TIDMTRC
RNS Number : 9778V
Trinity Capital PLC
09 November 2017
Trinity Capital PLC
Consolidated financial statements for the year ended 31 March
2017
Trinity Capital PLC (AIM: TRC), an Indian real estate fund,
announces its audited results for the year ended 31 March 2017.
Shareholders' attention is drawn to the final paragraphs of the
Chairman`s Statement which sets out the anticipated timetable of
events and the consequences affecting the AIM listing and
ultimately liquidation of the Company and final distribution.
For further information, please contact:
FIM Capital Limited
Graham Smith, Director +44 1624 681250
Arden Partners
Nominated Adviser and Broker
+44 207 614
Chris Hardie 5900
Chairman's Report
Dear Shareholder
The Board of Trinity Capital Plc ("Trinity" or the "Company") is
cautiously optimistic that the execution of the Company's
investment policy is approaching the end.
Although the attached financial statements relate to the year
ended 31 March 2017, the comments in this report cover both the
past financial year and subsequent months.
During the year ended 31 March 2017, the Company completed a
settlement with Immobilien Indien I GmbH & Co. KG and
Immobilien Indien II GmbH & Co. KG (together the "Immobilien
Funds") (the "Settlement"), which are managed by Euramco (formerly
SachsenFonds) and Deutsche Fonds Holding. Under the terms of the
Settlement, the Company's wholly owned subsidiary, Trinity Capital
Mauritius Limited ("TCML") sold its investments in Trinity Capital
(One) Limited ("TC-1") and Trinity Capital (Five) Limited ("TC-5")
in return for a payment of GBP8.7 million. In addition, all pending
legal proceedings in Mauritius between the parties were
discontinued. The proceeds from the Settlement are reflected in the
attached financial statements together with aggregate distributions
to shareholders made during the year of 6.0p per share, amounting
to GBP12.6 million.
Following the sale of TCML's interests in TC-1 and TC-5, the
Board's focus has been on the sale of the investment in TC-10,
which is the Company's last remaining asset in India. TCML owns the
economic interest in all of the compulsorily convertible preference
shares ("CCPS") issued to TC-10 by DB (BKC) Realtors Private
Limited ("DB(BKC)").
On 27 August 2017 the Company announced that it is offering TCML
for sale at auction. The deadline for receipt of unconditional bids
under the auction has been extended to 10 November 2017. In the
meantime, on 17 October 2017, TC-10 entered into a sale and
purchase agreement with DB Realty Limited in relation to all of the
CCPS held by TC-10 (the "Transaction"). Under the terms of the
Transaction, TC-10 will receive the equivalent of INR149.6 million
(approximately GBP1.7 million at current exchange rates).
Completion of the Transaction is subject to TC-10 obtaining all
final regulatory approvals in India, currently expected before the
auction deadline. If the Transaction completes as envisaged before
the auction deadline, the auction of TCML will be cancelled. Under
the terms of an agreement with the Immobilien Funds entered into at
the same time as the Settlement, TC-10 will pay the proceeds
received from the Transaction to TCML. TCML will then remit those
proceeds to Trinity.
For purposes of the attached financial statements, the
investment in TC-10 has been valued on the basis of the proceeds of
INR149.6 million that Trinity and TCML expect to receive under the
Transaction, using the sterling exchange rate prevailing at 31
March 2017.
Although there is no assurance that the Transaction will
complete, the Board expects that, one way or another, the last
remaining investment held by Trinity will be sold in the coming
weeks. Following completion of the Transaction (or, if it does not
complete, the sale of TCML under the auction), the Board expects to
convene a shareholder meeting approving a final distribution,
cancellation of admission to trading of Trinity's shares on AIM and
appointing a liquidator of the Company.
As we expect to appoint a liquidator of Trinity by early 2018,
in accordance with international accounting standards the financial
statements for the year ended 31 March 2017 are not presented on a
going concern basis and include a new provision of GBP550,000,
which is the Board's estimate of the operating and liquidation
costs for the period from 1 April 2017 up to the date of
liquidation.
Shareholders should note that, in accordance with para 5.6 of
the AIM Note for Investing Companies, AIM will suspend the
Company's shares from trading with effect from 7:30 a.m. on 17
November 2017, which is the anniversary of the Settlement. It
should also be noted that in accordance with the AIM rules, the
admission of the shares to AIM will be cancelled when they have
been suspended from trading for six months, unless there is an
earlier vote of shareholders to cancel admission to trading under
AIM rule 41.
Yours faithfully
Martin M. Adams
Chairman
Directors' Report
The Directors have pleasure in presenting their report and
financial statements of the Company and its subsidiaries (the
"Group") for the year ended 31 March 2017.
Principal activity and incorporation
The Company is a closed-end investment company, incorporated on
7 March 2006 in the Isle of Man as a public limited company. Its
shares were admitted to trade on AIM (formerly the Alternative
Investment Market) of the London Stock Exchange on 21 April
2006.
The Group invested in real estate and real estate related
entities in India. In March 2009, shareholders voted to change the
Company's investment policy by requiring the Company to gradually
dispose of its assets over time and return capital to
investors.
The Group has no employees.
The consolidated financial statements comprise the results of
the Group.
