22nd May 2007 07:02
Mirland Development Corporation PLC22 May 2007 22 May 2007 MIRLAND DEVELOPMENT CORPORATION PLC ("MirLand"/the "Company") UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 MARCH 2007 MirLand Development Corporation, one of the leading residential and commercialproperty developers in Russia, today announces its interim consolidatedfinancial statements for the three months to 31 March 2007. Since the announcement of our preliminary results the Company has continued tomake good progress. • In March the Company entered into a letter of intent with a view toacquire a Russian company that has rights to a plot of land in the City of Ufa,with the intention of constructing a circa 180,000 sqm logistics centre. Theletter of intent is subject to certain conditions. • The Company is pleased to announce further progress on the skyscraperproject. It now holds a 79% interest in the Russian company that has theleasehold rights to the land and has an agreement to acquire the remaining 21%for a consideration of up to a maximum of US$ 4.5 million. • In April the Company opened its first shopping mall development inYaroslavl. The Centre, which was virtually fully let on opening, is attractingstrong footfall and is generating significant rental income. Nigel Wright, Chairman, commented: "We are pleased with the strong progress the Company is making in delivering itsstrategy and vision. We continue to develop our existing assets, secure theacquisition of the remaining pipeline assets and work towards expanding ourportfolio with additional high yielding assets." For further information: MirLand Development Corporation plc +972 5227 76640Roman [email protected] Financial Dynamics +44 20 7831 3113Stephanie Highett/Dido [email protected]/[email protected] CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended Year ended 31 March 31 December 2007 2006 Unaudited Audited US$ '000 Rental income from investment properties 1,352 3,707 Revenues from managing fees 189 533 Fair value adjustments of investment properties - 35,878 Total income 1,541 40,118 Expenses Operating expenses (203) (863) General and administrative expenses (3,668) (8,839) Financial income, net 2,050 2,330 Profit (loss) before tax expense (280) 32,746 Tax expense 980 2,797 Profit (loss) for the period attributable to (1,260) 29,949the equity holders of the parent Earnings (loss) per share Basic (0.0104) 0.341 Diluted (0.0103) 0.340 The accompanying notes are an integral part of the financial statements. CONSOLIDATED BALANCE SHEET 31 March 31 December 2007 2006 Unaudited US $'000ASSETS NON-CURRENT ASSETSInvestment properties 75,933 65,709Investment properties under construction 63,716 46,930Inventories of buildings under construction 76,194Inventories of land 33,257 76,193Advance on acquisition of subsidiary (Note 4a) 1,000 1,600Equipment 1,748 1,082Long-term receivables and prepayments - 5,958 251,848 197,472CURRENT ASSETSTrade and other receivables 10,337 10,157Deferred taxes 1,143 -Cash and cash equivalents 262,634 267,916 274,114 278,073 Total assets 525,962 475,545 EQUITY AND LIABILITIES EQUITYEquity attributable to equity holders of the parent:Share capital 1,036 1,000Share premium 358,989 327,828Options 2,929 2,348Retained earnings 31,689 32,949Currency translation reserve 2,843 2,402 397,486 366,527Minority interest 4,586 25 Total equity 402,072 366,552 NON-CURRENT LIABILITIESLong-term loans from banks 95,571 93,049Other long-term liabilities 16,989 4,313Deferred taxes 3,030 1,755 115,590 99,117CURRENT LIABILITIESShort-term loans from bank 1,520 -Income tax payable 1,799 1,207Accounts payable and accruals 4,981 8,669 8,300 9,876 Total liabilities 123,890 108,993 Total equity and liabilities 525,962 475,545 The accompanying notes are an integral part of the financial statements. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Attributable to equity holders of the parent Total recognized income and expenses Issuance Currency Share Share of Retained translation Minority Total capital premium options earnings reserve Total interest equity Parent Minority US $'000 At 1 January 2006 7 3,717 - 3,000 (95) 6,629 25 6,654 2,905 - Issuance of 693 2,997 - - - 3,690 - 3,690 - -sharesCapitalization of - 62,192 - - - 62,192 - 62,192 - -shareholder loansIssuance of 300 258,922 - - - 259,222 - 259,222 - -shares inIPO, net ofexpenses (1)Profit for the - - - 29,949 - 29,949 - 29,949 29,949 -periodIssuance of - - 2,348 - - 2,348 - 2,348 - -optionsForeign currency - - - - 2,497 2,497 - 2,497 2,497 -translationadjustments At 31 December 1,000 327,828 2,348 32,949 2,402 366,527 25 366,552 32,446 -2006 Issuance of 36 31,161 - - - 31,197 - 31,197 - -sharesMovement in - - 581 - - 581 - 581 - -optionsLoss for the - - - (1,260) - (1,260) (36) (1,296) (1,260) (36)periodMinority's share - - - - - - 4,652 4,652 - -in purchase ofsubsidiaryForeign currency - - - - 441 441 (55) 386 441 (55) translationadjustments At 31 March 2007 1,036 358,989 2,929 31,689 2,843 397,486 4,586 402,072 (819) (91)(unaudited) (1) Issuance expenses consist of US $ 2,000 thousand. The accompanying notes are an integral part of the financial statements. CONSOLIDATED STATEMENTS OF CASH FLOWS Three months Year ended ended 31 December 31 March 2007 2006 Unaudited US$ '000Cash flows from operating activities:Profit (loss) before the tax expense (280) 32,746Adjustments for:Interest payable - 2,901Options granted 581 2,348(*Fair value adjustments of investment properties - (35,878)Depreciation of equipment 6 8Increase (decrease) in trade and other receivables 4,254 (4,475)Increase (decrease) in accounts payable and accruals (3,187) 7,712(*Income taxes paid (810) (1,465) Net cash flows provided by (used in) operating activities 564 3,897 Cash flows from investing activities:Prepayments - (2,315)Purchase of equipment (648) (892)Purchase of investment properties (4,627) (4,031)Purchase of investment properties under construction (16,471) (16,333)Interest capitalized in investment properties under construction (1,410) (3,658)Purchase of inventories of land - (48,235)Interest capitalized in inventories of land - (373)Advance on acquisition of subsidiary (1,000) (1,600)Payment of amount due in respect of purchase of subsidiaries - (1,250)Acquisition of joint ventures, net of cash acquired - (12,875)Acquisition of subsidiaries, net of cash acquired (15,900) (5,959) Net cash flows used in investing activities (40,056) (97,521) Cash flows from financing activities:Proceeds from issuance of shares by the Company 31,161 259,222Proceeds from (repayment of) short-term borrowings from related parties, net - (460)Proceeds from long-term borrowings 2,707 87,153Proceeds from (repayment of) short-term borrowings 279 -Proceeds from short-term borrowings from related parties - 19,286Repayment of long-term borrowings from related parties - (8,812) Net cash flows provided by financing activities 34,147 356,389 Increase (decrease) in cash and cash equivalents (5,345) 262,765Net foreign exchange differences on cash and cash equivalents 63 5,815Cash and cash equivalents at beginning of period 267,916 664 Cash and cash equivalents at end of period 262,634 267,916 Non-cash transactions:Payables included for investment properties under construction 3,425 2,481 Reclassification of inventories of land to inventories of buildings under 76,194 -construction Capitalization of shareholders' loans to equity - 62,192 Movement of options 581 2,348 Issuance of bonus shares - 683(* Reclassified The accompanying notes are an integral part of the financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1:- GENERAL These financial statements have been prepared as of 31 March 2007 and for thethree months period then ended. These financial statements are to be read inconjunction with the audited annual financial statements of the Company as of 31December 2006, and their accompanying notes. NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies applied in the financial statements of theCompany as of 31 December 2006, are applied consistently in these financialstatements. NOTE 3:- FINANCIAL STATEMENTS IN U.S. DOLLARS a. The financial statements are prepared in accordance with InternationalFinancing Reporting Standards ("IFRS"). b. Foreign currency translation: The consolidated financial statements are presented in the US dollar which isthe Company's functional and presentation currency. Each entity of the Groupdetermines its own functional currency and items included in the financialstatements of each entity are measured using that functional currency. Transactions in foreign currencies are remeasured into the functional currencyat the exchange rate at the date of the transaction. Monetary assets andliabilities denominated in foreign currencies are remeasured into the functionalcurrency at the exchange rate ruling at the balance sheet date. Non-monetaryitems that are measured in terms of historical cost in a foreign currency aretranslated using the exchange rates of the initial transactions. Non-monetaryitems measured at fair value in a foreign