million and mainly comprise E235 million of interest-bearing loans and finance lease obligations (of which, E9 million
are classified as liabilities held for sale), out of which E50 million and US$9.17 million Convertible Bonds are held at
Company level. The remaining loans are held by Group subsidiaries and are non-recourse to Dolphin (except for the Playa
Grande construction loan which is guaranteed by the Company). The E96 million of trade and other payables and deferred
revenue comprise mainly E25 million of option contracts to acquire land in the Company's Lavender Bay project, E7 million
deferred income from government grants and E22 million of client advances from villa sales.
C.3. Consolidated statement of changes in equity for the year ended 31 December 2015
Attributable to owners of the Company
Share Share Translation Revaluation Retained Non-controlling Total
capital premium reserve reserve Earnings/(deficit) Total interests Equity
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Balance at 1 January 2014 6,424 498,933 1,491 6,768 10,056 523,672 24,504 548,176
Total comprehensive income
Profit - - - - 21,639 21,639 2,673 24,312
Other comprehensive income
Revaluation of property, plant and equipment, net of tax - - - 5,661 - 5,661 106 5,767
Foreign currency translation differences - - 11,913 385 (72) 12,226 3,104 15,330
Translation differences to profit or loss due to disposal of subsidiary - - (2,709) - - (2,709) - (2,709)
Share of revaluation on equity accounted investees - - - (22) - (22) - (22)
Fair value adjustment on available-for-sale financial asset - - - (64) - (64) - (64)
Depreciation transfer due to revaluation - - - (153) 153 - - -
Total other comprehensive income - - 9,204 5,807 81 15,092 3,210 18,302
Total comprehensive income - - 9,204 5,807 21,720 36,731 5,883 42,614
Transactions with owners of the Company
Changes in ownership interests
Acquisition of non-controlling interests without a change in control - - - - (2,955) (2,955) (23) (2,978)
Total changes in ownership interests - - - - (2,955) (2,955) (23) (2,978)
Total transactions with owners of the Company - - - - (2,955) (2,955) (23) (2,978)
Balance at 31 December 2014 6,424 498,933 10,695 12,575 28,821 557,448 30,364 587,812
Balance at 1 January 2015 6,424 498,933 10,695 12,575 28,821 557,448 30,364 587,812
Total comprehensive income
Loss - - - - (145,360) (145,360) (2,635) (147,995)
Other comprehensive income
Revaluation of property, plant and equipment, net of tax - - - (12,993) - (12,993) (397) (13,390)
Foreign currency translation differences - - 13,244 854 - 14,098 3,123 17,221
Share of revaluation on equity accounted investees - - - 27 - 27 - 27
Total other comprehensive income - - 13,244 (12,112) - 1,132 2,726 3,858
Total comprehensive income - - 13,244 (12,112) (145,360) (144,228) 91 (144,137)
Transactions with owners of the Company
Contributions and distributions
Issue of ordinary shares 2,193 60,527 - - - 62,720 - 62,720
Placement costs - (1,464) - - - (1,464) - (1,464)
Bond conversions 429 11,851 - - - 12,280 - 12,280
Equity-settled share-based payment arrangements - - - - 375 375 - 375
Non-controlling interests on capital increases of subsidiaries - - - - (545) (545) 545 -
Total contribution and distributions 2,622 70,914 - - (170) 73,366 545 73,911
Changes in ownership interests
Acquisition of non-controlling interests without a change in control - - - - (4,997) (4,997) 3,236 (1,761)
Other movement in non-controlling interests - - - - - - 703 703
Total changes in ownership interests - - - - (4,997) (4,997) 3,939 (1,058)
Total transactions with owners of the Company 2,622 70,914 - - (5,167) 68,369 4,484 72,853
Balance at 31 December 2015 9,046 569,847 23,939 463 (121,706) 481,589 34,939 516,528
C.4. Consolidated statement of cash flows for the year ended 31 December 2015
31 December 2015 31 December 2014
E'000 E'000
Cash flows from operating activities
(Loss)/profit (147,995) 24,312
Adjustments for:
Net change in fair value of investment property 45,047 (18,576)
Impairment loss on trading properties 3,431 6,216
Gain on disposal of investment in subsidiaries (823) (2,497)
Profit on dilution in equity accounted investees - (149)
Share of losses/(profit) on equity accounted investees, net of tax 44,553 (50,146)
Equity-settled share-based payment arrangements 375 -
Impairment on remeasurement of disposal groups 763 -
Impairment loss and write offs of property, plant and equipment 15,247 13
