TIDMEIH
RNS Number : 0430P
EIH PLC
27 September 2013
27 September 2013
EIH PLC
("EIH" or the "Company")
Interim Results
The Company announces its interim results for the six months
ended 30 June 2013. A copy of this announcement will shortly be
available for inspection at www.eihplc.co.uk.
Chairman's Statement
The unaudited net assets of EIH as at 30 June 2013 were US$50.1
million and therefore net asset value ("NAV") per share at that
date was 77.6 cents based on 64,500,002 ordinary shares in issue
(31 December 2012 NAV per share: 72.7 cents).
On 15 March 2013, the Company made a capital distribution of 2
cents per share.
Adjusting for the 15 March 2013 capital distribution, the NAV
increased by 9.5% in the period under review.
Total operating costs during the period were US$0.26m, or 3%
above the comparable prior year figure. In addition, EIH paid
certain annual management fees and expenses to Evolvence India Fund
PCC ("EIF") in respect of its commitments to that fund. These costs
are embedded in the capital account of EIF and do not appear in the
profit or loss for EIH.
The Company's investment portfolio comprises the following
(based on unaudited values as at 30 June 2013):
Table 1. Investments Capital Commitment Capital Invested Capital Fair value Fair Value
Distribution Adjustment
--------------------- ------------------- ----------------- -------------------- -------------------- -----------
US$'000 US$'000 US$'000 US$'000 US$'000
Fund Investments
(equity)
Evolvence India Fund
PCC 45,120 44,601 (15,499) 124 29,226
Direct Investments
(equity)
EIF Co Invest VII
(RSB Group) 6,970 6,970 (29) 47 6,988
EIF Co Invest X
(Gland Pharma
Limited) 4,510 4,510 - 9,200 13,710
56,600 56,081 (15,528) 9,371 49,924
--------------------- ------------------- ----------------- -------------------- -------------------- -----------
Further details on the Company's investment portfolio are set
out below and in Note 5 to the interim financial statements.
EIF
EIF has now drawn down 98.85% of its committed capital, with
1.15% remaining undrawn. However, EIF's managers have informed us
that this unfunded commitment will likely continue to be adjusted
against future distributions, such that no further cash calls are
likely to be made by EIF.
During the period under review the BSE SENSEX and BSE MIDCAP
Indian stock market indices declined by 0.16% and 16.15%
respectively in local currency. The currency picture was volatile
in the period under review and it is also noted that the Indian
Rupee ("INR") declined by 8.99% against the US Dollar during the
period.
Against this challenging environment EIF's underlying private
equity funds performed reasonably well. On the basis of period
beginning and end fair values, and adjusting for drawdowns and
distributions made during the period, the fair value of EIF's
underlying funds decreased by approximately 6.1% in US Dollar
terms, while their value increased by approximately 2.3% in INR
terms. On the same basis of measurement, EIF's direct investments
outperformed its underlying funds, driven by increases in the fair
values of Gland and RSB; in aggregate their value increased by
approximately 9.2% in US Dollar terms, while in INR terms this
increase was approximately 19.0%.
Both EIF's underlying funds and its direct investments hold
exposure to listed equities and EIF's overall weighting was
approximately 7% at the period end, concentrated in the underlying
funds.
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 concentrated in one fund, HI-REF
International LLC Fund. During the period in review, EIF received
net distributions from most of its mature funds and these were
substantially higher than the comparable prior year figure.
As at 30 June 2013 the Company had US$29.1m invested in EIF
(capital called of US$44.6m, less refund of capital contributions
of US$15.5m), equivalent to 45.1 cents per share. At the reporting
date the Fair Value (unaudited) of the Company's investment in EIF
was US$29.2m, equivalent to 45.3 cents per share, representing a
1.0 times multiple over cost.
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.
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
("Evolvence India Life Sciences Fund") 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) 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$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 Company's interest in Gland is 31.9 cents per share;
while the fair value of the Company's interest in Gland held
through EIF Co Invest X is valued at 21.2 cents per share (see
Table 2, below). These values represent a 3.0 times multiple over
cost. The Directors have reviewed certain underlying financial
information pertaining to Gland and the valuation basis employed in
the fair valuation calculation thereof.
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$8.8m or 13.6
cents per share, while the fair value of the Company's interest in
RSB held through EIF Co Invest VII is valued at 10.8 cents per
share. These values represent a 1.0 times multiple over cost. The
Fair Value of the Company's interest in RSB is based on a valuation
performed by EIF's investment manager.
Table 2. Investments (Fair Values) As per LP reports RSB Gland Pro-forma
(EIF) (EIF)
------------------------------------ ------------------ -------- -------- ----------
US$'000 US$'000 US$'000 US$'000
Fund Investments
EIF (PE funds) 14,266 14,266
EIF (direct investments) 14,108 (1,799) (6,873) 5,436
EIF (other) 852 852
Direct Investments
RSB Group 6,988 1,799 8,787
Gland Pharma Limited 13,710 6,873 20,583
49,924 - - 49,924
------------------------------------ ------------------ -------- -------- ----------
Table 2 extracts the Company's "look through" interests in the
Gland and RSB (from EIF) and adds them to the Company's direct
interests in Gland and RSB (held by EIF Co Invest X and EIF Co
Invest VII respectively). On this basis, 58.8% of the Company's
Financial Assets at Fair Value (US$29.4m, equivalent to 45.5 cents
per share), is accounted for by its interests in Gland and RSB on
an underlying pro-forma basis.
