TIDMERE
RNS Number : 5562V
Eredene Capital PLC
16 December 2013
Date: 16 December 2013
On behalf of: Eredene Capital plc ("Eredene", "Eredene
Group" or "the Company")
Embargoed until: 0700hrs
EREDENE CAPITAL PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2013
Eredene Capital PLC (AIM: ERE), the AIM quoted investor in
Indian infrastructure, announces its interim results for the six
month period ended 30 September 2013.
Highlights
-- Strategic review concluded that it was not the optimum time
to attempt to realise all of the Company's assets due to the
historically low level of the Rupee and the uncertainty caused by
the May 2014 Indian government elections.
-- Realisation of all investments may take two to three years so
crucial to reduce the Company's cost base during that period. In
order to reduce costs, Eredene has signed an Investment Management
Agreement with Ocean Dial to take over the ongoing management of
the Company's operations in London. Head office costs are expected
to fall from c. GBP1.8m in year ended 31 March 2013 to c. GBP0.85m
per year once planned changes complete.
-- As part of the handover to Ocean Dial, Alastair King, Chief
Executive Officer, will leave Eredene on 31 December 2013 and Gary
Varley, Chief Financial Officer, will leave on 31 March 2014.
Ranveer Sharma will continue to lead Eredene's investment advisory
operations in India and will work alongside Ocean Dial's
experienced Mumbai advisory team to maximise the value of
investment realisations.
-- Loss for the period of GBP11.3m (30 September 2012: GBP10.6m)
of which GBP4.4m relates to unrealised fair value adjustments on
investments (GBP2.8m of adjustment due to foreign exchange
movements) and GBP4.6m relates to a further write-down of the
investment in Matheran and Gopi.
-- Net Asset Value of 13.3 pence per share as at 30 September
2013 (30 September 2012: 16.7 pence, 31 March 2013: 17.2
pence).
-- Adverse movement in Indian Rupee/Pound Sterling exchange rate
of 19% in period which negatively affected the value of all
investments - accounts for 2.1p of the 3.9p reduction in NAV.
-- Return of GBP20m to shareholders via Tender Offer at 17.2p
per share completed in October 2013. Company has now returned
GBP35m in total and further returns of capital are expected to
follow future material realisations.
For further information contact:
Eredene Capital PLC Tel: +44 20 7802 8901
Gary Varley (Chief Financial Officer)
Ocean Dial Asset Management Limited Tel: +44 20 7802 8900
Robin Sellers (Chief Executive Officer)
David Cornell (Chief Investment Officer)
Eredene Capital Advisors Private Limited Tel: +91 22 6737 7373
Ranveer Sharma (Managing Director)
Numis Securities Ltd (Nominated advisor Tel: +44 20 7260 1000
& Corporate broker)
Heraclis Economides (Nominated Advisor)
/ David Benda
Redleaf Polhill Limited (Financial PR) Tel: +44 20 7382 4720
Henry Columbine / David Ison eredene@redleafpr.com
CHAIRMAN'S STATEMENT
Operating Review
The Group announced in September 2013 that it would conduct a
strategic review to determine the optimum realisation strategy and
cost structure. This review concluded that it would not be possible
to realise the Company's investments in the short term at
acceptable valuations due to the historically low level of the
Rupee and the economic uncertainty in India in the lead up to the
May 2014 Indian government elections. The Rupee has declined by 19%
against Sterling since 31 March 2013 because of concerns that the
US Federal Reserve may start to taper its expansionary monetary
policies. In addition, India has entered a period of uncertainty in
advance of the May 2014 elections which have reduced the level of
investment activity in unquoted Indian companies.
Eredene is determined to extract maximum value from its assets
and is committed to returning funds to shareholders when market
conditions allow realisations at acceptable valuations. It is now
forecast that it may take two to three years to sell all
investments and so it is crucial that the Company's annual cost
base is reduced to preserve shareholder value over that period.
The Company has signed an Investment Management Agreement
("IMA") with Ocean Dial Asset Management Ltd ("Ocean Dial") to take
over the ongoing management of the Company's operations as the
first step in a significant cost reduction programme which will
include the closure of Eredene's London office.
