TIDMNBPC
RNS Number : 9073Y
Naya Bharat Property Company PLC
11 September 2009
?
11 September 2009
NAYA BHARAT PROPERTY COMPANY PLC (the "Company")
Final Results for the Year ended 31 March 2009
Naya Bharat Property Company plc (the "Company" or the "Group"), a Company
established to invest primarily in both listed and unlisted companies whose
principal activity is the ownership and/or development of land in India
announces its final results for the year ended 31 March 2009.
The Annual General Meeting of the Company will be held at Third Floor, Britannia
House, St George's Street, Douglas, Isle of Man IM1 1JE, British Isles on 12
October 2009 at 10.00 a.m.
For further information please contact:
+-----------------------------------------+----------------------------------------+
| Charlemagne Capital | 020 7518 2100 |
| Varda Lotan / Christopher Fitzwilliam | marketing@charlemagnecapital.com |
| Lay | www.charlemagnecapital.com |
| | |
+-----------------------------------------+----------------------------------------+
| Panmure Gordon | 020 7459 3600 |
| Hugh Morgan / Stuart Gledhill | |
| | |
+-----------------------------------------+----------------------------------------+
| Smithfield Consultants | 020 7360 4900 |
| John Kiely / Gemma Froggatt | |
+-----------------------------------------+----------------------------------------+
www.nayabharat.org
Chairman's Statement
The year under review has been a difficult one for the Company with share prices
falling sharply across the globe. The Company's investments in Indian real
estate companies were particularly harshly impacted by the perceived reliance of
such companies on the availability of financing given the severe dislocation in
credit markets that occurred at this time. The Manager made a number of changes
to the Company's investments over the year to reflect these developments,
bringing stability to the portfolio whilst at the same time maintaining exposure
to an eventual market recovery.
A number of larger companies were introduced to the portfolio, including DLF,
the largest real estate company in India which is well-diversified both
geographically and by sector, and Indiabulls Real Estate, another of the larger
real estate companies, with an especially strong balance sheet. Arihant
Foundations, a property developer with residential and office park projects in
Chennai, was divested. Holdings in BSEL and ERA Infra Engineering were also
divested towards the end of the year. The former, as a shopping mall player in
Nagpur, was vulnerable to continuing weakness in the retail segment whilst the
latter had outperformed the sector considerably. Unitech was divested early in
the year but then raised cash from a partial sale of its telecom subsidiary and
restructured a substantial part of its debt, thus alleviating the concerns which
prompted the earlier disposal. It was therefore brought back into the portfolio
later in the year.
Towards the end of the year, as a result of action taken across the globe to
provide liquidity and support economic activity, amongst other factors,
stockmarkets did indeed find some stability and more recently, subsequent to the
year end, they have appreciated sharply, with these developments reflected
positively in the net asset value of the Company.
Prospects for the Indian real estate market have also improved as the Indian
government has introduced a variety of fiscal measures to stimulate the economy
and the fall in the inflation rate to close to zero has helped the Reserve Bank
of India to cut interest rates to an all-time low, with the benchmark repurchase
rate now below 5%. The recent decisive re-election of the Congress party at the
general election also sets the scene for a period of political stability, which
should help foster continuing economic reform, providing further support to the
real estate market.
The structural case for Indian real estate remains as powerful as ever.
Sustained personal income growth and unusually favourable demographics are
swelling an aspirational middle class customer base. Private equity interest is
perking up as returns on offer grow. Companies themselves have stopped
aggressive land-bank acquisitions and are now focussed on converting existing
land-banks into cash.
The Company has the authority to purchase up to 14.99 per cent. of its own
Ordinary Shares in issue. The Company may use that authority to purchase
Ordinary Shares at a discount to the prevailing Net Asset Value per Share if
suitable occasions arise and the Company has funds available for that purpose.
The Board proposes to renew such authority at the forthcoming Annual General
Meeting.
In accordance with the aforementioned authority granted to the Company, the
Company purchased at a discount and cancelled a total of 5,925,957 Ordinary
Shares of the Company over the year to 31 March 2009 at an average price US
16.98 cents per share. As a result, there were 54,074,043 Ordinary Shares in
issue as at the date of this report. There have been no further share buy backs
subsequent to the year end.
Shankar Dey
Chairman
1 September 2009
Report of the Manager
Reporting Year:1 April 2008 to 31 March 2009
The net asset value of the Naya Bharat Property Company stood at USD 0.23 per
share on 31 March 2009. This represents a fall of 79% for the year and compares
with the 84% fall recorded by the BSE Realty Index (in US dollar terms) over the
same year. The Naya Bharat share price fell 88% over the year as its discount to
asset value widened.
Global financial markets came under severe strain over the second half of 2008
and Indian asset prices proved particularly vulnerable to the worldwide
withdrawal of credit. Given high fixed capital requirements and distant pay-back
time horizons, few other industries depend as heavily on long-term credit as
real estate, especially in its development stage. However, this trend was
tempered as interest rates fell to an all-time low of 5% in the first quarter of
2009. This should result in lower mortgage rates over time, improving
affordability. The government also lent support to the real estate sector by
allowing banks to restructure real estate loans and ease the loan repayment
pressures. Various fiscal measures were also introduced to stimulate the Indian
economy and reduce the impact of a global economic downturn. Last but not least,
with inflation falling close to zero, lower commodity prices will help reduce
current account deficits as well as public sector deficits, given subsidies in
place for food and fuel.
As a result of these developments, some of the more pessimistic views prevalent
just a few months ago seem to have been misplaced. Indeed, recent indicators
suggest that the economy may now be close to bottoming out; car and motorcycle
sales figures from manufacturers have being growing strongly since December
with, for example, the leading car producer Maruti Suzuki reporting sales up 15%
over the year to March. Fears of large scale layoffs in the IT and Finance
industries have also proven to be misplaced, with many banks hiring staff and
adding branches.
With credit conditions easing and the employment scenario not as bad as feared,
property developers in the residential segment have responded with price cuts.
All the large players, including DLF, Unitech and HDIL have announced projects
priced as much as 30% below peak levels and have in return received reasonably
enthusiastic responses. Demand may be being held back by some concern that
prices will continue to fall but once prices stabilise and potential buyers
realise that they are unlikely to fall any further, demand is likely to
strengthen. These signs of recovery are however limited to the residential
market. The commercial and retail segments of the property market remain
depressed with companies attempting to reschedule their debt obligations, divest
non-core assets and raise cash from private equity firms in order to improve
their financial positions.
There were a number of changes to the composition of the Naya Bharat portfolio
over the year under review. New companies coming into the portfolio included
DLF, the largest real estate company in India, which is well-diversified both
geographically and by sector, with its market leading position also giving it
further defensive qualities, and Indiabulls Real Estate, another of the larger
real estate companies, with an especially strong balance sheet, and a focus on
the Mumbai commercial property sector.
Ascendas India also came into the portfolio during the year. Ascendas India is a
REIT with well-located commercial properties in Bangalore, Chennai and
Hyderabad. It provides stable income, is relatively inexpensive and pays a 13%
yield.
Arihant Foundations, a property developer with residential and office park
projects in Chennai, was divested. Holdings in BSEL and ERA Infra Engineering
were also divested towards the end of the year under review. The former, as a
shopping mall player in Nagpur, was vulnerable to continuing weakness in the
retail segment whilst the latter had outperformed the sector considerably.
Unitech was divested in July but then raised cash from a partial sale of its
telecom subsidiary and restructured a substantial part of its debt, thus
alleviating the concerns which prompted the earlier disposal. It was therefore
brought back into the portfolio later in the year. Its share price fell by 76%
over the intervening year.
The structural case for Indian real estate remains as powerful as ever.
Sustained personal income growth and unusually favourable demographics are
swelling an aspirational middle class customer base. Private equity interest is
perking up as returns on offer grow. Companies themselves have stopped
aggressive land-bank acquisitions and are now focussed on converting existing
land-banks into cash. Economic activity is well supported by lower commodity
prices, and fiscal and monetary stimulus which may offer some support to Indian
property companies over the long term.
The Fund has a flexible cash policy. It seeks to be fully invested given the
number of attractive investment opportunities in the Indian real estate market
and related ancillary companies. However, in the event these investments become
unattractive/overvalued, the Fund has the flexibility to raise cash levels to
preserve capital. There is no limit on the percentage of NAV that can be held in
cash.
