Final Results

RNS Number : 3824N

Hermes Pacific Investments PLC

28 September 2012

 



HERMES PACIFIC INVESTMENTS PLC

(AIM: HPAC)

Final results for year ended 31 March 2012

Hermes Pacific Investments Plc today reports its financial results for the year ended 31 March 2012.

Contacts
Hermes Pacific Investments Plc
Haresh Kanabar, Non-Executive Chairman	Tel:  +44 (0)  207 290 3340
WH Ireland Limited (Nominated Adviser & Broker)
Marc Davies/ Mike Coe	Tel: [phone]

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"), formerly Indian Restaurants Group Plc ("IRG"), following a change of name on 20 August 2012, for the 12 month period ended 31 March 2012.

Review of the Company's Operations

It has been a year of great change for the Company which has seen the Company dispose of its trading business and became an investing company. On 18 July 2011, the Company announced that it had entered into a conditional agreement to dispose of Chandan Limited ("Chandan"), through which directly or indirectly all of the Company's restaurant related business operated, to Swadha Limited (the "Sale"). The total consideration for the Sale was £250,000 of which £150,000 was paid on completion with the balance of £100,000 to be paid in 78 equal weekly instalments ("Deferred Consideration"). To date, the Company has received £38,490 of the Deferred Consideration. As a term of the Sale and Purchase Agreement, the Company agreed to capitalise intercompany loans to the Chandan Group amounting to, in aggregate, £610,000.

In view of the size and the fundamental nature of the disposal of Chandan by the Company, it was a requirement of the AIM Rules for Companies ("AIM Rules") that the Sale be approved by shareholders of the Company ("Shareholders") at a general meeting of the Company. The Sale completed on 1 September 2011 following approval from Shareholders at a General Meeting of the Company on 26 August 2011 (the "2011 General Meeting"), at which time the Company became an investing company under the AIM Rules. An investing policy was also approved at the 2011 General Meeting. The investing policy was to acquire either minority interests or controlling stakes, either through the issue of securities or for cash, in quoted and non-quoted companies operating in the finance sector.

Since the Sale completed, the Company has attempted to maintain a low cost base whilst its directors endeavoured to raise further funds and began considering suitable investment opportunities and alternative sources of income for the Company.

Under the AIM Rules, the Company was required to make an acquisition or acquisitions which constitute a reverse takeover or otherwise to implement its investing policy to the satisfaction of the London Stock Exchange before 1 September 2012, being the anniversary of the Sale. On 27 July 2012, the Company was pleased to announce that it had raised new equity finance via a subscription, appointed three new members to the board of the Company and adopted a new investing policy focussing on investments in South East Asia. On 23 August 2012, the Company made its first investments under its new investment policy and made further investments on 31 August 2012, all in the financial services sector ("the Investments"). Following the Investments, the Company received confirmation that its investing policy had been implemented.

Financial Review

For the year under review, the Company recorded revenues of £0.9 million, all relating to the Chandan business disposed of during the year. The loss attributable to continued operations was £0.2 million. At the year end, the Company reported net assets of £0.04 million.

Subscription

On 27 July 2012, the Company announced that it completed a share subscription raising £320,000 (approximately £300,000 net of expenses) through the issue of 32,000,000 new ordinary shares of 0.5p each ("Ordinary Shares"), at a subscription price of 1p per new Ordinary Share ("Subscription Shares"). The net proceeds of the Subscription enabled the Company to implement its new Investing Policy approved by the Shareholders at the General Meeting held on 20 August 2012 (the "2012 General Meeting"), satisfy existing creditors and provide the Company with general working capital.

Investing Policy

The directors will be seeking re-approval of, inter alia, the investing policy as set out below at the annual general meeting of shareholders, which is to be held on 25 October 2012. The investing policy has not changed from that approved by shareholders at the 2012 General Meeting:

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.

