30 Sep 2019 16:30
30 September 2019
EIH PLC
("EIH" or the "Company")
Interim Results
The Company announces its interim results for the six months ended 30 June 2019. A copy of this announcement will shortly be made available for inspection on the Company's website at www.eihplc.co.uk.
Chairman's Statement
The Company made a net loss of US$0.4m for the six month period to 30 June 2019 (six month period to 30 June 2018: net loss US$3.3m), the loss per share for the six month period to 30 June 2019 was 0.66 cents (six month period to 30 June 2018: loss per share 5.08 cents).
The unaudited net assets of the Company as at 30 June 2019 were valued at US$10.1m and therefore net asset value ("NAV") per share at that date was 15.6 cents based on 64,500,002 ordinary shares in issue (31 December 2018 NAV per share: 26.3 cents).
The Company currently expects to receive a distribution of approximately US$0.9m from Evolvence India Fund PCC ("EIF") in October 2019.
Under the agreement for the disposal of its shareholding in RSB Group ("RSB"), which was held through EIF Co Invest VII, the Company received sale proceeds on 10 April 2019 of US$5.24m from its disposal of its shareholding in RSB, held through EIF Co Invest VII, and a further US$1.56m on 24 April 2019 as a distribution from EIF in respect of the disposal of its indirect shareholding in RSB, held through EIF.
Subsequently, on 23 April 2019, the Company made a capital distribution of 8.0 cents per share to shareholders on the register as at the close of business on 12 April 2019, equivalent to approximately US$5.16m. On 24 May 2019, the Company made a further capital distribution of 2.0 cents per share to shareholders on the register as at the close of business on 17 May 2019, equivalent to approximately US$1.29m.
While the NAV per share decreased by 40.7% in the period under review, adjusting for the aforementioned capital distributions made during the period, the Company's NAV decreased by 2.7% in the six months ended 30 June 2019. It is noted that the Indian Rupee ("INR") strengthened by 1.2% in value against the US Dollar during the period in review.
Total operating costs during the period were US$0.30m.
The Company's investment portfolio comprises the following (based on unaudited values as at 30 June 2019):
Table 1. Investments | Capital Commitment | Capital Invested | Capital Distribution | Fair value Adjustment | Fair Value |
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
Fund Investments (equity) |
|
|
|
|
|
Evolvence India Fund PCC | 45,120 | 45,120 | (32,235) | (3,493) | 9,392 |
| 45,120 | 45,120 | (32,235) | (3,493) | 9,392 |
Further details on the Company's investment portfolio are set out below and in Note 5 to the interim financial statements.
EIF
As at 30 June 2019, the fair value (unaudited) of the Company's investment in EIF was US$9.4m, equivalent to 14.6 cents per share. EIF is now fully drawn down.
Based on the latest valuations available and adjusting for distributions made during the period, the fair value of EIF's underlying funds decreased by approximately 0.1% in US Dollar terms, while their value decreased by approximately 1.3% in INR terms. On the same basis of measurement, the value of EIF's direct investments decreased by approximately 0.4% in US Dollar terms, whilst in INR terms this equated to a decrease of approximately 1.3%.
EIF's private equity fund exposure is weighted towards funds with vintages of 2006 and later. The three funds of these vintages, EIF's three largest funds, comprise 73.6% of EIF's private equity fund weighting. The remaining five funds, with a 26.4% weighting, are all 2004 and 2005 vintages. EIF's eight underlying private equity funds have fully drawn down their committed capital from EIF.
The Directors have reviewed certain underlying financial information provided to us by EIF's Investment Manager and we remain confident that as EIF's underlying portfolio matures and further realisations are achieved, further cash distributions will be received by the Company.
RSB
The Company's total interest in RSB was disposed of in the period under review (see above).
Other matters
At the date of signing this report, the Company holds US$0.59m in net cash balances, equivalent to 0.91 cents per share.
As a Board we will continue to manage operating costs carefully. Our objective remains to realise assets at the appropriate time and value, and to return the proceeds, less expenses, to our shareholders.
On behalf of the Board of Directors, I thank all Shareholders for their support.
Faithfully yours,
Rhys Davies
30 September 2019
For further information, please contact:
EIH PLC
Rhys Davies
Tel: +41 (0) 79 620 0215
Nplus1 Singer Advisory LLP (Nominated Adviser)
James Maxwell / George Tzimas
+44 (0)20 7496 3000
EIH PLC
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2019
|
| For the period from 1 January 2019 to 30 June 2019
| For the period from 1 January 2018 to 30 June 2018
|
| Note | US$'000 | US$'000 |
Income |
|
|
|
Fair value movement on investments at fair value through profit or loss
|
5 |
(156) |
(3,077) |
|
|
|
|
Net investment expenditure |
| (156) | (3,077) |
Expenses |
|
|
|
Administrative expenses |
| (162) | (110) |
Legal and other professional fees |
| (83) | (70) |
Audit fees |
| (21) | (20) |
Other (expenses)/income |
| (6) | 2 |
Total operating expenses |
| (272) | (198) |
Loss before taxation for the period |
| (428) | (3,275) |
Income tax expense |
| - | - |
Loss after taxation for the period |
| (428) | (3,275) |
Other comprehensive income |
| - | - |
Total comprehensive expenditure for the period |
|
(428) |
(3,275) |
|
|
|
|
Basic and fully diluted loss per share (US cents) |
6 |
(0.66) |
(5.08) |
The accompanying notes form an integral part of these interim financial statements.
