Pactolus Hungarian Property Plc
Final results to 31 December 2014
Pactolus Hungarian Property Plc presents its results for the
year ended 31 December 2014.
The original sphere of the Company’s activity was that of
acquiring, developing, selling and letting investment properties in
Budapest, Hungary. However,
at the Annual General Meeting held on 26
June 2014, this was expanded to include investing directly
or indirectly (via equities, debt and derivatives) in a portfolio
of assets or asset backed investment vehicles including real
estate, infrastructure, closed and open ended funds.
Key Highlights
-
The portfolio of properties was valued at €7.3m as at
31 December 2014 (2013:€7.3m);
-
Net asset value per share of 38p as at 31
December 2014 (2013: 41p), a decrease of 7 per cent, mainly
due to exchange rate movements;
-
Annualised rent roll of €400,590 at 31
December 2014 (2013: €393,810) with a current annualised
rent roll of €454,180;
-
Rental yield on cost as at 31 December
2014 was 7.4 per cent (2013: 7.5 per cent);
-
The quality of our leases has deteriorated with 83 per cent now
expiring in under a year (2013: 73 per cent); and
-
The Group has continued to review costs throughout the year,
reducing annual administration costs by 24 per cent to €177,140 for
the year ended 31 December 2014
(2013: €232,641).
Chairman’s Statement
In what has been a fairly static year for the Group in terms of
property sales, the Group’s reported net asset value at the period
end was €5.1m, which equates to 38
pence per share (conversion rate of €1.2870 to
Sterling). We continue to operate at a profit before
financing activities, generating €80,243 this year compared to
€20,862 last year.
The Group continued reducing its costs and for this year
reported €177,140 in administrative expenses, a reduction of 24 per
cent compared to the €232,641 incurred last year.
The bank loan provided by Investec was recalled and replaced by
funds made available from M&M Investment Company Plc (the
parent company of the Asset Manager and majority shareholder of
Pactolus Hungarian Property Plc) on 21 December 2014.
Subsequently the Group now has repaid €869,214 of this new loan
from M&M Investment Company Plc.
The share price has moved up to 26p per share as at 31 December 2014 compared to 24p per share as at
31 December 2013.
Our strategy for the forthcoming year remains to continue to cut
costs and sell properties, using the proceeds to reduce unsecured
debt. Once the debt has been cleared, the Company expects to
re-invest the proceeds from the sales of its current property
estate primarily into the shares of asset backed companies such as
property companies or closed-end investment funds, approval of
which was given at last year’s Annual General Meeting.
This year the Board will present for Shareholders approval, a
proposal to change the Company’s name from Pactolus Hungarian
Property plc to M&L Property & Assets plc as it is not the
long term intention of the Company to continue being so focused on
Hungarian property assets.
Our Annual General Meeting will be held at 10.00am on Thursday 25
June 2015 at the offices of Equiom (Isle of Man) Limited, Jubilee Buildings,
Victoria Street, Douglas,
Isle of Man, IM1 2SH.
Shareholders who are unable to attend the Meeting are requested to
complete and return the form of proxy which is enclosed with the
Annual Report and Financial Statements so as to ensure that their
votes are represented.
B Miller
Non-Executive Chairman
28 May 2015
Notes:
Forex Rates:
Euro to the Pound Sterling as at 31 December 2014 was
€1.2870 (2013: €1.2044);
Forint to the Euro
as at 31 December 2013 was 316.50Ft
(2013: 296.6Ft).
(Source: FactSet Research Inc.)
Asset Manager’s Report
The Property Portfolio
The Group’s portfolio valuation has not significantly changed
and remains at €7.3m as at 31 December
2014 (2013: €7.3m). The only valuation changes this
year are with regard to the properties sold post year end and
reported as current investment properties in the statement of
financial position. These properties have been sold at an
average net proceeds of 1.7 per cent above their 31 December 2013 book value.
During the year to 31 December
2014, the Group made no further additions to the portfolio
and the floor space remained at 4,783 square metres. As at
31 December 2014, there were no
property sales completed.
Lettings
As at 31 December 2014, the Group
had 18 out of 27 properties let for an average yield against cost
of approximately 7.4 per cent (2013: 7.5 per cent). As at
28 May 2015, the Group had a fully
let rental book of properties.
Disposals
The Group did not complete any property sales in 2014
(2013: One). However, since the year end the Group has
completed the sale of 5 properties. These properties are
being sold at an average price per square metre (after cost) of
€1,438.
Debt and Share Repurchase
Programme
On 21 December 2014 the Group
repaid the entire secured bank debt due to Investec Bank Plc
(Irish Branch). This repayment
was funded by an unsecured loan advanced to the Company from
M&M Investment Company Plc, the parent company of the Group’s
Asset Manager. As at 31 December
2014, the total amount due to M&M Investment Company Plc
was €2.3m.
Net debt to equity ratio has increased to 46 per cent from 44
per cent reported last year.
The Company currently has authority to acquire up to 28.6 per
cent (2,950,774 shares) of its current issued share capital
(10,316,624 shares) and will be seeking shareholders’ approval at
the next annual general meeting to renew this authority.
Dividend
The Company has continued with its policy of not paying
dividends. No dividend has been paid since 30 October 2009 and there are no plans to pay a
dividend.
Hungarian Economy
The residential property market in Budapest has stabilised. The Hungarian
economy is not expected to record any material growth in
2015.
The Group’s strategy for 2015 remains the same in that we intend
to work to retain our tenants, sell units when we can achieve
reasonable valuations, minimise costs and reduce debt.
Midas Investment Management
Limited
2nd Floor, Arthur House, Chorlton
Street, Manchester, M1 3FH.
