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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hirco | LSE:HRCO | London | Ordinary Share | IM00B1HYQS19 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 20.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMHRCO
RNS Number : 9488H
Hirco plc
27 June 2013
Hirco PLC
Interim results for the period ended 31 March 2013
Hirco PLC ("Hirco" or "the Company"), a closed end investment company that specialises in Indian real estate projects for development, today announces its interim results for the period ended 31 March 2013.
The Interim Results will shortly be available on the Company's website in accordance with Rule 26 of the AIM Rules for Companies at: http://www.hircoplc.co.im/rule_26.html.
For further information please contact:
IOMA Fund & Investment Management Tel: +44 (0)1624 681250 Limited ----------------------------------- ------------------------ Philip Scales ----------------------------------- ------------------------ N+1 Singer ----------------------------------- ------------------------ James Maxwell/Nick Donovan +44 (0) 20 7496 3000 ----------------------------------- ------------------------
Chairman's statement
Dear Fellow Shareholders,
The results for the half year ended 31st March 2013 show a small decline in our reported net assets to GBP196.2m (30th September 2012: GBP197.8m).
This reduction, is as you might expect the net of a number of offsetting factors. The Indian Rupee, which has been volatile over the period, at 31st March 2013 had appreciated against Sterling from GBP/INR 85.47 at 30th September to GBP/INR 82.64. The effect of this change has largely offset the estimated deterioration in the net asset position of the project companies, as based on the unaudited information packs provided by Hirco Developments Private Limited (HDPL).
The underlying trend, however, remains disappointing with a further deterioration in the Indian economic outlook and the general lack of business confidence in Government policy and actions, and again the preference dividend accruing for the half year, which amounted to GBP37.2m, has been fully provided against.
In my letter to the consolidated financial statements for the financial year ended 30th September 2012, I set out the scale of the projects and that completion of both the Chennai and Panvel projects remains at least a decade away. Our advisers, CBRE, have carried out further site visits, and although confirming their valuation at 30th September 2012, stating that market conditions have broadly remained similar to their previous assessment, did report that progress on the developments appeared somewhat subdued with only moderate progress over the last 6 months.
Whilst the information flow on the projects remains unsatisfactory and we have no real clarity over who is really in control of the projects, what does seem clear is that completion of these projects will need substantial further investment of both equity and longer term debt.
Given these issues of transparency and reporting, and the evident urgent need for further capital investment, we have continued to put in a lot of effort into trying to negotiate an exit from these investments, whilst pursuing all legal remedies open to us. However, the parties with whom we are negotiating appear to have their own agendas and seemingly irreconcilable differences, so the outcome of these discussions is hard to predict.
I set out in detail in my last statement the proceedings we had initiated in February against two former Company directors, Niranjan Hiranandani, the Company's former Chairman and Priya Hiranandani-Vandrevala, the Company's former CEO, in the English High Court and in the Isle of Man courts. The timing of this decision was to protect shareholders' interests in light of the relevant statute of limitation.
This was not a decision taken lightly, and although it would be imprudent ever to ignore the risk inherent in all litigation, and the cost of it, the board firmly believes this is the best course of action in the current circumstances.
The English proceedings against Niranjan Hiranandani and Priya Hiranandani-Vandrevala were issued in the High Court on 6th February 2013. The High Court claim seeks damages of almost GBP220 million. Both defendants have indicated their intention to contest the proceedings and also to contest the jurisdiction of the English High Court. The same proceedings against those two former directors were also issued in the Isle of Man courts to protect the Company from the possible expiry of limitation periods. These proceedings have now been served in the Isle of Man courts.
The Board would wish to emphasise to all shareholders that the possible outcome of any litigation, should proceedings commence, or the possible amount of any negotiated settlement, may differ materially from both the amount claimed in damages of GBP220 million, and the net asset value of GBP196.2m. In anticipation of these claims, Priya Hiranandani-Vandrevala commenced her own proceedings in the Isle of Man that she ought fairly to be excused for any breaches of duty of which she is found to be liable.
