TIDMTRC
RNS Number : 6246L
Trinity Capital PLC
14 August 2013
Trinity Capital PLC
Consolidated financial statements for the year ended 31 March
2013 and cash distribution
Trinity Capital PLC (AIM: TRC), a fund created for investing in
Indian real estate and infrastructure, announces its Preliminary
Results for the year ended 31 March 2013.
The Company also announces a distribution to shareholders of 5.0
pence per share, equivalent to approximately GBP10,522,000 (the
"Distribution"). The Distribution will be financed from the
distributable reserve created by the cancellation of share premium
account that took place shortly after the Company was admitted to
AIM in 2006. The Distribution will be paid on 6 September 2013 to
shareholders recorded on the register on 23 August 2013. The shares
will be marked ex on 21 August 2013.
Further information, please contact:
IOMA Fund and Investment Management
Limited
Graham Smith, Director +44 1624 681250
Arden Partners
Nominated Adviser and Broker
Chris Hardie +44 207 614 5900
Chairman's Report
Dear Shareholder
During the financial year to 31 March 2013, Trinity Capital plc
("Trinity" or the "Company") sold one investment, our holding in DB
Realty, which generated proceeds of GBP12.0 million. This resulted
in a distribution to Trinity's shareholders of 5p per share in
November 2012. As previously announced the Company's investment in
Luxor Cyber City was sold after year end for net proceeds of
GBP9.2m. We have today announced a further distribution of 5p per
share.
Weak economic conditions in India have reduced demand for
property in the country's main cities, including for assets such as
Trinity's. India's GDP growth during the quarter ended 31 March
2013 was 4.8% pa, which was the lowest rate in a decade and a sharp
slowdown compared with the more than 9% growth rates experienced
two years previously. A strong rebound in economic growth does not
appear likely, with capital investment and private spending
expected to remain sluggish. Foreign direct investment in the
fiscal year to 31 March 2013 fell by 38% to US$22.4 billion. During
the year to 31 March, the Bombay Stock Exchange's Realty Index was
flat. Indian inflation, as measured by the wholesale price index,
in the year to end-March was 6.0%, a 3 year low. With declining
inflationary pressures, the Reserve Bank of India reduced its repo
rate to 7.25% in May 2013, the third reduction since January. The
central bank is cautious regarding further cuts and demand for
property will not be stimulated as long as there is limited
appetite from traditional lenders to provide mortgage finance. High
interest rates of 18-20% pa normally demanded by non-bank lenders
for loan maturities of 2 to 3 years make it difficult for
developers to obtain cost effective financing. The prospect of
national elections scheduled to take place in 2014 has added to the
general business uncertainty prevailing in India.
Trinity's net asset value per share declined by 17% to GBP0.23
at 31 March 2013 from GBP0.28 a year previously, which was
primarily due to the November distribution of GBP0.05 to
shareholders. Net assets stood at GBP48.2 million at the financial
year end. The Rupee declined by 1.0% against sterling during the
year to 31 March 2013 and, by the end of July, had depreciated by a
further 10.8%. The six remaining investments in India held by
Trinity at 31 March 2013 were together valued at GBP41.1 million,
equivalent to GBP0.20 per share, after allowing for the
co-investors' interests. As in previous years, a description of
each asset and its current status is provided in the Investment
Manager's Report.
At 31 March 2013, the two funds managed by SachsenFonds were
invested in four companies in which our wholly owned subsidiary,
Trinity Capital Mauritius Limited ("TCML") is an investor.
Shareholders may recall that SachsenFonds brought a case against
Trinity in Mauritius which was dismissed on jurisdictional grounds
in 2011. SachsenFonds has appealed the order of dismissal and that
appeal is now scheduled to be heard towards the end of 2013.
Under the shareholder agreements governing the joint
investments, a certain degree of cooperation with SachsenFonds is
required. However, our co-investors have been uncooperative in
furthering exits because they have said they do not want to
"crystallize" losses without receiving additional compensation not
reflected in the relevant contracts. Inevitably, this strategy of
ignoring the realities of the Indian property market in the hope
that declines in market value will not be reflected in eventual
sales prices has delayed realisations. We struggle to understand
how investors in the vehicles managed by SachsenFonds will benefit
from this strategy because there is a substantial risk that values
will continue to decline caused by the combination of rising
construction costs, falling asking prices, limited demand for
property in Mumbai and the National Capital Region and currency
depreciation. We would very much like to make these points to the
ultimate investors in the vehicles managed by SachsenFonds but, as
they are not listed, it has not proven possible to do so.
The decision to sell TCML's investments where SachsenFonds is
not involved has been more straightforward. Although development of
the Jodhana site has been delayed due to licensing issues, local
property prices in Jodhpur remain buoyant and Indiareit is in
discussions to sell our interest to our joint venture partner. The
forthcoming listing of Horizon through a reverse takeover and
merger with other SKIL group companies will provide a potential
liquidity event that causes the put option to fall away. Following
listing and subject to liquidity in the shares, the investment in
Horizon can be sold in the stock market.
The Board remains committed to controlling costs. Effective 1
February 2013, the Company and TCML agreed with Indiareit
Investment Management Company ("Indiareit") to amend the terms of
its appointment as investment manager. The fixed cost of managing
the investment portfolio has been cut in favour of further
incentives to accelerate the pace of realisations. The annual
investment management fees payable to Indiareit have been reduced
to US$198,000 from US$1.7 million. In return, the performance fees
have been amended to incentivise early realisation of the remaining
investments and the previous partial holdback of fees earned is no
longer being applied. The money previously held in escrow and
provision for payment of performance fees have been adjusted
consistent with the terms of the new fee agreement and the Board's
projections for the timing of realisations of the remaining
investments. Further details of the previous and new investment
management arrangements are provided in note 4 to the financial
statements.
At 31 March 2013, Trinity held cash of GBP10.2 million. The
Board carries out regular solvency and liquidity tests and intends
to make further distributions to shareholders as investments are
sold and liabilities are reduced. The Company recently announced
the realisation of its investment in TC-14/ Luxor Cyber City,
generating proceeds of GBP9.2 million . The Company has today
announced a distribution of 5p per share to be made on 6 September
2013 to shareholders on the register on 23 August 2013.
Given the limited prospects of turnaround in Indian real estate
and the continuing risk of Rupee depreciation, the Board remains of
the view that early realisation of all of our investments is in the
best interests of investors in both Trinity and the funds managed
by SachsenFonds.
The Board is appreciative of your continued patience and
support.
Yours faithfully
Martin M Adams
Chairman
13 August 2013
Investment Manager Report
Indian Real Estate Overview
The Indian economy has grown at the slowest pace in ten years in
FY 2013 at 5.7%. The fiscal deficit at 5.2% estimated for FY 2013
also continues to strain the state's finances. The decline in
currency has been a significant cause for worry (the Indian rupee
has declined by nearly 12% over the past year and has touched
all-time lows several times during the past month). Though the
government and the central bank are directing efforts towards
stabilising the rupee, the monetary policy adopted has been
insufficient to achieve the desired effect so far and a sustained
problem is expected to have a negative impact on growth over the
medium-to-long term. Inflation, though, has moderated and the
wholesale price index based inflation was at 4.86% in June 2013
down from 7.5% levels in April 2012.
The primary reason for the state of the economy is being
attributed to policy paralysis on part of the government over the
past couple of years and which is generally expected to continue
until the General Elections are held in 2014. Although reform
measures such as permitting foreign direct investment in
multi-brand retail, aviation, insurance and broadcasting announced
during second half of the current financial year does break the
hiatus and are seen as politically motivated steps, its translation
into a revival of investment and consumer demand will take
time.
Budget update
The last Indian budget announced in February, 2013 has deferred
the controversial General Anti Avoidance Rules ('GAAR')
implementation to the Financial Year 2015-16, thus leading to less
uncertainty for foreign investors to plan their transactions and
structuring. Some onerous provisions were introduced in the budget
such as applicability of withholding tax on buyback of shares by a
company which may impact exits through such a route.
Residential real estate update
The absorption rate (net absorption as a percentage of available
stock) of residential units remained largely stable during the
first quarter of 2013 at 13.6%. On an overall basis, sales have
been slow and a large amount of unsold inventory has led to
developers reducing their launch pipeline. This trend is expected
to continue in 2013 with fewer launches - however, developers are
expected to hold up prices and aim to maintain a steady off take.
(Source: Real Estate Intelligence Service, JLL).
Mumbai, though, has witnessed a sharp slowdown in sales velocity
and also some price correction, due to the earlier price rally and
a significant upcoming supply in certain sub-markets.
Commercial real estate update
The occupier focus continues to be on consolidation and more
efficient use of their existing portfolio. As a result, leasing
activity has been moderate - the absorption in calendar year 2012
was at 28m sq.ft, down 21% year on year. Correspondingly, supply
also has been lower (24m sq.ft, 50% below initial estimates) with
developers deferring construction schedules and holding off new
project launches. Bangalore is the only market to witness stable
demand; while absorption rates in other markets were down 15-40%
over the year. Rentals have remained largely stable except for
appreciation in few prime locations in Mumbai and Bangalore
(Source: JP Morgan).