Results and dividends
The Group's results for the financial year ended 31 March 2017
are set out in the Consolidated Statement of Comprehensive Income.
The Financial Statements have been presented on a non-going concern
basis of accounting (note 2.2).
A review of the Group's activities is set out in the Chairman's
Report. Details of the Group's interest in the remaining one
investment is given in note 11 to the accounts.
During the year, the Company distributed GBP12.6 million (6.0p
per share) (2016: GBPNil).
Directors
The Directors of the Company during the year and to date of this
report were as follows:
Martin Adams (Chairman)
John Chapman
Stephen Coe
Graham Smith
Pradeep Verma
None of the Directors had interests in the shares of the Company
at 31 March 2017 (2016: none). Details of the Directors'
remuneration are provided in note 6.
Company Secretary
The secretary of the Company during the year and at the date of
this report was Philip Scales.
Auditors
The auditors, KPMG Audit LLC, being eligible, have expressed
their willingness to continue in office in accordance with Section
12(2) of the Isle of Man Companies Act 1982.
On behalf of the Board
Graham Smith
Director
8 November 2017
Statement of Directors' Responsibilities in Respect of the
Annual Report and the Financial Statements
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year, which meet the requirements of
Isle of Man company law. In addition, the Directors have elected to
prepare the financial statements in accordance with International
Financial Reporting Standards, as adopted by the EU.
The financial statements are required by law to give a true and
fair view of the state of affairs of the Group and Parent Company
and of the profit or loss of the Group for that year.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
International Financial Reporting Standards, as adopted by the EU;
and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Parent
Company will continue in business. See note 2.2. to the Financial
Statements regarding non-going concern basis adopted for the
current year's Financial Statements.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Parent
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Parent Company and to enable
them to ensure that its financial statements comply with the
Companies Acts 1931 to 2004. They have general responsibility for
taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation governing the preparation and
dissemination of financial statements may differ from one
jurisdiction to another.
Corporate Governance Statement
The UK Corporate Governance Code does not directly apply to
companies incorporated in the Isle of Man but the Board of
Directors (the "Board") has developed internal procedures in line
with the recommendations of the UK Corporate Governance Code where
appropriate and these are reviewed on a regular basis. The
Directors will continue to comply with the relevant requirements of
the UK Corporate Governance Code to the extent that they consider
it appropriate having regard to the Company's size and the nature
of its operations. The Board is not aware of any reason that would
cause it to reconsider its current approach.
Responsibilities of the Board
The Board is responsible for the implementation of the
investment policy of the Company and for its overall supervision
via the investment policy and objectives approved by shareholders.
At each of the Company's regular Board meetings, the financial
performance of the Group and its portfolio investments are
reviewed.
The Board is also ultimately responsible for the Group's
day-to-day operations, but in order to fulfil its obligations, the
Board has delegated operations through arrangements with the
Investment Manager and the Administrator. All Board members are
non-executive.
Audit Committee
The Audit Committee is a sub-committee of the Board and makes
recommendations to the Board which retains the right of final
decision. The Audit Committee has primary responsibility for
reviewing the financial statements and the accounting policies,
principles and practice underlying them, liaising with the external
auditors and reviewing the effectiveness of internal controls. The
Audit Committee maintains a risk register to help it identify,
evaluate, monitor and control risks. The Committee members are
Stephen Coe (Chairman), Martin Adams, John Chapman, and Pradeep
Verma.
The terms of reference of the Audit Committee include the
following:
-- duties in relation to external reporting, including reviews
of financial statements, shareholder communications and other
announcements;
-- duties in relation to the external auditors, including
appointment/ dismissal, approval of fee, discussion of the audit;
and
-- duties in relation to internal systems, procedures and controls.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee is a sub-committee of
the Board and makes recommendations to the Board which retains the
right of final decision. The Committee members are Stephen Coe
(Chairman) and Martin Adams.
The terms of reference of the Committee include the
following:
-- set the remuneration of the Directors;
-- demonstrate to the shareholders of the Company that the
remuneration of the non-executive Directors of the Company and each
of its subsidiaries is set by a committee of the Board whose
members have no personal interest in the outcome of the decisions
of such committee and who will have due regard to the interests of
shareholders;
-- to the extent that any executive or non-executive Director
may be invited to join meetings of the Committee as appropriate he
shall absent himself and take no part in any discussions concerning
his own remuneration or other benefits or matters within the
province of the Committee; and
-- consider the appropriateness of the Board's composition, and
assess the suitability of potential Board members.
The Committee is authorised by the Board to:
-- when the fulfilment of its duties requires, obtain any
outside legal or other professional advice including the advice of
independent remuneration consultants, to secure the attendance of
external advisers at its meetings, if it considers this necessary,
and to obtain reliable, up-to-date information about remuneration
in other companies, at the expense of the Company. The Committee
has full authority to commission any reports or surveys which it
deems necessary to help it fulfil its obligations; and
-- when the fulfilment of its duties requires, to obtain any
outside legal or other professional advice including the advice of
independent recruitment consultants and to secure the attendance of
external advisers at its meetings, if it considers this necessary,
at the expense of the Company. The Committee has full authority to
commission any reports or assistance which it deems necessary to
help it fulfil its obligations.
