TIDMRPF
RNS Number : 9639X
Romania Property Fund Limited
14 December 2010
14 December 2010
The Romania Property Fund Limited Reports its Interim Results
for the period ended 30 June 2010
London, United Kingdom - The Romania Property Fund Limited
("Romania Property Fund" or "the Company") today reports its
interim results for the period ended 30 June 2010.
Overview of the period to 30 June 2010
-- Accounting NAV of EUR 19.2 cents (GBP 15.75 pence) per
share.
-- On the 24 June 2010, the directors of Romania Property Fund
announced the signing of non-binding heads of terms with Blackpearl
Property Limited ("Blackpearl") in relation to a potential
acquisition by the Company of a portfolio of additional Romanian
property assets and simultaneous fundraising. The proposals, if
consummated through legally binding agreements, will constitute a
reverse takeover under Rule 14 of the AIM Rules. Although the
original heads of terms have now fallen away a revised acquisition
is being agreed.
Since the period end 30 June 2010
-- The Company has arranged for interim financing, via a loan
with Moserburg Investments Limited, for GBP250,000 of working
capital into the Company and a further EUR150,000 into its Romanian
subsidiary, Gold Developments SPV SRL..
-- A number of creditors to the Company have also agreed to
standstill to allow the Directors to continue their negotiations
regarding the property acquisition from Blackpearl and simultaneous
fund raising. The Directors expect these discussions to be
concluded in the first quarter of 2011. However, there can be no
certainty that those discussions will result in an acquisition by,
and refinancing of, the Company.
-- The Company announced the cancellation of admission of the
Company's Ordinary Shares to trading on AIM, following a period of
six months of suspension from trading and in accordance with AIM
Rule 41. If the Blackpearl discussions are successfully concluded
and the resulting transaction approved by Shareholders, the Company
will apply for its Ordinary Shares to be re-admitted to AIM on
completion of the transaction.
For further information please contact:
The Romania Property Fund
Limited
Richard Prickett, Chairman +44 (0) 777 565 1421
Canaccord Genuity Limited
(Nominated Adviser and Broker)
Sue Inglis/Robert Finlay +44 (0) 207 050 6500
Unaudited condensed consolidated statement of
comprehensive income
for the period 1
January to 30 June
2010
30 June 30 June
2010 2009
Notes EUR EUR
------------
Revenue
Inventory
Sales - -
- -
Cost of
Sales:
Reversal of impairment
of inventory 7 (36,168) -
------------- ------------
Gross profit 36,168 -
Expenditure
Administration fees 4 51,227 109,839
Management fees 74,366 288,422
Directors' fees
and expenses 48,463 42,383
Other
expenses 114,930 691,275
Legal and professional 155,365 137,999
Loss / (gain) on
foreign currency
exchange 65,343 (368,590)
Loss on disposal
of subsidiary companies 5 2,749 3,001,231
Total
expenditure 512,443 3,902,559
------------- ------------
Operating
loss (476,275) (3,902,559)
Interest receivable 939 17,037
Interest
payable (99,829) -
------------- ------------
Net finance (expense)
/ income (98,890) 17,037
------------- ------------
Loss before
tax (575,165) (3,885,522)
Taxation - -
------------- ------------
Loss for the period (575,165) (3,885,522)
Other comprehensive
income
Exchange differences arising
on translation of
foreign operations (25,497) (691,399)
Reclassification adjustment
for foreign exchange on
disposal of foreign
operation - 2,299,211
Total comprehensive
loss for the period (600,662) (2,277,710)
============= ============
Loss per share -
basic and
diluted (cents per
share) 6 (2.94) (19.85)
All items in the above statement derive from continuing
operations except where stated otherwise
These financial statements are unaudited and not the Group's
Statutory financial statements.
The accompanying notes 1 to 10 form an integral
part of these financial statements
Unaudited condensed consolidated statement of financial
position
as at 30 June 2010
30 June 31 December
2010 2009
Notes EUR EUR
------------
Assets
Non current assets
Inventory 7 6,300,000 6,350,000
Total non current
assets 6,300,000 6,350,000
------------- ------------
Current
assets
Trade and other
receivables 91,810 62,623
Cash and cash equivalents 304,409 830,935
------------- ------------
Total current assets 396,219 893,558
------------- ------------
Total assets 6,696,219 7,243,558
============= ============
Equity
Capital and reserves attributable
to
equity holders of the group
Issued capital and
reserves 3,764,079 4,364,741
------------- ------------
Total equity 3,764,079 4,364,741
------------- ------------
Liabilities
Current liabilities
Short term loans
payable 2,767,141 2,758,687
Trade and other
payables 164,996 120,127
------------- ------------
Total current liabilities 2,932,137 2,878,814
Non-current liabilities
Founder
shares 3 3
------------- ------------
Total
liabilities 2,932,140 2,878,817
Total equity and liabilities 6,696,219 7,243,558
============= ============
NAV per ordinary
share (Euro per
share) 8 0.192 0.223
NAV per ordinary share at launch (Euro per share) 1.935 1.935
These financial statements were approved by the Board of Directors
on 10 December 2010.
