Trinity Capital PLC

Consolidated financial statements for the period ended 30 September 2011

Trinity Capital PLC (AIM: TRC), a fund created for investing in Indian real estate and infrastructure, announces its Interim Results for the period ended 30 September 2011.

For further information, please contact:

MHP Communications

Tim McCall / James White                                              +44 20 3128 8756

IOMA Fund and Investment Management

Philip Scales, Director                                                    +44 1624 681250          

Evolution Securities, Nominated Adviser and Broker         

Jeremy Ellis, Corporate Finance                                     +44 207 071 4300

Chairman's Statement

15 December 2011

Dear Shareholder

We continue to make progress in winding down the affairs of Trinity Capital plc ("Trinity"), even though the rate of disposal of investments has slowed somewhat. A declining GDP growth rate in India, persistent price inflation at 9%, stalled domestic economic reforms, stock market declines of 15% in the first half of the year, a weak Rupee down 10% against the US dollar in the 6 months to 30 September 2011 and global macroeconomic uncertainty have negatively impacted on the flow of foreign direct investment into India. Domestic concerns about the pace of real estate price rises and 13 consecutive increases in interest rates over the past 2 years have limited the availability of debt finance to both developers and owners. The effect on Trinity of these negative economic developments in India and globally has been to reduce the pool of buyers interested in acquiring our remaining investments. 

During the first six months of the financial year, Trinity sold its investments in Kapstone and Rustomjee, generating proceeds of £14.5 million. After the end of the half year, £6.0 million was received from the sale of the interest in Enigma. Trinity effected further capital distributions to investors of £12.6 million, equivalent to 6p per share, in July 2011 and £9.5 million, equivalent to 4.5p per share in December 2011. Over the past year, Trinity has distributed an aggregate of £122.1 million to shareholders, equivalent to 58p per share. 

At the end of September 2011, and before the latest 4.5p cash distribution, Trinity's net asset value per share was 34.1p. Since the 31 March 2011 year end, Trinity's net assets of £71.9 million were negatively impacted by a 7% depreciation of the Rupee against Sterling. In Rupee terms, the value of the portfolio declined by 11% during the first half of the financial year. Trinity does not hedge its Rupee currency exposure. Further details concerning the changes in valuations are provided in the financial statements and the Investment Manager's Report.

The investments in Uppals IT Park "Tech Oasis" project and Luxor Cyber City continue to provide the main longer term challenges to Indiareit, Trinity's investment manager. Together with our Indian partners, Indiareit has completed a strategic review of the Luxor Cyber City development and is now working to change the planning consents from a special economic zone to that of a township mixed use project in order to attract a developer that can provide an exit at more attractive levels than our current valuation. Although the 2011 Formula 1 Grand Prix of India was held in October 2011 at a new race track located close to Uppals IT Park, recent tax changes and legislation concerning compensation rights for farmers whose land was dispossessed continue to negatively impact on the development potential of the site in the short term. The value of the investment was further written down by 18% at the end of the half year. The realisation of the investments in Luxor Cyber City and Uppals IT Park will continue to take time to materialise.

Trinity's investments in DB Realty and MK Malls made no progress during the first half of the financial year while the DB Group's promoters remained in detention. Although the timing, conclusions and outcomes of the concurrent criminal and parliamentary investigations remain unknown, the shares of DB Realty rallied after the two promoters were released on bail. It will take time to clarify DB Realty's strategic direction and its intentions towards the MK Malls project. However, we look forward to re-engaging with DB Realty's senior management in due course.

Infrastructure works on the site owned by Jodhana Developers is due to commence in 2012, after which marketing of residential plots will commence. The investment in Horizon Countrywide Logistics continues to be underpinned by the agreed 2013 minimum base price. We are working with Indiareit on ways to try to accelerate the realisation of both of these investments

In July 2011, the Supreme Court of Mauritius dismissed, on jurisdictional grounds, the claims made against Trinity, its former investment manager and the principals of the former investment manager by Immobilien Development Indien I GmbH & Co. KG and by Immobilien Development Indien II GmbH & Co. KG (the "Immobilien funds"), both of which are managed by SachsenFonds. The Immobilien funds have challenged the dismissal in the Court of Civil Appeal in Mauritius. Aside from the claims, however, there has been some progress in respect of the jointly-held investments. 

