TIDMMPL
RNS Number : 7488B
Mercantile Ports & Logistics Ltd
11 June 2019
11 June, 2019
Mercantile Ports & Logistics Limited
(the "Company" or "MPL")
Preliminary results for the year ended 31 December 2018
Mercantile Ports & Logistics (AIM: MPL), which is developing
a modern port and logistics facility in Mumbai, India, is pleased
to announce its preliminary results for the year ended 31 December
2018. These are set out below.
Highlights
-- Inauguration ceremony took place on 8 March 2019 and first revenue
generated from customer cargo operations
-- All customs approvals now received and customs IT connections established
-- MMB granted lease extension from 30 to 50 years
-- MMB granted approval to develop additional 200 acres of land and
1000 meters of waterfront
-- Completion of GBP29.8 million fund raise
Nikhil Gandhi, Executive Chairman of MPL, commented: "2018 was a
year of progress and that has continued into 2019. Customers have
been secured and the inauguration ceremony, alongside our first
revenue generating cargo movement, were important milestones.
With a growing economy and a settled political backdrop which is
supportive of infrastructure development and the Company, I am
excited about the prospects for MPL."
Enquiries:
MPL Jay Mehta
C/O Newgate Communications
+44 (0)20 3757 6880
Cenkos Securities plc Stephen Keys
+44 (0)20 7397 8900
Newgate Communications Adam Lloyd/Fiona Norman
(Financial PR) +44 (0)20 3757 6880
Chairman's Statement
2018 was an important year for MPL with further progress made on
the ground and Hunch Ventures and Investment Limited ("Hunch
Ventures") taking a 21.75% shareholding in the Company as part of
the equity fundraise in December.
This endorsement, along with the support shown from
institutional shareholders and directors, who all further invested,
raised c.GBP29.8m, enabling the Company to manage its own future
cashflow and not be reliant on additional drawdowns from the Indian
banks lending under consortium. We are fully focused on our maiden
project, the development of a world class multipurpose terminal and
logistics facility at Karanja creek within Mumbai Harbour (the
"Facility").
2018 was a year when milestones were achieved. Since our first
test vessel docked in November, management has been focused on
preparing for commercial operations commencing in H1 2019.
Following the funding, the official inauguration ceremony took
place on 8 March. This event was presided over by the Honourable
Chief Minister of Maharashtra and attendees included the Honourable
Minister of Fisheries Development, Mr. Mahadev Jankar, the
Honourable Minister of State for Ports, Mr. Ravindra Chavan, the
Principal Secretary (Ports) and the Vice Chairman of the
Maharashtra Maritime Board, along with other state government
officials, dignitaries and existing contracted and potential
customers of the Facility.
During the Ceremony, the Chief Minister emphasised his support
for Karanja as a key part of the port and logistics led development
in Maharashtra, India's most industrialised state. The Company also
welcomed Mr Jankar's comments in his address, which identified the
Facility as being considered for investment by his ministry as an
international marine hub, given its proximity to one of the largest
fishing centres in the State.
The ceremony followed assurances that the full customs approval
process would be concluded shortly, and that process has now been
concluded. This coincided with the Company's first revenue
generated from customer cargo operations, discharging steel
products for one of India's leading steel producers. Whilst
initially small, this operation took place after a successful trial
and is another proud milestone for the Company, demonstrating the
increasing interest major industrial businesses have in the
Facility.
During the course of 2018, we were pleased to welcome Karanpal
Singh to the Board. Mr. Singh is the promoter of Hunch Ventures and
has a wealth of experience across a range of sectors including
Steel, Iron Ore, Gold Mining, Power Production and Cement
manufacturing. Hunch Ventures focuses on growth opportunities and
has followed the development of the Karanja. At the same time Mr.
Warner Allen also joined the Board following a successful career in
the city of London as an adviser to growth companies across
multiple sectors.
Management is evaluating which types of business it should
prioritise, as potential customers have varying merits such as
speed of implementation, price, infrastructure required and length
of contract. The Facility has been designed to be flexible in the
type of cargo that it can handle and store and the Board is
delighted that this strategy has given the Company multiple options
in order to maximise value for shareholders as the Facility
matures.
During 2018, the Company was pleased to announce that its wholly
owned subsidiary, Karanja Terminal and Logistics Private Limited
("KTPL"), had received notification from the Maharashtra Maritime
Board that its lease over the land had been extended from 30 to 50
years. In addition, the MMB has also granted KTPL the approval to
develop an additional 200 acres of land and 1000 meters of
waterfront.
During 2019, we have been delighted to host our Non-Executive
Directors, our Nomad and both existing and potential institutional
investors at the site. These visits have involved a tour of the
site and meetings with our engineering team and also with
contracted and potential customers, with a view to us demonstrating
the work that has been completed and the opportunities available to
the Company. We are always proud to show off our site and extend a
warm invitation to any other interested parties.
The future looks positive for MPL in the context of a positive
macro-economic backdrop and a strong partnership with Maharashtra
Maritime Board ("MMB"). We have a re-energized board and a
successful strategic investor that shares our vision. These are
exciting times for MPL.
Nikhil Gandhi
Executive Chairman
Mercantile Ports & Logistics Limited
10 June, 2019
Operational Review
Status of the Project
The Group has made significant progress in completing its goal
of constructing and operating the port and logistics Facility at
Karanja Creek near Navi Mumbai, India.
One side of the 400 metre general cargo jetty is capable of
receiving vessels and the separate 200 meter bulk berth is nearly
complete. Approximately 100 acres of land have been reclaimed, with
approximately another 15 acres of reclamation material on site,
meaning that there is significantly more than the 50 acres of back
up land reclaimed as is required to enable the Facility to carry
out commercial operations. Covered storage facilities, currently
being planned, will be completed in consultation with contracted
customers and their requirements.
The Facility now has a fenced custom bond area, a brand new
operational office block, a six lane gated complex and furnished
operating work spaces for Custom officers and other port users.
As previously reported, the customs approval process took longer
than originally envisaged and there were some IT integration issues
with the customs' systems. Whilst this was frustrating and delayed
the start of commercial operations, the Company is pleased to
report that all approvals had been received and that KTPL have
received confirmation from the Ministry of Finance for the customs
jurisdiction to be under Jawaharlal Nehru Customs House. This is
extremely beneficial as it enables KTPL to have seamless container
handling operations between the Facility and Jawaharlal Nehru Port
Trust ("JNPT"), India's largest and busiest container handling
port. Jawaharlal Nehru Customs House is the biggest Customs House
in the country in terms of containers handled, documents filed, and
revenue generated.
Operational trials had previously been carried out by the Group
itself and before the end of 2018, the Facility handled cargo for
immediate onward transportation for one of India's most prominent
steel manufacturers on a trial basis. This trail was successful and
is shortly expected to result into a contract being agreed with
this customer becoming our third contracted partner.
Whilst the customs delay was the principal factor in larger
scale cargo movements not taking place when hoped, the Group is
pleased with the level of visibility it has over its future
revenues. As previously reported, the Group has signed contracts
with two customers, which together envisage growing volume to 6
million tonnes of cargo in the third year of operations. In
addition, the Group is in discussions to secure a number of
contracts, including one of India's largest fertilizer companies,
one of India's most prominent steel manufacturers (which has
already conducted trials at the Facility) a cement company and with
a large fly ash distributor. This is alongside the discussions that
continue with other interested parties and the encouragement from
MMB for agreements to be reached with JNPT, to help relieve
congestion.
The Directors consider the Facility to be well-aligned with
Indian government policy. In addition, the Directors believe that
the Facility is ideally situated to benefit from some of the
significant infrastructure projects that are taking place near the
site. In particular, projects that have commenced or are proposed,
include the US$2.7bn Mumbai Trans Harbour Link, the US$2.5bn Navi
Mumbai Airport, JNPT's US$1.3bn Fourth Terminal and the Navi Mumbai
Digital City, which is expected to attract significant investment.
Each of these projects will require enormous quantities of steel,
cement and other materials, and the Directors expect the Facility
to play a major part in the logistics for the construction of some
or all of these projects.
The Group has been delighted with the support that it has
received from MMB and in particular the extension of its lease of
the Project Land to 2059. Whilst the Directors' immediate focus is
on completing the build out of the Company's Facility to 200 acres,
the Directors are proud to have received permission from MMB to
extend the Facility to 400 acres, with 2,000 meters of sea
frontage, which the Directors intend to pursue in the future. The
Facility is now operational and the focus is on attracting,
contracting and moving cargo in volume. Whilst a small volume of
cargo has been handled already, the Directors expect larger volumes
to be handled, post the monsoon, in September. The reclamation of
land will continue this year and next year in parallel with the
pipeline of new business coming on stream. We believe that the
lease extension is a significant endorsement from the key
government organisation responsible for the maritime economy and
illustrates the confidence that MMB has in MPL. The decision of the
MMB comes on the back of significant interest in the Facility from
a wide range of shipping and cargo businesses. The current Indian
government's Sagarmala initiative supports port led development as
a key driver of Indian economic development and MPL is proud to be
an important contributor to the delivery of the Indian Prime
Minister's flagship policy.
