Hermes Pac. Regulatory News (HPAC)

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.

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

STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2013

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 MARCH 2013

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2013

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

4. Auditors' remuneration

5. Directors' emoluments

No directors exercised share options during the year (2012: nil)

6. Employees and staff costs

The average number of employees was as follows:

Staff costs for the above employees were as follows:

The pension contributions were made to the personal pension scheme of a director of the company.

7. Taxation

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.

Cash flows from discontinued operations included in the consolidated cash flow statements are as follows:

The major classes of assets and liabilities comprising operations that were disposed of on 1 September 2011 were as follows:

9. Loss per share

10. Property, plant and equipment

11. Investments

12. Cash and cash equivalents

Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:

13. Trade and other receivables

Included in other receivables are amounts of £nil (2012: £nil) due after more than one year.

14. Trade and other payables

15. Share capital

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.

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.

17. Cash flows from operating activities

18. Related party transactions

Short-term Employment BenefitsIn 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 BenefitsOn 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 TransactionsA 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.

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.