Last checked at 29 Jul 2009 07:00
INFRASTRUCTURE INDIA PLC
CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD
ENDED 31 March 2009
Infrastructure India plc, the closed-ended investment fund focusing on India's rapidly growing energy and transport sectors, is pleased to announce its results for the period ended 31 March 2009.
Highlights
Commenting on the results, Rupert Cottrell, Chairman of Infrastructure India plc, said:
"During the period under review there have been unprecedented turbulent market conditions, however, I am pleased by the ability with which we have thus far navigated ourselves through these difficult times. India's economy has inevitably been affected by the global economic crisis yet it has fared far better than most other economies and we are confident that this performance will continue bolstered by strong Indian election results. I am delighted by the valuation performance of our two investments and the expertise and experience of our Investment Advisor, which coupled with their strong local relationships, stands Infrastructure India in a solid position."
- Ends -
For further information please contact:
| Infrastructure India plc | |
| Rupert Cottrell | Via Redleaf Communications |
| Bloomsbury Asset Management Advisors (BAMA) | |
| Gary Neville | 07867 906377 |
| Akur Partners | 020 7955 1514 |
| Andrew Dawber / Tom Frost | |
| Singer Capital Markets | 020 3205 7500 |
| Jos Trusted | |
| Redleaf Communications | 020 7566 6700 |
| Emma Kane / Samantha Robbins / Henry Columbine | iif@redleafpr.com |
Chairman's Statement
Introduction
I am pleased to report the results for the period from 18 March 2008 (the date of incorporation) to 31 March 2009. Since Infrastructure India plc was admitted to the Official List in June 2008 (the "IPO"), it has made two investments totalling £24.5 million, which represents around 75.9% of the net proceeds raised at the IPO.
The Company remains focused on investing in assets which it believes have the potential to generate substantial capital growth and income - particularly in the energy and transport sectors. Despite global economic conditions, the Company and its Investment Advisor remain of the belief that Indian infrastructure continues to offer stable and long term growth.
Operational Review
Since June 2008, the Company has made two investments in the energy and transport sectors respectively. The first investment, undertaken via the Company's Mauritian subsidiary, Power Infrastructure India, totalled £13.2 million (Rs 1,100 million) in Shree Maheshwar Hydel Power Corporation Limited ("SMHPCL") on 9 June 2008 in return for a 6.23% stake post all dilution effects. SMHPCL was specifically established to own and develop a 400MW run-of-the-river hydroelectric project situated on the Narmada river in Madhya Pradesh, Central India. The project is expected to commence operations in Q1 2010 when the first of ten 40MW turbines will be installed, with the facility expected to be fully operational in Q2 2010. The asset is at an advanced stage of construction with over 88% of the civil works completed to date.
Our second acquisition, being a 26% shareholding in a toll road in Madhya Pradesh, was undertaken via the Company's Mauritian subsidiary, Roads Infrastructure India, and was for a consideration of £11.3 million (Rs 960 million). This acquisition represents the Company's first investment in India's transportation sector. The road will start partial tolling in August 2009, with full tolling expected to commence upon completion in 2010.
Financial Results
We are reporting a profit for the period of £3.18 million, which equates to earnings of 8.67p per share. This is due to the significant uplift in the valuation of the Company's investments.
Assuming that the SMHPCL investment is held to maturity and in line with the Company's stated valuation methodology the value derived for this holding at 31 March 2009 is £21.0 million compared to the £13.2 million invested on 9 June 2008. If a single "construction period" discount rate is applied to the expected cash flows then the value of the SMHPCL investment derived as at 31 March 2009 is approximately £14.4 million compared to the £13.2 million as invested on 9 June 2008. On the basis that the equity in the road project in Madhya Pradesh is held to maturity and in accordance with the Company's stated valuation methodology, a portfolio value for this investment as at 31 March 2009 is £28.2 million compared to the £11.3 million as invested on 30 September 2008. If a single "construction period" discount rate is applied to the expected cash flows then the value of this investment as at 31 March 2009 is £17.6 million compared to the £11.3 million as invested on 30 September 2008.
Investment Pipeline
Our Investment Advisor, Bloomsbury Asset Management Advisors, ("BAMA") has managed the completion of two investments. Through their relationship with Cornerstone Advisors, a subcontractor which handles some aspects of origination and management services, BAMA continues to develop a pipeline of opportunities across India with selected blue-chip counterparties in sectors that are core to the Company's strategy.
