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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Nordic Land | LSE:NLD | London | Ordinary Share | JE00B1Z91C77 | 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% | 10.00 | 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
TIDMNLD
RNS Number : 0553P
Nordic Land PLC
28 September 2011
28 September 2011
Nordic Land plc (in Liquidation)
Preliminary Announcement of Results
For the year ended 31 March 2011
Nordic Land plc (in Liquidation) ("Nordic Land" or the "Company" and together with its subsidiaries, the "Group") is a Jersey-registered, property investment company established in April 2007 to invest principally in retail real estate in the Nordic Region, including Sweden, Norway and Finland.
During the year, following approval at a shareholder meeting on 7 October 2010, the Group sold its entire property portfolio, repaid its bank borrowings and effectively ceased operations.
On 6 December 2010, following approval by shareholders at a subsequent general meeting, the directors commenced a summary winding up of the Company and its remaining subsidiaries.
The directors intend to distribute the net cash resources of the Company, after meeting the costs of the disposal and the costs of the winding up, to shareholders. An initial capital distribution of 10.5 pence per share was accordingly made on 11 February 2011.
The Company's shares are traded on the AIM market of the London Stock Exchange; however following disposal of the properties in October and November 2010, it is expected that these shares will cease to trade on AIM in November 2011, in accordance with AIM rules.
KEY POINTS
-- Properties sold for an aggregate consideration of SEK 673 million (GBP 61.9 million) compared to a prior year valuation of SEK 669 million (GBP 61.3 million)
-- Anticipated total return to shareholders of approximately 22.5 pence per share
-- Initial distribution of 10.5 pence per share made on 11 February 2011
-- Basic and EPRA NAV per share of 16.3 pence per share as at 31 March 2011 (post Initial Capital Distribution)
-- Final Distribution of approximately 12 pence per share is expected to be made in Q2 2012
Chairman, Ray Horney commented "The Board and shareholders have had to face some difficult issues and decisions during the last year, but I and the rest of the Board believe that the decisions reached and actions taken have been in the best interests of the Company's shareholders".
For further information please contact:
Nordic Land plc
Ray Horney +44 (0) 1273 775225
SP Angel Corporate Finance LLP
Robert Wooldridge +44 (0) 20 4463 2260
Matrix Corporate Capital LLP
Stephen Mischler +44 (0) 20 3206 7000
Bankside Consultants
Simon Rothschild +44 (0) 20 7367 8888
Chairman's Statement
Operating review
The results for the year ended 31 March 2011 cover the last full period in which the Group owned its portfolio of properties in Sweden. During the year, all of the properties were sold and the Group commenced an orderly winding up of its operations.
Sale of properties and winding up of the Group
At a general meeting of shareholders held on 7 October 2010 shareholders approved the sale of the Group's property portfolio on terms as set out in a circular to shareholders dated 17 September 2010.
Accordingly, on 15 October 2010, the sales of the subsidiaries owning Terminalen 1, Helsingborg and Lackeraren 3, Borlange were completed and all of the Group's bank borrowings were repaid. On 25 November 2010 the sale of the subsidiary owning the properties in Sicklaon was completed.
The sale of the Group's two largest properties, Terminalen 1 in Helsingborg and Lackeraren 3 in Borlange, were completed on 15 October 2010 at gross property values of SEK 490 million (GBP 45.1 million ) and SEK 148 million (GBP 13.6 million) respectively. Out of the gross consideration SEK 15 million (GBP 1.5 million) from the sale of Terminalen and SEK 2.5 million (GBP 0.2 million) from the sale of Borlange have been placed in escrow to cover potential warranty claims that may be brought by the purchasers of each property. Provided that no such claims are brought (and that the mortgage certificates for the Sicklaon property are delivered to its buyer - see below), these escrow amounts will be released to the Group on 14 October 2011 and 14 February 2012 respectively, but will be subject to a charge in favour of the Sickla buyer until the mortgage certificates are replaced, which is expected to occur by the end of Q1 2012.
The sale of the third property ("Sickla"), in Sicklaon, had to be renegotiated because the original lender, Lehman Brothers International (Europe) (In Administration), in its capacity as security agent for the bank borrowings and as holder of the mortgage certificates for the property, was not able to locate these mortgage certificates. Without the mortgage certificates the sale of Sickla could not be completed as planned. Under the renegotiated terms, the property was sold for the same gross consideration of SEK 35 million (GBP 3.2 million) but, out of this, SEK 12 million (GBP1.2 million) has been retained in a pledged account until the replacement mortgage certificates can be provided to the purchaser. The Sickla purchaser has taken a second charge on the Terminalen and Borlange escrow amounts. Replacement mortgage certificates are expected to be obtained in the first quarter of 2012. The sale of Sickla was completed on 25 November 2010.
Following the sale of the properties and the repayment of the Group's bank borrowings, the operations of the Group effectively ceased.
Following approval at a shareholder meeting on 6 December 2010, the Group commenced a summary winding up of its operations. The winding up of the Company is being administered by the Board under applicable Jersey law.
Current activities
On completion of the sales and commencement of the winding up, the Board has taken measures to reduce as much as possible the ongoing operational costs of the Group. The management agreement with Lathe Investments (Nordic) LLP (the "Former Manager") and the agreements with other service providers in connection with the properties have been terminated and administrative costs have been greatly reduced. The Board, which has responsibility for the winding up of the Group, has agreed to a 50% reduction in its fees bringing them to a level of GBP30,000 per annum in aggregate for all four directors. The Board is being assisted in effecting the winding up by SP Angel Corporate Finance LLP, its Financial Adviser, and Ogier Fund Administration (Jersey) Limited ("Ogier"), its Administrator.
