REG - Dolphin Capital Inv - Final Results <Origin Href="QuoteRef">DOLC.L</Origin> - Part 5
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31 December 2014 31 December 2013
E'000 E'000
Trade receivables 283 339
Amount receivable from Archimedia Holdings Corp. ('Archimedia')(see note 25.4) 415 1,509
VAT receivables 6,206 7,676
Other receivables 10,807 11,032
Total trade and other receivables (see note 28) 17,711 20,556
Prepayments and other assets 3,427 8,400
Total 21,138 28,956
18. Cash and cash equivalents
31 December 2014 31 December 2013
E'000 E'000
Bank balances (see note 28) 30,952 7,075
Cash in hand 26 25
Total 30,978 7,100
The Group during the period had no fixed deposits. The average interest rate on the fixed deposit balances for the year
ended 31 December 2013 was 0.495%.
As at 31 December 2014, the amount of E5 million and E18.9 million (US$22.9 million) received through Colony Luxembourg
S.a.r.l and Melody Business Finance LLC loan facilities are restricted for use only towards the development of Amanzoe and
Playa Grande projects, respectively. In addition, funds in bank accounts of certain Group companies are pledged as a
security for loans (see note 20).
19. capital and reserves
Capital
Authorised share capital
31 December 2014 31 December 2013
'000 of shares E'000 '000 of shares E'000
Common shares of E0.01 each 2,000,000 20,000 2,000,000 20,000
Movement in share capital and premium
Shares in Share capital Share premium
'000 E'000 E'000
Capital at 1 January 2013 and 31 December 2014 642,440 6,424 498,933
Warrants
In December 2011, the Company raised E8.5 million through the issue of new shares at GBP 0.27 per share (with warrants
attached to subscribe for additional Company shares equal to 25% of the aggregate value of the new shares at the price of
GBP 0.317 per share, subject to anti-dilution adjustments pursuant to the warrant's terms and conditions - initial price of
GBP 0.35 per share). The warrant holders can exercise their subscription rights within five years from the admission date.
The number of shares to be issued on exercise of their rights will be determined based on the subscription price on the
exercise date.
Reserves
Translation reserve
Translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations.
Fair value reserve
The fair value reserve comprises the cumulative net change in fair value of available-for-sale financial assets until the
assets are derecognised or impaired, and the revaluation of property, plant and equipment from both subsidiaries and equity
accounted investees, net of any deferred tax.
20. loans AND BORROWINGS
Total Within one year Within two to five years More than five years
2014 2013 2014 2013 2014 2013 2014 2013
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Loans in euro 111,562 76,390 20,943 11,619 23,986 32,550 66,633 32,221
Loans in United States dollars 43,128 10,982 2,984 1,902 10,009 7,760 30,135 1,320
Bank overdrafts in euro 2,239 2,239 2,239 2,239 - - - -
Convertible bonds payable 83,160 79,193 - - 83,160 79,193 - -
Total 240,089 168,804 26,166 15,760 117,155 119,503 96,768 33,541
Terms and Conditions
The terms and conditions of outstanding loans were as follows:
Description Currency Interest rate Maturity dates 31 December 2014E'000 31 December 2013E'000
Secured loans Euro Euribor plus margins ranging from 5% to 6.5% From 2015 to 2026 49,474 52,936
Secured loans Euro Basic rate plus margins ranging from 1.5% to 2.25% From 2015 to 2022 19,897 19,849
Secured loans Euro Fixed rates ranging from 7.9% to 11% From 2016 to 2020 42,191 3,605
Secured loans United States Dollars Libor plus margins ranging from 2% to 8% From 2017 to 2020 43,128 10,982
Unsecured bank overdraft Euro 9.05% On demand 2,239 2,239
Convertible bonds payable Euro 5.50% 2018 50,000 50,000
Convertible bonds payable United States Dollars 7% From 2016 to 2018 33,160 29,193
Total interest-bearing liabilities 240,089 168,804
Securities
As at 31 December 2014, the Group's loans and borrowings were secured as follows:
· Mortgage against immovable property of the subsidiary in Dominican Republic, PGH, with a carrying amount of E36.2
million (2013: E27.3 million).
· Mortgage against the immovable property of the Croatian subsidiary, Azurna, with a carrying amount of E32.2 million
(2013: E34 million), two promissory notes and a debenture note.
· Mortgage against immovable property of the Turkish subsidiary, Kalkan Yapi ve Turizm A.S., with a carrying amount of
E8.7 million (2013: E8.7 million). As at 31 December 2013, there was also a mortgage against immovable property of Pasakoy
Yapi ve Turism A.S., a Turkish subsidiary disposed of, with a carrying amount of E11.4 million.
