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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mercantile Ports & Logistics Limited | LSE:MPL | London | Ordinary Share | GG00BKSH7R87 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.80 | 1.70 | 1.90 | 1.80 | 1.80 | 1.80 | 100,629 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMMPL
RNS Number : 0402O
Mercantile Ports & Logistics Ltd
30 September 2019
30 September 2019
Mercantile Ports & Logistics Limited
("MPL", the "Group" or the "Company")
Interim Results
Mercantile Ports & Logistics (AIM: MPL), which is developing a modern port and logistics facility in Navi Mumbai, Maharashtra, India, announces its interim results for the period ended 30 June 2019.
Highlights during and post period:
-- Deployment of monies raised in December to make facility operationally ready
-- Official inauguration ceremony took place on 8 March, presided over by the Honourable Chief Minister of Maharashtra
-- Secured GBP5.5 million contract with Tata projects Ltd and Daewoo Engineering
-- Encouraging visibility on delivering further contracts wins, with the Company expecting meaningful revenues to be generated in the coming months
Nikhil Gandhi, Executive Chairman of MPL, commented: "I am delighted to report on a period of progress, following the inauguration of Karanja Port and the generation of first revenue from cargo movements. The strategic importance of Karanja Port has been demonstrated by the multi-year contract with Tata and Daewoo and we continue to see interest from numerous other parties to use our Facility.
"Currently, we are negotiating with, or in diligence and contracting phase with, at least two other major corporations to start using our facility during the course of 2019 and we have built a growing pipeline of potential customers. We look forward to contracting with more of the largest and most prestigious companies operating in the Sub Continent and delivering growth for our shareholders."
This announcement contains price sensitive information.
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Enquiries:
MPL Jay Mehta
C/O Newgate Communications
+44 (0)20 3757 6880
Cenkos Securities plc Stephen Keys
+44 (0)20 7397 8900
Newgate Communications (Financial Adam Lloyd
PR) +44 (0)20 3757 6880
Chairman's Statement
2019 has, so far, been a year of progress as our project develops and we build on what has been achieved to date. On 8 March, the Board of Directors and I were truly honoured when the Chief Minister of Maharashtra, Devendra Fadnavis, and other notable dignitaries, together with contracted and potential customers attended the inauguration of our Facility. This was a major milestone for the Company and enabled us to make it clear that our Facility is now open for business.
The other important milestone was the receipt of our first fee paying customer. Whilst this customer had already conducted trials at the Facility and the amount of cargo and resulting fee was small, it was a symbolic milestone and provided a platform from which we could negotiate contracts for meaningful volumes and revenue. We would have liked negotiations with that and other customers to have progressed more quickly but our business development team is performing strongly, with almost weekly site visits for potential customers.
On 9 September, we were delighted to announce the signing of our third customer contract, with Tata Project Limited and Daewoo Engineering, as these parties use our Facility to execute their workstreams for the construction of India's longest sea bridge, the Mumbai Trans Harbour Link, which has an estimated build cost of approximately $2.1 billion. This contract is expected to translate into revenue for the Company in excess of GBP 5.5 million over a 40-month period starting April 2020, with there being provisions in the contract for an extension of an additional 18 months. We believe that securing a contract with companies like Tata Projects and Daewoo is a further example of the attractive qualities of our site, in terms of logistics, fabrication and importantly enviable surrounding infrastructure to access the site.
Currently, we are negotiating with, or in diligence and contracting phase with, at least two other major corporations to start using our facility during the course of 2019 and we have built a growing pipeline of potential customers. Our team works closely with the senior management team of our major shareholder, Hunch Ventures, in seeking to win new business and it is pleasing that the relationship between Hunch Ventures and Mercantile Ports is a strong one and is strengthening further.
On site, since the start of the year, further work has been undertaken with regards to dredging the channel. In addition, ground improvement, security installations, installation of firefighting equipment and personnel, the build out of customs offices and IT implementation have all occurred at the site. The Facility enjoys full customs' approval and all other regulatory permissions needed to operate a port and logistics business and we look forward to meaningful revenues being generated this calendar year. The reclamation of land will continue this year and next, in parallel with the pipeline of new business coming on stream.
