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West Pioneer Props (WPR)

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Friday 21 December, 2012

West Pioneer Props

Interim Results

RNS Number : 0840U
West Pioneer Properties Limited
21 December 2012
 



Press Release

21 December 2012

 

West Pioneer Properties Limited

 

("West Pioneer" or the "Company")

 

Unaudited Interim Results

 

West Pioneer Properties Limited (AIM:WPR), a leading developer and operator of shopping malls and mixed use developments in west and south India, announces its unaudited interim results for the 6 months ended 30 September 2012.

 

Highlights

·    

Major boost to Indian retail sector as Foreign Direct Investment ("FDI") in multi-brand retail approved by Parliament on 7 December 2012. This has improved confidence in the retail sector

·    

Steady progress being made in the Company's commercial and residential development projects at Kalyan

·    

Repositioning of the Kalyan Mall into a lifestyle/value mall progressing well but has led to a short term fall in rental income over the period

·    

The Company has successfully negotiated a new debt facility of US$11.83 million to fund capital expenditure at the Kalyan Mall, construction of commercial plaza, towers 3 and 4 at Kalyan and construction work at Aurangabad.  The facility will be drawn down in phases, as required, over the next 1-2 years

·    

20% depreciation in average value of Indian Rupee against the US Dollar for the period compared to the financial year ended 31 March 2012, materially affecting the reported profit

·    

Balance sheet remains robust as a result of prudent cash management with period end cash and cash equivalents of US$0.97million, while maintaining good levels of ongoing investment into inventory, together with an additional US$11.42 million unutilised bank facilities in place

·    

Development approvals at Nashik being pursued. Ground break plans will be announced once approvals are available.

 

Commenting on the results, Amit Jatia, Chairman of West Pioneer, said: "The period has been one of mixed news for the Company as its retail operations have been affected, as envisaged, by the ongoing re-engineering of the tenant mix in the Kalyan Mall.  This is reflected in the fall in rental income which is expected to continue in the current financial year.  However, once the re-positioning is completed this is likely to result in a rise in rental income.

 

"The Mall is therefore well placed to take advantage of increased confidence in the retail sector following the approval by Parliament of the relaxation of restrictions in Foreign Direct Investment.  Progress in the residential and commercial development is continuing steadily and this should result in improved financial performance for the Company in the near future.

 

"The results, particularly the income statement, have been materially affected by depreciation in the value of Indian Rupee against the US Dollar over the last year.

 

"Although moving at slower pace, we remain confident of the intrinsic underlying values in the Aurangabad and Nashik properties.  The Company is confident of making further progress on these sites in the future."

 

-Ends-

 

 

For further information:

 

West Pioneer Properties Limited

 


Nitin Dattani, Executive Director

Tel: +44 (0) 20 8424 0690

 

Shore Capital:

 


Anita Ghanekar / Edward Mansfield

 

Tel: +44 (0) 20 7408 4090

Media enquiries:

 

Abchurch Communications:

 


Joanne Shears

 

Tel: +44 (0) 20 7398 7709

[email protected]

www.abchurch-group.com



Chairman's Statement

 

Indian Economy

Challenges from sluggish economic growth and high inflation continue with GDP expected to rise at 5.7% in the year to March 2013 and inflation currently running at 7.2%, well above the Central Bank's target of 5%. Business confidence has been boosted by recent steps taken by Central government allowing Foreign Direct Investment ("FDI") in the retail, aviation and insurance sectors. However, concerns in relation to rising levels of fiscal deficit and risk of spill-over of global economic slowdown still loom over the Indian economy.

 

Impact of depreciation of Rupee

The Indian Rupee has depreciated by around 20% against the US Dollar from the average exchange rate for the financial year ended 31 March 2012compared to the accounting period in the six months to 30 September 2012. This has had a material impact the income statement. 

 

Retail

With the relaxation of FDI in multi-brand retail, retailers are preparing to scale up their operations. Many prominent international brands have expressed intentions to enter the Indian retail market revalidating strength and attractiveness of this largely unexploited industry. The policy aims to deploy FDI capital in retail infrastructure and other auxiliary industries. In addition to helping penetration of organised retail, this will also provide impetus to overall economic growth.

 

Residential

This sector is growing steadily on both volume and price fronts. In established markets, developers are producing luxury developments with ultra modern amenities. As units are becoming more expensive in established markets, further projects are being launched in extended suburbs to meet the demand in middle and lower segments. The outlook of the residential sector remains positive with ample opportunities in various micro markets catering to different income levels. 

 

Financial Review

In the period ended 30 September 2012, West Pioneer achieved revenue and other income of US$1.7million (2011: US$2.4million), including property rentals and other operating income of US$1.6million (2011: US$2.3million). Loss before tax was US$(1.7million) (2011: US$(0.6) million) and basic loss per share was US$(0.0191) (2011: Loss US$(0.0033)). Net assets at the period end were US$55.4million (2011: US$61.1million), including cash and short term deposits of US$1.0 million (2011: US$1.8 million). Interest bearing loans and borrowings increased from US$10.0 million to US$10.2million during the period, inclusive of debt repayments.

