RNS Number : 1886P
Hermes Pacific Investments PLC
30 September 2013
HERMES PACIFIC INVESTMENTS PLC
(AIM: HPAC)
Final results for year ended 31 March 2013
Hermes Pacific Investments Plc today reports its financial results for the year ended 31 March 2013.
Contacts
Hermes Pacific Investments Plc
Haresh Kanabar, Non-Executive Chairman
Tel: +44 (0) 207 290 3340
WH Ireland Limited (Nominated Adviser & Broker)
Mike Coe
Tel: +44 (0) 117 945 3470
Note to Editors:
The Company's investment policy was approved by shareholders at a general meeting of the Company held on 20 August 2012. The proposed investments to be made by the Company may be either quoted or unquoted; made by direct acquisition of an equity interest; may be in companies, partnerships, joint ventures; or direct interests in projects in South East Asia including, but not limited to, investments in the financial sector. The Company's equity interest in a proposed investment may range from a minority position to 100 per cent. ownership.
The Company will identify and assess potential investment targets and where it believes further investigation is required and subject to assessment of potential risk, intends to appoint appropriately qualified advisers to assist.
The Company proposes to carry out a project review process in which all material aspects of any potential investment will be subject to due diligence, as considered appropriate by the Board. It is likely that the Company's financial resources will be invested in a small number of projects or potentially in just one investment which may be deemed to be a reverse takeover under the AIM Rules.
Where this is the case, it is intended to mitigate risk by undertaking an appropriate due diligence process. Any transaction constituting a reverse takeover under the AIM Rules will require Shareholder approval. The possibility of building a broader portfolio of investment assets has not, however, been excluded.
The Company intends to deliver shareholder returns principally through capital growth rather than capital distribution via dividends. Given the nature of the Company's Investment Policy, the Company does not intend to make regular periodic disclosures or calculations of net asset value.
Chairman's Statement
I am pleased to report the results of Hermes Pacific Investments Plc ("HPAC" or the "Company") for the 12 month period ended 31 March 2013. During the year the Company had no revenues as it does not have any operating business and the company made a loss of £122,000 which has been significantly reduced from a recorded loss of £215,000 during the previous financial year. We continue to focus on keeping our cost base low particularly during this phase of our development. At the year end the Company had net assets of £241,000
Review of the Company's Operations
The Company has made some investments in line with its investing policy in companies involved in trade finance for emerging countries and also other financial activities operating from the Far East region. These investments have performed well and we are evaluating other suitable opportunities in emerging markets and expect to make further investments in the near future.
Subscription
Following the year-end the Company has raised £4,160,000 before expenses, through the placing of 416,000,000 New Ordinary Shares. The New Ordinary Shares were placed with three existing shareholders and one new investor. The New Ordinary Shares were allotted by the Company under authorities granted by shareholders at the last Annual General Meeting of the Company held on 25 October 2012. The proceeds of the placing will provide the Company with general working capital to enable it to further implement its investing policy.
Consolidation
The Board considered that the share consolidation would be beneficial as it will reduce the size of the issued ordinary share capital of the Company, thereby making it more manageable and improve the attractiveness of the Company's shares to new investors. Consolidation would also help the market in HPAC's shares generally if its share price was higher and it was no longer a "penny stock".
A shareholders meeting was held on 9 September 2013 and the proposed resolution to consolidate the shares was passed by shareholders of the company. Under the share consolidation, every 200 Existing Ordinary Shares will be consolidated into one New Ordinary Share. The Share Consolidation became effective immediately on 10 September 2013. Post consolidation the Company has 2,333,295 shares in issue.
I would like to thank our shareholders for their continued support.
