TIDMSPL
RNS Number : 7124N
SKIL Ports & Logistics Limited
20 May 2015
20(th) May 2015
SKIL Ports & Logistics Limited
("SPL" or the "Company")
Preliminary results for the year ended 31 December 2014
SPL, which is developing a modern port and logistics facility in
Mumbai, India, is pleased to announce its preliminary results for
the year ended 31 December 2014.
2014 summary
-- Secured approximately GBP 48 million debt facility for the project
-- Mr. Sunil Tandon appointed as a Non-Executive Director -
track record of building infrastructure projects in India
-- Liaison program with local community initiated
-- The Company remains confident that the Group has adequate
resources in order to complete the facility at Karanja - cash at
the end of 2014 standing at GBP41m
Post year end summary
-- Significant work carried out on access roads in order to allow heavy machinery onto site
-- Approximately 4 hectares of land having been reclaimed
-- Ground improvement and compaction works expected to start shortly
-- Local community issues likely to be resolved in the near term
and full mobilisation of the contractor's workforce thereafter
-- Work on site likely to move to 24 hour operations in the near
term - expected to boost productivity by 60-70 per cent.
Nikhil Gandhi Executive Chairman of SPL said, "Our goal has
always been to build a 'world-class' port and logistics facility in
India and the demand from businesses in India for such a facility
is evident. I remain confident that the Group has adequate
resources in order to complete the port, and I am working to a
timeline that sees the facility partially operational by the end of
the year.
Enquiries:
SPL Nikhil Gandhi
C/O Redleaf PR +44 (0) 20 382 4769
Cenkos Securities plc Stephen Keys/Mark Connelly
(Nomad and Broker) +44 (0) 20 7397 8926
Redleaf PR Charlie Geller
(Financial PR) +44 (0) 20 382 4769
SKIL@redleafpr.com
Chairman's Statement
It is pleasing to be able to report that we now have clear
visibility of the build out of our port and logistics project.
Since the Company's Admission to AIM in October 2010, our goal has
been to build a 'world-class' port and logistics facility in India.
The business case for such a facility was very much evident at the
time of our IPO and our track record of building such
infrastructure was proven. The Board remains certain that the whole
region will benefit from the facility that we are building. The
lines of vessels waiting to use ports in the area, coupled with the
inherent bottle necks in basic logistics facilities, prove this on
a daily basis.
Although things did not proceed as quickly as management would
have liked in 2014, much was achieved during the year. As well as
closing the Group's Rs 480 Crores (approximately GBP 48 million)
debt facility for the project, significant work was carried out on
the access roads in order to allow heavy machinery onto the site.
In addition, the Company embarked on a liaison program with the
local community to ensure that their interests and livelihoods were
protected by the development of the project.
We were delighted to welcome the Honourable Chief Minister of
Maharashtra, Mr. Devendra Fadnavis, as the chief guest at a
ceremony and other dignitaries to mark the laying of the foundation
stone in December. This was a clear demonstration of the State's
commitment to the success of our project. Also in December, Mr.
Sunil Tandon was appointed as a Non-Executive Director, bringing an
enviable track record of building out infrastructure projects in
India and a wealth of experience in high-level Government posts. It
was pleasing to report that dredging of the approach channel had
commenced and we ended 2014 with positive momentum.
2015 started off strongly and, as reported in the Project Update
announcement issued on 22 April 2015, the East approach trestle has
been completed as well as approximately 4 hectares of land having
been reclaimed. Ground improvement and compaction works are
expected to start shortly with work on site likely to move to 24
hour operations in the near term, which the Board expects will
boost productivity by 60-70 per cent.
On 22 April, we reported that recent weeks had seen reduced
activity on site as local community issues were being resolved.
Resolution of these matters should be forthcoming and full
mobilisation of the contractor's workforce is expected to resume in
the coming weeks. Once work resumes, we will see continuation of
reclamation and piling activities. In early Q3, which is
predominantly the monsoon season, in addition to continued jetty
construction activities, the contractors are scheduled to commence
ground improvement works including laying pre-fabricated vertical
band drains across the length and breadth of the reclaimed area
followed by laying a 3-4 meter surcharge. This process will enable
extraction of the moisture from the soil and compaction of the
ground to enable it to be ready to handle heavy container loads.
The ground improvement process will be followed by laying concrete
paver blocks (interlocking concrete blocks) which will form the
ultimate surface of the container and bulk cargo storage yards.
The Group has conserved its resources during periods of lower
than anticipated activity, with the Group's operational spend
accelerating in line with increased activity on site. The Board
remains confident that the Group has adequate resources in order to
complete the facility at Karanja, with cash at the end of 2014
standing at GBP41m.
Finally, I would like to thank all SPL shareholders for their
support, my fellow Board members for their tireless work during the
course of last year and to all SPL staff for their considerable
efforts in what has been a difficult period. I would like to
conclude by saying that, given the significant progress achieved so
far this year and notwithstanding the issues that we have
encountered, I remain confident that part of the facility will be
operational by this year end and I am well aware that my personal
reputation remains at stake until this is achieved.
Nikhil Gandhi
Executive Chairman - SKIL Ports & Logistics Limited
Consolidated Statement of Comprehensive Income
for the Year ended 31 December 2014
Notes Year ended Year ended
31 Dec 31 Dec 13
14 GBP000
GBP000
CONTINUING OPERATIONS
Revenue - -
----------- -----------
- -
Administrative Expenses 5 (1,936) (1,921)
----------- -----------
OPERATING LOSS (1,936) (1,921)
Finance Income 6 2,665 4,321
Finance Cost - -
----------- -----------
NET FINANCING INCOME 2,665 4,321
----------- -----------
PROFIT BEFORE TAX 729 2,400
Tax expense for the year 7 (862) (1,399)
----------- -----------
(Loss)/PROFIT FOR THE YEAR (133) 1,001
=========== ===========
(Loss)/profit for the year attributable
to:
Non-controlling interest 2 5
Owners of the parent (135) 996
----------- -----------
(Loss)/profit for the year (133) 1,001
=========== ===========
Other Comprehensive Income / (expense):
Items that will not be reclassified
subsequently to profit or loss - -
Items that will be reclassified subsequently
to profit or loss
Exchange differences on translating
foreign operations 1,641 (7,941)
----------- -----------
Other comprehensive income/(expense)
for the year 1,641 (7,941)
----------- -----------
Total comprehensive income/(expense)
for the year 1,508 (6,940)
=========== ===========
Total comprehensive income/(expense) for
the year attributable to:
Non-controlling interest 2 5
Owners of the parent 1,506 (6,945)
----------- -----------
1,508 (6,940)
=========== ===========
Earnings per share (consolidated):
Basic & Diluted, for the year attributable
to ordinary equity holders (pence) 9 (0.003) 0.023
Consolidated Statement of Financial Position
as at 31 December 2014
Notes Year Year ended
ended 31 Dec 13
31 Dec GBP000
14
GBP000
Assets
Property, plant and equipment 10 15,508 6,463
---------- --------------
Total non-current assets 15,508 6,463
---------- --------------
Trade and other receivables 11 16,320 10,273
Cash and cash equivalents 12 41,041 45,796
---------- --------------
Total current assets 57,361 56,069
Total assets 72,869 62,532
========== ==============
Equity
Share Premium 14 71,590 71,590
Retained earnings 14 5,134 5,269
Translation Reserve 14 (20,000) (21,641)
---------- --------------
Equity attributable to owners of parent 56,724 55,218
---------- --------------
Non-controlling Interest 15 13
---------- --------------
Total equity 56,739 55,231
---------- --------------
Liabilities
Non-current
Borrowings 15 9,412 53
---------- --------------
Non-current Liabilities 9,412 53
---------- --------------
Current
Borrowings 15 9 -
Current tax liabilities 16 5,724 4,516
Trade and other payables 17 985 2,732
---------- --------------
Current liabilities 6,718 7,248
---------- --------------
Total liabilities 16,130 7,301
---------- --------------
Total equity and liabilities 72,869 62,532
========== ==============
The notes form part of these consolidated
financial statements.
