TIDMUCP
RNS Number : 0926A
Unitech Corporate Parks Plc
18 December 2014
Unitech Corporate Parks plc
("UCP" or the "Company")
Half-Yearly Report
Unitech Corporate Parks Plc (AIM: UCP), an investment company
focusing on commercial real estate in India, announces its
half-yearly report for the six month period ended 30 September
2014.
The Company's half-yearly report for the period ended 30
September 2014 will shortly be available on the Company's website
(http://www.unitechcorporateparks.com/) in accordance with AIM Rule
26.
For further information please contact:
Westhouse Securities Limited Tel: +44 (0)20 7601
6100
------------------------------------ --------------------
Alastair Moreton
------------------------------------ --------------------
Rose Ramsden
------------------------------------ --------------------
IOMA Fund and Investment Management Tel: +44 (0)1624
Limited 681250
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Philip Scales
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Graham Smith
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Chairman's Statement
On 11 June 2014, the Company announced that it had entered into
an agreement (the "Disposal Agreement") with an affiliate of
Brookfield Property Partners ("Brookfield") for the sale and
purchase of the entire issued share capital of Candor Investments
Limited, the wholly-owned subsidiary of the Company which was the
holding company for all of the Company's Property Interests
("Candor"). The Disposal Agreement provided that Brookfield would
acquire Candor, subject to certain conditions, for an aggregate
cash consideration of approximately GBP205.9 million (subject to
adjustment). The sale of Candor was completed on 4 November 2014
("Completion"), and the consideration received from Brookfield
amounted to GBP188.9 million which reflected an adjustment of
GBP15.7 million in relation to certain funds placed with two
financial institutions in the name of two project companies which
had not been repaid by Completion and GBP1.2 million in relation to
payments made by Candor to or on behalf of UCP prior to Completion.
The Company continues to work actively towards the recovery of the
funds placed with the two financial institutions and alternative
means to obtain redress, although the timing and eventual amount
recovered cannot be estimated with certainty.
As announced on 28 November 2014, the Company proposes to make
an Initial Cash Return to Shareholders. It is currently expected
that this will amount to 49.25 pence per Ordinary Share, amounting
to GBP177.3 million in total, and is subject to Shareholder
approval at the Extraordinary General Meeting and satisfaction of
certain other conditions. In light of the Company having
liabilities pursuant to the Disposal Agreement for a period of 30
days after Completion and the potential for purchase price
adjustments within 60 days of Completion, the Company intends to
confirm the amount of the Initial Cash Return by way of an
announcement by 7 January 2015. The 30 day period for liabilities
under the Disposal Agreement has now lapsed, and no breaches have
been notified to the Company.
The Initial Cash Return will be made by way of the B Share
Scheme which will allow Shareholders (other than an Overseas
Shareholder resident, or with a registered address, in a Restricted
Territory) to make an election as to whether to receive the Initial
Cash Return as a dividend by way of the B Share Dividend or as a
capital return by way of the B Share Purchase Offer, or a
combination of both.
The Initial Cash Return takes account of a GBP4 million
provision for Indian tax, even though the Board has been advised
that no tax should be payable on the Disposal, and a further GBP4
million retention as a prudent reserve against additional external
costs which may be incurred and unforeseen expenses.
As an example of such costs, on 10 April 2014, Cruz City 1
Mauritius Holdings ("Cruz City") obtained from the English Court a
worldwide freezing order (the "Freezing Order") over the assets of
Unitech Limited, Burley Holdings Limited and Arsanovia Limited. UCP
was served with the Freezing Order and was obliged to take all
steps necessary to ensure compliance by it with the terms of the
Freezing Order in a manner that did not affect UCP's operations and
contractual relations (including the agreement to sell certain of
its assets to Brookfield) or its ability to make distributions to
Shareholders (which include an affiliate of Unitech Limited). UCP
will continue to take such steps as are required to ensure
compliance with the Freezing Order. UCP has incurred legal costs
and expenses in this regard and expects these costs to rise. On 5
September 2014, UCP obtained from the English Court an order
requiring Cruz City to reimburse UCP's reasonable legal costs
incurred in relation to the Freezing Order ("the Costs Order"). UCP
intends to take such steps as are necessary to ensure compliance by
Cruz City with the Costs Order.