 

The Company has also continued to manage its working capital carefully and after having invested US$2.9 million in increasing its inventory, the Board is pleased to still be able to report US$1.0 million of cash on its balance sheet.

 

Operating Review

Kalyan

The Company has been successful in implementing its retail-led mixed use development model at Kalyan (the "Mall"). As a mixed use development, West Pioneer has the benefit of direct access to consumers through the residential and commercial projects, which in turn offers valuable consumer insight and synergies for use in the Mall itself. As previously announced, these insights have resulted in the strategic focus for the Mall shifting to consumer value and the successful positioning of the Mall as a value and lifestyle destination.

 

Kalyan - Retail

Phase I of the 500,000 sq. ft. Mall includes a fully functional food court and entertainment zone on the second floor, along with other retail offerings on Lower Ground and Ground floors. The repositioning exercise undertaken which is focused on establishing the Mall as a leading value shopping and lifestyle destination is in progress.  This has led to a short term loss of income.  Capital and other expenditure is also being incurred as part of this exercise which is aimed at improving the look and feel of the Mall and upgrading infrastructure at the premises. 

 

However, the Company is confident that on completion of this exercise the Mall will provide enhanced opportunities to lifestyle retailers, resulting in higher rentals and footfalls in the near future, which is anticipated to have a positive effect on Mall profitability.

 
Leasing levels at the Mall remained steady at 74% during the period and the Company is currently in negotiation with a number of other major brands to lease the remaining retail space.

 

Kalyan - Residential

The Company is pleased that the development of the first two residential towers of Phase II at Kalyan is progressing well. The first tower is nearing completion with final activities under way. Completion of tower A is expected to be in the first quarter of FY14.  The profits from completion are therefore expected be recognised in the September 2013 interim results. The second tower development is on schedule and is currently completed to the 17th floor. Response from customers remains encouraging with 89% of the units pre-sold in these two towers.

 

Planning permissions for the fourth tower are in progress and the launch will take place upon receipt of these planning permissions.  The third tower, which is already approved, will be launched together with the fourth tower. The fourth tower will see the total residential area being developed at Kalyan rising to over 810,000 sq. ft.

 

Kalyan - Commercial plaza

Significant progress has been made in Phase III of the development, a commercial plaza ("Metro Plaza") of 68,000 sq. ft. of office space with the building structure completed recently. Work is progressing well and the development is expected to be completed in the next few months. Metro Plaza will have small commercial units for leasing on the ground floor and units for sale on the first and second floors, with the target market being self-employed professionals such as doctors, lawyers and architects. The response to the development continues to be encouraging with 40% of the space pre-sold at an estimated 50% premium over current residential sale rates.  This is in line with the Company's strategy to take advantage of opportunities where the maximum value can be generated.

 

Nashik

Development permissions at Nashik are being pursued with various authorities and ground break will be announced once these permissions are in place. The Company is confident of initiating activities on this site in the future and exploiting the intrinsic value the Nashik property carries.

 

Aurangabad

The Company has commenced development of retail and warehousing space at Aurangabad with an intention to sell on completion.

 

Outlook

The Company's focus in the near term remains on the repositioning and refurbishment of the Kalyan mall and establishing it as a value and lifestyle destination. This in turn is likely to increase revenues and help support the long term plans of the Company. In addition, the Company is optimistic of earning good rental income from the ground floor space at the Metro Plaza project on completion.  The Development of residential and commercial projects at Kalyan is also a priority and the Company intends to deliver these projects to customers in a phased manner.  

 

The Company is confident of making further progress in the development of the Nashik and Aurangabad sites in the near future and will update shareholders on the progress of these projects. The Board is confident of continuing progress on establishing West Pioneer as a formidable brand standing for quality and transparency among retailers and consumers. The Board believes strongly in the Company's ability to deliver growth over the longer term.

 

Amit Jatia

Chairman

20 December 2012

 

 

 

 

INTERIM CONSOLIDATED INCOME STATEMENT

For the six month period ended 30 September 2012

 








2012

2011


Notes


Unaudited  




$

$






Revenue





Property rentals



826,275

1,147,780

Other operating income



818,082

1,153,868

Total Revenue



1,644,357

2,301,648

Finance and other income

6


105,897

106,812

Total Income



1,750,254

2,408,460






Expenses





Property revaluation loss



(669,925)

(46,943)

Direct operating expenses for rent-earning properties



(1,138,976)

(1,132,494)

Administrative expenses



(757,160)

(1,010,806)

Selling and distribution costs



(189,685)

(232,322)

Finance costs

7


(734,967)

(585,817)

Total expenses



(3,490,713)