Reversal of impairment loss on property, plant and equipment - (670)
Concession/write off of land 2,607 -
Depreciation charge 2,919 3,239
Interest income (106) (325)
Interest expense 19,700 15,228
Exchange difference 2,590 (4,303)
Income tax expense (15,296) (1,588)
(26,988) (29,246)
Changes in:
Receivables 810 3,400
Payables 16,495 6,853
Cash used in operating activities (9,683) (18,993)
Tax paid (160) (207)
Net cash used in operating activities (9,843) (19,200)
Cash flows from investing activities
(Outflow)/proceeds from disposal of subsidiaries, net of cash disposed of (299) 10,047
Net acquisitions of investment property (308) (1,406)
Net acquisitions of property, plant and equipment (42,260) (23,412)
Net change in trading properties 16,189 4,510
Net change in equity accounted investees (286) (1,116)
Interest received 106 325
Net cash used in investing activities (26,858) (11,052)
Cash flows from financing activities
Proceeds from issue of share capital 61,256 -
Acquisition of non-controlling interests without a change in control (1,761) (2,978)
Change in loans and borrowings 3,892 72,708
Change in finance lease obligations 1,100 (346)
Interest paid (13,183) (15,228)
Net cash from financing activities 51,304 54,156
Net increase in cash and cash equivalents 14,603 23,904
Cash and cash equivalents at 1 January 28,739 4,861
Effect of movement in exchange rates on cash held (587) (26)
Cash and cash equivalents reclassified to assets held for sale (765) -
Cash and cash equivalents at 31 December 41,990 28,739
D. Financial Statements for the Year Ended 31 December 2015
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2015
31 December 2015 31 December 2014
Note E'000 E'000
Continuing operations
Revenue 6 51,906 41,205
Net change in fair value of investment property 15 (45,047) 18,576
Impairment loss on trading properties 17 (3,431) (6,216)
Total operating profits 3,428 53,565
Operating expenses 7 (55,015) (38,607)
Investment Manager remuneration 29.2 (13,128) (13,671)
Directors' remuneration 29.1 (904) (159)
Depreciation charge 14 (2,919) (3,239)
Professional fees 9 (8,164) (7,428)
Administrative and other expenses 10 (6,100) (5,552)
Total operating and other expenses (86,230) (68,656)
Results from operating activities (82,802) (15,091)
Finance income 11 106 325
Finance costs 11 (20,855) (15,959)
Net finance costs (20,749) (15,634)
Gain on disposal of investment in subsidiaries 31 823 2,497
Profit on dilution in equity-accounted investees 19 - 149
Share of (losses)/profit on equity-accounted investees, net of tax 19 (44,553) 50,146
Impairment loss on remeasurement of disposal groups 16 (763) -
Impairment loss and write offs of property, plant and equipment 14 (15,247) (13)
Reversal of impairment loss on property, plant and equipment 14 - 670
Total non-operating (losses)/profits (59,740) 53,449
(Loss)/profit before taxation (163,291) 22,724
Taxation 12 15,296 1,588
(Loss)/profit (147,995) 24,312
Other comprehensive income
Items that will not be reclassified to profit or loss
Revaluation of property, plant and equipment 14 (15,181) 6,322
Share of revaluation on equity-accounted investees 19 27 (22)
Related tax 12 1,791 (555)
(13,363) 5,745
Items that are or may be reclassified subsequently to profit or loss
Foreign currency translation differences 11 17,221 15,330
Translation differences to profit or loss due to disposal of subsidiary - (2,709)
Net change in fair value of available-for-sale financial assets 18 - (64)
17,221 12,557
Other comprehensive income, net of tax 3,858 18,302
Total comprehensive income (144,137) 42,614
(Loss)/profit attributable to:
Owners of the Company (145,360) 21,639
Non-controlling interests (2,635) 2,673
(147,995) 24,312
Total comprehensive income attributable to:
Owners of the Company (144,228) 36,731
Non-controlling interests 91 5,883
(144,137) 42,614
(Loss)/EARNINGS per share
Basic and diluted (loss)/earnings per share (E) 13 (0.18) 0.03
Consolidated statement of financial position
As at 31 December 2015
31 December 2015 31 December 2014
Note E'000 E'000
Assets
Property, plant and equipment 14 187,015 176,765
Investment property 15 340,853 451,880
Equity-accounted investees 19 188,637 234,223
Available-for-sale financial assets 18 2,201 2,201
Deferred tax assets 24 997 2,557
Trade and other receivables 20 1,178 2,584
Non-current assets 720,881 870,210
Trading properties 17 37,387 52,323
Trade and other receivables 20 15,002 21,138