Table 2 further shows that 28.6% of the Company's Financial
Assets at Fair Value is accounted for by its interests in EIF's ten
PE fund investments, and a further 10.9% by its interests in EIF's
direct investments (excluding Gland and RSB).
Other matters
At the date of this report, net cash balances held by the
company amount to US$0.07m.
Our objective remains to realise assets at the appropriate time
and value, and to return the proceeds less expenses to our
shareholders.
On behalf of the Board of Directors, I thank all Shareholders
for their support.
Respectfully yours,
Rhys Cathan Davies
26 September 2013
For further information, please contact:
EIH PLC
Rhys Davies
Tel: +41 (0) 79 620 0215
Nplus1 Singer Advisory LLP (Nominated Adviser)
James Maxwell / Nick Donovan
+44 (0)20 7496 3000
EIH PLC
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2013
For the period For the period
from 1 January from 1 January
2013 to 2012 to
30 June 2013 30 June 2012
Note US$'000 US$'000
--------------------------------- ------ ---------------- ----------------
Income
Fair value movement
on investments at fair
value through profit
or loss 5 4,735 (2,180)
Net investment income/(expense) 4,735 (2,180)
--------------------------------- ------ ---------------- ----------------
Expenses
Administrative expenses (142) (146)
Legal and other professional
fees (89) (85)
Audit fees (19) (18)
Other expenses (9) (2)
Total operating expenses (259) (251)
--------------------------------- ------ ---------------- ----------------
Profit/(loss) before
taxation 4,476 (2,431)
Income tax expense - -
Profit/(loss) after
taxation for the period 4,476 (2,431)
--------------------------------- ------ ---------------- ----------------
Basic and fully diluted
earnings/(loss) per
share (US cents) 7 6.94 (3.77)
--------------------------------- ------ ---------------- ----------------
The accompanying notes form an integral part of these interim
financial statements.
EIH PLC
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2013
As at 30 As at 31
June December
2013 2012
Note US$'000 US$'000
------------------------------ ----- --------- ----------
Non-current assets
Financial assets at
fair value through
profit or loss 5 49,924 46,093
------------------------------ ----- --------- ----------
Total non-current
assets 49,924 46,093
------------------------------ ----- --------- ----------
Current assets
Trade and other receivables 23 18
Cash and cash equivalents 227 840
------------------------------ ----- --------- ----------
Total current assets 250 858
------------------------------ ----- --------- ----------
Total assets 50,174 46,951
============================== ===== ========= ==========
Equity
Issued share capital 1,265 1,265
Share premium 6 43,365 44,655
Retained earnings 5,443 967
------------------------------ ----- --------- ----------
Total equity 50,073 46,887
------------------------------ ----- --------- ----------
Current liabilities
Trade and other payables 101 64
Total current liabilities 101 64
------------------------------ ----- --------- ----------
Total liabilities 101 64
------------------------------ ----- --------- ----------
Total equity and liabilities 50,174 46,951
============================== ===== ========= ==========
The accompanying notes form an integral part of these interim
financial statements.
EIH PLC
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2013
Share Share Retained Total
capital premium earnings
US$'000 US$'000 US$'000
US$'000
----------------------- --------- --------- ---------- ---------
Balance at 1
January 2012 1,265 46,590 3,372 51,227
Total comprehensive
income
(Loss) for the
period - - (2,431) (2,431)
Transactions
with owners of
the company recorded
directly in equity
Return of capital - (1,935) - (1,935)
Balance at 30
June 2012 1,265 44,655 941 46,861
----------------------- --------- --------- ---------- ---------
Balance at 1
January 2013 1,265 44,655 967 46,887
Total comprehensive
income
Profit for the
period - - 4,476 4,476
Transactions
with owners of
the company recorded
directly in equity
Return of capital - (1,290) - (1,290)
Balance at 30
June 2013 1,265 43,365 5,443 50,073
----------------------- --------- --------- ---------- ---------
The accompanying notes form an integral part of these interim
financial statements.