Consolidated Statement of Cash Flows
for the Year ended 31 December 2014
Notes Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit Before Tax 729 2,400
Non cash flow adjustments 19 (2,301) (4,616)
----------- -----------
Operating profit before working
capital changes (1,572) (2,216)
Net changes in working capital 19 (7,794) (8,013)
----------- -----------
Net cash used in operating
activities (9,366) (10,229)
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant
and equipment (8,861) (4,801)
Proceeds from disposals of
property, plant and equipment - 15
Finance Income 2,665 4,321
Net cash from investing activities (6,196) (465)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from new borrowing 9,368 -
Net cash from financing activities 9,368 -
----------- -----------
Net change in cash and cash
equivalents (6,194) (10,694)
Cash and cash equivalents,
beginning of the year 45,796 64,180
Exchange differences on cash
and cash equivalents 1,439 (7,690)
----------- -----------
Cash and cash equivalents,
end of the year 41,041 45,796
=========== ===========
Consolidated Statement of Changes in Equity
for the Year ended 31 December 2014
Share Translation Retained Non- controlling Total
Premium Reserve Earnings Interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2014 71,590 (21,641) 5,269 13 55,231
Share capital adjustment - - - - -
--------- ------------ ---------- ----------------- --------
Transactions with - - - - -
owners
--------- ------------ ---------- ----------------- --------
Profit/(loss) for
the year - - (135) 2 (133)
Foreign currency
translation differences
for foreign operations - 1,641 - - 1,641
--------- ------------ ---------- ----------------- --------
Total comprehensive
income for the
year - 1,641 (135) 2 1,508
--------- ------------ ---------- ----------------- --------
Balance at 31 December
2014 71,590 (20,000) 5,134 15 56,739
========= ============ ========== ================= ========
Balance at 1 January
2013 71,590 (13,700) 4,273 8 62,171
Share capital
adjustment - - - - -
Transactions with
owners - - - - -
------- --------- ------ --- --------
Profit for the
year - - 996 5 1,001
Foreign currency
translation differences
for foreign operations - (7,941) - - (7,941)
------- --------- ------ --- --------
Total comprehensive
income for the
year - (7,941) 996 5 (6,940)
------- --------- ------ --- --------
Balance at 31
December 2013 71,590 (21,641) 5,269 13 55,231
======= ========= ====== === ========
The notes form part of these consolidated financial
statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
SKIL Ports & Logistics Limited (the "Company") was
incorporated in Guernsey under The Companies (Guernsey) Law 2008
with registered number 52321 on 24 August 2010. Its registered
office and principal place of business is 1st and 2nd Floors,
Elizabeth House, Les Ruettes Brayes, St Peter Port, Guernsey GY1
1EW. It was listed on the Alternative Investment Market ('AIM') of
the London Stock Exchange on 7 October 2010.
The consolidated financial statements of SKIL Ports &
Logistics Limited comprise the financial statements of the Company
and its subsidiaries (together referred to as the "Group"). The
consolidated financial statements have been prepared for the year
ended 31 December 2014, and are presented in UK Sterling (GBP).
The principal activities of the Group are to develop, own and
operate port and logistics facilities. As of 31 December 2014, the
Group had 21 (Twenty One) [prior year 10 (Ten)] employees.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The consolidated financial statements have been prepared on a
historical cost basis.
The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union and also to
comply with The Companies (Guernsey) Law, 2008.
Going Concern
The financial statements have been prepared on a going concern
basis as the Group has adequate funds to enable it to exist as a
going concern for the foreseeable future. The Group has received
the requisite statutory approvals and has already commenced the
construction work at site. The Directors believes that they will
have sufficient equity, sanctioned credit facilities from lenders
and headroom in the capital structure for the build out of the
facility. The group closely monitors and manages its liquidity
risk. In assessing the Group's going concern status, the Directors
have taken account of the financial position of the Group,
anticipated future utilisation of available bank facilities, its
capital investment plans and forecast of gross operating margins as
and when the operations commence.
Based on the above, the Board of Directors believe that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the financial statements.
(b) Basis of Consolidation
The consolidated financial statements incorporate the results of
the Company and entities controlled by the Company (its
subsidiaries) up to 31 December 2014. Subsidiaries are all entities
over which the Group has the power to control the financial and
operating policies. The Group obtains and exercises control through
holding more than half of the voting rights. The financial
statements of the subsidiaries are prepared for the same period as
the Company using consistent accounting policies. The fiscal year
of KTLPL (Karanja Terminal & Logistics Private Limited) ends on
March 31 and its accounts are adjusted for the same period as the
Company for consolidation.
Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
The results of subsidiaries acquired during the year are
included in the consolidated statement of comprehensive income from
the effective date of acquisition. Individual financial statements
of the subsidiaries are not presented.
Non-controlling interests
Non-controlling interests, presented as part of equity,
represent the portion of a subsidiary's profit or loss and net
assets that is not held by the Group. The Group attributes total
comprehensive income or loss of subsidiaries between the owners of
the parent and the non-controlling interests based on their
respective ownership interests.
(c) LIST OF SUBSIDIARIES
Details of the Group's subsidiaries which are consolidated into
the company's financial statements are as follows:
Subsidiary Immediate Parent Country of % Voting Rights % Economic
Incorporation Interest
----------------------- -------------------- ---------------- ---------------- -----------
Karanja Terminal
& Logistics (Cyprus) SKIL Ports &
Limited Logistics Limited Cyprus 100.00 100.00
Karanja Terminal Karanja Terminal
& Logistics Private & Logistics
Limited (Cyprus) Limited India 99.71 99.71
(d) FOREIGN CURRENCY TRANSLATION
The consolidated financial statements are presented in UK
Sterling (GBP), which is the Company's functional currency. The
functional currency for all of the subsidiaries within the Group is
as detailed below:
Karanja Terminal & Logistics (Cyprus) Limited (KTLCL) - Euro
Karanja Terminal & Logistics Private Limited (KTLPL) - Indian Rupees
Foreign currency transactions are translated into the functional
currency of the respective Group entity, using the exchange rates
prevailing at the dates of the transactions (spot exchange rate).
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the retranslation of monetary items
denominated in foreign currency at the year-end exchange rates are
recognised in the statement of comprehensive income.
Non-monetary items are not retranslated at year-end and are
measured at historical cost (translated using the exchange rates at
the transaction date).
