REG - Dolphin Capital Inv - Final Results <Origin Href="QuoteRef">DOLC.L</Origin> - Part 6
30/06/2016 07:10
- Part 6: For the preceding part double click ID:nRSd7515Ce
conversion shares,
respectively, at GBP 0.21 per share, for a total value of E75 million. The new shares rank pari passu with the existing
common shares of the Company.
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 0.3105 per share, subject to anti-dilution adjustments pursuant to the warrant's terms and conditions - initial price
of GBP 0.35 per share). The 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
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.
23. loans AND BORROWINGS
Total Within one year Within two to five years More than five years
2015 2014 2015 2014 2015 2014 2015 2014
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Loans in euro 92,395 111,562 10,578 20,943 61,707 23,986 20,110 66,633
Loans in United States dollars 57,550 43,128 6,638 2,984 50,912 10,009 - 30,135
Bank overdrafts in Euro - 2,239 - 2,239 - - - -
Convertible bonds payable 73,735 83,160 15,312 - 58,423 83,160 - -
223,680 240,089 32,528 26,166 171,042 117,155 20,110 96,768
Loans in Euro within disposal groups held for sale 8,700 - 709 - 7,991 - - -
Total 232,380 240,089 33,237 26,166 179,033 117,155 20,110 96,768
Terms and Conditions
The terms and conditions of outstanding loans were as follows:
Description Currency Interest rate Maturity dates 31 December 2015E'000 31 December 2014E'000
Secured loans Euro Euribor plus margins ranging from 4.25% to 6.5% From 2015 to 2026 41,744 49,474
Secured loans Euro Basic rate plus margins ranging from 1.5% to 2.25% From 2015 to 2022 16,443 19,897
Secured loans Euro Fixed rates ranging from 7.9% to 11% From 2016 to 2020 42,908 42,191
Secured loans United States Dollars Libor plus margins ranging from 2% to 8% From 2017 to 2020 57,550 43,128
Unsecured bank overdraft Euro 9.05% On demand - 2,239
Convertible bonds payable Euro 5.50% 2018 50,000 50,000
Convertible bonds payable United States Dollars 7% From 2016 to 2018 23,735 33,160
Total interest-bearing liabilities 232,380 240,089
Securities
As at 31 December 2015 and 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 E34.8
million (2014: E36.2 million).
· Mortgage against the immovable property of the Croatian subsidiary, Azurna, with a carrying amount of E33.3 million
(2014: E32.2 million), two promissory notes, a debenture note and a letter of support from its parent company Single
Purpose Vehicle Four Limited.
· Mortgage against immovable property of the Turkish subsidiary, Kalkan Yapi ve Turizm A.S., with a carrying amount of
E6.7 million (2014: E8.7 million).
· Mortgage against the immovable property of the Cypriot subsidiary, Symboula Estates Limited, with a carrying amount of
E34.4 million (2014: E41.2 million).
· Mortgage against immovable property of the Cypriot associate, Aristo, amounting to E2.8 million.
· Lien up to E41.6 million on immovable properties of the Greek subsidiaries of The Porto Heli project, with a carrying
amount of E149 million (2014: E178 million).
· Pledge of 1,500 shares of DCI H2 for Symboula Estates Limited bank loans (2014: pledge of 1,500 shares of DCI H2) (see
note 19).
· 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 loan of Cypriot subsidiary, Symboula
Estates Limited, amounting to E16 million (2014: guarantee of E21.3 million for two bank loans).
· 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.
· Corporate guarantee by the Company on a PGH group bank loan and convertible bonds issued in 2011.
As at 31 December 2014, in addition to the above, the Group's loans and borrowings were secured as follows:
· 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, and a prenotation of mortgage against immovable property of the same entity, with a
carrying amount of E7.9 million.
· All shares of SPV 5 for SPV 5 loan facility from DCI H50 (see note 19).
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 conversion price is E0.5623, equivalent of GBP 0.49 (initial conversion
price GBP 0.50) and US$0.6583, equivalent of GPB 0.4410 (initial conversion price GBP 0.45) per share for the Euro Bonds
and the US$ Bonds, respectively.
The Euro Bonds and the US$ Bonds are not publicly traded.