Consolidated Statement of
Comprehensive Income
For the year ended 31 December
|
Notes |
2014
€ |
Restated
2013
€ |
Continuing
operations |
|
|
|
Rental income and related
fees |
4 |
493,473 |
564,195 |
Direct operating
expenses |
|
(236,090) |
(310,692) |
Gross
profit |
|
257,383 |
253,503 |
Administrative
expenses |
5 |
(177,140) |
(232,641) |
Operating
profit |
5 |
80,243 |
20,862 |
Finance income |
10 |
412 |
2,265 |
Finance costs |
11 |
(115,896) |
(111,804) |
Profit on disposal of investment
properties |
17 |
- |
9,978 |
Profit on sale of listed
investments |
16 |
967 |
- |
Net gain on
revaluation of investment properties |
17 |
26,458 |
- |
Unrealised loss on
listed investments |
16 |
(99) |
- |
Loss for the
year from continuing operations |
|
(7,915) |
(78,699) |
Exceptional
items |
6 |
- |
(32,517) |
Loss before
taxation |
|
(7,915) |
(111,216) |
Tax expense |
12 |
(802) |
(741) |
Net loss
attributable to equity shareholders |
|
(8,717) |
(111,957) |
|
|
|
|
Other
comprehensive loss: |
|
|
|
Exchange
differences on translating foreign operations |
|
(62,316) |
(190,044) |
Total
comprehensive loss for the year |
|
(71,033) |
(302,001) |
|
|
|
|
|
|
|
|
Loss attributable to equity
shareholders |
|
(8,717) |
(111,957) |
|
|
|
|
Total
comprehensive loss attributable to equity shareholders |
|
(71,033) |
(302,001) |
|
|
|
|
Loss per
Ordinary
Share:
Basic |
13
13 |
(0.1)
Cent |
(1.1)
Cents |
Diluted |
(0.1)
Cent |
(1.1)
Cents |
Statements of Financial Position
As at 31 December
|
|
Group
2014 |
Parent
2014 |
Group
2013 |
Parent
2013 |
|
Notes |
€ |
€ |
€ |
€ |
Non-Current
Assets |
|
|
|
|
|
Property, plant &
equipment |
15 |
24,360 |
- |
32,480 |
- |
Listed investments |
16 |
904 |
904 |
- |
- |
Investment properties |
17 |
5,355,611 |
- |
6,944,319 |
- |
Property under development |
17 |
317,804 |
- |
317,804 |
- |
Investment in subsidiaries |
18 |
- |
81,955 |
- |
81,955 |
|
|
5,698,679 |
82,859 |
7,294,603 |
81,955 |
Current
Assets |
|
|
|
|
|
Investment properties |
17 |
1,615,166 |
- |
- |
- |
Loans to subsidiaries |
19 |
- |
14,926,622 |
- |
12,997,751 |
Trade and other receivables |
20 |
61,775 |
44,771 |
98,588 |
51,963 |
Cash and cash equivalents |
|
233,906 |
2,803 |
175,479 |
5,626 |
|
|
1,910,847 |
14,974,196 |
274,067 |
13,055,340 |
Total
Assets |
|
7,609,526 |
15,057,055 |
7,568,670 |
13,137,295 |
Current
Liabilities |
|
|
|
|
|
Trade and other payables |
21 |
257,187 |
54,997 |
835,312 |
642,378 |
Secured loan |
22 |
- |
- |
1,150,000 |
- |
Other loans |
23 |
2,284,901 |
2,284,901 |
444,887 |
444,887 |
|
|
2,542,088 |
2,339,898 |
2,430,199 |
1,087,265 |
Net
Assets |
|
5,067,438 |
12,717,157 |
5,138,471 |
12,050,030 |
Equity Attributable to Owners of the Parent |
|
|
|
|
|
Share capital |
24 |
150,226 |
150,226 |
150,226 |
150,226 |
Capital redemption reserve |
|
222,715 |
222,715 |
222,715 |
222,715 |
Share premium |
|
1,046,894 |
1,046,894 |
1,046,894 |
1,046,894 |
Merger reserve |
|
(109,193) |
(3,689,271) |
(109,193) |
(3,689,271) |
Translation reserve |
|
(1,578,518) |
- |
(1,516,202) |
- |
Retained earnings |
|
5,335,314 |
14,986,593 |
5,344,031 |
14,319,466 |
Total
Equity |
|
5,067,438 |
12,717,157 |
5,138,471 |
12,050,030 |
The financial statements were
approved and authorised for issue at a meeting of the Board of
Directors held on 28 May 2015 and
signed on its behalf by:
Stephen Gray
Barry Smith
Director
Director
Group Statements of Changes in Equity
|
Share
capital
€ |
Capital
redemption
reserve
€ |
Share
premium
€ |
Merger
reserve
€ |
Translation
reserve
€ |
Retained
earnings
€ |
Total
€ |
Balance as
at
1 January 2014 |
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,516,202) |
5,344,031 |
5,138,471 |
|
|
|
|
|
|
|
|
Changes in equity for 2014 |
|
|
|
|
|
Loss for the
year |
- |
- |
- |
- |
- |
(8,717) |
(8,717) |
Exchange
differences on translating foreign operations |
- |
- |
- |
- |
(62,316) |
- |
(62,316) |
Balance as
at
31 December 2014 |
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,578,518) |
5,335,314 |
5,067,438 |
|
Share
capital
€ |
Capital
redemption reserve
€ |
Share
premium
€ |
Merger
reserve
€ |
Translation
reserve
€ |
Retained
earnings
€ |
Total
€ |
Balance as
at
1 January 2013 |
235,133 |
137,808 |
1,046,894 |
(109,195) |
(1,326,158) |
7,143,758 |
7,128,240 |
|
|
|
|
|
|
|
|
Changes in equity for 2013 |
|
|
|
|
|
Loss for the
year |
- |
- |
- |
- |
- |
(111,957) |
(111,957) |
Purchase of own
share |
(84,907) |
84,907 |
- |
- |
- |
(1,687,770) |
(1,687,770) |
Subsidiary write
down |
- |
- |
- |
2 |
- |
- |
2 |
Exchange
differences on translating foreign operations |
- |
- |
- |
- |
(190,044) |
- |
(190,044) |
Balance as
at
31 December 2013 |
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,516,202) |
5,344,031 |
5,138,471 |
Company Statements of Changes in Equity
|
Share
capital
€ |
Capital
redemption reserve
€ |
Share
premium
€ |
Merger
reserve
€ |
Retained
earnings
€ |
Total
€ |
Balance as
at
1 January 2014 |
150,226 |
222,715 |
1,046,894 |
(3,689,271) |
14,319,466 |
12,050,030 |
|
|
|
|
|
|
|
Changes in equity for 2014 |
|
|
|
|
Profit for the
year |
- |
- |
- |
- |
667,127 |
667,127 |
Balance as
at
31 December 2014 |
150,226 |
222,715 |
1,046,894 |
(3,689,271) |
14,986,593 |
12,717,157 |
|
Share
capital
€ |
Capital
redemption reserve
€ |
Share
premium
€ |
Merger
reserve
€ |
Retained
earnings
€ |
Total
€ |
Balance as
at
1 January 2013 |
235,133 |
137,808 |
1,046,894 |
(3,689,271) |
15,465,269 |
13,195,833 |
|
|
|
|
|
|
|
Changes in equity for 2013 |
|
|
|
|
Profit for the
year |
- |
- |
- |
- |
541,966 |
541,966 |
Purchase of own
shares |
(84,907) |
84,907 |
- |
- |
(1,687,769) |
(1,687,769) |
Balance as
at
31 December 2013 |
150,226 |
222,715 |
1,046,894 |
(3,689,271) |
14,319,466 |
12,050,030 |
Statements of Cash Flows
For the year ended 31 December
|
|
Group
2014 |
Parent
2014 |
Group
2013 |
Parent
2013 |
|
Notes |
€ |
€ |
€ |
€ |
Cash flows from
operating activities |
|
|
|
|
|
Net
(loss)/profit |
|
(8,717) |
667,127 |
(111,957) |
541,966 |
Adjusted for: |
|
|
|
|
|
Profit on sale of
investment properties |
17 |
- |
- |
(9,978) |
- |
Unrealised gain on
investment |
17 |
(26,458) |
- |
- |
- |
Profit on sale of
listed investment |
|
(868) |
(868) |
- |
- |
Depreciation |
15 |
8,120 |
- |
8,120 |
- |
Interest
income |
10 |
(412) |
(812,991) |
(2,265) |
(753,680) |
Bank loan interest
expense |
11 |
56,180 |
- |
74,129 |
- |
Other loans
interest expense |
11 |
59,716 |
59,716 |
37,675 |
37,675 |
Foreign exchange
(gains)/losses |
|
(28,825) |
(6,005) |
(4,345) |
1,206 |
Income tax
expense |
12 |
802 |
- |
741 |
- |
Decrease/(increase)
in receivables |
|
36,813 |
7,192 |
148,873 |
(48,633) |
Increase/(decrease)
in payables |
|
58,116 |
45,750 |
(130,574) |
76,387 |
Cash
generated from/(used in) operation |
154,467 |
(40,079) |
10,419 |
(145,079) |
Interest paid |
|
(57,950) |
- |
(74,282) |
(37) |
Income taxes
paid |
|
(2,142) |
- |
(352) |
- |
Net
cash generated from/(used in) operating activities |
94,375 |
(40,079) |
(64,215) |
(145,116) |
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
Net receipts from
sales of investment properties |
|
- |
- |
152,509 |
- |
Purchase of listed
investments |
16 |
(9,513) |
(9,513) |
- |
- |
Proceeds of sale of
listed investments |
16 |
9,477 |
9,477 |
- |
- |
Purchases of
furniture and fittings |
15 |
- |
- |
(40,600) |
- |
Bank interest
received |
10 |
412 |
17 |
2,265 |
292 |
Net
cash generated from/(used in) investing activities |
376 |
(19) |
114,174 |
292 |
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
Bank loan
repayment |
|
(1,150,000) |
- |
(350,000) |
- |
Purchase of own