Further to the announcement on 16 March 2009 relating to the proposed acquisition of BAMA, the Directors continue to keep the proposal under review and will update the Company's shareholders in due course on progress to resolve the matter.
Outlook
During the period, there have been unprecedented turbulent market conditions, however, I am pleased by the ability with which we have thus far navigated ourselves through these difficult times. India's economy has inevitably been affected by the global economic crisis yet it has fared far better than most other economies and we are confident that this performance will continue. I am delighted by the valuation performance in our two investments and the expertise and experience of our Investment Advisor, coupled with their strong local relationships, stands Infrastructure India in a solid position.
India remains a popular choice for new funds focusing on the development of infrastructure in India. Competition is increasing (especially from unlisted funds allied to local institutional players with government backing) and the Company will need to both be active locally and in a position to follow through with new commitments if it is to benefit from the renewed local momentum in its chosen sectors. The outlook is positive and there are good quality investment opportunities in both the primary and secondary markets.
Finally, I would like to take this opportunity to convey my thanks and appreciation to the board and advisors for their dedicated work and loyalty during the past year.
Rupert Cottrell
Chairman
28 July 2009
Investment Advisor Review
Bloomsbury Asset Management Advisors ("BAMA"), a Mauritius incorporated entity, is the Investment Advisor to Infrastructure India plc ("IIP"). BAMA assists the Company in value creation through originating and executing investments; and once an investment is made BAMA provides a portfolio management function to ensure the value of the Company's interests in the investment is protected. BAMA has managed the completion of two investments: one in the power sector and the other in the transport sector; thus deploying £24.5million (75.9%) of the £32.3 million net proceeds available for investment following the IPO in June 2008. Through its relationship with Cornerstone Advisors, BAMA continues to develop a pipeline of opportunities across India with selected blue-chip counterparties in sectors that are core to the Company's strategy.
Economic background and market context
During the period, the global financial meltdown and consequent economic recession in developed economies have clearly been a major factor in India's economic slowdown. The Indian economic growth in 2008-09 decelerated to 6.7% as compared to an average growth rate of 8.8% in the previous five years (2003-04 to 2007-08). Despite this slowdown in growth investment remained relatively buoyant, growing at a rate higher than the GDP.
Inflation, after peaking subsequent to the commodity price surge at over 12%, averaged an estimated 6.2 % in 2008-09. While still the highest average in the current decade, the rapid decline from Q3 2008 allowed the focus of policy to shift towards supporting growth, as the Government provided substantial fiscal expansion in the form of tax relief to boost demand and increased expenditure on public projects to create employment. In parallel the Reserve Bank of India announced monetary easing and liquidity enhancing measures to meet the needs of productive and trade exposed sectors.
The Indian Government is confident in its ability to secure increased growth from 2009-10, allowing for additional resources to be directed towards enhanced infrastructure and rural development. The Finance Ministry has set a range of 6.25% to 7.75% for the growth target for 2009-10 and it is the Government's stated intention to pursue a policy goal of achieving a return to 9% GDP growth thereafter by promoting a conducive investment scenario.
During the period, the significant gap between Government intentions and performance in relation to the roads and power sectors has remained a concern, when only 10 out of 60 Build, Operate and Transfer projects to widen 6,343 km of highways have been awarded and there was only 2.7% growth in electricity generation by power utilities registered during 2008-09, well below the targeted 9.1%. However, following the recent Government elections and the approved Budget 2009-10, there are strong indications that the infrastructure related activity will be fuelled by the string of reforms expected from the newly elected Congress party-led Government, as opposed to the previous Coalition between the Left and communist parties historically stalled planned reforms.
As one of the steps forward, the Government has recently introduced a definition of the "takeout financing" scheme to facilitate incremental lending to infrastructure projects by empowering the government-run Indian Infrastructure Finance Company Ltd (IIFCL) to refinance up to 60% of bank loans for PPP projects in critical sectors over the next 15-18 months. This is to ensure that infrastructure projects in sectors such as telecommunication, power generation, airports, ports, roads and railways, do not face financing difficulties arising from the current downturn. The Government has stated that the IIFCL is now in a position to support projects involving a total investment of circa £12.7 billion in infrastructure.
