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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 : 5562V
Eredene Capital PLC
16 December 2013
Date: 16 December 2013 On behalf of: Eredene Capital plc ("Eredene", "Eredene Group" or "the Company") Embargoed until: 0700hrs
EREDENE CAPITAL PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013
Eredene Capital PLC (AIM: ERE), the AIM quoted investor in Indian infrastructure, announces its interim results for the six month period ended 30 September 2013.
Highlights
-- Strategic review concluded that it was not the optimum time to attempt to realise all of the Company's assets due to the historically low level of the Rupee and the uncertainty caused by the May 2014 Indian government elections.
-- Realisation of all investments may take two to three years so crucial to reduce the Company's cost base during that period. In order to reduce costs, Eredene has signed an Investment Management Agreement with Ocean Dial to take over the ongoing management of the Company's operations in London. Head office costs are expected to fall from c. GBP1.8m in year ended 31 March 2013 to c. GBP0.85m per year once planned changes complete.
-- As part of the handover to Ocean Dial, Alastair King, Chief Executive Officer, will leave Eredene on 31 December 2013 and Gary Varley, Chief Financial Officer, will leave on 31 March 2014. Ranveer Sharma will continue to lead Eredene's investment advisory operations in India and will work alongside Ocean Dial's experienced Mumbai advisory team to maximise the value of investment realisations.
-- Loss for the period of GBP11.3m (30 September 2012: GBP10.6m) of which GBP4.4m relates to unrealised fair value adjustments on investments (GBP2.8m of adjustment due to foreign exchange movements) and GBP4.6m relates to a further write-down of the investment in Matheran and Gopi.
-- Net Asset Value of 13.3 pence per share as at 30 September 2013 (30 September 2012: 16.7 pence, 31 March 2013: 17.2 pence).
-- Adverse movement in Indian Rupee/Pound Sterling exchange rate of 19% in period which negatively affected the value of all investments - accounts for 2.1p of the 3.9p reduction in NAV.
-- Return of GBP20m to shareholders via Tender Offer at 17.2p per share completed in October 2013. Company has now returned GBP35m in total and further returns of capital are expected to follow future material realisations.
For further information contact:
Eredene Capital PLC Tel: +44 20 7802 8901 Gary Varley (Chief Financial Officer) Ocean Dial Asset Management Limited Tel: +44 20 7802 8900 Robin Sellers (Chief Executive Officer) David Cornell (Chief Investment Officer) Eredene Capital Advisors Private Limited Tel: +91 22 6737 7373 Ranveer Sharma (Managing Director) Numis Securities Ltd (Nominated advisor Tel: +44 20 7260 1000 & Corporate broker) Heraclis Economides (Nominated Advisor) / David Benda Redleaf Polhill Limited (Financial PR) Tel: +44 20 7382 4720 Henry Columbine / David Ison eredene@redleafpr.com
CHAIRMAN'S STATEMENT
Operating Review
The Group announced in September 2013 that it would conduct a strategic review to determine the optimum realisation strategy and cost structure. This review concluded that it would not be possible to realise the Company's investments in the short term at acceptable valuations due to the historically low level of the Rupee and the economic uncertainty in India in the lead up to the May 2014 Indian government elections. The Rupee has declined by 19% against Sterling since 31 March 2013 because of concerns that the US Federal Reserve may start to taper its expansionary monetary policies. In addition, India has entered a period of uncertainty in advance of the May 2014 elections which have reduced the level of investment activity in unquoted Indian companies.
Eredene is determined to extract maximum value from its assets and is committed to returning funds to shareholders when market conditions allow realisations at acceptable valuations. It is now forecast that it may take two to three years to sell all investments and so it is crucial that the Company's annual cost base is reduced to preserve shareholder value over that period.
The Company has signed an Investment Management Agreement ("IMA") with Ocean Dial Asset Management Ltd ("Ocean Dial") to take over the ongoing management of the Company's operations as the first step in a significant cost reduction programme which will include the closure of Eredene's London office.
As part of the transition to Ocean Dial, Alastair King, Chief Executive Officer will leave Eredene on 31 December 2013 and Gary Varley, Chief Financial Officer, will leave on 31 March 2014 after completing the handover. Alastair, with Gary's assistance, founded the Company in 2005 and I would like to take this opportunity to thank them both for their invaluable contribution in building Eredene. Ranveer Sharma will continue to lead Eredene's investment advisory operations in India and will work alongside Ocean Dial's experienced Mumbai advisory team to maximise the realisation value of Eredene's investments.