Signed on behalf of the Board
P Duquemin C Simon
Director Director
These financial statements are unaudited and not the Group's
Statutory financial statements.
The accompanying notes 1 to 10 form an integral part of these financial
statements
Unaudited condensed consolidated statements of changes in equity
for the period 1 January to 30 June 2010
Share Foreign Share Revenue
capital exchange premium reserve Total
reserve
EUR EUR EUR EUR EUR
As at 1 January
2009 - (2,137,212) 39,517,333 (24,526,178) 12,853,943
Disposal of subsidiary - 2,299,211 - - 2,299,211
Foreign exchange
adjustments
arising on consolidation - (691,399) - - (691,399)
Loss for the period - - - (3,885,522) (3,885,522)
As at 30 June 2009 - (529,400) 39,517,333 (28,411,700) 10,576,233
========= ============ =========== ============= ============
As at 1 January
2010 - (538,726) 39,517,333 (34,613,866) 4,364,741
Foreign exchange
adjustments
arising on consolidation - (25,497) - - (25,497)
Loss for the period - - - (575,165) (575,165)
As at 30 June 2010 - (564,223) 39,517,333 (35,189,031) 3,764,079
========= ============ =========== ============= ============
These financial statements are unaudited and not the Group's
Statutory financial statements.
The accompanying notes 1 to 10 form an integral part of these financial
statements
Unaudited condensed consolidated statement of cash flows
for the period 1 January to 30 June 2010
30 June 30 June
2010 2009
EUR EUR
Loss for the period (575,165) (3,885,522)
Adjustment
for:
Loss on disposal
of subsidiary company 2,749 3,001,231
Impairment of inventory (36,168) -
Net finance expense 98,890 (17,037)
Operating cash flows before movements
in working
capital (509,694) (901,328)
Increase in trade
and other receivables (33,501) (65,229)
Increase in trade
and other payables 51,372 101,825
Cash used in operations (491,823) (864,732)
Interest
received 939 17,037
Interest paid (99,829) -
------------- ------------
Net cash outflow
from operating activities (590,713) (847,695)
------------- ------------
Investing activities
Investment in inventory 86,168 (604,489)
Cash and cash equivalents disposed
of on disposal of subsidiary (4,938) (25,131)
------------- ------------
Net cash inflow / (outflow) from
investing activities 81,230 (629,620)
------------- ------------
Financing activities
Proceeds from loans 8,454 1,509,602
------------- ------------
Net cash inflow
from financing activities 8,454 1,509,602
------------- ------------
(Decrease) / increase in
cash and cash equivalents (501,029) 32,287
Cash and cash equivalents
at beginning of the period 830,935 2,112,752
Effect of foreign
exchange rates (25,497) (691,399)
------------- ------------
Cash and cash equivalents
at end of the period 304,409 1,453,640
============= ============
These financial statements are unaudited and not the Group's
Statutory financial statements.
The accompanying notes 1 to 10 form an integral
part of these financial statements
Notes to the condensed consolidated financial statements
for the period 1 January to 30 June
2010
1 CORPORATE INFORMATION
The Romania Property Fund Limited formerly Lewis Charles Romania
Property Fund Limited (the "Company") and its subsidiaries
(together the "Group") is an investment fund with an investment
portfolio in Romania. The aim of the Company is to generate
capital gains by investing in both residential and commercial
property in Romania, primarily, although not exclusively, around
Bucharest.
The Company is a limited company incorporated in Guernsey.
The address of the registered office is shown on page 2. The
life of the Company is fixed by the Articles to sixth anniversary
of Admission. The directors have the right to extend to the
seventh anniversary of Admission, thereafter the duration of
the Company may be extended at an extraordinary general meeting
convened for the purpose.
On 2 August 2007 the Company was listed on the Alternative
Investment Market (AIM) of the London Stock Exchange PLC, however
shares were suspended from trading on 10 June 2010, whilst
negotiations for re-structuring took place. However, these
negotiations were not successful and the company has arranged
for alternative finances. A reinstatement of trading in the
Company's shares should occur on publication of these accounts
by the Company.
