TIDMEIH
RNS Number : 1422P
EIH PLC
29 September 2011
EIH PLC
("EIH" or the "Company")
Interim Results
The Company announces its interim results for the six months
from 1 January 2011 to 30 June 2011.
Chairman's Statement
The unaudited net assets of EIH as at 30 June 2011 were valued
at US$64.8 million and therefore net asset value ("NAV") at that
date was 99.7 cents per share based on 65,000,002 ordinary shares
in issue, compared with 113.6 cents per share as at 31 December
2010, representing a decrease of 12% (unadjusted for the 15 April
2011 capital distribution).
On 15 April 2011, the Company made a capital distribution of 10
cents per share. A further 8 cents per share capital distribution
was paid on 15 July 2011, after the period end.
Total operating costs during the period were US$0.3m. In
addition, EIH paid certain annual management fees and expenses to
Evolvence India Fund PCC ("EIF") and Evolvence India Life Sciences
Fund ("EILSF") in respect of its commitments to those funds. These
costs are embedded in the capital accounts for those two funds and
do not appear in the profit or loss for EIH.
The Company's investment portfolio comprises the following
(based on unaudited values as at 30 June 2011):
Investments Capital Capital Capital Fair value Fair
(Unlisted) Commitment Invested Distribution Adjustment Value
--------------- ----------- --------- ------------- ----------- ---------
US$'000 US$'000 US$'000 US$'000 US$'000
Fund
Investments
(equity)
Evolvence
India Fund
PCC 45,120 39,097 (10,486) 5,065 33,676
Direct
Investments
(equity)
EIF Co Invest
VII (RSB
Group) 6,970 6,970 - 3,993 10,963
EIF Co Invest
X (Gland
Pharma
Limited) 4,510 4,510 - 5,320 9,830
56,600 50,577 (10,486) 14,378 54,469
--------------- ----------- --------- ------------- ----------- ---------
Further details on the Company's investment portfolio are set
out below and in Note 5 to the interim financial statements.
EIF
Despite mixed conditions in the Indian capital markets during
the period under review, the aggregate fair value of EIF's ten
underlying private equity funds declined by 0.5%, while the
aggregate fair value of EIF's direct investments declined by
4.2%.
During the period in review, many of EIF's underlying private
equity funds achieved exits at attractive multiples from certain of
their investments. Notable were the partial and complete exits at
aggregate multiples over cost of 1.7 X and 2.2 X which were
achieved by two of EIF's underlying private equity funds. EIF also
fully realised one of its direct investments, Emaar MGF Land
Limited, at an acceptable uplift to its cost in a transaction that
was completed after the period end. The majority of EIF's ten
underlying private equity funds have fully drawn down their
committed capital from EIF, and EIF's remaining commitments are
mostly concentrated in two funds (NYLIM Jabob Ballas India Fund III
LLC and HI-REF International LLC).
As at 30 June 2011 the Company had US$28.6m invested in EIF
(capital called of US$39.1m, less refund of capital contributions
of US$10.5m), equivalent to 44 cents per share. At the reporting
date the fair value (unaudited) of the Company's investment in EIF
was US$33.7m, equivalent to 51.8 cents per share, representing a
1.18 X multiple over cost.
EIH's outstanding commitment to EIF was US$6.0m as at 30 June
2011. Since that time EIF has drawn down a further US$2.5m from
EIH. This drawdown was funded by an equivalent distribution by EIF,
thus there was no net cash effect on EIH. Following this drawdown
92.15% of EIF's committed capital has now been drawn down and EIH's
outstanding commitment to EIF is US$3.5m.
The Directors have reviewed certain underlying financial
information provided to us by EIF's Investment Manager and we
remain confident that as EIF's underlying portfolio matures and
further realisations are achieved, further cash distributions will
be received.
EILSF
During the period in review, the Company sold its interest in
EILSF to an entity managed by Swiss Re Private Equity Partners for
US$5.0m. EIH's original commitment to EILSF was US$6.0m of which
US$2.1m remained uncalled. The obligation to meet future calls was
assumed by the buyer.
The consideration received represented a 16.2% discount to the
Fair Value of EIH's interest in EILSF of US$6.0m as at 31 December
2010 and a 1.29 X multiple over cost.