+-------------------------------------+----------------+
| Top 10 Holdings as at 31 March 2009 | % of Total |
| | Assets |
+-------------------------------------+----------------+
| Unitech | 18.0% |
+-------------------------------------+----------------+
| HDIL | 15.4% |
+-------------------------------------+----------------+
| DLF | 15.4% |
+-------------------------------------+----------------+
| Indiabulls Real Estate | 14.9% |
+-------------------------------------+----------------+
| IFCI | 9.1% |
+-------------------------------------+----------------+
| BSE Realty Index PN | 8.2% |
+-------------------------------------+----------------+
| Ascendas India Trust | 4.3% |
+-------------------------------------+----------------+
| DSK Developers | 2.3% |
+-------------------------------------+----------------+
| Ansal Housing | 1.8% |
+-------------------------------------+----------------+
| Orbit Corporation | 1.8% |
+-------------------------------------+----------------+
Investment Policy
Naya Bharat Property Company plc is an Isle of Man Company established to take
advantage of the opportunities that exist in the Indian property market. The
Company has an indefinite life and expects to provide Shareholders with an
attractive return to be achieved primarily through long-term capital growth.
The Company will invest primarily in listed companies whose principal activity
is the ownership and/or development of land in India. The Company's portfolio of
investments will seek to provide exposure to the residential, commercial,
retail, industrial and Special Economic Zone ("SEZ") sectors. Geographic
exposure will also be diversified across major and secondary cities in India.
The primary focus of target companies is the development of property
portfolios/land banks, although certain investee companies may also retain
completed properties for income generation. The Company may also invest in
special situations such as small capitalisation stocks with perceived large
undervalued property holdings, where a catalyst for re-valuation/realisation of
the property assets is anticipated.
The Company may also invest in unlisted companies although it is not anticipated
that the Company's investments in unlisted property companies will exceed 25 per
cent. of Net Asset Value once fully invested and measured at the time of
investment. However, if suitable opportunities arise, the Company may invest
more than 25 per cent. of its Net Asset Value in unlisted property companies.
Additionally, the Company may invest in freely transferable low exercise price
warrants, low strike price options, zero coupon equity linked notes or other
similar instruments which in the view of the Manager offer an efficient means of
providing the Company with exposure to Indian companies. These products
typically aim to provide economic exposure to the underlying security without
the associated tax and administrative burdens of investing directly in the local
market.
To achieve its investing policy, the Company will rely on the Manager's
disciplined bottom-up value-investing approach in order to select its
investments. Where valuations appear too rich, the Company will not be averse to
holding cash as a defensive strategy. In order to diversify its risk the Company
or its Group intends, except in special circumstances, to limit its investment
in property companies to ten. There is no limit to the percentage of NAV that
may be held in cash.
The Manager will regularly travel to India in order to seek out new
opportunities and monitor existing holdings. These trips will typically involve
meeting with management of investee companies and industry research bodies and
visiting project sites. The Manager may also utilise Charlemagne Capital's local
resources in order to perform due diligence on potential investments.
The Company may, but does not currently intend to take a seat on the board of
directors of investee companies. An active dialogue with the management teams of
many of the investee companies will be pursued in an effort to put forward
suggestions for improved investor/market visibility and transparency.
Hedging
Although it is not anticipated that it will do so, the Company may enter into
certain currency related transactions in order to hedge its currency risk.
Bank Borrowings
In seeking to enhance returns for Shareholders, the Directors believe that it
may be advantageous for the Company to borrow at an appropriate level in order
to acquire investments which would achieve a higher return than the cost of
borrowing. The Company or its Group may therefore make use of debt facilities
for investment purposes and may borrow up to 50 per cent. of its NAV (measured
at the time any borrowings are drawn down). The Articles contain no restrictions
on borrowing.
Charlemagne Capital (IOM) Limited
1 September 2009-09-10
Consolidated Income Statement
+-----------------+--------+----------+----------------+
| | Note | 31 | For |
| | | March | the |
| | | 2009 | period |
| | | | 8 |
| | | | December |
| | | | 2006 |
| | | | (date of |
| | | | incorporation) |
| | | | to |
| | | | 31 March 2008 |
+-----------------+--------+----------+----------------+
| | | US$'000 | US$'000 |
+-----------------+--------+----------+----------------+
| Income | | | |
+-----------------+--------+----------+----------------+
| Interest | | 10 | 282 |
| income | | | |
+-----------------+--------+----------+----------------+
| Dividend | | 424 | 291 |
| income | | | |
+-----------------+--------+----------+----------------+
| Net | 6 | (50,451) | 9,873 |
| changes | | | |
| in fair | | | |
| value | | | |
| of | | | |
| financial | | | |
| assets at | | | |
| fair | | | |
| value | | | |
| through | | | |
| profit or | | | |
| loss | | | |
+-----------------+--------+----------+----------------+
| Total | | (50,017) | 10,446 |
| net | | | |
| (loss)/income | | | |
+-----------------+--------+----------+----------------+
| Expenses | | | |
+-----------------+--------+----------+----------------+
| Manager's | | | |
| fees: | | | |
+-----------------+--------+----------+----------------+
| Annual | 8.3 | 515 | 1,569 |
| fees | | | |
+-----------------+--------+----------+----------------+
| Performance | 8.3 | - | 790 |
| fees | | | |
+-----------------+--------+----------+----------------+
| Audit | | 65 | 35 |
| fees | | | |
+-----------------+--------+----------+----------------+
| Legal | | 21 | 22 |
| and | | | |
| professional | | | |
| fees | | | |
+-----------------+--------+----------+----------------+
| Directors | 15 | 123 | 139 |
| fees | | | |
+-----------------+--------+----------+----------------+
| Administration | 9.3 | 126 | 120 |
| fees | | | |
+-----------------+--------+----------+----------------+
| Nominated | 9.1 | 53 | - |
| Adviser | | | |
| and | | | |
| broker | | | |
| fees | | | |
+-----------------+--------+----------+----------------+
| Custodian | 9.2 | 103 | 118 |
| fees | | | |
+-----------------+--------+----------+----------------+
| Company | | 12 | 15 |
| secretarial | | | |
| fees | | | |
+-----------------+--------+----------+----------------+
| Accounts | | 8 | 7 |
| preparation | | | |
+-----------------+--------+----------+----------------+
| Other | | 86 | 502 |
| expenses | | | |
+-----------------+--------+----------+----------------+
| Total | | 1,112 | 3,317 |
| operating | | | |
| expenses | | | |
+-----------------+--------+----------+----------------+
| (Loss)/profit | | (51,129) | 7,129 |
| before tax | | | |
+-----------------+--------+----------+----------------+
| Income | 16 | - | - |
| tax | | | |
| expense | | | |
+-----------------+--------+----------+----------------+
| (Loss)/profit | | (51,129) | 7,129 |
| for the | | | |
| year/period | | | |
+-----------------+--------+----------+----------------+
| Basic | 13 | (88.93) | 11.88 |
| and | | | |
| diluted | | | |
| (loss)/earnings | | | |
| per share | | | |
| (cent) | | | |
+-----------------+--------+----------+----------------+
The Directors consider all results are derived from continuing operations.
Consolidated Balance Sheet
+-------------+--------+---------+---------+
| | Note | Group | Group |
| | | At 31 | At 31 |
| | | March | March |
| | | 2009 | 2008 |
+-------------+--------+---------+---------+
| | | US$'000 | US$'000 |
+-------------+--------+---------+---------+
| Financial | 6 | 11,307 | 64,533 |
| assets at | | | |
| fair | | | |
| value | | | |
| through | | | |
| profit or | | | |
| loss | | | |
+-------------+--------+---------+---------+
| Due | | - | 2,361 |
| from | | | |
| broker | | | |
+-------------+--------+---------+---------+
| Other | | 85 | 96 |
| receivables | | | |
| and | | | |
| prepayments | | | |
+-------------+--------+---------+---------+
| Cash | 11 | 1,095 | 5 |
| at | | | |
| bank | | | |
+-------------+--------+---------+---------+
| Total | | 12,487 | 66,995 |
| current | | | |
| assets | | | |
+-------------+--------+---------+---------+
| Issued | 12 | 541 | 600 |
| share | | | |
| capital | | | |
+-------------+--------+---------+---------+
| Share | 12 | - | 56,729 |
| premium | | | |
+-------------+--------+---------+---------+
| Foreign | | (30) | 8 |
| currency | | | |
| translation | | | |
| reserve | | | |
+-------------+--------+---------+---------+
| Capital | 12 | 59 | - |
| redemption | | | |
| reserve | | | |
+-------------+--------+---------+---------+
| Retained | | 11,723 | 7,129 |
| earnings | | | |
+-------------+--------+---------+---------+
| Total | | 12,293 | 64,466 |
| equity | | | |
+-------------+--------+---------+---------+
| Accruals | 10 | 194 | 2,529 |
| and | | | |
| other | | | |
| payables | | | |
+-------------+--------+---------+---------+
| Total | | 194 | 2,529 |
| current | | | |
| liabilities | | | |
+-------------+--------+---------+---------+
| Total | | 194 | 2,529 |
| liabilities | | | |
+-------------+--------+---------+---------+
| Total | | 12,487 | 66,995 |
| equity | | | |
| and | | | |
| liabilities | | | |
+-------------+--------+---------+---------+
Approved by the Board of Directors on 1 September 2009.
