TIDMERE
RNS Number : 8945O
Eredene Capital PLC
12 August 2014
12 August 2014
Eredene Capital PLC
("Eredene" or the "Company")
(a closed-ended investment company registered in England and
Wales with company number 5330839)
Preliminary results for the year ended 31 March 2014
Eredene Capital PLC, the AIM quoted investor in Indian
infrastructure, announces its preliminary results for the year
ended 31 March 2014.
Highlights
-- Net asset value ("NAV") attributable to equity shareholders
of GBP27.8m (2013 restated: GBP67.0m), representing 11.30p per
share (2013 restated: 18.52p) as at 31 March 2014
-- Return of capital to shareholders of GBP19.9m (17.2p per
share) completed in October 2013 to add to the GBP15.3m returned in
August 2012
-- Orderly process of realising investments in India continues
in line with stated strategy to extract maximum value from
portfolio with the sale of a 23% stake in Sattva CFS &
Logistics for GBP1.9m cash in July 2014
-- New management company appointed in December 2013 to aid the
divestment process and reduce operating costs
-- Cost reduction programme continues with operating costs
reduced from GBP3.4m in 2013 to GBP2.4m in 2014 and forecast to be
in the region of GBP1m in 2015
-- The board is considering the cancellation of the admission of
its shares to trading on AIM at some future date in order to
further reduce operating costs and better achieve its divestment
strategy
Enquiries:
Ocean Dial Asset Management Limited (Investment Manager &
Administrator)
David Cornell
Robin Sellers Tel: +44 20 7802 8900
Grant Thornton UK LLP (NOMAD)
Philip Secrett
Jen Clarke Tel: +44 20 7383 5100
Numis Securities Limited (Broker)
David Benda
Hugh Jonathan Tel: +44 20 7260 1000
Chairman's Statement
Introduction
Eredene has announced a number of significant strategic changes
over the last 18 months, all of which have been implemented with
the objective of returning value, over time, to shareholders. Ocean
Dial, whom the board appointed as investment manager to Eredene in
December 2013, have worked alongside the Eredene team to evaluate
how best to extract maximum value from the portfolio using their
considerable contacts and experience in India. The board's view is
that the realisation programme for the portfolio is likely to take
a further one to two years. However, as announced on 29 July 2014,
I am pleased to report that a significant stake in Sattva CFS &
Logistics was recently sold for GBP1.9m cash.
India's macroeconomic and political environment
The board continues to focus on its strategy of asset
realisations but this has proved difficult to achieve over the last
18 months given the macroeconomic environment in India,
characterised by high inflation, slowing growth, a depreciating
currency and an administration rocked by corruption scandals. The
BJP, led by Narendra Modi, achieved a resounding victory in the
National Elections in May. For the first time in India's recent
history, a business friendly, pro-market Government has an absolute
majority in Parliament. Furthermore, Narendra Modi is a leader with
a proven track record in delivering clean and effective governance
as Chief Minister of his home state of Gujarat. Initial measures by
the new Government indicate a renewed vigour to get the country
moving again.
Operating expenses
Eredene has continued its programme of cost reduction following
previous announcements that the board is determined to extract
maximum value for the benefit of shareholders. The Group's
operating expenses for the year were GBP2.4m (2013 restated:
GBP3.4m). Following the significant cost reduction programme
announced in December 2013 the operating costs for the year ended
31 March 2015 are expected to be in the region of GBP1m.
The board is considering the cancellation of the admission of
its shares to trading on AIM at some future date in order to
further reduce operating costs and better achieve its divestment
strategy
Financial Results
As at 31 March 2014, the Group had a net asset value ("NAV")
attributable to equity shareholders of GBP27.8m (2013 restated:
GBP67.0m), representing 11.30p per share (2013 restated: 18.52p)
following the return to shareholders of GBP19.9m in October 2013
and a total loss for the year of GBP19.2m (2013 restated: GBP7.6m),
most of which was incurred in the first half of the year.
The Group had total consolidated cash balances of GBP1.5m at 31
March 2014 (2013 restated: GBP17.8m) having received GBP8.2m from
the sale of Ocean Sparkle in June 2013 and returned GBP19.9m to
shareholders in October 2013 and GBP15.3m in August 2012. A further
GBP1.9m was received in July 2014 from the sale of a 23% stake in
Sattva CFS & Logistics.
Board changes
During the year Sir Christopher Benson and Mr Paul Gismondi
stepped down from the board. I would like to thank them both for
their valuable contribution, wise counsel and advice over many
years. In addition Mr Alastair King, founder and Chief Executive of
the company stepped down and Mr Gary Varley's consultancy was
terminated at the end of the financial year. I wish them both well
in their future endeavours. This smaller board, in combination with
Ocean Dial Asset Management, will provide the appropriate
governance required for the asset disposal programme.
Outlook
The Company has cash on the balance sheet to continue an orderly
process of realising its investments in India and we expect to
announce more sales in the course of the next 12 months with
commensurate returns of capital to shareholders.
Struan Robertson
Non-Executive Chairman
11 August 2014
Strategic Report (including the investment manager's report)
The Company
Eredene Capital PLC (the "Company") was registered in England
and Wales on 12 January 2005 and is a closed-ended investment
company listed on the AIM market of the London Stock Exchange. At
31 March 2014 the Company has one wholly owned Indian subsidiary,
Eredene Capital Advisors Private Limited, which provides
independent investment advisory services to the Eredene Group, and
seven wholly owned Mauritian holding company subsidiaries each of
which has a wholly owned Mauritian subsidiary acting as an
investment holding company for each investment in the Company's
portfolio. The Company also has six further Mauritian subsidiaries
which are dormant and in the process of being liquidated as they no
longer hold an investment for the Company.
Principal activities, investing policy and future
developments
The Company is an equity investor in Indian infrastructure
operating companies and holds its investments as part of an
investment portfolio. It has no restrictions or maximum exposure
limits on its investments. The Company does not currently envisage
making any further investments in new projects and intends to
concentrate on extracting maximum value from the existing
portfolio. All future substantive realisations are also expected to
give rise to a return of capital to shareholders.
Review of the business and net asset value
A detailed review of business and the performance of the
investment portfolio are provided in the investment manager's
report below.
As at 31 March 2014, the net asset value ("NAV") attributable to
equity shareholders was GBP27.8m (2013 restated: GBP67.0m),
representing 11.30p per share (2013 restated: 18.52p).
Principal risks and uncertainties including financial risk
management
The execution of the Group's strategy is subject to a number of
risks and uncertainties which include:
-- Infrastructure investments are early stage, long-term,
illiquid investments and so the Group may not be able to exit at
the time and at the price which it had forecast. The Group seeks to
mitigate those risks by diversifying its portfolio across different
sectors, different cities in India and different partners.