Gland Pharma Limited ("Gland")
Gland is a specialised generic pharmaceuticals company based in
Hyderabad. Gland has delivered strong compound revenue growth and
stable EBITDA margins over the past four years and continues to
deliver very strong revenue growth and stable EBITDA margins driven
by sales to regulated markets. Moreover, it has a promising
pipeline of US FDA approved products.
The Company's direct investment in Gland is held through EIF Co
Invest X. The shareholders in EIF Co Invest X are the Company and
EIF, which invested US$4.5m and US$12.5m respectively, for a total
investment of US$17.0m. Furthermore, EIF Co Invest X is, in turn,
an investor in EILSF Co-Invest I, the entity through which EILSF
invested US$12.5m in Gland. No fees are payable on the Company's
investment in EIF Co Invest X, while the Company's indirect
investment in Gland (through its interest in EIF only following the
sale of its interest in EILSF) attract standard management and
carried interest fee arrangements. EILSF Co-Invest I and EILSF
share a common investment manager. Through the above arrangements,
and on a look-through basis, the Company has a total of US$6.8m
invested in Gland (at cost) compared to the US$4.5m invested in
Gland through EIF Co Invest X.
Through the above arrangements, and on a look-through basis, the
fair value of the Company's interest in Gland is US$14.76m or 22.7
cents per share, while the fair value of the Company's interest in
Gland held through EIF Co Invest X is valued at 15.1 cents per
share. These values represent a 2.2 X multiple over cost. The Fair
Value of the Company's interest in Gland is held at the 31 December
2010 Fair Value despite its continued delivery of very strong
revenue growth and stable EBITDA margins in the period under
review. The Directors have reviewed certain underlying financial
information pertaining to Gland and the valuation basis employed in
the fair valuation calculation.
RSB Group ("RSB")
RSB is an automotive component manufacturer based in Pune. The
Company's direct investment in RSB is held through EIF Co Invest
VII. The shareholders in EIF Co Invest VII are the Company and EIF,
which invested US$7.0m and US$10.0m respectively, for a total
investment of US$17.0m. No fees are payable on the Company's
investment in EIF Co Invest VII, while the Company's indirect
investment in RSB (through its interest in EIF) attracts standard
management and carried interest fee arrangements. Through the above
arrangements, and on a look-through basis, the Company has a total
of US$8.8m invested in RSB (at cost) compared to the US$7.0m
invested in RSB through EIF Co Invest VII.
Through the above arrangements, and on a look-through basis, the
fair value of the Company's interest in RSB is US$13.8m or 21.1
cents per share, while the fair value of the Company's interest in
RSB held through EIF Co Invest X is valued at 16.9 cents per share.
These values represent a 1.57 X multiple over cost.
Other matters
The share price (mid-price) of the Company at the date of this
report is 60 cents per share representing a 34.6% discount to the
91.7 cents adjusted NAV as at 30 June 2011 (adjusting for the 8
cents per share capital distribution paid on 15 July 2011).
Since our appointment on 18 May 2010, the Company's shareholders
have seen a +41% total return (adjusting for the 18 cents per share
capital distributions). This equates to a +30% IRR, the basis of
measurement being the share price (mid-price).
At the date of this report, net cash balances held by the
company amount to US$5.0m.
Our objective remains to realise assets at the appropriate time
and value, and to return the proceeds less expenses to our
shareholders.
Respectfully yours,
Rhys Cathan Davies
28 September 2011
For further information, please contact:
EIH PLC
Rhys Davies
Tel: +41 (0) 79 620 0215
Singer Capital Markets (Nominated Adviser)
James Maxwell / Nick Donovan
+44 (0)20 3205 7500
EIH PLC
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2011
For the period
For the period from 1
from 1 January January
2011 to 2010 to
30 June 2011 30 June 2010
Note US$'000 US$'000
------------------------------------ ----- ---------------- ---------------
Income
Interest income on cash balances 10 25
Realised gain on investments
at fair value through profit
or loss 5 1,133 -
Movement in fair value of
investments through profit or
loss 5 (3,333) 768
Net investment (expense)/income (2,190) 793
------------------------------------ ----- ---------------- ---------------
Expenses
Administrative expenses (136) (135)
Legal and other professional
fees (128) (578)
Audit fees (29) (17)
Other expenses 5 (4)
Value Added Tax recovered - 135
Total operating expenses (288) (599)
------------------------------------ ----- ---------------- ---------------
(Loss)/profit before taxation (2,478) 194
Income tax expense - -
(Loss)/profit after taxation
for the period (2,478) 194
------------------------------------ ----- ---------------- ---------------
Basic and fully diluted
(loss)/earnings per share (US
cents) 7 (3.81) 0.30
------------------------------------ ----- ---------------- ---------------
The accompanying notes form an integral part of these interim
financial statements.