The successful fundraise we completed in 2018 allowed the Company to continue to build out the Facility and pursue customer acquisition without fear of being impacted by the banking difficulties in India. Whilst we have no need currently to further use our banking facility, I am pleased to report that the existing consortium of banks to Karanja Terminal Private Limited have been in advanced discussions with the Company about, once again, making available the existing banking facility to be drawn down. This does not change the Board's plans for MPL, but I believe that this is encouraging, as it demonstrates that the challenges faced by the banking system in India may be receding and this improving broader economic climate is a positive backdrop for customers intending to use our Facility. Importantly, it also demonstrates that these banks have confidence in our project and are happy to lend to it.
We believe that the re-election of Prime Minister Modi provides further support to the Company, as he and his government drive forward the Sagarmala initiative, which supports port-led development as a key driver of the Indian economy. MPL is proud to be an important contributor to the delivery of the Indian Prime Minister's flagship policy.
Around the time of the inauguration, we were delighted to host our Non-Executive Directors, our Nomad and both existing and potential institutional investors at the site. These visits have involved a tour of the site and meetings with our engineering team and also with contracted and potential customers, with a view to us demonstrating the work that has been completed and the opportunities available to the Company. We are always proud to show off our site and extend a warm invitation to any other interested parties.
Outlook
India is forecast to continue enjoying significant economic growth in the coming years and has been and will always be a global trading nation. We are confident that our Facility will benefit from this, growing in tandem with India's growth, and from being located in close proximity to the financial and industrial heartland of India. Whilst it has taken longer than we would have liked, the recent contract win with the Daewoo Tata JV does, we believe, demonstrate the opportunity that our Facility has to benefit from significant infrastructure projects being undertaken in the region. We continue to see interest from numerous parties in using our Facility and, whilst it has taken longer than originally anticipated, we look forward to contracting with more of the largest and most prestigious companies operating in the Sub Continent.
Nikhil Gandhi, Executive Chairman
Mercantile Ports & Logistics Limited 25th September 2019
FINANCIAL REVIEW
In December 2018 the Company raised an additional GBP29.82 million from Investors, giving us the security to address the general banking constraints in India.
The successful fundraise meant that the delay to the drawdown of the Company's banking facilities did not have an impact on the Group. During the last 6 month we have spent GBP5.6m of the cash raised across 3 main areas
1. On key project expenditure to enable the facility to be operational.
2. Servicing the debt on the current facility
3. Managing working capital.
As of 30 June 2019, MPL had cash resources of GBP15.7million including a GBP8.3m debtor in the form of an Escrow Account controlled by the Company's wholly owned subsidiary (31 Dec 2018: GBP21.4 m and 30 June 2018: GBP1.08m) and GBP20.78 million headroom in its existing credit facility (31 Dec 2018: GBP20.5m) (using INR/GBP exchange rate at 30 June 2019 of 87.35, 31 December 2018: 88.55 and 30 June 2018: 89.93). Given that the RBI approval from the Reserve Bank of India to transfer the placing proceeds of Hunch to the Company's bank account in Guernsey was taking longer than anticipated, the monies held in Escrow have transferred to a bank account of MPL wholly owned subsidiary, Karanja Terminal and Logistics Private Limited ("KTLPL"). The funds are now fully available to be deployed as needed and this GBP8.3 million is no longer a debtor.
During the summer monsoon and prior to meaningful revenues being generated, the Company managed its cash position prudently. Management are confident that they will be able to optimise MPL's capital structure in the next 12 months, including securing access to debt capital on better terms. The Company believes that it will achieve this based on the majority of construction risks having been eliminated and regulatory risks having been successfully dealt with. In addition, the Group has signed contracts with end users and a healthy pipeline of customers that have signalled to move from Memorandum of Understanding "MoU" to documentation stage.
During the period, a customer, with which the Company is in negotiations for a long term contract, successfully landed cargo and paid for this service. As explained on page 46 of the Company's 2018 Annual accounts, the current accounting policy on Property Plant and Equipment states that "Cost includes expenditures that are directly attributable to the acquisition of the asset and income directly related to testing the Facility is offset against the corresponding expenditure". Given that this cargo movement was not part of a larger contract, it has been possible for the revenues received in this instance to be netted against the ongoing construction cost and recognised as Property, Plant and Equipment on the balance sheet. Once trading revenue is generated, which is expected during this calendar year, this revenue and its related costs will be recognised in the comprehensive statement of Income.
Corporate Governance
From 28 September 2018, under the AIM Rules, the Company is required to comply with a recognised corporate governance code chosen by the Board. The Board recognises the importance of sound corporate governance and has adopted that the Quoted Companies Alliance ("QCA") Code.