As part of the transition to Ocean Dial, Alastair King, Chief
Executive Officer will leave Eredene on 31 December 2013 and Gary
Varley, Chief Financial Officer, will leave on 31 March 2014 after
completing the handover. Alastair, with Gary's assistance, founded
the Company in 2005 and I would like to take this opportunity to
thank them both for their invaluable contribution in building
Eredene. Ranveer Sharma will continue to lead Eredene's investment
advisory operations in India and will work alongside Ocean Dial's
experienced Mumbai advisory team to maximise the realisation value
of Eredene's investments.
Ocean Dial, which is authorised and regulated by the Financial
Conduct Authority, currently manages two India focused funds,
Gateway to India Fund, a Dublin listed fund investing in Indian
equities, and India Capital Growth Fund, an AIM quoted investment
trust investing in small and mid-cap Indian equities. Between May
2011 and May 2013, Ocean Dial was wholly owned by Caledonia
Investments plc ("Caledonia"), a 21% shareholder in Eredene. In May
2013, Caledonia disposed of its entire shareholding in Ocean Dial
to the Ocean Dial management team.
The Ocean Dial group has offices in London, Singapore and Mumbai
and is headed by its Chairman, Raju Shukla, who was previously
India Country Head for Barclays Capital from 2007 to 2012. Raju has
an extensive range of contacts in India and the Board is confident
that the Company will benefit from his corporate network. Ocean
Dial's London based executives are Robin Sellers, Chief Executive
Officer, formerly Head of Group Finance at Close Brothers, and
David Cornell, Chief Investment Officer, formerly at Henderson
Global Investors.
Ocean Dial will work alongside Ranveer Sharma and his team to
identify and execute the sale of the investments. The Group remains
committed to realising its investments and does not envisage
investing in any new companies. Ocean Dial will also be responsible
for the Group's accounting and administration services and will be
paid a management fee of GBP20,000 per month. The IMA is for a 24
month period and thereafter can be terminated with three months'
notice.
As a consequence of the appointment of Ocean Dial and other cost
cutting measures, it is expected that the Company's head office
costs will be reduced from approximately GBP1.8m in the year ended
31 March 2013 to approximately GBP850,000 per annum, once the
change to external management has been completed.
Ocean Dial may also receive a capped performance fee on the sale
of each investment, excluding Matheran and Gopi, varying from, on
average, 0.4% to 0.6% of the sales proceeds per investment,
depending on the sales price achieved, and is subject to a capped
maximum. The Company has previously announced that it is in
discussions to sell its stakes in Matheran and Gopi. Should this
not occur, Ocean Dial will manage the assets and will be
incentivised to achieve a successful realisation for Matheran and
Gopi through a capped performance fee which varies from 0.67% to a
capped maximum of 5.0% of proceeds depending on the sales value
achieved. The manager is incentivised to achieve the highest
possible realisation price for shareholders and there is a minimum
price below which the manager will not receive a performance
fee.
Financial Results
The Group reported a loss for the period of GBP11.3m (30
September 2012: GBP10.6m) of which GBP4.4m relates to unrealised
fair value adjustments on investments (GBP2.8m of adjustment due to
foreign exchange movements) and GBP4.6m relates to a further
write-down of the investments in Matheran Realty and Gopi
Resorts.
Eredene's Net Asset Value per share fell to 13.3 pence per share
as at 30 September 2013 (30 September 2012: 16.7 pence, 31 March
2013: 17.2 pence). The adverse movement in the Indian Rupee to
Sterling exchange rate of 19% in the period affected negatively the
value of all investments and accounts for 2.1p of the total 3.9p
reduction in NAV.
The Group sold its entire stake in Ocean Sparkle Ltd in June
2013 for GBP8.2m with the sales price representing a 39% premium
over investment cost in Indian Rupee terms.
The return of GBP20m to shareholders via a Tender Offer at 17.2p
per share completed in October 2013. The Company has now returned
GBP35m in total and further returns of capital are expected to
follow future material realisations.
Investee Companies
Set out below are some of the key developments in Eredene's
investee companies in India during the period to 30 September
2013.