Legal Committee
The Legal Committee is a sub-committee of the Board and makes
recommendations to the Board which retains the right of final
decision. The Legal Committee's primary responsibility is to
oversee the disputes which the Group is currently involved in. The
Committee members are John Chapman (Chairman), Martin Adams and
Graham Smith.
Investment Committee
The Investment Committee is a sub-committee of the Board and
makes recommendations to the Board which retains the right of final
decision. The Investment Committee's primary responsibility is to
oversee the realisation of the Company's portfolio of investments
in consultation with the Investment Manager in accordance with the
Company's investment policy. The Committee members are Martin Adams
(Chairman), John Chapman and Pradeep Verma.
Report of the Independent Auditors, KPMG Audit LLC, to the
members of Trinity Capital PLC
We have audited the financial statements of Trinity Capital plc
for the year ended 31 March 2017 which comprise the Consolidated
and Company Statement of Comprehensive Income, the Consolidated and
Company Statements of Financial Position, the Consolidated and
Company Statements of Changes in Equity, the Consolidated Statement
of Cash Flows and the related notes. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs), as
adopted by the EU.
This report is made solely to the Company's members, as a body,
in accordance with Section 15 of the Companies Act 1982. Our audit
work has been undertaken so that we might state to the Company's
members those matters we are required to state to them in an
auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Statement of Directors'
Responsibilities, the Directors are responsible for the preparation
of financial statements that give a true and fair view. Our
responsibility is to audit, and express an opinion on, the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
(APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Group's circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Directors; and the overall
presentation of the financial statements. In addition, we read the
financial and non-financial information in the annual report to
identify material inconsistencies with the audited financial
statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit. If
we become aware of any apparent material misstatements or
inconsistencies, we consider the implications for our report.
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Group's and
Parent Company's affairs as at 31 March 2017 and of the Group's
profit for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the EU; and
-- have been properly prepared in accordance with the provisions
of the Companies Acts 1931 to 2004.
Emphasis of matter - non-going concern basis of preparation
We draw attention to the disclosure made in note 2.2 to the
financial statements which explains that the financial statements
are now not prepared on the going concern basis for the reasons set
out in that note. Our opinion is not modified in respect of this
matter.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Acts 1931 to 2004 require us to report to you
if, in our opinion:
-- proper books of account have not been kept by the Parent
Company and proper returns adequate for our audit have not been
received from branches not visited by us; or
-- the Parent Company's statement of Financial Position and
Statement of Comprehensive Income are not in agreement with the
books of account and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
8 November 2017
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2017
Notes 2017 2016
---------------------------------------- ------ -------- --------
GBP'000 GBP'000
Fair value movement on investments 10 (1,363) (7,806)
Net realised gain on disposal
of investments 10 3,658 -
Interest income from cash
and cash equivalents 18 25
Foreign exchange loss (9) (6)
---------------------------------------- ------ -------- --------
Net investment gain/(loss) 2,304 (7,787)
---------------------------------------- ------ -------- --------
Investment management fees 4 (76) (133)
Other administration fees
and expenses 5 (669) (593)
Movement in legal fee provision 13 2,000 -
Provision for run-off costs 19 (550) -
---------------------------------------- ------ -------- --------
Total gain/(expenses) 705 (726)
---------------------------------------- ------ -------- --------
Profit/(loss) before tax 3,009 (8,513)
Taxation 7 - -
Profit/(loss) for the year
and total comprehensive profit/(loss)
for the year 3,009 (8,513)
---------------------------------------- ------ -------- --------
Total comprehensive loss attributable
to:
Equity holders of the Company 3,009 (6,969)
Non-controlling Interest - (1,544)
---------------------------------------- ------ -------- --------
Profit/(loss) for the year 3,009 (8,513)
---------------------------------------- ------ -------- --------
Basic and diluted earnings/(loss)
per share (pence) 8 1.4 (3.3)
---------------------------------------- ------ -------- --------
The notes form an integral part of the financial statements.
Consolidated and Company Statements of Financial Position
as at 31 March 2017
Group Company
------------------ ------------------
Notes 2017 2016 2017 2016
------------------------------- ------ -------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Investments in subsidiaries 16 - 1,886 8,234
Investments at fair
value through profit
or loss 10 - 8,272 - -
------------------------------- ------ -------- -------- -------- --------
Total non-current assets - 8,272 1,886 8,234
------------------------------- ------ -------- -------- -------- --------
Current assets
Investment held for
sale 11 1,840 - - -
Trade and other receivables - 1 - -
Cash and cash equivalents 12 790 5,656 705 5,557
Prepayments 25 30 21 21
------------------------------- ------ -------- -------- -------- --------
Total current assets 2,655 5,687 726 5,578
------------------------------- ------ -------- -------- -------- --------
Total assets 2,655 13,959 2,612 13,812
------------------------------- ------ -------- -------- -------- --------
Liabilities
Non-current liabilities
Provision for legal
costs 13 - (2,000) - (2,000)
------------------------------- ------ -------- -------- -------- --------
Total non-current liabilities - (2,000) - (2,000)
------------------------------- ------ -------- -------- -------- --------
Current liabilities
Trade and other payables (105) (342) (62) (195)
Provision for run-off
costs 19 (550) - (550) -
------------------------------- ------ -------- -------- -------- --------
Total current liabilities (655) (342) (612) (195)
------------------------------- ------ -------- -------- -------- --------
Total liabilities (655) (2,342) (655) (2,195)
------------------------------- ------ -------- -------- -------- --------
Net assets 2,000 11,617 2,000 11,617
------------------------------- ------ -------- -------- -------- --------
Represented by:
Ordinary shares 14 2,107 2,107 2,107 2,107
Capital redemption reserves 214 214 214 214
Retained reserves (321) 9,296 (321) 9,296
------------------------------- ------ -------- -------- -------- --------
Total equity 2,000 11,617 2,000 11,617
------------------------------- ------ -------- -------- -------- --------
Net Asset Value
per share (pence) 15 0.9 5.5
The notes form an integral part of the financial statements.
