Report and Consolidated Financial Statements
For the period from 13 August 2013 (date of incorporation) to 31 March 2014
creating sustainable value
Directors and Other Information
Directors
Daniel Kitchen (Chairman)
Colm Barrington (Senior
Independent Director)
Stewart Harrington
William Nowlan
Terence O’Rourke
Secretary
Castlewood Corporate Services Limited
(t/a Chartered Corporate Services)
Taney Hall
Eglinton Terrace
Dundrum
Dublin 14, Ireland
Registered Office
Marine House
Clanwilliam Place
Dublin 2, Ireland
Company Number
531267
Independent Auditor
Deloitte & Touche
Chartered Accountants and Statutory
Audit Firm
Hardwicke House
Hatch Street
Dublin 2, Ireland
Investment Manager
WK Nowlan REIT Management Limited
Marine House
Clanwilliam Place
Dublin 2, Ireland
Bankers
Bank of Ireland
50-55 Baggot Street Lower
Dublin 2, Ireland
Depository
Credit Suisse International,
Dublin Branch
Kilmore House
Park Lane
Spencer Dock
Dublin 1, Ireland
Registrar
Capita Registrars (Ireland) Limited
(t/a Capita Asset Services)
2 Grand Canal Square
Dublin 2, Ireland
Legal Advisors
A&L Goodbody
28 North Wall Quay
IFSC
Dublin 1, Ireland
Brokers
Goodbody
Ballsbridge Park
Ballsbridge
Dublin 4, Ireland
Credit Suisse Securities (Europe) Limited
One Cabot Square
London E14 40J
United Kingdom
Report and Consolidated Financial Statements
HIBERNIA REIT PLC
1
Contents
Contents
Highlights
Chairman’s Statement
Investment Manager’s Report
Corporate Governance Report
Report of the Directors
Statement of Directors’ Responsibilities
Independent Auditor’s Report to the Members of Hibernia REIT plc
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
1
2
4
6
13
19
28
29
32
33
34
35
35
36
37
38
2
HIBERNIA REIT PLC
Report and Consolidated Financial Statements
Financial Highlights
€385m
raised (€372m net of expenses) in
successful initial public offering (IPO) on
the Irish and London Stock Exchanges
in December 2013
4 of the 5
acquisitions undertaken
to
date off-market, with 3 of the 5
acquisitions made through loan
purchases
€223m
of equity invested and committed to
date in 5 acquisitions, representing
60% of net IPO proceeds
Investment Manager team built
out with
four new hires,
bringing permanent headcount to
10
3
further hires in pipeline:
CFO appointment imminent
HIGHLIGHTS TO 31 MARCH 2014
HIGHLIGHTS SINCE 31 MARCH 2014
Successful listing on the Irish and London Stock Exchanges in December 2013May 2014: acquisition of Montague House and Hardwicke House, two office buildings in Dublin 2 in partially deferred off-market transaction of €60m. Initial investment of €18.25m in loans, with right to pay incremental €41.75m to take full ownership at any time in next 2 years May 2014: acquisition of Chancery office building and apartments in Dublin 8 for €16m via a loan transaction €148m of cash invested at 19 May 2014, with a further €75m committedFeb 2014: acquired €67m (excluding transactions costs) loan portfolio of predominantly Dublin residential assets from Ulster Bank in an off-market transactionMar 2014: contracted to acquire New Century House, an office building in the IFSC, for €47m (excluding transactions costs) in an off-market transaction completed in April 2014Mar 2014: contracted to acquire Gateway site, an industrial / logistics facility at Newlands Cross, Dublin 22 for €10m (excluding transactions costs) in a transaction which closed in May 2014€79m of cash invested by 31 March 2014, with a further €67m committed€292m of cash as at 31 March 2014
3
March 2014
€371.0m
96.35 cents
0%
€291.7m
€(0.85)m
(0.22) cents
Net assets
EPRA and Basic NAV per share
Group LTV
Net cash & cash equivalents
Net loss
Basic and diluted EPS
Daniel Kitchen, Chairman of Hibernia REIT said:
“ Hibernia has made a strong and active start to life as a publicly
traded REIT since the successful IPO in December 2013. We have
now invested 60% of the net funds received from shareholders in
5 acquisitions in Dublin despite intense competition for assets.
Our focus has been, and will continue to be, on spending our
shareholders’ money well rather than on prioritising speed of
deployment.”
Kevin Nowlan, Chief Executive Officer, WK Nowlan REIT Management Ltd, said:
“ We are delighted with the progress we have made in our first 140 days of operation. All
of the acquisitions we have made either have significant rental reversion to come or
value-add / development angles. Our focus is on maximising returns for shareholders
and we have been, and will remain, disciplined regarding the prices we are willing to
pay for assets. All but one of our acquisitions was concluded off-market, in a number
of cases buying loans to secure an interest in properties we wouldn’t otherwise have
been able to. Looking ahead, we expect continued growth in rents and capital values
in our target markets. Given our contacts and knowledge of the Dublin market, we are
confident in our ability to continue to find attractive investment opportunities.”
HIBERNIA REIT PLCReport and Consolidated Financial Statements 4
HIBERNIA REIT PLC
Report and Consolidated Financial Statements
Chairman’s Statement
I am pleased to present the first Report and Financial
Statements of Hibernia REIT plc (the “Company” or “Hibernia”)
and its subsidiary, Hibernia REIT Finance Limited (“the Group”).
The Company was listed in December 2013 on the Irish and
London stock exchanges. We raised gross funds of €385m
through the initial public offering.
After allowing for the costs of fundraising we
had net proceeds of €372m to invest. I am
delighted to report that 60% of these funds
have now been either deployed or committed.
Since the commencement of operations in
January 2014, WK Nowlan REIT Management
(the ”Investment Manager”), has
Limited
identified and assessed numerous investment
opportunities. All
investment opportunities
are subject to rigorous review. Our focus has
been, and will continue to be, on spending
our shareholders money well rather than
prioritising speed of deployment.
A number of the opportunities we have assessed
failed to meet the criteria that the Board has
established for investments. In addition we did
not secure a number of opportunities which
were identified as suitable investments as their
transaction or asking prices went above our
assessment of their value. This is a reflection
of the intense competition in the marketplace
to secure quality assets and in some instances
the excessive expectations of vendors.
Considerable progress has been made by the
Investment Manager in the short time since
flotation in further strengthening the team of
property and financial professionals and in
setting up our administration systems.
Results
The period from 13 August 2013 (date of
incorporation) to 31 March 2014 shows a loss
of €846,149. This is a reflection of the short
period of operation since flotation and the
very early stage we are at in the assembly of
our portfolio. As the Group had not completed
the acquisition of any investment property
by the year end no rental income has been
recognised. Our costs for this period have
been in line with our budgets.
We did acquire a loan portfolio from Ulster
Bank at a cost of €67m (excluding transaction
costs) which represents a substantial discount
to its par value. This approach was adopted
in order to provide us with an opportunity to
convert our loan holding into direct interests
in a number of the key assets which provide
the collateral for these loans. The Investment
Manager was requested to formulate for
Board approval a comprehensive and robust
business plan to maximise the return for the
Company from the realisation of the value of
these loans. At 31 March 2014 this process was
in progress and this investment continued to
be recognised as Loans and Receivables in the
financial statements. The security underlying
these loans includes a substantially complete
213 unit apartment complex in Dundrum,
Wyckham Point, a 9,000 Sq.Ft Grade A let
office development in the regenerated and
vibrant Grand Canal Dock area and a high
quality residential multi-family scheme
in
Ballsbridge, Dublin 4.
Prior to year-end we entered into contracts
to acquire, at a cost of €10m, “Gateway” a
strategically located industrial/logistics facility
on a 14 acre site in south west Dublin close
to the intersection of the N7/M7 and M50
motorways. We also contracted to acquire, at
a cost of €47m, New Century House, an 80,000
Sq.Ft. prime Grade A office building let to Bank
of Ireland and located in the heart of Dublin’s
International Financial Services Centre.
The upturn in the Irish property markets which
we predicted prior to flotation has progressed
more quickly
than we anticipated. The
competition to acquire high quality assets has
been intense. Two of the three transactions
to 31 March 2014 have been achieved off-
market and are testament to the Investment
Manager’s in-depth knowledge of the Irish
property industry and its markets. The Board is
cognisant of the Investment Manager’s proven
ability in an extremely competitive market to
identify and acquire quality assets which offer
our shareholders both sustainable income
and the real prospect of capital growth. In
times like this, the temptation to acquire
the wrong assets or wrongly priced assets
is strong, particularly in auction processes.
The Board and the Investment Manager are
absolutely committed to judicious and careful
asset selection.
5
Considerable progress has been made by the
Investment Manager in the short time since flotation
in further strengthening the team of property
and financial professionals and in setting up our
administration systems.
Post Balance Sheet Events
The completion of the acquisitions of Gateway
and New Century House since the period-end
are very welcome developments. In addition,
since the period-end the Investment Manager
has successfully negotiated the acquisition
of two properties at a total cost of €76m.
Of particular note is the recent acquisition in
an off-market transaction of Hardwicke House
and Montague House for total consideration
€60m with the bulk (€42m) of the acquisition
cost deferred. These are top grade office
buildings, with
reversionary
potential, in a prime central business district
(“CBD”) location.
significant
We also very recently acquired for €16m by way
of a loan note purchase, again off-market, the
Chancery Building, a mixed-use predominantly
office development with a small residential
element located adjacent to Dublin Castle.
Outlook
As our setup phase comes to its end I look
forward with a high degree of optimism to our
first full year of active operations.
In 2014 the Irish economy is continuing its
gradual recovery. Our national finances are
stabilising, domestic demand
is growing,
numbers in work are increasing and inward
foreign direct investment (FDI) flows remain
strong. In our key target markets occupational
demand is increasing while supply remains,
and in the short term will continue to be,
constrained. All these factors augur well for
further growth in rental levels and capital
values in the coming years.
Investment Manager continues
to
The
actively pursue a number of
investment
opportunities with a particular focus on prime
office accommodation and on active asset
management value-adding opportunities. The
current pipeline of potential opportunities
is substantial, reflecting the continuing and
accelerating deleveraging efforts of the banks
and the National Asset Management Agency
(NAMA). Notwithstanding
the competitive
nature of the market I am confident about the
prospects of further successful high-quality
acquisitions in the coming year. The Board
and the Investment Manager will maintain
their commitment to careful asset selection
and ensure that acquisition opportunities
offering sustainable value to shareholders are
preferred over those which address shorter
term income and deployment concerns.
Finally I would like to pay particular tribute
to my fellow director Mr Bill Nowlan for his
enormous contribution to the introduction of
REITs in Ireland by his founding and chairing
of the REITs Forum. It was this group that was
primarily responsible for making the case
and persuading the government to introduce
REITs to Ireland. With three REITs now up and
running and over €1bn of funds raised for
investment in Irish property, the introduction
of REITs to Ireland has clearly been a success.
Daniel Kitchen
Chairman
19 May 2014
HIBERNIA REIT PLCReport and Consolidated Financial Statements 6
Investment Manager’s Report
The Chancery,
3 – 10 Chancery Lane,
Dublin 8
more information on page 11
Gateway Site,
Newlands Cross,
Naas Road,
Dublin 22
Blanchardstown
more information on page 10
Santry
Clonsilla
Lucan
Howth
Drumcondra
Fairview
Ballybough
IFSC
Clontarf
Dublin
Harbour
Parkwest
Business Park
Heuston
South Quarter
Walkinstown
Cross
Crumlin
City Centre
Stephen’s
Green
Rathmines
Ballsbridge
Elm Park
Donnybrook
Citywest
Business Campus
Tallaght
Dundrum
Dublin Bay
Blackrock
Dun Laoghaire
New Century House,
Mayor Street,
IFSC,
Dublin 1
more information on page 9
Wyckham Point,
Dundrum,
Dublin 16
more information on page 9
Montague House,
Adelaide Road,
Dublin 2
more information on page 10
Hardwicke House,
Upper Hatch Street,
Dublin 2
more information on page 10
HIBERNIA REIT PLCReport and Consolidated Financial Statements
The Chancery,
3 – 10 Chancery Lane,
Dublin 8
more information on page 11
Gateway Site,
Newlands Cross,
Naas Road,
Dublin 22
Blanchardstown
more information on page 10
Santry
Howth
Clonsilla
Lucan
Drumcondra
Fairview
Clontarf
Dublin
Harbour
Parkwest
Business Park
Heuston
South Quarter
Walkinstown
Cross
Crumlin
Ballybough
IFSC
City Centre
Stephen’s
Green
Rathmines
Ballsbridge
Elm Park
Donnybrook
Dublin Bay
Blackrock
Dun Laoghaire
Citywest
Business Campus
Tallaght
Dundrum
New Century House,
Mayor Street,
IFSC,
Dublin 1
Wyckham Point,
Dundrum,
Dublin 16
more information on page 9
more information on page 9
7
Flotation
Hibernia was admitted to the Irish and London Stock
Exchanges in December 2013 and successfully raised
€385m through its IPO.
Investment Management Role
WK Nowlan REIT Management Limited
provides a range of services to Hibernia,
which has no employees. The services we
provide include property acquisition and
management services, accounting and
administration services and regulatory
the
services. We are authorised by
Central Bank of Ireland as an Authorised
Investment Fund Manager (“AIFM”) under
the AIFM Directive Regulations.
Our strategy
As set out in the prospectus at the
time of the IPO, the strategy Hibernia
has adopted is to build a portfolio of
attractively located, institutional quality,
income-producing properties primarily
in the Greater Dublin area. We intend to
concentrate on the office sector, but will
consider industrial, retail, warehousing
and distribution, recreational, residential
and other Irish property assets.