Concerns over the global economic outlook are expected to
continue to weigh on occupier sentiment in the short to medium term
and the overall mood in the leasing market is expected to remain
cautious.
Trinity's investments are also impacted by the macro-economic as
well as regulatory factors. We provide below a detailed update on
each asset and likely exit strategy.
Summary of Investments
Luxor Cyber City
Indian Investee Company Luxor Cyber City Pvt. Ltd.
-------------------------- -------------------------------------------
Mauritian SPV Trinity Capital (Fourteen) Limited (TC14)
-------------------------- -------------------------------------------
Local Promoter/ Partner Uppal & Luxor Group
-------------------------- -------------------------------------------
Location Sector 77 and 78, Gurgaon, Haryana,
NCR
-------------------------- -------------------------------------------
Project Development of IT/ITES SEZ with Supporting
Residential and Commercial Space
-------------------------- -------------------------------------------
Development potential 8.2 million sq. ft. basis above product
mix
-------------------------- -------------------------------------------
Date of Investment June 2007
-------------------------- -------------------------------------------
Ownership of TC14 Trinity Capital Mauritius Ltd. ('TCML')
: 85%
Immobilien II : 15%
-------------------------- -------------------------------------------
TC14's interest in Indian 49.38% of voting and economic rights
Investee Company
-------------------------- -------------------------------------------
An exit was secured by Trinity from its investment in Luxor
Cyber City in August, 2013. The investment was held through the
Mauritian subsidiary company (TC-14), in which Trinity held 85%.
The remaining shareholding was held by Immobilien II/ SachsenFonds
and the decision to exit was taken in consultation with them. The
exit involved purchase of shares held by TC-14 in Luxor Cyber City
by the promoters.
The valuation of the asset had seen significant erosion over the
past several valuation exercises given worsening market dynamics
and adverse impact owing to changes in tax laws. The realization
terms were attractive given that it provided an opportunity for
immediate exit at a value which was at a significant premium to the
30 September 2012 carrying value, and also doing away with the
market, execution, regulatory and currency risks.
The total consideration to Trinity Capital was INR 870 million
(GBP 9.2 million).
Jodhana
Indian Investee Company Jodhana Developers Pvt. Ltd.
-------------------------- ----------------------------------------
Mauritian SPV Trinity Capital (Seventeen) Limited
(TC17)
-------------------------- ----------------------------------------
Local Promoter/ Partner Marudhar Hotels Private Limited
-------------------------- ----------------------------------------
Location Umaid Bhawan Palace Precincts, Jodhpur,
Rajasthan
-------------------------- ----------------------------------------
Project Development of a Residential Scheme
-------------------------- ----------------------------------------
Development potential 823,754 sq. ft., basis above product
mix
-------------------------- ----------------------------------------
Date of Investment October 2008
-------------------------- ----------------------------------------
Ownership of TC17 TCML: 100%
-------------------------- ----------------------------------------
TC17's interest in Indian 48% of voting rights, 49% of economic
Investee Company interest
-------------------------- ----------------------------------------
Market overview
Jodhpur is a historic city located in the western Indian state
of Rajasthan with a population of over 1.0 million and an economy
thriving on handicrafts and tourism. The city has witnessed
heightened activity in residential real estate segment in last
couple of years owing to the development by local and regional
developers. The demand comes primarily from wealthy businessmen
residing within Jodhpur and Non-Resident Indians who originally
belong to Jodhpur and are keen to maintain a link with the
city.
Project Location overview
The project site is located in the precincts of the Umaid Bhawan
Palace (residence of the former Maharaja (King) of Jodhpur) - an
iconic monument that attracts tourists and travelers from across
the world and lends significant prestige to the area, allowing for
new developments to be positioned as high-end products. A large
part of the palace is managed as a luxury hotel by the Taj
Group.
Partner/ promoter overview
The project is a joint venture with Marudhar Hotels Pvt. Ltd.
(MHPL) (a company promoted by the Maharaja of Jodhpur), which is
also the owner of the project land. The Indian investee company
(SPV) has acquired development rights over the land from MHPL and
the project is being developed by the SPV. The Maharaja is a
prominent ceremonial figure and commands significant respect and
authority.
Development overview
The development plan is to undertake a high-end villa
development on the 19 acre land parcel. The plan for the 9.7 acre
land parcel is to undertake plotted residential development.
The status on ground remains the same as mentioned in the
September, 2012 report - layout plan approval for the 19 acre
master plan has been obtained and infrastructure works had
commenced on site. The procedural issues which had arisen are still
being reviewed with the government authorities and the partner.
These have taken longer than expected to resolve, and construction
activity has been stopped until these are resolved.
Exit rationale/ strategy
The Manager has begun exploring the possibility of a strategic
sale/ developer buy back at an appropriate value in order to
provide a timely exit to TC-17.
Uppals IT Park "Tech Oasis"
Indian Investee Company Uppals IT Projects Private Limited
----------------------------------- --------------------------------------------
Mauritian SPV Trinity Capital (One) Limited (TC1)
----------------------------------- --------------------------------------------
Local Promoter/ Partner n.a.
----------------------------------- --------------------------------------------
Location Greater Noida, NCR, Uttar Pradesh
----------------------------------- --------------------------------------------
Project Development of IT/ITES SEZ with Residential
and Commercial Space
----------------------------------- --------------------------------------------
Development potential 10.16 million sq. ft., basis above product
mix
----------------------------------- --------------------------------------------
Date of Investment October 2006
----------------------------------- --------------------------------------------
Ownership of TC1 TCML: 67%*
Immobilien I: 8%
Immobilien II: 25%
----------------------------------- --------------------------------------------
TC1's interest in Indian Investee
Company 100%
----------------------------------- --------------------------------------------
*TCML also provided GBP7.5 million of mezzanine debt to TC1 in
October 2008.
Market overview
As mentioned in our previous update, the farmer issue continues
with some farmers challenging the legality of the land acquisition
by the Greater Noida/ Noida authorities in higher courts. However,
not much progress has been made in those cases by the Courts.
Meanwhile, construction activity in the region continues full swing
after the master plan of the entire Greater Noida area was
re-validated by a government planning board.
The region continues to be plagued with severe oversupply of
office space with around two thirds remaining vacant.
Project location overview
The Yamuna Express way which was opened last year, has been the
fulcrum of real estate activity in the region. Being a 165 km long
access controlled six-lane concrete pavement expressway connecting
NCR with the northern hinterlands, terminating at Agra (a major
city in the northern Indian state of Uttar Pradesh), the expressway
has led to increased accessibility of the region. The project land
has frontage on this expressway. The Indian Grand Prix is held in
October each year on the Formula 1 race track which is located very
close to the project site. The region has seen heightened real
estate activity even several kilometres further from our site
towards Agra, however this has been limited to the residential
sector only.
Partner/ promoter overview
There is no Indian partner/ promoter in the project.
Development overview
The project land is zoned for the IT/ITES industry and has
received approval as a Special Economic Zone (SEZ) from the Indian
government. The requisite lease premium has been paid to the local
authority.
Since the development has to be done in line with the zoning and
approval received, the product mix does not justify any
development. This has been the case since inception - hence, the
site is still at land stage. During Oct, 2011 to Aug, 2012, in any
case no construction work was permitted by the authorities due to
the requirement for re-validation of the area's master plan.
Subsequent to such re-validation, the company has followed up with
the authorities and obtained approval for construction of a
boundary wall on site. The design of the boundary wall has since
been frozen, the necessary BOQs drawn up and quotations obtained
from the contractors. The company plans to proceed with
construction of the boundary wall once the contractor has been
finalized.
Uppals IT had applied for an extension of timelines for
completion of phase I of the project and has now obtained further
extension from GNIDA until May, 2014 for completion of the said
milestones.
As regards the farmer issue with higher courts, apart from the
risk as to status of ownership, there may also arise a situation
whereby landowners such as Uppals IT are asked by the authority to
share in the enhanced compensation to be paid to the farmers.
However, this outcome, though a risk, is remote.
Exit/ realization strategy
The immediate focus remains protection of land value. The
Investment Manager will be evaluating any possible realization
strategies as they emerge. Any exit decision would need to be taken
in consultation with Immobilien I and II.
Horizon
Indian Investee Company Horizon Countrywide Logistics
Limited
--------------------------- -------------------------------
Mauritian SPV Trinity Capital (Four) Limited
(TC4)
--------------------------- -------------------------------
Local Promoter/ Developer SKIL Group
--------------------------- -------------------------------
Location Nationwide
--------------------------- -------------------------------
Project Logistics
--------------------------- -------------------------------
Date of Investment October 2008
--------------------------- -------------------------------
Ownership of TC4 TCML: 100%
--------------------------- -------------------------------
TC4's interest in Indian
Investee Company 22.7%
--------------------------- -------------------------------
Market overview
India is emerging as one of the world's leading consumer markets
with the rising middle income group. Estimated at $991 billion in
2010, total consumption expenditure is expected to grow to nearly
$3.6 trillion in 2020. To service such a large market at shortest
possible time with least cost, the logistics sector is expected to
play a key role. Currently, India's logistics sector is valued at
around $110 billion and is expected to touch $200 billion by 2020.