-- MJ Logistic Services (MJL), a multi-user third party
logistics business in North India, opened a second cold storage
chamber at its hub warehouse in Palwal near Delhi, doubling cold
storage capacity there to 5,000 pallets. New cold storage customers
include industry innovator DuPont and US food manufacturer J.R.
Simplot. The high-tech warehouse at Palwal provides both cold and
ambient storage over 200,000 square feet. Tata Motors is a key
customer, storing and sourcing components and spare parts in MJL's
automated rack shelves at Palwal. MJL also operates leased
warehouses, and including Palwal it has a total warehouse capacity
in North India of 800,000 square feet.
-- Sattva Vichoor Container Freight Station ("CFS"), one of two
joint investments with the Sattva Business Group in Tamil Nadu, saw
a strong recovery in volumes with revenue for the half year up by
43% over the same period last year. The fair value of the
investment has increased in Indian Rupee terms following the
improvement in performance; however the Sterling value has fallen
due to the negative currency movement. Customers include South
Korean machinery manufacturer Doosan, NYK Line, Maersk, CMA-CGM and
MSC. A new 10,000 square feet export warehouse is under
construction which will take the total warehousing capacity on the
26-acre site to 97,500 square feet.
-- Sattva Conware CFS, a second joint investment with the Sattva
Business Group, continues to provide only domestic warehousing and
empty container services. The business is still waiting for the
customs authorities to assign customs staff to the site in order to
process export-import containers. The 60-acre site is within reach
of both Ennore and Chennai ports and the newly opened Kattupalli
container terminal and has a total warehousing capacity of 74,000
square feet.
-- Contrans Logistics CFS at Pipavav Port in Gujarat, one of two
Contrans projects in Northwest India, saw a decline in volumes over
the six-month period despite a recovery in container volumes at
Pipavav Port. The fair value of the investment has been written
down due to this under performance. A new container handling
contract has been signed with Maersk, the operators of the port.
The CFS, located on 79 acres just outside the port, is using
approximately 23 acres of the site, and negotiations are under way
to sell a 17-acre parcel of surplus land. Contrans is also
considering selling part of its second site near Baroda, also in
Gujarat.
-- Eredene has two logistic parks in East India with investment
partner Apeejay Surrendra Group, the Kolkata-based tea and shipping
conglomerate. The two facilities - at Haldia and Kalinganagar - are
operated in a 50/50 joint venture, Apeejay Infra-Logistics. They
offer integrated services for multi-modal logistics through open
and covered warehousing, container logistics and transportation,
and both have customs bonded facilities.
The logistics park in Haldia, West Bengal, is on a 90-acre site
close to the Port of Haldia, a petrochemical centre at the mouth of
the Hooghly River, and all three domestic warehouses there are now
leased. New contracts have been signed with shipping lines Maersk,
MSC, CMA CGM, Hanjin, Tata NYK, PIL and CSAV Norasial. Haldia is
providing both domestic and export-import services with a total
warehousing area of 140,000 square feet. Haldia Port has seen a
reduction in container volumes during the period and Apeejay's
logistics park has been further impacted by a restriction on
containers being handled by external CFS imposed by Haldia Port
Trust. Eredene has written down the value of its investment in
Apeejay Infralogistics as a result of the reduced prospects for the
Haldia logistics park.
The Kalinganagar logistics park, close to local steel and
metallurgical plants, has been licensed to commence export-import
operations. The facility provides domestic warehousing and storage
for Tata, and Apeejay is in discussions with DAMCO and Jindal Steel
to handle the steel produced at Jindal Steel's nearby plant. Total
warehousing capacity is 84,000 square feet.
-- Eredene is still in discussions to sell its stakes in
Matheran and Gopi Resorts for GBP3m and accordingly the Board has
taken the decision to write the realisable value down to that price
in these accounts. If a sale is not achieved then it would be the
Company's intention to work with Matheran and Gopi to complete the
first phase of the affordable housing development prior to any
subsequent sale; this may require further funding from the
Company.