In the Group's financial statements, all assets, liabilities and
transactions of Group entities with a functional currency other
than GBP are translated into GBP upon consolidation.
On consolidation, the assets and liabilities of foreign
operations are translated into GBP at the closing rate at the
reporting date. The income and expenses of foreign operations are
translated into GBP at the average exchange rates over the
reporting period. Foreign currency differences are recognised in
other comprehensive income in the translation reserve. When a
foreign operation is disposed of, in part or in full, the relevant
amount in the translation reserves shall be transferred to the
Statement of Comprehensive Income.
(e) REVENUE RECOGNITION
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. The Group applies revenue recognition criteria
to each separately identifiable component. In particular:
Interest income:-
Interest income is reported on an accruals basis using the
effective interest method.
The Group is in process of constructing its initial project, the
creation of a modern and efficient port and logistics facility in
India. The Group has not yet commenced operations and hence,
currently does not have any revenue from operations of its core
business activity.
(f) Borrowing costs
Borrowing costs directly attributable to the construction of a
qualifying asset are capitalised during the period of time that is
necessary to complete and prepare the asset for its intended use.
Other borrowing costs are expensed in the period in which they are
incurred and reported in finance costs.
(g) Leases
Finance leases
The economic ownership of a leased asset is transferred to the
lessee if the lessee bears substantially all the risks and rewards
of ownership of the leased asset. Where the Group is a lessee in
this type of arrangement, the related asset is recognised at the
inception of the lease at the fair value of the leased asset or, if
lower, the present value of the lease payments plus incidental
payments, if any. A corresponding amount is recognised as a finance
lease liability. The corresponding finance lease liability is
reduced by lease payments net of finance charges. The interest
element of lease payments represents a constant proportion of the
outstanding capital balance and is charged to profit or loss, as
finance costs over the period of the lease.
Operating leases
All other leases are treated as operating leases. Where the
Group is a lessee, payments on operating lease agreements are
recognised as an expense on a straight-line basis over the lease
term. Associated costs, such as maintenance and insurance, are
expensed as incurred.
(h) INCOME TAX
Tax expense recognised in profit or loss comprises the sum of
deferred tax and current tax not recognised in other comprehensive
income or directly in equity. Current income tax assets and/or
liabilities comprise those obligations to, or claims from, fiscal
authorities relating to the current or prior reporting periods,
that are unpaid at the reporting date. Current tax is payable on
taxable profit, which differs from profit or loss in the financial
statements. Calculation of current tax is based on tax rates and
tax laws that have been enacted or substantively enacted by the end
of the reporting period.
Deferred tax
Deferred income taxes are calculated using the liability method
on temporary differences between the carrying amounts of assets and
liabilities and their tax bases. However, deferred tax is not
provided on the initial recognition of goodwill, or on the initial
recognition of an asset or liability unless the related transaction
is a business combination or affects tax or accounting profit.
Deferred tax on temporary differences associated with investments
in subsidiaries, associates and joint ventures is not provided if
reversal of these temporary differences can be controlled by the
Group and it is probable that reversal will not occur in the
foreseeable future.
Deferred tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply to their
respective period of realisation, provided those rates are enacted
or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised to the extent that it is
probable that the underlying tax loss or deductible temporary
difference will be utilised against future taxable income. This is
assessed based on the Group's forecast of future operating results,
adjusted for significant non-taxable income and expenses and
specific limits on the use of any unused tax loss or credit.
Deferred tax liabilities are always provided for in full.
Deferred tax assets and liabilities are offset only when the
Group has a right and intention to set off current tax assets and
liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as
a component of tax income or expense in profit or loss, except
where they relate to items that are recognised in other
comprehensive income (such as the revaluation of land) or directly
in equity, in which case the related deferred tax is also
recognised in other comprehensive income or equity,
respectively.
(i) FINANCIAL ASSETS
Financial assets are recognised when the Group becomes a party
to the contractual provisions of the financial instrument and are
measured initially at fair value adjusted by transaction costs.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are
transferred. A financial asset is derecognised when it is
extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial
assets
For the purpose of subsequent measurement financial assets,
other than those designated and effective as hedging instruments,
are classified into the following categories upon initial
recognition:
-- loans and receivables
-- financial assets at fair value through profit or loss
(FVTPL)
-- held-to-maturity (HTM) investments
-- available-for-sale (AFS) financial assets
All financial assets except for those at FVTPL are reviewed for
impairment at least at each reporting date to identify whether
there is any objective evidence that a financial asset or a group
of financial assets is impaired.
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. After initial recognition, these are measured at amortised
cost using the effective interest method, less provision for
impairment. Discounting is omitted where the effect of discounting
is immaterial. The Group's cash and cash equivalents, trade and
most other receivables fall into this category of financial
instruments. Individually significant receivables are considered
for impairment when they are past due or when other objective
evidence is received that a specific counterparty will default.
Receivables that are not considered to be individually impaired are
reviewed for impairment in groups, which are determined by
reference to the industry and region of the counterparty and other
shared credit risk characteristics. The impairment loss estimate is
then based on recent historical counterparty default rates for each
identified group.
Financial assets at FVTPL
Financial assets at FVTPL include financial assets that are
either classified as held for trading or that meet certain
conditions and are designated at FVTPL upon initial recognition.
All derivative financial instruments fall into this category,
except for those designated and effective as hedging instruments,
for which the hedge accounting requirements apply. Assets in this
category are measured at fair value with gains or losses recognised
in profit or loss. The fair values of financial assets in this
category are determined by reference to active market transactions
or using a valuation technique where no active market exists.
HTM investments
HTM investments are non-derivative financial assets with fixed
or determinable payments and fixed maturity other than loans and
receivables. Investments are classified as HTM if the Group has the
intention and ability to hold them until maturity. HTM investments
are measured subsequently at amortised cost using the effective
interest method. If there is objective evidence that the investment
is impaired, determined by reference to external credit ratings,
the financial asset is measured at the present value of estimated
future cash flows. Any changes in the carrying amount of the
investment, including impairment losses, are recognised in profit
or loss.
AFS financial assets
AFS financial assets are non-derivative financial assets that
are either designated to this category or do not qualify for
inclusion in any of the other categories of financial assets. The
equity investment is measured at cost less any impairment charges,
as its fair value cannot currently be estimated reliably.
Impairment charges are recognised in profit or loss. All other AFS
financial assets are measured at fair value. Gains and losses are
recognised in other comprehensive income and reported within the
AFS reserve within equity, except for interest and dividend income,
impairment losses and foreign exchange differences on monetary
assets, which are recognised in profit or loss. When the asset is
disposed of or is determined to be impaired, the cumulative gain or
loss recognised in other comprehensive income is reclassified from
the equity reserve to profit or loss. Interest calculated using the
effective interest method and dividends are recognised in profit or
loss within finance income. Reversals of impairment losses for AFS
debt securities are recognised in profit or loss if the reversal
can be objectively related to an event occurring after the
impairment loss was recognised. For AFS equity investments
impairment reversals are not recognised in profit loss and any
subsequent increase in fair value is recognised in other
comprehensive income.
(j) FINANCIAL LIABILITIES
The Group's financial liabilities include trade and other
payables and borrowings. Financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
financial instrument and are measured initially at fair value
adjusted by transaction costs. Financial liabilities are measured
subsequently at amortised cost using the effective interest method.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
(k) PROPERTY, PLANT AND EQUIPMENT
Items of property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses.