Appointment of Directors

On 27 July 2012, the board was strengthened by the appointment of two new non-executive directors, John Berry and John Morton, both of whom took part in the Subscription. It is envisaged that these new Directors will assist the Company in reviewing and assessing potential investments which will enable the Company to generate value for shareholders.

On 17 September 2012 it was announced that Alfredo Villa and Matt Wood resigned as non-executive directors.

Change of Name

At the 2012 General Meeting, the Shareholders approved the Company's change of name from Indian Restaurants Company plc to Hermes Pacific Investments plc to reflect the South East Asian focus of the Company's newly adopted Investing Policy.  

Investments

During August 2012, the Company took minority equity stakes in three quoted companies with exposure to South East Asia. £71,952 was invested in Deutsche Forfait AG, which is listed on the Deutsche Börse and is involved in trade finance with a focus on emerging markets, including South East Asia, £49,023 was invested in DBS Bank Limited ("DBS") and £49,853 in Overseas Chinese Banking Corporation Limited ("OCBC"). Both DBS and OCBC are listed on the Singapore Stock Exchange and involved in the banking industry in South East Asia. All investments were made at market price.

Outlook

Following the significant changes in the year under review and those post year end, I am looking forward to assessing further investments in line with our Investing Policy. The board will continue to review potential investments and may undertake fundraisings in the future to facilitate such potential investments.  I would like to thank our Shareholders for their continued support.

Haresh Kanabar

Chairman

27 September 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2012

		Year ended 31 March	18 months ended 31 March
	Note	2012	2011
		£'000	£'000
Continuing operations
Revenue	3	-	3,598
Cost of sales		-	(810)
gross profit		-	2,788
Other operating income		-	10
Administrative expenses	4	(196)	(4.417)
Operating loss		(196)	(1,619)
Finance income	7	-	3
Finance costs	7	-	(1)
Loss on ordinary activities before tax		(196)	(1,617)
Tax expense	10	-	-
Loss for the year from continuing activities		(196)	(1,617)
Discontinued operations
Loss for the year from discontinued operations	11	(19)	-
Loss for the year		(215)	(1,617)
Basic and diluted loss per share
From continuing operations	12	(1.1)p	(9.6)p
From discontinuing operations	12	(0.1)p	-
		(1.2)p	(9.6)p

CONSOLIDATED BALANCE SHEET

AS AT 31 MARCH 2012

		As at 31 March	As at 31 March
		2012	2011
	Notes	£'000	£'000
ASSETS
Non-current assets Goodwill	13	-	475
Property, plant and equipment	14	-	292
		-	767
Current assets Inventories	17	-	20
Trade and other receivables	18	61	295
Cash and cash equivalents	16	39	142
		_
		100	457
LIABILITIES
Current liabilities
Trade and other payables	19	(58)	(755)
Financial liabilities -borrowings	20	-	(123)
		(58)	(878)
Net current (liabilities)/assets		42	(421)
Non-current liabilities Financial liabilities -borrowings NET ASSETS	20	-                          42	(89)                              257
SHAREHOLDERS' EQUITY
Issued share capital	21	1,336	1,336
Share premium account		3,563	3,563
Share based payments reserve		139	139
Retained earnings		(4,996)	(4,781)
TOTAL EQUITY		42	257

COMPANY BALANCE SHEET

AS AT 31 MARCH 2012

		As at 31 March	As at 31 March
		2012	2011
	Notes	£'000	£'000
ASSETS
Non-current assets
Property, plant and equipment	14	-	2
		-	2
Current assets
Trade and other receivables	18	61	305
Cash and cash equivalents	16	39	88
		100	393
LIABILITIES
Current liabilities
Trade and other payables	19	(58)	(139)
		(58)	(139)
Net current assets		42	254
NET ASSETS		42	256
SHAREHOLDERS' EQUITY
Issued share capital	21	1,336	1,336
Share premium account		3,563	3,563
Share based payments reserve		139	139
Retained earnings		(4,996)	(4,782)
TOTAL EQUITY		42	256