An updated Statement of Compliance with the QCA Corporate Governance Code will be published on our website on the 26 September.
Andrew Henderson, CFO
Mercantile Ports & Logistics Limited, 25 September, 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 June 2019
Note
6 months 6 months Year to
to 30 June to 30 June 31 Dec
2019 2018 2018
GBP000 GBP000 GBP000
CONTINUING OPERATIONS
Revenue - - -
Administrative expenses (1,899) (1,711) (3,296)
------------ ------------ ---------
OPERATING LOSS (1,899) (1,711) (3,296)
Finance income 10 12 13
Finance cost (125) - -
------------ ------------ ---------
NET FINANCING INCOME/(COST) (115) 12 13
LOSS BEFORE TAX (2,014) (1,699) (3,283)
Tax expense for the period / year - - -
------------ ------------ ---------
LOSS FOR THE PERIOD /YEAR FROM
CONTINUNING
OPRATION (2,014) (1,699) (3,283)
Loss on closure of subsidiary operations (44) - -
Tax expense of discontinued operations - - -
------------ ------------ ---------
LOSS FOR THE PERIOD/YEAR (2,058) (1,699) (3,283)
Loss for the period / year attributable
to:
Non-controlling interest (3) (2) (5)
Owners of the parent (2,055) (1,697) (3,278)
------------ ------------ ---------
Loss for the period / year (2,058) (1,699) (3,283)
============ ============ =========
Other comprehensive income/(expense)
Items that will not be reclassified
to profit or( loss)
Re-measurement of net defined benefit
liability - 6 4
Items that may be reclassified to profit
or loss
Exchange differences on translating
foreign operations 4 1,282 (3,815) (2,218)
------------ ------------ ---------
Other comprehensive loss for the period
/ year 1,282 (3,809) (2,214)
------------ ------------ ---------
Total comprehensive loss for the period
/ year (776) (5,508) (5,497)
============ ============ =========
Total comprehensive loss for the period
/ year attributable to:
Non-controlling interest (3) (2) (5)
Owners of the parent (773) (5,506) (5,492)
------------ ------------ ---------
(776) (5,508) (5,497)
============ ============ =========
Loss per share (consolidated):
Basic & Diluted, for the year/period
attributable to ordinary equity holders
(GBP) (0.001) (0.004) (0.006)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2019
Note Period Period Year ended
ended ended 31 Dec
30 June 30 June 2018
2019 2018
GBP000 GBP000 GBP000
Assets
Property, plant and equipment 7 138,926 127,094 131,257
------------- --------------- ----------------
Total non-current assets 138,926 127,094 131,257
------------- --------------- ----------------
Trade and other receivables 27,938 14,182 26,169
Cash and cash equivalents 7,371 1,084 13,113
------------- --------------- ----------------
Total current assets 35,309 15,266 39,282
Total assets 174,235 142,360 170,539
============= =============== ================
Equity
Share capital and share premium 134,627 106,763 134,627
Retained earnings (5,783) (2,191) (3,772)
Translation reserve (13,676) (16,555) (14,958)
------------- --------------- ----------------
Equity attributable to owners
of parent 115,168 88,017 115,897
------------- --------------- ----------------
Non-controlling interest 8 14 11
------------- --------------- ----------------
Total equity 115,176 88,031 115,908
------------- --------------- ----------------
Liabilities
Non-current
Borrowings 34,302 33,341 33,831
Employee benefit obligations 26 1 3
Trade and other payables 2,591 - -
------------- --------------- ----------------
Non-current liabilities 36,919 33,342 33,834
------------- --------------- ----------------
Current
Borrowings 60 55 59
Employee benefit obligations 41 54 58
Current tax liabilities 7,339 7,157 7,341
Trade and other payables 14,700 13,721 13,339
------------- --------------- ----------------
Current liabilities 22,140 20,987 20,797
------------- --------------- ----------------
Total liabilities 59,059 54,329 54,631
------------- --------------- ----------------
Total equity and liabilities 174,235 142,360 170,539
========= ============= =================================
CONDENSED STATEMENT OF CASH FLOWS
for the period ended 30 June 2019
Note 6 months 6 months Year to
to 30 June to 31 Dec 2018
2019 30 June
2018
GBP000 GBP000 GBP000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (2,058) (1,699) (3,283)
Adjustments including changes in working
capital 5 928 1,949 46
------------- --------------- ----------------
Net cash generated/used from operating
activities (1,919) 250 (3,237)
------------- --------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (4,541) (4,525) (8,420)
Proceeds from sale of fixed asset - - 5
Finance income 2 7 13
------------- --------------- ----------------
Net cash used in investing activities (4,539) (4,518) (8,402)
------------- --------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of share capital - - 19,552
Proceeds/ from borrowing 6 (17) (44)
Net cash generated from / (used in)
financing activities 6 (17) 19,508
------------- --------------- ----------------
Net change in cash and cash equivalents (5,663) (4,285) 7,869
Cash and cash equivalents, beginning
of the period / year 13,113 5,423 5,423
Exchange differences on cash and cash
equivalents (79) (54) (179)
------------- --------------- ----------------
Cash and cash equivalents, end of the
period / year 7,371 1,084 13,113
============= =============== ================
Note :
1) The adjustments and working capital movements have been combined in the above Statement of Cash Flows.