shares |
|
- |
- |
(1,687,769) |
(1,687,769) |
Net loans to
subsidiary undertakings |
|
- |
(1,115,897) |
- |
(115,727) |
Other loans
received |
|
1,147,167 |
1,147,167 |
444,887 |
444,887 |
Net cash (used
in)/from financing activities |
|
(2,833) |
31,270 |
(1,592,882) |
(1,358,609) |
|
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents |
91,918 |
(8,828) |
(1,542,923) |
(1,503,433) |
Exchange movement on foreign subsidiaries |
(33,491) |
6,005 |
(185,698) |
(1,206) |
Cash and cash
equivalents as at 1 January |
|
175,479 |
5,626 |
1,904,100 |
1,510,265 |
Cash
and cash equivalents as at 31 December |
233,906 |
2,803 |
175,479 |
5,626 |
Notes to the Financial Statements
For the year ended 31 December
2014
Accounting policies
- Summary of significant accounting policies
The principal accounting policies applied in the preparation of
these consolidated and parent company financial statements are set
out below.
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union and the Isle of Man Companies Acts 1931 to
2004.
A separate income statement for the parent company has not been
presented as permitted by the Isle of Man Companies Acts 1931 to
2004. The parent company generated profits of €667,127 (2013:
€541,966).
Consolidation
The consolidated financial statements incorporate the financial
statements of the Company and all of its Subsidiaries.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group.
Presentational currency
The Directors have adopted to use the Euro in presenting the
financial statements due to the international exposure and
stakeholders of the Company.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks and other short term highly liquid investments with
original maturities of three months or less.
Deferred taxation
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the balance sheet
differs to its tax base, except for differences arising on:
-
the initial recognition of goodwill;
-
the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit;
and
-
investment in subsidiaries where the Group is able to control
the timing of the reversal of the difference and it is probable
that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantially enacted by end of the
reporting period and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered). Deferred tax
balances are not discounted.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
-
the same taxable group company; or
-
different group entities which intend either to settle current
tax assets and liabilities on a net basis, or to realise the assets
and settle the liabilities simultaneously, in each future period in
which significant amounts of deferred tax assets or liabilities are
expected to be settled or recovered.
Segmental reporting
The Directors are of the opinion that the Group is engaged in a
single segment of business, being primarily investment in
properties and related services. The Group invests in properties
situated in Budapest, Hungary.
Adoption of standards effective in
2014
(a) New and amended standards adopted by the group.
There are no IFRSs or IFRIC
interpretations that are effective for the first time for the
financial year beginning on 1 January
2014 that would be expected to have
a material impact on the group.
(b) New standards and interpretations not yet adopted.
Standards |
Effective
Dates:
Accounting periods commencing after |
- IFRS 19 Financial Instruments
|
1 January 2015 |
- IFRS 15 Revenue from Contract with Customers
|
1 January 2015 |
The financial statements are prepared in accordance with
International Financial Reporting Standards and Interpretations in
force at the reporting date. The Group has not adopted any
standards or interpretations in advance of the required
implementation dates. It is not expected that adoption of
standards or interpretations which have been issued by the
International Accounting Standards Board but have not been adopted
will have a material impact on the financial statements.
Income
Interest, fees and rental income are included in the financial
statements on an accruals basis. Rental income is recognised
on a straight line basis.
Property sales are included in the financial statements on an
unconditional exchange basis. The profit on disposal of
investment properties is the difference between the sales proceeds
and the carrying value of the assets at the date of disposal, less
selling costs.
Expenses
All expenses are accounted for on an accruals basis.
Issue and redemption costs
All costs incurred in the placing and repurchase of the
Company's shares are written off in full against the profit
and loss reserve.
Foreign currencies
Transactions in foreign currencies are recorded at the rate
ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the
rate of exchange ruling at the end of the reporting period.
All differences are taken to the statement of comprehensive
income.
Group entities that have a functional currency different from
the presentation currency are translated at the closing rate at the
end of the reporting period for assets and liabilities. Income and
expenses are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the closing rate at the end
of the reporting period) and all resulting exchange differences are
recognised as a separate component of equity.
Investment properties
Investment properties include completed properties which are
held for their investment potential.
Investment properties are carried at fair value. Fair value is
based on active market prices. Gains and losses arising from
changes in the fair value of investment property are included in
the statement of comprehensive income for the period in which they
arise. As permitted by IAS 40, investment properties have
been valued by the Directors using judgements based on the current
local property market.
Properties under development are classified under non-current
assets and are stated at the fair value less any impairment.
Investment properties held for sale are actively marketed for
sale and classified under current assets and are stated at the fair
value less any impairment and selling costs.
Impairment of assets
At the end of each reporting period, the Group reviews the
carrying amounts of its assets to determine whether there is any
indication that those assets have suffered an impairment loss. If
the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
estimated recoverable amount. Any impairment loss is recognised as
an expense immediately.
Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior years. A
reversal of an impairment loss is recognised as income
immediately.
Property,
plant and equipment
All furniture and equipment are stated at cost less impairment.
Cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to profit
or loss during the financial period in which they are incurred.
Depreciation, based on a component approach, is calculated using
the straight line method to allocate the cost over
the assets estimated useful lives, as follows:
Furniture and equipment
– 5 – 10 years
Asset residual values and useful lives are reviewed, and
adjusted if appropriate at each financial year-end.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These are
included in the Statement of Comprehensive
Income.
Investment in subsidiary companies
The investments in subsidiary companies are included in the
Statement of Financial Position at cost less any provisions for
diminution in value.
Loans to subsidiary companies
The unsecured subordinated loan made to Midasz Property Kft. is
repayable on demand and has been accounted for under Current Assets
and is measured at cost.
Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. A provision for
impairment of trade receivables is established when there is
objective evidence that the Company will not be able to collect all
amounts due according to the original terms of receivables. The
amount of provisions is the difference between the asset's carrying
amount and the present value of estimated future cash flows,
discounted at the effective interest rate.
The provision is recognised in associated
profit or loss.
Trade payables
Trade payables are stated at their original invoice value.
Interest–bearing borrowings
Interest–bearing borrowings are stated at amortised cost using
the effective interest method. The effective interest method is a
method of calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts
estimated future cash payments throughout the expected life of the
financial liability.
Borrowing costs
All borrowing costs are recognised in the profit or loss
amortised over the period of the loan.
Critical judgment in applying the
Group's accounting policies
The Group prepares its consolidated financial statements in
accordance with IFRS as adopted by the European Union, the
application of which often requires judgements to be made by the
board when formulating the Group’s financial position and
results. The key sources of estimation uncertainty of the
Group are the fair value estimates of investment properties.
Investment properties and properties under development represent
a significant proportion of the Group’s assets, being 96% (2013:
96%) of the Group’s total assets. Therefore, the estimates and
assumptions made to determine their fair value are critical to the
measurement of the Group’s financial position and performance.
In determining the fair value of investment properties, the
Group uses historical and current market data, and existing lease
agreements to determine the fair value of each property.
Financial instruments
Financial instruments are classified and accounted for according
to the substance of the contracted arrangement, as either financial
assets, financial liabilities or equity instruments. An
equity instrument is any contract that evidences a residual
interest in the assets of the company after deducting all of its
liabilities.
Prior year restatement
The Group amended its disclosure of certain items of expenses to
more accurately record these within their appropriate class.
Agency fees and insurance costs directly relating to property are
now classed under direct operating costs. The net impact of
the restatement to the shareholder funds for both Group and Company
is €Nil.
2. Material agreements
(i) Midas Investment Management Limited (“MIM”) was appointed
the Group's Asset Manager on 17 March
2006.
On 24 April 2013, the Asset Management Agreement was
amended by a side letter to incorporate changes to the management
fees. From
that date MIM will charge:
- A flat annual fee of €55,000 per annum plus VAT;
- A quarterly fee on all property rented out of 12 per cent of
the net rental income plus VAT; and
- A commission on sales of up to 4 per cent plus VAT of sales
proceeds. For the avoidance of doubt, MIM will only charge a fee on
sales if it is involved in procuring the buyer and only if the
commission charged by others when aggregated with MIM's commission
does not exceed 5 per cent plus VAT.
The Investment
Management Agreement cannot be terminated, other than for cause by
the Company on 12 month’s prior notice.
(ii) Equiom (Isle of Man)
Limited (previously known as Equiom Trust Company Limited) was
appointed as Administrator to the Company, pursuant to the Terms of
a Letter of Engagement dated 21 December
2005. As part of its engagement, Equiom (Isle of Man) Limited ("Equiom") agrees, as
required, for a number of its senior staff members to accept
appointment as director of the Company. Equiom also agrees to
arrange for a suitable person to be appointed as Company
Secretary.
3. Operating segments
The Group primarily operates in a single reporting segment under
the classification of its properties held for investment. The
entire Group’s revenue and property assets are derived from and
located in a single geographical location, Budapest, in Hungary.
The loss for the year €8,717 (2013: €111,957) primarily derived
from operations of managing the Group’s investment
properties. The Group’s principal activity is to let or sell
properties located in Central
Budapest.
The Group defines its major customers for disclosure purposes as
any one customer that represents five per cent or more of the
Group's annualised rent roll. Throughout the year, the Group
invoiced four (2013: four) major customers for rental income
totalling €200,700 (2013: €193,890), being 44 per cent (2013: 49
per cent) of the Group's current annualised rent roll.
4. Rental income and related fees
Analysis of the Group’s revenue is as follows:
|
2014
€ |
2013
€ |
Rental income from investment
properties |
493,473 |
564,195 |
|
493,473 |
564,195 |
5. Group operating profit is stated
after charging/(crediting)
|
2014 |
Restated
2013 |
Administrative
expenses |
€ |
€ |
Directors' emoluments |
14,100 |
17,025 |
Asset Manager's fees |
66,000 |
113,717 |
Legal and professional fees |
60,694 |
31,349 |
Administrator's costs |
16,247 |
19,608 |
Auditor's remuneration |
20,300 |
24,682 |
Administrative costs |
13,992 |
14,481 |
Currency exchange gains |
(28,825) |
(4,345) |
Bank charges |
6,512 |
8,004 |
Depreciation |
8,120 |
8,120 |
|
177,140 |
232,641 |
The Group amended its disclosure of certain items of expenses to
more accurately record these within their appropriate class.
Agency fees and insurance costs directly relating to property are
now classed under direct operating costs. The amounts
relating to these expenses for the year amounted to €15,335
(2013: €16,580). The net impact of the restatement to
the shareholder funds for both Group and Company is €Nil.
The Asset Manager's fees calculated and payable for the year
ended 31 December 2014 and the
preceding period all relate to Midas Investment Management
Limited. As at 31 December 2014
management fees and related interest due to Midas Investment
Management Limited were €Nil (2013: €588,745).
6. Exceptional items
|
2014 |
2013 |
|
€ |
€ |
Tender and reorganisation
costs |
- |
32,517 |
7. Staff numbers and costs
Excluding Directors, the Group employs no staff.
8. Auditor's remuneration
|
2014 |
2013 |
|
€ |
€ |
Fees payable to the Group's
auditors |
11,700 |
13,760 |
The audit of the Group's trading
subsidiaries |
8,600 |
10,922 |
Taxation services |
500 |
1,000 |
9. Directors' emoluments
|
2014 |
2013 |
|
€ |
€ |
(i) Directors'
fees: |
|
|
Total fees |
2,000 |
2,400 |
The Directors' fees for all other directors, for both reporting
periods, were paid to Equiom (Isle of
Man) Limited in accordance with the Letter of Engagement
referred to in Note 2.
(ii) Remuneration of Directors:
|
2014 |
2013 |
|
€ |
€ |
Mr. C Bennett |
- |
2,925 |
Mr. B Miller |
12,100 |
11,700 |
10. Finance income
|
2014 |
2013 |
|
€ |
€ |
Bank and cash
equivalents interest |
412 |
2,265 |
11. Finance costs
|
2014 |
2013 |
|
€ |
€ |
Interest on bank
loan |
56,180 |
74,129 |
Interest on other
borrowings |
59,716 |
36,675 |
|
115,896 |
111,804 |
12. Tax expense
|
2014 |
2013 |
|
€ |
€ |
Current
tax |
|
|
Income tax on
foreign subsidiaries |
802 |
741 |
The Company is subject to Isle of
Man income tax at zero per cent (2013: zero per
cent).
