(SPL) SKIL Ports & Logistics

SKIL Ports and Logistics Limited

("SPL" or the "Company")

Final audited results for the period ended 31 December 2011

The Company is pleased to announce its final audited results for the period ended 31 December 2011.

Chairman's Statement

SKIL Ports & Logistics Limited was formed to build ports and logistics facilities across India and India's sphere of influence.  The need for ports and logistics facilities has never been greater or more urgent.  India's fundamental growth depends on it having modern gateways for goods to enter and leave, and infrastructure that complements this.  Sadly, India continues to struggle in both these areas.  SPL intends to leverage this mis-match and create and operate world-class ports and logistics facilities.

The Company embarked on building its first facility in the state of Maharashtra, principally in the vibrant Navi Mumbai area, which is the gateway to a further eight land locked states in India.  At the time of the Company's admission to AIM ("Admission"), SPL's management stated their intention to complete construction of the facility within a 36-month period.  The timetable set out at Admission always catered for potential delays arising from the intensely bureaucratic nature of infrastructure projects in India.  SPL's management team continues to navigate through this delicate process and believes that on-site reclamation works will commence in the coming months.  The additional studies that the Company was requested to undertake have been completed, including Coastal Regulatory Zone demarcation, modelling studies (including shoreline changes and hydrodynamics pre- and post-construction) and an Environment Impact Assessment Report.  As a result, and with additional work that was scheduled for the latter part of the build having been brought forward, the Directors remain confident of achieving a completion timetable broadly in line with that which was expected at the time of Admission.

In anticipation of receiving the requisite approvals, the Company is in the process of short-listing engineering, procurement and construction ("EPC") contractors and expects to be in a position to announce the chosen EPC contractor in due course.

The Group has maintained a very conservative cash burn rate and had cash or cash equivalent balances of approximately GBP 63.4 million as of 31 December 2011.  The Directors expect the cash burn to remain low until such time as material works begin at the Navi Mumbai facility.  The Company remains debt free and therefore has a very flexible capital structure.  As announced on 28 February 2012, SPL's Chairman Nikhil Gandhi, the executive management and others associated with the Company are proud and protective of their track record of building world-class infrastructure projects in India on time and on budget.  As a result, whilst the Directors continue to expect to complete the project broadly in line with the original timetable, the Company will seek to return cash to shareholders in the event that outstanding consents and approvals are not obtained in sufficient time to enable reclamation works to commence at the Navi Mumbai facility during the fourth quarter of this calendar year.

The Company is in the process of evaluating candidates to further strengthen the board and aid management in the delivery of a successful business, and it is anticipated that further announcements will be made in this regard in the near term.  The Group will also increase personnel on the ground in India once ground-works commence; the first hire is anticipated to be a head of the finance and reporting function for SPL and will be based in Mumbai.

The Company continues to analyse a number of strategic avenues to enhance shareholder value but the focus amongst the Directors and SPL management remains to deliver a world-class port and logistics facility in the Navi Mumbai region on time and within budget.  The Directors look forward to updating the market with further developments on the Company's path to becoming a leading ports and logistics developer and operator.

A copy of the Company's annual report and accounts will be posted to shareholders shortly.

The Company will hold its annual general meeting at 12 noon on 12 July 2012 at the Company's registered office at 1st and 2nd Floors, Elizabeth House, Les RuettesBrayes, St Peter Port, Guernsey GY1 1EW.

Enquiries

SPL                              -           Pavan Bakhshi
                                                +44 (0) 7956 209433

Cenkos Securities plc            Stephen Keys/Camilla Hume
                                                020 7397 8900

NOTES TO THE FINANCIAL STATEMENTS

From 24 August 2010 (Date of incorporation) to 31 December 2011

1. CORPORATE INFORMATION

SKIL Ports & Logistics Limited (the "Company") is 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 & 2nd Floors Elizabeth House, Les Ruettes Brayes, St Peter Port, Guernsey GY1 1EW. It was admitted to AIM 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 period from 24 August 2010 (date of incorporation) to 31 December 2011, and are presented in Great Britain Pounds Sterling (GBP).

