Trinity Capital Regulatory News (TRC)

30 Jul 2007 07:01

Trinity Capital PLC30 July 2007 30 July 2007 TRINITY CAPITAL PLC ("Trinity" or the "Company") Preliminary results for the period ended 31 March 2007 Highlights • Admitted to AIM on 21 April 2006, raising gross proceeds of £250m (net £238m) • 56% of net funds utilised at 31 March 2007 - a further 33% of net funds committed since period end • Currently, the Company's portfolio consists of 12 investments, comprising a total development potential of 72 million square feet • As of 31 March 2007, the investment portfolio was valued at £216 million, an increase of 74% against capital committed of £124 million • Net Asset Value ("NAV") per share increased by 31% to 124p from 94p at Admission • Fair value gain of £92.4 million on total investment portfolio • Fair value gain of £44.3 million recognised in financial statements (excluding wholly owned subsidiaries) under IFRS • Interest income of £9.1 million • Profit before tax of £34.0 million • EPS for the period of 13.6 pence Michael Cassidy, Chairman of Trinity Capital PLC, said: "We have made excellentprogress with the fund being fully invested well ahead of our originaltimetable. We have built up a strong portfolio of diversified investments,across a range of key growth sectors and geographies, and are well positioned totake advantage of the partnerships we have established. Our focus has nowswitched from the successful deployment of the investment capital to managementof the development projects as well as selective partial realization andredeployment of capital to investments with higher expected returns." Enquiries: Trikona Capital Rak Chugh +91 11 2620 7257(India) +44 20 7871 0099(UK) +1 212 686 3077 (US) Cardew Group Tim Robertson +44 20 7930 0777 Sofia Rehman Catherine Maitland (London) Gutenberg PR Mike Sherrill +1 212-239-8741 Notes: • For further information and regular updates regarding the Fund's activities, please log on and sign up for news alerts at www.trinityplc.com Chairman's Statement I am pleased to report Trinity's first set of results since its admission to theAIM market in April 2006. Trinity has made excellent progress in establishingitself as a leading investor in the Indian real estate market. The Company wasfully invested six months ahead of schedule. During the financial period ending March 31, 2007, Trinity made nine investments for a total capital commitment of £124 million or 56% of its available capital. Currently Trinity's portfolio, including the three acquisitions made since theyear end, comprises of a financial interest in twelve projects whichcollectively are developing 72 million square feet of real estate, and strategicholdings in IL&FS Transportation and Networks Limited ("ITNL"), Pipavav Shipyardand Fortis Healthcare. During the period under review the Group achieved a significant uplift in valuein its underlying investments. Together with interest income on unutilised fundsand after administration and other expenses the net profit for the period inaccordance with IFRS is £34 million. Net cash amounted to £122 million. InFebruary 2007, the Company repurchased 20.7 million of its shares at 88p,seeking to enhance shareholder value. In line with the Group's stated strategy,the Board does not propose a final dividend. Valuation and Net Asset Value CB Richard Ellis ("CBRE") conducted an independent valuation of the developmentproperties in which we hold full or partial ownership interests. Based on CBRE'swork on the underlying assets, the directors' valuation of our interest in thedevelopment property portfolio, combined with our shareholdings in corporateentities, was valued, as of 31 March 2007, at £216 million, giving a net surplusof £92 million (74%) , compared with the acquisition cost of £124 million.Taking all properties at fair value, the NAV per share at the period end was 124pence per share. The NAV after adjusting for non-invested cash is approximately140 pence per share. This reflects successful operations over a very shortperiod of time together with improving real estate yields. Investment Manager Trikona Capital, Trinity's Investment Manager, has continued to expand itspresence in Mumbai and New Delhi and plays a key role in sourcing newdevelopments and managing the growing investment portfolio. The property teamhas expanded by over thirty professionals since April 2006 and as a consequencenow incorporates a wide range of property expertise ideal for supporting thedevelopment of the company's portfolio. The Indian real estate market along with the Indian economy is expected tocontinue to grow at a rapid rate in order to support both global and domesticdemand. The investment manager remains confident of its ability to make progresson each of the investments made since the IPO and, where appropriate, realisevalue on specific projects by introducing additional equity partners. Theinvestment manager is confident of its ability to re-invest recycled capital inattractive development opportunities. No performance fee is payable to the Investment Manager for the period sincethere have been no disposals, but a provision at an appropriate level has beenmade in arriving at the NAV. Outlook Trinity has delivered on the objectives set at the time of the IPO. The Companyhas invested the capital raised in a diverse range of attractive real estatetransactions and as evidenced by the recent valuation has generated a netsurplus value of £92 million against the purchase price. The current financialyear has begun well with the announcement of three further acquisitions takingthe total level of investment commitments so far to £196 million, (representing89% of the share capital). The investment manager's primary focus has alreadyswitched to progressing each investment through the development stage with aparticular focus on value addition to existing projects, while also mindful overtime of ultimately realising cash returns to shareholders. The Board believesthe Indian real estate market offers excellent value to the long-term investorand is therefore confident the Company can continue to deliver strong returns toshareholders. Michael Cassidy CBEChairman Investment Manager's Report During the period under review, we have made significant progress towards ourgoal of establishing a world class platform for Indian real estate andinfrastructure investments. Trinity Capital's business is to develop and ownquality Indian real-estate and infrastructure assets for the long-term. We havepursued an active investment strategy, resulting in the capital raised at IPObeing substantially invested by April 2007, well ahead of the schedule setduring the IPO. Since the period end, your company has also made three furtherinvestments resulting in £196 million of capital now being invested in twelveindividual investments, which reflects well on our ability to source and closetransactions in what is still a developing marketplace. Our focus has nowshifted from deployment of investment capital to the building and financingphase for our portfolio of projects. We will also look to