REG - Dolphin Capital Inv - Half-year Report <Origin Href="QuoteRef">DOLC.L</Origin> - Part 3
30/09/2016 07:08
- Part 3: For the preceding part double click ID:nRSd2781Lb
Auditors' remuneration comprises the following fees:
Audit and other audit related services 180 226
Tax and advisory 32 -
Total 212 226
10. ADMINISTRATIVE AND OTHER EXPENSES
From 1 January 2016 to 30 June 2016 From 1 January 2015 to 30 June 2015
E'000 E'000
Travelling 274 165
Insurance 58 66
Repairs and maintenance 128 93
Marketing and advertising expenses 381 434
Litigation liability provisions - 1,922
Rents 175 188
Other 949 613
Total 1,965 3,481
11. Taxation
From 1 January 2016 From 1 January 2015
to 30 June 2016 to 30 June 2015
E'000 E'000
Income tax (43) 26
Deferred tax (230) (9)
Deferred tax relating to disposal groups held for sale (46) -
Total (319) 17
12. LOSS per share
Basic loss per share
Basic loss per share is calculated by dividing the loss attributable to owners of the Company by the weighted average
number of common shares outstanding during the period.
From 1 January 2016 From 1 January 2015
to 30 June 2016 to 30 June 2015
'000 '000
Loss attributable to owners of the Company (E) (162,417) (36,057)
Number of weighted average common shares outstanding 904,627 671,174
Basic loss per share (E) (0.18) (0.05)
Weighted average number of common shares outstanding
From 1 January 2016 to 30 June 2016 From 1 January 2015 to 30 June 2015
'000 '000
Outstanding common shares at beginning of period 904,627 642,440
Effect of shares issued during the period - 24,227
Effect of Bond Conversion shares - 4,507
Weighted average number of common shares outstanding 904,627 671,174
Diluted loss per share
Diluted loss per share is calculated by adjusting the loss attributable to owners and the number of common shares
outstanding to assume conversion of all dilutive potential shares. As of 30 June 2016 and 31 December 2015, the diluted
loss per share is the same as the basic loss per share, due to the fact that no dilutive potential ordinary shares were
outstanding during these periods.
The average market value of the Company's shares for the purpose of calculating the dilutive effect of warrants and
convertible bonds was based on quoted market prices.
13. Property, plant and equipment
Under constructionE'000 Land, buildings and otherE'000 TotalE'000
30 June 2016
Cost or revalued amount
At beginning of period 12,227 206,935 219,162
Direct acquisitions 708 1,095 1,803
Direct disposals - (133) (133)
Transfers to trading property (see note 16) - (2,029) (2,029)
Exchange difference (222) (1,941) (2,163)
At end of period 12,713 203,927 216,640
Depreciation and impairment losses
At beginning of period - 32,147 32,147
Direct disposals - (14) (14)
Depreciation charge for the period - 1,401 1,401
Exchange difference - (92) (92)
At end of period - 33,442 33,442
Carrying amounts 12,713 170,485 183,198
Under constructionE'000 Land, buildings and otherE'000 TotalE'000
31 December 2015
Cost or revalued amount
At beginning of year 31,273 163,019 194,292
Direct acquisitions 35,483 7,090 42,573
Direct disposals - (1,063) (1,063)
Disposals through disposal of subsidiary company - (1,581) (1,581)
Reclassification to assets held for sale - (5,505) (5,505)
Transfers to trading property (see note 16) - (198) (198)
Transfers (to)/from other assets (58,131) 58,131 -
Revaluation adjustment - (15,181) (15,181)
Write offs - (1,513) (1,513)
Exchange difference 3,602 3,736 7,338
At end of year 12,227 206,935 219,162
Depreciation and impairment losses
At beginning of year - 17,527 17,527
Direct disposals - (750) (750)
Disposals through disposal of subsidiary company - (159) (159)
Reclassification to assets held for sale - (75) (75)
Transfers to trading property (see note 16) - (104) (104)
Depreciation charge for the year - 2,919 2,919
Impairment loss - 14,167 14,167
Write offs - (433) (433)
Exchange difference - (945) (945)
At end of year - 32,147 32,147
Carrying amounts 12,227 174,788 187,015
Fair value hierarchy
The fair value of land and buildings, has been categorised as a Level 3 fair value based on the inputs to the valuation
techniques used.
Valuation techniques and significant unobservable inputs
The valuation techniques used in measuring the fair value of land and buildings, as well as the significant unobservable
inputs used are the same as those used as at 31 December 2015.