The principal activities of the Group are to develop, own and operate port and logistics facilities in India.

As at 31 December 2011, the Group had 7 (seven) 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 EU and also to comply with the Companies (Guernsey) Law 2008.

The period from 24 August 2010 (date of incorporation) to 31 December 2011 is the first period of the Group's operations and, therefore, no comparatives are presented.

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 Company is currently awaiting statutory approvals prior to commencement of ground works at its site. After receiving necessary approvals the management believe that they will have sufficient equity and headroom in the capital structure for the build out of the facility. Currently the company has no debt and limited expenses. The Company 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 believes that the Company 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 2011. 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.

Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. Profit or loss and other comprehensive income of subsidiaries acquired during the year are recognised from the effective date of acquisition.

The results of subsidiaries acquired during the period are included in the consolidated income statement from the effective date of acquisition. Individual profit and loss account and balance sheet of the subsidiaries are not presented.

(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 Incorporation         % Voting Rights      %Economic Interest

Karanja Terminal &

Logistics                          SKIL Ports & Logistics             Cyprus                                    100.00                     100.00

(Cyprus) Limited              Limited                    

Karanja Terminal &          Karanja Terminal &                  India                                         99.71                       99.71

Logistics                          Logistics (Cyprus) 

        Private Limited                 Limited

(D) FOREIGN CURRENCY TRANSLATION

The consolidated financial statements are presented in Great Britain Pounds 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) Ltd.                  -Euro

- Karanja Terminal & Logistics Private Limited               -INR

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 remeasurement of monetary items denominated in foreign currency at exchange rates ruling at the balance sheet date are recognised in profit or loss.

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 exchange rate at the reporting date. The income and expenses of foreign operations are translated into GBP at the average exchange rates for the period. Foreign currency differences are recognised in other comprehensive income; in the foreign currency translation reserve (FCTR). When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR shall be transferred to profit or loss.

(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 accrual 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) INCOME TAX

Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax.

Current income tax

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 measured at the balance sheet date at the amount expected to be recovered from or paid to the taxation authorities. Current tax is payable on taxable profit, which may differ from profit or loss in the financial statements. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred income 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 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 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 income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply to the year when the related asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.

Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilized against future taxable income, based on the Group's forecast of future operating results which is adjusted for significant non-taxable income and expenses and specific limits to 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 or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.

(G) 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 liability is derecognised when it is extinguished, discharged, cancelled or expires.

The Group's financial assets are loans and receivables.Financial assets are subject to review 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. Different criteria to determine impairment are applied for each category of financial assets.

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.

(H) FINANCIAL LIABILITIES

The Group's financial liabilities include trade and other payables. 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, except for financial liabilities held for trading or designated at fair value through profit or loss, that are carried subsequently at fair value with gains or losses recognised in profit or loss.

All interest related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within 'finance costs' or 'finance income'.

(I) 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 expenditure incurred in respect of terminal port under development is carried at historical cost under Capital Work In Progress. Cost includes professional fees, material charges, construction costs and other direct expenditure.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Depreciation is recognised in profit or loss over the estimated useful lives of each part of an item of property, plant and equipment. Leasehold improvements are amortized over the shorter of the lease term or their useful lives.

The estimated useful lives for the current periods are as follows:

- Port and Logistics facility                                   50-55 years

- Equipment                                                          3-5 years

- Computers                                                         2-3 years

- Furniture                                                             5-7 years

- Leasehold Improvements                                  1-2 years

Depreciation methods, useful lives and residual values are reassessed at each reporting date.

(J) TRADE RECEIVABLES AND PAYABLES

Trade receivables are financial assets categorized as loans and receivables, measured initially at fair value and subsequently at amortised cost using 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 effective interest rate method.

(K) 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.

(L) EQUITY INSTRUMENTS

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

(M) SHARE CAPITAL AND RESERVES

      Share capital represents the nominal value of shares that have been issued.

      Share premium includes any premiums received on issue of share capital reduced by share issue costs.