SachsenFonds has obtained the approval of their investors to change the Luxor Cyber City planning consents to that of a township. In addition, a non-binding term sheet has been signed in respect of the sale of Trinity Capital (Five) Limited ("TC5"), which holds the investment in Lokhandwala Kataria Constructions. As part of a joint sale of TC5 to a third party, SachsenFonds has obtained the approval of the Immobilien funds to negotiate with Trinity a settlement of the legal claims made in the Mauritius courts in return for an aggregate payment to the Immobilien funds of approximately £2.0 million. The detailed terms of sale of TC5 and any settlement of claims are at this stage non-binding and subject to further negotiation and contract.  . 

The administration and management of Trinity continue to operate smoothly. The day-to-day operation of the Board is conducted through the investment committee, the audit committee and the legal committee. If the working relationship with SachsenFonds continues to improve, we are optimistic that further realisations may materialise in the coming months. 

Yours faithfully

Martin M Adams

Chairman

Investment Manager's Report

Indian Real Estate overview

The Indian economy's growth is slowing down with the central bank reducing the GDP growth estimate for Q3 2011 to 8.0%, as compared to previous quarter estimate of 8.3%. The real estate market is bound to be affected by the overall economic sentiment, which in turn is largely impacted by economic events taking place in the rest of the world including the Eurozone debt crisis, the American credit rating downgrade etc. The overall outlook for 2011 is thus not very buoyant.

Residential overview

The rate of appreciation in residential property rates slowed over the first six months of 2011. Sales and absorption have been adversely hit on account of increasing interest rates, along with persistent high inflation and increasing prices. The residential launches also witnessed a slowdown across segments, except in the category with capital values of INR 2,000-3,000 per sq ft, where the volume of units launched in Q2 2011 remained the same as in Q1 2011. However, due to fewer launches in other segments, the share of this category increased from nearly 30% in Q4 2010 and Q1 2011 to 46.0% in Q2 2011. The high end premium segment has suffered a severe blow with launches slowing in Q2 2011 compared to Q4 2010 and Q1 2011 due to the a slowdown in sales off take, especially in Mumbai Island City and a delay in project approvals.

Going forward, it is expected that certain locations that have seen rapid increases in prices such as Mumbai will not only resist further price rises, but also see prices come under some downward pressure.

Commercial overview

The absorption remained healthy accompanied by strong leasing activity in 2011 with more than 35 million sq ft of office space expected to have been absorbed by the end of 2011, an increase of 17.7% year on year (Source : JLL Real Estate Intelligence Service). Despite a rise in absorption levels and stable rents, construction delays have resulted in the supply of office projects across Indian cities being deferred. The focus of developers has shifted to execution and delivery of office space, rather than the launch of new projects due to increasing financing costs involved in undertaking new projects. While the prime markets of Bangalore, Mumbai and NCR-Delhi have seen rents rise, the majority of the other markets remained stable.

The implications of the proposed Revised Direct Tax Code (DTC) will have a significant impact on the IT and IT SEZ supply, thereby affecting the earnings of both landlords and tenants. Investors, particularly private equity funds, are restricting investments to stable, income-yielding assets in the commercial office sector, with less focus on speculative options.

Regulatory overview

Inflation continues to remain a challenge in India and has forced the central bank (RBI) to continue with a tight monetary policy. The key interest rates have now been raised 13 times since March, 2010. This has had a trickle-down effect with banks raising lending rates leading to increased financing and input cost for developers. This has forced some developers to look at options to liquidate their existing land banks and projects, thereby adversely impacting the sentiment in the sector. The increased home loan rates for home buyers have also adversely impacted housing demand. These events have adversely impacted Trinity's portfolio assets such as Lokhandwala. The increase in cap rates for commercial properties has adversely impacted Luxor and Uppals IT.