Marketing Update
The Company's marketing efforts continued in the early part of
2019, with two large potential contracts in negotiation and
diligence stage. The Company expects to make further announcements
in relation to new contract wins throughout 2019. In preparation
for the ramping-up of commercial operations and to maximise the
Company profile and marketing ability, in 2019 we have added to our
advisory panel. I am pleased to welcome Mr Rajeev Ranjan Sinha to
our panel. Mr Sinha has served as Principal Secretary (Ports) to
the Government of Maharashtra and also served as Deputy Chairman of
Mumbai Port Trust and Chief Executive Officer of the Maharashtra
Maritime Board. I am looking forward to working closely with him
and benefitting from his significant experience and expertise in
the port sector.
Conclusion
2018 was a year of progress and preparing for the future in
terms of building the Facility, strengthening the board and
management team, securing customers and developing a healthy
pipeline to deliver on the promise of a professional and profitable
port and logistics facility. Karanja lies at the heart of India's
trading gateway and, with India's macro story still conducive to
Karanja's growth, the Board sees enormous opportunities available
to the Company. Everyone involved in this project recognises the
strategic ambition of the Indian government and our customers. We
are proud to be working with all our stakeholders to deliver on
this vision.
Jay Mehta
Managing Director
Mercantile Ports & Logistics Limited
10 June, 2019
Financial Review
In December the Company raised an additional GBP29.82 million
from investors, giving us the security to address the general
banking constraints in India.
The successful fundraise has meant that any delay to the
drawdown of the Company's banking facilities in the future will not
have an impact on the Group.
As at 31 December, following the payment of outstanding
liabilities, the Company had cash resources of GBP21.4 million
including an GBP8.3m debtor in the form of a promissory note/bank
guarantee from Hunch Ventures, as payment of the Subscription Price
from India to the Company's bank account in Guernsey which requires
the approval of the Reserve Bank of India ("RBI"), with the flow of
funds happening following that approval. As announced on 29 March
2019, in order to ensure that there is no doubt about Hunch's
commitment to the project, Hunch transferred GBP8.3 million to an
Escrow Account controlled by the Company's wholly owned subsidiary,
pending approval from the RBI. This process is expected to conclude
shortly and further announcements will be made in due course.
As at 31 December 2018, MPL and its subsidiaries (the "Group")
had cash resources of GBP13.1 million (with a further GBP8.3
million held in Escrow) and GBP20.5 million of undrawn banking
facilities. The Group continues to be in compliance with the terms
of its banking facilities, and the Company continues to review its
future debt refinancing options.
The Company was pleased that the impairment review performed
indicated that the Value in Use of the port, once completed, has
been calculated as being higher than the final expected cost of the
completed port.
Management are confident that they will be able to optimise
MPL's capital structure in the next 12 months, including securing
access to debt capital on better terms. The Company believes that
it will achieve this based on the majority of construction risks
having been eliminated and regulatory risks having been
successfully dealt with. In addition, the Group has signed
contracts with end users and a healthy pipeline of customers that
have signalled to move from Memorandum of Understanding ("MoU") to
documentation stage.
Shareholder engagement
This year's AGM will be held in Guernsey on Thursday, 11 July
2019.
Andrew Henderson
CFO
Mercantile Ports & Logistics Limited,
10 June, 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2018
Year ended Year ended
31 Dec 18 31 Dec 17
Notes GBP000 GBP000
CONTINUING OPERATIONS
Revenue - -
- -
Administrative Expenses 5 (3,296) (3,416)
OPERATING LOSS (3,296) (3,416)
Finance Income 6 13 11
Finance Cost - -
NET FINANCING INCOME 13 11
LOSS BEFORE TAX (3,283) (3,405)
Tax expense for the year 7 - -
LOSS FOR THE YEAR (3,283) (3,405)
Loss for the year attributable to:
Non-controlling interest (5) (1)
Owners of the parent (3,278) (3,404)
LOSS FOR THE YEAR (3,283) (3,405)
Other Comprehensive Income/(expense):
Items that will not be reclassified subsequently
to profit or (loss)
Re-measurement of net defined benefit liability 24 4 -
Items that will be reclassified subsequently
to profit or (loss)
Exchange differences on translating foreign
operations (2,218) (2,785)
Other comprehensive expense for the year (2,214) (2,785)
Total comprehensive expense for the year (5,497) (6,190)
Total comprehensive expense for the year
attributable to:
Non-controlling interest (5) (1)
Owners of the parent (5,492) (6,189)
(5,497) (6,190)
Earnings per share (consolidated):
Basic & Diluted, for the year attributable
to ordinary equity holders 9 (0.006p) (0.008p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2018
Year ended Year ended
31 Dec 18 31 Dec 17
Notes GBP000 GBP000
Assets
Property, plant and equipment 10 131,257 123,985
Total non-current assets 131,257 123,985
Trade and other receivables 11 26,169 15,315
Cash and cash equivalents 12 13,113 5,423
--------------------------------- -------------------- ---------- ----------
Total current assets 39,282 20,738
Total assets 170,539 144,723
Equity
Stated Capital 14 134,627 106,763
Retained earnings 14 (3,772) (498)
Translation Reserve 14 (14,958) (12,740)
Equity attributable to owners of
parent 115,897 93,525
Non-controlling Interest 11 16
Total equity 115,908 93,541
Liabilities
Non-current
Employee benefit obligations 15 3 -
Borrowings 16 33,831 34,934
Non-current liabilities 33,834 34,934
Current
Employee benefit obligations 15 58 36
Borrowings 16 59 23
Current tax liabilities 17 7,341 7,417
Trade and other payables 18 13,339 8,773
Current liabilities 20,797 16,249
Total liabilities 54,631 51,183
Total equity and liabilities 170,539 144,723
The consolidated financial statements have been approved and
authorized for issue by the Board on 10 June, 2019.
Nikhil Gandhi
Director
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2018
Year ended Year ended
31 Dec 18 31 Dec 17
Notes GBP000 GBP000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (3,283) (3,405)
Non cash flow adjustments 20 59 (1,559)
Operating (loss)/profit before working
capital changes (3,224) (4,964)
Net changes in working capital 20 (13) 770
Net cash from operating activities (3,237) (4,194)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment 10 (8,420) (31,752)
Proceeds from sale of fixed asset 5 -
Finance income 6 13 11
Net cash used in investing activities (8,402) (31,741)
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of Share Capital 14 19,552 3,000
Reversal of share issue cost - 49
Proceeds from new borrowing (44) 2,630
Net cash from financing activities 19,508 5,679
Net change in cash and cash equivalents 7,869 (30,256)
Cash and cash equivalents, beginning
of the year 5,423 35,697
Exchange differences on cash and cash
equivalents (179) (18)
Cash and cash equivalents, end of
the year 13,113 5,423
The notes pages shown below part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2018
Other Non-
Stated Translation Retained Components controlling Total
Capital Reserve Earnings of equity Interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 106,763 (12,740) (498) - 16 93,541
1 January 2018
Issue of share capital 29,820 - - - - 29,820
Share issue cost (1,956) - - - - (1,956)
Transactions with
owners 134,627 (12,740) (498) - 16 121,405
Loss for the year - - (3,278) - (5) (3,283)
Foreign currency
translation - (2,218) - - - (2,218)
differences for foreign
operations
Re-measurement of
net - - - 4 - 4
defined benefit liability
Re-measurement of
net - - 4 (4) - -
defined benefit liability
transfer to retained
earning
Total comprehensive - (2,128) (3,274) - (5) (5,497)
income for the year
Balance at 134,627 (14,958) (3,772) - 11 115,908
31 December 2018
Balance at 103,714 (9,955) 2,905 - 17 96,681
1 January 2017
Issue of share capital 3,049 - - - - 3,049
Transactions with
owners 106,763 (9,955) 2,905 - 17 99,730
Loss for the year - - (3,404) - (1) (3,424)
Foreign currency
translation - (2,785) - - - (2,785)
differences for foreign
operations
Total comprehensive - (2,785) (3,404) - (1) (6,209)
income for the year
Balance at 106,763 (12,740) (498) - 16 93,541
31 December 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
Mercantile Ports & Logistics Limited formerly known as SKIL
Ports & Logistics Limited (the "Company") was incorporated in
Guernsey under The Companies (Guernsey) Law, 2008 with registered
number 52321 on 24 August 2010. Its registered office and principal
place of business is Martello Court, Admiral Park, St. Peter Port,
Guernsey GY1 3HB. It was listed on the Alternative Investment
Market ('AIM') of the London Stock Exchange on 7 October 2010.