Not only is there a scope for growth in this sector, what is needed
are efficient players who can help reduce the cost of logistics as
a whole. (Source: www.ciilogistics.in)
Project location overview
Horizon's projects include container freight stations, free
trade warehousing zones, inland container depots and logistics and
warehousing facilities and are located across the country.
Partner/ promoter overview
SKIL Group, the promoter shareholder of Horizon is a leading
player in the Indian infrastructure industry and has executed large
scale projects nationwide. It is the SKIL group's expertise which
will enable execution of Horizon's projects and creation of
value.
Development overview
The company continues to progress its various projects with the
objective of creation of greater substance in the Company, and
ultimately capturing greater value at the time of listing.
Exit/ realisation strategy
The company and the promoters have progressed the proposed
merger of Horizon and flagship company SKIL with another listed
entity of the group. The merger process is now in advanced stages.
Since the flagship company of the group SKIL also forms part of the
merger scheme, this should enable the capture of greater value by
the combined entity at the time of listing.
Meanwhile, an agreement with the promoters for TC4's exit at a
base price of Rs. 22 per share in 2013 continues to be in place.
If, however, the listing happens before option exercise date in
September, 2013, the agreement terminates.
There exists a possibility of an upside (or downside), if the
merger happens and listed shares are traded at a higher (or lower)
price than the base price of Rs. 22 per share. However, shares in
the existing listed entity into which Horizon will merge have been
depressed in recent months.
Lokhandwala
Indian Investee Company Lokhandwala Kataria Constructions Pvt.
Ltd
--------------------------- ------------------------------------------------
Mauritian SPV Trinity Capital (Five) Limited (TC5)
--------------------------- ------------------------------------------------
Local Promoter/ Developer Lokhandwala Group
--------------------------- ------------------------------------------------
Location Mahalaxmi (South Mumbai), Mumbai, Maharashtra
--------------------------- ------------------------------------------------
Project Redevelopment project under a slum clearance
scheme for development and sale of residential
units and parking
--------------------------- ------------------------------------------------
Development potential 929,215 sq. ft., basis above product
mix
--------------------------- ------------------------------------------------
Date of Investment October 2006: GBP6.26m
October 2009: GBP6.18m
--------------------------- ------------------------------------------------
Ownership of the TC5 TCML: 59%
Immobilien I: 41%
--------------------------- ------------------------------------------------
TC5's interest in Indian
Investee Company 49%
--------------------------- ------------------------------------------------
Market overview
Mahalaxmi has become a highly sought after residential hub of
South Mumbai. The micro market is seeing a significant amount of
supply with several iconic projects having been launched and under
construction. In fact, the general market slowdown and the quantum
of upcoming supply in the specific sub-market is putting pressure
on prices - a few recent projects by well-known developers have
been launched at prices 15-20% lower than those prevailing.
Project location overview
The micro market boasts a top quality social infrastructure
including premium hotels such as Four Seasons and the recently
opened Shangri-la. The nearby high street development known as
Phoenix Mills, complete with outlets of all leading clothing brands
(such as Zara, Giorgio Armani etc), a multiplex cinema, high end
food and beverage outlets, entertainment zone etc is a well-known
social destination. Besides, the area is a commercial hub as well
with several well-known buildings such as Indiabulls Financial
Centre, Peninsula Corporate Park, Peninsula Business Park, One
Indiabulls Centre etc. in the vicinity.
Promoter/ partner overview
Lokhandwala Infrastructure, a large Mumbai based developer
having a strong presence in the slum rehabilitation/ redevelopment
space, is the majority partner in the company, and is leading the
project development. The Lokhandwala Group has developed over 10
million sq. ft. of other projects in Mumbai including slum
redevelopments.
Development overview
The nearly 2,100 slums that were at the site had already been
cleared and re-located. The construction of the slum rehab area is
now progressing well and is expected to be completed by the end of
2013. With one of India's best contractors (Larsen and Toubro)
having been appointed for the construction of the free sale area,
the pace of construction is steady after the commencement of
construction had been delayed by over 2 yrs due to several reasons.
The project was launched as "Minerva" and comprises two proposed
towers of around 84 floors each, including stilt and podium parking
and amenities in addition to the slum rehabilitation buildings -
around 50% of the project has now been sold.
The project is however facing several serious challenges which
has impacted its valuation as well. A few of the critical approvals
such as 'Floor Area Ratio' construction density (which is presently
approved at 25% below that projected) and the final height
clearance of the Minerva tower are still pending. The construction
costs have seen a significant increase over those projected largely
on account of inflation and change in design resulting in increase
in prices of raw materials, labour and financing costs. The sales
velocity has been severely hit recently on account of a general
slowdown in the market and excess supply.
Besides, the impact of the recently introduced Development
Control Regulations ('DCR') still is not fully clear. For the
purpose of this valuation exercise as well, CBRE has maintained its
assumption that the new DCR will apply only to the additional floor
space (which has not yet been approved).
Exit/ realisation strategy
Several realisation alternatives are being evaluated, including
a strategic sale/ developer buyback during the development phase of
the project.
Any exit decision would need to be taken in consultation with
Immobilien II who are partners in TC5 and this may pose several
challenges in realising a timely exit.
DB (BKC) Realtors
Indian Investee Company DB (BKC) Realtors Private Limited (formerly,
MK Malls & Developers Pvt. Ltd.)
-------------------------- ---------------------------------------------
Mauritian SPV Trinity Capital (Ten) Limited (TC10)
-------------------------- ---------------------------------------------
Local Promoter/ Developer Dynamix Balwas Group
-------------------------- ---------------------------------------------
Location Bandra Kurla Complex, Mumbai
-------------------------- ---------------------------------------------
Project Commercial Office development
-------------------------- ---------------------------------------------
Date of Investment December 2006 : GBP5.9 million
January 2008 : GBP6.4 million
-------------------------- ---------------------------------------------
Ownership of TC10* Immobilien I : 40%
Immobilien II : 48%
TCML : 12%
-------------------------- ---------------------------------------------
TC10's investment in DB (BKC) Realtors Private Limited ("MK
Malls") consists of (a) equity; (b) redeemable optionally
convertible cumulative preference shares ("ROCCPS"); and (c)
compulsorily convertible preference shares ("CCPS"). In 2007 and
2008, the capital structure of TC10 was reorganised such that the
shares acquired by Immobilien I and Immobilien II in TC10 provided
the economic interest in the equity and ROCCPS. TCML was issued
with shares in TC10 which provide the economic interest in the
CCPS, with a return on equity capped at an IRR of 20%. The figures
below refer only to the economic interest in the CCPS.
MK Malls is engaged in an attractively located commercial office
development in the Bandra Kurla Complex business district of
Mumbai.
The amount due to TC10 on exercise of the right to sell all CCPS
(in which TCML has economic interest) after the expiry of three
years from date of allotment has still not been paid by the
promoters. However, after a long period of stalemate, dialogue has
begun over the past couple of months between the Manager and the
promoters towards providing an exit to Trinity.
Should the proceeds of sale be received by TC10, Immobilien I
and Immobilien II, who together own 88% of TC10, can block the
distribution of cash to TCML.
Directors' Report
The Directors have pleasure in presenting their report and
financial statements of the Group for the year ended 31 March
2013.
Principal activity and incorporation
The Company is a closed-end investment company, incorporated on
7 March 2006 in the Isle of Man as a public limited company. Its
shares were admitted to trade on the Alternative Investment Market
of the London Stock Exchange on 21 April 2006.
The Group has invested in real estate and real estate related
entities in India, primarily in commercial development in the
office and business space, residential, retail, hospitality, and
infrastructure sectors deriving returns from development, long-term
capital appreciation and income.
In March 2009, shareholders voted to change the Company's
investment policy by requiring the Company to gradually dispose of
its assets over time and return capital to investors.
The Group has no employees.
The consolidated financial statements comprise the results of
the Company and its subsidiaries (together referred to as the
"Group").
Results and dividends
The Group's results for the financial year ended 31 March 2013
are set out in the Consolidated Statement of Comprehensive
Income.
A review of the Group's activities is set out in the Chairman's
Report and the Investment Manager's Report respectively.
During the year, the Company paid distributions of GBP10,519,000
(2012: GBP22,095,000).
Directors
The Directors of the Company during the year and to date of this
report were as follows:
Martin Adams (Chairman)
John Chapman
Stephen Coe
Arvind Pahwa (resigned 12 December 2012)
Graham Smith
Pradeep Verma
None of the Directors had interests in the shares of the Company
at 31 March 2013 (2012: none).
Details of the Directors' remuneration are provided in note
12.
Company Secretary
The secretary of the Company during the year and at the date of
this report was Philip Scales.
Auditors
The auditors, KPMG Audit LLC, being eligible, have expressed
their willingness to continue in office in accordance with Section
12(2) of the Isle of Man Companies Act 1982.
