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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Trinity Capital | LSE:TRC | London | Ordinary Share | GB00B0ZL5243 | 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% | 0.725 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMTRC
RNS Number : 9778V
Trinity Capital PLC
09 November 2017
Trinity Capital PLC
Consolidated financial statements for the year ended 31 March 2017
Trinity Capital PLC (AIM: TRC), an Indian real estate fund, announces its audited results for the year ended 31 March 2017.
Shareholders' attention is drawn to the final paragraphs of the Chairman`s Statement which sets out the anticipated timetable of events and the consequences affecting the AIM listing and ultimately liquidation of the Company and final distribution.
For further information, please contact:
Hot Features
Premium
FIM Capital Limited
Graham Smith, Director +44 1624 681250
Arden Partners
Nominated Adviser and Broker
+44 207 614
Chris Hardie 5900
Chairman's Report
Dear Shareholder
The Board of Trinity Capital Plc ("Trinity" or the "Company") is cautiously optimistic that the execution of the Company's investment policy is approaching the end.
Although the attached financial statements relate to the year ended 31 March 2017, the comments in this report cover both the past financial year and subsequent months.
During the year ended 31 March 2017, the Company completed a settlement with Immobilien Indien I GmbH & Co. KG and Immobilien Indien II GmbH & Co. KG (together the "Immobilien Funds") (the "Settlement"), which are managed by Euramco (formerly SachsenFonds) and Deutsche Fonds Holding. Under the terms of the Settlement, the Company's wholly owned subsidiary, Trinity Capital Mauritius Limited ("TCML") sold its investments in Trinity Capital (One) Limited ("TC-1") and Trinity Capital (Five) Limited ("TC-5") in return for a payment of GBP8.7 million. In addition, all pending legal proceedings in Mauritius between the parties were discontinued. The proceeds from the Settlement are reflected in the attached financial statements together with aggregate distributions to shareholders made during the year of 6.0p per share, amounting to GBP12.6 million.
Following the sale of TCML's interests in TC-1 and TC-5, the Board's focus has been on the sale of the investment in TC-10, which is the Company's last remaining asset in India. TCML owns the economic interest in all of the compulsorily convertible preference shares ("CCPS") issued to TC-10 by DB (BKC) Realtors Private Limited ("DB(BKC)").
On 27 August 2017 the Company announced that it is offering TCML for sale at auction. The deadline for receipt of unconditional bids under the auction has been extended to 10 November 2017. In the meantime, on 17 October 2017, TC-10 entered into a sale and purchase agreement with DB Realty Limited in relation to all of the CCPS held by TC-10 (the "Transaction"). Under the terms of the Transaction, TC-10 will receive the equivalent of INR149.6 million (approximately GBP1.7 million at current exchange rates). Completion of the Transaction is subject to TC-10 obtaining all final regulatory approvals in India, currently expected before the auction deadline. If the Transaction completes as envisaged before the auction deadline, the auction of TCML will be cancelled. Under the terms of an agreement with the Immobilien Funds entered into at the same time as the Settlement, TC-10 will pay the proceeds received from the Transaction to TCML. TCML will then remit those proceeds to Trinity.
For purposes of the attached financial statements, the investment in TC-10 has been valued on the basis of the proceeds of INR149.6 million that Trinity and TCML expect to receive under the Transaction, using the sterling exchange rate prevailing at 31 March 2017.
Although there is no assurance that the Transaction will complete, the Board expects that, one way or another, the last remaining investment held by Trinity will be sold in the coming weeks. Following completion of the Transaction (or, if it does not complete, the sale of TCML under the auction), the Board expects to convene a shareholder meeting approving a final distribution, cancellation of admission to trading of Trinity's shares on AIM and appointing a liquidator of the Company.
As we expect to appoint a liquidator of Trinity by early 2018, in accordance with international accounting standards the financial statements for the year ended 31 March 2017 are not presented on a going concern basis and include a new provision of GBP550,000, which is the Board's estimate of the operating and liquidation costs for the period from 1 April 2017 up to the date of liquidation.
Shareholders should note that, in accordance with para 5.6 of the AIM Note for Investing Companies, AIM will suspend the Company's shares from trading with effect from 7:30 a.m. on 17 November 2017, which is the anniversary of the Settlement. It should also be noted that in accordance with the AIM rules, the admission of the shares to AIM will be cancelled when they have been suspended from trading for six months, unless there is an earlier vote of shareholders to cancel admission to trading under AIM rule 41.
Yours faithfully
Martin M. Adams
Chairman
Directors' Report
The Directors have pleasure in presenting their report and financial statements of the Company and its subsidiaries (the "Group") for the year ended 31 March 2017.