Jonathan BradleyAnderson Whamond
Director Director
Company Balance Sheet
+---------------+--------+---------+---------+
| | Note | Company | Company |
| | | At 31 | At 31 |
| | | March | March |
| | | 2009 | 2008 |
+---------------+--------+---------+---------+
| | | US$'000 | US$'000 |
+---------------+--------+---------+---------+
| Inter-company | | 12,341 | 64,571 |
| balances | | | |
+---------------+--------+---------+---------+
| Other | | 33 | 60 |
| receivables | | | |
| and | | | |
| prepayments | | | |
+---------------+--------+---------+---------+
| Cash | 11 | 50 | 10 |
| at | | | |
| bank | | | |
+---------------+--------+---------+---------+
| Total | | 12,424 | 64,641 |
| current | | | |
| assets | | | |
+---------------+--------+---------+---------+
| Issued | 12 | 541 | 600 |
| share | | | |
| capital | | | |
+---------------+--------+---------+---------+
| Share | | - | 56,729 |
| premium | | | |
+---------------+--------+---------+---------+
| Foreign | | 9 | 8 |
| currency | | | |
| translation | | | |
| reserve | | | |
+---------------+--------+---------+---------+
| Capital | 12 | 59 | |
| redemption | | | |
| reserve | | | |
+---------------+--------+---------+---------+
| Retained | | 11,684 | 7,139 |
| earnings | | | |
+---------------+--------+---------+---------+
| Total | | 12,293 | 64,476 |
| equity | | | |
+---------------+--------+---------+---------+
| Accruals | 10 | 131 | 165 |
| and | | | |
| other | | | |
| payables | | | |
+---------------+--------+---------+---------+
| Total | | 131 | 165 |
| current | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
| Total | | 131 | 165 |
| liabilities | | | |
+---------------+--------+---------+---------+
| Total | | 12,424 | 64,641 |
| equity | | | |
| and | | | |
| liabilities | | | |
+---------------+--------+---------+---------+
The loss made by the Company for the year ended 31 March 2009 was US$
(51,158,000) (2008: gain US$7,129,000), after impairment of inter-company
balances amounting to US$ 51,483,689 (primarily as a result of the provisions
made against the investments held by the Company's subsidiaries).
Approved by the Board of Directors on 1 September 2009.
Jonathan BradleyAnderson Whamond
Director Director
Consolidated Statement of Changes in Equity
+-------------+---------+---------+-------------+------------+----------+---------+
| | Share | Share | Foreign | Capital | Retained | Total |
| | Capital | Premium | Currency | | Earnings | |
| | | | Translation | Redemption | | |
| | | | Reserve | Reserve | | |
+-------------+---------+---------+-------------+------------+----------+---------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+-------------+---------+---------+-------------+------------+----------+---------+
| Balance | - | - | - | - | - | - |
| at 8 | | | | | | |
| December | | | | | | |
| 2006 | | | | | | |
+-------------+---------+---------+-------------+------------+----------+---------+
| Proceeds | 600 | 59,400 | - | - | - | 60,000 |
| from | | | | | | |
| shares | | | | | | |
| issued | | | | | | |
+-------------+---------+---------+-------------+------------+----------+---------+
| Share | - | (2,671) | - | - | - | (2,671) |
| issue | | | | | | |
| expenses | | | | | | |
+-------------+---------+---------+-------------+------------+----------+---------+
| Foreign | - | - | 8 | - | - | 8 |
| exchange | | | | | | |
| translation | | | | | | |
| differences | | | | | | |
+-------------+---------+---------+-------------+------------+----------+---------+
| Profit | - | - | - | - | 7,129 | 7,129 |
| for | | | | | | |
| the | | | | | | |
| period | | | | | | |
+-------------+---------+---------+-------------+------------+----------+---------+
| Balance | 600 | 56,729 | 8 | - | 7,129 | 64,466 |
| at 31 | | | | | | |
| March | | | | | | |
| 2008 | | | | | | |
+-------------+---------+---------+-------------+------------+----------+---------+
+-------------+--------+----------+--------+--------+----------+----------+
| Balance | 600 | 56,729 | 8 | - | 7,129 | 64,466 |
| at 1 | | | | | | |
| April | | | | | | |
| 2008 | | | | | | |
+-------------+--------+----------+--------+--------+----------+----------+
| Share | (59) | - | - | 59 | (1,006) | (1,006) |
| buyback | | | | | | |
+-------------+--------+----------+--------+--------+----------+----------+
| Transfer | - | (56,729) | - | - | 56,729 | - |
| to | | | | | | |
| retained | | | | | | |
| earnings | | | | | | |
| (note | | | | | | |
| 12) | | | | | | |
+-------------+--------+----------+--------+--------+----------+----------+
| Foreign | - | - | (38) | - | - | (38) |
| exchange | | | | | | |
| translation | | | | | | |
| differences | | | | | | |
+-------------+--------+----------+--------+--------+----------+----------+
| Loss | - | - | - | - | (51,129) | (51,129) |
| for | | | | | | |
| the | | | | | | |
| year | | | | | | |
+-------------+--------+----------+--------+--------+----------+----------+
| Balance | 541 | - | (30) | 59 | 11,723 | 12,293 |
| at 31 | | | | | | |
| March | | | | | | |
| 2009 | | | | | | |
+-------------+--------+----------+--------+--------+----------+----------+
Consolidated Cash Flow Statement
+-------------+--------+----------+----------------+
| | Note | Year | For |
| | | ended | the |
| | | 31 | period 8 |
| | | March | December |
| | | 2009 | 2006 |
| | | | (date of |
| | | | incorporation) |
| | | | to |
| | | | 31 March 2008 |
+-------------+--------+----------+----------------+
| | | US$'000 | US$'000 |
+-------------+--------+----------+----------------+
| Cash | | | |
| flows | | | |
| from | | | |
| operating | | | |
| activities | | | |
+-------------+--------+----------+----------------+
| Purchase | | (18,222) | (86,868) |
| of | | | |
| financial | | | |
| assets | | | |
+-------------+--------+----------+----------------+
| Proceeds | | 23,326 | 29,847 |
| from | | | |
| sale of | | | |
| investments | | | |
+-------------+--------+----------+----------------+
| Dividends | | 410 | 258 |
| received | | | |
+-------------+--------+----------+----------------+
| Interest | | 10 | 282 |
| received | | | |
+-------------+--------+----------+----------------+
| Interest | | - | (3) |
| paid | | | |
+-------------+--------+----------+----------------+
| Operating | | (3,425) | (848) |
| expenses | | | |
| paid | | | |
+-------------+--------+----------+----------------+
| Net | | 2,099 | (57,332) |
| cash | | | |
| received | | | |
| from/(used | | | |
| in) | | | |
| operating | | | |
| activities | | | |
+-------------+--------+----------+----------------+
| Financing | | | |
| activities | | | |
+-------------+--------+----------+----------------+
| Share | | (1,006) | - |
| buyback | | | |
+-------------+--------+----------+----------------+
| Proceeds | | - | 60,000 |
| from | | | |
| issue of | | | |
| shares | | | |
+-------------+--------+----------+----------------+
| Share | | - | (2,671) |
| issue | | | |
| costs | | | |
+-------------+--------+----------+----------------+
| Net | | (1,006) | 57,329 |
| cash | | | |
| (used | | | |
| in)/ | | | |
| generated | | | |
| from | | | |
| financing | | | |
| activities | | | |
+-------------+--------+----------+----------------+
| Net | | 1,093 | (3) |
| increase | | | |
| /(decrease) | | | |
| in cash and | | | |
| cash | | | |
| equivalents | | | |
+-------------+--------+----------+----------------+
| Effects | | (3) | 8 |
| of | | | |
| exchange | | | |
| rate | | | |
| changes | | | |
| on cash | | | |
| and cash | | | |
| equivalents | | | |
+-------------+--------+----------+----------------+
| Cash | | 5 | - |
| and | | | |
| cash | | | |
| equivalents | | | |
| at | | | |
| beginning | | | |
| of period | | | |
+-------------+--------+----------+----------------+
| Cash | 11 | 1,095 | 5 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at end of | | | |
| year/period | | | |
+-------------+--------+----------+----------------+
Schedule of Investments
+-------------------------------------------+-----------+---------+----------+----------+
| 31 March 2009 | No of | Cost | Fair | % of |
| | Shares | | Value | Total |
+-------------------------------------------+-----------+---------+----------+----------+
| Investments | Nominal | | | Assets |
+-------------------------------------------+-----------+---------+----------+----------+
| | | US$'000 | US$'000 | |