The Group is in the process of constructing its initial project,
the creation of a modern and efficient port and logistics facility
in India. All the eligible expenditure incurred in respect of
terminal port under development is carried at historical cost under
Capital Work In Progress.
Cost includes expenditures that are directly attributable to the
acquisition of the asset. The cost of self- constructed assets
includes the cost of materials, direct labour and any other costs
directly attributable to bringing the asset to a working condition
for its intended use. Purchased software that is integral to the
functionality of the related equipment is capitalised as part of
that equipment.
Parts of the property, plant and equipment are accounted for as
separate items (major components) on the basis of nature of the
assets.
Depreciation is recognised in the Statement of Comprehensive
Income over the estimated useful lives of each part of an item of
property, plant and equipment. For items of property, plant and
equipment under construction, depreciation begins when the asset is
available for use, i.e. when it is in the condition necessary for
it to be capable of operating in the manner intended by management.
Thus as long as an item of property, plant and equipment is under
construction, it is not depreciated. Leasehold improvements are
amortised over the shorter of the lease term or their useful
lives.
Depreciation is calculated on a straight-line basis.
The estimated useful lives for the current year are as
Assets Estimated Life of assets
Equipment 3-5 Years
Computers 2-3 Years
Furniture 5-7 Years
Vehicle 5-7 Years
Depreciation methods, useful lives and residual value are
reassessed at each reporting date.
Gains or losses arising on the disposal of property, plant and
equipment are determined as the difference between the disposal
proceeds and the carrying amount of the assets and are recognised
in profit or loss within other income or other expenses.
(l) TRADE RECEIVABLES AND PAYABLES
Trade receivables are financial assets categorised as loans and
receivables, measured initially at fair value and subsequently at
amortised cost using an effective interest rate method, less an
allowance for impairment. An allowance for impairment is made when
there is objective evidence that the Group will not be able to
collect the debts. Bad debts are written off when identified.
Trade payables are financial liabilities at amortised cost,
measured initially at fair value and subsequently at amortised cost
using an effective interest rate method.
(m) TRADE RECEIVABLES FOR ADVANCES
Advances paid to the EPC contractor and suppliers for build out
of the facility are categorised as trade receivables for advances.
These advances are measured initially at fair value and
subsequently at amortised cost using an effective interest rate
method, less an allowance for impairment. An allowance for
impairment is made when there is objective evidence that the Group
will not be able to recover these advances.
(n) CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
(o) SHARE CAPITAL AND RESERVES
Shares are 'no par value'. Share premium includes any premiums
received on issue of share capital. Any transaction costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Foreign currency translation differences are included in the
translation reserve. Retained earnings include all current and
prior year retained profits.
(p) IMPAIRMENT OF FINANCIAL AND OTHER ASSETS
Property, Plant and Equipment
Internal and external sources of information are reviewed at the
end of the reporting period to identify indications that the
property, plant and equipment may be impaired or an impairment loss
previously recognised no longer exists or may have decreased.
Considering the current stage of the Group, it possesses very
limited equipment. Going-forward as the Group accumulates property,
plant and equipment, these will be stated at cost, net of
accumulated depreciation and/or impairment losses, if any. The cost
will include expenditures that are directly attributable to
property, plant and equipment such as employee cost, if recognition
criteria are met. Likewise, when a major inspection will be
performed, its costs will be recognised in the carrying amount of
the plant and equipment as a replacement if the recognition
criteria have been satisfied. All other repairs and maintenance
will be recognised in the Consolidated Statement of Comprehensive
Income as incurred. There is currently no impairment of property,
plant and equipment.
(q) STANDARDS, AMENDMENTS AND INTERPRETATIONS TO EXISTING
STANDARDS THAT ARE NOT YET EFFECTIVE AND HAVE NOT BEEN ADOPTED
EARLY BY THE GROUP
At the date of authorisation of these financial statements,
certain new standards, amendments and interpretations to existing
standards have been published by the IASB but are not yet
effective, and have not been adopted early by the Group. Management
anticipates that all of the relevant pronouncements will be adopted
in the Group's accounting policies for the first period beginning
after the effective date of the pronouncement. Information on new
standards, amendments and interpretations that are expected to be
relevant to the Group's financial statements is provided below.
Certain other new standards and interpretations have been issued
but are not expected to have a material impact on the Group's
financial statements.
New standards and interpretations currently in issue but not
effective for accounting periods commencing on 1 January 2015
are:
-- IFRS 9 Financial Instruments (effective 1 January 2015)
The IASB aims to replace IAS 39 'Financial Instruments:
Recognition and Measurement' (IAS 39) in its entirety with IFRS 9.
To date, the chapters dealing with recognition, classification,
measurement and derecognition of financial assets and liabilities
have been issued. These chapters are effective for annual periods
beginning on or after 1 January 2015. Chapters dealing with
impairment methodology and hedge accounting are still being
developed. Further, in November 2011, the IASB tentatively decided
to consider making limited modifications to IFRS 9's financial
asset classification model to address application issues. The
Group's management have yet to assess the impact of this new
standard on the Group's consolidated financial statements.
Management does not expect to implement IFRS 9 until it has been
completed and its overall impact can be assessed.
-- IAS 10 Events after the Reporting Period (effective 1 January 2015)
Management does not anticipate a material impact on the Group's
consolidated financial statements.
3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The following are significant management judgments in applying
the accounting policies of the Group that have the most significant
effect on the financial statements.
Warrants
The Board of Directors are of the opinion that based on where
the group is currently with regards to the build out of its
facility that, the warrants granted to the Founder Shareholders and
to Cenkos Securities PLC (Nominated Adviser) will not be exercised
in the next 12 months and hence are not dilutive.
The Board is not accounting for the warrants that were granted
to the Founders Shareholders and to Cenkos Securities PLC
(Nominated Adviser) at the time of IPO as they are so significantly
out of the money and the chance of them being exercised within the
next 12 months period is almost zero. The Board will continue to
assess the treatment of these outstanding warrants on a six monthly
basis.
Functional Currency
The Company is listed on the London Stock Exchange's AIM market
("AIM"). The Company's subsidiaries are Karanja Terminal &
Logistics (Cyprus) Limited and Karanja Terminal & Logistics
Private Limited, in Cyprus and in India respectively. SPL which is
the managing entity of all the subsidiaries is managed and
controlled in Guernsey.
Since the company's investors are predominantly UK based and
invested in GBP, the Board of directors has decided to keep GBP as
the functional currency of the company. The Board at the time of
IPO decided not to hedge its exposure to INR as the project is
based in India and the capex, debt, operating expenses and revenue
are expected to be in INR.
Capitalisation of expenses related to port and logistics
facility
The Group is in the process of constructing its initial project;
the creation of a modern and efficient port and logistics facility
in India. All the expenditures directly attributable in respect of
the port and logistics facility under development are carried at
historical cost under Capital Work In Progress as the Board
believes that these expenses will generate probable future economic
benefits. These costs include borrowing cost, professional fees,
construction costs and other direct expenditure. After
capitalisation, management monitors whether the recognition
requirements continue to be met and whether there are any
indicators that capitalised costs may be impaired.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is
based on an assessment of the probability of the Group's future
taxable income against which the deductible temporary differences
can be utilised. In addition, significant judgement is required in
assessing the impact of any legal or economic limits or
uncertainties in various tax jurisdictions.