EIH PLC
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
As at 30 June As at 31 December
2011 2010
Note US$'000 US$'000
------------------------------ ----- -------------- ------------------
Non-current assets
Financial assets at fair
value through profit or
loss 5 54,469 61,669
------------------------------ ----- -------------- ------------------
Total non-current assets 54,469 61,669
------------------------------ ----- -------------- ------------------
Current assets
Trade and other receivables 85 88
Cash and cash equivalents 10,354 12,320
------------------------------ ----- -------------- ------------------
Total current assets 10,439 12,408
------------------------------ ----- -------------- ------------------
Total assets 64,908 74,077
============================== ===== ============== ==================
Equity
Issued share capital 1,275 1,275
Share premium 6 52,080 58,580
Retained earnings 11,473 13,951
------------------------------ ----- -------------- ------------------
Total equity 64,828 73,806
------------------------------ ----- -------------- ------------------
Current liabilities
Trade and other payables 80 271
Total current liabilities 80 271
------------------------------ ----- -------------- ------------------
Total liabilities 80 271
------------------------------ ----- -------------- ------------------
Total equity and liabilities 64,908 74,077
============================== ===== ============== ==================
The accompanying notes form an integral part of these interim
financial statements.
EIH PLC
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2011
Share Retained
Share capital premium earnings Total
US$'000 US$'000 US$'000 US$'000
------------------------ -------------- ----------- ------------ ---------
Balance at 1 January
2010 1,275 58,580 2,630 62,485
Total comprehensive
income
Profit for the period - - 194 194
Balance at 30 June
2010 1,275 58,580 2,824 62,679
------------------------ -------------- ----------- ------------ ---------
Balance at 1 January
2011 1,275 58,580 13,951 73,806
Total comprehensive
income
(Loss) for the period - - (2,478) (2,478)
Transactions with
owners of the company
recorded directly
in equity
Return of capital - (6,500) - (6,500)
Balance at 30 June
2011 1,275 52,080 11,473 64,828
------------------------ -------------- ----------- ------------ ---------
The accompanying notes form an integral part of these interim
financial statements.
EIH PLC
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 JUNE 2011
For the period For the period
from 1 January from 1 January
2011 to 2010 to
30 June 2011 30 June 2010
Note US$'000 US$'000
Cash flows from operating
activities
(Loss)/profit before taxation (2,478) 194
Adjustments:
Movement in fair value of
investments through profit or
loss 5 3,333 (768)
Realised (gain) on investments
through profit or loss 5 (1,133) -
Interest income on cash balances (10) (25)
----------------------------------- ----- ---------------- ----------------
Operating loss before working
capital changes (288) (599)
Decrease/(increase) in trade
and other receivables 3 (149)
(Decrease) in trade and other
payables (191) (17)
----------------------------------- ----- ---------------- ----------------
Net cash used in operations (476) (765)
Interest received 10 24
Net cash used in operating
activities (466) (741)
----------------------------------- ----- ---------------- ----------------
Cash flows from investing
activities
Proceeds from repayment of
short-term loan - 2,500
Proceeds from sale of investment 5 5,000 -
Net cash generated by investing
activities 5,000 2,500
----------------------------------- ----- ---------------- ----------------
Cash flows from financing
activities
Return of capital 6 (6,500) -
----------------------------------- ----- ---------------- ----------------
Net cash used in financing
activities (6,500) -
----------------------------------- ----- ---------------- ----------------
Net (decrease)/increase in cash
and cash equivalents (1,966) 1,759
Cash and cash equivalents at
1 January 12,320 10,492
----------------------------------- ----- ---------------- ----------------
Cash and cash equivalents at
30 June 10,354 12,251
=================================== ===== ================ ================
The accompanying notes form an integral part of these interim
financial statements.
1 The Company
EIH PLC (formerly Evolvence India Holdings plc) was incorporated
and registered in the Isle of Man under the Isle of Man Companies
Act 1931-2004 on 10 November 2006 as a public company with
registered number 118297C. On 23 March 2011 the Company
re-registered under the Isle of Man Companies Act 2006.