Besides the High Court proceedings, the Company's Mauritius subsidiary is also involved in a related arbitration with Mr Hiranandani and his wife Kamal. These proceedings were commenced on 6th February 2013 by the Hiranandani's. Separately the Company and its Mauritius subsidiary have brought separate arbitration proceedings against the Burke Companies and their shareholder, BCL, to assert rights over the control of the Company's investments and information flow we are contractually entitled to. The proceedings against the Burke Companies and BCL were initiated on 5th March 2013.
The confidential nature of arbitration proceedings prevents us from disclosing further details as to the substance of these actions.
We continue to press all these claims with vigour and with the intention if possible of achieving a negotiated exit from the projects that shareholders will find acceptable. We will continue to update shareholders on any developments that we are able to.
The attention of shareholders is drawn to the paragraph referring to Disclaimer of opinion, in KPMG's Review Report on page 4 The accounts should be reviewed critically in that light, especially in connection with evaluating the Company's net asset value. The Company's principal tangible asset remains the preference shares it owns in Mauritius holding companies. These preference shares are illiquid and have no trading market. They represent contractual rights rather than equity in property. Accordingly, there is a great uncertainty as to their value both because of their structure and illiquidity. This uncertainty has been magnified by the Company's inability to obtain consistent information regarding the Company's underlying investments in India.
Shareholders should keep these facts in mind when reviewing these financial statements.
David Burton
27th June 2013
Review report by KPMG Audit LLC to Hirco plc
Introduction
We were engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 31 March 2013, which comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.
The condensed sets of financial statements included in this half yearly report have been prepared in accordance with IAS 34 Interim Financial Reporting.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Basis for disclaimer of review opinion
In seeking to form a review opinion on the condensed set of financial statements in the half-yearly report for the six month ended 31 March 2013, we have considered the implications of the significant uncertainties disclosed in the condensed financial statements concerning the following matters:
-- Note 11 set out the significant uncertainty regarding the carrying value of the Group's participating preference share interests in Burke 1 Limited, Burke 2 Limited, Burke 3 Limited and Burke 4 Limited ("the Burke companies"), including accrued preference dividends. The carrying value of the preference share interests and accrued preference dividends is based on cost less impairment. The assessment of impairment is undertaken by the Directors based on the unaudited net asset value of each of the Burke companies and the order of distribution of net assets set out in the respective investment agreements, as adjusted to include independent valuations of the underlying property development projects. As detailed in note 11, there are a number of uncertainties regarding the adjusted net asset value of the Burke companies, including the extended timelines for the projects, the sensitivity of the valuations to key assumptions, the availability of external finance in order to complete the projects and the lack of control able to be exercised by the Group over the projects and distribution of cash from the projects. The carrying value of the Group's participating preference share interests, including accrued preference dividends, in the Burke companies is therefore inherently uncertain.
-- Note 12 sets out the significant uncertainty regarding the outcome of various litigation and arbitration proceedings being pursued by the Company and Group against certain former directors and promoters and arbitrations involving the Company, its Mauritius subsidiary, members of the Hiranandani family, the Burke Companies and Burke Consolidated Limited. The outcome of this litigation/arbitration and any associated negotiations cannot be estimated with any reasonable degree of certainty and may be concluded at amounts significantly different from the amount of damages being claimed and to the net asset value as stated in the balance sheet.
There is potential for these uncertainties to interact with one another such that we have not been able to obtain sufficient appropriate evidence regarding the possible effect of the uncertainties taken together.