These financial statements were approved by the Board on 8
November 2017 and signed on their behalf by
Stephen Coe Graham Smith
Director Director
Consolidated and Company Statements of Changes in Equity
for the year ended 31 March 2017
Consolidated Share Capital Capital Redemption Reserve Retained Reserves Total Equity
GBP '000 GBP '000 GBP '000 GBP '000
Balance at 31 March 2015 2,107 214 16,265 18,586
Total comprehensive loss - - (6,969) (6,969)
Balance at 31 March 2016 2,107 214 9,296 11,617
---------------------------- -------------- --------------------------- ------------------ -------------
Balance at 31 March 2016 2,107 214 9,296 11,617
Total comprehensive profit - - 3,009 3,009
Distribution (note 9) - - (12,626) (12,626)
Balance at 31 March 2017 2,107 214 (321) 2,000
---------------------------- -------------- --------------------------- ------------------ -------------
Company Share Capital Capital Redemption Reserve Retained Reserves Total Equity
GBP '000 GBP '000 GBP '000 GBP '000
Balance at 31 March 2015 2,107 214 16,265 18,586
Total comprehensive loss - - (6,969) (6,969)
Balance at 31 March 2016 2,107 214 9,296 11,617
---------------------------- -------------- --------------------------- ------------------ -------------
Balance at 31 March 2016 2,107 214 9,296 11,617
Total comprehensive profit - - 3,009 3,009
Distribution (note 9) - - (12,626) (12,626)
Balance at 31 March 2017 2,107 214 (321) 2,000
---------------------------- -------------- --------------------------- ------------------ -------------
The notes form an integral part of the financial statements.
Consolidated Statement of Cash Flows
for the year ended 31 March 2017
Notes 2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the year 3,009 (8,513)
Adjustments for:
Interest income from cash and cash equivalents (18) (25)
Movement in legal fee provision 13 (2,000) 0
Movement in foreign exchange 9 6
Fair value movement on investments 10 1,363 7,806
Provision for run-off costs 550 -
Net realised gain on disposal of investments 10 (3,658) -
----------------------------------------------------- ------- --------- --------
Net cash flows from operations before changes
in working capital (745) (726)
----------------------------------------------------- ------- --------- --------
Changes in working capital
Decrease/(Increase) in receivables 6 (15)
Decrease in payables (237) (3)
----------------------------------------------------- ------- --------- --------
Net cash used by operating activities (976) (744)
----------------------------------------------------- ------- --------- --------
Cash flows from investing activities
Interest income from cash and cash equivalents 18 25
Proceeds from disposal of investments 10 8,727 -
----------------------------------------------------- ------- --------- --------
Net cash from investing activities 8,745 25
----------------------------------------------------- ------- --------- --------
Cash flows from financing activities
Distributions 9 (12,626) -
Net cash outflow from financing activities (12,626) -
----------------------------------------------------- ------- --------- --------
Net decrease in cash and cash equivalents (4,857) (719)
Cash and cash equivalents at the start of the year 5,656 6,381
Effect of foreign exchange fluctuation on cash held (9) (6)
Cash and cash equivalents at the end of the year 790 5,656
-------------------------------------------------------------- --------- --------
The notes form an integral part of the financial statements.
Notes to the Financial Statements
for the year ended 31 March 2017
1. General information
The Company is a closed-end investment company incorporated on 7
March 2006 in the Isle of Man as a public limited company. The
address of its registered office is IOMA House, Hope Street,
Douglas, Isle of Man, IM1 1AP.
The Company is listed on the AIM Market ("AIM") of the London
Stock Exchange.
The Company and its subsidiaries (together the "Group") invest
in real estate and real estate related entities in India, primarily
in commercial development in the office and business space,
residential, retail, hospitality and infrastructure sectors
deriving returns from development, long-term capital appreciation
and income.
In March 2009, shareholders voted to change the Company's
investment policy by requiring the Company to gradually dispose of
its assets over time and return capital to investors.
The Group has no employees.
The consolidated financial statements were authorised for issue
by the Board on 8 November 2017.
2. Summary of significant accounting policies
2.1. Basis of preparation
(a) Statement of compliance
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRSs") as adopted by
the EU.
(b) Basis of measurement
See section 2.2 below regarding adoption of the non-going
concern basis of accounting.
