Half Yearly Report

RNS Number : 1044U

Indian Restaurants Group PLC

16 December 2011

 



INDIAN RESTAURANTS GROUP PLC

(AIM: IRGP)

Unaudited interim results for the six months ended 30 September 2011

Chairman's Statement

Indian Restaurants Group is pleased to announce its interim results for the six months period ended 30 September 2011. There was a change in the accounting period and therefore the comparative results relate to six month period ended 31 March 2010. The group recorded a loss of £240,000 and a loss per share of 1.3p

The Group has operated Indian restaurants since the Company's acquisition of the Mela, Chowki and The Three Monkeys (a restaurant in Herne Hill which has now closed) in February 2008.  The expectation at that time was that the Group would be able to grow both organically and through acquisition.  However, against the background of the challenging economic conditions that have prevailed since 2008, the Company has not been able to implement this strategy successfully.

As stated in the Chairman's statement accompanying the release of the Company's unaudited results on 28 March 2011 we had, over the previous six months, been actively working in conjunction with our major shareholders with respect to evaluating alternative options to increase the scale of the operations.  In particular with the emphasis of scaling the business through acquisitions.  Despite our best efforts we had been unable to achieve this objective and therefore indicated that, in consultation with our shareholders, it had been decided to conduct a review of our operations.

The result of this review is that the Board has concluded that the interests of Shareholders would be best served by a realisation of the restaurant businesses thereby allowing the Company the chance to explore other investment opportunities that may offer Shareholders a better prospect of positive returns in the current economic environment.

The Company announced on 18 July that it had entered into an agreement to dispose of Chandan Limited, through which directly or indirectly all of the Company's business is operated, to Swadha Limited.  The total consideration for the Sale is £250,000 of which £150,000 was paid on completion at 1 September 2011 with the balance of £100,000 to be paid in 78 equal weekly instalments.

As a term of the Agreement IRG has agreed to capitalise its intercompany loans to the Chandan Group amounting to, in aggregate, £610,000. Swadha Limited is owed and controlled by Pranoti Singh, the wife of Kuldeep Singh who was until recently a director of IRG. Kuldeep Singh, a former employee of the Company, has waived all claims against the Company arising out of his employment or its termination.

Following on from the disposal of the restaurants the Company does not have any operating business. Pursuant to AIM Rule 15 has become an investing company. Its investing policy, which was adopted by shareholders, is to acquire either minority interests or controlling stakes, either through the issue of securities or for cash, in quoted and non-quoted companies operating in the leisure sector.

We are currently looking for a suitable opportunities and will update shareholders on our progress when appropriate.

Haresh Kanabar

Chairman

14 December 2011

Contacts:
Indian Restaurants Group plc	www.indianrestaurantsgroup.com
Haresh Kanabar, Chairman	[phone]
Alfredo Villa	[phone]
WH Ireland Limited	www.wh-ireland.co.uk
Mike Coe / Marc Davies	[phone]

Unaudited Consolidated Income Statement for the year ended 30 September 2011

	Note	Unaudited 6 Months ended 30 September 2011  £'000	Unaudited 6 Months ended 31 March 2010 £'000	Audited 18 Months to 31 March 2011 £'000	Audited Year ended 30 September 2009 £'000
Continuing activities
Revenue		-	1,265	3,598	2,470
Cost of sales		-	(249)	(810)	(657)
Gross loss/profit		-	1,016	2,788	1,813
Other operating income		-		10
Administrative expenses		(231)	(1,151)	(4,417)	(2,508)
Operating loss		(231)	(135)	(1,619)	(695)
Finance income		-	6	3	26
Finance costs		-	(6)	(1)	(10)
Loss on ordinary activities before taxation		(231)	(135)	(1,617)	(679)
Tax expense		-	-	-	26
Loss for the period from continuing activities		(231)	(135)	(1,617)	(653)
Discontinued operations
Loss for the period from discontinued operations		(9)	-	-	(405)
Loss for the period		(240)	(135)	(1,617)	(1,058)
Basic and diluted loss per share
From continuing operations	3	(1.2)p	(1.0)p	(9.6)p	(5.0)p
From discontinuing operations		(0.1)p	-	-	(3.1)p
		(1.3)p	(1.0)p	(9.6)p	(8.1)p