+-------------------------------------------+-----------+---------+----------+----------+
| | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Housing Development & Infrastructure | 389,726 | 547 | 629 | 5.0 |
+-------------------------------------------+-----------+---------+----------+----------+
| Mahindra Lifespace | 52,823 | 115 | 138 | 1.2 |
+-------------------------------------------+-----------+---------+----------+----------+
| Unitech | 3,218,815 | 1,658 | 2,218 | 17.8 |
+-------------------------------------------+-----------+---------+----------+----------+
| Ascendas India Trust | 1,539,399 | 539 | 526 | 4.2 |
+-------------------------------------------+-----------+---------+----------+----------+
| | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| P Notes ¹ | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| ABN Indiabulls | 338,265 | 857 | 672 | 5.4 |
+-------------------------------------------+-----------+---------+----------+----------+
| ABN AMRO Bank 03-Jul-09 (HDIL) | 294,573 | 2,947 | 475 | 3.8 |
+-------------------------------------------+-----------+---------+----------+----------+
| Citigroup Global Markets 17-Jan-2012 | 1,848,446 | 1,052 | 703 | 5.6 |
| (IFCI Limited) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Citigroup Global Markets 17-Jan-2012 | 210,013 | 3,121 | 339 | 2.7 |
| (HDIL) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Citigroup Global Markets 20-Jan-2010 | 78,410 | 454 | 31 | 0.2 |
| (Kulkarni) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Deutsche Bank AG 30-Mar-17 (Orbit | 214,689 | 1,416 | 221 | 1.8 |
| Corporation) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Deutsche Bank AG London (DLF Limited) | 217,677 | 2,858 | 718 | 5.7 |
+-------------------------------------------+-----------+---------+----------+----------+
| Deutsche Bank AG London (HDIL) | 150,351 | 1,224 | 243 | 1.9 |
+-------------------------------------------+-----------+---------+----------+----------+
| Deutsche Bank AG London 12-May-2009 | 202,434 | 1,263 | 81 | 0.6 |
| (Kulkarni) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Deutsche Bank AG London 23-Jul-08 (IFCI | 1,043,027 | 696 | 397 | 3.2 |
| Limited) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Deutsche Bank AG London 27-Mar-17 | 583,065 | 4,112 | 1,159 | 9.3 |
| (Indiabulls) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Deutsche Bank AG London BSEREAL | 32,656 | 935 | 1,005 | 8.1 |
+-------------------------------------------+-----------+---------+----------+----------+
| Deutsche Call Wts 05-Dec-16 (Ansal | 63,068 | 343 | 26 | 0.2 |
| Housing) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| JP Morgan (DLF Limited) | 52,647 | 230 | 174 | 1.4 |
+-------------------------------------------+-----------+---------+----------+----------+
| JP Morgan (HDIL) | 121,563 | 313 | 196 | 1.6 |
+-------------------------------------------+-----------+---------+----------+----------+
| Merrill Lynch Intl & Co 08-Mar-2011 | 484,762 | 2,570 | 198 | 1.6 |
| (Ansal Housing) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Merrill Lynch Intl & Co 12-Jul-2010 | 427,397 | 2,392 | 170 | 1.4 |
| (Kulkarni) | | | | |
+-------------------------------------------+-----------+---------+----------+----------+
| Maquarie Bank (DLF Limited) | 299,591 | 3,554 | 988 | 7.9 |
+-------------------------------------------+-----------+---------+----------+----------+
| Total Investments | | | 11,307 | 90.6 |
+-------------------------------------------+-----------+---------+----------+----------+
| Other Current Assets | | | 1,180 | 9.4 |
+-------------------------------------------+-----------+---------+----------+----------+
| Total Assets | | | 12,487 | 100.0 |
+-------------------------------------------+-----------+---------+----------+----------+
¹ P Notes are issued by EU rated credit institutions and derive their value from
the underlying local Indian stock upon which they are issued and are listed on
the Luxembourg or Dublin Stock Exchange. For further information see Note 6.
Notes to the Consolidated Financial Statements
1 The Company
Naya Bharat Property Company plc (the "Company") was incorporated and registered
in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 8
December 2006 as a public company with registered number 118539C.
Pursuant to an admission document dated 21 February 2007 (the "Prospectus")
there was an original placing of up to 60,000,000 Ordinary Shares. Following the
close of the placing on 26 February 2007 60,000,000 Ordinary Shares were issued.
The Shares of the Company were admitted to trading on the AIM market of the
London Stock Exchange on 26 February 2007 when dealings also commenced.
The Company's agents and the Manager perform all significant functions.
Accordingly, the Company itself has no employees.
Dividend Policy
The Directors have absolute discretion as to the payment of dividends and do not
currently intend to pay dividends on the Ordinary Shares.
Financial Year End
The financial year end of the Company is 31 March in each year.
3 The Subsidiaries
Naya Bharat Property Company (Mauritius) Limited a wholly owned subsidiary of
the Company, was incorporated as a limited liability company under the
provisions of the Mauritius Companies Act 2001, Mauritius on 12 January 2007,
registered number 067911 C1/GBL. 2 shares of US$1 each have been issued to the
Company. The Directors of the subsidiary are Dhanun Ujoodha, Mowlooda Randera
Taher, Anderson Whamond (resigned 2 February 2009), Jane Bates and Adrian Jones
(appointed 2 February 2009).
Naya Bharat Investments (Mauritius) Limited is a wholly owned subsidiary of the
Company. It was incorporated as a limited liability company under the provisions
of the Mauritius Companies Act 2001, Mauritius on 28 December 2007, registered
number 76564 C1/GBL. 2 shares of US$1 each have been issued to the Company. The
Directors of the subsidiary are Dhanun Ujoodha, Mowlooda Randera Taher, Jane
Bates(appointed 8 January 2008) and Adrian Jones (appointed 8 July 2008).
Naya Bharat Investments (Mauritius) Limited is registered with The Securities &
Exchange Board of India ("SEBI") (effective 9 September 2008) as an sub-account
of the Manager, acting in its capacity as a Foreign Institutional Investor,
registration number 20080967 and the company therefore, is authorised to invest
in Indian securities in accordance with SEBI regulations.
4 Accounting Policies
The annual audited consolidated financial statements of the Company for the year
ended 31 March 2009 comprises of the Company and its subsidiaries (together
referred to as the "Group").
The annual report was authorised for issue by the Directors on 1 September 2009.
4.1 Basis of presentation
These consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards promulgated by the International
Accounting Standards Board ("IFRS").
4.2 Basis of consolidation
Subsidiaries
Subsidiaries are those enterprises controlled by the Company. Control exists
where the Company has the power, directly or indirectly, to govern the financial
and operating policies of an enterprise so as to obtain benefits from its
activities. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control effectively
commences until the date that control effectively ceases.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised gains arising from
intra-group transactions, are eliminated in preparing the consolidated financial
statements.
4.3 Financial assets at fair value through profit or loss
Investments are designated as at fair value through profit or loss. The Company
invests in Indian listed real estate companies for which fair value is based on
quoted market prices. The quoted market price used for financial assets held by
the Company is the current bid price ruling at the year end without regard to
selling prices. Where bid price is not available as at the year end, the last
trade price is used. As at 31 March 2009, investments valued at US$1,004,939 in
the consolidated balance sheet were held at last trade price (31 March 2008:
US$41,960,983).
Purchases and sales of investments are recognised on trade date - the date on
which the Company commits to purchase or sell the asset. Investments are
initially recorded at cost, and transaction costs for all financial assets and
financial liabilities carried at fair value through profit or loss are expensed
as incurred.