-- Investment in India is subject to a number of Government
rules and regulations governing foreign investment and taxation and
changes in those rules may adversely affect the Group's
investments. The Group monitors this risk by seeking advice from
specialist lawyers and tax advisors in India and by structuring its
investments accordingly.
-- The Group places its funds with financial institutions and so
is exposed to credit risk. The Group manages that risk by placing
funds primarily with institutions with a Standard & Poors
credit rating of A- or higher.
-- The Group receives interest income on its variable rate bank
balances and fixed rate treasury deposits. A reduction in interest
rates would reduce the Group's interest income.
-- The Group invests in Indian companies and the fair value of
those investments is denominated in Indian Rupees. A movement in
foreign exchange rates would affect the carrying value of those
investments and the unrealised gain or loss.
-- The Group's investee companies are, in certain cases,
dependent on bank financing and that financing may be difficult to
obtain or renew on acceptable commercial terms.
-- The Company is subject to the UK Bribery Act 2010 and
operates in a jurisdiction which has a higher perceived risk of
corruption. The Company has adopted an Anti-Corruption and Bribery
policy following consultation with its lawyers and taken
appropriate measures to ensure that it has effective procedures in
place to prevent corruption and bribery. This policy and the
procedures underpinning it have been communicated to all directors,
officers, employees and agents of the Company.
The Board will continue to monitor and, where possible, control
the risks and uncertainties which could affect the business.
Investment manager's report
Introduction
The last year has proved challenging for the infrastructure
sector in India with slowing GDP growth, a depreciating currency
and infrastructure projects and Government investment stagnating
ahead of the Indian national elections held in May 2014.
Investee Companies at 31 March 2014
Sattva CFS & Logistics' container freight station (CFS) at
Vichoor, a joint investment with the Sattva Business Group in Tamil
Nadu, paid a dividend for a sixth consecutive year. It owns and
operates on a 26 acre site and handles containers from Chennai Port
and also provides facilities for on-site assembly of imported
machinery. Customers include NYK Line, Maersk, CMA-CGM and MSC. The
CFS handled 78,689 TEUs (twenty foot equivalent units, the length
of a standard container) in 2013-14, compared to 74,000 TEUs in the
previous year, a 6% increase. The CFS posted annual revenue of
GBP3.84m, a year-on-year increase of 19% in Indian Rupee terms.
Since the year end a 23% stake in Sattva CFS & Logistics has
been sold to the Sattva Business Group for GBP1.9m in cash. The
remaining 16% stake is retained at a fair value of GBP1.25m.
A second joint investment with the Sattva Business Group in
Tamil Nadu, Sattva Conware CFS, is located on a 56 acre site within
reach of both Ennore and Chennai ports and the newly opened
Kattupalli container terminal. The CFS opened to EXIM business in
the last quarter of the financial year after it obtained all
relevant planning permissions including the CFS license and long
awaited deployment of customs staff at the site. The facility has a
92,000 square feet container yard and a 60,000 square feet EXIM cum
bonded warehouse in addition to a 14,000 square feet domestic
warehouse. Major cargo currently handled at the CFS include rice,
granite and auto components.
Contrans Logistics' CFS near Pipavav port in Gujarat, one of two
Contrans projects in Northwest India, recorded a small profit for
the second consecutive year on the back of an improvement in
container volumes. The CFS saw a year-on-year growth in container
volumes from 17,700 TEUs to 19,000 TEUs on the back of a pick up in
exports of cotton and agricultural commodities in the second half
of the financial year. Major customers included shippers Maersk
India, Hapag-Lloyd and J.M. Baxi & Co, global chemical and
textile company GHCL. In addition to the 23 acre CFS the company
has around 55 acres of surplus land at Pipavav which it will
gradually sell over a period of time to focus on its core
operations.
Options are being explored to sell Contrans Logistics' other
project, a 128 acre greenfield site at Baroda in central Gujarat
which has planning permission to develop a rail and road Inland
Container Depot (ICD) on the busy Delhi-Mumbai freight corridor.
Currently the company is in the process of renewing commercial
permissions for this land, following which a formal sale process
for the land shall commence during the ongoing financial year.
Eredene has two logistic parks in East India with investment
partner Apeejay Surrendra Group, the Kolkata-based tea and shipping
conglomerate. The two facilities - at Haldia and Kalinganagar - are
operated in a 50/50 joint company, Apeejay Infra-Logistics. They
offer integrated services for multi-model logistics through
warehousing, container logistics and transportation, and both have
customs bonded facilities.
-- The Apeejay Infra-Logistics logistics park in Haldia, West
Bengal, is located on a 90 acre site close to the Port of Haldia
with a bonded warehouse of 54,000 square feet, three domestic
warehouses totalling 86,000 square feet and a container yard of
300,000 square feet. The facility, which commenced full EXIM
operations during the financial year, handled 5,600 TEUs in the
period serving major shipping lines including MSC, CMA-CGM, Tata
NYK, Hanjin and Maersk, and leading domestic companies such as
Hindustan Unilever and Tata Steel. During the second quarter of the
financial year Haldia port put an embargo on handling of non-scrap
cargo by the private facilities on the back of declining container
volumes at Haldia port. This has severely affected the business
performance of the company and unless the port infrastructure
improves, which shall lead to a revival of container volumes at the
port, and the embargo on cargo is uplifted in the near future, the
business growth will remain limited.
-- The Apeejay Infra-Logistics' 30 acre logistics park at
Kalinganagar in Orissa State, close to local steel and
metallurgical plants, has a domestic warehouse of 65,000 square
feet, a bonded warehouse of 19,000 square feet and a container yard
of 185,000 square feet. The facility, licensed as an ICD, commenced
EXIM operations in May 2014. The domestic warehouse and a
substantial area of the open yard are already leased to logistics
services provider Tata TKM.
MJ Logistic Services (MJL), a multi-user third party logistics
business in North India, posted revenue of GBP3.8m for the
financial year ended 31 March 2014, a 6% increase over the previous
year in Indian Rupee terms, and generated positive Earnings before
Tax, Interest, Depreciation and Amortisation.
MJL increased its total warehousing capacity to 800,000 square
feet. Its 200,000 square feet fully automated hub warehouse at
Palwal, on the Delhi-Agra Highway, provides both ambient and cold
storage warehousing. The major ambient customer is Tata Motors
Limited. Cold chain customers include Pepsico, Subway, DuPont
Danisco and Unilever. A second cold chamber project was added
during the financial year taking the cold storage capacity just
above 5,000 pallets.