(3,008,382)

Loss before tax



(1,740,459)

(599,922)

Income tax credit

8


216,766

335,092






Loss after tax



(1,523,693)

(264,830)






Attributable to:

Equity holders



(1,523,693)

(264,830)











Earnings per share (attributable to equity holders)

9




Basic



(0.0191)

(0.0033)

Diluted



(0.0190)

(0.0033)

 

 

  

 

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six month period ended 30 September 2012

 





2012

2011



Unaudited



$

$






Loss for the period



(1,523,693)

(264,830)






Exchange loss on  translation of foreign operations



(832,077)

(5,759,269)






Other comprehensive loss for the period, net of tax



(832,077)

(5,759,269)






Total comprehensive loss for the period, net of tax



(2,355,770)

(6,024,099)






Attributable to:





Equity holders



(2,355,770)

(6,024,099)




(2,355,770)

(6,024,099)

 

 



INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2012

 



30 September

31March



2012

2011

2012


Notes

Unaudited

Audited



$

$

$

Assets





Non-current assets





Property, plant and equipment


1,622,635

3,151,545

 1,671,041

Investment properties

10

53,810,775

68,557,254

54,329,562

Intangible assets


4,542

8,385

6,321

Other non-financial assets


11,913

-

16,103

Other financial assets


335,388

289,769

322,879

Advance income tax


182,447

292,369

308,076



55,967,700

72,299,322

56,653,982

Current assets





Inventories

11

32,551,634

10,081,640

29,557,631

Investments - held for trading

12

-

435,120

438,592

Trade and other receivables

13

920,500

1,068,846

 966,668

Other non-financial assets


719,702

250,818

531,693

Prepayments


84,754

175,867

43,501

Cash and short-term deposits

5

967,153

1,760,516

771,640



35,243,743

13,772,807

32,309,725

Total Assets


91,211,443

86,072,129

 88,963,707






Equity and liabilities





Equity attributable to the equity holders





Issued capital


7,996,130

7,996,130

7,996,130

Share premium


45,717,870

 45,717,870

45,717,870

Retained earnings


15,140,782

17,325,675

  16,664,475

Employee equity benefit reserve


561,185

554,104

559,427

Foreign currency translation reserve


(14,009,168)

(10,502,064)

(13,177,091)



55,406,799

61,091,715

57,760,811

Non current liabilities





Interest bearing loans and borrowings

17

7,534,519

-

4,453,381

Advance from sale of units


12,520,340

5,493,409

8,269,352

Other financial liabilities


4,108,163

1,018,516

3,817,688

Other non-financial liabilities


34,394

15,300

6,282

Employee benefit liability


51,341

49,139

48,620

Deferred tax liability


6,174,691

7,918,438

6,488,338



30,423,448

14,494,802

23,083,661

Current liabilities





Trade and other payables


1,050,446

1,848,949

1,442,463

 

Interest bearing loans and borrowings

17

2,691,491

7,423,863

5,552,766

 

Other financial liabilities


1,614,613

1,182,870

1,107,284

 

Other non-financial liabilities


24,646

29,930

16,722

 



5,381,196

10,485,612

8,119,235

 

Total Liabilities


35,804,644

24,980,414

31,202,896

 

Total Equity and Liabilities


91,211,443

86,072,129

88,963,707

 


INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Forthe six month period ended 30 September 2012

 

 


Attributable to equity holders


Issued

Share

Retained

Employee equity benefits

Foreign currency translation

Total


capital

premium

earnings

reserve

 reserve

Equity


$

$

$

$

$

$

 

Balance as at 1 April 2012

7,996,130

45,717,870

16,664,475

559,427

(13,177,091)

57,760,811

 

Loss for the period

                 -  

                 - 

(1,523,693)

-

-

(1,523,693)

 

Other comprehensive loss 

                 -  

                 -  

-

-

(832,077)

(832,077)

 

Total comprehensive loss

-  

-  

(1,523,693)

-

(832,077)

(2,355,770)

 

Share based payment

                 -  

                 -  

-

1,758

-

1,758

 

Balance as at 30 September 2012

7,996,130

45,717,870

15,140,782

561,185

(14,009,168)

55,406,799

 








 

 

 







 

Balance as at 1 April 2011

7,996,130

45,717,870

  17,449,183

       690,216

(4,742,795)

   67,110,604

 

Loss for the period

                 -  

                 - 

(264,830)   

-  

-

      (264,830)  

 

Other comprehensive loss 

                 -  

                 -  

                 -  

                 -  

(5,759,269)

    (5,759,269)  

 

Total comprehensive loss

-  

-  

(264,830)

                 -  

(5,759,269)

(6,024,099)

 

Share based payment

                 -  

                 -  

                 -  

5,210                   

-

5,210                   

 

Transfer to retained earnings on options forfeited

                 -  

                 -  

141,322                

(141,322)