India's economy
Against a backdrop of sluggish business activity and a weakening
economy, the International Monetary Fund has lowered its projection
of India's growth in Gross Domestic Product (GDP) for the year
ending 31 March 2014 to 3.75%. According to official figures, GDP
grew at 5% for the year ending 31 March 2013, the lowest in a
decade. The Indian Rupee also came under continued downward
pressure in the international money markets, sliding from 82.54 to
the British Pound at 31 March 2013 to 101.38 on 30 September
2013.
Non-executive director changes
As announced at the 2013 Annual General Meeting, two of Eredene
Capital's non-executive directors, Sir Christopher Benson and Mr
Paul Gismondi, stepped down from the board in September 2013. The
Company would like to put on record its thanks for their years of
invaluable service.
Outlook
Eredene is determined to extract maximum value from its core
infrastructure investments in India, and remains committed to
returning more cash to shareholders when market conditions allow
realisations at acceptable valuations. The Company has reduced its
cost base through the move to external management, and so is well
placed to weather the storms currently buffeting the Indian
economy.
Struan Robertson
Non-Executive Chairman
16 December 2013
Investment Portfolio Summary
Investment Amount Fair Value Sector Location Progress
invested at
at 30/9/13 30/9/13
----------------------- ------------ ------------- -------------------- ---------------- ------------------------
1. Sattva CFS & GBP0.7m GBP3.8m Container Chennai, Revenue generating
Logistics - Vichoor Logistics Tamil & dividend paying
CFS Nadu
----------------------- ------------ ------------- -------------------- ---------------- ------------------------
2. Sattva Conware GBP3.9m N/A as Container Ennore, Operational & revenue
CFS subsidiary Logistics Tamil generating
Nadu
----------------------- ------------ ------------- -------------------- ---------------- ------------------------
Contrans Logistic GBP5.7m GBP6.0m
3. Project One: Container Pipavav, Operational & revenue
Pipavav CFS Logistics Gujarat generating
Container Baroda, Pre-construction
4. Project Two: Logistics Gujarat phase
Baroda ICD
----------------------- ------------ ------------- -------------------- ---------------- ------------------------
Apeejay GBP2.9m GBP2.3m
Infra-Logistics Logistics Haldia, Operational & revenue
5. Project One: Park West Bengal generating
Haldia Logistics
Park Kalinganagar, Operational & revenue
Logistics Odisha generating
6. Project Two: Park
Kalinganagar
Logistics
Park
----------------------- ------------ ------------- -------------------- ---------------- ------------------------
7. MJ Logistic GBP10.9m N/A as Warehousing Northern Operational & revenue
Services subsidiary & Third India generating
Party Logistics
----------------------- ------------ ------------- -------------------- ---------------- ------------------------
8. Matheran Realty GBP15.3m GBP2.9m Urban Development Mumbai Construction phase
& Gopi Resorts Net of region
NCI Asset
held
for sale
----------------------- ------------ ------------- -------------------- ---------------- ------------------------
9. Ocean Sparkle - - Marine operations Pan-India Stake sold in period
& maintenance for GBP8.2m
----------------------- ------------ ------------- -------------------- ---------------- ------------------------
Eredene Capital PLC
Consolidated Statement of Comprehensive Income
for the six month period ended 30 September 2013
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended 31
September September March
2013 2012 2013
Note GBP'000 GBP'000 GBP'000
------------------------------------ ----- ----------- ----------- ----------
Portfolio return and revenue
Realised loss over fair (529) - -
value on disposal of investments
Unrealised adjustments
on the revaluation of investments (4,447) (2,811) 285
Other portfolio income 33 15 70
(4,943) (2,796) 355
Revenue from services 2,131 2,111 4,376
Cost of sales for services (1,811) (1,609) (3,252)
----------- ----------- ----------
Gross profit 320 502 1,124
Gross profit and net portfolio
return (4,623) (2,294) 1,479
----------- ----------- ----------
Administrative expenses (1,935) (1,602) (3,924)
Finance income 39 130 229
Finance costs (210) (284) (544)
Loss before taxation (6,729) (4,050) (2,760)