The reasons for the difference between the actual tax charge for
the year and the theoretical amount that would arise using the
average tax rate applicable to profits of the consolidated group
are as follows:
|
2014 |
2013 |
|
€ |
€ |
Loss
before tax |
(7,915) |
(111,216) |
|
|
Foreign subsidiaries expected tax
charge based on the applicable rate of 10% (2013: 10%) |
(792) |
(11,121) |
Local business tax
in Hungary |
802 |
741 |
Different tax rates applied on
overseas jurisdictions |
(16,431) |
(54,197) |
Expenses that are not deductable
for tax |
14,587 |
76,151 |
Gains/(losses) not
relievable |
2,636 |
(10,833) |
Current income tax
charge for the year |
802 |
741 |
The movements in deferred tax assets and liabilities (prior to
the offsetting of balances within the same jurisdiction as
permitted by IAS 12 Income Taxes) during the year are shown
below.
Amounts credited to the consolidated income statement are as
follows:
|
2014 |
2013 |
|
€ |
€ |
Available losses in
the UK |
27,059 |
27,059 |
Deferred tax asset
not recognised |
(27,059) |
(27,059) |
|
- |
- |
13. Earnings per share
The calculation of the earnings per share is based on the
following:
|
|
|
As
at 31 December 2014 |
Loss
for the year |
Ordinary Shares |
|
Per
Share |
|
€ |
|
Number |
|
€ |
Basic
and diluted loss per share |
(8,717) |
|
10,316,624 |
|
(0.001) |
Adjusted earnings per share for the year ended 31 December
2014 |
Loss
for the year |
Ordinary Shares |
|
Per
Share |
|
€ |
|
Number |
|
€ |
Basic loss per
share |
(8,717) |
|
10,316,624 |
|
(0.001) |
Gain on listed
investment |
(868) |
|
- |
|
(0.000) |
Net valuation
gain |
(26,458) |
|
- |
|
(0.003) |
Adjusted loss per share |
(36,043) |
|
10,316,624 |
|
(0.004) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
at 31 December 2013 |
Loss
for the year |
Ordinary Shares |
|
Per
Share |
|
€ |
|
Number? |
|
€ |
Basic
and diluted loss per share |
(111,957) |
|
11,207,261 |
|
(0.010) |
Adjusted earnings per share for the year ended 31 December
2013 |
Loss
for the year |
Ordinary Shares |
|
Per
Share |
|
€ |
|
Number? |
|
€ |
Basic loss per
share |
(111,957) |
|
11,207,261 |
|
(0.010) |
Adjusted loss per share |
(111,957) |
|
11,207,261 |
|
(0.010) |
|
|
|
|
|
|
Earnings per share: Retrospective adjustment (See note
23) |
|
|
2012 |
|
|
|
Loss for the year |
|
|
Per
Share |
|
€ |
Ordinary Shares |
|
€ |
Basic
and diluted loss per share |
(111,957) |
|
16,147,582 |
|
(0.007) |
Shares
acquired post year end |
|
|
(5,830,958) |
|
|
|
(111,957) |
|
10,316,624 |
|
(0.011) |
|
|
|
|
|
|
|
|
|
? Weighted average number of Ordinary Shares in issue during the
period.
14. Dividends
|
|
2014 |
|
2013 |
|
No. of Shares |
€ |
No. of Shares |
€ |
Dividend of €Nil
(2013: €Nil) per share paid |
10,316,624 |
- |
10,316,624 |
- |
The Company has not paid a dividend to shareholders since
30 October 2009 and will not be
paying any future dividends to shareholders until further
reductions have been made to the debt outstanding.
15. Property, plant and equipment
Furniture and equipment
Group |
|
2014
€ |
2013
€ |
Cost |
|
|
|
As at 1 January |
|
40,600 |
545,874 |
Additions |
|
- |
40,600 |
Impairment write off |
|
- |
(545,874) |
As at 31
December |
|
40,600 |
40,600 |
|
|
|
|
Accumulated
depreciation/impairment |
|
|
|
As at 1 January |
|
8,120 |
545,874 |
Depreciation |
|
8,120 |
8,120 |
Impairment write off |
|
- |
(545,874) |
As at 31
December |
|
16,240 |
8,120 |
|
|
|
|
Opening net book value as at 1
January |
|
32,480 |
- |
|
|
|
|
Closing net book value as at
31 December |
|
24,360 |
32,480 |
As at 31 December 2013, the
Directors recognised an impairment loss in furniture and equipment
after their annual review and impairment tests.
16. Listed investments at fair value
through profit and loss
Group and Company |
|
2014
€ |
2013
€ |
Purchase at cost |
|
9,513 |
- |
Sales proceeds |
|
(9,477) |
- |
Realised profit on sale |
|
967 |
- |
Unrealised loss on
valuation |
|
(99) |
|
Closing fair value
at 31 December |
|
904 |
- |
17. Investment properties
Group
Investment properties at 31 December
2014 were subjected to a management valuation review based
on the active market indicative prices.
Amounts recognised in the income
statement:
|
2014 |
2013 |
|
€ |
€ |
Rental income |
493,473 |
564,195 |
Direct operating
expenses on properties that generated rental income |
236,090 |
310,692 |
Reconciliation of carrying
amounts:
|
2014 |
2013 |
|
€ |
€ |
Carrying value at the beginning
of the year |
7,262,123 |
7,404,654 |
Fair value
changes |
26,458 |
- |
Disposals |
- |
(142,531) |
Carrying value
at the end of the year |
7,288,581 |
7,262,123 |
|
|
|
Investment
properties |
5,355,611 |
6,944,319 |
Properties under
development |
317,804 |
317,804 |
Properties held for
resale |
1,615,166 |
- |
|
7,288,581 |
7,262,123 |
Properties sold during the
year
|
2014 |
2013 |
|
€ |
€ |
Gross proceeds from the sale of
investment properties |
- |
168,000 |
Less: carrying
value and related sales costs |
- |
(158,022) |
Realised profit on
disposal of property |
- |
9,978 |
Of properties held for resale as current assets, 5 have been
sold post year end. The remaining are actively marketed and
expected to sell in 2015.
18. Investments in subsidiary
companies
The subsidiaries of the Company are stated below:
Subsidiary |
Principal activity |
Country of registration |
Proportion of voting rights & shares held |
Midasz Property
Kft. |
Property
investment |
Hungary |
100% |
Midasz Property Two
Kft.
|
Property
investment |
Hungary |
100% |
Pactolus Eastern
European Property Limited |
Property investment |
UK |
100% |
Pactolus (UK)
Limited |
Property
investment |
UK |
100% |
Pactolus (IOM)
Limited |
Dormant |
IOM |
100% |
|
2014 |
2013 |
Subsidiaries |
€ |
€ |
Pactolus Eastern European
Property Limited |
18,561 |
18,561 |
Pactolus (UK) Limited |
1 |
1 |
Midasz Property Kft. |
51,393 |
51,393 |
Midasz Property Two
Kft. |
12,000 |
12,000 |
|
81,955 |
81,955 |
All the above subsidiaries, with the exception of Midasz
Property Two Kft., were acquired and accounted for under IFRS 3:
Business Combinations.