Disclaimer of review opinion on the interim financial statements
Because of the significance of the possible combined effect of the uncertainties described in the basis for disclaimer of review opinion paragraph above, we have not been able to obtain sufficient appropriate evidence to provide a basis for a review opinion. Accordingly we do not express a review opinion on the interim financial statements
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
27 June 2013
Consolidated statement of comprehensive income for the period ended 31 March 2013
Amount in GBP000
Hot Features
Premium
Unaudited Unaudited
6 months ended 6 months ended
Note 31 March 2013 31 March 2012
Investment income 7 114 7,632
------------------------------------- ----- ---------------- ----------------
Foreign exchange loss (6) (2)
------------------------------------- ----- ---------------- ----------------
Net investment income 108 7,630
===== ================ ================
Impairment loss on debt instruments 11 - (34,930)
------------------------------------- ----- ---------------- ----------------
Administrative expenses 8 (1,733) (442)
------------------------------------- ----- ---------------- ----------------
Loss before taxation (1,625) (27,742)
===== ================ ================
Income tax expense (2) -
------------------------------------- ----- ---------------- ----------------
Loss for the period (1,627) (27,742)
===== ================ ================
Other comprehensive income
------------------------------------- ----- ---------------- ----------------
Exchange difference on translation
of foreign operations (8) (1)
------------------------------------- ----- ---------------- ----------------
Total comprehensive loss for the
period (1,635) (27,743)
===== ================ ================
Weighted average number of ordinary
shares 100,526,984 100,526,984
Loss per share (pence), basic and
fully diluted 9 (2) (28)
Consolidated statement of financial position as at 31 March 2013
Amount in GBP000
Unaudited 31 Audited 30 September
ASSETS Note March 2013 2012
-------------------------------------- ===== ============= =====================
NON-CURRENT ASSETS
-------------------------------------- ----- ------------- ---------------------
Investments 11 - -
-------------------------------------- ----- ------------- ---------------------
Accrued income 187,901 187,901
-------------------------------------- -----
187,901 187,901
-------------------------------------- ----- ------------- ---------------------
CURRENT ASSETS
-------------------------------------- ----- ------------- ---------------------
Other debtors and prepayments 161 158
-------------------------------------- ----- ------------- ---------------------
Other current assets 159 202
-------------------------------------- ----- ------------- ---------------------
Cash and cash equivalents 10,312 11,712
-------------------------------------- ----- ------------- ---------------------
10,632 12,072
-------------------------------------- ----- ------------- ---------------------
Total assets 198,533 199,973
LIABILITIES
===== ============= =====================
CURRENT LIABILITIES
-------------------------------------- ----- ------------- ---------------------
Trade and other payables 2,347 2,152
-------------------------------------- ----- ------------- ---------------------
Total liabilities 2,347 2,152
Net assets 196,186 197,821
EQUITY
===== ============= =====================
Share capital 1,005 1,005
-------------------------------------- ----- ------------- ---------------------
Share premium 372,833 372,833
-------------------------------------- ----- ------------- ---------------------
Foreign currency translation reserve 14 22
-------------------------------------- ----- ------------- ---------------------
Retained earnings (177,666) (176,039)
-------------------------------------- ----- ------------- ---------------------
Total equity 196,186 197,821
Number of ordinary shares 10 100,526,984 100,526,984
Net Assets Value per share (Pence) 10 195 197
Consolidated statement of changes in equity for the period ended 31 March 2013
Amount in GBP000
Currency
Share Share Translation Retained
Capital Premium Reserve Earnings Total
---------------------------- --------- --------- ------------- ---------- ---------
Balance at 1 October 2011 1,005 372,833 22 (122,490) 251,370
---------------------------- --------- --------- ------------- ---------- ---------
Total comprehensive income
---------------------------- --------- --------- ------------- ---------- ---------
Loss for the year - - - (27,742) (27,742)
---------------------------- --------- --------- ------------- ---------- ---------
Other comprehensive income - - (1) - (1)
---------------------------- --------- --------- ------------- ---------- ---------
Total comprehensive income
for the year - - (1) (27,742) (27,743)
---------------------------- --------- --------- ------------- ---------- ---------
Balance at 31 March 2012
(unaudited) 1,005 372,833 21 (150,232) 223,627
Currency
Share Share Translation Retained
Capital Premium Reserve Earnings Total
---------------------------- --------- --------- ------------- ---------- ---------
Balance at 1 October 2012 1,005 372,833 22 (176,039) 197,821
---------------------------- --------- --------- ------------- ---------- ---------
