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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| West Pioneer | LSE:WPR | London | Ordinary Share | VGG955191074 | ORD USD0.10 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 10.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMWPR
RNS Number : 0871I
West Pioneer Properties Limited
20 July 2012
Press Release 20 July 2012
West Pioneer Properties Limited
("West Pioneer" or the "Company")
Preliminary Results
West Pioneer Properties Limited (AIM:WPR), a leading developer and operator of shopping malls and mixed use developments in west and south India, announces its preliminary results for the year ended 31 March 2012.
Highlights
Hot Features
Premium
-- Planning approval process is underway for phase IV at
the Kalyan development on the additional land that the
Company acquired during the period, which provides an
additional opportunity of more than 250,000 sq. ft. of
residential space
-- Successfully renegotiated Company's existing bank loans
by securing considerably longer repayment terms and decreasing
yearly outlay towards servicing the facility
-- Balance sheet remains robust as a result of prudent cash
management and low gearing with year end cash and cash
equivalents of US$0.8m, while maintaining good levels
of ongoing investment into inventory, together with an
additional US$5m unutilised bank facility in place
-- Retail leasing at Metro Junction Mall remains steady at
74% with Shoppers Stop, a leading national departmental
store, currently under fit-out at the Mall and other major
brands also in advanced stages of negotiation
-- The Metro Junction Mall's repositioning exercise continues
to progress well with the focus on tenant mix and quality
of tenants in order to position the mall as a leading
value and lifestyle destination
-- First residential tower at Kalyan development expected
to be completed and with a positive contribution to income
for the financial year ended 31 March 2013
-- The Commercial Plaza development at Kalyan is also anticipated
to be completed with a positive contribution to income
for the financial year ended 31 March 2013
-- Nashik ground break currently held back due to a delay
in receiving development approvals. These are expected
to be obtained within the first half of the current financial
year
-- Management actively investing cash and resources into
exploring opportunities to generate value in the retail,
residential, commercial and leisure spaces, with the focus
predominantly on relatively smaller but promising development
opportunities
-- Indian Rupee has fallen in value significantly depreciating
by more than 14% against the US Dollar, materially impacting
the Company's reported Net Asset Value during the 12 months
ended 31 March 2012
-- An increase in the discount rate to 14% has resulted in
a material impairment in the carrying value of the Company's
properties for the 12 months ended 31 March 2012
-- The Company has continued to focus its efforts on positioning
the Kalyan mall as a leading value shopping and lifestyle
destination. This has led to a re-engineering of the tenant
mix towards larger lifestyle retailers which has had a
short term impact on rental income, however the Board
believes the benefits will flow through in the longer
term
Commenting on the results, Amit Jatia, Chairman of West Pioneer, said: "It has been a challenging year for the Indian economy with high inflation continuing, an increasing current account deficit and a steep depreciation of the Indian rupee.
"The wider economic environment and tight monetary conditions have affected the Company's operations, in particular within the Company's retail operations. However the Board remains positive about the unique position that the Kalyan mall has created for itself in the catchment area and we remain committed to providing the best in terms of convenience, shopping experience and a compelling entertainment destination for our customers.
"We have made a significant improvement in the pace of our residential and commercial development at Kalyan and are confident of delivering high quality products to our customers. They have acknowledged our commitment to transparency and quality and we are confident of garnering positive responses to future developments as well.
"The Nashik development is moving at a slower pace due to a delay in receiving development approvals. However the Board has confidence in the intrinsic value the Nashik site offers to the Company and the disposal of Aurangabad enables a greater focus on accelerating the rate of other core developments."
-Ends-
For further information:
West Pioneer Properties Limited
Nitin Dattani, Executive Director Tel: +44 (0) 20 8424
0690
Shore Capital:
Anita Ghanekar / Edward Mansfield Tel: +44 (0) 20 7408
4090
Media enquiries:
Abchurch Communications:
Joanne Shears / Oliver Baxendale Tel: +44 (0) 20 7398
7720
oliver.baxendale@abchurch-group.com www.abchurch-group.com
Chairman's Statement
Indian Economy
Whilst the macro-economic fundamentals of the Indian economy continue to remain attractive, persistently high inflation rates and ensuing tightening of monetary policy by the Central Bank are contributing to lower than expected rates of growth. Since the release of the Company's Interim Results in December 2011, the Central Bank has revised its growth forecast for India down from 7.6% to 6.5% for the financial year 2011/12.