Ocean Dial, which is authorised and regulated by the Financial Conduct Authority, currently manages two India focused funds, Gateway to India Fund, a Dublin listed fund investing in Indian equities, and India Capital Growth Fund, an AIM quoted investment trust investing in small and mid-cap Indian equities. Between May 2011 and May 2013, Ocean Dial was wholly owned by Caledonia Investments plc ("Caledonia"), a 21% shareholder in Eredene. In May 2013, Caledonia disposed of its entire shareholding in Ocean Dial to the Ocean Dial management team.
The Ocean Dial group has offices in London, Singapore and Mumbai and is headed by its Chairman, Raju Shukla, who was previously India Country Head for Barclays Capital from 2007 to 2012. Raju has an extensive range of contacts in India and the Board is confident that the Company will benefit from his corporate network. Ocean Dial's London based executives are Robin Sellers, Chief Executive Officer, formerly Head of Group Finance at Close Brothers, and David Cornell, Chief Investment Officer, formerly at Henderson Global Investors.
Ocean Dial will work alongside Ranveer Sharma and his team to identify and execute the sale of the investments. The Group remains committed to realising its investments and does not envisage investing in any new companies. Ocean Dial will also be responsible for the Group's accounting and administration services and will be paid a management fee of GBP20,000 per month. The IMA is for a 24 month period and thereafter can be terminated with three months' notice.
As a consequence of the appointment of Ocean Dial and other cost cutting measures, it is expected that the Company's head office costs will be reduced from approximately GBP1.8m in the year ended 31 March 2013 to approximately GBP850,000 per annum, once the change to external management has been completed.
Ocean Dial may also receive a capped performance fee on the sale of each investment, excluding Matheran and Gopi, varying from, on average, 0.4% to 0.6% of the sales proceeds per investment, depending on the sales price achieved, and is subject to a capped maximum. The Company has previously announced that it is in discussions to sell its stakes in Matheran and Gopi. Should this not occur, Ocean Dial will manage the assets and will be incentivised to achieve a successful realisation for Matheran and Gopi through a capped performance fee which varies from 0.67% to a capped maximum of 5.0% of proceeds depending on the sales value achieved. The manager is incentivised to achieve the highest possible realisation price for shareholders and there is a minimum price below which the manager will not receive a performance fee.
Financial Results
The Group reported a loss for the period of GBP11.3m (30 September 2012: GBP10.6m) of which GBP4.4m relates to unrealised fair value adjustments on investments (GBP2.8m of adjustment due to foreign exchange movements) and GBP4.6m relates to a further write-down of the investments in Matheran Realty and Gopi Resorts.
Eredene's Net Asset Value per share fell to 13.3 pence per share as at 30 September 2013 (30 September 2012: 16.7 pence, 31 March 2013: 17.2 pence). The adverse movement in the Indian Rupee to Sterling exchange rate of 19% in the period affected negatively the value of all investments and accounts for 2.1p of the total 3.9p reduction in NAV.
The Group sold its entire stake in Ocean Sparkle Ltd in June 2013 for GBP8.2m with the sales price representing a 39% premium over investment cost in Indian Rupee terms.
The return of GBP20m to shareholders via a Tender Offer at 17.2p per share completed in October 2013. The Company has now returned GBP35m in total and further returns of capital are expected to follow future material realisations.
Investee Companies
Set out below are some of the key developments in Eredene's investee companies in India during the period to 30 September 2013.
-- MJ Logistic Services (MJL), a multi-user third party logistics business in North India, opened a second cold storage chamber at its hub warehouse in Palwal near Delhi, doubling cold storage capacity there to 5,000 pallets. New cold storage customers include industry innovator DuPont and US food manufacturer J.R. Simplot. The high-tech warehouse at Palwal provides both cold and ambient storage over 200,000 square feet. Tata Motors is a key customer, storing and sourcing components and spare parts in MJL's automated rack shelves at Palwal. MJL also operates leased warehouses, and including Palwal it has a total warehouse capacity in North India of 800,000 square feet.