----------- ----------- ----------
Taxation charge (5) - (21)
Loss for the period from
continuing operations (6,734) (4,050) (2,781)
Loss for the period from
discontinued operations (4,553) (6,553) (6,301)
----------- ----------- ----------
Loss for the period (11,287) (10,603) (9,082)
----------- ----------- ----------
Other comprehensive income
Foreign currency translation (3,634) (546) (49)
----------- ----------- ----------
Total comprehensive loss
for the period (14,921) (11,149) (9,131)
Loss attributable to:
Owners of the parent company (11,278) (10,599) (9,062)
Non-controlling interests
(NCI) (9) (4) (20)
----------- ----------- ----------
(11,287) (10,603) (9,082)
----------- ----------- ----------
Total comprehensive loss
attributable to:
Owners of the parent company (14,121) (11,271) (9,322)
Non-controlling interests (800) 122 191
----------- ----------- ----------
(14,921) (11,149) (9,131)
----------- ----------- ----------
Loss per share Basic and
diluted
From continuing operations (1.86)p (0.95)p (1.78)p
From discontinued operations (1.26)p (1.54)p (0.52)p
----------- ----------- ----------
3 (3.12)p (2.49)p (2.30)p
----------- ----------- ----------
Eredene Capital PLC
Consolidated Balance Sheet
As at 30 September 2013
Unaudited Unaudited Audited
30 September 30 September 31 March
2013 2012 2013
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 13,556 15,259 16,054
Investments held at fair value
through profit or loss 12,120 22,186 17,061
Intangible assets 754 902 917
Deferred income tax asset - 6 -
Other receivables 149 103 115
------------- ------------- ---------
26,579 38,456 34,147
------------- ------------- ---------
Current assets
Trade and other receivables 1,002 1,187 989
Cash and cash equivalents 24,335 21,502 19,543
25,337 22,689 20,532
------------- ------------- ---------
Non-current assets classified
as held for sale - - 8,724
Assets of disposal group classified
as held for sale 11,436 16,134 16,673
Total assets 63,352 77,279 80,076
------------- ------------- ---------
Current liabilities
Trade and other payables (766) (566) (883)
Current income tax liabilities (15) (6) (21)
Borrowings (995) (862) (1,213)
Provisions (310) - (310)
Non-current liabilities
Borrowings (2,865) (4,586) (4,083)
Liabilities of disposal group
classified as held for sale (8,233) (8,216) (8,478)
Total liabilities (13,184) (14,236) (14,988)
------------- ------------- ---------
Total net assets 50,168 63,043 65,088
============= ============= =========
Equity
Share capital 36,199 36,199 36,199
Share premium 16,268 16,268 16,268
Special reserve 17,311 17,311 17,311
Capital redemption reserve 8,492 8,492 8,492
Foreign exchange reserve (3,065) (928) (466)
Retained deficit (26,998) (16,892) (15,409)
Capital and reserves attributable
to equity shareholders of the
company 48,207 60,450 62,395
Non controlling interests (NCI) 1,961 2,593 2,693
Total Equity 50,168 63,043 65,088
============= ============= =========
Eredene Capital PLC
Consolidated Statement of Changes in Equity for the six months
ended 30 September 2013
Capital Foreign Share
Share Share Special redemption exchange Retained holders Total
capital premium reserve reserve reserve deficit equity NCI equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months
ended
30/9/13
unaudited
As at 1 April
2013 36,199 16,268 17,311 8,492 (466) (15,409) 62,395 2,693 65,088
--------- --------- --------- ------------ ---------- --------- --------- -------- ---------
Loss for the
period - - - - - (11,278) (11,278) (9) (11,287)
Other
comprehensive
income for the
period - - - - (2,599) (244) (2,843) (791) (3,634)
Total
comprehensive
income for the
period - - - - (2,599) (11,522) (14,121) (800) (14,921)
Share based
payment - - - - - 1 1 - 1
NCI on dilution
of
shareholding - - - - - (68) (68) 68 -
As at 30
September
2013 36,199 16,268 17,311 8,492 (3,065) (26,998) 48,207 1,961 50,168
--------- --------- --------- ------------ ---------- --------- --------- -------- ---------
Six months
ended
30/9/12
unaudited
As at 1 April
2012 44,691 16,268 32,826 - (256) (6,121) 87,408 1,600 89,008
--------- --------- --------- ------------ ---------- --------- --------- -------- ---------
Loss for the
period - - - - - (10,599) (10,599) (4) (10,603)
Other
comprehensive
income for the
period - - - - (672) - (672) 126 (546)
Total
comprehensive
income for the