Impact on change of discount rate
As a result of the increased risk free rate within India, the Board has continued to review the appropriateness of the discount rates it is using in valuing the Company's investment properties. As a result of an increase in the discount rate from 13% to 14% there has been a material impairment in the carrying value of these properties which are recognised in the 31 March 2012 results.
Impact of depreciation of Rupee
During the current financial year the Indian Rupee has fallen in value significantly, depreciating by more than 14% against the US Dollar, falling from 45.4 rupees to the US Dollar as at 31 March 2011 to 52.08 rupees as at 31 March 2012. As the Company manages its accounts in rupees but reports to the market in US dollars, the depreciation of the rupee has had a negative impact on the reported value of the Company's revenues and assets. As such, this has materially impacted the Company's reported Net Asset Value during the 12 months ended 31 March 2012. The Indian Rupee has continued to depreciate since the year end which will further impact the Company's reported Net Asset Value going forward.
Retail
The outlook for the organised retail sector in India remains promising with its share of total retail sales expected to rise from the current 6% to 11% by 2013 according to Knight Frank, although developing at a slower pace than expected. Relaxation in Foreign Direct Investment ("FDI") regulations will boost growth in the organised retail segment. Retailers continue to look for expansion but have become more cautious given the economic uncertainty. As such, the focus of many retailers has shifted towards tier II and tier III cities, where demand continues to increase and where existing consumers are currently not as well-serviced. Given West Pioneer's focus on tier II cities, the Company views this as a positive market trend for its retail operations.
Residential
Following a period of volume-led demand and price increases, the sector is expected to stabilise in higher end markets. Demand remains robust in the middle segment of this market, driven predominantly by India's growing middle class and their increasing levels of disposable income. This provides opportunities for developers like West Pioneer operating in extended suburbs and tier II cities.
Company Strategy
West Pioneer's strategy is to be a leading developer and operator of shopping malls and mixed use developments in west and south India. By capitalising on the synergies created through building and operating mixed use developments, the Company is not solely a mall developer and operator but also one that has direct access to consumers through its residential and commercial projects. By leveraging this mixed use development strategy, West Pioneer is in a strong position to create value, generate sustainable operating income and achieve breakeven at project launch levels through pre-leasing and advance sale bookings. The Company continues to focus its activities in tier II cities where rapid growth and competitive land pricing is more achievable than in established tier I cities.
Financial Review
In the year ended 31 March 2012, West Pioneer achieved revenue and other income of US$4.3m (2011: US$8.7m), including property rentals and other operating income of US$4.1m (2011: US$4.4m). (Loss)/ Profit before tax was US$(2.4m) (2011: US$3.15m) and basic loss per share was US$(0.012) (2011: earnings US$0.053). Net assets at the year end were US$57.8m (2011: US$67.1m), including cash and short term deposits of US$0.8m (2011: US$2.2m). Interest bearing loans and borrowings increased from US$7.8m to US$10m during the period, inclusive of debt repayments.
The Company has also continued to manage its working capital carefully and after having invested $8m in increasing its inventory, the Board is pleased to still be able to report $0.8m of cash on its balance sheet.
In turn, the Company is also pleased to report that it has successfully refinanced its existing bank loans during the period. These loans were previously repayable over a two year period but the new arrangement has extended the repayment period to nine years; in addition, the Company has secured its bank loans at reduced interest rate levels. The new facility includes an unutilised additional $5m of finance which will ensure the Company has sufficient liquidity for the foreseeable future.
Operating Review
Kalyan
The Company has been successful in implementing its retail-led mixed use development model at Kalyan. As a mixed use development, West Pioneer has the benefit of direct access to consumers through the residential and commercial projects, which in turn offers valuable consumer insight and synergies for use in the mall itself. As previously announced, these insights have resulted in the strategic focus for the mall shifting to consumer value and the successful positioning of the mall as a value and lifestyle destination.
Kalyan - Retail
Phase I of the 500,000 sq. ft. mall has been developed and includes a fully functional food court and entertainment zone on the second floor, along with three restaurants and a five screen multiplex cinema. However, over the last year the Company has undertaken a repositioning exercise focused on establishing the mall as a leading value shopping and lifestyle destination.