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 MARCH 2012

		As at 31 March	As at 31 March
		2012	2011
	Notes	£'000	£'000
ASSETS
Non-current assets
Property, plant and equipment	14	-	2
		-	2
Current assets
Trade and other receivables	18	61	305
Cash and cash equivalents	16	39	88
		100	393
LIABILITIES
Current liabilities
Trade and other payables	19	(58)	(139)
		(58)	(139)
Net current assets		42	254
NET ASSETS		42	256
SHAREHOLDERS' EQUITY
Issued share capital	21	1,336	1,336
Share premium account		3,563	3,563
Share based payments reserve		139	139
Retained earnings		(4,996)	(4,782)
TOTAL EQUITY		42	256

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 MARCH 2012

	Note	Year ended 31 March 2012	18 months ended 31 March 2011
		£'000	£'000
Cash flows from operating activities	23	(309)	(630)
Cash flows from investing activities
Purchase of property, plant and equipment		-	(4)
Income from disposal of subsidiary undertakings		260	(66)
Interest received		-	3
Net cash (used in)/from investing activities		260	(67)
Cash flows from financing activities
Proceeds of share issues		-	140
Net cash from financing activities		-	140
Decrease in cash and cash equivalents		(49)	(557)
Cash and cash equivalents at start of period	15	88	645
Cash and cash equivalents at end of period	15	39	88

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2012

CONSOLIDATED

	Ordinary share capital	Deferred share capital	Share premium	Share based payments reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 October 2009 Share re-organisation	1,308 (1,243)	- 1,243	3,451 -	139 -	(3,164) -	1,734 -
Share issue	28	-	112	-	-	140
Total comprehensive loss for the period	-	-	-	-	(1,617)	(1,617)
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 31 March 2012	93	1,243	3,563	139	(4,996)	42

COMPANY

	Ordinary share capital	Deferred share capital	Share premium	Share based payments reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 October 2009 Share re-organisation	1,308 (1,243)	- 1,243	3,451        -	139 -	(2,882) -	2,016 -
Share issue	28	-	112	-	-	140
Total comprehensive loss for the period	-	-	-	-	(1,900)	(1,900)
At 1 April 2011	93	1,243	3,563	139	(4,782)	256
Share re-organisation	-	-	-	-	-	-
Share issue	-	-	-	-	-	-
Total comprehensive loss for the period	-	-	-	-	(214)	(214)
At 31 March 2012	93	1,243	3,563	139	(4,996)	42

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2012

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 2012

2.    Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements.

Going concern

The consolidated financial statements have been prepared on a going concern basis as, after making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future at the time of approving the financial statements. 

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company made up to 31 March 2012.  The excess of cost of acquisition over the fair values of the Group's share of identifiable net assets acquired is recognised as goodwill.  Any deficiency of the cost of acquisition below the fair value of identifiable net assets acquired is recognised directly in the income statement.

Business combinations

The Group adopts the purchase method in accounting for the acquisition of subsidiaries.  On acquisition the cost is measured at the fair value of the assets given, plus equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the acquisition.  The assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at their fair value at the date of acquisition. Any excess of the fair value of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill.

Any deficiency of the fair value of the consideration below the fair value of identifiable net assets acquired is credited to the income statement in the period of the acquisition.

The results of subsidiary undertakings acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the group. Inter-company transactions and balances between group companies are eliminated.

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 Group'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 Group are detailed below:

Goodwill

The Group 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 methodology described in note 21.  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.

Segmental Reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.  A geographical segment is engaged in providing products or services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.

The Group's primary reporting format is by business segment and its secondary format is by geographical segment.

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:

Leasehold premises                                                over the term of the lease

Plant and machinery                                               15% reducing balance

     Fixtures and fittings                                            15% reducing balance

Motor vehicles                                                        25% 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 Group 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 group 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.

inventories

 Inventories are stated at the lower of cost or net realisable value.