Montague House,
Adelaide Road,
Dublin 2
more information on page 10
Hardwicke House,
Upper Hatch Street,
Dublin 2
more information on page 10
HIBERNIA REIT PLCReport and Consolidated Financial Statements
8
Investment Manager’s Report continued
New Century House Mayor Street, IFSC, Dublin 1
Review of Hibernia’s operations
Since flotation our principal focus has
been on the identification, assessment
and negotiation of investment acquisition
opportunities. As the Irish economy has
recovered, property markets, particularly
Dublin’s, have enjoyed a period of
consistently positive and accelerating
growth. The positive fundamental supply
and demand characteristics in our main
target market of the Greater Dublin area
have driven increases in rental and capital
values in both commercial and residential
property and fuelled competition among
purchasers keen to acquire high quality
property assets.
Our mandate from Hibernia’s Board is that,
in addition to compliance with Hibernia’s
investment policy, we must apply absolute
rigour to our asset selection to ensure
that we source investment opportunities
of quality assets at the right price. Our
emphasis is to acquire assets that will
offer shareholders sustainable income
and significant capital appreciation.
Notwithstanding this extremely competitive
market environment and our highly
in the
disciplined approach to value,
short period from the commencement
of operations in January to the period-
end, we agreed and contracted three
significant acquisitions. At the period-end
the combined value of these transactions
and related anticipated capital expenditure
is €148m which represented 40% of the
€372m of net IPO proceeds which we had
available for deployment. In our prospectus
we indicated that we expected that it would
take 18 to 24 months to fully deploy these
funds. We are pleased to report that we are
running well ahead of this target.
HIBERNIA REIT PLCReport and Consolidated Financial Statements South Dock House
1st Floor Offices,
Hanover Quay, Dublin 2
It is envisaged that
Hibernia may acquire
certain core assets and
the others, non-core,
will be disposed of in a
phased manner.
Wyckham Point Dundrum, Dublin 16
9
Loan Portfolio Acquisition
On 28 February 2014 we acquired from
Ulster Bank for €67m a portfolio of loans
secured on predominantly residential,
and overwhelmingly Dublin located, real
estate assets. It is envisaged that Hibernia
may acquire certain core assets and the
others, non-core, will be disposed of in a
phased manner.
Since the period end we have formulated
and submitted
for Hibernia’s Board’s
approval a comprehensive and robust
business plan to maximise the return for
Hibernia from the realisation of its interest
in these loans. In this plan we propose that
Hibernia acquire Block 3 Wyckham Point
Dundrum, a high quality substantially
complete 213 unit apartment complex
and that this scheme be completed and
income-producing as soon as practicable.
In an improving residential rental market
we are confident that we can achieve
occupancy and rental levels ahead of
the attractive levels which we initially
estimated this property would achieve.
Our current projection is that, if acquired,
this property would generate gross
annual rents of €4m (net €3m) which
we project would represent gross yield
of 7.00% to 7.25% (net yield 5.75% to
6.00%) on costs. We also propose that
Hibernia acquire South Dock House a
9,000 Sq.Ft 3rd generation office suite in
a mixed use waterfront scheme located
in the vibrant Grand Canal Dock area and
Canon Place, a high quality 12 unit multi-
family residential scheme in Ballsbridge
Dublin 4. We propose that the remaining,
non-core, assets which comprise 79
residential units, 12 commercial units and
3 residential development sites are sold
off on a phased basis to maximise the
return to Hibernia. The positive movement
to date, and projected further increases, in
residential rents and values have resulted
in us revising upwards the projected
returns from this disposal programme.
New Century House
On 10 March 2014 Hibernia contracted to
acquire for €47m New Century House an
80,167 Sq.Ft 3rd generation office building
located in the heart of Dublin’s financial
district, let to Bank of Ireland on a FRI
(full repairing and insuring) lease expiring
in 2024. The initial rent of €1.85m will
increase to €2.85m once a rent abatement
period expires in October 2015. There is a
rent review due in 2019, a passing rental
level of €32 per Sq.Ft. (post expiration of
abatement) and real prospects for further
rental growth in office market rents in the
intervening years. We are confident that
there is real potential for a substantial
increase in the income return from this
property. This acquisition was completed
in April 2014.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 10
Investment Manager’s Report continued
The combined value of all five of these
transactions, acquisition costs and related
anticipated capital expenditure is €223m which
represents 60% of the net proceeds of the IPO.
Gateway Site Newlands Cross, Naas Road, Dublin 22
Gateway Site
On 28 March 2014 Hibernia contracted to
acquire for €10m Gateway, a strategically
located industrial/logistics facility on a
14 acre site in the south west of Dublin
city, adjacent to the intersection of the
two busiest roads (N7/M7 & M50) in
Ireland and close to the Red Cow Luas
(light rail) stop and park-and-ride facility.
The property comprises 177,960 Sq.Ft.
of warehouse accommodation which is
currently 46% occupied and generates
a gross annual rent of €517,000. We
believe that this property offers both the
opportunity to grow its rental income in
the short term and, in the longer term, the
potential to benefit from higher value uses
and/or intensification of development on
the site. This acquisition was completed
in May 2014.
Montague House/Hardwicke House
in an off-market
On 16 May 2014,
transaction,
exchanged
Hibernia
contracts to acquire two Grade A Dublin
offices in the core of Dublin’s CBD from
the Hardwicke Group
in a partially
deferred transaction valuing the buildings
at €60m. The initial cost is €18.25m with
the right to take full ownership of the
buildings at any time up to mid-2016 for
an incremental sum of €41.75m. The
properties comprise 88,483 Sq.Ft. of
prime Grade A office accommodation with
a current annual rent roll of €2.7m, which
offers significant reversionary potential in
the coming years.
M50
Northbound
N7 to Dublin
Gateway Site
Newlands Cross,
Naas Road,
Dublin 22
N7 to South
Red Cow
Luas
Red Cow
Moran Hotel
Red Cow
Roundabout
M50
Southbound
HIBERNIA REIT PLCReport and Consolidated Financial Statements Hardwicke House
Upper Hatch Street, Dublin 2
11
The Chancery
3 –10 Chancery Lane, Dublin 8
to acquire
Chancery Lane
On 19 May 2014 Hibernia exchanged
contracts
the Chancery
Building and the Chancery Apartments
for €16m in an off-market loan purchase
transaction. The property is located in a
city centre location which is popular with
government agencies. The Chancery
Building is a 33,799 Sq. Ft. office building
with a current annual rent roll of €1.1m.
The Chancery Apartments comprise four
fully let 2 bedroom flats with a separate
entrance to the Chancery Building.
The combined value of all five of these
costs and
transactions, acquisition
related anticipated capital expenditure is
€223m which represents 60% of the net
proceeds of the IPO.
Team
in
During the period since flotation,
addition to the progress we have made in
assembling the portfolio we have added
to our management and support staff and
now have a dedicated team of 10 property
and financial professionals and we will
continue to grow the team as required to
meet the demands of providing Hibernia
with the services it needs to become a
best in class REIT. In addition to our own
in-house team we have the option of
drawing on the considerable resources
of WK Nowlan Property’s team of 30
seasoned property professionals.
Outlook
It is likely that competition will remain
intense in our target markets. However,
we are confident of both the adequacy of
the supply of investment opportunities
and our ability to secure sufficient suitable
properties to enable us to continue the
momentum in the assembly of Hibernia’s
portfolio which we have demonstrated
since January.
Kevin Nowlan
Chief Executive Officer
WK Nowlan REIT Management Limited
19 May 2014
HIBERNIA REIT PLCReport and Consolidated Financial Statements 12 HIBERNIA REIT PLC
Report and Consolidated Financial Statements
Montague House
Adelaide Road,
Dublin 2
Corporate Governance Report
13
Introduction
The Board of Directors of Hibernia REIT plc (“the Board”) is committed to developing and maintaining a high standard of corporate
governance. This is the first period of operation for the Company and accordingly the Company has worked during the period to
ensure that all relevant procedures are in place. From the listing date, 11 December 2013, the Company has sought to achieve
compliance with the relevant requirements and procedures as set out by the Irish Corporate Governance Annex to the UK Corporate
Governance Code (“Irish Code”), UK Corporate Governance Code 2012 (“UK Code”) and the Association of Investment Companies
Code of Corporate Governance (“AIC Code”), except as outlined below. To this end, the Board has established audit and nominations
committees, as described below, composed of independent non-executive directors.
For as long as the Company has no employees it is not intended
to have a Remuneration Committee. If this position changes, the
Board will review the matter further with a view to complying with
the terms of the UK Code and the AIC Code. The Board sets the
remuneration of the non-executive directors. Further information
on remuneration is set out in the Report of the Directors on page
26 of this report.
Certain requirements of the codes have not been
fully
implemented to date due to the short first period. However, the
Board has established procedures to ensure that all the relevant
requirements are complied with on an on-going basis.
The Board of Directors
The Board is responsible for providing governance and stewardship
to the Company and its business. This includes establishing goals
for management and monitoring the achievement of these goals.
The Company has entered into the REIT Investment Management
Agreement with the Investment Manager, whereby the Investment
Manager is required to produce an annual business execution plan
setting out the strategy for the provision of its services and the
management of the properties held or acquired by the Company.
The Board oversees the performance of the Investment Manager
and the Company’s activities. The Investment Manager has
discretionary authority to enter into transactions for and on
behalf of the Company, save for certain matters which require
the consent of the Board. The Board is at all times free to offer
ideas to the Investment Manager relating to the structure of a
transaction so as to afford the Company the greatest value.
Directors are expected to attend all scheduled Board meetings as
well as the Annual General Meeting (“AGM”).
All Directors are furnished with information necessary to assist
them in the performance of their duties. The Board meets at
least four times each calendar year and prior to such meetings
taking place, an agenda and board papers are circulated to the
Directors so that they are adequately prepared for the meetings.
The Company Secretary is responsible for the procedural aspects
of the Board meetings. Directors are, where appropriate, entitled
to have access to independent professional advice at the expense
of the Company.
Any Director appointed to the Board by the Directors will be
subject to election by the Shareholders at the first AGM after his/
her appointment. Furthermore, under the Articles, one third of
all Directors must retire by rotation each year and may seek re-
election. However, in keeping with best corporate governance
practice, all Directors intend to seek re-election each year at
the AGM.
The Board is also responsible for reviewing the Company’s fees
and expenses on at least an annual basis to determine that the
expenses incurred are in the best interest of the Shareholders.
Details of the remuneration of Directors are set out in the
Directors’ remuneration report on page 26.
The composition of the Board is reviewed regularly to ensure that
the Board has an appropriate mix of expertise and experience.
The Articles of the Company provide that the number of Directors
that may be appointed cannot be fewer than two or greater than
ten and that two Directors present at a Directors’ meeting shall
be a quorum.
On appointment, new directors are provided with induction
training. There was one such session during the period for all the
Directors on the commencement of their duties.
The Board plans to carry out an evaluation of its performance on
an annual basis. The first evaluation is due to take place in the
last quarter of 2014. This evaluation will review the balance of
skills, experience, independence and knowledge of the Company
on the board, its diversity, including gender, how the board works
together as a unit, and other factors relevant to its effectiveness.
Individual evaluation of Directors aims to show whether each
Director continues to contribute effectively and to demonstrate
commitment to the role (including commitment of time for Board
and Committee meetings and any other duties).
As at the date of this report, there are five Directors on the Board,
all of whom are non-executive directors. Daniel Kitchen (the
Chairman), Colm Barrington (the Senior Independent Director),
Stewart Harrington and Terence O’Rourke are each considered
independent for the purposes of the Listing Rules. William
Nowlan is also a member of the Board and management team of
the Investment Manager. This number of directors is considered
by the Company to be sufficiently small to allow efficient
management of the Company while being large enough to ensure
an appropriate mix of skills and backgrounds. The Board has
a strong focus on property investment management to allow it
access to a good knowledge base. This is balanced with some
diversity of background and strong financial skills. Further details
of the background and qualifications of the Board are given in the
Directors’ biographical details report on pages 24 to 25.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 14
Corporate Governance Report continued
Senior Independent Non-executive Director
The Company has appointed Colm Barrington as the Senior
Independent Director. The role of the Senior Independent Director
is mainly to:
- provide a sounding board for the Chairman and to serve as an
intermediary for the other Directors when necessary.
- facilitate shareholders if they have concerns which contact
through the normal channels of Chairman, or Investment
Manager has failed to resolve or for which such contact is
inappropriate.
- to hold a meeting with non-executive Directors at least annually
(and on such other occasions as are deemed appropriate) to
appraise the Chairman’s performance, taking into account the
view of executive directors (if any).
- to attend sufficient meetings with a range of major shareholders
to listen to their views in order to help develop a balanced
understanding of the issues and concerns of major shareholders.
Committees of the Board
The Board has established two committees: the Audit Committee
and the Nominations Committee. The duties and responsibilities
of each of these committees are set out clearly in written terms of
reference, which have been approved by the Board.
Audit Committee
Membership: Colm Barrington, Stewart Harrington, Terence
O’Rourke (Chair).
Report of the Audit Committee
The Terms of Reference for the Audit Committee were approved
and adopted by the Board on 15 November 2013 and noted by the
Audit Committee at the inaugural meeting held on 28 January
2014. Prior to this inaugural meeting, the duties assigned to the
Audit Committee were undertaken by the Board.
The Audit Committee is chaired by Terence O’Rourke, who is
also an independent non-executive director and is considered by
the Board to have sufficient financial experience and sufficient
understanding of financial reporting and accounting principles. All
members of the Audit Committee are independent non-executive
directors, appointed by the Board for a period of up to three years.
The Audit Committee is constituted in compliance with the UK
Code, the AIC Code, the Irish Code and the Articles regarding the
composition of the Audit Committee.