      Retained earnings include all current and prior period retained profits.

      The foreign currency translation reserve is on account of foreign exchange rate difference on re-translation of investment in foreign operations on conversion from functional currency to presentation currency and difference arising due to monthly profit and loss items being translated at average exchange rates whereas the profit and loss figure in the functional currency balance sheet is translated at the year-end exchange rate to presentation currency.

(N) PROVISIONS

Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Company's management team/director's best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

(O) DIVIDENDS

Dividend distributions, if any, to the Company's shareholders are recognised as another liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders in a general meeting.

Subject to the provisions of the Company's articles of incorporation, the Company's board of directors may by ordinary resolution declare that out of profits available for distribution in accordance with Guernsey law, dividends be paid to members according to their respective rights and interests in the profits of the Company available for distribution. However, no dividend shall exceed the amount recommended by the board of directors. There is no fixed date on which an entitlement to dividend arises.

(P) IMPAIRMENT OF FINANCIAL AND OTHER ASSETS

A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortized cost, the reversal is recognised in profit or loss.

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 profit and loss 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. These are listed below and 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 2011 are:

·     IFRS 9 Financial Instruments (effective 1 January 2015)

·     IFRS 10 Consolidated Financial Statements (effective 1 January 2013)

·     IFRS 11 Joint Arrangements (effective 1 January 2013)

·     IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2013)

·     IFRS 13 Fair Value Measurement (effective 1 January 2013)

·     IAS 19 Employee Benefits (Revised June 2011) (effective 1 January 2013)

·     IAS 27 (Revised), Separate Financial Statements (effective 1 January 2013)

·     IAS 28 (Revised), Investments in Associates and Joint Ventures (effective 1 January 2013)

·     Disclosures - Transfers of Financial Assets - Amendments to IFRS 7 (effective 1 July 2011)

·     Deferred Tax: Recovery of Underlying Assets - Amendments to IAS 12 Income Taxes (effective 1 January 2012)

·     Presentation of Items of Other Comprehensive Income - Amendments to IAS 1 (effective 1 July 2012)

·     Disclosures - Offsetting Financial Assets and Financial Liabilities - Amendments to IFRS 7 (effective 1 January 2013)

·     Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32 (effective 1 January 2014)

·     Mandatory Effective Date and Transition Disclosures - Amendments to IFRS 9 and IFRS 7 (effective 1 January 2015)

·     Government Loans - Amendments to IFRS 1 (effective 1 January 2013)

·     IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (effective 1 January 2013)

(R) SHARE OPTIONS

     The Company has an equity-settled share-based plan in place. All goods and services received in exchange for the grant of any share-based payment are measured at their fair values. Where individuals are rewarded using share-based payments, the fair values of individuals services are determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).

     All share-based cost is ultimately recognised as an expense in profit or loss with a corresponding credit to retained earnings. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest.

     Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting.

     Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the nominal value of the shares issued are allocated to share capital with any excess being recorded as share premium.

3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The following are the significant management judgment 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 company is currently with regards to the build out of the facility that the founder warrants are not vested and hence no charge is recognised in the current year P&L.

Functional Currency

The Board of Directors believe that the functional currency of the group is GBP. This is based on the fact that the funds raised at the time of the IPO were in GBP and that any dividends that may be paid to shareholders in the future will also be denominated in GBP. SPL which is the managing entity of all the subsidiaries is managed and controlled in Guernsey.

Capitalisation of expenses related to port and logistics facility

Management judgment is required for the capitalisation or expensing of costs incurred for the port and logistics facility. The Group is in process of constructing its initial project, the creation of a modern and efficient port and logistics facility in India. All the expenditure incurred in respect of terminal port under development is carried at historical cost under Capital Work In Progress. Cost includes professional fees, material charges, construction costs and other direct expenditure.

The estimated useful life of the port and logistics facility under development is estimated around 50-55 years.

Estimation uncertainty

Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to obsolescence that may change the utility of certain assets.