-

                  -  

 

Balance as at 30 September 2011

7,996,130

45,717,870

17,325,675

554,104

(10,502,064)

61,091,715

 



INTERIM CONSOLIDATED CASH FLOW STATEMENT

Forthe six month period ended 30 September 2012

 

 



 

2012

 

2011


   Notes


Unaudited




$

$

Operating activities





 Loss before tax                       



(1,740,459)

(599,922)

 Adjustments to reconcile loss  before tax to net cash flows





 Depreciation and amortisation



10,114

14,982

 Provision for doubtful debts



81,696

157,222

 Share based payments expense



1,758

5,210

 Decrease in fair value of investment properties



669,925

46,943

 Decrease / (Increase) in value of investments held-for-sale



27,633

9,377

 Foreign exchange difference



(54,325)

39,428

 Net gain on sale of investment



(106)

(5)

 Dividend income



(12,573)

(5,229)

 Interest income



(26,849)

(78,728)

 Interest expense



702,771

536,532




(340,415)

125,810

Working Capital adjustments





 (Increase) in prepayments (current)



(32,700)

(139,325)

 (Increase) / Decrease in trade and other receivables



(82,700)

(350,118)

 (Increase) / Decrease in other assets (current)



(191,762)

43,208

 (Increase) in other assets (non-current)



(16,276)

(3,671)

 (Increase) in inventories



(3,105,278)

(1,083,815)

 (Decrease) in trade and other payables (current)



(273,132)

(83,828)

 Increase / (Decrease) in other liabilities (current)



425,407

45,790

 Increase in other liabilities (non current)



4,337,247

1,037,428




1,060,806

(534,331)

 Income tax refund / (paid)



149,639

268,877

 Net cash flows from/ (used in)  operating activities



870,030

(139,644)






 Investing activities





 Proceeds from sale of held-for-trading investments



3,712,808

1,528,590

 Purchase of property, plant and equipment and intangible assets



(2,517)

(9,086)

 Purchase of held-for-trading investments



(3,247,785)

(1,438,428)

 Capital expenditure on Investment Property



(829,586)

(101,212)

 Dividend income



12,573

5,229

 Interest received



26,849

52,731

 Net cash flows (used in)/from investing activities



(327,658)

37,824

 Financing activities





 Proceeds from borrowings



5,807,143

1,808,283

 Repayment of  borrowings



(5,683,236)

(1,668,040)

 Interest paid



(460,216)

(344,089)

 Net cash flows (used in) financing activities



(336,309)

(203,846)

 

 Net increase/(decrease) in cash and cash equivalents



206,063

 

(305,666)

 Net foreign exchange difference



(10,717)

(63,883)

 Cash and cash equivalents at 1st April



752,868

1,492,741

 Cash and cash equivalents at 30th September (See Note 5)  



948,214

1,123,192

 

 

 

Notes to interim condensed consolidated financial statements

For the six months period ended 30 September 2012

 

 

1.   Corporate information

 

The interim condensed consolidated financial statements of West Pioneer Properties Limited and its subsidiaries ('the Group') for the six months ended 30 September 2012 were authorised for issue in accordance with a resolution of the directors on 17 December 2012.

 

West Pioneer Properties Limited ('the Company') is a limited company, incorporated on 5 September 2006 and domiciled in the British Virgin Islands, whose shares are publicly traded on the Alternative Investment Market (AIM) of the London Stock Exchange. Winmore Investments Limited is the holding company of the Company.

 

The Company has the following wholly owned subsidiary companies

 


Country of incorporation

West Brick Investment Limited ('WBIL')

Mauritius

West Brick Properties Limited ('WBPL')

Mauritius

West Pioneer Properties (India) Private Limited ('WPPIPL')

India

Westfield Entertainment Private Limited ('WEPL')

India

 

The Company, WBIL and WBPL are investment holding companies, having no other business activities.  WPPIPL and WEPL are in the business of development and management of shopping malls, development and sale of residential, office and warehousing property and development of mixed use properties in India.

 

2. Basis of preparation and accounting policies

 

Basis of preparation

 

The interim condensed consolidated financial statements for the six months ended 30 September 2012 have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the European Union.

 

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 31 March 2012.

 

Significant accounting policies

 

The accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 March 2012, except for the adoption of following  new and amended IFRS and IFRIC interpretations applicable from 1 April 2012:

 

IAS 12 - Deferred Tax: Recovery of Underlying Assets (Amendment)

 

This amendment to IAS 12 includes a rebuttable presumption that the carrying amount of investment property measured using the fair value model in IAS 40 will be recovered through sale and, accordingly, that any related deferred tax should be measured on a sale basis. The presumption is rebutted if the investment property is depreciable and it is held within a business model whose objective is to consume substantially all of the economic benefits in the investment property over time, rather than through sale. Specifically, IAS 12 requires that deferred tax arising from a non-depreciable asset measured using the revaluation model in IAS 16 should always reflect the tax consequences of recovering the carrying amount of the underlying asset through sale. Effective implementation date is for annual periods beginning on or after 1 January 2012.