On behalf of the Board
Graham Smith
Director
13 August 2013
Statement of Directors' Responsibilities in Respect of the
Annual Report and the Financial Statements
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year, which meet the requirements of
Isle of Man company law. In addition, the Directors have elected to
prepare the financial statements in accordance with International
Financial Reporting Standards, as adopted by the EU.
The financial statements are required by law to give a true and
fair view of the state of affairs of the Group and Parent Company
and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
International Financial Reporting Standards, as adopted by the EU;
and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Parent
Company will continue in business.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Parent
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Parent Company and to enable
them to ensure that its financial statements comply with the
Companies Acts 1931 to 2004. They have general responsibility for
taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation governing the preparation and
dissemination of financial statements may differ from one
jurisdiction to another.
Corporate Governance Statement
The UK Corporate Governance Code does not directly apply to
companies incorporated within the Isle of Man but the Company's
Board has developed its internal procedures to be in line with the
recommendations of the UK Corporate Governance Code where
appropriate and these are monitored on a regular basis. The
Directors will continue to comply with the relevant requirements of
the UK Corporate Governance Code to the extent that they consider
it appropriate having regard to the Company's size and the nature
of its operations. The Board is not aware of any reason that would
cause it to reconsider its current approach.
Responsibilities of the Board
The Board of Directors is responsible for the implementation of
the investment policy of the Company and for its overall
supervision via the investment policy and objectives approved by
shareholders. At each of the Company's regular Board meetings, the
financial performance of the Company and its portfolio investments
are reviewed.
The Board is also ultimately responsible for the Company's
day-to-day operations, but in order to fulfil its obligations, the
Board has delegated operations through arrangements with the
Investment Manager and the Administrator. All Board members are
non-executive.
Audit Committee
The Audit Committee is a sub-committee of the Board and makes
recommendations to the Board which retains the right of final
decision. The Audit Committee has primary responsibility for
reviewing the financial statements and the accounting policies,
principles and practice underlying them, liaising with the external
auditors and reviewing the effectiveness of internal controls. The
Audit Committee maintains a risk register to help it identify,
evaluate, monitor and control risks. The Committee members are
Stephen Coe (Chairman) and Pradeep Verma.
The terms of reference of the Audit Committee covers the
following:
-- duties in relation to external reporting, including reviews
of financial statements, shareholder communications and other
announcements;
-- duties in relation to the external auditors, including
appointment/ dismissal, approval of fee, discussion of the audit;
and
-- duties in relation to internal systems, procedures and controls.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee is a sub-committee of
the Board and makes recommendations to the Board which retains the
right of final decision. The Committee members are Stephen Coe
(Chairman) and Martin Adams.
The purpose of the Committee is to:
-- set the remuneration of the Directors;
-- demonstrate to the shareholders of the Company that the
remuneration of the non-executive Directors of the Company and its
subsidiaries (the "Group") is set by a committee of the Board whose
members have no personal interest in the outcome of the decisions
of such committee and who will have due regard to the interests of
shareholders;
-- to the extent that any executive or non-executive Director
may be invited to join meetings of the Committee as appropriate he
shall absent himself and take no part in any discussions concerning
his own remuneration or other benefits or matters within the
province of the Committee; and
-- consider the appropriateness of the Board's composition, and
assess the suitability of potential Board members.
The Committee is authorised by the Board to:
-- when the fulfilment of its duties requires, obtain any
outside legal or other professional advice including the advice of
independent remuneration consultants, to secure the attendance of
external advisers at its meetings, if it considers this necessary,
and to obtain reliable, up-to-date information about remuneration
in other companies, at the expense of the Company. The Committee
has full authority to commission any reports or surveys which it
deems necessary to help it fulfil its obligations; and
-- when the fulfilment of its duties requires, to obtain any
outside legal or other professional advice including the advice of
independent recruitment consultants and to secure the attendance of
external advisers at its meetings, if it considers this necessary,
at the expense of the Company. The Committee has full authority to
commission any reports or assistance which it deems necessary to
help it fulfil its obligations.
Legal Committee
The Legal Committee is a sub-committee of the Board and makes
recommendations to the Board which retains the right of final
decision. The Legal Committee's primary responsibility is to
oversee the disputes which the Group is currently involved in. The
Committee members are John Chapman (Chairman), Martin Adams and
Graham Smith.
Investment Committee
The Investment Committee is a sub-committee of the Board and
makes recommendations to the Board which retains the right of final
decision. The Investment Committee's primary responsibility is to
oversee the realisation of the Company's portfolio in consultation
with the Investment Manager in accordance with the Company's
investment policy. The Committee members are Martin Adams
(Chairman), John Chapman and Pradeep Verma.
Report of the Independent Auditors, KPMG Audit LLC, to the
members of Trinity Capital PLC
We have audited the financial statements of Trinity Capital plc
for the year ended 31 March 2013 which comprise the Group Statement
of Comprehensive Income, the Group and Parent Company Statements of
Financial Position, the Group and Parent Company Statements of
Changes in Equity, the Group Statement of Cash Flows and the
related notes. The financial reporting framework that has been
applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs), as adopted by the EU.
This report is made solely to the Company's members, as a body,
in accordance with Section 15 of the Companies Act 1982. Our audit
work has been undertaken so that we might state to the Company's
members those matters we are required to state to them in an
auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors' Responsibilities
Statement, the Directors are responsible for the preparation of
financial statements that give a true and fair view. Our
responsibility is to audit, and express an opinion on, the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
(APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Group's circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Directors; and the overall
presentation of the financial statements.
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Group's and
Parent Company's affairs as at 31 March 2013 and of the Group's
profit for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the EU; and
-- have been properly prepared in accordance with the provisions of Companies Acts 1931 to 2004.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Acts 1931 to 2004 require us to report to you
if, in our opinion:
-- proper books of account have not been kept by the Parent
Company and proper returns adequate for our audit have not been
received from branches not visited by us; or
-- the Parent Company's statement of Financial Position and
Statement of Comprehensive Income are not in agreement with the
books of account and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2013
Notes 2013 2012
----------------------------------------- ------ --------- ---------
GBP'000 GBP'000
Interest income from cash and cash
equivalents 61 89
Foreign exchange loss (84) (30)
Fair value movement on investments 10 15,536 (25,341)
Net realised (loss)/gains on disposal
of investments 13 (14,380) 2,685
----------------------------------------- --------- ---------
Net investment gain/(loss) 1,133 (22,597)
----------------------------------------- ------ --------- ---------
Investment Manager's management fees (870) (1,227)
Investment Manager's performance fees 4 3,414 757
Other administration fees and expenses 5 (979) (1,332)
Total expenses 1,565 (1,802)
----------------------------------------- ------ --------- ---------
Profit/(loss) before tax 2,698 (24,399)
Taxation 6 - -
----------------------------------------- ------ --------- ---------
Profit/(loss) for the year 2,698 (24,399)
----------------------------------------- ------ --------- ---------
Other comprehensive income - -
Total comprehensive profit/(loss) 2,698 (24,399)
----------------------------------------- ------ --------- ---------
Total comprehensive income attributable
to:
Equity holders of the Company 505 (18,676)
Non-controlling Interest 2,193 (5,723)
----------------------------------------- ------ --------- ---------
Profit/(loss) for the year 2,698 (24,399)
----------------------------------------- ------ --------- ---------
Basic and diluted earnings/(loss) per
share (pence) 7 0.2 (8.9)
Consolidated Statement of Financial Position
as at 31 March 2013
Group Company
-------------------- --------------------
Notes 2013 2012 2013 2012
-------------------------------- ------ --------- --------- --------- ---------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Investments in subsidiaries 9 - - 41,598 51,101
Investments as at fair value
through profit or loss 10 50,817 61,664 - -
-------------------------------- ------ --------- --------- --------- ---------
Total non-current assets 50,817 61,664 41,598 51,101
-------------------------------- ------ --------- --------- --------- ---------
Current assets
Trade and other receivables 166 27 5 4
Cash and cash equivalents 15 10,166 11,052 8,881 9,206
Prepayments 124 26 - -
-------------------------------- ------ --------- --------- --------- ---------
Total current assets 10,456 11,105 8,886 9,210
-------------------------------- ------ --------- --------- --------- ---------
Total assets 61,273 72,769 50,484 60,311
-------------------------------- ------ --------- --------- --------- ---------
Liabilities
Non-current liabilities
Provision for legal costs 16 (2,000) (1,000) (2,000) (1,000)
Performance fee provision 4 (985) (3,174) - -
-------------------------------- ------ --------- --------- --------- ---------
Total non-current liabilities (2,985) (4,174) (2,000) (1,000)
-------------------------------- ------ --------- --------- --------- ---------
Current liabilities