The Board has determined that in the short term, it remains in shareholders' best interests to retain the admission to listing on AIM of the Company's shares so as to provide continued liquidity for shareholders. However, as notified, under AIM Rule 15, the Company's shares will be suspended unless it has completed its investing policy, which is the completion of the winding up, by 26 November 2011. Since the winding up will not have completed by that date, the shares will be suspended on 27 November 2011. If, a further 6 months later (i.e. by 28 May 2012) the Company has still not completed its investing policy, the shares admission to AIM will be cancelled.
Cash distributions
An Initial cash distribution of 10.5 pence per share was made to shareholders in February 2011.
As and when the respective escrow amounts associated with the sales of the properties become available to the Group a further cash distribution will be made of the escrow amounts released, less a retention for all the remaining expected costs of the winding up. This further distribution is expected to be approximately 12 pence per share and is expected to be made by the end of the second quarter of 2012.
The Board and shareholders have had to face some difficult issues and decisions during the last year but I and the rest of the Board believe that the decisions reached and actions taken have been in the best interests of the Company's shareholders.
Ray Horney
Chairman
28 September 2011
Annual Review
Disposal of the property portfolio
As discussed in the Chairman's Statement, the Group sold its entire property portfolio in October and November 2010 and the Directors have commenced the summary winding up of the Group. The directors intend to return the remaining net cash proceeds in the Group after providing for the costs of the winding up to shareholders.
Financial review
Results
The Group's property activities are classified as discontinued operations reflecting the sale of the property portfolio during the year.
Net rental income for the year was GBP 2.1 million (2010: GBP3.7 million), the reduction reflecting property disposals part way through the year.
The operating loss from continuing operations for the year was GBP 0.6 million (2010: loss of GBP0.6 million). The loss before income tax for continuing operations for the year was GBP 0.6 million (2010: GBP0.6 million).
The operating profit from discontinued operations for the year was GBP 0.6 million (2010: loss of GBP6.3 million) after allowing for administrative expenses of GBP 0.4 million (2010: GBP0.7 million), disposal costs of GBP 1.3 million (2010: nil) and gain on disposal of GBP0.2 million (2010: nil).
The loss before income tax from discontinued operations for the year was GBP 3.5 million (2010: GBP9.2 million), after allowing for net interest expense of GBP 1.9 million (2010: GBP3.0 million) and break costs on early repayment of debt of GBP2.3 million (2010: nil).
The tax charge relating to discontinued operations for the year was nil (2010: GBP1.4 million credit).
The total comprehensive loss for the year attributable to equity shareholders was GBP 3.8 million (2010: GBP7.6 million).
Dividend
As reported in the Chairman's Statement, no dividend has been declared, in line with the statement made by the directors at the time of Admission. A capital distribution of 10.5 pence per share was made on 11 February 2011.
Cash flow
Net cash flows used in operating activities were GBP 2.4 million (2010: GBP0.3 million).
After allowing for the disposals of properties of GBP 61.9 million, associated disposal costs of GBP 1.3 million, repayment of the Bank Debt of GBP 55.5 million and associated break fees of GBP 2.3 million and the payment of the Initial Distribution of GBP 2.1 million, the net decrease in cash and cash equivalents for the year was GBP 4.6 million (2010: GBP0.9 million). Available cash balances at the year end were GBP 0.5 million (2010: GBP4.8 million).
In addition, a total of SEK 29.5 million ( GBP 2.9 million ) is held in escrow accounts as a result of the property disposals, which is expected to be released to the Group by the end of Q1 2012.
Statement of financial position
Net assets of GBP 3.2 million (2010: GBP 9.1 million) comprise current assets of GBP 3.5 million (2010: GBP 5.2 million), of which escrow amounts total GBP 2.9 million (2010: nil), less current liabilities of GBP 0.2 million (2010: GBP 2.3 million).
Financing
The Group's Bank Debt of GBP 55.5 million was repaid in full on 15 October 2010 on completion of the disposals of Terminalen and Borlange, together with associated break fees of GBP 2.3 million. As a result the Group has no Bank Borrowings outstanding at the year end date.
NAV per share
31 March 2011 31 March 2010
Basic net asset value per share GBP0.16 GBP0.46
Diluted net asset value per share GBP0.16 GBP0.46
Split between:
Continuing operations GBP0.16 GBP0.46
Discontinued operations - -
EPRA net asset value per share GBP0.16 GBP0.46
Reconciliation of NAV per share to expected Final Distribution
GBP million Pence per share
Basic net asset value 3.2 16
Expected costs of winding up the group (0.8) (4)
Expected Final Distribution 2.4 12
Consolidated Financial Statements
Consolidated Statement of Comprehensive Income for the Year Ended 31 March 2011
Hot Features
Premium
Year ended
Year ended 31 March
31 March 2011 2010
Note GBP000 GBP000
Continuing Operations
Administrative expenses (625) (579)
------------------- -----------
Operating loss (625) (579)
Financial income 8 8 8
------------------- -----------
Loss before income tax (617) (571)
Income tax 10 (4) (11)
------------------- -----------
Loss for the year from continuing
operations (621) (582)
------------------- -----------
Discontinued operations
Net rental income 6 2,076 3,656
Administrative expenses (420) (683)
Disposal costs (1,287) -
Profit on disposal of investment
properties 239 -
Loss on revaluation of investment
properties - (9,252)
------------------- -----------
Operating profit /(loss) 608 (6,279)
Financial expenses 9 (1,875) (2,963)
Break costs on early repayment of
debt 9 (2,260) -
Loss before income tax (3,527) (9,242)
Income tax 10 - 1,425
------------------- -----------
Loss for the year from discontinued
operations (3,527) (7,817)
------------------- -----------
Total loss for the year attributable
to equity holders (4,148) (8,399)
Other comprehensive income
Foreign currency translation
differences 348 838
------------------- -----------
Total other comprehensive income for
the year 348 838
------------------- -----------
Total comprehensive loss for the
year attributable to equity
holders (3,800) (7,561)
------------------- -----------
Earnings per share - basic and
diluted 11 (19.1)p (42.3)p
Continuing operations (3.1)p (2.9)p
Discontinued operations (16.0)p (39.4)p
The notes form part of the consolidated financial statements.