The Group has investment properties at fair value and under the tax jurisdiction applicable to the location of the investment property, certain portion of the property is depreciable and the balance is taxable on a sale basis. The adoption of this amendment did not have any significant impact on the financial statements of the group.

 

The following amendments to IFRSs standards did not have any impact on the accounting policies, financial position or performance of the Group:

 

IFRS 7 - Disclosures - Transfers of financial assets (Amendment)

 

The IASB issued an amendment to IFRS 7 that enhances disclosures for financial assets. These disclosures relate to assets transferred (as defined under IAS 39). If the assets transferred are not derecognised entirely in the financial statements, an entity has to disclose information that enables users of financial statements to understand the relationship between those assets which are not derecognised and their associated liabilities. If those assets are derecognised entirely, but the entity retains a continuing involvement, disclosures have to be provided that enable users of financial statements to evaluate the nature of, and risks associated with, the entity's continuing involvement in those derecognised assets. Effective implementation date is for annual periods beginning on or after 1 July 2011 with no comparative requirements.

 

The group did not have any assets that have been transferred and not derecognised.

 

IFRS 1 - Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (Amendment)

 

When an entity's date of transition to IFRS is on or after the functional currency normalisation date, the entity may elect to measure all assets and liabilities held before the functional currency normalisation date, at fair value on the date of transition to IFRS. This fair value may be used as the deemed cost of those assets and liabilities in the opening IFRS statement of financial position. However, this exemption may only be applied to assets and liabilities that were subject to severe hyperinflation. Effective implementation date is for annual periods beginning on or after 1 July 2011 with early adoption permitted.

 

The application of this amendment did not have any impact on the financial statements of the group.

 

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

 

 

3.   Seasonality of operations

 

The Group is engaged in the construction and operation of shopping malls and generates revenue in the form of lease rentals which are not seasonal in nature.

 

The Group constructs residential apartments, office and warehousing property for ultimate sale for which it receives construction linked payments based on progress of construction which are not seasonal in nature.

 

 

4.   Segment information

 

The following tables present revenue and profit / (loss) information regarding the Group's operating segments for the six months ended 30 September 2012 and 2011 respectively.

 

 



Six months ended 30 September 2012

 


Retail

 Residential

 Office

 

Warehousing

 Total


 $

 $

 $

$

 $

Segment revenue






Property rent and other operating income

1,644,357

-

-

-

1,644,357

Property operating expenses

(1,138,976)

-

-

-

(1,138,976)

Net valuation loss on investment property

(669,925)

-

-

-

(669,925)

Related finance costs

(282,400)

-

-

(128,345)

(410,745)

Segment profit/(loss)

(446,945)

-

-

(128,345)

(575,289)

Administrative expenses





(757,160)

Selling and distribution expenses





(189,685)

Finance costs





(324,222)

Finance income





105,897

Loss before tax





(1,740,459)

 

Finance income includes other income of US$55,776.

 

Six months ended 30 September 2011

 


Retail

 Residential

 Office

 

Warehousing

 Total


 $

 $

 $

 

$

 $

Segment revenue






Property rent and other operating income

2,301,648

-

-

-

2,301,648

Property operating expenses

(1,132,494)

-

-

-

(1,132,494)

Net valuation loss on investment property

(36,897)

-

(10,046)

-

(46,943)

Related finance costs

(393,036)

(16,685)

-

-

(409,721)

Segment profit/(loss)

739,221

(16,685)

(10,046)

-

712,490

Administrative expenses




-

(1,010,806)

Selling and distribution expenses





(232,322)

Finance costs





(176,096)

Finance income





106,812

Loss before tax





(599,922)

 

Finance income includes other income of $100,267.

 


The following table presents segment assets of the Group's operating segments as at 30 September 2012 and 31 March 2012.

 


 

Retail

 

Residential

 

Office

 

Warehousing

 

Others

 

Total


 $

 $

 

$

 

$

 $

 $

Segment assets

 







At 30 September 2012

55,194,778

16,926,448

3,186,587

 

13,330,652

2,572,978

91,211,443

At 31 March 2012

56,020,750

14,282,257

2,514,541

13,470,629

2,675,530

88,963,707








Segment liabilities

 







At 30 September 2012

8,990,150

16,198,608

1,332,885

 

2,311,110

-

28,832,753

At 31 March 2012

9,137,738

13,096,741

487,690

1,698,179

-

24,420,348

 

Assets classified as "others" are made up of US$1,564,762 (31 March 2012: US$1,586,386) invested in hotel property; US$21,444 (31st March 2012: US$17,397) invested in property, plant & equipment: US $Nil (31 March 2012: US $438,592) in investments-held for trading: US$686,418 (31st March 2012: US$339,016) in cash & cash equivalents; and US$300,353 (31 March 2012: US$294,139) in other financial assets.