Part of the bonds, amounting to E41,004 thousand, was subscribed for by Third Point LLC, a significant shareholder of the
Company.
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. On 10 June 2015, certain bondholders, including the Investment Manager,
opted to convert bonds of total value US$14,420 thousand into 42,930,080 shares that were admitted on AIM on 11 June 2015.
The Investment Manager converted bonds of total value US$420 thousand into 1,250,390 shares.
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$0.7095, equivalent of GBP 0.4436, 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.
24. Deferred tax assets and liabilities
31 December 2015 31 December 2014
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 2,557 (55,180) 4,230 (56,610)
From disposal of subsidiary (see note 31) - 314 (1,162) -
Recognised in profit or loss (see note 12) 256 15,112 (510) 2,218
Recognised in other comprehensive income (see note 12) - 1,791 - (555)
Reclassification to (assets)/liabilities held for sale (1,628) 8,091 - -
Exchange difference and other (188) (257) (1) (233)
Balance at the end of the year 997 (30,129) 2,557 (55,180)
Deferred tax assets and liabilities are attributable to the following:
31 December 2015 31 December 2014
Deferred Deferred Deferred Deferred
tax assets tax liabilities tax assets tax liabilities
E'000 E'000 E'000 E'000
Revaluation of investment property - (23,819) - (45,160)
Revaluation of trading properties - (1,926) - (2,394)
Revaluation of property, plant and equipment - (6,007) - (8,374)
Other temporary differences - 1,623 - 748
Tax losses 997 - 2,557 -
Total 997 (30,129) 2,557 (55,180)
25. Finance lease LIABILITIES
31 December 2015 31 December 2014
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 78 1 77 529 62 467
Between two and five years 197 8 189 1,738 227 1,511
More than five years 4,186 1,419 2,767 9,168 3,051 6,117
Total 4,461 1,428 3,033 11,435 3,340 8,095
The major finance lease obligations comprise leases in Greece with 99-year lease terms.
26. DEFERRED REVENUE
31 December 2015 31 December 2014
E'000 E'000
Prepayment from clients 21,713 19,549
Government grant 7,353 7,475
Total 29,066 27,024
31 December 2015 31 December 2014
E'000 E'000
Non-current 17,846 9,131
Current 11,220 17,893
Total 29,066 27,024
27. Trade and other payables
31 December 2015 31 December 2014
E'000 E'000
Trade payables 4,019 349
Land creditors 25,609 24,989
Investment Manager fees payable (see note 29.2) 467 467
Payable to the former controlling shareholder of PGH project (see note 29.3) - 565
Other payables and accrued expenses 34,844 30,079
Total 64,939 56,449
31 December 2015 31 December 2014
E'000 E'000
Non-current 6,698 12,262
Current 58,241 44,187
Total 64,939 56,449
28. NAV per share
31 December 2015 31 December 2014
'000 '000
Total equity attributable to owners of the Company (E) 481,589 557,448
Number of common shares outstanding at end of year 904,627 642,440
NAV per share (E) 0.53 0.87
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 2015, 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 132
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.
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.
From 1 January 2015 to 31 December 2015 From 1 January 2014 to 31 December 2014
'000 '000
Remuneration 844 159
Equity-settled share-based payment arrangements (see note 30) 60 -
Total remuneration 904 159
The Directors' remuneration details for the years ended 31 December 2015 and 31 December 2014 were as follows:
From 1 January 2015 to 31 December 2015 From 1 January 2014 to 31 December 2014
E'000 E'000
Laurence Geller 233 -
Robert Heller 175 -
Graham Warner 174 -
Mark Townsend 58 -
Justin Rimel 13 -
Andrew Coppel 34 -
David B. Heller 21 19
Roger Lane-Smith 122 45
Andreas Papageorghiou 2 15
Cem Duna 2 15
Antonios Achilleoudis 2 15
Christopher Pissarides 8 50
Total 844 159
Mr. Miltos Kambourides has waived his fees.
On 25 February 2015, the Company announced the following Directorate changes: five new members joined the Board, Laurence
Geller who also served as Chairman, Robert Heller, Graham Warner, Mark Townsend and Justin Rimel. Miltos Kambourides,
David B. Heller remained on the new Board and Roger Lane Smith remained until his retirement on 31 December 2015. Also
Andreas Papageorghiou, Cem Duna, Antonios Achilleoudis and Christopher Pissarides stepped down from the Board. On 6 October
2015, Andrew Coppel also joined the Board.