Consolidated Statement of Financial Position as at 31 March 2011
31 Mar 2011 31 Mar 2010
Note GBP000 GBP000
ASSETS
Non-current assets
Investment properties 12 - 61,253
------------ ------------
Current assets
Consideration held in escrow 14 2,912 -
Trade and other receivables 15 50 393
Cash and cash equivalents 16 490 4,767
------------ ------------
3,452 5,160
------------ ------------
Total assets 3,452 66,413
------------ ------------
LIABILITIES
Current liabilities
Borrowings 19 - -
Trade and other payables 17 196 2,323
Income tax provisions 20 18
------------ ------------
216 2,341
------------ ------------
Non-current liabilities
Borrowings 19 - 54,950
- 54,950
------------ ------------
Total liabilities 216 57,291
------------ ------------
Net assets 3,236 9,122
------------ ------------
EQUITY
Ordinary share capital 21 199 199
Share premium 15,437 17,523
Foreign currency translation reserve 3,045 2,697
Retained earnings (15,445) (11,297)
------------ ------------
Total shareholders' equity 3,236 9,122
------------ ------------
Net asset value per share 22 16.3 p 45.9 p
The notes form part of these consolidated financial statements. Consolidated Statement of Changes in Equity for the Year Ended 31 March 2011
Ordinary
share Share Translation Retained Total
capital premium reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
April 2009 199 17,523 1,859 (2,936) 16,645
-------------- --------- ------------ ---------- --------
Total
Comprehensive
income/(loss)
for the Year
Loss for the
year - - - (8,399) (8,399)
Other
Comprehensive
income/(loss)
for the Year
Foreign
exchange
differences - - 838 - 838
-------------- --------- ------------ ---------- --------
Total
comprehensive
income/(loss)
for the Year - - 838 (8,399) (7,561)
-------------- --------- ------------ ---------- --------
Transactions
with owners,
recorded
directly in
equity
Share based
payments - - - 38 38
-------------- --------- ------------ ---------- --------
Total
transactions
with owners - - - 38 38
-------------- --------- ------------ ---------- --------
Balance at 31
March 2010 199 17,523 2,697 (11,297) 9,122
--------------- -------------- --------- ------------ ---------- --------
Total
Comprehensive
Income/(Loss)
for the Year
-------------- --------- ------------ ---------- --------
Loss for the
year - - - (4,148) (4,148)
-------------- --------- ------------ ---------- --------
Other
Comprehensive
income/(loss)
for the Year
-------------- --------- ------------ ---------- --------
Foreign
exchange
differences - - 348 - 348
-------------- --------- ------------ ---------- --------
Total
comprehensive
income/(loss)
for the Year - - 348 (4,148) (3,800)
-------------- --------- ------------ ---------- --------
Transactions
with owners,
recorded
directly in
equity
-------------- --------- ------------ ---------- --------
Initial
Capital
Distribution - (2,086) - - (2,086)
-------------- --------- ------------ ---------- --------
Total
transactions
with owners - (2,086) - - (2,086)
-------------- --------- ------------ ---------- --------
Balance at 31
March 2011 199 15,437 3,045 (15,445) 3,236
-------------- --------- ------------ ---------- --------
The notes form part of these consolidated financial statements. Consolidated Statement of Cash Flows for the Year Ended 31 March 2011
Year ended Year ended
31 March 2011 31 March 2010
(Audited) (Audited)
Note GBP000 GBP000
Cash flows from operating activities
Loss for the year (4,148) (8,399)
Interest receivable (8) (8)
Interest payable and other finance
costs 1,859 2,963
Income tax 4 (1,414)
Disposal costs 1,287 -
Break fees on early repayment of
debt 2,260 -
Adjustments for non-cash items:
(Profit)/Loss on disposal of
investment properties (239) -
(Profit )/Loss on revaluation of
investment properties - 9,252
Share-based payments - 38
--------------- ---------------
Operating profit before changes
in working capital 1,015 2,432
Other movements arising from
operations:
Decrease/(increase) in trade and
other receivables 381 (15)
(Decrease)/increase in trade and
other payables (2,125) 116
Tax paid (4) (12)
--------------- ---------------
Net cash flows (used in) / generated
by operations (733) 2,521
Interest received 8 6
Interest paid (1,645) (2,845)
--------------- ---------------
Net cash flows used in operating
activities (2,370) (318)
--------------- ---------------
Cash flows used in investing
activities
Acquisition and development of
investment properties 12 (84) (1,474)
Disposal of properties 12 61,937 -
Less: consideration held in escrow 14 (2,912) -
Disposal costs (1,287) -
--------------- ---------------
Cash flows from/(used in) investing
activities 57,654 (1,474)
Cash flows from financing activities
Net drawdown of borrowings - 858
Repayment of borrowings 19 (55,504) -
Break fees due to repayment of
borrowings (2,260) -
Initial Capital Distribution to
shareholders (2,086) -
--------------- ---------------
Cash flows (used in)/from financing
activities (59,849) 858
Net decrease in cash and cash
equivalents (4,565) (934)
Opening cash and cash equivalents 4,767 5,336
Exchange gains/(losses) 288 365
--------------- ---------------
Closing cash and cash equivalents 16 490 4,767
--------------- ---------------
The notes form part of these consolidated financial statements.