Trade and other payables (436) (1,922) (285) (257)
Provision for legal costs - (1,000) - (1,000)
-------------------------------- ------ --------- --------- --------- ---------
Total current liabilities (436) (2,922) (285) (1,257)
-------------------------------- ------ --------- --------- --------- ---------
Total liabilities (3,421) (7,096) (2,285) (2,257)
-------------------------------- ------ --------- --------- --------- ---------
Net assets 57,852 65,673 48,199 58,054
-------------------------------- ------ --------- --------- --------- ---------
Represented by:
Ordinary shares 11 2,107 2,107 2,107 2,107
Capital redemption reserves 214 214 214 214
Distributable reserve 72,756 83,275 72,756 83,274
Retained reserves (26,711) (27,216) (26,878) (27,541)
Other reserves (167) (167) - -
-------------------------------- ------ --------- --------- --------- ---------
Total equity attributable to equity
holders of the Company 48,199 58,213 48,199 58,054
Non-controlling Interest 9,653 7,460 - -
-------------------------------- ------ --------- --------- --------- ---------
Total equity 57,852 65,673 48,199 58,054
-------------------------------- ------ --------- --------- --------- ---------
Net Asset Value per share (GBP
) 14 0.229 0.276
These financial statements were approved by the Board on 13
August 2013 and signed on their behalf by
Stephen Coe Graham Smith
Director Director
Consolidated Statement of Changes in Equity
for the year ended 31 March 2013
Share Capital Distributable Retained Other Shareholders' Non-controlling Total
Capital Redemption Reserve Loss Reserves Funds Interest Equity
Reserves
GBP GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
'000
Balance at 1
April 2011 2,107 214 105,370 (8,540) (167) 98,984 13,183 112,167
Total
comprehensive
loss - - - (18,676) - (18,676) (5,723) (24,399)
Distribution - - (22,095) - - (22,095) - (22,095)
Balance at 31
March 2012 2,107 214 83,275 (27,216) (167) 58,213 7,460 65,673
--------------- -------- ----------- -------------- --------- --------- -------------- ---------------- ---------
Balance at 1
April 2012 2,107 214 83,275 (27,216) (167) 58,213 7,460 65,673
Total
comprehensive
earnings - - - 505 - 505 2,193 2,698
Distribution - - (10,519) - - (10,519) - (10,519)
Balance at 31
March 2013 2,107 214 72,756 (26,711) (167) 48,199 9,653 57,852
--------------- -------- ----------- -------------- --------- --------- -------------- ---------------- ---------
Company Statement of Changes in Equity
for the year ended 31 March 2013
Capital
Share Redemption Distributable Retained Total
Capital Reserves Reserve Loss Equity
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
Balance at 1 April
2011 2,107 214 105,370 (7,418) 100,273
Total comprehensive
loss - - - (20,124) (20,124)
Distribution - - (22,095) - (22,095)
Balance at 31 March
2012 2,107 214 83,275 (27,542) 58,054
--------------------- ------------- ----------------- ----------------- --------------- -------------
Balance at 1 April
2012 2,107 214 83,275 (27,542) 58,054
Total comprehensive
earnings - - - 664 664
Distribution - - (10,519) - (10,519)
Balance at 31 March
2013 2,107 214 72,756 (26,878) 48,199
--------------------- ------------- ----------------- ----------------- --------------- -------------
Consolidated Statement of Cash Flows
for the year ended 31 March 2013
2013 2012
GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the year 2,698 (24,399)
Adjustments for:
Interest income from cash and cash equivalents (61) (89)
Foreign exchange loss 84 30
Movement in performance fee provision (2,189) (2,301)
Fair value movement on investments (15,536) 25,342
Net realised loss /(gains) on disposal of investments 14,380 (2,685)
------------------------------------------------------- -------------------- -------------------
(624) 20,297
Changes in working capital
(Increase)/decrease in receivables (237) 48
(Decrease)/increase in payables (1,481) 825
Net cash used by operating activities (2,342) (3,229)
------------------------------------------------------- -------------------- -------------------
Cash flows from investing activities
Interest received 61 89
Proceeds from disposal of investments 12,003 20,568
------------------------------------------------------- -------------------- -------------------
Net cash from investing activities 12,064 20,657
------------------------------------------------------- -------------------- -------------------
Cash flows from financing activities
Distributions (10,519) (22,095)
Net cash outflow from financing activities (10,519) (22,095)
------------------------------------------------------- -------------------- -------------------
Net decrease in cash and cash equivalents (797) (4,667)
Cash and cash equivalents at the start of the year 11,052 15,750
Effect of foreign exchange fluctuation on cash held (89) (31)
Cash and cash equivalents at the end of the year 10,166 11,052
------------------------------------------------------- -------------------- -------------------
Notes to the Financial Statements
for the year ended 31 March 2013
1. General information
The Company is a closed-end investment company incorporated on 7
March 2006 in the Isle of Man as a public limited company. The
address of its registered office is IOMA House, Hope Street,
Douglas, Isle of Man.
The Company is listed on the Alternative Investment Market (AIM)
of the London Stock Exchange.
The Company and its subsidiaries (together the "Group") invest
in real estate and real estate related entities in India, primarily
in commercial development in the office and business space,
residential, retail, hospitality and infrastructure sectors
deriving returns from development, long-term capital appreciation
and income.
In March 2009, shareholders voted to change Trinity's investment
policy by requiring the company to gradually dispose of its assets
over time and return capital to investors.
The Group has no employees.
2. Summary of significant accounting policies
2.1. Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRSs), as adopted by the EU.
The consolidated financial statements were authorised for issue
by the Board on 13 August 2013.
(b) Basis of measurement
The consolidated financial statements have been prepared on the
historical cost basis except for financial instruments at fair
value through profit or loss are measured at fair value in the
statement of financial position.
(c) Functional and presentation currency
These consolidated financial statements are presented in
Sterling. The Company's functional currency is Indian Rupee (Rs).
All financial information presented in Sterling has been rounded to
the nearest thousand.
(d) Use of estimates and judgements
The preparation of the consolidated financial statements in
conformity with IFRSs requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in Note 3.
2.2. Basis of Consolidation
(a) Consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries and subsidiary undertakings). Control is achieved
where the Company has the power to govern the financial and
operating policies of a portfolio company so as to obtain benefits
from its activities.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated Statement of Comprehensive
Income from the effective date of acquisition or up to the
effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group. All intra-group
transactions, balances, income and expenses are eliminated on
consolidation.
(b) Business combinations
The acquisition of subsidiaries is accounted for using the
purchase method. The cost of the acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the portfolio
company, plus any costs directly attributable to the business
combination. The portfolio company's identifiable assets,
liabilities and contingent liabilities that meet the conditions for
recognition under IFRS 3 are recognised at their fair value at the
acquisition date, except for non-current assets (or disposal
groups) that are classified as held for resale in accordance with
IFRS 5 Non-Current Assets Held for Sale and Discontinued
Operations, which are recognised and measured at fair value less
costs to sell.
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the
business combination over the Group's interest in the net fair
value of the identifiable assets, liabilities and contingent
liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the portfolio company's
identifiable assets, liabilities and contingent liabilities exceeds
the cost of the business combination, the excess is recognised
immediately in profit or loss.
2.3. Segment reporting
A business segment is a group of assets and operations engaged
in providing products or services that are subject to risks and
returns that are different from those of other business segments. A
geographical segment is engaged in providing products or services
within a particular economic environment that are subject to risks
and returns that are different from those of segments operating in
other economic environments.
The Directors are of the opinion that the Group is engaged in a
single segment of business being property investment business in
one geographical area being India.
2.4. Revenue recognition
Revenue includes interest receivable, dividend income and fair
value gains and losses.
Interest receivable is accrued on a time basis by reference to
the principal outstanding and the effective interest rate
applicable.
Fair value gains and losses are recognised in the period of
revaluation
Dividend income from investments is recognised when the
Company's right to receive payment has been established, normally
the ex-dividend date.
2.5. Expenses
All expenses are accrued for on an accruals basis and are
presented as revenue items except for expenses that are incidental
to the disposal of an investment which are deducted from the
disposal proceeds.
2.6. Taxation
Income tax expense comprises current and deferred tax. Current
tax and deferred tax are recognised in profit or loss except to the
extent that it relates to a business combination, or items
recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to
tax payable in respect of previous years. Current tax payable also
includes any tax liability arising from the declaration of
dividends.
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for:
-- temporary differences on the initial recognition of assets or
liabilities in a transaction that is
not a business combination and that affects neither accounting
nor taxable profit or loss;
-- temporary differences related to investments in subsidiaries
and jointly controlled entities to
the extent that it is probable that they will not reverse in the
foreseeable future; and
-- taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to
be applied to temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised for unused tax losses, tax
credits and deductible temporary differences, to the extent that it
is probable that future taxable profits will be available against
which they can be utilised. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.
2.7. Foreign currency transactions
(a) Functional and presentation currency
Items included in the financial statements of each of the
Group's entities are measured using
the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated
financial statements are presented in Sterling, which is the
Company's functional and presentation currency.