Haresh Kanabar
Chairman
30 September 2013
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2013
Year ended 31 March
Year ended 31 March
Note
2013
2012
£'000
£'000
Continuing operations
Revenue
-
-
Cost of sales
-
-
gross profit
-
-
Other operating income
-
-
Administrative expenses
3
(122)
(196)
Operating loss
(122)
(196)
Finance income
-
-
Finance costs
-
-
Loss on ordinary activities before tax
(122)
(196)
Tax expense
7
-
-
Loss for the year from continuing activities
(122)
(196)
Discontinued operations
Loss for the year from discontinued operations
8
-
(19)
Loss for the year
(122)
(215)
Other comprehensive income Available-for-sale financial assets: Gains/(losses) arising in the year Total comprehensive loss for the year
23 (99)
- (215)
Basic and diluted loss per share
From continuing operations
9
(0.2)p
(1.1)p
From discontinuing operations
9
-
(0.1)p
(0.2)p
(1.2)p
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2013
As at 31 March
As at 31 March
2013
2012
Notes
£'000
£'000
ASSETS
Non-current assets
Property, plant and equipment Investments
10 11
- 196
- -
196
-
Current assets
Trade and other receivables
13
13
61
Cash and cash equivalents
12
57
39
70
100
LIABILITIES
Current liabilities
Trade and other payables
14
(25)
(58)
(25)
(58)
Net current assets
45
42
NET ASSETS
241
42
SHAREHOLDERS' EQUITY
Issued share capital
15
1,496
1,336
Share premium account
3,701
3,563
Share based payments reserve Revaluation reserve
139 23
139 -
Retained earnings
(5,118)
(4,996)
TOTAL EQUITY
241
42
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2013
Note
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Cash flows from operating activities
17
(106)
(309)
Cash flows from investing activities
Acquisition of investments
(173)
-
Income from disposal of subsidiary undertakings
-
260
Net cash (used in)/from investing activities
(173)
260
Cash flows from financing activities
Proceeds of share issues Cost of share issue
320 (23)
- -
Net cash from financing activities
297
-
Decrease in cash and cash equivalents
18
(49)
Cash and cash equivalents at start of period
12
39
88
Cash and cash equivalents at end of period
12
57
39
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2013
Ordinary share capital £'000
Deferred share capital £'000
Share premium £'000
Share based payments reserve £'000
Retained earnings £'000
Revaluation reserve £'000
Total £'000
At 1 April 2011
93
1,243
3,563
139
(4,781)
-
257
Share re-organisation
-
-
-
-
-
-
-
Share issue
-
-
-
-
-
-
-
Total comprehensive loss for the period
-
-
-
-
(215)
-
(215)
At 1 April 2012
93
1,243
3,563
139
(4,996)
-
42
Share re-organisation
-
-
-
-
-
-
-
Share issue
160
-
138
-
-
-
298
Total comprehensive loss for the period
-
-
-
-
(122)
23
(99)
At 31 March 2013
253
1,243
3,701
139
(5,118)
23
241
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2013
1. General information
This announcement has been prepared in accordance with International Financial Reporting Standards ("IFRS") but in itself does not contain sufficient information to comply with IFRS. Details of the accounting policies are set out in the annual report for the year ended 31 March 2013.
2. Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements.
Going concern
The financial statements have been prepared on a going concern basis as, after making appropriate enquiries, the Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future at the time of approving the financial statements. In addition see note 20 regarding post year end transactions.
Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of the company's accounting policies with respect to the carrying amounts of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting year. The judgements, estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, including current and expected economic conditions. Although these judgements, estimates and associated assumptions are based on management's best knowledge of current events and circumstances, the actual results may differ. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised and in any future years affected.
The judgements, estimates and assumptions which are of most significance to the company are detailed below:
Goodwill
The company tests goodwill for impairment on an annual basis or more frequently if there are indications that the amount may be impaired. The impairment analysis for such assets is principally based upon discounted estimated future cash flows based on value in use calculations. Such an analysis includes an estimation of the future anticipated results and cash flows, annual growth rates and the appropriate discount rates.
Valuation of share based payments
The charge for share based payments is calculated in accordance with the accounting policy as set out below. The model requires highly subjective assumptions to be made including the future volatility of the Company's share price, expected dividend yield and risk-free interest rates.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the company's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is included in intangible assets and is tested annually for impairment or when there is an indication of impairment. Any impairment is recognised immediately in the income statement and is not subsequently reversed.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.
The charge for depreciation is calculated to write down the cost of tangible fixed assets to their estimated residual values over their expected useful lives, as follows:
Fixtures and fittings 15% reducing balance
Impairment provisions are made where the carrying value of tangible fixed assets exceeds the recoverable amount.
Revenue recognition
Revenue represents the fair value of the consideration received or receivable, net of Value Added Tax, for goods sold and services provided to customers after deducting discounts. Revenue is recognised when the significant risks and rewards of ownership are transferred.
