DCI Advisors
Limited
(the
"Company" or "DCI"))
Annual Report and Unaudited
Financial Statements for the year ended 31 December
2023
9
July 2024
The Company announces that
unaudited financial statements for the year ended 31 December 2023
along with accompanying reports are released today and that copies
will be available on the Company's website at: www.dciadvisorsltd.com
Enquiries
DCI Advisors Ltd
Nicolai Huls / Nick Paris,
Managing Directors
|
nickparis@btinternet.com
+44 (0) 7738 470550
|
Cavendish Capital Markets (Nominated Adviser &
Broker)
James King / Jonny
Franklin‐Adams /
Edward Whiley / Oscar Valeur‐Adu (Corporate Finance)
Pauline Tribe (Sales)
|
+44 (0) 20 7220 0500
|
FIM Capital Limited (Administrator)
Lesley Lennon / Grainne Devlin
(Corporate Governance)
|
llennon@fim.co.im
/ gdevlin@fim.co.im
|
CHAIRMAN'S STATEMENT
For the year ended 31 December
2023
Dear Shareholders,
After joining the Board as
Chairman in February 2023, I am pleased to report the DCI Advisors
Ltd (the "Company" or "DCI") unaudited annual results.
Temporary Suspension
The Company is required under Rule
19 of the AIM Rules for Companies to present its audited Annual
Results within 6 months of the financial year end. There has been a
delay in the audit process of the Annual Results for the year ended
31 December 2023.The Company expects to be able to present the full
audited Annual Results during August 2024. As a result of the
delay, trading in the Company's shares on AIM was suspended with
effect from 07.30a.m. on 1 July 2024.
Corporate Governance, Assets Sales
& Distributing Surplus Capital
The focus during the financial
year, and which continues apace, was to improve the Company's
corporate governance, implement the strategy of selling remaining
assets, repaying debt and distributing surplus capital to
shareholders. We will start to consult with shareholders shortly
about the mechanism for returning capital when a surplus is
available.
In addition to the significant
events highlighted in the 2022 Final results (to 31 December 2022)
and 2023 Interim results (to 30th June 2023) there have been a
number of events in 2024 which it would be prudent to highlight in
this FY2023 statement.
●
The Managing Directors' report will update shareholders on the
Legal Update which was released on 28 March 2024.
●
Likewise, following the Shareholder/Trading Update on 15 April
2024, the Managing Directors' report will update shareholders on
the current progress of DCI's major assets.The Managing Directors
have been working tirelessly in order to dispose of the DCI's
assets now that the Company has been stabilised and corporate
governance improved.
Summary of Financial
Performance
At the 31st December 2023
financial year end, the NAV of the Company measured as the equity
attributable to owners of the Company was € 115.5 million (2022:
€112.1 million) representing an increase of 3.0% compared to
31 December 2022. The net gain, after tax attributable to the
owners of the company, was €3.4 million (2022: loss €7.0
million).
As at 31 December 2023, the DCI
group had three principle liabilities:
●
€11.1 million owed under the redeemable preference share agreement
signed at the Kilada investment level;
● €
4.1 million owed to PBZ, the Croatian lender to the Livka Bay
investment; and
● €
2.9 million owed to shareholders in respect of working capital
loans received throughout the year.
In sterling terms, DCI's NAV
remained at 10p as it was on 31 December 2022 notwithstanding an
increase when measured in euro. At the financial year end, DCI had
a market capitalisation of approximately £35.3 million, compared
with the Company's NAV of £105.9 million after DTL representing a
discount to NAV of 67.1%.
Additional Director
It is still the Board's intention
to appoint at least one new independent Directors in order to
enhance the corporate governance within the Company. The Board is
considering appointing a fourth Director who can take over from
Nick Paris as Chair of the Audit Committee given that he became an
executive Managing Director in March 2023. At the time of writing
this statement, the process is well under way in conjunction with
an independent, external recruitment consultant. We will update
shareholders as soon as the process has been completed.
In addition, The Board is
considering appointing a US based investment professional with
knowledge of Greece at the suggestion of one of the large
shareholders. From a governance perspective this would mean that
the majority of the Board will be non-executive
Directors.
I would like to thank again DCI's
shareholders and our numerous service providers for their support
and confidence that they have given the Board in proceeding with
the managed wind-down of the Company. The Board continues to liaise
with shareholders and remains confident that significant
announcements will be made in the near future.
Sean Hurst
Chairman
DCI Advisors Ltd 8 July
2024
MANAGING DIRECTORS'
REPORT
Business Overview
The economic environment in each
of the three countries in which DCI owns assets continues to
improve and we are making progress on selling our assets and
finishing the construction of Phase One at Kilada Hills which will
enable that asset to be sold too hopefully at an increase to its
current Net Asset Value.
Financing
The DCI portfolio of assets
generates no income as the assets are either under development
(i.e. Kilada) or under the preconstruction phase. However, the
costs of constructing Phase One at Kilada and the operating costs
of the Group including maintaining its 36 SPV's must be met. We
have been trying to avoid taking out a large Group level secured
loan since the CastleLake Loan facility was repaid from the
proceeds of selling our interst in One & Only Kea Island in
December 2022 as a new facility would need to be repaid before we
could return any capital to DCI shareholders. The Board might
however consider additional funding in case the execution of exits
takes longer than expected in order to repay current shareholder
loans and to fund development at Kilada and operation
expenses.
In order to continue the
development in 2023 of Phase One at Kilada our JV partner agreed in
2023 to lend the project up to €2.5 million in order to continue
the development. Further funding, as announced in April 2024, for
the project was found for up to a further €2.5 million from an
Asian based family office. These funding flows plus the €1.5
million in government grants which we have received have resulted
in continued development of the Kilada project, although slower
than initially hoped for. More funding is needed for finalising
Phase One at Kilada and the current plan is for DCI to fund the
remaining cash needs.
We have reduced and covered our
operating costs via thirteen short term loans from our shareholders
taken out since April 2023. We intend to repay the first five of
these from the proceeds of our next asset sale and the remaining
loans which are not pre-payable early as each of them reaches their
respective 12 month anniversary.
Legal actions
The Company is currently involved
in litigation in the British Virgin Islands (BVI), Greece, and the
United Kingdom (UK), all relating to the former Investment Manager
or DCP's close business partner Zoniro.
UK: In April 2023, DCP filed a
claim in the High Court of Justice of England and Wales against DCI
for alleged breach of contract and unpaid fees. DCI is defending
the claim, considering it opportunistic and without merit. A
reverse summary judgment hearing in March 2024 determined that a
full trial is needed.
Greece: In September 2023, Zoniro
SA issued a payment order against one of Kilada's Greek companies
and blocked its bank account. A judgment in May 2024 ruled in favor
of DCI, and the bank account is expected to be released soon. In
December 2023, DCI filed criminal charges in Greece against key
individuals from DCP and Zoniro SA, alleging money laundering and
corporate governance abuse. Additionally, DCI filed civil claims in
2024 seeking €57.0 million in damages and transaction cancellation
in Cyprus.
BVI: In August 2023, Zoniro Ltd
issued a statutory demand for payment from DCI and another DCI
group company. DCI has initiated proceedings to set aside these
demands, citing collusion between DCP and Zoniro. A hearing took
place on May 3, 2024, with no judgment yet rendered.
Market Dynamics
The three countries in which the
Company owns assets showed solid GDP growth throughout 2023
following the high growth experienced in 2022 when the world
rebounded from the Covid related shutdowns and this trend is
expected to continue throughout 2024. Tourist arrival numbers also
continued to improve which is a key metric for the development of
luxury beachfront land like ours. This helped to improve the
prospects for selling our assets where we always target to achieve
sales prices above the Net Asset Values at the assets are
carried.
Year
|
2024 (forecast)
|
2023
|
2022
|
GDP growth (% yoy):
|
|
|
|
Greece
|
2.0
|
1.8
|
5.6
|
Cyprus
|
2.6
|
2.5
|
5.1
|
Croatia
|
3.3
|
3.1
|
7.0
|
Tourist arrivals
(million):
|
|
|
|
Greece
|
N/a
|
36
|
30
|
Cyprus
|
N/a
|
3.8
|
3.2
|
Croatia
|
N/a
|
20.6
|
15.0
|
In Greece, political stability
continued to improve with the re-election of the existing
pro-business government in June 2023 leading to an upgrade of Greek
government debt by the international rating agencies in September
and October. In addition, Greek banks began to finance property
development again provided that the projects are able to produce
reliable future cash flows to service the loans.
In Cyprus, the existing
pro-business government was re-elected in February 2023.
In Croatia, the benefits from
joining the Euro currency zone and the Schengen passport area in
January 2023 were increasingly apparent throughout the year as EU
citizens benefitted from easier access for themselves as well as
the elimination of cross border exchange rate regimes.
Review of our Major
Assets
Greece - Kilada Country Club, Golf
and Residences
During 2023/2024, significant
progress has been made on the Kilada project. The archaeological
team has released 95% of the golf course's land, minimizing
concerns about archaeological findings. By the end of 2022, two
golf holes were grassed, and in 2023, an additional four holes were
completed, totalling six. Four more holes have been shaped and are
ready for grassing. Excavations for the golf clubhouse and country
club are finished, and foundational reinforcements and columns are
in place. Nine holes are expected to be ready this summer,
facilitating marketing events to attract potential land buyers and
speeding up land lot sales. Unfortunately in April of this year we
lost our exceptionally valuable colleague and friend Ioannis
Tsaramparis who strongly supported DCI. He served Kilada as the
Construction Manager during a very challenging period. He welcomed
and supported the termination and change in management and became a
member of the boards of the Greek SPVs.
In December, the Greek government
approved a €1.5 million grant for the project, with an additional
€4.5 million expected over the next year. Preliminary discussions
are underway to agree with a 5-star hotel operator to secure hotel
development financing. A family office investor is set to invest up
to €2.5 million for a 3% equity stake, aiding in bridging current
capital needs and reducing DCI's funding obligations.
The progress made in 2023 was
confirmed by a strong uplift in the valuation for the project. This
valuation increase is, we believe, the result of greater visibility
that the 18-holes golf course and countryclub will be finalised.
This has supported the land value but also the valuation the hotel
and branded villas component where the strongest valuation uplift
was visible. While we support this valuation increase and always
were of the opinion that the hotel component was undervalued we are
also aware that DCI still has work to do before the 18-holes golf
course and countryclub is finalised. As a result we have decided,
for now, to apply as 50% haircut to the valuation of the hotel and
branded villas component. As soon as funding for finalising phase
one of the development is 100% guaranteed we will remove the 50%
discount to the valuation. Given the signing of the Livka Bay SPA
we believe the funding will be guaranteed soon.
Investor interest has increased,
leading to more inquiries about purchasing land lots, and the sales
team has been restructured to meet this demand. There have also
been several inquiries about purchasing the entire project, which
has resulted in DCI signing a Memorandum of Understanding with a
potential buyer for DCI's stake in the Kilada asset which gives the
potential buyer an initial exclusivity period of 90 days to
complete further due diligence in order to present an offer. In the
meantime preparations for an official sales process are ongoing in
case no agreement can be reached with the potential
buyer.
Lavender Bay/Plaka Bay and Scorpio
Bay
DCI has identified several
potential interested parties for our other three developments in
Greece, being Lavender Bay, Plaka Bay and Scorpio Bay. In the
meantime, we have applied for a special urban planning permit for
Plaka Bay (similar to our Kilada asset) in order to mature it and
make it more marketable, and have started the same process for
Scorpio Bay.
For Lavender Bay, DCI is in
discussions with the Greek Church to restructure the original
purchase in order to compensate DCI for the money paid and to
restructure the original purchase terms in order to better reflect
the current situation. Both DCI and the Greek Church have showed
willingness to get this restructuring agreed as soon as possible.
At the same time we are exploring permitting options under the
current ownership situation.
The legal opinion that we and the
Greek Church have received is that the land sold to us was owned by
the Church and that the Greek state is not the owner.
Unfortunately, this needs to be confirmed by a Greek court before
the matter can be irrevocably resolved.
The Church has already started its
legal proceedings against the Greek State. DCI will do the same for
the disputed land banks already held in the name of DCI's
subsidiary, Golfing Developments S.A. Both the Greek Church as well
as DCI believe their court cases against the Greek State have
strong legal grounds based on facts and recent Greek
legislation.
Since the current liabilities at
the project level are higher than the asset value, Lavender Bay's
valuation within the Company's NAV is negative €19.3 million. Due
to accounting rules the Company has been obliged to use this
negative valuation in its books. Given the fact that the
liabilities are at project level and non-recourse, it is the Board
of Director's view that it is highly unlikely that this negative
valuation will ever be realised. So, while the published Company's
NAV is €115.5 million, the Board of Directors believes that the
Company's real NAV is closer to €134.8 million. The Board of
Directors believe a zero valuation for this asset is the worst-case
scenario. However, we would like to emphasise that our focus will
be to achieve a positive exit value for this asset going
forward.
Cyprus - Aristo
Developers
Aristo Developers continued to
benefit from a robust market for residential property in Cyprus
with its home base in Paphos showing particularly strong demand
from new buyers. However sales that have been made are only
accounted for under IFRS rules when the property is finished and
handed over to the buyer. This creates a lag of up to two
years which means that the 2023 accounts which are summarised in
Note 17 reflect property sales made during 2021 which was a period
of significant disruption and weak demand because of the Covid
outbreak. Revenue was therefore down 45% of the prior year.
However, the company coninued to use the majority of the cash flow
generated in the year from sales to pay down bank borrowings and
these therefore fell by approximately 18% in the
year.
At the end of 2023, the balance
sheet was also strengthened by the decision to convert a
significant number of shareholder loans to the company into equity
which increased total equity by 93%.
Apollo Heights
Apollo Heights comprises 447
hectares of contiguous undeveloped land zoned for agricultural and
forest purposes. 93% of our site is located within the Sovereign
Base Area ("SBA") which surrounds the British military bases in
Southern Cyprus. The SBA is administered jointly by the Cyprus and
British governments and it forms a buffer zone to protect the
security of the bases. Building permissions within the SBA are
limited and are governed by five year plans. The last plan was
published in May 2022 and DCI filed an appeal to try to improve the
planning possibilities of Apollo but more than 3,000 appeals were
lodged in total. The results of these should be released by the SBA
Administration at the end of 2024.