Cash and cash equivalents 21 41,990 30,978
Assets held for sale 16 70,240 -
Current assets 164,619 104,439
Total assets 885,500 974,649
Equity
Share capital 22 9,046 6,424
Share premium 22 569,847 498,933
Retained (deficit)/earnings (121,706) 28,821
Other reserves 24,402 23,270
Equity attributable to owners of the Company 481,589 557,448
Non-controlling interests 34,939 30,364
Total equity 516,528 587,812
Liabilities
Loans and borrowings 23 191,152 213,923
Finance lease liabilities 25 2,956 7,628
Deferred tax liabilities 24 30,129 55,180
Trade and other payables 27 6,698 12,262
Deferred revenue 26 17,846 9,131
Non-current liabilities 248,781 298,124
Loans and borrowings 23 32,528 26,166
Finance lease liabilities 25 77 467
Trade and other payables 27 58,241 44,187
Deferred revenue 26 11,220 17,893
Liabilities held for sale 16 18,125 -
Current liabilities 120,191 88,713
Total liabilities 368,972 386,837
Total equity and liabilities 885,500 974,649
Net asset value ('NAV') per share (E) 28 0.53 0.87
Consolidated statement of changes in equity
For the year ended 31 December 2015
Attributable to owners of the Company
Retained
Share Share Translation Revaluation earnings/ Non-controlling Total
capital premium reserve reserve (deficit) Total interests equity
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Balance at 1 January 2014 6,424 498,933 1,491 6,768 10,056 523,672 24,504 548,176
Total comprehensive income
Profit - - - - 21,639 21,639 2,673 24,312
Other comprehensive income
Revaluation of property, plant and equipment, net of tax - - - 5,661 - 5,661 106 5,767
Foreign currency translation differences - - 11,913 385 (72) 12,226 3,104 15,330
Translation differences to profit or loss due to disposal of subsidiary - - (2,709) - - (2,709) - (2,709)
Share of revaluation on equity accounted investees - - - (22) - (22) - (22)
Fair value adjustment on available-for-sale financial asset - - - (64) - (64) - (64)
Depreciation transfer due to revaluation - - - (153) 153 - - -
Total other comprehensive income - - 9,204 5,807 81 15,092 3,210 18,302
Total comprehensive income - - 9,204 5,807 21,720 36,731 5,883 42,614
Transactions with owners of the Company
Changes in ownership interests
Acquisition of non-controlling interests without a change in control - - - - (2,955) (2,955) (23) (2,978)
Total changes in ownership interests - - - - (2,955) (2,955) (23) (2,978)
Total transactions with owners of the Company - - - - (2,955) (2,955) (23) (2,978)
Balance at 31 December 2014 6,424 498,933 10,695 12,575 28,821 557,448 30,364 587,812
Balance at 1 January 2015 6,424 498,933 10,695 12,575 28,821 557,448 30,364 587,812
Total comprehensive income
Loss - - - - (145,360) (145,360) (2,635) (147,995)
Other comprehensive income
Revaluation of property, plant and equipment, net of tax - - - (12,993) - (12,993) (397) (13,390)
Foreign currency translation differences - - 13,244 854 - 14,098 3,123 17,221
Share of revaluation on equity accounted investees - - - 27 - 27 - 27
Total other comprehensive income - - 13,244 (12,112) - 1,132 2,726 3,858
Total comprehensive income - - 13,244 (12,112) (145,360) (144,228) 91 (144,137)
Transactions with owners of the Company
Contributions and distributions
Issue of ordinary shares 2,193 60,527 - - - 62,720 - 62,720
Placement costs - (1,464) - - - (1,464) - (1,464)
Bond conversions 429 11,851 - - - 12,280 - 12,280
Equity-settled share-based payment arrangements (see note 30) - - - - 375 375 - 375
Non-controlling interests on capital increases of subsidiaries - - - - (545) (545) 545 -
Total contribution and distributions 2,622 70,914 - - (170) 73,366 545 73,911
Changes in ownership interests
Acquisition of non-controlling interests without a change in control - - - - (4,997) (4,997) 3,236 (1,761)
Other movement in non-controlling interests - - - - - - 703 703
Total changes in ownership interests - - - - (4,997) (4,997) 3,939 (1,058)
Total transactions with owners of the Company 2,622 70,914 - - (5,167) 68,369 4,484 72,853
Balance at 31 December 2015 9,046 569,847 23,939 463 (121,706) 481,589 34,939 516,528
Consolidated statement of cash flows
For the year ended 31 December 2015
31 December 2015 31 December 2014
E'000 E'000
Cash flows from operating activities
(Loss)/profit (147,995) 24,312
Adjustments for:
Net change in fair value of investment property 45,047 (18,576)
Impairment loss on trading properties 3,431 6,216
Gain on disposal of investment in subsidiaries (823) (2,497)