(b) Transactions and balances
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at exchange
rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date
are retranslated to the functional currency at the exchange rate at
that date. The foreign currency gain or loss on monetary items is
the difference between amortised cost in the functional currency at
the beginning of the year, adjusted for effective interest and
payments during the year, and the amortised cost in foreign
currency translated at the exchange rate at the end of the
year.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair
value was determined. Non-monetary items in a foreign currency that
are measured in terms of historical cost are translated using the
exchange rate at the date of the transaction. Foreign currency
differences arising on retranslation are recognised in profit or
loss, except for differences arising on the retranslation of
available-for-sale equity investments, a financial liability
designated as a hedge of the net investment in a foreign operation
that is effective, or qualifying cash flow hedges, which are
recognised in other comprehensive income.
(c) Foreign operations
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are
translated to Sterling at exchange rates at the reporting date. The
income and expenses of foreign operations, excluding foreign
operations in hyperinflationary economies, are translated to
Sterling at exchange rates at the dates of the transactions.
The income and expenses of foreign operations in
hyperinflationary economies are translated to Sterling at the
exchange rate at the reporting date. Prior to translating the
financial statements of foreign operations in hyperinflationary
economies, their financial statements for the current year are
restated to account for changes in the general purchasing power of
the local currency. The restatement is based on relevant price
indices at the reporting date.
Foreign currency differences are recognised in other
comprehensive income, and presented in the foreign currency
translation reserve (translation reserve) in equity. However, if
the operation is a non-wholly-owned subsidiary, then the relevant
proportionate share of the translation difference is allocated to
the non-controlling interests. When a foreign operation is disposed
of such that control, significant influence or joint control is
lost, the cumulative amount in the translation reserve related to
that foreign operation is reclassified to profit or loss as part of
the gain or loss on disposal. When the Group disposes of only part
of its interest in a subsidiary that includes a foreign operation
while retaining control, the relevant proportion of the cumulative
amount is reattributed to non-controlling interests. When the Group
disposes of only part of its investment in an associate or joint
venture that includes a foreign operation while retaining
significant influence or joint control, the relevant proportion of
the cumulative amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or
payable to a foreign operation is neither planned nor likely in the
foreseeable future, foreign exchange gains and losses arising from
such a monetary item are considered to form part of a net
investment in a foreign operation and are recognised in other
comprehensive income, and presented in the translation reserve in
equity.
2.8. Financial instruments
Financial assets and financial liabilities are recognised when a
Group entity becomes a party to the contractual provisions of a
financial instrument. Financial assets and financial liabilities
are offset if there is a legally enforceable right to set off the
recognised amounts and interests and it is intended to settle on a
net basis.
Investments of the Group where the Group does not have control
are designated as at fair value through profit or loss on initial
recognition. They are measured at fair value. Unrealised gains and
losses arising from revaluation are recognised in profit or
loss.
Investments in entities over which the Group has control are
consolidated in accordance with IAS 27.
The fair value of unquoted securities is estimated by the
Directors using the most appropriate valuation technique for each
investment.
Securities quoted or traded on a recognised stock exchange or
other regulated market are valued by reference to the last
available bid price.
2.9. Provisions
A provision is recognised in the statement of financial position
when the Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation, and
the obligation can be reliably measured. If the effect is material,
provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of
the time value of money and, where appropriate, the risks specific
to the liability.
2.10. Standards and interpretations not yet effective
At the date of authorisation of the financial statements, the
following standards and interpretation were in issue, but not yet
effective. The impact of these statements on the Group's financial
statements in the period of initial application is not known at
this stage. These statements, where applicable, will be applied in
the year when they are effective.
Future changes in accounting policies
IASB (International Accounting Standards Board) and IFRIC
(International Financial Reporting Interpretations Committee) have
issued the following standards and interpretations as adopted by
the EU with an effective date after the date of these financial
statements:
IASB Effective date Standard, amendment or interpretation
------------------- -------------------------------------------------------------------------------------------
1 January 2013 Government Loans (Amendments to IFRS 1)
------------------- -------------------------------------------------------------------------------------------
Disclosures: Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7)
------------------- -------------------------------------------------------------------------------------------
IFRS 10 Consolidated Financial Statements: Insights into IFRS
-------------------------------------------------------------------------------------------
IFRS 11 Joint Arrangements: Insights into IFRS
-------------------------------------------------------------------------------------------
IFRS 12 Disclosure of Interests in Other Entities: Insights into IFRS
-------------------------------------------------------------------------------------------
Consolidated Financial Statements, Joint Arrangements and Disclosures of Interests in Other
Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)
-------------------------------------------------------------------------------------------
IFRS 13 Fair Value Measurements
-------------------------------------------------------------------------------------------
IAS 19 Employee Benefits (amended 2011)
-------------------------------------------------------------------------------------------
IAS 27 Separate Financial Statements (2011)
-------------------------------------------------------------------------------------------
IAS 28 Investments in Associates and Joint Ventures (2011)
-------------------------------------------------------------------------------------------
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine
-------------------------------------------------------------------------------------------
Annual Improvements to IFRS 2009-2011 Cycle - various standards
------------------- -------------------------------------------------------------------------------------------
1 January 2014 Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
------------------- -------------------------------------------------------------------------------------------
Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
------------------- -------------------------------------------------------------------------------------------
1 January 2015 IFRS 9 Financial Instruments: Insights into IFRS
------------------- -------------------------------------------------------------------------------------------
The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Group's financial
statements in the period of initial application.
3. Critical accounting estimates and assumptions
These disclosures supplement the commentary on financial risk
management (see note 19).
Key sources of estimation uncertainty
Determining fair values
The determination of fair values for financial assets for which
there is no observable market prices requires the use of valuation
techniques as described in accounting policy note 2.8. For
financial instruments that trade infrequently and have little price
transparency, fair value is less objective, and requires varying
degrees of judgement depending on liquidity, concentration,
uncertainty of market factors, pricing assumptions and other risks
affection the specific instrument. See also "Valuation of financial
instruments" below.
Critical judgements in applying the Company's accounting
policies
Critical judgements made in applying the Company's accounting
policies include:
Valuation of financial instruments
The Company's accounting policy on fair value measurements is
discussed in accounting policy note 2.8. The Company measures fair
value using the following hierarchy that reflects the significant
of inputs used in making the measurements:
-- Level 1: Quoted market price (unadjusted) in an active market for and identical instrument.
-- Level 2: Valuation techniques based on observable inputs,
either directly (i.e. as prices) or indirectly (i.e. derived from
prices). This category included instruments valued using: quoted
market prices in active markets for similar instruments: quoted
market prices for identical or similar instruments in markets that
are considered less than active; or other valuation techniques
where all significant inputs are directly or indirectly observable
from market data.
-- Level 3: Valuation techniques using significant unobservable
inputs. This category includes all instruments where the valuation
technique includes inputs not based on observable data and the
unobservable inputs have a significant effect on the instrument's
valuation. This category includes instruments that are valued based
on quoted prices for similar instruments where significant
unobservable adjustments or assumptions are required to reflect
differences between the instruments.
Fair values of financial assets and financial liabilities that
are traded in active markets are based on quoted market prices or
dealer price quotations. For all other financial instruments the
Company determines fair values using valuation techniques, as
described in detail in note 10.
All the Company's investments measured at fair value have been
valued on the basis of Level 3 described above. A reconciliation
from the beginning balances to the ending balances for fair value
measurements in level 3 of the fair value hierarchy is given in
note 10.
Estimated performance fee (carried interest) on investments
As described in note 4, a provision has been made for
performance fees. This is calculated by reference to the total fair
value of those assets covered by the investment management
agreement.
Estimated future legal fees
As described in note 18, the Company is engaged in litigation. A
provision has been made for the associated legal costs, but this
amount cannot be calculated with any certainty. The actual amount
may differ significantly, and will depend on the duration and
complexity of the litigation, and the success or otherwise in
reaching settlement with the other parties.
4. Investment Management fees and performance fees
On 19 April 2013, Trinity Capital Mauritius Limited ("TCML"), a
wholly owned subsidiary of the Company, entered into an amendment
agreement (the "Amendment Agreement") with Indiareit Investment
Management Company ("Indiareit") which amends the terms of the
original investment management agreement entered into between these
parties on 18 June 2010. The Amendment Agreement reduced the
investment management fee from US$1.69 million p.a.to US$198,000
p.a. with effect from 1 February 2013. In addition, it incentivised
acceleration in the pace of realisation of investments by changing
the performance fees. The new performance fees payable range from
5% per cent to 10 per cent of net realisation proceeds and reduce
on a sliding scale over time. Prior to the Amendment Agreement,
Indiareit was entitled to receive (subject to certain escrow
arrangements which no longer apply) 7.5 per cent. of net
realisation proceeds on the sale of investments.
The performance fee liability of GBP1.225 million arising from
these escrow arrangements and the provision for performance fees of
GBP3.174 million have been reversed as a result of the Amendment
Agreement. A new provision of GBP985,000 has been set, based on the
terms of the Amendment Agreement and the likely timing of
disposals.
