Source - RNS
RNS Number : 2565L
EIH PLC
30 September 2016
 

 

 

EIH PLC

("EIH" or the "Company")

 

 

Interim Results

The Company announces its interim results for the six months from 1 January 2016 to 30 June 2016.  A copy of this announcement will shortly be available for inspection at www.eihplc.co.uk.

Chairman's Statement

The unaudited net assets of the Company as at 30 June 2016 were valued at US$31.4m and therefore net asset value ("NAV") per share at that date was 48.7 cents based on 64,500,002 ordinary shares in issue (31 December 2015 NAV per share: 49.5 cents).

 

The NAV per share decreased by 1.6% in the period under review.

 

After the period under review, on 13 July 2016, the Company made a capital distribution to shareholders of 2.5 cents per share, equivalent to approximately US$1.61m.

 

Total operating costs during the period were US$0.23m, or 2.7% above the comparable prior year figure.  In addition, the Company paid certain annual management fees and expenses to Evolvence India Fund PCC ("EIF") in respect of its commitments to that fund.  These costs are embedded in the capital account of EIF and do not appear in the profit or loss for the Company.

 

The Company's investment portfolio comprises the following (based on unaudited values as at 30 June 2016):

 

Table 1. Investments

Capital Commitment

Capital Invested

Capital Distribution

Fair value Adjustment

Fair      Value


US$'000

US$'000

US$'000

US$'000

US$'000

Fund Investments (equity)






Evolvence India Fund PCC

45,120

45,120

(24,982)

482

20,620

Direct Investments (equity)






EIF Co Invest VII (RSB       Group)

 

6,970

 

6,970

 

(29)

 

(34)

 

6,907

EIF Co Invest X (Gland Pharma Limited)

 

466

 

466

 

-

 

888

 

1,354


52,556

52,556

(25,011)

1,336

28,881

 

Further details on the Company's investment portfolio are set out below and in Note 5 to the interim financial statements.

 

 

EIF

EIF has now drawn down 100% of its committed capital. 

As at 30 June 2016 the Company had US$20.1m invested in EIF (capital called of US$45.1m, less refund of capital contributions of US$25.0m), equivalent to 31.2 cents per share.  At the reporting date the Fair Value (unaudited) of the Company's investment in EIF was US$20.6m, equivalent to 31.9 cents per share, representing a 1.03 x multiple over cost.

During the period under review the S&P BSE SENSEX Indian stock market index advanced by 3.4% in local currency and by 1.4% in US dollar terms. The currency picture was relatively stable in the period under review and it is also noted that the Indian Rupee ("INR") weakened by 1.9% against the US Dollar during the period.

EIF's underlying private equity funds performed well such that on the basis of beginning and end period fair values, and adjusting for drawdowns and distributions made during the period, the fair value of EIF's underlying funds increased by approximately 2.4% in US Dollar terms, while their value increased by approximately 4.4% in INR terms. On the same basis of measurement, however the aggregate value of EIF's direct investments decreased by approximately 0.4% in US Dollar terms, while in INR terms the increase was approximately 1.6%.

EIF's private equity fund exposure is weighted towards funds with vintages of 2006 and later. The four funds of these vintages comprise 78.1% of EIF's private equity fund weighting. The remaining six funds, with a 21.9% weighting, are all 2004 and 2005 vintages. EIF's three largest funds constitute 70% of EIF's private equity fund weighting. These funds are Jacob Ballas India Fund III (Growth / PIPE category), JMF India Fund I (Growth category) and HI-REF International LLC (Real Estate category). The majority of EIF's ten underlying private equity funds have fully drawn down their committed capital from EIF, and EIF's remaining commitments are concentrated in one fund, HI-REF International LLC Fund.  During the period under review, EIF received net distributions from all but four of its funds, and the amount received was approximately 50% more as compared to prior period figure. 

The Directors have reviewed certain underlying financial information provided to us by EIF's Investment Manager and we remain confident that as EIF's underlying portfolio matures and further realisations are achieved, further cash distributions will be received.

 

 RSB Group ("RSB")

RSB is a large automotive components group based in Pune with a multi-product portfolio comprising of propeller shafts, gears, axles, machined engine components, trailers and construction equipment parts. The Company's direct investment in RSB is held through EIF Co Invest VII. The shareholders in EIF Co Invest VII are the Company and EIF, which invested US$7.0m and US$10.0m respectively, for a total investment of US$17.0m. No fees are payable on the Company's investment in EIF Co Invest VII, while the Company's indirect investment in RSB (through its interest in EIF) attracts standard management and carried interest fee arrangements. Through the above arrangements, and on a look-through basis, the Company has a total of US$8.7m invested in RSB (at cost) compared to the US$7.0m invested in RSB through EIF Co Invest VII.