Notes to the Financial Statements
Note 1 General Information
Nordic Land plc - In Liquidation ("Nordic Land" or the "Company" and together with its subsidiaries the "Group") is a Jersey company incorporated on 3 April 2007. As at 31 March 2010 the Group owned three investment properties in Sweden. The consolidated financial statements have been prepared for the year ended 31 March 2011.
These statements are not statutory accounts and have been extracted from the full statutory accounts on which the auditors are expected to provide an unqualified opinion.
During the year, following approval at a shareholder meeting on 7 October 2010, the Group sold its entire property portfolio, repaid its bank borrowings and effectively ceased operations. On 6 December 2010, following approval by shareholders at a subsequent general meeting, the directors commenced a summary winding up of the Company and its remaining subsidiaries. The directors intend to distribute the net cash resources of the Company, after meeting the costs of the disposal and the costs of the winding up, to shareholders. An initial capital distribution of 10.5 pence per share was made to Shareholders on 11 February 2011.
Note 2 Basis of preparation
The financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") and is presented in sterling. The preparation of financial statements in conformity with IFRSs 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. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The audited consolidated financial statements have been prepared on the historical cost basis as modified by the revaluation of investment properties which are measured at fair value.
The audited consolidated financial statements have been prepared on a going concern basis which assumes the Group will be able to meet its liabilities as they fall due. The Group's working capital forecasts show that the Group has sufficient cash resources to meet its funding requirements over the next 12 months and to continue in operational existence until such time as the Group is wound up under Jersey Law, assuming that the consideration held in escrow is received and that the costs of the orderly winding up do not materially exceed expected levels. The only difference between the going concern basis and non going concern basis would be in relation to the recognition of the estimated costs of the orderly winding up of the Group as at 31 March 2011 which are disclosed in the Annual Review.
There are no new standards, amendments to existing standards and interpretations relevant to the Group applicable for the current year.
Interpretations and amendments to standards becoming effective in 2010 but not relevant to the Group:
-- Improvements to IFRS (issued April 2009). Effective for annual periods beginning on or after 1 January 2010.
-- Amendments to IFRS 1 Additional Exemptions for First Time Adopters. Effective for annual periods beginning on or after 1 January 2010.
-- Group Cash-settled Share-based Payment Transactions (Amendments to IFRS 2). Effective for annual periods beginning on or after 1 January 2010.
-- IFRIC 15 Agreements for the Construction of Real Estate. This Interpretation was effective for annual periods beginning on or after 1 January 2010.
Standards, amendments and interpretations that are not yet effective and are not expected to have significant impact on the Group's financial statements:
-- IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments. Effective for annual periods beginning on or after 1 July 2010
-- Amendment to IFRS 1 - Limited exemption from comparative IFRS 7 disclosures for first-time adopters. Effective for annual periods beginning on or after 1 July 2010
-- Improvements to IFRS (issued May 2010). Effective for annual periods beginning on or after 1 July 2010.
-- IAS 24 Related Party Disclosures (revised 2009). Effective for annual periods beginning on or after 1 January 2011.
-- Amendments to IFRIC 14 - Prepayments of a Minimum Funding Requirement. Effective for annual periods beginning on or after 1 January 2011.
-- Improvements to IFRS (issued May 2010). Effective for annual periods beginning on or after 1 January 2011.
Note 3 Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. The accounting policies have been consistently applied by the Company and its subsidiaries.
Basis of consolidation
The financial statements incorporate the net assets and liabilities of the Group at the statement of financial position date and its results for the year then ended. Results of subsidiaries acquired or disposed during a year are included from the effective date of acquisition or up to the effective date of disposal as appropriate. The results of subsidiaries are included in the consolidated financial statements from the date that control commences up to the date that control ceases. Control exists when the Company has the power, directly or indirectly, to govern the financial and operatingpolicies of an entity so as to obtain benefits from its activities.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
A change in the ownership interest of a subsidiary, without a change in control, is accounted for as an equity transaction.
Functional and presentational currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The Group's consolidated financial statements are presented in Sterling, which is the Company's functional and presentational currency.
Share capital
Shares are classified as equity to the extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company; and
(b) where the instrument will or may be settled in the Company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
Share issue expenses
The costs incurred by the Company in connection with the issue of shares are written off against the share premium account.
Revenue
Revenue represents amounts receivable calculated on an accruals basis in respect of property rental income earned in the normal course of business, net of sales-related taxes.
Investment property
Investment properties are properties owned or leased by the Group which are held for long-term rental income and for capital appreciation. Investment property is initially recognised at cost and re-valued at the statement of financial position date to fair value, as determined by professionally qualified external valuers. Any gain or loss arising from the change in fair value is reported in the Statement of Comprehensive Income. No depreciation is provided in respect of investment property. Borrowing costs associated with direct expenditure on investment properties under development or undergoing refurbishment are capitalised using the average rate of interest paid on the relevant debt outstanding until the date of practical completion. Sales of investment property are recognised when contracts have been unconditionally exchanged during the period and the significant risks and rewards of ownership have been transferred. Acquisitions of corporate interests in investment property are accounted for on consolidation as if the Group had acquired the underlying property asset directly. Accordingly, no goodwill arises on such acquisitions as any difference between the fair values of the assets acquired and the acquisition consideration is allocated to the investment property asset, which is subject to subsequent revaluation under IAS 40.
Gains and losses on disposal are determined by comparing proceeds with the carrying amount. The gain/(loss) on disposal along with disposal costs have been presented separately on the Statement of Comprehensive Income.