The movements of the performance fee charge in the Statement of
Comprehensive Income are made up as follows:
2013 2012
GBP'000 GBP'000
Decrease/(increase) in provision based on valuation of investments at year-end 2,189 2,301
Performance fee payable on disposals in year - (1,544)
Cancellation of performance fee liability 1,225 -
======== ========
Net credit in year 3,414 757
======== ========
5. Other administration fees and expenses
2013 2012
GBP'000 GBP'000
Audit fees 64 73
Legal fees 41 23
Administration fees 90 90
Other professional costs 30 12
Insurance 38 59
Directors' remuneration (see note 12) 335 537
Bank charges 2 6
Other 379 532
-------- --------
979 1,332
======== ========
6. Taxation
There is no liability for income tax in the Isle of Man.
The Group is subject to income tax in Mauritius at the rate of
15% on the chargeable income of Mauritian subsidiaries. The
Mauritius subsidiaries are, however, entitled to a tax credit
equivalent to the higher of the foreign tax paid and a deemed
credit of 80% of the Mauritian tax on their foreign source income.
No provision has been made in the financial statements due to the
availability of tax losses.
7. Earnings per share
Basic earnings per share is calculated by dividing the net
earnings attributable to equity shareholders of the parent by the
weighted average number of ordinary shares outstanding during the
year.
2013 2012
GBP'000 GBP'000
Earnings attributable to equity shareholders of the parent (GBP'000) 505 (18,676)
Weighted average number of ordinary shares (thousands)
for the purposes of basic earnings per share 210,682 210,682
-------- ---------
Basic earnings per share (pence) 0.2 p (8.9) p
======== =========
There is no difference between fully diluted earnings per share
and basic earnings per share.
8. Distributions
The Company made the following distributions during the year and
the previous year:
Pence per
Date share GBP 000
9 November 2012 5.0p 10,519
Total in year ended 31 March
2013 10,519
-------------
4 July 2011 6.0p 12,626
9 December 2011 4.5p 9,469
-------------
Total in year ended 31 March
2012 22,095
-------------
The distributions were paid out of reserves created upon the
cancellation of the share premium reserve which arose at the time
of the Company's admission to AIM.
9. Investments in subsidiaries
The Company has the following subsidiaries incorporated in
Mauritius. They are recorded at cost in the financial statements of
the Company.
Name Proportion of ownership
interest
At 31 March At 31 March
2013 2012
Trinity Capital Mauritius Limited 100% 100%
Trinity Capital (One) Limited 67% 67%
Trinity Capital (Four) Limited 100% 100%
Trinity Capital (Five) Limited 59% 59%
Trinity Capital (Fourteen) Limited 85% 85%
Trinity Capital (Seventeen) Limited 100% 100%
Trinity Capital (Nineteen) Limited 100% 100%
As described in note 21, Trinity Capital (Fourteen) Limited sold
its interest in Luxor Cyber City Private Limited after the
reporting date. For consolidation purposes, the "non-controlling
interest" amount has been calculated on the basis of the percentage
share of sale proceeds agreed with the co-investor, Immobilien
Development Indien II GmbH & Co. KG.
In addition to above, the Company has the following subsidiaries
in India:
(a) Uppals IT Projects Private Limited: Trinity Capital (One)
Limited held 100% of the total equity share capital at 31 March
2013.
(b) Jodhana Developers Private Limited: Trinity Capital
(Seventeen) Limited held over 98% of the total equity share capital
but only 48.48% of the voting rights and 49% of the economic
interest at 31 March 2013.
(c) Nirmaan Buildwell Private Limited: Trinity Capital
(Fourteen) Limited held 99.99% of the total equity share capital at
31 March 2013.
The financial statements of the subsidiaries in India are not
consolidated in these financial statements, as they do not meet all
the criteria for consolidation as required by IAS 27.
10. Investments - designated at fair value through profit or loss
The Group holds full or partial ownership interests in a number
of unquoted Indian companies. CB Richard Ellis ("CBRE") conducted
an independent valuation (acting as external valuers) of the
development properties owned by each of these companies as at 31
March 2013. Based on CBRE's valuation of the development
properties, which were carried out in accordance with the valuation
guidelines of The Royal Institution of Chartered Surveyors, the
Directors valued the Group's interest in the equity interests held
in each of the Project Companies. CBRE also carried out certain
Agreed Upon Procedures to test these computations of the fair value
of Group's interest in Project Companies.
The Directors' valuations are based (where appropriate) on a
discounted cash flow methodology. The methodology uses the
cash-flow data generated by CBRE (which in turn is partially based
on company-generated cash flows) and observable market data on
interest rates and equity returns. The discount rates used for
valuing equity securities are determined based on historic equity
returns for other entities operating in the same industry for which
market returns are observable. Management uses models to adjust the
observed equity returns to reflect the actual debt/equity financing
structure of the investment. The discount rate applied varies from
project to project to take account of the estimated risk and ranges
between 22.5% and 27.5%. The only exceptions to this are the
valuation of DB (BKC) Realtors Private Limited, Horizon Countrywide
Logistics Limited, and Luxor Cyber City. DB (BKC) Realtors Private
Limited valuation is based on the discounted nominal value of the
compulsorily convertible preference shares (excluding any
interest). The valuation of Horizon Countrywide Logistics Limited
which is based on a mark-to-market basis that assumes a reverse
takeover and merger with other SKIL group companies will proceed.
The valuation of Luxor Cyber City was based on the price offered by
the potential purchaser, which ultimately led to a sale after the
end of the reporting period, as detailed in note 21.
The valuation of the investment in Uppals IT Project Pvt. Ltd
has been prepared on the basis that relevant lease extensions will
be obtained from the local government development authority. The
Board believes that such extensions will be forthcoming (and the
valuation of the investment has been prepared on this basis) but
there is no guarantee that this will take place. If such extensions
were not obtained then the value of this investment would be
materially lower.
Investments are recorded at fair value are as follows:
31-Mar-13 31-Mar-12
GBP'000 GBP'000
Beginning of period 61,664 104,888
Fair value adjustment 15,536 (25,341)
Disposals (26,383) (17,883)
End of period 50,817 61,664
========== ==========
11. Share capital
The authorised share capital at 31 March 2012 and 31 March 2013
and the issued and fully paid share capital at the same dates were
as follows:
Authorised Issued and fully paid
No. of Shares GBP No. of Shares GBP
Ordinary shares of GBP0.01 each 416,750,000 4,167,500 210,432,498 2,104,325
Deferred shares of GBP0.01 each 250,000 2,500 250,000 2,500
417,000,000 4,170,000 210,682,498 2,106,825
============== ========== ============== ==========
The Deferred Shares rank pari passu with the Ordinary Shares
save that the Deferred Shares have no right to dividends or voting
rights or the right to receive notice of or attend any general
meeting. On the return of capital in a winding-up of the Company or
otherwise (other than re-purchases or redemptions of shares
authorised by special resolution), the Deferred Shares have the
right to return of par value paid up thereon in priority to the
return of the par value paid up on the Ordinary Shares.
Capital management
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor, and market confidence. In accordance
with the investment policy adopted by the Shareholders in March
2010, the Company's ordinary shares are trading at a price below
the NAV per Ordinary Share the Company shall effect a return of
capital through a cash distribution to Shareholders. If the
Company's Ordinary Shares are trading at a price above the NAV per
ordinary share, the Board will selectively determine, on a periodic
basis, whether or not to make new investments.
Group capital comprises share capital and reserves.
Neither the Company nor any of its subsidiaries are subject to
externally imposed capital requirements.
12. Directors' remuneration
Details of Directors' remuneration during the year are as
follows:
Martin Pradeep Stephen Arvind John Chapman 2013 2012
Adams Verma Coe Pahwa Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed fees 48 32 45 28 45 198 250
Payments under incentive
plan 79 40 - - 18 137 287
127 72 45 28 63 335 537
======== ======== ======== ======== ============= ======== ========
The Directors' Incentive Plan was approved by Shareholders on 29
November 2011, and provides for payments to Martin Adams, Pradeep
Verma and John Chapman amounting to 0.75%, 0.375% and 0.175%
respectively of amounts distributed to shareholders.
The fixed fee paid to Stephen Coe includes GBP15,000 per annum
for acting as Chairman of the Audit Committee and Remuneration
Committee. The fixed fee to John Chapman includes GBP15,000 per
annum for acting as Chairman of the Legal Committee
13. Disposals of investments
Realised loss on disposal of investments is as follows:
1 April 2012 to 31 March 2013 DB Realty (TC11)
GBP'000
------------------------------------------ -----------------
Net proceeds 12,003
Cost (26,383)
------------------------------------------ -----------------
Realised loss on disposal of investments (14,380)
------------------------------------------ -----------------
Enigma Constructions Pvt Ltd.
("Virar")
1 April 2011 to 31 March 2012 Kapstone Constructions Pvt (TC 3) Rustomjee Constructions Pvt (TC 15) (TC 18) Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ---------------------------------- ------------------------------------ ------------------------------ ---------
Net proceeds 12,585 1,950 6,033 20,568
Cost (10,593) (1,630) (5,660) (17,883)
------------------------------- ---------------------------------- ------------------------------------ ------------------------------ ---------
Realised gain on disposal of
investments 1,992 320 373 2,685
------------------------------- ---------------------------------- ------------------------------------ ------------------------------ ---------
14. Net asset value (NAV)
The NAV per share is calculated by dividing the net assets
attributable to the equity holders of the Company at the end of the
year by the number of shares in issue as at 31 March 2013.