The Audit Committee assists the Board in discharging its
responsibilities with regard to corporate governance, financial
reporting and external and internal audits and controls. The Audit
Committee meets at least four times per year and as otherwise
required. The main areas of focus of the Audit Committee are:
a) the review of the adequacy and effectiveness of the Company’s
internal financial controls and internal control and risk
management systems in particular with regard to the operation
of the Investment Manager;
b) the verification that procedures in place comply with applicable
legislation, the Listing Rules and the Irish REIT Regime
guidelines;
c) the review of the operation of the Investment Manager in
relation to the Company’s procedures for the detection of
fraud, bribery, compliance and money laundering;
d) the monitoring of the integrity of the Company’s financial
statements included in its Report and Financial Statements
and any other formal announcement relating to the Company’s
financial performance business model and strategy and to
review significant financial reporting issues and all other
material continuous disclosure obligations;
e) the assessment of the external auditors’ performance
qualifications, expertise, resources and their terms of reference,
determine their independence, approve their fees, and review
external audit reports to ensure that where deficiencies in
internal controls have been identified that appropriate and
prompt remedial action is taken by the Investment Manager;
f) the development and implementation of a policy on the supply
of non-audit services by the Company’s auditor, taking into
account any relevant ethical guidance on the matter;
g) to review and note the external auditor’s audit plan and
ensure that it is consistent with the Company’s overall risk
management system.
The Audit Committee met three times during the period to the
date of signing of this Report. There are two further dates set for
the committee to meet in the calendar year 2014.
The independence and objectivity of the auditor was addressed by
the Audit Committee in conjunction with the level of fees for non-
audit services in the reporting period. Following discussion with
the auditors, the Audit Committee determined that while the fees
for non-audit services are significantly higher than the audit fees
for the period to 31 March 2014, there are mitigating factors which
reduce the potential threat to independence and objectivity. These
factors include the following:
- The quantum of the non-audit fees are deemed non-substantial
relative to the overall size of Deloitte and Touche’s firm-wide fee
income.
- The non-audit services do not involve a significant amount of
judgement nor are they likely to have a material effect on the
Report and Financial Statements.
- The professionals involved in the non-audit services were
different to those involved in the audit.
- Given that this is the first period of operation, and included work
associated with the IPO, the imbalance between non-audit and
audit fees is likely to be less significant in future periods.
The Audit Committee concluded that the independence and
objectivity of the external auditors has not been compromised.
The Audit Committee established a policy for the future supply of
non-audit services by the external auditors. It was also agreed to
review the level of non-audit services provided on an annual basis
HIBERNIA REIT PLCReport and Consolidated Financial Statements 15
and, in conjunction with the external auditor, assess the impact
on independence and objectivity.
The Audit Committee met with the external auditors at each of the
meetings during the period.
Initially they reviewed the audit plan, and noted the focus of the
audit, the principal risks and issues for the first financial period
and the terms of engagement of the auditor. As the first auditing
period was an unusually short period, the main focus of the
audit was on the Company’s compliance with relevant corporate
governance codes, the REIT rules and relevant stock exchange
listing rules. At the conclusion of the audit, the Committee
reviewed the audit summary report with the external auditors
in conjunction with the Report and Financial Statements for the
period from incorporation to 31 March 2014.
The Nominations Committee is responsible for the appointments
to the Board and meets at least once a year and as otherwise
directed. The Terms of Reference for the Nominations Committee
were approved and adopted by the Board on 15 November 2013
and noted by the Committee at the inaugural meeting held on 28
January 2014.
No external recruitment consultants were used in the recruitment
of the current Board who were all appointed while the Company
was still a private limited company and prior to the establishment
of the Nominations Committee and the listing of the Company.
No vacancies have arisen during the period since the Company
became a public limited company and therefore no selection
process has been undertaken. Appropriate procedures are
however in place for the future process in recruiting new Board
members.
As this was the first Report of the Company, a particular focus was
placed on the establishment of accounting policies, the treatment
of its assets and the disclosures surrounding the activities of the
Company in its inaugural period. In particular, a detailed review
of post balance sheet acquisitions was undertaken to ensure
that the assets purchased subsequent to the period end were
treated correctly in the Consolidated and Company Statements
of Financial Position. The key areas of judgement in the current
period related to the recognition and classification of investment
transactions and the treatment of expenses charged in relation to
the initial public offering (IPO).
Prior to the establishment of the Nominations Committee
the Board was responsible for all matters delegated to the
Nominations Committee. The Nominations Committee’s main
areas of focus are the following:
a) to review the structure, size and composition of the Board and
the combination and balance of experience, core competencies
and other attributes which the Board should possess in order
to discharge its role and to propose changes to the Board
where appropriate;
b) to assess the effectiveness of the Board and each of its
Most of the Group’s assets were in cash at the period end.
The Board had engaged a depository and put in place a cash
management policy in order to ensure that the cash was properly
managed and safeguarded. The external auditors informed the
committee that no issues were identified in their testing of the
cash balances.
The Report and Financial Statements were considered in draft
on 13 May 2014. The final Report and Financial Statements
were approved by the Audit Committee on 19 May 2014 and
recommended to the Board for signing.
Nominations Committee
Membership: Colm Barrington, Stewart Harrington, Daniel
Kitchen (Chair), Terence O’Rourke
Report of the Nominations Committee
The Nominations Committee met once during the period to the
date of signing of this Report.
The Nominations Committee is chaired by Daniel Kitchen, who
is also the independent non-executive Chairman. All members
of the Nominations Committee are independent non-executive
directors, appointed by the Board for a period of up to three
years. The Nominations Committee is constituted in compliance
with the UK Code and Irish Stock Exchange Annex, the AIC Code
and the Articles regarding the composition of the Nominations
Committee.
committees;
c) to identify and nominate for the approval of the Board,
candidates to fill Board vacancies as and when they arise;
d) to engage in succession planning for directors and other senior
executives, if any, of the Company taking into account any skills
set or expertise that the Board may require;
e) review the leadership needs of the Company and stay fully
informed about strategic issues and commercial changes
affecting the Company; and
f) provide a report on its activity to be included in the Company’s
Report and Financial Statements.
Before any appointment is made by the Board, the Nominations
Committee will evaluate the balance of skills, knowledge and
experience and diversity of the Board. The Board is actively
considering diversity and believes this is an important factor when
considering appointments to the Board. In this context, diversity in
skills and background as well as gender is important. The Board
does not consider it appropriate at this time to set gender quotas for
Board representation but will monitor developments in best practice.
The Nominations Committee may not be chaired by the
Chairman when it is dealing with the matter of succession to the
chairmanship of the Company.
The composition of the Audit Committee was discussed at the
inaugural meeting on 28 January 2014 and the resignation of Mr
Kitchen from the Audit Committee was agreed.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 16
Corporate Governance Report continued
Internal controls
The Board acknowledges it is responsible for maintaining the
Company’s system of internal control and risk management
in order to safeguard the Company’s assets. Such a system is
designed to identify, manage and mitigate financial, operational
and compliance risks inherent to the Company. The system is
designed to manage rather than eliminate the risk of failure to
achieve business objectives and can only provide reasonable, but
not absolute, assurance against material misstatement or loss.
The Investment Manager is appointed on an exclusive basis to
acquire properties on behalf of the Company, to manage the
Company’s assets and properties on behalf of the Company
and to provide or procure the provision of various accounting,
administrative, reporting, record keeping, regulatory and
other services to the Company. The Investment Manager has
discretionary authority to enter into transactions for and on behalf
of the Company subject to certain reserved matters that require
the consent of the Directors.
The Board has adopted a Policies and Procedures Manual
which documents those procedures which govern the day to day
operation of the Company. This manual sets out financial reporting
and other procedures and policies of the Company and addresses
the respective authority levels and responsibilities of the Company
and the Investment Manager, the authorisations required to effect
those transactions, and the necessary controls to ensure that
only appropriately authorised individuals in either the Investment
Manager or the Company can approve a transaction. In particular,
the Policy and Procedures Manual establishes the necessary
controls and authority levels of the Investment Manager to
manage the Company’s property portfolio. Other controls and
authorities in the Policy and Procedures Manual include those in
relation to the management of risk, property valuations, and the
maintenance of registers and other administrative matters.
An annual operating plan will be reviewed and approved by the
Board. This plan will be updated each quarter and the revised
plan, along with financial results, will be presented to the Board
each quarter for review. The Half Year report and the Annual
Report will be reviewed by the Audit Committee and approved by
the Board of Directors.
The Board has reviewed the effectiveness of the Group’s system
of internal control. This review took account of the principal risks
facing the Group, the controls in place to manage those risks and
the procedures in place to monitor them. The Board is satisfied
that the controls and procedures in place are effective at the end
of the period covered by the report.
Accountability and relationship with the Investment
Manager and the Depository
The Statement of Directors’ Responsibilities is set out on page 28.
The Board has contractually delegated to external third parties,
including the Investment Manager, and the Depository, the
management of the investment portfolio, the custodial services
(which include the safeguarding of the assets) and the day to
day accounting and administration. Each of these contracts was
entered into after full and proper consideration by the Board
of the quality and cost of the services provided, including the
control systems in operation in so far as they relate to the affairs
of the Company.
The Investment Manager ensures that all Directors receive, in a
timely manner, all relevant management, regulatory and financial
information. Representatives of the Investment Manager attend
each Board meeting enabling the Directors to probe further on
matters of concern.
Under the terms of the REIT Investment Management Agreement,
the Investment Manager provides a management team. Within
the Investment Manager, the management team responsible for
the provision of management services to the Company are:
Kevin Nowlan
Frank Kenny
William Nowlan
Frank O’Neill
Chief Executive Officer
Development Director
Investments Director
Chief Operations Officer
All of this team are directors of the Investment Manager.
The investment management fee covers the services of this
management team.
Detail on the fee structure with the Investment Manager is
provided in Note 20 on page 52.
Risk management
The Company considers risk management to be a very important
matter. The Board, together with the Investment Manager, deals
with risk management on behalf of the Company as part of its
regular monitoring of the business.
The Board has put in place procedures designed to ensure that
all applicable risks pertaining to the Company can be identified,
monitored and managed at all times. These procedures are
carried out as part of the duties of the Investment Manager under
the Investment Management Agreement and are kept under
review by the Audit Committee and the Board.
The Investment Manager has established a permanent and
independent risk management function and has appointed a
Risk and Compliance Officer (“RCO”). The RCO is responsible
for monitoring and managing the key risks of the Company and
is independent from those persons involved in the operations of
the Company.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 17
A Risk Register is maintained in which risks are identified,
assessed and any gaps are considered for mitigation. The Risk
Register is updated and reviewed by the Board at least annually
or more frequently if specifically required. The RCO manages the
following:
- Implementation of the risk management policy and procedures
of the Company;
- Quarterly reports to the Board on the adequacy and effectiveness
of the risk management process in the Company;
- Any deficiencies and whether appropriate remedial measures
have been implemented.
The Company has in place a share dealing code which gives
guidance to the Directors, the Investment Manager, any persons
discharging managerial responsibilities as defined in regulation
12(8) of the Market Abuse Regulations and persons identified by
the Board to fulfil this role, and anyone listed on the Company’s
Insider List on the pre-clearance notification procedures to be
followed when dealing in the shares of any class of the Company
or any other type of securities issued by or related to the Company.
Communications with shareholders
The Board intends to communicate with shareholders at least
four times a year.
There was one report to the Board in the period to 31 March
2014. An additional report was made at the Board meeting on
13 May 2014.
The RCO will independently escalate specific matters to the Board
if required. No specific matters have been escalated to the Board
as of this date.
On an annual basis the RCO reviews the risk management
policies and procedures of the Investment Manager and makes
recommendations to the Investment Manager and to the Board
for any improvements.
The Company is satisfied that the risk management function has
the necessary authority, resources, expertise and access to relevant
information to fulfil its role. Further information on the principal
risks is given on pages 20 to 22.
Internal audit
The Company has reviewed the business model under which
it operates in the context of its activities and in particular the
external management model which it has put in place to manage
its business operations. Having undertaken such a review, and
in light of the nature, scale, complexity and range of operations
of the Company, the Company does not intend to establish an
internal audit function and instead it will rely on any internal audit
functions in key service providers, on external audit reports and
on its own and the Investment Manager’s internal monitoring
procedures. As an internal audit function has not been established,
the audit committee will consider annually (in accordance with the
UK Code) whether there is a need for an internal audit function
and make a recommendation to the Board.
Model Code on share dealing
The Company must comply with the Model Code which imposes
restrictions on share dealings for the purposes of preventing the
abuse, or suspicion of abuse, of inside information by Directors
and other persons discharging managerial responsibilities within
the Company. The Board is responsible for taking all proper and
reasonable steps to ensure compliance with the Model Code by
the Directors and others to whom the Model Code is applicable.
General Meetings
The Company holds a general meeting each year as its annual
general meeting in addition to any other meeting in that year.
Not more than 15 months shall elapse between the date of one
annual general meeting and that of the next. The Directors are
responsible for the convening of general meetings. Information is
distributed to shareholders at least 20 days prior to the meeting.
Quorum
No business other than the appointment of a chairman shall be
transacted at any general meeting unless a quorum is present at
the time when the meeting proceeds to business. Two members
present in person or by proxy shall be a quorum.
Voting Rights
(a) Votes of Members: Votes may be given either personally or by
proxy. Subject to any rights or restrictions for the time being
attached to any class or classes of shares, on a show of hands
every member present in person and every proxy shall have
one vote, so, however, that no individual shall have more than
one vote, and on a poll every member shall have one vote for
every share carrying voting rights of which he is the holder. The
Chairman shall be entitled to a casting vote where there is an
equality of votes.