Eredene reached a mutual settlement with the promoter and
minority shareholder of Matheran Realty (Matheran) in February
2014, following which it has become a 100% shareholder of Matheran
and Gopi Resorts. The settlement is expected to facilitate the
process of appointing a new developer on the basis of a joint
development agreement in order to complete the project. Eredene is
now in full control of the disposal process. Suitable developers
are being shortlisted to buy the project, against the economic
backdrop of tough market conditions for developer finance and a
subdued domestic real estate market.
India's macroeconomic and political environment
All recent events in India have been over shadowed by an
historic election result for the BJP led by Narendra Modi. For the
first time in 30 years, and against best expectations, a single
political party won a clear mandate from Indian voters for a five
year mandate. To date there has been much rhetoric about future
style of governance but little of substance. Modi's efforts are
centred on streamlining decision making and improving
accountability. In the immediate future the Government will focus
on reviving economic growth by bringing back on track
infrastructure projects that have stalled, facilitated by better
process, more energy and real intent. Whilst listed equity markets
have started to price in this improved economic outlook, it is
natural that in the private equity space, and particularly
greenfield operations, they will take more time to filter
through.
Portfolio summary
Sattva CFS & Logistics - Vichoor CFS
Fair value as at 31 March GBP3.0m
2014
----------------------------- -----------------------------
Amount invested to 31 March GBP0.7m
2014
----------------------------- -----------------------------
Ownership stake at 31 March
2014 39%
----------------------------- -----------------------------
Realisation proceeds since GBP1.9m (for 23% of Sattva
31 March 2014 CFS & Logistics)
----------------------------- -----------------------------
Sector Container Logistics
----------------------------- -----------------------------
Location Chennai, Tamil Nadu, South
East India
----------------------------- -----------------------------
Progress to date Profitable & dividend paying
----------------------------- -----------------------------
Investment partner Sattva Business Group
----------------------------- -----------------------------
Sattva Conware
Fair value as at 31 March GBP5.6m
2014
----------------------------- ---------------------------------
Amount invested to 31 March GBP4.2m
2014
----------------------------- ---------------------------------
Ownership stake at 31 March
2014 79%
----------------------------- ---------------------------------
Sector Container Logistics
----------------------------- ---------------------------------
Location Ennore, Tamil Nadu, South
East India
----------------------------- ---------------------------------
Progress to date Operational & revenue generating
----------------------------- ---------------------------------
Investment partner Sattva Business Group
----------------------------- ---------------------------------
Contrans Logistic
Fair value as at 31 March GBP5.5m
2014
----------------------------- ----------------
Amount invested in total to GBP5.7m
31 March 2014
----------------------------- ----------------
Ownership stake at 31 March
2014 44%
----------------------------- ----------------
Website www.contrans.in
----------------------------- ----------------
Contrans Project One Pipavav CFS
--------------------- ---------------------------------
Sector Container Logistics
--------------------- ---------------------------------
Location Pipavav, Gujarat, North West
India
--------------------- ---------------------------------
Progress to date Operational & revenue generating
--------------------- ---------------------------------
Contrans Project Two Baroda ICD
--------------------- ----------------------------
Sector Container Logistics
--------------------- ----------------------------
Location Baroda, Gujarat, North West
India
--------------------- ----------------------------
Progress to date Pre-construction phase
--------------------- ----------------------------
Apeejay Infra-Logistics
Fair value as at 31 March GBP0.8m
2014
----------------------------- ----------------------
Amount invested in total to GBP2.9m
31 March 2014
----------------------------- ----------------------
Ownership stake 50%
----------------------------- ----------------------
Investment Partner Apeejay Surrendra
www.apeejaygroup.com
----------------------------- ----------------------
Apeejay Infra-Logistics Project Haldia Logistics Park
One
-------------------------------- ---------------------------------
Sector Logistics Park
-------------------------------- ---------------------------------
Location Haldia, West Bengal, East
India
-------------------------------- ---------------------------------
Progress to date Operational & revenue generating
-------------------------------- ---------------------------------
Apeejay Infra-Logistics Project Kalinganagar Logistics Park
Two
-------------------------------- ---------------------------------
Sector Logistics Park
-------------------------------- ---------------------------------
Location Kalinganagar, Orissa, East
India
-------------------------------- ---------------------------------
Progress to date Operational & revenue generating
-------------------------------- ---------------------------------
MJ Logistic Services
Fair value as at 31 March GBP8.7m
2014
----------------------------- ---------------------------------
Amount invested to 31 March GBP11.0m
2014
----------------------------- ---------------------------------
Ownership stake at 31 March
2014 86%
----------------------------- ---------------------------------
Website www.mjlsl.com
----------------------------- ---------------------------------
Sector Warehousing & Third Party
Logistics
----------------------------- ---------------------------------
Location Delhi region, North India
----------------------------- ---------------------------------
Progress to date Operational & revenue generating
----------------------------- ---------------------------------
Matheran Realty and Gopi Resorts
Fair value as at 31 March GBP3.2m
2014
---------------------------- --------------------------------------
Amount invested in total to GBP16.1m
31 March 2014
---------------------------- --------------------------------------
Ownership stake at 31 March
2014 * 100% - Matheran Realty Pvt Ltd
* 100% - Gopi Resorts Pvt Ltd
(direct stake and indirect
stake through Matheran)
---------------------------- --------------------------------------
Sector Urban development
---------------------------- --------------------------------------
Location Mumbai region, Maharashtra,
West India
---------------------------- --------------------------------------
Progress to date Construction on hold
---------------------------- --------------------------------------
Outlook
The Company has cash on the balance sheet to continue an orderly
process of realising its investments in India and we expect to
announce more sales in the course of the next 12 months with
commensurate returns of capital to shareholders.