· Mortgage against the immovable property of the Cypriot subsidiary, Symboula Estates Limited, with a carrying amount of
E41.2 million (2013: E43.6 million).
· Mortgage against immovable property of the Cypriot associate, Aristo, amounting to E2.8 million (2013: E2.8 million).
· First and second prenotations of mortgage against immovable property of the Greek subsidiary, Aristo Developers S.A.,
with a carrying amount of E1.4 million (2013: E1.5 million), and a prenotation of mortgage against immovable property of
the same entity, with a carrying amount of E7.9 million (2013: E7.8 million).
· Lien up to E41.6 million on immovable properties of the Greek subsidiaries of The Porto Heli project with a carrying
amount of E178 million (2013: E176 million).
· Pledge of 1,500 shares of DCI H2 for Symboula Estates Limited bank loans and all shares of SPV 5 for SPV 5 loan
facility received from DCI H50 (2013: pledge of 1, 500 shares of DCI H2) (see note 16).
· Pledge of 4,495 shares of the Cypriot subsidiary, DCI 14, and all shares of six Cypriot and Greek subsidiaries of
Amanzoe project for DCI 14 loan received from Colony Luxembourg S.a.r.l. acting on behalf of managed funds.
· Pledge of all shares of PGH, its subsidiary, Playa Grande Golf Resort Inc., and its parent, DCA Holdings Seven Limited
for the loan received by DCA Holdings Seven Limited's parent, DCA Holdings Six Limited, from Melody Business Finance LLC,
acting as administrative agent of a group of lenders.
· Fixed and floating charges over the rights, titles and interests of DCI 14 and three Cypriot subsidiaries of Amanzoe
project, charge over their bank accounts and assignment of their intra-group receivables for the loan from Colony
Luxembourg S.a.r.l.
· Pledge over the net loan proceeds related to the loan through Melody Business Finance LLC.
· Pledge over funds in bank accounts of PGH and its subsidiary, Playa Grande Golf Resort Inc., pledge over rights under
insurance policies, conditioned assignment over operation and promissory notes for disbursements in connection with Playa
Grande Golf Resort Inc. bank loan.
· Corporate guarantees by DCI Holdings One Limited for the serving of the bank loans of Cypriot subsidiary, Symboula
Estates Limited, amounting to E21.3 million (2013: E21.3 million).
· Corporate guarantee by the Company on PGH group bank loan and convertible bonds issued in 2011, as at 31 December 2014
and 31 December 2013.
· Guarantee by Dolphin Capital Americas Limited, the parent of DCA Holdings Six Limited, on the payment and performance
of guaranteed obligations in connection with the loan from Melody Business Finance LLC.
Convertible bonds payable
On 5 April 2013, the Company issued 5,000 bonds (the 'Euro Bonds') at E10 thousand each, bearing interest of 5.5% per
annum, payable semi-annually, and maturing on 5 April 2018.
On 23 April 2013, the Company issued 917 bonds (the 'US$ Bonds') at US$10 thousand each, bearing interest of 7% per annum,
payable semi-annually, and maturing on 23 April 2018.
The Euro Bonds and the US$ Bonds may be converted prior to maturity (unless earlier redeemed or repurchased) at the option
of the holder into common shares of E0.01 each. The initial conversion price is E0.5737 (representing GBP 0.50 per share
converted into euro at the fixed exchange rate of GBP 1.00:E1.1474) and US$0.6717 (representing GBP 0.45 per share
converted into United States dollars at the fixed exchange rate of GBP 1.00:US$1.4928) per share for the Euro Bonds and the
US$ Bonds, respectively.
The Euro Bonds and the US$ Bonds are not publicly traded.
Part of the bonds, amounting to E41,004 thousand, was subscribed by Third Point LLC, a significant shareholder of the
Company (see note 25.5).
On 29 March 2011, DCI H7 issued 4,000 bonds at US$10 thousand each, bearing interest of 7% per annum, payable
semi-annually, and maturing on 29 March 2016. The bonds are trading on the Open Market of the Frankfurt Stock Exchange (the
freiverkehr market) under the symbol 12DD. On 23 April 2013, the Company purchased 891 bonds at a consideration of US$10
thousand each (representing their par value) plus corresponding accrued interest of approximately US$200 thousand using the
funds received from the issue of the US$ Bonds.
