Dci Advisors Regulatory News (DCI)

DCI Advisors Ltd

("DCI") or the ("Company") and together with its subsidiaries the ("Group")

Final Results and Publication of Annual Report for the year ended 31 December 2022

The Company is pleased to announce its final results for the year ended 31 December 2022.

Copies of the Annual Report and Accounts will be posted to shareholders today and made available on the Company's website at: www.dciadvisorsltd.com

Enquiries

CHAIRMAN'S STATEMENT

For the year ended 31 December 2022

Dear Shareholders,

I joined the board of DCI Advisors (the "Company" or "DCI") as Chairman in February 2023.

The previous Chairman, Martin Adams, resigned at the same time to focus on other projects. The Board would like to thank Martin for his guidance and support of DCI since June 2021 during what continued to be a challenging period for the Company. The focus remains on improving the Company's corporate governance and implementing its new investment policy and realisation strategy aimed at selling the remaining investments, repaying debt and distributing the net proceeds to shareholders.

In 2022, since the Interim Report was released, there have been two significant events:

● The Company completed the disposal of its entire interest in the One & Only at Kea Island project ("OOKI") Prior to the sale, Dolphin was the owner of 66.67% of Single Purpose Vehicle Ten Ltd ("SPV10") which, in turn, indirectly owned 50% of OOKI, thereby providing the Company with an effective equity interest of 33.33% in OOKI. Pursuant to the sale, the Company received a net consideration, in aggregate, of €17.92 million, of which €0.90 million was paid as an advance to DCI on 5 December and the remaining €17.02 million balance was received on completion. Following the completion of the disposal of our interest in SPV10, the guarantees provided by Dolphin under the OOKI construction loan, including the existing share pledge and mortgage over Dolphin's Scorpio Bay asset to secure the guarantees, are expected to be released by the end of Q2 2023.

● From these disposal proceeds, an amount of €13.01 million was applied towards the repayment in full by 31 December 2022 of the existing loan facility that Dolphin drew down on 7 June and 16 July 2021. Following this repayment, all debt at the Company level was fully repaid. All remaining proceeds from the sale of our interest in OOKI were retained by Dolphin to meet its accrued and current liabilities and working capital requirements.

In 2023, in addition to the change of Chairman, there have been a number of further significant events which would be prudent to highlight in this FY2022 statement:

● On 20 March 2023 the Board announced that the Investment Management Agreement ("IMA") between the Company and Dolphin Capital Partners Ltd ("DCP") had been terminated with immediate effect on the basis of a repudiatory breach of that contract by DCP

● It had come to the Company's attention that DCP entered into an undisclosed share option agreement with the purchaser of the Amanzoe resort in Porto Heli, Greece at the same time that the Company sold its interest in the resort, as originally announced on 2 August 2018 (the "Undisclosed Option Agreement"). The Undisclosed Option Agreement entitled DCP to acquire up to 30% of the share capital of DolphinCI Fourteen Ltd (the special purpose vehicle holding the Amanzoe resort). A separate agreement for DCP to acquire 15% of the share capital of DolphinCI Fourteen Limited had been disclosed and authorised by the Company at the time.

● The Undisclosed Option Agreement had not been disclosed to the Company by DCP at the time of the sale of DolphinCI Fourteen Limited. The failure by DCP, as agent of the Company under the terms of the IMA, to disclose the existence of the Undisclosed Option Agreement, and to fulfil its other duties as agent, constitutes a repudiatory breach of the IMA that has resulted in the termination of the IMA by the Company. DCP has filed a legal claim against the Company in the commercial Courts in England seeking to recover various sums including termination notice of six months but the Directors believe that this claim has no merit and have filed a counter claim.

● The Company is seeking to pursue all legal options to recover the value arising from the Undisclosed Option Agreement that is the Company's property. The Directors believe that this value could be material in the context of the size of the Company, but at this time do not have enough information to put a precise quantum on this and therefore no account of it has yet been taken in our NAV.

● The independent Directors of the Company also removed Miltos Kambourides, who is the Co-Founder and Managing Partner of DCP, as a Director of the Company with immediate effect.

● The Directors have put in place additional resources since the termination of DCP, including loan funding (from certain shareholders in the Company), in order to enable the Company to self-manage its assets and to enable the continued construction of the Kilada Hills Golf & Country Resort and to facilitate the various asset sales processes currently underway.

● Nicolai Huls and Nick Paris were appointed as Executive Directors of the Company and also appointed as co-Managing Directors. The Company will now be self-managed and has no current intention of appointing a new investment manager. The Directors remain committed to the objectives for the Company that were approved by Shareholders at the Company's Extraordinary General Meeting held on 22 December 2021 which were to make no further investments, pay off Group level debts, aim to realise all investments by 31 December 2024 and return all surplus capital to shareholders after retaining sufficient funds for liabilities and working capital requirements.

On 7 June 2023, Dolphin Capital Investors Ltd changed its name to DCI Advisors Ltd as part of the termination terms contained in the IMA. The stock price ticker on the London Stock Exchange remained unchanged as DCI LN.

Summary of Financial Performance

At the 31 December 2022 financial year end, the NAV of the Company was €120.5 million (2021: €128.0 million) representing a decrease of 5.86% compared to 31 December 2021.. The NAV reflects a reduction of 8.7% in the value of investment property by €4.5 million (2021: €24.2 million) to €47.8 million (2021: €52.2 million) and 2022 operating expenses of €3.8 million (2021: €7.3 million). The net loss after tax attributable to the owners of the company was €5.5 million (2021: €21.3 million).