19. Loans to subsidiaries
|
Company |
Company |
|
2014 |
2013 |
|
€ |
€ |
Midasz Property Kft. |
14,786,291 |
12,857,420 |
Midasz Two Property Kft. |
75,760 |
75,760 |
Pactolus Eastern European
Property Limited |
65,270 |
65,270 |
Pactolus (UK) Limited |
(699) |
(699) |
|
14,926,622 |
12,997,751 |
These comprise of unsecured subordinated loans issued in support
of property acquisitions. The loans provided by the parent company
to Midasz Property Kft. are currently charged at interest of 6.25
per cent (2013: 6.25 per cent), and are repayable on demand,
however it is not anticipated that the full balance will be
recovered within 12 months of the balance sheet date.
20. Trade and
other receivables |
Group
2014 |
Company
2014 |
Group
2013 |
Company
2013 |
|
€ |
€ |
€ |
€ |
Rent and fees
receivable |
12,594 |
- |
21,548 |
- |
Other
receivables |
39,969 |
39,969 |
65,046 |
39,969 |
Prepayments and
accrued income |
9,212 |
4,802 |
11,994 |
11,994 |
|
61,775 |
44,771 |
98,588 |
51,963 |
21. Trade and other
payables |
Group
2014 |
Company
2014 |
Group
2013 |
Company
2013 |
|
€ |
€ |
€ |
€ |
Trade payables and accruals |
87,923 |
31,824 |
723,738 |
618,630 |
Rent received in advance |
6,536 |
- |
2,151 |
- |
Deposits held
|
138,259 |
- |
81,269 |
- |
Taxation |
1,296 |
- |
2,636 |
- |
Interest payable
and similar charges |
23,173 |
23,173 |
25,518 |
23,748 |
|
257,187 |
54,997 |
835,312 |
642,378 |
22. Secured
loan |
Group
2014 |
Company
2014 |
Group
2013 |
Company
2013 |
|
€ |
€ |
€ |
€ |
Variable interest rate loan |
- |
- |
1,150,000 |
- |
|
|
|
|
|
Loan to value of
portfolio |
- |
- |
16% |
- |
During the current and preceding period, the Group operated a
loan facility with Investec Bank Plc (Irish
Branch). During the year this loan was repaid in full
and the facility cancelled.
23. Other loans |
Group
2014 |
Company
2014 |
Group
2013 |
Company
2013 |
|
€ |
€ |
€ |
€ |
Unsecured loans |
2,284,901 |
2,284,901 |
444,887 |
444,887 |
|
2,284,901 |
2,284,901 |
444,887 |
444,887 |
During the year the Company was advanced funds repayable on
demand from the parent and associated companies of Asset Manager,
Midas Investment Management Limited. These advances are
repayable on demand and attract interest at the rate of 4.8 per
cent (2013: 6.25 per cent) above Euribor.
24. Share capital
Authorised share capital
|
Number
of shares |
2014
€ |
Number
of shares |
2013
€ |
Ordinary shares of
1p each |
70,000,000 |
900,900 |
70,000,000 |
843,080 |
Ordinary shares of 1p each issued and fully paid |
|
|
|
|
|
Number
of shares |
2014
€ |
Number
of shares |
2013
€ |
Balance as at 1
January |
10,316,624 |
150,226 |
16,147,582 |
235,133 |
Buy back and
cancellation of shares |
- |
- |
(5,830,958) |
(84,907) |
As at 31
December |
10,316,624 |
150,226 |
10,316,624 |
150,226 |
Each ordinary share carries the right to one vote in any
circumstances and the right to dividends paid.
At the last Annual General Meeting on 26
June 2014, shareholders approved the Board's proposal to
authorise the Company to acquire up to 28.6 per cent of its issued
share capital as at 26 June 2014. After the resolution was
passed, the Company was authorised to acquire up to 2,950,774 of
its issued ordinary shares. The Company did not utilise this
facility during 2014.
During the year to 31 December
2013, the Company acquired 5,830,958 of its issued Ordinary
shares for a total cost of €1,687,769 as part of the ongoing share
repurchase programme. The average price paid per ordinary
share was 24 pence, exclusive of
direct acquisition costs.
Ordinary shareholders are entitled to vote at all general
meetings.
The currency rate used to convert the authorised share capital
is €1.2870 (2013: €1.2044).
25.
Net Asset Value per Ordinary Share |
2014 |
2013 |
Net asset value as at 31 December |
€5,067,438 |
€5,138,471 |
Number of shares in issue as at 31 December |
10,316,624 |
10,316,624 |
Net asset value per ordinary share |
€0.49 |
€0.50 |
Net asset value per
share [Euro to Sterling
exchange rate at the year-end €1.2870
(2013: €1.2044)] |
£0.38 |
£0.41 |
26. Financial risk factors
The Group and Company's activities throughout the current and
previous year exposes it to a variety of financial risks: market
risk (including currency risk and price risk), credit risk,
liquidity risk, cash flow risk and interest rate risk.
Risk management is carried out by the Board of Directors.
The Board identifies and evaluates financial risks in close
co–operation with the Group's operating units. The Board
provides principles for overall risk management, as well as
policies covering specific areas, such as foreign exchange risk,
interest–rate risk, credit risk, use of financial instruments and
investing excess liquidity.
Fair value of financial
instruments:
|
2014
Carrying
Value |
2014
Fair
Value |
2013
Carrying
Value |
2013
Fair
Value |
Group |
€ |
€ |
€ |
€ |
Financial
assets |
|
|
|
|
Trade and other
receivables |
52,563 |
52,563 |
86,651 |
86,651 |
Cash and cash
equivalents |
233,906 |
233,906 |
175,479 |
175,479 |
Financial
liabilities |
|
|
|
|
Other payables |
257,187 |
257,187 |
835,312 |
835,312 |
Secured loan |
- |
- |
1,150,000 |
1,150,000 |
Other loans |
2,284,901 |
2,284,901 |
444,887 |
444,887 |
|
|
|
|
|
Company |
|
|
|
|
Financial
assets |
|
|
|
|
Trade and other
receivables |
39,969 |
39,969 |
39,969 |
39,969 |
Loans to
subsidiaries |
14,926,622 |
14,926,622 |
12,997,751 |
12,997,751 |
Cash and cash
equivalents |
2,803 |
2,803 |
5,626 |
5,626 |
Financial
liabilities |
|
|
|
|
Other payables |
54,997 |
54,997 |
618,629 |
618,629 |
Other loans |
2,284,901 |
2,284,901 |
444,887 |
444,887 |
It is the Directors' opinion that the Group and Company's
carrying and fair value of its financial instruments are the
same.
Credit risk
The Group places surplus cash with third parties and is
therefore potentially at risk from the failure of any such third
party of which it is a creditor. It is the Group's policy to
place excess cash funds on a short–term basis only and spread the
risk over a number of different providers.
The Group's principal credit risk is that of cash and short–term
deposits. The Board, in conjunction with the Asset Manager,
has credit policies in place and this exposure is monitored on an
ongoing basis.
Within the Group's credit risk policies are measures to ensure
that rental contracts are made with customers of an appropriate
credit history in order to minimise the exposure to any outstanding
debts from lessees.