The consolidated financial statements of the Company comprises
the financial statements of the Company and its subsidiaries
(together referred to as the "Group"). The consolidated financial
statements have been prepared for the year ended 31 December 2018,
and are presented in UK Sterling (GBP).
The principal activities of the Group are to develop, own and
operate a port and logistics facilities. As of 31 December 2018,
the Group had 57 (Fifty seven) (2017: 51 (Fifty one)
employees).
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The consolidated financial statements have been prepared on a
historical cost basis except where otherwise stated. The
consolidated financial statements of the Group have been prepared
in accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union and also to comply with
The Companies (Guernsey) Law, 2008
Going Concern
The financial statements have been prepared on a going concern
basis as the Group has adequate funds to enable it to exist as a
going concern for the foreseeable future. The Group has continued
the construction work at site and the Directors believe that they
will have sufficient equity, sanctioned credit facilities from
lenders and headroom in the capital structure for the construction
of the Facility. The assumptions are based on the port becoming
operational within the conceivable future and using revenue
generated to help fund the future costs.
As part of the review the Directors have performed sensitivity
analysis flexing a number of key variables, including the exact
date and speed of on boarding new customers, one off associated
costs as the port gears up and becomes operational and the effects
of final Capex spending. The Directors have also considered
covenant compliance for the bank loan to identify any forecast
breaches of the financial ratio covenants under various
scenarios.
The review has been greatly assisted by the GBP29.8m equity
fundraise in November 2018. This gives the Group the financial
flexibility to deliver the completed port and build up operational
income to part finance working capital requirements.
The Group closely monitors and manages its liquidity risk in
assessing the Group's going concern status. The Directors have
taken account of the financial position of the Group, anticipated
future utilisation of available bank facilities, its capital
investment plans and forecast of gross operating margins as and
when the operations commence, stress testing as explained above.
Based on the above, the Board of Directors believe that the Group
has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the financial statements.
(b) Basis of consolidation
The consolidated financial statements incorporate the results of
the Company and entities controlled by the Company (its
subsidiaries) up to 31 December 2018. Subsidiaries are all entities
over which the Company has the power to control the financial and
operating policies. The Company obtains and exercises control
through holding more than half of the voting rights. The financial
statements of the subsidiaries are prepared for the same period as
the Company using consistent accounting policies. The fiscal year
of (Karanja Terminal & Logistics Private Limited KTPL ends on
March 31 and its accounts are adjusted for the same period as the
Company for consolidation.
Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Non-controlling interests
Non-controlling interests, presented as part of equity,
represent the portion of a subsidiary's profit or loss and net
assets that is not held by the Group. The Group attributes total
comprehensive income or loss of subsidiaries between the owners of
the parent and the non-controlling interests based on their
respective ownership interests.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(c) List of subsidiaries
Details of the Group's subsidiaries which are consolidated into
the Company's financial statements are as follows:
Subsidiary Immediate Parent Country of % Voting % Economic
Incorporation Rights Interest
Karanja Terminal & Mercantile Ports &
Logistics Logistics Limited Cyprus 100.00 100.00
(Cyprus) Ltd
Karanja Terminal & Karanja Terminal &
Logistics Private Logistics India 99.75 99.75
Limited (Cyprus) Ltd
*Mercantile Ports (Netherlands) Mercantile Ports &
BV Logistics Limited Netherlands 100.00 100.00
* Mercantile Ports (Netherlands) BV was incorporated on 19th
April 2017, in Netherlands jurisdiction.
(d) Foreign currency translation
The consolidated financial statements are presented in UK
Sterling (GBP), which is the Company's functional currency. The
functional currency for all of the subsidiaries within the Group is
as detailed below:
Karanja Terminal & Logistics (Cyprus) Ltd (KTLCL) - Euro
Karanja Terminal & Logistics Private Limited (KTLPL) -
Indian Rupees Mercantile Ports (Netherlands) BV - Euro
Foreign currency transactions are translated into the functional
currency of the respective Group entity, using the exchange rates
prevailing at the dates of the transactions (spot exchange rate).
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the retranslation of monetary items
denominated in foreign currency at the year-end exchange rates are
recognised in the Consolidated Statement of Comprehensive
Income.
Non-monetary items are not retranslated at year-end and are
measured at historical cost (translated using the exchange rates at
the transaction date).
In the Group's financial statements, all assets, liabilities and
transactions of Group entities with a functional currency other
than GBP are translated into GBP upon consolidation.
On consolidation, the assets and liabilities of foreign
operations are translated into GBP at the closing rate at the
reporting date. The income and expenses of foreign operations are
translated into GBP at the average exchange rates over the
reporting period. Foreign currency differences are recognised in
other comprehensive income in the translation reserve. When a
foreign operation is disposed of, in part or in full, the relevant
amount in the translation reserves shall be transferred to the
profit or loss in the Consolidated Statement of Comprehensive
Income.
(e) Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured, regardless of when the payment is being
made.
Interest income:
Interest income is reported on an accruals basis using the
effective interest method.
The Group is in the process of constructing its initial project,
the creation of a modern and efficient port and logistics Facility
in India. The Group currently does not have any material revenue
from operations of its core business activity.
(f) Borrowing costs
Borrowing costs directly attributable to the construction of a
qualifying asset are capitalised during the period of time that is
necessary to complete and prepare the asset for its intended use.
Other borrowing costs are expensed in the period in which they are
incurred and reported in finance costs.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(g) Employee benefits
i) Defined contribution plans (Provident Fund)
In accordance with Indian Law, eligible employees receive
benefits from Provident Fund, which is a defined contribution plan.
Both the employee and employer make monthly contributions to the
plan, which is administrated by the government authorities, each
equal to the specific percentage of employee's basic salary. The
Group has no further obligation under the plan beyond its monthly
contributions. Obligation for contributions to the plan is
recognised as an employee benefit expense in the Consolidated
Statement of Comprehensive Income when incurred.
ii) Defined benefit plans (Gratuity)
In accordance with applicable Indian Law, the Group provides for
gratuity, a defined benefit retirement plan (the Gratuity Plan)
covering eligible employees. The Gratuity Plan provides a lump sum
payment to vested employees, at retirement or termination of
employment, and amount based on respective last drawn salary and
the years of employment with the Group. The Group's net obligation
in respect of the Gratuity Plan is calculated by estimating the
amount of future benefits that the employees have earned in return
of their service in the current and prior periods; that benefit is
discounted to determine its present value. Any unrecognised past
service cost and the fair value of plan assets are deducted. The
discount rate is a yield at reporting date on risk free government
bonds that have maturity dates approximating the terms of the
Group's obligation. The calculation is performed annually by a
qualified actuary using the projected unit credit method. When the
calculation results in a benefit to the Group, the recognised asset
is limited to the total of any unrecognised past service cost and
the present value of the economic benefits available in the form of
any future refunds from the plan or reduction in future
contribution to the plan.
The Group recognises all remeasurements of net defined benefit
liability/asset directly in other comprehensive income and presents
them within equity.
iii) Short term benefits
Short term employee benefit obligations are measured on an
undiscounted basis and are expensed as a related service provided.
A liability is recognised for the amount expected to be paid under
short term cash bonus or profit sharing plans if the Group has a
present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation
can be estimated reliably.
(h) Leases
Finance leases
The economic ownership of a leased asset is transferred to the
lessee if the lessee bears substantially all the risks and rewards
of ownership of the leased asset. Where the Group is a lessee in
this type of arrangement, the related asset is recognised at the
inception of the lease at the lower of the fair value of the leased
asset and the present value of the minimum lease payments.
A corresponding amount is recognised as a finance lease
liability. The corresponding finance lease liability is reduced by
lease payments net of finance charges. The interest element of
lease payments represents a constant proportion of the outstanding
capital balance and is charged to profit or loss, as finance costs
over the period of the lease.
Operating leases
All leases other than finance leases explained above are treated
as operating leases. Where the Group is a lessee, payments on
operating lease agreements are recognised as an expense on a
straight-line basis over the lease term. Associated costs, such as
maintenance and insurance, are expensed as incurred.
(i) Income tax
Tax expense recognised in profit or loss comprises the sum of
deferred tax and current tax not recognised in other comprehensive
income or directly in equity. Current income tax assets and/or
liabilities comprise those obligations to, or claims from, fiscal
authorities relating to the current or prior reporting periods,
that are unpaid at the reporting date. Current tax is payable on
taxable profit, which differs from profit or loss in the financial
statements. Calculation of current tax is based on tax rates and
tax laws that have been enacted or substantively enacted by the end
of the reporting period.