 

Reconciliation of segment liabilities to amounts appearing on the statement of financial position

 


30 September 2012

31 March 2012


 $

 $




Segment operating liabilities 

28,832,753

24,420,348

Other financial liabilities

2,429

3,386

Employee benefit liability

51,341

48,620

Deferred tax liability

6,174,692

6,488,338

Trade and other payables

315,267

197,690

Other financial liabilities

428,163

44,514

Group operating liabilities

35,804,644

31,202,896

 

 

5.   Cash and short-term deposits                               

 


30 September


2012

2011


Unaudited


$

$

 Cash at bank and in hand

948,214

1,123,192

 Short term deposits

18,939

637,324


967,153

1,760,516

 

Short term deposits include restricted deposits of US$18,939 (30September 2011 US$637,324) kept as a margin money towards bank guarantee issued by bank.

 



A reconciliation of the cash and cash equivalents as above to the amounts considered for the interim consolidated cash flow statement is presented below.

 


30 September


2012

2011


Unaudited


$

$

 Cash and cash equivalents as above

967,153

1,760,516

 Restricted deposits

(18,939)

(637,324)

Cash and cash equivalents for the purpose of the cash flow

948,214

1,123,192

 

 

6.   Finance and other income

 

Finance income during the period ended 30 September 2012 comprises:


30 September


2012

2011


Unaudited


$

$

Foreign exchange gain

37,362

-

Dividend earned on investments

12,573

5,229

Profit on sale of investments

106

-

Bank interest

80

1,316


50,121

6,545

Other income

55,776

100,267


105,897

106,812

 

 

7.   Finance costs

 

Finance costs during the period ended 30 September 2012 and 2011 comprise primarily interest expense.

 

 

8.   Income taxes

 

The major components of the income tax expense in the interim consolidated income statement, arising from the operations of the Group's subsidiaries in India and subject to Income Tax in that Jurisdiction are:

 


30 September


2012

2011


Unaudited


$

$

Current income tax



Current income tax charge

-

-

Deferred income tax



Relating to origination and reversal of temporary differences

(216,766)

(335,092)

Income tax credit

(216,766)

(335,092)

 

 

9.   Earnings per share

 

Basic earnings per share amount is calculated by dividing net (loss)  after tax for the period attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the six months.

 

 

The following reflects the income and share data used in the earning per share computations for six months ended on

 

 

30 September


2012

2011


Unaudited


$

$

Profit attributable to equity holders

(1,523,693)

(264,830)

 

Number of shares



Weighted average number of shares for basic earnings per share

79,961,298

79,961,298

Effect of dilution in respect of employee stock options

24,448

24,448

Weighted average number of shares adjusted for the effect of dilution

79,985,746

79,985,746




Basic earnings per share (par value $0.10)

(0.0191)

(0.0033)

Diluted earnings per share (par value $0.10)

(0.0190)

(0.0033)

 

 


10.  Investment Properties

 

Movements during the period


30 September 2012

31 March 2012


Completed

Under Construction

Total

Completed

Under Construction

Total

Completed

Under Construction

Total



Unaudited



Audited



Unaudited



$

$

$

$

$

$

$

$

$

Balance at 1st April

37,964,215

16,365,347

54,329,562

45,418,498

29,600,457

75,018,955

45,418,498

29,600,457

75,018,955

Transfer to inventory

-

-

-

-

(11,519,216)

(11,519,216)

-

-

-

Additions during the period comprising:










- Expenditure incurred

438,823

444,554

883,377

90,471

385,668

476,139

5,339

135,374

140,713

-Acquisition of land

-

-

-

551,855

35,495

587,350




Adjustment to fair value

(438,823)

(229,144)

(667,967)

(2,544,489)

970,660

(1,573,829)

13,881

(135,374)

(121,493)

Income from straight lining

(1,958)

-

(1,958)

156,603

-

156,603

74,550

-

74,550

Foreign currency translation

(517,555)

(214,684)

(732,239)

(5,708,723)

(3,107,717)

(8,816,440)

(3,971,846)

(2,583,625)

(6,555,471)

Balance at end date

37,444,702

16,366,073

53,810,775

 

37,964,215

 

16,365,347

 

54,329,562

41,540,422

27,016,832

68,557,254

 

 

Note: In October 2011 WPPIPL has entered into a non-binding Memorandum of Understanding (MOU) to develop and sell, subject to contract, its asset in Aurangabad, India for a total cash consideration of approximately US$14,400,839. Under the terms of the MOU, the Company will develop the project as retail and warehousing space.

 

Upon commencement of construction the company has transferred the amounts in respect of the Aurangabad property aggregating US$11,519,216 from investment property to inventory.

 

 

 


Significant assumptions

 

The fair value of all investment properties has been assessed by the Directors at the end of the reporting period.