On 1 March 2016, Laurence Geller, David B. Heller and Justin Rimel resigned from the Company's Board with Andrew Coppel
being appointed as the Independent Non-Executive Chairman.
Laurence Geller will no longer retain an interest in the stock options issued pursuant to the Company's Stock Option
Programme whilst Andrew Coppel will not participate in the Stock Option Programme.
29.2 Investment Manager remuneration
From 1 January 2015 to 31 December 2015 From 1 January 2014 to 31 December 2014
E'000 E'000
Annual fees 12,813 13,671
Equity-settled share-based payment arrangements (see note 30) 315 -
Total remuneration 13,128 13,671
In line with the Amended and Restated Investment Management Agreement, signed in June 2015 and effective from 1 July 2015,
the following arrangements came into effect:
Annual fees
The Investment Manager is entitled to an annual management fee defined as follows:
• for the period from 1 July 2015 to and including 31 December 2015, the annual management fee shall be E1 million per
calendar month payable quarterly in advance; and
• with effect from and including 1 January 2016, the annual management fee shall be E8.5 million payable quarterly in
advance.
• commencing on and with effect from 1 January 2017, the annual management fee payable for the following annual periods
will be permanently reduced on 1 January in each year to an amount equal to the lower of:
(i) 1.25% of the gross asset value of the Company calculated as at the last preceding 31 December calculation date;
and
(ii) E8.5 million.
In addition, the Company shall reimburse the Investment Manager for any professional fees or other costs incurred on behalf
of the Company for the provision of services or advice.
Performance fees
Core asset incentive fee
The Investment Manager will be entitled to the core asset incentive fee based on the net profits received by the Company
from the core assets or the disposal thereof.
Core assets comprise of the following projects: Amanzoe, Kilada Hills, Kea, Pearl Island and Playa Grande. All other
assets of the company are characterized as non-core for the purpose of incentive fee calculations.
The net proceeds will be divided between the Investment Manager and the Company on the following basis:
• first, 100% to the Company until the Company has received an amount equal to E169.6 million (the 'Aggregate Core Asset
Base Value');
• second, 100% to the Company until the Company has received an amount equal to the core asset capital and costs;
• third, 100% to the Company until the Company has received an amount equal to the base cost compounded quarterly at the
average one-month Euribor rate plus 500 basis points (but capped at a maximum interest rate of 6% per annum);
• fourth, 60% to the Investment Manager and 40% to the Company until the Investment Manager has received an amount equal
to 20% of the Net Profits then distributed; and
• thereafter, 20% to the Investment Manager and 80% to the Company such that the Investment Manager shall receive a
total core asset incentive fee equivalent to 20% of the Net Profits.
On the disposal of a core asset, the Investment Manager shall be entitled to receive an advance of the core asset incentive
fee on the following basis:
• where the disposal takes place prior to the date on which the Company shall have first received an amount of net
profits from the disposal of core assets equal to, or in excess of, E113,055,360 (the 'Trigger Date'), an amount equal to
6.666% of the net profits received by the Company on the disposal of such core asset; or
• where the disposal takes place after the Trigger Date, an amount equal to 10% of the net profits received by the
Company on the disposal of such core asset, (in each case a 'Core Asset Incentive Fee Advance Payment').
The aggregate value of any Core Asset Incentive Fee Advance Payments will at any time be set off against, and thereby
reduce to not less than zero, any liability of the Company to pay core asset incentive fees.
Non-core asset incentive fee
The Investment Manager will be entitled to the non-core asset incentive fee based on the net profits received by the
Company from the disposal of any non-core asset. No non-core asset incentive fee will be payable in respect of a non-core
asset unless the aggregate disposal proceeds actually received by the Company in respect of such non-core asset exceeds the
base value (the 'Payment Condition'). The base value is defined as 65% of the non-core asset value as at 31 December 2014.