Although our previous Investment
Manager drew up plans for villas, a hotel, various polo fields and
an 18 hole golf course on Apollo it is clear that our land will not
get planning permission for such a development unless there is a
significant and unexpected relaxation of controls. Whilst this may
happen sometime in the future, DCI needs to sell its assets before
then so we have been exploring a sale to local landowners who have
the time to wait for such relaxation. We are also exploring the
potential to instal a Photvoltaic ("PV") facility on the high
ground at Apollo but again this will require planning permission
plus support from the Cyprus government which has been encouraging
the development of PV facilities across the island but has not yet
identified its preferred sites.
In 2022, we reduced the value of
Apollo in our NAV to reflect the lack of planning permissions and
their likely impact on the saleability of the land but we have left
it unchanged this year.
Croatia - Livka Bay
Our seafront land on the island of
Solta opposite to the Dalmatian City of Split attracted significant
interest during our sale exercise that we started in April 2023.
The land has special development status from the Croatian
government and planning permission to build a 90 room hotel, with
villas and bungalows and a marina. We received three Letters of
Intent from interested parties and have signed a Sale and Purchase
Agreement with the preferred bidder to sell this asset at a price
of €22.0 milion which exceeds our previous Net Asset Value. The
value of this asset has been increased as at 31 December 2023 from
€18.3 million to €21.0 million reflecting the expected net proceeds
from the sale accordingly.
Future Objectives
During 2023, we spent time
stabilising the Company following the termination of our Investment
Manager in March and cutting our operating costs to reduce our cash
burn. We then sought to improve each asset and ready them for sale
which disappointingly had not already been done even though each of
the assets has been for sale since 2016 when the shareholders voted
to start to realise them.
We then designed and implemented
disposal processes for each asset except for the Kilada Country
Club, Golf and Residences as our shareholders voted in December
2021 to continue to build it and complete the golf course and
country club before seeking to sell it ahead of Phase 2 which is
the development of several hundred villas, a hotel and a beach
club. We have been seeing interest from prospective buyers in many
of our assets and have multiple sales discussions underway with
Livka Bay announced on the 28 June 2024 as the first to sell. When
assets are sold, the proceeds will be used to refinance the
Company, build up a limited reserve for future operating costs, pay
off any bank debt and repay the shareholder loans. We expect to be
able to commence the payment of surplus capital back to
shareholders this year.
Thank you for your continued
support.
Nicolai Huls & Nick Paris,
Joint Managing Directors
8 July 2024
DIRECTORS REPORT
For the year ended 31 December 2023
The Directors present their report
together with the unaudited financial statements of the Company and
its subsidiary undertakings (together the "Group") for the twelve
months ended 31 December 2023.
Principal Activities
The principal activity of the
Group is the development of beachfront properties in the Eastern
Mediterranean - Greece, Cyprus and Croatia.
Change of Company Name
On 1 June 2023, the Company
changed its name from Dolphin Capital Investors Ltd to DCI Advisors
Ltd and the website address was changed to
www.dciadvisorsltd.com
Business Review for the period and Future
Developments
The unaudited consolidated
statement of comprehensive income for the year and the unaudited
statement of financial position as at 31 December 2023 are set out
on pages 10 and 11 of this report. The assets of the Group are
principally development properties and these are valued once a year
by the Directors based on recommendations from the Managing
Directors. In addition, external valuers are contracted in each
relevant country at the financial year end to assess the current
value of those properties.
A review of the development and
performance of the Group and of expected future developments has
been set out in the Chairman's Statement.
No dividends were declared or paid
during 2023.
Principal Risks and Uncertainties
The Group's business is property
development in the Eastern Mediterranean. Its principal risks are
therefore related to the property market in these countries in
general, and also the particular circumstances of the property
development projects that it is undertaking.
The Directors seek to mitigate and
manage these risks through continual review, policy setting and
enforcement of contractual rights and obligations. They also
regularly monitor the economic and investment environment in
countries that the Group operates in and the management of the
Group's property development portfolio.
Directors
The Directors
of the Company who held office throughout the financial period and
up to the date of this report were as follows:
· Martin Adams - Resigned 10 February 2023
· Sean
Hurst - Appointed 13 February 2023
· Nicolai Huls
· Nick
Paris
· Miltos Kambourides - Removed 18 March 2023
On 10 February 2023, Martin Adams
resigned as Chairman of the Board of Directors and Sean Hurst was
subsequently elected appointed to that role on 13 February
2023.
Nicolai Huls and Nick Paris became
executive directors when they became Managing Directors of the
Company on 20 March 2023 when the agreement with the previous
Investment Manager was terminated.
Directors' remuneration during the twelve months
ended 31 December 2023
The Directors remuneration details
during the period of this report were as follows:
Director
|
Director's
fees
(€)
|
Total
(€)
|
Martin Adams
|
8,425
|
8,425
|
Sean Hurst
|
66,042
|
66,042
|
Nicolai Huls
|
150,000
|
150,000
|
Nick Paris
|
150,000
|
150,000
|
*Miltos Kambourides continued to
waive his right to collect a Director's fee from the Company in
light of his involvement as the founder and majority owner of the
Company's former Investment Manager.
Directors' interests
The interests of the Directors in
the Company's shares as at 31 December
2023 were as follows:
Director
|
Numbers of Common Shares
of
€ 0.01 each
held
|
Sean Hurst
Nicolai Huls
- direct shareholding
- director of Discover Investment
Company which owns 30,026,849 shares
Nick Paris
- direct shareholding
- shareholder loan
|
475,000
775,000
1,634,487
€100,000
|
Substantial Shareholders
The Directors are aware of the
following direct and indirect interests comprising more than 3% of
the issued share capital of the Company as at 1 June 2024, which is
the latest practicable date before the publication of this
report:
|
Number of
Common Shares
held
|
Percentage
of
issued Share
Capital (%)
|
Almitas Capital LLC
|
180,443,478
|
19.95
|
Mr. Lars Ernest Bader
|
92,925,600
|
10.27
|
Fortress Investment
Group
|
89,922,801
|
9.94
|
Peter Gyllenhammar AB The Union
Discount Company of London Ltd
|
70,000,000
|
7.74
|
Forager Funds Management Pty
Ltd
|
53,889,519
|
5.96
|
Progressive Capital Partners
Ltd
|
53,787,814
|
5.95
|
Terra Partners Asset Mgt
Ltd
|
53,736,687
|
5.94
|
Discover Investment
Company*
|
30,026,849
|
3.32
|
Weiss Asset Management
|
27,400,000
|
3.03
|
UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 31 December 2023
|
|
31 December
2023
|
31 December
2022
|
|
Note
|
€'000
|
€'000
|
|
|
|
|
Revenue
|
6
|
157
|
318
|
Cost of sales
|
7
|
-
|
-
|
Gross profit
|
|
157
|
318
|
|
|
|
|
Gain on disposal of
equity-accounted investees
|
|
-
|
5,421
|
Change in valuations
|
8
|
19,926
|
(2,984)
|
Investment Manager
remuneration
|
27.2
|
-
|
-
|
Directors' remuneration
|
27.1
|
(374)
|
(205)
|
Professional fees
|
10
|
(3,990)
|
(1,987)
|
Administrative and other
expenses
|
11
|
(2,026)
|
(1,614)
|
Depreciation charge
|
15
|
(50)
|
(48)
|
Total operating and other expenses
|
|
13,486
|
(1,417)
|
|
|
|
|
Results from operating activities
|
|
13,643
|
(1,099)
|
|
|
|
|
Finance income
|
|
-
|
73
|
Finance costs
|
|
(874)
|
(2,997)
|
Net finance costs
|
12
|
(874)
|
(2,924)
|
|
|
|
|
Share of (losses)/profits on
equity-accounted investees, net of tax
|
17
|
(5,857)
|
(1,785)
|
Profit/(loss) before taxation
|
|
6,912
|
(5,808)
|
|
|
|
|
Taxation
|
13
|
(2,365)
|
12
|
Profit/(loss)
|
|
4,547
|
(5,796)
|
|
|
|
|
DISCONTINUED OPERATIONS
|
|
(316)
|
-
|
|
|
|
|
Other comprehensive Loss
|
|
|
|
Foreign currency translation
differences
|
12
|
(69)
|
(56)
|
Other comprehensive loss, net of tax
|
|
(69)
|
(56)
|
|
|
|
|
Total comprehensive profit/(loss)
|
|
4,162
|
(5,852)
|
|
|
|
|
Profit/(loss) attributable to:
|
|
|
|
Owners of the Company
|
|
3,480
|
(6,924)
|
Non-controlling
interests
|
|
751
|
1,128
|
|
|
4,231
|
(5,796)
|
|
|
|
|
Total comprehensive loss attributable to:
|
|
|
|
Owners of the Company
|
|
3,411
|
(6,980)
|
Non-controlling
interests
|
|
751
|
1,128
|
|
|
4,162
|
(5,852)
|
|
|
|
|
PROFIT/(Loss) per share
|
|
|
|
Basic and diluted loss per share (€)
|
14
|
0.004
|
(0.008)
|
The notes on pages 14 to 44 are an
integral part of these consolidated financial
statements.
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
As at 31 December 2023
|
|
31 December
2023
|
31 December
2022
|
|
Note
|
€'000
|
€'000
|
Assets
|
|
|
|
Property, plant and
equipment
|
15
|
27,647
|
15,226
|
Investment property
|
16
|
27,918
|
45,943
|
Equity-accounted
investees
|
17
|
42,694
|
42,694
|
Non-current assets
|
|
98,259
|
103,863
|
|
|
|
|
Assets held for sale
|
16
|
21,000
|
-
|
Trading properties
|
18
|
56,516
|
56,516
|
Receivables and other
assets
|
19
|
4,008
|
10,083
|
Cash and cash
equivalents
|
20
|
1,008
|
2,226
|
Current assets
|
|
82,532
|
68,825
|
Total assets
|
|
180,791
|
172,688
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
21
|
9,046
|
9,046
|
Share premium
|
21
|
569,847
|
569,847
|
Retained deficit
|
|
(463,834)
|
(467,314)
|
Other reserves
|
|
459
|
528
|
Equity attributable to owners of the
Company
|
|
115,518
|
112,107
|
Non-controlling
interests
|
|
2,555
|
8,440
|
Total equity
|
|
118,073
|
120,547
|
|
|
|
|
Liabilities
|
|
|
|
Loans and borrowings
|
22
|
11,103
|
10,434
|
Lease liabilities
|
24
|
3,322
|
3,347
|
Deferred tax
liabilities
|
23
|
7,736
|
6,577
|
Trade and other
payables
|
25
|
19,509
|
19,795
|
Non-current liabilities
|
|
41,670
|
40,153
|
|
|
|
|
Loans and borrowings
|
23
|
7,049
|
4,611
|
Lease liabilities
|
25
|
88
|
88
|
Trade and other
payables
|
26
|
13,911
|
7,289
|
Current liabilities
|
|
21,048
|
11,988
|
Total liabilities
|
|
62,718
|
52,141
|
Total equity and liabilities
|
|
180,791
|
172,688
|
|
|
|
|
Net asset value ('NAV')
per share
(€)
|
26
|
0.13
|
0.12
|
The unaudited consolidated
financial statements were authorised for issue by the Board of
Directors on 8 July 2024.
Nick Paris
Nicolai Huls
Managing
Director
Managing Director
The notes on pages 14 to 44 are an
integral part of these consolidated financial
statements.
UNAUDITED CONSOLIDATED STATEMENT OF CASH
FLOWS
For the year ended 31 December 2023
|
|
31 December
2023
|
31 December
2022
|
|
|
€'000
|
€'000
|
Cash flows from operating activities
|
|
|
|
Profit/(loss)
|
|
4,231
|
(5,796)
|
Adjustments for:
|
|
|
|
(Gain)/Loss in fair value of
investment property
|
|
(3,830)
|
6,316
|
Impairment loss on other
investments
|
|
-
|
-
|
Gain on disposal of
investment in associates/subsidiaries
|
|
-
|
(5,411)
|
Reversal of impairment loss
on property, plant and equipment
|
|
(10,239)
|
(2,944)
|
(Reversal of)/impairment
loss on equity-accounted investees
|
|
(5,857)
|
(388)
|
Depreciation
charge
|
|
47
|
48
|
Interest expense
|
|
874
|
2,891
|
Interest income
|
|
-
|
(4)
|
Exchange
difference
|
|
(69)
|
(76)
|
Share of losses/(profits) on
equity-accounted investees, net of tax
|
|
5,857
|
1,785
|
Taxation
|
|
1,159
|
(12)
|
|
|
(7,827)
|
(3,591)
|
Changes in:
|
|
|
|
Receivables
|
|
(562)
|
(8,974)
|
Payables
|
|
7,287
|
568
|
Trading
properties
|
|
-
|
-
|
Deferred revenue
|
|
-
|
-
|
Cash used in operating
activities
|
|
(1,102)
|
(11,997)
|
Tax paid
|
|
-
|
-
|
Net cash used in operating activities
|
|
(1,102)
|
(11,997)
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
Proceeds
from disposal of associate
|
|
-
|
26,875
|
Acquisitions of investment
property
|
|
(95)
|
(75)
|
Acquisitions of property, plant and
equipment
|
|
(2,229)
|
(3,264)
|
Proceeds from other
investments
|
|
-
|
99
|
Interest received
|
|
-
|
4
|
Net cash from/(used in) investing
activities
|
|
2,324
|
23,639
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
Repayment of loans and
borrowings
|
|
(500)
|
(12,370)
|
New loans
|
|
2,781
|
-
|
Proceeds from issue of redeemable
preference shares
|
|
-
|
3,000
|
Payment of lease
liabilities
|
|
-
|
(8)
|
Interest paid
|
|
(73)
|
(2,363)
|
Dividend paid to non-controlling
interests
|
|
-
|
(2,250)
|
Net cash (used in)/from financing
activities
|
|
2,208
|
(13,991)
|
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents
|
|
(1,218)
|
(2,349)
|
Cash and cash equivalents at 1
January
|
|
2,226
|
4,575
|
Cash and cash equivalents at 31 December
|
|
1,008
|
2,226
|
|
|
|
|
For the purpose of the
consolidated statement of cash flows, cash and cash equivalents
consist of the following:
|
|
|
|
Cash in hand and at bank (see note
20)
|
|
1,008
|
2,226
|
Cash and cash equivalents at the end of the
year
|
|
1,008
|
2,226
|
The notes on pages 14 to 44 are an
integral part of these consolidated financial
statements.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
For the year ended 31 December 2023
1.