period - - - - (672) (10,599) (11,271) 122 (11,149)
Share based
payment - - - - - 2 2 - 2
Purchase and
cancellation
of treasury
shares (8,492) - (15,515) 8,492 - - (15,515) - (15,515)
NCI on dilution
of
shareholding - - - - - (174) (174) 174 -
NCI on
acquisition
of
discontinued
operations - - - - - - - 697 697
--------- --------- --------- ------------ ---------- --------- --------- -------- ---------
As at 30
September
2012 36,199 16,268 17,311 8,492 (928) (16,892) 60,450 2,593 63,043
--------- --------- --------- ------------ ---------- --------- --------- -------- ---------
Year ended
31/3/13
audited
As at 1 April
2012 44,691 16,268 32,826 - (256) (6,121) 87,408 1,600 89,008
--------- --------- --------- ------------ ---------- --------- --------- -------- ---------
Loss for the
period - - - - - (9,062) (9,062) (20) (9,082)
Other
comprehensive
income for the
period - - - - (210) (50) (260) 211 (49)
Total
comprehensive
income for the
period - - - - (210) (9,112) (9,322) 191 (9,131)
Share based
payment - - - - - 4 4 - 4
Purchase and
cancellation
of treasury
shares (8,492) - (15,515) 8,492 - - (15,515) - (15,515)
NCI on dilution
of
shareholding - - - - - (180) (180) 180 -
NCI on
acquisition
of
discontinued
operations - - - - - - - 722 722
As at 31 March
2013 36,199 16,268 17,311 8,492 (466) (15,409) 62,395 2,693 65,088
--------- --------- --------- ------------ ---------- --------- --------- -------- ---------
Eredene Capital PLC
Consolidated Cash Flow Statement
for the six months ended 30 September 2013
Unaudited Unaudited Audited
Six months Six months Year
ended 30 ended 30 ended
September September 31 March
2013 2012 2013
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ----------- ----------
Cash flows from operating activities
Loss before taxation (6,729) (4,050) (2,760)
Adjustments for:
Finance income (39) (130) (229)
Dividend income (33) (15) (70)
Realised loss over fair value on disposal
of investments 529 - -
Unrealised adjustments on the revaluation
of investments 4,447 2,811 (285)
Share based payment charge 1 2 4
Foreign exchange differences 398 59 (323)
Depreciation 157 129 339
Amortisation 12 12 25
Increase in trade and other receivables (51) (235) (50)
(Decrease)/increase in trade and other
payables (117) 125 441
Decrease in provisions - (362) (52)
Taxation paid (6) - -
Net cash used in operating activities (1,431) (1,654) (2,960)
----------- ----------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment (627) (216) (707)
Disposal of property, plant and equipment - - 2
Purchase of investments (70) - (504)
Disposal of investments 8,160 - -
Purchase of disposal group held for
sale - (2,642) (2,642)
Interest received 42 146 244
Dividends received 33 15 70
Net cash generated from/(used in)
investing activities 7,538 (2,697) (3,537)
----------- ----------- ----------
Cash flows from financing activities
Purchase of treasury shares - (15,514) (15,515)
Repayment of borrowings (452) (361) (716)
Proceeds from issue of shares in subsidiary
to NCI 19 - 27
----------- ----------- ----------
Net cash used in financing activities (433) (15,875) (16,204)
----------- ----------- ----------
Net increase/(decrease) in cash and
cash equivalents 5,674 (20,226) (22,701)
Cash and cash equivalents at the
beginning of the period 19,543 41,839 41,839
Exchange (losses)/gains (882) (111) 405
Cash and cash equivalents at the
end of the period 24,335 21,502 19,543
=========== =========== ==========
Eredene Capital PLC
Notes to the Interim Statement
1. Basis of preparation
The interim financial information for the periods ended 30
September 2013 and 30 September 2012 has neither been audited nor
reviewed pursuant to guidance issued by the Auditing Practices
Board and does not constitute statutory accounts within the meaning
of the Companies Act 2006. The statutory accounts for the period
ended 31 March 2013, which were prepared in accordance with
International Financial Reporting Standards as endorsed by the
European Union ("IFRS") and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS, have been
delivered to the Registrar of Companies. The auditors' opinion on
those accounts was unqualified, did not include any references to
any matters to which the auditors drew attention without qualifying
their report, and did not contain a statement made under Section
498(2) or Section 498(3) of the Companies Act 2006.