Principal activity and incorporation
The Company is a closed-end investment company, incorporated on 7 March 2006 in the Isle of Man as a public limited company. Its shares were admitted to trade on AIM (formerly the Alternative Investment Market) of the London Stock Exchange on 21 April 2006.
The Group invested in real estate and real estate related entities in India. In March 2009, shareholders voted to change the Company's investment policy by requiring the Company to gradually dispose of its assets over time and return capital to investors.
The Group has no employees.
The consolidated financial statements comprise the results of the Group.
Results and dividends
The Group's results for the financial year ended 31 March 2017 are set out in the Consolidated Statement of Comprehensive Income. The Financial Statements have been presented on a non-going concern basis of accounting (note 2.2).
A review of the Group's activities is set out in the Chairman's Report. Details of the Group's interest in the remaining one investment is given in note 11 to the accounts.
During the year, the Company distributed GBP12.6 million (6.0p per share) (2016: GBPNil).
Directors
The Directors of the Company during the year and to date of this report were as follows:
Martin Adams (Chairman)
John Chapman
Stephen Coe
Graham Smith
Pradeep Verma
None of the Directors had interests in the shares of the Company at 31 March 2017 (2016: none). Details of the Directors' remuneration are provided in note 6.
Company Secretary
The secretary of the Company during the year and at the date of this report was Philip Scales.
Auditors
The auditors, KPMG Audit LLC, being eligible, have expressed their willingness to continue in office in accordance with Section 12(2) of the Isle of Man Companies Act 1982.
On behalf of the Board
Graham Smith
Director
8 November 2017
Statement of Directors' Responsibilities in Respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year, which meet the requirements of Isle of Man company law. In addition, the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards, as adopted by the EU.
The financial statements are required by law to give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group for that year.
In preparing these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with International Financial Reporting Standards, as adopted by the EU; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent Company will continue in business. See note 2.2. to the Financial Statements regarding non-going concern basis adopted for the current year's Financial Statements.
The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and to enable them to ensure that its financial statements comply with the Companies Acts 1931 to 2004. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another.
Corporate Governance Statement
The UK Corporate Governance Code does not directly apply to companies incorporated in the Isle of Man but the Board of Directors (the "Board") has developed internal procedures in line with the recommendations of the UK Corporate Governance Code where appropriate and these are reviewed on a regular basis. The Directors will continue to comply with the relevant requirements of the UK Corporate Governance Code to the extent that they consider it appropriate having regard to the Company's size and the nature of its operations. The Board is not aware of any reason that would cause it to reconsider its current approach.
Responsibilities of the Board
The Board is responsible for the implementation of the investment policy of the Company and for its overall supervision via the investment policy and objectives approved by shareholders. At each of the Company's regular Board meetings, the financial performance of the Group and its portfolio investments are reviewed.
The Board is also ultimately responsible for the Group's day-to-day operations, but in order to fulfil its obligations, the Board has delegated operations through arrangements with the Investment Manager and the Administrator. All Board members are non-executive.
Audit Committee
The Audit Committee is a sub-committee of the Board and makes recommendations to the Board which retains the right of final decision. The Audit Committee has primary responsibility for reviewing the financial statements and the accounting policies, principles and practice underlying them, liaising with the external auditors and reviewing the effectiveness of internal controls. The Audit Committee maintains a risk register to help it identify, evaluate, monitor and control risks. The Committee members are Stephen Coe (Chairman), Martin Adams, John Chapman, and Pradeep Verma.
The terms of reference of the Audit Committee include the following:
-- duties in relation to external reporting, including reviews of financial statements, shareholder communications and other announcements;
-- duties in relation to the external auditors, including appointment/ dismissal, approval of fee, discussion of the audit; and
-- duties in relation to internal systems, procedures and controls.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee is a sub-committee of the Board and makes recommendations to the Board which retains the right of final decision. The Committee members are Stephen Coe (Chairman) and Martin Adams.
The terms of reference of the Committee include the following:
-- set the remuneration of the Directors;
-- demonstrate to the shareholders of the Company that the remuneration of the non-executive Directors of the Company and each of its subsidiaries is set by a committee of the Board whose members have no personal interest in the outcome of the decisions of such committee and who will have due regard to the interests of shareholders;
-- to the extent that any executive or non-executive Director may be invited to join meetings of the Committee as appropriate he shall absent himself and take no part in any discussions concerning his own remuneration or other benefits or matters within the province of the Committee; and
-- consider the appropriateness of the Board's composition, and assess the suitability of potential Board members.
The Committee is authorised by the Board to:
-- when the fulfilment of its duties requires, obtain any outside legal or other professional advice including the advice of independent remuneration consultants, to secure the attendance of external advisers at its meetings, if it considers this necessary, and to obtain reliable, up-to-date information about remuneration in other companies, at the expense of the Company. The Committee has full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations; and
-- when the fulfilment of its duties requires, to obtain any outside legal or other professional advice including the advice of independent recruitment consultants and to secure the attendance of external advisers at its meetings, if it considers this necessary, at the expense of the Company. The Committee has full authority to commission any reports or assistance which it deems necessary to help it fulfil its obligations.