The Group and Company's maximum exposure to credit risk:
|
Group
2014 |
Company
2014 |
Group
2013 |
Company
2013 |
|
€ |
€ |
€ |
€ |
Financial
assets |
|
|
|
|
Trade and other receivables |
52,563 |
39,969 |
86,651 |
39,969 |
Cash and cash equivalents |
233,906 |
2,803 |
175,479 |
5,626 |
Loans to subsidiaries |
- |
14,926,622 |
- |
12,997,751 |
|
286,469 |
14,969,394 |
262,130 |
13,043,346 |
The Group and Company hold no collateral as security against any
of the above assets.
An analysis of rent and fees receivable for the Group:
2014 |
|
|
|
|
|
|
Carrying
amount |
Neither
impaired nor
past due |
61-90
Days |
91-120
Days |
Past due not impaired over 120 Days |
|
€ |
€ |
€ |
€ |
€ |
Rent and fees
receivable |
12,594 |
12,594 |
- |
- |
- |
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
Carrying
amount |
Neither
impaired nor
past due |
61-90
Days |
91-120
Days |
Past due not impaired over 120 Days |
|
€ |
€ |
€ |
€ |
€ |
Rent and fees
receivable |
21,548 |
21,548 |
- |
- |
- |
|
|
|
|
|
|
|
There are no rent receivables in the accounts of the parent
company.
The Group allows an average receivables period of 30 days after
invoice date. The receivables age analysis is also evaluated
on a regular basis for potential doubtful debts. It is
management's opinion that no provision for doubtful debts is
required.
The Company's principal credit risk is that of its loans
advanced to subsidiaries.
As at the year end the amounts due to/(from) the Company were as
follows:
|
2014 |
2013 |
|
€ |
€ |
Midasz Property Kft. |
14,786,291 |
12,857,420 |
Midasz Two Property Kft. |
75,760 |
75,760 |
Pactolus Eastern European
Property Limited |
65,270 |
65,270 |
Pactolus (UK) Limited |
(699) |
(699) |
|
14,926,622 |
12,997,751 |
These loans do not carry any security on the assets of the
related subsidiary and are also evaluated on a regular basis for
potential impairments. It is the Board's opinion that no
impairment provision is required for the year ended 31 December 2014 (2013: €Nil).
Market risk
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the UK Pound, the Hungarian Forint and the Euro.
Foreign xchange risk arises from future commercial transactions,
recognised monetary assets and
liabilities and net investments in foreign operations.
Interest rate risk arises from the Group's borrowing
exposure.
Net interest income from cash and cash equivalents for the year
totalled €412 (2013: €2,265). Net interest payments on
borrowings for the year totalled €115,896 (2013: €111,804).
The Company’s net interest income from cash and cash equivalents
for the year totalled €17 (2013:
€292).
The Company does not have any long-term borrowing. Interest
earned on loans to
subsidiaries for the year was €812,974 (2013: €753,388).
Based on current volatility for both interest and currency
exchange rates, the Board determined that relevant risk factors
should be taken into account when assessing the Group's exposure to
the market risk. The sensitivity test below is based on the
following:
(a) Interest rate
change of +0.5 per cent from the average rate of 1.2 per cent
earned in 2014. The average rate is calculated as
the weighted
average effective interest rate.Rate on cash at bank balances
represents average rate earned on cash balances;
(b) Foreign
exchange rate change of –7 per cent and +7 per cent from €1.2870 to
the Pound Sterling and 316.50 Forint
to the Euro, being
the rates as at 31 December 2014.
The Company's loans to subsidiaries are transacted in
Euros. The operating currency of the leading trading
subsidiary is Forint and so this exposes the Company to foreign
currency exchange risks. The Board is satisfied that no impairment
is necessary as the major assets within the relevant
subsidiary
are valued in Euros.
The tables below show the effect on profit and equity after tax
if changes in interest rates as stated in (a) above with all other
variables held constant, are used as a sensitivity test on the
Group's market risk exposures.
Group
2014 |
|
Financial Assets |
Financial Liabilities |
Total increase/
(decrease) |
Cash & cash
equivalents |
Rent &
fees
receivable |
Trade
payables |
Long term
loans |
|
€ |
€ |
€ |
€ |
€ |
Carrying
amount |
- |
233,906 |
12,594 |
257,187 |
2,284,901 |
Interest rate
risk |
|
|
|
|
|
Profit (change of
+0.5%) |
(11,326) |
171 |
- |
- |
(11,497) |
Foreign exchange rate risk |
|
|
|
|
Equity
(change of –7%) |
(21,926) |
(21,926) |
- |
- |
- |
Equity
(change of +7%) |
12,523 |
12,523 |
- |
- |
- |
|
|
|
|
Company
2014 |
|
Financial Assets |
Financial Liabilities |
Total increase/
(decrease) |
Cash & cash
equivalents |
Loans to
subsidiaries |
Trade
payables |
Long term
loan |
|
€ |
€ |
€ |
€ |
€ |
Carrying
amount |
- |
2,803 |
14,926,622 |
54,997 |
2,284,901 |
Interest rate
risk |
|
|
|
|
|
Profit (change of
+0.5%) |
(11,497) |
- |
- |
- |
(11,497) |
Foreign exchange rate risk |
|
|
|
|
Equity
(change of –7%) |
(492) |
(492) |
- |
- |
- |
Equity
(change of +7%) |
1,570 |
1,570 |
- |
- |
- |
|
|
|
|
|
|
|
Group
2013 |
|
Financial Assets |
Financial Liabilities |
Total increase/
(decrease) |
Cash & cash
equivalents |
Rent &
fees
receivable |
Trade
payables |
Long term
loan |
|
€ |
€ |
€ |
€ |
€ |
Carrying
amount |
- |
175,479 |
21,548 |
835,312 |
1,594,887 |
Interest rate
risk |
|
|
|
|
|
Profit (change of
+0.5%) |
(10,148) |
944 |
- |
- |
(11,092) |
Foreign exchange rate risk |
|
|
|
|
Equity
(change of –4%) |
1,372 |
508 |
- |
864 |
- |
Equity
(change of +4%) |
392 |
405 |
- |
(797) |
- |
|
|
|
|
Company
2013 |
|
Financial Assets |
Financial Liabilities |
Total increase/
(decrease) |
Cash & cash
equivalents |
Loans to
subsidiaries |
Trade
payables |
Long term
loan |
|
€ |
€ |
€ |
€ |
€ |
Carrying
amount |
- |
5,626 |
12,997,751 |
642,378 |
444,887 |
Interest rate
risk |
|
|
|
|
|
Profit (change of
+0.5%) |
(3,738) |
- |
- |
- |
(3,738) |
Foreign exchange rate risk |
|
|
|
|
Equity
(change of –4%) |
(263) |
(263) |
- |
- |
- |
Equity
(change of +4%) |
1,118 |
1,118 |
- |
- |
- |
|
|
|
|
|
|
|
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities to finance the Group's operations.
The average creditor payment period for the Group and Company
is 60 days (2013: 60 days).