2) As at the 30.06.2019 & 31.12.2018 the company had cash resources of GBP15.7 Million and GBP21.4 million respectively including a GBP8.3m debtor in the form of a promissory note/bank guarantee from Hunch Ventures', as payment of the Subscription Price from India to the Company's bank account in Guernsey which requires the approval of the Reserve Bank of India ("RBI"), with the flow of funds happening following that approval. As announced on 29 March 2019, in order to ensure that there is no doubt about Hunch's commitment to the project, Hunch transferred GBP8.3 million to an Escrow Account controlled by the Company's wholly owned subsidiary. Since the 30 June 2019, given that the approval process from the RBI to transfer the funds to the Parent in Guernsey was taking longer than anticipated, the monies held in Escrow have been transferred to a bank account of MPL's wholly owned subsidiary, Karanja Terminal and Logistics Private Limited ("KTLPL"). These funds are now fully available to be used by KTLPL for the continued development of the Facility.
Consolidated Statement of Changes in Equity
for the PERIOD ended 30 JUNE 2019
Stated Translation Retained Other Non- controlling Total
Capital Reserve Earnings Components Interest Equity
of equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------- ------------ ---------- ------------ -----------------
Balance at
1 January 2018 106,763 (12,740) (498) -- 16 93,541
Issue of share
capital 29,820 -- - -- - 29,820
Share Issue cost (1,956) -- - -- - (1,956)
--------- ------------ ---------- ------------ ----------------- --------
Transactions with
owners 134,627 (12,740) (498) -- 16 121,405
--------- ------------ ---------- ------------ ----------------- --------
Loss for the year -- -- (3,278) -- (5) (3,283)
Foreign currency
translation differences
for foreign operations -- (2,218) -- -- -- (2,218)
Re-measurement
of net defined
benefit liability -- -- -- 4 -- 4
Re-measurement
of net defined
benefit liability
transfer to retained
earning -- -- 4 (4) -- --
--------- ------------ ---------- ------------ ----------------- --------
Total comprehensive
income for the
year -- (2,218) (3,274) -- (5) (5,497)
--------- ------------ ---------- ------------ ----------------- --------
Balance at
31 December 2018 134,627 (14,958) (3,772) -- 11 115,908
========= ============ ========== ============ ================= ========
Balance at
1 January 2019 134,627 (14,958) (3,772) -- 11 115,908
Issue of share capital -- -- -- -- -- --
Transactions with
owners 134,627 (14,958) (3,772) -- 11 115,908
-------- --------- -------- ----- ---- --------
Loss for the year/Period -- -- (2,055) -- (3) (2,058)
Loss on closure
of subsidiary operations -- -- 44 -- -- 44
Foreign currency
translation differences
for foreign operations -- 1,282 -- -- -- 1,282
-------- --------- -------- ----- ---- --------
Total comprehensive
income for the year -- 1,282 (2,011) -- (3) (732)
-------- --------- -------- ----- ---- --------
Balance at
30 June 2019 134,627 (13,676) (5,783) -- 8 115,176
======== ========= ======== ===== ==== ========
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Reporting entity
Mercantile Ports & Logistics Limited (the "Company") was incorporated in Guernsey under the Companies (Guernsey) Law 2008 on 24 August 2010. The condensed interim consolidated financial statements of the Company for the period ended 30 June 2019 comprise the Company and its subsidiaries (together referred to as the "Group"). The Company has been established to develop, own and operate port and logistics facilities.