Total comprehensive income
---------------------------- --------- --------- ------------- ---------- ---------
Loss for the year - - - (1,627) (1,627)
---------------------------- --------- --------- ------------- ---------- ---------
Other comprehensive income - - (8) - (8)
---------------------------- --------- --------- ------------- ---------- ---------
Total comprehensive income
for the year - - (8) (1,627) (1,635)
---------------------------- --------- --------- ------------- ---------- ---------
As at 31 March 2013
(unaudited) 1,005 372,833 14 (177,666) 196,186
Consolidated statement of cash flows for the period ended 31 March 2013
Amount in GBP000
Unaudited Unaudited
6 months 6 months
ended 31 ended 31
March 2013 March 2012
---------------------------------------------- ============ ============
Cash flows from operating activities
---------------------------------------------- ============ ============
Loss before taxation : (1,625) (27,742)
---------------------------------------------- ------------ ------------
Adjustment for:
---------------------------------------------- ------------ ------------
Loss on investments - 34,930
---------------------------------------------- ------------ ------------
Bank interest income (114) (70)
---------------------------------------------- ------------ ------------
Foreign exchange loss 6 2
---------------------------------------------- ------------ ------------
Operating (loss) / profit before working
capital changes (1,733) 7,120
---------------------------------------------- ------------ ------------
Change in debtors and prepayments 40 (7,495)
----------------------------------------------
Change in creditors and other accruals 195 (175)
---------------------------------------------- ------------ ------------
(1,498) (550)
---------------------------------------------- ------------ ------------
Bank interest received 114 70
---------------------------------------------- ------------ ------------
Tax paid (2) -
---------------------------------------------- ------------ ------------
Net cash used in operating activities (1,386) (480)
---------------------------------------------- ------------ ------------
Decrease in cash during the year (1,386) (480)
---------------------------------------------- ------------ ------------
Effect of exchange rate fluctuations on cash
balances (16) (3)
---------------------------------------------- ------------ ------------
Cash and cash equivalents at the beginning
of the period 11,714 13,321
---------------------------------------------- ------------ ------------
Cash and cash equivalents at the end of the
period 10,312 12,838
---------------------------------------------- ------------ ------------
Notes to the Consolidated Financial Statements
1 GENERAL INFORMATION
Hirco PLC (the "Company") is a public limited company incorporated in the Isle of Man on 2 November 2006. It was admitted to AIM on 13 December 2006.
The interim consolidated financial statements of Hirco PLC comprise the Company and its subsidiaries (together referred to as the "Group").
The principal activities of the Group include investment in FDI compliant Indian real estate projects for developments of large-scale and mixed-use township communities, which could include special economic zones ("SEZs") in India.
The audited consolidated financial statements of the Group for the year ended 30 September 2012 are available at www.hircoplc.co.im
2 STATEMENT OF COMPLIANCE
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 30 September 2012.
These condensed consolidated interim financial statements were approved by the Board of Directors on 26 June 2013.
3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 September 2012.
4 ESTIMATES
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these interim consolidated financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 30 September 2012.
5 FINANCIAL RISK MANAGEMENT POLICIES
The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 30 September 2012.
6 SEGMENT REPORTING
The Group has only one business and geographic segment, being the investment in real estate in India and hence no separate segment report has been presented.
7 INVESTMENT INCOME
Unaudited Unaudited
6 months 6 months
ended 31 ended 31
Mar 2013 Mar 2012
GBP000 GBP000
------------------------------------------- ---------- ----------
Preference dividends less impairment (see
note 11) - 7,562
Bank interest 114 70
114 7,632
------------------------------------------- ---------- ----------
The above dividends are after deduction of impairment provisions of GBP37.2m (2012: GBP25.7m).
8 ADMINISTRATIVE EXPENSES
Unaudited Unaudited
6 months 6 months
ended 31 ended 31
Mar 2013 Mar 2012
GBP000 GBP000
---------------------------- ---------- ----------
Employee costs 44 -
Professional fees 1,332 217
Directors' fees 292 168
Other administration costs 65 57
1,733 442
---------------------------- ---------- ----------
9 LOSS PER SHARE
Basic loss per share for the unaudited 6 months ended 31 March 2013 is based on the loss attributable to equity holders of the Company of GBP1,625,051 (Unaudited six months ended 31 March 2012: loss of GBP27,741,871) and the weighted average number of ordinary shares outstanding during the six months ended 31 March 2013 of 100,526,984 (Six months ended 31 March 2012: 100,526,984).