realise value onselected assets by bringing in other equity partners. We recognise that investing in emerging markets real estate is complex anddevelopment of assets is even more so. Therefore, we believe that a talentedmanagement team with expertise in land laws, zoning, permits, development,capital markets, finance and marketing is essential for success. Our operationshave increased in scale and scope in line with the growth of the investmentportfolio. With offices located in New Delhi and Mumbai, our team has expandedby over 30 professionals since April 2006. Partnership with local experts who have a long history of proven developmentexperience in the local markets is a vital part of our strategy. We have beenvery selective about our partners, choosing to work only with those developerswho have demonstrated excellence in their reliability, transparency, financialcontrols, management depth and execution capabilities. Our development partnershave made significant progress on each of their projects, getting permits andapprovals, selecting leading designers and architects, in particular onKapstone, DB Hospitality and Lokhandwala, as well as continuing planning andmarketing efforts to ensure the operational and financial success of eachproperty. Valuation of Property Portfolio We are pleased to report that CBRE, as independent valuers, has appraised theproperties in Trinity's investment portfolio as of 31st March 2007. Based on thework by CBRE on the underlying assets, the Directors' valuation of Trinity'stotal investments, including cash and entity level shareholdings, produces a NAVof £287 million or 124 pence per share compared with the NAV at IPO of 94 penceper share. Our Portfolio NAV after adjusting for non-invested cash isapproximatley 140 Pence per share*. With the exception of our equity position inFortis Healthcare, all portfolio investments made during the period have addedto the Group's NAV. Since the end of our fiscal year, most of the remaining funds in the companyhave been invested into three additional projects that are expected to to add toshareholder value in future valuation periods. * Adjusted NAV per share excluding non-invested cash. Investment Portfolio - NAV Summary Development Project Cost Directors' Valuation NAV per % of £ million Valuation gain % share (£) total NAV £ million Uppal IT 28.3 76.3 170% 0.33 26.6%Kapstone 14.3 20.3 42% 0.09 7.1%DB Realty / MK Malls 17.6 28.9 64% 0.12 10.1%Lokhandwala 11.6 22.3 92% 0.10 7.8%Manjeera 9.1 14.9 64% 0.06 5.2%DB Hospitality 11.6 14.5 25% 0.06 5.0% ______________________ _________Subtotal - Projects 92.5 177.2 92% 0.76 61.7% Equity holdings 31.6 39.3 24% 0.17 13.7% ______________________ _________TOTAL 124.1 216.5 74% 0.93 75.4% Cash 123.7 0.53 43.1%Committed cash (23.9) (0.10) (8.3)%Other (including performance fee provision) (29.0) (0.12) (10.1)% ___________ _________ 287.3 1.24 100.0% =========== =========Shares in issue at period end (thousands) 232,050 Notes: As required by IFRS, the investment in Uppal IT is consolidated in the financialstatements and effectively stated at cost, since it is a 100% subsidiary. In thetable above, it is included at fair value. Cost represents the capital commitment. The amount invested at the period endamounted to £100.2 million. Indian Real Estate Market Overview During 2006 India's GDP grew at a healthy 9%, and this trend is broadly expectedto continue with the Reserve Bank of India ("RBI") projecting a strong 8.5% GDPgrowth rate for 2007. The Indian real estate market is expected to grow rapidlyover the next five years, driven by positive underlying fundamentals thatinclude urbanization and education, rising purchasing power and affluence and apro-investment government stance. However, the real estate market does faceshort-term challenges. Pockets of the Indian real estate market have been affected by interest raterises to nearly 13% , an increase of almost 3% over a 12 month period. Whilst insome cities the residential housing segment has experienced a slight slow downin demand for mortgages and pre-sales for properties under development, theGroup's projects have so far not been greatly impacted. The commercial andretail segments have been buoyed by the continued strong demand by companies inthe IT/ITES sector. However, tightening liquidity and higher interest rates arebeginning to affect smaller developers who are undercapitalised. The fundamentals of the real estate market remain unchanged and future demandstill far outweighs supply. This underpins the long-term growth of the realestate sector albeit some shorter term fluctuations can be expected. Geographic Focus Trinity's investments are focused primarily on three of India's major urbanareas: Delhi, Mumbai and Hyderabad, due to these cities' attractive demographicsand underlying economic fundamentals. National Capital Region ("NCR") of Delhi - As India's second most populous citywith more than 13 million residents, the NCR has been witnessing robust demandfor commercial and office space during the first two quarters of 2007. Theburgeoning suburbs of Gurgaon and Greater Noida have cemented their position asalternate centres of commercial and residential activity. Head offices of largecompanies as well as IT/ITES continue to be a major demand driver. Constrainedsupply in CBD areas has caused a demand shift towards Greater Noida and otherdeveloping submarkets, which have seen an increasing share of IT Parks, retailand commercial developments, as well as new township developments. Mumbai - On average, real estate prices in Mumbai have risen by 16% a year overthe last four years. As the country's financial hub, Mumbai is the favoureddestination of financial institutions, investment and consulting firms, creatingsuch demand for commercial real estate that Mumbai currently ranks as the mostexpensive city in India in terms of real estate prices. Trinity has teamed upwith some of the top local Mumbai developers, namely Dynamix Balwas Group,Lokhandwala Group and Keystone Group, in order to develop and own choicelocation properties in the most populous city in India. Hyderabad - As Trinity's managers we see tremendous growth potential inHyderabad, state capital of Andhra Pradesh and the country's fifth largestmetropolis with a population in excess of six million. Over the last decadeHyderabad has emerged as an IT/ITES hub with IT exports from the city reachingsubstantial levels. In addition to the IT sector, the pharmaceutical industryhas established a strong presence in Hyderabad, with companies such as Dr.Reddy's Lab, Matrix Lab, Hereto Drugs Limited, Divis Lab and Vimta Labsheadquartered in the state capital. Current Investments As Trinity's managers, we seek undervalued assets that are scarce,supply-constrained and located in densely populated areas in rapidly growingcities that are economically self-sustainable. We construct our portfolio ofassets with platforms in mind. Synergies and scale in our portfolio assets isimportant. If we are unable to add value to a portfolio asset we would ratherpass on the opportunity. During the period under