Deferred tax
Income taxes are accounted for under the asset and liability
method, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that
have been included in the financial statements. Under this method,
we determine deferred tax assets and liabilities on the basis of
the differences between the financial statement and tax bases of
assets and liabilities by using enacted tax rates in effect for the
year in which the differences are expected to reverse. The effect
of a change in tax rates on deferred tax assets and liabilities is
recognized in income in the period that includes the enactment
date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Deferred tax assets are recognised to the extent that management
believe that these assets are more probable than not to be
realized. In making such a determination, we consider all available
positive and negative evidence, including future reversals of
existing taxable temporary differences, projected future taxable
income, tax-planning strategies, and results of recent operations.
If management determine that the company would be able to realize
its deferred tax assets in the future in excess of its net recorded
amount, management would make an adjustment to the deferred tax
asset valuation allowance, which would reduce the provision for
income taxes.
(j) Financial assets
The Group has adopted IFRS 9 from 1st January 2018 and Financial
assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial
instrument.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Classification and Classification and initial measurement of
financial assets
Except for those trade receivables that do not contain a
significant financing component and are measured at the transaction
price in accordance with IFRS 15, all financial assets are
initially measured at fair value adjusted for transaction costs
(where applicable).
Financial assets, other than those designated and effective as
hedging instruments, are classified into the following
categories:
-- amortised cost
-- fair value through profit or loss (FVTPL)
-- fair value through other comprehensive income (FVOCI).
In the periods presented the corporation does not have any
financial assets categorised as FVOCI.
The classification is determined by both:
-- the entity's business model for managing the financial asset
-- the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets
meet the following conditions (and are not designated as
FVTPL):
-- they are held within a business model whose objective is to
hold the financial assets and collect its contractual cash
flows
-- the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding
After initial recognition, these are measured at amortised cost
using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Group's cash and cash
equivalents, trade and most other receivables fall into this
category of financial instruments as well as listed bonds that were
previously classified as held-to-maturity under IAS 39.
Impairment of financial assets
IFRS 9's impairment requirements use more forward-looking
information to recognise expected credit losses - the 'expected
credit loss (ECL) model'. This replaces IAS 39's 'incurred loss
model'. Instruments within the scope of the new requirements
included loans and other debt-type financial assets measured at
amortised cost and FVOCI, trade receivables, contract assets
recognised and measured under IFRS 15 and loan commitments and some
financial guarantee contracts (for the issuer) that are not
measured at fair value through profit or loss.
(k) Financial liabilities
Classification and measurement of financial liabilities
As the accounting for financial liabilities remains largely the
same under IFRS 9 compared to IAS 39, the Group's financial
liabilities were not impacted by the adoption of IFRS 9. However,
for completeness, the accounting policy is disclosed below.
The Group's financial liabilities include borrowings, trade and
other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or
loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method except for derivatives and
financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in
profit or loss (other than derivative financial instruments that
are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an
instrument's fair value that are reported in profit or loss are
included within finance costs or finance income.
(l) Property, plant and equipment
Items of property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses.
The Group is in the process of constructing its initial project;
the creation of a modern and efficient port and logistics Facility
in India. All the expenditures directly attributable in respect of
the port and logistics Facility under development are carried at
historical cost under Capital Work In Progress as the Board
believes that these expenses will generate probable future economic
benefits. These costs include borrowing cost, professional fees,
construction costs and other direct expenditure. After
capitalisation, management monitors whether the recognition
requirements continue to be met and whether there are any
indicators that capitalised costs may be impaired.
Cost includes expenditures that are directly attributable to the
acquisition of the asset and income directly related to testing the
Facility is offset against the corresponding expenditure. The cost
of constructed asset includes the cost of materials,
sub-contractors and any other costs directly attributable to
bringing the asset to a working condition for its intended use.
Purchased software that is integral to the functionality of the
related equipment is capitalised as part of that equipment.
Parts of the property, plant and equipment are accounted for as
separate items (major components) on the basis of nature of the
assets.
Depreciation is recognised in the Consolidated Statement of
Comprehensive Income over the estimated useful lives of each part
of an item of property, plant and equipment. For items of property,
plant and equipment under construction, depreciation begins when
the asset is available for use, i.e. when it is in the condition
necessary for it to be capable of operating in the manner intended
by management. Thus, as long as an item of property, plant and
equipment is under construction, it is not depreciated. Leasehold
improvements are amortised over the shorter of the lease term or
their useful lives.
Depreciation is calculated on
a straight-line basis.
The estimated useful lives for
the current year are as
Assets Estimated Life of assets
Office equipment 3-5 Years
------------------------------ ---------------------------------
Computers 2-3 Years
------------------------------ ---------------------------------
Furniture 5-10 Years
------------------------------ ---------------------------------
Vehicles 5-8 Years
------------------------------ ---------------------------------
Depreciation methods, useful lives and residual value are
reassessed at each reporting date.
Gains or losses arising on the disposal of property, plant and
equipment are determined as the difference between the disposal
proceeds and the carrying amount of the assets and are recognised
in profit or loss within other income or other expenses.
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT
Internal and external sources of information are reviewed at the
end of the reporting period to identify indications that the
property, plant and equipment may be impaired.
Property, plant and equipment is stated at cost, net of
accumulated depreciation and/or impairment losses, if any. There is
currently no impairment of property, plant and equipment.
(m) Trade receivables and payables
Trade receivables are financial assets categorised as loans and
receivables, measured initially at fair value and subsequently at
amortised cost using an effective interest rate method, less an
allowance for impairment. An allowance for impairment is made when
there is objective evidence that the Group will not be able to
collect the debts. Bad debts are written off when identified.
Trade payables are financial liabilities at amortised cost,
measured initially at fair value and subsequently at amortised cost
using an effective interest rate method.
(n) Advances
Advances paid to the EPC contractor and suppliers for
construction of the Facility are categorised as advances and will
be offset against future work performed by the contractor.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(o) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits that are readily convertible into known amounts of cash
and which are subject to an insignificant risk of changes in
value.
(p) Stated capital and reserves
Shares have 'no par value'. Stated capital includes any premiums
received on issue of share capital. Any transaction costs
associated with the issuing of shares are deducted from stated
capital, net of any related income tax benefits.
Foreign currency translation differences are included in the
translation reserve. Retained earnings include all current and
prior year retained profits.
(q) New standard adopted during the year
During the calendar year the Company has adopted IFRS 9
"Financial Instrument "and IFRS 15 "Revenue recognition". There is
no material impact on the group financial as a result of the above
standards.
(r) Standards, amendments and interpretations to existing
standards that are not yet effective and have not been adopted
early by the group
A number of new standards, amendments to standards and
interpretations are not effective for annual periods beginning 1
January 2018, and have not been applied in preparing these
consolidated financial statements. Those which may be relevant to
the Group are set out below. The Group does not plan to adopt this
standard early.
IFRS 16 Leases (effective from 1 January 2019)
IFRS 16 replaces existing leases guidance including IAS 17
Leases, IFRIC 4 Determining whether an arrangement contains a
lease, SIC-15 Operating lease incentives and SIC-27 Evaluating the
substance of transaction involving the legal form of lease.
The new standard requires the lessee to recognise the operating
lease commitment on the balance sheet. The Group, as a lessee, has
substantial operating leases and commitments as disclosed in note
22. The standard would require future lease commitments to be
recognised as a liability, with a corresponding right of use asset.
This will impact the EBITDA and debt to equity ratios of the Group.
In addition, depending on the stage of lease, there would be a
different pattern of expense recognition on leases. Currently,
lease expenses are recognised in cost of sales, however, in future
the lease expense would be an amortisation charge and finance
expense.
The Group is in the process of collating its leases and
computing the impact.
3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The following are significant management judgments in applying
the accounting policies of the Group that have the most significant
effect on the financial statements.
Recognition of income tax liabilities
In light of a recent court judgement, there is a possibility
that the Group will not be expected to pay income tax in India on
interest income due to the availability of pre-operating losses
nevertheless, Full liability has been provided for income tax based
on the assumption that the interest income will be taxed in full.
However, no accrual has been made for tax related interest or
penalties on the non-payment of Indian income tax until we have
certainty on the tax position.
Impairment Review
At the end of each reporting period, the Board is required to
assess whether there is any indication that an asset may be
impaired (i.e. its carrying amount may be higher than its
recoverable amount). As at 31 December the carrying value of the
port which is still under construction is GBP130.99 Million. The
value in use has been calculated using the present value of the
future cash flows expected to be derived from the port. As the port
is still under construction this has included the costs to
completion plus the anticipated revenues and expenses once the port
becomes operational. The key assumptions behind the discounted cash
flow as at 31 December 2018 are:
-- Construction outflow to get the asset in a state to start generating income.
-- Cash flow projections have been run until 2059. This is the
length of the lease of the land.
-- The revenue capacity is a product of the area available to
store and stack containers and jetty capacity.