(b) Resolutions: Resolutions are categorised as either ordinary
or special resolutions. The essential difference between an
ordinary resolution and a special resolution is that a bare
majority of more than 50% of the votes cast by members
voting on the relevant resolution is required for the passing of
an ordinary resolution, whereas a qualified majority of more
than 75% of the votes cast by members voting on the relevant
resolution is required in order to pass a special resolution.
Matters requiring a special resolution include for example:
- altering the Objects of the Company;
- altering the Articles of Association of the Company; and
- approving a change of the Company’s name.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
18
Corporate Governance Report continued
The Company will make an announcement if it has reason to believe
that a leak may have occurred about any on-going negotiations
of a price-sensitive nature. Any board decisions which might
influence the share price must be announced before the start of
trading next day. Information relayed at a shareholders’ meeting
which could be price-sensitive must be announced no later than
the time the information is delivered at the meeting.
In relation to any uncertainty regarding the communication of
a particular matter, advice will be sought from the Company’s
sponsors and/or legal advisor(s).
Other
The Company discloses information to the market as required
by the Irish Stock Exchange and Financial Conduct Authority
including inter alia:
- periodic financial information such as annual and half yearly
results.
- price-sensitive information, which might be a significant change
in the Company’s financial position or outlook, unless a reason
is present not to (e.g. prejudicing commercial negotiations).
- information regarding major developments in the Company’s
activities.
- information regarding dividend decisions.
- any changes at board level must be announced immediately
once a decision has been made.
- information in relation to any significant changes notified to the
company of shares held by a substantial shareholder.
Substantial shareholdings
As at 31 March 2014, the Company has been notified of the following substantial interests in the Company’s shares:
Holder
31 March 2014
Goodbody Stockbrokers
Mainstay Marketfield Fund
Marshall Wace LLP
Moore Capital Management LP
Putnam Investments LLC
Soros Fund Management LLC
TIAA-CREF Investment Management LLC
Wellington Management Company LLP
As at 19 May 2014 the Company has been notified of the following changes:
Holder
Goodbody Stockbrokers
Moore Capital Management LP
Wellington Management Company LLP
Holding
‘000 shares
15,561
36,886
19,829
25,000
33,516
30,000
23,570
14,287
Holding
‘000 shares
15,041
14,812
20,499
%
4.04
9.58
5.15
6.49
8.71
7.79
6.12
3.71
%
3.91
3.85
5.32
19 May 2014
European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006
The information on the Board of Directors on pages 24 to 25 and the disclosures on Director’s Remuneration on page 26 of this Report
cover the information required for the purposes of Regulation 21 of the European Communities (Takeover Bids (Directive 2004/25/EC))
Regulations 2006.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
Report of the Directors
19
The Directors present their first report on the affairs of the Group
together with the audited financial statements for the period ended 31
March 2014. The Investment Manager’s Report and all other sections of
the Report and financial statements, to which cross reference is made,
are incorporated into the Report of the Directors by reference.
Directors’ responsibilities
These are set out in the Directors’ Statement of Responsibilities on page
28 of this report.
Principal activity and business review
The principal activity of the Group is property investment. The Group
consists of the Company, Hibernia REIT plc, and its subsidiary, Hibernia
REIT Finance Limited.
The Company was incorporated on 13 August 2013 and commenced
trading on 11 December 2013. Its shares were listed on the main Irish
and London stock exchanges on the same day.
The Group completed its first transaction on 28 February 2014, with the
acquisition of a mixed portfolio of real estate loans from RBS Capital
Resolution through its subsidiary, Hibernia REIT Finance Limited, at a
total cost of €68m.
On 10 March 2014 the Group announced its second transaction, the
purchase of New Century House in Dublin’s International Financial
Services Centre at a cost of €48m. This transaction was completed in
April 2014.
On 28 March 2014, the Group also contracted for the purchase of the
Gateway site at Newlands Cross in Dublin at a cost of €10m. This brings
funds invested at the period end to €126m.
The Group continues to search out appropriate properties to develop its
portfolio. Both the purchase of New Century House and the Gateway site
properties were completed after the period end date.
On 16 May 2014, the Group announced the acquisition of Montague
House and Hardwicke House, two office buildings in Dublin 2 in a
partially deferred off market transaction of €60m.
On 19 May 2014, the Group exchanged contracts to acquire an interest
in the Chancery Building and the Chancery Apartments for €16m in an
off-market loan purchase transaction.
A more detailed review of the business is contained in the Investment
Manager’s Report on pages 6 to 12.
REIT status
Hibernia REIT plc elected for Real Estate Investment Trust (“REIT”) status
on 11 December 2013 under section 705 E of the Finance Act 2013. As
a result, the Group does not pay Irish corporation tax on the profits and
gains from qualifying rental business in Ireland provided it meets certain
conditions. With certain exceptions, corporation tax is still payable in the
normal way in respect of income and gains from the Group’s Residual
Business, that is its non-property rental business.
An Irish REIT is required to distribute to its shareholders (by way of
dividend), on or before the filing date for the Irish REIT’s tax return for
the accounting period in question, at least 85% of the Property Income of
the Property Rental Business arising in each accounting period (provided
it has sufficient distributable reserves). Failure to meet this requirement
will result in the Irish REIT incurring a tax charge calculated by reference
to the extent of the shortfall in the dividend paid. A dividend paid by an
Irish REIT or the principal company of a Group REIT, as the case may be,
from its Property Rental Business is referred to as a Property Income
Distribution (PID). Any other dividend paid by the Irish REIT is referred to
as a Non PID dividend.
The REIT or Group REIT must satisfy the conditions summarised below
for each accounting period:
a) at least 75% of the Aggregate Income of the REIT or Group REIT is
derived from carrying on a Property Rental Business;
b) it should conduct a Property Rental Business consisting of the
generation of rental income from at least three properties, the
market value of no one of which is more than 40% of the total market
value of the properties in the Property Rental Business (in the case of
a new REIT or Group REIT this condition is regarded as having been
met if it is met within 3 years of it becoming a REIT or Group REIT);
c) it should maintain a property financing ratio being, broadly, the ratio
of Property Income plus Financing Costs to Financing Costs, of at
least 1.25:1;
d) at least 75% of the market value of the assets of the REIT or Group
REIT must relate to assets of the Property Rental Business;
e) the aggregate debt shall not exceed an amount of 50% of the market
f)
value of the assets of the REIT or Group REIT;
subject to having sufficient distributable reserves, the Irish REIT must
distribute at least 85% of its Property Income to its shareholders by
way of a Property Income Distribution for each accounting period.
Once the Group has fully invested the proceeds of its issue, it will have
a greater diversification within its portfolio than the minimum required
under the Irish REIT regime with a minimum of five properties, with no
one property asset representing more than 30% of the Group’s total
assets at the time of acquisition.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 20
Report of the Directors continued
Shares in issue
At 31 March 2014 the Company had 385,000,000 units of ordinary
stock in issue.
Principal risks and uncertainties
Under Irish company law, the Company is required to give a
description of the principal risks and uncertainties which it faces.
The Board recognises there are certain risks in the structure,
operation and management of the Group and Company and acts
to mitigate these through their close and active management.
The Group and Company exposure to financial risk is further
described in Note 18 on page 48. The Company’s procedures in
respect of the management of these risks are further explained in
the Corporate Governance Report on pages 16 to 17.
Some of the risks set out below have not impacted directly on the
Group in the current period given that the Group has only recently
commenced operations and is in the process of investing the
proceeds of the initial public offering. However, such risks are
expected to be applicable in the coming financial year.
Where funds raised from the issue of share capital or from the
sale of an existing rental property are awaiting investment, profits
arising from the investment of these funds, other than in the
property rental business, are treated as property profits for two
years from either date of issue of the shares or date of disposal
of the property. Therefore income arising from such funds should
qualify for tax relief under the REIT provisions for a period of two
years.
to properties under development, where
In relation
the
development costs exceed 30% of the market value of the property
at the commencement of development, then the property must
not be disposed of within three years of completion. If such a
disposal takes place, then the Group would be liable to tax on the
proceeds of any profit on disposal.
As at 31 March 2014 no investment property transactions had
been completed by the Group. However, as described in the
Investment Manager’s Report on pages 6 to12, an acquisition of a
loan portfolio with property providing the collateral for the loans
had been completed and a number of other transactions were in
progress.
Corporate governance
The Group is committed to high standards of corporate governance,
details of which are given in the Corporate Governance Report on
pages 13 to 18 which form part of the Report of the Directors.
Results and Dividend
This is the first period of operation for the Group. During this
period the Company listed and began sourcing properties for
acquisition. The Group showed a loss of € 846,149 for the period
to 31 March 2014. The Directors do not propose a payment of a
dividend for this period.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 21
Business risks
Risks
Description of exposure
Measures to manage risks
Business
environment
Competition
The pace of economic recovery both in Ireland
and globally is uncertain and the precise nature
of the risks the Group faces is difficult to predict.
While there are clear signs of economic recovery
there is no assurance that this recovery will be
maintained.
The Group uses the services of its Investment
Manager and its access to market knowledge
through the WK Nowlan Property group to
ensure that it has the best possible knowledge
of the current business environment. The
Group proactively manages this risk using this
knowledge and the combined expertise of its
Board.
from other
faces competition
The Group
property investors for suitable properties which
could impact on its ability to purchase suitable
properties for renting at satisfactory rates and
to successfully deploy the funds from its share
issuance.
The Group uses the knowledge and contacts of
the Investment Manager to seek out suitable
properties for its portfolio. This activity is a
major focus of the Group currently given its
recent launch.
Investment risk
While the Group searches for suitable investment
properties, the funds from its share issuance are
held as cash. As the cash must be invested in
short term instruments, the Group is exposed to
both interest rate and credit risk.
Property
investment risks
Certain risks, such as tenant default and
occupier demand, are inherent to any property
business. These risks may result in a reduction
of rental income for the Group. In addition, the
valuation of property and property related assets
is inherently subjective. Property markets are
also generally illiquid. Therefore there is a risk
that the valuations of properties acquired might
not be achieved on disposal and that a resultant
reduction in returns to shareholders may occur.
Investment
manager risks
The Group is dependent on the investment
manager for its expertise in property investment
and management.
In particular, the Group
is dependent on the ability of the investment
manager to procure and maintain access to
suitably skilled and experienced staff to support
the Group’s activities.
The Group is conscious of the risks associated
with holding large amounts of cash and
employs the services of a Depository, Credit
Suisse International, to safeguard the Group’s
assets. The Group has adopted a Cash
Management Policy which sets out cash limits
for any one institution dependent on its credit
rating.
The Group’s long term focus is on managing
these risks and the Board and Investment
Manager work closely together to monitor
and actively manage these risks. Strategies
employed include diversifying the portfolio
in terms of use, industry sector and other
property characteristics. The Group complies
with the principles of the Society of Chartered
Surveyors,
in accordance with the Royal
Institute of Chartered Surveyors (“RICS”) -
Valuation Professional Standards (2014) (the
Red Book).
The Group manages the performance of
the Investment Manager through the close
supervision of
its activities and uses a
performance based fee approach to incentivise
its activities.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 22
Report of the Directors continued
Regulation and taxation risks
Risks
Tax risks
Authorisation:
Investment Manager
Description of Risks
Measures to manage risk
The Group monitors this risk very actively. The
suitability and impact of all new acquisitions
are researched prior to completion. For
example, restrictions in respect of development
properties are in place under the regime and
therefore mechanisms are in place to ensure
these restrictions are complied with by the
Group. Tax status and issues are a primary
part of the financial review process. Dividend
policy is dependent on the REIT rules. The
Group supplements internal knowledge and
monitoring with the advice of tax advisors in all
cases of ambiguity or doubt.
The Board monitors the activities of the
Investment Manager to ensure its compliance
with the regulations. Should it become aware
of any issues, it will actively seek to address
these and make plans in case of potential
disruption to its activities by loss of the
Investment Manager’s authorisation.
As described on pages 19 to 20 of this report,
the Group has elected for Group REIT status
which confers an exemption from paying Irish
corporation taxation on the profits and gains
arising from qualifying rental business providing
it meets certain conditions. Failure to meet these
conditions would result in substantial penalties
to the Company.
the
lose
Investment Manager
The Investment Manager is a newly appointed
Alternative Investment Fund Manager (AIFM).
Should
its
authorisation then the Group would have to
appoint a new investment manager. The Group
is dependent on the expertise of the Investment
Manager and there is no guarantee that the
Group could find a replacement with comparable
expertise or on similar terms. Any such transition
could result in significant loss to the Group. In
addition, the regulations are new and changes
to the regime or to the recommendations or
guidance as to its implementation could result
in restrictions on the activities of the Investment
Manager and in turn the Group.
Authorisation:
The Company
The Directors do not believe that the Company
requires to be authorised by the Central Bank as
a Retail Alternative Investment Fund (“RAIF”) or a
Qualifying Alternative Investment Fund (“QAIF”).
Should the Company be determined in the future
to fall within the scope of these regulations
this could result in material restrictions to the
Company’s activities and in its ability to achieve
its
its return to
shareholders.
investment objectives and
the opinion of
The Board has sought
professional advisors to support its opinion in
this matter. It continues to monitor the issue
and the potential impact a requirement to seek
authorisation under the various categories
might have.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 23
The Directors do not have service contracts but do have letters of
appointment which reflect their responsibilities and commitments.
Each Director has the same general legal responsibilities to
the Company as any other Director and the Board as a whole is
collectively responsible for the overall success of the Company.
The Directors were appointed for an initial term of 3 years, and
their dates of appointment are set out below. The Company may
lawfully terminate a Director’s appointment with immediate effect
in certain circumstances, including where a Director has breached
the terms of his letter of appointment and no compensation would
be payable to such Director in such event. In addition to their
general legal responsibilities, the Directors have responsibility for
the Company’s strategy, performance, financial and risk control
and personnel.