Approval
This strategic report was approved by the board and signed on
its behalf by
Struan Robertson
Non-Executive Chairman
11 August 2014
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2014
Restated
Year Year
ended 31 ended 31
March 2014 March 2013
Note GBP'000 GBP'000
Portfolio return and revenue
Realised losses over fair value on (529) -
disposal of investments
Unrealised adjustments on the revaluation
of investments 4 (15,691) (4,681)
Other portfolio income 86 70
------------ ------------
(16,134) (4,611)
Operating expenses (2,418) (3,421)
(Loss) / Gain on foreign currency
transactions (278) 323
Other expenses (334) (4)
Finance income 32 115
Loss before taxation (19,132) (7,598)
Taxation charged 2 (12) (2)
Loss after taxation (19,144) (7,600)
Other comprehensive (losses)/income
Foreign currency translation (52) 3
Total comprehensive loss for the period (19,196) (7,597)
------------ ------------
Loss per share Basic and diluted 3 (6.21)p (1.93)p
Consolidated Statement of Financial Position
At 31 March 2014
Restated Restated
31 March 31 March 1 April
2014 2013 2012
Note GBP'000 GBP'000 GBP'000
Non-Current Assets
Property, plant and equipment 13 8 1
Investments held at fair value 4 26,832 33,689 49,660
Intangible assets - 104 129
Other receivables 5 5 -
26,850 33,806 49,790
Current Assets
Trade and other receivables 70 39 56
Cash and cash equivalents 1,516 17,799 40,834
---------- ---------
1,586 17,838 40,890
Non-current assets held for sale 5 - 16,198 -
Total Assets 28,436 67,842 90,680
----------- ---------- ---------
Current Liabilities
Trade and other payables (297) (488) (169)
Current income tax liabilities - (2) -
Provisions (310) (310) (362)
(607) (800) (531)
Non-Current Liabilities
Corporation tax liabilities (5) - -
Total Liabilities (612) (800) (531)
TOTAL NET ASSETS 27,824 67,042 90,149
=========== ========== =========
Equity
Share capital 24,616 36,199 44,691
Share premium - 16,268 16,268
Special reserve 33,630 17,311 32,826
Capital redemption reserve - 8,491 -
Foreign exchange deficit (49) 3 -
Other reserves 997 996 991
Retained deficit (31,370) (12,226) (4,627)
TOTAL EQUITY 27,824 67,042 90,149
=========== ========== =========
Number of ordinary shares in issue
(000s) 246,156 361,994 446,907
NAV per share Basic and diluted 3 11.30p 18.52p 20.17p
Consolidated Statement of Changes in Equity
for the year ended 31 March 2014
Capital Foreign Share
Share Share Special redemption Other exchange Retained holders
capital premium reserve reserve reserve reserve deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31
March 2014
As at 1 April
2013 (restated) 36,199 16,268 17,311 8,491 996 3 (12,226) 67,042
--------- --------- --------- ------------ --------- ---------- --------- ---------
Loss for the
period - - - - - - (19,144) (19,144)
Other comprehensive
income for the
period - - - - - (52) - (52)
Total comprehensive
income for the
period - - - - - (52) (19,144) (19,196)
Share based
payment - - - - 1 - 1
Purchase and
cancellation
of treasury
shares (11,583) - (8,341) - - - - (19,924)
Stamp duty - - (99) - - - - (99)
Reduction of
share premium - (16,268) 24,759 (8,491) - - - -
As at 31 March
2014 24,616 - 33,630 - 997 (49) (31,370) 27,824
--------- --------- --------- ------------ --------- ---------- --------- ---------
Year ended 31
March 2013
As at 1 April
2012 (as previously
reported) 44,691 16,268 32,826 - - (256) (6,121) 87,408
--------- --------- --------- ------------ --------- ---------- --------- ---------
Restatement
(see note 23) - - - - 991 256 1,494 2,741
--------- --------- --------- ------------ --------- ---------- --------- ---------
As at 1 April
2012 (restated) 44,691 16,268 32,826 - 991 - (4,627) 90,149
--------- --------- --------- ------------ --------- ---------- --------- ---------
Loss for the
period - - - - - - (7,600) (7,600)
Other comprehensive
income for the
period - - - - - 3 - 3
--------- --------- --------- ------------ --------- ---------- --------- ---------
Total comprehensive
income for the
period - - - - - 3 (7,600) (7,597)
Share based
payment - - - - 5 - - 5
Purchase and
cancellation
of treasury
shares (8,492) - (15,515) 8,491 - - 1 (15,515)
As at 31 March
2013 36,199 16,268 17,311 8,491 996 3 (12,226) 67,042
--------- --------- --------- ------------ --------- ---------- --------- ---------
Consolidated Cash Flow Statement
For the year ended 31 March 2014
Year ended Restated
31 March 2014 Year ended
31 March
2013
GBP'000 GBP'000
Cash flow from operating activities
Loss before taxation (19,132) (7,597)
Adjustments for:
Finance income - (115)
Dividend income (87) (71)
Realised profits over fair value
on disposal of investments 564 -
Unrealised adjustments on the revaluation
of investments 15,691 4,681
Share based payment charge 2 4
Foreign exchange differences - 3
Depreciation 6 1
Amortisation 104 25
Decrease/(increase) in trade and
other receivables (31) 14
(Decrease)/increase in trade and
other payables (187) 319
Decrease in provisions - (52)
Taxation paid (12) -
Net cash used in operating activities (3,082) (2,788)
--------------- ----------
Cash flows from investing activities
Purchase of property, plant and
equipment (12) (8)
Purchase of investments (1,362) (4,908)
Disposal of investments 8,160 -
Interest received - 115
Dividends received 87 71
Net cash used in investing activities 6,873 (4,730)
--------------- ----------
Cash flows from financing activities
Purchase of treasury shares (20,023) (15,514)
Net cash used in financing activities (20,023) (15,514)
--------------- ----------
Net decrease in cash and cash equivalents (16,232) (23,032)
Cash and cash equivalents at the
beginning of the period 17,799 40,834
Exchange losses (51) (3)
Cash and cash equivalents at the
end of the period 1,516 17,799
=============== ==========
Notes forming part of the preliminary results
for the year ended 31 March 2014
1. Accounting policies
Eredene Capital PLC (the "Company") is a company incorporated
and domiciled in the United Kingdom and quoted on the London Stock
Exchange's AIM market.
This preliminary results announcement was authorised for issue
by the Directors on 11 August 2014.
The Directors have considered the appropriateness of preparing
the accounts on a going concern basis in light of the decision to
realise the Group's investments in an orderly basis. There is no
certainty over the timeframe that the investments will be realised
and the Directors believe that the business will be able to realise
its assets and discharge its liabilities in the normal course of
business.
The directors, therefore, consider that the Group has adequate
resources to continue in operational existence for the foreseeable
future and so it remains appropriate to prepare the financial
statements on a going concern basis.
A. Statement of Compliance
This preliminary results announcement has been extracted from
the consolidated nancial statements of the Company which have been
prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and their
interpretations issued or adopted by the International Accounting
Standards Board as adopted for use in the European Union ("IFRS")
and in accordance and compliance with the Companies Act 2006.
The financial information contained within this preliminary
results announcement does not constitute the company's statutory
accounts for 2013 or 2014. Statutory accounts for the years ended
31 March 2013 and 31 March 2014 have been reported on by the
Independent Auditors. The Independent Auditors' Report on the
Annual Report and Financial Statements for 2013 was unqualified,
did not contain a statement under 498(2) or 498(3) of the Companies
Act 2006, and did not draw attention to any matters by way of
emphasis. The Independent Auditors' Report on the Annual Report and
Financial Statements for 2014 was unqualified, did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006, but
drew attention by way of emphasis to the disclosures made
concerning the continued appropriateness of preparing the financial
statements on the going concern basis.