Impairment of assets
The Group assesses at each reporting date whether there is objective evidence that an asset may be impaired. If any such indication exists the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of the asset's fair value less costs to sell and its value in use and is determined on an asset by asset basis. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated and the corresponding impairment loss that was previously booked is reversed.
Financial instruments
Classification
Management determines the classification of financial instruments at initial recognition. The Group classifies its financial assets into the following categories:
-- financial assets at fair value through profit and loss
-- loans and receivables
The Group classifies its financial liabilities into the following categories:
-- financial liabilities at fair value through profit and loss
-- financial liabilities measured at amortised cost
Derecognition
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition in accordance with IAS 39.
A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expired.
Consideration held in escrow
Consideration held in escrow is reported at its fair value, being the face value without discounting due to the short term nature of the receivable.
A provision for impairment is made when there is objective evidence (such as a claim against the Escrow amounts) that the Group will not be able to collect all the amounts due under the original terms of the Sale and Purchase and Escrow agreements.
Trade and other receivables
Trade and other receivables are reported at their fair value. As trade and other receivables have a short expected term, they are carried at face value without discounting. Trade and other receivables are reported at the amount they are expected to realise after a deduction for doubtful debts, which is made on a case by case basis.
A provision for impairment is made when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor) that the Group will not be able to collect all the amounts due under the original terms of the invoice. Impaired debts are derecognised when they are assessed as uncollectable.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and on demand deposits that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. In order to be classified as cash and cash equivalents, the maturity of the cash and cash equivalents instruments is three months or less at the time of acquisition.
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at their issue proceeds, net of issue costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Borrowing costs are recognised on an accruals basis in the Statement of Comprehensive Income using the effective interest rate method. Gains and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognised, as well as through the amortisation process.
Derivative financial instruments
The Group may use derivative financial instruments such as interest rate swaps to hedge its risks associated with interest rate fluctuations. Such derivative financial instruments are stated at fair value, based on market prices, estimated future cash flows and forward rates as appropriate.
Any gains or losses arising from changes in fair value are taken directly to the Statement of Comprehensive Income. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes.
Effective 1 January 2009 the Group adopted the amendment to IFRS 7 for financial instruments that are measured in the statement of financial position at fair value. However, the Group does not hold any financial instruments measured at fair value as at the statement of financial position date (2010: nil).
Trade and other payables
Trade and other payables are non-interest bearing and are reported at their amortised cost. As trade payables have a short expected term, they are carried at their face value without discounting.
Taxation
The Company is liable to pay Jersey income tax at 0%. Certain subsidiary undertakings are subject to foreign taxes in respect of foreign source income; provision for such taxes is made on the basis of taxable profits.
Deferred taxation
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions:
(a) where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss;
(b) in respect of temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future; and
(c) deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax
assets and unused tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantially enacted at the statement of financial position date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred income tax is recognised in the Statement of Comprehensive Income except when it relates to items that are credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
Segmental analysis
The Group had a single geographical and business segment until the properties were sold, being investment in property in the Nordic region.
Management fees
Under the terms of the Management Agreement, the Former Manager, Lathe Investments (Nordic) LLP, was entitled to receive an annual management fee and performance carry dependent on the consolidated gross assets of the Group. Fees are recorded on an accruals basis, up to the point that the management contract was terminated in line with the Management Agreement (as amended in September 2009).
Foreign currencies
The assets and liabilities of foreign entities are translated into sterling at the rate of exchange ruling at the statement of financial position date and their income statements and cash flows are translated at the average rate for the year. Exchange differences arising from the retranslation of the net investment in foreign entities are dealt with in reserves. Transactions in currencies other than the Group's functional currency are recorded at the exchange rate prevailing at the transaction dates. Foreign exchange gains and losses resulting from settlement of these transactions and from retranslation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of
Comprehensive Income except when qualifying as hedges, in which case they are dealt with in reserves.
Share-based payments
Options
The grant-date fair value of options granted to employees of the Former Manager and Directors of the Company are recognised as an expense, with a corresponding increase in equity, over the period that the employees and Directors become unconditionally entitled to the options. The amount recognised as an
expense is adjusted to reflect the actual number of share options that vest.
Performance carry
The Former Manager was entitled to receive a performance carry equal to 20 per cent of the Total Shareholder Return (defined as the sum of the increase in adjusted net asset value per share and dividends per share, divided by the adjusted net asset value per share at the beginning of the relevant financial period) in excess of 8 per cent. per annum for the relevant period, subject to a high watermark, to which a performance carry relates. This cost was recorded on an accruals basis. To the extent it was payable by the issue of shares in the Company, the cost of such share-based payments was recognised in the Consolidated Statement of Comprehensive Income by reference to the fair value at the date of payment, together with a corresponding increase in equity.
Note 4 Operating segments
During the year the Group operated in one business segment, being property investment and development in the Nordic region, and as such no further segmental information is required. Following the decision to sell these properties, these activities have been treated as discontinued operations.
The Group's continuing operations relate to the administrative costs associated with the non-property owning companies in the Group and the costs incurred relating to the winding up of the Group.
Note 5 Discontinued operations
The income and expenses arising from the ownership of the properties have been shown as discontinued operations as the decision to sell the properties had been taken prior to the period end. The properties were sold in October 2010 and November 2010.
The cash flows arising from the discontinued operations were:
Year ended Year ended
31 March 31 March
2011 2010
GBP000 GBP000
Net cash flows (used in) / from operating
activities (1,749) 182
Cash flows from / (used in) investing activities 57,654 (1,474)
Cash flows (used in) / from financing activities (59,849) 858
Note 6 Net Rental Income
Until the disposal of the property portfolio, the Group engaged in only one class of business activity, being investment in retail property in the Nordic region.