As at 31 December 2022, the DCI group had two principle liabilities:

· €10.4 million owed under the redeemable preference share agreement signed at the Kilada investment level; and

· €4.6 million owed to PBZ, the Croatian lender to the Livka Bay investment.

In sterling terms, DCI's NAV per share remained at 11p on 31 December 2022 (31 December 2021: 11p)

Additional Director

It is our intention to appoint a new independent Director in the coming months in order to enhance the corporate governance within the Company. We will update shareholders as soon as the process has been completed.

I would like to thank shareholders and our numerous service providers for the support and confidence that they have given the Board in proceeding with the changes outlined above. I look forward to meeting with shareholders in person over the coming months.

Sean Hurst

Chairman

DCI Advisors Ltd 30 June 2023

MANAGING DIRECTORS' REPORT

Termination of DCI's Investment Manager

The Company was founded by Miltos Kambourides/Dolphin Capital Partners Ltd ("DCP") in 2004. Since that time the Company raised close to €950 million in equity of which currently just €121 million in NAV is left. Over this period shareholders received no dividends. No value creation was achieved while DCP as Investment Manager received close to €190 million in Investment Management fees.

Given this background we were very disappointed when it came to the Company's attention that DCP had entered into an undisclosed option agreement with the purchaser of the Amanzoe resort in Porto Heli, Greece at the time that the Company sold its interest in the resort, as originally announced on 2 August 2018 (the "Undisclosed Option Agreement"). The Undisclosed Option Agreement entitled DCP to acquire up to 30% of the share capital of DolphinCI Fourteen Limited (the special purpose vehicle holding the Amanzoe resort). A separate agreement for DCP to acquire 15% of the share capital of DolphinCI Fourteen Limited had been disclosed and authorised by the Company.

The failure by DCP, as agent of the Company under the terms of the Investment Management Agreement dated 1 December 2021 (the "IMA"), to disclose the existence of the Undisclosed Option Agreement, and to fulfil its other duties as agent, constituted a repudiatory breach of the IMA that resulted in the immediate termination of the IMA by the Company which was announced 20 March 2023. The independent Directors of the Company also removed Miltos Kambourides, who is the Co-Founder and Managing Partner of DCP, as a Director of the Company on 18 March 2023 with immediate effect.

Since then, the Company has received notification that DCP filed a claim against the Company in the English High Court alleging a repudiatory breach of contract by the Company in relation to the termination by the Company of the IMA (the "Claim").

The Company considers the Claim to be opportunistic, speculative and without merit and will be defending the Claim vigorously. The Company has filed its own counterclaim. The Company will pursue all legal options to recover the value arising from the Undisclosed Option Agreement as the Directors believe that value is the Company's property. The Directors believe that this value could be material in the context of the size of the Company, but at this time do not have enough information to put a precise quantum on this. The Company has since found more potential issues relating to DCP and its management of the company which are currently under review.

Business Overview

Due to DCP's termination as Investment Manager and the removal of Miltos Kambourides as a Director, the remaining Directors have put in place additional resources, including funding, to enable the Company to self-manage its assets and to enable the continued construction of the Kilada Hills Golf & Country Resort ("Kilada") and the various asset sales processes currently underway.

The Company has no current intention of appointing a new investment manager. Nicolai Huls and Nick Paris became Executive Directors of the Company with immediate effect after DCP's termination and were also appointed as Managing Directors. The Company is managing this transition phase together with its service providers who are all still in place.

During 2022, the Directors focused on implementing the Investing Policy & Realisation Strategy which had been approved by shareholders in December 2021. Also, after the removal of Miltos Kambourides as Director and the termination of the IMA, this Investing Policy & Realisation Strategy continues to be in place with the aim of paying surplus capital back to Shareholders.

DCP was paid €2.4 million of advances against future incentive fees in 2022, and it was due to be paid €2.31 million in 2023 and €1.3 million in 2024, but these payments ended on 20 March 2023. Additional costs have been incurred to replace DCP, but the Directors believe they will be significantly lower than those levels leading to a net gain to Shareholders. 

In December 2022, the Company sold its stake in One & Only Kea ("OOKI") for a net consideration, in aggregate, of €17.92 million which represented a premium of 17% to the valuation of the Dolphin's investment in OOKI as disclosed in the Company's financial statements as at 31 December 2021. From these disposal proceeds, an amount of €13.01 million was applied towards the repayment in full by 31 December 2022 of the existing loan facility owed by DCI after which all debt at the Company level was fully repaid. While the original plan was to maximise its realisation value by holding and developing OOKI until fully operational, the offer received during the summer of 2022 in combination with the obligation to repay the existing loan facility by the year end led the Board of Directors to decide to exit OOKI earlier than planned.

During the year, we also focused on enhancing the value of Kilada, an asset which we have indicated that we will hold and develop until the first phase of construction, involving constructing the golf course and the Country Club, is finalised. During 2022 and 2023, DCI made some follow-on investments to Kilada in order to enhance its value and to continue construction.

As part of our Investing Policy & Realisation Strategy, in 2022 we also made steps to implement the sales of some of our other assets, although most progress was achieved after DCP's termination as Investment Manager. 

Bridge Financing

During 2022, the Company was able to repay its loan facility in full after which all debt at the Company level was fully repaid. It is the Director's view that it is not in shareholders' interests to have another very expensive credit facility in place going forwards.