REPORTING ENTITY
DCI Advisors Ltd (the 'Company')
was incorporated and registered in the British Virgin Islands
('BVI') on 7 June 2005. The Company is a real estate investment
company focused on the early-stage, large-scale leisure-integrated
residential resorts in the Eastern Mediterranean, and managed,
until 20 March 2023, by Dolphin Capital Partners Ltd (the
'Investment Manager'), an independent private equity management
firm that specialises in real estate investments, primarily in
south-east Europe, and thereafter self-managed. The shares of the
Company were admitted to trading on the AIM market of the London
Stock Exchange ('AIM') on 8 December 2005.
With effect from 01 June 2023, the
name of the Company was changed from Dolphin Capital Investors Ltd
to DCI Advisors Ltd.
The unaudited consolidated
financial statements of the Company as at 31 December 2023 comprise
the financial statements of the Company and its subsidiaries
(together referred to as the 'Group') and the Group's interests in
equity-accounted investees.
The unaudited consolidated
financial statements of the Group as at and for the year ended 31
December 2023 are available at www.dciadvisorsltd.com.
2. basis
of preparation
a. Statement of
compliance
The unaudited consolidated
financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') as adopted by
the European Union ('EU').
The unaudited consolidated
financial statements were authorised for issue by the Board of
Directors on 3 July2024.
b. Basis of
preparation
The unaudited consolidated
financial statements have been prepared on a going concern basis,
which assumes that the Group will be able to discharge its
liabilities in the normal course of business.
On 22 December 2021, an
Extraordinary General Meeting was held and the Shareholders
approved a continuation of the Company without setting a
termination date or a date for a further continuation vote in order
to provide time to optimise for Shareholders the value that can be
realised from the Company's investments by removing potentially
commercially prejudicial deadlines from negotiations with potential
buyers. Notwithstanding the absence of a formal date for
Shareholders to consider a continuation of the Company, the Board
may, at any time, propose a further continuation vote to
Shareholders.
The Group's cash flow forecasts for
the foreseeable future involve uncertainties related primarily to
the exact disposal proceeds and timing of disposals of the assets
expected to be disposed of. Management believes that the
proceeds from forecast asset sales will be sufficient to maintain
the Group's cash flow at a positive level. Should the need arise,
management will take actions to reduce costs and is confident that
it can secure additional loan facilities and/or obtain repayment
extension on existing ones, until planned asset sales are realised
and proceeds received.
If for any reason the Group is
unable to continue as a going concern, then this could have an
impact on the Group's ability to realise assets at their recognised
values and to extinguish liabilities in the normal course of
business at the amounts stated in the unaudited consolidated
financial statements.
Based on these factors, management
has a reasonable expectation that the Group has and will have
adequate resources to continue in operational existence for the
foreseeable future.
c. Basis of
measurement
The unaudited consolidated
financial statements have been prepared under the historical cost
convention, with the exception of property (investment property and
property, plant and equipment), which are stated at their fair
values.
d. Adoption of new and revised
standards and interpretations
As from 1 January 2023, the Group
adopted all changes to IFRS which are relevant to its operations.
This adoption did not have a material effect on the unaudited
consolidated financial statements of the Group.
The following standards,
amendments to standards and interpretations have been issued but
are not yet effective for annual periods beginning on 1 January
2023. Those which may be relevant to the Group are set out below.
The Group does not plan to adopt these standards early. The Group
continues to assess the potential impact on its unaudited
consolidated financial statements resulting from the application of
the following standards.
(i)
Standards and interpretations adopted by the EU
Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies
(applicable for annual periods beginning on or after 1 January
2023)
The amendments to IAS 1 and the
update to IFRS Practice Statement 2 aim to help companies on the
application of materiality to the disclosure of accounting
policies. The key amendments to IAS 1 include: (1) requiring
companies to disclose their material accounting policies rather
than their significant accounting policies, (2) clarifying that
accounting policies related to immaterial transactions, other
events or conditions are themselves immaterial and as such need not
be disclosed, and (3) clarifying that not all accounting policies
that relate to material transactions, other events or conditions
are themselves material to a company's financial statements. The
amendments to IFRS Practice Statement 2 are to include guidance and
two additional examples on the application of materiality to
accounting policy disclosures. The amendments are consistent with
the refined definition of material i.e. "Accounting policy
information is material if, when considered together with other
information included in an entity's financial statements, it can
reasonably be expected to influence decisions that the primary
users of general-purpose financial statements make on the basis of
those financial statements". The Group is currently evaluating the
expected impact of adopting the amendments on its financial
statements. As such, the expected impact of the amendments is not
yet known or reasonably estimable.
Amendments to IAS 8 Accounting policies, Changes in
Accounting Estimates and Errors: Definition of Accounting Estimates
(applicable for annual periods beginning on or after 1 January
2023)
The amendments to IAS 8 are issued
to clarify how companies should distinguish changes in accounting
policies from changes in accounting estimates, with a primary focus
on the definition of and clarifications on accounting estimates.
The amendments introduce a new definition for accounting estimates:
clarifying that they are monetary amounts in the financial
statements that are subject to measurement uncertainty. The
amendments also clarify the relationship between accounting
policies and accounting estimates by specifying that a company
develops an accounting estimate to achieve the objective set out by
an accounting policy. Developing an accounting estimate includes
both: (1) selecting a measurement technique (estimation or
valuation technique), and (2) choosing the inputs to be used when
applying the chosen measurement technique. The effects of changes
in such inputs or measurement techniques are changes in accounting
estimates. The definition of accounting policies remains unchanged.
The Group is currently evaluating the expected impact of adopting
the amendments on its financial statements. As such, the expected
impact of the amendments is not yet known or reasonably
estimable.
Amendments to IAS 12 Income Taxes: Deferred Tax related to
Assets and Liabilities arising from a Single Transaction
(applicable for annual periods beginning on or after 1 January
2023)
Targeted amendments to IAS 12
clarify how companies should account for deferred tax on certain
transactions (e.g. leases and decommissioning provisions). The
amendments narrow the scope of the initial recognition exemption
(IRE) so that it does not apply to transactions that give rise to
equal and offsetting temporary differences. As a result, companies
will need to recognise a deferred tax asset and a deferred tax
liability for temporary differences arising on initial recognition
of a lease and a decommissioning provision. The Group is currently
evaluating the expected impact of adopting the amendments on its
financial statements. As such, the expected impact of the
amendments is not yet known or reasonably estimable.
(ii) Standards
and interpretations not adopted by the EU
Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and
Non-current Liabilities with Covenants (applicable for annual
periods beginning on or after 1 January 2024)
In 2020, the IASB has amended IAS
1 to promote consistency in application and clarify the
requirements on determining if a liability is current or
non-current. Under existing IAS 1 requirements, companies classify
a liability as current when they do not have an unconditional right
to defer settlement of the liability for at least twelve months
after the end of the reporting period. As part of its amendments,
the IASB has removed the requirement for a right to be
unconditional and instead, now requires that a right to defer
settlement must have substance and exist at the end of the
reporting period. Similar to existing requirements in IAS 1, the
classification of liabilities is unaffected by management's
intentions or expectations about whether the company will exercise
its right to defer settlement or will choose to settle
early.
On 31 October 2022 the IASB issued
further amendments to IAS 1 i.e. Non-current liabilities with
covenants. The new amendments aim to improve the information an
entity provides when its right to defer settlement of a liability
is subject to compliance with covenants within twelve months after
the reporting period. The amendments clarify that only covenants
with which a company must comply on or before the reporting date
affect the classification of a liability as current or non-current.
Covenants with which the company must comply after the reporting
date (i.e. future covenants) do not affect a liability's
classification at that date. However, when non-current liabilities
are subject to future covenants, companies will now need to
disclose information to help users understand the risk that those
liabilities could become repayable within 12 months after the
reporting date.
The amendments also clarify how a
company classifies a liability that can be settled in its own
shares (e.g. convertible debt). When a liability includes a
counterparty conversion option that involves a transfer of the
company's own equity instruments, the conversion option is
recognised as either equity or a liability separately from the host
liability under IAS 32 Financial Instruments: Presentation. The
IASB has now clarified that when a company classifies the host
liability as current or non-current, it can ignore only those
conversion options that are recognised as equity. Companies may
have interpreted the existing IAS 1 requirements differently when
classifying convertible debt. Therefore, convertible debt may
become current.
Amendments to IFRS 16 Leases:
Lease Liability in a Sale and Leaseback (applicable for annual
periods beginning on or after 1 January 2024)
The IASB has issued amendments to
IFRS 16 Leases, which add to requirements explaining how a company
accounts for a sale and leaseback after the date of the
transaction. A sale and leaseback is a transaction for which a
company sells an asset and leases that same asset back for a period
of time from the new owner. IFRS 16 includes requirements on how to
account for a sale and leaseback at the date the transaction takes
place. However, IFRS 16 had not specified how to measure the
transaction when reporting after that date. The amendments issued
in September 2022 impact how a seller-lessee accounts for variable
lease payments that arise in a sale and leaseback transaction. The
amendments introduce a new accounting model for variable payments
and will require seller-lessees to reassess and potentially restate
sale and leaseback transactions entered into since 2019.
The amendments confirm the
following: (1) On initial recognition, the seller-lessee includes
variable lease payments when it measures a lease liability arising
from a sale and leaseback transaction. (2) After initial
recognition, the seller-lessee applies the general requirements for
subsequent accounting of the lease liability such that it
recognises no gain or loss relating to the right of use it
retains.
e. Use of estimates and
judgements
In preparing these unaudited
consolidated financial statements, management has made judgements,
estimates and assumptions that affect the application of accounting
principles and the related amounts of assets and liabilities,
income and expenses. The estimates and underlying assumptions
are based on historical experience and various other factors that
are deemed to be reasonable based on knowledge available at that
time. Actual results may deviate from such
estimates.
The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
estimates are recognised prospectively.
Impairment of investment in equity-accounted
investees
The Company follows the
requirements of IAS 36 to determine whether the investments in
equity-accounted investees are impaired and calculates the amount
of the impairment. An impairment loss is recognised for the
difference between the carrying amount and the recoverable amount
of the asset. The recoverable amount is the greater of the fair
value less costs to sell and value in use. As at 31 December 2023,
the Group assessed whether the carrying amount of equity-accounted
investees is impaired, by comparing it with its fair value less
cost to sell.
Measurement of fair values
A number of the Group's accounting
policies and disclosures require the measurement of fair values,
for both financial and non-financial assets and
liabilities.
The Group has an established
control framework with respect to the measurement of fair
values. This includes the Managing Directors who have overall
responsibility for overseeing all significant fair value
measurements, including Level 3 fair values.
When measuring the fair value of an
asset or a liability, the Group uses observable market data as far
as possible. Significant unobservable inputs and valuation
adjustments are regularly reviewed and changes in fair value
measurements from period to period are analysed.
Fair values are categorised into
different levels in a fair value hierarchy based on the inputs used
in the valuation techniques as follows:
·
Level
1: quoted prices (unadjusted) in
active markets for identical assets or liabilities.
·
Level
2: inputs other than quoted prices
included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
· Level 3:
inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
If the inputs used to measure the
fair value of an asset or a liability might be categorised in
different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the
fair value hierarchy as the lowest level input that is significant
to the entire measurement.
The Group recognises transfers
between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.
When applicable, further
information about the assumptions made in measuring fair values is
included in the notes specific to that asset or liability. Further
information about the assumptions made in measuring fair values is
included in the following notes:
- Note 3 and 15: property, plant
and equipment;
- Note 3 and 16: investment
property.
f. Functional and presentation
currency
These unaudited consolidated
financial statements are presented in Euro (€), which is the
Company's functional currency. All amounts have been rounded
to the nearest thousand, unless otherwise indicated.
3.
MEASUREMENT of fair values
Properties
The fair value of investment
property and land and buildings classified as property, plant and
equipment is determined at the end of each reporting period.
External, independent valuation companies, having appropriate
recognised professional qualifications and recent experience in the
location and category of the properties being valued, value the
Group's properties at the end of each year and where necessary,
semi-annually.
The Directors have appointed
American Appraisal and Avison Young, two internationally recognised
valuation firms, to conduct valuations of the Group's acquired
properties to determine their fair value. These valuations
are prepared in accordance with generally accepted appraisal
standards, as set out by the Royal Institute of Chartered Surveyors
('RICS'). Furthermore, the valuations are conducted on an 'as
is condition' and on an open market comparative basis.
The valuation analysis of
properties is based on all the pertinent market factors that relate
both to the real estate market and, more specifically, to the
subject properties. The valuation analysis of a property typically
uses four approaches: the cost approach, the direct sales
comparison approach, the income approach and the residual value
approach. The cost approach measures value by estimating the
Replacement Cost New or the Reproduction Cost New of property and
then determining the deductions for accrued depreciation that
should be made to reflect the age, condition and situation of the
asset during its past and proposed future economic working
life. The direct sales comparison approach is based on the
premise that persons in the marketplace buy by comparison. It
involves acquiring market sales/offerings data on properties
similar to the subject property. The prices of the comparables are
then adjusted for any dissimilar characteristics as compared to the
subject's characteristics. Once the sales prices are adjusted, they
can be reconciled to estimate the fair value for the subject
property. Based on the income approach, an estimate is made of
prospective economic benefits of ownership. These amounts are
discounted and/or capitalised at appropriate rates of return in
order to provide an indication of value. The residual value
approach is used for the valuation of the land and depends on two
basic factors: the location and the total value of the buildings
developed on a site. Under this approach, the residual value
of the land is calculated by subtracting the development cost from
the estimated sales value of the completed development.
Each of the above-mentioned
valuation techniques results in a separate valuation indication for
the subject property. A reconciliation process is then
performed to weigh the merits and limiting conditions of each
approach. Once this is accomplished, a value conclusion is
reached by placing primary weight on the technique, or techniques,
that are considered to be the most reliable, given all
factors.
4.