Statutory accounts for the year ended 31 March 2013 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 March 2014 will be delivered to the Registrar in
due course.
New accounting standards and changes to existing accounting
standards
The new standards adopted during the year are outlined
below.
-- IFRS 10 Consolidation Financial Statements
-- IFRS 11 Joint Arrangements
-- IFRS 12 Disclosure of Interests in Other Entities
-- IFRS 13 Fair Value Measurement
The following standards and interpretations which have not been
applied in these financial statements were in issue but not yet
effective at year end. They are deemed to be not relevant to the
Group or to have no material impact on the financial statements of
the Group when they come into effect:
-- IAS 27 Separate Financial Statements
-- IAS 28 Investments in Associates and Joint Ventures
-- IAS 19 Employee Benefits
-- IAS 12 (amended) Deferred Tax: Recovery of Underlying Assets
-- IFRS 7 (amended) Disclosures-Offsetting Financial Assets and Financial Liabilities
-- IAS 32 (amended) Offsetting Financial Assets and Financial Liabilities
-- IAS 35 (amended) Recoverable amounts disclosures for non-financial assets
-- IAS 39 (amended) Novation of Derivatives and Continuation of Hedge Accounting
Restatement - Impact of the application of IFRS 10
The Group applied, for the rst time, IFRS 10 Consolidated
Financial Statements, that requires restatement of previous nancial
statements. Further, the application of IFRS 13 Fair Value
Measurement resulted in additional disclosures in the consolidated
nancial statements.
The nature and the impact of this new standard and amendment is
described below:
IFRS 10 Consolidated Financial Statements
Under IFRS 10, MJ Logistics and Sattva Conware CFS have been
classi ed as investment entities. Previously, they were carried at
fair value in accordance with IAS 39 having taken the exemption
allowed under IAS 28.
Impact on statement of comprehensive income
As a result of this change in treatment the total return
generated by the investment entities is no longer presented on a
line-by-line basis but combined and shown as a new line in the
Statement of comprehensive income - "Unrealised adjustments on the
revaluation of investments". This has resulted in a restatement of
prior year gures where previously consolidated line items are now
aggregated into this line.
Translation of investment entity subsidiaries which are
non-sterling denominated will no longer be shown as part of other
comprehensive income "Foreign currency translations" and will now
be included as part of the fair value movement on investment entity
subsidiaries held at fair value. Consequently these translation
amounts will no longer be shown as a movement in the translation
reserve and it will become a movement in capital reserves. IFRS 10
has been retrospectively applied as if IFRS 10 was in effect from 1
April 2012. The translation reserve has been restated to re ect the
impact of IFRS 10 for the year to 31 March 2012 by GBP256,000 and
for the year to 31 March 2013 by GBP469,000 with corresponding
movements in capital reserves. Basic and diluted earnings per share
of the Group have been restated as a result of adopting IFRS
10.
Impact on statement of nancial position
The closing fair value of the net assets of the investment
entities is now combined and stated in 'Investments held at fair
value through profit and loss'. This has resulted in a restatement
of prior year gures where previously consolidated line items are
now aggregated into this line. Cash balances held in investment
entity subsidiaries are aggregated into the "Investments held at
fair value" line and not consolidated. Group transactions which
would have previously been eliminated on consolidation are no
longer eliminated. An opening balance sheet has also been provided
as at 1 April 2012 this year to show the effect on the opening
balances of the prior year.
Impact on cash ow statement
The cash ow statement is impacted by the adoption of IFRS 10
because the cash held by investment entity subsidiaries is no
longer consolidated. It now forms part of the fair value of the
investment entity subsidiary.
IFRS 13 Fair Value Measurement
The Group has adopted IFRS 13 which relates to the fair value
measurement of assets and liabilities. Investments are recognised
and de-recognised on the date where the purchase or sale of an
investment is under a contract whose terms require the delivery or
settlement of the investment. The Group manages its investments
with a view to pro ting from the receipt of investment income and
capital appreciation from changes in the fair value of equity
investments.
Unquoted investments are designated at fair value through pro t
and loss and are subsequently carried in the balance sheet at fair
value. Fair value is measured using the International Private
Equity and Venture Capital valuation guidelines (IPEV), refer to
Note 4 for further details of the Group's valuation policies.
All investments are initially recognised at the fair value of
the consideration given and held at this value until it is
appropriate to measure fair value on a different basis, applying
the Group's valuation policies.
IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations
In the prior year, investments in Matheran and Gopi were
classified as held for resale on account that they met the criteria
laid out in IFRS 5. During the current year, the Board withdrew
from the sale and as a consequence, both investments have been
reclassified back to investments held at fair value through profit
and loss.
B. Basis of preparation
The nancial statements are presented in sterling, the functional
currency of the Company, rounded to the nearest thousand pounds
(GBP000) except where otherwise indicated. The preparation of
nancial statements in conformity with IFRS requires management to
make judgments, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. In the process of applying the
Group's accounting policies, management has made the following
judgments, which have the most signi cant effect on the amounts
recognised in the nancial statements:
Assessment as investment entity
Entities that meet the de nition of an investment entity within
IFRS 10 are required to account for most investments in controlled
entities at fair value through pro t and loss. Subsidiaries that
provide investment related services or engage in permitted
investment related activities with investees continue to be
consolidated unless they are also investment entities. The criteria
which de ne an investment entity are currently as follows:
-- An entity that obtains funds from one or more investors for
the purpose of providing those investors with investment
services;
-- An entity that commits to its investors that its business
purpose is to invest funds solely for returns from capital
appreciation, investment income or both;
-- An entity that measures and evaluates the performance of
substantially all of its investments on a fair value basis.
The Group's annual and interim accounts clearly state its
objective of investing directly into portfolio investments for the
purpose of generating returns in the form of capital appreciation.
The Group has always reported its investment in portfolio
investments at fair value. It also produces reports for investors
of the funds it manages and its internal management report on a
fair value basis.
The Board has concluded that the Company meets the additional
characteristics of an investment entity, in that it has more than
one investment; the investments are predominantly in the form of
equities and similar securities; it has more than one investor and
its investors are not related parties. The Board has also concluded
that the Company therefore meets the de nition of an investment
entity. These conclusions will be reassessed on an annual basis for
changes in any of these criteria or characteristics.
Application and signi cant judgments
The preparation of the Group's financial statements requires the
directors to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities. Estimates and judgements are
continually evaluated and are based on historical experience and
other factors including expectations of future events that are
believed to be reasonable under the circumstances. Actual results
may differ from these estimates.
The directors consider that the following estimates and
judgements are likely to have the most significant effect on the
amounts recognised in the financial statements.