Through the above arrangements, and on a look-through basis, the fair value of the Company's total interest in RSB is 13.5 cents per share; while the fair value of the Company's direct interest in RSB (held through EIF Co Invest VII) is 10.7 cents per share.  These values represent a 1.0 times multiple over cost.  The Fair Value of the Company's interest in RSB is based on a valuation performed by EIF's investment manager.

Table 2. Investments (Fair Values)

As per LP reports

RSB

(EIF)

Gland

(EIF)

Pro-forma

 

US$'000

US$'000

US$'000

US$'000

Fund Investments

 

 

 

 

EIF (PE funds)

12,281

 

 

12,281

EIF (direct investments)

7,990

(1,787)

(678)

5,525

EIF (other)

349

 

 

349

Direct Investments

 

 

 

 

RSB Group

6,907

1,787

 

8,694

Gland Pharma Limited

1,354

 

678

2,032

 

28,881

-

-

28,881

 

Table 2 extracts the Company's "look through" interests in Gland Pharma Limited ("Gland") and RSB (from EIF) and adds them to the Company's direct interests in Gland and RSB (held by EIF Co Invest X and EIF Co Invest VII respectively).  On this basis, 37.1% of the Company's Financial Assets at Fair Value (US$10.7m, equivalent to 16.6 cents per share), is accounted for by its interests in Gland and RSB on an underlying pro-forma basis. As stated in the 2015 Annual Report the distribution of the Company's share of its interest in EILSF Co-invest I is expected to occur in early 2017.

Table 2 further shows that 42.5% of the Company's Financial Assets at Fair Value is accounted for by its interests in EIF's ten PE fund investments, and a further 19.1% by its interests in EIF's direct investments (excluding Gland and RSB).

Other matters

At the date of this report, net cash balances held by the company amount to US$0.8m.

Our objective remains to realise assets at the appropriate time and value, and to return the proceeds, less expenses, to our shareholders.

On behalf of the Board of Directors, I thank all Shareholders for their support.

Respectfully yours,

 

Rhys Cathan Davies

29 September 2016

For further information, please contact:

 

EIH PLC

Rhys Davies

Tel: +41 (0) 79 620 0215

 

 

Nplus1 Singer Advisory LLP (Nominated Adviser)

James Maxwell / Alex Laughton-Scott

+44 (0)20 7496 3000

 

 

 

  

EIH PLC

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2016



For the period                            from 1 January

2016 to

 30 June 2016

 

For the period                            from 1 January

2015 to

 30 June 2015

 

For the period

from 1 January

2014 to

30 June 2014

 


 Note

US$'000

US$'000

US$'000

Income

 Interest income on cash balances


 

1

 

-


Fair value movement on investments at fair value through profit or loss

 

 

 

(318)

 

293

 

1,909






Net investment (expenditure)/income


(317)

293

1,909

Expenses





Administrative expenses


(107)

(94)

(113)

Legal and other professional fees


(98)

(108)

(112)

Audit fees


(20)

(23)

(26)

Other expenses/income


(5)

1

-

Total operating expenses


(230)

(224)

(251)

(Loss)/profit before taxation for the period


(547)

69

1,658

Income tax expense


-

-

-

(Loss)/profit after taxation for the period


(547)

69

1,658

Other comprehensive income


-

-

-

Total comprehensive (expenditure)/income for the period


 

(547)

 

69

1,658






Basic and fully diluted (loss)/earnings per share (US cents)

 

6

 

(0.85)

 

0.11

 

2.57

 

The accompanying notes form an integral part of these interim financial statements.

 

 

EIH PLC

UNAUDITED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2016

 




As at 30 June

2016

As at 31 December 2015



Note 

US$'000

US$'000






Non-current assets





Financial assets at fair value through profit or loss


 

 

28,881

 

29,922

Total non-current assets



28,881

29,922






Current assets





Trade and other receivables

25

19




 

 


Cash and cash equivalents



2,620

2,114

Total current assets



2,645

2,133

Total assets



31,526

32,055






Equity





Issued share capital



1,265

1,265

Share premium



26,595

26,595

Retained earnings



3,516

4,063

Total equity



31,376

31,923






Current liabilities





Trade and other payables



150

132

Total current liabilities



150

132

Total liabilities



150

132

Total equity and liabilities



31,526

32,055

 

The accompanying notes form an integral part of these interim financial statements.