EIH PLC
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 JUNE 2013
For the For the
period from period from
1 January 1 January
2013 to 2012 to
30 June 30 June
2013 2012
Note US$'000 US$'000
Cash flows from operating
activities
Profit/(loss) before taxation 4,476 (2,431)
Adjustments:
Fair value movement on
investments at fair value
through profit or loss 5 (4,735) 2,180
Operating loss before
working capital changes (259) (251)
(Increase)/decrease in
trade and other receivables (5) 13
Increase/(decrease) in
trade and other payables 37 (21)
------------------------------- ----- -------------- -------------
Net cash used in operations (227) (259)
Net cash used in operating
activities (227) (259)
------------------------------- ----- -------------- -------------
Cash flows from investing
activities
Capital calls - (3,021)
Capital distribution received 5 904 1,627
Net cash generated by/(used
in) investing activities 904 (1,394)
------------------------------- ----- -------------- -------------
Cash flows from financing
activities
Return of capital 6 (1,290) (1,935)
------------------------------- ----- -------------- -------------
Net cash used in financing
activities (1,290) (1,935)
------------------------------- ----- -------------- -------------
Net (decrease) in cash
and cash equivalents (613) (3,588)
Cash and cash equivalents
at 1 January 840 4,653
------------------------------- ----- -------------- -------------
Cash and cash equivalents
at 30 June 227 1,065
=============================== ===== ============== =============
The accompanying notes form an integral part of these interim
financial statements.
Notes to the Unaudited Interim Results
For the six months ended 30 June 2013
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 2015 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 2012. 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 2012.
Notes to the Unaudited Interim Results
For the six months ended 30 June 2013 (continued)
3.1 Basis of presentation (continued)
The Company has adopted the following new standards with a date
of initial application of 1 January 2013.
-- IFRS 13 Fair Value Measurement
Fair Value Measurement
IFRS 13 establishes a single framework for measuring fair value
and making disclosures about fair value measurements, when such
measurements are required or permitted by IFRSs. In particular, it
unifies the definition of fair value as the price at which an
orderly transaction to sell an asset or transfer a liability would
take place between market participants at the measurement date. It
also replaces and expands the disclosure requirements about fair
value measurements in other IFRSs, including IFRS 7 Financial
Instruments: Disclosures. The change has no significant impact on
the measurements of the Company's assets and liabilities.
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.
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.
Notes to the Unaudited Interim Results
For the six months ended 30 June 2013 (continued)
4 Net asset value per share
The unaudited net asset value per share as at 30 June 2013 is
77.6 cents per share based on 64,500,002 ordinary shares in issue
as at that date (31 December 2012: 72.7 cents per share based on
64,500,002 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 2013,
the investment portfolio comprised the following assets:
Investments Capital Commitment Capital Invested Capital Fair value Fair Value
(Unlisted) Distribution Adjustment
--------------------- ------------------- ----------------- -------------------- -------------------- -----------
US$'000 US$'000 US$'000 US$'000 US$'000
Fund Investments
(equity)
Evolvence India Fund
PCC 45,120 44,601 (15,499) 124 29,226
Direct Investments
(equity)
EIF Co Invest VII
(RSB Group) 6,970 6,970 (29) 47 6,988
EIF Co Invest X
(Gland Pharma
Limited) 4,510 4,510 - 9,200 13,710
56,600 56,081 (15,528) 9,371 49,924
--------------------- ------------------- ----------------- -------------------- -------------------- -----------
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:
30 June 31 December
2013 2012
US$'000 US$'000
Fair value brought forward 46,093 46,603
Disposal of investment at
cost - -
Capital calls - 3,022
Capital distributions (904) (1,627)
Movement in fair value 4,735 (1,905)
Fair value at period/year
end 49,924 46,093
---------------------------- --------- ------------
The outstanding capital commitment as at 30 June 2013 is US$0.5m
(31 December 2012: US$0.5m).
Notes to the Unaudited Interim Results
For the six months ended 30 June 2013 (continued)
5 Financial assets at fair value through profit or loss (continued)
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 98.85% drawn down as at 30 June 2013. Moreover, EIF has
distributed 35% of its drawn capital.
Valuation basis
The fair value of the investment in EIF is based on the
Company's share of the net assets of EIF at 30 June 2013 per its
unaudited financial statements. The financial statements of EIF are
prepared under IFRS, with all investments stated at fair value. The
valuation of the investment portfolio of EIF has been performed by
its investment manager at 30 June 2013. The investment portfolio
comprises investments in private equity funds, where fair value is
based on reported net asset values, and co-investments in private
companies where fair values are based on valuation techniques.
EIF Co Invest VII
EIH has invested US$7m 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$4.5m in Gland Pharma Limited through a
Special Purpose Vehicle, EIF Co Invest X. Gland Pharma Limited is a
Hyderabad based pharmaceutical company. The valuation in Gland
Pharma Limited which is unlisted, is based on a valuation performed
by EIF's investment manager and is based on an average valuation
multiple of comparable companies.
6 Return of capital
On 15 March 2013, the Company made a capital distribution of 2
cents per share.
Notes to the Unaudited Interim Results
For the six months ended 30 June 2013 (continued)
7 Earnings per share
Basic and fully diluted earnings per share are calculated by
dividing the profit attributable to equity holders of the Company
by the weighted average number of ordinary shares in issue during
the period:
30 June 30 June
2013 2012
'000 '000
Profit/(loss) attributable
to equity holders of the
Company (US$) 4,476 (2,431)
Weighted average number of
ordinary shares in issue 64,500 64,500
Basic earnings/(loss) per
share (cents per share) 6.94 (3.77)
---------------------------- -------- --------
There is no difference between the basic and fully diluted
earnings per share for the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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