Legal Committee
The Legal Committee is a sub-committee of the Board and makes recommendations to the Board which retains the right of final decision. The Legal Committee's primary responsibility is to oversee the disputes which the Group is currently involved in. The Committee members are John Chapman (Chairman), Martin Adams and Graham Smith.
Investment Committee
The Investment Committee is a sub-committee of the Board and makes recommendations to the Board which retains the right of final decision. The Investment Committee's primary responsibility is to oversee the realisation of the Company's portfolio of investments in consultation with the Investment Manager in accordance with the Company's investment policy. The Committee members are Martin Adams (Chairman), John Chapman and Pradeep Verma.
Report of the Independent Auditors, KPMG Audit LLC, to the members of Trinity Capital PLC
We have audited the financial statements of Trinity Capital plc for the year ended 31 March 2017 which comprise the Consolidated and Company Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Changes in Equity, the Consolidated Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs), as adopted by the EU.
This report is made solely to the Company's members, as a body, in accordance with Section 15 of the Companies Act 1982. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's 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 and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of financial statements that give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies, we consider the implications for our report.
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Group's and Parent Company's affairs as at 31 March 2017 and of the Group's profit for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the EU; and
-- have been properly prepared in accordance with the provisions of the Companies Acts 1931 to 2004.
Emphasis of matter - non-going concern basis of preparation
We draw attention to the disclosure made in note 2.2 to the financial statements which explains that the financial statements are now not prepared on the going concern basis for the reasons set out in that note. Our opinion is not modified in respect of this matter.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Acts 1931 to 2004 require us to report to you if, in our opinion:
-- proper books of account have not been kept by the Parent Company and proper returns adequate for our audit have not been received from branches not visited by us; or
-- the Parent Company's statement of Financial Position and Statement of Comprehensive Income are not in agreement with the books of account and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or -- we have not received all the information and explanations we require for our audit.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
8 November 2017
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2017
Notes 2017 2016
---------------------------------------- ------ -------- --------
GBP'000 GBP'000
Fair value movement on investments 10 (1,363) (7,806)
Net realised gain on disposal
of investments 10 3,658 -
Interest income from cash
and cash equivalents 18 25
Foreign exchange loss (9) (6)
---------------------------------------- ------ -------- --------
Net investment gain/(loss) 2,304 (7,787)
---------------------------------------- ------ -------- --------
Investment management fees 4 (76) (133)
Other administration fees
and expenses 5 (669) (593)
Movement in legal fee provision 13 2,000 -
Provision for run-off costs 19 (550) -
---------------------------------------- ------ -------- -------- Total gain/(expenses) 705 (726) ---------------------------------------- ------ -------- -------- Profit/(loss) before tax 3,009 (8,513) Taxation 7 - - Profit/(loss) for the year and total comprehensive profit/(loss) for the year 3,009 (8,513) ---------------------------------------- ------ -------- -------- Total comprehensive loss attributable to: Equity holders of the Company 3,009 (6,969) Non-controlling Interest - (1,544) ---------------------------------------- ------ -------- -------- Profit/(loss) for the year 3,009 (8,513) ---------------------------------------- ------ -------- -------- Basic and diluted earnings/(loss) per share (pence) 8 1.4 (3.3) ---------------------------------------- ------ -------- --------
The notes form an integral part of the financial statements.
Consolidated and Company Statements of Financial Position
as at 31 March 2017
Group Company
------------------ ------------------
Notes 2017 2016 2017 2016
------------------------------- ------ -------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Investments in subsidiaries 16 - 1,886 8,234
Investments at fair
value through profit
or loss 10 - 8,272 - -
------------------------------- ------ -------- -------- -------- --------
Total non-current assets - 8,272 1,886 8,234
------------------------------- ------ -------- -------- -------- --------
Current assets
Investment held for
sale 11 1,840 - - -
Trade and other receivables - 1 - -
Cash and cash equivalents 12 790 5,656 705 5,557
Prepayments 25 30 21 21
------------------------------- ------ -------- -------- -------- --------
Total current assets 2,655 5,687 726 5,578
------------------------------- ------ -------- -------- -------- --------
Total assets 2,655 13,959 2,612 13,812
------------------------------- ------ -------- -------- -------- --------
Liabilities
Non-current liabilities
Provision for legal
costs 13 - (2,000) - (2,000)
------------------------------- ------ -------- -------- -------- --------
Total non-current liabilities - (2,000) - (2,000)
------------------------------- ------ -------- -------- -------- --------
Current liabilities
Trade and other payables (105) (342) (62) (195)
Provision for run-off
costs 19 (550) - (550) -
------------------------------- ------ -------- -------- -------- --------
Total current liabilities (655) (342) (612) (195)
------------------------------- ------ -------- -------- -------- --------
Total liabilities (655) (2,342) (655) (2,195)
------------------------------- ------ -------- -------- -------- --------
Net assets 2,000 11,617 2,000 11,617
------------------------------- ------ -------- -------- -------- --------
Represented by:
Ordinary shares 14 2,107 2,107 2,107 2,107
Capital redemption reserves 214 214 214 214
Retained reserves (321) 9,296 (321) 9,296
------------------------------- ------ -------- -------- -------- --------
Total equity 2,000 11,617 2,000 11,617
------------------------------- ------ -------- -------- -------- --------
Net Asset Value
per share (pence) 15 0.9 5.5
The notes form an integral part of the financial statements.