Both retentions will be returned to Shareholders at the time of
the members' voluntary winding up or other restructuring of the
Company to the extent not utilised.
The Company's Investing Policy, as approved by Shareholders on
27 June 2014, is to return capital to Shareholders. It is expected
that at the end of this process the Company will enter a members'
voluntary winding up or other restructuring and this is likely to
take place in 2015.
Donald Lake, Chairman
17 December 2014
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Notes Year
Six months ended Six months ended ended
30 Sep 2014 30 Sep 2013 31 Mar 2014
GBP '000 GBP '000 GBP '000
Income
Interest income on cash balances - 4 8
Interest income on deposits and investments 10 1,143 - -
1,143 4 8
----------------- ----------------- ------------
Expenditure
Management fee - 2,333 4,654
Other operating expenses 3 842 721 1,717
Change in provision for run-off costs 4 (550) - 1,750
292 3,054 8,121
----------------- ----------------- ------------
Operating profit/(loss) for the period 851 (3,050) (8,113)
----------------- ----------------- ------------
Share of profits of equity-accounted joint ventures,
net of tax - 22,483 32,688
Change in value of assets held for sale 5 (2,183) - 14,411
(Loss)/profit for the period before tax (1,332) 19,433 38,986
Current tax expense 6 - - -
----------------- ----------------- ------------
(Loss)/profit for the period (1,332) 19,433 38,986
----------------- ----------------- ------------
Other comprehensive loss
Foreign currency translation differences for foreign
operations - (40,177) (44,482)
Other comprehensive loss for the period net of income
tax - (40,177) (44,482)
----------------- ----------------- ------------
Total comprehensive loss for the period (1,332) (20,744) (5,496)
----------------- ----------------- ------------
Basic and diluted (loss)/earnings per share 7 (0.37)p 5.40p 10.83p
----------------- ----------------- --------------
The notes form an integral part of these financial
statements.
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
Notes 30 Sep 2014 30 Sep 2013 31 Mar 2014
GBP '000 GBP '000 GBP '000
Assets
Non-current assets
Equity-accounted joint ventures 8 - 130,734 -
- 130,734 -
------------ ------------ ------------
Current assets
Assets held for sale and associated liabilities 9 186,597 50,539 188,950
Trade and other receivables 89 1,142 23
Deposits and investments 10 15,762 - 14,624
Cash and cash equivalents 344 6,074 775
202,792 57,755 204,372
------------ ------------ ------------
Total assets 202,792 188,489 204,372
------------ ------------ ------------
Financed by:
Equity and liabilities
Capital and reserves
Share capital 3,600 3,600 3,600
Share premium 342,919 342,919 342,919
Translation reserve - 4,305 -
Retained loss (145,441) (163,662) (144,109)
Total equity 201,078 187,162 202,410
------------ ------------ ------------
Current liabilities
Trade and other payables 514 1,327 212
Provision for run-off costs 4 1,200 - 1,750
------------ ------------ ------------
Total liabilities 1,714 1,327 1,962
------------ ------------ ------------
Total equity and liabilities 202,792 188,489 204,372
------------ ------------ ------------
The notes form an integral part of these financial
statements.