Also, in a major development for the real estate sector, the Government has come out with a draft Real Estate Bill to serve as a formal measure to regulate the sector. The bill provides for stringent disclosure norms and mandatory registration for every new housing project and will serve to curb unfair practices currently prevailing. Also, a new land acquisition policy was finalized by the government. The policy provides for owner friendly acquisition of land and will serve to minimize land acquisition issues as are currently being faced in some regions of the country such as Greater Noida. 

Conclusion

The above macro economic conditions have had a bearing on Trinity's projects as well - the slowdown in off-take in case of Lokhandwala on account of rising housing prices in Mumbai and the continued depressed demand for SEZ projects due to the demand supply mismatch among other factors are cases in point. We provide an overview of each project in the following pages:

Luxor Cyber City

Market overview

Gurgaon remains one of the most preferred IT/ITES destinations in the country. The previous quarters witnessed fairly active leasing activity, with total space leased of approximately1 million sq ft in Q3 2011. The supply, however, continued to outstrip demand with new supply of around 1.2 million sq ft being added during the quarter. This, coupled with the prospective supply of over 10 million sq ft per annum for the next three years which is at presently in different stages of work in progress, will cause the rentals to remain under pressure and vacancy rates to remain high in the foreseeable future.

Project Location overview

With frontage on a major national highway, Luxor Cyber City's ('LCC') location is a definitive plus for its commercial acceptance in the future. However, not much has changed in the micro market since the last report and the area still remains largely under developed.

Partner/ promoter overview

Mr. B.K. Uppal (promoter of Uppal Housing, a leading local developer) and Mr. D.K. Jain (promoter of Luxor Group, a large industrial house active in the NCR) are the other shareholders of LCC, with whom the project is to be developed.

Development overview

The project is a notified Special Economic Zone (SEZ). However, the lack of agreement between shareholders and adverse market conditions during the 2008-09 period resulted in no development taking place on the ground. The market situation still remains grim on account of significant commercial supply coming up in the region. Further, recent changes in tax laws for SEZs (applicability of Minimum Alternate Tax with effect from April 1, 2011) are also likely to adversely impact SEZ demand rendering development as an SEZ unviable.

Alternatives for development are being examined on an ongoing basis to improve the return potential. The best land use in today's context is to develop a residential township, and efforts are in progress to proceed in this direction. However, there are several challenges in terms of land aggregation (a minimum of 100 acres contiguous land is required to obtain a license for such a development), and possible lock-in of investment for a further period of three years from the date of receipt of township permission.

Exit strategy/ timelines

The valuation of the project has seen little change as compared to the March 2011 value.  The supply demand dynamics in the micro market and adverse tax implications on SEZs continue to have a downward impact on the value.

As mentioned above, alternatives for development are being reviewed and thus realization prior to 2014 is unlikely, except through a strategic sale.

However, any exit decision would need to be taken in consultation with Immobilien II who are partners in TC14 together with Trinity, and thereby have "reserved" veto rights on such a decision. There have been several discussions on the strategy/way forward for the project with Immobilien II, and recent indications are that they are now receptive to the above strategy of proceeding with a township development.

Jodhana

Market overview

Jodhpur is the second largest city of the northwestern Indian state of Rajasthan and is home to rich tradition and history. Although the local economy centres around tourism and handicrafts, several wealthy businessmen residing all over the world have their family roots in this region. The real estate segment has witnessed brisk activity over the past few years. As is the case with most traditional cities in the country, residential development essentially comprises of prime single family gated compounds, with few multi-family apartments.

Project Location overview

The project site is located in the precincts of the Umaid Bhawan Palace (former residence of the Maharaja of Jodhpur). A large portion of the palace is now being managed as a luxury hotel by the Taj Group. The Palace is renowned for its grandeur and spectacular architecture, which lends significant prestige and high end market positioning to the area.

Partner/ promoter overview

The project is to be developed as a joint venture with Marudhar Hotels Pvt. Ltd. (MHPL) (a company promoted by the Maharaja of Jodhpur), which is also the owner of the project land. Jodhana Developers Pvt. Ltd. has acquired the development rights over the land from MHPL and is now responsible for the project development.