The Gross and Net Rental Income were:
Year ended Year ended
31 March 31 March
2011 2010
GBP000 GBP000
Gross Rental Income 3,226 5,403
Property Expenses (1,150) (1,747)
----------- -----------
Net Rental Income 2,076 3,656
Note 7 Operating loss
Operating loss is stated after charging:
Year ended Year ended
31 March 31 March
2011 2010
GBP000 GBP000
Auditors' remuneration for audit and non-audit
services 151 84
Asset management fees payable to the Former
Manager (note 24) 335 458
Directors' remuneration 81 60
Share-based payments (note 23) - 38
The analysis of auditors' remuneration is as follows:
Year ended Year ended
Year ended Year ended
31 March 31 March
2011 2010
GBP000 GBP000
Audit fees payable to the Company's auditors
and their associates for the audit of
the Company's and Group financial statements 65 55
Non-audit fees payable to the Company's
auditors and their associates for:
- Tax services 57 25
- Other services 29 4
----------- -----------
Total auditors' remuneration 151 84
31 March 2010 31 March 2009
Note 8 Financial Income
Year ended Year ended
31 March 31 March
2011 2010
GBP000 GBP000
Interest receivable 8 8
Note 9 Financial Expenses
Financial expenses represent interest and other financial costs arising on the Group's bank borrowings and are part of the Group's discontinued operations. In addition, the Group incurred costs as a result of the early repayment of its debt, comprising swap break fees and related expenses.
Year ended Year ended
31 March 31 March
2011 2010
GBP000 GBP000
Interest on bank loans 1,643 2,850
Other finance costs 232 113
----------- -----------
Interest payable and other finance
costs 1,875 2,963
Break fees on early repayment of debt 2,260 -
Note 10 Income Tax
Year ended Year ended
31 March 31 March
2011 2010
GBP000 GBP000
Continuing operations
Current income tax charge (4) (11)
----------- -----------
Tax charge for continuing operations (4) (11)
----------- -----------
Discontinued operations
Deferred taxation credit - 1,425
Tax credit for discontinued operations - 1,425
----------- -----------
Total tax (charge) / credit (4) 1,414
----------- -----------
The 2010 tax charge and deferred tax calculations represented corporate income tax on income arising in Sweden that was subject to income tax in Sweden at 26.3% and in Luxembourg at 29.63%.
The tax on the Group's loss differs from the theoretical amount that would arise using the tax rates applicable to the consolidated entities as follows:
Year ended Year ended
31 March 31 March
2011 2010
GBP000 GBP000
Loss before tax (4,144) (9,813)
----------- -----------
Income tax calculated at the Jersey
income tax rate of 0% - -
Taxation of income in other countries 4 11
Deferred taxation arising from temporary
differences in the year - (1,425)
Total tax charge / (credit) 4 (1,414)
----------- -----------
Note 11 Earnings per share
The loss per share has been calculated by dividing the loss for the year attributable to equity shareholders by the weighted average number of shares in issue during the year of 19,859,561 (31 March 2010 and 31 March 2011: 19,859,561).
As at 31 March 2011 basic and diluted earnings per share are identical, as the issued share options have lapsed. As at 31 March 2010 the basic and diluted earnings were identical as the issued share options were anti-dilutive.
Note 12 Investment Properties
As at 31 March As at 31 March
2011 2010
GBP000 GBP000
Opening balance 61,253 64,203
Capital expenditure on
properties 84 1,474
Foreign exchange gains/(losses) 361 4,828
Loss on revaluation - (9,252)
Disposed in year (61,937) -
Gain on disposal (excluding
disposal costs) 239 -
--------------- ---------------
Closing balance - 61,253
The fair value of investment properties at 31 March 2010 was based on a valuation by DTZ Sweden AB performed in accordance with the Appraisal and Valuation Standards of RICS, on the basis of market value.
At a general meeting of the shareholders held on 7 October 2010, shareholders approved the sale of the Group's property portfolio on terms as set out in a circular to shareholders dated 17 September 2010.
Accordingly, on 15 October 2010 the sales of the subsidiaries owning Terminalen 1, Helsingborg, and Lackeraren 3, Borlange, were completed and all of the Group's bank borrowings were repaid. On 25 November 2010, the sale of the subsidiary owning the properties in Sicklaon was completed.
The sale of the Group's two largest properties, Terminalen 1 in Helsingborg and Lackeraren 3 in Borlange, were completed on 15 October 2010 at gross property values of SEK 490 million (GBP 45.1 million ) and SEK 148 million (GBP 13.6 million) respectively. Out of the gross consideration, SEK 15 million (GBP 1.5 million) from the sale of Terminalen and SEK 2.5 million (GBP 0.2 million) from the sale of Borlange have been placed in escrow to cover potential warranty claims that may be brought by the purchasers of each property. Provided that no such claims are brought (and that the mortgage certificates for the Sicklaon property are delivered to its buyer - see below), these escrow amounts will be released to the Group on 14 October 2011 and 14 February 2012 respectively, but will be subject to a charge in favour of the Sickla buyer until the mortgage certificates are replaced, which is expected to occur by the end of Q1 2012.
The sale of the third property ("Sickla"), in Sicklaon, had to be renegotiated because the original lender, Lehman Brothers International (Europe) (In Administration), in its capacity as security agent for the bank borrowings and as holder of the mortgage certificates for the property, was not able to locate these mortgage certificates. Without the mortgage certificates the sale of Sickla could not be completed as planned. Under the renegotiated terms, the property was sold for the same gross consideration of SEK 35 million (GBP 3.2 million), but out of this SEK 12 million (GBP1.2 million) has been retained in a pledged account until the replacement mortgage certificates can be provided to the purchaser. The Sickla purchaser has also taken a second charge on the Terminalen and Borlange escrow amounts. Replacement mortgage certificates are expected to be obtained in the first quarter of 2012. The sale of Sickla was completed on 25 November 2010.