Profit on dilution in equity accounted investees - (149)
Share of losses/(profit) on equity accounted investees, net of tax 44,553 (50,146)
Equity-settled share-based payment arrangements 375 -
Impairment on remeasurement of disposal groups 763 -
Impairment loss and write offs of property, plant and equipment 15,247 13
Reversal of impairment loss on property, plant and equipment - (670)
Concession/write off of land 2,607 -
Depreciation charge 2,919 3,239
Interest income (106) (325)
Interest expense 19,700 15,228
Exchange difference 2,590 (4,303)
Taxation (15,296) (1,588)
(26,988) (29,246)
Changes in:
Receivables 810 3,400
Payables 16,495 6,853
Cash used in operating activities (9,683) (18,993)
Tax paid (160) (207)
Net cash used in operating activities (9,843) (19,200)
Cash flows from investing activities
(Outflow)/proceeds from disposal of subsidiaries, net of cash disposed of (299) 10,047
Net acquisitions of investment property (308) (1,406)
Net acquisitions of property, plant and equipment (42,260) (23,412)
Net change in trading properties 16,189 4,510
Net change in equity accounted investees (286) (1,116)
Interest received 106 325
Net cash used in investing activities (26,858) (11,052)
Cash flows from financing activities
Proceeds from issue of share capital 61,256 -
Acquisition of non-controlling interests without a change in control (1,761) (2,978)
Change in loans and borrowings 3,892 72,708
Change in finance lease obligations 1,100 (346)
Interest paid (13,183) (15,228)
Net cash from financing activities 51,304 54,156
Net increase in cash and cash equivalents 14,603 23,904
Cash and cash equivalents at 1 January 28,739 4,861
Effect of movement in exchange rates on cash held (587) (26)
Cash and cash equivalents reclassified to assets held for sale (765)
Cash and cash equivalents at 31 December 41,990 28,739
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) 41,990 30,978
Bank overdrafts (see note 23) - (2,239)
Cash and cash equivalents at the end of the year 41,990 28,739
1. REPORTING ENTITY
Dolphin Capital Investors Limited (the 'Company') was incorporated and registered in the British Virgin Islands ('BVIs') on
7 June 2005. The Company is a real estate investment company focused on the early-stage, large-scale leisure-integrated
residential resorts in south-east Europe and the Americas, and managed by Dolphin Capital Partners Limited (the 'Investment
Manager'), an independent private equity management firm that specialises in real estate investments, primarily in
south-east Europe. The shares of the Company were admitted to trading on the AIM market of the London Stock Exchange
('AIM') on 8 December 2005.
The consolidated financial statements of the Company as at 31 December 2015 comprise the financial statements of the
Company and its subsidiaries (together referred to as the 'Group') and the Group's interests in associates.
The consolidated financial statements of the Group as at and for the year ended 31 December 2015 are available at
www.dolphinci.com.
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 29 June 2016.
b. Basis of measurement
The consolidated financial statements have been prepared under the historical cost convention, with the exception of
property (investment property, property, plant and equipment), available-for-sale financial assets, which are stated at
their fair values, assets and liabilities held for sale, which are stated at the lower of their carrying amount and fair
value less costs to sell and investments in associates, which are accounted for in accordance with the equity method of
accounting.
c. Adoption of new and revised standards and interpretations
As from 1 January 2015, the Group adopted all changes to IFRS which are relevant to its operations. This adoption did not
have a material effect on the consolidated financial statements of the Company.
The following standards, amendments to standards and interpretations have been issued but are not yet effective for annual
periods beginning on 1 January 2015. Those which may be relevant to the Group are set out below. The Group does not plan to
adopt these standards early. Although, the Group continues to assess the potential impact on its consolidated financial
statements resulting from the application of the following standards, it currently expects that their adoption in future
periods will not have a significant effect on the consolidated financial statements of the Company.
