REG - Hermes Pacific Inv - Final Results
26/09/2023 12:00
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RNS Number : 7067N Hermes Pacific Investments PLC 26 September 2023
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
26 September 2023
HERMES PACIFIC INVESTMENTS PLC
("Hermes" or the "Company")
Final results for the year ended 31 March 2022
Hermes Pacific Investments Plc (AIM: HPAC) today reports its financial results
for the year ended 31 March 2023 ("FY23", "Period" or "Year")
Chairman's statement
I am pleased to present the annual results of Hermes for the financial year
ending on March 31, 2023. The Company has generated income of £21,000
through the rental of our residential property which was acquired in May 2022.
The Company made a loss for the year of £62,000 (FY22: a loss of £105,000),
the improvement reflects the rental income now being generated from this
investment property. Our unwavering commitment to cost minimisation remained
steadfast as we actively sought opportunities to allocate our available funds.
At the close of the financial year, the Company's net assets amounted to
£3,432,000 (FY22 £3,486,000), a marginal decrease from the previous year.
Notably, in the prior financial period, we adopted a new investment policy,
primarily focusing on the property sector, although not exclusively. We are
pleased to report that we successfully executed our first investment within
the property sector in May 2022. The Company purchased a two-bedroom leasehold
flat and a single garage in Westcliff-on-sea. The purchase price of £594,907
was funded from the Company's existing cash resources. This flat has now been
rented out on assured shorthold tenancy agreement.
The Company is not only benefitting from the rental income but due to rising
interest rates, our cash holdings have begun to accrue interest through
investments in treasury deposits.
Company Activities Review
Hermes operates as an investment company and has previously committed funds in
alignment with its investment policy, particularly in companies engaged in
financial activities within the emerging market sector. These investments have
consistently met management's expectations. Our balance sheet remains robust,
with cash and treasury deposits amounting to £2.571 million as of March 31,
2023, compared to £3.284 million in the prior fiscal year. Over the course of
this year, we diligently assessed potential opportunities to deploy our
financial resources but regrettably did not identify any transactions that met
our criteria.
As we reflect upon the past year, it is imperative to acknowledge the
challenges and strategic decisions that have influenced our operations. We
observed a cautious approach within our company regarding additional
investments, primarily driven by the prevailing economic conditions. The rapid
escalation of interest rates and the resultant contraction of yields in the
property market prompted this strategic decision. Our steadfast commitment to
prudent risk management necessitated a careful evaluation of potential impacts
on our investments, leading us to exercise caution in deploying further
capital at this juncture.
Despite the constraints we encountered, it is noteworthy that the underlying
fundamentals of the property market remained relatively robust. The demand for
properties in the United Kingdom continued to display resilience, underpinned
by a robust economy and favourable demographics. However, we must acknowledge
that, akin to any investment, inherent risks persist.
One pivotal risk is the potential for a decline in property prices. As an
investment company, we maintain vigilant oversight of market indicators to
ensure the long-term stability and growth of our investments. We remain
cognizant of the prospect of price adjustments and are prepared to proactively
safeguard our investments against adverse market conditions.
Looking forward, our commitment entails continued vigilance in monitoring
market trends, harnessing our expertise, and seeking appealing investment
opportunities that align with our risk tolerance and long-term objectives.
While we acknowledge the uncertainties and potential challenges within the
property market, our optimism endures regarding the underlying strength and
resilience of the sector over the long term.