These financial statements were authorised by the Board for
issue on 10 December 2010 and are signed on its behalf by P
Duquemin and C Simon.
2 STATEMENT OF COMPLIANCE
These unaudited condensed consolidated interim financial statements
have been prepared in accordance with International Accounting
Standard 34: Interim Financial Reporting ("IAS 34"). They do
not include all the information required for full annual financial
statements and should be read in conjunction with the consolidated
financial statements for the year ended 31 December 2009.
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared on the basis of
the accounting policies set out in the Group's annual financial
statements for the year ended 31 December 2009 except for the
adoption of standards described below. The Group's annual financial
statements refer to new Standards and Interpretations none
of which had a material impact on the financial statements.
IFRS 3 (revised) - "Business Combinations" is applicable prospectively
to all business combinations for which the designated acquisition
date is on or after 1 January 2010. IAS 27 (revised) - "Consolidated
and Separate Financial Statements" is effective as from 1 January
2010. The application of these two revised standards does not
have a material impact on the Group's financial statements
at 30 June 2010. Other amendments obligatorily applicable as
of 1 January 2010 do not have a material impact on the consolidated
financial statements.
The Directors have reviewed the current budgets and cash flow
projections for the period to 31 May 2012. These forecasts
indicate the need for additional funding for continuing working
capital.
Confirmation has been obtained from creditors for a deferral
to the value of GBP450,000 but the Group still requires additional
cash for working capital needs. This will be met by a loan
facility of GBP250,000 to the Company and an additional loan
facility of EUR150,000 to Romanian joint venture company SC
Gold Developments SPV SRL. Deferral of payment to creditors
and cash received will allow sufficient time for Directors
to consider alternative financing and disposal of the property
within the Joint Venture. Based on advanced discussions with
Unicredit Bank, the directors anticipate that the loan payable,
which is due for renewal on 15 December 2010, by Joint Venture
entity will be rolled forward.
Various sources of financing are currently being considered
by the directors including negotiating new property acquisitions
and raising fresh equity with the Blackpearl group. A final
decision regarding the source of financing has not been made.
Accordingly the directors have prepared these financial
statements on going concern basis.
4 ADMINISTRATION FEES
Under the Administration Agreement the Administrator is entitled
to receive an annual administration fee at a rate as may be
agreed in writing from time to time between the Company and
the Administrator. The present fee is 0.09% per annum of the
Net Asset Value of the Company up to GBP100 million and 0.07%
of the Net Asset Value of the Company above GBP100 million,
subject to a minimum fee during the period of GBP65,958 per
annum plus disbursements.
Other administration fees are paid by the underlying subsidiaries
at a rate as may be agreed in writing from time to time between
those companies and their separately appointed administrators.
5 DISPOSAL OF SUBSIDIARY COMPANY
The Group sold its Luxembourg subsidiary Romholdings S.A. to
Blackpearl Real Estate LLP for a nominal consideration of EUR
1 on 11 June 2010. The cash balances of Romholdings S.A., of
EUR 22,525.40, was used to clear all outstanding liabilities
including The Romania Property Fund Limited's' Shareholders
Loan of EUR 40,658.56. The remaining balance of The Romania
Property Fund Limited's' Shareholders loan, after this part
repayment, was written off in the books of both Romholdings
S.A. and The Romania Property Fund Limited.
6 LOSS PER SHARE - BASIC AND DILUTED
The consolidated basic and diluted loss per Ordinary Share
of 2.94 cents (2009: 19.85 cents) is based on the net loss
of EUR575,165 (2009: 3,885,522) and on 19,576,405 (2009: 19,576,405)
ordinary shares in issue, being the weighted average number
of shares in issue during the period.
7 INVENTORY
31 December
Ploiesti Mogosoaia Total 2009
EUR EUR EUR EUR
------------ ----------- ------------- ------------
As at 1
January 2010
/ 2009 - 6,350,000 6,350,000 17,600,000
Additions during
the period - 30,634 30,634 1,362,972
Foreign exchange
adjustments - (116,802) (116,802) (895,014)
------------ ----------- ------------- ------------
- 6,263,832 6,263,832 18,067,958
Reversal of impairment
/ (impairment) - 36,168 36,168 (5,186,693)
------------ ----------- ------------- ------------
- 6,300,000 6,300,000 12,881,265
Disposals - - - (6,531,265)
------------ ----------- ------------- ------------
As at 30
June 2010
/ 31 Dec
2009 - 6,300,000 6,300,000 6,350,000
============ =========== ============= ============
Net
realisable
value - 6,300,000 6,300,000 6,350,000
============ =========== ============= ============
The Group's main activity is the development and sale of residential
and commercial property. The process of obtaining zoning and
permits may in itself take some time. This period is then added
to by the time taken to construct the properties. In this time
the costs of the land and the construction are recorded in
Inventories. The Group continually reviews the net realisable
value of the inventory against the cumulative costs that are
held on its balance sheet. To enable this review, management
have appointed appropriately qualified personnel to monitor
and control the costs of construction.