currency are translated using theexchange rates at the date when the fair value was determined. All differencesare taken to profit or loss. As at the reporting date, the assets and the liabilities of the subsidiaries aretranslated into US dollars according to the exchange rate prevailing at thebalance sheet date and income and expense items are translated into US dollarsat the weighted average exchange rate for the period. The exchange differencesarising on the translation are taken directly to a separate component of equity("currency translation reserve"). Such translation differences are recognized inthe income statement in the period in which the entity is disposed of. Below is data regarding the representative exchange rates of the Russian Ruble,which is the functional currency of the Russian subsidiaries of the Company: As of: Representative exchange rate of the Russian Ruble for US$ 1 31 March 2007 26.0131 December 2006 26.33 Change during the period: % Three months ended 31 March 2007 (1.19)Year ended 31 December 2006 (8.54) NOTE 4:- SIGNIFICANT EVENTS WITHIN THE PERIOD OF FINANCIAL STATEMENTS a. In March 2007, the Company (the "Purchaser") signed a letter of intent(the "LOI") with Ekford Commercial Inc. (the "Seller") whereby the Purchaserexpressed its intention to purchase a 100% participatory interest from theSeller of Zhilstroyproekt Limited Liability company, a legal entity incorporatedin Russia. According to the LOI the Purchaser intends to acquire such participatoryinterest in Zhilstroyproekt for an aggregate purchase price of up to US$ 10million subject to the following conditions: - The first instalment of US$ 1,000 thousand will be payable as arefundable deposit within 5 business days following the date of the execution ofthe LOI. This installment was paid on March 19, 2007. - The second instalment of US$ 6 million will be payable within fivebusiness days upon occurrence of the latest of the following conditions: (i) The transfer of 100% of the participatory interest from the Seller tothe Company. (ii) The Company enters into a land lease agreement in respect of the landplot owned by Zhilstoyproekt in the Dema District in the City of Ufa (the "LandPlot") for not less then two years with a purpose of designing a logisticcenter. (iii) The Company is granted with a legal and valid resolution of thegovernmental and municipal authorities pursuant to which the Company ispermitted to commence the designing of the logistic center. - The third installment of US$ 3 million will be payable within fivebusiness days upon occurrence of the latest of the following conditions: (i) The date of issuance to the Company of a legal and valid resolutionsand authorizations of the governmental and municipal authorities pursuant towhich the Company is permitted to commence the construction of the logisticcenter. (ii) The date on which the Company enters into a land lease agreement inrespect of the Land Plot for not less than five years with a purpose ofconstruction the logistic center. b. On 3 January 2007, the Company completed the first share purchaseagreement to acquire the entire issued share capital of Gasconade Holding Ltd.,a Cypriot company that holds 58% interest in Real Estate LLC, a Russian companythat has the leasehold rights in land to be used for the Company's skyscraperdevelopment project in Moscow. The consideration under this agreement is a totalof US$ 13 million (US$ 1.6 million of which has already been paid by theCompany). In addition, the Company has entered into an additional share purchaseagreement to acquire an effective further 21% interest in the Russian companyreferred to above for a consideration of US$ 4.5 million. The Company intends toclose this additional agreement and also acquire the remaining 21% interest fora further US$ 4.5 million subject to the satisfaction of certain conditions, incase not fulfilled within a certain period the remaining 21% will be transferredto the Company for no further consideration. c. On 3 January 2007, the Company announced that, in connection with itsinitial public offering of Ordinary shares ("the Placing"), Merrill LynchInternational, as stabilizing manager, gave notice that it is exercising theover-allotment option in respect of 3,558,000 Ordinary shares in the Company("the Over-allotment Shares"). The Over-allotment Shares were issued at theoffer price of 478 pence per Over-allotment Share ("the Offer Price"). Theseshares were issued on 8 January 2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MLD.L