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

6. INVESTMENT INCOME

7. INCOME TAX

Reconciliation between profit before tax and actual tax expense

* The Indian corporate tax rate for part of the period is 33.22% up to 31 March 2011 and 32.445% from 1 April 2011 to 31 December 2011. Tax expense is calculated based on the average tax rate of 32.79%.

The current income tax charge of £1,891,000 represents tax charges on profit arising in India converted at average exchange rates for the period. Administrative expenses are not taken as deductions for tax income since they shall not be allowed until commencement of operations.

Current tax liabilities of £1,646,000 represent the tax charges on profit arising in India converted at the year-end exchange rate.

The major components of income tax expense for the period ended 31 December 2011 are:

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 or gains and there will be no requirement to deduct withholding tax from payments of dividends to non-resident shareholders.

There are no corporation, capital gains or inheritance taxes payable in Guernsey.

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:

(*) charged to the income statement

(**) charged to the share premium account

9. EARNINGS PER SHARE

Both basic and diluted earnings per share for the period ended 31 December 2011 have been calculated using the profit attributable to equity holders of the Company of £2,267,301.

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

11. TRADE AND OTHER RECEIVABLES

      Trade and other receivables consist of the following:

12. CASH AND CASH EQUIVALENTS

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 interest at the respective short-term deposit rates. The fair value of cash and short-term deposits is £63,447,000

As at 31 December 2011, there is no cash held in blocked accounts.

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, price risk and interest rate risk), credit risk and liquidity risk. Risk management is carried out by the Board of Directors.

(a) Market risk

(i) Foreign exchange 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 Great Britain Pound.

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. Any difference in cash balances on the account of exchange rate fluctuations between INR/GBP are taken in equity as the translation currency is INR and the presentation currency is GBP. There are no flows between the parent and KTLPL and therefore, there are no other currency risks or exposures at the balance sheet date.

(ii) Price risk

The Group is currently not exposed to any price risk.

(iii) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As of 31st December 2011 the Company has no debt instruments or interest rate derivatives and therefore, SPL has limited interest rate risk other than what it receives in interest with regards to the cash the Company has on deposit. Further, the Group utilises fixed rates of deposit and thus a 100 basis point increase or decrease in interest rates would have an immaterial impact on the Group's equity.

(b) Credit risk

Credit risk is the risk that counterparty fails to discharge an obligation to the Group. The Group's maximum exposure 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 Company does not concentrate any of its deposits in one bank or 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. The Company receives a fixed interest and thus has limited interest rate risk. 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. To date all investments have been funded by cash from the IPO and the Group has no debt. The Group has adequate cash to pay its creditors.

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.

14. EQUITY

14.1 ISSUED CAPITAL

The issued fully paid up share capital of the company as at December 31, 2011 was 44,000,000 Ordinary Shares of no par value. The share premium amount on the no par value shares amounts to £71,596,000 after reduction of share issue costs of £4,410,000

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 £ 2,267,000 include all current period retained profits.

TRANSLATION RESERVE

      The foreign currency translation reserve of (£11,824,000) is on account of foreign exchange rate difference on re-translation of foreign operations and on account of differences in average exchange rates used in profit and loss account and closing exchange rate used in balance sheet.

15. TRADE AND OTHER PAYABLES

      Trade and other payables consist of the following:

16. RELATED PARTY TRANSACTIONS

The consolidated financial statements include the financial statements of the Company and the subsidiaries listed in the following table:

The Group has the following related parties with whom it entered into transactions with during the period.

a)   Shareholder having significant influence

The following shareholders of the Group have had a significant influence during the period under review:

-     SKIL Global Ports & Logistics Limited, which is 100% owned by Mr. Nikhil Gandhi, holds 28.91% of issued share capital at the period end.

b)   Key Managerial personnel

Non-executive Directors

-     Mr. Peter Anthony Jones

-     Mr. James Stocks Sutcliffe

Chief Executive Officer and Key Managers

-     Mr. Pavan Bakhshi (Managing Director)

c)   Other related party disclosures

-     SKIL Infrastructure Ltd.

-     JPT Securities Limited.