Going concern
The Group’s activities, strategy and performance are explained
in the Investment Manager’s Report on pages 6 to 12 of this
Report and Financial Statements. Further detail on the financial
performance and financial position of the Group is provided in the
financial statements on pages 32 to 53. In addition, Note 18 on
page 48 to the Report and Financial Statements includes details
on the Company’s financial risk management and exposures.
The Company has considerable financial resources in the form
of the remaining cash proceeds from its share issuance. Having
assessed the relevant business risks, the Directors believe that
the Company is well placed to manage these risks successfully,
and they have a reasonable expectation that the Company, and
the Group as a whole, have adequate resources to continue in
operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing these
Financial Statements.
Directors
The business of the Company is managed by the Directors, each
of whose business address is Hibernia REIT plc, Marine House,
Clanwilliam Place, Dublin 2, Ireland.
Unless otherwise determined by the Company in a general
meeting, the number of Directors shall not be more than ten nor
less than two. A Director is not required to hold shares in the
Company. Two Directors present at a Directors’ meeting shall be
a quorum.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 24
Report of the Directors continued
Directors biographical details
Daniel Kitchen
Independent non- Executive Chairman
Colm Barrington
Senior Independent Non-executive Director
Stewart Harrington
Independent Non-executive Director
Appointed: 23 August, 2013
Appointed: 23 August, 2013
Appointed: 23 August, 2013
Nationality: Irish
Nationality: Irish
Nationality: Irish
Age: 62
Age: 68
Age: 71
Committee membership:
Nominations (Chair)
Committee membership:
Audit and Nominations
Committee membership:
Audit and Nominations
Daniel Kitchen
is currently the non-
executive Chairman of Workspace Group
plc and a non-executive director of LXB
Retail Properties plc, as well as the ISE-
nominated director on the Irish Takeover
Panel. Previously, he was finance director
of Green Property plc from 1994 to
2002, the
Irish Government-appointed
Chairman of Irish Nationwide Building
Society, deputy chief executive of Heron
International plc from 2003 to 2008 and a
non-executive director of Kingspan Group
plc and Minerva plc. He brings the benefit
of his expertise and the experience gained
across a variety of property, finance and
public company roles to his chairmanship
of the Board and Nominations Committee.
Colm Barrington is currently chief executive
officer and a director of Fly Leasing Ltd,
the NYSE-listed and Irish based aircraft
leasing company, non-executive Chairman
of Aer Lingus Group plc and the senior
independent director of IFG Group plc.
Previously he was managing director of
Babcock & Brown Ltd in Ireland, President
of GE Capital Aviation Services Ltd, chief
operating officer of GPA Group plc and
chief executive of GPA’s Capital Division.
Colm Barrington’s senior executive and
non-executive board roles add significant
experience to the Board from outside the
property sector and within the context of a
public company.
Stewart Harrington is currently a director
of Killeen Properties and a non-executive
director of BWG Group, Stafford Holdings
and St. Vincent’s Healthcare Group. He
has extensive knowledge and experience
of the Irish property market over many
years in a variety of roles. Previously,
Stewart Harrington was a partner
in
Jones Lang Wootton (now JLL), a founding
partner of Harrington Bannon Chartered
Surveyors (now BNP Paribas Real Estate
Ireland), and managing director of Dunloe
Ewart Ltd (formerly known as Dunloe
House Group plc). He was also previously
a non-executive director of CIE (Córas
Iompair Éireann, Ireland’s national public
transport provider), ESB (the Electricity
Supply Board, Ireland’s premier electricity
utility) and the National Development
Finance Agency.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 25
William Nowlan
Non-executive Director
Terence O’Rourke
Independent Non-executive Director
Appointed: 13 August, 2013
Appointed: 23 August, 2013
Nationality: Irish
Nationality: Irish
Age: 68
Age: 59
Committee membership:
None
Committee membership:
Audit and Nominations
Mr Frank O’Neill was appointed as
Director and Company Secretary on 13
August 2013. He resigned as Director on
23 August 2013 and as Company Secretary
on 15 November 2013.
All the Directors will retire at the Annual
General Meeting (AGM) and, being eligible,
will offer themselves up for election or re-
election.
The Company Secretary, Castlewood
Corporate Service Limited (trading as
Chartered Corporate Services), was
appointed on 15 November 2013.
the
Terence O’Rourke is currently Chairman
of Enterprise Ireland, a non-executive
director of The Irish Times and a council
Irish Management
member of
Institute. Previously, he was managing
partner of KPMG Ireland from 2007 to 2013,
President of The Institute of Chartered
Accountants in Ireland, a board member
of the Chartered Accountants Regulatory
Board and Chairman of the Leinster
Society of Chartered Accountants. He was
also a member of the Global Board, EMA
Board and Global Executive Team of KPMG
International from 2006 to 2013. Terence
O’Rourke’s professional accounting and
management background and experience
over many years
in advising clients
across a range of sectors, contributes
to the balance of skills, experience and
knowledge of the Board.
William Nowlan has more than 40 years’
experience investing in Irish commercial
property. Prior to forming W K Nowlan &
Associates (now W K Nowlan Property) in
1996, William Nowlan was Head of Property
Investment at Irish Life Assurance plc from
1985 to 1995 and for a period during that
time was also Secretary to the Investment
Committee. He was a member of the
Committee of Management of IPUT (Irish
Property Unit Trust, one of the largest
institutional property investors in Ireland)
from 1997 to 2007. He is a member of the
Irish Town Planning Institute, a fellow of
the Royal Institute of Chartered Surveyors
and a former Chairman of both Royal
Institute of Chartered Surveyors Ireland
and Royal Institute of Chartered Surveyors
Europe. He was also a member of the RICS
Governing council in London. He was the
founding Chairman of the Irish Property
and Facilities Managers’ Association.
He was also Visiting Professor in the
University of Ulster and lecturer in Town
Planning at University College, Dublin. He
assembled and led the Irish REITs Forum,
leading property
a voluntary body of
industry practitioners and shareholders
who came together
in January 2011,
to promote the introduction of REITs to
Ireland that influenced the introduction
of the Irish REIT legislation in early 2013.
William Nowlan is also a director of WK
Nowlan REIT Management Limited. WK
Nowlan REIT Management Limited has
been appointed as Investment Manager to
the Company.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 26
Report of the Directors continued
Directors’ attendance at Board and Committee meetings
Directors’ attendance at Board Meetings
Number of meetings
held during the period
while a Board member
Number of meetings
attended during the
period while a Board
member*
attract individuals with the necessary experience and ability to make
a significant contribution to the Group and to compensate them
appropriately for their role.
The Board will review its performance and the remuneration level of
the Directors on an annual basis.
Name
Daniel Kitchen
Colm Barrington
Stewart Harrington
William Nowlan**
Frank O’Neill**
Terence O’Rourke
14
14
14
15
2
14
13
7
14
12
2
11
* All of the Directors attended all scheduled board meetings. However
due to the start up nature of our operations in the period to 31 March
2014 a large number of ad hoc, single item meetings were convened
at short notice and some directors were unable to attend every
meeting.
** William Nowlan and Frank O’Neill were the only directors appointed
at the first meeting of the company. Frank O’Neill was a director
from 13 August 2013 to 23 August 2013.
Directors attendance at Board Committee Meetings
Number of meetings
held during the period
while a Committee
member
Number of meetings
attended during
the period while a
Committee member
Audit Committee
Colm Barrington
Terence O’Rourke
Stewart Harrington
Nominations Committee
Daniel Kitchen
Colm Barrington
Stewart Harrington
Terence O’Rourke
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Directors’ remuneration report
This is the first financial reporting period for the Group and the Group
has no executive directors or employees. The only significant decision
made on remuneration during the period was the determination of
appropriate fees for the non-executive directors.
Remuneration policy
For as long as the Group has no employees it is not intended to have
a Remuneration Committee. The remuneration of the non-executive
directors is determined by the Board of Directors as a whole. The
Chairman is not involved in determining his own remuneration.
Levels of remuneration for non-executive directors should reflect
the time commitment and responsibilities of the role. The fees paid
to non-executive directors are therefore set at a level which aims to
Remuneration report
Directors’ Remuneration
Name
Daniel Kitchen
Colm Barrington
Stewart Harrington
William Nowlan
Terence O’Rourke
Totals
Annual Fee
€’000
Period to
31 March 2014
€’000
100
50
50
0
50
250
58
29
29
0
29
145
William Nowlan does not receive remuneration for his role as a Director.
The Investment Manager performs most of the duties associated
with key management activities and details on the remuneration of
the Investment Manager are disclosed in Note 20 on pages 52 to 53
of the Report and Financial Statements. The Investment Manager‘s
remuneration is set and reviewed by the Board.
The total amount of remuneration paid by the Investment Manager to
its staff in the period from commencement of trade to 31 March 2014
was €215,002. The remuneration comprised fixed remuneration only
and the average number of staff during the period was six.
Interests of Directors in share capital
The Directors had no interests in the share capital at their date of
appointment.
Ordinary Shares
At 31 March
2014
% of Company
At 31 March
2014
Director
Daniel Kitchen
Stewart Harrington
Colm Barrington
Terence O’Rourke
William Nowlan
Company Secretary, Chartered
Corporate Services
100,000
100,000
800,000
100,000
500,000
-
0.03%
0.03%
0.22%
0.03%
0.14%
0.00%
All of the Directors are non-executive directors.
The interests disclosed above include both direct and indirect interests
in shares.
There have been no changes in the beneficial and non-beneficial
shareholdings of the Directors between 31 March 2014 and the date
of this report.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
27
Subject to certain exceptions, the members of the Board have agreed
that the members of the Board shall not sell any ordinary shares prior
to the first anniversary of admission. The Investment Manager has
also agreed to lock-in arrangements in respect of any Performance
Fee Shares that may be issued under the terms of the REIT Investment
Management Agreement. No such shares have been issued to the
Investment Manager as of the date of this report.
Key management personnel
The Company is managed by the non-executive directors who have
delegated investment management and administration functions
including accounting and risk management, to the Investment
Manager without abrogating their overall responsibility. The Investment
Manager’s remuneration is detailed in Note 20 on pages 52 to 53.
Directors’ conflict of interest
Section 194 of the 1963 Act requires each Director who is in any way,
either directly or indirectly, interested in a contract or proposed contract
with the Company to declare the nature of his interest at a meeting of
the Directors. The Company keeps a record of all such declarations
which may be inspected by any Director, secretary, auditor or member
of the Company at the registered office of the Company.
The Chairman and each of Colm Barrington, Terence O’Rourke and
Stewart Harrington are independent of the Investment Manager.
William Nowlan is a director of the Investment Manager and a member
of the Management Team and has provided an undertaking to the
Company that he will not: (i) be involved in any capacity in the launch or
operation of another REIT or other property investment vehicle or fund
involved in a similar area of business as the Company, or in the launch
or operation of a REIT or other property investment vehicle or fund in a
different area of business, without approval of the Board (such approval
not to be unreasonably withheld), (ii) acquire or act for another party
to acquire a property investment that is within the parameters of the
investment policy of the Company, to include all income producing
property assets of any value and non-income producing property
asset with a market value or purchase price of at least €10 million,
other than where the Company has had the opportunity to invest in
a particular property, and has declined to do so and has consented
to William Nowlan pursuing the opportunity or (iii) advise any investor
in competition with the Company for the acquisition of an investment
property. All possible or actual conflicts of interest will be disclosed
in writing by William Nowlan to the Board. These provisions shall not
apply to any dealings or interest in property held as of the date of the
REIT Investment Management Agreement.
Subject to certain exceptions, the Articles generally prohibit Directors
from voting at Board meetings or meetings of committees of the
Board on any resolution concerning a matter in which they have a
direct or indirect interest which is material or a duty which conflicts or
may conflict with the interests of the Company. Directors may not be
counted in the quorum in relation to resolutions on which they are not
entitled to vote. William Nowlan accordingly will not be permitted to
vote on any matter at Board level relating to the Investment Manager.
In addition, appropriate Board procedures will also be implemented
as required to address any potential conflict which may arise by virtue
of William Nowlan’s position as a Director of the Company and of the
Investment Manager.
The Directors also consider that the interests of the Company and
the Investment Manager are aligned via the incentivisation structure
within the REIT Investment Management Agreement.
The Directors consider that the fact that William Nowlan and Kevin
Nowlan are related does not give rise to a conflict not addressed by any
of the above procedures and provisions. However, should any conflict
emerge in relation to this or any other matter, the Directors believe
that sufficient provisions in the Articles, and corporate governance
procedures, exist in the Company to address it. To the extent any
matter arises that is unforeseen at this point, additional procedures or
provisions that may be required shall be put in place.
Political and charitable contributions
The Group made no political or charitable contributions during the
period.
Financial risk management
The financial risk management objectives and policies of the Company
are set out in Note 18 on page 48 to the financial statements.
Disclosure of information to auditors
The Directors who held office at the date of approval of this Report of
the Directors confirm that, so far as they are each aware there is no
relevant information of which the Group’s auditors are unaware; and
each Director has taken all the steps that they ought to have taken as
Directors to make themselves aware of any relevant audit information
and to establish that the Group’s auditors are aware of that information.
Independent auditors
The auditors, Deloitte & Touche, have indicated their willingness to
continue in office and a resolution that they will be reappointed will be
included as ordinary business at the Annual General Meeting.
Subsequent events
These are described in Note 21 on page 53.
Annual general meeting
The 1st Annual General Meeting of the Company will be held on 22 July
2014. Accompanying this report is the Notice of the Annual General
Meeting, which sets out the resolutions to be considered and approved
at the meeting.
The Board, having reviewed the Report and Financial Statements in
their entirety, is satisfied that they are fair, balanced and reasonable
and give the reader all the information required to understand the
business model, strategy and performance of the Group.