 

Further, the methodology and key estimates in the valuation of completed investment property are the same as that for 31st March 2012 except that the average rent is assumed at US$0.65 per sq ft per month (31st March 2012: US$0.66 per sq ft per month). Although there is an increase in average rent in rupee terms during the period, the average rent in dollar terms has been impacted due to the depreciation of the Indian rupee against the US dollar.

 

The discount rate used in the valuation of completed properties remains unchanged at 14%.

 

11.  Inventories


30th September

31st March


2012

2011

2012


Unaudited

Audited


$

$

$

Work in progress

32,298,803

9,889,522

29,299,800

Construction Material

251,073

189,628

255,519

Diesel Stock

1,758

2,490

2,312


32,551,634

10,081,640

29,557,631

 

 

Work in progress represents the inventory for the residential & office construction of the group at Kalyan and for the retail and warehouse space at Aurangabad.

 

 

12.  Investments held-for-trading

 

Investments held-for-trading   have a maturity from one month to three months which can be redeemed and liquidated at any point of time until maturity.

 

These are valued at fair value through income statement.  All the investments are quoted instruments and their carrying values approximate their fair values.

 

13.  Trade and other receivables

 

 

 

30th September

31st March


2012

2011

2012


Unaudited

Audited


$

$

$

Trade receivables (Net)

708,926

729,480

807,631

Trade receivable from related parties (Net)

204,072

226,015

153,529

Accrued income

7,502

113,351

5,508

Other advances

719,702

250,818

531,693


1,640,202

1,319,664

1,498,361

 

As at 30th September 2012, the Company has provided for doubtful trade receivables aggregating US$552,830 (30th September 2011: US$520,108; 31st March 2012: US$474,562).

 

 

 

 

 

14.  Share-based payment

 

There were no new options granted to the employees of the Group (including key management personnel) under the Employee Stock Option Plan 2007 ('the plan').

 

The share based payments expense during the period arising from equity settled share-based payment transactions aggregated US$1,758 (30th September 2011: US$5,210).

 

 

15.  Commitment and Contingencies

 

a. Contingencies

 

At 30th September 2012 there are no changes in the contingencies which were outstanding at 31st March 2012 except for the following

 

1. SDR Clothing Co Pvt. Ltd. (Lanos) has challenged the arbitration Award concluded in favour of WPPIPL by filing an Arbitration Petition in Bombay High Court. The said petition is admitted and is pending for decision.

 

WPPIPL is contesting this claim and does not believe that the proceedings will have a material adverse impact on the Group.

 

2. The Bombay High Court on 14th December 2012 has admitted the legal case in relation to the Nashik land and continued the interim stay granted earlier in favour of the Company. The matter will now be heard finally by the Bombay High Court. The detailed order is yet to be received by the Company and implications, if any, will be ascertained on receipt of the same.

 

b. Commitments

 

WPPIPL has contractual commitments amounting to US$3,754,488 (31st March 2012: US$NIL) towards construction and for the acquisition of property, plant and equipment for the projects under construction.

 

 

16.  Related party transactions

 

The following table provides the total amount of transactions, which have been entered into with the related parties during the six months ended 30th September 2012 and the outstanding balances as at 30th September 2012 and 2011.

 

Related Party

For the six months ended 30th September


2012

2011


   Unaudited


$

$

Transactions with parent company



a. Winmore Investments Limited



Consultancy fees expenses

43,109

44,085

Amount due (to) related party

(21509)

-




Transactions with other related parties



Enterprises over which significant influence exercised by the Jatia family



a. Hardcastle Restaurants Private Limited



Rental income for premises leased

59,599

54,430

Common Area Maintenance income for premises leased

13,888

16,350

Income - Reimbursement for premises leased

75,707

75,781

Expenses - Reimbursement

15,467

-

Provision for doubtful debt expenses for the period

5,248

12,951

Provision for doubtful debt as at

31,876

29,010

Amount due from related party

36,938

56,675

 

 




 

b. Hardcastle & Waud Manufacturing Company Limited



 

Expenses - Reimbursement

13,288

20,161

 

Lease rent expenses for Kalyan land by WPPIPL

-

39,469

 

Interest expenses for deferred credit on purchase of Kalyan land by WPPIPL

206,862

-

 

Amount due (to) related party

(2,984,350)

(20,837)

 




 

c. Vishwas Investment & Trading Company Private Limited



 

Expenses - Reimbursement 

2,431

5,437

 

Office premises rent expenses

47,500

50,849

 

Security deposit given

-

10,012

 

Amount due from related party

78,325

93,246

 





d. Global Trendz Limited *



 

Provision for doubtful debt as at

NA

16,143

 

Amount due (to) / from related party

NA

10,628

 




 

* Relationship ceases to exist from December 2010



 




 

e. Fame India Limited



 

Rental income for premises leased

135,488

157,266

 