Deferred taxation
Deferred taxation is provided in full using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Leased assets
Expenditure on operating leases is charged to the income statement on a basis representative of the benefit derived from the asset, normally on a straight line basis over the lease period.
Where fixed assets are financed by financing arrangements which give rights approximating to ownership they are treated as if they had been purchased outright at their fair value and the corresponding commitments are shown in the balance sheet as obligations under finance leases and hire purchase contracts. Depreciation of fixed assets acquired under finance leases and hire purchase contracts is calculated to write off the attributed cost over the shorter of the lease or contract term and their estimated useful lives by equal annual instalments. The excess of the total rentals over the amount capitalised is treated as interest which is charged to the profit and loss account in proportion to the amounts outstanding under the lease and hire purchase contracts.
Share based payments
The Company operates an employee share scheme under which it makes equity-settled share based payments to certain employees. For share based payments to employees of the Company, the fair value is determined at the date of grant using a Black Scholes model, and is expensed on a straight line basis together with a corresponding increase in equity over the vesting period, based on the group's estimate of the number of shares that will vest.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid funds with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowing in current liabilities on the balance sheet.
Borrowing costs
All borrowing costs are recognised in the income statement for the period in which they are incurred.
Investments available for sale
Investments classified as available for sale are initially recorded at fair value including transaction costs. Quoted investments are held at fair value and measured either at bid price or latest traded price, depending on convention of the exchange on which the investment is quoted. Such instruments are subsequently measured at fair value with gains and losses being recognised directly in equity until the instrument is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is recycled to the income statement and recognised in profit or loss for the period. Impairment losses are recognised in the Income Statement when there is objective evidence of impairment.
Financial instruments
Financial assets and liabilities are recognised in the balance sheet when the company becomes party to the contractual provisions of the instrument.
Trade and other receivables
Trade receivables are measured at cost less any provision necessary when there is objective evidence that the company will not be able to collect all amounts due.
Trade and other payables
Trade and other payables are not interest bearing and are measured at original invoice amount.
3. Operating loss
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
The operating loss is stated after charging the following, included in administrative expenses:
Depreciation
-
2
Staff costs
68
75
Other admin costs
54
119
122
196
4. Auditors' remuneration
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Audit fees:
- statutory audit of the accounts
12
9
- statutory audit of the company's subsidiaries
-
3
12
12
5. Directors' emoluments
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Emoluments for qualifying services
68
65
Pension contributions
-
5
68
70
The above includes amounts paid to the highest paid director as follows:-
Emoluments for qualifying services
25
40
Pension contributions
-
-
25
40
No directors exercised share options during the year (2012: nil)
6. Employees and staff costs
The average number of employees was as follows:
Year ended 31 March 2013
Year ended 31 March 2012
No.
No.
Management
1
1
1
1
Staff costs for the above employees were as follows:
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Wages and salaries
68
65
Social security costs
-
5
Pension contributions
-
5
68
75
The pension contributions were made to the personal pension scheme of a director of the company.
7. Taxation
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Continuing operations:
Current tax charge
-
-
Adjustment in respect of prior years
-
-
Current tax credit
-
-
Factors affecting the tax charge for the period
Loss from continuing operations before taxation
(122)
(196)
Loss from continuing operations before taxation multiplied by standard rate of corporation tax of 24% (2012: 26%)
(29)
(51)
Effects of:
Temporary timing differences
-
-
Non deductible expenses
-
-
Depreciation in excess of capital allowances
-
-
Unutilised tax losses
29
51
Current tax charge
-
-
The Group has approximately £3.2m (2012: £3.1m) of trading losses to carry forward and offset against future trading profits.
8. Discontinued operations
Discontinued operations relate to Chandan Limited and Rice & Spice Limited which were sold on 1 September 2011.