Note 13 Details of Subsidiary Undertakings
The Company's subsidiaries at 31 March 2011 are as follows:
Proportion Proportion
of voting of ownership
Place of incorporation power held interest
% %
Nordic Land Holdings
Limited Jersey 100 100
Nordic Land Holding
(Luxembourg) Sarl Luxembourg 100 100
Nordic Land
(Luxembourg) Sarl Luxembourg 100 100
Nordic Land Finance
(Luxembourg) Sarl Luxembourg 100 100
Nordic Land AB Sweden 100 100
Nordic Land Sicklaon
Holding AB Sweden 100 100
Each of the undertakings listed above was engaged in investment in retail property up to the date of disposal of the properties.
Note 14 Consideration held in escrow
Disposal proceeds held As at 31 March As at 31 March
in escrow for: 2011 2010
GBP000 GBP000
Terminalen 1,480 -
Borlange 247 -
Sicklaon 1,185 -
Total 2,912 -
Under the terms of the sale agreements, out of the initial gross consideration, SEK 15 million (GBP 1.5 million) from the sale of Terminalen and SEK 2.5 million (GBP 0.2 million) from the sale of Borlange have been placed in escrow to cover potential warranty claims that may be brought by the purchasers of each property. Provided that no such claims are brought (and that the mortgage certificates for the Sicklaon property are delivered to its buyer - see below), these escrow amounts will be released to the Group on 14 October 2011 and 14 February 2012 respectively, but will be subject to a charge in favour of the Sickla buyer until the mortgage certificates are replaced, which is expected to occur by the end of Q1 2012.
Out of the initial gross consideration from the sale of Sicklaon, SEK 12 million (GBP 1.2 million) has been retained in a pledged account until the replacement mortgage certificates for the property can be provided to the purchaser. The Sickla purchaser has also taken a second charge on the Terminalen and Borlange escrow amounts. Replacement mortgage certificates are expected to be obtained in the first quarter of 2012. The sale of Sicklaon was completed on 25 November 2010.
Note 15 Trade and Other Receivables
As at 31 March As at 31 March
2011 2010
GBP000 GBP000
Rental debtors - 255
Prepayments and accrued income 12 104
Other debtors 38 34
--------------- ---------------
50 393
--------------- ---------------
The carrying amount of trade and other receivables approximate their fair value.
The Group's credit risk is primarily the risk that a debtor will be unable to pay amounts in full when due, with a maximum exposure equal to the carrying amount of the debtor. As at 31 March 2011 nil (2010: GBP16,000) had been provided against some potential doubtful debts.
Note 16 Cash and Cash Equivalents
As at 31 March As at 31 March
2011 2010
GBP000 GBP000
Continuing operations
Cash and cash equivalents 490 709
--------------- ---------------
Discontinued operations - 4,058
Total cash and cash equivalents 490 4,767
--------------- ---------------
Cash and cash equivalents comprise cash held by the Group and short-term deposits with an original maturity of three months or less. The carrying value of these assets equals their fair value. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings.
Note 17 Trade and other payables
As at 31 March As at 31 March
2011 2010
GBP000 GBP000
Accounts payable - trade - 336
Deferred income - 1,081
Accruals 196 906
196 2,323
--------------- ---------------
The Directors consider that the carrying amount of trade and other payables approximate to their fair value. All of the above amounts are due and payable within one year.
Note 18 Deferred tax liability
The following are the major deferred tax liabilities recognised during the year:
Revaluation Revaluation
of Accelerated of Accelerated
investment tax Total investment tax Total
properties depreciation 2011 properties depreciation 2010
2011 GBP000 GBP000 2010 GBP000 GBP000
GBP000 GBP000
At start of
year (1,394) 1,394 - 279 1,124 1,403
Charge to
income - - - (1,589) 164 (1,425)
Foreign
exchange
differences - - - (84) 106 22
Disposed in
year 1,394 (1,394) - - - -
------------ ------------- ------- ------------ ------------- --------
At 31 March - - - (1,394) 1,394 -
------------ ------------- ------- ------------ ------------- --------
Note 19 Borrowings
Bank loans (31 March 2010: SEK 602.7 million) were repaid in full, together with the break costs, on 15 October 2010 when the disposals of the two largest properties were completed.
As at 31 As at 31 March
March 2011 2010
GBP000 GBP000
Amounts falling due within
12 months:
Bank loans - -
Break costs payable on early
redemption - -
Unamortised borrowing costs - -
------------- ---------------
- -
------------- ---------------
Amounts falling due after
more than one year:
Bank loans - 55,178
Unamortised borrowing costs - (228)
------------- ---------------
- 54,950
-------------------------------------------- ---------------
Total borrowings are now nil (31 March 2010: SEK 602.7 million).
The bank loans were secured on the shares of the borrowing subsidiaries and their investment properties. On disposal of the properties and repayment of the loan principal and break fees, the security was discharged.
The loans were accounted for at amortised cost at the statement of financial position date, in accordance with IFRS, and the fair value is disclosed below. Nordic Land's only obligation was to pay interest at fixed and variable rates and repay loans at par value at maturity.