4. SEGMENTAL REPORTING
The Group has only one operating and geographic segment, being
the project on hand in India and hence no separate segmental report
has been presented.
5. ADMINISTRATIVE EXPENSES
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Employee costs 176 75
Traveling expenses 307 292
Professional fees 393 207
Directors' fees 304 323
Communication charges 12 20
Operating lease rentals 170 820
Other borrowing costs 401 75
Foreign exchange gains/loss 1 -
Other administration costs 154 86
Depreciation 18 23
----------------- -----------------
1,936 1,921
================= =================
6. FINANCE INCOME
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Interest on demand deposits 2,624 4,312
Interest on bank deposits 41 9
----------- -----------
2,665 4,321
=========== ===========
7. INCOME TAX
The major components of tax expense and the reconciliation of
the expected tax expense and the reported tax expense in the
Statement of Comprehensive Income are as follows:
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Profit Before Tax 729 2,400
Applicable tax rate in India* 32.45% 32.45%
----------- -----------
Expected tax expense 236 779
Adjustment for non-deductible
losses of SPL & Cyprus entity
against income from India 220 238
Adjustment for non-deductible
expenses 406 382
Actual tax expense 862 1,399
=========== ===========
*Considering that the Group's operations are presently based in
India, the effective tax rate of the Group of 32.45% (prior year
32.45%) has been computed based on the current tax rates prevailing
in India. In India, incomes earned from all sources (including
interest income) are taxable at the prevailing tax rate unless
exempted. However, administrative expenses are treated as
non-deductible expenses until commencement of operations. The
current income tax expense of GBP0.86 million (prior year GBP1.40
million) represents tax on profit/interest arising in India.
The Company is incorporated in Guernsey under The Companies
(Guernsey) Law 2008, as amended. The Guernsey tax rate for
companies is 0%. The rate of withholding tax on dividend payments
to non-residents by companies within the 0% corporate income tax
regime is also 0%. Accordingly, the Company will have no liability
to Guernsey income tax on its income and there will be no
requirement to deduct withholding tax from payments of dividends to
non-resident shareholders. There is no corporation tax payable in
Guernsey.
In Cyprus, the tax rate for companies is 12.5 % with effect from
1 January 2014.
8. AUDITORS' REMUNERATION
The following are the details of fees paid to the auditors,
Grant Thornton UK LLP and Indian auditors, in various capacities
for the year:
Year ended Year ended
31 Dec 31 Dec 13
14
GBP000 GBP000
Audit Fees
Interim 9 9
Annual 55 55
Subsidiary Audit Fees 12 2
Prior Year Overruns 7 4
83 70
============= ===========
9. EARNINGS PER SHARE
Both basic and diluted earnings per share for the year ended 31
December 2014 have been calculated using the loss attributable to
equity holders of the Group of GBP0.14 million {prior year profit
of GBP0.99 million}.
Year ended Year ended
31 Dec 14 31 Dec 13
Profit/(loss) attributable GBP(135,000) GBP996,000
to equity holders of the
parent
Weighted average number
of shares used in basic
& diluted earnings per
share 44,000,000 44,000,000
EARNINGS PER SHARE Pence Pence
Basic & Diluted earnings
per share (0.003) 0.023
As mentioned under note 3, the warrants are not dilutive. There
are no dilutive potential ordinary shares. There have been no other
transactions involving ordinary shares or potential ordinary shares
between the reporting date and the date of completion of these
financial statements.
10. PROPERTY, PLANT AND EQUIPMENT
Details of the Group's property, plant and equipment and their
carrying amounts are as follows:
Capital Work
Computers Office Furniture Vehicles In Progress Total
Equipment
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gross carrying
amount
Balance 1 Jan
2014 10 16 8 44 6,412 6,490
Net Exchange
Difference - 1 - - 201 202
Additions 4 3 6 - 8,848 8,861
---------------- ---------------- ------------- ----------------- -------------- ------------------ ------------
Balance 31 Dec
2014 14 20 14 44 15,461 15,553
---------------- ---------------- ------------- ----------------- -------------- ------------------ ------------
Depreciation
Balance 1 Jan
2014 (7) (5) (3) (12) - (27)
Net Exchange - - - - - -
Difference
Charge for the
year (3) (3) (1) (11) - (18)
Balance 31 Dec
2014 (10) (8) (4) (23) - (45)
---------------- ---------------- ------------- ----------------- -------------- ------------------ ------------
Carrying amount
31 Dec 2014 4 12 10 21 15,461 15,508
================ ================ ============= ================= ============== ================== ============
Computers Office Furniture Vehicles Capital
Equipment Work In
Progress Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gross carrying
amount
Balance 1 Jan
2013 10 17 9 47 1,881 1,964
Net Exchange
Difference (1) (2) (1) (6) (250) (260)
Disposals - - - (15) - (15)
Additions 1 1 - 18 4,781 4,801
----------------- ---------- ----------- --------------- --------- ---------- --------
Balance 31 Dec
2013 10 16 8 44 6,412 6,490
----------------- ---------- ----------- --------------- --------- ---------- --------
Depreciation
Balance 1 Jan
2013 (4) (3) (2) (4) - (13)
Net Exchange
Difference 1 - - 1 - 2
Charge for the
year (4) (2) (1) (14) - (21)
Disposals - - - 5 - 5
----------------- ---------- ----------- --------------- --------- ---------- --------
Balance 31 Dec
2013 (7) (5) (3) (12) - (27)
----------------- ---------- ----------- --------------- --------- ---------- --------
Carrying amount
31 Dec 2013 3 11 5 32 6,412 6,463
================= ========== =========== =============== ========= ========== ========
The net exchange difference on the Group's property, plant and
equipment's carrying amount is a gain of GBP0.20 million (prior
year loss of GBP0.26 million). The net exchange difference on the
Group's property, plant and equipment carrying amount is on the
account of the foreign exchange movement. Since the foreign
exchange movement was minimal in the previous year, with a lower
carrying amount of the Group's property, plant and equipment, the
net exchange difference was insignificant and was not provided in
the previous year.
a) Net Book Value of assets held under Finance Lease
KTLPL's vehicles are held under finance lease arrangements. The
Net Book Value of assets held under finance lease arrangements are
as follows:
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Vehicles 21 31
----------- -----------
21 31
=========== ===========
The Port facility being developed in India has been hypothecated
by the Indian subsidiary as security for the bank borrowings
[Borrowing limit sanctioned INR 480 crore (GBP48.60 million)] for
part financing the build out of the facility.
The borrowing cost in respect of the bank borrowing for
financing the build out of facility are capitalised under Capital
work in progress. During the year the company has capitalised
borrowing cost of GBP763,000 (prior year GBP NIL).
The Indian subsidiary has a contractual commitment of INR 800.74
crore (GBP81.07 million) towards construction of the port facility
over a scheduled construction period of 26 months (ground work
commenced in September 2013 and expected completion date on
November 2015). There were no other material contractual
commitments.