Bonds may be converted prior to maturity (unless earlier redeemed or repurchased) at the option of the holder into
Company's common shares of E0.01 each for a conversion price of US$0.7239, equivalent of GBP 0.453, subject to
anti-dilution adjustments pursuant to the bond's terms and conditions (initial conversion price GBP 0.50). The number of
shares to be issued on exercise of a conversion right shall be determined by dividing the principal amount of the bonds to
be converted by the conversion price in effect on the relevant conversion date.
At the option of bondholders:
(i) some or all of the principal amount of the bonds held by a bondholder may be repurchased by the issuer; and
(ii) the consideration for such repurchase shall be the transfer by the Company to the bondholder of land plot(s) at
the issuer's Playa Grande Aman development in the Dominican Republic.
21. Deferred tax assets and liabilities
31 December 2014 31 December 2013
Deferred Deferred Deferred Deferred
tax assets tax liabilities tax assets tax liabilities
E'000 E'000 E'000 E'000
Balance at the beginning of the year 4,230 (56,610) 3,384 (45,454)
From disposal of subsidiary (see note 26) (1,162) - - -
Recognised in profit or loss (see note 10) (510) 2,218 1,427 (12,393)
Recognised in other comprehensive income (see note 10) - (555) - 1,118
Exchange difference and other (1) (233) (581) 119
Balance at the end of the year 2,557 (55,180) 4,230 (56,610)
Deferred tax assets and liabilities are attributable to the following:
31 December 2014 31 December 2013
Deferred Deferred Deferred Deferred
tax assets tax liabilities tax assets tax liabilities
E'000 E'000 E'000 E'000
Revaluation of investment property - (45,160) - (45,452)
Revaluation of trading properties - (2,394) - (4,723)
Revaluation of property, plant and equipment - (8,374) - (6,180)
Other temporary differences - 748 - (255)
Tax losses 2,557 - 4,230 -
Total 2,557 (55,180) 4,230 (56,610)
22. Finance lease obligationS
31 December 2014 31 December 2013
Future Present value Future Present value
minimum of minimum minimum of minimum
lease lease lease lease
payments Interest payments payments Interest payments
E'000 E'000 E'000 E'000 E'000 E'000
Less than one year 529 62 467 502 79 423
Between two and five years 1,738 227 1,511 1,773 293 1,480
More than five years 9,168 3,051 6,117 11,665 5,127 6,538
Total 11,435 3,340 8,095 13,940 5,499 8,441
The major finance lease obligations comprise leases in Greece with 99-year lease terms.
23. Trade and other payables
31 December 2014 31 December 2013
E'000 E'000
Trade payables 349 514
Land creditors 24,989 24,251
Prepayments from clients 17,893 7,178
Investment Manager fees payable (see note 25.2) 467 467
Payable to the former controlling shareholder of PGH project (see note 25.4) 565 498
Other payables and accrued expenses 17,796 20,207
Total 62,059 53,115
24. NAV per share
31 December 2014 31 December 2013
'000 '000
Total equity attributable to owners of the Company (E) 557,448 523,672
Number of common shares outstanding at end of year 642,440 642,440
NAV per share (E) 0.87 0.82
25. Related party transactions
25.1 Directors of the Company
Miltos Kambourides is the founder and managing partner of the Investment Manager.
The interests of the Directors, all of which are beneficial, in the issued share capital of the Company as at 31 December
2014 were as follows:
Shares
'000
Miltos Kambourides (indirect holding) 65,081
Roger Lane-Smith 60
Andreas Papageorghiou 5
Save as disclosed, none of the Directors had any interest during the period in any material contract for the provision of
services which was significant to the business of the Group.
On 30 May 2013, David B. Heller acquired convertible Euro Bonds of E2,050 thousand par value that may be converted prior to
maturity into 3,573,296 common Company shares of E0.01 each.
25.2 Investment Manager fees
Annual fees
The Investment Manager is entitled to an annual management fee of 2% of the equity funds defined as follows:
• E890 million; plus
• The gross proceeds of further equity issues, other than the funds raised in respect of the proceeds of the equity
issues as at 25 October 2012 and 30 December 2011; plus
• Realised net profits less any amounts distributed to shareholders.
The equity funds as at 31 December 2014 comprised E681 million.
In addition, the Company shall reimburse the Investment Manager for any professional fees or other costs incurred on behalf
of the Company for the provision of services or advice.
Management fees for the years ended 31 December 2014 and 31 December 2013 amounted to E13,671 thousand and E13,780
thousand, respectively.