Gains and losses arising from changes in the fair value of the financial assets
and liabilities are included in the income statement in the year in which they
arise.
4.4 Foreign currency translation
Indian Rupee is the currency of the primary economic environment in which the
entity operates (the "functional currency").
The United States Dollar is the currency in which the annual results are
presented (the "presentation currency").
Monetary assets and liabilities denominated in foreign currencies as at the date
of these financial statements are translated to Indian Rupee at exchange rates
prevailing on that date. Income and expenses are translated into Indian Rupee
based on exchange rates on the date of the transaction. All resulting exchange
differences are recognised in the income statement.
The accounts are presented in US$ by translating the assets and liabilities at
the exchange rate prevailing on the balance sheet date. Items of revenue and
expense are translated at exchange rates on the date of the relevant
transactions. Components of equity are translated at the date of the relevant
transaction and not retranslated. All resulting exchange differences are
recognised in equity.
4.5 Dividends
Dividends are recognised as a liability in the year in which they are declared
and approved. No dividends were declared as at 31 March 2009 (2008: nil).
4.6 Interest income and dividend income
Interest income is recognised on a time-proportionate basis using the effective
interest rate method.
Dividend income is recognised when the right to receive payment is established.
4.7Segment reporting
The Company has one segment focusing on maximising total returns through
investing in real estate companies in India. No additional disclosure is
included in relation to segment reporting, as the Company's activities are
limited to one business and geographic segment.
4.8 Share Capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of shares are shown in equity as a deduction from the
proceeds.
4.9 Income tax
The Company is resident for taxation purposes in the Isle of Man and is subject
to income tax at a rate of zero per cent.
The Group is liable to tax in Mauritius on the activities of its subsidiaries.
5 Net Asset Value per Share
The net asset value per share as at 31 March 2009 is US$0.23 per share (31 March
2008: US$1.07 per share) based on 54,074,043 ordinary shares in issue as at that
date (31 March 2008: 60,000,000 ordinary shares).
6 Investments
The P Notes below are issued by EU rated credit institutions and derive their
value from the underlying local Indian stock upon which they are issued and are
listed on the Luxembourg or Dublin Stock Exchange.
Financial assets at fair value through profit or loss:
+------------------+-----------+---------+
| 31 | | Fair |
| March | | Value |
| 2009 | | |
+------------------+-----------+---------+
| Security | Number | US$'000 |
| name | | |
+------------------+-----------+---------+
| Housing | 389,726 | 629 |
| Development | | |
| & | | |
| Infrastructure | | |
+------------------+-----------+---------+
| Mahindra | 52,823 | 138 |
| Lifespace | | |
+------------------+-----------+---------+
| Unitech | 3,218,815 | 2,218 |
+------------------+-----------+---------+
| Ascendas | 1,539,399 | 526 |
| India | | |
| Trust | | |
+------------------+-----------+---------+
| P | | |
| Notes | | |
+------------------+-----------+---------+
| ABN | 338,265 | 672 |
| Indiabulls | | |
+------------------+-----------+---------+
| ABN | 294,573 | 475 |
| AMRO | | |
| Bank | | |
| 03-Jul-09 | | |
| (HDIL) | | |
+------------------+-----------+---------+
| Citigroup | 1,848,446 | 703 |
| Global | | |
| Markets | | |
| 17-Jan-2012 | | |
| (IFCI | | |
| Limited) | | |
+------------------+-----------+---------+
| Citigroup | 210,013 | 339 |
| Global | | |
| Markets | | |
| 17-Jan-2012 | | |
| (HDIL) | | |
+------------------+-----------+---------+
| Citigroup | 78,410 | 31 |
| Global | | |
| Markets | | |
| 20-Jan-2010 | | |
| (Kulkarni) | | |
+------------------+-----------+---------+
| Deutsche | 214,689 | 221 |
| Bank AG | | |
| 30-Mar-17 | | |
| (Orbit | | |
| Corporation) | | |
+------------------+-----------+---------+
| Deutsche | 217,677 | 718 |
| Bank AG | | |
| London | | |
| (DLF | | |
| Limited) | | |
+------------------+-----------+---------+
| Deutsche | 150,351 | 243 |
| Bank AG | | |
| London | | |
| (HDIL) | | |
+------------------+-----------+---------+
| Deutsche | 202,434 | 81 |
| Bank AG | | |
| London | | |
| 12-May-2009 | | |
| (Kulkarni) | | |
+------------------+-----------+---------+
| Deutsche | 1,043,027 | 397 |
| Bank AG | | |
| London 23-Jul-08 | | |
| (IFCI Limited) | | |
+------------------+-----------+---------+
| Deutsche | 583,065 | 1,159 |
| Bank AG | | |
| London | | |
| 27-Mar-17 | | |
| (Indiabulls) | | |
+------------------+-----------+---------+
| Deutsche | 32,656 | 1,005 |
| Bank AG | | |
| London | | |
| BSEREAL | | |
+------------------+-----------+---------+
| Deutsche | 63,068 | 26 |
| Call Wts | | |
| 05-Dec-16 | | |
| (Ansal | | |
| Housing) | | |
+------------------+-----------+---------+
| JP | 52,647 | 174 |
| Morgan | | |
| (DLF | | |
| Limited) | | |
+------------------+-----------+---------+
| JP | 121,563 | 196 |
| Morgan | | |
| (HDIL) | | |
+------------------+-----------+---------+
| Merrill | 484,762 | 198 |
| Lynch | | |
| Intl & | | |
| Co | | |
| 08-Mar-2011 | | |
| (Ansal | | |
| Housing) | | |
+------------------+-----------+---------+
| Merrill | 427,397 | 170 |
| Lynch | | |
| Intl & | | |
| Co | | |
| 12-Jul-2010 | | |
| (Kulkarni) | | |
+------------------+-----------+---------+
| Maquarie | 299,591 | 988 |
| Bank | | |
| (DLF | | |
| Limited) | | |
+------------------+-----------+---------+
| | | 11,307 |
+------------------+-----------+---------+
Financial assets at fair value through profit or loss:
+--------------------+-----------+---------+
| 31 | | Fair |
| March | | Value |
| 2008 | | |
+--------------------+-----------+---------+
| Security | Number | US$'000 |
| name | | |
+--------------------+-----------+---------+
| ABN | 193,642 | 3,138 |
| AMRO | | |
| Bank | | |
| 3/7/09 | | |
| (HDIL) | | |
+--------------------+-----------+---------+
| Citigroup | 3,574,835 | 3,877 |
| Global | | |
| Markets | | |
| 17-Jan-2012 | | |
| (Bhagyanagar | | |
| India) | | |
+--------------------+-----------+---------+
| Citigroup | 1,848,446 | 2,032 |
| Global | | |
| Markets | | |
| 17-Jan-2012 | | |
| (IFCI) | | |
+--------------------+-----------+---------+
| Citigroup | 163,344 | 2,677 |
| Global | | |
| Markets | | |
| 17-Jan-2012 | | |
| (HDIL) | | |
+--------------------+-----------+---------+
| Citigroup | 426,686 | 5,607 |
| Global | | |
| Markets | | |
| 17-Jan-2012 | | |
| (Orbit | | |
| Corporation) | | |
+--------------------+-----------+---------+
| Citigroup | 485,984 | 7,196 |
| Global | | |
| Markets | | |
| 20-Jan-2010 | | |
| (Era Infra | | |
| Engineering) | | |
+--------------------+-----------+---------+
| Citigroup | 601,958 | 2,424 |
| Global | | |
| Markets | | |
| 20-Jan-2010 | | |
| (DSK | | |
| Developers) | | |
+--------------------+-----------+---------+
| Citigroup | 339,932 | 887 |
| Global | | |
| Markets | | |
| 24/10/12 | | |
| (SSI | | |
| Limited) | | |
+--------------------+-----------+---------+
| Citigroup | 92,000 | 355 |
| Global | | |
| Markets | | |
| 20/01/10 | | |
| (Ansal | | |
| Properties) | | |
+--------------------+-----------+---------+
| Deutsche | 45,868 | 343 |
| Bank AG | | |
| 11/05/09 | | |
| (Arihant | | |
| Found & | | |
| Housing) | | |
+--------------------+-----------+---------+
| Deutsche | 547,917 | 7,200 |
| Bank AG | | |
| 30/03/17 | | |
| (Orbit | | |
| Corporation) | | |
+--------------------+-----------+---------+
| Deutsche | 29,400 | 435 |
| Bank AG | | |
| London | | |
| 04/01/18 | | |
| (Era | | |
| Infra | | |
| Engineering) | | |
+--------------------+-----------+---------+
| Deutsche | 202,434 | 815 |
| Bank AG | | |
| London 12-May-2009 | | |
| (DSK Developers) | | |
+--------------------+-----------+---------+
| Deutsche | 4,858,657 | 5,342 |
| Bank AG | | |
| London | | |
| 23-Jul-2008 | | |