This repositioning has led to a re-engineering of the tenant mix towards larger lifestyle retailers and also to the reorganisation of certain floor compositions. As part of this, Shoppers Stop, a leading national department store, has entered into an agreement to lease 48,620 sq. ft. of retail space. In the long term attracting retailers of Shoppers Stop's scale and profile will prove extremely beneficial to the development but in the short term the reorganisation required to accommodate Shoppers Stop has materially affected the footfall and resulting revenues of the mall. These disturbances resulted in around an 8% decline in footfall numbers over the corresponding period in the previous year. However, the Company is confident that this decline is temporary and that footfall will return to higher levels as the repositioning exercise nears its completion.
Leasing levels at the mall remained steady at 74% during the period and the Company is currently in negotiation with a number of other major brands to lease the remaining retail space.
Kalyan - Residential
The Board is particularly pleased with the good progress that has been made at Phase II of the development at Kalyan, the three-tower residential project of 560,000 sq. ft. The first tower is now completed to the 23rd floor and the Company expects the development to be fully completed with a positive contribution to income in the financial year ended 31 March 2013. The second tower is also developing well and is currently completed to the 11th floor. In turn, the Company is pleased to report that 87% of the units are pre-sold in the first two towers and pre-sales in the third tower are expected to commence later this year. The residential development maintains its status as the premium development in the Kalyan area and units have achieved a 50% increase from their sale price at launch.
Phase III of the development, a commercial plaza ("Metro Plaza") of 68,000 sq. ft. of office space, is also progressing at an encouraging pace with construction underway. The Board expects that this will be completed in the current financial year, which, together with the completion of the first tower of Phase II, is expected to result in a positive income contribution for the full year to 31 March 2013. The development will have small commercial units for leasing on the ground floor and units for sale on the first and second floors, with the target market being self-employed professionals such as doctors, lawyers and architects. The response to the development continues to be very positive with 38% of the sale space pre-sold (an increase from 20% at 28 June 2011) at an estimated 50% premium over current residential sale rates, which is in line with the management's strategy to take advantage of opportunities where the maximum value can be generated. The Board believes that the Metro Plaza project is likely to generate a net cash inflow from sales during the financial year ended March 2013.
In March 2012, West Pioneer announced that it had acquired an additional 35,035 square feet of land along with the freehold rights of the Company's leased land of 686,922 square feet at Kalyan for a total consideration of 190 million Rupees (US$3.7m), spread over 18 months. This land will provide West Pioneer with the capacity to build an additional tower of residential space. The planning approval process for a fourth tower of residential units is currently underway and the Company expects this approval to be received during the course of this year. Both the third and fourth towers are proposed to have an increased capacity of 27 floors, making them larger than towers one and two. The Board believes that this is a significant opportunity to enhance the existing value of the Kalyan development. The fourth tower is expected to increase the total residential space from 560,000 square feet to 810,000 square feet.
Nashik
The Nashik development is moving at a slightly slower pace due to various site specific reasons including delays in receiving development approvals. However the Company is convinced of the intrinsic values this property brings to the Company and is confident of receiving the necessary development approvals within the coming two months.
Aurangabad
The Company has commenced development of retail and warehousing space at Aurangabad with an intention to sell on completion. The development is currently running behind schedule.
Outlook
The Company's key short term goals are to continue with the repositioning of the Kalyan development as a value and lifestyle destination in order to drive further footfall and to maximise the rental values and quality of tenants and tenant mix rather than short-term occupancy. The Board intends to continue to develop Kalyan's commercial plaza alongside the development of the residential site, and sees particular opportunity for the fourth tower that is currently going through the planning approval process.
The Board is confident of making further progress in the development of the Nashik and Aurangabad sites in the current financial year and will update shareholders on the progress of these projects. In the current financial year the Company is also expected to benefit from the completion of the commercial plaza and first residential tower at Kalyan. Overall, the Board believes that West Pioneer is continuing to make good progress towards developing a brand that is recognised by retailers and consumers alike for quality and attractive pricing and the Board remains confident of the Company's ability to deliver growth over the longer term.