Despite this view, due to regular operating expenses, commitments to Kilada and Investment Management fees paid to DCP (both advances as well as outstanding investment management fees) it was decided by the Board of Directors to borrow some money from shareholders in the form of modest shareholder loans. These loans pay 12% pa interest which is much more attractive to the Company than the other credit facilities which were offered to the Company during 2022/2023. By the end of June 2023, the number of committed shareholder loans was 4 with a total capital amount of €1.4m. We expect more shareholder loans going forwards until we raise funds from asset sales later this year.

Major Asset Review

Kilada Country Club, Golf & Residences (www.mykilada.com)

The Kilada Country Club, Golf & Residences is our main asset. Finalising the 18-hole golf course plus the Country Club is our highest priority and we believe we should be able to reach that target during 2024. This will be supported by the new financing agreement put in place during May 2023 with our joint venture ("JV") partner which will help to fund these development costs. By finalising the golf course plus the Country Club we believe we will de-risk the project which then should support a higher valuation of this asset.

During 2022, our 15% JV partner completed their financial commitment to the project and contributed €3 million of capital to the project bringing their total commitment to €12 million. In May 2023, the Company announced a new agreement between DCI and its JV Partner to secure funding for the finalisation of the Golf Course and the Country Club on an 85%:15% split which reflects our respective equity shareholdings. As part of this agreement our JV partner has committed to lend a further €2.5 million with immediate effect. Thanks to this agreement, the Company will be in the position to apply for the payment of the first €1.5 million of €6 million of approved Greek government grants very shortly. These grants are drawn down in stages dependent on spending on the project concerned.

On the development side, construction of the centrepiece Jack Nicklaus Signature Golf Course at Kilada continues to progress. After the archaeologists finalised their work on the site on which the Country Club is to be built we started excavations and construction of the retaining wall and started work on the Country Club's access road. Archaeologists continue to work on the site, but we do not expect that these activities will create any major delays for the project at this stage. We also focused on the construction of the pipe network connecting the water desalination system with the lake and completion of the pump station and the corresponding infrastructure.

Lavender Bay

The situation at Lavender Bay has been complicated by a challenge in Q1 2022 by the Greek state in relation to DCI's ownership title, which needs to be addressed in tandem with the original vendor of the land, the Archdiocese of Dimitriada. As a conservative measure, the now disputed ownership of Lavender Bay has led the Company to write down the value of the asset. However, the liability to pay further instalments of €20.8 million to the Church for the land purchase has been retained in the 2022 financial statements although the Company has no intention to make any further payments until the ownership dispute has been resolved.

In view of these developments, we have been in negotiations with the original vendor with a view to ensuring that no additional funds will be paid to them under our sale and purchase contracts until the resolution of this legal dispute with the Greek State and, to potentially reduce the overall quantum of our deferred liabilities to them, by capitalizing such deferred payments against a minority equity position in the project. In parallel, we have been working with their legal counsel to prepare our legal recourse against the Greek State to the competent courts so that the matter can be finally judicially resolved.

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 €22.9m. 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 €120.5m, the Board of Directors believes that the Company's real NAV is closer to €143.4m. 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.

Plaka Bay and Scorpio Bay

There have been no new developments at these two projects.

Livka Bay, Croatia

In October 2022, it was decided to appoint a local real estate adviser to lead the process to find potential investors for this asset. In 2023 the agent approached potential investors, and several have expressed interest in the project and due diligence is currently underway. While a 100% exit is our preferred option, we are open to staying involved in the project together with a new JV-partner if there is a clear path for the Company to exit from this asset over the next couple of years.

Apollo Heights, Cyprus

In 2022, the Company had been approached by several potential buyers for this asset, but none of these resulted in any serious discussions. The Company is therefore currently reworking all sales and due diligence materials relating to the site with a view to re-marketing it.

Aristo Developers, Cyprus (a 47.9% affiliate)

In 2022, Aristo Developers benefited from a more favourable real estate market in Cyprus. Total sales increased by close to 26% compared to the year before. Due to this strong performance, Aristo Developers has been able to continue to deleverage by paying down bank debt. Sales started well in 2023and this year further revenue growth, profits and positive cash flows are expected.

In late 2022, the Company together with the majority shareholder signed a mandate with AXIA Ventures, a Greek and Cypriot investment bank to sell Aristo Developers to international investors. A marketing exercise took place in early 2023 and it is still ongoing as we work to develop interest with those investors.

One&Only at Kea Island

The Company sold its stake in OOKI in December 2022. The project is still under development and a precise opening date has yet to be announced.

Market Dynamics

The Greek economy is performing strongly and has been outperforming the EU-average growth rate. This is expected to also be the case for the next couple of years. The recent Greek government elections indicate another four years of a business friendly environment in the country. The strong performance of the Greek economy has been supported by stable politics, increasing Foreign Direct Investment, pent-up domestic demand after many years of underperformance and a very strong hospitality sector. Given these positive developments it is expected that Greece will soon again achieve investment grade status for its government bonds. This all bodes well for DCI's Greek assets. We also expect the availability of credit for Greek companies and real estate developments to improve strongly over the next couple of years and we hope to also benefit from that.

Croatia entered the Schengen passport zone and joined the EURO currency zone on 1 January 2023. This will support the Croatian economy as it will be easier for tourists and second homeowners to visit the country and for foreign investors to invest in the country while at the same time minimising their currency risk. The tourism sector continues to perform well, and more tourists are again expected this year.

The Cypriot economy is also performing well. While real estate prices are still 15% below their peak they have stabilised and are slowly picking up. The banking sector is still very conservative, and the banks are still cautious in providing credit to companies, but this is slowly improving. Tourism has already picked up strongly and is supporting the economy.