11. TRADE AND OTHER RECEIVABLES
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Deposits 229 262
Advances 16,008 9,940
Debtors
- Related Party 60 47
- Prepayment 23 24
16,320 10,273
=========== ===========
Advances include payment to EPC contractor of GBP14.54 million
(prior year GBP9.92 million) towards mobilisation advances and
quarry development. These advances will be recovered as a deduction
from the invoices being raised by the contractor over the contract
period.
12. CASH AND CASH EQUIVALENTS
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Cash at bank and in hand 3,339 2,899
Deposits 37,702 42,897
----------- -----------
41,041 45,796
=========== ===========
Cash at bank earns interest at floating rates based on bank
deposit rates. Short-term deposits are callable on demand depending
on the immediate cash requirements of the Group, and earn fixed
interest at the respective short-term deposit rates. The fair value
of cash and short-term deposits is GBP41.04 million (prior year
GBP45.80 million).
13. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
Risk Management
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk and interest rate
risk), credit risk and liquidity risk. Risk management is carried
out by the Board of Directors.
(a) Market Risk
(i) Translation risk
Foreign currency risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market foreign exchange rates. The Company's
presentation currency is the UK Sterling (GBP). The functional
currency of SPL is GBP. The functional currency of its subsidiary
Karanja Terminal & Logistics Private Limited (KTLPL) is INR and
the functional currency of Karanja Terminal & Logistics
(Cyprus) Limited is the Euro.
The exchange difference arising due to foreign currency exchange
rate variances on translating a foreign operation into the
presentation currency results in a translation risk. The exchange
differences arising from the translation of foreign operation into
the presentation currency are recognised in other comprehensive
income. There are no flows between the parent and KTLPL and
therefore, there are no other currency risks or exposures at the
reporting date. As stated under note 3 - Functional currency, the
board has decided not to hedge its exposure to INR as the project
is based in India and the cash balance, capex, debt, operating
expenses and revenue are all expected to be in INR and hence no
foreign exchange risk exists.
Currency risk exposure arises from financial instruments that
are denominated in a currency that is not the functional currency
of the entity in which they are recognised. Therefore as the cash
balance is denominated in INR and the functional currency of the
entity holding the cash is INR, no currency risk exposure
arises.
The Group's exposure to the risk of changes in foreign exchange
rates relates primarily to the cash and cash equivalents available
with the Indian entity of INR 3,835 million (GBP38.83 million) as
on reporting date [prior period INR 4,370 million (GBP45.80
million)]. In computing the below sensitivity analysis, the
management has assumed the following % movement between foreign
currency (INR) and the underlying functional currency (GBP):
Functional Currency 31 Dec 2014 31 Dec 2013
(GBP)
INR +- 10% +- 10%
The following table details the Group's sensitivity to
appreciation or depreciation in functional currency vis-Ã -vis the
currency in which the foreign currency cash and cash equivalents
are denominated:
Functional currency GBP GBP
(depreciation (appreciation by
by 10%) 10%)
GBP000 GBP000
31 December 2014 3,883 (3,883)
31 December 2013 4,580 (4,580)
If the functional currency (GBP) had weakened with respect to
foreign currency (INR) by the percentages mentioned above, for year
ended 31 December 2014 then the effect will be change in profit and
equity for the year by GBP3.88 million (prior period GBP4.58
million). If the functional currency had strengthened with respect
to the various currencies, there would be an equal and opposite
impact on profit and equity for each year. This exchange difference
arising due to foreign currency exchange rate variances on
translating a foreign operation into the presentation currency
results in a translation risk.
(ii) Interest rate risk
Interest rate risk is the risk that the future cash flows of a
financial instrument will fluctuate because of changes in market
interest rates. The Group's exposure to the risk of changes in
market interest rates relates primarily to the Group's long-term
debt obligations with floating interest rates.
KTLPL has successfully tied-up rupee term loan of INR 480 crore
(GBP48.60 million) for part financing the build out of its
facility. The company has commenced the drawdown of its sanctioned
bank borrowing as of the reporting date. The rate of interest on
the bank borrowing will be a floating rate linked to the bank base
rate with an additional spread of 355 basis points. The present
composite rate of interest is 13.50%.
The base rate set by the bank may be changed periodically as per
the discretion of the bank in line with Reserve Bank of India (RBI)
guidelines. Based on the current economic outlook and RBI Guidance,
management expects the Indian economy to enter a lower interest
rate regime as moderating inflation will allow the RBI and thus the
banks to lower its base rate in the coming quarters. The company
has therefore not entered into any derivative instrument to protect
from rising interest rates. The Board will monitor the interest
rate environment on an on-going basis every six months.
Interest rate sensitivity
At 31 December 2014, the Group is exposed to changes in market
interest rates through bank borrowings at variable interest rates.
The exposure to interest rates for the Group's money market funds
is considered immaterial.
The following table illustrates the sensitivity of profit to a
reasonably possible change in interest rates of +/- 1% (2013: +/-
1%). These changes are considered to be reasonably possible based
on observation of current market conditions. The calculations are
based on a change in the average market interest rate for each
period, and the financial instruments held at each reporting date
that are sensitive to changes in interest rates. All other
variables are held constant.
Year Profit for the Equity, net of tax
Year GBP000
GBP000
+1% -1% +1% -1%
31 December
2023 (15) 15 (10) 10
31 December
2022 (91) 91 (61) 61
31 December
2021 (173) 173 (117) 117
31 December
2020 (253) 253 (171) 171
31 December
2019 (330) 330 (223) 223
31 December
2018 (399) 399 (270) 270
31 December
2017 (453) 453 (306) 306
31 December
2016 (451) 451 (305) 305
31 December
2015 (220) 220 (149) 149
31 December
2014 (71) 71 (48) 48
(b) Credit risk
Credit risk is the risk that a counterparty fails to discharge
an obligation to the Group. The Group's maximum exposure (GBP37.70
million) to credit risk is limited to the carrying amount of
financial assets recognised at the reporting date. The Group's
policy is to deal only with creditworthy counterparties. The Group
has no significant concentrations of credit risk.
The Group does not concentrate any of its deposits in one bank
or a non-banking finance company (NBFC). This is seen as being
prudent. Credit risk is managed by the management having conducted
its own due diligence. The balances held with NBFC's and banks are
on a short term basis. Management reviews quarterly NAV information
sent by NBFC's and monitors bank counter-party risk on an on-going
basis.
(c) Liquidity risk
Liquidity risk is the risk that the Group might be unable to
meet its financial obligations. Prudent liquidity risk management
implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of committed
credit facilities. To date all investments have been funded by cash
from the IPO. KTLPL has tied-up rupee term loan of INR 480 crore
(GBP48.60 million) for financing the build out of its facility. The
company has started utilisation of bank borrowing.
The Group's objective is to maintain cash and demand deposits to
meet its liquidity requirements for 30-day periods at a minimum.
This objective was met for the reporting periods. Funding for build
out of the port facility is secured by sufficient equity,
sanctioned credit facilities from lenders and the ability to raise
additional funds due to headroom in the capital structure.
The Group manages its liquidity needs by monitoring scheduled
contractual payments for build out of the port facility as well as
forecast cash inflows and outflows due in day-to-day business.