These financial statements were approved by the Board on 8 November 2017 and signed on their behalf by
Stephen Coe Graham Smith Director Director
Consolidated and Company Statements of Changes in Equity
for the year ended 31 March 2017
Consolidated Share Capital Capital Redemption Reserve Retained Reserves Total Equity
GBP '000 GBP '000 GBP '000 GBP '000
Balance at 31 March 2015 2,107 214 16,265 18,586
Total comprehensive loss - - (6,969) (6,969)
Balance at 31 March 2016 2,107 214 9,296 11,617
---------------------------- -------------- --------------------------- ------------------ -------------
Balance at 31 March 2016 2,107 214 9,296 11,617
Total comprehensive profit - - 3,009 3,009
Distribution (note 9) - - (12,626) (12,626)
Balance at 31 March 2017 2,107 214 (321) 2,000
---------------------------- -------------- --------------------------- ------------------ -------------
Company Share Capital Capital Redemption Reserve Retained Reserves Total Equity
GBP '000 GBP '000 GBP '000 GBP '000
Balance at 31 March 2015 2,107 214 16,265 18,586
Total comprehensive loss - - (6,969) (6,969)
Balance at 31 March 2016 2,107 214 9,296 11,617
---------------------------- -------------- --------------------------- ------------------ -------------
Balance at 31 March 2016 2,107 214 9,296 11,617
Total comprehensive profit - - 3,009 3,009
Distribution (note 9) - - (12,626) (12,626)
Balance at 31 March 2017 2,107 214 (321) 2,000
---------------------------- -------------- --------------------------- ------------------ -------------
The notes form an integral part of the financial statements.
Consolidated Statement of Cash Flows
for the year ended 31 March 2017
Notes 2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the year 3,009 (8,513)
Adjustments for:
Interest income from cash and cash equivalents (18) (25)
Movement in legal fee provision 13 (2,000) 0
Movement in foreign exchange 9 6
Fair value movement on investments 10 1,363 7,806
Provision for run-off costs 550 -
Net realised gain on disposal of investments 10 (3,658) -
----------------------------------------------------- ------- --------- --------
Net cash flows from operations before changes
in working capital (745) (726)
----------------------------------------------------- ------- --------- --------
Changes in working capital
Decrease/(Increase) in receivables 6 (15)
Decrease in payables (237) (3)
----------------------------------------------------- ------- --------- --------
Net cash used by operating activities (976) (744)
----------------------------------------------------- ------- --------- --------
Cash flows from investing activities
Interest income from cash and cash equivalents 18 25
Proceeds from disposal of investments 10 8,727 -
----------------------------------------------------- ------- --------- --------
Net cash from investing activities 8,745 25
----------------------------------------------------- ------- --------- --------
Cash flows from financing activities
Distributions 9 (12,626) -
Net cash outflow from financing activities (12,626) -
----------------------------------------------------- ------- --------- --------
Net decrease in cash and cash equivalents (4,857) (719)
Cash and cash equivalents at the start of the year 5,656 6,381 Effect of foreign exchange fluctuation on cash held (9) (6) Cash and cash equivalents at the end of the year 790 5,656 -------------------------------------------------------------- --------- --------
The notes form an integral part of the financial statements.
Notes to the Financial Statements
for the year ended 31 March 2017
1. General information
The Company is a closed-end investment company incorporated on 7 March 2006 in the Isle of Man as a public limited company. The address of its registered office is IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP.
The Company is listed on the AIM Market ("AIM") of the London Stock Exchange.
The Company and its subsidiaries (together the "Group") invest in real estate and real estate related entities in India, primarily in commercial development in the office and business space, residential, retail, hospitality and infrastructure sectors deriving returns from development, long-term capital appreciation and income.
In March 2009, shareholders voted to change the Company's investment policy by requiring the Company to gradually dispose of its assets over time and return capital to investors.
The Group has no employees.