-- Sattva Vichoor Container Freight Station ("CFS"), one of two joint investments with the Sattva Business Group in Tamil Nadu, saw a strong recovery in volumes with revenue for the half year up by 43% over the same period last year. The fair value of the investment has increased in Indian Rupee terms following the improvement in performance; however the Sterling value has fallen due to the negative currency movement. Customers include South Korean machinery manufacturer Doosan, NYK Line, Maersk, CMA-CGM and MSC. A new 10,000 square feet export warehouse is under construction which will take the total warehousing capacity on the 26-acre site to 97,500 square feet.
-- Sattva Conware CFS, a second joint investment with the Sattva Business Group, continues to provide only domestic warehousing and empty container services. The business is still waiting for the customs authorities to assign customs staff to the site in order to process export-import containers. The 60-acre site is within reach of both Ennore and Chennai ports and the newly opened Kattupalli container terminal and has a total warehousing capacity of 74,000 square feet.
-- Contrans Logistics CFS at Pipavav Port in Gujarat, one of two Contrans projects in Northwest India, saw a decline in volumes over the six-month period despite a recovery in container volumes at Pipavav Port. The fair value of the investment has been written down due to this under performance. A new container handling contract has been signed with Maersk, the operators of the port. The CFS, located on 79 acres just outside the port, is using approximately 23 acres of the site, and negotiations are under way to sell a 17-acre parcel of surplus land. Contrans is also considering selling part of its second site near Baroda, also in Gujarat.
-- 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 venture, Apeejay Infra-Logistics. They offer integrated services for multi-modal logistics through open and covered warehousing, container logistics and transportation, and both have customs bonded facilities.
The logistics park in Haldia, West Bengal, is on a 90-acre site close to the Port of Haldia, a petrochemical centre at the mouth of the Hooghly River, and all three domestic warehouses there are now leased. New contracts have been signed with shipping lines Maersk, MSC, CMA CGM, Hanjin, Tata NYK, PIL and CSAV Norasial. Haldia is providing both domestic and export-import services with a total warehousing area of 140,000 square feet. Haldia Port has seen a reduction in container volumes during the period and Apeejay's logistics park has been further impacted by a restriction on containers being handled by external CFS imposed by Haldia Port Trust. Eredene has written down the value of its investment in Apeejay Infralogistics as a result of the reduced prospects for the Haldia logistics park.
The Kalinganagar logistics park, close to local steel and metallurgical plants, has been licensed to commence export-import operations. The facility provides domestic warehousing and storage for Tata, and Apeejay is in discussions with DAMCO and Jindal Steel to handle the steel produced at Jindal Steel's nearby plant. Total warehousing capacity is 84,000 square feet.
-- Eredene is still in discussions to sell its stakes in Matheran and Gopi Resorts for GBP3m and accordingly the Board has taken the decision to write the realisable value down to that price in these accounts. If a sale is not achieved then it would be the Company's intention to work with Matheran and Gopi to complete the first phase of the affordable housing development prior to any subsequent sale; this may require further funding from the Company.
India's economy
Against a backdrop of sluggish business activity and a weakening economy, the International Monetary Fund has lowered its projection of India's growth in Gross Domestic Product (GDP) for the year ending 31 March 2014 to 3.75%. According to official figures, GDP grew at 5% for the year ending 31 March 2013, the lowest in a decade. The Indian Rupee also came under continued downward pressure in the international money markets, sliding from 82.54 to the British Pound at 31 March 2013 to 101.38 on 30 September 2013.
Non-executive director changes
As announced at the 2013 Annual General Meeting, two of Eredene Capital's non-executive directors, Sir Christopher Benson and Mr Paul Gismondi, stepped down from the board in September 2013. The Company would like to put on record its thanks for their years of invaluable service.
Outlook
Eredene is determined to extract maximum value from its core infrastructure investments in India, and remains committed to returning more cash to shareholders when market conditions allow realisations at acceptable valuations. The Company has reduced its cost base through the move to external management, and so is well placed to weather the storms currently buffeting the Indian economy.