Unaudited Consolidated Balance Sheet at 30 September 2011          

	Note	Unaudited 6 Months ended 30 September 2011  £'000	Unaudited 6 Months ended 31 March 2010 £'000	Audited 18 Months to 31 March 2011 £'000
Assets
Non-current assets
Goodwill		-	1,473	475
Property, plant & equipment		1	336	292
		1	1,809	767
Current assets Inventories		-	18	20
Trade and other receivables		99	166	295
Cash and cash equivalents		112	403	142
Total current assets		211	587	457
Total assets		212	2396	1224
Liabilities
Current liabilities
Trade and other Payables		(195)	(464)	(755)
Financial liabilities- borrowings		-	(183)	(123)
		(195)	(647)	(878)
Total assets less current liabilities		17	1749	346
Non-current liabilities
Financial liabilities- borrowings		-	(150)	(89)
Provision for other liabilities and charges		-	-	-
Net assets		17	1599	257
Equity
Share Capital		93	65	1336
Deferred Share capital		1243	1243	-
Share premium account		3563	3451	3563
Share Based payments reserves		139	139	139
Retained losses		(5,021)	(3,299)	(4,781)
Equity attributable to equity holders of the parent		17	1,599	257

Unaudited Consolidated Statement of Changes in Equity

	Share capital - equity	Deferred share capital	Share premium	Share Based Payments Reserves	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Six months ended 31 March 2010
At 30 September 2009	1,308	-	3,451	139	(3,164)	1,734
Share re-organisation Share based payments	(1,243)	1243	-	-	-	6
Total comprehensive loss for the period	-	-	-	-	(135)	(135)
At 31 March 2010	65	1243	3,451	139	(3,299)	1,599
Period ended 31 March 2011
At 30 September 2009	1,308	-	3,451	139	(3,164)	1,734
Share re-organisation Share issue	(1,243) 28	1,243	112	-	-	140
Total comprehensive loss for the period	-	-	-	-	(1,617)	(1,617)
At 31 March 2011	93	1,243	3,563	139	(4,781)	257
Six months ended 31 September 2011
At 31 March 2011	93	1,243	3,563	139	(4,781)	257
Share re-organisation	-	-	-	-	-	-
Total comprehensive loss for the period	-	-	-	-	(240)	(240)
At 30 September 2011	93	1,243	3,563	139	5,021	17

 

Unaudited Consolidated Cash Flow Statement for the Year ended 30 September 2011

	Note	Unaudited 6 Months ended 30 September 2011  £'000	Unaudited 6 Months ended 31 March 2010 £'000	Audited 18 Months to 31 March 2011 £'000
Cash outflow from operating activities		(85)	(162)	(435)
Corporation tax paid			-
Net cash flow from operating activities		(85)	(162)	(435)
Cash flows from investing activities
Purchase of property, plant and equipment		-	(3)	(13)
Disposal of discontinued operations (net of cash balances transferred)		196	-	-
Interest received		-	6	3
Net cash from/(used in) investing activities		196	3	(10)
Cash flows from financing activities
Proceeds of share issues			-	140
Repayment of bank loans and finance leases		(141)	(63)	(100)
Interest paid		-	(6)	(1)
Net cash used in financing activities		(141)	(69)	39
Decrease in cash and cash equivalents		(30)	(228)	(406)
Cash and cash equivalents at start of the period		142	548	548
Cash and cash equivalents at end of the period		112	320	142

Notes to the unaudited consolidated interim statement for the period ended 30 September 2011

 

1.         Basis of preparation

Indian Restaurant Group Plc is a public limited company incorporated and domiciled in United Kingdom. The principal activity of the company is to operate a chain of Indian restaurants.  The company's ordinary shares are traded on the AIM market of the London Stock Exchange plc ("AIM").

These final accounts have been prepared using the accounting policies to be applied in the annual report and accounts for the period ended 30 September 2011. These are consistent with those included in the previously published annual report and accounts for the period ended 31 March 2011, which have been prepared in accordance with IFRS as adopted by the European Union.

The preparation of the interim statement requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

The interim financial statements are unaudited and do not constitute statutory accounts as defined in section 434(3) of the Companies Act 2006. 

The figures for the period ended 31 March 2011 have been extracted from the audited annual report and accounts that have been delivered to the Registar of Companies. Welbeck Associates, Indian Restauraunt Group's auditors, reported on those accounts under section 495 of the Companies Act 2006. Their report was unqualified and did not contain a statement under section 498 of that Act.

2.         Significant accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the group's financial statements.

Basis of consolidation

The consolidated financial information for the period to 30 September 2011 includes the results of Indian Restaurants Group Plc and its subsidiary undertakings for that period.  Subsidiary undertakings are entities over which the group has the power to control the financial and operating policies so as to obtain benefits from the activities. The group obtains and exercises control through voting rights.