Mr Daniel Kitchen
Chairman
19 May 2014
Mr Terence O’Rourke
Director
19 May 2014
HIBERNIA REIT PLCReport and Consolidated Financial Statements 28
Statement of Directors’ Responsibilities
The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s
website. Legislation in the Republic of Ireland governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
functions
The Directors have contracted with the Investment Manager
in order to ensure that those requirements are met. The books
and accounting records of the Company are maintained at the
registered office located at Marine House, Clanwilliam Place,
Dublin 2. The Directors have delegated investment management
and administration
including risk management,
to the Investment Manager without abrogating their overall
responsibility. The Directors have in place mechanisms for
monitoring the exercise of such delegated functions which are
always subject to the supervision and direction of the Board.
These delegations of functions and the appointment of regulated
third party entities are detailed in the Corporate Governance
Report on pages 13 to 18. Each of the Directors, whose names
and functions are listed on pages 24 to 25, confirms that, to the
best of each person’s knowledge and belief:
- the financial statements, prepared in accordance with IFRS as
adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position for the Group as at 31 March
2014 and of the result for the period then ended; and
- the Report of the Directors, the Chairman’s Statement and
the Investment Manager’s Report include a fair review of the
development and performance of the Group’s business and the
state of affairs of the Group at 31 March 2014, together with a
description of the principal risks and uncertainties facing the
Group.
- the Report and Financial Statements, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the performance, strategy
and business model of the Group.
Mr Daniel Kitchen
Chairman
19 May 2014
Mr Terence O’Rourke
Director
19 May 2014
The Directors, whose names and details are listed on pages 24
to 25, are responsible for preparing the Report and the financial
statements in accordance with applicable laws and regulations.
Company law requires the Directors to prepare financial
statements for each financial period. Under such law the Directors
are required to prepare the Group and Company financial
statements in accordance with International Financial Reporting
Standards as adopted by the EU (“IFRSs”) and in accordance with
the provisions of the Companies Acts 1963 to 2013.
The Group and Company financial statements are required by law
and IFRSs to present fairly the financial position and performance
of the Group and Company: the Companies Acts 1963 to 2013
provide in relation to such financial statements that references in
the relevant part of that Act to financial statements giving a true
and fair view are references to their achieving a fair presentation.
In preparing the Report and Financial Statements, the Directors
are required to:
– select suitable accounting policies and then apply them
consistently;
– make judgements and estimates that are reasonable and
prudent;
– comply with applicable
International Financial Reporting
Standards as adopted by the European Union, subject to any
material departures disclosed and explained in the financial
statements; and
– prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and
Company will continue in business.
The Directors are responsible for keeping proper books of account
which disclose with reasonable accuracy at any time the financial
position of the Company and the Group and to enable them to
ensure that the financial statements are prepared in accordance
with International Financial Reporting Standards as adopted by
the European Union and comply with Irish statute comprising the
Companies Acts, 1963 to 2013 and, as regards the Group financial
statements, Article 4 of the IAS Regulation, and the Listing
Rules of the Irish Stock Exchange They are also responsible for
safeguarding the assets of the Company and the Group and for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
In accordance with the Transparency (Directive 2004/109/EC)
Regulations 2007 (‘the Transparency Regulations’), the Directors
are required to include a management report containing a fair
review of the business and a description of the principal risks and
uncertainties facing the Group. The Directors are also required
by applicable law and the Listing Rules issued by the Irish Stock
Exchange to prepare a Report of the Directors and reports relating
to Directors’ remuneration and corporate governance that comply
with that law and those Rules.
HIBERNIA REIT PLCReport and Consolidated Financial Statements Independent Auditor’s Report
to the Members of Hibernia REIT plc
29
Opinion on
financial
statements of
Hibernia REIT plc
In our opinion:
• the Group Financial Statements give a true and fair view in accordance with International Financial Reporting
Standards (“IFRSs”) as adopted by the European Union, of the state of the Group’s affairs as at 31 March 2014
and of its loss for the period then ended;
• the Company financial statements give a true and fair view in accordance with IFRSs, as adopted by the European
Union, as applied in accordance with the provisions of the Companies Acts, 1963 to 2013 and of the state of the
Company’s affairs as at 31 March 2014; and
• the financial statements have been prepared in accordance with the Companies Acts, 1963 to 2013 and, as
regards the Group Financial Statements, Article 4 of the IAS Regulation.
The financial statements comprise the Group Financial Statements: the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity,
the Consolidated Statement of Cash Flows and the Company Financial Statements: the Company Statement of
Financial Position, the Company Statement of Changes in Equity and the Company Statement of Cash Flows,
and the related notes 1 to 22. The financial reporting framework that has been applied in their preparation is
applicable law and IFRSs as adopted by the European Union, and, as regards the Company financial statements,
in accordance with the provisions of the Companies Act 1963 to 2013.
Going concern
As required by the Listing Rules we have reviewed the Directors’ Statement contained within the Report of the
Directors on pages 19 to 27 that the Group is a going concern. We confirm that:
• we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the
financial statements is appropriate; and
• we have not identified material uncertainties related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the
Group’s ability to continue as a going concern.
Our assessment of
risks of material
misstatement
The assessed risks of material misstatement described below are those that had the greatest effect on our audit
strategy, the allocation of resources in the audit and directing the efforts of the engagement team:
Risk of material misstatement
How the scope of our audit responded to the risk
Investment transactions
Management completed an analysis to determine
the appropriate accounting treatment of investment
transactions entered into during the period. Risk
relating to the recognition and classification of
investment transactions.
We considered the appropriateness of the recognition
policy for the acquisition of investment properties and
loan portfolios. We considered the appropriateness of
the classification of the loans acquired and evaluated
the assumptions used by management and evidence
supporting management’s conclusions.
Expenses incurred on Initial Public Offering (IPO)
Costs directly relating to the issue of share capital
have been offset against the share premium account.
Risk relating to the validity and accounting treatment
of expenses which have been charged against the
share premium account.
We carried out testing of the IPO expenses incurred by
agreeing the actual expenses recorded to supporting
documentation. We considered the appropriateness
of the accounting treatment used by management in
determining which expenses qualified as direct costs
on the issue of equity.
Our audit procedures relating to these matters were designed in the context of our audit of the financial statements
as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the financial
statements is not modified with respect to any of the risks described above, and we do not express an opinion on
these individual matters.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 30
Independent Auditor’s Report continued
to the Members of Hibernia REIT plc
Our application of
materiality
• We define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a
reasonably knowledgeable person, relying on the financial statements, would be changed or influenced. We use
materiality both in planning the scope of our audit work and in evaluating the results of our work.
• We determined planning materiality for the Group to be €3,700,000, which is below 1% of Shareholders’ Equity.
• We agreed with the Audit Committee that we would report to the Committee any audit differences in excess
of €185,000, as well as differences below that threshold that, in our view, warranted reporting on qualitative
grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the
overall presentation of the financial statements.
An overview of the
scope of our audit
Our audit scope focused on the Company and its subsidiary, Hibernia REIT Finance Limited. The subsidiary was
subject to a full scope audit which was also performed by the Group audit team and was performed to the Group
materiality level described above.
Matters on which
we are required
to report by the
Companies Acts
1963 to 2013
• We have obtained all the information and explanations which we consider necessary for the purposes of our audit;
• In our opinion proper books of account have been kept by the Company;
• The Company’s Statement of Financial Position is in agreement with the books of account;
• I n our opinion the information given in the Report of the Directors is consistent with the financial statements
and the description in the Corporate Governance Report of the main features of the internal control and risk
management systems in relation to the process for preparing the consolidated financial statements is consistent
with the consolidated financial statements; and
• The net assets of the Company, as stated in the Company’s Statement of Financial Position are more than half
of the amount of its called up share capital and, in our opinion, on that basis there did not exist at 31 March
2014 a financial situation which under Section 40 (1) of the Companies (Amendment) Act, 1983 would require the
convening of an extraordinary general meeting of the Company.
Matters on which we are required to report by exception
Directors’
remuneration and
transactions
Under the Listing Rules we are required to review the six specified elements of disclosures in the report to
shareholders by the Board on Directors’ remuneration. Under the Companies Acts, 1963 to 2013 we are required
to report to you if, in our opinion the disclosures of Directors’ remuneration and transactions specified by law are
not made. We have nothing to report arising from our review of these matters.
Corporate
Governance
Statement
Under the Listing Rules of the Irish and London Stock Exchanges we are also required to review the part of
the Corporate Governance Statement relating to the Company’s compliance with the nine provisions of the UK
Corporate Governance Code and the two provisions of the Irish Corporate Governance Annex specified for our
review. We have nothing to report arising from our review.
Our duty to read
other information
in the Report
Under International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion,
information in the Report is:
• materially inconsistent with the information in the audited financial statements; or
• apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired
in the course of performing our audit; or
• otherwise misleading.
In particular, we are required to consider whether we have identified any inconsistencies between our knowledge
acquired during the audit and the Directors’ statement that they consider the Report is fair, balanced and
understandable and whether the Report appropriately discloses those matters that we communicated to the
audit committee which we consider should have been disclosed. We confirm that we have not identified any such
inconsistencies or misleading statements.
HIBERNIA REIT PLCReport and Consolidated Financial Statements 31
Respective
responsibilities
of Directors and
auditor
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors.
This report is made solely to the Group’s members, as a body, in accordance with section 193 of the Companies Act
1990. Our audit work has been undertaken so that we might state to the Group’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
Scope of the audit
of the financial
statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s and
the Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In
addition, we read all the financial and non-financial information in the Report to identify material inconsistencies
with the audited financial statements and to identify any information that is apparently materially incorrect based
on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we
become aware of any apparent material misstatements or inconsistencies we consider the implications for our
report.
Brian Jackson
For and on behalf of Deloitte & Touche
Chartered Accountants and Statutory Audit Firm
Dublin
Date: 19 May 2014
HIBERNIA REIT PLCReport and Consolidated Financial Statements
32
Consolidated Statement of Comprehensive Income
For the period from 13 August 2013 (date of incorporation) to 31 March 2014
Income
Revenue
Property outgoings
Total net income
Investment manager’s fee
Administration Expenses
Total operating expenses
Net operating loss
Finance income
Loss before tax
Income tax expense
Loss for the period from continuing operations
Other comprehensive income
Total comprehensive loss
Earnings per share
Basic and diluted
Period to
31 March 2014
€’000
Notes
4
5
20
6
7
8
158
(59)
99
(669)
(490)
(1,159)
(1,060)
214
(846)
-
(846)
-
(846)
Cents
9
(0.221)
The notes on pages 38 to 53 form an integral part of these consolidated financial statements. The consolidated financial statements on
pages 32 to 53 were approved and authorised for issue by the Board of Directors on 19 May 2014 and signed on its behalf by:
Mr Daniel Kitchen
Chairman
Mr Terence O’Rourke
Director
HIBERNIA REIT PLCReport and Consolidated Financial Statements
Consolidated Statement of Financial Position
As at 31 March 2014
Assets
Non-current assets
Loans and receivables
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Capital and reserves
Issued capital and share premium
Retained earnings
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total equity and liabilities
EPRA NAV per share
IFRS NAV per share
33
Notes
2014
€’000
10
68,563
11
12
13
14
15
16
16
11,647
291,690
303,337
371,900
371,812
(846)
370,966
934
934
371,900
Cents
96.35
96.35
The notes on pages 38 to 53 form an integral part of these consolidated financial statements. The consolidated financial statements on
pages 32 to 53 were approved and authorised for issue by the Board of Directors on 19 May 2014 and signed on its behalf by:
Mr Daniel Kitchen
Chairman
Mr Terence O’Rourke
Director
HIBERNIA REIT PLCReport and Consolidated Financial Statements 34
Company Statement of Financial Position
As at 31 March 2014
Assets
Non-current assets
Loans to subsidiary
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Capital and reserves
Issued capital and share premium
Retained earnings
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total equity and liabilities
Notes
2014
€’000
10
11
12
13
14
15
68,416
11,647
291,679
303,326
371,742
371,812
(962)
370,850
892
892
371,742
The notes on pages 38 to 53 form an integral part of these consolidated financial statements.
The consolidated financial statements on pages 32 to 53 were approved and authorised for issue by the Board of Directors on 19 May
2014 and signed on its behalf by:
Mr Daniel Kitchen
Chairman
Mr Terence O’Rourke
Director
HIBERNIA REIT PLCReport and Consolidated Financial Statements Consolidated Statement of Changes in Equity
For the period from 13 August 2013 (date of incorporation) to 31 March 2014
Total comprehensive income for the period
Loss for the period
Total other comprehensive income
Notes
Share Capital Share Premium
€’000
€’000
-
-
-
-
-
-
Retained
earnings
€’000
(846)
-
(846)
35
Total
€’000
(846)
-
(846)
Transactions with owners of the Company, recognised directly in equity
Issue of ordinary shares for cash
Share issue costs
At 31 March 2014
13
13
38,500
-
346,500
(13,188)
-
-
385,000
(13,188)
38,500
333,312
(846)
370,966
Company Statement of Changes in Equity
For the period from 13 August 2013 (date of incorporation) to 31 March 2014
Total comprehensive income for the period
Loss for the period
Total other comprehensive income
Share
Capital
€’000
Share
Premium
€’000
Retained
earnings
€’000
Notes
-
-
-
-
-
-
(962)
-
(962)
Total
€’000
(962)
-
(962)
Transactions with owners of the Company, recognised directly in equity
Issue of ordinary shares for cash
Share issue costs
At 31 March 2014
13
13
38,500
-
346,500
(13,188)
-
-
385,000
(13,188)
38,500
333,312
(962)
370,850
The notes on pages 38 to 53 form an integral part of these consolidated financial statements.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
36
Consolidated Statement of Cash Flows
For the period from 13 August 2013 (date of incorporation) to 31 March 2014
Cash flows from operating activities
Loss for the period
Adjusted for:
Finance income
Interest income accrued
Operating cashflow before movement in working capital
Increase in trade and other receivables
Increase in trade and other payables
Net cash flow from operating activities
Cash flows from investing activities
Deposit paid on investment property
Purchase of loans and receivables
Interest received
Net cashflow from investing activities
Cash flow from financing activities
Proceeds from the issue of ordinary share capital
Share issue costs
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Net cash and cash equivalents at period end
The notes on pages 38 to 53 form an integral part of these consolidated financial statements.