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Revenue
-
869
Expenses
-
(843)
Profit before taxation
-
26
Profit from discontinued operations for the year
-
26
Loss on disposal of investment
-
(45)
(Loss)/profit from discontinued operations
-
(19)
Cash flows from discontinued operations included in the consolidated cash flow statements are as follows:
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Net cash flow from operating activities
-
104
Net cash flow from investing activities Net cash flow from financing activities
- -
(9) (141)
Total cash flows
-
(46)
The major classes of assets and liabilities comprising operations that were disposed of on 1 September 2011 were as follows:
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Goodwill Property, plant and equipment
- -
475 269
Inventories
-
19
Trade and other receivables
-
219
Bank and cash
-
54
Total assets classified as held for sale Trade and other payables Bank overdrafts and loans
_______ - - -
_______ 1,036 (688) (53)
_______
_______
Net assets of disposal group Consideration
- -
295 (250)
Loss on disposal
-
45
9. Loss per share
Year ended 31 March2013
Year ended 31 March 2012
Basic
Loss from continuing activities (£'000)
(122)
(196)
Loss from discontinued activities (£'000)
-
(19)
(122)
(215)
Number of shares
50,658,844
16,806,004
Basic loss per share (p)
From continuing operations
(0.2)p
(1.1)p
From discontinued operations
-
(0.1)p
(0.2)p
(1.2)p
There was no dilutive effect from the share options outstanding during the year.
10. Property, plant and equipment
Fixtures & Fittings
£'000
Cost
At 1 April 2011
12
Additions
-
At 31 March 2012
12
Additions Disposals
- (12)
At 31 March 2013
-
Accumulated depreciation
At 1 April 2011
10
Charge for the year
2
At 31 March 2012
12
Charge for the period Elimination on disposal
- (12)
At 31 March 2013
-
Net book value
At 31 March 2013
-
At 31 March 2012
-
11. Investments
Investments
£'000
Cost
Additions Revaluation
173 23
At 31 March 2013
196
12. Cash and cash equivalents
2013
2012
£'000
£'000
Cash at bank and in hand
57
39
57
39
Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:
2013
2012
£'000
£'000
Cash and cash equivalents
57
39
Bank overdraft
-
-
57
39
13. Trade and other receivables
2013
2012
£'000
£'000
Other receivables
12
61
12
61
Included in other receivables are amounts of £nil (2012: £nil) due after more than one year.
14. Trade and other payables
2013
2012
£'000
£'000
Trade payables
1
53
Accruals and deferred income
24
5
25
58
15. Share capital
Group and Company
2013
2012
£'000
£'000
Authorised
200,000,000 ordinary shares of 0.5p each
1,000
1,000
200,000,000 ordinary shares of 9.5p each
19,000
19,000
20,000
20,000
Issued and fully paid
50,658,844 ordinary shares of 0.5p each
253
93
13,079,850 deferred shares of 9.5p each
1,243
1,243
1,496
1,336
All ordinary shares rank equally in respect of shareholders' rights.
16. Financial Instruments
Financial risk management
The company's activities expose the company to a number of risks including credit risk, interest rate risk and liquidity risk. The Board manages these risks through a risk management programme. The fair value of the company's assets and liabilities at 31 March 2013 are not materially different from their book value.
Financial assets
2013
2012
£'000
£'000
Loan and receivables:
Trade and other receivables
13
61
Cash and cash equivalents
57
39
At fair value through profit and loss
70
100
Financial liabilities at amortised cost
2013
2012
£'000
£'000
Trade and other payables
25
58
25
58
Credit risk
The company monitors credit risk on an on-going basis and manages risk by concentrating on trading and placing bank deposits with reliable counterparties. The company has no significant concentration of credit risk associated with trading counterparties. Credit risk predominantly arises from cash and cash equivalents.
Interest rate risk
The company has both interest bearing assets and interest bearing liabilities. Interest bearing assets include cash balances which earn interest at a variable rate. The financial liabilities in the current year are all non-interest bearing. The company has not entered into derivatives transactions and has not traded in financial instruments during the period under review. The entire company's debt is non-interest bearing there would be no effect on the company if interest rates changed.
Liquidity risk
The company seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. All cash and cash equivalents are immediately accessible. All of the company's financial assets are recoverable within the next six months.
The maturity dates of the company's financial liabilities are shown below and are based on the period outstanding at the balance sheet date up to the contractual maturity date.