Performance fees
The Investment Manager is entitled to a performance fee based on the net profits made by the Company, subject to the
Company receiving the 'Relevant Investment Amount' which is defined as an amount equal to:
i The total cost of the investment reduced on a pro rated basis by an amount of E160.1 million*; plus
ii a hurdle amount equal to an annualised percentage return equal to the average one-month Euribor rate applicable
in the period commencing from the month when the relevant cost is incurred compounded for each year or fraction of a year
during which such investment is held (the 'Hurdle'); plus
iii a sum equal to the amount of any realised losses and/or write-downs in respect of any other investment which has
not already been taken into account in determining the Investment Manager's entitlement to a performance fee.
In the event that the Company has received distributions from an investment equal to the Relevant Investment Amount, any
subsequent net profits arising shall be distributed in the following order or priority:
i 60% to the Investment Manager and 40% to the Company until the Investment Manager shall have received an amount
equal to 20% of such profits; and
ii 80% to the Company and 20% to the Investment Manager, such that the Investment Manager shall receive a total
performance fee equivalent to 20% of the net profits.
* The total cost of investment was reduced in April 2014 by E7.6 million, as compared to the base reduction of E167.7
million, to reflect the loss incurred by the Company through the Pasakoy Yapi ve Turizm A.S. ('Pasakoy') sale transaction,
as calculated in accordance with the Investment Management Agreement provisions and definitions.
The performance fee payment is subject to the following escrow and clawback provisions:
Escrow
The following table displays the current escrow arrangements:
Escrow Terms
Up to E109 million returned 50% of overall performance fee held in escrow
Up to E109 million plus the cumulative hurdle returned 25% of any performance fee held in escrow
After the return of E409 million post-hurdle, plus the return of E225 million post-hurdle All performance fees released from escrow
Clawback
If on the earlier of (i) disposal of the Company's interest in a relevant investment or (ii) 1 August 2020, the proceeds
realised from that investment are less than the Relevant Investment Amount, the Investment Manager shall pay to the Company
an amount equivalent to the difference between the proceeds realised and the Relevant Investment Amount. The payment of the
clawback is subject to the maximum amount payable by the Investment Manager not exceeding the aggregate performance fees
(net of tax) previously received by the Investment Manager in relation to other investments.
No performance fees were charged to the Company for the years ended 31 December 2014 and 31 December 2013. As at 31
December 2014 and 31 December 2013, funds held in escrow, including accrued interest, amounted to E467 thousand.
25.3 Directors' remuneration
The Directors' remuneration for the years ended 31 December 2014 and 31 December 2013 were as follows:
From 1 January 2014 From 1 January 2013
to 31 December 2014 to 31 December 2013
E'000 E'000
Andreas Papageorghiou 15.0 15.0
Cem Duna 15.0 15.0
Roger Lane-Smith 45.0 45.0
Antonios Achilleoudis 15.0 15.0
Christopher Pissarides 50.0 50.0
David B.Heller 18.8 14.2
Total 158.8 154.2
Mr. Miltos Kambourides has waived his fees.
On 14 March 2013, Mr. David B. Heller was appointed as non-executive Director, having been nominated for appointment by
Third Point LLC. On 10 June 2014, he was elected to be Chairman of the Board of the Company. The previous Chairman, Mr.
Andreas Papageorgiou, will continue to act as a non-executive director.
On 25 February 2015, the Company announced the following Directorate changes: five new members joined the Board, Mr.
Laurence Geller who will also serve as Chairman, Mr. Robert Heller, Mr. Graham Warner, Mr. Mark Townsend and Mr. Justin
Rimel. Mr. Miltos Kambourides, Mr. David Heller and Mr. Roger Lane Smith remain on the new Board, which now comprises of
eight members.
25.4 Shareholder and development agreements
Shareholder agreements
DolphinCI Twenty Two Limited, a subsidiary of the Group, had signed a shareholder agreement with the non-controlling
shareholder of Eastern Crete Development Company S.A., under which it had acquired 60% of the shares of Plaka Bay project
by paying the former majority shareholder a sum upon closing and a conditional amount in the event the non-controlling
shareholder was successful in, among others, acquiring additional specific plots and obtaining construction permits. On 23
August 2013, the parties signed a new agreement for the purchase of the remaining 40% stake of the entity. The base
consideration for the purchase was E4.4 million payable in three installments: E2.4 million by 10 September 2013, E1
million by 30 September 2013 and E1 million by 31 October 2013. The last installment of E1 million was transferred in
February 2014. Consideration might be increased by the transfer of plots of land in the project, to the seller, of total
market value equal to E4 million, subject to the project receiving permits for building 40,000 m², of freehold residential
properties. The conditional deferred consideration will be adjusted pro rata in case the buildable properties are less than
40,000 m² but is also subject to a 5% annual increase commencing from the second anniversary from the signing of the
agreement and until implementation from the Company.