-     Grevek Investment & Finance Private Limited.

The following transactions took place between the Group and related parties during the financial period:

TRANSACTIONS WITH SHAREHOLDER HAVING SIGNIFICANT INFLUENCE

SKIL Global Ports & Logistics Limited - Receivable amount: GBP 33,895

TRANSACTIONS WITH SUBSIDIARIES

None

TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL OF THE PARENT

See Key Management Personnel Compensation details as provided below

ADVISORY SERVICES FEE

None

KEY MANAGEMENT PERSONNEL COMPENSATION

Fees paid to persons or entities considered to be key management personnel of the Group include:

     SKIL Global Ports & Logistics Limited (controlled by Mr. Nikhil Gandhi) and Mr. Pavan Bakhshi (together the "Founder Shareholders"), as the sole shareholders of the Company prior to admission, have been granted warrants by the Company to subscribe, for 4,400,000 ordinary shares at nominal consideration within three months of the earlier of 1) the Multi-purpose Terminal and Logistics Park becoming fully operational and 2) the Group generating annualised consolidated revenues of at least GBP 48 million in any consecutive three month period ending on or prior to 31 December 2015.

     Cenkos Securities PLC have been granted warrants to subscribe for 220,000 ordinary shares exercisable at £2.50 per share at any time within five years ending October 7, 2015.

CORPORATE DEPOSITS

As at 31 December 31, 2011, the Group had GBP 975,594 as demand deposits with related parties.

1.   Name: JPT Securities Limited

Amount of deposit: Rs. 47,500,000 (GBP 557,650 @ 1 INR = 0.01174 GBP)

Nature: Unsecured; Callable on Demand

Interest Rate: 5 per cent per annum

Nature of Relationship: Mr. Nikhil Gandhi has a controlling interest in JPT Securities Ltd.

2.   Name: Grevek Investment & Finance Private Limited

Amount of deposit: Rs. 35,600,000 (GBP 417,944 @ 1 INR = 0.01174 GBP)

Nature: Unsecured; Callable on Demand

Interest Rate: 5 per cent per annum

Nature of Relationship: Mr. Nikhil Gandhi has a controlling interest in Grevek Investment & Finance Private Ltd.

PAYMENT OF LIABILITY ON BEHALF OF THE GROUP

SKIL Infrastructure Ltd. has paid IPO expenses of GBP 54,438 on behalf of Karanja Terminal & Logistics Pvt. Ltd., India. This amount appears as a Trade Payable under Current Liabilities and shall be paid within twelve months from the Balance Sheet date.

ULTIMATE CONTROLLING PARTY

None

17. 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:

18. CAPITAL MANAGEMENT POLICIES AND PROCEDURES

      The Group's capital management objectives are:

·           To ensure the Group's ability to continue as 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.

The Company currently has no debt. The Company will source debt once all the requisite approvals are in place and construction begins. The Company believes that it is adequately capitalised and will pursue a conservative capital structure during the development and operational phrase. 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 Company's project in Navi Mumbai and for the general working capital of the Company. 

As building of the project has not commenced the Company manages its capital by depositing its funds with various banks and NBFCs (Non-Banking Financial Companies). The Company seeks to maximise its interest income through this route in preparation for the build out of the project. Once the project build out commences the cash usage rate will increase and the management will seek to manage the cash usage in a conservative manner while always maintaining enough head room to employ debt securities or hybrid securities. The cash management policy is reviewed at 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 balance sheet and in Note 14.

Shares in issue: As at December 31, 2011 44,000,000 ordinary shares of no par value were in issue.

19. CONTINGENT LIABILITIES AND COMMITMENTS

The Company has no contingent liabilities as at 31 December 2011. The Group does not have any capital commitments as at 31 December 2011.

20. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

There are no events subsequent to the balance sheet date that affect the accounts reflected on the balance sheet date.

21. AUTHORISATION OF FINANCIAL STATEMENTS

      The consolidated financial statements for the year ended 31 December 2011 were approved and authorized for issue by the board of directors on 16 May 2012.