PRINCIPAL subsidiaries
The Group's most significant
subsidiaries were
the following:
|
|
Country of
|
Shareholding interest
|
Name
|
Project
|
incorporation
|
2023
|
2022
|
Scorpio Bay Holdings
Limited
|
Scorpio Bay Resort
|
Cyprus
|
100%
|
100%
|
Scorpio Bay Resorts
S.A.
|
Scorpio Bay Resort
|
Greece
|
100%
|
100%
|
Xscape Limited
|
Lavender Bay Resort
|
Cyprus
|
100%
|
100%
|
Golfing Developments
S.A.
|
Lavender Bay Resort
|
Greece
|
100%
|
100%
|
MindCompass Overseas One
Limited
|
Kilada Hills Golf
Resort
|
Cyprus
|
85%
|
85%
|
MindCompass Overseas
S.A.
|
Kilada Hills Golf
Resort
|
Greece
|
85%
|
85%
|
MindCompass Overseas Two
S.A.
|
Kilada Hills Golf
Resort
|
Greece
|
100%
|
100%
|
MindCompass Parks S.A.
|
Kilada Hills Golf
Resort
|
Greece
|
100%
|
100%
|
Dolphin Capital Greek Collection
Limited
|
Kilada Hills Golf
Resort
|
Cyprus
|
100%
|
100%
|
DCI Holdings One Limited
*
|
Aristo Developers
|
BVIs
|
100%
|
100%
|
D.C. Apollo Heights Polo and
Country Resort Limited
|
Apollo Heights Resort
|
Cyprus
|
100%
|
100%
|
Symboula Estates
Limited
|
Apollo Heights Resort
|
Cyprus
|
100%
|
100%
|
Azurna Uvala D.o.o.
|
Livka Bay Resort
|
Croatia
|
100%
|
100%
|
Eastern Crete Development Company
S.A.
|
Plaka Bay Resort
|
Greece
|
100%
|
100%
|
Single Purpose Vehicle Ten Limited
**
|
One&Only Kea Resort
|
Cyprus
|
100%
|
67%
|
The above shareholding interest
percentages are rounded to the nearest integer.
*This entity holds a 48%
shareholding interest in DCI Holdings Two Ltd ("DCI H2") which is
the owner of Aristo Developers Ltd.
** The Company disposed of its
interest in the One&Only Kea Resort in December 2022. During
2023 an application was made to reduce the capital of SPV 10 in
return for settlement of the outstanding loan with the non
controlling interest.
5. Significant
accounting policies
The principal accounting policies
adopted in the preparation of these unaudited consolidated
financial statements are set out below. These policies have been
consistently applied to all periods presented in these unaudited
consolidated financial statements unless otherwise
stated.
5.1 Subsidiaries
Subsidiaries are the entities
controlled by the Group. The Group 'controls' an entity when it is
exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through
its power over the entity. The financial statements of subsidiaries
are included in the unaudited consolidated financial statements
from the date on which control commences until the date on which
control ceases.
5.2 Non-controlling interests
('NCI')
NCI are measured initially at
their proportionate share of the acquiree's identifiable net assets
at the date of acquisition. Changes in the Group's interest in a
subsidiary that do not result in a loss of control are accounted
for as equity transactions.
5.3 Loss of control
When the Group loses control over
a subsidiary, it derecognises the assets and liabilities of the
subsidiary, and any related Non-controlling Interest ("NCI") and
other components of equity. Any resulting gain or loss is
recognised in profit or loss. Any interest retained in the former
subsidiary is measured at fair value when control is
lost.
5.4 Transactions eliminated on
consolidation
Intra-group balances and any
unrealised gains and losses arising from intra-group transactions
are eliminated in preparing the unaudited consolidated financial
statements. Unrealised gains arising from transactions with
equity-accounted investees are eliminated to the extent of the
Group's interest in the entity. Unrealised losses are eliminated in
the same way as unrealised gains, but only to the extent that there
is no evidence of impairment.
5.5 Business combinations
The Group accounts for business
combinations using the acquisition method when the acquired set of
activities and assets meets the definition of a business and
control is transferred to the Group (see Note 5.1). In determining
whether a particular set of activities and assets is a business,
the Group assesses whether the set of assets and activities
acquired includes, at a minimum, an input and substantive process
and whether the acquired set has the ability to produce
outputs.
The consideration transferred in
the acquisition is generally measured at fair value, as are the
identifiable net assets acquired. Any goodwill that arises is
tested annually for impairment. Any gain on a bargain purchase is
recognised in profit or loss immediately. Transaction costs are
expensed as incurred, except if related to the issue of debt or
equity securities.
The consideration transferred does
not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in profit or
loss.
Any contingent consideration is
measured at fair value at the date of acquisition. If an obligation
to pay contingent consideration that meets the definition of a
financial instrument is classified as equity, then it is not
re-measured and settlement is accounted for within equity.
Otherwise, other contingent consideration is remeasured at fair
value at each reporting date and subsequent changes in the fair
value of the contingent consideration are recognised in profit or
loss.
5.6 Interest in equity-accounted
investees
The Group's interests in
equity-accounted investees comprise interests in associates and a
joint venture. Associates are those entities in which the Group has
significant influence, but not control, over the financial and
operating policies. A joint venture is an arrangement in
which the Group has joint control, whereby the Group has rights to
the net assets of the arrangement, rather than rights to its assets
and obligations for its liabilities. Interests in associates and
the joint venture are accounted for using the equity method and are
initially recognised at cost, which includes transaction
costs. The Group's investment includes
goodwill identified on acquisition, net of any accumulated
impairment losses. Subsequent to initial
recognition, the unaudited consolidated
financial statements include the Group's share of the income and
expenses and equity movements of equity-accounted investees, after
adjustments to align the accounting policies with those of the
Group, until the date that significant influence or joint control
ceases. When the Group's share of losses exceeds its interest in an
equity-accounted investee, the carrying amount of that interest
(including any long-term investments) is reduced to nil and the
recognition of further losses is discontinued except to the extent
that the Group has an obligation or has made payments on behalf of
the investee.
After application of the equity
method, the Group assess the recoverable amount for each associate
or joint venture, unless the associate or joint venture does not
generate cash inflows from continuing use that are largely
independent of those from other assets of the entity. An impairment
loss is recognised for the difference between the carrying amount
and the recoverable amount of the equity-accounted investees. The
recoverable amount is the greater of the fair value less costs to
sell and value in use.
5.7
Investment
property
Investment property is property
held either to earn rental income or for capital appreciation or
for both, but not for sale in the ordinary course of the business,
use in the production or supply of goods or services or for
administration purposes. Investment property is initially
measured at cost and subsequently at fair value with any change
therein recognised in profit or loss.
Cost includes expenditure that is
directly attributable to the acquisition of the investment
property. The cost of self-constructed investment property
includes the cost of materials and direct labour, any other costs
directly attributable to bringing the investment property to a
working condition for their intended use.
Any gain or loss on disposal of an
investment property (calculated as the difference between the net
proceeds from disposal and the carrying amount of the item) is
recognised in profit or loss. When an investment property
that was previously classified as property, plant and equipment is
sold, any related amount included in the revaluation reserve is
transferred to retained earnings.
When the use of property changes
such that it is reclassified as property, plant and equipment, its
fair value at the date of reclassification becomes its cost for
subsequent accounting.
5.8 Assets held for sale
Non-current assets, or disposal
groups comprising assets and liabilities, are classified as held
for sale if it is highly probable that they will be recovered
primarily through sale rather than through continuing use. Such
assets, or disposal groups, are generally measured at the lower of
their carrying amount and fair value less costs to sell. Any
impairment loss on a disposal group is allocated first to goodwill,
and then to the remaining assets and liabilities on a pro rata
basis. Impairment losses on initial classification as held for sale
and subsequent gains and losses on re-measurement are recognised in
profit or loss. Once classified as held for sale, property, plant
and equipment is no longer depreciated, and any equity-accounted
investee is no longer equity accounted
5.9 Property, plant and
equipment
Land and buildings are carried at
fair value, based on valuations by external independent valuers,
less subsequent accumulated depreciation for buildings and the
subsequent accumulated impairment losses. Revaluations are carried
out at the end of each year and where necessary, semi-annually.
Properties under construction are stated at cost less any
accumulated impairment losses. All other property, plant and
equipment are stated at cost less accumulated depreciation and any
accumulated impairment losses. Any gain or loss on disposal of an
item of property, plant and equipment is recognised in profit
or loss.
Increases in the carrying amount
arising on revaluation of property, plant and equipment are
credited to fair value reserve in shareholders' equity. Decreases
that offset previous increases of the same asset are charged
against that reserve; all other decreases are recognised in profit
or loss. Increase is recognised to the profit or loss to the extent
that it reverses a revaluation decrease of the same asset
previously recognised in profit or loss.
The cost of self-constructed
assets includes the cost of materials and direct labour, any other
costs directly attributable to bringing the asset to a working
condition for their intended use.
Depreciation charge is recognised
in profit or loss on a straight-line basis over the estimated
useful lives of items of property, plant and equipment. Freehold
land is not depreciated.
The annual rates of depreciation
are as follows:
Buildings
3%
Machinery and equipment
10% - 33.33%
Motor vehicles and
other
10% - 20%
Depreciation methods, useful lives
and residual values are reviewed at each reporting date and
adjusted if appropriate.
The Group recognises in the
carrying amount of an item of property, plant and equipment the
cost of replacing part of such an item when that cost is incurred
if it is probable that the future economic benefits embodied with
the item will flow to the Group and the cost of the item can be
measured reliably. All other costs are recognised in profit
or loss as incurred.
5.10 Trading properties
Trading properties (inventory) are
shown at the lower of cost and net realisable value. Net realisable
value is the estimated selling price in the ordinary course of the
business less the estimated costs of completion and the estimated
costs necessary to make the sale. Cost of trading properties is
determined on the basis of specific identification of their
individual costs and represents the fair value paid at the date
that the land was acquired by the Group.
5.11 Leases
At inception of a contract, the
Group assesses whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right
to control the use of an identified asset for a period of time in
exchange for consideration.
At commencement or on modification
of a contract that contains a lease component, the Group allocates
the consideration in the contract to each lease component on the
basis of its relative stand-alone prices. However, for the leases
of property the Group has elected not to separate non-lease
components and account for the lease and non-lease components as a
single lease component.
The Group recognises a
right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease
incentives received.
The right-of-use asset is
subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease
transfers ownership of the underlying asset to the Group by the end
of the lease term or the cost of the right-of-use asset reflects
that the Group will exercise a purchase option. In that case the
right-of-use asset will be depreciated over the useful life of the
underlying asset, which is determined on the same basis as those of
property and equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially
measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. Generally, the
Group uses its incremental borrowing rate as the discount
rate.
The Group determines its
incremental borrowing rate by obtaining interest rates from various
external financing sources and makes certain adjustments to reflect
the terms of the lease and type of the asset leased.
Lease payments included in the
measurement of the lease liability comprise the
following:
- fixed payments, including in-substance fixed
payments;
- variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement
date;
- amounts expected to be payable under a residual value
guarantee; and
- the exercise price under a purchase option that the Group is
reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an
extension option, and penalties for early termination of a lease
unless the Group is reasonably certain not to terminate
early.
The lease liability is measured at
amortised cost using the effective interest method. It is
re-measured when there is a change in future lease payments arising
from a change in an index or rate, if there is a change in the
Group's estimate of the amount expected to be payable under a
residual value guarantee, if the Group changes its assessment of
whether it will exercise a purchase, extension or termination
option or if there is a revised in-substance fixed lease
payment.
When the lease liability is
re-measured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit
or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The Group presents right-of-use
assets that do not meet the definition of investment property in
'property, plant and equipment' and lease liabilities in 'loans and
borrowings' in the statement of financial position.
Short-term leases and leases of low-value
assets
The Group has elected not to
recognise right-of-use assets and lease liabilities for leases of
low-value assets and short-term leases, including IT equipment. The
Group recognises the lease payments associated with these leases as
an expense on a straight-line basis over the lease term.
5.12 Financial
instruments
Recognition and initial measurement
Trade receivables and debt
securities issued are initially recognised when they are
originated. All other financial assets and financial liabilities
are initially recognised when the Group becomes a party to the
contractual provisions of the instrument.
A financial asset (unless it is a
trade receivable without a significant financing component) or
financial liability is initially measured at fair value plus, for
an item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue. A trade receivable
without a significant financing component is initially measured at
the transaction price.
Classification and subsequent measurement
Financial assets
On initial recognition, a
financial asset is classified as measured at: amortised cost; FVOCI
- debt investment; FVOCI - equity investment; or FVTPL. Financial
assets are not reclassified subsequent to their initial recognition
unless the Group changes its business model for managing financial
assets, in which case all affected financial assets are
reclassified on the first day of the first reporting period
following the change in the business model.
A financial asset is measured at
amortised cost if it meets both of the following conditions and is
not designated as at FVTPL:
- it is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
A debt investment is measured at
FVOCI if it meets both of the following conditions and is not
designated as at FVTPL:
- it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling
financial assets; and
- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
On initial recognition of an
equity investment that is not held for trading, the Group may
irrevocably elect to present subsequent changes in the investment's
fair value in OCI. This election is made on an
investment‑by‑investment basis.
All financial assets not
classified as measured at amortised cost or FVOCI as described
above are measured at FVTPL. This includes all derivative financial
assets. On initial recognition, the Group may irrevocably designate
a financial asset that otherwise meets the requirements to be
measured at amortised cost or at FVOCI as at FVTPL if doing so
eliminates or significantly reduces an accounting mismatch that
would otherwise arise.
Cash and cash equivalents
Cash and cash equivalents comprise
cash deposited with banks and bank overdrafts repayable on demand.
Cash equivalents are short-term, highly-liquid investments that are
readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value. Bank overdrafts
that are repayable on demand and form an integral part of the
Group's cash management are included as a component of cash and
cash equivalents for the purpose of the unaudited consolidated
statement of cash flows.
Financial assets - Business model
assessment
The Group makes an assessment of
the objective of the business model in which a financial asset is
held at a portfolio level because this best reflects the way the
business is managed and information is provided to management. The
information considered includes:
- the stated policies and objectives for the portfolio and the
operation of those policies in practice. These include whether
management's strategy focuses on earning contractual interest
income, maintaining a particular interest rate profile, matching
the duration of the financial assets to the duration of any related
liabilities or expected cash outflows or realising cash flows
through the sale of the assets;
- how the performance of the portfolio is evaluated and
reported to the Group's management;
- the risks that affect the performance of the business model
(and the financial assets held within that business model) and how
those risks are managed;
- how managers of the business are compensated - e.g. whether
compensation is based on the fair value of the assets managed or
the contractual cash flows collected; and
- the frequency, volume and timing of sales of financial assets
in prior periods, the reasons for such sales and expectations about
future sales activity.
Transfers of financial assets to
third parties in transactions that do not qualify for derecognition
are not considered sales for this purpose, consistent with the
Group's continuing recognition of the assets.