Future Objectives

The Company's main objectives for 2023 are to:

1. Execute further portfolio asset disposals;

2. Progress construction at Kilada and generate plot and villa sales momentum at the project;

3. Secure adequate working capital liquidity for DCI

4. Defend our claim against DCP and pursue all legal options to recover the value arising from the Undisclosed Option Agreement.

Nicolai Huls, Managing Director

Nick Paris, Managing Director

DCI Advisors Ltd 30 June 2023

DIRECTORS' REPORT

The Directors present their report together with the audited financial statements of the Company and its subsidiary undertakings (together the "Group") for the twelve months ended 31 December 2022.

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.

Business Review for the period and Future Developments

The consolidated statement of comprehensive income for the twelve month period and the statement of net assets as at 31 December 2022 are set out on pages 20 and 21 of the printed 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 2022.

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.

As of 31 December 2022 all Directors were independent non-executive Directors, except Miltos Kambourides, who was considered to be non-independent because of his role as the founder and majority owner of Dolphin Capital Partners Ltd, the Company's Investment Manager. In addition, Nicolai Huls and Nick Paris became executive directors when they became Managing Directors on 20 March 2023. 

Directors' remuneration during the twelve months ended 31 December 2022

The Directors remuneration details during the period of this report were as follows:

*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 Investment Manager.

The Directors intend to propose changes at the Company's AGM in 2023 to the Company's incentive fee scheme which was payable to Dolphin Capital Partners Ltd until their Investment Management Agreement was terminated on 20 March 2023. No incentive fees have been paid or are due to the former Investment Manager from that date. The proposed changes will create an incentive fee pool for key members of the Company's employees including the Directors. Further details will be contained in the Notice of the AGM.

Directors' interests

The interests of the Directors in the Company's shares as at 31 December 2022 were as follows:

* Miltos Kambourides is 75% shareholder of Dolphin Capital Partners that held 88,025,342 shares. Following the year end Dolphin Capital Partners disposed of all their shares in the Company.

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 2023, which is the latest practicable date before the publication of this report:

CORPORATE GOVERNANCE STATEMENT

Statement of compliance with the Quoted Companies Alliance Corporate Governance Code (the "QCA statement")

Introduction from the Chairman

The Board of DCI (the Board or the Directors) fully endorses the importance of good corporate governance and applies the QCA Corporate Governance Code, published in April 2018 by the Quoted Companies Alliance (the "QCA Code"), which the Board believes to be the most appropriate recognised governance code for a company of the Company's size with shares admitted to trading on the AIM market of the London Stock Exchange. This is a practical, outcome-oriented approach to corporate governance that is tailored for small and mid-size quoted companies in the UK and which provides the Company with the framework to help ensure that a strong level of governance is maintained.

As Chairman, I am responsible for leading an effective board, fostering a good corporate governance culture, maintaining open communications with the major shareholders and ensuring appropriate strategic focus and direction for the Company. The Board is also supported by a Nomination and Corporate Governance Committee which comprised the Board's independent Directors throughout to help us to do that.

Notwithstanding the Board's commitment to applying the QCA Code, we will not seek to comply with the QCA Code where strict compliance in the future would be contrary to the primary objective of delivering long-term value for our shareholders. However, we do consider that following the QCA Code, and a framework of sound corporate governance and an ethical culture, is conducive to long-term value creation for shareholders.

All members of the Board believe strongly in the importance of good corporate governance to assist in achieving objectives and in accountability to our shareholders. In the statements that follow, the Company explains its approach to governance in more detail.

The QCA Code identifies 10 principles that are considered appropriate arrangements and asks companies to disclose how the companies apply each principle. Our compliance with these 10 principles is set out below.

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

The Company's investment policy is to realize all its portfolio assets in a controlled, orderly and timely manner. The strategy of the Group, which was approved by the Company's shareholders in an Extraordinary General Meeting held on 22 December 2021 (the "EGM"), is set out in detail in the EGM circular dated 2 December 2021 (the "Circular"), specifically the investing policy and realisation strategy is defined in paragraph 4 of Part 1 and the investment management agreement is defined in paragraph 5 in the Circular.

The Circular is available to view at: www.dciadvisorsltd.com

The Company strategy is shaped and formulated by the Board in regular discussions with the Managing Director. The Company's assets were managed by Dolphin Capital Partners Limited ("DCP"), an investment management company incorporated in February 2005, until their IMA was terminated on 20 March 2023. Full details of the Investment Manager's remuneration arrangements and the terms and conditions of service are set out in the Circular.

The Board is the Company's decision-making body, approving or disapproving each investment and divestment proposed by the Investment Manager. The Board is responsible for acquisitions and divestments, major capital expenditures and focuses upon the Company's long-term objectives, strategic direction, and distributions policy. The Managing Directors are responsible for implementing this strategy and for generally managing and developing the business. Changes in strategy require approval from the Board.

The key challenges and risks that the Group strategy presents relate to the fact that most of the Company's investments are illiquid, and there can be no assurance that the Company will be able to realise financial returns on such investments in a timely manner. Other risks include those associated with general economic climate, local real estate conditions, changes in supply of, or demand for, competing properties in an area, energy and supply shortages, various uninsured or uninsurable risks. As a result, a downturn in the real estate sector or the materialisation of any one or a combination of the aforementioned risks could materially adversely affect the Company and the implementation of the investment policy.