(i) Standards and interpretations adopted by the EU
· Annual Improvements to IFRSs 2010-2012 (effective for annual periods beginning on or after 1 February 2015).
These amendments impact seven standards. The amendments to IFRS 2 amend the definitions of 'vesting condition' and 'market
condition' and add definitions for 'performance condition' and 'service condition' that previously formed part of the
definition of 'vesting condition'. The amendments to IFRS 3 clarify that contingent consideration which is classified as an
asset or a liability should be measured at fair value at each reporting date. The amendments to IFRS 8, require disclosure
of judgements made by management in applying the aggregation criteria to operating segments. They also clarify that an
entity is only required to provide reconciliations of the total of the reportable segments' assets to the entity's assets
if the segment assets are reported regularly. Amendments to IFRS 13 clarify that issuing IFRS 13 and amending IFRS 9 and
IAS 39 did not remove the ability to measure short-term receivables and payables with no stated interest rate at their
invoice amounts without discounting if the effect of not discounting is immaterial. The amendments to IAS 16 and IAS 38
clarify that when an item of property, plant and equipment or an intangible asset is revalued, the gross carrying amount is
adjusted in a manner that is consistent with the revaluation of the carrying amount. Finally, the amendments to IAS 24
clarify that when an entity is providing key management personnel services to the reporting entity or to the parent of the
reporting entity it is considered a related party of the reporting entity.
· IAS 1 (Amendments): Disclosure Initiative (effective for annual periods beginning on or after 1 January 2016).
The amendments introduce changes in various areas. In relation to materiality the amendments clarify that information
should not be obscured by aggregating or by providing immaterial information, that materiality considerations apply to all
parts of the financial statements, and even when a standard requires a specific disclosure, materiality considerations do
apply. In relation to the statement of financial position and statement of profit or loss and other comprehensive income,
the amendments clarify that the list of line items to be presented in these statements can be disaggregated and aggregated
as relevant and provide additional guidance on subtotals in these statements. They also clarify that an entity's share of
other comprehensive income of equity-accounted associates and joint ventures should be presented in aggregate as single
line items based on whether or not it will subsequently be reclassified to profit or loss. In relation to the notes to the
financial statements the amendments add additional guidance of ordering the notes so as to clarify that understandability
and comparability should be considered when determining the order of the notes in order to demonstrate that the notes need
not be presented in the order so far listed in paragraph 114 of IAS 1.
· Annual Improvements to IFRSs 2012-2014 Cycle (effective for annual periods beginning on or after 1 January 2016).
The amendments include the following: IFRS 5 was amended to clarify that changes in the manner of disposal
(reclassification from 'held for sale' to 'held for distribution' or vice versa) does not constitute a change to a plan of
sale or distribution, and does not have to be accounted for as such. The amendment to IFRS 7 adds guidance to help
management determine whether the terms of an arrangement to service a financial asset which has been transferred constitute
continuing involvement, for the purposes of disclosures required by IFRS 7. IAS 34 will require a cross reference from the
interim financial statements to the location of information disclosed elsewhere in the interim financial report.
· IAS 16 and IAS 38 (Amendments) 'Clarification of acceptable methods of depreciation and amortisation' (effective for
annual periods beginning on or after 1 January 2016).
In this amendment, the IASB has clarified that the use of revenue-based methods to calculate the depreciation of an asset
is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors
other than the consumption of the economic benefits embodied in the asset. However, in relation to intangible assets, the
IASB stated that there are limited circumstances when the presumption can be overcome. This is applicable when the
intangible asset is expressed as a measure of revenue and it can be demonstrated that revenue and the consumption of
economic benefits of the intangible asset are highly correlated.
(ii) Standards and interpretations not adopted by the EU
· IAS 7 (Amendments) 'Disclosure Initiative' (effective for annual accounting periods beginning on or after 1 January
2017).
The amendments are intended to clarify IAS 7 and improve information provided to users for an entity's financing
activities. The amendments will require that the following changes in liabilities arising from financing activities are
disclosed (to the extent necessary): (a) changes from financing cash flows; (b) changes arising from obtaining or losing
control of subsidiaries or other businesses; (c) the effect of changes in foreign exchange rates; (d) changes in fair
values; and (e) other changes.
· IAS 12 (Amendments) 'Recognition of Deferred Tax Assets for Unrealised Losses' (effective for annual accounting
periods beginning on or after 1 January 2017).