Less than 6 months
Between 6 months and 1 year
Between 1 and 5 years
Total
£'000
£'000
£'000
£'000
2013
Financial Assets
Variable interest rate instruments
57
-
-
57
Non-interest bearing
-
13
-
13
57
13
-
70
Financial Liabilities
Non-interest bearing
25
-
-
25
25
-
-
25
Less than 6 months
Between 6 months and 1 year
Between 1 and 5 years
Total
£'000
£'000
£'000
£'000
2012
Financial Assets
Variable interest rate instruments
39
-
-
39
Non-interest bearing
-
61
-
61
39
61
-
100
Financial Liabilities Non-interest bearing
58
-
-
58
58
-
-
58
17. Cash flows from operating activities
Year ended 31 March 2013
Year ended 31 March 2012
£'000
£'000
Loss on ordinary activities before tax
(122)
(214)
Depreciation of property, plant and equipment
-
2
Operating cash flows before movements in working capital
(122)
(212)
Decrease in trade and other receivables
49
(16)
Decrease in trade and other payables
(33)
(81)
Cash flows from operating activities
(106)
(309)
18. Related party transactions
Short-term Employment Benefits
In addition to salaries of £14,140 (2012: £44,390), key management personnel received an additional one-off payment of £10,000 (2012: £nil) as compensation for contract of services not rendered as employment.
Termination Benefits
On resignation at the company's request, the directors who resigned in the year were entitled to termination benefits of £12,750 (2012: £nil).
Key Management Personnel and Director Transactions
A number of key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial and operating policies of these entities.
A number of these entities transacted with the company during the year. The terms and conditions of these transactions with key management personnel and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an arm's length basis.
The aggregate value of transactions related to key management personnel and entities over which they have control or significant influence was £44,554.
During the year, the company used the services of Poonam & Roshni Limited totalling £12,000 (2012: £nil). H Kanabar is a director of both companies. No balance was outstanding at the year end.
During the year the company used the services of CMS Corporate Consultants Limited totalling £13,054 (2012: £nil). M Wood is a director of both companies. No balance was outstanding at the year end.
During the year the company used the services of John Berry Associates Limited totalling £12,000 (2012: £nil). J Berry is a director of both companies. No balance was outstanding at the year end.
During the year the company used the services of Thirty Acre Stables totalling £7,500 (2012: £nil). J Morton is a director of both companies. No balance was outstanding at the year end.
During the year four of the directors ("the Participating Directors") participated and acquired subscription shares.
Name of Director
Number of Subscription Shares
Percentage of Enlarged Share Capital
Haresh Kanabar Matthew Wood John Morton John Berry
1,000,000 1,000,000 1,000,000 1,000,000
1.97 1.97 1.97 1.97
An independent director of the Company, that is a director excluding the Participating Directors, having consulted with the Company's nominated adviser, WH Ireland Limited, considers that the terms of this transaction to be fair and reasonable insofar as the Company's Shareholders are concerned.
19. Post balance sheet events
Subscription
Post the year-end the Company has raised £4,160,000 before expenses, through the placing of 416,000,000 New Ordinary Shares. The New Ordinary Shares were placed with three existing shareholders and one new investor. The New Ordinary Shares were allotted by the Company under authorities granted by shareholders at the last Annual General Meeting of the Company held on 25 October 2012. The proceeds of the Placing will provide the Company with general working capital to enable it to further implement its investing policy.
Consolidation
The Board considered that the Share Consolidation would be beneficial as it will reduce the size of the issued ordinary share capital of the Company, thereby making it more manageable and improve the attractiveness of the Company's shares to new investors. Consolidation would also help the market in HPAC's shares generally if its share price was higher and it was no longer a "penny stock".
A shareholders meeting was held on 9 September 2013 and the resolution proposed to consolidate the shares was passed by shareholders of the company. Under the Share Consolidation, every 200 Existing Ordinary Shares will be consolidated into one New Ordinary Share. The Share Consolidation became effective immediately on 10 September 2013. Post consolidation the Company has 2,333,295 shares in issue.
20. Publication of Non-Statutory Accounts
The financial information set out in this announcement does not comprise the Group's statutory accounts for the year ended 31 March 2013.
The financial information has been extracted from the statutory accounts of the Company for the year ended 31 March 2013. The auditors' opinion on those accounts was unmodified and did not contain a statement under section 498 (2) or section 498 (3) Companies Act 2006 and did not include references to any matters to which the auditor drew attention by the way of emphasis.
21. Annual Report and Annual General Meeting
The Annual Report will be available from the Company's website www.hermespacificinvestments.com from 30 September 2013 and will be posted to shareholders on 30 September 2013. The Annual Report contains notice of the Annual General Meeting of the Company which will be held at 11 a.m. on 30 October 2013 at the offices of Gordons Partnership LLP, 22 Great James Street, London WC1N 3ES.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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