(c) Functional and presentation currency
These financial statements are presented in Sterling, which is
the Company's functional currency. All financial information
presented in Sterling has been rounded to the nearest thousand.
(d) Use of estimates and judgements
The preparation of the financial statements in conformity with
IFRSs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in note 3.
2.2. Going concern
On 27 August 2017 the Company announced that it is offering
Trinity Capital Mauritius Limited ("TCML") for sale at auction. The
deadline for receipt of unconditional bids under the auction has
been extended to 10 November 2017. In the meantime, on 17 October
2017, Trinity Capital (Ten) Limited entered into a sale and
purchase agreement with DB Realty Limited in relation to all of the
compulsorily convertible preference shares held by it (the
"Transaction") - representing the last investment held by the
Group.
Although there is no assurance that the Transaction will
complete, the Board expects that, one way or another, the last
remaining investment held by the Company will be sold in the coming
weeks. Following completion of the Transaction (or, if it does not
complete, the sale of TCML under the auction), the Board expects
to:
-- effect a further distribution to shareholders;
-- appoint a liquidator of TCML (unless it is sold under the auction); and
-- convene a shareholder meeting seeking approval [to delist the
Company's shares from trading on AIM and] to appoint a liquidator
of the Company.
In light of this, the financial statements have been presented
on a non-going concern basis. The assets of the Company have been
stated at realisable value and provision has been made for the
unavoidable costs of winding up the Company (see note 19).
2.3. 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 power over an investee, exposure or rights to
variable returns and the ability to exert power to affect those
returns.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated Statement of Comprehensive
Income from the effective date of acquisition or up to the
effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group. All intra-group
transactions, balances, income and expenses are eliminated on
consolidation.
As an investment entity under the terms of the amendments to
IFRS 10 Consolidated Financial Statements the Company is not
permitted to consolidate its controlled portfolio entities. Control
is achieved where the Company has the power to govern the financial
and operating policies of an entity company so as to obtain
benefits from its activities.
The Directors consider the Company to be an investment entity as
defined by IFRS 10 Consolidated Financial Statements as it meets
the following criteria as determined by the accounting
standard:
-- Obtains funds from one or more investors for the purpose of
providing those investors with investment management services;
-- Commits to its investors that its business purpose is to
invest funds solely for returns from capital appreciation,
investment income or both; and
-- Measures and evaluates the performance of substantially all
of its investments on a fair value basis.
Accordingly, the consolidated financial statements incorporate
the financial statements of the Company and the financial
statements of the intermediate investment holding companies, but
the interests of the intermediate holding companies in the Indian
project SPVs are stated at fair value, as described in note 10 and
note 11.
2.4. 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 which are different from those of segments operating in
other economic environments.
The Directors are of the opinion that the Group is engaged in a
single segment of business being property investment business in
one geographical area being India. See note 10.
2.5. Revenue recognition
Revenue includes interest receivable and fair value gains and
losses. Interest receivable is accrued on a time basis by reference
to the principal outstanding and the effective interest rate
applicable.
Fair value gains and losses are recognised in the period of
revaluation.
2.6. Expenses
All expenses are accounted for on an accruals basis and are
presented as revenue items except for expenses that are incidental
to the sale of an investment which are deducted from the disposal
proceeds.
2.7. Financial instruments
Financial assets and financial liabilities are recognised when a
Group entity becomes a party to the contractual provisions of a
financial instrument. Financial assets and financial liabilities
are offset if there is a legally enforceable right to set off the
recognised amounts and interests and it is intended to settle on a
net basis.
Investments in portfolio entities are designated as at fair
value through profit or loss on initial recognition and are
measured at fair value. Unrealised gains and losses arising from
revaluation are recognised in profit or loss
The fair value of unquoted securities is estimated by the
Directors using the most appropriate valuation technique for each
investment.
Securities quoted or traded on a recognised stock exchange or
other regulated market are valued by reference to the last
available market price.
Investments held for sale are estimated by the Directors using
the most appropriate valuation technique for each investment.
2.8. Provisions
A provision is recognised in the statement of financial position
when the Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation, and
the obligation can be reliably measured. If the effect is material,
provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of
the time value of money and, where appropriate, the risks specific
to the liability.
2.9. Standards and interpretations not yet effective
There are no standards or interpretations with an effective date
on or after 1 January 2016 that are likely to have a significant
effect on the financial statements.
3. Critical accounting estimates and assumptions
These disclosures supplement the commentary on financial risk
management (see note 18).
Key sources of estimation uncertainty
Determining fair values
The determination of fair values for financial assets for which
there are no observable market prices requires the use of valuation
techniques as described in accounting policy note 2.6. For
financial instruments that trade infrequently and have little price
transparency, fair value is less objective, and requires varying
degrees of judgement depending on liquidity, concentration,
uncertainty of market factors, pricing assumptions and other risks
affection the specific instrument. See also "Valuation of financial
instruments" below.
Critical judgements in applying the Company's accounting
policies
Critical judgements made in applying the Company's accounting
policies include:
Valuation of financial instruments
The Company's accounting policy on fair value measurements is
discussed in accounting policy note 2.7. The Company measures fair
value using the following hierarchy that reflects the significant
of inputs used in making the measurements:
-- Level 1: Quoted market price (unadjusted) in an active market for and identical instrument.