14. Investment property
30 June 2016 31 December 2015
E'000 E'000
At beginning of period/year 340,853 451,880
Direct acquisitions 11 1,064
Concession/write off of land - (2,607)
Reclassification to assets held for sale (see note 15) - (52,507)
Transfers to trading properties (see note 16) - (14,290)
Disposals through disposal of subsidiary company - (10,979)
Direct disposals - (756)
Exchange difference (2,748) 14,095
338,116 385,900
Fair value adjustment (11) (45,047)
At end of period/year 338,105 340,853
Fair value hierarchy
The fair value of investment property, has been categorised as a Level 3 fair value based on the inputs to the valuation
techniques used.
Valuation techniques and significant unobservable inputs
The valuation techniques used in measuring the fair value of investment property, as well as the significant unobservable
inputs used are the same as those used as at 31 December 2015.
15. DISPOSAL GROUPS HELD FOR SALE
Management committed to a plan to sell four properties and associated liabilities, through the sale of their holding
companies. Accordingly, the assets and liabilities of each of these holding companies are presented as separate disposal
groups held for sale. The disposal groups are: Iktinos (owner of 'Sitia Bay') and Porto Heli (owner of 'Nikki Beach') in
Greece, Azurna (owner of 'Livka Bay') in Croatia and Kalkan (owner of 'La Vanta') in Turkey. All of the disposal groups are
included in the geographical segment of 'South-East Europe' and in the operating segments of 'Hotel & Leisure operations'
(Porto Heli), 'Construction & Development' (Kalkan) and 'Other' (Iktinos and Azurna). Efforts to sell the disposal groups
continued aiming to complete their sale within the next twelve months.
Impairment losses relating to the disposal group
Impairment losses of E205 thousand (30 June 2015: nil) for write-downs of the disposal groups to the lower of their
carrying amount and their fair value less costs to sell have been recognised. The impairment losses have been applied to
reduce the carrying amount of property, plant and equipment and equity accounted investee.
Assets and liabilities of disposal groups held for sale
As at 30 June 2016, the disposal groups comprised the following assets and liabilities:
Iktinos disposal group Azurnadisposal group Kalkan disposal group Porto Heli Total
disposal group
E'000 E'000 E'000 E'000 E'000
Property, plant and equipment 4,439 - 21 - 4,460
Investment property 17,901 34,643 - - 52,544
Equity-accounted investee - - - 1,245 1,245
Deferred tax assets - - 1,667 - 1,667
Trading properties - - 7,769 - 7,769
Trade and other receivables - 7 1,401 - 1,408
Cash and cash equivalents 47 234 5 - 286
Assets held for sale 22,387 34,884 10,863 1,245 69,379
Loans and borrowings - 8,147 137 - 8,284
Deferred tax liabilities 3,382 4,469 25 - 7,876
Trade and other payables 254 956 82 - 1,292
Liabilities held for sale 3,636 13,572 244 - 17,452
As at 31 December 2015, the disposal groups comprised the following assets and liabilities:
Iktinos disposal group Azurnadisposal group Kalkan disposal group Porto Heli Total
disposal group
E'000 E'000 E'000 E'000 E'000
Property, plant and equipment 4,439 - 23 - 4,462
Investment property (see note 14) 17,901 34,606 - - 52,507
Equity-accounted investee - - - 1,450 1,450
Deferred tax assets - - 1,628 - 1,628
Trading properties (see note 16) - - 7,960 - 7,960
Trade and other receivables - 9 1,459 - 1,468
Cash and cash equivalents 86 282 397 - 765
Assets held for sale 22,426 34,897 11,467 1,450 70,240
Loans and borrowings - 8,162 538 - 8,700
Deferred tax liabilities 3,380 4,405 25 - 7,810
Trade and other payables 252 970 393 - 1,615
Liabilities held for sale 3,632 13,537 956 - 18,125
Cumulative income or expenses included in other comprehensive income
No cumulative income or expenses relating to the disposal groups, is included in other comprehensive income.
Measurement of fair values
i. Fair value hierarchy
The fair value measurement for the disposal groups before costs to sell has been categorised as a Level 3 fair value based
on the inputs to the valuation techniques used.
ii. Valuation techniques and significant unobservable inputs
The fair value of each disposal group is significantly based on the valuation of the immovable property in each group. The
valuation techniques and significant unobservable inputs used in measuring the fair values of these properties are the same
as those used as at 31 December 2015.