EIH PLC
UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
|
|
| As at 30 June 2019 | As at 31 December 2018 |
|
| Note | US$'000 | US$'000 |
|
|
|
|
|
Non-current assets |
|
|
|
|
Financial assets at fair value through profit or loss |
|
5 |
9,392 |
16,345 |
Total non-current assets |
|
| 9,392 | 16,345 |
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
|
| 29 | 25 |
|
|
|
|
|
Cash and cash equivalents |
|
| 739 | 628 |
Total current assets |
|
| 768 | 653 |
Total assets |
|
| 10,160 | 16,998 |
|
|
|
|
|
Equity |
|
|
|
|
Issued share capital |
|
| 1,265 | 1,265 |
Share premium |
|
| 12,405 | 18,855 |
Retained earnings |
|
| (3,614) | (3,186) |
Total equity |
|
| 10,056 | 16,934 |
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
| 104 | 64 |
Total current liabilities |
|
| 104 | 64 |
Total liabilities |
|
| 104 | 64 |
Total equity and liabilities |
|
| 10,160 | 16,998 |
The accompanying notes form an integral part of these interim financial statements.EIH PLC
UNAUDITED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2019
|
|
|
|
| ||
| Share capital
US$'000 | Share premium US$'000 | Retained earnings US$'000 | Total
US$'000 | ||
Balance at 1 January 2018 | 1,265 | 21,435 | 2,074 | 24,774 | ||
Total comprehensive income |
|
|
|
| ||
Loss for the period | - | - | (3,275) | (3,275)
| ||
Transactions with owners of the company recorded directly in equity |
|
|
|
| ||
Return of capital | - | (1,613) | - | (1,613) | ||
|
|
|
|
| ||
Balance at 30 June 2018 | 1,265 | 19,822 | (1,201) | 19,886 | ||
|
|
|
|
| ||
Balance at 1 January 2019 |
1,265 |
18,855 |
(3,186) |
16,934 | ||
Total comprehensive income |
|
|
|
| ||
Loss for the period | - | - | (428) | (428) | ||
Transactions with owners of the company recorded directly in equity |
|
|
|
| ||
Return of capital | - | (6,450) | - | (6,450) | ||
|
|
|
|
| ||
Balance at 30 June 2019 | 1,265 | 12,405 | (3,614) | 10,056 | ||
The accompanying notes form an integral part of these interim financial statements.EIH PLC
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 JUNE 2019
|
|
For the period from 1 January 2019 to 30 June 2019 |
For the period from 1 January 2018 to 30 June 2018 |
| Note | US$'000 | US$'000 |
Cash flows from operating activities |
|
|
|
Loss before taxation |
| (428) | (3,275) |
Adjustments: |
|
|
|
Fair value movement on investments at fair value through profit or loss |
5 | 156 | 3,077 |
Operating loss before working capital changes |
| (272) | (198) |
Increase in trade and other receivables |
| (4) | (1) |
Increase in trade and other payables |
| 40 | 43 |
Net cash used in operations |
| (236) | (156) |
|
|
|
|
Net cash used in operating activities |
| (236) | (156) |
Cash flows from investing activities |
|
|
|
Proceeds from disposal of investment |
| 5,237 | - |
Capital distribution received | 5 | 1,560 | 2,440 |
|
|
|
|
Net cash generated by investing activities |
| 6,797 | 2,440 |
Cash flows from financing activities |
|
|
|
Return of capital |
| (6,450) | (1,613) |
Net cash used in financing activities |
| (6,450) | (1,613) |
Net increase in cash and cash equivalents |
| 111 | 671 |
Cash and cash equivalents at 1 January |
| 628 | 748 |
Cash and cash equivalents at 30 June |
| 739 | 1,419 |
The accompanying notes form an integral part of these interim financial statements.
Notes to the Unaudited Interim Results
For the six months ended 30 June 2019
1 The Company
EIH PLC was incorporated and registered in the Isle of Man under the Isle of Man Companies Act 1931-2004 on 10 November 2006 as a public company with registration number 118297C. On 28 March 2011 the Company re-registered under the Isle of Man Companies Act 2006 with registration number 006738V.
Pursuant to a prospectus dated 19 March 2007 there was a placing of up to 65,000,000 Ordinary Shares of £0.01 each. The number of Ordinary Shares in issue immediately following the placing was 65,000,002. The shares of the Company were admitted to trading on the Alternative Investment Market of the London Stock Exchange ("AIM") following the close of the placing on 23 March 2007. The Company purchased 500,000 of its own shares for US$0.60 each on 30 September 2011.
The Company's agents perform all significant functions. Accordingly, the Company itself has no employees.