Development overview

The commercial terms of the project had been re-negotiated by the Investment Manager to ensure greater security of capital for Trinity, and also an improved return potential. Furthermore, the development mix had been changed to a residential centric development due to a lack of demand for commercial property as an asset class in the area, low rentals, higher capital expenditure requirement and longer gestation period for recovery of capital in any commercial development. The plan is now to undertake a plotted residential layout on the 9.7 acre land parcel and a high end villa development on the 19 acre land parcel.

The approval process for the 19 acre master plan is still in progress and approval is expected shortly. In addition to the project manager, the various consultants for the project (landscape, utilities, structural etc.) have been appointed. The development is going to be managed by the Board of the Indian SPV, relying on the support of the Investment Manager. Infrastructure works will be commenced shortly after receiving the master plan approval.

Exit rationale/ strategy

The valuation of the project continues to improve, essentially on account of a change in the development mix described above leading to better cash flow visibility and reduced costs.

The project launch is expected to take place in Q2 2012, with an exit over 3 years through development and sale of residential units. Being a residential development, the project would be self liquidating in nature.

Uppals IT Park "Tech Oasis"

*Trinity also provided £7.5 million of mezzanine debt to TC1 in October 2008 (included below)

Market overview

Greater Noida is one of the few regions in the country where high quality infrastructure has already been provided by the government in anticipation of inhabitation. However, this has resulted in release of large areas of land all with equally good access leading to a situation of severe excess supply. This is particularly relevant for commercial real estate (majority of which will cater to the IT/ITES sector) - in the year 2011, approximately 3.7 million sq ft of office space is expected to be completed, while the absorption is expected to be a mere 1.9 million sq ft. Taking into account the vacant stock from the previous years, vacancy levels are expected to rise to around 26% in 2011 and further to almost 32% in 2012 (Source: Real Estate Intelligence Service, JLL).

Project location overview

The project land is located with significant frontage on the under construction Yamuna Expressway, which is a 165 km long access controlled six-lane concrete pavement expressway connecting NCR with the northern hinterlands, terminating at Agra (a major town in the northern Indian state of Uttar Pradesh). The expressway is expected to be completed over the next year.

In addition, the Formula 1 racetrack (near the project site) has recently (in October, 2011) hosted the first edition of the Indian Grand Prix very successfully, which has put Greater Noida on the world map. This has helped in creating a marginal improvement in the real estate activity in the region.

Partner/ promoter overview

There is no Indian partner/ promoter in the said project.

Development overview

The project land is zoned for the IT/ITES industry and has received approval as a Special Economic Zone (SEZ) from the Indian government. An extension of the SEZ approval, which had expired, has been obtained.

The land was originally procured from the local authority on a lease installment basis. The entire lease premium payment to the local authority has now been completed by the Company.

No development has taken place on the land since inception on account of the slowdown in the IT/ITES sector over the past couple of years and more specifically due to the excess supply situation being witnessed in the Noida Greater Noida region. More recently, the SEZ demand has also been adversely impacted due to changes in tax laws (applicability of Minimum Alternate Tax with effect from April 1, 2011).

An extension of the timeline provided in the lease agreement for achieving certain construction milestones was accordingly sought and obtained from the local authority to ensure no default. Hence the immediate risk of land repossession, referred to in the 2010 Annual Report, has been successfully alleviated. However, development will remain a challenge until market conditions improve.

Also, over the past months, the farmers in the region have challenged the legality of land acquisition by the Greater Noida/ Noida authorities and have filed petitions in the courts. Although a state court judgement upholds the validity of the acquisition, it has directed the government authorities to pay enhanced compensation to the farmers. However, there are concerns that the matter may not be over as yet and may be pursued further with the higher courts. Apart from the risk as to status of ownership, there may also arise a situation whereby landowners such as Uppals IT are asked by the authority to share in the enhanced compensation to be paid to the farmers. However, this outcome, though a risk, is less likely.

Exit/ realization strategy

The challenging market conditions and risk factors have led to a decline in valuation as compared to that in March, 2011.

The realization potential remains distant as of now. The immediate focus is protection of land value. The infrastructure and social initiatives such as the Yamuna expressway and Formula 1 are leading to increased interest in the micro market. However, the excess supply situation and risk factors such as farmer agitations continue to depress demand. It is still too early to negotiate an agreement with a development partner and pursue realisation strategies.   