review, Trinity hassuccessfully assembled a high quality and high value portfolio, diversifiedacross platforms in Infrastructure, Urban Rejuvenation, Residential, Commercial,Retail and Hospitality. The investments made during the period were subjected to independent duediligence to ensure consistency with Trinity's investment strategy andpreviously articulated return objectives. The key operating and financialmetrics for each investment for the portfolio are provided below. Given thenature of development assets, the square foot numbers are expected to changeuntil plans are finalised. Portfolio - Indicative Size Metrics Land Size (Square Footage) Hotel Site Keys ____________________________________________________________Development Projects (Acres) Residential Commercial Retail Hotel Total____________________________________________________________________________________________________Uppal IT 76.0 1,472,621 7,306,971 1,544,540 240,000 10,564,132 300Kapstone 125.0 4,159,201 4,282,002 600,000 9,041,203MK Malls 4.43 848,264 848,264Lokhandwala 7.0 982,830 982,830Manjeera 8.3 419,462 1,271,292 1,007,930 2,698,684Neelkamal 26.6 292,500 145,000 828,800 1,266,300 1,036Subtotal - Projects 247 7,326,614 13,708,529 3,297,470 1,068,800 25,401,413 1,336 ____________________________________________________________________________________________________TOTAL AS OF 31ST MARCH 247 7,326,614 13,708,529 3,297,470 1,068,800 25,401,413 1336____________________________________________________________________________________________________ DB Realty 206.8 15,160,651 3,721,252 2,814,194 21,696,097Luxor SEZ 66.9 2,361,452 7,204,539 395,096 9,961,087Phoenix Mills 15,000,000 15,000,000 ____________________________________________________________________________________________________TOTAL AS OF 30TH JULY 521 24,848,717 24,634,320 21,506,760 1,068,800 72,058,597 1336____________________________________________________________________________________________________ Portfolio - Key Financial Metrics Ownership Capital CapitalDevelopment Projects Location Partners % Committed Invested___________________________________________________________________________________________Uppal IT NCR of Delhi Panthera Developers 100.0% £28.3 £22.1Kapstone Mumbai Keystone Group 21.3% £14.3 £10.6MK Malls Mumbai Dynamix Balwas Group 28.9% £17.6 £17.6Lokhandwala Mumbai Lokhandwala 49.0% £11.6 £6.3 Construction LtdManjeera Hyderabad Manjeera Construction 49.0% £9.1 £6.3 LtdNeelkamal Mumbai / Dynamix Balwas Group 9.5% £11.6 £5.8 Pune / GoaSubtotal - Projects £92.5 £68.6 Equity Holdings_____________________Fortis Healthcare Pan India Ranbaxy Group 3.5% £13.5 £13.5Pipavav Gujarat SKIL 15.8% £13.2 £13.2ITNL Pan India IL&FS 2.6% £4.8 £4.8Subtotal - Equity £31.6 £31.6 ___________________________________________________________________________________________TOTAL AS OF 31ST MARCH £124.1 £100.2___________________________________________________________________________________________ Development Projects_____________________DB Realty Western India Dynamix Balwas Group 5.9% £26.4 £26.4Luxor Cyber City NCR of Delhi Uppals & Luxor Groups 49.4% £37.9 £37.9Subtotal - Projects £64.3 £64.3 Phoenix Mills Pan India Atul Ruia Group 1.7% £7.4 £7.4Subtotal - Equity £7.4 £7.4 ___________________________________________________________________________________________TOTAL AS OF 30TH JULY £195.8 £171.8___________________________________________________________________________________________ ________________________________________________________________________________1 Development Project________________________________________________________________________________ Project Name: Uppal IT Park - "TECH OASIS"Location: Greater Noida, NCR of DelhiType: IT Park with residential, commercial and IT space Initial Investment 18 October 2006 £28.3 millionNAV as of 31 March 2007: £76.3 millionTrinity Ownership %: 100% Uppal IT Park, also known as Tech Oasis, is located in Greater Noida's TechZone, an emerging destination of choice for IT/ITES companies in the NCR.Situated less than 50 km away from the Central Business District of Delhi andthe international Airport, Tech Oasis will be built on a 76 acre parcel of landwith excellent connectivity to key surrounding areas. Tech Oasis has beencreatively designed to capture the energy and imagination of IT work force -young, educated and culturally sophisticated tech workers - in a complete live,work and play environment. Progress to Date:• Trinity has physical possession of the plot;• Pre-construction (e.g. topographical survey, soil/water investigation, etc.) in progress;• Consultants for Environmental Impact Assessment and Traffic analysis appointed;• Initial Master Plan ("MP") submitted to government: - Revised MP, prepared by HPP Consultants (Germany), to be submitted shortly, - Approval of MP expected by Q4, 2007.• Approval for SEZ designation submitted to government; approval expected by Q4, 2007; ________________________________________________________________________________2 Development Project________________________________________________________________________________ Project Name: Kapstone Constructions Pvt. Ltd. - "Rustomjee's Township"Location: Thane, MumbaiType: Mixed use - residential, commercial and retail Initial Investment 23 October 2006: £14.3 millionNAV as of 31 March 2007: £20.3 millionTrinity Ownership %: 21.3% Rustomjee's Township is one of the largest integrated developments at Thane, arapidly growing satellite town of Mumbai. Located only 40 kilometres fromcentral Mumbai's business centre, and adjacent to a major highway that connectsMumbai and Delhi, Rustomjee offers excellent access to all of Mumbai and itssurrounding areas. The integrated township, to be built on a land parcelmeasuring 127-acres in four phases over a 7-year period, will create 4.2 millionsquare feet of Residential, 4.3 million square feet of Commercial and 0.6million square feet of Retail space. Progress to Date:• Necessary approvals for Phase 1 of development are in place;• Leading Indian architectural firm Hafeez Contractor has been retained to design the development;• Construction on two of the six towers has already commenced with targeted completion by (early 2009);• Pre-sales are well above expectations; and - To date, 129 units, representing 23.5% of total, have sold at average price of £40 per square foot. ________________________________________________________________________________3 Development Project________________________________________________________________________________ Project Name: Dynamix-Balwas ("DB") Realty - MK MallsLocation: Bandra Kulra Complex ("BKC"), MumbaiType: 848,000 square feet of Grade A office space in six buildings Initial Investment 3 March 2007 £17.6 millionNAV as of 31 March 2007 £28.9 millionTrinity Ownership %: 28.9% MK Malls is a partnership with Dynamix-Balwas Group to develop commercial officespace in Mumbai's most sought after secondary business districts ('SBDs'),Bandra Kulra Complex. Offering easy accessibility, high quality amenities and adistinct character, the