Notes to the financial statements for the year ended 31 March 2021

1.   General information

Hermes Pacific Investments Plc is a 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 4.

Statement of compliance

The Group financial statements were prepared in accordance with international accounting standards in conformity 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 (and in some cases had not been adopted by the EU). 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.  The outbreak of Covid 19 which has spread globally does not have any impact on our going concern status as we have sufficient cash to fund our activities in the foreseeable future.

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 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.

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.

3.   Operating loss

4.   Auditors' remuneration

5.   Directors' emoluments

6.   Employees and staff costs

The company has no employees. Staff costs comprises payments made in respect of services provided by the directors. 

7.   Taxation

The company has approximately £4m (2020: £3.9m) of trading losses to carry forward and offset against future trading profits

8.   Loss per share

9.   Investments

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

10.  Cash and cash equivalents 

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

11.  Trade and other receivables

12.  Trade and other payables

13.  Share capital

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 2021and 31 March 2020 the authorised share capital was 3,500,000 ordinary shares of 100p and 200,000,000 deferred shares of 9.5p.

14.  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 2021 are not materially different from their book value.

The fair value measured is categorised within level 1 of the fair value hierarchy.

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.

15.  Cash flows from operating activities

16.  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 £42,800 (2020: £43,600).

During the year, the company used the services of Poonam & Roshni Limited totalling £21,600 (2020: £21,600). H Kanabar is a director of both companies. No balance was outstanding at the year end (2020: Nil).

During the year the company used the services of John Berry Associates Limited totalling £9,000 (2020: £10,000). J Berry resigned on 28 February 2021 but was a director of both companies. No balance was outstanding at the year end (2020: Nil).

During the year the company used the services of Thirty Acre Stables totalling £12,000 (2020: £12,000). J Morton is the owner of that business. No balance was outstanding at the year end (2020: Nil).

The compensation of key management is as disclosed in the directors' emoluments note.

17.  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.