-- Inflation 4%.
-- Utilisation rate at 12% in 2019, 30% in 2020, 39% in 2021 & 45% by 2022.
-- Revenue based on current comparable market rates.
-- The costs are set based on margins of 40-45%, based on margin
of similar ports & CFS facilities.
-- Discount Rate 13.25%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
While the Company has obtained the approval to build out a
further 200 Acres of Land and develop a further 1,000 meters of
waterfront, the costs and future income flow associated with this
second phase of construction project have not been considered in
the current review. The impairment review is based on the current
project, being the completion and operation of the multi-purpose
site being developed over 200 acres of land with a sea frontage of
1,000 meters.
4. SEGMENTAL REPORTING
The Group has only one operating and geographic segment, being
the project on hand in India and hence no separate segmental report
has been presented.
5. ADMINISTRATIVE EXPENSES
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Employee costs 265 302
Directors' fees 452 488
Operating lease rentals 327 302
Foreign exchange gains/loss - 4
Depreciation 71 113
Other administration costs 2,181 2,207
3,296 3,416
6. FINANCE INCOME
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Interest on bank deposits 13 11
13 11
7. INCOME TAX
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Loss Before Tax (3,263) (3,405)
Applicable tax rate in India* 30.90% 30.90%
Expected tax credit (1,008) (1,052)
Adjustment for non-deductible losses of MPL &
Cyprus entity against income 412 311
from India
Adjustment for non-deductible expenses 596 741
Actual tax expense - -
*Considering that the Group's operations are presently based in
India, the effective tax rate of the Group of 30.90% (prior year
30.90%) has been computed based on the current tax rates prevailing
in India. In India, income earned from all sources (including
interest income) are taxable at the prevailing tax rate unless
exempted. However, administrative expenses are treated as
non-deductible expenses until commencement of operations.
The Company is incorporated in Guernsey under The Companies
(Guernsey) Law 2008, as amended. The Guernsey tax rate for
companies is 0%. The rate of withholding tax on dividend payments
to non-residents by companies within the 0% corporate income tax
regime is also 0%. Accordingly, the Company will have no liability
to Guernsey income tax on its income and there will be no
requirement to deduct withholding tax from payments of dividends to
non-resident shareholders.
In Cyprus, the tax rate for companies is 12.5% with effect from
1 January 2014. There is no tax expense in Cyprus.
In Netherland, the tax rate for companies is 20% with effect
from 1 January 2018. There is no tax expense in Netherland.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
8. AUDITORS' REMUNERATION
The following are the details of fees paid to the auditors,
Grant Thornton UK LLP and Indian auditors, in various capacities
for the year:
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Audit Fees
Interim 9 15
Annual 78 78
Site Visit Fees 9 9
95 102
A fee of GBP56,650 was debited to Statement of Comprehensive
Income for financial advisory services performed by Grant Thornton
UK LLP during the year (2017: GBPNil). The statutory audits of
Karanja Terminal & Logistics Private Limited and Karanja
Terminal & Logistics (Cyprus) Limited are conducted by other
auditors, fees paid for these audits is GBP6,875 (2017: GBP3,000).
Audit fees related to prior year overruns during the year amount to
GBP58,436 (2017: GBP29,000).
9. EARNINGS PER SHARE
Both basic and diluted earnings per share for the year ended 31
December 2018 have been calculated using the loss attributable to
equity holders of the Group of GBP3.3 million (prior year loss of
GBP3.4 million).
Year ended Year ended
31 Dec 18 31 Dec 17
Loss attributable to equity holders of the parent GBP(3,278,000) GBP(3,404,000)
Weighted average number of shares used in basic
and diluted earnings per share 516,141,290 412,620,439
EARNINGS PER SHARE
Basic and Diluted earnings per share (0.006p) (0.008p)
10. PROPERTY, PLANT AND EQUIPMENT
Details of the Group's property, plant and equipment and their
carrying amounts are as follows:
Capital Work
Office In
Computers Equipment Furniture Vehicles Progress Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gross carrying amount
Balance 1 Jan 2018 40 58 35 510 123,647 124,290
Net Exchange Difference (1) (2) (1) (15) (3,616) (3,635)
Additions 1 2 - 11 10,958 10,972
Disposals - - - (32) - (32)
Balance 31 Dec 2018 40 58 34 474 130,989 131,595
Depreciation
Balance 1 Jan 2018 (30) (24) (16) (235) - (305)
Net Exchange Difference 1 1 - 7 - 9
Charge for the year (6) (9) (3) (53) - (71)
Disposals - - - 29 - 29
Balance 31 Dec 2018 (35) (32) (19) (252) - (338)
Carrying amount 31
Dec 2018 5 26 15 222 130,989 131,257
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Capital Work
Office In
Computers Equipment Furniture Vehicles Progress Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gross carrying amount
Balance 1 Jan 2017 33 36 25 279 94,936 95,309
Net Exchange Difference (1) (1) (1) (6) (2,762) (2,771)
Additions 8 23 11 237 31,473 31,752
Balance 31 Dec 2017 40 58 35 510 123,647 124,290
Depreciation
Balance 1 Jan 2017 (23) (18) (12) (145) - (198)
Net Exchange Difference 1 1 1 3 - 6
Charge for the year (8) (7) (5) (93) - (113)
Balance 31 Dec 2017 (30) (24) (16) (235) - (305)
Carrying amount 31
Dec 2017 10 34 19 275 123,647 123,985
The net exchange difference on the Group's property, plant and
equipment's carrying amount is a loss of GBP3.64 million (prior
year gain of GBP2.77 million). The net exchange difference on the
Group's property, plant and equipment carrying amount is on the
account of the foreign exchange movement.
a) Net Book Value of assets held under Finance Lease
KTLP's vehicles are held under finance lease arrangements. The
Net Book Value of assets held under finance lease arrangements are
as follows:
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Vehicles 222 275
222 275
The Port Facility being developed in India has been hypothecated
by the Indian subsidiary as security for the bank borrowings
(borrowing limit sanctioned INR 480 crore (GBP54.21 million) (2017
INR 480 crore (GBP55.84 million)) for part financing the build out
of the Facility.
The borrowing costs in respect of the bank borrowing for
financing the build out of Facility are capitalised under Capital
Work in Progress. During the year the Group has capitalised
borrowing cost of GBP4.58 million (prior year GBP4.58 million).
The Indian subsidiary has estimated the total project cost of
INR1,404 crore (GBP158.56 million) towards construction of the port
Facility. Out of the aforesaid project cost, the contract signed
with the major contractor is INR1,048 crores (GBP118.35 million).
As of 31 December 2018, the contractual amount (net of advances) of
INR 104.13 crores (GBP11.76 million) is still payable. There were
no other material contractual commitments.
Karanja Terminal & Logistics Private Limited (KTPL), the
Indian subsidiary has received sanction of a Rupee term loan of INR
480 crore (GBP54.21 million) for part financing the port Facility.
The Rupee term loan has been sanctioned by four Indian public
sector banks and the loan agreement was executed on 28 February
2014. As at 29 September 2017 the agreement was amended extending
the tenure of the loan for 13 years and 6 months with repayment
beginning at the end of June 2020.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
11. TRADE AND OTHER RECEIVABLES
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Deposits 3,699 2,227
Advances 14,082 12,999
Debtors
- Related Party 72 72
- Prepayment 26 17
- Others 8,290 -
26,169 15,315
Advances include payment to EPC contractor of GBP11.70 million
(prior year GBP12.5 million) towards mobilisation advances and
quarry development. These advances will be recovered as a deduction
from the invoices being raised by the contractor over the contract
period.
12. CASH AND CASH EQUIVALENTS
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Cash at bank and in hand 13,101 5,081
Deposits 12 342
13,113 5,423
Cash at bank earns interest at floating rates based on bank
deposit rates. The fair value of cash and short-term deposits is
GBP13.11million (prior year GBP5.42 million).
13. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
Risk Management
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk and interest rate
risk), credit risk and liquidity risk. Risk management is carried
out by the Board of Directors.
(a) Market Risk
(i) Translation risk
Foreign currency risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market foreign exchange rates. The Company's functional
and presentation currency is the UK Sterling (GBP). The functional
currency of its subsidiary Karanja Terminal & Logistics Private
Limited (KTLPL) is INR and functional currency of Karanja Terminal
& Logistics (Cyprus) Ltd and Mercantile Ports (Netherlands) BV
is Euro.
The exchange difference arising due to variances on translating
a foreign operation into the presentation currency results in a
translation risk. These exchange differences are recognised in
other comprehensive income. As a result, the profit, assets and
liabilities of this entity must be converted to GBP in order to
bring the results into the consolidated financial statements. The
exchange differences resulting from converting the profit and loss
account at average rate and the assets and liabilities at closing
rate are transferred to the translation reserve.