Struan Robertson
Non-Executive Chairman
16 December 2013
Investment Portfolio Summary
Investment Amount Fair Value Sector Location Progress invested at at 30/9/13 30/9/13 ----------------------- ------------ ------------- -------------------- ---------------- ------------------------ 1. Sattva CFS & GBP0.7m GBP3.8m Container Chennai, Revenue generating Logistics - Vichoor Logistics Tamil & dividend paying CFS Nadu ----------------------- ------------ ------------- -------------------- ---------------- ------------------------ 2. Sattva Conware GBP3.9m N/A as Container Ennore, Operational & revenue CFS subsidiary Logistics Tamil generating Nadu ----------------------- ------------ ------------- -------------------- ---------------- ------------------------ Contrans Logistic GBP5.7m GBP6.0m 3. Project One: Container Pipavav, Operational & revenue Pipavav CFS Logistics Gujarat generating Container Baroda, Pre-construction 4. Project Two: Logistics Gujarat phase Baroda ICD ----------------------- ------------ ------------- -------------------- ---------------- ------------------------ Apeejay GBP2.9m GBP2.3m Infra-Logistics Logistics Haldia, Operational & revenue 5. Project One: Park West Bengal generating Haldia Logistics Park Kalinganagar, Operational & revenue Logistics Odisha generating 6. Project Two: Park Kalinganagar Logistics Park ----------------------- ------------ ------------- -------------------- ---------------- ------------------------ 7. MJ Logistic GBP10.9m N/A as Warehousing Northern Operational & revenue Services subsidiary & Third India generating Party Logistics ----------------------- ------------ ------------- -------------------- ---------------- ------------------------ 8. Matheran Realty GBP15.3m GBP2.9m Urban Development Mumbai Construction phase & Gopi Resorts Net of region NCI Asset held for sale ----------------------- ------------ ------------- -------------------- ---------------- ------------------------ 9. Ocean Sparkle - - Marine operations Pan-India Stake sold in period & maintenance for GBP8.2m ----------------------- ------------ ------------- -------------------- ---------------- ------------------------
Eredene Capital PLC
Consolidated Statement of Comprehensive Income
for the six month period ended 30 September 2013
Unaudited Unaudited Audited Six months Six months Year ended 30 ended 30 ended 31 September September March 2013 2012 2013 Note GBP'000 GBP'000 GBP'000 ------------------------------------ ----- ----------- ----------- ---------- Portfolio return and revenue Realised loss over fair (529) - - value on disposal of investments Unrealised adjustments on the revaluation of investments (4,447) (2,811) 285 Other portfolio income 33 15 70 (4,943) (2,796) 355 Revenue from services 2,131 2,111 4,376 Cost of sales for services (1,811) (1,609) (3,252) ----------- ----------- ---------- Gross profit 320 502 1,124 Gross profit and net portfolio return (4,623) (2,294) 1,479 ----------- ----------- ---------- Administrative expenses (1,935) (1,602) (3,924) Finance income 39 130 229 Finance costs (210) (284) (544) Loss before taxation (6,729) (4,050) (2,760) ----------- ----------- ---------- Taxation charge (5) - (21) Loss for the period from continuing operations (6,734) (4,050) (2,781) Loss for the period from discontinued operations (4,553) (6,553) (6,301) ----------- ----------- ---------- Loss for the period (11,287) (10,603) (9,082) ----------- ----------- ---------- Other comprehensive income Foreign currency translation (3,634) (546) (49) ----------- ----------- ---------- Total comprehensive loss for the period (14,921) (11,149) (9,131) Loss attributable to: Owners of the parent company (11,278) (10,599) (9,062) Non-controlling interests (NCI) (9) (4) (20) ----------- ----------- ---------- (11,287) (10,603) (9,082) ----------- ----------- ---------- Total comprehensive loss attributable to: Owners of the parent company (14,121) (11,271) (9,322) Non-controlling interests (800) 122 191 ----------- ----------- ---------- (14,921) (11,149) (9,131) ----------- ----------- ---------- Loss per share Basic and diluted From continuing operations (1.86)p (0.95)p (1.78)p From discontinued operations (1.26)p (1.54)p (0.52)p ----------- ----------- ---------- 3 (3.12)p (2.49)p (2.30)p ----------- ----------- ----------
Eredene Capital PLC
Consolidated Balance Sheet
As at 30 September 2013