Common Area Maintenance income  for premises leased

61,065

75,488

 

Income - Reimbursement for premises leased

115,296

150,528

 

Provision for doubtful debt expenses for the period

-

20,970

 

Provision for doubtful debt as at

150,000

148,325

 

Amount due from related party

(3,554)

178,645

 




 

f. International Financial Services Limited



 

         Admin expenses

16,473

11,355

 

Amount due (to) related party

(11,875)

(4,388)

 




 

g. Bungee Fashions Private Limited **



 

Common Area Maintenance income  for premises leased

NA

4,317

 

Income - Reimbursement  for premises leased

NA

5,278

 

Amount due from related party

NA

3,367

 




 

** Relationship ceases to exist from March 2011



 




 

Transactions with key managerial personnel



 

            Foreign Travel

-

18,933

 

            Chief Executive Officer's compensation

75,669

83,240

 

            Other Short-term employee benefits

3,774

11,482

 

            Directors Remuneration

65,231

71,731

 

            Share based payments expense on options granted

1,758

5,210

 

            Post - employment benefits

2,770

3,667

 

Amount due (to)/ from related party

(663)

(10,716)

 




 

Loans taken from related parties and key management personnel of the group



 

a. Amit Jatia



 

          Loan given by

-

-

 

          Loan repaid to

-

-

 

          Interest expense

-

43,174

 

Amount due (to) related party

-

(675,734)

 




 

b. Anurag Jatia



 

          Loan given by

72,917

-

 

          Loan repaid to

-

-

 

          Interest expense

63

22,306

 

Amount due (to) related party

(72,983)

(340,799)

 




 

c. Ayush Amit Jatia



 

          Loan given by

186,553

217,133

 

          Loan repaid to

-

-

 

          Interest expense

20,073

10,258

 

Amount due (to) related party

(446,292)

(226,566)

 




 

d. Banwari Lal Jatia



 

          Loan given by

-

100,524

 

          Loan repaid to

-

-

 

          Interest expense

-

3,967

 

Amount due (to) related party

-

(104,173)

 




 

e. Banwari Lal Jatia (HUF)



 

Sale of flat

-

4,423

 

          Loan given by

89,962

466,433

 

          Loan repaid to

107,955

76,398

 

          Interest expense

10,901

31,052

 

Amount due (to) related party

(203,242)

(419,987)

 




 

f. Lalita Devi



 

          Loan given by

28,409

310,017

 

          Loan repaid to

73,864

-

 

          Interest expense

3,038

12,235

 

Amount due (to) related party

(20,508)

(321,269)

 




 

g. Akshay Amit Jatia



 

          Loan given by

441,288

-

 

          Loan repaid to

37,879

-

 

          Interest expense

18,321

-

 

Amount due (to) related party

(422,444)

-

 




 

h. Amit Jatia (HUF)



 

          Loan given by

2,841

-

 

          Loan repaid to

7,576

-

 

          Interest expense

12,799

-

 

Amount due (to) related party

(187,949)

-

 




 

i. Anurag Jatia (HUF)



 

          Loan given by

-

-

 

          Loan repaid to

303,030

-

 

          Interest expense

7,734

-

 

Amount due (to) related party

(134,886)

-

 




 

j. Usha Devi Jatia



 

          Loan given by

616,477

-

 

          Loan repaid to

448,864

-

 

          Interest expense

14,673

-

 

Amount due (to) related party

(182,858)

-

 




 

k. Vishwas Investment & Trading Company Private Limited     



 

          Loan given by

861,742

556,905

 

          Loan repaid to

4,243,371

110,577

 

          Interest expense

112,551

5,749

 

Amount due (to) related party

(625,379)

(511,055)

 




 

l. Westlife Development Limited



 

          Loan given by

-

-

 

          Loan repaid to

-

275,437

 

          Interest expense

-

1,658

 

Amount due (to) related party

-

-

 




 

m. West Leisure Resorts Private Limited



 

          Loan given by

-

-

 

          Loan repaid to

-

267,395

 

          Interest expense

-

596

 

Amount due (to) related party

-

-

 




 

n. Anand Veena Twisters Pvt. Ltd



 

          Loan given by

353,220

-

 

          Loan repaid to

350,379

-

 

          Interest expense

10,212

-

 

Amount due (to) related party

(13,451)

-

 

                                                                                                                                

 

17.  Events occurring after the reporting period

 

Since the balance sheet date WPPIPL has arranged loan facility of US$11,833,333 with The Ratnakar Bank Limited.  The effective interest rate currently is 14.30% i.e. base rate plus 3.30% and is secured against the assets of WPPIPL. To date WPPIPL has drawn down US$1,759,732 of the available facility.

  

 

18. Copy of the Interim Report

 

Copies of the Interim Report are available to download from the Company's website at www.west-pioneer.com/.

 

 

- Ends -

 


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