-- Level 2: Valuation techniques based on observable inputs,
either directly (i.e. as prices) or indirectly (i.e. derived from
prices). This category included instruments valued using: quoted
market prices in active markets for similar instruments: quoted
market prices for identical or similar instruments in markets that
are considered less than active; or other valuation techniques
where all significant inputs are directly or indirectly observable
from market data.
-- Level 3: Valuation techniques using significant unobservable
inputs. This category includes all instruments where the valuation
technique includes inputs not based on observable data and the
unobservable inputs have a significant effect on the instrument's
valuation. This category includes instruments that are valued based
on quoted prices for similar instruments where significant
unobservable adjustments or assumptions are required to reflect
differences between the instruments.
All the Company's investments measured at fair value have been
valued on the basis of Level 3 described above.
A reconciliation from the beginning balances to the ending
balances for Level 3 investments is as follows:
2017 2016
GBP'000 GBP'000
Beginning of year 8,272 16,078
Disposals - fair value at beginning (5,069) -
of year
Fair value adjustment (1,363) (7,806)
--------- ---------
End of year 1,840 8,272
--------- ---------
Financial instruments not measured at fair value
The carrying value of short-term financial assets and financial
liabilities (cash, debtors and creditors) approximate their fair
value.
Estimated future legal fees
As described in note 13, the Group had been engaged in
litigation. A provision had been made for the associated legal
costs. Following a mutual agreement to discontinue the legal
claims, the provision has been cancelled.
Provision for run-off costs
As described in note 19 a provision for run-off costs has been
made. This comprises an estimate of all costs incurred from the
reporting date of 31 March 2017 up to and including a liquidation
of the Company, on the assumption that the investment disposal
described in note 11 completes as contracted.
4. Investment management fees and performance fees
The Investment Management Agreement with Indiareit Investment
Management Company ("Indiareit") expired on 31 December 2013.
However, Indiareit continued to provide investment management
services to the Company and the Company continued to pay the
regular investment management fee of US$198,000 per annum
(GBP133,000). The Company's investments are now managed directly by
its Board of Directors and the last payment made to Indiareit was
for the quarter ended September 2016. No further payments will be
made to Indiareit.
5. Other administration fees and expenses
2017 2016
GBP'000 GBP'000
Administration fees 138 147
Audit fees 27 33
Directors' fees (note 6) 335 171
Legal fees 106 47
NOMAD & broker fees 42 42
Other costs 21 153
669 593
======== ========
6. Directors' remuneration
Details of Directors' remuneration during the year are as
follows:
Martin Pradeep Stephen John 2017 2016
Adams Verma Coe Chapman Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed fees 45 30 41 55 171 171
Payments under
incentive plan 95 22 - 47 164 -
140 52 41 102 335 171
======== ======== ======== ========= ======== ========
The Directors' Incentive Plan ("DIP") was approved by
Shareholders on 29 November 2012, and provides for payments to
Martin Adams, Pradeep Verma and John Chapman amounting, in
aggregate to 1.3% of amounts distributed to shareholders.
7. Taxation
There is no liability for income tax in the Isle of Man.
The Mauritian subsidiaries are subject to income tax in
Mauritius at the rate of 15% on the chargeable income. The
Mauritian subsidiaries are, however, entitled to a tax credit
equivalent to the higher of the foreign tax paid and a deemed
credit of 80% of the Mauritian tax on their foreign source income.
No provision has been made in the financial statements due to the
availability of tax losses.
8. Earnings/ (loss) per share
Basic loss per share is calculated by dividing the net loss
attributable to equity shareholders of the parent by the weighted
average number of ordinary shares outstanding during the year.
2017 2016
Earnings/ (loss) attributable to equity shareholders of the parent (GBP'000) 3,009 (6,969)
Weighted average number of ordinary shares (thousands)
for the purposes of basic earnings/(loss) per share 210,682 210,682
-------- --------
Basic earnings/(loss) per share (pence) 1.4 p (3.3) p
======== ========
There is no difference between fully diluted earnings/(loss) per
share and basic earnings/(loss) per share.
9. Distributions
2017 2016
GBP'000 GBP'000
1.0 pence per share on 23 September 2,104 -
2016
5.0 pence per share on 16 December 10,522 -
2016
--------- ---------
12,626 -
--------- ---------
Both distributions were paid out of the reserves created upon
cancellation of the share premium reserve which had arisen at the
time of the Company's admission to AIM in 2006.
10. Investments - designated at fair value through profit or loss
On 20 October 2016 an agreement was signed with Immobilien
Indien I GmbH & Co. KG and Immobilien Indien II GmbH & Co.
KG (together the "Immobilien Funds"), which facilitated the
realisation of all of the Company's remaining investments held
jointly with the Immobilien Funds.
Accordingly, on 15 November 2016, the Company disposed of its
investments in Trinity Capital (One) Limited ("TC-1") and Trinity
Capital (Five) Limited ("TC-5") held by its wholly owned subsidiary
Trinity Capital Mauritius Limited ("TCML") in return for a payment
of INR720,000,000 (GBP8,727,000). As the Company's holdings in TC-1
and TC-5 were valued at 3 March 2016 at an aggregate of
GBP5,069,000, the Company recorded a gain on disposal of
GBP3,658,000 in the year ended 31 March 2017.