The consolidated financial statements were authorised for issue by the Board on 8 November 2017.
2. Summary of significant accounting policies 2.1. Basis of preparation (a) Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the EU.
(b) Basis of measurement
See section 2.2 below regarding adoption of the non-going concern basis of accounting.
(c) Functional and presentation currency
These financial statements are presented in Sterling, which is the Company's functional currency. All financial information presented in Sterling has been rounded to the nearest thousand.
(d) Use of estimates and judgements
The preparation of the 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, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3.
2.2. Going concern
On 27 August 2017 the Company announced that it is offering Trinity Capital Mauritius Limited ("TCML") for sale at auction. The deadline for receipt of unconditional bids under the auction has been extended to 10 November 2017. In the meantime, on 17 October 2017, Trinity Capital (Ten) Limited entered into a sale and purchase agreement with DB Realty Limited in relation to all of the compulsorily convertible preference shares held by it (the "Transaction") - representing the last investment held by the Group.
Although there is no assurance that the Transaction will complete, the Board expects that, one way or another, the last remaining investment held by the Company will be sold in the coming weeks. Following completion of the Transaction (or, if it does not complete, the sale of TCML under the auction), the Board expects to:
-- effect a further distribution to shareholders; -- appoint a liquidator of TCML (unless it is sold under the auction); and
-- convene a shareholder meeting seeking approval [to delist the Company's shares from trading on AIM and] to appoint a liquidator of the Company.
In light of this, the financial statements have been presented on a non-going concern basis. The assets of the Company have been stated at realisable value and provision has been made for the unavoidable costs of winding up the Company (see note 19).
2.3. Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries and subsidiary undertakings). Control is achieved where the Company has power over an investee, exposure or rights to variable returns and the ability to exert power to affect those returns.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
As an investment entity under the terms of the amendments to IFRS 10 Consolidated Financial Statements the Company is not permitted to consolidate its controlled portfolio entities. Control is achieved where the Company has the power to govern the financial and operating policies of an entity company so as to obtain benefits from its activities.
The Directors consider the Company to be an investment entity as defined by IFRS 10 Consolidated Financial Statements as it meets the following criteria as determined by the accounting standard:
-- Obtains funds from one or more investors for the purpose of providing those investors with investment management services;
-- Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and
-- Measures and evaluates the performance of substantially all of its investments on a fair value basis.
Accordingly, the consolidated financial statements incorporate the financial statements of the Company and the financial statements of the intermediate investment holding companies, but the interests of the intermediate holding companies in the Indian project SPVs are stated at fair value, as described in note 10 and note 11.
2.4. Segment reporting
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns which are different from those of segments operating in other economic environments.
The Directors are of the opinion that the Group is engaged in a single segment of business being property investment business in one geographical area being India. See note 10.
2.5. Revenue recognition
Revenue includes interest receivable and fair value gains and losses. Interest receivable is accrued on a time basis by reference to the principal outstanding and the effective interest rate applicable.
Fair value gains and losses are recognised in the period of revaluation.
2.6. Expenses
All expenses are accounted for on an accruals basis and are presented as revenue items except for expenses that are incidental to the sale of an investment which are deducted from the disposal proceeds.
2.7. Financial instruments
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of a financial instrument. Financial assets and financial liabilities are offset if there is a legally enforceable right to set off the recognised amounts and interests and it is intended to settle on a net basis.
Investments in portfolio entities are designated as at fair value through profit or loss on initial recognition and are measured at fair value. Unrealised gains and losses arising from revaluation are recognised in profit or loss
The fair value of unquoted securities is estimated by the Directors using the most appropriate valuation technique for each investment.
Securities quoted or traded on a recognised stock exchange or other regulated market are valued by reference to the last available market price.
Investments held for sale are estimated by the Directors using the most appropriate valuation technique for each investment.
2.8. Provisions
A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation, and the obligation can be reliably measured. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
2.9. Standards and interpretations not yet effective
There are no standards or interpretations with an effective date on or after 1 January 2016 that are likely to have a significant effect on the financial statements.
3. Critical accounting estimates and assumptions
These disclosures supplement the commentary on financial risk management (see note 18).
Key sources of estimation uncertainty
Determining fair values
The determination of fair values for financial assets for which there are no observable market prices requires the use of valuation techniques as described in accounting policy note 2.6. For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affection the specific instrument. See also "Valuation of financial instruments" below.
Critical judgements in applying the Company's accounting policies
Critical judgements made in applying the Company's accounting policies include:
Valuation of financial instruments
The Company's accounting policy on fair value measurements is discussed in accounting policy note 2.7. The Company measures fair value using the following hierarchy that reflects the significant of inputs used in making the measurements:
-- Level 1: Quoted market price (unadjusted) in an active market for and identical instrument.
-- Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category included instruments valued using: quoted market prices in active markets for similar instruments: quoted market prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.
-- Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.
All the Company's investments measured at fair value have been valued on the basis of Level 3 described above.
A reconciliation from the beginning balances to the ending balances for Level 3 investments is as follows:
2017 2016
GBP'000 GBP'000
Beginning of year 8,272 16,078
Disposals - fair value at beginning (5,069) -
of year
Fair value adjustment (1,363) (7,806)
--------- ---------
End of year 1,840 8,272
--------- ---------
Financial instruments not measured at fair value
The carrying value of short-term financial assets and financial liabilities (cash, debtors and creditors) approximate their fair value.
Estimated future legal fees
As described in note 13, the Group had been engaged in litigation. A provision had been made for the associated legal costs. Following a mutual agreement to discontinue the legal claims, the provision has been cancelled.
Provision for run-off costs
As described in note 19 a provision for run-off costs has been made. This comprises an estimate of all costs incurred from the reporting date of 31 March 2017 up to and including a liquidation of the Company, on the assumption that the investment disposal described in note 11 completes as contracted.
4. Investment management fees and performance fees
The Investment Management Agreement with Indiareit Investment Management Company ("Indiareit") expired on 31 December 2013. However, Indiareit continued to provide investment management services to the Company and the Company continued to pay the regular investment management fee of US$198,000 per annum (GBP133,000). The Company's investments are now managed directly by its Board of Directors and the last payment made to Indiareit was for the quarter ended September 2016. No further payments will be made to Indiareit.
5. Other administration fees and expenses
2017 2016
GBP'000 GBP'000
Administration fees 138 147
Audit fees 27 33
Directors' fees (note 6) 335 171
Legal fees 106 47
NOMAD & broker fees 42 42
Other costs 21 153
669 593
======== ========
6. Directors' remuneration
Details of Directors' remuneration during the year are as follows:
Martin Pradeep Stephen John 2017 2016
Adams Verma Coe Chapman Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed fees 45 30 41 55 171 171
Payments under
incentive plan 95 22 - 47 164 -
140 52 41 102 335 171
======== ======== ======== ========= ======== ========
The Directors' Incentive Plan ("DIP") was approved by Shareholders on 29 November 2012, and provides for payments to Martin Adams, Pradeep Verma and John Chapman amounting, in aggregate to 1.3% of amounts distributed to shareholders.
7. Taxation
There is no liability for income tax in the Isle of Man.
The Mauritian subsidiaries are subject to income tax in Mauritius at the rate of 15% on the chargeable income. The Mauritian subsidiaries are, however, entitled to a tax credit equivalent to the higher of the foreign tax paid and a deemed credit of 80% of the Mauritian tax on their foreign source income. No provision has been made in the financial statements due to the availability of tax losses.
8. Earnings/ (loss) per share
Basic loss per share is calculated by dividing the net loss attributable to equity shareholders of the parent by the weighted average number of ordinary shares outstanding during the year.
2017 2016
Earnings/ (loss) attributable to equity shareholders of the parent (GBP'000) 3,009 (6,969)
Weighted average number of ordinary shares (thousands)
for the purposes of basic earnings/(loss) per share 210,682 210,682
-------- --------
Basic earnings/(loss) per share (pence) 1.4 p (3.3) p
======== ========
There is no difference between fully diluted earnings/(loss) per share and basic earnings/(loss) per share.
9. Distributions
2017 2016
GBP'000 GBP'000
1.0 pence per share on 23 September 2,104 -
2016
5.0 pence per share on 16 December 10,522 -
2016
--------- ---------
12,626 -
--------- ---------
Both distributions were paid out of the reserves created upon cancellation of the share premium reserve which had arisen at the time of the Company's admission to AIM in 2006.
10. Investments - designated at fair value through profit or loss
On 20 October 2016 an agreement was signed with Immobilien Indien I GmbH & Co. KG and Immobilien Indien II GmbH & Co. KG (together the "Immobilien Funds"), which facilitated the realisation of all of the Company's remaining investments held jointly with the Immobilien Funds.
Accordingly, on 15 November 2016, the Company disposed of its investments in Trinity Capital (One) Limited ("TC-1") and Trinity Capital (Five) Limited ("TC-5") held by its wholly owned subsidiary Trinity Capital Mauritius Limited ("TCML") in return for a payment of INR720,000,000 (GBP8,727,000). As the Company's holdings in TC-1 and TC-5 were valued at 3 March 2016 at an aggregate of GBP5,069,000, the Company recorded a gain on disposal of GBP3,658,000 in the year ended 31 March 2017.
Following the above sale of TCML's interests in TC-1 and TC-5, the Company's only investment at the year-end was its holding in Trinity Capital (Ten) Limited ("TC-10"). This has been transferred to investments held for sale (note 11).