In order to mitigate the above risks, the Board and the Managing Directors, working with the Company's advisers, will continue to explore the best manner in which the divestment of the Company's portfolio can be achieved on an asset by asset basis, in the light of prevailing market conditions and circumstances, in order to maximise returns to shareholders. Moreover, in order to preserve the financial resources of the Company, the allocation of any additional capital investment into any of the Company's projects will be substantially sourced from joint venture agreements with third party capital providers and project level debt and with the sole objective of enhancing the respective asset's realisation potential and value.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company is committed to engaging and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. All Board members have responsibility for shareholder liaison but queries are primarily delegated to the Company's advisors or Managing Directors in the first instance or to the Company's Chairman.

Contact details for the Company's advisors are contained on the Company's website www.dciadvisorsltd.com

Additionally, shareholders can get in touch by sending an e-mail to the Company's administrator, FIM Capital Limited ("FIM") at corporate.governance@fim.co.im

The Board, together with the Managing Directors, are responsible for implementing the strategy that was approved by the shareholders at the EGM.

Throughout the year, the Board has regular dialogue with institutional investors, providing them with such information on the Company's progress as is permitted within the guidelines of the AIM Rules, MAR and requirements of the relevant legislation. Twice a year, at the time of announcing the Group's half and full-year results, the Company schedules a round of investor calls with its shareholders to update them on developments and to receive feedback and suggestions from them.

Commencing in 2022, the Company has held an Annual General Meeting each year ("AGM"). This provides investors the opportunity to enter into dialogue with the Board and for the Board to receive feedback and take action if and when necessary. The results of the AGM are subsequently announced via RNS and published on the Company's website. Feedback from, and engagement with, substantial shareholders has historically been successful in ensuring, for example, material transactions are suitably structured with shareholder considerations in mind.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

Corporate social responsibility ("CSR") is a cornerstone of the Company's culture. The Board is responsible for the social and ethical frameworks at DCI and the Company is committed to transparency with its approach and business and welcomes interaction with all stakeholders and the local communities.

The Board is aware that engaging with its stakeholders strengthens relationships, assists the Board in making better business decisions and ultimately promotes the long-term success of the Company. The Group's stakeholders include shareholders, members of staff of underlying companies and of Advisors and other service providers, suppliers, auditors, lenders, regulators, industry bodies and the communities surrounding the locations of its investments. DCI is an internally managed company.

The Board as a whole is responsible for reviewing and monitoring the parties contracted to the Company, including their service terms and conditions. The Audit Committee supports Board decisions by considering and monitoring the risks of the Company.

The Board is regularly updated on wider stakeholder views and issues concerning its projects, both formally at Board meetings and informally through ad hoc updates. Advisers involved with the investment portfolio are invited to join Board meetings and provide a report to the Board. Engagement in this manner enables the Board to receive feedback and better equips them to make decisions affecting the business.

The goal is to deliver value for our stakeholders while in parallel to contribute in meaningful ways to the local economies, societies, and environments where DCI invests.

The Company's Corporate Social Responsibility statement can be viewed on it's website at: www.dciadvisorsltd.com

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

Ultimate responsibility for the process by which risk in the business is managed rests with the Board. The Managing Directors are required to enforce the risk management framework adopted by the Company and report its effectiveness to the Board. The respective risks and processes to implement risk management are reviewed bi-annually.

The principal risks and uncertainties facing the Group, as well as mitigating actions, are set out in this Report. These risks are reviewed by the Audit Committee, whose role is to provide oversight of the financial reporting process, the audit process, the system of internal controls, overall compliance with laws and regulations and review the budgetary process. The Audit Committee is currently chaired by Nick Paris and its other member is Nicolai Huls.

The Company's Directors and its former Investment Manager comply with Rule 21 of the AIM Rules relating to directors' and applicable employees' dealings in the DCI's securities. Accordingly, DCI has adopted an appropriate Share Dealing Code for Directors and applicable employees of the Investment Manager and the Investment Manager had also adopted a conflicts of interest policy.

The Company does not have an Investment Committee as, in accordance with its investment strategy, it is not proceeding into any investments into new projects or the acquisition of additional assets.

Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chair

The Board had four members throughout 2022, comprising an independent non-executive Chairman and three non- executive directors of which 2 were independent. The Company has restrictions on the maximum length of service for Directors. At every annual general meeting any director:

 - who has been appointed by the board since the previous annual general meeting;

- who held office at the time of the two preceding annual general meetings and who did not retire at either of them; or

- who has held office with the Company, other than employment or executive office, for a continuous period of nine years or more at the date of the meeting,

shall retire from office and may offer himself for re-appointment by the members

The Directors biographies are published on the Company's website at www.dciadvisorsltd.com

The Board will continue to review its structure in order to provide what it considers to be an appropriate balance of experience and skills. Board meetings are held on a frequent basis, in person where possible, with additional meetings held as required.

All Directors receive regular and timely information regarding the operational and financial performance of the Company. Relevant information is circulated to the Directors in advance of the Board meetings. All Directors have direct access to the advice and services of the Company's advisors and are able to receive independent professional advice in the furtherance of their duties, if necessary, at DCI's expense.

14 formal Board meetings (including Board calls) were held in the period during 2022. A summary of Board and Committee meetings attended in the 12 months to 10 February 2023 is set out below:

Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The biographical details of all the Directors can be viewed on the Company website: www.dciadvisorsltd.com

The Directors skills are kept up to date by attending seminars, conferences and specialized courses from advisers as well as personal reading into the subjects of real estate management and development and corporate finance. The Directors also receive ad hoc guidance on certain matters, for example, the AIM Rules for Companies from the Company's Nominated Adviser as well as receiving updates on the regulatory environment from FIM, who provide specialist fund administration services to a variety of closed ended funds and collective investment schemes. The role and responsibilities of the Directors are set out in a Statement of Directors' Responsibilities and the Terms of Reference of the Audit Committee are summarised at the end of this document.