The financial information in this report comprises the Group
balance sheets as at 30 September 2013, 31 March 2013 and 30
September 2012 and related statements of comprehensive income, cash
flow, changes in equity and related notes for the period then ended
("financial information"). The financial information has been
prepared in accordance with the Group's principal accounting
policies as set out in the Annual Report for the period ended 31
March 2013. There have been no changes in the existing policies. It
has been prepared on the historical cost basis, except for the
revaluation of certain investments.
As permitted, the Group has not applied IAS 34 "Interim
Reporting" in preparing this interim report.
2. Critical accounting judgements and estimates
The preparation of the Group's financial statements requires the
directors to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities. Estimates and judgements are
continually evaluated and are based on historical experience and
other factors including expectations of future events that are
believed to be reasonable under the circumstances. Actual results
may differ from these estimates.
The directors consider that the following estimates and
judgements are likely to have the most significant effect on the
amounts recognised in the financial statements.
Accounting for investments
Investments in which the Group has a long-term interest and over
whose operating and financial policies it exerts significant
influence, but which are held as part of an investment portfolio,
the value of which is through their marketable value as part of a
basket of investments, are not regarded as joint ventures or
associated undertakings. The treatment adopted is in accordance
with IAS 39 "Financial Instruments: Recognition and Measurement"
and the exemptions applying to venture capital organisations in IAS
28 "Investments in Associates" and IAS 31 "Interests in Joint
Ventures".
Value of investments
The Group's investments held at fair value through profit or
loss are valued based on the International Private Equity and
Venture Capital Guidelines. The valuations are made based on market
conditions and information about the investment. These estimates
are subjective in nature and involve uncertainties and matters of
significant judgement (e.g interest rates, volatility and estimated
cash flows).
Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held
for sale when:
-- they are available for immediate sale;
-- management is committed to a plan to sell;
-- it is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn;
-- an active programme to locate a buyer has been initiated;
-- the asset or disposal group is being marketed at a reasonable
price in relation to its fair value; and
-- a sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for
sale are measured at the lower of:
-- their carrying amount immediately prior to being classified
as held for sale in accordance with the group's accounting policy;
and
-- fair value less costs to sell.
The determination of fair value for an unlisted investment
requires the use of estimates and assumptions.
3. Earnings per share and net asset value per share
The calculation of the basic earnings per share is based on the
loss for the period attributable to equity shareholders of GBP11.3m
(2012: GBP10.6m) and the weighted average number of shares in issue
during the period of 361,994,426 (2012: 425,862,314). The shares
under option were non-dilutive due to the loss for the period. The
calculation of net asset value per share is based on the net assets
attributable to equity shareholders of GBP48.2m (30/9/12: GBP60.5m;
31/3/13: GBP62.4m) and the number of shares in issue at the period
end of 361,994,426 (30/9/12 and 31/3/13: 361,994,426).
4. Forward-looking statements
This document may contain forward-looking statements relating to
the future financial condition, business performance and results of
Eredene Capital PLC. By their nature, all forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances that are beyond the control of
Eredene Capital PLC including, amongst other things, UK, Indian and
global economic and business conditions, market related risks such
as fluctuations in interest rates, foreign exchange rates,
inflation, the impact of competition, delays in implementing
proposals, the timing, impact and other uncertainties of future
investments, the impact of tax or other legislation and other
regulations in the jurisdictions in which Eredene Capital PLC and
its affiliates operate. As a result, Eredene Capital PLC's actual
future condition, business performance and results may differ
materially from the plans, goals and expectations expressed or
implied in these forward-looking statements.
5. Interim Results
Copies of the Interim Results will be available from
www.eredene.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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