On 20 September 2010, the Group signed an agreement with Archimedia, controlled by John Hunt, for the sale of a 14.29%
stake in Amanzoe for a consideration of E11 million. The agreement also granted Archimedia the right to partially or wholly
convert this shareholding stake into up to three predefined Aman Villas (the 'Conversion Villas') for a predetermined value
and percentage per Villa. The first E1 million of the consideration was received at signing, while the completion of the
transaction and the payment of the E10 million balance was subject to customary due diligence on the project and the
issuance of the construction permits for the Conversion Villas prior to a longstop date set at 1 April 2011. On 28 March
2011, the Company reached an agreement with Archimedia to vary the original terms of the sale agreement, which was followed
by the Company and Archimedia entering into an amended sale agreement on 13 March 2012. The Company received US$12,422
thousand and E1,300 thousand, while US$978 thousand and E800 thousand due as at 31 December 2013, plus any additional
consideration that could be due depending on the exact size and features of the Conversion Villas, would be received upon
completion of the Conversion Villas. On 2 July 2014, Archimedia remitted E904 thousand (E263 thousand and US$878 thousand)
to the Company towards this end. The total receivable amount of E415 thousand (31 December 2013: E1,509 thousand) is
included in receivables and other assets (see note 17). On 3 August 2012, the Company received a Conversion Notice from
Archimedia to convert 6.43% of its shares in Amanzoe in exchange for an Aman Villa and on 27 December 2012 a further Notice
for the conversion of the remaining 7.86% of its shares for two other Aman Villas. On 17 September 2014, the conversion of
6.43% of Archimedia's 14.29% stake into one of the designated Conversion Villas was completed while the finalization of the
relevant documentation for the conversion of the remaining 7.86% is expected shortly. Following these conversions,
Archimedia will not hold any shareholding interest in Amanzoe.
On 6 August 2012, the Company signed an agreement for the sale of eight out of the nine remaining Seafront Villas, part of
the Mindcompass Overseas Limited group of entities. The total base net consideration agreed for this sale was E10 million,
with the Company also entitled to 50% profit participation in the sale of five Villas. It was also agreed that the Company
would undertake the construction contract for the completion of the Villas and a E1 million deposit was paid upon signing.
During 2013, the Company received an additional amount of E990 thousand. The construction of the two Villas is currently
underway.
On 5 September 2012, the Company signed a sales agreement with a regional investor group led by Mr. Alberto Vallarino for
the sale of its 60% shareholding in Peninsula Resort Holdings Limited, the entity that indirectly holds the land for Pearl
Island's Founders' phase of the Pearl Island Project. The consideration for the sale was a cash payment of US$6 million
(50% paid at closing on 14 September 2012 and 50% one year from closing, collected on 17 September 2013) and a commitment
to invest an additional circa US$35 million of development capital within a maximum period of two years in order to
complete the aforementioned phase of the project. Out of those funds, approximately US$13 million shall be incurred on
development of components owned by Pearl Island Limited S.A., with US$12,553 thousand already invested by 31 December 2014
(31 December 2013: US$7,171 thousand).
On 24 September 2012, the Company signed an agreement with an affiliate of the Swiss Development Group for the sale of a
75% stake in the Nikki Beach Resort & Spa at Porto Heli together with a contract for the management and construction of the
project for a minimum consideration of E3.15 million, that will increase depending on the size of the loan facility
obtained, the returns realised and the final construction cost. An amount of E1.23 million had been received by the Company
as of 31 December 2012, and the remaining balance of the minimum consideration was received in early 2013.
Development agreements
Pursuant to the original Sale and Purchase Agreement of 10 December 2007, DCI H7 was obliged to make payments for the
construction of infrastructure on the land retained by DR Beachfront Real Estate LLC ('DRB'), the former majority
shareholder of PGH. Pursuant to a restructuring agreement dated 5 November 2012, those obligations have been restructured
with the material provisions of that agreement already fulfilled. As at 31 December 2014, following cash payments of
US$7.6 million and transfers of land parcels valued at approximately US$11 million, the total provision outstanding is
US$0.7 million (E565 thousand) (31 December 2013: US$0.7 million or E498 thousand) which is included in trade and other
payables (see note 23).