Unaudited
Unaudited 6 months
6 months ended ended 31
31 Mar 2013 Mar 2012
GBP000 GBP000
-------------------------------------------- ---------------- -------------
Loss attributable to equity holders of
the parent (GBP) (1,625,051) (27,741,871)
Weighted average number of ordinary shares 100,526,984 100,526,984
PENCE PENCE
-------------------------------------------- ---------------- -------------
Basic and diluted loss per share (2) (28)
-------------------------------------------- ---------------- -------------
There are no dilutive potential ordinary shares. There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.
10 NET ASSET VALUE PER SHARE
Net asset value per share is calculated by dividing the net assets attributable to the equity holders of the Company of GBP196,185,721 (30 September 2012: GBP197,820,963) by the number of ordinary shares as at 31 March 2013 of 100,526,984 (30 September 2012: 100,526,984).
31 March 30 September
2013 2012
GBP000 GBP000
------------------------------------------- ------------ -------------
Net assets attributable to equity holders
of the parent (GBP) 196,185,721 197,820,963
Number of ordinary shares 100,526,984 100,526,984
PENCE PENCE
------------------------------------------- ------------ -------------
Net asset value per share 195 197
------------------------------------------- ------------ -------------
11 GROUP INVESTMENTS
Company Projects Date of Book Value Book Value Book Value Cost of
in India Investment As at 30 Impairment As at 31 Acquisition
Sep 12 loss for Mar 13
the period
GBP000 GBP000 GBP000 GBP000
------------- ------------------ ------------------ ------------ ------------- ------------ -------------
Investment in participating
preference shares of:
Chennai
Burke 1 township
Limited projects 13-Feb-2007 - - - 77,847
Chennai
Burke 2 commercial
Limited projects 23-Mar-2007 - - - 47,889
Burke 3 Panvel
Limited SEZ, commercial
and Burke and residential 19-Jul-2007
4 Limited projects and 25-Oct-2007 - - - 225,074
------------- ------------------ ------------------ ------------ ------------- ------------ -------------
Balance
as at 31
March 2013 - - - 350,810
----------------------------------------------------- ------------ ------------- ---------- -------------
The participating preference share interests in Burke 1 Limited, Burke 2 Limited, Burke 3 Limited and Burke 4 Limited entitle the Group to an accrued preference dividend of 12% per annum compounded annually, a preferred capital return and a 40% share in residual profits. The debt component of this compound financial instrument, representing the preference dividend and the preferred capital return, is stated at amortized cost, with the preference dividend accrued under the effective interest method. The equity component representing the 40% residual profit share is stated at fair value. The cost of acquisition of GBP350.8 million is treated as the debt component; hence there is no cost attributable to the equity component. The equity component was written down to nil as at 30 September 2010.
The carrying value of the Group's investments and accrued preference dividends were assessed for impairment based on the net asset value of the Burke Companies and the order of distribution of net assets of those companies based on the investment agreements. This gave rise to an impairment provision against the investments of GBP350.8m which was fully recognised at 30 September 2012 and an impairment provision against the preference dividends of GBP136.9m, of which GBP99.7m was recognised as at 30 September 2012.
The Burke Companies' net assets were adjusted to reflect the valuation of the underlying projects carried out by CBRE, an independent valuer, using the valuation standard prescribed by the Royal Institute of Chartered Surveyors. The valuation done by CBRE is based on the details of pre-sales achieved, project progress, expected revenue and anticipated cost of construction as on the valuation date. The valuers have also made reference to market evidence of transaction prices for similar projects. The assumptions underlying the September 2012 valuation were re-confirmed as at 31 March 2013.