Financial assets that are held for
trading or are managed and whose performance is evaluated on a fair
value basis are measured at FVTPL.
Financial assets - Assessment whether
contractual cash flows are solely payments of principal and
interest
For the purposes of this
assessment, 'principal' is defined as the fair value of the
financial asset on initial recognition. 'Interest' is defined as
consideration for the time value of money and for the credit risk
associated with the principal amount outstanding during a
particular period of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative costs), as well as a
profit margin.
In assessing whether the
contractual cash flows are solely payments of principal and
interest, the Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset
contains a contractual term that could change the timing or amount
of contractual cash flows such that it would not meet this
condition. In making this assessment, the Group
considers:
-
contingent events that would change the amount or timing of cash
flows;
-
terms that may adjust the contractual coupon rate, including
variable‑rate
features;
-
prepayment and extension features; and
-
terms that limit the Group's claim to cash flows from specified
assets (e.g. non‑recourse features).
A prepayment feature is consistent
with the solely payments of principal and interest criterion if the
prepayment amount substantially represents unpaid amounts of
principal and interest on the principal amount outstanding, which
may include reasonable additional compensation for early
termination of the contract. Additionally, for a financial asset
acquired at a discount or premium to its contractual par amount, a
feature that permits or requires prepayment at an amount that
substantially represents the contractual par amount plus accrued
(but unpaid) contractual interest (which may also include
reasonable additional compensation for early termination) is
treated as consistent with this criterion if the fair value of the
prepayment feature is insignificant at initial
recognition.
·
Financial
assets at FVTPL: These assets are
subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognised in profit
or loss.
·
Financial
assets at amortised cost: These
assets are subsequently measured at amortised cost using the
effective interest method. The amortised cost is reduced by
impairment losses. Interest income, foreign exchange gains and
losses and impairment are recognised in profit or loss. Any gain or
loss on derecognition is recognised in profit or loss.
·
Debt
investments at FVOCI: These assets
are subsequently measured at fair value. Interest income calculated
using the effective interest method, foreign exchange gains and
losses and impairment are recognised in profit or loss. Other net
gains and losses are recognised in OCI. On derecognition, gains and
losses accumulated in Other Comprehensive Income ("OCI") are
reclassified to profit or loss.
·
Equity
investments at FVOCI: These assets
are subsequently measured at fair value. Dividends are recognised
as income in profit or loss unless the dividend clearly represents
a recovery of part of the cost of the investment. Other net gains
and losses are recognised in OCI and are never reclassified to
profit or loss.
Financial liabilities - Classification, subsequent
measurement and gains and losses
Financial liabilities are
classified as measured at amortised cost or FVTPL. A financial
liability is classified as at FVTPL if it is classified as
held-for-trading, it is a derivative or it is designated as such on
initial recognition. Financial liabilities at FVTPL are measured at
fair value and net gains and losses, including any interest
expense, are recognised in profit or loss. Other financial
liabilities are subsequently measured at amortised cost using the
effective
nterest method. Interest expense
and foreign exchange gains and losses are recognised in profit or
loss. Any gain or loss on derecognition is also recognised in
profit or loss.
The financial liabilities of the
Group are measured as follows:
Interest-bearing borrowings
Interest-bearing borrowings are
recognised initially at fair value, less attributable transaction
costs. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any difference between
cost and redemption value being recognised in profit or loss over
the period of the borrowings on an effective interest
basis.
Trade payables
Trade payables are initially
recognised at fair value and are subsequently measured at amortised
cost, using the effective interest rate method.
Derecognition
Financial assets
The Group derecognises a financial
asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all
of the risks and rewards of ownership of the financial asset are
transferred or in which the Group neither transfers nor retains
substantially all of the risks and rewards of ownership and it does
not retain control of the financial asset.
The Group enters into transactions
whereby it transfers assets recognised in its statement of
financial position, but retains either all or substantially all of
the risks and rewards of the transferred assets. In these cases,
the transferred assets are not derecognised.
Financial liabilities
The Group derecognises a financial
liability when its contractual obligations are discharged or
cancelled, or expire. The Group also derecognises a financial
liability when its terms are modified and the cash flows of the
modified liability are substantially different, in which case a new
financial liability based on the modified terms is recognised at
fair value.
On derecognition of a financial
liability, the difference between the carrying amount extinguished
and the consideration paid (including any non-cash assets
transferred or liabilities assumed) is recognised in profit or
loss.
Offsetting
Financial assets and financial
liabilities are offset and the net amount presented in the
statement of financial position when, and only when, the Group
currently has a legally enforceable right to set off the amounts
and it intends either to settle them on a net basis or to realise
the asset and settle the liability simultaneously.
5.13 Share capital and premium
Share capital represents the
issued amount of shares outstanding at their par value. Any excess
amount of capital raised is included in share premium. External
costs directly attributable to the issue of new shares, other than
on a business combination, are shown as a deduction, net of tax, in
share premium from the proceeds. Share issue costs incurred
directly in connection with a business combination are included in
the cost of acquisition.
5.14 Dividends
Dividends are recognised as a
liability in the period in which they are declared and approved and
are subtracted directly from retained earnings.
5.15 Contract liabilities
Payments received in advance on
development contracts for which no revenue has been recognised yet
are recorded as contract liabilities as at the statement of
financial position date.
5.16 Provisions
A provision is recognised in the
unaudited consolidated statement of financial position when the
Group has a legal or constructive obligation as a result of a past
event, and it is probable that an outflow of economic benefits will
be required to settle the obligation. If the effect is material,
provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of
the time value of money and, where appropriate, the risks specific
to the liability.
5.17 Expenses
Investment Manager remuneration,
Directors' remuneration, operational expenses, professional fees,
administrative and other expenses are accounted for on an accrual
basis. Expenses are charged to profit or loss, except for expenses
incurred on the acquisition of an investment property, which are
included within the cost of that investment. Expenses arising
on the disposal of an investment property are deducted from the
disposal proceeds.
5.18 Impairment
Financial instruments and contract assets
The Group recognises loss
allowances for expected credit losses ('ECLs') on:
- financial assets
measured at amortised cost;
- debt investments
measured at FVOCI; and
- contract
assets.
The Group measures loss allowances
at an amount equal to lifetime ECLs, except for the following,
which are measured at 12‑month ECLs:
- debt securities that are determined to have low credit risk
at the reporting date; and
- other debt securities and bank balances for which credit risk
(i.e. the risk of default occurring over the expected life of the
financial instrument) has not increased significantly since initial
recognition.
Loss allowances for trade
receivables and contract assets are always measured at an amount
equal to lifetime ECLs.
When determining whether the
credit risk of a financial asset has increased significantly since
initial recognition and when estimating ECLs, the Group considers
reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on the
Group's historical experience and informed credit assessment and
including forward‑looking information.
The Group assumes that the credit
risk on a financial asset has increased significantly if it is more
than 30 days past due.
The Group considers a financial
asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the
Group in full, without recourse by the Group to actions such as
realising security (if any is held); or
- the financial asset is more than 90 days past due.
Non-financial assets
At each reporting date, the Group
reviews the carrying amounts of its non-financial assets (other
than investment property and trading properties) to determine
whether there is any indication of impairment. If any such
indication exists, then the asset's recoverable amount is
estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are
grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of
the cash inflows of other assets or CGUs. Goodwill arising from a
business combination is allocated to CGUs or groups of CGUs that
are expected to benefit from the synergies of the
combination.
The recoverable amount of an asset
or CGU is the greater of its value in use and its fair value less
costs of disposal. Value in use is based on the estimated future
cash flows, discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset or
CGU.
An impairment loss is recognised
if the carrying amount of an asset or CGU exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. They
are allocated first to reduce the carrying amount of any goodwill
allocated to the CGU, and then to reduce the carrying amounts of
the other assets in the CGU on a pro rata basis.
An impairment loss in respect of
goodwill is not reversed. For other assets, an impairment loss is
reversed only to the extent that the asset's carrying amount does
not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been
recognised.
The Group considers a debt
security to have low credit risk when its credit risk rating is
equivalent to the globally understood definition of 'investment
grade'.
Lifetime ECLs are the ECLs that
result from all possible default events over the expected life of a
financial instrument. 12‑month ECLs are the portion of ECLs
that result from default events that are possible within the 12
months after the reporting date (or a shorter period if the
expected life of the instrument is less than 12 months). The
maximum period considered when estimating ECLs is the maximum
contractual period over which the Group is exposed to credit
risk.
Measurement of ECLs
ECLs are a
probability‑weighted estimate of credit losses. Credit losses are
measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance
with the contract and the cash flows that the Group expects to
receive).
ECLs are discounted at the
effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group
assesses whether financial assets carried at amortised cost and
debt securities at FVOCI are credit‑impaired. A financial asset is
'credit‑impaired'
when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have
occurred.
Evidence that a financial asset is
credit‑impaired
includes the following observable data:
· significant financial difficulty of the borrower or
issuer;
· a breach of contract such as a default or being more than 90
days past due;
· the restructuring of a loan or advance by the Group on terms
that the Group would not consider otherwise;
· it is probable that the borrower will enter bankruptcy or
other financial reorganisation; or
· the disappearance of an active market for a security because
of financial difficulties.
Presentation of allowance for ECL in the statement of
financial position
Loss allowances for financial
assets measured at amortised cost are deducted from the gross
carrying amount of the assets. For debt securities at FVOCI, the
loss allowance is charged to profit or loss and is recognised in
OCI.
Write-off
The gross carrying amount of a
financial asset is written off when the Group has no reasonable
expectations of recovering a financial asset in its entirety or a
portion thereof. For individual customers, the Group has a policy
of writing off the gross carrying amount when the financial asset
is 180 days past due based on historical experience of recoveries
of similar assets. For corporate customers, the Group individually
makes an assessment with respect to the timing and amount of
write‑off based on
whether there is a reasonable expectation of recovery. The Group
expects no significant recovery from the amount written off.
However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the
Group's procedures for recovery of amounts due.
5.19 Revenue recognition
Revenue is measured based on the
consideration specified in a contract with a customer. The Group
recognises revenue at a point in time, which is when it transfers
control over the property to the buyer. The buyer obtains control
when the sale consideration is fully settled, and the ownership of
the property is then transferred to the buyer.
5.20 Finance income and
costs
The Group's finance income and
finance costs include:
- interest income;
- interest expense;
- dividend income.
Interest income or expense is
recognised using the effective interest method. Dividend income is
recognised in profit or loss on the date on which the Group's right
to receive payment is established.
The 'effective interest rate' is
the rate that exactly discounts estimated future cash payments or
receipts through the expected life of the financial instrument
to:
- the
gross carrying amount of the financial asset; or
- the
amortised cost of the financial liability.
In calculating interest income and
expense, the effective interest rate is applied to the gross
carrying amount of the asset (when the asset is not
credit-impaired) or to the amortised cost of the liability.
However, for financial assets that have become credit-impaired
subsequent to initial recognition, interest income is calculated by
applying the effective interest rate to the amortised cost of the
financial asset. If the asset is no longer credit-impaired, then
the calculation of interest income reverts to the gross
basis.
5.21 Foreign currency
translation
Transactions in foreign currencies
are translated to the respective functional currencies of Group
entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies
are translated into the functional currency at the exchange rate at
the reporting date. Non-monetary assets and liabilities that are
measured at fair value in a foreign currency are translated into
the functional currency at the exchange rate when the fair value
was determined. Non-monetary items that are measured based on
historical cost in a foreign currency are translated at the
exchange rate at the date of the transaction. Foreign currency
differences are generally recognised in profit or loss and
presented within finance costs.
5.22 Foreign operations
The assets and liabilities of
foreign operations, including goodwill and fair value adjustments
arising on acquisition, are translated to Euro at exchange rates at
the reporting date. The income and expenses of foreign operations
are translated to Euro at exchange rates at the dates of the
transactions.
Foreign currency differences are
recognised in OCI and accumulated in the translation reserve,
except to the extent that the translation difference is allocated
to NCI.
When a foreign operation is
disposed of in its entirety or partially such that control,
significant influence or joint control is lost, the cumulative
amount in the translation reserve related to that foreign operation
is reclassified to profit or loss as part of the gain or loss on
disposal. If the Group disposes of part of its interest in a
subsidiary but retains control, then the relevant proportion of the
cumulative amount is reattributed to NCI. When the Group disposes
of only part of an associate or joint venture while retaining
significant influence or joint control, the relevant proportion of
the cumulative amount is reclassified to profit or loss.
5.23 Segment reporting
A segment is a distinguishable
component of the Group that is engaged either in providing products
or services (operating segment), or in providing products or
services within a particular economic environment (geographical
segment), which is subject to risks and rewards that are different
from those of other segments. Segment results that are reported to
the Group's chief operating decision maker include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
5.24 Earnings per share
The Group presents basic and
diluted (if applicable) earnings per share ('EPS') data for its
shares. Basic EPS is calculated by dividing the profit or loss
attributable to shareholders of the Company by the weighted average
number of shares outstanding during the period. Diluted EPS is
determined by adjusting the profit or loss attributable to
shareholders and the weighted average number of shares outstanding
for the effects of all dilutive potential shares.
5.25 NAV per share
The Group presents NAV per share
by dividing the total equity attributable to owners of the Company
by the number of shares outstanding as at the statement of
financial position date.
5.26 Taxation
Income tax
Taxation comprises current and
deferred tax. Taxation is recognised in profit or loss, except to
the extent that it relates to a business combination, or items
recognised directly in equity or in other comprehensive
income.
Current tax
Current tax is the expected tax
payable or receivable on the taxable income or loss for the year,
using tax rates enacted or substantially enacted at the statement
of financial position date, and any adjustment to tax payable or
receivable in respect of previous years. Current tax also includes
any tax arising from dividends.
Deferred tax
Deferred tax is recognised in
respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes.
Deferred tax is not recognised
for:
- temporary differences on
the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither
accounting nor taxable profit or loss;
- temporary differences related to
investments in subsidiaries, associates and joint arrangements to
the extent that the Group is able to control the timing of the
reversal of the temporary differences and it is probable that they
will not reverse in the foreseeable future; and
- taxable temporary differences
arising on the initial recognition of goodwill.
A deferred tax asset is recognised
for unused tax losses, tax credits and deductible temporary
differences to the extent that it is probable that future taxable
profits will be available against which the temporary difference
can be utilised. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
The measurement of deferred tax
reflects the tax consequences that would follow from the manner in
which the Group expects, at the reporting date, to recover or
settle the carrying amount of its assets and liabilities. For this
purpose, the carrying amount of investment property measured at
fair value is presumed to be recovered through sale, and the Group
has not rebutted this presumption.