Accounting for investments
The most signi cant estimates relate to the fair valuation of
the investment portfolio. Two entities, MJ Logistics and Sattva
Conware, which the Group previously consolidated, will now be
recognised at fair value.
The Group's investments held at fair value through profit or
loss are valued based on the International Private Equity and
Venture Capital Guidelines. An independent valuer, Grant Thornton
India, was engaged to value the investments under those Guidelines.
Apart from Apeejay Infra-Logistics the valuations are made based on
market conditions and information about the investment. These
estimates are subjective in nature and involve uncertainties and
matters of significant judgement (e.g interest rates, volatility
and estimated cash flows). See Note 4 for details of the valuation
methodologies employed.
The determination of fair value for an unlisted investment
requires the use of estimates and assumptions. Revisions to
accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision
affects both current and future periods.
Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held
for sale when:
-- they are available for immediate sale;
-- management is committed to a plan to sell;
-- it is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn;
-- an active programme to locate a buyer has been initiated;
-- the asset or disposal group is being marketed at a reasonable
price in relation to its fair value; and
-- a sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for
sale are measured at the lower of their carrying amount immediately
prior to being classified as held for sale in accordance with the
Group's accounting policy; and fair value less costs to sell. In
the prior year, three investments were classified held for sale and
disposal groups (Ocean Sparkle, Matheran and Gopi). At year end,
Ocean Sparkle had been sold and Matheran and Gopi no longer met the
criteria, therefore they were reclassified as investments held at
fair value through profit and loss.
The accounting policies set out below have been applied
consistently to all periods presented in these consolidated nancial
statements. The accounting policies have been consistently applied
across all Group entities for the purposes of producing these
consolidated
C. Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control, as
de ned by IFRS 10, is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over
the investee. Speci cally, the Group controls an investee if and
only if the Group has:
-- Power over the investee (i.e. existing rights that give it
the current ability to direct the relevant activities of the
investee);
-- Exposure, or rights, to variable returns from its involvement with the investee; and
-- The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar
rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- Rights arising from other contractual arrangements; and
-- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the elements of control. Most of the Group's interests in
subsidiaries are recognised as fair value through pro t or loss,
and measured at fair value. This represents a change in accounting
policy in the current year. Eredene Capital Advisors Private
Limited, which provides investment advisory services, is not classi
ed at fair value through pro t and loss and continues to be
consolidated. The Group also continues to consolidate the holding
companies in Mauritius through which the investments are held.
D. Impairment of intangible assets (including goodwill)
Goodwill is not subject to amortisation but is tested for
impairment annually and whenever events or circumstances indicate
that the carrying amount may not be recoverable. Assets that are
subject to amortisation are tested for impairment when events or a
change in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by
which the carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of the asset's fair value less
costs to sell and the value in use. For the purposes of assessing
impairments, assets are grouped at the lowest levels for which
there are identifiable cash flows (i.e. cash generating units). In
prior years, the Group has recognised an intangible asset relating
to a pipeline of investments (2013: GBP104,000) At year end, the
Board concluded the pipeline no longer held any value and the
remaining value was impaired down to GBPnil.
E. Property, plant and equipment
Property, plant and equipment is stated at cost less
depreciation and impairment. Depreciation on property plant and
equipment is provided at rates calculated to write off the cost
less estimated residual value of each asset over its expected
useful life. It is calculated at the following rates:
Fixtures and fittings - 6-20% per annum straight line basis
Office equipment - 5-33% per annum straight line basis
Buildings - 3-22% per annum straight line basis
Vehicles and machinery - 5-10% per annum straight line basis
F. Financial assets
Investments held at fair value through profit or loss
Investments in which the Group has a long-term interest and over
whose operating and financial policies it exerts significant
influence, but which are held as part of an investment portfolio,
the value of which is through their marketable value as part of a
basket of investments, are not regarded as joint ventures or
associated undertakings. The treatment adopted is in accordance
with IAS 39 'Financial Instruments: Recognition and Measurement'
and the exemptions applying to venture capital organisations in IAS
28 'Investments in Associates' and IAS 31 'Interests in Joint
Ventures'.
These investments are measured at fair value through profit or
loss. Gains and losses arising from changes in the fair value of
these investments, including foreign exchange movements, are
included in profit or loss for the period.
Unquoted investments are valued using appropriate valuation
methodologies, based on the International Private Equity and
Venture Capital Guidelines, which reflect the price at which an
orderly transaction would take place between knowledgeable and
willing market participants.
Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held
for sale when:
-- they are available for immediate sale;
-- management is committed to a plan to sell;
-- it is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn;
-- an active programme to locate a buyer has been initiated;
-- the asset or disposal group is being marketed at a reasonable
price in relation to its fair value; and
-- a sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for
sale are measured at the lower of:
-- their carrying amount immediately prior to being classified
as held for sale in accordance with the Group's accounting policy;
and
-- fair value less costs to sell.
In the prior year, the controlling stake in Matheran and its
subsidiary Gopi had been classified as held for sale on acquisition
as it fulfilled the criteria. In the current year, the sale did not
complete and therefore the investment has been reclassified back to
an investments held at fair value through profit or loss.
Loans and receivables
-- Other receivables
-- Other receivables are recognised and carried at amortised
cost less an allowance for any uncollectible amounts. Unless
otherwise indicated, the carrying amount of the group's financial
assets are a reasonable approximation to their fair value.
-- Cash and cash equivalents
-- Cash and cash equivalents comprise cash at bank and in hand
and short term deposits of less than three months maturity.
Financial liabilities held at amortised cost
-- Borrowings
-- Borrowings are recognised initially at fair value. Borrowings
are subsequently carried at amortised cost.
-- Trade and other payables
-- Trade payables and other payables are recognised and carried
at amortised cost and are a short term liability of the Group.
G. Foreign currency
Foreign currency transactions of individual companies are
translated at the rates ruling when they occurred. Foreign currency
monetary assets and liabilities are translated at the rate of
exchange ruling at the balance sheet date. Any differences are
taken to the income statement.
Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated at foreign
exchange rates ruling at the date the fair value was
determined.
On consolidation, the assets and liabilities of the Group's
overseas subsidiaries are translated at exchange rates prevailing
on the balance sheet date. Income and expense items are translated
at the average exchange rates for the period. Exchange differences
arising, if any, are classified as equity and translated to a
foreign exchange reserve.
H. Derivative financial instruments
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently
re-measured at their fair value. Changes in the fair value of the
instruments are recognised immediately in the income statement.
I. Portfolio return and revenue
Change in fair value of equity investments represents
revaluation gains and losses on the Group's portfolio of
investments.
Dividends receivable from equity shares are included within
other portfolio income and recognised on the ex-dividend date or,
where no ex-dividend date is quoted, are recognised when the
Group's right to receive payment is established.