Subject to satisfaction of the Payment Condition in respect of any non-core asset, the net proceeds actually received by
the Company from the disposal of such non-core asset will be divided between the Investment Manager and the Company on the
following basis:
• first, 100% to the Company until the Company has received an amount equal to the base value;
• second, 12.5% to the Investment Manager and 87.5% to the Company until the net proceeds equal 80% of the base value;
• third, 17.5% to the Investment Manager and 82.5% to the Company until the net proceeds equal 100% of the base value;
and
• thereafter, 25% to the Investment Manager and 75% to the Company.
50% of each non-core asset incentive fee will be placed in an interest bearing escrow account to be operated by the
Company's administrator. Any funds held in this escrow account will be dealt with as follows; commencing on 31 December
2015, in the event that, as at 31 December in each year, the aggregate net proceeds received by the Company in relation to
all non-core assets disposed of during the previous 12 month period (the 'Look-back Period'):
• do not equal or exceed the aggregate of the base values of any non-core assets disposed of during an applicable
Look-back Period (the 'Aggregate Base Value') then the Company's administrator will be authorised to repay any escrowed
funds to the Company until such time as the Company has received an amount equal to the Aggregate Base Value and thereafter
any remaining escrowed funds (if any) will be paid to the Investment Manager; or
• equal or exceed the Aggregate Base Value then the Company's administrator will be authorised to pay to the Investment
Manager the escrowed funds.
Incentive shares
Investment Manager Awards have been granted (see note 30).
Clawback
Following the Amended and Restated Investment Management Agreement, if, on the clawback assessment date, the Company has
not received an amount from the disposal of the core assets equal or in excess of the Aggregate Core Asset Base Value, the
Investment Manager will pay to the Company an amount to cover the difference, not to exceed the aggregate amount of any
Core Asset Incentive Fee Advance Payments received by the Investment Manager. The clawback assessment date is the earlier
of, (i) disposal of the Company's interest in the last core asset concerned; or (ii) 1 August 2020. In the event that a
fees clawback applies the Company shall be entitled to set off at any time the amount of any fees clawback payment due
against, (i) any liability of the Company to pay non-core asset incentive fees and/or (ii) any other fees due and payable
by the Company to the Investment Manager, but excluding the annual management fee. In addition, the Company will have a
security interest over any unvested shares awarded to the Investment Manager under the Share Incentive Plan.
No performance fees were charged to the Company for the years ended 31 December 2015 and 31 December 2014. As at 31
December 2015 and 31 December 2014, funds held in escrow, including accrued interest, amounted to E467 thousand.
Previous arrangements, in force until 30 June 2015, were as follows:
Annual fees
The Investment Manager was 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 30 June 2015 comprised E681 million.
In addition, the Company reimbursed the Investment Manager for any professional fees or other costs incurred on behalf of
the Company for the provision of services or advice.
Performance fees
The Investment Manager was entitled to a performance fee based on the net profits made by the Company, subject to the
Company receiving the 'Relevant Investment Amount' which is defined as an amount equal to:
i The total cost of the investment reduced on a pro rated basis by an amount of 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 was incurred compounded for each year or fraction of a year
during which such investment was held (the 'Hurdle'); plus
iii A sum equal to the amount of any realised losses and/or write-downs in respect of any other investment which has not
already been taken into account in determining the Investment Manager's entitlement to a performance fee.
In the event that the Company had received distributions from an investment equal to the Relevant Investment Amount, any
subsequent net profits arising should have been distributed in the following order or priority:
i 60% to the Investment Manager and 40% to the Company until the Investment Manager should had received an amount equal
to 20% of such profits; and
ii 80% to the Company and 20% to the Investment Manager, such that the Investment Manager should had received a total
performance fee equivalent to 20% of the net profits.
* The total cost of investment was reduced in April 2014 by 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 was subject to the following escrow and clawback provisions:
Escrow
The following table displays the previous 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 All performance fees released from escrow
return of E225 million post-hurdle
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 should have paid to the
Company an amount equivalent to the difference between the proceeds realised and the Relevant Investment Amount. The
payment of the clawback was 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.
29.3 Shareholder and development agreements
Shareholder agreements
DolphinCI Twenty Two Limited, a subsidiary of the Group, had signed a shareholder agreement with the non-controlling
shareholder of Eastern Crete Development Company S.A., under which it had acquired 60% of the shares of the Plaka Bay
project by paying the former majority shareholder a sum upon closing and a conditional amount in the event the
non-controlling shareholder was successful in, among others, acquiring additional specific plots and obtaining construction
permits. On 23 August 2013, the parties signed a new agreement for the purchase of the remaining 40% stake of the entity.