All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company's expense.

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

Board meetings are held on a frequent basis at key geographical locations.

To date, no independent Board evaluation process has been conducted by the Company as the Chairman believes that the Board performs effectively. Key strategic issues and risks are discussed in an open and forthright manner, with decisions being made based on the factual data available.

In future, Board evaluations will take place periodically, whereby Board members will be asked to complete and return an effectiveness questionnaire across a variety of criteria, then return these to FIM, who, where necessary, will seek clarification on any responses given. Responses will then be recorded anonymously to enable the Board to hold open follow-up discussions on the aggregated evaluation data.

The Board's periodic self-evaluations of performance will be based on externally determined guidelines appropriate to the composition of the Board and the Company's operation, including Board committees. The scope of the self-evaluation exercise will be re-assessed in each instance to ensure appropriate depth and coverage of the Board's activities consistent with corporate best practice.

The effectiveness questionnaire underlying the Board evaluation process assesses the composition, processes, behaviours and activities of the Board through a range of criteria, including the size and independence, mix of skills (for example corporate governance, financial, real estate industry and regulatory) and experience, and general corporate governance considerations in line with the QCA code.

All Board appointments have been made after consultation with advisers and, when appropriate, with major shareholders. Detailed due diligence is carried out on all new potential Board candidates. The Board will consider using external advisers to review and evaluate the effectiveness of the Board and Directors in future to supplement internal evaluation processes. Additionally, the Board will undertake formal and periodic succession planning.

The independent Directors have remained independent throughout their term of office except for Nicolai Huls and Nick Paris who became executive directors and therefore non-independent on 20 March 2023.

When the Board undertakes a periodic evaluation process, the relevant materials and guidance in respect of this process, following current best practice at the time of the evaluation, is available from FIM.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

Throughout DCI, culture has significant impact on behaviours, risk management and ultimately performance. The Board is responsible for defining the desired culture, delegating the embedding of culture in operations in the Company and then overseeing and monitoring the result. The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Company's operations. An open culture is encouraged within the Company, with regular communications among shareholders.

The Board believes that if an organization wants to create a culture of ethical conduct, they must be sure that members have the tools that they need to do so. These include adequate and appropriate training, consultation, modeling and supervision. These tools also include being able to bring internal and external experts to the organization in to engage staff at all levels of training and problem solving as well.

The Company has made investments in projects that seek to make a contribution to the development of communities in which they are located. In planning its activities, the Board will give consideration to evaluating the social impact of proposed developments with a view to promoting where possible local employment and the delivery of other local benefits; and mitigating negative impacts to the extent possible.

The Company promotes and supports the rights and opportunities of all people to seek, obtain and hold employment without discrimination.

The Company is also committed to being honest and fair in all its dealings with partners, contractors and suppliers. Procedures are in place to ensure that any form of bribery or improper behaviour is prevented from being conducted on the Company's behalf by investee companies, contractors and suppliers. Robust systems are in place to safeguard the Company's information entrusted to it by investee companies, contractors and suppliers, and seeks to ensure that it is never used improperly.

In order to comply with legislation or regulations aimed at the prevention of money laundering, the Company has adopted anti-money laundering and anti-bribery procedures.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

A description of each board member and their experience is available on the website at www.dciadvisorsltd.com, and the role of the Company's committees are also available on the Company website at: www.dciadvisorsltd.com

 Responsibilities of the Board

The Board is responsible for the implementation of the investment policy of the Company and for its overall supervision. The Board is also responsible for the Company's day-to-day operations. In order to fulfil these obligations, the Board has delegated certain operational responsibilities to the Managing Directors, to FIM and to other service providers.

The Company has not established a remuneration committee as it is satisfied that any pertinent issues can be considered by the Board as a whole.

The Chairman is responsible for leading an effective Board, focusing the Directors' discussions on the key levers for value creation and risk management as well as the effective running of the Company, fostering a good corporate governance culture, maintaining open communications with the major shareholders and ensuring appropriate strategic focus and direction.

In addition to this, the Chairman is responsible for ensuring that all Directors are fully informed and qualified to take the required decisions.

For this purpose, non-executive directors spend time with the Managing Directors between Board meetings, covering certain aspects of the business where they have special expertise.

The Board receives formal investment reports from the Managing Directors at frequent Board meetings, and receives management accounts, and compliance reports from FIM. The Board maintains regular contact with all its service providers and is kept fully informed of investment and financial controls and any other matters that should be brought to the attention of the Directors. The Directors also have access where necessary to independent professional advice at the expense of the Company.

In addition to these, the Directors review and approve the following matters:

• Strategy and management

• Policies and procedures

• Financial reporting and controls

• Capital structure

• Contracts

• Shareholder documents / Press announcements

• Adherence to Corporate Governance and best practice procedures

The Board has established the following Committees:

Audit Committee: The Audit Committee is chaired by Nick Paris and its other member is Nicolai Huls and it aims to meet at least three times a year.

The Audit Committee provides oversight and review of the financial reporting process, the audit process, the system of internal controls, the accounting policies, principles and practices underlying them, liaising with the external auditors and reviewing the effectiveness of internal controls, and overall compliance with laws and regulations and review the budgetary process.