J. Share-based payments
Where share options are awarded to employees, the fair value of
the options at the date of grant is determined using an option
pricing model and charged to the income statement over the vesting
period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
balance sheet date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options that eventually vest.
Where equity instruments are granted to persons other than
employees, the income statement is charged with fair value of goods
and services received. If it is not possible to identify the fair
value of these goods or services provided, the income statement is
charged with the fair value of the options granted.
K. Deferred tax
Deferred tax expected to be payable or recoverable on
differences at the balance sheet date between the tax bases of
assets and liabilities and their carrying amounts for financial
reporting purposes is accounted for using the balance sheet
liability method. Deferred tax liabilities are generally recognised
for all taxable temporary differences, and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised.
Such assets and liabilities are not recognised if the temporary
differences arise from goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction that at the time of the transaction,
affects neither the taxable profit nor the accounting profit.
Deferred tax is calculated at the rates of taxation enacted or
substantively enacted at the balance sheet date.
L. Pension costs
The Company contributes to directors' personal money-purchase
pension schemes. Contributions are charged to the income statement
in the period in which they become payable.
M. National Insurance on share options
To the extent that the share price at the balance sheet date is
greater than the exercise price on options granted under unapproved
schemes, provision for any national insurance contributions has
been made based on the prevailing rate of national insurance. The
provision is accrued over the performance period attaching to the
award.
N. Operating leases
Operating lease rentals are charged to the income statement on a
straight-line basis over the term of the lease.
2. Taxation
Restated
Year ended
Year ended 31 March
Recognised in the income statement: 31 March 2014 2013
GBP'000 GBP'000
Current tax expense
Corporate income tax 12 2
Deferred tax
Movement in deferred tax asset - -
Income tax 12 2
--------------- ------------
The tax assessed for the period differs from the standard rate
of corporation tax in the UK applied to the Group profit before
tax. The differences are explained below:
Restated
Year ended Year ended
31 March 31 March
2014 2013
GBP'000 GBP'000
Loss on ordinary activities before
tax
in respect of continuing operations (19,132) (7,598)
----------- ------------
Loss on ordinary activities at the
standard rate of
corporation tax in the UK for the period
of 23% (2013: 24%) (4,400) (1,823)
Effects of:
Expenses not deductible for tax purposes 73 109
Adjustment to capitalised expenses
deductible for tax purposes 6
Depreciation less than capital allowances 2 1
Non-taxable losses/(gains) on investments 3,597 (68)
Non-UK recoverable overseas losses 286 342
Non-taxable dividend income - (17)
Tax losses carried forward 454 311
Non-taxable finance income - (1)
Prior period adjustment - 1,142
Tax charge for period 12 2
----------- ------------
The change in the tax rate applied compared to the previous year
reflects the reduction in the UK corporation tax rate from 1 April
2012.
Deferred tax
No deferred tax asset has been recognised on unutilised taxable
losses due to lack of certainty that taxable profits will be
available against which deductible temporary differences can be
utilised. The unutilised tax losses carried forward are GBP8.0m
(2013: GBP6.1m).
3. Earnings per share and net assets per share
The calculation of the basic earnings per share is based on the
loss for the period attributable to equity shareholders of GBP19.1m
(2013 restated: loss of GBP7.6m) and the weighted average number of
shares in issue during the period of 308,994,475 (2013:
393,865,608). 23.1m shares under option (2013: 23.1m) were
non-dilutive due to the Company being loss making.
The calculation of net asset value per share is based on the net
assets attributable to equity shareholders of GBP27.8m (2013
restated: GBP67.0m) and the number of shares in issue at the period
end of 246,156,210 (2013: 361,994,426).
4. Investments held at fair value through profit or loss
The Group has the following principal investments held at fair
value through profit or loss, all of which are incorporated in
India:
Net Profit/
Class Assets/ (loss) Date of % held % held
of (Liabilities) before financial 31 March 31 March
shares GBP'000 tax GBP'000 statements 2014 2013
held
Apeejay Infra-Logistics Ord. 4,977 (636) 31-Mar-13 50.0% 50.0%
Contrans Logistic Ord. 6,308 123 31-Mar-13 44.0% 44.0%
Gopi Resorts A & B (752) (1,881) 31-Mar-13 100.0% 91.3%
Matheran Realty A 4,972 (4,808) 31-Mar-13 100.0% 87.1%
MJL Logistic Services Ord. 7,478 (156) 31-Mar-14 86.0% 86.0%
Sattva CFS & Logistics Ord. 4,144 1,212 31-Mar-14 39.0% 39.0%
Sattva Conware Ord. 4,240 (12) 31-Mar-14 79.0% 83.0%
At 31 March 2014 the cost and valuation of the Group's
investments was as follows:
Fair value Fair Value
Historical Prior periods adjustment adjustments Fair
cost Fair Value on shares 1/4/13 - value
at 31/3/14 adjustments disposed 31/3/14 at 31/3/14
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Apeejay Infra-Logistics 2,900 1,206 - (3,356) 750
Contrans Logistic 5,687 2,871 - (3,042) 5,516
Gopi Resorts 2,542 (132) - (1,419) 991
Matheran Realty 13,553 (7,707) - (3,623) 2,223
MJ Logistic Services 11,001 (272) - (2,022) 8,707
Sattva CFS & Logistics 697 3,770 - (1,421) 3,046
Sattva Conware 4,177 2,230 - (808) 5,599
40,557 1,966 - (15,691) 26,832
----------- ------------- ----------- ------------- ----------------
At 31 March 2013 the restated cost and valuation of the Group's
investments was as follows:
Fair value Fair Value
Historical Prior periods adjustment adjustments Fair
cost Fair Value on shares 1/4/12 - value
at 31/3/13 adjustments disposed 31/3/13 at 31/3/13
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Apeejay Infra-Logistics 2,900 2,328 - (1,122) 4,106
Contrans Logistic 5,618 2,631 - 240 8,489
MJ Logistic Services
Ltd 10,850 561 - (833) 10,578
Sattva CFS & Logistics 697 3,372 - 398 4,467
Sattva Conware Pvt
Ltd 3,819 61 - 2,169 6,049
----------- ------------- ----------- ------------- ---------------
23,884 8,953 - 852 33,689
Reclassified as
asset
held for sale
Ocean Sparkle 7,343 612 - 769 8,724
Matheran Realty
Pvt Ltd 12,770 (2,182) - (5,525) 5,063
Gopi Resorts Pvt
Ltd 2,543 644 - (776) 2,411
46,540 8,027 - (4,680) 49,887
----------- ------------- ----------- ------------- ---------------
The Group's holdings in the above investments are all held by
wholly owned intermediate Mauritian registered holding
companies.