16. Trading properties
30 June 2016 31 December 2015
E'000 E'000
At beginning of period/year 37,387 52,323
Net direct disposals (2,707) (16,189)
Net transfers from investment property (see note 14) - 14,290
Net transfers from property, plant and equipment (see note 13) 2,029 94
Disposals through disposal of subsidiary companies (see note 29) (1,599) (1,952)
Impairment loss - (3,431)
Reclassification to assets held for sale (see note 15) - (7,960)
Exchange difference (40) 212
At end of period/year 35,070 37,387
17. AVAILABLE-FOR-SALE FINANCIAL ASSETS
On 15 July 2013, the Company acquired 9.6 million shares, equivalent to 10% of Itacare's share capital, for the amount of
E1.9 million. Itacare is a real estate investment company that was listed on AIM until 16 May 2014, when the admission of
its ordinary shares to trading on AIM was cancelled following a decision of its shareholders at the Extraordinary General
Meeting that took place on 6 May 2014.
30 June 2016 31 December 2015
E'000 E'000
At beginning and end of period/year 2,201 2,201
Fair value hierarchy
The fair value of available-for-sale financial assets, on Itacare's de-listing date, was transferred from Level 1 to Level
3 at the fair value hierarchy.
18. equity accounted investees
DCI Holdings Progressive
Two Limited Porto Business
('DCI H2') Heli Advisors S.A. Total
E'000 E'000 E'000 E'000
Balance as at 1 January 2016 188,637 - - 188,637
Share of loss, net of tax (34,389) - - (34,389)
Impairment loss (109,265) - - (109,265)
Share of revaluation reserve 17 - - 17
Balance as at 30 June 2016 45,000 - - 45,000
Balance as at 1 January 2015 231,972 2,227 24 234,223
Reclassification to assets held for sale - (1,526) - (1,526)
Additions - 310 - 310
Disposals - - (24) (24)
Share of translation reserve 180 - - 180
Share of loss, net of tax (43,542) (1,011) - (44,553)
Share of revaluation reserve 27 - - 27
Balance as at 31 December 2015 188,637 - - 188,637
The details of the above investments are as follows:
Principal place
of business/Country of Shareholding interest
Name incorporation Principal activities 30 June 2016 31 December 2015
DCI H2 BVIs Acquisition and holding of investments in Cyprus 50% 50%
Porto Heli BVIs Acquisition and holding of investments in Greece 25% 25%
The above shareholding interest percentages are rounded to the nearest integer.
During the period, the Company's investment in DCI H2, owner of Aristo Developers Limited ('Aristo'), decreased
significantly, as a result of a share of loss and an impairment amounting to E34,389 thousand and E109,265 thousand,
respectively. The share of loss comprises the result of the loan restructuring arrangement between Aristo and Bank of
Cyprus, whereby a loss from the extinguishment of such bank loans emerged through their settlement with property swapped.
The impairment loss has been recognized to bring the DCI H2 investment to its recoverable amount of E45 million, which
represents the agreed proceeds of the Company from the disposal of its investment on 29 September 2016, as described in
note 33, Events after the reporting period.
During 2015, the Company disposed of its participation in Progressive Business Advisors S.A. Also, its management committed
to a plan to sell Porto Heli, owner of 'Nikki Beach', in Greece; and the investment in Porto Heli was reclassified to
assets held for sale.
As of 30 June 2016, Aristo, had a total of E354 thousand (31 December 2015: E1.8 million) contractual capital commitments
on property, plant and equipment and a total of E38 million (31 December 2015: E39 million) bank guarantees arising in the
ordinary course of its business. Aristo's management does not anticipate any material liability to arise from these
contingent liabilities. In addition, 1,500 shares out of 4,975 shares that the Company holds in DCI H2 are pledged as a
security against the Group's bank loans.