Contractual maturity analysis for
financial liabilities:
Group
2014 |
|
|
|
|
|
Due within
1 month |
Due
between
1 to 3
months |
Due
between
3 to 12 months |
Due between
1 to 5 years |
Total |
|
€ |
€ |
€ |
€ |
€ |
Other payables |
167,928 |
3,500 |
82,259 |
3,500 |
257,187 |
Other loans |
2,284,901 |
- |
- |
- |
2,284,901 |
|
2,452,829 |
3,500 |
82,259 |
3,500 |
2,542,088 |
|
|
|
|
|
|
Company
2014 |
|
|
|
|
|
|
|
|
|
|
|
Other payables |
54,997 |
- |
- |
- |
54,997 |
Other loans |
2,284,901 |
- |
- |
- |
2,284,901 |
|
2,339,898 |
- |
- |
- |
2,339,898 |
Group
2013 |
|
|
|
|
|
Due within
1 month |
Due
between
1 to 3
Months |
Due
between
3 to 12 months |
Due between
1 to 5 years |
Total |
|
€ |
€ |
€ |
€ |
€ |
Other payables |
754,043 |
- |
61,319 |
19,950 |
835,312 |
Secured loan |
- |
- |
1,150,000 |
- |
1,150,000 |
Other loans |
444,887 |
- |
- |
- |
444,887 |
|
1,198,930 |
- |
1,211,319 |
19,950 |
2,430,199 |
|
|
|
|
|
|
Company
2013 |
|
|
|
|
|
|
|
|
|
|
|
Other payables |
618,630 |
- |
23,748 |
- |
642,378 |
Other loans |
444,887 |
- |
- |
- |
444,887 |
|
1,063,517 |
- |
23,748 |
- |
1,087,265 |
27. Capital risk management
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximising Shareholders’ return.
Consistently with others in the industry, the Group monitors
capital on the basis of the debt–to–adjusted capital ratio.
This ratio is calculated as net debt divided by adjusted
capital. Net debt is calculated as total debt less cash and
short term deposits. Adjusted capital comprises all
components of equity.
This gearing ratio at the year-end is as follows:
|
2014 |
|
2013 |
|
€ |
|
€ |
Debt |
2,542,088 |
|
2,430,199 |
Cash and cash
equivalents |
(233,906) |
|
(175,479) |
Net debt |
2,308,182 |
|
2,254,720 |
Equity |
5,067,438 |
|
5,138,471 |
Net debt to equity
ratio |
46% |
|
44% |
The Group’s Asset Manager reviews the debt structure on a
quarterly basis in conjunction with the Board. The cost of
capital and the associated risks are considered and appropriate
measures are taken to manage the Group's exposure.
28. Leasing
Leases with tenants
The Group leases out investment properties for an average lease
term of 0.9 years (2013: 1.2 years). There were no contingent
rental incomes recognised in the year (2013: €Nil). The
future aggregate minimum rentals receivable under non–cancellable
operating leases are as follows:
|
2014 |
2013 |
|
€ |
€ |
Less than one year |
230,212 |
358,076 |
Between two and
five years |
82,770 |
132,678 |
|
312,982 |
490,754 |
The company has contracted guarantee rental payments as
follows:
|
2014 |
2013 |
|
€ |
€ |
Less than one year |
45,006 |
57,302 |
Between two and
five years |
- |
1,176 |
|
45,006 |
58,478 |
29. Commitments
At the year end the Group had no capital commitments (2013:
€Nil) in its portfolio of investment properties. The Company
had no other capital commitments as at the year end.
30. Related parties
The Group was charged fees by Equiom (Isle of Man) Limited of €16,247 (2013:
€19,608) in accordance with the Letter of Engagement referred to in
Note 2 (ii). The amount outstanding as at 31 December 2014 is €4,880 (2013: €3,278).
All of the Directors, apart from Brett
Miller, are current staff of Equiom (Isle of Man) Limited.
Asset and tenant management fees amounting to €66,000 (2013:
€113,717), interest charges of €29,217 (2013: €31,829),
re-organisational charges of €Nil (2013: £5,000), direct expenses
recharges of €Nil (2013: €49,841) and commission income
received on share buy back and listed investment transactions
totalling €50 (2013: €3,025) were charged by Midas Investment
Management Limited. Tenant management fees chargeable to the
company amounting to €59,217 (2013: €Nil) was waived for the year
by the Asset Manager but remains chargeable in respect of future
periods. Midas Investment Management Limited is controlled by
Mark Sheppard, who is also a
Director of the Pactolus Group's United
Kingdom subsidiaries. As at 31
December 2014 the amount outstanding to Midas Investment
Management Limited was €Nil (2013: €588,745).
During the year the Company was advanced unsecured funds
repayable on demand from the parent and associated companies of the
Asset Manager, Midas Investment Management Limited. These
advances attract interest at the rate of 4.8 per cent above the 3
month Euribor (2013: 6.25 per cent) and are detailed
below:
There have been no significant events that require reporting
since the reporting period date.
- M&M Investment Company Plc, balance outstanding as at the
reporting period date is €2,284,901 (2013:€257,050), interest
charged and included in accruals amounts to €23,173
(2013:€616).
- Midas Nominees Limited, balance outstanding as at the reporting
period date is €Nil (2013:€156,758), interest charged for the
period totalled €6,865 (2013:€4,799).
- Gall & Eke Limited, balance outstanding as at the reporting
period date is €Nil (2013:€36,889), interest charged and included
in accruals amounts to €461 (2013:€395).
The Company also charges interest on its loan account with its
subsidiaries. Interest charged during the year amounted to
€812,974 (2013: €753,388) a rate of 6.25 per cent (2013: 6.25 per
cent) per annum.
The amount due from each subsidiary is detailed in note 19 of
these financial statements.
31. Events after the reporting
period
There have been no significant events that require reporting
since the reporting period date.
32. Domiciled
Pactolus Hungarian Property Plc is registered and domiciled in
the Isle of Man.
33. Ultimate control
During the current and previous year, ultimate control of the
Group does not lie with any identifiable individual. Copies
of the Group Annual Report and Financial Statements are available
at the Registered Office, Jubilee Buildings, Victoria Street, Douglas, Isle of Man, IM1 2SH and at the office of the
Company’s Asset Manager, Midas Investment Management Limited, 2nd
Floor, Arthur House, Chorlton
Street, Manchester, M1 3FH.
34. Financial Information
The financial information set out above does not constitute the
Group's statutory accounts for the year ended 31 December 2014.
Audited statutory financial statements for 2014 will be
delivered to the Isle of Man Companies Registry following the
Group's Annual General Meeting.
35. Annual General Meeting
Details of the Annual General Meeting will be issued under a
separate notice.
36. Report and Accounts
Pursuant to Rule 20 copies of the Audited Financial Statements
for the year ended 31 December 2014
will be sent to shareholders in due course. Further copies will be
available from the Company's website at www.pactolus.co.uk, at the
Company's registered office at Jubilee Buildings, Victoria Street, Douglas, Isle of Man, IM1 2SH or at the offices of
Midas Investment Management Ltd, 2nd Floor, Arthur House, Chorlton Street, Manchester, M1 3FH.
Contacts & enquiries:
Asset Manager
Midas Investment Management Ltd
Mark Sheppard
Tel: 00 44 (0) 161 242 2895
Nominated Adviser:
Cairn Financial Advisers LLP
Liam Murray
Tel: 00 44 (0) 20 7148 7900