Haresh Kanabar
Chairman
26 September 2023
Contacts
Hermes Pacific Investments Plc www.hermespacificinvestments.com (http://www.hermespacificinvestments.com/)
Haresh Kanabar, Non-Executive Chairman Tel: +44 (0) 207 290 3340
WH Ireland Limited ( Nominated Adviser & Broker) www.whirelandplc.com/capital-markets
(http://www.whirelandplc.com/capital-markets)
Mike Coe/ Sarah Mather Tel: +44 (0) 207 220 1666
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2023
Year ended Year ended
31 March 31 March
Note 2023 2022
£'000 £'000
Continuing operations
Revenue 3 21
Cost of sales - -
gross profit 21 -
Other operating income - -
Administrative expenses 4 (113) (111)
Operating loss (92) (111)
Finance income 30 6
Finance costs - -
Loss on ordinary activities before tax (62) (105)
Tax expense 8 - -
Loss for the year from continuing activities (62) (105)
Discontinued operations
Loss for the year from discontinued operations - -
Loss for the year (62) (105)
Other comprehensive income
Gain/(losses) arising in the year on investments 8 37
Total comprehensive loss for the year (54) (68)
Basic and diluted loss per share
From continuing operations 9 (2.7)p (4.5)p
STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
As at As at
31 March 31 March
2023 2022
Notes £'000 £'000
ASSETS
Non-current assets
Investment property 10 635 -
Investments 11 218 211
853 211
Current assets
Trade and other receivables 14 24 10
Treasury deposit 12 2,000 -
Cash and cash equivalents 13 571 3,284
2,595 3,294
LIABILITIES
Current liabilities
Trade and other payables 15 (16) (19)
(16) (19)
Net current assets 2,579 3,275
NET ASSETS 3,432 3,486
SHAREHOLDERS' EQUITY
Issued share capital 16 3,576 3,576
Share premium account 5,781 5,781
Share based payments reserve 139 139
Fair value reserve 46 38
Retained earnings (6,110) (6,048)
TOTAL EQUITY 3,432 3,486
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2023
Note Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Cash flows from operating activities 19 (108) (117)
Cash flows from investing activities
Acquisition of investment property (635) -
Investment income 30 6
Treasury deposit (2,000)
Net cash (used in)/from investing activities (2,605) 6
Cash flows from financing activities
Other operating activities - -
Net cash from financing activities - -
(Decrease)/increase in cash and cash equivalents (2,713) (111)
Cash and cash equivalents at start of period 13 3,284 3,395
Cash and cash equivalents at end of period 13 571 3,284
Cash and cash equivalents at end of period
13
571
3,284
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2023
Share
Ordinary share capital Deferred share capital based payments reserve
Share premium Retained earnings Fair value reserve
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2021 2,333 1,243 5,781 139 (5,943) 1 3,554
Loss for the year - - - - (105) - (105)
Other comprehensive income 37 37
At 1 April 2022 2,333 1,243 5,781 139 (6,048) 38 3,486
Loss for the year period - - - - (62) - (62)
Other comprehensive income 8 8
___
At 31 March 2023 2,333 1,243 5,781 139 (6,110) 46 3,432
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023
1. General information
Hermes Pacific Investments Plc is a public limited liability company
incorporated in the United Kingdom under the Companies Act 2006. The nature of
the Company's operations and its principal activities are set out in the
Directors' Report on page 5. The Company's registered office is 22 Great James
Street, London, WC1N 3ES.
Statement of compliance
The Group financial statements were prepared in accordance with UK adopted
international accounting standards and with the requirements of the Companies
Act 2006.
At the date of approval of these financial statements, various Standards and
Interpretations affecting the Company, which have not been applied in these
financial statements, were in issue, but not yet effective. The Directors have
considered these new standards and interpretations and do not expect them to
have a material impact on the Company.
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.
Critical accounting estimates and judgments
The preparation of financial statements in conformity with UK adopted
international accounting standards 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 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 on-going basis. Revisions to
accounting estimates are recognised in the year in which the estimate is
revised and in any future years affected.
Management have not made any material estimates or judgements that may result
in a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year.
Revenue
Revenue comprises rental income which is recognised on a straight line and
accruals basis over the rental period.
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.
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.
Investments
The Company carries its investments at fair value. Gains and losses are
either recorded in profit or loss or other comprehensive income. For
investments in equity instruments that are not held for trading, this will
depend on whether the company has made an irrevocable election at the time of
initial recognition to account for the equity investment at fair value through
other comprehensive income.
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.
Investment property
Investment property, which is property held to earn rentals and/or for capital
appreciation, is stated at fair value at the reporting date. Gains or losses
arising from changes in the fair value of investment property are included in
profit or loss for the period in which they arise.
3. Revenue
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Rents received 21 -
21 -
Revenue represents rentals received in respect of the Company's investment
property which is rented under an assured shorthold tenancy. The lease
provides for an annual rental of £25,380, expiring in May 2027.
4. Operating loss
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
The operating loss is stated after charging the following, included in
administrative expenses:
Staff costs 34 34
Other admin costs 79 77
113 111
5. Auditors' remuneration
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Audit fees:
- statutory audit of the accounts 12 12
12 12
6. Directors' emoluments
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Emoluments for qualifying services:
H Kanabar 22 22
J Morton 12 12
34 34
7. Employees and staff costs
The Company has no employees. Staff costs comprises payments made in respect
of services provided by the Directors.
8. Taxation
Year ended Year ended
31 March 2023 31 March 2022
£'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 (62) (105)
Loss from continuing operations before taxation multiplied by standard rate of (12) (20)
corporation tax of 19% (2022: 19%)
Effects of:
Temporary timing differences - -
Non deductible expenses - -
Depreciation in excess of capital allowances - -
Unutilised tax losses 12 20
Current tax charge - -
The Company has approximately £4.2m (2022: £4.1m) of trading losses to carry
forward and offset against future trading profits
9. Loss per share
Year ended Year ended
31 March 2023 31 March 2022
Basic
Loss from continuing activities (£'000) (62) (105)
(62) (105)
Number of shares 2,333,295 2,333,295
Basic loss per share (p)
From continuing operations (2.7)p (4.5)p
(2.7)p (4.5)p
10. Investment property
£'000
Fair value
At 1 April 2022 -
Additions 635
At 31 March 2023 635
Net book value
At 31 March 2023 635
The investment property has been valued by the Directors at the year end. This
is based on the advice of local agents and having considered property price
movements since acquisition.