Investment Activity
Shree Maheshwar Hydel power Corporation Limited (SMHPCL)
IIP, via its Mauritius subsidiary Power Infrastructure India, invested a total of £13.2 million (Rs 1,100 million) in Shree Maheshwar Hydel Power Corporation Limited ("SMHPCL") on 9 June 2008 in return for a 6.23% stake post all dilution effects. SMHPCL was specifically established to own and develop a 400MW run-of-the-river hydroelectric project situated on the Narmada river in Madhya Pradesh, Central India. Once commissioned it is expected to be one of the largest privately owned hydroelectric power projects in India. The project is expected to commence operations in Q1 2010 when the first of ten 40MW turbines will be installed with the facility expected to be fully operational in Q2 2010. The asset is at an advanced stage of construction with over 88% of the civil works completed to date.
The Power Purchase Agreement ("PPA") signed between SMHPCL and the state government body, The Madhya Pradesh Electricity Board ("MPEB"), obliges MPEB to take the full electricity production of the plant for a period of 35 years.
The project requires approximately 10,000 people to be relocated from land to be submerged. The relocation and rehabilitation process, including land acquisition, is the responsibility of the State and is well underway in accordance with State and National regulations. Over 90% of the submergence lands have been acquired or are under offer and more than 50% of the re-habitation sites have been developed or are under development.
Assuming that the investment is held to maturity and in line with the Company's stated valuation methodology the value derived for this holding as at 31 March 2009 is £21.0 million compared to the £13.2 million invested on 9 June 2008.
If a single "construction period" discount rate is applied to the expected cash flows then the value of the SMHPCL investment derived as at 31 March 2009 is approximately £14.4 million compared to the £13.2 million as invested on
9 June 2008.
Toll Road Central India
On September 30, 2008 IIP completed its second acquisition, being a 26% shareholding in a toll road in Madhya Pradesh. The transaction was undertaken through IIP's Mauritian subsidiary, Roads Infrastructure India and was for a consideration of Rs. 960 million (approximately £11.3 million). This acquisition represents IIP's first investment in India's transportation sector.
The SPV was awarded the project on a Design Build Finance Operate (DBFO) basis in August 2007 for a term of 25 years. The toll road project comprises a single 125 km stretch which is being widened from the existing 2 lanes to 4 lanes in order to reduce congestion experienced on the route and to provide further scope for traffic growth. The project is currently 13 months into construction and works to date are ahead of schedule. Presently acquisition of less than 1% of the land required for the project remains outstanding and is due to be handed over by the Roads Authority by Q3 2009. The expected date of completion of the construction works and start of tolling is forecast as April 1, 2010. The SPV shall have the right to toll the traffic as soon as it receives the Completion or Provisional Completion Certificate for the project from the Independent Certifier. Upon completion of the concession period the SPV will hand over the project highway to the Concession Authority.
Assuming that the equity is held to maturity and in accordance with the Company's stated valuation methodology, a portfolio value for this investment as at March 31 2009 is £28.2 million compared to the £11.3 million as invested on 30 September 2008.
If a single "construction period" discount rate is applied to the expected cash flows then the value of this investment as at March 31st 2009 is £14.4 million compared to the £11.3 million as invested on 30 September 2008.
Principal risks and uncertainties
Principal risks
The implementation of the Company's investment policy is potentially affected by a number of risks and uncertainties. A detailed list of the risk factors that could potentially affect the Company is set out in the Prospectus issued 30 June 2008 to which investors should refer. The Prospectus is available on the Company's website http://www.iiplc.com/index.html
The principal risks affecting the Company include:
Current operational risks in existing projects Operational risks relating to investments include: the Group's investee company management teams may be resistant to proactive shareholder involvement; infrastructure projects may be affected by cost overruns; infrastructure projects may be affected by the performance of the Engineering Procurement Construction (EPC) contractors causing project milestones to be delayed thus prolonging the ability of the project company to start generating revenues; and the Company will be dependent on the skills of the project management teams employed in the underlying SPVs.
General Risk Factors
Dependence on key personnel
The Company is highly dependent on the Directors, the senior strategic adviser (currently Andrew Friend) and also on the investment advisor, Bloomsbury Asset Management ("the Investment Advisor") to identify, structure and monitor investments and advise on exit strategies for the investments to be made by the Group.