The group adopts the purchase method in accounting for the acquisition of subsidiaries. On acquisition the cost is measured at the fair value of the assets given, plus equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the acquisition. The assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at their fair value at the date of acquisition. Any excess of the fair value of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Any deficiency of the fair value of the consideration below the fair value of identifiable net assets acquired is credited to the income statement in the period of the acquisition.

The results of subsidiary undertakings acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal. 

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. Inter-company transactions and balances between group companies are eliminated.

Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The group makes estimates and assumptions concerning the future. Whilst the directors believe that the estimates and assumptions used in the preparation of the interim financial statements are reasonable, the resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates that have a significant risk of causing a material adjustment to the carrying values of assets and liabilities within the next financial year are discussed below.

1)   Impairment of goodwill

The group tests whether goodwill has suffered any impairment annually or when there is an indication of impairment. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations which require the use of estimates.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the company's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is included in intangible assets and is tested annually for impairment or when there is an indication of impairment. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

On disposal of a subsidiary, the amount of goodwill attributable is included in the determination of the profit and loss on disposal.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation.

The charge for depreciation is calculated to write down the cost of tangible fixed assets to their estimated residual values by equal annual instalments over their expected useful lives which are as follows:

    Fixtures and fittings                15% reducing balance
    Plant & machinery                  15% reducing balance
    Motor Vehicles                        25% reducing balance
    Leasehold building                  over the term of the lease

Impairment provisions are made where the carrying value of tangible fixed assets exceeds the recoverable amount.

Revenue recognition

Revenue is recognised on the sale of food and beverages, service charges and gratuities, exclusive of value added tax.

Taxation

Current tax, including UK corporation tax and foreign tax, is provided on the group's taxable profits, at amounts expected to be paid using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

Deferred taxation is provided in full using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates that have been enacted at or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. 

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Leased assets

Expenditure on operating leases is charged to the income statement on a basis representative of the benefit derived from the asset, normally on a straight line basis over the lease period.

Where fixed assets are financed by financing arrangements which give rights approximating to ownership they are treated as if they had been purchased outright at their fair value and the corresponding commitments are shown in the balance sheet as obligations under finance leases and hire purchase contracts. Depreciation of fixed assets acquired under finance leases and hire purchase contracts is calculated to write off the attributed cost over the shorter of the lease or contract term and their estimated useful lives by equal annual instalments. The excess of the total rentals over the amount capitalised is treated as interest which is charged to the profit and loss account in proportion to the amounts outstanding under the lease and hire purchase contracts.

Share based payments

The cost of equity-settled transaction with suppliers of goods and services is measured by reference to the fair value of the good or service received, unless that fair value cannot be estimated reliably. The fair value of the good or service received is recognised as an expense as the Group receives the goods or service. The cost of equity-settled transactions with employees, and transactions with suppliers where fair value cannot be estimated reliably, is measured by reference to the fair value of their equity instrument. The fair value of the equity instrument is determined at the date of grant, taking into account market based vesting conditions. The fair value is determined using the Black Scholes Model.

No expense is recognised for awards that do not ultimately vest, except for awards where the vesting conditions are conditional upon market conditions, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management's best estimate of the achievement or otherwise of non-market conditions, the number of equity instruments that will ultimately vest, or in the case of an instrument subject to a market condition, be treated as vesting as described above. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in equity.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid funds with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowing in current liabilities on the balance sheet.

Financial instruments

Financial assets and liabilities are recognised in the balance sheet when the Group becomes party to the contractual provisions of the instrument.

Trade and other receivables

Trade receivables are measured at cost less any provision necessary when there is objective evidence that the group will not be able to collect all amounts due.

Trade and other payables

Trade and other payables are not interest bearing and are measured at original invoice amount.

3.       Loss per ordinary share

		Unaudited 6 Months ended 30 September 2011  £'000	Unaudited 6 Months ended 31 March 2010 £'000	Audited 18 Months to 31 March 2011 £'000
Basic
Loss from continuing activities		(231)	(134)	(1617)
Loss from discontinuing activities		(9)	-	-
		(240)	(134)	(1617)
Weighted average number of shares		18,659	13,080	16806
Basic loss per share (pence)
From continuing operations		(1.2)p	(1.0)p	(9.6)p
From discontinuing operations		(0.1)p	-	-
		(1.3)p	(1.0)p	(9.6)p
There was no dilutive effect from the share options outstanding during the period.

 

END

 

 

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