Unaudited Unaudited Audited 30 September 30 September 31 March 2013 2012 2013 GBP'000 GBP'000 GBP'000 Non-current assets Property, plant and equipment 13,556 15,259 16,054 Investments held at fair value through profit or loss 12,120 22,186 17,061 Intangible assets 754 902 917 Deferred income tax asset - 6 - Other receivables 149 103 115 ------------- ------------- --------- 26,579 38,456 34,147 ------------- ------------- --------- Current assets Trade and other receivables 1,002 1,187 989 Cash and cash equivalents 24,335 21,502 19,543 25,337 22,689 20,532 ------------- ------------- --------- Non-current assets classified as held for sale - - 8,724 Assets of disposal group classified as held for sale 11,436 16,134 16,673 Total assets 63,352 77,279 80,076 ------------- ------------- --------- Current liabilities Trade and other payables (766) (566) (883) Current income tax liabilities (15) (6) (21) Borrowings (995) (862) (1,213) Provisions (310) - (310) Non-current liabilities Borrowings (2,865) (4,586) (4,083) Liabilities of disposal group classified as held for sale (8,233) (8,216) (8,478) Total liabilities (13,184) (14,236) (14,988) ------------- ------------- --------- Total net assets 50,168 63,043 65,088 ============= ============= ========= Equity Share capital 36,199 36,199 36,199 Share premium 16,268 16,268 16,268 Special reserve 17,311 17,311 17,311 Capital redemption reserve 8,492 8,492 8,492 Foreign exchange reserve (3,065) (928) (466) Retained deficit (26,998) (16,892) (15,409) Capital and reserves attributable to equity shareholders of the company 48,207 60,450 62,395 Non controlling interests (NCI) 1,961 2,593 2,693 Total Equity 50,168 63,043 65,088 ============= ============= =========
Eredene Capital PLC
Consolidated Statement of Changes in Equity for the six months ended 30 September 2013
Capital Foreign Share Share Share Special redemption exchange Retained holders Total capital premium reserve reserve reserve deficit equity NCI equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Six months ended 30/9/13 unaudited As at 1 April 2013 36,199 16,268 17,311 8,492 (466) (15,409) 62,395 2,693 65,088 --------- --------- --------- ------------ ---------- --------- --------- -------- --------- Loss for the period - - - - - (11,278) (11,278) (9) (11,287) Other comprehensive income for the period - - - - (2,599) (244) (2,843) (791) (3,634) Total comprehensive income for the period - - - - (2,599) (11,522) (14,121) (800) (14,921) Share based payment - - - - - 1 1 - 1 NCI on dilution of shareholding - - - - - (68) (68) 68 - As at 30 September 2013 36,199 16,268 17,311 8,492 (3,065) (26,998) 48,207 1,961 50,168 --------- --------- --------- ------------ ---------- --------- --------- -------- --------- Six months ended 30/9/12 unaudited As at 1 April 2012 44,691 16,268 32,826 - (256) (6,121) 87,408 1,600 89,008 --------- --------- --------- ------------ ---------- --------- --------- -------- --------- Loss for the period - - - - - (10,599) (10,599) (4) (10,603) Other comprehensive income for the period - - - - (672) - (672) 126 (546) Total comprehensive income for the period - - - - (672) (10,599) (11,271) 122 (11,149) Share based payment - - - - - 2 2 - 2 Purchase and cancellation of treasury shares (8,492) - (15,515) 8,492 - - (15,515) - (15,515) NCI on dilution of shareholding - - - - - (174) (174) 174 - NCI on acquisition of discontinued operations - - - - - - - 697 697 --------- --------- --------- ------------ ---------- --------- --------- -------- --------- As at 30 September 2012 36,199 16,268 17,311 8,492 (928) (16,892) 60,450 2,593 63,043 --------- --------- --------- ------------ ---------- --------- --------- -------- --------- Year ended 31/3/13 audited As at 1 April 2012 44,691 16,268 32,826 - (256) (6,121) 87,408 1,600 89,008 --------- --------- --------- ------------ ---------- --------- --------- -------- --------- Loss for the period - - - - - (9,062) (9,062) (20) (9,082) Other comprehensive income for the period - - - - (210) (50) (260) 211 (49) Total comprehensive income for the period - - - - (210) (9,112) (9,322) 191 (9,131) Share based payment - - - - - 4 4 - 4 Purchase and cancellation of treasury shares (8,492) - (15,515) 8,492 - - (15,515) - (15,515) NCI on dilution of shareholding - - - - - (180) (180) 180 - NCI on acquisition of discontinued operations - - - - - - - 722 722 As at 31 March 2013 36,199 16,268 17,311 8,492 (466) (15,409) 62,395 2,693 65,088 --------- --------- --------- ------------ ---------- --------- --------- -------- ---------
Eredene Capital PLC
Consolidated Cash Flow Statement
for the six months ended 30 September 2013