These financial statements were approved and authorised for
issue by the Board of Directors on 17 December 2014 and signed on
their behalf by:
_______________ ________________
Donald Lake Nicholas Sallnow-Smith
Director Director
Consolidated Statement of Changes in Equity
Share Translation Retained
capital Share premium reserve loss Total
GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Balance at 1 April
2013 3,600 342,919 44,482 (183,095) 207,906
Profit for the period - - 19,433 19,433
Other comprehensive
loss - - (40,117) - (40,177)
-------- ------------- ----------- --------- --------
Total comprehensive
(loss)/profit for
the period - - (40,117) 19,433 (20,744)
-------- ------------- ----------- --------- --------
Balance at 30 September
2013 3,600 342,919 4,305 (163,662) 187,162
-------- ------------- ----------- --------- --------
Balance at 1 October
2013 3,600 342,919 4,305 (163,662) 187,162
Profit for the period - - - 19,553 19,553
Other comprehensive
loss - - (4,305) - (4,305)
-------- ------------- ----------- --------- --------
Total comprehensive
(loss)/profit for
the period - - (4,305) 19,553 15,248
-------- ------------- ----------- --------- --------
Balance at 31 March
2014 3,600 342,919 - (144,109) 202,410
-------- ------------- ----------- --------- --------
Balance at 1 April
2014 3,600 342,919 - (144,109) 202,410
-------- ------------- ----------- --------- --------
Loss for the period - - - (1,332) (1,332)
Total comprehensive
loss for the period - - - (1,332) (1,332)
-------- ------------- ----------- --------- --------
Balance at 30 September
2014 3,600 342,919 - (145,441) 201,078
-------- ------------- ----------- --------- --------
The notes form an integral part of these financial
statements.
Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
Year
Six months ended Six months ended ended
30 Sep 2014 30 Sep 2013 31 Mar 2014
GBP '000 GBP '000 GBP '000
Operating activities
(Loss)/profit for the period before tax (1,332) 19,433 38,986
Adjustments for:
Interest income on deposits and investments (1,143) - -
Interest income on cash balances - (4) (8)
Share of profit of equity-accounted joint ventures, net of tax - (22,483) (32,688)
Change in disposal costs provision 215 - -
Change in value of assets held for sale 1,138 - (14,411)
Foreign exchange loss/(gain) 19 (5) 13
----------------- ----------------- ------------
Operating loss before changes in working capital (1,103) (3,059) (8,108)
(Increase)/decrease in trade and other receivables (66) 14 1,132
Increase/(decrease) in trade and other payables 302 6 (1,109)
(Decrease)/increase in provisions (550) - 1,750
----------------- ----------------- ------------
(314) 20 1,773
Tax paid - - -
Net cash used in operating activities (1,417) (3,039) (6,335)
----------------- ----------------- ------------
Investing activities
Interest received - 4 8
Distribution from joint venture - 4,672 4,672
Advance from Candor Investments Limited 1,000 - -
Subsidiaries cash and cash equivalents, receivables and payables
reclassified as assets held
for sale - - (1,989)
----------------- ----------------- ------------
Net cash generated from investing activities 1,000 4,676 2,691
----------------- ----------------- ------------
(Decrease)/increase in cash and cash equivalents (417) 1,637 (3,644)
Cash and cash equivalents at beginning of period 775 4,432 4,432
Exchange difference on cash and cash equivalents (14) 5 (13)
Cash and cash equivalents at end of the period 344 6,074 775
----------------- ----------------- ------------
The notes form an integral part of these financial
statements.
Notes to the Half-yearly report at 30 September 2014
1. General information
Unitech Corporate Parks PLC (the "Company") is a closed-ended
investment company domiciled in the Isle of Man. It was
incorporated on 6 September 2006 in the Isle of Man as a public
limited company and is quoted on AIM, a market operated and
regulated by the London Stock Exchange. The consolidated financial
statements of the Company comprise the Company and its subsidiaries
(together referred to as the "Group") and the Group's interest in
jointly controlled entities. All the Company's subsidiaries and
interests in jointly controlled entities have been sold during the
period (see note 2).
2. Basis of preparation
This financial information has been prepared in accordance with
the recognition and measurement criteria of International Financial
Reporting Standards (IFRS). The financial information included in
the interim financial statements has been prepared in accordance
with the AIM Rules for Companies and IAS 34 Interim Financial
Reporting.
The interim financial statements for the six months ended 30
September 2014 should be read in conjunction with the annual
financial statements for the year ended 31 March 2014 which have
been prepared in accordance with IFRS.
The accounting policies applied by the Group in these interim
consolidated financial statements are the same as those applied by
the Group in its consolidated financial statements as at and for
the year ended 31 March 2014.
Critical accounting estimates and assumptions
The preparation of condensed consolidated interim financial
statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application
of accounting policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances,
the results for which form the basis of making the judgements about
carrying values of assets and liabilities that are not readily
available from other sources. Actual results may differ from these
estimates.