Valuation Policy
The investments were independently valued at 31 March 2014 by
Grant Thornton India. The investments are valued using appropriate
valuation methodologies, in accordance with the International
Private Equity and Venture Capital Guidelines endorsed by the
British & European Venture Capital Associations, which reflect
the amount for which an asset could be exchanged between
knowledgeable, willing parties on an arm's length basis. The
companies in which the Group has invested are at various stages of
development. The methodologies used in the valuation of these
investments include Earnings Multiples, Net Assets and Discounted
Cash Flow.
Whilst Grant Thornton India has independently valued the
investments as explained above, the directors have valued the
investment in Apeejay Infra-Logistics based upon on-going interest
and discussions with third parties about the possible sale of this
investment.
Earnings Multiple - this methodology involves the application of
an earnings multiple to the earnings of the business being valued
in order to derive a value for the business. This methodology is
appropriate where the business has an identifiable stream of
continuing earnings that can be considered to be maintainable. A
number of earnings multiples may be used including price/earnings
and enterprise value/earnings before interest, tax, depreciation
and amortisation.
Net Assets - this methodology involves deriving the value of a
business by reference to the value of its assets. The assets and
liabilities may be adjusted to reflect the fair value of those
assets and liabilities as at the valuation date.
Discounted Cash Flow - this methodology involves deriving the
value of a business by calculating the present value of expected
future cash flows. The cash flows and the terminal value are those
of the underlying business rather than from the investment itself.
A suitable discount rate is estimated based on the weighted average
cost of capital of the business.
Investment value - the directors have valued the investment in
Apeejay Infra-Logistics based upon on-going interest and
discussions with third parties about the possible sale of this
investment.
The actual methodologies used vary from investment to investment
with the independent valuers applying an appropriate methodology
based on the particular circumstances of the underlying
business.
The movements in non-current investments were as follows:
GBP'000
Carrying value at 1 April 2012
(restated) 49,660
---------
Purchases, at cost 2,266
Fair value adjustment 1,620
Re-categorised as assets held for
sale (19,857)
Carrying value at 31 March 2013 33,689
---------
Purchases, at cost 579
Fair value adjustment (15,691)
Re-categorised from assets held
for sale 8,255
Carrying value at 31 March 2014 26,832
---------
The table below summarises the valuation methodologies used in
relation to each investment:
Investment Valuation methodology
Apeejay Infra-Logistics Investment value
Contrans Logistic DCF & land value
Gopi Resorts Adjusted NAV
Matheran Realty Adjusted NAV
MJ Logistic Services DCF & land value
Sattva CFS & Logistics DCF
Sattva Conware DCF & land value
Quantitative information of significant unobservable inputs -
Level 3
For those investments using the DCF valuation technique the
range of unobservable inputs were:
Unobservable input Lowest rate Highest rate
Revenue growth -11.4% 485.4%
EBIT margin -41.3% 53.0%
Discount rate 17.9% 20.9%
Discount for lack of liquidity 0.0% 15.0%
Terminal growth rate 4.0% 4.0%
For those investments including a land valuation the capital
value per acre ranged from a low of GBP69,000 to a high of
GBP320,000.
Sensitivity analysis to significant changes in unobservable
inputs within Level 3 hierarchy
The significant unobservable inputs used in fair value
measurement categorised within Level 3 of the fair value hierarchy
together with a quantitative sensitivity analysis as at 31 March
2014 are as shown below:
Input Sensitivity used Effect on fair value
GBP'000
Revenue growth -5% (332) to (1,704)
EBIT margin -5% (99) to (479)
Discount for lack of liquidity 15% (116) to (266)
5. Assets classified as held for sale
Non-current assets held for sale
Restated Restated
31 March 31 March 1 April
2014 2013 2012
GBP'000 GBP'000 GBP'000
Investments - 16,198 -
--------- ---------- ----------
At 31 March 2013, it was determined that Matheran and Gopi
formed a disposal group and should be classified as held for sale
under the requirements of IFRS5 as:
-- Matheran and Gopi are available for immediate sale;
-- Eredene's management is committed to a plan to sell;
-- it is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn;
-- an active programme to locate a buyer has been initiated;
-- the asset or disposal group is being marketed at a reasonable
price in relation to its fair value; and
-- a sale is expected to complete within 12 months from the date of classification.
Assets classified as held for sale are measured at the lower
of:
-- their carrying amount immediately prior to being classified as held for sale; and
-- fair value less costs to sell.
At 31 March 2104, the sale of Matheran and Gopi were no longer
considered imminent, and therefore derecognised as assets of a
disposal group held for sale and reclassified as investments held
at fair value through profit and loss.
The Group announced on 11 March 2013 that it had appointed an
advisor to manage the sale of its stake in Ocean Sparkle and an
active realisation programme was initiated. It was determined that,
at the 31 March 2013, the investment in Ocean Sparkle met the IFRS
5 criteria to be classified as an asset held for sale. The
investment was therefore classified from "Investments held at fair
value through profit or loss" to "Non-current assets classified as
held for sale" and held at its realisable value less costs to
sell.
The Group sold its stake in Ocean Sparkle on 13 June 2013 for
GBP8.2m. The variance between the carrying value at 31 March 2013
and the final disposal value was solely due to adverse foreign
exchange movements with the sale price in Indian Rupees having
remained constant.
6. Post balance sheet events
As a part of the on-going strategy to realise assets and return
capital to shareholders, the Company announced on 29 July 2014 the
receipt of GBP1.9m in cash for the sale of a 23% stake in Sattva
CFS & Logistics, through its subsidiary Ennore Mauritius
Limited, to Sattva Hi-tech and Conware Private Limited, part of the
Sattva Business Group. Subsequent to the sale, the Company retains
a 16% stake in Sattva CFS & Logistics. The GBP1.9m sale
proceeds will be retained until further significant asset
realisations have been achieved when another return of capital to
the shareholders will be considered.
7. Forward-looking statements
This document may contain forward-looking statements with
respect to certain of the plans and current goals and expectations
relating to the future financial condition, business performance
and results of Eredene Capital PLC. By their nature, all
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances that are beyond the
control of Eredene Capital PLC including, amongst other things, UK
domestic and global economic and business conditions, market
related risks such as fluctuations in interest rates, foreign
exchange rates, inflation, the impact of competition, delays in
implementing proposals, the timing, impact and other uncertainties
of future investments, the impact of tax or other legislation and
other regulations in the jurisdictions in which Eredene Capital PLC
and its affiliates operate. As a result, Eredene Capital PLC's
actual future condition, business performance and results may
differ materially from the plans, goals and expectations expressed
or implied in these forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR QKBDDKBKDQFD
Eredene Capital (LSE:ERE)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Eredene Capital (LSE:ERE)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
