/: Theron Quashie RBC Trust (Trinidad & Tobago) Limited Trustee

Transcription

1 RBC Trust (Trinidad & Tobago) Limited, in our capacity as trustee of the Praetorian Property Mutual Fund, are pleased to report to Unit holders on the activities of the Fund and its performance for the six months ended March 31, The Fund reported a net loss of TT$1.09 Million for the six months ended March 31, 2014 versus a profit of TT$0.16 Million for the comparable period in The loss was driven primarily by foreign exchange losses of just under TT$1 Million and lower rental income in the face of stable expenses. In comparison to 2013, rental income declined by TT$0.53 Million as the Fund liquidated properties in Trinidad and the continued economic slack in Barbados and the Eastern Caribbean kept rents on a downward trend in those countries. No further properties were disposed in the 6 month period ending March 31, 2014 as the properties remaining in the Fund are largely those held in countries suffering the most severe downturn. The Fund's persistent challenge remains in the regional markets where several consecutive years of low to negative growth have created significant excess commercial and vacation rental supply. The single largest remaining property held by the Fund is the Bermuda House property in the Cayman Islands where the Fund is confronted by a surplus of rental space on the island as new supply significantly outstrips demand. Overall, we estimate a 12.4% commercial vacancy rate on this island with Class B buildings such as Bermuda House suffering vacancies higher than the average at 15%. While we have maintained the occupancy level of the building at 48%, the pressure to reduce rental rates to maintain this occupancy level continues to increase. After Bermuda House, the Fund's largest holding is the Bay Corporate Centre in Barbados. This island continues to decline from an economic perspective as their fiscal deficit widened to 11.3% of GDP from 8% in the prior year. The government of Barbados intends to address this with a number of revenue and expenditure measures, which include a new consolidation tax, changes to the excise tax rate, a tax on financial assets, a municipal solid waste tax, a reduction in waivers on import duties and excise taxes, and sizable public sector layoffs. All of these measures, while necessary from an economic standpoint, will serve to place further downward pressure on consumers, the businesses that serve them and by extension demand for commercial rental space. Over the remainder of the year, the Fund Managers will focus on the continued disposal of the Fund's properties. In Barbados and the Cayman Islands there will be a concentrated effort to improve occupancy levels as a means to increase the appeal of these properties while in Trinidad the focus will be on negotiating best pricing on the Fund's behalf as the market rebounds. As always the Fund Managers will continue to invest in the upgrade and maintenance of all properties in order to ensure values are sustained. As we move towards the windup of the Fund in the near future, we note that the Fund's constitution does not allow for a partial wind-up. Hence we will invest the proceeds from prior property sales very conservatively until such time as all the properties are disposed. The following are to financial highlights for the period. /: Theron Quashie RBC Trust (Trinidad & Tobago) Limited Trustee

2 1,1f\ PRAETORIAN Consolidated Statement of Net Assets Six months ended Year ended 31-Mar Sep-13 Unaudited Audited $ $ Assets Investment properties Rental income receivable Other receivables Investments at fair value through profit and loss Cash at bank 121,376,652 50,554, ,545 75,855, , ,385,113 47,183, ,424 76,146,738 1,117,940 Total Assets 249,205, ,412,910 Liabilities Fees payable 756, ,024 Other payables 46,971,704 44,045,444 Units - Class B Total Liabilities 47,728,196 44,844,668 Total Net Assets 201,477, ,568,242 Fund Value Units-Class A 200,000, ,000,000 Accumulated surplus 1,477,657 2,568,242 Total Fund Value 201,477, ,568,242 Net Asset Value Per Unit

3 Consolidated Statement of Net Investment Income Six months Six months Year ended ended ended 31-Mar Mar Sep-13 Unaudited Unaudited Audited $ $ $ Income Interest 464, , ,765 Dividend interest 121,442 24, ,912 Service Charge 596, ,192 1,027,124 Rental Income 3,674,830 4,205,482 8,198,503 Net foreign exchange (losses)/gains (979,794) (325,370) 1,429,499 Realised gains from sale of investment properties - 525, ,000 Fair value gains/(losses) in financials assets 250, ,345 (450,207) Total Income 4,128,269 5,619,873 11,713,596 Expenses Market value depreciation in investment properties (15,378,590) Fees, commission and service charges (5,163,567) (5,152,456) (10,354,064) Other administrative expenses (40,713) (287,734) (482,475) Total Expenses (5,204,280) (5,440,190) (26,215,129) Net Investment (Loss)/ Income Before Taxation (1,076,011) 179,683 (14,501,533) Taxation (14,574) (15,150) (15,084) Net Investment (Loss)/ Income (1,090,585) 164,533 (14,516,617) Total Comprehensive (Loss)/Income for the Period/ Year (1,090,585) 164,533 (14,516,617)

4 Consolidated Statement of Changes in Net Assets Units Accumulated Total Six months ended 31 March Unaudited Surplus Balance at beginning of period 200,000,000 2,568, ,568,242 Total comprehensive loss for the period (1,090,585) (1,090,585) Balance at end of period 200,000,000 1,477, ,477,657 Capital Accumulated Total Six months ended 31 March 2013-Unaudited Surplus Balance at beginning of period 200,000,000 17,084, ,084,859 Total comprehensive income for the period 164, ,533 Balance at end of period 200,000,000 17,249, ,249,392 Year ended 30 September Audited Capital Accumulated Total Surplus Balance at beginning of year 200,000,000 17,084, ,084,859 Total comprehensive loss for the year (14,516,617) (14,516,617) Balance at end of year 200,000,000 2,568, ,568,242

5 FUNCDS Consolidated Statement of Cash Flows Six months Six months Year ended ended ended 31-Mar Mar Sep-13 Unaudited Unaudited Audited $ $ $ Cash Flow from Operating Activities Net Investment (Loss) /Income before Taxation (1,076,011) 179,683 (14,501,533) Adjustments: Realised gain from sale of investment properties (525,000) (600,000) Unrealised exchange loss/(gain) on investments properties 1,008, ,465 (1,273,785) Foreign exchange loss/(gain) on mutal funds 70,905 (47,730) Net fair value (gain)/loss on mutual funds (250,307) (370,345) 450,207 Market value depreciation in investment properties - - " 15,378,590 Investment Loss Before Working Capital Changes (317,857) (390,292) (594,251) Increase in Receivables (3,593,234) (6,809,255) (6,270,717) Increase in Payables 2,883,528 3,799,306 6,601,809 (1,027,563) (3,400,241) (263,159) Net Taxation paid (14,574) (15,150) (27,722) Net Cash Flow Used in Operating Activities (1,042,137) (3,415,391) (290,881) Cash Flow from Investing Activities Purchase of Investment Securities (7,853,396) (61,902,918) Disposal of Investment Securites 541,631 48,927,487 Capitalised expenditure on investments properties (52,823) Proceeds on sale of investment properties 10,025,000 12,300,000 Net Cash Flow Generated From/(Used in) Investing Activities 541,631 2,118,781 (675,431) Net Decrease in Cash and Cash Equivalents (500,506) (1,296,610) (966,312) Cash and Cash Equivalents at Beginning of Period/ Year 1,117,940 2,084,252 2,084,252 Cash and Cash Equivalents at End of Period/ Year 617, ,642 1,117,940 Represented By: Cash at Bank 617, ,642 1,117,940