Pedro Gonzalez Holdings II Limited, a subsidiary of the Group in which the Company holds a 60% stake, has signed a
Development Management agreement with DCI Holdings Twelve Limited ('DCI H12') in which the Group has a stake of 60%. Under
its terms, DCI H12 undertakes, among others, the management of permitting, construction, sale and marketing of the Pearl
Island project.
25.5 Other related parties
During the years ended 31 December 2014 and 31 December 2013, the Group incurred the following related party transactions
with the following parties:
2014Related party name E'000 Nature of transaction
Iktinos Hellas S.A. 48 Project management services in relation to Sitia project and rent payment
John Heah, non-controlling shareholder of SPV 10 486 Design fees in relation to Kea Resort project and Playa Grande project
Progressive Business Advisors S.A. 314 Accounting fees
Aristo 1,445 Sale of property to Group company
Portoheli Ksenodoxio Kai Marina S.A. 7,655 Construction cost and project management services in relation to Nikki Beach project
Third Point LLC, shareholder of the Company 2,326 Bond interest for the year
2013Related party name E'000 Nature of transaction
Iktinos Hellas S.A. 48 Project management services in relation to Sitia project and rent payment
John Heah, non-controlling shareholder of SPV 10 73 Design fees in relation to Kea Resort project and Playa Grande project
Portoheli Ksenodoxio Kai Marina S.A. 4,345 Construction cost and project management services in relation to Nikki Beach project
Progressive Business Advisors S.A. 292 Accounting fees
Third Point LLC, shareholder of the Company 41,004 Subscription to bonds (see note 20)
Third Point LLC, shareholder of the Company 1,695 Bond interest for the year
26. Business combinations
During the year ended 31 December 2014, the Group increased its ownership interest in Bourne Holdings (Cyprus) Limited
(holding company of Eastern Crete Development Company S.A.) by 9.09% to 100% and in DCI 14 by 6.43% to 92.14% as follows:
Eastern Crete
Development
Company S.A. DCI 14 Total
E'000 E'000 E'000
Non-controlling interests acquired 1,535 (1,512) 23
Consideration transferred (1,000) (4,914) (5,914)
Less: receivables assignment - 2,936 2,936
Net consideration transferred (1,000) (1,978) (2,978)
Acquisition effect recognised in equity 535 (3,490) (2,955)
The consideration transferred for the acquisition of the 6.43% stake in DCI 14 relates to a conversion villa, per relevant
agreement (see note 25.4).
During the year ended 31 December 2014, the Group disposed of its entire stake in Pasakoy and reduced its participation in
DCI H50 from 100% to 50%, as follows:
Pasakoy DCI H50 Total
E'000 E'000 E'000
Deferred tax assets (see note 21) (1,162) - (1,162)
Non-current assets (955) - (955)
Trading properties (see note 14) (7,252) - (7,252)
Receivables and other assets (394) (3,943) (4,337)
Cash and cash equivalents (1) (1) (2)
Loans and borrowings 1,423 - 1,423
Trade and other payables 52 - 52
Net assets on which control was lost (8,289) (3,944) (12,233)
Equity accounted investees (see note 16) - 1,972 1,972
Net assets disposed of (8,289) (1,972) (10,261)
Proceeds on disposal 8,289 1,760 10,049
Translation reserve 2,709 - 2,709
Gain on disposal recognised in profit or loss 2,709 (212) 2,497
Cash effect on disposal:
Proceeds on disposal 8,289 1,760 10,049
Cash and cash equivalents (1) (1) (2)
Net cash inflow on disposal 8,288 1,759 10,047
During the year ended 31 December 2013, the Group increased its ownership interest without any change in control in Bourne
Holdings (Cyprus) Limited (holding company of Eastern Crete Development Company S.A.) by 30.91% to 90.91% as follows:
Eastern Crete
Development
Company S.A.