Movements in investments at fair value are as follows:
2017 2016
GBP'000 GBP'000
Beginning of year 8,272 16,078
Disposals - fair value at beginning (5,069) -
of year
Fair value adjustment (1,363) (7,806)
Transfer to investment held for sale (1,840) -
(note 11)
--------- ---------
End of year - 8,272
--------- ---------
Fair value hierarchy of investments
The financial assets measured at fair value are valued using a fair value hierarchy as described in Note 3.
11. Investment - held for sale
Following the sale of TCML's interests in TC-1 and TC-5 as described in note 10, the Company's last remaining asset in India is its investment in TC-10. TCML owns the economic interest in all of the compulsorily convertible preference shares ("CCPS") issued to TC-10 by DB (BKC) Realtors Private Limited ("DB(BKC)").
After the year-end, on 17 October 2017, TC-10 entered into a sale and purchase agreement (the "SPA") with DB Realty Limited in relation to all of the CCPS held by TC-10. The value of the Company's interest in TC-10 as reported in these financial statements is based on the selling price determined in the SPA, namely INR 149.6 million, equivalent to GBP1.8 million at the 31 March 2017 exchange rate, (approximately GBP1.7 million at exchange rates prevailing at the date of the SPA).
12. Cash and cash equivalents
2017 2016 2017 2016
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
Cash held with banks 11 367 5 338
Money market funds 779 5,289 700 5,219
-------- -------- -------- --------
790 5,656 705 5,557
======== ======== ======== ========
13. Provision for future legal costs
In January 2011, the Company created a provision of GBP2.0 million to cover the possible costs of defending against legal actions brought by the Immobilien Funds. As part of the agreement with the Immobilien Funds referred to in note 10, all pending legal proceedings in Mauritius between the parties were discontinued. The Company has therefore reversed the provision.
14. Share capital
The authorised share capital at 31 March 2017 and 31 March 2016 and the issued and fully paid share capital at the same dates were as follows:
Authorised Issued and fully paid
No. of Shares GBP No. of Shares GBP
Ordinary shares of 1 pence each 416,750,000 4,167,500 210,432,498 2,104,325
Deferred shares of 1 pence each 250,000 2,500 250,000 2,500
417,000,000 4,170,000 210,682,498 2,106,825
============== ========== ============== ==========
The Deferred Shares rank pari passu with the Ordinary Shares save that the Deferred Shares have no right to dividends or voting rights or the right to receive notice of or attend any general meeting. On the return of capital in a winding-up of the Company or otherwise (other than re-purchases or redemptions of shares authorised by special resolution), the Deferred Shares have the right to return of par value paid up thereon in priority to the return of the par value paid up on the Ordinary Shares.
15. Net asset value (NAV)
The NAV per Share is calculated by dividing the net assets attributable to the equity holders of the Company at the end of the year by the number of Shares in issue as at 31 March 2017.
2017 2016
Net assets (GBP'000) 2,000 11,617
Number of Shares in issue (note
14) 210,672,498 210,682,498
------------ ------------
NAV per Share (pence) 0.9 5.5
============ ============
16. Investments in subsidiaries
The Company has the following subsidiaries incorporated in Mauritius. They are recorded at cost in the financial statements of the Company less provision for impairment.
Name Proportion of ownership
interest
At 31 March At 31 March
2017 2016
Trinity Capital Mauritius
Limited 100% 100%
Trinity Capital (One)
Limited - 67%
Trinity Capital (Four)
Limited 100% 100%
Trinity Capital (Five)
Limited - 59%
Trinity Capital (Ten)
Limited 12% 12%
Trinity Capital (Nineteen)
Limited - 100%
17. Commitments
There were no outstanding contractual commitments at the year-end (2016: nil).
18. Financial risk management
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, market price risk and interest rate risk), credit risk and liquidity risk.
Risk management is carried out by the Board to the extent possible and as appropriate.
(a) Market risk (i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Indian Rupee. Foreign exchange risk arises from future commercial transactions, recognised monetary assets and liabilities and net investments in foreign operations.
Net assets denominated in Indian Rupee at the year-end amounted to GBP1.8 million (2016: GBP8.3 million).
At 31 March 2017, had the exchange rate between the Indian Rupee and Sterling increased or decreased by 5% with all other variables held constant, the increase or decrease respectively in net assets would amount to approximately GBP0.09 million (2016: GBP0.4 million).
The Group does not hedge against foreign exchange movements.
(ii) Market price risk
The Group is exposed to market price risk arising from its investments. All these securities present a risk of capital loss. The Board is responsible for the selection of investments and monitoring exposure to market risk. All investments are in Indian companies.
If the value of the group's investment portfolio had increased by 10%, the Group's net assets would have increased by GBP0.18 million (2016: GBP0.8 million). A decrease of 10% would have resulted in equal and opposite decrease in net assets.