Burke 1 Burke 2 Burke 3 Total
Limited Limited & Burke
4 Limited
GBP000 GBP000 GBP000 GBP000
Net worth post valuation as on 31
March 2013 before charging Preference
dividend 18,771 14,817 154,313 187,901
DISTRIBUTION IN THE ORDER OF CONTRACTUAL
PREFERENCE:
Preference dividend (18,771) (14,817) (154,313) (187,901)
Repayment of the Group's participating - - - -
preference shares
Repayment of the Ordinary Shares, - - - -
denominated in US dollars (which
are subordinated to the participating
preference shares)
Share of the Group (40%) of the residual - - - -
net worth
Share of the ordinary shareholders - - - -
(60%) of the residual net worth
------------------------------------------ --------- --------- ----------- -----------
Total distribution (18,771) (14,817) (154,313) (187,901)
------------------------------------------ --------- --------- ----------- -----------
The above figures have been extracted from the Burke Companies' statements of financial position as at 31 March 2013 as per the unaudited quarterly information packs provided by HDPL.
There are a number of key uncertainties regarding the methodology to assess the carrying value of the Group's investment in preference shares (and accrued preference dividend):
- The Burke Companies' group reporting packs, used for the net asset value calculation, are unaudited.
- The project valuations are highly sensitive to key assumptions, including discount rates, project timelines, cost and revenues.
- Completion of the projects will likely take at least another ten years.
- Significant external finance will likely be required to complete the projects, with the inevitable uncertainties regarding availability and terms thereof.
- The Group does not have control over the timing and amounts of distributions from the projects.
12 LITIGATION
Legal proceedings have been issued by the Company against two former directors of the Company, Hiranandani Family Members, Niranjan Hiranandani and Priya Hiranandani-Vandrevala, in the English courts and in the Isle of Man courts. The Company is also involved in a related arbitration with Niranjan Hiranandani and his wife Kamal Hiranandani. In addition the Company and its Mauritius subsidiary have brought separate arbitration proceedings against the Burke Companies and their shareholder, Burke Consolidated Limited, "BCL", with a view to ensuring compliance by them with their contractual obligations to the Company under the investment agreements the Group has with them. Further details of these claims are set out in the paragraphs that follow.
The English proceedings against Niranjan Hiranandani and Priya Hiranandani-Vandrevala were issued in the High Court on 6 February 2013 on behalf of the Company and its wholly owned subsidiary Hirco Holdings Limited, ("HHL"). The claim is for damages of almost GBP220m. Proceedings were issued at that time in order to protect the Company's position in relation to the possible expiry of limitation periods. Both defendants have indicated their intention to contest the proceedings, and also to contest the jurisdiction of the English courts.
The same proceedings against Niranjan Hiranandani and Priya Hiranandani-Vandrevala were also issued in the Isle of Man courts on behalf of the Company and HHL on 6 February 2013. Again this was in order to protect the Company's position in relation to the possible expiry of limitation periods. These proceedings have now been served in the Isle of Man courts. In response to the threat of legal action, Priya Hiranandani-Vandrevala issued proceedings in the Isle of Man on 1 February 2013 seeking an order under s337 of the Isle of Man Companies Act 1931 that she ought fairly to be excused for any breaches of duty of which she is found to be liable.
Certain of HHL's claims against Niranjan Hiranandani that would otherwise be heard as part of the English or Isle of Man proceedings detailed above are currently the subject of arbitration proceedings because they fall within the arbitration provisions of an exclusivity agreement between HHL, Niranjan Hiranandani and Kamal Hiranandani. Niranjan and Kamal Hiranandani initiated those proceedings on 31 January 2013 seeking a declaration that Niranjan Hiranandani has no liability to HHL.
Separately, the Company and HHL have launched arbitration proceedings against each of the Burke Companies and BCL. These proceedings, which were initiated on 5 March 2013, are being brought in order to assert the Company and HHL's contractual rights under the investment agreements, being the mechanism by which the Company and HHL can exercise control over the projects and monitor their investments.
The confidential nature of arbitration proceedings prevents the disclosure of further details as to the substance of these actions.
The Board considers that these actions are necessary and proper, and the best way for the Company to protect its shareholders' investments. The Board intends to pursue this litigation and the arbitration proceedings while also seeking to resolve its dispute with the Hiranandani Family through negotiation.
No provision has been made in these financial statements for any possible recovery under these actions.
13 SUBSEQUENT EVENTS
There are no significant post balance sheet events that have a material effect on the financial statements as at 31 March 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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