However, any exit decision would need to be taken in consultation with Immobilien I and II who are partners in TC1 together with Trinity, and thereby have reserved veto rights on such a decision.

Horizon

Market overview

The Indian logistics industry holds significant potential, which is evidenced by a buoyant growth of 9.2% in 2010 resulting in revenue of about USD82 billion. The growth trajectory is expected to continue going forward as well: for the period 2010-2020, the industry is likely to witness consistent growth of around 8-9 percent every year and reach revenues of about USD190-200 billion by 2020 (Source : Frost & Sullivan report on Indian Transportation Logistics 2011).

This is helped in no small measure by the increasing focus of the government as well as the private sector towards infrastructure development. India is targeting a projected investment of about USD one trillion in infrastructure by both public and private sectors in the 5 year plan from 2012-2017. Several initiatives have been taken with this in mind: the government has permitted FDI of up to 100 per cent under the automatic route for the construction and maintenance of ports and harbours; a 10-year tax holiday is allowed to enterprises engaged in the business of developing, maintaining and operating ports, inland waterways and inland ports; the government has allowed non-major ports to determine their own tariffs as opposed to the regulation of tariffs at major ports by Tariff Authority for Major Ports (TAMP); the Ministry of Finance has expedited approvals to projects under the public-private partnership (PPP) mode.

Project location overview

The company's projects are located across the country and include container freight stations, free trade warehousing zones, inland container depots and logistics and warehousing facilities.

Partner/ promoter overview

SKIL Group, the promoter shareholder of Horizon is a leading player in the ever growing Indian infrastructure industry and has executed large scale projects across the country. It is the group's expertise which will enable execution of Horizon's projects and creation of value therein.

Development overview

The company is making satisfactory progress on several projects undertaken and the Investment Manager is monitoring the same on a regular basis. The basic premise of the company is to undertake forward and backward integration in the logistics space which shall result in Horizon becoming a preferred provider of logistics services under a single window concept resulting in cost benefits for the clients.

A list of the major projects of the company is as follows:

·    A Container Freight Station to be located near the Jawaharlal Nehru Port, Navi Mumbai (the port handles about 60% of the containerized traffic of the country)

·    A free trade warehousing zone ('FTWZ') in Navi Mumbai, in respect of which a co-developer status has been granted to a subsidiary of the company viz. Chiplun FTWZ Pvt. Ltd. It is proposed to acquire additional land for development of a larger area under the FTWZ

·    The company is also undertaking development of an Inland Clearance Depot in National Capital Region and a Container Freight Station at Pipavav, Chennai, and a Multimodal Logistics Park at Jhansi

·    Setting up an additional logistics park as a part of the Sohar SEZ in Oman

These activities will help in creation of greater substance in the company, and ultimately result in capture of greater value at the time of listing, which is currently being targeted in 2013.

Exit/ realisation strategy

An exit has been negotiated with the promoters at a base price of INR 22 per share within a three year time period. This price has been used as the basis for the valuation of the asset as at September 30, 2011.

However, there may arise a possible upside where an Initial Public Offer of the company is brought out or it is merged with any other listed entity at a more attractive price within a period of three years. In any case, the downside of the TC is protected at INR 22 per share.

Lokhandwala

Market overview

The project is located at Mahalaxmi in South Mumbai - a well established premium residential location well connected to other parts of the city and suburbs through rail and road linkages. Several established Mumbai developers have launched projects in the micro market, which has as a result seen a significant rise in developments under construction as well as ready supply. However, as is the case with the entire Mumbai market, the prices in region had witnessed significant appreciation till recently. It is only now that the market is beginning to see some amount of rationalisation in prices as sales have dropped significantly and the developers have not been able to attract customers even with freebies being offered.

Project location overview

The project is well located with easy access to well developed social infrastructure including premium hotels such as Four Seasons and the upcoming Shangri-la hotel, as well as a premium high street development known as Phoenix Mills, complete with outlets of all leading clothing brands (such as Zara, Giorgio Armani etc), a multiplex theatre, high end food and beverage outlets, entertainment zone etc.

Promoter/ partner overview

Lokhandwala Infrastructure, a large Mumbai based developer having a strong presence in the slum rehabilitation / redevelopment space, is the majority partner leading the project. The Group has developed over 10 million sq. ft. of other projects in Mumbai including slum redevelopments.

Development overview

The project is being developed as per the Slum Redevelopment guidelines of Mumbai city, and will have a component for rehabilitation of slum dwellers for which the developer will be entitled to free sale area. Spread over 7 acres, the land was earlier occupied by over 2,100 slum units, which have now been relocated. The longer than expected time taken to relocate the slum units, coupled with regulatory issues delayed the project by over 2 years. However, with the site now clear of slums and the issues sorted, construction for both the slum rehab area and the free sale are has started.

The project has already been launched in the market, branded as "Minerva." It comprises of two proposed towers of around 80 floors each, including stilt and podium parking and amenities in addition to the slum rehabilitation buildings. The project has seen an off take of over 100 apartments i.e. almost 28% of proposed stock, albeit at lower price levels ranging from INR. 17,000/- to INR 19,000/- per sq.ft. The project pricing has faced resistance around the INR 22,000/- per sq.ft. level. A severe slowdown in sales has been witnessed over the past few months due to adverse market conditions and higher prices.

The project also faces challenges in execution given the complexity of design and the targeted height. The timeline for development could stretch to 6-7 years and the project may run into potential cost over-runs as well. The project has, however, been able to tie up funding through bank financing and should also get substantial funding for construction from pre-sales.

Exit/ realisation strategy

The valuation of the project has seen a drop since the March, 2011 value, essentially on account of delay in timelines, rise in costs and slower sales.

A strategic sale/ developer buyback during the development phase of the project is the most likely realisation strategy given the likelihood of the project extending beyond the fund life.

However, any exit decision would need to be taken in consultation with Immobilien I who are partners in TC5 together with Trinity, and thereby have reserved veto rights on such a decision.

Enigma

On 3 November 2011, subsequent to the period end, TC18 sold its interest in Enigma for £6.03 million. TC 18 had acquired the holding in October 2008 for a total consideration of GBP 5.7 million and therefore a profit on investment of approximately £ 0.3 million has been realised.

MK Malls

TC10's investment in DB (BKC) Realtors Private Limited ("MK Malls") consists of (a) equity; (b) redeemable optionally convertible cumulative preference shares ("ROCCPS; and (c) compulsorily convertible preference shares ("CCPS"). In 2007 and 2008, the capital structure of TC10 was reorganised such that the shares acquired by Immobilien I and Immobilien II in TC10 provided the economic interest in the equity and ROCCPS. Trinity was issued with shares in TC10 which provide the economic interest in the CCPS, with a return on equity capped at an IRR of 20%. The figures below refer only to the economic interest in the CCPS.

MK Malls is engaged in a commercial office development in the Bandra Kurla Complex business district of Mumbai.

The investment continues to be strained on account of issues being faced by the promoters due to involvement in the telecom (2G) scam. The promoters have still not paid the amount due to TC10 on exercise of the right to sell all CCPS (in which Trinity has economic interest) after the expiry of three years from date of allotment. The Investment Manager and TCML are, however, in constant touch with representatives of the promoters to ensure a timely and optimal exit.

Also, the fact that 88% of the voting shares in TC10 are owned by Immobilien I and II (in addition to the equity and ROCCPS) poses several challenges in negotiating an exit.

INDEPENDENT REVIEW REPORT TO TRINITY CAPITAL PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 30 September 2011 which comprises the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with IAS 34 Interim Financial Reporting.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 30 September 2011 is not prepared, in all material respects, in accordance with IAS 34 and the AIM Rules.

KPMG Audit LLC

Chartered Accountants 
Heritage Court

41 Athol Street

Douglas

Isle of Man

IM99 1HN

15 December 2011

Consolidated Statement of Comprehensive Income
for the period ended 30 September 2011

Consolidated Statement of Financial Position
at 30 September 2011

These financial statements were approved by the Board on 15 December 2011 and signed on their behalf by

Stephen Coe                                                     Philip Scales

Director                                                             Director