Pursuant to a prospectus dated 19 March 2007 there was a placing
of up to 65,000,000 Ordinary Shares of GBP0.01 each. The number of
Ordinary Shares in issue immediately following the placing was
65,000,002. The shares of the Company were admitted to trading on
the Alternative Investment Market of the London Stock Exchange
("AIM") following the close of the placing on 23 March 2007.
The Company's agents perform all significant functions.
Accordingly, the Company itself has no employees.
2 Duration
The Company currently does not have a fixed life but the Board
considers it desirable that Shareholders should have the
opportunity to review the future of the Company at appropriate
intervals. Accordingly, at the annual general meeting of the
Company in 2012 a resolution will be proposed that the Company
ceases to continue as presently constituted. Shareholders holding
at least fifty one per cent of the shares must vote in favour of
this resolution for it to be passed. If the resolution is not
passed, a similar resolution will be proposed at every third annual
general meeting of the Company thereafter. If the resolution is
passed, the Directors will be required, within 3 months of the
resolution, to formulate proposals to be put to Shareholders to
reorganise, unitise or reconstruct the Company or for the Company
to be wound up.
3 Significant accounting policies
The principal accounting policies adopted in the preparation of
the financial statements are set out below.
3.1 Basis of presentation
These interim financial statements have been prepared in
accordance with International Financial Reporting Standard (IFRS)
IAS 34: Interim Financial Reporting. They do not include all of the
information required for full annual financial statements and
should be read in conjunction with the financial statements of the
Company as at and for the year ended 31 December 2010. The interim
financial statements are unaudited.
The accounting policies adopted in the preparation of the
interim consolidated financial statements are consistent with those
followed in the preparation of the Company's annual financial
statements for the year ended 31 December 2010.
3.2 Investments at fair value through profit or loss
Investments are designated as financial assets at fair value
through profit or loss. They are measured at fair value with gains
and losses recognised through profit or loss.
The fair value of investments at fair value through profit or
loss in unlisted equity investments is estimated by the Directors,
with input from Evolvence India Advisors Inc. In estimating the
fair value of the Company's investments in private equity funds
consideration is taken of the valuations of underlying investments
performed by the directors and managers of those funds. The
valuation of the unlisted holdings in the co-investments and
underlying funds investments are performed by using the most
appropriate valuation techniques, including the use of recent arms'
length market transactions, use of market comparables, use of
discounted cash flows, recent financial statements or any other
valuation technique that provides a reliable estimate. Under the
discounted cash flow method, free cash flows have been discounted
using an appropriate weighted cost of capital.
Under the market comparables method, an appropriate multiple
(e.g EV/PBDIT or EV/Revenue or Price to Earnings multiple) is used.
From the equity valuation arrived at using the above approaches,
adjustments are made for company specific discounts/premiums, scale
discounts, illiquidity discounts and forward looking financial
discounts/premiums.
Listed holdings in the co-investments and underlying funds are
valued based upon prevailing market prices as of the date of
valuation. Exited investments are valued using the respective
exited multiples.
3.3 Segment reporting
The Company has one segment focusing on maximising total returns
through investing in an Indian private equity portfolio of
investments. No additional disclosure is included in relation to
segment reporting, as the Company's activities are limited to one
business and geographic segment.
4 Net asset value per share
The unaudited net asset value per share as at 30 June 2011 is
99.7 cents per share based on 65,000,002 ordinary shares in issue
as at that date (31 December 2010: 113.6 cents per share based on
65,000,002 ordinary shares).
5 Financial assets at fair value through profit or loss
The objective of the Company is to make indirect investments in
Indian private equity funds and companies via Mauritian based
investment funds and to also co-invest directly in certain
portfolio companies of the underlying funds. As at 30 June 2011,
the investment portfolio comprised the following assets:
Investments Capital Capital Capital Fair value Fair
(Unlisted) Commitment Invested Distribution Adjustment Value
--------------- ----------- --------- ------------- ----------- ---------
US$'000 US$'000 US$'000 US$'000 US$'000
Fund
Investments
(equity)
Evolvence
India Fund
PCC 45,120 39,097 (10,486) 5,065 33,676
Direct
Investments
(equity)
EIF Co Invest
VII (RSB
Group) 6,970 6,970 - 3,993 10,963
EIF Co Invest
X (Gland
Pharma
Limited) 4,510 4,510 - 5,320 9,830
56,600 50,577 (10,486) 14,378 54,469
--------------- ----------- --------- ------------- ----------- ---------
The fair value of the Company's investments has been estimated
by the Directors with the input from Evolvence India Advisors Inc.