Unaudited Unaudited Audited Six months Six months Year ended 30 ended 30 ended September September 31 March 2013 2012 2013 GBP'000 GBP'000 GBP'000 --------------------------------------------- ----------- ----------- ---------- Cash flows from operating activities Loss before taxation (6,729) (4,050) (2,760) Adjustments for: Finance income (39) (130) (229) Dividend income (33) (15) (70) Realised loss over fair value on disposal of investments 529 - - Unrealised adjustments on the revaluation of investments 4,447 2,811 (285) Share based payment charge 1 2 4 Foreign exchange differences 398 59 (323) Depreciation 157 129 339 Amortisation 12 12 25 Increase in trade and other receivables (51) (235) (50) (Decrease)/increase in trade and other payables (117) 125 441 Decrease in provisions - (362) (52) Taxation paid (6) - - Net cash used in operating activities (1,431) (1,654) (2,960) ----------- ----------- ---------- Cash flows from investing activities Purchase of property, plant and equipment (627) (216) (707) Disposal of property, plant and equipment - - 2 Purchase of investments (70) - (504) Disposal of investments 8,160 - - Purchase of disposal group held for sale - (2,642) (2,642) Interest received 42 146 244 Dividends received 33 15 70 Net cash generated from/(used in) investing activities 7,538 (2,697) (3,537) ----------- ----------- ---------- Cash flows from financing activities Purchase of treasury shares - (15,514) (15,515) Repayment of borrowings (452) (361) (716) Proceeds from issue of shares in subsidiary to NCI 19 - 27 ----------- ----------- ---------- Net cash used in financing activities (433) (15,875) (16,204) ----------- ----------- ---------- Net increase/(decrease) in cash and cash equivalents 5,674 (20,226) (22,701) Cash and cash equivalents at the beginning of the period 19,543 41,839 41,839 Exchange (losses)/gains (882) (111) 405 Cash and cash equivalents at the end of the period 24,335 21,502 19,543 =========== =========== ==========
Eredene Capital PLC
Notes to the Interim Statement
1. Basis of preparation
The interim financial information for the periods ended 30 September 2013 and 30 September 2012 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board and does not constitute statutory accounts within the meaning of the Companies Act 2006. The statutory accounts for the period ended 31 March 2013, which were prepared in accordance with International Financial Reporting Standards as endorsed by the European Union ("IFRS") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, have been delivered to the Registrar of Companies. The auditors' opinion on those accounts was unqualified, did not include any references to any matters to which the auditors drew attention without qualifying their report, and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006.
The financial information in this report comprises the Group balance sheets as at 30 September 2013, 31 March 2013 and 30 September 2012 and related statements of comprehensive income, cash flow, changes in equity and related notes for the period then ended ("financial information"). The financial information has been prepared in accordance with the Group's principal accounting policies as set out in the Annual Report for the period ended 31 March 2013. There have been no changes in the existing policies. It has been prepared on the historical cost basis, except for the revaluation of certain investments.
As permitted, the Group has not applied IAS 34 "Interim Reporting" in preparing this interim report.
2. Critical accounting judgements and estimates
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
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".
Value of investments
The Group's investments held at fair value through profit or loss are valued based on the International Private Equity and Venture Capital Guidelines. 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).
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.
The determination of fair value for an unlisted investment requires the use of estimates and assumptions.
3. Earnings per share and net asset value per share
The calculation of the basic earnings per share is based on the loss for the period attributable to equity shareholders of GBP11.3m (2012: GBP10.6m) and the weighted average number of shares in issue during the period of 361,994,426 (2012: 425,862,314). The shares under option were non-dilutive due to the loss for the period. The calculation of net asset value per share is based on the net assets attributable to equity shareholders of GBP48.2m (30/9/12: GBP60.5m; 31/3/13: GBP62.4m) and the number of shares in issue at the period end of 361,994,426 (30/9/12 and 31/3/13: 361,994,426).
4. Forward-looking statements
This document may contain forward-looking statements 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, Indian 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.
5. Interim Results
Copies of the Interim Results will be available from www.eredene.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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