The principal risks and uncertainties are consistent with those
disclosed in the Group's annual financial statements for the year
ended 31 March 2014. Attention is drawn to the recoverability of
deposits and investments, see note 10.
The interim financial statements have been prepared on the
historical cost basis except that assets held for sale are measured
at realisable value. On 10 June 2014 the Company entered into an
agreement ("Disposal Agreement") with an affiliate of Brookfield
Property Partners ("Brookfield") for the sale and purchase of the
entire issued share capital of Candor Investments Limited
("Candor"). After the distribution of cash generated by this sale
the Company is expected to be wound up, as such the financial
statements have been presented on a non-going concern basis. The
assets of the Group have been stated at realisable value and
provision has been made for the unavoidable costs of run-off and
winding up the Company.
3. Other operating expenses
Other operating expenses comprise of:
Unaudited Unaudited Audited
Year
Six months ended Six months ended ended
30 Sep 14 30 Sep 13 31 Mar 14
GBP 000 GBP 000 GBP 000
Administration and accounting fees 105 57 165
Valuation fees 3 20 57
Legal fees 371 46 610
Directors' fees, travel and expenses 214 210 386
Audit fees - 30 85
NOMAD and LSE expenses 101 134 233
Other expenses 47 224 181
841 721 1,717
----------------- ----------------- ----------
4. Provision for run-off costs
A provision has been made for the estimated unavoidable costs
that are expected to be incurred in respect of the winding up of
the Company. At 30 September 2014 it was estimated that these
costs, including general contingencies, are likely to be GBP1.20m
(31 March 2014: GBP1.75m). The run-off provision has been partially
released at 30 September to take account of the costs incurred in
the 6 months from 1 April 2014 and to reflect the current estimate
of costs to be incurred until liquidation.
5. Change in value of assets held for sale
At 31 March 2014 due to the announcement of the sale of Candor
all subsidiaries were classified as held for sale and were measured
at realisable value less costs to sell. This led to a valuation
uplift of GBP14.41 million in the Statement of Comprehensive Income
for the year ended 31 March 2014. Between 1 April and 30 September
2014 there has been a decrease in the realisable value of the
assets held for sale (see note 9). The significant fair value
movements in the period were an increase in the provision for
disposal costs of GBP1.04 million and an increase in the deduction
for deposits and investments due to interest earned in the period
of GBP1.14 million.
6. Taxation
A standard zero per cent rate of income tax applies for Isle of
Man companies (except in relation to profits arising from banking,
or from land and property in the Isle of Man).
The sale of Candor is not expected to result in a tax liability
for UCP in either India or Mauritius. The Company is, however,
required to file a tax return in India after the end of the current
tax year on 31 March 2015 and the Board has decided,
conservatively, to retain an amount of GBP4.0 million from the sale
proceeds. No provision has been made in the financial statements
for this retention. In light of the advice that no tax liability is
expected to result from the sale, the Company anticipates that it
will ultimately be able to be return this retention to
Shareholders.
7. Basic and diluted (loss)/earnings per share
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 Sep 2014 30 Sep 2013 31 Mar 2014
(Loss)/earnings attributable to owners of the Company (GBP 000) (1,332) 19,433 38,986
Weighted average number of ordinary shares in issue 360,000,000 360,000,000 360,000,000
Basic earnings per share (0.37)p 5.40p 10.83p
----------------- ----------------- ------------
There is no difference between the basic and diluted
(loss)/earnings per share.
8. Equity accounted joint ventures
Since 31 March 2014 all equity accounted joint ventures have
been recognised as assets held for sale (see note 2). At 30
September 2013 only Unitech Developers and Projects Limited ("G2")
was classified as held for sale.
9. Assets held for sale and associated liabilities
The sale of all the subsidiaries and joint ventures of the
Company was under negotiation and highly probable at 31 March 2014
and the investments were available for immediate sale in their
present condition at this time. Therefore from 31 March 2014 all
the subsidiaries and joint ventures of the Company were classified
as held for sale in accordance with IFRS 5. The sale subsequently
completed on 4 November 2014.