The costs that have been incurred and are projected to be incurred
are benchmarked against those available in the market to ensure
that best value is achieved. A strict tendering process is
adhered to when procuring construction services and the costs
are controlled locally on a monthly basis. In addition to this,
the Group has appointed DTZ Echinox Consulting S.R.L to assist
them to undertake an independent assessment of the net realisable
value of its developments.
DTZ Echinox Consulting S.R.L in their valuation report as of
30 June 2010 have calculated value of the Mogosoaia Project,
to be EUR6,300,000, in accordance with RICS valuation standards.
The approved RICS definition of market value is the '"The estimated
amount for which a property should exchange on the date of
valuation between a willing buyer and a willing seller in an
arm's-length transaction after proper marketing wherein the
parties had each acted knowledgeably, prudently and without
compulsion".
8 NAV PER SHARE
June December
2010 2009
------------- ------------
EUR EUR
Net Asset Value attributable
to ordinary shareholders 3,764,079 4,364,741
Number of
shares in
issue 19,576,405 19,576,405
Net asset
value per
share 0.192 0.223
The Net Asset Value per Ordinary Share is based on the Net
Asset Value at the balance sheet date and on 19,576,405 (2009:
19,576,405) Ordinary Shares, being the number of shares in
issue at the balance sheet date.
RECONCILIATION OF NAV PER THE CONSOLIDATED STATEMENTS TO PUBLISHED
9 NAV
December
June 2010 2009
------------ ----------- ------------- ------------
EUR Per share EUR Per share
Net Asset Value per
financial statements 3,764,079 0.192 4,364,741 0.223
Add back:
Preliminary
expenses 688,218 0.035 736,747 0.038
Published
Net Asset
Value 4,452,297 0.227 5,101,488 0.261
============ =========== ============= ============
The Company's principal documents require the dealing valuation
of the Company's net assets to include preliminary expenses
incurred in the establishment of the Company, such expenses
to be amortised over the expected life of the Company. However,
this accounting treatment is not permitted for financial reporting
purposes and has been adjusted accordingly within these financial
statements.
10 EVENTS AFTER THE BALANCE SHEET DATE
The Group, on 24 June 2010, obtained a short term loan of GBP73,000
from Blackpearl Property Limited at an interest rate of 5%
per annum. The loan is secured by assigning Group's beneficial
interest in Magnolia Real Estate SRL to the lender. This loan
will mature on earlier of date of restructuring of the Group
or date when a new loan is introduced into The Romania Property
Fund Limited.
As discussed in note 3, the Company entered into agreements
to obtain loan facilities of GBP250,000 from Moserburg Investments
Limited which has been earmarked by Directors for working capital
in the Group. A further agreement for a loan of EUR150,000
was entered into with Moserburg Investments Limited for SC
Gold Developments SPV SRL. Both loans mature on 2 April 2012
and have an interest payable at 15.5% per annum and are secured
against a first ranking charge over the shareholder loan of
Rominvestments S.A. or the first proceeds remitted to The Romania
Property Fund or its subsidiaries from the Borrower for the
amount of the Loan.
The Directors are currently negotiating a new property acquisition
and financing arrangement with the Blackpearl group. A number
of creditors have agreed to standstill until these negotiations
are completed and the Group is restructured.