While consolidating the Indian subsidiary accounts the group has
taken closing rate of GBP 1: INR 88.5488 for balance sheet
items
and for profit and loss item GBP 1: INR 90.9678
This balance is cumulatively a GBP14.96m loss to equity (2017:
GBP12.74m loss). This is mainly due to a movement from
approximately 1:70 to 1:100 between 2010 to 2013 and the
translation reserve reaching a loss of GBP21.6m at 31 December
2013. This resulted in a significant loss to the GBP value of the
Indian entity net assets. The closing rate at 31 December 2018 was
1:88, hence the loss in the reserve is not as significant as in
2013-15. With the majority of funding now in India this risk is
further mitigated. During 2018 the average and year end spot rate
used for INR to GBP were 90.97 and 88.55 respectively (2017: 90.91
and 83.46).
Translation risk sensitivity
The Group's exposure to the risk of changes in foreign exchange
rates relates primarily to the cash and cash equivalents available
with the Indian entity of INR 8.43 million (GBP0.095 million) as on
reporting date (prior year INR 94.87 million (GBP1.10 million)).
In
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
computing the below sensitivity analysis, the management has
assumed the following % movement between foreign currency (INR)
and the underlying functional currency GBP:
Functional Currency (GBP) 31 Dec 2018 31 Dec 2017
INR +- 10% +- 10%
The following table details the Group's sensitivity to
appreciation or depreciation in functional currency vis-Ã -vis the
currency in which the foreign currency cash and cash equivalents
are denominated:
GBP (appreciation
Functional Currency (GBP) GBP (depreciation by 10%) by 10%)
GBP000 GBP000
31 December 2018 10.58 (8.66)
31 December 2017 122.63 (100.33)
If the functional currency GBP had weakened with respect to
foreign currency (INR) by the percentages mentioned above, for year
ended 31 December 2018 then the effect will be change in profit and
equity for the year by GBP0.0106 million (prior period GBP0.124
million). If the functional currency had strengthened with respect
to the various currencies, there would be an equal and opposite
impact on profit and equity for each year. This exchange difference
arising due to foreign currency exchange rate variances on
translating a foreign operation into the presentation currency
results in a translation risk.
(ii) Interest rate risk
Interest rate risk is the risk that the future cash flows of a
financial instrument will fluctuate because of changes in market
interest rates. The Group's exposure to the risk of changes in
market interest rates relates primarily to the Group's long-term
debt obligations with floating interest rates.
KTPL has successfully tied-up a rupee term loan of INR 480 crore
(GBP54.21 million) for part financing the build out of its
Facility. The Group has commenced the drawdown of its sanctioned
bank borrowing as of the reporting date. The rate of interest on
the bank borrowing is a floating rate linked to the bank base rate
with an additional spread of 375 basis points (2017: 375 bp). The
present composite rate of interest is 13.20% (2017: 13.20%).
The base rate set by the bank may be changed periodically as per
the discretion of the bank in line with Reserve Bank of India (RBI)
guidelines. Based on the current economic outlook and RBI Guidance,
management expects the Indian economy to enter a lower interest
rate regime as moderating inflation will allow the RBI and thus the
banks to lower its base rate in the coming quarters.
Interest rate sensitivity
At 31 December 2018, the Group is exposed to changes in market
interest rates through bank borrowings at variable interest
rates.
The exposure to interest rates for the Group's money market
funds is considered immaterial.
The following table illustrates the sensitivity of profit to a
reasonably possible change in interest rates of +/- 1% (2017: +/-
1%). These changes are considered to be reasonably possible based
on observation of current market conditions. The calculations are
based on a change in the average market interest rate for each
period, and the financial instruments held at each reporting date
that are sensitive to changes in interest rates. All other
variables are held constant.
Equity, net of
Profit for the Year tax
GBP000 GBP000
Year +1% -1% +1% -1%
31 December 2028 - - - -
31 December 2027 (2) 2 1 1
31 December 2026 (48) 48 (31) 31
31 December 2025 (116) 116 (75) 75
31 December 2024 (185) 185 (120) 120
31 December 2023 (256) 256 (166) 166
31 December 2022 (323) 323 (210) 210
31 December 2021 (377) 377 (245) 245
31 December 2020 (418) 418 (272) 272
31 December 2019 (215) 215 (140) 140
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(b) Credit risk
Credit risk is the risk that a counterparty fails to discharge
an obligation to the Group. The Group's maximum exposure (GBP22.47
million) to credit risk is limited to the carrying amount of
financial assets recognised at the reporting date. The Group's
policy is to deal only with creditworthy counterparties. The Group
has no significant concentrations of credit risk.
The Group does not concentrate any of its deposits in one bank
or a non-banking finance company (NBFC). This is seen as being
prudent. Credit risk is managed by the management having conducted
its own due diligence. The balances held with NBFC's and banks are
on a short-term basis. Management reviews quarterly NAV information
sent by NBFC's and monitors bank counter-party risk on an on-going
basis.
(c) Liquidity risk
Liquidity risk is the risk that the Group might be unable to
meet its financial obligations. Prudent liquidity risk management
implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of committed
credit facilities KTLPL has tied-up rupee term loan of INR 480
crore (GBP54.21 million) and c.GBP20M as at December 2018 of cash
reserves which can be used for financing the build out of its
Facility.
The Group's objective is to maintain cash and demand deposits to
meet its liquidity requirements for 30-day periods at a minimum.
This objective was met for the reporting periods. Funding for build
out of the port Facility is secured by sufficient equity,
sanctioned credit facilities from lenders and the ability to raise
additional funds due to headroom in the capital structure.
As at 29 September 2017 the agreement was amended extending the
tenure of the loan for 13 years and 6 months with repayment
beginning at the end of June 2020 to ensure additional
headroom.
The Group manages its liquidity needs by monitoring scheduled
contractual payments for build out of the port Facility as well as
forecast cash inflows and outflows due in day-to-day business.
Liquidity needs are monitored and reviewed by the management on a
regular basis. Net cash requirements are compared to available
borrowing facilities in order to determine headroom or any
shortfalls. This analysis shows that available borrowing facilities
are expected to be sufficient over the lookout period.
As at 31 December 2018, the Group's non-derivative financial
liabilities have contractual maturities (and interest payments) as
summarized below:
Principal payments Interest payments
Payment falling due INR in Crore GBP000 INR in Crore GBP000
Within 1 year - - 50.16 5,514
1 to 5 years 185.25 20,921 163.68 17,993
After 5 years 194.75 21,994 44.23 4,863
Total 380.00 42,914 258.07 28,370
The present composite rate of interest of 13.20% and closing
exchange rate has been considered for the above analysis. Principal
and interest payments are after considering future drawdowns of
term loans.
In addition, the Group's liquidity management policy involves
considering the level of liquid assets necessary to meet the
funding requirement; monitoring balance sheet liquidity ratio
against internal requirements and maintaining debt financing plans.
As a part of monitoring balance sheet liquidity ratio, management
monitors the debt to equity ratio and has specified optimal level
for debt to equity ratio of 1:1.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Financial Instruments
Fair Values
Set out below is a comparison by category of carrying amounts
and fair values of the entire Group's financial instruments that
are carried in the financial statements.
(Carried at amortised
cost)
Year ended Year ended
31 Dec 18 31 Dec 17
Note GBP000 GBP000
Financial Assets
Cash and Cash Equivalents 12 13,113 5,423
Loan and receivables 11 10,743 15,315
23,856 20,738
Financial Liability
Borrowings 16 33,890 34,957
Trade and other payables 18 13,340 8,773
Trade and other payables 15 61 8,36
47,291 43,766
The fair value of the Group's financial assets and financial
liabilities significantly approximate their carrying amount as at
the reporting date.
The carrying amount of financial assets and financial
liabilities are measured at amortised cost in the financial
statements are a reasonable approximation of their fair values
since the group does not anticipate that the carrying amounts would
be significantly different from the values that would eventually be
received or settled.
14. EQUITY
14.1 Issued Capital
The share capital of MPL consists only of fully paid ordinary
shares of no par value. The total number of issued and fully paid
up shares of the Company as on each reporting date is summarised as
follows:
Year ended Year ended
31 December 18 31 December 17
Particulars No of shares GBP000 No of shares GBP000
Shares issued and
fully paid:
Beginning of the year 414,017,699 106,763 384,017,699 103,714
Addition in the year 1,491,004,424 27,864 30,000,000 3,049
(net of share issue
cost)
Closing number of
shares 1,905,022,123 134,627 414,017,699 106,763
The stated capital amounts to GBP134.63 million (prior year
GBP106.76 million) after reduction of share issue costs. Holders of
the ordinary shares are entitled to receive dividends and other
distributions and to attend and vote at any general meeting. During
the year the Company has allotted 1,491 million equity shares to
various institutional and private investors, by way of a placing,
open offer and subscription.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
14.2 Other Components of Equity
Retained Earnings
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Opening Balance (518) 2,905
Addition during the year (3,258) (3,423)
Re-measurement of net defined benefit
liability 4 -
Closing balance (3,772) (518)
Retained earnings of GBP(3.77) million (prior year GBP0.50
million) include all current year retained profits.