project is expected to be completed within three years.The development offers Trinity an opportunity to tap into the large overflow ofdemand for commercial real estate in Mumbai. The project is part of Trinity's larger Urban Rejuvenation Program ("URP"),under which Trinity works with the local government to rehabilitate slums byrelocating existing inhabitants and redeveloping the area. In exchange for therights to build market rate housing, the Company agrees to provide new housingfor the existing residents. IL&FS, a leading Indian financial institution is a co-investor with Trinity onthis project. Progress to Date:• 60% of rehabilitation work completed to date and• Currently appointing international design and development professionals. ________________________________________________________________________________4 Development Project________________________________________________________________________________ Project Name: Lokhandwala Kataria - "Lady Ratan Seasons"Location: Worli, Southern MumbaiType: 983,000 square feet of residential space Initial Investment 12 October 2006: £11.6 millionNAV as of 31 March 2007: £22.3 millionTrinity Ownership %: 49% Located in Worli, one of the desirable suburbs of Southern Mumbai, LokhandwalaKataria luxury condominium development project, also known as "Lady RatanSeasons", offers great connectivity to all other parts of Mumbai. The projectsite is minutes away from key railway terminals in the city and only 30-45minutes away from the domestic and international airport and is in the sameneighbourhood as the only Four Season's sanctioned hotel in India. Lady Ratan Seasons development showcases Trikona's leading role in the UrbanRejuvenation Program (URP). Trinity will re-develop 7 acres into 983 thousandsquare feet of residential space. Under the URP, the project will provideapproximately 700,000 square feet of new housing in three 31-story towers forexisting residents and, in return, the project will receive the right to buildapproximately 983,000 square feet of market rate premium seaview housing. Progress to Date:• Entire project including the free sale portion is expected to be completed in 40 months;• 60% of the site has been readied for construction;• Environmental clearance and approval has been received from the state Government; and• Piling & foundation work for the first two buildings has commenced. ________________________________________________________________________________5 Development Project________________________________________________________________________________ Project Name: Manjeera Retail HoldingsLocation: Kukatpally, HyderabadType: 2.7 million square feet of commercial, residential and retail space Initial Investment 25 January 2007: £9.1 millionNAV as of 31 March 2007: £14.9 millionTrinity Ownership %: 49% Manjeera is Trinity's entry into Hyderabad, India's fifth largest city with apopulation in excess of 6 million. Strategically located on the road connectingHyderabad to HI-TEC city, home to major technology firms such as Microsoft, Delland Motorola,this innovative project will feature 2.7 million square feet ofoffice, retail and residential space, to be developed over two adjacent landparcels measuring 3.2 and 5.1 acres, respectively. Progress to Date:• Sites have been cleared and approvals for excavation and levelling work obtained;• Significant approvals, such as land use change, already secured;• Electricity substations being relocated to improve road frontage and marketability of project; and• Secured financing of £11.8 million from the Indian government's Housing and Urban Development ________________________________________________________________________________6 Development Project________________________________________________________________________________ Project Name: DB Hospitality - Neelkamal Marine DriveLocation: Mumbai, Pune and GoaType: 1 operating hotel and 3 new luxury hotels with (1,036) keys Initial Investment 15 December 2006 £11.6 millionNAV as of 31 March 2007: £14.5 millionTrinity Ownership %: 9.5% The investment comprises an operational 5 star hotel - Le Royal Meridian, Mumbaiand land to develop a further three luxury hotels over the next three years atMumbai, Pune and Goa, all to operate under the Hyatt brand. The group plans to develop a Park Hyatt in South Mumbai, designed to be thetallest tower in Mumbai. The hotel is strategically positioned to be the onlyluxury hotel in South Mumbai, a superior location in the city. Trinity isbuilding a premier hospitality platform with DB Group. IL&FS is co-investing with Trinity on this project. Progress to Date:• FX Fowle, designer of Reuters Building in Times Square, New York, the Conde Nast Building in New York and the ICBC building in Shanghai, has been appointed as the Project Architect;• Pre-construction planning and soil test analysis have been completed and land has been vacated;• Piling and Foundation work has commenced; and• Hyatt Group will be managing and operating the hotel properties. ________________________________________________________________________________7 Equity Holding________________________________________________________________________________ Company Name Fortis Healthcare Limited ("FHL")Business: India's Leading Healthcare CompanyStock Exchange : Bombay Stock Exchange ("BSE") - Ticker: FortisReal Estate: Access to develop healthcare facilities and related hospitals Initial Investment 15 January 2007: £13.5 millionTrinity Ownership: 8 million shares (3.5% of total shares outstanding) The transaction provides exposure to the hospitality sector, especially tolucrative Medical Tourism which is expected to become a £1 billion industry by2012. Trinity expects to capitalise on FHL's plans to develop 30-40 additionalhospitals over the next five years. FHL has also launched its network of healthshops branded "Fortis Healthworld", targeting 1,000 outlets by 2012. FHL is the only investment in Trinity's portfolio which is currently tradingbelow Trinity's purchase price. However, the fundamentals remain strong, and weexpect the price to recover. ________________________________________________________________________________8 Equity Holding________________________________________________________________________________ Company Name Pipavav Shipyard Limited ("PSL")Business: Private Company; Developer of one of the largest Indian PortLocation: Pipavav Port, State of GujaratReal Estate: Trinity has exclusive rights to co-develop 150 acre township near shipyard Initial Investment 23 January 2007 £13.2 millionTrinity Ownership: 49.5 million shares, 15.8% of total shares outstanding Trinity acquired a strategic shareholding in Pipavav Shipyard Limited ("PSL")which is building the largest Indian integrated shipyard near Pipavav port inthe state of Gujarat. As part of the transaction, Trinity also receivedexclusive co-development rights to a proposed 150 acre integrated townshipdevelopment adjacent to the shipyard. Spread over 175 acres, the world's fifth largest shipyard, once built, will bedesigned to handle vessels of all sizes and