| (IFCI) | | |
+--------------------+-----------+---------+
| Deutsche | 57,600 | 222 |
| Bank AG | | |
| London | | |
| 27/02/09 | | |
| (Ansal | | |
| Properties) | | |
+--------------------+-----------+---------+
| Deutsche | 99,835 | 260 |
| Bank AG | | |
| London 30/01/17 | | |
| (SSI Limited) | | |
+--------------------+-----------+---------+
| Deutsche | 63,068 | 246 |
| Call Wts | | |
| 05/12/16 | | |
| (Ansal | | |
| Housing) | | |
+--------------------+-----------+---------+
| JP | 188,802 | 1,271 |
| Morgan | | |
| Intl | | |
| 12/01/11 | | |
| (Unitech) | | |
+--------------------+-----------+---------+
| Merrill | 2,638,680 | 2,882 |
| Lynch | | |
| Intl & | | |
| Co | | |
| 07-Mar-2011 | | |
| (BSEL | | |
| Infrastructure | | |
| Realty) | | |
+--------------------+-----------+---------+
| Merrill | 11,615 | 225 |
| Lynch | | |
| Intl & | | |
| Co | | |
| 08-Feb-2012 | | |
| (Akruti | | |
| Nirm) | | |
+--------------------+-----------+---------+
| Merrill | 702,431 | 2,665 |
| Lynch | | |
| Intl & | | |
| Co | | |
| 08-Mar-2011 | | |
| (Ansal | | |
| Housing) | | |
+--------------------+-----------+---------+
| Merrill | 1,641,793 | 6,336 |
| Lynch | | |
| Intl & | | |
| Co | | |
| 12-Jun-2010 | | |
| (Ansal | | |
| Properties) | | |
+--------------------+-----------+---------+
| Merrill | 427,397 | 1,721 |
| Lynch | | |
| Intl & | | |
| Co | | |
| 12-Jul-2010 | | |
| (DSK | | |
| Developers) | | |
+--------------------+-----------+---------+
| Merrill | 249,138 | 1,862 |
| Lynch | | |
| Intl & | | |
| Co | | |
| 30-Nov-2011 | | |
| (Arihant) | | |
+--------------------+-----------+---------+
| Merrill | 80,937 | 1,199 |
| Lynch | | |
| Intl | | |
| 23/05/12 | | |
| (ERA | | |
| Infra | | |
| Engineering) | | |
+--------------------+-----------+---------+
| Morgan | 246,221 | 3,316 |
| Stanley | | |
| Asia | | |
| Products | | |
| 08-Jan-2009 | | |
| (Unitech) | | |
+--------------------+-----------+---------+
| | | 64,533 |
+--------------------+-----------+---------+
Net changes in fair value on financial assets at fair value through profit or
loss:
+------------+----------+---------+
| | 31 | 31 |
| | March | March |
| | 2009 | 2008 |
+------------+----------+---------+
| | US$'000 | US$'000 |
+------------+----------+---------+
| Realised | (27,405) | 8,717 |
+------------+----------+---------+
| Unrealised | (23,046) | 1,156 |
+------------+----------+---------+
| Total | (50,451) | 9,873 |
| gains | | |
+------------+----------+---------+
Analysis of investments:
+--------------------------------------------------+----------------+---------------+
| | 31 March 2009 | 31 March 2008 |
| | US$'000 | US$'000 |
+--------------------------------------------------+----------------+---------------+
| Investments - cost b/f | 63,377 | - |
+--------------------------------------------------+----------------+---------------+
| Acquisitions | 18,222 | 86,868 |
+--------------------------------------------------+----------------+---------------+
| Disposals | (48,402) | (23,491) |
+--------------------------------------------------+----------------+---------------+
| Investments - cost c/f | 33,197 | 63,377 |
+--------------------------------------------------+----------------+---------------+
| Unrealised gain | (21,890) | 1,156 |
+--------------------------------------------------+----------------+---------------+
| Investments - market value | 11,307 | 64,533 |
+--------------------------------------------------+----------------+---------------+
7 Interest bearing loans
On 1 March 2008, a loan facility between the Company and its subsidiary Naya
Bharat Investments (Mauritius) Limited (the "Subsidiary") for a maximum of
US$70,000,000 came into effect. The Subsidiary uses the loan solely for the
purpose of investing in listed equity securities and to meet operational
expenses. The loan is repayable by the Subsidiary on demand by the Company.
Interest is accrued daily from the date the loan came into effect, at a rate
equal to the USD overnight LIBOR on a basis of 360 days a year.
8 Related Party Transactions
8.1Directors of the Company
Anderson Whamond was an executive director of the Manager until 31 March 2009
when his role changed to that of non-executive. Until 31 March 2009 when he
resigned his position, Mr Whamond was a director of Charlemagne Capital Limited
("CCL"), the parent of the Manager and the Placing Agent. Mr Whamond holds
65,000 ordinary shares in the Company. He is also a shareholder of CCL and
additionally has an indirect family interest in shares of CCL.
Jonathan Bradley is a non-executive director of the Placing Agent and holds
20,000 ordinary shares in the Company (2008: 20,000 ordinary shares).
Charlemagne Capital (Investments) Limited, an entity associated with the
Manager, holds 97,181 ordinary shares in the Company (2008: 397,181 ordinary
shares).
As at 31 March 2009 Shares of the Company were held by a number of employees of
the Charlemagne Capital group and by an employee benefit trust managed by an
independent trustee, Sanne Trust Company Limited of which certain employees of
the group and their families may be potential beneficiaries.
CCL's shares are listed on the AIM Market of the London Stock Exchange.
Save as disclosed above, none of the Directors had any interest during the year
in any material contract for the provision of services which was significant to
the business of the Company.
8.2 Directors of the Subsidiaries
Jane Bates and Adrian Jones are directors of the Manager. In compliance with
local regulations the subsidiaries have appointed directors who are employees of
or are associated with, the registered office service provider.
8.3 Manager fees
Annual fees
The Manager is entitled to an annual management fee of 1.75% per annum of the
monthly net asset value of the Company. This fee will accrue monthly and is
payable monthly in arrears by Naya Bharat Property Company (Mauritius) Limited.
The Manager shall also be entitled to recharge to the Group all and any
reasonable costs and disbursements properly incurred by it in the performance of
its duties including costs of travel save to the extent that such costs are
staff costs or other internal costs of the Manager. All amounts payable to the
Manager by the Company shall be paid together with any value added tax, if
applicable.
Annual management fees payable during the year ended 31 March 2009 amounted to
US$514,592 (2008: US$1,569,248), of which US$52,013 is outstanding at the year
end.
Performance fees
The Manager is entitled to a performance fee, accrued monthly and calculated and
payable after the end of each performance fee year, equal to 15% of any excess
of the net asset value per ordinary share (after adding back dividends and other
distributions and ignoring any accrued performance fee) as at the end of each
performance fee year over the benchmark multiplied by the time weighted average
number of ordinary shares in issue over the relevant year.
For these purposes the benchmark shall be equal to the highest net asset value
per share as at the last valuation day in any preceding performance fee year
and, in the case of the first performance fee year, shall be the Placing Price.
Performance fee years shall commence on 1 April and terminate on 31 March of the
following year (or on the termination of the Management Agreement, if earlier).
Performance fees accrued during the year ended 31 March 2009 amounted to US$nil
(2008: US$789,782).
9 Charges and Fees
9.1 Nominated Adviser and Broker fees
Pursuant to the Placing and in its capacity as AIM Sponsor, the Nominated
Adviser and Broker was entitled to receive a fee of GBP75,000. The payment of
this fee was conditional upon admission of the Company's Shares to AIM taking
place on or before 26 February 2007 or such later date as may have been agreed,
not being later than 31 March 2007. This amount has been charged to equity as a
share issue expense.
As Nominated Adviser and Broker to the Company for the purposes of the AIM
rules, the nominated adviser and broker is entitled to receive an annual fee of
GBP25,000, payable twice yearly in advance, such annual fee to commence on 1
January 2008.