Translation Reserve
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Opening Balance (12,740) (9,955)
Addition during the year (2,218) (2,785)
Closing balance (14,958) (12,740)
The translation reserve of GBP14.96 million (prior year GBP12.74
million) is on account of exchange differences relating to the
translation of the net assets of the Group's foreign operations
which relate to subsidiaries, from their functional currency into
the Group's presentational currency being Sterling.
15. EMPLOYEE BENEFIT OBLIGATIONS
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Non-Current
Pensions - defined benefit plans 3 -
3 -
Current
Wages, salaries 36 36
Pensions - defined benefit plans 22 -
58 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
16. BORROWINGS
Borrowings consist of the following:
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Current
Vehicle loan 59 23
59 23
Non-Current
Bank loan 33,705 34,720
Vehicle loan 126 214
33,831 34,934
Borrowing
Karanja Terminal & Logistics Private Limited (KTPL), the
Indian subsidiary has tied-up a rupee term loan of INR 480 crore
(GBP54.21 million). The Rupee term loan has been sanctioned by four
Indian public sector banks and the loan agreement was executed on
28 February 2014. On 29 September 2017 the terms of sanction was
amended, extending the tenure of the loan for 13 years and 6 months
with repayment commencing from the end of June 2020.
The repayment schedule is as follows:
Repayment amount
Payment falling due INR in Crore GBP000
Within 1 year - -
1 to 5 years 185.25 20,920
After 5 years 194.75 21,994
Total 380.00 42,914
The rate of interest will be a floating rate linked to the
Canara bank base rate (9.40%) (2017: 9:40%) with an additional
spread of 375 basis points. The present composite rate of interest
is 13.20%. The borrowings are secured by the hypothecation of the
port Facility and pledge of its shares. The carrying amount of the
bank borrowing is considered to be a reasonable approximation of
the fair value.
KTLPL has utilised the Rupee term loan facility of INR 298.45
crore (GBP33.71 million) (prior year INR 298.45 crore (GBP34.72
million)) as of the reporting date.
17. CURRENT TAX LIABILITIES
Current tax liabilities consist of the following:
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Duties & taxes 192 52
Provision for Income Tax 7,149 7,365
Current tax liabilities 7,341 7,417
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
The carrying amounts and the movements in the Provision for
Income Tax account are as follows:
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Carrying amount 1 January 7,365 7,585
Exchange difference (216) (220)
Carrying amount 31 December 7,149 7,365
The Group recognises liabilities for anticipated tax issues
based on estimates of whether additional taxes will be due. Where
the final outcome of assessment by the Income Tax department on
these matters is different from the amounts that were initially
recorded, such differences will impact the income tax provisions in
the period in which such determination is made. The Group
discharges the tax liability on the basis of income tax
assessment.
18. TRADE AND OTHER PAYABLES
Trade and other payables consist of the following:
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Current
Sundry creditors* 12,692 8,381
Interest payable 647 392
13,339 8,773
*Sundry creditors are purely in nature of material and services
availed for port construction.
19. RELATED PARTY TRANSACTIONS
The consolidated financial statements include the financial
statements of the Company and the subsidiaries listed in the
following table:
HELD BY The Company (MPL):
Karanja Terminal & Logistics
(Cyprus) Ltd Cyprus Holding Company 100% Ordinary
Mercantile Port (Netherlands) Subsidiary Company
BV Netherland of MPL 100% Ordinary
HELD BY Karanja Terminal
& Logistics
(Cyprus) Ltd:
Karanja Terminal & Logistics Operating Company
Pvt. Ltd India - 99.75% Ordinary
Terminal Project
The Group has the following related parties with whom it has
entered into transactions with during the year.
a) Shareholders having significant influence
The following shareholders of the Group have had a significant
influence during the year under review:
-- SKIL Global Ports & Logistics Limited, which is 100%
owned by Mr. Nikhil Gandhi, holds 5.16% of issued share capital as
at
31 December 2018 (as at 31 December 2017 - 10.32%) of Mercantile
Ports & Logistics Limited. Nikhil Gandhi through SKIL Global
Ports & Logistics Limited had acquired additional shares of
GBP1.11 million, in December 2018.
-- Pavan Bakhshi holds 0.61% of issued share capital as on 31
December 2018 (as on 31 December 2017 - 0.39%) of Mercantile Ports
& Logistics Limited at the year end. Pavan Bakhshi had acquired
additional shares of GBP0.20 million, in December 2018. Pavan
Bakhshi resigned as a director during the year.
-- Peter Jones holds 0.05% of issued share capital as on 31
December 2018 (as on 31 December 2017 - 0.05%) of Mercantile Ports
& Logistics Limited at the year end. Peter Jones resigned as a
director during the prior year.
-- James Sutcliffe holds Nil % of issued share capital as on 31
December 2018 (as on 31 December 2017 - 0.002%) of Mercantile Ports
& Logistics Limited at the year end. James Sutcliffe resigned
as a director during the prior year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
-- Lord Howard Flight holds 0.20% of issued share capital as on
31 December 2018 (as on 31 December 2017 - 0.30%) of Mercantile
Ports & Logistics Limited at the year end. Lord Howard Flight
had acquired additional shares of GBP0.06 million, in December
2018.
-- Jay Mehta holds 0.28% of issued share capital as on 31
December 2018 (as on 31 December 2017 - 0.074%) of Mercantile Ports
& Logistics Limited at the year end. Jay Mehta had acquired
additional shares of GBP0.10 million, in December 2018.
-- John Fitzgerald holds 0.03% of issued share capital as on 31
December 2018 (as on 31 December 2017 - 0.063%) of Mercantile Ports
& Logistics Limited at the year end. John Fitzgerald had
acquired additional shares of GBP0.04 million, in December
2018.
-- Andrew Henderson holds 0.03% of issued share capital as on 31
December 2018 (as on 31 December 2017 - 0.015%) of Mercantile Ports
& Logistics Limited at the year end. Andrew Henderson had
acquired additional shares of GBP0.01 million, in December
2018.
-- Jeremy Warner Allen holds 0.40% of issued share capital as on
31 December 2018 (as on 31 December 2017 - Nil %) of Mercantile
Ports & Logistics Limited at the year end. Jeremy Warner Allen
had acquired additional shares of GBP0.15 million, in December
2018.
-- Karanpal Singh via Hunch Ventures and Investment Limited
holds 21.75% of issued share capital as on 31 December 2018 (as on
31 December 2017 - Nil %) of Mercantile Ports & Logistics
Limited at the year end. Karanpal Singh via Hunch Ventures and
Investment Limited had acquired additional shares of GBP8.29
million, in December 2018. Cash amount outstanding as at December
2018 GBP 8.31 million.
b) Key Managerial Personnel of the parent
Non-executive Directors
- Lord Howard Flight
- Mr. John Fitzgerald
- Jeremy Warner Allen (appointed on 7 December 2018)
- Karanpal Singh (appointed on 7 December 2018)
Executive Directors
- Mr. Nikhil Gandhi (Chairman)
- Mr. Pavan Bakhshi (Managing Director - resigned on 13 December
2018)
- Mr. Jay Mehta (Director and from 13 December 2018 appointed as
Managing Director)
- Mr. Andrew Henderson
c) Key Managerial Personnel of the subsidiaries
Directors of KTLPL (India)
- Mr. Pavan Bakhshi (Resigned on 16 December 2018)
- Mr. Jay Mehta
- Mr. Jigar Shah
- Mr. Nikhil Gandhi (Chairman)
- Mr. M L Meena (Appointed on 20 December 2018)
Directors of Karanja Terminal & Logistics (Cyprus) Ltd -
KTLCL (Cyprus)
- Mr. Pavan Bakhshi (resigned on 16 December 2018)
- Ms. Andria Andreou
- Ms. Olga Georgiades
- Mr. Andrew Henderson (alternate director to Pavan Bakhshi)
d) Other related party disclosure
Entities that are controlled, jointly controlled or
significantly influenced by, or for which significant voting power
in such entity resides with, directly or indirectly, any individual
or close family member of such individual referred above.
- SKIL Infrastructure Limited
- JPT Securities Limited
- KLG Capital Services Limited
- Grevek Investment & Finance Private Limited
- Carey Commercial (Cyprus) Limited
- Henley Trust (Cyprus) Limited
- Athos Hq Group Bus. Ser. Cy Ltd
- Henderson Accounting Consultants Limited
- John Fitzgerald Limited
- KJS Concrete Private Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
e) Transaction with related parties
The following transactions took place between the Group and
related parties during the year ended 31 December 2018:
Year ended Year ended
31 Dec 18 31 Dec 17
Nature of transaction GBP000 GBP000
Athos Hq Group Bus. Ser.