Summary of financial information for equity accounted investees as at 30 June 2016 and 31 December 2015, not adjusted for
the percentage of ownership held by the Group:
DCI H2 Porto Heli Total
E'000 E'000 E'000
30 June 2016
Current assets 140,728 - 140,728
Non-current assets 361,226 - 361,226
Total assets 501,954 - 501,954
Current liabilities 95,888 - 95,888
Non-current liabilities 95,986 - 95,986
Total liabilities 191,874 - 191,874
Net assets 310,080 - 310,080
Group's share of net assets 154,265 - 154,265
Impairment loss (109,265) - (109,265)
Carrying amount of interest in investee 45,000 - 45,000
Revenue 34,234 - 34,234
Loss for the period (69,124) - (69,124)
Other comprehensive income 33 - 33
Total comprehensive income (69,091) - (69,091)
Group's share of loss and total comprehensive income (34,372) - (34,372)
31 December 2015
Current assets 193,448 5,630 199,078
Non-current assets 680,085 11,380 691,465
Total assets 873,533 17,010 890,543
Current liabilities 312,628 6,355 318,983
Non-current liabilities 181,734 4,551 186,285
Total liabilities 494,362 10,906 505,268
Net assets 379,171 6,104 385,275
Carrying amount of interest in investee 188,637 - 188,637
Revenue 21,024 2,170 23,194
Loss for the year (87,522) (4,042) (91,564)
Other comprehensive income 417 - 417
Total comprehensive income (87,105) (4,042) (91,147)
Group's share of loss and total comprehensive income (43,335) (1,011) (44,346)
19. TRADE AND OTHER RECEIVABLES
30 June 2016 31 December 2015
E'000 E'000
Trade receivables 5,083 7,482
VAT receivables 3,284 3,560
Other receivables 3,106 4,154
Total trade and other receivables 11,473 15,196
Prepayments and other assets 3,173 984
Total 14,646 16,180
30 June 2016 31 December 2015
E'000 E'000
Non-current 910 1,178
Current 13,736 15,002
Total 14,646 16,180
20. Cash and cash equivalents
30 June 2016 31 December 2015
E'000 E'000
Bank balances 11,203 41,948
Cash in hand 35 42
Total 11,238 41,990
During the period, the Group had no fixed deposits.
As at 30 June 2016, the amount of E4.1 million (2015: E4.1 million) received through the Colony Luxembourg S.a.r.l loan
facility is restricted for use only towards the development of Amanzoe project.
21. CAPITAL AND RESERVES
Capital
Authorised share capital
30 June 2016 31 December 2015
'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 2015 642,440 6,424 498,933
Shares issued on 9 June 2015 219,257 2,193 60,527
Placement costs - - (1,464)
Bond conversion shares on 11 June 2015 42,930 429 11,851
Capital at 31 December 2015 904,627 9,046 569,847
Capital at 1 January 2016 and 30 June 2016 904,627 9,046 569,847
On 9 June 2015 and 11 June 2015, the Company issued 219,256,609 new common shares and 42,930,080 bond 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 interim 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.
22. LOANS AND BORROWINGS
Total Within one year Within two to five years More than five years
30 June 31 December 30 June 31 December 30 June 31 December 30 June 31 December
2016 2015 2016 2015 2016 2015 2016 2015
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Loans in Euro 93,290 92,395 10,394 10,578 69,146 61,707 13,750 20,110
Loans in United States Dollars 54,926 57,550 5,515 6,638 49,411 50,912 - -
Convertible bonds payable 58,260 73,735 - 15,312 58,260 58,423 - -
206,476 223,680 15,909 32,528 176,817 171,042 13,750 20,110
Loans in Euro within disposal groups held for sale 8,284 8,700 290 709 7,994 7,991 - -
Total 214,760 232,380 16,199 33,237 184,811 179,033 13,750 20,110
As of 30 June 2016, there were no significant changes in terms and conditions of the outstanding loans, compared to 31
December 2015.
1 January 2016 New issues Capital repayments Interest paid Other movements 30 June 2016
E'000 E'000 E'000 E'000 E'000 E'000
Loans in Euro 92,395 - (250) (3,023) 4,168 93,290
Loans in United States Dollars 57,550 - (3,131) (756) 1,263 54,926
Convertible bonds in Euro 50,000 - - (1,375) 1,375 50,000
Convertible bonds in United States Dollars 23,735 - (14,892) (539) (44) 8,260
223,680 - (18,273) (5,693) 6,762 206,476
Loans in Euro within disposal groups held for sale 8,700 - (385) (171) 140 8,284
Total 232,380 - (18,658) (5,864) 6,902 214,760
Securities
As of 30 June 2016, there were no significant changes in the Group's loan securities compared to 31 December 2015.
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 by Third Point LLC, a significant shareholder of the
Company.
On 29 March 2011, DCI Holdings Seven Limited ('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. 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. The
remaining amount of DCI H7 bonds including any accrued interest was repaid on scheduled maturity date in March 2016.
The bonds were trading on the Open Market of the Frankfurt Stock Exchange (the freiverkehr market) under the symbol 12DD.
23. Finance lease LIABILITIES
30 June 2016 31 December 2015
Future minimum lease payments Interest Present value of minimum lease payments Future minimum lease payments Interest Present value of minimum lease payments
E'000 E'000 E'000 E'000 E'000 E'000
Less than one year 79 1 78 78 1 77
Between two and five years 197 9 188 197 8 189
More than five years 4,148 1,391 2,757 4,186 1,419 2,767
Total 4,424 1,401 3,023 4,461 1,428 3,033
The major finance lease liabilities comprise leases in Greece with 99-year lease terms.