No guarantee as to future performance of the Company
There can be no assurance that the Company will be able to achieve strong returns referred to in the Prospectus or that it will be fully invested at all times.
The Company's profitability is subject to Group companies' ability to secure project financing
The Company's growth depends on the successful development and implementation of the infrastructure projects it invests in, all of which require or may require equity capital and/or, in some cases, debt in order to achieve returns acceptable to investors. A long delay or inability to raise financing for the projects could have a material adverse effect on the business, financial condition, results of operation and prospects of the Company.
The Group is subject to competition risks and it may be difficult to identify and secure suitable investments
An increasing number of investors have become active in seeking investment opportunities with a focus on India, including in the infrastructure sector. The activity of identifying and securing attractive investments may therefore be highly competitive and involve a high degree of uncertainty from time to time.
The Group cannot guarantee project performance
There is no guarantee that the Group's investee projects will proceed or perform as planned, or in accordance with the expected timescale or cost estimate. Delay to the projects, or failure of the projects to be completed or to operate as planned could have a material adverse effect on the business, financial condition, results of operation and prospects of the Company.
Risks related to the group's investments
Project liability risk
The Investment Adviser will carry out due diligence on proposed investments. There can be no guarantee that the due diligence process will highlight or eliminate all risks and liabilities (including weaknesses and uncertainties in local legal and regulatory systems) associated with any project, and the project may incur, directly or indirectly, unexpected liabilities, such as environmental problems or operational defects requiring remediation which could have a material adverse effect on the business, financial condition, results of operation and prospects of the Company.
Risk factors related to India
Economic policy
The Company's performance and the market price and liquidity of the Ordinary Shares and Warrants may be affected by changes in exchange rates and controls, interest rates, government policies, taxation, social and ethnic instability and other political and economic developments affecting India.
Economy
The performance and the growth of the Company's business are necessarily dependent on the health of the overall Indian economy. The Indian economy has shown sustained growth over the last several years. However, the growth in industrial production in India has been variable. Any slowdown in the Indian economy, or future volatility of global commodity prices, could have a material adverse effect on the business, financial condition, results of operation and prospects of the Company.
Political risks
Future political and economic conditions in India may result in its government adopting different policies with respect to foreign investment. Any such changes in policy may affect ownership of assets, taxation, rates of exchange, environmental protection, labour relations, repatriation of income and return of capital, with potential adverse effects on the Group's investments.
Financial risk management
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, market risk and price risk), credit risk and liquidity risk.
Risk management is carried out by the Board of Directors. The Board identifies and evaluates financial risks in close co-operation with the Investment Advisor.
Directors' Report
The Directors have pleasure in presenting their report and financial statements of the Group for the period from 18 March 2008 (date of incorporation) to 31 March 2009.
Principal activity and incorporation
The Company is a closed-end investment company, incorporated on the 18 March 2008 in the Isle of Man as a public limited company under the 2006 Companies Act. It was listed on the London Stock Exchange on 30 June 2008.
The Company's investment objective is to provide Shareholders with both capital growth and income by investing in assets in the Indian infrastructure sector, with particular focus on assets and projects related to energy and transport.
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 period ending 31 March 2009 are set out in the Consolidated Income Statement on page 10.
A review of the Group's activities are set out in the Chairman's report and Investment Advisor's report on pages x and x respectively.
The Directors do not recommend the payment of a dividend.
Directors
The Directors of the Company during the period and to date of this report were as follows:
|
| Date appointed | Date resigned |
|
|
|
|
| Rupert Cottrell | 23 April 2008 | |
| Timothy Walker | 23 April 2008 | |
| Philip Scales | 10 April 2008 | |
| Prodaman Sarwal | 12 May 2008 | |
| Hope Street Nominees Limited | 18 March 2008 | 10 April 2008 |
Directors' interests in the shares of the Company are detailed in note 14.
Company Secretary
The secretary of the Company during the period and to the date of this report was Philip Scales.
Auditors
The auditors, KPMG Audit LLC, were appointed during the period and being eligible have expressed their willingness to continue in office.
On behalf of the Board
Philip Scales
Director
28 July 2009
Statement of Directors' Responsibilities in Respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. In addition, the Directors have elected to prepare the Group and Parent Company financial statements in accordance with International Financial Reporting Standards.