The movement in investments during the period was as follows:
31 December
30 June 2011 2010
US$'000 US$'000
Fair value brought forward 61,669 49,586
Disposal of investment at cost (3,867) -
Capital calls - 4,447
Capital distributions - (4,806)
Movement in fair value (3,333) 12,442
Fair value at period/year end 54,469 61,669
-------------------------------- ------------- ------------
The outstanding capital commitment as at 30 June 2011 is US$6.0m
(31 December 2010: US$8.1m).
Evolvence India Fund PCC (EIF)
Evolvence India Fund PCC, a Protected Cell Company formed under
the laws of Mauritius having limited liability, is a private equity
fund of funds with a co-investment pool, focusing primarily on
investments in India. The fund size of EIF is US$250m, of which
approximately two-thirds have been invested in different private
equity funds (including growth capital, mezzanine and real estate
funds) with significant focus on India and the balance has been
invested in co-investment opportunities, primarily in Indian
companies or companies with significant operations in India. EIF
was 87% drawn down as at 30 June 2011 and has invested US$110m
towards investments in its ten underlying funds which in turn have
invested in 122 portfolio companies. Additionally, US$58.5m is
invested in eight co-investments.
EIF has distributed 15.73% of its drawn down capital. It has
received distributions amounting to US$41.6m out of which around
US$31.9m has been distributed to its investors.
Valuation basis
The fair value of the Company's investments has been estimated
by the Directors with input from Evolvence India Advisors Inc.
Underlying listed investments have been valued as per the closing
market prices of the respective companies listed on the Bombay
Stock Exchange. For unlisted underlying investments, a number of
valuation methodologies have been used depending on the nature of
the investment and the availability of suitable financial
information.
Evolvence India Life Sciences Fund (EILSF)
EILSF is a private equity fund formed under the laws of
Mauritius having limited liability with the investment strategy of
investing in the life sciences space in India. The final closing of
the fund occurred in June 2009 and the fund size of EILSF as at 3
December 2010 was US$84.1 million. It has made four investments.
EILSF was 64% drawn down as at 31 December 2010. No distributions
have been made by EILSF during the period ended 30 June 2011. On 27
June 2011, the Company sold its investment in EILSF for
consideration of US$5.0m, realising a gain of U$1.1m against
cost.
EIF Co Invest VII
EIH has invested US$7.0m in RSB Group through a Special Purpose
Vehicle (SPV), EIF Co Invest VII. RSB Group is a leading
manufacturer of automotive components and construction aggregates.
The valuation in RSB Group which is unlisted, is based on a
valuation performed by EIF's investment manager and is based on an
average valuation multiple of comparable companies.
EIF Co Invest X
EIH has invested US$4.5m in Gland Pharma Limited through an SPV,
EIF Co Invest X. Gland Pharma Limited is a Hyderabad based
pharmaceutical company. The valuation in Gland Pharma Limited which
is unlisted, is based on a valuation performed by EILSF's
investment manager and is based on an average valuation multiple of
comparable companies.
6 Return of capital
On 15 April 2011, the Company made a capital distribution of 10
cents per share.
7 Earnings per share
Basic and fully diluted earnings per share is calculated by
dividing the profit attributable to equity holders of the Company
by the weighted average number of ordinary shares in issue during
the period:
30 June 2011 30 June 2010
'000 '000
(Loss)/profit attributable to equity
holders of the Company (US$) (2,478) 194
Weighted average number of ordinary
shares in issue 65,000 65,000
Basic (loss)/earnings per share (cents
per share) (3.81) 0.30
---------------------------------------- ------------- -------------
There is no difference between the basic and fully diluted loss
per share for the period.
8 Subsequent events
On 15 July 2011, the Company made a further capital distribution
of 8 cents per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QVLFLFKFLBBK
Eih (LSE:EIH)
Historical Stock Chart
From Oct 2024 to Nov 2024
Eih (LSE:EIH)
Historical Stock Chart
From Nov 2023 to Nov 2024