Deferred tax assets and
liabilities are offset only if certain criteria are met.
5.27 Fair value measurement
'Fair value' is the price that
would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the
measurement date in the principal or, in its absence, the most
advantageous market to which the Group has access at that date. The
fair value of a liability reflects its non-performance
risk.
A number of the Group's accounting
policies and disclosures require the measurement of fair values,
for both financial and non-financial assets and liabilities (Note
2e).
When one is available, the Group
measures the fair value of an instrument using the quoted price in
an active market for that instrument. A market is regarded as
'active' if transactions for the asset or liability take place with
sufficient frequency and volume to provide pricing information on
an ongoing basis.
If there is no quoted price in an
active market, then the Group uses valuation techniques that
maximise the use of relevant observable inputs and minimise the use
of unobservable inputs. The chosen valuation technique incorporates
all of the factors that market participants would take into account
in pricing a transaction.
If an asset or a liability
measured at fair value has a bid price and an ask price, then the
Group measures assets and long positions at a bid price and
liabilities and short positions at an ask price.
The best evidence of the fair
value of a financial instrument on initial recognition is normally
the transaction price - i.e. the fair value of the consideration
given or received. If the Group determines that the fair value on
initial recognition differs from the transaction price and the fair
value is evidenced neither by a quoted price in an active market
for an identical asset or liability nor based on a valuation
technique for which any unobservable inputs are judged to be
insignificant in relation to the measurement, then the financial
instrument is initially measured at fair value, adjusted to defer
the difference between the fair value on initial recognition and
the transaction price. Subsequently, that difference is recognised
in profit or loss on an appropriate basis over the life of the
instrument but no later than when the valuation is wholly supported
by observable market data or the transaction is closed
out.
5.28 Comparatives
Where necessary, comparative
figures have been adjusted to conform to changes in presentation in
the current year.
6.
revenue
|
2023
€'000
|
2022
€'000
|
Revenue from contracts with customers:
|
|
|
Sale of trading
properties
|
-
|
-
|
Other revenue
|
|
|
Other income
|
157
|
318
|
Total
|
157
|
318
|
7. COST OF
SALES
|
2023
€'000
|
2022
€'000
|
Sales of trading
properties
|
-
|
-
|
Total
|
-
|
-
|
8. Change
in
valuation
|
Note
|
2023
€'000
|
2022
€'000
|
Gain/(loss) in fair value of
investment property
|
16
|
3,830
|
(6,316)
|
Reversal of impairment loss on
equity-accounted investees
|
17
|
5,857
|
388
|
Reversal of impairment loss of
property, plant and equipment
|
15
|
10,239
|
2,944
|
Total
|
|
19,926
|
(2,984)
|
9. SEGMENT
REPORTING
As at 31 December 2023 and 31
December 2022, the Group is not considered to have reportable
operating segments that require disclosure. The Group has one
business segment focusing on achieving capital growth through
investing in residential resort developments primarily in
south-east Europe.
The geographic information
analyses the Group's non-current assets by the Company's country of
domicile. The Croatian asset was moved from non-current assets to
assets held for sale in 2023. In presenting the geographic
information, segment assets were based on the geographic location
of the assets.
Non-current assets
|
2023
€'000
|
2022
€'000
|
Greece
|
50,045
|
36,469
|
Croatia
|
-
|
19,180
|
Cyprus
|
48,214
|
48,214
|
At end of year
|
98,259
|
103,863
|
Country risk
developments
Greece
According to the OECD, the GDP of
Greece was projected to increase by 1.8% in 2023 and 2.0% in 2024
and 2.5% in 2025 as increased employment, real wage growth and
strong tourist activity bolster consumption.
According to the Bank of Greece,
in 2023, the balance of travel services showed a surplus of €18.0bn
in 2023, €15.7bn in 2022 and €9.4bn in 2021.
Inflation in Greece is now
estimated to have peaked in 2022 and to have been 4.2% in 2023
according to the European Commission and is forecast to fall to
2.8% in 2024 and 2.1% in 2025.
Cyprus
The IMF praised Cyprus for its
robust economic recovery and fiscal discipline and it forecasts a
2.6% increase in GDP during 2024, 2.8% for 2025 and 3.1% for
2027.
Inflation in Cyprus is now
estimated to have peaked in 2022 and to have been 3.9% in 2023
according to the European Commission and is forecast to fall to
2.4% in 2024 and 2.1% in 2025.
Croatia
According to the European
Commission, GDP growth continued to recover strongly and grew by
3.1% in 2023 and is forecast to grow 3.3% in 2024 and 2.9% in 2025
and inflation peaked at 8.4% in 2023 and is forecast to fall to
3.5% in 2024 and 2.2% in 2022.
Economic activity and tourism
arrival numbers continued to benefit strongly from the adoption of
the Euro currency and the admission of Croatia into the Schengen
passport zone at the start of 2023.
10. PROFESSIONAL
FEES
|
|
2023
€'000
|
2022
€'000
|
Legal fees
|
|
1,750
|
383
|
Auditors' remuneration (see
below)
|
|
255
|
261
|
Accounting expenses
|
|
599
|
241
|
Appraisers' fees
|
|
44
|
9
|
Project design and development
fees
|
|
230
|
133
|
Consultancy fees
|
|
112
|
338
|
Administrator fees
|
|
365
|
270
|
Other professional fees
|
|
635
|
352
|
Total
|
|
3,990
|
1,987
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
Auditors' remuneration comprises the following
fees:
|
|
|
|
Audit and other audit related
services
|
|
255
|
261
|
Total
|
|
255
|
261
|
11.
ADMINISTRATIVE AND OTHER EXPENSES
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
Travelling and
accommodation
|
|
90
|
132
|
Insurance
|
|
50
|
75
|
Marketing and advertising
expenses
|
|
16
|
66
|
Personnel expenses including
social security and other costs
|
|
549
|
568
|
Immovable property and other
taxes
|
|
449
|
243
|
Rents
|
|
28
|
120
|
Other
|
|
844
|
410
|
Total
|
|
2,026
|
1,614
|
The average number of employees
employed by the Group
|
26*
|
27*
|
|
|
|
|
| |
*The vast majority consists of workers/archaeologists at
Kilada
12. Finance
costS
|
2023
|
2022
|
Recognised in profit or loss
|
€'000
|
€'000
|
Interest income
|
-
|
4
|
Exchange difference
|
-
|
69
|
Finance income
|
-
|
73
|
|
|
|
Interest expense
|
(804)
|
(2,891)
|
Transaction costs and other
financing expenses
|
(24)
|
(43)
|
Bank charges
|
(26)
|
(63)
|
Exchange difference
|
(20)
|
-
|
Finance costs
|
(874)
|
(2,997)
|
Net finance costs recognised in profit or
loss
|
(874)
|
(2,924)
|
|
2023
|
2022
|
|
€'000
|
€'000
|
Recognised in other comprehensive income
|
|
|
Foreign currency translation
differences
|
(69)
|
(56)
|
Finance costs recognised in other comprehensive
income
|
(69)
|
(56)
|
13.
Taxation
|
2023
|
2022
|
|
€'000
|
€'000
|
RECOGNISED IN PROFIT OR LOSS
|
|
|
Income tax expense
|
|
|
Current year
|
68
|
1
|
Other
|
-
|
6
|
|
68
|
7
|
|
|
|
Deferred tax expense
|
|
|
On valuation gains of investment
properties (see note 23)
|
2,297
|
(19)
|
|
-
|
(19)
|
|
|
|
Taxation recognised in profit or loss
|
2,365
|
(12)
|
14. PROFIT/(LOSS) per
share
Basic profit/(loss) per
share
Basic profit/(loss) per share is
calculated by dividing the profit/(loss) attributable to owners of
the Company by the weighted average number of common shares
outstanding during the year.
|
|
2023
|
2022
|
|
|
'000
|
'000
|
Profit/(loss) attributable to
owners of the Company (€)
|
|
4,162
|
(6,924)
|
Number of weighted average common
shares outstanding
|
|
904,627
|
904,627
|
Basic profit/(loss) per share (€)
|
|
0.004
|
(0.008)
|
Profit/(loss) attributable to
owners of the Company
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
Profit/(loss) attributable to
owners of the Company
|
|
3,480
|
(6,924)
|
Profit attributable to
non-controlling interests
|
|
751
|
1,128
|
Total
|
|
4,231
|
(5,796)
|
Weighted average number of common shares
outstanding
|
2023
|
2022
|
|
'000
|
'000
|
Outstanding common shares at the beginning and end of the
year
|
904,627
|
904,627
|
Diluted profit/(loss) per
share
As at 31 December 2023 and 2022,
the diluted profit/(loss) per share is the same as the basic
profit/(loss) per share, as there were no outstanding dilutive
potential ordinary shares (a financial instrument or other contract
that, when converted to ordinary shares, would decrease earnings
per share or increase loss per share) during these
years.
15. Property, plant
and equipment
|
Property under
construction
€'000
|
Land &
buildings
€'000
|
Machinery &
equipment
€'000
|
Other
€'000
|
Total
€'000
|
2022
|
|
|
|
|
|
Cost or revalued amount
|
|
|
|
|
|
At beginning of year
|
5,683
|
20,445
|
366
|
45
|
26,539
|
Direct acquisitions
|
3,241
|
12
|
11
|
-
|
3,264
|
At end of year
|
8,924
|
20,457
|
377
|
45
|
29,803
|
Depreciation and impairment
|
|
|
|
|
|
At beginning of year
|
-
|
17,080
|
357
|
33
|
17,470
|
Depreciation charge for the
year
|
-
|
38
|
9
|
1
|
48
|
Reversal of impairment loss (note
8)
|
-
|
(2,944)
|
-
|
-
|
(2,944)
|
Exchange difference
|
-
|
-
|
(1)
|
4
|
3
|
At end of year
|
-
|
14,174
|
365
|
38
|
14,577
|
Carrying amounts
|
8,924
|
6,283
|
12
|
7
|
15,226
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
Cost or revalued amount
|
|
|
|
|
|
At beginning of year
|
8,924
|
20,457
|
377
|
45
|
29,803
|
Direct acquisitions
|
2,232
|
-
|
-
|
-
|
2,232
|
At end of year
|
11,156
|
20,457
|
377
|
45
|
32,035
|
Depreciation and impairment
|
|
|
|
|
At beginning of year
|
-
|
14,174
|
365
|
38
|
14,577
|
Depreciation charge for the
year
|
-
|
45
|
5
|
-
|
50
|
Reversal of impairment loss (note
8)
|
-
|
(10,239)-
|
-
|
-
|
(10,239
|
Exchange difference
|
-
|
-
|
-
|
-
|
-
|
At end of year
|
-
|
3,980
|
370
|
38
|
4,388
|
Carrying amounts
|
11,156
|
16,477
|
7
|
7
|
27,647
|
16. Investment
property
|
|
2023
|
2022
|
|
Note
|
€'000
|
€'000
|
At beginning of
year
|
|
45,943
|
52,188
|
Capital subsequent
expenditure
|
|
145
|
75
|
Fair value adjustment
|
8
|
3,830
|
(6,316)
|
Transfer to Assets held for
sale
|
|
(22,000)
|
-
|
Exchange differences
|
|
-
|
(4)
|
At end of year
|
|
27,918
|
45,943
|
As at 31 December 2023
and 31 December
2022, part of the
Group's immovable property is held as security for bank loans (see
note 22).
Changes in fair value are
recognised as gain/(losses) in profit or loss and included in
"Change in Valuation" (see note 8). All such gains/(losses) are
unrealised.
Part of investment property
includes land acquired by Golfing Developments S.A. ("Golfing"), a
subsidiary company and owner of the Lavender Bay Resort, from third
parties and also right-of-use assets on land leased by third
parties. It should be noted that in 2010, the Greek State Real
Estate Service disputed part of this land owned by Golfing as
belonging to the Greek State. In 2011, the vendor of the land
lodged an objection (administrative appeal) to the Directorate of
Public Property of the Ministry of Finance, requesting the review
of the conclusion of the Real Estate Service report, as well as the
Final report of the inspector of the Ministry of Finance. Golfing
proceeded to various legal actions in order to indicate its
ownership of the land at that time. As part of these legal
proceedings, the Courts had issued a decision in 2019 as part of a
criminal law procedure, indicating that there were no grounds
indicating the public nature of Golfing's land.
In September 2021, the Greek
Council for Public Properties issued an Opinion claiming that a
part of the overall land comprising 843,114m2, amounting
to €2.4 million as at 31 December 2022 (2021: €3.2 million) and
included in Investment Property as of 31 December 2022 and 2021
respectively, that was sold from the Archdiocese of Dimitriada
('Vendor') to Golfing in 2006 and 2007, belonged to the Greek State
disputing the private character of the land. This Opinion was
adopted by the Ministry of Finance in January 2022, who took steps
to register the property in the name of the Greek State at the
local land registries in April and May 2022. This adoption
constitutes a unilateral administrative act and if it is found to
be incorrect or illegal, it can be revoked. The Company intends to
proceed to an appeal to the Greek courts claiming its ownership of
the disputed land, based on Golfing's and the Company's relevant
Board of Directors decision that was taken at its meetings on 15
June 2022 and 22 June 2022, respectively.
In addition, the Greek Council for
Public Properties disputed the ownership rights of the Vendor on
the land leased to Golfing in 2006 and 2007 of 2,097,443
m2, from which 1,746,334 m2 are activated
leased contracts, of an amount of €1.2 million included in
Investment Property as of 31 December 2022 (2021: €1.9 million),
for which, though, no final opinion was issued by this Council.
Golfing and the Vendor proceeded to legal actions relating to this
dispute as well in January 2022.
The Group believes, based on legal
assessments, that the unilateral registration of the property in
the name of the Greek State, does not establish and does not
constitute a title deed or a court decision and, therefore does not
lead to the loss of property rights of Golfing but the Greek State
disputes the private character of the above land of
843,114m2 of Golfing, indicating its public
character.
Although the dispute is considered
as a significant obstacle to the continuation of the investment in
the project, Golfing continues to recognize the respective land
under its assets as investment property of Golfing, on the basis of
legal evidence of ownership of the land as described
above.