Liquidity needs are monitored and reviewed by the management on a
regular basis. Net cash requirements are compared to available
borrowing facilities in order to determine headroom or any
shortfalls. This analysis shows that available borrowing facilities
are expected to be sufficient over the lookout period.
As at 31 December 2014, the Group's non-derivative financial
liabilities have contractual maturities (and interest payments) as
summarised below:
Principal payments Interest payments
Payment INR in Crore GBP000
falling
due INR in Crore GBP000
Within
1 year - - 29 2,974
1 to 5
year's 182.00 18,470 218 22,061
After 5
year's 298.00 30,130 71 7,168
Total 480.00 48,600 318 32,203
============= ======= ============= =======
The present composite rate of interest of 13.50% and closing
exchange rate has been considered for the above analysis.
In addition, the Company's liquidity management policy involves
considering the level of liquid assets necessary to meet the
funding requirement; monitoring balance sheet liquidity ratio
against internal requirements and maintaining debt financing plans.
As a part of monitoring balance sheet liquidity ratio, management
monitors the debt to equity ratio and has specified optimal level
for debt to equity ratio of 1.
Financial Instruments
Fair Values
Set out below is a comparison by category of carrying amounts
and fair values of the entire Group's financial instruments that
are carried in the financial statements.
Loans and Receivables
(Carried at amortised cost)
Year ended Year ended
Note 31 Dec 14 31 Dec 13
GBP000 GBP000
Financial Assets
Cash and Equivalents 12 41,041 45,796
Trade and Other
Receivables 11 16,320 10,273
----------- -----------
57,361 56,069
=========== ===========
Financial Liability
Borrowings 15 9,421 53
Trade and other
payables 17 985 2,732
----------- -----------
10,406 2,785
=========== ===========
The fair value of the Company's financial assets and financial
liabilities significantly approximate their carrying amount as at
the reporting date.
14. EQUITY
14.1 Issued Capital
The share capital of SPL consists only of fully paid ordinary
shares of no par value. The total number of shares issued and fully
paid up of the company as on each reporting date is summarised as
follows:
Year ended Year ended
Particulars 31 Dec 14 31 Dec 13
Shares issues and fully
paid:
Beginning of the year 44,000,000 44,000,000
Closing number of shares 44,000,000 44,000,000
============= =============
The share premium amount to GBP71.59 million (prior year
GBP71.59 million) after reduction of share issue costs. Holders of
the ordinary shares are entitled to receive dividends and other
distributions and to attend and vote at any general meeting.
14.2 Other Components of Equity
Retained Earnings
Retained earnings of GBP5.13 million (prior year GBP5.27
million) include all current year retained profits.
Translation Reserve
The translation reserve of GBP20.00 million (prior year GBP21.64
million) is on account of exchange differences relating to the
translation of the net assets of the Group's foreign operations
which relate to subsidiaries, from their functional currency into
the Group's presentational currency being GBP.
15. BORROWINGS
Borrowings consist of the following:
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Current
Vehicle loan 9 -
----------- -----------
9 -
=========== ===========
Non-Current
Bank loan 9,403 -
Vehicle loan 9 53
9,412 53
=========== ===========
Loan Facility
Karanja Terminal & Logistics Private Limited (KTLPL), the
Indian subsidiary has successfully tied-up rupee term loan of INR
480 crore (GBP48.60 million) for part financing the port facility.
The rupee term loan has been sanctioned by 4 Indian public sector
banks and the loan agreement was executed on 28(th) February, 2014.
The tenure of the loan is for 10 years with repayment beginning at
the end of the third year. The repayment schedule is as
follows:
Repayment amount
Payment falling due INR in Crore GBP000
Within 1 year - -
1 to 5 year's 182.00 18,470
After 5 year's 298.00 30,130
Total 480.00 48,600
============= =======
The rate of interest will be a floating rate linked to the
Canara bank base rate with an additional spread of 355 basis
points. The present composite rate of interest is 13.50%. The
borrowings are secured by the hypothecation of the port facility
and pledge of its shares. The carrying amount of the bank borrowing
is considered to be a reasonable approximation of the fair
value.
KTLPL has utilised the rupee term loan facility of INR 92.87
crore (GBP9.40 million) as of the reporting date.
16. current tax liabilities
Current tax liabilities consist of the following:
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Duties & taxes 528 327
Provision for
Income Tax 5,196 4,189
----------- -----------
Current tax liabilities 5,724 4,516
=========== ===========
The carrying amounts and the movements in the Provision for
Income Tax account are as follows:
GBP000
Carrying amount
1 January 2014 4,189
Additional Provisions 1,007
Carrying amount
31 December 2014 5,196
=====================
The Company recognises liabilities for anticipated tax issues
based on estimates of whether additional taxes will be due. Where
the final outcome of assessment by the Income Tax department on
these matters is different from the amounts that were initially
recorded, such differences will impact the income tax provisions in
the period in which such determination is made. The company
discharges the tax liability on the basis of income tax
assessment.
17. TRADE AND OTHER PAYABLES
Trade and other payables consist of the following:
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Current
Sundry creditor 877 2,725
Other payables 108 7
985 2,732
=========== ===========
18. RELATED PARTY TRANSACTIONS
The consolidated financial statements include the financial of
the Company and the subsidiaries listed in the following table:
Type of
Country of Ownership share
Name Incorporation Field Activity Interest Held
------------------------- --------------- ------------------- ---------- ---------
Cyprus Holding Company 100% Ordinary
HELD BY The Company
(SPL):
Karanja Terminal &
Logistics (Cyprus)
Limited
HELD BY Karanja Terminal
& Logistics (Cyprus)
Limited:
Karanja Terminal & Operating Company
Logistics Pvt. Ltd India -Terminal Project 99.71% Ordinary
The Group has the following related parties with whom it has
entered into transactions with during the year.
a) Shareholders having significant influence
The following shareholders of the Group have had a significant
influence during the year under review:
-- SKIL Global Ports & Logistics Limited, which is 100%
owned by Mr. Nikhil Gandhi, holds 28.91% of issued share capital of
SKIL Ports & Logistics Limited at the year end.
-- Pavan Bakhshi holds 2% of issued share capital of SKIL Ports
& Logistics Limited at the year end.
b) Key Managerial Personnel of the parent
Non-executive Directors
- Mr. Peter Anthony Jones
- Mr. James Stocks Sutcliffe
- Mr. Sunil Tandon (appointed on 16 December 2014)
Chief Executive Officer and Key Managers
- Mr. Pavan Bakhshi (Managing Director)
c) Key Managerial Personnel of the subsidiaries
Directors of KTLPL (India)
- Mr. Pavan Bakhshi
- Mr. Jay Mehta
- Mr. Jigar Shah
- Mr. Nikhil Gandhi (appointed on 13 March 2014)
(Mr. Nikhil Gandhi is Chairman)
Directors of KTLCL (Cyprus)
- Mr. Pavan Bakhshi
- Ms. Andria Andreou
- Ms. Olga Georgiades (appointed on 1 May 2014)
d) Other related party disclosure
Entities that are controlled, jointly controlled or
significantly influenced by, or for which significant voting power
in such entity resides with, directly or indirectly, any individual
or close family member of such individual referred above.