The Group and Parent Company financial statements are required 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 International Financial Reporting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; 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 disclose with reasonable accuracy at any time the financial position of the Group and Parent Company and to allow for the preparation of financial statements. 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.
The Directors confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with International Financial Reporting Standards, give
a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
• the Directors' Report includes a fair view of the development and performance of the business and position of the Company, together with a description of the principal risks and uncertainties that the Company faces.
On behalf of the Board
Philip Scales
Director
28 July 2009
Corporate Governance Statement
The Combined Code does not directly apply to companies incorporated within the Isle of Man but the Board of Infrastructure India plc has developed its internal procedures to be in line with the recommendations of the Combined Code where appropriate and these are monitored on a regular basis. The Directors will continue to comply with the relevant requirements of the Combined 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 adopted throughout the period under review.
Responsibilities of the Board
The Board of Directors is responsible for the determination of the investment policy of the Company and for its overall supervision via the investment policy and objectives that it has set out. The Board is also responsible for the Company's day-to-day operations; however, since the Board members are all non-executive, in order to fulfil these obligations, the Board has delegated operations through arrangements with the Investment Advisor and Administrator.
All the Directors are non-executive and therefore there is no nomination committee. The Company has not established a remuneration committee as it is satisfied that any issues can be considered by the Board or the Audit Committee.
The Board intends to meet formally at least four times each year.
At each Board meeting, the financial performance of the Company is reviewed so as to ensure the Directors maintain overall control and supervision of the Company's affairs. The Board also receive a regular investment report from the Investment Advisor and management accounts from the Administrator. The Board maintains regular contact with all its service providers and are kept fully informed of investment and financial controls and any other matters that should be brought to the attention of the Directors. The Directors also have access where necessary to independent professional advice at the expense of the Company.
Audit Committee
The Audit Committee is a sub-committee of the Board and it meets formally at least twice each year. It 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 practices underlying them, liaising with the external auditors and reviewing the effectiveness of internal controls.
The Audit Committee members are Timothy Walker (Chairman), Prodaman Sarwal and Philip Scales.
The terms of reference of the Audit Committee covers the following:
• The composition of the Committee, quorum and who else attends meetings.
• Appointment and duties of the Chairman.
• 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 and discussion of the audit.
In addition, the Company's Administrator (IOMA Fund and Investment Management Limited) has a number of internal control functions including a dedicated Compliance Officer who monitors compliance with all statutory and regulatory requirements and presents a report to the Board at each meeting.
Report of the Independent Auditors KPMG Audit LLC, to the members of Infrastructure India plc
We have audited the Group and Parent Company financial statements (the "financial statements") of Infrastructure India plc for the period from 18 March 2008 (date of incorporation) to 31 March 2009 which comprise the Consolidated Income Statement, the Consolidated and Parent Company Balance Sheets, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated Cash Flow Statements and the related notes. These financial statements have been prepared under the accounting policies set out therein.
This report is made solely to the Company's members, as a body. 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 Auditors
The Directors' responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and International Financial Reporting Standards are set out in the Statement of Directors' Responsibilities on page 7.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view. We also report to you if, in our opinion, the Company has not kept proper accounting records, or if we have not received all the information and explanations we require for our audit.
We read the Directors' Report and any other information accompanying the financial statements and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the audited financial statements. Our responsibilities do not extend to any other information.
Basis of opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group's and Company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view, in accordance with International Financial Reporting Standards, of the state of the Group and Parent Company's affairs as at 31 March 2009 and of the Group's profit for the period then ended.
KPMG Audit LLC
Chartered Accountants
Heritage Court, 41 Athol Street, Douglas
Isle of Man IM99 1HN
28 July 2009
Consolidated Income Statement
For the period from 18 March 2008 (date of incorporation) to 31 March 2009
| Note | 2009 | |
| £'000 | ||
| Investment Income | ||
| Interest received on bank balances | 278 | |
| Fair value gains on investments at fair value through the profit and loss | 11 | 7,467 |
| Realised loss on expired option | 11 | (250) |
| Net investment income | 7,495 | |
| Expenses | ||
| Investment advisor fees | 6 | 326 |
| Performance fee provision | 6 | 1,559 |
| Other administration fees and expenses | 5 | 2,367 |
| Foreign exchange loss | 5 | |
| Interest expense | 55 | |
| Total expenses | 4,312 | |
| Profit before taxation | 3,183 | |
| Tax | 7 | - |
| Profit for the period | 3,183 | |
| Basic and diluted earnings per share (pence) | 8 | 8.67p |
The Directors consider that all results derive from continuing activities.