EIH PLC

UNAUDITED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2016





 


Share capital

 

US$'000 

Share

premium

US$'000

Retained earnings

US$'000

Total

 

US$'000

Balance at 1 January 2015

1,265

26,595

4,276

32,136

Total comprehensive income





Profit for the period

-

-

69

69

 

Transactions with owners of the company recorded directly in equity





Return of capital

-

-

-

-






Balance at 30 June 2015

 1,265

26,595

4,345

32,205






 

Balance at 1 January 2016

 

1,265

 

26,595

 

           4,063

 

31,923

Total comprehensive income





Loss for the period

-

-

(547)

(547)

 

Transactions with owners of the company recorded directly in equity





Return of capital

-

-

-

-






Balance at 30 June 2016

1,265

26,595

3,516

31,376

 

The accompanying notes form an integral part of these interim financial statements.

EIH PLC

UNAUDITED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS TO 30 JUNE 2016

 



 

For the period from

 1 January 2016 to

30 June 2016

 

For the period from

 1 January 2015 to

30 June 2015


Note

US$'000

US$'000

Cash flows from operating activities




(Loss)/profit before taxation


(547)

69

Adjustments:




Fair value movement on investments at fair value through profit or loss

 

5

318

(293)

Interest income on cash balances


(1)

-

Operating loss before working capital changes


(230)

(224)

Increase in trade and other receivables


(6)

(7)

Increase/(decrease) in trade and other payables


18

(4)

Net cash used in operations


(218)

(235)





Net cash used in operating activities


(218)

(235)

Cash flows from investing activities




Interest income on cash balances


1

-

Capital distribution received

5

723

723





Net cash generated by investing activities


724

723

Cash flows from financing  activities




Return of capital


-

-

Net cash used in financing activities


-

-

Net increase in cash and cash equivalents


506

488

Cash and cash equivalents at 1 January


2,114

1,539

Cash and cash equivalents at 30 June


2,620

2,027

 

The accompanying notes form an integral part of these interim financial statements.



Notes to the Unaudited Interim Results

For the six months ended 30 June 2016

1             The Company

EIH PLC (formerly Evolvence India Holdings plc) was incorporated and registered in the Isle of Man under the Isle of Man Companies Act 1931-2004 on 10 November 2006 as a public company with registered number 118297C.  On 23 March 2011 the Company re-registered under the Isle of Man Companies Act 2006.

Pursuant to a prospectus dated 19 March 2007 there was a placing of up to 65,000,000 Ordinary Shares of £0.01 each. The number of Ordinary Shares in issue immediately following the placing was 65,000,002. The shares of the Company were admitted to trading on the Alternative Investment Market of the London Stock Exchange ("AIM") following the close of the placing on 23 March 2007.

The Company's agents perform all significant functions. Accordingly, the Company itself has no employees.

2             Duration

The Company currently does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the annual general meeting of the Company in 2018 a resolution will be proposed that the Company ceases to continue as presently constituted. Shareholders holding at least fifty one per cent of the shares must vote in favour of this resolution for it to be passed. If the resolution is not passed, a similar resolution will be proposed at every third annual general meeting of the Company thereafter. If the resolution is passed, the Directors will be required, within 3 months of the resolution, to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.

3             Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out below.

3.1          Basis of presentation

These interim financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34: Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements of the Company for the year ended 31 December 2015. The interim financial statements are unaudited.

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2015.

 

Notes to the Unaudited Interim Results

For the six months ended 30 June 2016 (continued)

3.2              Investments at fair value through profit or loss

Investments are designated as financial assets at fair value through profit or loss. They are measured at fair value with gains and losses recognised through profit or loss.

The Company's investments at fair value through profit and loss comprise funds and co-investment vehicles, where fair value is estimated by the Directors to be the Company's share of net asset value per latest financial results reported by the underlying fund administrator.

3.3              Segment reporting

The Company has one segment focusing on maximising total returns through investing in an Indian private equity portfolio of investments. No additional disclosure is included in relation to segment reporting, as the Company's activities are limited to one business and geographic segment.

4                                 Net asset value per share

 

The unaudited net asset value per share as at 30 June 2016 is 48.7 cents per share based on 64,500,002 ordinary shares in issue as at that date (31 December 2015: 49.5 cents per share based on 64,500,002 ordinary shares).