Nomination & Corporate Governance Committee: The Corporate Governance Committee is chaired by Nicolai Huls and its other members are Martin Adams and Nick Paris. The Committee aims to meet at least twice annually.

The role of the Nomination & Corporate Governance Committee is to evaluate the Company's corporate governance policies and principles and recommend changes to the Board as necessary, and identify, evaluate and recommend to the Board qualified nominees for Board election.

The Directors have access to the advice and services of FIM, the Nominated Adviser, legal counsel, regulatory consultants and other experts where it is deemed appropriate. They can also seek independent external professional advice and any relevant training, as necessary.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Board is committed to maintaining an open dialogue with shareholders. Direct communication with shareholders is coordinated by the Chairman in consultation with the Company's advisers, as appropriate.

Throughout the year, the Board maintains a regular dialogue with institutional investors, providing them with such information on the Company's progress as is permitted within the guidelines of the AIM Rules, MAR and requirements of the relevant legislation.

The Company communicates with shareholders through the yearly Annual Report and Financial Statements, Interim Report, the Annual General Meeting, and other AIM announcements. Investors are also able to contact the Directors and Company's advisors directly at any time.

The Board believes that the Annual Report and the Interim Report play an important part in presenting all shareholders with an assessment of the Group's position and prospects. All reports and press releases are published on the Company's website www.dciadvisorsltd.com

If a significant proportion of independent votes were to be cast against a resolution at any general meeting, the Board's policy would be to engage with the shareholders concerned to understand the reasons behind the voting results. Following this process, the Board would make an appropriate public statement regarding any different action it has taken, or will take, as a result of the vote.

Details of the Directors' remuneration can be found on page 8 of the printed report.

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DCI ADVISORS LTD

Report on the audit of the consolidated financial statements

Qualified Opinion

We have audited the accompanying consolidated financial statements of DCI Advisors Ltd (formerly Dolphin Capital Investors Ltd) (the 'Company'), and its subsidiaries (together with the Company, the 'Group'), which are presented on pages 20 to 62 of the printed report and comprise the consolidated statement of financial position as at 31 December 2022, and the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2022, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS-EU').

Basis for Qualified Opinion

As described in Note 16, an amount of €3.6 million (2021: €5.1 million) is included in Investment Property as of 31 December 2022 relating to land acquired or leased by the Group's subsidiary company Golfing Development S.A. in prior years, at Nies (Sourpi, Thessaly), for which a fair value adjustment of €1.5 million was recorded as loss in 2022 in profit or loss (2021: €13.2 million). The respective land is disputed by the Greek State as to its private character and actions were taken to register it in its name at the local Land Registries. Various actions are in progress by the Group's component, Golfing Development S.A. to claim its ownership and legal rights. We were not provided with an independent legal expert opinion regarding the outcome of these actions, hence the outcome cannot be reliably determined at this stage. This matter existed in the preceding financial year and caused us to qualify our audit opinion on the consolidated financial statements relating to that year. 

Based on the above, we were unable to obtain sufficient and appropriate audit evidence in relation to the ownership and fair value of the Investment Property of total amount of €3.6 million representing approximately 2% of the total assets of the Group. Consequently, we were unable to determine whether and to what extent any adjustments to the fair value of this property were necessary.

We conducted our audit in accordance with International Standards on Auditing ('ISAs'). Our responsibilities under those standards are further described in the 'Auditors' responsibilities for the audit of the consolidated financial statements' section of our report. We are independent of the Group in accordance with the International Code of Ethics (Including International Independence Standards) for Professional Accountants of the International Ethics Standards Board for Accountants (''IESBA Code'') together with the ethical requirements in Cyprus that are relevant to our audit of the consolidated financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Valuation of immovable property

(Refer to notes 15 to 16, and 19 to the consolidated financial statements)

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the Chairman's Statement, Managing Directors' report, Director's report and Corporate Governance statement, but does not include the consolidated financial statements and our auditors' report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and those charged with governance for the consolidated financial statements

The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRS-EU, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to either liquidate the Company or to cease Group's operations, or there is no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Group's financial reporting process.

Auditors' responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

Other matter

This report, including the opinion, has been prepared for and only for the Company's members as a body and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to. These financial statements have not been prepared for the purpose of complying with the legal requirements of the British Virgin Islands Law. 

The engagement partner on the audit resulting in this independent auditors' report is Demetris S. Vakis.

Demetris S. Vakis, FCA

Certified Public Accountant and Registered Auditor

for and on behalf of

KPMG Limited

Certified Public Accountants and Registered Auditors

14 Esperidon Street

1087 Nicosia

Cyprus

30 June 2023

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2022

The notes on pages 23 to 62 of the printed report are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2022

The consolidated financial statements were authorised for issue by the Board of Directors on 30 June 2023.

Nick Paris Nicolai Huls

Managing Director Managing Director

The notes on pages 23 to 62 of the printed report are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2022

The notes on pages 23 to 62 of the printed report are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2022

The notes on pages 23 to 62 of the printed report are an integral part of these consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2022

1. REPORTING ENTITY

DCI Advisors Ltd (Formerly: Dolphin Capital Investors 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 consolidated financial statements of the Company as at 31 December 2022 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 consolidated financial statements of the Group as at and for the year ended 31 December 2022 are available at www.dciadvisorsltd.com.

2. basis of preparation

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU').

The consolidated financial statements were authorised for issue by the Board of Directors on 30 June 2023.

b. Basis of preparation

The 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 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 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 2022, the Group adopted all changes to IFRS which are relevant to its operations. This adoption did not have a material effect on the 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 2022. 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 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.