Following the above sale of TCML's interests in TC-1 and TC-5,
the Company's only investment at the year-end was its holding in
Trinity Capital (Ten) Limited ("TC-10"). This has been transferred
to investments held for sale (note 11).
Movements in investments at fair value are as follows:
2017 2016
GBP'000 GBP'000
Beginning of year 8,272 16,078
Disposals - fair value at beginning (5,069) -
of year
Fair value adjustment (1,363) (7,806)
Transfer to investment held for sale (1,840) -
(note 11)
--------- ---------
End of year - 8,272
--------- ---------
Fair value hierarchy of investments
The financial assets measured at fair value are valued using a
fair value hierarchy as described in Note 3.
11. Investment - held for sale
Following the sale of TCML's interests in TC-1 and TC-5 as
described in note 10, the Company's last remaining asset in India
is its investment in TC-10. TCML owns the economic interest in all
of the compulsorily convertible preference shares ("CCPS") issued
to TC-10 by DB (BKC) Realtors Private Limited ("DB(BKC)").
After the year-end, on 17 October 2017, TC-10 entered into a
sale and purchase agreement (the "SPA") with DB Realty Limited in
relation to all of the CCPS held by TC-10. The value of the
Company's interest in TC-10 as reported in these financial
statements is based on the selling price determined in the SPA,
namely INR 149.6 million, equivalent to GBP1.8 million at the 31
March 2017 exchange rate, (approximately GBP1.7 million at exchange
rates prevailing at the date of the SPA).
12. Cash and cash equivalents
2017 2016 2017 2016
Group Group Company Company
GBP'000 GBP'000 GBP'000 GBP'000
Cash held with banks 11 367 5 338
Money market funds 779 5,289 700 5,219
-------- -------- -------- --------
790 5,656 705 5,557
======== ======== ======== ========
13. Provision for future legal costs
In January 2011, the Company created a provision of GBP2.0
million to cover the possible costs of defending against legal
actions brought by the Immobilien Funds. As part of the agreement
with the Immobilien Funds referred to in note 10, all pending legal
proceedings in Mauritius between the parties were discontinued. The
Company has therefore reversed the provision.
14. Share capital
The authorised share capital at 31 March 2017 and 31 March 2016
and the issued and fully paid share capital at the same dates were
as follows:
Authorised Issued and fully paid
No. of Shares GBP No. of Shares GBP
Ordinary shares of 1 pence each 416,750,000 4,167,500 210,432,498 2,104,325
Deferred shares of 1 pence each 250,000 2,500 250,000 2,500
417,000,000 4,170,000 210,682,498 2,106,825
============== ========== ============== ==========
The Deferred Shares rank pari passu with the Ordinary Shares
save that the Deferred Shares have no right to dividends or voting
rights or the right to receive notice of or attend any general
meeting. On the return of capital in a winding-up of the Company or
otherwise (other than re-purchases or redemptions of shares
authorised by special resolution), the Deferred Shares have the
right to return of par value paid up thereon in priority to the
return of the par value paid up on the Ordinary Shares.
15. Net asset value (NAV)
The NAV per Share is calculated by dividing the net assets
attributable to the equity holders of the Company at the end of the
year by the number of Shares in issue as at 31 March 2017.
2017 2016
Net assets (GBP'000) 2,000 11,617
Number of Shares in issue (note
14) 210,672,498 210,682,498
------------ ------------
NAV per Share (pence) 0.9 5.5
============ ============
16. Investments in subsidiaries
The Company has the following subsidiaries incorporated in
Mauritius. They are recorded at cost in the financial statements of
the Company less provision for impairment.
Name Proportion of ownership
interest
At 31 March At 31 March
2017 2016
Trinity Capital Mauritius
Limited 100% 100%
Trinity Capital (One)
Limited - 67%
Trinity Capital (Four)
Limited 100% 100%
Trinity Capital (Five)
Limited - 59%
Trinity Capital (Ten)
Limited 12% 12%
Trinity Capital (Nineteen)
Limited - 100%
17. Commitments
There were no outstanding contractual commitments at the
year-end (2016: nil).
18. Financial risk management
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk, market price risk and
interest rate risk), credit risk and liquidity risk.
Risk management is carried out by the Board to the extent
possible and as appropriate.
(a) Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the Indian Rupee. Foreign exchange risk arises from
future commercial transactions, recognised monetary assets and
liabilities and net investments in foreign operations.
Net assets denominated in Indian Rupee at the year-end amounted
to GBP1.8 million (2016: GBP8.3 million).
At 31 March 2017, had the exchange rate between the Indian Rupee
and Sterling increased or decreased by 5% with all other variables
held constant, the increase or decrease respectively in net assets
would amount to approximately GBP0.09 million (2016: GBP0.4
million).
The Group does not hedge against foreign exchange movements.
(ii) Market price risk
The Group is exposed to market price risk arising from its
investments. All these securities present a risk of capital loss.
The Board is responsible for the selection of investments and
monitoring exposure to market risk. All investments are in Indian
companies.