Balance Sheets
as at 31 March 2009
| Note | Group | Company | ||
| £'000 | £'000 | |||
| Non-current assets | ||||
| Investments at fair value through profit or loss | 11 | 32,000 | - | |
| Total non-current assets | 32,000 | - | ||
| Current assets | ||||
| Trade and other receivables | 15 | 75 | 25,840 | |
| Cash and cash equivalents | 5,604 | 5,483 | ||
| Prepayments | 5 | 4 | ||
| Total current assets | 5,684 | 31,327 | ||
| Total assets | 37,684 | 31,327 | ||
| Liabilities | ||||
| Current liabilities | ||||
| Trade and other payables | 16 | (688) | (666) | |
| Total current liabilities | (688) | (666) | ||
| Non-current liabilities | ||||
| Performance fee provision | (1,559) | - | ||
| Total non current liabilities | (1,559) | - | ||
| Total liabilities | (2,247) | (666) | ||
| Net assets | 35,437 | 30,661 | ||
| Represented by: | ||||
| Ordinary shares | 12 | 367 | 367 | |
| Share premium | 12 | 31,887 | 31,887 | |
| Retained reserves | 3,183 | (1,593) | ||
| Total equity | 35,437 | 30,661 |
Statements of Changes in Equity
For the period from 18 March 2008 (date of incorporation) to 31 March 2009
| Share Capital | Share Premium | Retained Earnings | Total | |
| GROUP | £'000 | £'000 | £'000 | £'000 |
| Shares issued | 367 | 36,333 | 36,700 | |
| Share issue costs | (4,446) | (4,446) | ||
| Profit for the period | 3,183 | 3,183 | ||
| Balance at 31 March 2009 | 367 | 31,887 | 3,183 | 35,437 |
| COMPANY | ||||
| Share issued | 367 | 36,333 | 36,700 | |
| Share issue costs | (4,446) | (4,446) | ||
| Loss for the period | (1,593) | (1,593) | ||
| Balance at 31 March 2009 | 367 | 31,887 | (1,593) | 30,661 |
Consolidated Cash Flow Statements
For the period from 18 March 2008 (date of incorporation) to 31 March 2009
| | | 2009 |
| | | Group |
| | | £'000 |
| Cash flows from operating activities | | |
| Profit for the period | | 3,183 |
| Adjustments: | | |
| Interest income on bank balances | | (278) |
| Fair value gains on investments at fair value through the profit and loss | | (7,467) |
| Foreign exchange loss | | 3 |
| Finance expense | | 55 |
| Realised loss of expired option | | 250 |
| Performance fee provision | | 1,559 |
| Operating loss before changes in working capital | | (2,695) |
| Increase in creditors and accruals | | 688 |
| Increase in debtors and prepayments | | (5) |
| | | (2,012) |
| Interest received | | 278 |
| Net cash utilised by operating activities | | (1,734) |
| | | |
| Cash flows from investing activities | | |
| Purchase of investments | | (24,533) |
| Loan issued to investment advisor | | (75) |
| Cash utilised by investing activities | | (24,858) |
| | | |
| Cash flows from financing activities | | |
| Proceeds from issue of share capital | | 27,130 |
| Payment of share issue costs | | (4,446) |
| Proceeds from loan received | | 13,350 |
| Repayment of loan received | | (3,780) |
| Interest on loan paid | | (55) |
| Net cash generated from financing activities | | 32,199 |
| | | |
| Increase in cash and cash equivalents | | 5,607 |
| | | |
| Cash and cash equivalents at the beginning of the period | | - |
| Effect of exchange rate fluctuations on cash held | | (3) |
| | | |
| Cash and cash equivalents at the end of the period | | 5,604 |
Non-cash transactions
£9,570,500 part of the loan from Kaupthing Bank hf was repaid by issue of 9,570,500 ordinary shares of the Company, see note 10.
The notes form an integral part of these consolidated financial statements.