will contain integrated facilitiesto carry out shipbuilding and ship repair activities. The facilities wouldinclude dry dock, ship lift along with a land berth fully equipped with state ofthe art technology for the construction of modern merchant ships and repairs orrefits. With a stake of 15.8%, this acquisition represents the second investment underTrinity's strategic partnership with IL&FS. New York Life International Fund hasalso invested £7.9m in the shipyard at the same valuation as Trinity. Since Trinity's investment, PSL have been awarded contract for conversion of wetdock into dry dock and other civil works. PSL has also received new orders foreight ships with option for others. ________________________________________________________________________________ 9 Equity Holding________________________________________________________________________________ Company Name IL&FS Transportation & Networks Limited ("ITNL")Business: Private Company; Leading developer of infrastructure projectsReal Estate: Trinity has rights of first refusal to invest in transport corridors with ITNL Initial Investment 5 October 2006 £4.8 millionTrinity Ownership: 4.16 million shares, 2.6% of total shares outstanding Trinity's acquisition of a 2.6% stake in ITNL represents the first investmentallocation from its landmark $100 million partnership with InfrastructureLeasing & Financing Services Limited ("IL&FS"), one of India's leading financialinstitutions. With this strategic partnership, Trinity gains access and theright of first refusal to invest in transport corridors alongside ITNL. ITNL, 90% owned by IL&FS, is a vehicle promoted by IL&FS to create a pan-Indiasurface transport business. IL&FS has identified the transport sector as an areaof focus and is in the process of implementing several significant road sectorprojects through this initiative. ITNL currently has a portfolio of 10 roadsub-sector projects already in development and a pipeline of further suchprojects which are in the planning phase. Subsequent to Trinity's investment, Goldman Sachs has has also invested in thiscompany. Investments Since the year-end Trinity has made three new investments since the end of March 2007, for a totalcapital commitment of £71 million. To date, Trinity has committed a total of£196 million, (89%) of the funds available for investment. ________________________________________________________________________________10 Development Project________________________________________________________________________________ Project Name: Luxor Cyber City - "SEZ" IT/ITES DevelopmentLocation: Gurgaon, National Capital Region of DelhiType: 10 million square feet of IT and other commercial space Initial Investment 12 June 2007 £37.9millionTrinity Ownership %: 49.4% Luxor Cyber City represents Trinity's largest investment, in terms of capital,to date. The Company is paying £37.9 million for a 49.4% stake in Luxor CyberCity to develop an IT / ITES Special Economic Zone (SEZ) over a 67-acre landparcel located in Gurgaon, National Capital Region of Delhi. Once developed, theproject will offer a total of nearly 10 million of square feet, comprising 7.2million square feet of IT/ ITES processing zone and 2.8 million square feet ofnon-processing (i.e. residential and retail) zone and community facilities. Located on the Delhi - Jaipur National Highway, amidst the upcoming growthcorridor of Gurgaon to IMT Manesar, the site lies in an enviable position totake advantage of growth in both the areas. With majority of upcoming supply inthe region already pre-leased, the prices are anticipated to remain firm. Trinity has partnered with Uppal Group, a leading developer with over threedecades of experience in real estate development. Progress to Date:• Boundary wall constructed;• Selection of design and other consultants expected by Q3, 2007; and• Business plan to be finalised by December 2007. ________________________________________________________________________________11 Development Project________________________________________________________________________________ Project Name: DB Realty - Mixed Use DevelopmentLocation: MumbaiType: 21.7 million square feet of prime commercial and residential space Initial Investment 23 April 2007 £26.4 millionTrinity Ownership %: 5.9% For a third time, Trinity has linked up with Dynamix-Balwas (DB) Group toacquired a 5.9% stake for £26.4 million in D.B. Realty Ltd. (DBR). DBR iscurrently developing 12 real estate projects in central and outer Mumbai. Uponcompletion, the projects will result in the development of up to 21.7 millionsquare feet of residential and commercial space and will significantly redefinethe landscape of central and suburban Mumbai where an acute shortage of qualityresidential and commercial space has seen rental and property prices soar inrecent years. This deal with IL&FS and Dynamix-Balwas Group, further demonstrates Trinity'scommitment towards developing sustainable partnerships alongside its ability tosource scaleable development opportunities. DB Realty retains the upside on a majority of freely tradeable TransferableDevelopment Rights (TDR) in Mumbai due to their urban rejuvenation andredevelopment work. Co-investors Lehman Brothers and IL&FS Investment Managershave together subscribed to an additional 11.8% stake in this investment. Progress to Date:• Work has already commenced on five of the twelve projects;• Construction on the remaining seven expected to commence by Q4, 2007;• DBR developing an IT park in Pune ________________________________________________________________________________12 Equity Holding________________________________________________________________________________ Company Name Phoenix Mills ("PML")Business: Retail Real Estate DevelopmentStock Exchange : BSE - Ticker: PhoenixReal Estate: PML portfolio includes high quality retail, commercial and hospitality space Initial Investment (June 2007): £7.4 millionTrinity Ownership: 370,000shares (1.7% of total shares outstanding) Trinity Capital invested in PML through a preferential allotment process at aprice of £19.95 per share, a discount to the then current market price of £23.7per share. Other institutional investors participating in the allotment wereDeutsche Bank, Yatra Capital and Americorp. The investment substantially enhances Trinity's retail portfolio in India'srapidly expanding retail sector which is expected to grow in the coming years.KSA-Technopak has estimated organised retailing in India will increase from £3.6billion to £10.3 billion by 2010. PML's flagship development is High Street Phoenix, a market city development inLower Parel, South Mumbai, a prominent commercial and residential location. Whenfully developed this will occupy over 2.3 million square feet. Consolidated Income StatementFor the period from 7 March 2006 (date of incorporation) to 31 March 2007 Group £'000 Interest received 9,077Foreign exchange loss (53)Fair value gains on investments 44,346 _________Net investment income 53,370 _________ Investment manager's management fees (4,736)Investment manager's performance fees (13,130)Other administration fees and expenses (1,493) _________Profit for the period before tax 34,011Tax - _________Profit for the period after tax 34,011 ========= Basic and diluted earnings per share (pence) 13.6 Consolidated Balance Sheetat 31 March 2007 Group £'000 Non-current assetsInvestments 122,442 _________Total non-current assets 122,442 _________ Current assetsTrade and other receivables 106Cash and cash equivalents 123,705Inventory 22,309Prepayments 18 _________Total current assets 146,138 _________ _________Total assets 268,580 _________ LiabilitiesNon-current liabilitiesPerformance fee (13,130)Borrowings (1,603) _________Total non-current liabilities (14,733) _________ Current liabilitiesTrade and other payables (154) _________Total current liabilities (154) _________ _________Total liabilities (14,887) _________ =========Net assets 253,693 ========= Represented by:Ordinary shares 2,321Distributable reserve 217,362Retained reserves 34,011Other reserves (1) _________ 253,693 ========= Statement of Changes in EquityFor the period from 7 March 2006 (date of incorporation) to 31 March 2007 Share Share Distributable Retained Other Capital Premium reserves Earnings Reserves TotalGROUP £'000 £'000 £'000 £'000 £'000 £'000 Share issue proceeds 2,528 247,500 250,028 Placing costs (12,038) (12,038) Cancellation of share premium (235,462) 235,462 0 Share buy back (207) (18,100) (18,307) Net profit for the period 34,011 34,011 Foreign exchange on translation of subsidiaries (1) (1) ___________________________________________________________ _________Balance at the end of the period 2,321 0 217,362 34,011 (1) 253,693 =========================================================== ========= Consolidated Cash Flow StatementFor the period from 7 March 2006 (date of incorporation) to 31 March 2007 £'000 Cash flows from operating activitiesProfit for the period 34,011Adjustments for:Fair value gains on investment (44,346)Finance income (9,076)Changes in working capitalIncrease in inventories (570)Increase in receivables (124)Increase in payables 13,220 _________Net cash used by operating activities (6,885) _________ Cash flows from investing activitiesPurchase of investments (78,096)Interest received 9,076Acquisition of subsidiaries, net of cash acquired (17,643) _________Net cash outflow from investing activities (86,663) _________ Cash flows from financing activitiesProceeds on issue of equity shares net of issue costs 237,990Share buy-back (18,307)Loan repayments (2,429) _________Net cash inflow from financing activities 217,254 _________ Net increase in cash and cash equivalents 123,706 Cash and cash equivalents at the start of the period -Foreign exchange (1) _________Cash and cash equivalents at the end of the period 123,705 ========= NotesFor the period from 7 March 2006 (date of incorporation) to 31 March 2007 1. General information The Company and its subsidiaries (together the Group) invest in real estate andreal estate related entities in India, primarily in commercial development inthe office and business space, residential, retail and hospitality sectorsderiving returns from development, long-term capital appreciation and income. The Company is a closed-end investment company incorporated on 7 March 2006 inthe Isle of Man as a public limited company. The address of its registeredoffice is IOMA House, Hope Street, Douglas, Isle of Man. The Company is listed on the Alternative Investment Market of the London StockExchange. The Group has no employees. 2. Summary of significant accounting policies The principal accounting policies applied in the preparation of the consolidatedfinancial statements are set out below. These policies have been consistentlyapplied 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 withInternational Financial Reporting Standards ("IFRS"), and the Isle of ManCompanies Act 1931 - 2004. The financial statements have been prepared under thehistorical cost convention as modified by including non-controlling investmentsin portfolio companies at fair value. The preparation of financial statements in conformity with IFRS requires the useof certain critical accounting estimates. It also requires management toexercise its judgment in the process of applying the Group's accountingpolicies. The areas involving a higher degree of judgment or complexity, orareas where assumptions and estimates are significant to the consolidatedfinancial statements, are disclosed in Note 4. 2.2 Basis of Consolidation (a) Consolidation The consolidated financial statements incorporate the financial statements ofthe Company and entities controlled by the Company (its subsidiaries andsubsidiary undertakings). Control is achieved where the Company has the power togovern the financial and operating policies of a portfolio company so as toobtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are includedin the consolidated income statement from the effective date of acquisition orup to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring the accounting policies used into line with those used bythe Group. All intra-group transactions, balances, income and expenses areeliminated on consolidation. (b) Business combinations The acquisition of subsidiaries is accounted for using the purchase method. Thecost of the acquisition is measured at the aggregate of the fair values, at thedate of exchange, of assets given, liabilities incurred or assumed, and equityinstruments issued by the Group in exchange for control of the portfoliocompany, plus any costs directly attributable to the business combination. Theportfolio company's identifiable assets, liabilities and contingent liabilitiesthat meet the conditions for recognition under IFRS 3 are recognised at theirfair value at the acquisition date, except for non-current assets (or disposalgroups) that are classified as held for resale in accordance with IFRS 5 NonCurrent Assets Held for Sale and Discontinued Operations, which are recognisedand measured at fair value less costs to sell. Goodwill arising on acquisition is recognised as an asset and initially measuredat cost, being the excess of the cost of the business combination over theGroup's interest in the net fair value of the identifiable assets, liabilitiesand contingent liabilities recognised. If, after reassessment, the Group'sinterest in the net fair value of the portfolio company's identifiable assets,liabilities and contingent liabilities exceeds the cost of the businesscombination, the excess is recognised immediately in profit or loss. 2.3 Segment reporting A business segment is a group of assets and operations engaged in providingproducts or services that are subject to risks and returns that are differentfrom those of other business segments. A geographical segment is engaged inproviding products or services within a particular economic environment that aresubject to risks and returns that are different from those of segments operatingin other economic environments. The directors are of the opinion that the Group is engaged in a single segmentof business being property investment business in one geographical area beingIndia. 