If the value of the group's investment portfolio had increased
by 10%, the Group's net assets would have increased by GBP0.18
million (2016: GBP0.8 million). A decrease of 10% would have
resulted in equal and opposite decrease in net assets.
(iii) Cash flow and fair value interest rate risk
The Group's cash and cash equivalents are invested at short term
market interest rates.
The following table below summarises the Group's exposure to
interest rate risks. It includes the Groups' financial assets and
liabilities at the earlier of contractual re-pricing or maturity
date, measured by the carrying values of assets and
liabilities.
Less than 1 month 3 mths Non-
1-3 to 1 year 1-5 years Over 5 interest
months years bearing Total
31 March 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Investment held for sale - - - - - 1,840 1,840
Cash and cash equivalents 790 - - - - - 790
Prepayments - - - - - 25 25
------------------ --------- ----------- ------------ --------- ---------- --------
Total financial assets 790 - - - - 1,865 2,655
------------------ --------- ----------- ------------ --------- ---------- --------
Financial liabilities
Trade and other payables - - - - - 105 105
Provision for run-off
costs 550 550
Total financial
liabilities 655 655
------------------ --------- ----------- ------------ --------- ---------- --------
Total interest rate
sensitivity gap 790 - - - - 1,210 2,000
------------------ --------- ----------- ------------ --------- ---------- --------
Less than 1 month 3 mths Non-
1-3 to 1 year 1-5 years Over 5 interest
months years bearing Total
31 March 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Investments at fair value
through profit or loss - - - - - 8,272 8,272
Trade and other
receivables - - - - - 1 1
Cash and cash equivalents 5,656 - - - - - 5,656
Prepayments - - - - - 30 30
------------------ --------- ----------- ------------ --------- ---------- --------
Total financial assets 5,656 - - - - 8,303 13,959
------------------ --------- ----------- ------------ --------- ---------- --------
Financial liabilities
Provision for legal costs - - - - - 2,000 2,000
Trade and other payables - - - - - 342 342
Total financial
liabilities 2,342 2,342
------------------ --------- ----------- ------------ --------- ---------- --------
Total interest rate
sensitivity gap 5,656 - - - - 5,961 11,617
------------------ --------- ----------- ------------ --------- ---------- --------
(b) Credit risk
Credit risk arises on investments, cash balances and debtor
balances. The amount of credit risk is equal to the amounts stated
in the statement of financial position for each of these assets.
Cash balances are limited to high-credit-quality financial
institutions. There are no impairment provisions as at 31 March
2017 (2016: nil).
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities, the availability of funding through
an adequate amount of committed credit facilities and the ability
to close out market positions. The Company aims to maintain
flexibility in funding.
Residual undiscounted contractual maturities of financial
liabilities:
31 March 2017 Less 1-3 3 months 1-5 Over No stated
than months to 1 years 5 maturity
1 month year Years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities
Provision for - - 550 - -
run-off costs
Trade and other 105 - - - - -
payables
105 - 550 - -
--------- -------- --------- -------- -------- ----------
31 March 2016 Less 1-3 3 months 1-5 Over No stated
than months to 1 years 5 maturity
1 month year Years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial liabilities
Provision for
legal costs - - - - - 2,000
Trade and other 342 - - - - -
payables
--------- -------- --------- -------- -------- ----------
342 - - - - 2,000
--------- -------- --------- -------- -------- ----------
19. Provision for run-off costs
A provision has been made for the estimated unavoidable costs
that are expected to be incurred in respect of the winding up of
the Company. It is estimated that these costs, consisting of
regular administration costs from 31 March 2017 up to the date of
liquidation, disposal costs associated with the transaction
described in note 11, and liquidation costs associated with the
closure of the Company and the remaining subsidiaries, are in the
region of GBP550,000.
20. Related party transactions
Graham Smith is a Director of the Company, and a Director of the
Administrator. He has received no Directors' fees from the Company
during the year (2016: nil). The fees paid by the Company to the
Administrator (excluding VAT) for the year amounted to GBP0.1
million (2016: GBP0.1 million).
Details of other Directors' remuneration during the year are
given in note 6.
21. Subsequent events
On 27 August 2017 the Company announced that it is offering TCML
for sale at auction. The deadline for receipt of unconditional bids
under the auction has been extended to 10 November 2017. In the
meantime, on 17 October 2017, TC-10 entered into a sale and
purchase agreement with DB Realty Limited in relation to all of the
CCPS held by TC-10 (the "Transaction"). Under the terms of the
Transaction, TC-10 will receive the equivalent of INR149.6 million
(approximately GBP1.7 million at current exchange rates).
Completion of the Transaction is subject to TC-10 obtaining all
final regulatory approvals in India, currently expected before the
auction deadline. If the Transaction completes as envisaged before
the auction deadline, the auction of TCML will be cancelled. Under
the terms of an agreement with the Immobilien Funds entered into at
the same time as the agreement referred to in note 10, TC-10 will
pay the proceeds received from the Transaction to TCML. TCML will
then remit those proceeds to Trinity.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UGGQCGUPMGMR
(END) Dow Jones Newswires
November 09, 2017 03:00 ET (08:00 GMT)
The Revel Collective (LSE:TRC)
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