110 111
15.
Investment in available-for-sale financial assets
Group
2015
2014
$'000
$'000
Balance at beginning of financial year
45,353
40,250
Additions
57,139
8,603
Transaction cost capitalised
224
–
Fair value gain (Note 25)
2,477
–
Translation differences
2,936
(3,500)
Balance at end of financial year
108,129
45,353
The investment in available-for-sale financial assets pertains to the subscription of interest-bearing Fully and Compulsorily
Convertible Debentures (“FCCD”) in Phoenix Hitec City Private Limited (“PHCPL”) and Non-Convertible Debentures (“NCD”)
in Flagship Developers Private Limited (“FDPL”).
FCCD
As at 31 March 2015, the FCCD amounting to INR 2,285 million (equivalent to $50,505,000) (2014: INR 2,170 million which
is equivalent to $45,353,000) may be fully converted into equity shares of the PHCPL any time before the 15th anniversary
after issuance, at the option of the Group. The FCCD, however, will be mandatorily converted into equity shares of the PHCPL
at the 15th anniversary after issuance.
This investment is to fund the construction of the third aVance Business Hub property (“aVance 3”), an IT building with a
total floor area of 690,520 sq ft located in Hyderabad. The subscription to the FCCD is a multi-stage process to eventually
acquire aVance 3. The Group would complete the acquisition of aVance 3, upon the building’s completion and satisfaction
of all conditions precedent, by purchasing the issued and paid up capital of PHCPL.
The FCCD is stated at fair value, which is based on the fair value of aVance 3 determined by valuation performed by Cushman
& Wakefield India Pte. Ltd. as at 31 March 2015. The details of the valuation techniques and inputs used are disclosed in
Note 28.
NCD
As at 31 March 2015, the NCD amounting to INR 2,607 million (equivalent to $57,624,000) (2014: NIL) issued by FDPL is to
fund the construction of the 3 IT buildings, with a total floor area of approximately 1.5 million sq ft, located in Hinjewadi,
Pune. The property is currently under construction by FDPL and subscription to the NCD is a multi-stage process to eventually
acquire the property.
The NCD is carried at cost because the cost approximates its fair value.