2.4 Income Dividend income from investments is recognised when the Company's right toreceive payment has been established, normally the ex-dividend date. Interest income is accrued on a time basis. 2.5 Expenses All expenses are accrued for on an accruals basis and are presented as revenueitems except for expenses that are incidental to the disposal of an investmentwhich are deducted from the disposal proceeds. 2.6 Taxation Income tax expense comprises current and deferred tax. Income tax expense isrecognised in profit or loss except to the extent that it relates to itemsrecognised directly in equity, in which case it is recognised in equity. (a) Current Income tax Current tax is the expected tax payable on the taxable income for the year,using tax rates enacted or substantively enacted at the reporting date, and anyadjustment to tax payable in respect of previous years. (b) Deferred income tax Deferred tax is recognised using the balance sheet method, providing fortemporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for taxation purposes.Deferred tax is not recognised for the following temporary differences: theinitial recognition of goodwill, the initial recognition of assets orliabilities in a transaction that is not a business combination and that affectsneither accounting nor taxable profit, and differences relating to investmentsin subsidiaries and jointly controlled entities to the extent that they probablywill not reverse in the foreseeable future. Deferred tax is measured at the taxrates that are expected to be applied to the temporary differences when theyreverse, based on the laws that have been enacted or substantively enacted bythe reporting date. 2.7 Foreign currency transactions (a) Functional and presentation currency Items included in the financial statements of each of the Group's entities aremeasured using the Currency of the primary economic environment in which the entity operates ('the functional Currency'). The consolidated financial statements are presented in Sterling, which is the Company's functional and presentation Currency. (b) Transactions and balances Transactions in currencies other than Sterling are translated at the foreignexchange rate ruling at the date of the transaction. Monetary assets andliabilities denominated in foreign currencies at the balance sheet date aretranslated into Sterling at the foreign exchange rate ruling at that date.Foreign exchange differences arising on translation are recognised in the IncomeStatement. Non-monetary assets and liabilities that are measured in terms ofhistorical cost in a foreign currency are translated using the exchange rate atthe date of transaction. Non-monetary assets and liabilities denominated inforeign currencies that are stated at fair value are translated into Sterling atforeign exchange rates ruling at the dates the fair value was determined. (c) Group companies The results and financial position of all the group entities (none of which hasthe Currency of a hyperinflationary economy) that have a functional Currencydifferent from the presentation Currency are translated into the presentationCurrency as follows: (i) assets and liabilities for each balance sheet presented are translated atthe closing rate at the date of that balance sheet; (ii) income and expenses for each income statement are translated at averageexchange rates (unless this average is not a reasonable approximation of thecumulative effect of the rates prevailing on the transaction dates, in whichcase income and expenses are translated at the rate on the dates of thetransactions); and (iii) all resulting exchange differences are recognised as a separate componentof equity. 2.8 Financial instruments Financial assets and financial liabilities are recognised when a Group entitybecomes a party to the contractual provisions of a financial instrument.Financial assets and financial liabilities are offset if there is a legallyenforceable right to set off the recognised amounts and interests and it isintended to settle on a net basis. 2.9 Investments Investments of the Group where the Group does not have control are initiallyrecognised at cost at the date of investment. Investments are subsequentlyre-measured at fair value at least every six months by the Directors using thevarious methods described below. Unrealised gains and losses arising from therevaluation of investments at the year end are taken directly to the incomestatement. Investments in entities over which the Group has control are consolidated inaccordance with IAS 27. Fair value for unquoted securities is estimated by the Directors using the mostappropriate valuation techniques for each investment. Securities quoted or traded on a recognised stock exchange or other regulatedmarket are valued by reference to the last available bid price. 2.10 Other receivables Other receivables do not carry any interest and are short-term in nature and areaccordingly stated at their nominal value as reduced by appropriate allowancesfor estimated irrecoverable amounts. 2.11 Financial liabilities and equity Financial liabilities and equity instruments are classified according to thesubstance of the contractual arrangement entered into. An equity instrument isany contract that evidences a residual interest in the assets of the Companyafter deducting all of its liabilities. Financial liabilities and equityinstruments are recorded at the proceeds received, net of issue costs. 2.12 Interest-bearing loans and borrowings Interest-bearing borrowings are recognised initially at fair value lessattributable transaction costs. Subsequent to initial recognition,interest-bearing borrowings are stated at amortised cost with any differencebetween cost and redemption value being recognised in the Income Statement overthe period of the borrowings on an effective interest basis. 2.13 Other payables Other payables are not interest bearing and are stated at their nominal value. 2.14 Provisions A provision is recognised in the balance sheet when the Company has a presentlegal or constructive obligation as a result of a past event, and it is probablethat an outflow of economic benefits will be required to settle the obligation,and the obligation can be reliably measured. If the effect is material,provisions are determined by discounting the expected future cash flows at apre-tax rate that reflects current market assessments of the time value of moneyand, where appropriate, the risks specific to the liability. 2.15 Share issue costs The share issue costs of the Company directly attributable to the Placing thatwould otherwise have been avoided have been taken to the share premium account 2.16 Dividend distribution Dividend distribution to the Company's shareholders is recognised as a liabilityin the Group's financial statements in the period in which the dividends areapproved. 