Period to
31 March 2014
€’000
Notes
(846)
(214)
(158)
(1,218)
(600)
434
(1,384)
(11,010)
(67,905)
177
(78,738)
385,000
(13,188)
371,812
291,690
12
291,690
HIBERNIA REIT PLCReport and Consolidated Financial Statements
Company Statement of Cash Flows
For the period from 13 August 2013 (date of incorporation) to 31 March 2014
Cash flows from operating activities
Loss for the period
Adjusted for:
Finance income
Operating cashflow before movement in working capital
Increase in trade and other receivables
Increase in trade and other payables
Net cash flow from operating activities
Cash flows from investing activities
Deposit paid on investment property
Loans to subsidiary
Interest received
Net cashflow from investing activities
Cash flow from financing activities
Proceeds from the issue of ordinary share capital
Share issue costs
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Net cash and cash equivalents at period end
The notes on pages 38 to 53 form an integral part of these consolidated financial statements.
37
Period to
31 March 2014
€’000
Notes
(962)
(214)
(1,176)
(600)
392
(1,384)
(11,010)
(67,916)
177
(78,749)
385,000
(13,188)
371,812
291,679
12
291,679
HIBERNIA REIT PLCReport and Consolidated Financial Statements
38
Notes to the Financial Statements
1. General Information
Hibernia REIT plc (‘the Company’) and its subsidiary, Hibernia
REIT Finance Limited (together ‘the Group’) are engaged
in property investment (primarily commercial) in the Irish
market with a view to maximising its shareholders’ returns.
The Company is a public limited company and is incorporated
and domiciled in Ireland. The address of the Company’s
registered office is Marine House, Clanwilliam Place, Dublin
2. The Company was incorporated on 13 August 2013 and re-
registered as a public limited company on 8 November 2013.
The registered number of the Company is 531267.
The Company’s ordinary shares were listed on the main
market for listed securities on the Irish and London Stock
Exchanges on 11 December 2013.
2.
the
International
Application of new and revised
Accounting Standards (IFRS)
The following standards and interpretations to existing
standards have been published by
International
Accounting Standards Board (“IASB”) and, to the extent
indicated, have been adopted by the European Union
(“EU”) and will be mandatory for future accounting periods.
The Company has not early adopted these standards or
interpretations.
• IFRS 9 (2009 & 2010) Financial Instruments, which is
effective for reporting periods beginning on or after
1 January 2018, introduces new requirements for the
classification and measurement of financial assets and
introduces additions relating to financial liabilities.
• IFRS 10 Consolidated Financial Statements, which is
effective for reporting periods beginning on or after
1 January 2013 (EU effective date: 1 January 2014),
introduces a single control model to determine whether an
investee should be consolidated.
• IFRS 11 Joint Arrangements, which is effective for reporting
periods beginning on or after 1 January 2013 (EU effective
date: 1 January 2014), sets out new criteria in determining
the type of joint arrangement and therefore the subsequent
accounting treatment.
• IFRS 12 Disclosure of Interest in Other Entities, which is
effective reporting periods beginning on or after 1 January
2013 (EU effective date: 1 January 2014), brings together
into a single standard all the disclosure requirements about
an entity’s interest in subsidiaries, joint arrangements,
associates and unconsolidated structured entities.
• IFRS 14 Regulatory Deferral Accounts, applies to an
entity’s first annual IFRS financial statements for a period
beginning on or after 1 January 2016, permits an entity
which is a first-time adopter of International Financial
Reporting Standards to continue to account, with some
limited changes, for ‘regulatory deferral account balances’
in accordance with its previous GAAP, both on initial
adoption of IFRS and in subsequent financial statements.
• IAS 16 Property, Plant and Equipment and IAS 38 Intangible
Assets, which are effective for accounting periods beginning
on or after 1 January 2016, clarify acceptable methods of
depreciation and amortisation.
• IAS 19 Employee Benefits, which is effective for accounting
periods beginning on or after 1 July 2014, deals with
employee contributions to defined benefit plans.
• IAS 27 Separate Financial Statements, which is effective
for accounting periods beginning on or after 1 January
2013 (EU effective date: 1 January 2014). Consolidation
requirements previously forming part of IAS 27 (2008) have
been revised and are now contained in IFRS 10 Consolidated
Financial Statements.
• IAS 28 Investments in Associates and Joint Ventures,
which is effective for accounting periods beginning on or
after 1 January 2013 (EU effective date 1 January 2014),
amends the previous version of IAS 28 and prescribes the
accounting for investments in associates and sets out
the requirements for the application of the equity method
when accounting for investments in associates and joint
ventures.
• IAS 32 Financial Instruments: Presentation, which is
effective for accounting periods beginning on or after 1
January 2014, deals with the offsetting of financial assets
and liabilities.
• IAS 36 Impairment of Assets, which is effective for
accounting periods starting on or after 1 January 2014,
introduces amendments arising from Recoverable Amount
Disclosures for Non-Financial Assets.
• IAS
39 Financial
Instruments: Recognition
and
Measurement, introduces amendments for novation of
derivatives (effective for accounting periods beginning on
or after 1 January 2014) and amendments to permit an
entity to elect to continue to apply the hedge accounting
requirements in IAS 39 for a fair value hedge of the interest
rate exposure of a portion of a portfolio of financial assets
or financial liabilities when IFRS 9 is applied, and to extend
the fair value option to certain contracts that meet the
‘own use’ scope exception (effective for accounting periods
where IFRS 9 is applied).
Improvements
IFRS: 2011-13 cycle and
Annual Improvements to IFRS: 2010-12 cycle. The IASB
has adopted the Annual Improvements process to deal
efficiently with a collection of narrow scope amendments to
IFRSs even though the amendments are unrelated. These
amendments are effective for annual periods beginning
on or after 1 July 2014, although entities are permitted to
apply them earlier.
to
• Annual
The Company has not yet fully determined the impact of
these amendments on its future financial reporting but does
not expect them to have a material impact.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
39
3. Significant Accounting Policies
a. Statement of compliance
The consolidated financial statements of Hibernia REIT
plc have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU,
which comprise standards and interpretations approved by
the International Accounting Standards Board (IASB). IFRS
as adopted by the EU differ in certain respects from IFRS as
issued by the IASB.
b. Functional and presentation currency
These financial statements are presented in Euro, which
is the Company’s functional currency and the Group’s
presentation currency.
c. Basis of preparation
The financial statements have been prepared on a going
concern basis, in accordance with IFRS and the IFRS
Interpretations Committee (IFRIC) interpretations as adopted
by the European Union and the Companies Act 1963 to 2013.
The financial statements have been prepared under the
historical cost convention.
d. Basis of consolidation
The consolidated financial statements
incorporate the
financial statements of the Company and its subsidiary,
Hibernia REIT Finance Limited. The Company controls
Hibernia REIT Finance Limited by virtue of its 100%
shareholding in that company.
All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of
the Group are eliminated in full on consolidation.
e. Significant judgements and key estimates
The preparation of financial statements in compliance with
adopted IFRS requires the use of certain critical accounting
estimates. It also requires the Group to exercise judgment
in applying the Group’s accounting policies. Although these
estimates are based on the Board’s best knowledge of the
amount, event or actions, actual results ultimately may
differ from those estimates. The following are the significant
judgements and key estimates which were made in respect
of the Report and Financial Statements.
Recognition and classification of investment transactions
The Company was in the process of acquiring two investment
properties at the period end. Both acquisitions were
completed after 31 March 2014 at a total cost of €57,934,129.
After due consideration of the conditions attaching to the
acquisitions, the Directors concluded that neither of these
properties should be recognised in the statement of financial
position at the period end.
The Group also acquired a portfolio of loans secured on
property assets in February 2014. Note 10 on page 44 gives
further detail in respect of these assets. The Directors are in
the process of assessing the collateral assets underlying this
portfolio in terms of their suitability as investment property
under the Group’s investment strategy. To that end, WK
Nowlan Property has undertaken a review of the property
on behalf of the Investment Manager. The Group will seek
to acquire any assets that are identified by this process as
suitable acquisitions and approved by the Board, from the
receiver or borrower. In preparing these financial statements,
the Directors have reviewed the status of this process and
determined that none of the collateral assets meet the
Group’s accounting policy for recognition as investment
property.
Impairment of Loans and receivables
The Directors’ have assessed the loans and receivables for
impairment and have determined that the carrying value
of the loans and receivables do not require impairment as
they expect that the loans will be resolved at least at their
carrying value due to the value of the collateral on which they
are secured. Further information on these loans is given in
Note 10 on page 44.
Costs associated with the Initial Public Offering (“IPO”)
The Directors have assessed the expenses associated with
the IPO and identified expenses that relate directly to the
issue of shares. These expenses have been offset against
the share premium account as described in the accounting
policy, 3.o: Equity and share issue costs.
There were no other items of significant judgement or key
estimates that might have a material impact on the financial
statements at 31 March 2014.
f. Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable.
Revenue is recognised in the statement of comprehensive
income when it meets the following criteria:
- it is probable that any future economic benefit associated
with the item of revenue will flow to the Company, and
- the amount of revenue can be measured with reliability.
Interest income and expense are recognised in the statement
of comprehensive income using the effective interest method.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
40
Notes to the Financial Statements continued
Current tax
Current tax is the expected tax payable on the taxable income
or loss for the period, using tax rates enacted or substantially
enacted at the reporting date, and any adjustment in taxes
payable in respect of the previous periods.
Deferred tax
Deferred tax is recognised in respect of temporary differences
between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is measured at the tax rates
that are expected to be applied to temporary differences
when they reverse using tax rates enacted or substantially
enacted at the reporting date.
l. Financial instruments
Financial assets and liabilities are recognised when a Group
entity becomes a party to the contractual provisions of the
instruments.
Financial assets and liabilities are initially measured at
fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and liabilities
(other than financial assets or liabilities at fair value through
the statement of comprehensive income) are added to
or deducted from the fair value of the financial assets or
liabilities, as appropriate, on initial recognition. Transaction
costs attributable to the acquisition of financial assets or
liabilities at fair value through profit or loss are recognised
immediately in the statement of comprehensive income.
loss
(FVTPL),
‘held-to-maturity
Financial assets
Financial assets are generally classified into the following
specified categories: financial assets ‘at fair value through
profit or
investments,
‘available-for-sale’ (AFS) financial assets and ‘loans and
receivables’. Financial assets ‘at fair value through profit or
loss’ has two subcategories which are determined at initial
recognition:
- Designated. This
includes any financial asset to be
measured at fair value with fair value changes in profit or
loss.
- Held for trading. The second category includes financial
assets that are held for trading.
Purchases and sales of financial assets in a regular way, i.e.
within timeframes established by regulation or convention
in the marketplace, are recognised and de-recognised on a
trade date basis.
3.
Significant Accounting Policies continued
g. Foreign currencies transactions and balances
Transactions in currencies other than Euro are recognised
at the rates of exchange prevailing on the dates of the
transactions. At the end of each period, monetary amounts
denominated in foreign currencies are re-translated at the
rates prevailing at that date. Non-monetary items carried
at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing when the fair value was
determined. Non-monetary items carried at historical cost
are not re-translated.
Exchange differences on monetary items are recognised in
profit or loss in the period in which they arise.
h. Finance income and expense
Interest income and expense is recognised in the statement
of comprehensive income for all interest-bearing financial
instruments using the effective interest method. The effective
interest method is a method of calculating the amortised cost
of a financial asset or financial liability (or group of financial
assets or financial liabilities) and of allocating the interest
income or interest expense over the relevant period.
i. Provisions
A provision is recognised if, as a result of a past event, the
Group has a present obligation (legal or constructive) that
can be estimated reliably, and it is probable that an outflow
of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected
future cash flows (in most cases, the risk free rate) at a pre-
tax rate that reflects the current market assessments of the
time value of money and the risks specific to the liability. The
unwinding of the discount is recognised as a finance cost.
When some or all of the economic benefits required to settle
a provision are expected to be recovered from a third party,
a receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
j. Expenses
Expenses are recognised in the statement of comprehensive
income on an accrual basis.
k. Taxation
Hibernia REIT plc elected for Real Estate Investment Trust
(REIT) status on 11 December 2013. As a result, the Group
will not pay Irish corporation tax on the profits and gains
from qualifying rental business in Ireland provided it meets
certain conditions. Corporation tax is still payable as normal
in respect of income and gains from a Group’s residual
business (generally any non-property rental business). The
Group is also liable to pay other taxes such as VAT, relevant
contracts tax, local property tax, property rates, payroll
taxes and foreign taxes as normal. Information on the REIT
legislation is provided in the Report of the Directors on pages
19 to 20.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
3.
Significant Accounting Policies continued
Effective interest method: The Group uses the effective
interest method of calculating the amortised cost of a
debt instrument and of allocating interest income over the
relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash receipts (including
all fees and points paid or received that form an integral part
of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the debt
instrument, or, where appropriate, a shorter period, to the
net carrying amount on initial recognition.
Loans and receivables: Loans and receivables are non-
derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans are
recorded at fair value plus transaction costs when purchased.
They are subsequently accounted for at amortised cost using
the effective interest method.
Valuation adjustments or impairment allowances for loans
and receivables are created if there is objective evidence
that it will not be possible for the entire amount which is due
under the original contractual arrangements to be recovered.