The following table provides a breakdown of the fair value less
estimated costs to sell of the assets held for sale and associated
liabilities.
Assets held for sale and
associated liabilities Unaudited Audited
Six months
ended Year ended
31 Mar
30 Sep 2014 2014
GBP 000 GBP 000
Base consideration 205,000 205,000
Add: Net receivables 689 689
Less: Deposits and investments (15,762) (14,624)
Less: Advance from Candor (1,000) -
Investments Limited
----------------------- ----------------------
188,927 191,065
Less: Disposal costs provision (2,330) (2,115)
----------------------- ----------------------
Realisable value 186,597 188,950
----------------------- ----------------------
At 30 September 2013 the only asset classified as held for sale
was G2, with a net asset value totaling GBP50,539,000.
10. Deposits and investments
On 10 June 2014 the Company entered into the Disposal Agreement
for the sale and purchase of the entire share capital of Candor.
The consideration receivable (see note 9) was subject to an
adjustment to the extent that certain funds placed with two
financial institutions by two of the Indian joint venture
companies, G2 and Unitech Realty Projects Limited ("G1"), were not
recovered by the date of completion of the sale ("Completion"). The
Disposal Agreement further provides that if the funds were not
repaid prior to Completion, the sales price was to be adjusted and
either (i) the rights of G2 and G1 to receive repayment of 60 per
cent. of such outstanding funds would be assigned to the Company,
subject to necessary approvals or (ii) any subsequent recovery of
such amounts by or on behalf of G2 or G1 would be repaid to the
Company.
At 4 November 2014, the date of Completion, 60 per cent of the
balance outstanding, including accrued interest, was GBP15,762,000.
That amount has been reflected in the interim financial statements
as at 30 September 2014, as an adjustment of the sales proceeds
received on Completion.
This amount is made up as follows:
30 Sep 31 Mar
2014 2014
GBP 000 GBP 000
SREI Infrastructure Finance Limited
("Srei") on behalf of G2 9,731 9,027
Aten Capital Pvt Limited ("Aten")
on behalf of G2 241 181
Aten Portfolio Managers Services
Pvt Limited on behalf of G2 and
G1 5,791 5,416
--------- --------
Total 15,762 14,624
--------- --------
Interest, which is included in these amounts, is accruing on the
relevant balances at a rate of 10.6% for funds deposited or
invested with SREI and 16% for funds deposited or invested with
Aten. Interest income of GBP1,143,000 which was earned on the
deposits and investments has been recognised in the Statement of
Comprehensive Income.
The Board is of the opinion that these transactions were not
conducted in accordance with the Group Treasury policy.
The maturity date in respect of all amounts deposited and
invested has now expired and repayment has been demanded. No
repayments have yet been received although the counterparties have
failed to provide any justification for not returning the deposits
and investments.
The Company has engaged English and Indian lawyers to assist in
their recovery. The Board has received legal advice that, in the
event that repayment is not forthcoming, the Company has recourse
to alternative means to obtain redress and therefore continues to
believe that the value of deposits and investments will be
recovered. Accordingly, the Board has concluded that these amounts
should be recorded in the Statement of Financial Position without
impairment.
11. Net asset value per share
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 Sep 2014 30 Sep 2013 31 Mar 2014
GBP 000 GBP 000 GBP 000
Net assets attributable to owners of the Company 201,078 187,162 202,410
Number of ordinary shares outstanding 360,000,000 360,000,000 360,000,000
Net Asset Value per share (pence) 55.9p 52.0p 56.2p
----------------- ----------------- ------------
12. Subsequent events
The sale of the entire issued share capital of Candor, the
Company's wholly owned subsidiary and holding company for all UCP's
property interests, was completed on 4 November 2014.
The consideration received on 4 November 2014 from Brookfield
amounted to GBP188.9 million which reflects the realisable value of
the assets held for sale and associated liabilities shown in the
Statement of Financial Position at 30 September 2014, excluding the
provision for disposal costs (see note 9).
On 28 November 2014 the Company announced a proposal to make an
initial cash return to the Shareholders in January 2015 by way of a
B share scheme, subject to approval by Shareholders at an EGM to be
held on 22 December 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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