Nominated Advisor and Broker fees paid for the year ended 31 March 2009 amounted
to GBP53,281 (2008: nil).
9.2 Custodian fees
The Custodian is entitled to receive fees calculated as 5 basis points per annum
of the net asset value of the portfolio of the Company, subject to a minimum
monthly fee of US$2,250, calculated monthly and payable quarterly in arrears.
Custodian fees for the year ending 31 March 2009 amounted to US$103,253 (2008:
US$118,289), of which US$24,150 is outstanding at the year end.
9.3 Administrator and Registrar fees
The Administrator is entitled to receive a fee of 10 basis points per annum of
the net asset value of the Company, subject to a minimum monthly fee of
US$7,500, calculated monthly and payable quarterly in arrears.
Additionally, the Administrator is entitled to receive a fee of US$6,500 for
assisting in the preparation of the annual and interim financial statements of
the Company; US$10,000 per annum for providing registered office and company
secretarial services, and reimbursement of all costs incurred in utilising the
services of CREST.
Administration fees for the year ending 31 March 2009 amounted to US$125,718
(2008: US$119,658), secretarial fees were US$12,125 (2008: US$14,553), financial
statement preparation fees were US$7,637 (2008: US$6,500) and CREST fees were
US$8,289 (2008 : US$9,950).
9.4 Other operating expenses
The costs associated with maintaining the Company's subsidiaries, to include the
costs of continuing incorporation and third party service providers, shall be
chargeable to each subsidiary.
9.5 Audit fees
Audit fees payable for the year end 31 March 2009 amounted to US$65,204 (2008`:
US$34,714).
10 Accruals and other payables
+----------------+---------+---------+---------+---------+
| | Group | Company | Group | Company |
| | 31 | 31 | 31 | 31 |
| | March | March | March | March |
| | 2009 | 2009 | 2008 | 2008 |
+----------------+---------+---------+---------+---------+
| | US$'000 | US$'000 | US$'000 | US$'000 |
+----------------+---------+---------+---------+---------+
| Performance | - | - | 790 | - |
| fee payable | | | | |
+----------------+---------+---------+---------+---------+
| Management | 52 | - | 1,569 | - |
| fee | | | | |
| payable | | | | |
+----------------+---------+---------+---------+---------+
| Administration | 29 | 22 | 51 | 49 |
| fees payable | | | | |
+----------------+---------+---------+---------+---------+
| Audit | 52 | 48 | 35 | 33 |
| fee | | | | |
| payable | | | | |
+----------------+---------+---------+---------+---------+
| CREST | 2 | 2 | 2 | 2 |
| fees | | | | |
| payable | | | | |
+----------------+---------+---------+---------+---------+
| Custodian | 24 | 24 | 50 | 50 |
| fees | | | | |
| payable | | | | |
+----------------+---------+---------+---------+---------+
| Directors | 25 | 25 | 19 | 19 |
| fees | | | | |
| payable | | | | |
+----------------+---------+---------+---------+---------+
| Other | 10 | 10 | 13 | 12 |
| payables | | | | |
+----------------+---------+---------+---------+---------+
| Total | 194 | 131 | 2,529 | 165 |
+----------------+---------+---------+---------+---------+
11 Cash and Cash Equivalents
+-------------+---------+---------+---------+---------+
| | Group | Company | Group | Company |
| | 31 | 31 | 31 | 31 |
| | March | March | March | March |
| | 2009 | 2009 | 2008 | 2008 |
+-------------+---------+---------+---------+---------+
| | US$'000 | US$'000 | US$'000 | US$'000 |
+-------------+---------+---------+---------+---------+
| Bank | 1,095 | 50 | 5 | 10 |
| balances | | | | |
+-------------+---------+---------+---------+---------+
| Cash | 1,095 | 50 | 5 | 10 |
| and | | | | |
| cash | | | | |
| equivalents | | | | |
+-------------+---------+---------+---------+---------+
12Share Capital
+----------+-------------+---------+
| Ordinary | Number | US$'000 |
| Shares | | |
+----------+-------------+---------+
| In | 60,000,000 | 600 |
| issue | | |
| at the | | |
| start | | |
| of the | | |
| year | | |
+----------+-------------+---------+
| Share | (5,925,957) | (59) |
| buyback | | |
| during | | |
| the | | |
| year | | |
+----------+-------------+---------+
| In | 54,074,043 | 541 |
| issue | | |
| at 31 | | |
| March | | |
| 2009 | | |
+----------+-------------+---------+
At incorporation the authorised share capital of the Company was US$300 million
divided into Ordinary Shares of US$1 each. On 5 February 2007 the Company
cancelled 297 million unissued Ordinary Shares of US$1 each and on the same day
subdivided its remaining 3 million authorised Ordinary Shares of US$1 each into
300 million shares of US$0.01 each.
During the year 5,925,957 shares were bought back for a total consideration of
US$1,006,454.20. The buyback was effected through retained reserves with an
amount equal to the nominal value of the shares repurchased being transferred to
a capital redemption reserve in accordance with local statutory requirements
On 13 February 2008 the Company received confirmation from the High Court of
Justice of the Isle of Man of its approval for the Company to cancel the amount
of the share premium account and for such amount to be credited as a
distributable reserve. The Company stated its intention to seek such approval in
its Prospectus. Having received court approval, the amount of the share premium
account so cancelled was credited as a distributable reserve which may be
applied in any manner in which the Company's profits available for distribution
are able to be applied.
The holders of Ordinary Shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company. All shares rank equally with regards to the Company's assets.
12.1 Capital management
The Board's policy is to maintain a strong capital base so as to maintain
investor, creditor and market confidence and to sustain future development of
the business. The Board manages the Group's affairs to achieve shareholder
returns through capital growth rather than income, and monitor the achievement
of this through growth in net asset value per share.
Gearing may be employed by the Group with the aim of enhancing shareholder
returns. This would be in the form of bank borrowings, secured on the investment
portfolio.
Group capital comprises share capital, share premium and reserves.
Neither the Company nor any of its subsidiaries are subject to externally
imposed capital requirements.
13 Loss/earnings per share
Basic and diluted (loss)/earnings per share are calculated by dividing the loss
attributable to equity holders of the Company by the weighted average number of
Ordinary shares in issue during the year
+--------------+----------+--------+
| | 2009 | 2008 |
+--------------+----------+--------+
| (Loss)/ | (51,129) | 7,129 |
| profit | | |
| attributable | | |
| to equity | | |
| holders of | | |
| the Company | | |
| (US$'000) | | |
+--------------+----------+--------+
| Weighted | 57,493 | 60,000 |
| average | | |
| number | | |
| of | | |
| ordinary | | |
| shares | | |
| in issue | | |
| (thousands) | | |
+--------------+----------+--------+
| Basic | (88.93) | 11.88 |
| and | | |
| diluted | | |
| earnings | | |
| per | | |
| share | | |
| (cent | | |
| per | | |
| share) | | |
+--------------+----------+--------+
14 Exchange Rates
The following exchange rates were used to translate assets and liabilities into
the reporting currency at 31 March 2009:
+--------------+---------+
| Indian Rupee | 50.7200 |
+--------------+---------+
| Singapore | 1.5225 |
| Dollar | |
+--------------+---------+
| GBP | 0.6980 |
+--------------+---------+
15 Directors' Remuneration
The Company
The maximum amount of remuneration payable to the Directors permitted under the
Articles of Association is US$200,000 per annum. The Directors each receive a
fee of US$25,000 per annum accrued monthly and payable quarterly in arrears.
Additionally the Directors are each entitled to receive reimbursement of any
expenses incurred in relation to their appointment. Total fees and expenses
payable to the Directors for the year ended 31 March 2009 amounted to US$104,219
(2008: US$117,465) and Directors insurance cover amounted to US$19,077 (2008:
US$21,920).
The Subsidiaries
No fees are paid to the Directors of the subsidiaries except in circumstances
where a director is appointed in compliance with local regulations and in such
cases the fees payable are nominal.
16 Taxation
Isle of Man taxation
The Company is resident for taxation purposes in the Isle of Man by virtue of
being incorporated in the Isle of Man and is technically subject to taxation on
its income but the rate of tax will be zero. An annual corporate charge is
payable. The exemption fee charge for 2008/2009 tax year is GBP250.
There are no corporation, capital gains or inheritance taxes payable in the Isle
of Man. No Isle of Man stamp duty or stamp duty reserve tax will be payable on
the issue, transfer, conversion or redemption of Ordinary Shares.