The Directors estimate that the book value and fair value of the Group's bank loans are:
Book value Fair value
Book value Fair value at 31 at 31
at 31 March at 31 March March March
2011 2011 2010 2010
GBP000 GBP000 GBP000 GBP000
Bank loans - - 55,178 58,371
Note 20 Financial Instruments
Financial risk management objectives and policies
The Group's activities expose it to a variety of market, capital and financial risks, including:
-- market risk (including currency risk)
-- credit risk
-- liquidity risk
The main risks arising from the Group's financial instruments are detailed below together with the policies adopted by the Board to manage these risks.
These risks are managed by the Group under policies approved by the Board of Directors. The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Risk management policies are reviewed regularly to reflect changes in market conditions and the Group's operational activities.
Financial risks relate to consideration held in escrow, trade and other receivables, trade and other payables, and cash and cash equivalents.
In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes.
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain satisfactory levels of financial resources to mitigate against financial risk.
The capital structure of the Group consists of a mixture of cash and cash equivalents and receivables, all as disclosed in the Statement of financial position.
Categories of financial instruments
The Group's financial instruments relate to consideration held in escrow, trade and other receivables, cash and cash equivalents, and trade and other payables.
In all cases, the Directors consider that the carrying amount of the Group's financial instruments approximate to their fair value.
Currency risk
The Group operates in the Nordic region and is exposed to foreign exchange risk arising primarily with respect to the Swedish krona and Euro. Foreign exchange risk arises from recognised monetary assets and liabilities.
The Group's policy is not to undertake any speculative currency hedging arrangements.
At the reporting date the Group had the following exposure, measured as a proportion of net non-monetary and monetary assets:
Currency As at 31 March 2011 As at 31 March 2010
Swedish Krona 94.6% 90.4%
Euro 0.1% (0.2%)
The following table sets out the Group's total exposure to foreign currency risk and the net exposure to foreign currencies of monetary assets and liabilities:
Monetary
Assets Monetary Net Monetary Monetary Net
2011 Liabilities Exposure Assets Liabilities Exposure
(1) 2011 2011 2010 2010 2010
Currency GBP,000 GBP,000 GBP,000 GBP,000 GBP,000 GBP,000
---------- --------- ------------ --------- --------- ------------ ---------
Swedish
Krona 3,414 - 3,414 4,058 57,135 (53,077)
---------- --------- ------------ --------- --------- ------------ ---------
Euro - - - 2 20 (18)
---------- --------- ------------ --------- --------- ------------ ---------
(1) Including Escrow receivables and accrued income
Credit risk
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due and relates principally to consideration held in escrow, trade and other receivables and cash and cash equivalents. The Directors believe there is no significant credit risk to the Group as the Escrows are held in a reputable Nordic Bank.
The Directors also believe there is no significant risk associated with the cash and cash equivalents balance as the banks are reputable multinational corporate banks which are regulated in various jurisdictions. Cash deposits are held with approved financial institutions with high credit ratings.
With respect to credit risk arising from the other financial assets of the Group, the Group's exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.
Liquidity risk
The Directors limit the Group's liquidity risk by ensuring that sufficient cash resources are available to fund its working capital requirements.
The contractual maturities of financial liabilities are disclosed in note 17 regarding Trade and other payables, and note 19 regarding Borrowings.
Note 21 Ordinary Share Capital
As at As
As at 31 March As at 31
2011 March 2010
GBP000 GBP000
Authorised
250,000,000 Ordinary shares
of GBP0.01 each 2,500 2,500
Issued and fully paid
19,859,561 (2009: 19,859,561) 199 199
Note 22 Net asset value per share
Net asset value per share has been calculated by dividing the net assets attributable to the equity shareholders of the Company by the number of ordinary shares in issue at the year end of 19,859,561 (31 March 2010: 19,859,561).
As at 31 March 2011 basic and net asset value per share are identical, as the issued share options have lapsed. As at 31 March 2010 basic and diluted net asset value per share were identical, as the issued share options were anti-dilutive.
Note 23 Share-based payments
On 25 July 2007, the Company established a share option programme (the 'Nordic Land Share Option Plan') that entitles Directors and representatives of the Former Manager to purchase shares in the Company. The share-based payment scheme is equity settled by the award of options to acquire Ordinary shares.
Following the commencement of the winding up of the company the options have lapsed.
Weighted Weighted
average average
exercise Number of exercise Number of
price 2011 Options 2011 price 2010 Options 2010
Outstanding
at 1 April 106p 383,736 106p 383,736
Granted during
the period - -
Lapsed during
the period (383,736) -
At 31 march
2011 - 106p 383,736
The total share-based payment charge relating to shares of the Company is:
Year ended Year ended
31 March 31 March
2011 2010
GBP,000 GBP,000
Options - 38
Total - 38
Note 24 Related party transactions
The following related party transactions were conducted during the year:
a) asset management fees of GBP 335,457 (2010: GBP458,000) were charged in accordance with the management agreement until such time as the contract was terminated in line with the management agreement as amended in September 2009;
b) legal fees incurred by the Former Manager of GBP 37,243 were reimbursed to it by the Group, as stipulated by the management agreement;
c) fees of GBP15,175 were paid to Ogier in relation to Directors fees for Richard Thomas;
d) total fees of GBP207,404 were paid to Ogier in relation to administration and accountancy fees for the year, additional administration fees resulting from the disposal process and additional Jersey legal advice in connection with the shareholder meetings;
e) the Directors beneficial interests in the Ordinary Shares of the Company as at 31 March 2011 are disclosed in the Directors' Report.
Note 25 Events after the date of statement of financial position
There have been no material events after the date of statement of financial position.
Note 26 Contingent Liabilities
As at 31 March 2011 the Group had no contingent liabilities (2010: nil).
Note 27 Annual Report
The Annual Report is available on the Company's website: www.nordicland.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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