5             Financial assets at fair value through profit or loss

 

The objective of the Company is to make indirect investments in Indian private equity funds and companies via Mauritian based investment funds and to also co-invest directly in certain portfolio companies of the underlying funds. As at 30 June 2016, the investment portfolio comprised the following assets:

Investments (Unlisted)

Capital Commitment

Capital Invested

Capital Distribution

Fair value Adjustment

Fair      Value


US$'000

US$'000

US$'000

US$'000

US$'000

Fund Investments (equity)






Evolvence India Fund PCC

45,120

45,120

(24,982)

482

20,620

Direct Investments (equity)






EIF Co Invest VII (RSB       Group)

 

6,970

 

6,970

 

(29)

 

(34)

 

6,907

EIF Co Invest X (Gland Pharma Limited)

 

466

 

466

 

-

 

888

 

1,354


52,556

52,556

(25,011)

1,336

28,881

 

  

Notes to the Unaudited Interim Results

 

For the six months ended 30 June 2016 (continued)

5             Financial assets at fair value through profit or loss (continued)

 

The fair value of the Company's investments has been estimated by the Directors with advice from Evolvence India Advisors Inc.  The movement in investments during the period was as follows:







30 June 2016

US$'000

31 December 2015

US$'000

Fair value brought forward


29,922

30,626

Capital distributions


(723)

(1,012)

Movement in fair value


(318)

308





Fair value at period/year end


28,881

29,922

 

The outstanding capital commitment as at 30 June 2016 is US$nil (31 December 2015: US$nil).

Evolvence India Fund PCC (EIF)

 

Evolvence India Fund PCC, a Protected Cell Company formed under the laws of Mauritius having limited liability, is a private equity fund of funds with a co-investment pool, focusing primarily on investments in India. The fund size of EIF is US$250m, of which approximately two-thirds have been invested in different private equity funds (including growth capital, mezzanine and real estate funds) with significant focus on India and the balance has been invested in co-investment opportunities, primarily in Indian companies or companies with significant operations in India. The fund investments of EIF include Baring India Private Equity Fund II, IDFC Private Equity Fund II, India Value Fund II (Formerly GW Capital), Leverage India Fund, New York Life Investment Management India Fund II, Ascent India Fund, JM Financial India Fund I, HI-REF International LLC Fund, NYLIM Jacob Ballas India Fund III and IDFC Private Equity Fund III.

Valuation basis

The fair value of the investment in EIF is based on the Company's share of the net assets of EIF at 30 June 2016 per its results as reported by the underlying fund administrator.  The financial statements of EIF are prepared under IFRS, with all investments stated at fair value.  The valuation of the investment portfolio of EIF has been performed by its investment manager at 30 June 2016.  The investment portfolio comprises investments in private equity funds, where fair value is based on reported net asset values, and co-investments in private companies where fair values are based on valuation techniques.


Notes to the Unaudited Interim Results

 

For the six months ended 30 June 2016 (continued)

5              Financial assets at fair value through profit or loss (continued)

 

EIF Co Invest VII

 

The Company has invested US$7m in RSB Group through a Special Purpose Vehicle (SPV), EIF Co Invest VII. RSB Group is a leading manufacturer of automotive components and construction aggregates.  The fair value of the investment in Co Invest VII is based on the Company's share of the net assets of Co Invest VII at 30 June 2016 per its financial results as reported by the underlying fund administrator.  The financial statements of EIF Co Invest VII are prepared under IFRS, with all investments stated at fair value.  The underlying valuation of RSB Group, which is unlisted, is based on the trading multiples of RSB's comparable group and the application of a liquidity discount thereto.

EIF Co Invest X

 

The Company held its interest in Gland Pharma Limited through an SPV, EIF Co Invest X.  EIF Co Invest X sold its interest in Gland Pharma Limited during the year ended 31 December 2014, but retained an amount of the sale proceeds to address any possible contingencies.  The fair value of the investment in EIF Co Invest X is based on the Company's share of the net assets of EIF Co Invest X at 30 June 2016 per its financial results as reported by the underlying fund administrator.  The financial statements of EIF Co Invest X are prepared under IFRS.

6             (Loss)/earnings per share

 

Basic and fully diluted (loss)/earnings per share are calculated by dividing the (loss)/profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period:

 







30 June 2016

'000

30 June 2015

'000

(Loss)/profit attributable to equity holders of the Company (US$)


(547)

69

Weighted average number of ordinary shares in issue


64,500

64,500





Basic (loss)/earnings per share (cents per share)


(0.85)

0.11

 

There is no difference between the basic and fully diluted loss per share for the period.

 

7             Subsequent event - return of capital

 

On 13 July 2016, the Company made a capital distribution to shareholders of 2.5 cents per share, equivalent to approximately US$1.61m.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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