The base consideration for the purchase was 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 by the Company.
On 20 September 2010, the Group signed an agreement with Archimedia, controlled by John Hunt, for the sale of a 14.29%
stake in Amanzoe for a consideration of 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. As of 31 December 2015 no receivable amount was outstanding (2014: E415 thousand, included
in trade and other receivables - see note 20). On 3 August 2012, the Company received a Conversion Notice from Archimedia
to convert 6.43% of its shares in Amanzoe in exchange for an Aman Villa and on 27 December 2012 a further Notice for the
conversion of the remaining 7.86% of its shares for two other Aman Villas. As of 31 December 2015, all Villas Conversions
had been completed and Archimedia did not hold any shareholding interest in Amanzoe.
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 would be incurred on
development of components owned by Pearl Island Limited S.A., with the entire amount already invested by 31 December 2015
(2014: US$12,553 thousand).
Development agreements
Pursuant to the original Sale and Purchase Agreement of 10 December 2007, DCI H7 was obliged to make payments for the
construction of infrastructure on the land retained by DR Beachfront Real Estate LLC ('DRB'), the former majority
shareholder of PGH. Pursuant to a restructuring agreement dated 5 November 2012, those obligations have been restructured
with the material provisions of that agreement already fulfilled. As at 31 December 2015, following cash payments of
US$7.6 million and transfers of land parcels valued at approximately US$11.7 million, no amount is outstanding (31 December
2014: US$0.7 million or E565 thousand, included in trade and other payables - see note 27).
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.
29.4 Other related parties
During the years ended 31 December 2015 and 31 December 2014, the Group incurred the following related party transactions
with the following parties:
2015Related 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 10 191 Design fees in relation to Kea Resort project and Playa Grande project
Progressive Business Advisors S.A. 282 Accounting fees
Third Point LLC, shareholder of the Company 2,401 Bond interest for the year
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
30. EQUITY-SETTLED SHARE-BASED PAYMENT ARRANGEMENTS
From 1 January 2015 to 31 December 2015 From 1 January 2014 to 31 December 2014
'000 '000
Investment Manager Awards (see note 29.2) 315 -
Director Awards (see note 29.1) 60 -
Total equity-settled share-based payment arrangements 375 -
Investment Manager Awards
On 9 June 2015, under a Stock Incentive Plan, the Company granted two nil-cost share option awards to the Investment
Manager (the 'DCP Awards') as follows:
Number of Shares to which the DCP Awards relate:
· DCP Award 1: 31,661,940 common shares of E0.01 each; and
· DCP Award 2: 22,615,671 common shares of E0.01 each,
both subject to reductions in case that certain non-market performance targets are not met.
These awards will performance vest in various equal tranches dependent upon the average closing price of the shares trading
at or above certain relevant target share prices for a continuous period of 30 trading days. The relevant target share
prices for the purposes of these awards range from 35p to 80p. DCP Awards remain exercisable up until the day before the
fifth anniversary of the grant date of the awards.
Director Awards
On 9 June 2015, Mr. Laurence Geller, Mr. Robert Heller and Mr. Graham Warner were granted nil-cost share option awards
under a Stock Incentive Plan (the 'Director Awards'). These awards will performance vest in equal tranches dependent upon
the average closing price of the shares trading at or above certain relevant target share prices for a continuous period of
30 trading days. The relevant target share prices for the purposes of these awards are 35p, 40p, 45p, and 50p. The number
of shares to which the Director Awards relate is 11,273,912 common shares of E0.01 each with reductions in case that
certain non-market performance targets are not met. Director Awards remain exercisable up until the day before the fifth
anniversary of the grant date of the awards. On 1 March 2016, Mr. Laurence Geller, resigned from the Company's Board and no
longer retains an interest in the stock options issued pursuant to the Company's Stock Option Programme.