E'000
Non-controlling interests acquired 5,291
Consideration transferred (3,400)
Acquisition effect recognised in equity 1,891
27. 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 2014 DCI Holdings Eleven LimitedE'000 Pedro Gonzalez Holdings I LimitedE'000 IktinosE'000 DCI 14E'000 SPV 10E'000
Non-controlling interests percentage 40% 40% 22.18% 7.86%* 33.33%
Non-current assets 989 78,012 30,217 97,528 19,713
Current assets 2,220 6,750 100 38,437 230
Non-current liabilities (47) (2,179) (3,517) (146,678) (20,232)
Current liabilities (3,422) (14,318) (308) (17,244) (1,064)
Net assets (260) 68,265 26,492 (27,957) (1,353)
Carrying amount of non-controlling interests (104) 27,306 5,876 (2,197) (451)
Revenue 4,600 583 - 5,776 -
Profit/(loss) 2,022 4,294 (1,415) (13,697) 6,207
Other comprehensive income - - - 1,347 -
Total comprehensive income 2,022 4,294 (1,415) (12,350) 6,207
Profit/(loss) allocated to non-controlling interests 809 1,718 (314) (1,597) 2,069
Other comprehensive income allocated to non-controlling interests - - - 106 -
Cash flow from/(used in) operating activities 5 5,078 24 (19,408) 401
Cash flow (used in)/from investing activities (36) (5,076) (25) 4,324 (429)
Cash flow (used in) from financing activities - (45) - 20,185 (2)
Net (decrease)/increase in cash and cash equivalents (31) (43) (1) 5,101 (30)
31 December 2013 DCI Holdings Eleven LimitedE'000 Pedro Gonzalez Holdings I LimitedE'000 IktinosE'000 DCI 14E'000 SPV 10E'000
Non-controlling interests percentage 40% 40% 22.18% 14.29%* 33.33%
Non-current assets 993 59,882 31,736 99,207 11,329
Current assets 2,001 5,903 271 32,821 454
Non-current liabilities (28) (1,839) (3,818) (120,901) (18,439)
Current liabilities (5,143) (7,985) (282) (26,648) (904)
Net assets (2,177) 55,961 27,907 (15,521) (7,560)
Carrying amount of non-controlling interests (871) 22,384 6,190 (2,218) (2,520)
Revenue 4,220 1,839 - 6,630 -
(Loss)/ profit (40) 3,663 (2,756) (8,351) (878)
Other comprehensive income - - - (5,887) -
Total comprehensive income (40) 3,663 (2,756) (14,238) (878)
(Loss)/profit allocated to non-controlling interests (16) 1,465 (611) (1,193) (293)
Other comprehensive income allocated to non-controlling interests - - - (841) -
Cash flow from/(used in) operating activities 533 6,026 37 15,365 (34)
Cash flow used in investing activities (533) (6,298) (6) (16,046) (19)
Cash flow from/(used in) financing activities - 566 (1) 637 149
Net increase/(decrease) in cash and cash equivalents - 294 30 (44) 96
*As mentioned in note 26, the Group during 2014 increased its shareholding interest in DCI 14 by 6.43% to 92.14%, as a
result the non-controlling interest decreased from 14.29% to 7.86%.
28. 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 2014 31 December 2013
E'000 E'000
Trade and other receivables (see note 17) 17,711 20,556
Cash and cash equivalents (see note 18) 30,952 7,075
Total 48,663 27,631
Trade and other receivables
Exposure to credit risk
The maximum exposure to credit risk for trade and other receivables at the end of the reporting year by geographic region
was as follows:
Carrying amount
31 December 2014 31 December 2013
E'000 E'000
Europe 15,363 16,087
Turkey 703 703
Americas 1,645 3,766
Total trade and other receivables 17,711 20,556
Credit quality of trade and other receivables
The Group's trade and other receivables that relate to business combinations and to VAT receivables are neither past nor
due. The amount of VAT receivables is primarily receivable from the Greek government.
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 2014 31 December 2013
No. of Banks E'000 E'000
Bank group based on credit ratings by Moody's
Rating Aaa to A 3 385 1,866
Rating Baa to B 6 78 641
Rating Caa to C 5 7,427 1,173
Bank group based on credit ratings by Fitch's
Rating AAA to A- 1 22,285 399
Rating BBB to B- 4 777 2,996
Total bank balances 30,952 7,075
(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 amounts Contractual cash flows Within one year One to two years Three to five years Over five years
E'000 E'000 E'000 E'000 E'000 E'000
31 December 2014
Loans and borrowings 240,089 (332,197) (39,005) (48,540) (116,124) (128,528)
Finance lease obligations 8,095 (11,435) (529) (435) (1,304) (9,167)
Land creditors 24,989 (24,989) (24,989) - - -
Trade and other payables 55,204 (55,204) (33,811) (3,440) (368) (17,585)
328,377 (423,825) (98,334) (52,415) (117,796) (155,280)
31 December 2013
Loans and borrowings 168,804 (213,604) (25,392) (27,177) (119,804) (41,231)
Finance lease obligations 8,441 (13,940) (502) (443) (1,329) (11,666)
Land creditors 24,251 (24,251) (24,251) - - -
Trade and other payables 49,253 (49,253) (25,717) (1,850) (123) (21,563)
250,749 (301,048) (75,862) (29,470) (121,256) (74,460)
The Group, as at the date of financial position, had secured individual financing facilities for its individual active
projects, which are monitored on an on-going basis.