2013 2012
Net assets (GBP'000) 48,199 58,213
Number of shares in issue (note 11) 210,682,498 210,682,498
------------ ------------
NAV per share GBP0.23 GBP0.28
============ ============
15. Cash and cash equivalents
2013 2012 2013 2012
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
Cash held with banks 3,985 4,872 2,700 3,026
Money market funds 6,181 6,180 6,181 6,180
-------- -------- -------- --------
10,166 11,052 8,881 9,206
======== ======== ======== ========
16. Provision for future legal costs
The Company is engaged in a dispute, as described in note 18,
with Immobilien Development Indien I GmbH & Co. KG ("Immobilien
I") and Immobilien Development Indien II GmbH & Co. KG
("Immobilien II"), being limited partnerships incorporated in
Germany, both sponsored by SachsenFonds Holding GmbH. A provision
was established in March 2011 for the amount of the estimated legal
costs yet to be incurred in the litigation. A provision of GBP2
million is retained for the estimate of future legal costs
associated with the dispute.
The provision is as follows:
2013 2012
GBP'000 GBP'000
Closing balance 2,000 2,000
======== ========
Included in current liabilities - 1,000
Included in non-current liabilities 2,000 1,000
-------- --------
2,000 2,000
======== ========
There can of course be no certainty as to the accuracy of these
provisions. The actual amount may differ significantly, and will
depend on the duration and complexity of the litigation, and the
success or otherwise in reaching settlement with the other
parties.
17. Commitments
There were no outstanding contractual commitments at the year
end (2012: mil).
18. Contingent Liabilities
On 12 January 2011 the Company received a notification of claim
from Immobilien I and Immobilien II. In addition to the Company,
the notification was addressed to TCML, Trikona Advisers Ltd.
("TAL", the former investment adviser of the Company), private
persons who together controlled TAL, and TSF Advisers Mauritius
Limited (a joint venture between TAL and SachsenFonds Asset
Management GmbH). On 13 July 2011, the Supreme Court in Mauritius
set aside the claim lodged by Immobilien I and Immobilien II.
Immobilien I and Immobilien II appealed against that decision on 26
July 2011.
By way of background, in November 2007 and May 2008 Immobilien I
and Immobilien II purchased from TCML interests in various
Mauritian companies (the "TC Companies") which in turn owned equity
stakes in Indian investment vehicles (the "Indian Companies") which
held certain of the Company's development projects in India (the
"Transactions"). Accordingly, Immobilien I and/or Immobilien II
were partners with TCML in various Mauritian companies in respect
of five development projects in India. One Mauritian TC Company was
sold in its entirety to Immobilien I and Immobilien II. In
aggregate, Immobilien I and Immobilien II paid GBP86.4 million for
investments in which the Company had invested GBP41.8 million. The
contracts included legal provisions in the relevant documentation
whereby the Group would be obliged to make good to the acquirer the
economic loss which would arise upon the non-fulfilment of certain
conditions in the contractual arrangements.
The amount claimed by Immobilien I and Immobilien II in the
original pleading was their original cost of the investments, being
nearly EUR116 million, plus amounts to compensate for prejudice,
trouble, annoyance, interest and costs.
The Board is fully committed to defending the claims made by
Immobilien I and Immobilien II. The Directors do not consider it
necessary to provide for the claims in the financial statements,
but the Company maintains a provision of GBP2,000,000 for future
legal costs, as explained in note 16, to defend the actions.
19. Financial risk management
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk, market price risk and
interest rate risk), credit risk and liquidity risk.
Risk management is carried out by the Board, with assistance
from the Investment Manager to the extent possible and as
appropriate.
(a) Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the Indian Rupee. Foreign exchange risk arises from
future commercial transactions, recognised monetary assets and
liabilities and net investments in foreign operations.
Net assets denominated in Indian Rupee at the year-end amounted
to GBP50,817,000 (2012: GBP61,664,000).
At 31 March 2013, had the exchange rate between the Indian Rupee
and Sterling increased or decreased by 5% with all other variables
held constant, the increase or decrease respectively in net assets
would amount to approximately GBP2,541,000 (2012:
GBP3,083,000).
The Group does not hedge against foreign exchange movements,
except from time to time for short term receivables or payables
with a known settlement date.
(ii) Market price risk
The Group is exposed to market price risk arising from its
investment in unlisted and listed equity investments. All these
securities present a risk of capital loss. The Board and the
Investment Manager are responsible for the selection of investments
and monitoring exposure to market risk. All investments are in
Indian companies.
If the value of the Group's investment portfolio had increased
by 5%, the Group's net assets would have increased by GBP2,541,000
(2012: GBP3,083,000). A decrease of 5% would have resulted in equal
and opposite decrease in net assets.
The Group is exposed to property price risk, property rentals
risk and the normal risks of property development through its
investment in Indian real estate companies.
(iii) Cash flow and fair value interest rate risk
The Group's cash and cash equivalents are invested at short term
market interest rates.
The table below summarises the Group's exposure to interest rate
risks. It includes the Groups' financial assets and liabilities at
the earlier of contractual re-pricing or maturity date, measured by
the carrying values of assets and liabilities.
Less than 1-3 3 months 1-5 years Over 5 Non- Total
1 month months to 1 year years interest
bearing
31 March 2013 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Investments at fair value
through profit or loss - - - - - 50,817 50,817
Trade and other receivables - - - - - 166 166
Cash and cash equivalents 10,166 - - - - - 10,166
Prepayments - - - - - 124 124
Total financial assets 10,166 - - - - 51,107 61,273
---------- ------------ ------------ ----------- --------- ---------- --------
Financial liabilities
Provision for legal costs - - - - - 2,000 2,000
Performance fee provision - - - - - 985 985
Trade and other payables - - - - - 436 436
Total financial liabilities - - - - - 3,421 3,421
---------- ------------ ------------ ----------- --------- ---------- --------
Total interest rate sensitivity 10,166 - - - - - -
gap
---------- ------------ ------------ ----------- --------- ---------- --------
Less than 1-3 3 months 1-5 years Over 5 Non- Total
1 month months to 1 year years interest
bearing
31 March 2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Investments at fair value
through profit or loss - - - 7,838 - 53,826 61,664
Trade and other receivables - - - - - 27 27
Cash and cash equivalents 11,052 - - - - - 11,052
Prepayments - - - - - 26 26
---------- ------------ ------------ ----------- ---------- ---------- --------
Total financial assets 11,052 - - 7,838 - 53,879 72,769
---------- ------------ ------------ ----------- ---------- ---------- --------
Financial liabilities
Performance fee provision - - - - - 3,174 3,174
Provision for legal costs - - - - - 2,000 2,000
Trade and other payables - - - - - 1,922 1,922
---------- ------------ ------------ ----------- ---------- ---------- --------
Total financial liabilities - - - - - 7,096 7,096
---------- ------------ ------------ ----------- ---------- ---------- --------
Total interest rate
sensitivity gap 11,052 - - 7,838 - - -
---------- ------------ ------------ ----------- ---------- ---------- --------
(b) Credit risk
Credit risk arises on investments, cash balances and debtor
balances. The amount of credit risk is equal to the amounts stated
in the statement of financial position for each of these assets.
Cash balances are limited to high-credit-quality financial
institutions. There are no impairment provisions as at 31 March
2013 (2012: nil).
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities, the availability of funding through
an adequate amount of committed credit facilities and the ability
to close out market positions. The Company aims to maintain
flexibility in funding.
Residual undiscounted contractual maturities of financial
liabilities:
31 March 2013 Less than 1-3 3 months 1-5 Over 5 No stated
1 month months to 1 year years Years maturity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities
Performance fee
provision - - - - - 985
Provision for legal
costs - - - - - 2,000
Trade and other 436 - - - - -
payables
436 - - - - 2,985
---------- -------- ----------- -------- -------- ----------
31 March 2012 Less than 1-3 3 months 1-5 Over 5 No stated
1 month months to 1 year years Years maturity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities
Performance fee
provision - - - - - 3,248
Provision for legal
costs - - - - - 2,000
Trade and other 1,922 - - - - -
payables
1,922 - - - - 5,248
---------- -------- ----------- -------- -------- ----------
20. Related party transactions
Graham Smith is a Director of the Company, and a Director of the
Administrator. He has received no Directors' fees from the Company
during the year (2012: nil). The fees paid by the Company to the
Administrator (excluding VAT) for the year amounted to GBP104,000
(2012: GBP131,000).
21. Subsequent events
In August 2013, TC14 realised its investment in Luxor Cyber
City. The Company's share of the proceeds were INR 870 million (GBP
9.2 million at the prevailing exchange rate). This equals the
carrying value of the Company's interest in the financial
statements at 31 March 2013 in INR terms, but in GBP terms the
carrying value was GBP 10.5 million (using 31 March 2013 exchange
rates).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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