2 Duration
The Company currently does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the annual general meeting of the Company in 2021 a resolution will be proposed that the Company ceases to continue as presently constituted. Shareholders holding at least fifty one per cent of the shares must vote in favour of this resolution for it to be passed. If the resolution is not passed, a similar resolution will be proposed at every third annual general meeting of the Company thereafter. If the resolution is passed, the Directors will be required, within 3 months of the resolution, to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.
3 Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below.
3.1 Basis of presentation
These interim financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34: Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements of the Company for the year ended 31 December 2018. The interim financial statements are unaudited.
The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2018.
Notes to the Unaudited Interim Results
For the six months ended 30 June 2019 (continued)
3.2 Investments at fair value through profit or loss
Investments are designated as financial assets at fair value through profit or loss. They are measured at fair value with gains and losses recognised through profit or loss.
The Company's investments at fair value through profit and loss comprise funds where fair value is estimated by the Directors to be the Company's share of net asset value per latest financial results reported by the underlying fund administrator.
3.3 Segment reporting
The Company has one segment focusing on maximising total returns through investing in an Indian private equity portfolio of investments. No additional disclosure is included in relation to segment reporting, as the Company's activities are limited to one business and geographic segment.
4 Net asset value per share
The unaudited net asset value per share as at 30 June 2019 is 15.6 cents per share based on 64,500,002 ordinary shares in issue as at that date (31 December 2018: 26.3 cents per share based on 64,500,002 ordinary shares).
5 Financial assets at fair value through profit or loss
The objective of the Company is to make indirect investments in Indian private equity funds and companies via Mauritian based investment funds and to also co-invest directly in certain portfolio companies of the underlying funds. As at 30 June 2019, the investment portfolio comprised the following assets:
Investments (Unlisted) | Capital Commitment | Capital Invested | Capital Distribution | Fair value Adjustment | Fair Value |
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
Fund Investments (equity) |
|
|
|
|
|
Evolvence India Fund PCC | 45,120 | 45,120 | (32,235) | (3,493) | 9,392 |
| 45,120 | 45,120 | (32,235) | (3,493) | 9,392 |
Notes to the Unaudited Interim Results
For the six months ended 30 June 2019 (continued)
5 Financial assets at fair value through profit or loss (continued)
The fair value of the Company's investments has been estimated by the Directors with advice from Evolvence India Advisors Inc. The movement in investments during the period was as follows:
|
|
|
|
|
| 30 June 2019 US$'000 | 31 December 2018 US$'000 |
Fair value brought forward |
| 16,345 | 24,065 |
Disposal proceeds of investments at fair value |
| (5,237) | - |
Loss on disposal of investments at fair value through profit and loss |
| - | - |
Capital distributions |
| (1,560) | (2,982) |
Movement in fair value |
| (156) | (4,738) |
|
|
|
|
Fair value at period/year end |
| 9,392 | 16,345 |
The outstanding capital commitments as at 30 June 2019 were US$nil (31 December 2018: US$nil).
Evolvence India Fund PCC (EIF)
Evolvence India Fund PCC, a Protected Cell Company formed under the laws of Mauritius having limited liability, is a private equity fund of funds with a co-investment pool, focusing primarily on investments in India. The fund investments of EIF are Baring India Private Equity Fund II, India Value Fund II, Leverage India Fund, New York Life Investment Management India Fund II, Ascent India Fund, JM Financial India Fund I, HI-REF International LLC Fund and NYLIM Jacob Ballas India Fund III.
Valuation basis
The fair value of the investment in EIF is based on the Company's share of the net assets of EIF at 30 June 2019 per its results as reported by the underlying fund administrator. The financial statements of EIF are prepared under IFRS, with all investments stated at fair value. The valuation of the investment portfolio of EIF has been performed by its investment manager at 30 June 2019, although underlying fund valuations are based on the latest LP reports available (31 March 2019), adjusted for distributions received by the Company. The investment portfolio comprises investments in private equity funds, where fair value is based on reported net asset values.
EIF Co Invest VII
The Company invested US$7m in RSB Group through a Special Purpose Vehicle (SPV), EIF Co Invest VII. The Company entered into an agreement for the sale of its shareholding in RSB, held through EIF Co Invest VII, on 20 March 2019. The Company received sale proceeds on 10 April 2019 of US$5.24m from its disposal of its shareholding in RSB, held through EIF Co Invest VII, and a further US$1.55m on 24 April 2019 as a distribution from EIF in respect of the disposal of its indirect shareholding in RSB, held through EIF.
Notes to the Unaudited Interim Results
For the six months ended 30 June 2019 (continued)
6 Loss per share
Basic and fully diluted loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period:
|
|
|
|
|
| 30 June 2019 '000 | 30 June 2018 '000 |
Loss attributable to equity holders of the Company (US$) |
| (428) | (3,275) |
Weighted average number of ordinary shares in issue |
| 64,500 | 64,500 |
|
|
|
|
Basic loss per share (cents per share) |
| (0.66) | (5.08) |
There are no dilutive potential ordinary shares in issue, therefore there is no difference between the basic and fully diluted loss per share for the period.
7 Subsequent events
The Company currently expects to receive a distribution of approximately US$0.9m from EIF in October 2019.