Wednesday, 29 February 2012

From Rob Saltmarsh, Inox managing director

By Email
29th February 2012
Dear Councillor,
Ref: Inox Group

I am writing to you following a recent email from Councillor Bob Egerton that was
sent to all members of Cornwall Council in relation to my company Inox Group.

Inox Group (trading as Inox Property Ltd as stated on Inox Group's website under the
privacy section) is the company that applied for and secured outline planning consent
for the Stadium for Cornwall at Threemilestone last year, and has submitted the
Langarth application for a sustainable mixed-use community at Threemilestone,
which will be considered by the Strategic Planning Committee on 5th April.

Councillor Egerton's email makes a number of points that need to be addressed.
Inox Group was established in 2005/06 and commenced trading in 2008 to pursue a
number of development opportunities across the UK and to create a recognised brand
in the market place. Although a relatively 'young company', Inox's investors and
development partners have an extensive track record, both in the real estate industry
and the general field of business.

For each project we usually establish a development vehicle in the form of a limited
company. As managing director of Inox Group I am listed as a director of some of
these holding companies. On completion/sale of the individual project, the limited
company is usually dissolved. This is recognised practice in the development industry
and is fully accepted by HMRC.

Some of the companies that Councillor Egerton mentions, of which I am a director,
are listed as 'dormant' at Companies House because they relate to projects that are in
the process of being brought forward, or are yet to commence and therefore no
promotional or development expenditure has been incurred. This is particularly
evident in the case of Exemplar Projects (Truro) Ltd, which is joint applicant for the planning applications at Langarth, but would not commence trading until construction
began and hence would remain dormant until such a time.

Other companies may show a trading loss, year on year, because they reflect the
significant up-front costs of bringing a development project to fruition over say, 3-5

At no time have I stated that I personally fund any of our projects or indeed that I am
anything other than the Managing Director of the lnox Group and associated
companies. I deal with the day to day running of the companies and am the 'face' of
the business. I also have my own property related interests which are completely separate to the Inox Group. For example, 122 Kew Road Ltd, which is a flat management company, managing the London based property of the same name, of which I am an owner and Ikona Developments Ltd that recently developed a small housing scheme, which has now been completed and sold. Both sets of accounts are with Companies House for processing (signed 21st February 2012). I have also relinquished my interest in Riversvale Ltd and am no longer a director of the company, as of 31st October 2011.
This will be reflected in the company's annual return which is due on 14th March

In regards to Inox Group's two separate planning applications at Langarth, we have so far incurred ongoing costs of £1.9 million. This includes money we have spent for
both the stadium and residential applications. Inox became involved in the Langarth
projects at the end of 2009.

We do not have extensive numbers of employees, as for each development project we
employ a specialist external project team, which can consist of anything up to 15
individual consultancy firms. And because we work across the UK, we have little
need to enter into a long term lease on office space that does not meet our needs;
hence the reason for occupying Grade A serviced office accommodation in the centre
of Exeter, where we have been based since 2008. Several well known UK-based
companies also occupy space within the building.

Inox Group is backed by private equity investors, both institutional and individual,
who forward-fund our development activity. If planning permission for a development is granted they make their return once the development is sold. In the case of the Langarth development, these investors would fund the infrastructure necessary for delivering the scheme, including roads and services. We would then sell serviced development plots on a phased basis over a number of years. On each project, Inox Group enters into partnership agreements with major PLC house builders.

In the period 2006-2010, Inox Group's associated companies have sold property
assets with a gross development value of £65m, despite a very challenging market. A
complete overview of transactions are not accessible on the Companies House
website and not all associated companies have myself as a director, so I would be
happy for our accountants to confirm this position if required.

Councillor Egerton also points out that the financial accounts for Inox Group's
associated companies are overdue. This is correct and relates to Inox Property Ltd and
Inox Capital Ltd. This was due to an internal valuation exercise that was undertaken,
which lasted longer than expected. Accounts were filed with Companies House on
21st February 2012 and no doubt their website will be updated in due course.

In his email Councillor Egerton asserts that Inox Group has promised to make a
substantial financial contribution towards the construction costs of the Stadium for
Cornwall. This is not the case. We have made no promises whatsoever and our
position remains that we do not intend to fund the capital costs of the stadium, but we
may be able to facilitate third party investment.

Inox Group have made it very clear from the beginning that we would finance the outline planning application and provide the land area for the stadium, at no cost to the Council or indeed taxpayer. We have also made it clear that the residential scheme would provide for a dual-use of infrastructure and would therefore aid with the viability of delivering a stadium at Langarth.

Recent discussions with the Council's economic team have led to the formation of
Cornwall Community Stadium Ltd (CCS Ltd), which includes Truro College, Cornish Pirates RFC and Inox Group (myself as a director). This company has been formed to
enable the costs of the detailed planning application to be met and also could act as a
vehicle for the future management / delivery of the stadium.

Inox Group has been in talks with third party private investors, and there is potential
interest in funding the project but there is presently no formal agreement in place that
would guarantee private sector funding. I believe this will remain the case until the
revenue/rental model that is currently being developed is finished and is shown to be
viable and deliverable. At this point, then it is possible that CCS Ltd could deliver the
stadium project with third party private sector support.

In relation to Inox providing direct funding into the stadium project from monies that
would otherwise be used to fulfil its Section 106 obligations for its residential
application, this will absolutely not happen and not a penny of the S106 monies due to
the Council will be used to fund the stadium project. Inox will comply with all legal
obligations, as set out by the S106 agreement and will deliver in full these obligations.

The significant S106 package will include the single largest allocation of affordable
housing in Cornwall for years, some 525 affordable homes for local people. Significant new jobs will be created and we already have expressions of interest from Truro based firms, wishing to acquire the planned community uses, such as the medical centre and care home. The delivery of open market housing will also enable a multi-million pound investment into upgrading infrastructure, including roads, public transport sewers and extensive play and recreational areas which will benefit the whole of Truro. Inox Group genuinely believes that both proposals at Langarth are exceptional and will offer a huge boost to the local economy.

It is disappointing that Councillor Egerton did not contact me directly prior to his email to members. Equally, I would have appreciated the opportunity to comment prior to the email being posted online by Graham Smith at BBC Radio Cornwall.

Because Councillor Egerton felt the need to cast doubt over my professional integrity
and indeed Inox Group's credentials, I have attached a letter of reference for your
information. I have also written separately to Councillor Egerton to offer to meet with
him, to discuss any genuine concerns he may have.

I would also like to lay to rest, unequivocally, comments made in the press by Councillor Dyer, that Inox Group have agreed to sell the Langarth residential site to Manchester City Football Club and Manchester City Council to create a retirement village for people from Manchester, as being entirely untrue. To state further that local people will not benefit from the Langarth proposals and the scheme will become a burden on local services is inaccurate at best. Again, I have written separately to Councillor Dyer and offered to meet with him also.

On a personal note, I have genuinely enjoyed engaging with many positive and proactive people, who have no agenda other than to provide first class facilities for the
people of Cornwall. However, I have found it disheartening that some choose to treat
the stadium as nothing more than a political football.

I would be happy to answer any further questions you may have.

Rob Saltmarsh
Managing Director
Inox Group

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