3.    Segmental information

Segment information is presented in respect of the group's business segments.  The primary business segments are based on the group's reporting structure.  As all the Group's operations are in the UK no geographical analysis has been disclosed.

Segmental results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 

	Restaurants	Head Office	Group
	£'000	£'000	£'000
Year ended 31 March 2012
Revenue
Sales to external customers	-	-	-
Results
Operating profit/(loss) before interest and tax	-	(196)	(196)
Net finance income/(expense)	-	-	-
Profit/(loss) before tax	-	(196)	(196)
Taxation	-	-	-
Profit/(loss) for the year from continuing activities	-	(196)	(196)
Loss for the year from discontinued operations			(19)
Loss for the year			(215)
Assets and liabilities
Segment assets	-	100	100
Segment liabilities	-	(58)	(58)
Total net assets	-	(42)	42
Other segment information
Capital expenditure
Property, plant & equipment	-	-	-
Depreciation	-	2	2

	Restaurants	Head Office	Total Group
	£'000	£'000	£'000
18 months ended 31 March 2011
Revenue
Sales to external customers	3,598	-	3,598
Result
Operating profit/(loss) before interest and tax	51	(1,670)	(1,619)
Net finance (cost) income	(1)	3	2
Loss before tax	50	(1,667)	(1,617)
Taxation	-	-	-
Loss for the year from continuing operations	50	(1,667)	(1,617)
Loss for the year from discontinued operations			-
Loss for the year			(1,617)
Assets and liabilities
Segment assets	1,132	92	1,224
Segment liabilities	(828)	(139)	(967)
Total net assets	304	(47)	257
Other segment information
Capital expenditure
Property, plant & equipment	9	4	13
Depreciation	74	4	78

4.    Operating loss

		Year ended  31 March 2012		18 months ended 31 March 2011
		£'000		£'000
	The operating loss is stated after charging the following, included in administrative expenses:
	Depreciation	2		78
	Impairment of goodwill	-		998
	Staff costs	75		1,845
	Other admin costs	119		1,000
	Operating lease rentals	-		496
		196		4,417

As permitted by section 408 of the Companies Act 2006 the income statement of the Parent Company is not presented as part of these financial statements.  The Company made a loss for the period of £215,000 (18 months to 31 March 2011 - £1,617,000).

5.   Auditors' remuneration

		Year ended  31 March 2012		18 months ended 31 March 2011
		£'000		£'000
	Audit fees:
	- statutory audit of the Group accounts	9		6
	- statutory audit of the company's subsidiaries	3		9
		12		15

6.   Other operating income

		Year ended      31 March 2012		18 months ended  31 March 2011
		£'000		£'000
	Rent received	-		10
		-		10

7    Finance income and costs

		Year ended  31 March 2012		18 months ended  31 March 2011
		£'000		£'000
	Bank interest receivable	-		3
	Interest payable on bank loans	-		(1)
		-		2

8.   Directors' emoluments

		Year ended  31 March 2012		18 months ended  31 March 2011
		£'000		£'000
	Emoluments for qualifying services	65		495
	Pension contributions	5		11
		70		506
	The above includes amounts paid to the highest paid director as follows:-
	Emoluments for qualifying services	40		165
	Pension contributions	-		11
		40		176

No directors exercised share options during the year (2011: nil)

9.   Employees and staff costs

The average number of employees was as follows:

		Year ended  31 March 2012		18 months ended  31 March 2011
		No.		No.
	Management	1		4
	Restaurants	-		67
		1		71

Staff costs for the above employees were as follows:

		Year ended  31 March 2012		18 months ended    31 March 2011
		£'000		£'000
	Wages and salaries	65		1,771
	Social security costs	5		63
	Pension contributions	5		11
		75		1,845

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

10.  Taxation

		Year ended  31 March 2012		18 months ended 31 March 2011
		£'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	(196)		(1,617)
	Loss from continuing operations before taxation multiplied by standard rate of corporation tax of 26% (2011: 28%)	(51)		(453)
	Effects of:
	Temporary timing differences	-		6
	Non deductible expenses	-		28
	Depreciation in excess of capital allowances	-		10
	Unutilised tax losses	51		130
	Impairment of goodwill	-		279
	Current tax charge	-		-

The Group has approximately £4.2m (2011: £4.0m) of trading losses to carry forward and offset against future trading profits.