Amit Jatia
Chairman
20 July 2012
CONSOLIDATED INCOME STATEMENT
For the year ended 31st March 2012
Year ended 31(st) March
2012 2011
------------ ------------
$ $
Revenue
Property rentals 2,073,669 2,100,805
Other operating income 2,065,872 2,272,500
------------ ------------
Total Revenue 4,139,541 4,373,305
Property revaluation gains - 4,117,148
Finance and other income 152,904 184,749
Total Income 4,292,445 8,675,202
------------ ------------
Expenses
Property revaluation loss (1,417,226) -
Direct operating expenses for
rent-earning properties (2,145,383) (2,063,289)
Administrative expenses (1,911,094) (1,922,748)
Selling and distribution costs (282,927) (490,176)
Finance costs (930,419) (1,048,174)
------------ ------------
Total expenses (6,687,049) (5,524,387)
------------ ------------
(Loss)/Profit before tax (2,394,604) 3,150,815
Income tax credit 1,468,574 1,092,426
(Loss)/Profit after tax (926,030) 4,243,241
============ ============
Attributable to:
Equity holders (926,030) 4,243,241
Earnings per share (attributable
to equity holders)
Basic (0.012) 0.053
Diluted (0.012) 0.053
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31st March 2012
Year ended 31(st) March
2012 2011
-------------- ----------
$ $
(Loss)/Profit for the year (926,030) 4,243,241
============== ==========
Exchange (loss) on translation of
foreign operations (8,434,296) (510,093)
-------------- ----------
Other comprehensive (loss) for the
year, net of tax (8,434,296) (510,093)
-------------- ----------
Total comprehensive (loss)/income
for the year, net of tax (9,360,326) 3,733,148
============== ==========
Attributable to:
Equity holders (9,360,326) 3,733,148
============== ==========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31st March 2012
As at 31st March
2012 2011
------------- ------------
$ $
Assets
Non-current assets
Property, plant and equipment 1,671,041 3,455,261
Investment properties 54,329,562 75,018,955
Intangible assets 6,321 12,755
Other non-financial assets 16,103 -
Other financial assets 322,879 313,781
Advance income tax 308,076 482,167
56,653,982 79,282,919
------------- ------------
Current assets
Inventories 29,557,631 9,953,710
Investments - held for trading 438,592 549,527
Trade and other receivables 966,668 1,121,141
Prepayments & Other non-financial
assets 575,194 312,965
Cash and short-term deposits 771,640 2,191,013
------------- ------------
32,309,725 14,128,356
------------- ------------
Total Assets 88,963,707 93,411,275
============= ============
Equity and Liabilities
Equity attributable to the equity
holders
Issued capital 7,996,130 7,996,130
Share premium 45,717,870 45,717,870
Retained earnings 16,664,475 17,449,183
Employee equity benefit reserve 559,427 690,216
Foreign currency translation
reserve (13,177,091) (4,742,795)
------------- ------------
Total Equity 57,760,811 67,110,604
------------- ------------
Non-current liabilities
Interest bearing loans and borrowings 4,453,381 3,744,675
Advance from sale of units 8,269,352 5,001,611
Other financial liabilities 3,817,688 1,076,772
Other non-financial liabilities 6,282 28,276
Employee benefit liability 48,620 51,900
Deferred tax liability 6,488,338 9,013,315
23,083,661 18,916,549
------------- ------------
Current liabilities
Trade and other payables 1,442,463 2,151,057
Interest bearing loans and borrowings 5,552,766 4,116,708
Other financial liabilities 1,107,284 1,066,790
Other non-financial liabilities 16,722 49,567
8,119,235 7,384,122
------------- ------------
Total Liabilities 31,202,896 26,300,671
------------- ------------
Total Equity and Liabilities 88,963,707 93,411,275
============= ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31(st) March 2012
Attributable to equity holders of the parent
Employee
equity Foreign currency
Issued Share Retained benefits translation Total
capital Premium Earnings reserve reserve Equity
---------- ----------- ----------- ---------- ----------------- ------------
$ $ $ $ $ $
Balance as at 1(st) April 2011 7,996,130 45,717,870 17,449,183 690,216 (4,742,795) 67,110,604
