REG - Dolphin Capital Inv - Final Results <Origin Href="QuoteRef">DOLC.L</Origin> - Part 7
30/06/2016 07:18
- Part 7: For the preceding part double click ID:nRSd7515Cf
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 2015 31 December 2014
E'000 E'000
Trade and other receivables (see note 20) 15,196 20,295
Cash and cash equivalents (see note 21) 41,948 30,952
Total 57,144 51,247
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 2015 31 December 2014
E'000 E'000
South-East Europe 12,464 17,923
Americas 2,732 2,372
Total trade and other receivables 15,196 20,295
Credit quality of trade and other receivables
The Group's trade and other receivables are unimpaired.
Cash and cash equivalents
Exposure to credit risk
The table below shows an analysis of the Group's bank deposits by the credit rating of the bank in which they are held:
31 December 2015 31 December 2014
No. of Banks E'000 No. of Banks E'000
Bank group based on credit ratings by Moody's
Rating Aaa to A 3 69 3 385
Rating Baa to B 1 5 6 78
Rating Caa to C 5 6,188 5 7,427
Bank group based on credit ratings by Fitch's
Rating AAA to A- 1 572 1 22,285
Rating BBB to B- 4 35,114 4 777
Total bank balances 41,948 30,952
(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 2015
Loans and borrowings 223,680 (313,641) (44,900) (24,931) (220,034) (23,776)
Finance lease obligations 3,033 (4,461) (78) (50) (148) (4,185)
Land creditors 25,609 (25,609) (25,609) - - -
Trade and other payables 30,187 (30,187) (23,489) (455) - (6,243)
282,509 (373,898) (94,076) (25,436) (220,182) (34,204)
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)
(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 E1,076
thousand (2014: E1,125 thousand). This analysis assumes that all other variables, in particular foreign currency rates,
remain constant. For a decrease of 100 basis points there would be an equal and opposite impact on the profit or loss and
other equity.
Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.
Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a
currency that is not the Group's measurement currency. The Group is exposed to foreign exchange risk arising from various
currency exposures primarily with respect to the United States dollar. The Group's management monitors the exchange rate
fluctuations on a continuous basis and acts accordingly.
The Group's exposure to foreign currency risk for its use of financial instruments was as follows:
31 December 2015 31 December 2014
Euro USD GBP Euro USD TRY HRK GBP
'000 '000 '000 '000 '000 '000 '000 '000
Trade and other receivables 12,467 2,973 - 15,467 1,915 1,885 14 -
Cash and cash equivalents 36,988 2,462 2,008 10,103 25,132 153 924 -
Loans and borrowings (142,395) (88,495) - (163,801) (92,621) - - -
Finance lease obligations (3,004) (28) - (7,961) (163) - - -
Land creditors (24,746) (938) - (24,217) (938) - - -
Trade and other payables (24,255) (16,423) - (48,578) (10,009) (1,944) (7,309) -
Net statement of financial position exposure (144,945) (100,449) 2,008 (218,987) (76,684) 94 (6,371) -
The following exchange rates applied at the date of financial position:
Euro 1 equals to: 31 December 2015 31 December 2014
USD 1.09 1.21
TRY 3.18 2.83
HRK 7.64 7.66
GBP 0.73 0.78
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
2015 2014 2015 2014
E'000 E'000 E'000 E'000
USD 8,388 5,742 8,388 5,742
TRY - (3) - (3)
HRK - 77 - 77
GBP (249) - (249) -
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 liquidity. Notably, these
measures include the completion of certain Group asset divestment transactions, principally involving the Group's Non-Core
Assets, as well as the conclusion of additional working capital facilities at the Group and/or Company level.
34. Commitments
As of 31 December 2015, the Group had a total of E3,229 thousand contractual capital commitments on property, plant and
equipment (2014: E19,446 thousand).
Non-cancellable operating lease rentals are payable as follows:
31 December 2015 31 December 2014
E'000 E'000
Less than one year 19 19
Between two and five years 11 29
Total 30 48
35. 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 these matters which are considered necessary have
been recorded in these consolidated financial statements.
If investment properties, trading properties and property, plant and equipment were sold at their fair market value, this
would have given rise to a payable performance fee to the Investment Manager of approximately E21 million (2014: E63
million), subject always to the escrow and clawback provisions mentioned in note 29.2.
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.
36. SUBSEQUENT EVENTS
On 29 June 2016, Aristo concluded an agreement with the Bank of Cyprus for a debt-for-asset swap. This transaction
resulted in the settlement of Aristo's total debt with Bank of Cyprus, currently comprising c. E283 million in exchange for
certain Aristo assets (including most of its Venus Rock project) with a total book value of c. E382 million as at 31
December 2015. The impact of this transaction on Dolphin's share of Aristo NAV is a further reduction of c. E34 million to
the 31 December 2015 reported NAV. Aristo will continue managing the Venus Rock Golf Course for a minimum of 6 months and
will retain an earn-out interest in the project, subject to the terms and conditions agreed in the relevant restructuring
agreement. In addition to reducing Aristo's overall debt by E283 million to an amount of c. E110 million, this agreement
eliminates annual interest costs of at least E16 million.
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 2015.
This information is provided by RNS
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