(ii) Standards and interpretations not adopted by the EU continued

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 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 2022, 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 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 Colliers International, 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:

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.

** During the year the entity disposed of the 50% shareholding interest in Single Purpose Vehicle Fourteen Limited (owner of One&Only Kea Resort)

5. Significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all periods presented in these 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 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 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 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 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.

5.9 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.

5.10 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.

5.11 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 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 interest 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.

5.12 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.

5.13 Dividends

Dividends are recognised as a liability in the period in which they are declared and approved and are subtracted directly from retained earnings.

5.14 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.

5.15 Provisions

A provision is recognised in the 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.

5.16 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.

5.17 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.

5.18 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.

5.19 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.

5.20 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.

5.21 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.

5.22 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.

5.23 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.

5.24 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.

5.25 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.

5.26 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.

5.27 Comparatives

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.

6. revenue

7. COST OF SALES

8. Change in valuation

9. SEGMENT REPORTING

As at 31 December 2022 and 31 December 2021, 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. In presenting the geographic information, segment assets were based on the geographic location of the assets.

Non-current assets

Country risk developments

Greece

According to the OECD, the GDP of Greece was projected to increase by 5.6% in 2022, 1.8% in 2023 and 2.3% in 2024. As COVID containment measures eased in April 2021, economic activity rebounded, supported by a stronger-than-expected summer tourist season.

According to the Bank of Greece, in 2022, the balance of travel services showed a surplus of €15.7bn vs surplus of €9.4bn in 2021 and €15.4bn in 2019.

The government's recovery and resilience plan has boosted activity and productivity through investments in green transition, upgrading digital infrastructure and skills, and supporting private firms' investments. However, further to the unfolding developments with the Ukraine-Russia current situation, inflation in Greece is now estimated to have peaked at 9.3% in 2022 and to be 4.0% in 2023 according to the IMF. Besides the inflationary pressure, a very strong tourism season is expected. According to the President of the Greek Tourism Confederation (SETE), the revenues from Greek tourism this season may exceed 2019 levels.

Cyprus

Even though Cyprus' economy was negatively affected by rising Covid infection rates at the end of 2020, a strong recovery of the economy was recorded by the end of 2021 and this has continued. According to IMF forecasts, a 6.6% increase in GDP was expected during 2022, reaching almost pre-crisis levels and it is forecast to be 2.5% for 2023.

Despite the disruption caused by the pandemic and the termination of the Cyprus Investment Program (CIP), the Real Estate & Construction sector maintained its position as one of the fastest growing sectors of the economy, highlighting its resilience and importance to the overall economy according to the PWC Real Estate Market Report.

However, the current situation in Ukraine has had an impact on Russian demand, which has been drastically reduced. This also results in a reduction of tourism, which is a lead-in for interest in real estate. In addition, the rising inflation and petrol prices, which resulted to the increase of the cost in travel and materials by c.10%, as well as a VAT charge, affected the Cyprus market.

Croatia

2022 was defined by a return to normality in Croatia, after the dual crises of the Covid pandemic and an earthquake in the previous year. According to the European Commission the economic developments in 2022 point to a full V-shaped recovery of the Croatian economy. After a drop of 8.1% in 2020, real GDP grew by 10.4% in 2021 and by 6.2% in 2022. Economic activity and tourism arrival numbers are expected to benefit strongly from the adoption of the Euro currency and the admission of Croatia into the Schengen passport zone on 1.1.23. 

10. PROFESSIONAL FEES

11. ADMINISTRATIVE AND OTHER EXPENSES

Personnel expenses

\* The vast majority consists of workers/archaeologists at Kilada

12. Finance costS

13. Taxation

Reconciliation of taxation based on taxable loss and taxation based on accounting loss:

As a company incorporated under the BVI International Business Companies Act (Cap. 291), the Company is exempt from taxes on profits, income or dividends. Each company incorporated in BVI is required to pay an annual government fee, which is determined by reference to the amount of the company's authorised share capital.

In Greece, the corporation tax rate applicable to profits is 22% (22% in 2021). Tax losses of Greek companies are carried forward to reduce future profits for a period of five years.

The profits of the Cypriot companies of the Group are subject to a corporation tax rate of 12.50% on their total taxable profits. Tax losses of Cypriot companies are carried forward to reduce future profits for a period of five years. In addition, the Cypriot companies of the Group are subject to a 3% special contribution tax on rental income. Under certain conditions, interest income may be subject to a special contribution tax at the rate of 30%. In such cases, this interest is exempt from corporation tax.

 In Croatia, the corporation tax rate is 18%. Tax losses of Croatian companies are carried forward to reduce future profits for a period of five years.

14. LOSS per share

Basic loss per share

Basic loss per share is calculated by dividing the loss attributable to owners of the Company by the weighted average number of common shares outstanding during the year.

Loss attributable to owners of the Company

Diluted loss per share

As at 31 December 2022 and 2021, the diluted loss per share is the same as the basic 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

The carrying amount at year end of land and buildings, if the cost model was used, would have been €6.3 million (2021: €3.3 million). Land and buildings include right-of-use assets of €442 thousand (2021: €442 thousand) related to leased properties that do not meet the definition of investment property.

Fair value hierarchy

The fair value of land and buildings, amounting to €6,283 thousand (2021: €3,365 thousand), has been categorised as a Level 3 fair value based on the inputs to the valuation techniques used.

The following table shows a reconciliation from opening to closing balances of Level 3 fair value.