(Loss) for the year - - (926,030) - - (926,030)
Other comprehensive loss - - - - (8,434,296) (8,434,296)
---------- ----------- ----------- ---------- ----------------- ------------
Total comprehensive income - - (926,030) - (8,434,296) (9,360,326)
Share based payment - - - 10,533 - 10,533
Transfer to retained earnings
on options forfeited - - 141,322 (141,322) - -
Balance as at 31(st) March
2012 7,996,130 45,717,870 16,664,475 559,427 (13,177,091) 57,760,811
========== =========== =========== ========== ================= ============
Balance as at 1(st) April 2010 7,996,130 45,717,870 13,192,220 650,152 (4,232,702) 63,323,670
Profit for the year - - 4,243,241 - - 4,243,241
Other comprehensive loss - - - - (510,093) (510,093)
---------- ----------- ----------- ---------- ----------------- ------------
Total comprehensive income - - 4,243,241 - (510,093) 3,733,148
Share based payment - - - 53,786 - 53,786
Transfer to retained earnings
on options forfeited - - 13,722 (13,722) - -
---------- ----------- ----------- ---------- ----------------- ------------
Balance as at 31(st) March
2011 7,996,130 45,717,870 17,449,183 690,216 (4,742,795) 67,110,604
========== =========== =========== ========== ================= ============
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31(st) March 2012
Year ended 31(st) March
2012 2011
------------ -----------
$ $
Operating activities
(Loss)/Profit before tax (2,394,604) 3,150,815
Adjustments to reconcile profit before
tax to net cash flows
Depreciation and amortization 29,572 58,036
Provision for doubtful debts 126,694 277,638
Share based payment expense 10,533 53,786
Decrease/(Increase) in fair value of
investment properties 1,417,226 (4,117,148)
Decrease/(Increase) in value of investments
held-for-sale 54,402 (24,462)
Net (Gain) on sale of investment (5) -
Dividend income (8,763) (8,845)
Interest income (109,377) (72,744)
Interest expense 870,500 1,040,439
------------ -----------
(3,822) 357,515
Working Capital adjustments
Decrease in prepayments (current) 1,877 19,592
(Increase)/Decrease in trade and other
receivables (234,988) 1,269,711
(Increase) in other assets (current) (339,927) (126,609)
(Increase) in other assets (non-current) (61,611) (304)
(Increase) in Inventories (7,894,027) (2,191,193)
Increase/(Decrease) in trade and other
payables (current) 982,054 (1,270,559)
(Decrease)/Increase in other liabilities
(current) (29,353) 292,348
Increase in other liabilities (non current) 4,208,378 2,665,077
(3,367,597) 658,063
Income tax Refund/(paid) 240,253 (128,986)
Net cash flows (used in)/from operating
activities (3,131,166) 886,592
------------ -----------
Investing activities
Proceeds from sale of held-for-trading
investments 3,002,010 250,538
Purchase of property, plant and equipment
and intangible assets (79,671) (2,930)
Purchase of held-for-trading investments (2,894,555) (174,150)
Capital expenditure on investment property (561,302) (713,746)
Dividend income 8,763 6,735
Interest received 58,182 22,855
Net cash flows (used in) investing activities (466,573) (610,698)
------------ -----------
Financing activities
Proceeds from borrowings 12,327,312 1,646,012
Repayment of borrowings (9,204,106) (1,388,856)
Interest paid (808,561) (930,753)
Net cash flows from/(used in) financing
activities 2,314,645 (673,597)
------------ -----------
Net (Decrease) in cash and cash equivalents (1,283,094) (397,703)
Net foreign exchange difference (136,279) 15,294
Cash and cash equivalents at 1(st) April
2011 2,191,013 2,573,422
Cash and cash equivalents at 31(st) March
2012 771,640 2,191,013
------------ -----------
Notes:
1. Foreign currency translation
The foreign currency translation reserve is used to record exchange difference arising from translation of the financial statements of WPPIPL and WEPL, the foreign subsidiaries. The foreign currency translation during the period ended 31(st) March 2012 of $8.43 million is on account of the depreciation of the Indian Rupee against the United States Dollar between 31(st) March 2012 and 31(st) March 2011.