11.   Discontinued operations

Discontinued operations relate to Chandan Limited and Rice & Spice Limited which were sold on 1 September 2011.

		Year ended  31 March 2012		18 months ended 31 March 2011
		£'000		£'000
	Revenue	869		-
	Expenses	(843)		-
	Profit before taxation	26		-
	Income tax expense	-		-
	Profit from discontinued operations for the year	26		-
	Impairment of goodwill	-		-
	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 2012	1	18 months ended 31 March 2011
		£'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 2012		18 months ended 31 March 2011
		£'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		-

12.  Loss per share

		Year ended  31 March 2012		18 months ended  31 March 2011
	Basic
	Loss from continuing activities (£'000)	(196)		(1,617)
	Loss from discontinued activities (£'000)	(19)		-
		(215)		(1,617)
	Number of shares	16,806,004		16,806,004
	Basic loss per share (p)
	From continuing operations	(1.1)p		(9.6)p
	From discontinued operations	(0.1)p		-
		__
		(1.2)p		(9.6)p

There was no dilutive effect from the share options outstanding during the year.

13.  Goodwill

				2012
				£'000
	Cost
	At 1 April 2011			2,137
	Derecognised on disposal of subsidiaries			(475)
	At 31 March 2012			1,662
	Impairment
	At 1 April 2011			(1,662)
	At 31 March 2012			(1,662)
	Net book value
	At 31 March 2012			-

				2011
				£'000
	Cost
	At 1 October 2009			2,137
	At 31 March 2011			2,137
	Impairment
	At 1 October 2009			(664)
	Impairment charge			(998)
	At 31 March 2011			(1,662)
	Net book value
	At 31 March 2011			475

14.   Property, plant and equipment

GROUP

		Leasehold buildings	Fixtures & Fittings	Motor Vehicles	Total
		£'000	£'000	£'000	£'000
	Cost
	At 1 October 2009	359	352	7	718
	Additions		13	-	13
	Disposals		-	-	-
	At 31 March 2011	359	365	7	731
	Additions	-	-	-	-
	Disposals	(359)	(353)	(7)	(719)
	At 31 March 2012	-	12	-	12
	Accumulated depreciation
	At 1 October 2009	168	190	3	361
	Charge for the year	29	48	1	78
	On disposal	-	-	-	-
	At 31 March 2011	197	238	4	439
	Charge for the period	-	2	-	2
	On disposal	(197)	(228)	(4)	(429)
	At 31 March 2012	-	12	-	12
	Net book value
	At 31 March 2012	-	-	-	-
	At 31 March 2011	162	127	3	292

COMPANY

					Fixtures & Fittings
					£'000
	Cost
	At 1 October 2009				10
	Additions				2
	At 31 March 2011				12
	Additions				-
	At 31 March 2012				12
	Accumulated depreciation
	At 1 October 2009				6
	Charge for the year				4
	At 31 March 2011				10
	Charge for the period				2
	At 31 March 2012				12
	Net book value
	At 31 March 2012				-
	At 31 March 2011				2

15.  Investments - available for sale

COMPANY

		Subsidiary undertakings	Total
		£'000	£'000
	Cost and net book value
	At 1 April 2011	-	-
	Impairment of investment	-	-
	At 31 March 2012	-	-
		Subsidiary undertakings	Total
	Cost and net book value
	At 1 October 2009	880	880
	Impairment of investment	(880)	(880)
	At 31 March 2011	-	-