Shareholders resident outside the Isle of Man will not suffer any income tax in
the Isle of Man on any income distributions to them.
Shareholders resident in the Isle of Man will, depending upon their particular
circumstances, be liable to Manx income tax on dividends received from the
Company.
Mauritius taxation
The subsidiaries are registered as Category 1 Global Business Companies ("GBC1")
and each have obtained a Category One Global Business Licence certificate from
the Mauritius Financial Supervision Commission. They each maintain a registered
office in Mauritius and as such, the subsidiaries are deemed residents of the
Republic of Mauritius and a certificate of tax residence for each of the
subsidiaries has been obtained from the Mauritius Revenue Authority.
Accordingly, the subsidiaries have been advised that they should maintain their
place of effective management in Mauritius so as to be resident in Mauritius and
qualify as a resident of Mauritius for the purposes of the Mauritius/India
income tax treaty.
A GBC1 is taxed on its chargeable income (including dividends, interests and
other income but not capital gains less expenses) at a corporate rate of 15%
which is reduced to a net effective tax rate of 3% or even less :
Normal tax rate 15% less EITHER
Deemed tax credit of 80% on foreign sourced income - 80% of 15% (12%) - 3%
OR
Actual foreign tax credit, if written evidence is available where then the tax
payment in Mauritius can even be (Actual foreign tax credit) - Nil
A GBC1 is exempt from capital gains tax in Mauritius.
United Kingdom
The affairs of the Company are conducted so that the central management and
control of the Company is not exercised in the UK and so that the Company does
not carry out any trade in the UK (whether or not through a permanent
establishment situated there). On this basis, the Company should not be liable
for UK taxation on its income and gains, other than certain income deriving from
a UK source.
17 Financial Risk Management
The Group's activities expose it to a variety of financial risks: market price
risk, foreign exchange risk, credit risk, liquidity risk and cash flow interest
rate risk.
Market price risk
The Group's strategy on the management of investment risk is driven by the
Group's investment objective. The main objective of the Group is to maximise the
total returns to investors through long-term capital growth.
The Group invests in Indian listed real estate companies in order to focus on
maximising total returns. The Group's securities are susceptible to market price
risk arising from uncertainties about future prices of these instruments caused
by market factors specific to the instrument or its issuer or factors affecting
all instruments traded in the market. The Manager reviews the position on a day
to day basis and the Directors review the position at the Board meetings.
The Group's investment activities expose it to various types of market risks
(including, for example, interest rates, foreign exchange rates and rates of
inflation), industry conditions, competition, political and diplomatic events,
tax laws, environmental laws, changes in the law and other factors can
substantially and either adversely or favourably affect the value of the
securities in which the Group invests and, therefore, the Group's performance
and prospects.
At 31 March 2009, if the market value to the investment portfolio had
increased/decreased by 80% with all other variables held constant, this would
have increased/decreased the net assets attributable to shareholders by
approximately US$9,045,798 (31 March 2008: 10% US$6,453,273), based on
US$11,307,248 (i.e. including Due from Broker balances) (31 March 2008:
US$66,825,509).
The performance of the Group can decrease as well as increase. In addition to
market price risk, the main risks arising from the Group's financial instruments
are as follows:
Foreign exchange risk
The Group's operations are conducted in jurisdictions which generate revenue,
expenses, assets and liabilities in currencies other than the functional
currency Indian Rupee. As a result, the Company is subject to the effects of
exchange rate fluctuations with respect to these currencies. For the year under
review the currencies giving rise to this risk are primarily US Dollars.
The Group may invest in financial instruments and enter into transactions
denominated in currencies other than its functional currency of Indian Rupee.
Consequently, the Group is exposed to risks that the exchange rate of its
currency relative to other foreign currencies may change in a manner that has an
adverse effect on the value of that portion of the Group's assets and
liabilities denominated in currencies other than the United States Dollar.
The Group's policy is not to enter into any currency hedging transactions.
At the reporting date the Group had the following exposure:
+-------------------------+---------------+
| Currency | 31 March 2009 |
| | % |
+-------------------------+---------------+
| Indian Rupees | 24.3 |
+-------------------------+---------------+
| Singapore Dollars | 4.3 |
+-------------------------+---------------+
| US Dollars | 71.4 |
+-------------------------+---------------+
The following table sets out the Group's total exposure to foreign currency risk
and the net exposure to foreign currencies of the monetary assets and
liabilities:
+-------------------------+---------------+---------------------+-------------------+
| | Monetary | Monetary | Net Exposure |
| | Assets | Liabilities | US$'000 |
| | US$'000 | US$'000 | |
+-------------------------+---------------+---------------------+-------------------+
| Indian Rupees | 2,985 | - | 2,985 |
+-------------------------+---------------+---------------------+-------------------+
| Singapore Dollars | 526 | - | 526 |
+-------------------------+---------------+---------------------+-------------------+
| US Dollars | 8,976 | (194) | 8,782 |
+-------------------------+---------------+---------------------+-------------------+
| | 12,487 | (194) | 12,293 |
+-------------------------+---------------+---------------------+-------------------+
Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail
to discharge an obligation or commitment that it has entered into with the
Group.
The carrying amounts of financial assets best represent the maximum credit risk
exposure at the balance sheet date. This relates also to financial assets
carried at amortised cost, as they have a short term maturity.
At the reporting date, the Group's financial assets exposed to credit risk
amounts to the following:
+-------------------------+---------------+
| | 31 March 2009 |
| | US$'000 |
+-------------------------+---------------+
| Other receivables and | 85 |
| prepayments | |
+-------------------------+---------------+
| Cash at bank | 1,095 |
+-------------------------+---------------+
| | 1,180 |
+-------------------------+---------------+
Management does not expect any counterparty to fail to meet its obligation.
The maximum exposure to credit risk is represented by the carrying amount of
each financial asset in the balance sheet. Management does not expect any
counterparty to fail to meet its obligation.
The Group will be exposed to credit risk on parties with whom it trades and will
also bear the risk of settlement default. The Group minimises concentrations of
credit risk by undertaking transactions with a large number of customers and
counter-parties on recognised and reputable exchanges. All transactions in
listed securities are settled/paid for upon delivery using approved brokers. The
risk of default is considered minimal, as delivery of securities sold is only
made once the broker has received payment. Payment is made on a purchase once
the securities have been received by the broker. The trade will fail if either
party fails to meet is obligation.
The Group will be exposed to credit risk on the counterparties with which it
trades in relation to options, futures, forward contracts and other derivative
financial instruments that are not traded on a Recognised Exchange. Such
instruments are not afforded the same protections as may apply to participants
trading futures or options on organised exchanges, such as the performance
guarantee of an exchange clearing house. The Group will be subject to the
possibility of the insolvency, bankruptcy or default of a counterparty with
which the Group trade such instruments, which could result in substantial losses
to the Group. The Company monitors its risk by monitoring the credit quality and
financial positions of the counterparties the Group use.
Substantially all of the cash held by the Group is held by Citibank (the
"Bank"). Bankruptcy or insolvency by the Bank may cause the Group's rights with
respect to the cash held by the Bank to be delayed or limited. The credit rating
of the Bank is A1/A. If the credit quality or financial position of the Bank
deteriorates significantly the Manager will move the cash holdings to another
bank.
At 31 March 2009, balances due from brokers and other receivables were exposed
to credit risk. The total amount of financial assets exposed to credit risk
approximates to their carrying value in the Balance Sheet.
The Group uses P Notes and other similar types of instruments to gain exposure
to the underlying listed Indian companies. These instruments are issued by EEA
credit institutions rated A or higher.
Liquidity risk
The Group manages its liquidity risk by maintaining sufficient cash balances for
working capital requirements. The Group's liquidity position is monitored by the
Manager and the Board of Directors.
Other creditors and accruals fall due for settlement within less than one month.
Interest rate risk
The majority of the Group's financial assets are non-interest bearing. Cash held
by the Group is invested at short-term market interest rates. As a result, the
Group is not subject to fair value interest rate risk due to fluctuations in the
prevailing levels of market interest rates. However, it is subject to cash flow
risk arising from changes in market interest rates.
Given that the cash held by the Group at the year end is not considered to be
significant and no other financial assets or liabilities are interest bearing,
no sensitivity analysis has been performed.
18 Post Balance Sheet Events
There were no post balance sheet events that require to be brought to the
attention of shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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