(iii) Cash flow and fair value interest rate risk
The Group's cash and cash equivalents are invested at short term market interest rates.
The following table below summarises the Group's exposure to interest rate risks. It includes the Groups' financial assets and liabilities at the earlier of contractual re-pricing or maturity date, measured by the carrying values of assets and liabilities.
Less than 1 month 3 mths Non-
1-3 to 1 year 1-5 years Over 5 interest
months years bearing Total
31 March 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Investment held for sale - - - - - 1,840 1,840
Cash and cash equivalents 790 - - - - - 790
Prepayments - - - - - 25 25
------------------ --------- ----------- ------------ --------- ---------- --------
Total financial assets 790 - - - - 1,865 2,655
------------------ --------- ----------- ------------ --------- ---------- --------
Financial liabilities
Trade and other payables - - - - - 105 105
Provision for run-off
costs 550 550
Total financial
liabilities 655 655
------------------ --------- ----------- ------------ --------- ---------- --------
Total interest rate
sensitivity gap 790 - - - - 1,210 2,000
------------------ --------- ----------- ------------ --------- ---------- --------
Less than 1 month 3 mths Non-
1-3 to 1 year 1-5 years Over 5 interest
months years bearing Total
31 March 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Investments at fair value
through profit or loss - - - - - 8,272 8,272
Trade and other
receivables - - - - - 1 1
Cash and cash equivalents 5,656 - - - - - 5,656
Prepayments - - - - - 30 30
------------------ --------- ----------- ------------ --------- ---------- --------
Total financial assets 5,656 - - - - 8,303 13,959
------------------ --------- ----------- ------------ --------- ---------- --------
Financial liabilities
Provision for legal costs - - - - - 2,000 2,000
Trade and other payables - - - - - 342 342
Total financial
liabilities 2,342 2,342
------------------ --------- ----------- ------------ --------- ---------- --------
Total interest rate
sensitivity gap 5,656 - - - - 5,961 11,617
------------------ --------- ----------- ------------ --------- ---------- --------
(b) Credit risk
Credit risk arises on investments, cash balances and debtor balances. The amount of credit risk is equal to the amounts stated in the statement of financial position for each of these assets. Cash balances are limited to high-credit-quality financial institutions. There are no impairment provisions as at 31 March 2017 (2016: nil).
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Company aims to maintain flexibility in funding.
Residual undiscounted contractual maturities of financial liabilities:
31 March 2017 Less 1-3 3 months 1-5 Over No stated
than months to 1 years 5 maturity
1 month year Years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities
Provision for - - 550 - -
run-off costs
Trade and other 105 - - - - -
payables
105 - 550 - -
--------- -------- --------- -------- -------- ----------
31 March 2016 Less 1-3 3 months 1-5 Over No stated
than months to 1 years 5 maturity
1 month year Years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities
Provision for
legal costs - - - - - 2,000
Trade and other 342 - - - - -
payables
--------- -------- --------- -------- -------- ----------
342 - - - - 2,000
--------- -------- --------- -------- -------- ----------
19. Provision for run-off costs
A provision has been made for the estimated unavoidable costs that are expected to be incurred in respect of the winding up of the Company. It is estimated that these costs, consisting of regular administration costs from 31 March 2017 up to the date of liquidation, disposal costs associated with the transaction described in note 11, and liquidation costs associated with the closure of the Company and the remaining subsidiaries, are in the region of GBP550,000.
20. Related party transactions
Graham Smith is a Director of the Company, and a Director of the Administrator. He has received no Directors' fees from the Company during the year (2016: nil). The fees paid by the Company to the Administrator (excluding VAT) for the year amounted to GBP0.1 million (2016: GBP0.1 million).
Details of other Directors' remuneration during the year are given in note 6.
21. Subsequent events
On 27 August 2017 the Company announced that it is offering TCML for sale at auction. The deadline for receipt of unconditional bids under the auction has been extended to 10 November 2017. In the meantime, on 17 October 2017, TC-10 entered into a sale and purchase agreement with DB Realty Limited in relation to all of the CCPS held by TC-10 (the "Transaction"). Under the terms of the Transaction, TC-10 will receive the equivalent of INR149.6 million (approximately GBP1.7 million at current exchange rates). Completion of the Transaction is subject to TC-10 obtaining all final regulatory approvals in India, currently expected before the auction deadline. If the Transaction completes as envisaged before the auction deadline, the auction of TCML will be cancelled. Under the terms of an agreement with the Immobilien Funds entered into at the same time as the agreement referred to in note 10, TC-10 will pay the proceeds received from the Transaction to TCML. TCML will then remit those proceeds to Trinity.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UGGQCGUPMGMR
(END) Dow Jones Newswires
November 09, 2017 03:00 ET (08:00 GMT)
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