- SKIL Infrastructure Limited
- JPT Securities Limited
- KLG Capital Services Limited
- Grevek Investment & Finance Private Limited
- Carey Commercial (Cyprus) Limited
- Henley Trust (Cyprus) Ltd
e) Transaction with related parties
The following transactions took place between the Group and
related parties during the year ended 31 December 2014:
Nature of transaction Year ended Year
31 Dec 14 ended
31 Dec
13
GBP000 GBP000
Grevek Investment
& Finance Pvt Ltd Interest income - 27
Henley Trust (Cyprus) Administrative 5 -
Ltd fees
Carey Commercial Administrative
(Cyprus) Ltd fees 10 2
----------- --------
15 29
=========== ========
The following table provides the total amount outstanding with
related parties as at year ended 31 December 2014
Carey Commercial (Cyprus) Limited - Creditor:
Nature of transaction Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Administrative
Creditor services - 1
------------ -----------
- 1
================================================= ===========
SKIL Infrastructure Limited - Loan taken:
Nature of transaction Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Loan Loan taken - 35
------------ -----------
- 35
============================================= ===========
Transactions with shareholder having significant influence
SKIL Global Ports & Logistics Limited - Receivable
amount:
Nature of transaction Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Debtors Advances 60 47
----------- -----------
60 47
=========== ===========
Transactions with subsidiary
None
Transactions with Key Managerial Personnel of the parent
See Key Managerial Personnel Compensation details as provided
below
Transactions with Key Managerial Personnel of the
subsidiaries
See Key Managerial Personnel Compensation details as provided
below
Advisory services fee
None
Compensation to Key Managerial Personnel of the parent
Fees paid to persons or entities considered to be Key Managerial
Personnel of the Group include:
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Directors' fees
- Peter Jones 45 45
- James Sutcliffe 40 40
----------- -----------
85 85
Short-term employee
benefits
- Pavan Bakhshi 175 175
----------- -----------
175 175
Total compensation
paid to Key Managerial
Personnel 260 260
=========== ===========
SKIL Global Ports & Logistics Limited (controlled by Mr.
Nikhil Gandhi, a director) and Mr. Pavan Bakhshi, a director
(together the "Founder Shareholders"), have been granted warrants
by the Company to subscribe, for 4,400,000 ordinary shares at
nominal consideration at the time of (1) the Multi-purpose Terminal
and Logistics Park becoming fully operational and (2) the Group
generating annualised consolidated revenues of at least GBP48
million in any consecutive three month period ending on or prior to
31 December 2015. As stated in note 3, the Board of Directors
believes that under the current situation, these founder warrants
will not be exercised in the next 12 months and hence no charge is
recognised in the current year Statement of Comprehensive
Income.
As per the contract agreement entered into with the nominated
adviser (Cenkos Securities PLC), they were granted warrants to
subscribe for 220,000 ordinary shares exercisable at GBP2.50 per
share at any time within five years ending October 7, 2015. As
stated under note 3, the Board of Directors believes that under the
current situation, these warrants will not be exercised in the next
12 months and hence no charge is recognised in the current year
Statement of Comprehensive Income.
Compensation to Key Managerial Personnel of the subsidiaries
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Directors' fees
KTLPL - India 44 60
KTLCL - Cyprus 3 3
----------- -----------
47 63
=========== ===========
Corporate Deposits
As at 31 December 2014, the Group had GBP1.12 million (prior
year GBP0.95 million) as demand deposits with related parties.
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Grevek Investment
& Finance Pvt Ltd 840 682
KLG Capital Services
Ltd 118 115
JPT Securities
Limited 159 155
1,117 952
=========== ===========
Terms and conditions of transactions with related parties
The demand deposits are unsecured, callable on demand, carrying
interest at 5% per annum and settlement occurs in cash.
For the year ended 31 December 2014, the Company has not
recorded any impairment of receivables relating to amounts owed by
related parties (31 December 2013: GBP NIL). This assessment is
undertaken each financial year through examining the financial
position of the related party and the market in which the related
party operates.
Ultimate controlling party
The Directors do not consider there to be an ultimate
controlling party.
19. CASH FLOW ADJUSTMENTS AND CHANGES IN WORKING CAPITAL
The following non-cash flow adjustments and adjustments for
changes in working capital have been made to profit before tax to
arrive at operating cash flow:
Year ended Year ended
31 Dec 14 31 Dec 13
GBP000 GBP000
Non cash flow adjustments
Depreciation 18 23
Finance Income (2,665) (4,321)
Tax Expenses (862) (1,399)
Change In Current Tax
Liabilities 1,208 1,081
----------- -----------
(2,301) (4,616)
----------- -----------
Net changes in working
capital
Change in trade & other
payables (1,848) 1,908
Change in borrowings 101 (10)
Change in trade & other
receivables (6,047) (9,911)
----------- -----------
(7,794) (8,013)
----------- -----------
20. CAPITAL MANAGEMENT POLICIES AND PROCEDURE
The Group's capital management objectives are:
-- To ensure the Group's ability to continue as a going concern
-- To provide an adequate return to shareholders
By development of the port and logistics facility and effective
& efficient operation of the business commensurate with the
level of risk.
During the year, the group has commenced the construction of the
port facility. The group has also secured sanction for bank
borrowing. It has commenced the drawdown of the credit
facility.
With debt and equity funding fully tied-up, the EPC contract
being a fixed-price contract and given the group's substantial
project execution experience, the Group is protected against any
significant cost overruns. Additionally, contingencies have been
factored as 5% of the project cost. The Group believes that it is
adequately capitalised and will pursue a conservative capital
structure during the development and operational phase.
The Board has no immediate plans for paying a dividend and as
such would only consider a dividend or share buy-back at a time
where the project has significant free cash flow. The capital that
was raised at the time of the IPO has been earmarked for the build
out of the project and for the general working capital.
Given that the project has gone into the construction phase the
Group has started redeeming its deposit from NBFCs. The cash
management policy is regularly reviewed at its board meetings.
Capital
The Company's capital includes share premium (reduced by share
issue costs), retained earnings and translation reserve which are
reflected on the face of the statement on financial position and in
Note 14.
21. Operating Lease
The Group has entered into a 30 years lease agreement with the
Maharashtra Maritime Board for the development of a port and
logistics facility in India. The operating lease payments are
capitalised at historical cost under Capital Work in Progress in
the consolidated financial statement on a straight-line basis until
the completion of construction.
The future minimum lease payments are as follows:
Payments falling Future minimum Future minimum
due lease lease
payments outstanding payments outstanding
on 31 Dec 2014 on 31 Dec 2013
GBP000 GBP000
Within 1 year 173 168
1 to 5 year's 692 671
After 5 year's 3,390 3,455
---------------------- ----------------------
Total 4,255 4,294
====================== ======================
The annual lease rent is payable by KTLPL in INR. The exchange
rate on the reporting date has been considered for deriving the GBP
amount for future minimum lease payment.
22. CONTINGENT LIABILITIES AND COMMITMENTS
The group has no (2013: GBP NIL) contingent liabilities as at 31
December 2014.
23. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
There is no notable events have occurred subsequent to the
balance sheet date.
24. AUTHORISATION OF FINANCIALS STATEMENTS
The consolidated financial statements for the Year ended 31
December 2014 were approved and authorised for issue by the board
of directors on 20 May 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EANSNFLDSEFF
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