The most significant inputs used in the measurement of the grant date fair value of the Awards are as follows:
Awards Awards
2015 2014
Fair value at grant date £0.0659 -
Share price at grant date £0.215 -
Exercise price Nil -
Expected volatility (long run forecast) 31% -
Risk-free rate (based on UK government 5 years bonds) 1.523% -
31. Business combinations
During the year ended 31 December 2015, the Group increased its ownership interest in DCI 14 by 7.86% to 100% as follows:
DCI 14
E'000
Non-controlling interests acquired (3,236)
Consideration transferred (5,108)
Less: receivables assignment 3,347
Net consideration transferred (1,761)
Acquisition effect recognised in equity (4,997)
The consideration transferred for the acquisition of the 7.86% stake in DCI 14 relates to a conversion villa, per the
relevant agreement (see note 29.3).
On 2 October 2015, DCI H1 sold the shares of its wholly owned subsidiary Dolphinci Twenty Seven Ltd ('DCI 27') to DRG
Development Greece Ltd, as follows:
DCI 27
E'000
Investment property (see note 15) (10,979)
Property, plant and equipment (see note 14) (1,422)
Trading properties (see note 17) (1,952)
Other non-current assets (24)
Receivables and other assets (5,242)
Cash and cash equivalents (299)
Loans and borrowings 9,055
Finance lease liabilities 6,162
Deferred tax liabilities (see note 24) 314
Other non-current liabilities 206
Trade and other payables 5,004
Net liabilities disposed of 823
Proceeds on disposal -
Gain on disposal recognised in profit or loss 823
Cash effect on disposal:
Proceeds on disposal -
Cash and cash equivalents (299)
Net cash outflow on disposal (299)
The consideration was E 1 along with Profit Sharing based on the Net Proceeds that may be received by DCI 27 in respect of
any disposal of its subsidiary Aristo Developers S.A. or any of the subsidiary's assets. Profit sharing is adjusted on a
yearly basis and is set to 50%, 35% and finally 20% in the period between the second and third anniversary from the sale.
The profit sharing entitlement will elapse on the third anniversary from the sale date.
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 the
relevant agreement (see note 29.3).
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 Porto Heli Total
E'000 E'000 E'000
Deferred tax assets (see note 24) (1,162) - (1,162)
Non-current assets (955) - (955)
Trading properties (see note 17) (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 19) - 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/(loss) 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
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 2015 DCI Holdings Eleven Limited(Pearl Island)E'000 Pedro Gonzalez Holdings I Limited(Pearl Island)E'000 Iktinos (Sitia Bay)E'000 DCI 14 (Amanzoe)E'000 SPV 10(Kea Resort) E'000 SPV 2(Amanzoe)E'000
Non-controlling interests percentage 40% 40% 22.18% 0%* 33.33% 31.68%
Non-current assets 1,040 91,508 21,160 82,494 21,012 248
Current assets 3,463 7,972 45 39,444 75 3,906
Non-current liabilities (67) (2,432) (1,954) (137,688) (21,531) (75)
Current liabilities (5,564) (21,391) (334) (23,063) (294) (357)
Net (liabilities)/assets (1,128) 75,657 18,917 (38,813) (738) 3,722
Carrying amount of non-controlling interests (451) 30,263 4,196 - (246) 1,179
Revenue 1,994 65 - 41,147 829 165
(Loss)/ profit (823) (463) (7,576) (8,156) 615 (7)
Other comprehensive income - - - (5,057) - -
Total comprehensive income (823) (463) (7,576) (13,212) 615 (7)
(Loss)/profit allocated to non-controlling interests (329) (185) (1,680) (641) 205 (1)
Other comprehensive income allocated to non-controlling interests - - - (397) - -
Cash flow (used in)/from operating activities (66) 3,248 (84) (43,122) (1,455) (4,247)
Cash flow from/(used in) investing activities 76 (3,393) 107 45,481 1,398 -
Cash flow from/(used in) financing activities - (121) - (2,331) - 4,253
Net increase/(decrease) in cash and cash equivalents 10 (266) 23 28 (57) 6
31 December 2014 DCI Holdings Eleven LimitedE'000 Pedro Gonzalez Holdings I LimitedE'000 IktinosE'000 DCI 14E'000 SPV 10 E'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 (liabilities)/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)
*As mentioned in note 31, 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% and during 2015 increased its shareholding interest to
100%, as a result the non-controlling interest decreased to 0%.
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
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