The amendments will give clarifications in relation to the recognition of a deferred tax asset that is related to a debt
instrument measured at fair value. Additionally, it clarifies that the carrying amount of an asset does not limit the
estimation of probable future taxable profits and that estimates for future taxable profits exclude tax deductions
resulting from the reversal of deductible temporary differences. Further, it clarifies that an entity assesses a deferred
tax asset in combination with other deferred tax assets. Finally, where tax law restricts the utilisation of tax losses, an
entity would assess a deferred tax asset in combination with other deferred tax assets of the same type.
· IFRS 15 'Revenue from contracts with customers' (effective for annual periods beginning on or after 1 January
2018).
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces
existing revenue recognition guidance, including IAS 18 'Revenue', IAS 11 'Construction Contracts' and IFRIC 13 'Customer
Loyalty Programs'.
· IFRS 9 'Financial Instruments' (effective for annual periods beginning on or after 1 January 2018).
IFRS 9 replaces the existing guidance in IAS 39. IFRS 9 includes revised guidance on the classification and measurement of
financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general
hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial
instruments from IAS 39.
· IFRS 16 'Leases' (effective for annual periods beginning on or after 1 January 2019).
IFRS 16 will supersede IAS 17 and related interpretations. The new standard will bring most leases on-balance sheet for
lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting however
will remain largely unchanged and the distinction between operating and finance leases is retained.
d. Use of estimates and judgements
The preparation of consolidated financial statements in accordance with IFRS requires from Management the exercise of
judgement, to make estimates and assumptions that influence the application of accounting principles and the related
amounts of assets and liabilities, income and expenses. The estimates and underlying assumptions are based on historical
experience and various other factors that are deemed to be reasonable based on knowledge available at that time. Actual
results may deviate from such estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in any future periods affected. In particular, information about
significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most
significant effect on the amounts recognised in the consolidated financial statements are described below:
Work in progress
Work in progress is stated at cost plus any attributable profit less any foreseeable losses and less amounts received or
receivable as progress payments. The cost of work in progress includes materials, labour and direct expenses plus
attributable overheads based on a normal level of activity. The Group uses its judgement to select a variety of methods and
make assumptions that are mainly based on market conditions existing at each statement of financial position date.
Revenue recognition
The Group applies the provisions of IAS18 for accounting for revenue from sale of developed property, under which income
and cost of sales are recognised upon delivery and when substantially all risks have been transferred to the buyer.
Provision for bad and doubtful debts
The Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes the
customer's payment record and the customer's overall financial position. If indications of irrecoverability exist, the
recoverable amount is estimated and a respective provision for bad and doubtful debts is made. The amount of the provision
is charged through profit or loss. The review of credit risk is continuous and the methodology and assumptions used for
estimating the provision are reviewed regularly and adjusted accordingly.
Taxation
Significant judgement is required in determining the provision for taxation. There are transactions and calculations for
which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities
for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of
these matters is different from the amounts that were initially recorded, such differences will impact the income taxand
deferred tax provisions in the period in which such determination is made.
Measurement of fair values
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and
non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes a valuation
team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair
values.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible.
Significant unobservable inputs and valuation adjustments are regularly reviewed and changes in fair value measurements
from period to period are analysed.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
· Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
· Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the
fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value
hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which
the change has occurred.
When applicable, further information about the assumptions made in measuring fair values is included in the notes specific
to that asset or liability.
e. Functional and presentation currency
These consolidated financial statements are presented in Euro (E), 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 and quarterly.
The Directors have appointed Colliers International, American Appraisal (Hellas) and PKF Consulting USA, three
internationally recognised firms of surveyors, to conduct valuations of the Group's acquired properties to determine their
fair value. These valuations are prepared in accordance with generally accepted appraisal standards, as set out by the
American Society of Appraisers (the 'ASA'), and in conformity with the Uniform Standards of Professional Appraisal Practice
of the Appraisal Foundation and the Principles of Appraisal Practice and Code of Ethics of the ASA and the Royal Institute
of Chartered Surveyors ('RICS'). Furthermore, the valuations are conducted on an 'as is condition' and on an open market
comparative basis.
The valuation analysis of properties is based on all the pertinent market factors that relate both to the real estate
market and, more specifically, to the subject properties. The valuation analysis of a property typically uses four
approaches: the cost approach, the direct sales comparison approach, the income approach and the residual value
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