2. General information and basis of preparation
The condensed interim consolidated financial statements are for the 6 months' period ended 30 June 2019 and are not full year accounts. The condensed interim consolidated financial statements are prepared under AIM 18 guidance. They have been prepared on the historical cost basis. They do not include all of the information required in annual financial statements in accordance with IFRS. The condensed interim consolidated financial statements are not audited.
The condensed interim consolidated financial statements are presented in Great British Pounds Sterling (GBP), which is the functional currency of the parent company. The preparation of the condensed interim consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
In preparing these, condensed interim consolidated financial statements, the significant judgments made by management applying the Group's accounting policies and the key sources of estimation uncertainty are the same as those applied in the annual IFRS financial statements. "The Company is confident of its ability to raise further funds to meet cost overruns, project enhancements or working capital requirements. The Company's financing effort to date is considered sufficient to enable the Company to fund all aspects of its operations. As a result, the condensed interim consolidated financial statements have been prepared on a going concern basis."
The condensed interim consolidated financial statements have been approved for issue by the Board of Directors on 25(th) September, 2019.
3. Significant accounting policies
The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 December 2018. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements.
New standards, amendments and interpretations to existing standards effective from January 1, 2019
IFRS 16 "Leases"
The Group has adopted the standard from January 1, 2019 without restating comparative amounts for the year 2018 as permitted by the simplified retrospective approach. In addition, the Group has applied the exceptions provided for short-term leases, including contracts with a term of less than twelve months after the application date and those relating to low-value assets.
Most of the lease contracts are operating leases where the Group is the lessee. Leased assets are mainly real estate assets.
Key assumptions that the Group is applying for implementing the standard are as follows:
Terms: For each contract, the Group reviewed the renewal and the early termination options within the term of the arrangement and determined, after taking into account all the relevant facts and circumstances, what would be the date at which the Group reasonably expects the contract to be terminated. For certain categories of leased assets, the Group assesses that there is no reasonably certain extension option, consequently the duration selected coincides with the first term of the lease contract. For real estate lease arrangements, the Group defines the reasonable end date of the contracts, while taking into account the renewal and early termination options stated in the agreements, in line with the asset's expected period of use.
Discount rates: The Group determined discount rates reflecting each subsidiary's specific credit risk, the currency of the contract and the weighted average maturity of the reimbursement of the lease liability. For the transition the incremental borrowing rate used is the rate applicable to the residual terms of the contracts.
For contracts previously classified as finance leases the Group has recognized the carrying amount of the right of use assets and lease liability at the date of initial application.
The reconciliation between operating lease commitments disclosed at December 31, 2018 and the lease liability recognized at IFRS 16 first application date is presented below:
Particular GBP000
Operating lease commitments disclosed as at December
31, 2018 8,375
--------
Present value adjustment using incremental borrowing
rate of 8% (5,449)
--------
Lease liability at January 1, 2019 2,926
--------
Of which are:
--------
Current lease liabilities 293
--------
Non-current lease liabilities 2,633
--------
Right-of-use assets include the following types of assets:
Particular 30 June 2019 1 January
GBP000 2019
GBP000
Land & building (Office premises) 2,820 2,926
------------- ----------
The first time application of IFRS 16 affected mainly the following items in the statement of financial position on January 1, 2019:
Particular 31 Dec 2018 Impact of 1 January
GBP000 adoption 2019
of IFRS 16 GBP000
Property plant and equipment 131,257 2,926 134,183
------------ ------------ ----------
Non-current financial liabilities 33,834 2,633 36,467
------------ ------------ ----------
Current financial liabilities 20,797 293 21,090
------------ ------------ ----------
IFRIC 23 "Uncertainty over income tax treatments"
IFRIC Interpretation 23 "Uncertainty over income tax treatments" clarifies the recognition and valuation principles applicable to income tax risks. These risks arise when there is uncertainty related to a tax position adopted by the Group that could be challenged by the tax administration.
This interpretation was adopted by the European Union in October 2018 and is applicable for financial years beginning on January 1, 2019 and did not have any significant impact on the financial statements.
There are no other new standards, updates and interpretations published and effective whose impact could be significant for the Group.
Improvements to IAS 19 - Plan Amendment, Curtailment or Settlement
The amendments relate to the measurement of pension obligations based on updated assumptions if plan amendment, curtailment or settlement occurs. After such an event, the past service cost as well as any gains or losses on the basis of current actuarial assumptions and a comparison of the resulting pension benefits must be calculated before and after the change. The periods before and after the plan amendment, curtailment or settlement are treated separately in subsequent measurement. The improvements were endorsed by the European Union on March 13, 2019. The group does not anticipate any effects from the improvements to IAS 19 in 2019.