Notes to the Financial Statements
for the period from 18 March 2008 (date of incorporation) to 31 March 2009
1 General information
The Company and its subsidiaries (together the Group) invest in assets in the Indian infrastructure sector, with particular focus on assets and projects related to energy and transport.
The Company is a closed-end investment company incorporated on 18 March 2008 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 London Stock Exchange.
The Group has no employees.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the entities included in the consolidated financial statements.
2.1 Basis of preparation
The financial statements of the Company are prepared in accordance with International Financial Reporting Standards ("IFRS"). The financial statements have been prepared under the historical cost convention as modified by including non-controlling investments in portfolio companies at fair value.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgment in the process of applying the Group's accounting policies. 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 4.
2.2 Basis of 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 income statement 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.
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 investment in infrastructure assets in one geographical area being India.
2.4 Income
Dividend income from investments is recognised when the Company's right to receive payment has been established, normally the ex-dividend date.
Interest income is recognised using the effective interest method.
2.5 Expenses
All expenses are accrued for on an accruals basis and are presented as revenue items except for expenses that are incidental the disposal of an investment which are deducted from the disposal proceeds.
| New/Revised International Financial Reporting Standards (IAS/IFRS) | Effective date (accounting periods commencing on or after) |
| | |
| IAS 1 Presentation of Financial Statements – Comprehensive revision including requiring a statement of comprehensive income (Revised 2007) | 1 January 2009 |
| IAS 1 Presentation of Financial Statements (Revised May 2008)* | 1 January 2009 |
| IAS 1 Presentation of Financial Statements – Amendments relating to disclosure of puttable instruments and obligations arising on liquidation (2008) | 1 January 2009 |
| IAS 1 Presentation of Financial Statements (Revised April 2009)** | 1 January 2010 |
| IAS 7 Statement of Cash Flows (Revised April 2009)** | 1 January 2010 |
| IAS 23 Borrowing Costs – Comprehensive revision to prohibit intermediate expensing (Amended 2007) | 1 January 2009 |
| IAS 23 Borrowing costs (Revised May 2008)* | 1 January 2009 |
| IAS 27 Consolidated and Separate Financial Statements – Consequential amendments resulting from amendments to IFRS 3 (2008) | 1 July 2009 |
| IAS 27 Consolidated and Separate Financial Statements – Amendment relating to cost of an investment on first-time adoption (Revised 2008) | 1 January 2009 |
| IAS 27 Consolidated and Separate Financial Statements (Revised May 2008)* | 1 January 2009 |
| IAS 28 Investments in Associates - Consequential amendments resulting from amendments to IFRS 3 (2008) | 1 July 2009 |
| IAS 28 Investments in Associates* | 1 January 2009 |
| IAS 31 Interests in Joint Ventures - Consequential amendments resulting from amendments to IFRS 3 (2008) | 1 July 2009 |
| IAS 31 Interests in Joint Ventures (Revised May 2008)* | 1 January 2009 |
| IAS 32 Financial instruments: Presentation - Amendments relating to puttable instruments and obligations arising on liquidation | 1 January 2009 |
| IAS 36 Impairment of Assets (Revised May 2008)* | 1 January 2009 |
| IAS 36 Impairment of Assets** | 1 January 2010 |
| IAS 39 Financial Instruments: Recognition and Measurement (Revised May 2008)* | 1 January 2009 |
| IAS 39 Financial Instruments: Recognition and Measurement – Amendments for embedded derivatives when reclassifying financial instruments | 30 June 2009 |
| IAS 39 Financial Instruments: Recognition and Measurement – Amendments for eligible hedged items | 1 July 2009 |
| IAS 39 Financial Instruments: Recognition and Measurement (Revised April 2009)** | 1 January 2010 |
| IAS 40 Investment Property (Revised May 2008)* | 1 January 2009 |