(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 E2,044
thousand (2013: E1,503 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 and other
equity.
Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.
Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a
currency that is not the Group's measurement currency. The Group is exposed to foreign exchange risk arising from various
currency exposures primarily with respect to the United States dollar. The Group's management monitors the exchange rate
fluctuations on a continuous basis and acts accordingly.
The Group's exposure to foreign currency risk for its use of financial instruments was as follows:
31 December 2014 31 December 2013
Euro USD TRY HRK GBP Euro USD TRY HRK GBP
'000 '000 '000 '000 '000 '000 '000 '000 '000 '000
Trade and other receivables 15,467 1,915 1,885 14 - 16,018 6,123 288 - -
Cash and cash equivalents 10,103 25,132 153 924 - 2,240 5,541 41 4,563 192
Loans and borrowings (163,801) (92,621) - - - (128,629) (55,406) - - -
Finance lease obligations (7,961) (163) - - - (8,284) (217) - - -
Land creditors (24,217) (938) - - - (23,571) (938) - - -
Trade and other payables (48,578) (10,009) (1,944) (7,309) - (43,923) (9,310) (2,241) (7,394) -
Net statement of financial position exposure (218,987) (76,684) 94 (6,371) - (186,149) (54,207) (1,912) (2,831) 192
The following exchange rates applied at the date of financial position:
Euro 1 equals to: 31 December 2014 31 December 2013
USD 1.21 1.38
TRY 2.83 2.96
HRK 7.66 7.63
GBP 0.78 0.83
Sensitivity analysis
A 10% strengthening of the euro against the following currencies at 31 December would affected the measurement of financial
instruments denominated in a foreign currency and increased/(decreased) equity and profit or loss by the amounts shown
below. This analysis assumes that all other variables, in particular interest rates, remain constant. For a 10% weakening
of the euro against the relevant currency, there would be an equal and opposite impact on the profit and other equity.
Equity Profit or loss
2014 2013 2014 2013
E'000 E'000 E'000 E'000
USD 5,742 3,573 5,742 3,573
TRY (3) 59 (3) 59
HRK 77 34 77 34
GBP - (21) - (21)
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 are expected to focus on the
achievement of the Group's investment objectives, achieve cost efficiencies and strengthen its corporate governance. The
Board of Directors has decided on 2 June 2015 to proceed with a capital increase of up to E75 million through the placing
of new shares through an accelerated book building procedure. The proceeds of the fund raise will be used to finance the
implementation of the above-mentioned objectives and provide working capital to the Group.
29. Commitments
As of 31 December 2014, the Group had a total of E19,446 thousand contractual capital commitments on property, plant and
equipment (2013: E16,499 thousand).
Non-cancellable operating lease rentals are payable as follows:
31 December 2014 31 December 2013
E'000 E'000
Less than one year 19 19
Between two and five years 29 50
Total 48 69
30. Contingent liabilities
Companies of the Group are involved in pending litigations. Such litigations principally relate to day-to-day operations as
a developer of second-home residences and largely derive from certain clients and suppliers. Based on the Group's legal
advisers, the Investment Manager believes that there is sufficient defence against any claim and they do not expect that
the Group will suffer any material loss. All provisions in relation to this matter which are considered necessary have been
recorded in these consolidated financial statements.
If investment properties, trading properties and property, plant and equipment were sold at their fair market value, this
would have given rise to a payable performance fee to the Investment Manager of approximately E63 million (2013: E48
million), subject always to the escrow and clawback provisions mentioned in note 25.2.
In addition to the tax liabilities that have already been provided for in the consolidated financial statements based on
existing evidence, there is a possibility that additional tax liabilities may arise after the examination of the tax and
other matters of the companies of the Group in the relevant tax jurisdictions.
The Group, under its normal course of business, guaranteed the development of properties in line with agreed specifications
and time limits in favor of other parties.
31. SUBSEQUENT EVENTS
On 2 June 2015, the Board of Directors has decided (a) to proceed with a capital increase of up to E75 million through the
placing of new shares through an accelerated book building procedure, (b) amendments to the Investment Management agreement
between the Company and Investment Manager (including changes to the management fees and performance fees payable by the
Company to the Investment Manager) and (c) the adoption of a management stock incentive plan in respect of which certain
Directors and Investment Manager would be entitled to participate. The implementation of the above would be conditional
upon approval by shareholders.
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 2014.
This information is provided by RNS
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