16.   Cash and cash equivalents   

		Group			Company
		2012	2011		2012	2011
		£'000	£'000		£'000	£'000
	Cash at bank and in hand	39	142		39	88
		39	142		39	88

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

		Group			Company
		2012	2011		2012	2011
		£'000	£'000		£'000	£'000
	Cash and cash equivalents	39	142		39	88
	Bank overdraft	-	(8)		-	-
		39	134		39	88

17.  Inventories   

		Group			Company
		2012	2011		2012	2011
		£'000	£'000		£'000	£'000
	Inventories	-	20		-	-
		-	20		-	-

18.  Trade and other receivables

		Group			Company
		2012	2011		2012	2011
		£'000	£'000		£'000	£'000
	Trade receivables	-	9		-	-
	Amounts due from subsidiary undertakings	-	-		-	303
	Other receivables Prepayments and accrued income	61                 -	84            202		61                 -	2                 -
		61	295		61	305

Included in other receivables are amounts of nil (2011: £2,000) due after more than one year.

19.   Trade and other payables

		Group			Company
		2012	2011		2012	2011
		£'000	£'000		£'000	£'000
	Trade payables	53	378		53	2
	Taxation and social security	-	133		-	14
	Other payables	-	67		-	33
	Accruals and deferred income	5	177		5	90
		58	755		58	139

20.   Financial liabilities - borrowings

		Group			Company
		2012	2011		2012	2011
		£'000	£'000		£'000	£'000
	Current:
	Bank overdrafts	-	8		-	-
	Bank loans	-	104		-	-
	Obligations under finance leases	-	11		-	-
		-	123		-	-
	Non current:				-	-
	Bank loans	-	89		-	-
	Obligations under finance leases	-	-		-	-
		-	89		-	-

The maturity date of the Group's financial liabilities is provided in note 22.

The bank loans are secured against the assets of the subsidiary undertaking to which they relate.  Interest on the loans is charged at base rate plus a margin of between 1.75 per cent and 2.5 per cent per annum. 

21.   Share capital

	Group and Company
		2012	2011
		£'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
	18,658,844 ordinary shares of 0.5p each	93	93
	13,079,850 deferred shares of 9.5p each	1,243	1,243
		1,336	1,336

All ordinary shares rank equally in respect of shareholders' rights.

22.  Financial Instruments

Financial risk management

The Group's activities expose the Group 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 group's assets and liabilities at 31 March 2012 are not materially different from their book value.

	Financial assets	2012	2011
		£'000	£'000
	Group:
	Loans and receivables:
	Trade and other receivables	61	295
	Cash and cash equivalents	39	142
	At fair value through profit and loss	100	437
	Company:
	Loan and receivables:
	Trade and other receivables	61	2
	Cash and cash equivalents	39	88
	At fair value through profit and loss	100	90

	Financial liabilities at amortised cost		2012	2011
			£'000	£'000
	Group:
	Trade and other payables		58	755
	Other financial liabilities - borrowings		-	212
			58	967
	Company:
Trade and other payables			58	139
			58	139

Credit risk

The Group monitors credit risk on an on-going basis and manages risk by concentrating on trading and placing bank deposits with reliable counterparties. The Group has no significant concentration of credit risk associated with trading counterparties. Credit risk predominantly arises from cash and cash equivalents. 

Interest rate risk

The group 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 Group has not entered into derivatives transactions and has not traded in financial instruments during the period under review. All the Group's debt is non-interest bearing there would be no effect on the Group if interest rates changed.

Liquidity risk

The Group 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 Group's financial assets are recoverable within the next six months.