11. Investments
Investments
£'000
Cost or valuation
Brought forward 211
Fair value movement 7
At 31 March 2023 218
The Directors have elected to hold the investments at fair value through OCI
as it is their intention to hold these
for the long term.
12. Treasury Deposit
2023 2022
£'000 £'000
Treasury deposit 2,000 -
2,000 -
The treasury deposit is a deposit held with the Company's
bankers with a four month maturity.
13. Cash and cash
equivalents
2023 2022
£'000 £'000
Cash at bank and in hand 571 3,284
571 3,284
14. Trade and other receivables
2023 2022
£'000 £'000
Other receivables 24 10
24 10
15. Trade and other payables
2023 2022
£'000 £'000
Trade payables 0 3
Accruals and deferred income 16 16
16 19
16. Share capital
2023 2022
£'000 £'000
Issued and fully paid
2,333,295 ordinary shares of 100p each 2,333 2,333
13,079,850 deferred shares of 9.5p each 1,243 1,243
3,576 3,576
All ordinary shares rank equally in respect of shareholders' rights.
The deferred shares have no voting and dividend rights. On winding up of the
Company, they will be entitled to the nominal value only after all ordinary
shareholders receive the nominal value of their shares plus £10m per share.
As at 31 March 2023 and 31 March 2022 the authorised share capital was
3,500,000 ordinary shares of 100p and 200,000,000 deferred shares of 9.5p.
17. Reserves
Share premium
This is the amount subscribed for share capital in excess of
nominal value.
Share based payments reserve
This is the fair value of equity instruments issued as share
based payments.
Fair value reserve
This is gains and losses arising on the revaluation of the
company's long term investments.
Retained earnings
This is all other net gains and losses and transactions with
the owners not recognised elsewhere.
18. 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 2023 are not materially different from
their book value.
Financial assets at fair value
through other comprehensive income
2023 2022
£'000 £'000
Investments 218 211
218 211
The fair value measured is categorised within level 1 of the fair value
hierarchy.
Financial assets at amortised cost 2023 2022
£'000 £'000
Trade and other receivables 24 10
Cash and cash equivalents 571 3,284
Treasury deposit 2,000 -
2,595 3,294
Financial liabilities at amortised cost 2023 2022
£'000 £'000
Trade and other payables 16 19
16 19
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 interest bearing assets. Interest bearing assets comprise 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.
Price risk
The Company's exposure to equity securities price risk arises from investments
held by the Company and classified in the statement of financial position
either as at fair value through other comprehensive income or at fair value
through profit or loss. The risk is managed by regular reviews of the
portfolio of investments held to ensure that exposure to price movements is
within acceptable limits.
The maturity dates of the Company's financial instruments are shown below and
are based on the period outstanding at the balance sheet date up to the
contractual maturity date.
Between Between
Less than 6 months and 1 year 1 and 5 years
6 months Total
£'000 £'000 £'000 £'000
2023
Financial Assets
Variable interest rate instruments 2,571 - - 2,571
Non-interest bearing 24 - - 24
2,595 - - 2,595
Financial Liabilities
Non-interest bearing 16 - - 16
16 - - 16
Between Between
Less than 6 months and 1 year 1 and 5 years
6 months Total
£'000 £'000 £'000 £'000
2022
Financial Assets
Variable interest rate instruments 3,284 - - 3,284
Non-interest bearing - 10 - 10
3,284 10 - 3,294
Financial Liabilities
Non-interest bearing 19 - - 19
19 - - 19
19. Cash flows from operating activities
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Operating (92) (111)
loss
Depreciation of property, plant and equipment - -
Operating cash flows before movements in working capital (92) (111)
(Increase)/Decrease in trade and other receivables (14) (1)
(Decrease)/Increase in trade and other payables (2) (5)
Cash flows from operating activities (108) (117)
20. Related party transactions
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 £33,600
(2022: £33,600).
During the year, the Company used the services of Poonam & Roshni Limited
totalling £21,600 (2022: £21,600). H Kanabar is a director of both
companies. No balance was outstanding at the year end (2022: Nil).
During the year the Company used the services of Thirty Acre Stables totalling
£12,000 (2022: £12,000). J Morton is the owner of that business. No balance
was outstanding at the year end (2022: Nil).
The compensation of key management is as disclosed in the
Directors' emoluments note.
21. Annual report
The Annual Report will be posted to shareholders shortly and will be available
on the Company's website http://www.hermespacificinvestments.com. Copies will
be available thereafter in hard copy format from the Company's registered
office, 22 Great James Street, London WC1N 3ES.
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