Golfing, based on third party
valuation experts, proceeded to the assessment of fair value of the
respective land included in investment property and recorded a
positive adjustment of €1.0 million as at 31 December 2023
(2022:negative €1.5 million) in 'Loss in fair value of investment
property' in profit or loss in 2023 and 2022 including a
significant downward adjustment to account for the estimated
uncertainty relating to the above case.
Golfing and the Greek Church have
started discussions on renegotiating the current agreements in
place in order to replace these with new ones which better reflect
current situation.
17. equity-accounted investees
|
|
DCI H2
|
SPV14
|
Total
|
|
Note
|
€'000
|
€'000
|
€'000
|
2023
|
|
|
|
|
At beginning of year
|
|
42,694
|
-
|
42.964
|
Share of loss, net of tax
|
|
(5,857)
|
-
|
(5,857)
|
Disposal of Associate
|
|
-
|
-
|
-
|
Reversal of impairment
loss
|
8
|
5,857
|
-
|
5,857
|
At end of year
|
|
42,694
|
-
|
42,694
|
2022
|
|
|
|
|
At beginning of year
|
|
42,694
|
22,861
|
65,555
|
Share of loss, net of tax
|
|
(388)
|
(1,397)
|
(1,785)
|
Disposal of Associate
|
|
-
|
(21,464)
|
(21,464)
|
Reversal of impairment
loss
|
8
|
388
|
-
|
388
|
At end of year
|
|
42,694
|
-
|
42,694
|
Single Purpose Vehicle
Fourteen Limited ('SPV 14')
On 23 December 2022 it was
announced that the Company had completed the disposal of its entire
interest in the One&Only at Kea Island ('OOKI') Project. Prior
to the sale, the Company was the owner of 66.67% of Single Purpose
Vehicle Ten Ltd ('SPV10') which, in turn, indirectly owned 50% of
SPV 14, thereby providing the Company with an effective equity
interest of 33.33% in SPV 14 and the OOKI project.
Under the share purchase agreement
("SPA") signed on 13 October 2022 SPV10 received €26.9 million for
the 50% ownership of SPV14. At the time of the disposal the value
of the associate was €21.5 million,
following a €1.4 million share of losses recognised, as a result
the gain on the disposal was €5.4 million.
Pursuant to the sale, the Company
received a net consideration, in aggregate of €17.9 million. From
these disposal proceeds, an amount of €13 million was applied
towards the repayment in full by 31 December 2022 of the existing
loan facility that Company drew down on 7 June and 16 July 2021.
All remaining proceeds from the sale of SPV10 was retained by the
Company for use as working capital.
DCI Holdings Two Limited
("DCI H2")
Since 31 December 2020, the
Company's holding of 47.9% in DCI H2 (owner of Aristo Developers
Ltd, 'Aristo'), has been classified as an associate. An impairment
loss was recognised in 2016, based on an agreement to dispose of
the entire 49.75% shareholding in DCI H2 then owned, for the amount
of €45 million. The Group subsequently disposed of 1.82% and as a
result the Company's investment in DCI H2 reduced to 47.9% at a
value of €42.7 million, which the Group estimates to be the
recoverable amount as at the end of the reporting period. The
recoverable amount is calculated based on the NAV of DCI H2 group
at the reporting date adjusted by approximately 34% discount on the
DCI H2 group's real estate properties. The
fair value of the investment in DCI H2 has
been categorised as a Level 3 fair value based on the inputs to the
valuation techniques used.
The details of the above
investments are as follows:
|
Country of
|
|
Shareholding
interest
|
Name
|
incorporation
|
Principal activities
|
2023
|
2022
|
|
SPV 14
|
Cyprus
|
Development of OOKI
Resort
|
-
|
-
|
|
DCI H2
|
BVIs
|
Acquisition and holding of real
estate investments in Cyprus
|
48%
|
48%
|
|
The above shareholding interest
percentages are rounded to the nearest integer.
The following table summarises the
financial information of DCI H2 and SPV 14 as included in their own
financial statements, the table also reconciles the summarised
financial information to the carrying amount of the Group's
interest in equity-accounted investees:
|
DCI H2
|
SPV 14
|
Total
|
|
€'000
|
€'000
|
€'000
|
Percentage ownership interest
|
48%
|
-%
|
48%
|
31 December 2023
|
|
|
|
Current assets
|
104,253
|
-
|
104,253
|
Non-current assets
|
199,940
|
-
|
199,940
|
Total assets
|
304,193
|
-
|
304,193
|
|
|
|
|
Current liabilities
|
88,887
|
-
|
88,887
|
Non-current liabilities
|
40,561
|
-
|
40,561
|
Total liabilities
|
129,448
|
-
|
129,448
|
Net assets
|
174,745
|
-
|
174,745
|
Group's share of net
assets
|
83,703
|
-
|
83,703
|
Impairment
|
(41,009)
|
-
|
(41,009)
|
Carrying amount of interest in investee
|
42,694
|
-
|
42,694
|
|
|
|
|
Revenues
|
25,467
|
-
|
25,467
|
Profit
|
(12,228)
|
-
|
(12,228)
|
Other comprehensive
income
|
-
|
-
|
-
|
Total comprehensive income
|
(12,228)
|
-
|
(12,228)
|
Group's share of total comprehensive income
|
(5,857)
|
-
|
(5,857)
|
|
DCI H2
|
SPV 14
|
Total
|
|
€'000
|
€'000
|
€'000
|
Percentage ownership interest
|
48%
|
-%
|
48%
|
31 December 2022
|
|
|
|
Current assets
|
105,293
|
-
|
105,293
|
Non-current assets
|
208,873
|
-
|
208,873
|
Total assets
|
314,166
|
-
|
314,166
|
|
|
|
|
Current liabilities
|
69,943
|
-
|
69,943
|
Non-current liabilities
|
57,367
|
-
|
57,367
|
Total liabilities
|
127,310
|
-
|
127,310
|
Net assets
|
186,856
|
-
|
186,856
|
Group's share of net
assets
|
89,560
|
-
|
89,560
|
Impairment
|
(46,866)
|
-
|
(46,866)
|
Carrying amount of interest in investee
|
42,694
|
-
|
42,694
|
|
|
|
|
Revenues
|
46,986
|
-
|
46,986
|
Profit
|
(810)
|
(2,793)
|
(3,603)
|
Other comprehensive
income
|
-
|
-
|
-
|
Total comprehensive income
|
(810)
|
(2,793)
|
(3,603)
|
Group's share of total comprehensive income
|
(388)
|
(1,397)
|
(1,785)
|
18. Trading
properties
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
At beginning of year
|
|
56,516
|
56,516
|
Disposals
|
|
-
|
-
|
At end of year
|
|
56,516
|
56,516
|
Trading properties comprise land
to be sold and to be developed into villas and holiday
houses.
19. RECEIVABLES AND
OTHER ASSETS
|
|
2023
|
2022
|
|
Note
|
€'000
|
€'000
|
Trade receivables
|
|
47
|
90
|
Other receivables
|
|
936
|
939
|
Loan Receivable
|
27.3.1
|
-
|
6,637
|
VAT receivables
|
|
1,127
|
509
|
Total Trade and other receivables (see note
31)
|
|
2,110
|
8,175
|
Amounts Receivable from Investment
Manager
|
27.2
|
1,898
|
1,898
|
Prepayments and other
assets
|
|
-
|
10
|
Total
|
|
4,008
|
10,083
|
The amount receivable from
Investment Manager relates to €3.0 million of advance payments made
during 2022 net of variable management fees payable of €1.1 million
relating to previous years. See note 27.2 for further
information.
20. Cash and cash
equivalents
|
2023
|
2022
|
|
€'000
|
€'000
|
Bank balances
|
1,008
|
2,226
|
Total
|
1,008
|
2,226
|
21. capital and
reserves
Capital
Authorised share capital
|
2023
|
|
2022
|
|
'000 of
shares
|
€'000
|
|
'000 of
shares
|
€'000
|
Common shares of €0.01
each
|
2,000,000
|
20,000
|
|
2,000,000
|
20,000
|
Movement in share capital and
premium
|
Shares in
issue
|
Share
capital
|
Share
premium
|
|
'000
|
€'000
|
€'000
|
Capital at 1 January 2023 and to 31 December
2023
|
904,627
|
9,046
|
569,847
|
Reserves
Translation reserve: Translation reserve comprises all foreign currency
differences arising from the translation of the financial
statements of foreign operations.
Revaluation reserve: Revaluation reserve relates to 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
|
|
Two to five
years
|
|
2023
|
2022
|
|
2023
|
2022
|
|
2023
|
2022
|
|
€'000
|
€'000
|
|
€'000
|
€'000
|
|
€'000
|
€'000
|
Loans in Euro
|
7,049
|
4,611
|
|
7,049
|
4,611
|
|
-
|
-
|
Redeemable preference
shares
|
11,103
|
10,434
|
|
-
|
-
|
|
11,103
|
10,434
|
Total
|
18,152
|
15,045
|
|
7,049
|
4,611
|
|
11,103
|
10,434
|
Loans denominated in Euros
In the prior year, the maturity
date of the outstanding loan of Azurna (the owner of "Livka Bay")
was extended to 31 December 2022. This maturity date was further
extended to 31 December 2023 and since then is tied to being repaid
from the sale of the asset.
During the year, the Company
borrowed € 2.76 million from shareholders at a simple interest rate
of 12% per annum. The loans are of a fixed duration being 12 months
from receipt of the funds.
Redeemable preference shares
On 18 December 2019, the Company
signed an agreement with an international investor for a €12.0
million investment in the Kilada Hills Project. The investor agreed
to subscribe for both common and preferred shares. The total €12.0
million investment was payable in 24 monthly instalments of €0.5
million each. Under the terms of the agreement, the investor is
entitled to a priority return of the total investment amount from
the net disposal proceeds realised from the project and retains a
15% shareholding stake in Kilada. As of 31 December 2023, 15.00%
(2022: 15.00%) of
the ordinary shares have been transferred to the
investor.
As of 31 December 2023, 12,000
redeemable preference shares (20221:
12,000) were issued as fully paid with
value of €1,000 per share. The redeemable preference shares were
issued with a zero-coupon rate and are discounted with a 0.66%
effective monthly interest rate, do not carry the right to vote and
are redeemable when net disposal proceeds are realised from the
Kilada Project. As at 31 December 2023, the fair value of the
redeemable preference shares was €11.1 million (2022: €10.4
million).
Terms and conditions of the loans
The terms and conditions of
outstanding loan were as follows:
Secured loan
|
Currency
|
Interest rate
|
Maturity
dates
|
2023
€'000
|
2022
€'000
|
Livka Bay
|
Euro
|
Euribor plus 4.25% p.a.
|
2023
|
4,156
|
4,611
|
Shareholder loans
|
Euro/USD
|
12% per annum
|
2024
|
2,893
|
-
|
Total interest-bearing liabilities
|
|
7,049
|
4,611
|
Security given to
lenders
As at 31 December 2023, the
Group's loans were secured as follows:
· Regarding the Kilada preference shares, upon transfer of the
entire amount of €12 million from the investor in accordance with
the terms of the agreement, a mortgage is set against the immovable
property of the Kilada Hills Project, in the amount of €15.0
million (2021: €15.0 million).
· Regarding the Livka Bay loan, a
mortgage against the immovable property of the Croatian subsidiary,
Azurna (the owner of "Livka Bay"), with a carrying value of €21.0
million (2022: €17.7 million), two promissory notes, a debenture
note and a letter of support from its parent company Single
Purpose Vehicle Four Limited.
· In
addition, the development at One&Only Kea was partly funded by
a construction loan which was secured over its assets and those of
the Scorpio Bay asset. Steps are being taken to remove the security
over Scorpio Bay now that we have sold our interest in One&Only
Kea.
· The
shareholders loans have been secured against the issued share
capital of the wholly owned subsidiary Eastern Crete Development
Company Limited.
23. Deferred tax
liabilities
|
2023
|
2022
|
|
€'000
|
€'000
|
Balance at the beginning of the
year
|
6,577
|
6,609
|
Recognised in profit or loss (see
note 13)
|
2,297
|
(19)
|
Transferred to held for sale
assets
|
(1,138)
|
|
Exchange differences
|
-
|
(13)
|
Balance at the end of the year
|
7,763
|
6,577
|
Deferred tax liabilities are
attributable to the following:
|
2023
|
2022
|
|
€'000
|
€'000
|
Investment properties
|
1,121
|
2,215
|
Trading properties
|
4,299
|
4,299
|
Property, plant and
equipment
|
2,316
|
63
|
Total
|
8,874
|
6,577
|
24 Lease liabilities
The major lease obligations
comprise leases in Greece with 99-year lease terms, for which, as
mentioned in note 16, the Greek State disputed the ownership rights
of the lessor.
|
2023
|
2022
|
|
€'000
|
€'000
|
Non-current
|
3,322
|
3,347
|
Current
|
88
|
88
|
Total
|
3,410
|
3,435
|
25. Trade and
other payables
|
2023
|
2022
|
|
€'000
|
€'000
|
Land creditor
|
20,752
|
20,752
|
Investment Management fees (see
note 27.2)
|
-
|
-
|
Other payables and accrued
expenses
|
12,668
|
6,332
|
Total
|
33,420
|
27,084
|
|
2023
|
2022
|
|
€'000
|
€'000
|
Non-current
|
19,509
|
19,795
|
Current
|
13,911
|
7,289
|
Total
|
33,420
|
27,084
|
Land creditors relate to contracts
in connection with the purchase of land at Lavender Bay from the
Church. The above outstanding amount bears an annual interest rate
equal to the inflation rate, which cannot exceed 2% p.a. Full
settlement is due on 31 December 2025. As mentioned in note 16, the
Group is in negotiations with the land creditor with a view to
ensuring that no additional funds are paid to them under the sale
and purchase contracts until the resolution of the legal dispute
with the Greek State and, also to reduce the overall quantum of the
Group's deferred liabilities to them, potentially swapping all or
part of the deferred payments against equity in the
project.
26. NAV per
share
|
2023
|
2022
|
|
'000
|
'000
|
Total equity attributable to
owners of the Company (€)
|
115,518
|
112,107
|
Number of common shares
outstanding at end of year
|
904,627
|
904,627
|
NAV per share (€)
|
0.13
|
0.12
|
27. Related party
transactions
27.1 Directors' interest and remuneration
Directors' interests
Miltos Kambourides is the founder
and managing partner of the Investment Manager whose IMA was
terminated on 20 March 2023.