| IFRS 3 Business Combinations – Comprehensive revision on applying the acquisition method | 1 July 2009 |
| IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (Revised May 2008)* | 1 July 2009 |
| IFRS 5 Non-current Assets Held for Sale and Discontinued Operations** | 1 January 2010 |
| IFRS 7 Financial Instruments: Disclosures – Amendments enhancing disclosures about fair value and liquidity risk (Revised March 2009) | 1 January 2009 |
| IFRS 8 Operating Segments (Original issuance 2006) | 1 January 2009 |
| IFRS 8 Operating Segments (Revised April 2009)** | 1 January 2010 |
| | |
| IFRIC Interpretation | |
| | |
| IFRIC13 Customer loyalty programmes | 1 July 2008 |
| IFRIC 15 Agreement for Construction of Real Estate | 1 January 2009 |
| IFRIC 16 Hedges of a Net Investment in a Foreign Operation | 1 October 2008 |
| IFRIC 17 Distributions of Non-Cash Assets to Owners | 1 July 2009 |
| IFRIC 18 Transfers of Assets from Customers | 1 July 2009 |
| | |
| 31 March 2009 | Less than 1 month | 1-3 months | 3 months to 1 year | 1-5 years | Over 5 years | No stated maturity |
| | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
| Financial liabilities | | | | | | |
| Trade and other payables | - | - | 688 | - | - | - |
| | | | | | | |
| | | 2009 £’000 £’000 |
| Audit fees | | *67 |
| Legal fees – general | | 364 |
| Legal fees – investment projects | | 472 |
| Corporate advisory fees | | 225 |
| PR | | 70 |
| Consultancy fees | | 82 |
| Other professional costs | | 738 |
| Administration fees | | 117 |
| Directors’ fees | | **147 |
| Insurance costs | | 11 |
| Other | | 74 |
| | | 2,367 |
| The following key definitions apply: | |
| | |
| Lower Hurdle | the sum of the net placing proceeds from the Placing and any subsequent capital raising multiplied by 10 per cent. per annum, calculated on a daily pro rata basis, and presented at the Accounting Date; |
| Upper Hurdle | the sum of the net placing proceeds from the Placing and any subsequent capital raising multiplied by 12 per cent. per annum, calculated on a daily pro rata basis, and presented at the Accounting Date; |
| Total Cash Returned (“TCR”) | TCR shall be the sum of all amounts received from all investments and paid to IIHoldCo; including all dividends all income from cash on deposit or cash equivalents, and all net cash proceeds on realisations and/or refinancing (i.e. cash gains on principal originally invested, following realisations) for the period from the date of completion of the first investment to the relevant Calculation Date. TCR shall be calculated net of: - any interest expenses on borrowings to finance the acquisition or development of any investment; - any expenses directly attributable to the acquisition or disposal of Investments; and - the Annual Advisory Fee; TCR shall be calculated without including expenses due to the direct operation of IIHoldCo, including: inter alia directors’ fees, treasury management, administration, brokerage fees, and incidentals. |
| | 2009 |
| Profit attributable to shareholders (thousands) | £3,183 |
| Weighted average number of ordinary shares in issue (thousands) | 36,700 |
| Basic and diluted earnings per share (pence) | 8.67p |
| Name | Country of Incorporation | Ownership interest |
| Infrastructure India HoldCo | Mauritius | 100% |
| Power Infrastructure India | Mauritius | 100% |
| Roads Infrastructure India | Mauritius | 100% |
| Roads Infrastructure India (Two) | Mauritius | 100% |
| 31 March 2009 | At Cost £’000 | Fair value Adjustment £’000 | At Fair Value £’000 |
| Shree Maheshwar Hydel Power Corporation Ltd | 13,220 | 1,180 | 14,400 |
| Western Madhya Pradesh Infrastructure Toll Road Pvt Limited | 11,313 | 6,287 | 17,600 |
| | 24,533 | 7,467 | 32,000 |
| | | Share capital | Share premium |
| | No. of shares | £’000 | £’000 |
| | | | |
| Ordinary shares of £ 0.01 each | 36,700,000 | 367 | 31,887 |
| | 36,700,000 | 367 | 31,887 |
| Rupert Cottrell | 25,000 | Ordinary Shares |
| Timothy Walker | 25,000 | Ordinary Shares |
| Prodaman Sarwal | 25,000 | Ordinary Shares |
| | 2009 | 2009 |
| | Group | Company |
| | £’000 | £’000 |
| Advance to Bloomsbury Asset Management Limited * | 75 | - |
| Intercompany loans | - | 25,840 |
| | 75 | 25,840 |
| | 2009 | 2009 |
| | Group | Company |
| | £’000 | £’000 |
| Trade payables | 318 | 318 |
| Accruals | 370 | 348 |
| | 688 | 666 |