The maturity dates of the Group'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
2012	£'000	£'000	£'000	£'000
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

	Less than 6 months	Between 6 months and 1 year	Between 1 and 5 years	Total
2011	£'000	£'000	£'000	£'000
Financial Assets
Variable interest rate instruments	142	-	-	142
Non-interest bearing	-	295	-	295
	142	295	-	437
Financial Liabilities
Variable interest rate instruments	73	39	89	201
Non-interest bearing Fixed interest rate instruments	755 5	- 5	- 1	755 11
	833	44	90	967

23.   Cash flows from operating activities

       GROUP

	Year ended 31 March 2012	18 months ended    31 March 2011
	£'000	£'000
Loss before tax - (including discontinued operations)	(215)	(1,617)
Finance income	-	(3)
Finance costs	-	1
Depreciation of property, plant and equipment	22	78
Loss on disposal of subsidiaries	45	-
Impairment of goodwill	-	998
Reverse provision for liabilities and charges	-	(25)
Operating cash flows before movements in working capital	(148)	(568)
Decrease in inventories	2	-
Decrease in trade and other receivables	14	(77)
(Decrease)/increase in trade and other payables	(19)	202
Cash flows from operating activities	(151)	(443)

       COMPANY                                                

	Year ended 31 March 2012	18 months ended    31 March 2011
	£'000	£'000
Loss on ordinary activities before tax	(214)	(1,900)
Share based payments	-	-
Finance income	-	(3)
Depreciation of property, plant and equipment	2	4
Impairment of investment in subsidiary undertakings	-	880
Impairment of loans to subsidiary undertakings	-	351
Operating cash flows before movements in working capital	(212)	(668)
Decrease in trade and other receivables	(16)	5
Decrease in trade and other payables	(81)	33
Cash flows from operating activities	(309)	(630)

24.   Related party transactions

During the period to 31 August 2011, no purchases were made from Gandhi Imbibe Limited by the Group. (2011: £27.301).  The balance owed to Gandhi Imbibe Limited as at 31 August 2011 was £nil (2011: £nil).  Dinesh Mody, a director of Chandan Limited and Rice & Spice Limited, has a controlling interest in this company.

During the period to 31 August 2011, the Group purchased supplies from Gandhi Oriental Foods Limited totalling £36,089 (2011: £150,095).  The amount owed to Gandhi Oriental Foods Limited at 31 August 2011 was £29,094 (2011: £24,476).  Dinesh Mody, a director of Chandan Limited and Rice & Spice Limited, has a controlling interest in Gandhi Oriental Foods Limited.

During the period to 31 August 2011, the Group received marketing services from SHP Marketing Solutions Limited amounting to £1,200 (2011: £7,545). No amounts were outstanding at the period end. The wife of one of the directors is a director of SHP Marketing Solutions Limited.

25.   Post balance sheet events

On 27 July 2012, the Company announced that it had completed a share subscription raising £320,000 through the issue of 32,000,000 new Ordinary Shares at 1p per share. The net proceeds of the Subscription enabled the Company to satisfy existing creditors, provided the Company with general working capital and enabled it to implement its new Investment Policy approved by the Shareholders at the 2012 General Meeting. On 27 July 2012, the board was also enlarged by the appointment of three new non-executive directors, John Berry, Matt Wood and John Morton, all of whom took part in the Subscription.

At the 2012 General Meeting, the Shareholders approved the Company's change of name from Indian Restaurants Group plc to Hermes Pacific Investments plc to reflect the South East Asian focus of the Company's newly adopted investment policy. Lastly, on 23 August 2012, the Company made its first investments under its new investment policy and made further investments on 31 August 2012, all in the financial services sector.

26.  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 2012.

The financial information has been extracted from the statutory accounts of the Company for the year ended 31 March 2012. 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.

27.  Annual Report and Annual General Meeting

The Annual Report will be available from the Company's website www.hermespacificinvestments.com from 28 September 2012 and will be posted to shareholders on 28 September 2012.  The Annual Report contains notice of the Annual General Meeting of the Company which will be held at 10 a.m. on 25 October 2012 at 24 Martin Lane
, London
 EC4R 0DR. 

 

END

 

 

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