Amendments to IFRS 9 - Financial Assets with a Prepayment Feature with Negative Compensation
The amendments pertain to the relevant criteria for the classification of financial assets. Financial assets with a prepayment feature with negative compensation may be recognized under certain conditions at amortized cost or at fair value through other comprehensive income instead of at fair value through profit and loss. They have no effect on the group.
4. Comprehensive income
The comprehensive loss for the period is calculated after crediting a profit of GBP 1.28 million, which arises on the retranslation of foreign operations to Great British Pounds Sterling (GBP), which is the functional currency of the Company and loss of GBP 0.04 million on cessation of wholly owned subsidiary "Mercantile Ports (Netherlands) B.V." (INR/GBP exchange rate at 30 June 2019 of 87.34, 31 December 2018: 88.54 and 30 June 2018: 89.93 were used).
5. Cash flow adjustments and changes in working capital
The following non-cash flow adjustments and adjustments for changes in working capital have been made to profit before tax to arrive at operating cash flow:
Period ended Period ended Year ended
30 Jun 2019 30 Jun 2018 31 Dec 2018
GBP000 GBP000 GBP000
Adjustments and changes in working
capital
Depreciation 142 36 71
Finance income (2) (7) (13)
Re-measurement of net defined
benefit liability - 6 -
Unrealized exchange loss - - 1
Change in trade and other payables 2,080 5,160 3,714
Change in trade and other receivables (1,292) (3,246) (3,727)
928 1,949 46
------------- ------------- ------------
6. Loan facility
Karanja Terminal & Logistics Private Limited (KTLPL), the Indian subsidiary has in place a rupee term loan of INR 480 crore (GBP 54.95 million) for part financing the port facility. The rupee term loan was sanctioned by 4 Indian public sector banks and the loan agreement was executed on 28(th) February, 2014. On 29 September
2017 the terms of sanction was amended, extending the tenure of the loan for 13 years and 6 months with repayment commencing from the end of June 2020 which is as follow:
Repayment amount
Payment falling GBP in Million
due INR in Crore
Within 1 year - -
1 to 5 year's 222.00 25.42
After 5 year's 258.00 29.53
Total 480.00 54.95
============= ===============
The rate of interest will be a floating rate linked to the Canara bank base rate (9.40%) with an additional spread of 375 basis points. The present composite rate of interest is 13.20%. The borrowings are secured by the hypothecation of the port facility and pledge of its shares as well as a personal guarantee by the chairman, Nikhil Gandhi. The carrying amount of the bank borrowing is considered to be a reasonable approximation of the fair value.
KTLPL has utilised the rupee term loan facility of INR 298.45 crore (GBP 34.17 million) as at 30 June 2019 (1 crore = 10 Million Rupees). (30 June 2018: INR 298.45 crore (GBP33.19 million)) as of the reporting date.
7. Property, plant and equipment
During the six months ended 30 June 2019, the Group progressed construction of the facility and the carrying amount at 30 June 2019 was GBP 138.93 million (31 June 2018: GBP 127.09 million). The amount of borrowing costs capitalised during the six months ended 30 June 2019 was GBP 2.36 million (31 December 2018: GBP 2.32 million). The weighted average rate used to determine the amount of borrowing costs during the period eligible for capitalisation was 13.20 %, which is the effective interest rate of the specific borrowing.
8. Closure of subsidiary operation.
During the period group has closed the wholly owned subsidiary i.e Mercantile Ports (Netherlands) B.V. with effect from 17(th) May 2019. On the date of closure, the net worth of the company was GBP (0.04) million which is charged to statement of comprehensive income.
9. Trade Payable.
During the period trade payable has significantly increased as compared with December 2018, the increase is mainly on account of adopting new IFRS 16 "Leases".
10. Events subsequent to the reporting period.
Since the 30 June 2019, given that the approval process from the RBI to transfer the funds to the Parent in Guernsey was taking longer than anticipated, the monies held in Escrow have been transferred to a bank account of MPL's wholly owned subsidiary, Karanja Terminal and Logistics Private Limited ("KTLPL"). These funds are now fully available to be used by KTLPL for the continued development of the Facility.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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