24. Deferred tax assets and liabilities
30 June 2016 31 December 2015
Deferred Deferred Deferred Deferred
tax assets tax liabilities tax assets tax liabilities
E'000 E'000 E'000 E'000
Balance at beginning of period/year 997 (30,129) 2,557 (55,180)
From disposal of subsidiary - - - 314
Recognised in profit or loss (1) 231 256 15,112
Recognised in other comprehensive income - - - 1,791
Exchange difference and other - 64 (188) (257)
Reclassification to (assets)/liabilities held for sale - - (1,628) 8,091
Balance at end of period/year 996 (29,834) 997 (30,129)
Deferred tax assets and liabilities are attributable to the following:
30 June 2016 31 December 2015
Deferred Deferred Deferred Deferred
tax assets tax liabilities tax assets tax liabilities
E'000 E'000 E'000 E'000
Revaluation of investment property - (23,777) - (23,819)
Revaluation of trading properties - (1,622) - (1,926)
Revaluation of property, plant and equipment - (6,064) - (6,007)
Other temporary differences - 1,629 - 1,623
Tax losses 996 - 997 -
Total 996 (29,834) 997 (30,129)
25. DEFERRED REVENUE
30 June 2016 31 December 2015
E'000 E'000
Prepayment from clients 24,013 21,713
Government grant 7,235 7,353
Total 31,248 29,066
30 June 2016 31 December 2015
E'000 E'000
Non-current 17,538 17,846
Current 13,710 11,220
Total 31,248 29,066
26. Trade and other payables
30 June 2016 31 December 2015
E'000 E'000
Trade payables 3,787 4,019
Land creditors 25,874 25,609
Investment Manager fees payable (see note 28.2) 500 467
Other payables and accrued expenses 30,398 34,844
Total 60,559 64,939
30 June 2016 31 December 2015
E'000 E'000
Non-current 6,861 6,698
Current 53,698 58,241
Total 60,559 64,939
27. NAV per share
30 June 2016 31 December 2015
'000 '000
Total equity attributable to owners of the Company (E) 317,310 481,589
Number of common shares outstanding at end of period/year 904,627 904,627
NAV per share (E) 0.35 0.53
28. Related party transactions
28.1 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 30 June 2016, 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 period in any material contract for the provision of
services which was significant to the business of the Group.
On 5 July 2016, Mark Townsend purchased 150,000 shares of the Company, bringing his total interest to 282,000 shares.
On 15 July 2016, Andrew Coppel, purchased 150,000 shares of the Company.
From 1 January 2016to 30 June 2016 From 1 January 2015 to 30 June 2015
E'000 E'000
Remuneration 1,022 304
Equity-settled share-based payment arrangements 49 -
Total remuneration 1,071 304
The Directors' remuneration details for the six-month periods ended 30 June 2016 and 30 June 2015 were as follows:
From 1 January 2016to 30 June 2016 From 1 January 2015 to 30 June 2015
E'000 E'000
Laurence Geller *678 97
Robert Heller 103 73
Graham Warner 93 73
Mark Townsend 31 7
Justin Rimel 2 7
Andrew Coppel 112 -
David B. Heller 3 10
Roger Lane-Smith - 23
Andreas Papageorghiou - 2
Cem Duna - 2
Antonios Achilleoudis - 2
Christopher Pissarides - 8
Total 1,022 304
*Comprises E636 thousand compensation for loss of office and E42 thousand compensation for expenses.
Mr. Miltos Kambourides has waived his fees.
On 25 February 2015, the Company announced the following Directorate changes. Andreas Papageorghiou, Cem Duna, Antonios
Achilleoudis and Christopher Pissarides stepped down from the Board. Five new members joined the Board - Laurence Geller,
who also served as Chairman, Robert Heller, Graham Warner, Mark Townsend and Justin Rimel. Miltos Kambourides and David B.
Heller remained on the new Board, as did Roger Lane Smith until his retirement on 31 December 2015. 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 no longer retains an interest in the stock options issued pursuant to the Company's Stock Option Programme
whilst Andrew Coppel does not participate in the Stock Option Programme.
On 19 July 2016, Sue Farr joined the Board as a non-executive Director.
28.2 Investment Manager remuneration
From 1 January 2016to 30 June 2016 From 1 January 2015 to 30 June 2015
E'000 E'000
Annual fees 4,250 6,814
Equity-settled share-based payment arrangements 261 -
Total remuneration 4,511 6,814
28. Related party transactions
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 characterised 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.
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 six-month periods ended 30 June 2016 and 30 June 2015. As at 30
June 2016, funds held in escrow, including accrued interest, were released (31 December 2015: 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.
28.3 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
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