2.17 Impairment of assets Assets including goodwill that have an indefinite useful life are not subject toamortisation and are tested annually for impairment. Assets that are subject toamortisation or depreciation are reviewed for impairment whenever events orchanges in circumstances indicate that the carrying amount may not berecoverable. An impairment loss is recognised for the amount by which theasset's carrying amount exceeds its recoverable amount. The recoverable amountis the higher of an asset's fair value less costs to sell and value in use. Forthe purposes of assessing impairment, assets are grouped at the lowest levelsfor which there are separately identifiable cash flows (cash-generating units). 2.18 Inventories Inventories, including development project work in progress, are carried at thelower of cost and net realisable value. Net realisable value is the estimatedselling price in the ordinary course of business less cost to complete. 2.19 Trade receivables Trade receivables are recognised initially at fair value and subsequentlymeasured at amortised cost using the effective interest method, less provisionfor impairment. 2.20 Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits held at call withbanks, other short-term highly liquid investments with original maturities ofthree months or less, and bank overdrafts. 2.21 Revenue recognition Revenue includes interest receivable and fair value gains and losses. Finance income is accrued on a time basis by reference to the principaloutstanding and the effective interest rate applicable. Fair value gains and losses are recognised in the period of revaluation. 2.22 Interest expense Interest expenses for borrowings are recognised within "finance costs" in theincome statement using the effective interest rate method. 2.23 Trade payables Trade payables are not interest bearing and are stated at their nominal value. 2.24 Share based payments transactions Goods and services received or acquired in a share-based payment transaction arerecognised when the goods or services are received. A corresponding increase inequity is recognised if the goods or services are received in an equity-settledshare-based payment transaction, or a liability if the goods or services areacquired in a cash-settled share-based payment transaction. For equity-settled share based payment transactions, goods or services aremeasured at the fair value of the goods or services received, unless the fairvalue cannot be reliably measured - in which case fair value is measured byreference to the fair value of the equity instruments granted. The fair value of goods is recognised when they are received and the fair valueof services is recognised over the period they are received. Where a reliable estimate cannot be made of the fair value of equity instrumentsgranted at the measurement date, the equity instruments granted are measured atintrinsic value. This is measured initially at the date the goods are obtainedor services rendered and subsequently at each reporting date and at finalsettlement, with any changes intrinsic value recognised in profit or loss. 3. Investments in subsidiaries The subsidiaries of Trinity Capital PLC are recorded at cost in the accounts ofthe Company and included in the consolidated financial statements. Name Country of Proportion of Incorporation ownership interestTrinity Capital Mauritius Limited Mauritius 100%Trinity Capital (One) Limited Mauritius 100%Trinity Capital (Two) Limited Mauritius 100%Trinity Capital (Three) Limited Mauritius 100%Trinity Capital (Five) Limited Mauritius 100%Trinity Capital (Six) Limited Mauritius 100%Trinity Capital (Seven) Limited Mauritius 100%Trinity Capital (Eight) Limited Mauritius 100%Trinity Capital (Nine) Limited Mauritius 100%Trinity Capital (Ten) Limited Mauritius 100%Uppals I.T. Projects Private Limited India 100% Uppals IT is a wholly owned investment of Trinity Capital (One) Limited and hasbeen consolidated. No fair value gain has been included in the consolidatedfinancial statements in relation to this company. 4. Investments Investments are recorded at fair value as follows: At Cost Fair value At Fair Adjustment Value £'000 £'000 £'000 Lokhandwala Kataria Constructions Pvt Ltd. 6,258 10,720 16,978Kapstone Construction Pvt Ltd. 10,593 6,000 16,593Neelkamal Marine Drive Developers Pvt Ltd. 5,766 2,869 8,635Manjeera Retail Holdings 6,267 5,760 12,027M K Malls Developers 17,626 11,234 28,860Equity Holdings 31,586 7,763 39,349 ________________________________ 78,096 44,346 122,441 ================================5. Share capital Authorised share capital No. of shares £ Ordinary shares of £ 0.01 each 416,750,000 4,167,500Deferred shares of £0.01 each 250,000 2,500 ____________________________ 417,000,000 4,170,000 ============================ The Company was incorporated on 7 March 2006 with an authorised share capital of£2,000 comprising 2,000 ordinary shares of £1 each. On 29 March 2006 the authorised share capital was subdivided into 200,000ordinary shares of £0.01 each and increased by the addition of £4,153,000divided into 415,300,000 ordinary shares of £0.01 each, to rank pari passu withthe existing ordinary shares, and by the addition of £15,000 divided into1,500,000 convertible shares of £0.01 each having the rights set out in the NewMemorandum and Articles of Association of the Company. On 21 April 2006 the convertible shares were converted into 1,250,000 ordinaryshares of £0.01 each and 250,000 deferred shares of £0.01 each. On 9 February 2007, the Company purchased and cancelled 20,700,000 of its ownshares at a price of 88 pence per share. No. of Shares Share Share Issued and Capital Premium Fully Paid £ £Ordinary shares of £ 0.01 eachSubscriber shares 200 2 -21 April 2006 - AIM placing 252,500,000 2,525,000 247,500,00021 April 2006 - Share issue costs - - (12,037,796) _____________ ___________ ____________ 252,500,200 2,525,002 235,462,204 9 February 2007 - share buy back (20,700,000) (207,000) (18,100,081) Deferred shares of £0.01 each21 April 2006 250,000 2,500 - _____________ ___________ ____________ 232,050,200 2,320,502 217,362,123 ============= =========== ============ The Deferred Shares rank pari passu with the Ordinary Shares save that theDeferred Shares have no right to dividends or voting rights or the right toreceive notice of or attend any general meeting. On the return of capital in awinding-up of the Company or otherwise (other than re-purchases or redemptionsof shares authorised by special resolution), the Deferred Shares have the rightto return of par value paid up thereon in priority to the return of the parvalue paid up on the Ordinary Shares. 6 Events after the balance sheet date Details of events that have occurred after the balance sheet date are asfollows: (a) Investments The Group has invested a total of £71.7 million in further property developmentprojects since the year end. (b) IPO of underlying investment. The Group has an investment in Fortis Healthcare Limited, which is carried atcost in the financial statements. Shares in Fortis were listed on the MumbaiStock Exchange on 8th May at a price 25% below the cost to the Group. The shareshave subsequently traded below the issue price. This information is provided by RNS The company news service from the London Stock Exchange