2. Investment Property
Movements during the period
31(st) March 2012 31(st) March 2011
Completed Under Construction Total Completed Under Construction Total
------------ ------------------- ------------- ----------- ------------------- ------------
$ $ $ $ $ $
Balance at 1(st)
April 45,418,498 29,600,457 75,018,955 45,328,291 27,730,769 73,059,060
Transfers from
property, plant
and equipment - - - 57,329 - 57,329
Transfer to
inventory - (11,519,216) (11,519,216) - (2,373,460) (2,373,460)
Additions during
the period
comprising
-Subsequent
expenditure 90,471 385,668 476,139 142,283 522,188 664,471
-Acquisition of
lands 551,855 35,495 587,350 - - -
Adjustment to
fair value (2,544,489) 970,660 (1,573,829) 58,687 3,863,343 3,922,030
Income from
straight
lining (reversed) 156,603 - 156,603 195,118 - 195,118
Foreign currency
translation (5,708,723) (3,107,717) (8,816,440) (363,210) (142,383) (505,593)
Balance at 31(st)
March 37,964,215 16,365,347 54,329,562 45,418,498 29,600,457 75,018,955
-------------------- ------------ ------------------- ------------- ----------- ------------------- ------------
Fair value adjustments
Fair Value Adjustments comprise: 31st March 2012 31st March
2011
---------------- -------------
$ $
Adjustment to fair value of completed
properties (includes income from straight
lining $156,603 (March 31(st) 2011:$195,118)) (2,387,886) 253,805
Adjustment to fair value of investment
property under construction arising
in the period 970,660 3,863,343
---------------- -------------
Total fair value adjustment for the
year (1,417,226) 4,117,148
---------------- -------------
Significant assumptions
The fair value of Group's investment properties have been assessed by the directors and confirmed at 31(st) March 2012 & 2011 by an independent valuation performed by Cushman & Wakefield (India) Private Ltd as at 31(st) March 2012 and 2011 in accordance with Royal Institute of Chartered Surveyors (RICS) and International Valuation Standards Committee (IVSC) Valuation standards.
The Company has used the income approach for arriving at fair value of completed investment property in Kalyan.
The methodology and key estimates for the valuation are as follows:
-- The effective gross annual income of the property has been estimated based on expected rentals and other income arising out of mall operations. The inflows considered for calculating the value of the property are lease revenue, parking income, kiosks & marketing income, and interest on security & utility deposits.
-- The outflows considered for calculating the value of the property are brokerage for lease and sale and capital expenditure.
-- Net operating income has been calculated for ten years of operation and capitalized at the end of this period.
The Company has used the comparable land transactions method for its Nashik property and income approach for arriving at the fair value of Kalyan Phase II property.
Significant assumptions (on the basis of weighted averages) used in the valuations as of 31(st) March 2012 are presented below:
31st March 31st March
2012 2011
----------- -----------
$ $
Completed Investment property
Average rental rate per sq ft per month 0.66 0.72
Rate used in capitalising the terminal
year income stream (10 year model) 11% 11%
Discount rate 14% 13%
Vacancy 5% 5%
----------------------------------------- ----------- -----------
Investment property under construction
(at fair value)
Rate used in capitalising the terminal
year income stream (10 year model) 12% 12 %
Discount rate 19.5% 18.2%
Average % complete 12% 0%
Estimated average development profit 10% 10%
Effective average development profit 0% 0%
----------------------------------------- ----------- -----------
The completed investment property at Kalyan is subject to first charge to secure the term loan facility availed by WPPIPL from the Ratnakar Bank Limited.
On 27(th) March 2012 WPPIPL acquired 67,071.50 square metres of land (including the existing lease land of 63,816.60 square metres) from Hardcastle & Waud Manufacturing Company Limited, a related party, for a total consideration of $3,650,469 of which $3,458,339 is payable on 27(th) September 2013. The present value of this consideration aggregating $2,338,221 net of the payables to Hardcastle & Waud Manufacturing Company Limited on the date of purchase has been added to the assets in respect of which the land is to be used as follows:
$
Investment Properties 464,965
Inventory 1,842,686
Investment properties under construction 30,570
----------
Total 2,338,221
----------
The purchase consideration of $3,650,469 has been assessed by the directors and confirmed by an independent valuation report of the land by Knight Frank.
$
Newly acquired Land 881,763 Based on Land comparable
method
Existing Land 2,768,706 Based on difference between
fair value of freehold land
on Land comparable method
and lessee's right in the
leasehold value and lessor's
right in the land
Total 3,650,469
In October 2011 WPPIPL entered into a non-binding Memorandum of Understanding (MOU) to develop and sell, subject to contract, its asset in Aurangabad, India for a total cash consideration of approximately $14,400,839. Under the terms of the MOU, the Company will develop the project as a retail space and warehousing space.
Upon commencement of construction the company has transferred the amounts in respect of the Aurangabad property aggregating $1,468,721 and $11,519,216 from property, plant and equipment and investment property, respectively, to inventory.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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