Martin Adams, Nick Paris and
Nicolai Huls were non-executive Directors throughout 2022, with
Martin Adams serving as Chairman of the Board of Directors. On 10
February 2023, Martin Adams resigned as a Director and Sean Hurst
was appointed as a non-executive Director and Chairman.
The interests of the Directors as
at 31 December 2023, all of which are beneficial, in the issued
share capital of the Company as at this date were as
follows:
|
Shares
|
|
'000
|
Sean Hurst
|
475
|
Nicolai Huls
|
775
|
Nick Paris
|
1,634
|
Miltos Kambourides is 75%
shareholder of Dolphin Capital Partners that previously held
88,025,342 shares. Dolphin Capital Partners disposed of all their
shares in the Company during April 2023.
Save as disclosed in this Note,
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. Although the Directors
believe that DCP with whom Miltos Kambourides is connected acquired
an undisclosed option after the call of Amanzoe by the Company in
August 2018.
Directors' remuneration
|
2023
|
2022
|
|
€'000
|
€'000
|
Remuneration
|
374
|
205
|
Total remuneration
|
374
|
205
|
The Directors' remuneration
details for the years ended 31 December 2023 and 31 December 2022
were as follows:
|
2023
|
2022
|
|
€'000
|
€'000
|
Martin Adams
|
8
|
75
|
Sean Hurst
|
66
|
-
|
Nick Paris
|
150
|
65
|
Nicolai Huls
|
150
|
65
|
|
|
|
Total
|
374
|
205
|
Miltos Kambourides waived his fees
for both 2023 and 2022. The Executive
Directors have been entitled to receive remuneration of €250,000
per annum in total with effect from 1 March 2024 but they have
undertaken in writing not to draw such additional fees for the time
being.
27.2
Investment Manager
remuneration (in place until March 2023)
|
2023
|
2022
|
|
€'000
|
€'000
|
Fixed management fee
|
-
|
-
|
Total remuneration
|
-
|
-
|
|
|
|
Variable management fee
payable
|
(1,075)
|
(1,075)
|
Project Fees
|
(2)
|
(2)
|
Incentive fee advance
payments
|
2,975
|
2,975
|
Amount Receivable from Investment Manager
|
1,898
|
1,898
|
On 9 April 2019, the Company
signed an Amended and Restated Investment Management Agreement
('IMA'), which was effective from 1 January 2019. The details of it
were as follows:
i. Fixed investment management
fee
No fixed management fee was due
after 31 December 2021.The annual investment management fees for
2021 was previously €3.6 million per annum.
ii. Variable investment management
fee
The variable investment management
fee for the period from 1 January 2020 to 31 December 2021 was
equal to a percentage of the actual distribution made by the
Company to its shareholders, as shown below:
Aggregate Shareholder
Distributions
|
|
%
applied
on Distributions
|
Up to but excluding €30
million
|
|
Nil
|
€30 million up to but excluding
€50 million
|
|
2.0%
|
€50 million up to but excluding
€75 million
|
|
3.0%
|
€75 million up to but excluding
€100 million
|
|
4.0%
|
€100 million up to but excluding
€125 million
|
|
5.0%
|
€125 million or more
|
|
6.0%
|
The Investment Manager was
entitled to a performance fee payable subject to certain
conditions, under the terms of the IMA. However, any performance
fees earned under this arrangement would have been fully deducted
from any future annual investment management fees and variable
management fees payable over the term of the IMA. No performance
fee was payable to the Investment Manager for the year ended 31
December 2021.
On 22 December 2021, a new IMA was
approved by the Shareholders at the Extraordinary General Meeting,
which is effective from 1 January 2022,
which was terminated on 20 March 2023. The details were as
follows:
A. INCENTIVE FEES AND BONUS
I. The Investment Manager shall be
entitled to be paid Incentive Fees which shall be calculated as
follows based on the aggregate Distributions made by the Company to
its Shareholders:
Aggregate Distributions(1)
|
Incentive Fees (as a percentage of Aggregate
Distributions)
|
Up to an including €40
million
|
0%
|
In excess of €40
million
|
15%
|
(1) For the
avoidance of doubt, the different percentages set out below shall
be applied incrementally and not as against the total aggregate
Distributions.
II. In addition to the fees
payable pursuant to paragraph A.I above, and subject to paragraphs
B and C once aggregate Distributions of €80 million have been made,
the Investment Manager shall be entitled to be paid a further bonus
(the "Bonus") on the
following basis:
Aggregate Distributions
|
Bonus payment
|
€80 million
|
€1 million
|
For each amount of €5 million of
Distributions paid in excess of €80 million up to and including
€100 million(1)
|
€1 million
|
(1) For the avoidance
of doubt, the total aggregate Bonus payments which may be paid to
the Investment Manager shall not exceed a maximum of €5
million.
III. Any Incentive Fees and/or
Bonus payable by the Company to the Investment Manager shall be set
off against and shall be reduced (to not less than zero) by the
amount of any fees (including but not limited to asset management
fees and villa sales fees) collected in cash by the Investment
Manager under the terms of the Kea Asset Management Agreement
accruing from 1 January 2022 onwards (to the extent that these have
not already been off set against the Incentive Fee Advance Payments
pursuant to paragraph B.II. below).
B. INCENTIVE FEE ADVANCE PAYMENTS
I. As an advance against future
Incentive Fees, the Investment Manager shall be entitled to receive
the following annual advances, which shall be payable in equal
quarterly instalments in advance:
Year
|
Incentive Fee Advance Payment
|
2022
|
€2.4 million
|
2023
|
€2.3 million
|
2024
|
€1.3 million
|
II. The Incentive Fee Advance
Payments payable by the Company to the Investment Manager shall,
(i) be set off against and shall reduce (to not less than zero) the
entitlement of the Investment Manager to any Incentive Fees and/or
Bonus payable pursuant to paragraphs A.I and A.II above, and (ii)
be set off against and shall be reduced (to not less than zero) by
the amount of any fees (including but not limited to asset
management fees and villa sales fees) collected in cash by the
Investment Manager under the terms of the Kea Asset Management
Agreement accruing from 1 January 2022 onwards.
III. For the avoidance of doubt,
the Company shall not be obliged to take active steps to generate
funding to pay any Incentive Fee Advance Payments and,
consequently, the payment of any Incentive Fee Advance Payments
shall be deferred, partly or wholly as required, by the Company in
the case where:
(i) the Company does not have
freely transferable funds available to pay such Incentive Fee
Advance Payments due, or
(ii) the Company's readily
accessible consolidated cash balance (excluding (a) cash that is
not readily available to the Company, (b) cash held at Kilada and
the One&Only at Kea, and (c) any cash deposited in the interest
retention account in connection with the CastleLake Loan Agreement
or any subsequent lender to the Company) after the payment of any
Incentive Fee Advance Payments due would be less than €1.0
million.
C
ESCROW ACCOUNT
I. An amount equal to 25 per cent
of the aggregate of any Incentive Fees and/or Bonus in excess of
the aggregate Incentive Fee Advance Payments to which the
Investment Manager may become entitled shall be placed in the
Escrow Account.
II. The amount held in the Escrow
Account from time to time shall become payable to the Investment
Manager on the earlier to occur of:
(i) the date of completion of the
disposal of the last Relevant Investment;
(ii) the date of commencement of
the formal liquidation of the Company under BVI law; and
(iii) the date of effective
termination of this Agreement by the Company.
III. If the Investment Manager
serves notice to terminate this Agreement, any amounts held in the
Escrow Account shall be forfeited and shall become due and payable
to the Company.
27.3
Other related party
transactions
27.3.1 Exactarea Holdings Limited
On 15th December 2022 SPV10
entered into a bridge loan facility with its 33% shareholder
Exacterea Holding Limited, making available of a principle amount
up to €6.6 million. The loan was interest-free and repayable at the
latest six months from the date of the agreement.
This loan was in connection with
the sale of the interest in One&Only Kea, and was deemed to be
fully repaid when the courts in Cyprus approved an application to
reduce the share premium reserve account of SPV10 on 16 January
2023.
27.3.2 One&Only Kea
The Investment Manager (DCP) owned
an effective 5% equity interest in SPV14 (an equity-accounted
investee and the holding company of the One&Only Kea at the
time that the Company sold its interest in SPV14. Under the
relevant shareholders agreement dated 27 May 2019, the Investment
Manager, One&Only Kea and Exactarea had priority returns for an
amount equal to 75% of their equity investment, following the
payment of which the Company became entitled to a priority catch-up
for the same amount. The Investment Manager also had an asset
management agreement dated 1 November 2017 with One&Only Kea
and provided management services.
27.3.3 Amanzoe resort
The Investment Manager (DCP)
retained a 4.9% equity interest in AZOE Holdings Ltd, the company
that owns Amanzoe resort ('AZOE') and it also had an asset
management agreement dated 3 October 2018 for the resort. However,
the Directors believe that DCP also retained an option over a
further 15% of the equity in AZOE. Amanzoe Resort S.A. entered on 2
August 2021 into a contract to buy 24 founder plots in the
Company's Kilada project for a price of €10.0 million payable in
instalments subject to the achievement of certain construction
milestones but this contract was unwound by both parties in
February 2023. The Directors believe that DCP sold all of its
interests in AZOE Holdings Ltd during March 2023.
27.3.3 AXIA
AXIA Ventures Group Limited
('Axia'), an investment banking operation with offices in Cyprus
and Athens was 20% owned by an affiliate of the Investment Manager
(DCP) and Miltos Kambourides served on its Board of Directors.
However, the affiliate sold its interest during 2022. Axia was
appointed by the Company to undertake a process for the sale of its
equity interest in OOKI dated 29 September 2020. No transaction was
concluded and therefore no fee was due or paid. Axia was also
appointed by the Company in December 2022 to undertake a process
for the sale of its equity interest in Aristo Developers Limited
but no transaction has been concluded. This process is ongoing and
no fees have yet been paid but they are believed by the Directors
to be under normal commercial terms.
27.3.4 The Company has
borrowed €2.8 million from 9 shareholders during the year. The
loans are for a 12 month term bearing an interest rate of 12% p.a.
with no fees payable on disbursement or repayment. Collateral in
the form of security over certain Company assets will be put in
place which exceed the aggregate value of the
loans.
28.
Non-Controlling interests
The following tables summarises
the information relating to each of the Group's subsidiaries that
has material non-controlling interests, before any intra-group
eliminations.
2023
|
|
MCO
1
€'000
|
SPV
10
€'000
|
Non-controlling interests' percentage
|
|
15.00%
|
0.00%
|
Non-current assets
|
|
30,961
|
-
|
Current assets
|
|
59,006
|
-
|
Non-current liabilities
|
|
(61,295)
|
-
|
Current liabilities
|
|
(11,635)
|
-
|
Net assets
|
|
17,037
|
-
|
Carrying amount of non-controlling
interests
|
|
2,556
|
-
|
Revenue
|
|
125
|
-
|
(Loss)/profit
|
|
5,022
|
-
|
Other comprehensive
income
|
|
-
|
-
|
Total comprehensive
income
|
|
5,022
|
-
|
Dividends Paid
|
|
-
|
-
|
Profit allocated to non-controlling
interests
|
|
753
|
-
|
Other comprehensive income allocated to non-controlling
interests
|
|
-
|
-
|
Dividends paid to non-controlling interest
|
|
-
|
-
|
2022
|
|
MCO
1
€'000
|
SPV
10
€'000
|
Non-controlling interests' percentage
|
|
15.00%
|
33.33%
|
Non-current assets
|
|
18,293
|
-
|
Current assets
|
|
57,509
|
19,921
|
Non-current liabilities
|
|
(57,443)
|
-
|
Current liabilities
|
|
(6,343)
|
(8)
|
Net assets
|
|
12,016
|
19,913
|
Carrying amount of non-controlling
interests
|
|
1,803
|
6,637
|
Revenue
|
|
37
|
-
|
(Loss)/profit
|
|
(588)
|
4,001
|
Other comprehensive
income
|
|
-
|
-
|
Total comprehensive
income
|
|
(588)
|
4,001
|
Dividends Paid
|
|
-
|
6,750
|
(Loss)/profit allocated to non-controlling
interests
|
|
(206)
|
1,334
|
Other comprehensive income allocated to non-controlling
interests
|
|
-
|
-
|
Dividends paid to non-controlling interest
|
|
-
|
2,250
|
|
|
|
|
Cash flow
from/(used in) operating activities
|
|
2,329
|
(8)
|
Cash flow (used in)/from investing
activities
|
|
(6,285)
|
3,195
|
Cash flow from/(used in) financing
activities
|
|
3,885
|
(3,183)
|
Net (decrease)/increase in cash and cash
equivalents
|
|
(71)
|
4
|
29. Contingent
liabilities
Companies of the Group are
involved in pending litigation. This principally relates to
day-to-day operations as a developer of second-home residences and
largely derives from certain clients and suppliers. Based on advice
from the Group's legal advisers, the Investment Manager believes
that there is sufficient defence against any claim and does 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 unaudited consolidated financial
statements.
In addition to the tax liabilities
that have already been provided for in the unaudited 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 favour of other
parties.
In 2007, the Company purchased a
90% interest in land at Livka Bay in Croatia and in 2008 it bought
the remaining 10%. In that final purchase it undertook to repay a
loan of E883,000 to the former owners of the land plus a further
payment of approximately € 7.0 million if and when the development
of Livka Bay was completed in its entirety. As there is no
certainty that the development will be completed, no provision has
been made in the DCI accounts for these payments.
30. SUBSEQUENT
EVENTS
During 2024, the Company has
borrowed a total of €0.75 million from a further four shareholders
totalling €750,000 on the same terms as previous loans. In
addition, the first four loans that were borrowed in 2023 reached
their 12 month anniversaries in 2024 and the lenders each agreed to
roll them forward by three months. The intention is to repay them
from asset sales proceeds.
In March 2024, the Company filed
civil claims against its former Investment Manager amounting to €57
million of damages.
In April 2024, we announced that an
agreement had been reached with a Family Office for further funding
for the Kilada Hills resort for up to a further €2.5
million.
In June 2024, the Company signed a
Memorandum of Understanding with a potential buyer of the Company's
investment in the Kilada Hills resort giving them an initial 90 day
exclusivity period to undertake due diligence. In addition, the
Company signed a Sale and Purchase Agreement to sell its land at
Livka Bay in Croatia for €22 million which is above the previous
NAV of €19.2 million.
There were no other material events
after the reporting period except the shareholder loans described
above and in note 27.3.4, which have a bearing on the understanding
of the unaudited consolidated financial statements as at 31
December 2023.