THE FOLLOWING PAGES ARE PRESENTED FOR INFORMATION PURPOSES ONLY
AND DO NOT FORM PART OF THE AUDITED FINANCIAL STATEMENTS
Unaudited condensed consolidated statement of comprehensive
income
for the period 1 January to 30 June 2010
Restated into Pound Sterling
30 June 30 June
2010 2009
GBP GBP
Revenue
Inventory
Sales - -
Cost of
Sales:
Reversal of impairment
of inventory (31,250) -
Gross profit 31,250 -
------------- ------------
Expenditure
Administration fees 44,260 97,246
Management fees 64,253 255,354
Directors' fees
and expenses 41,872 37,524
Other
expenses 99,300 612,019
Legal and professional 134,236 122,177
Loss / (gain) on
foreign currency
exchange 56,457 (326,330)
Loss on disposal
of subsidiary companies 2,375 2,657,132
Total expenditure 442,753 3,455,122
------------- ------------
Operating
loss (411,503) (3,455,122)
Interest receivable 811 15,084
Interest
payable (86,253) -
------------- ------------
Net finance (expense)
/ income (85,442) 15,084
Loss before
tax (496,945) (3,440,038)
Taxation - -
Loss for the period (496,945) (3,440,038)
Other comprehensive
income
Exchange differences arising
on translation of
foreign operations (141,406) (1,879,366)
Reclassification adjustment
for foreign exchange on
disposal of foreign
operation - 2,035,601
Total comprehensive
loss for the period (638,351) (3,283,803)
============= ============
Loss per share - basic and diluted
(pence per share) (2.54) (17.57)
Unaudited condensed consolidated statement of
financial position
as at 30 June 2010
Restated into Pound Sterling
30 June 31 December
2010 2009
GBP GBP
Assets
Non current assets
Inventory 5,160,551 5,414,393
Total non current
assets 5,160,551 5,414,393
------------- ------------
Current
assets
Trade and other
receivables 75,205 53,396
Cash and cash equivalents 249,352 708,505
Total current assets 324,557 761,901
------------- ------------
Total assets 5,485,108 6,176,294
============= ============
Equity
Capital and reserves attributable to
equity holders of the group
Issued capital and
reserves 3,083,290 3,721,641
Total equity 3,083,290 3,721,641
------------- ------------
Liabilities
Current
liabilities
Short term loans
payable 2,266,662 2,352,223
Trade and other
payables 135,154 102,428
Total current liabilities 2,401,816 2,454,651
Non-current liabilities
Founder
shares 2 2
Total
liabilities 2,401,818 2,454,653
------------- ------------
Total equity and
liabilities 5,485,108 6,176,294
============= ============
NAV per ordinary
share (pence per
share) 15.75 19.01
NAV per ordinary share
at launch (pence per share) 140.00 140.00
Unaudited condensed consolidated statements of changes in equity
for the period 1 January to 30 June 2010
Restated into Pound Sterling
Share Foreign Share Revenue
capital exchange premium reserve Total
reserve
GBP GBP GBP GBP GBP
As at 1 January
2009 - 2,405,015 26,584,758 (16,688,035) 12,301,738
Foreign exchange
adjustments
arising on consolidation - (1,879,366) - - (1,879,366)
Loss for the period - - - (3,440,038) (3,440,038)
Disposal of subsidiary - 2,035,601 - - 2,035,601
As at 30 June 2009 - 2,561,250 26,584,758 (20,128,073) 9,017,935
========= ============ =========== ============= ============
As at 1 January
2010 - 6,045,650 26,584,758 (28,908,767) 3,721,641
Foreign exchange
adjustments
arising on consolidation - (141,406) - - (141,406)
Loss for the period - - - (496,945) (496,945)
As at 30 June 2010 - 5,904,244 26,584,758 (29,405,712) 3,083,290
========= ============ =========== ============= ============
Unaudited condensed consolidated statement of cash flows
for the period 1 January to 30 June 2010
Restated into Pound Sterling
30 June 30 June
2010 2009
GBP GBP
Loss for the period (496,945) (3,440,038)
Adjustment
for:
Loss on disposal
of subsidiary company 2,375 2,657,132
Impairment of inventory 31,250 -
Net finance income 85,442 (15,084)
Operating cash flows before movements
in working
capital (377,878) (797,990)
Increase in trade
and other receivables (28,945) (57,750)
Increase in trade
and other payables 44,386 90,151
Cash used in operations (362,437) (765,589)
Interest
received 811 15,084
Interest paid (86,253) -
Net cash outflow from operating activities (447,879) (750,505)
------------- ------------
Investing activities
Investment in inventory 74,450 (535,183)
Cash and cash equivalents disposed
of on disposal of subsidiary (4,266) (22,250)
Net cash inflow / (outflow) from investing
activities 70,184 (557,433)
------------- ------------
Financing activities
Proceeds from loan 7,304 1,336,522
Net cash inflow
from financing activities 7,304 1,336,522
------------- ------------
(Decrease) / increase in
cash and cash equivalents (370,391) 28,584
Cash and cash equivalents
at beginning of the period 708,505 2,021,988
Effect of foreign exchange
rates (88,762) (811,111)
Cash and cash equivalents at end
of the period 249,352 1,239,461
============= ============
This information is provided by RNS
The company news service from the London Stock Exchange
END
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