![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Eredene Cap. | LSE:ERE | London | Ordinary Share | GB00B064S565 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
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
1 Year Eredene Capital Chart |
1 Month Eredene Capital Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions