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Palace Garden, Hirco Group, Panvel, Mumbai

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Palace Garden, Hirco Group, Panvel, Mumbai

Last updated: July 11 2017
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  • Re : Palace Garden, Hirco Group, Panvel, Mumbai

    Hirco PLC Results and Updates

    RNS Number : 9296A

    Hirco plc

    27 March 2013

    Hirco PLC

    Results for the year ended 30 September 2012

    Hirco PLC ("Hirco" or "the Company"), a closed end investment company that specialises in Indian real estate projects for development, today announces its results for the year ended 30 September 2012.

    For further information please contact:


    IOMA Fund & Investment Management Tel: +44 (0)1624 681250
    Limited
    ----------------------------------- ------------------------
    Philip Scales
    ----------------------------------- ------------------------

    N+1 Singer
    ----------------------------------- ------------------------
    James Maxwell/Nick Donovan +44 (0) 20 7496 3000
    ----------------------------------- ------------------------

    Chairman's Letter

    Dear Fellow Shareholders,

    During the full year ended 30 September 2012 the Company reported an after tax loss of GBP53.6million or 53p per share. This loss is primarily non-cash and represents the Board's decision to write down the Company's investments based on CBRE's 30 September 2012 valuation. Administration costs over the period were GBP2.7 million, which includes some exceptional professional costs. Based on the accounting policies adopted in respect of the interest of the Company in the Burke companies, the disclosed net asset value of the Company has declined to GBP197.8 million or GBP1.97 per share. The Company continues to accrue the 12 percent return on the participating preference share interests in the Burke Companies; however, there is no visibility as to when that accrual might be paid in cash.

    Progress on the projects continues to be modest and both Chennai and Panvel remain at least a decade away from completion. As at 31 December 2012, 1,689 of Chennai's 2,665 available residential units and 2,556 of Panvel's 2,968 available residential units had been sold. The average selling price per square foot as of at the year-end was Rs 4,382 at Chennai and Rs 5,106 at Panvel. We estimate that approximately Rs 12.2 billion in cash has been collected from the Panvel and Chennai residential sales (GBP142.8 million at year end exchange rates) though we have no visibility as to when any cash will be returned to the Burke companies. The completion of Chennai and Panvel Phase One Residential are now projected for September 2015 and November 2015 respectively. Newcastle and Edinburgh, the two office buildings at Panvel totalling 1.9 million square feet gross, are now projected to be completed later this year. No tenants have been secured for these buildings. Shareholders should note that the Panvel and Chennai projects comprise over one hundred million square feet of developable area. This figure is equivalent to many times the size of Canary Wharf. Currently approximately eight per cent of the total developable area (or eight million square feet) is under development with the remaining ninety-two percent to be developed in the future.

    The information flow about the financial and technical aspects of the projects, the progress on the projects and the sharing of cash with Hirco Plc has not been what investors envisioned when Hirco was floated. We still do not have complete clarity over who is really in control of the projects in India. In addition we are two years behind in receiving audited financial statements from the Burke companies, the Mauritius entities in which we hold preference shares, and we have not been informed over the period of these accounts of the fees payable to the Hiranandani entities that provide marketing and development management services in connection with the projects. We have raised issues of transparency and reporting with the Hiranandani family on many occasions; our concerns have not yet been satisfactorily addressed. In light of this plainly unsatisfactory situation, we have put a lot of effort into trying to negotiate an exit from these investments and have had many meetings over the last year with various family members. However, these efforts have so far been fruitless and notwithstanding what you may have read in the media we have not so far received settlement indications in the form and substance which we think our shareholders would find acceptable. We consequently retained counsel over a year ago to examine our legal options.

    As a consequence of this legal analysis and our view of the likelihood of success of these negotiations in the foreseeable future, the Board issued proceedings in February against two former Company directors, Niranjan Hiranandani, the Company's former Chairman and Priya Hiranandani-Vandrevala, the Company's former CEO, in the English High Court and in the Isle of Man courts. The timing of this decision was dictated by relevant statutes of limitations, which, had we not filed when we did, may have barred forever any claims that were not then asserted.

    The Company regards litigation as a last resort. It is never a decision taken lightly. All other reasonable attempts to achieve a satisfactory level of transparency, involvement and reassurance in respect of the underlying investments have failed. And there is no clarity at all about the likelihood of a return being paid on the preference share interests in the Burke companies. The litigation (and arbitrations referred to below) will be complex but have been commenced with the benefit of an exhaustive analysis of our legal rights and remedies conducted over the last 12 months. Although it would be imprudent ever to ignore the risk inherent in all litigation, and the cost of it, the board firmly believes this is the best course of action in the current circumstances.

    The English proceedings against Niranjan Hiranandani and Priya Hiranandani-Vandrevala were issued in the High Court on 6 February 2013. The High Court claim seeks damages of almost GBP220 million. Both defendants have indicated their intention to contest the proceedings and also to contest the jurisdiction of the English High Court. The same proceedings against those two former directors were also issued in the Isle of Man courts to protect the Company from the possible expiry of limitation periods. These proceedings have not yet been served, and the Board would wish to emphasise to all shareholders that the possible outcome of any litigation, should proceedings commence, or the possible amount of any negotiated settlement, may differ materially from both the amount claimed in damages of GBP220 million and the net asset value of GBP197.8 million. In anticipation of these claims, Priya Hiranandani-Vandrevala commenced her own proceedings in the Isle of Man that she ought fairly to be excused for any breaches of duty of which she is found to be liable.

    Besides the High Court proceedings, the Company's Mauritius subsidiary is also involved in a related arbitration with Mr Hiranandani and his wife Kamal. These proceedings were commenced on 6 February 2013 by the Hiranandani's. Separately, the Company and its Mauritius subsidiary have brought separate arbitration proceedings against the Burke Companies and their shareholder, Burke Consolidated Limited ("BCL") to assert rights over the control of the Company's investment and information fklow we are contractually entitled to. The proceedings against the Burke Companies and BCL were initiated on 5 March 2013.

    The confidential nature of arbitration proceedings prevents us from disclosing further details as to the substance of these actions.

    The attention of shareholders is drawn to the paragraphs set out under the heading "Disclaimer of opinion on financial statements" which are included within the Report of the Independent Auditors on pages 8 to 10, and to the further information contained in the Notes to the financial statements which are detailed in these paragraphs

    I hope when writing to you next in reporting our mid-year results to be able to give you a further update on all these matters.

    David Burton

    Chairman of Hirco Plc

    Source:Hirco Hirco plc Annual Financial Report

    Comment


    • Re : Palace Garden, Hirco Group, Panvel, Mumbai



      Read this firstpost article published yesterday ---

      Firstpost Real%20estate

      New airport delay will dent Navi Mumbai real estate prices

      by Sunainaa Chadha Apr 2, 2013

      Comment


      • Re : Palace Garden, Hirco Group, Panvel, Mumbai

        Originally posted by rohu01 View Post
        They have already sold their plots for huge profits so don't think they care any more.
        Can you please elaborate I thought they are only selling apartments and not plots. The current area under construction is only 8% of total area

        Comment


        • Re : Palace Garden, Hirco Group, Panvel, Mumbai

          Originally posted by malkotia View Post
          Can you please elaborate I thought they are only selling apartments and not plots. The current area under construction is only 8% of total area
          I was referring to politicians who bought lands when airport was planned, most of them probably have already sold their land to builders for exorbitant sums.

          Comment


          • Re : Palace Garden, Hirco Group, Panvel, Mumbai

            Originally posted by realebuyer View Post
            According to the financial report Phase I completion date has been revised to November 2015......don't even think of Phase II starting anytime soon...

            Comment


            • Re : Palace Garden, Hirco Group, Panvel, Mumbai

              Hi Members,
              I feel we should wait for few more days,as savvy will be mumbai,this month,and may be savvy may meet niranjan hiranandani,and positive results,will be posted,awaiting to hear.Thanks.

              Comment


              • Re : Palace Garden, Hirco Group, Panvel, Mumbai

                Hi Guys,
                whats up,why so quite,wondering,why no one from phase 1, is not posting any,comments,as they have 95% in the project.

                Comment


                • Re : Palace Garden, Hirco Group, Panvel, Mumbai

                  Originally posted by vinchi View Post
                  Hi Guys,
                  whats up,why so quite,wondering,why no one from phase 1, is not posting any,comments,as they have 95% in the project.
                  All the euphoria of more delays more returns seems to have died down ....anybody is in Mumbai, please visit their office/site and provide details ...

                  I requested earlier as well it is high time we make a group in social media and pressurise HIRCO to provide clarity to the buyers ...how many takers are there for this idea ...

                  Comment


                  • Re : Palace Garden, Hirco Group, Panvel, Mumbai

                    Originally posted by REIdiots View Post
                    Read this firstpost article published yesterday ---

                    Firstpost Real%20estate

                    New airport delay will dent Navi Mumbai real estate prices

                    by Sunainaa Chadha Apr 2, 2013
                    it was bound to happen .. People were falling for the airport trap since many years and jacking up rates .. now they will come back to reality hopefully ...

                    Comment


                    • Re : Palace Garden, Hirco Group, Panvel, Mumbai

                      Originally posted by malkotia View Post
                      All the euphoria of more delays more returns seems to have died down ....anybody is in Mumbai, please visit their office/site and provide details ...

                      I requested earlier as well it is high time we make a group in social media and pressurise HIRCO to provide clarity to the buyers ...how many takers are there for this idea ...
                      Well Malkotia,
                      I agree with u.
                      When can we meet RM , just tell me.I am ready. Mid april onwards APRIL2013 fix date.
                      Lot of people are worried of situation & happening around , mentioning facts on NMIA,and allHarbour link and all.

                      Well dudes..
                      If we were so worried then why we have put money here.
                      My Thinking is as follow;
                      1] Never put Money in a place where u don't feel u have returns. HPG {Over 10 years from now will be GREAT DEAL}.
                      2] Never underestimate anyones reality .
                      Ups & downs in a big business like RE is always there.
                      3] Also I am sure Hirco is not going to run from there, after all he has to fulfill promises .. some delay is bound to happen, and its reality.
                      Only people will affect is those who have taken this product as END USER....

                      Savvy_v
                      Last edited April 7 2013, 01:42 PM.

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