Cy Ltd Administrative fees 22 18
22 18
The following table provides the total amount outstanding with
related parties as at year ended 31 December 2018:
Transactions with shareholder having significant influence
Year ended Year ended
31 Dec 18 31 Dec 17
Nature of transaction GBP000 GBP000
SKIL Global Ports & Logistics
Limited
Debtors Advances 72 72
Hunch Ventures and Investment
Limited
Debtors Share subscription 8,287 -
KJS Concrete Pvt Ltd
Debtor Repayment of Advance 770
9,129 72
Transactions with Key Managerial Personnel of the
subsidiaries
See Key Managerial Personnel Compensation details as provided
below.
Advisory services fee
None.
Compensation to Key Managerial Personnel of the parent
Fees paid to persons or entities considered to be Key Managerial
Personnel of the Group include:
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Non Executive Directors' fees
- Peter Jones - 45
- James Sutcliffe - 40
- Jeremy Warner Allen 3 -
- Lord Flight 40 40
- John Fitzgerald 45 17
88 142
Executive Directors' fees
- Pavan Bakhshi 175 175
- Jay Mehta 99 107
- Andrew Henderson 90 64
364 346
Total compensation paid to Key Managerial
Personnel 452 488
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Compensation to Key Managerial Personnel of the subsidiaries
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Directors' fees
KTLPL - India 99 107
KTLCL - Cyprus 3 3
102 110
Sundry Creditors
As at 31 December 2018, the Group had GBP2.65 million (prior
year GBP0.11 million) as sundry creditors with related parties.
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Grevek Investment & Finance Pvt Ltd 2,645 114
2,645 114
Ultimate controlling party
The Directors do not consider there to be an ultimate
controlling party.
20. CASH FLOW ADJUSTMENTS AND CHANGES IN WORKING CAPITAL
The following non-cash flow adjustments and adjustments for
changes in working capital have been made to profit before tax to
arrive at operating cash flow:
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Non-cash flow adjustments
Depreciation 71 113
Finance Income (13) (11)
Unrealised exchange loss 1 -
Decrease in Non-Controlling Interest - (1)
Decrease in Current Tax Liabilities - (1,660)
59 (1,559)
Increase/(Decrease in trade payables 3,714 (3,094)
Increase in other payables - 100
Increase/Decrease in trade & other receivables (3,727) 3,764
(13) 770
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
21. CAPITAL MANAGEMENT POLICIES AND PROCEDURE
The Group's capital management objectives are:
-- To ensure the Group's ability to continue as a going concern
-- To provide an adequate return to shareholders
Capital
The Company's capital includes share premium (reduced by share
issue costs), retained earnings and translation reserve which are
reflected on the face of the Statement on Financial Position and in
Note 15.
22. FINANCE LEASE
KTLPLs vehicles are held under finance lease arrangements. As of
31 December 2018, the net carrying amount of the vehicles is
GBP0.22 million (2016: GBP0.28 million).
Finance lease liabilities are secured by the related assets held
under finance leases. Future minimum finance lease payments at 31
December were as follows:
Minimum lease payments due
within 1 year 1 to 5 years after 5 years Total
GBP000 GBP000 GBP000 GBP000
31 December 2018
Lease payments 76 147 - 223
Finance charges (17) (21) - (38)
Net present values 59 126 - 185
31 December 2017
Lease payments 221 76 - 297
Finance charges (38) (23) - (61)
Net present values 183 53 - 236
23. OPERATING LEASE
The Group has entered into a 50 years lease agreement with the
Maharashtra Maritime Board for the development of a port and
logistics Facility in India.
Payments falling due Future minimum lease payments Future minimum lease payments
outstanding on 31 Dec
outstanding on 31 Dec 18 17
GBP000 GBP000
Within 1 year 352 273
1 to 5 years 1,154 989
After 5 years 6,869 3,299
Total 8,375 4,561
The future minimum lease payments are as follows:
Payments falling due Future minimum lease payments Future minimum lease payments
outstanding on 31 Dec
outstanding on 31 Dec 18 17
INR in Million INR in Million
Within 1 year 31 23
1 to 5 years 102 85
After 5 years 608 284
Total 741 392
The annual lease rent is payable by KTLPL in INR. The exchange
rate on the reporting date has been considered for deriving the GBP
amount for future minimum lease payment.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
24. EMPLOYEE BENEFIT OBLIGATIONS
a) Defined Contribution Plan
The following amount recognized as an expense in statement of
profit and loss on account of provident fund and other funds. There
are no other obligations other than the contribution payable to the
respective authorities.
Year ended Year ended
31 Dec 18 31 Dec 17
GBP000 GBP000
Contribution to Provident Fund 6 2
Contribution to ESIC 1 -
7 2
b) Defined Benefit Plan:
The Company has an unfunded defined benefit gratuity plan. The
gratuity plan is governed by the Payment of Gratuity Act, 1972.
Under the Act, employee who has completed five years of service is
entitled to specific benefit. The level of benefits provided
depends on the member's tenure of service and salary at retirement
age. Every employee who has completed five years or more of service
gets a gratuity on departure at 15 days salary (last drawn salary)
for each completed year of service as per the provision of the
Payment of Gratuity Act, 1972 with total ceiling on gratuity of
INR1 Million.
The following tables summaries the components of net benefit
expense recognised in the Consolidated Statement of Comprehensive
Income and the funded status and amounts recognised in the
Consolidated Statement of Financial Position for the gratuity
plan:
As at As at
31 Dec 18 31 Dec 17
Particulars GBP000 GBP000
Statement of Comprehensive Income
Net employee benefit expense recognised in the
employee cost
Current service cost 6 19
Past service cost 3 -
Interest cost on defined benefit obligation 1 -
Total expense charged to loss for the period 10 19
Amount recorded in Other Comprehensive Income
(OCI)
Opening amount recognised in OCI
Remeasurement during the period due to:
Actuarial (gain)/loss arising on account of
experience changes (4) -
Amount recognised in OCI (4) -
Closing amount recognised in OCI (4) -
Reconciliation of net liability/asset
Opening defined benefit liability 19 -
Expense charged to profit or loss account 10 19
Amount recognised in Other Comprehensive Income (4) -
Benefit Paid - -
Closing net defined benefit liability 25 19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Movement in benefit obligation and Consolidated Statement of
Financial Position A reconciliation of the benefit obligation
during the inter-valuation period:
As at As at
31 Dec 18 31 Dec 17
Particulars GBP000 GBP000
Opening defined benefit obligation 19 -
Current service cost 6 19
Past service cost 3 -
Interest on defined benefit obligation 1 -
Re-measurement during the period due to:
Actuarial (gain)/loss arising on account of experience
changes (4) -
Benefits Paid - -
Closing defined benefit obligation liability
recognised in Consolidated 25 19
Statement of Financial Position
As at As at
31 Dec 18 31 Dec 17
Particulars GBP000 GBP000
Net liability is bifurcated as follows:
Current 3 -
Non-current 22 19
Net liability 25 19
25. CONTINGENT LIABILITIES AND COMMITMENTS
As at As at
31 Dec 18 31 Dec 17
Particulars GBP000 GBP000
Bank guarantee issued to Maharashtra Pollution
Control Board 11 12
Capital Commitment not provided for 8,544 15,195
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
26. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING
ACTIVITIES
The changes in the Group's liabilities arising from financing
activities can be classified as follows:
Long-term Short-term
borrowing borrowing Leased liabilities Total
Particulars GBP000 GBP000 GBP000 GBP000
1 January 2018 34,934 23 236 35,193
Cash-flows:
- Repayment (29) (23) (51) (103)
- Proceeds 8 - - 8
Non-cash:
- Exchange difference (1,015) (1) - (1,016)
- Reclassification (60) 60 - -
31 December 2018 33,830 59 185 34,074
1 January 2017 32,294 33 111 32,438
Cash-flows:
- Repayment - (43) 125 82
- Proceeds 3,706 - - 3,706
Non-cash:
- Exchange difference (1,034) - - (1,034)
- Reclassification (33) 33 - -
31 December 2017 34,934 23 236 35,193
27. EVENTS SUBSEQUENT TO THE CONSOLIDATED STATEMENT OF FINANCIAL
POSITION DATE
As at the date of signing there were no significant events to
report
28. AUTHORISATION OF FINANCIAL STATEMENTS
The consolidated financial statements for the year ended 31
December 2018 were approved and authorised for issue by the Board
of Directors on 10 June 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EAAKEFEDNEAF
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