Allowances for loans and receivables are calculated where
there is objective evidence with regard to loan defaults, the
structure and quality of the loan portfolio as well as macro-
economic parameters, on an individual and portfolio basis.
Losses expected as a result of future events, no matter how
likely, are not recognised.
Individual loans: The allowance is calculated as the difference
between the carrying value of the asset and the present
value of the expected future cash flows using the original
effective interest rate. The increase in the present value of
an adjusted receivable which occurs over time is shown as
interest income.
Portfolio-based allowances: Measurement of an impairment
on a portfolio basis may be applied to groups of loans that have
been considered individually and on which no impairment
has been identified when there is evidence of impairment in
a similar group of loans and impairment cannot be identified
with an individual loan in that group. These allowances are
calculated on current events and information with regard
to significant changes with detrimental consequences that
have occurred in the market, economic or legal environment
as well as historic default rates.
In assessing the need for
impairment on loans and
receivables, the Group takes into account the expected cash
flows from the realisation of collateral.
41
m. Trade and other receivables
Trade and other receivables are initially measured at fair
value and subsequently measured at amortised cost. Where
there is objective evidence that the recoverability of an asset
is at risk, appropriate allowances for any irrecoverable
amounts are recognised in the statement of comprehensive
income.
n. Cash and cash equivalents
Cash and cash equivalents includes cash at banks in current
accounts, deposits held at call with banks and other short
term investments in an active market with original maturities
of three months or less.
o. Equity and share issue costs
The equity of the Company consists of ordinary shares
issued. Shares issued are recorded at the date of issuance.
The par value of the issued shares is recorded in the share
capital account. The excess of proceeds received over the par
value is recorded in the share premium account. Direct issue
costs in respect of the issue of shares are accounted for in
the share premium account, as a deduction from equity, net
of any related tax deduction. Direct issue costs include:
- Costs of preparing the prospectus
- Accounting, tax and legal expenses
- Underwriting fees
- Valuation fees in respect of the shares and of other assets
Costs that relate to the listing itself (e.g. stock exchange
registration costs) are not directly attributable to the share
issue and are expensed.
p. Trade and other payables
Trade and other payables are initially measured at fair value,
subsequently measured at amortised cost.
q. Net asset value (NAV)
The IFRS NAV is calculated as the value of the Company’s
assets less the value of its liabilities measured in accordance
with IFRS. EPRA NAV is calculated in accordance with the
European Public Real Estate Association (EPRA) Best
Practice Recommendations, September 2011 and
its
additional guidance issued in January 2014.
The EPRA net asset value per share excludes the net mark
to market adjustment to the value of financial instruments
which are used for hedging purposes and which the Group
intends to keep to the end of their contractual duration,
deferred taxation on revaluations and is calculated on a fully
diluted basis.
r. Operating segments
During the period, the Group operated in and was managed
as one business segment, being property investment, with
all investment properties located in Ireland. There was no
rental income during the period as the first property was
contracted for but not settled at the period end.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
42
Notes to the Financial Statements continued
4. Revenue
Rental income
Interest income from loans and receivables
Group
Period to
31 March 2014
€’000
-
158
158
The Group had no rental income from its property business for the period to 31 March 2014 as it did not acquire its first property
until April 2014.
5. Property outgoings
Property outgoings relate to the expenses incurred in sourcing investment property for the Group’s rental business.
6. Administration expenses
Directors fees
Fees for services as directors
Fees for other services
Depository fees
Registrar fees
Professional costs
Other operating expenditure
Auditor remuneration
Fees paid to the external auditor
Audit of financial statements
Other assurance services
Tax advisory services
Other non-audit services
Group
Period to
31 March 2014
€’000
145
-
145
69
4
164
108
490
Group
Period to
31 March 2014
€’000
Company
Period to
31 March 2014
€’000
30
-
30
220
280
30
-
30
220
280
The amount of €220,000 included in other non-audit services was paid to the auditors for services provided in relation to the share
issuance at the initial public offering. This amount has been charged to the share premium account as part of the cost of share
issuances (see Note 13).
There were no employees during the period.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
7. Finance income
Interest income on cash and cash equivalents
43
Group
Period to
31 March 2014
€’000
214
8.
Income tax expense
The Group has elected for Irish Group REIT status with effect from 11 December 2013. As a result, the Group does not pay Irish
corporation tax on the profits and gains from its qualifying rental business in Ireland provided it meets certain conditions.
The Directors confirm that the Group has remained in compliance with the Irish REIT rules and regulations up to and including the
date of this report.
9. Earnings per share
The calculation of earnings per share is based on the period from commencement to trade, 11 December 2013, to 31 March 2014
rather than the period from incorporation, 13 August 2013, to 31 March 2014 as the Directors believe that this calculation provides
a more informative disclosure to the shareholders because:
- The date of commencement to trade is the same as the listing date, and
- The majority of shares were issued around this date.
There are no convertible instruments, options, warrants or ordinary shares that are issued upon the satisfaction of specified
conditions as of the period end, 31 March 2014. As a result, there are no dilutive effects on earnings per share and the basic and
diluted earnings per share are identical.
The calculation is based on the loss attributable to ordinary shareholders of €846,149 and a weighted average number of ordinary
shares outstanding for the period of 383,558,559 shares calculated as follows.
Loss for the period attributable to the owners of the Company
Weighted average number of ordinary shares (basic)
In issue on 11 December 2013 (date of commencement to trade)
Issued on 18 December 2013
Weighted average shares for the period
Basic and diluted earnings per share
Group
Period to
31 March 2014
€’000
(846)
Number
‘000
365,000
20,000
383,559
Cents
(0.221)
The European Public Real Estate Association (EPRA) best practice recommendations recommend the presentation of earnings per
share based on EPRA earnings which are defined as the profit after taxation excluding investment property revaluations and gains/
losses on disposals, intangible asset movements and their related taxation. EPRA earnings are a measure of the degree as to which
the Group’s earnings are supported by core activities. The Group intends to comply with EPRA best practice recommendations and
disclose EPRA earnings per share. However, no EPRA earnings are disclosed here as the Group had not commenced its property
rental business in the period to 31 March 2014.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
44
Notes to the Financial Statements continued
10. Loans and receivables
As at 31 March 2014
Loans to subsidiary
Group
2014
€’000
68,563
Company
2014
€’000
68,416
Loans and receivables on the Group’s Statement of Financial Position at the period end were purchased as part of a portfolio
acquisition on 28 February 2014. This portfolio is secured on real estate collateral.
The loans were acquired at a substantial discount to their nominal value reflecting their distressed state at the time of acquisition.
All of the loans are past due. None of the loans are expected to be repaid by recourse to the original borrower, although income from
the underlying collateral assets is being generated. The majority of loans were the subject of a receivership when acquired and do
not pay interest. As a result of these factors, no disclosures are made in relation to maturity or age analysis or interest rate risk.
The objective in purchasing these loans was to generate returns for the Group in the following ways:
-
-
-
Income will be generated from the underlying portfolio; and
Disposal of the collateral assets over time to achieve a redemption of the loan at a value greater than the acquisition cost; or
Acquisition of the collateral asset by the Company for inclusion in its investment portfolio subject to compliance with the
Company’s investment strategy.
The Directors do not consider further impairment allowances are required against these loans as they expect that the loans will be
resolved at least at their carrying value due to the value of the collateral on which they are secured.
The Group expects to work out these loans within a two year period.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
45
Group
2014
€’000
Company
2014
€’000
11,010
11,010
366
37
73
161
366
37
73
161
11,647
11,647
11. Trade and other receivables
Deposit paid on investment property
Investment Manager’s fee prepaid (Note 20)
Interest receivable
Other prepayments
VAT refundable
As at 31 March 2014
The €11,010,000 on 31 March 2014 relates to deposits paid on the purchase of investment properties as follows:
New Century House, IFSC
Gateway site, Naas Road
Group
2014
€’000
10,000
1,010
Company
2014
€’000
10,000
1,010
11,010
11,010
There were no other contractual commitments relating to either the Group or the Company at 31 March 2014.
12. Cash and cash equivalents
As at 31 March 2014
Group
2014
€’000
Company
2014
€’000
291,690
291,679
HIBERNIA REIT PLCReport and Consolidated Financial Statements
46
Notes to the Financial Statements continued
13. Share capital and share premium
Shares issued during the period
Costs associated with the issue
As at 31 March 2014
Authorised share capital
Authorised
Allotted, called up and fully paid
Issued for cash
In issue at 31 March 2014
Group and Company
Share capital
2014
€’000
Share
premium
2014
€’000
Total
2014
€’000
38,500
-
346,500
(13,188)
385,000
(13,188)
38,500
333,312
371,812
Number
‘000
1,000,000
385,000
385,000
The Company was incorporated on 13 August 2013 as a private company limited by shares. On incorporation the issued share
capital of the Company was €100 divided into 100 ordinary shares of €1 each.
On 31 October 2013 the Company subdivided the entire existing share capital into ordinary shares of €0.10 each and increased the
authorised share capital to €100,000,000 divided into 1,000,000,000 ordinary shares of €0.10 each. A further 399,000 were issued at
par of €0.10 each bringing the total issued share capital at this date to €40,000 divided into 400,000 ordinary shares of €0.10 each.
On 8 November 2013 the Company was converted to a public limited company.
On 6 December 2013 the Company made an Initial Public Offering (IPO). On 11 December 2013 the Company listed on the Irish and
London stock exchanges and 364,600,000 shares were issued at a listing price of €1.00 per share, except for 100,000 shares issued
to William Nowlan at €4.60 per share.
An over-allotment option was granted to the underwriter as a stabilisation measure for a period of 30 days from listing. Under this
option, the underwriter was permitted to purchase, or procure purchasers for, additional ordinary shares up to a total of 20,000,000
ordinary shares (the “over-allotment shares”) at the issue price, representing up to 5.49% of the ordinary shares comprised in the
issue before any utilisation of the over-allotment option. On 18 December 2013 a further 20,000,000 ordinary shares were issued
under this option at the issue price of €1.00 per share.
IPO Costs
Lead underwriter and sponsor costs
Legal costs
Regulatory fees
Other professional advisers
Accounting costs
Printing costs
Total
As a percentage of funds raised
Group and
Company
2014
€’000
10,444
1,461
617
403
220
43
13,188
3.43%
HIBERNIA REIT PLCReport and Consolidated Financial Statements
47
Group
2014
€’000
Company
2014
€’000
333,312
333,312
(846)
(962)
14. Reserves
The Group and Company Statement of Changes in Equity are shown as primary statements.
The nature and purpose of each reserve within equity is as follows:
Share premium
Retained earnings
Share premium: This represents the excess of the proceeds of share issuances over their nominal value, net of issue costs.
Retained earnings: This represents the accumulated loss recognised in the Consolidated Statement of Comprehensive Income.
The Group has availed of the exemption to include a Company Statement of comprehensive income in this Report and Financial Statements
as permitted under the Companies Act, 1963 section 148. The Company’s Loss for the period to 31 March 2014 was €961,807.
15. Trade and other payables
Audit Fees
PAYE/PRSI
Trade payables
Loan acquisition costs
Other payables
Group
2014
€’000
Company
2014
€’000
30
36
67
500
301
934
30
36
67
500
259
892
The payable for loan acquisition costs represents an accrual for costs in respect of the acquisition of the loan portfolio on 28
February 2014.
16. IFRS and EPRA net asset value per share
As at 31 March 2014 the Group had no financial derivatives, no deferred tax liability or asset and no potentially dilutive equity
arrangements in place. Therefore the IFRS and EPRA NAV calculation is the same.
Group
2014
€’000
IFRS net assets at 31 March 2014
Ordinary shares in issue at period end
IFRS NAV per share
370,966
Number
‘000
385,000
Cents
96.35
HIBERNIA REIT PLCReport and Consolidated Financial Statements
48
Notes to the Financial Statements continued
17. Dividends
There were no dividends declared or paid by the Company during the period and there are no dividends proposed by the Directors
in respect of this reporting period.
18. Financial instruments and risk management
The Group has identified exposure to the following risks:
Market risk
Credit risk
Liquidity risk
The policies for managing each of these and the principal effects of these policies on the results for the period are summarised below:
a) Market risk
Market risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices.
Market risk reflects interest rate risk, currency risk and other price risks.
The Group’s financial assets currently comprise loans and receivables, short term bank deposits and trade receivables. The Group
currently has no financial liabilities other than trade payables which do not give rise to any significant market risk. The Company
has, in addition to the short term bank deposits and trade payables and receivables, loans to subsidiary financial assets, the risks
of which correspond to the risks of the loans and receivables discussed for the Group risks as these loans were made to facilitate
the purchase of the loans and receivables portfolio for the Group.
The loans and receivables are secured by property collateral assets, the value of which is subject to market fluctuation. The values
of these collateral assets are monitored closely to ensure that the amount is sufficient to repay the loan balances outstanding.
The short term bank deposits are used to invest cash while awaiting suitable investment properties for investment. These are
denominated in euro. Therefore exposure to market risk in relation to these is limited to interest rate risk. Exposure to interest
rates is limited to the exposure of its earnings from uninvested funds, €291,689,829 at the period end. An interest rate movement
of +/- 0.5% during the period would have increased or decreased its finance income by €439,533.
b) Credit risk
Credit risk is the risk of loss of principal or loss of a financial reward stemming from a counterparty’s failure to repay a loan or
otherwise meet a contractual obligation. Credit risk is therefore, for the Group and Company, the risk that the counterparties
underlying its’ assets default.
The Group’s main financial assets are Loans and receivables and Cash and cash equivalents.
All loans held are past due and were acquired at a significant discount to the par value. The risks associated with these loans
are linked directly to the value of the property collateral underlying the loans. Any decline in the value of the property collateral
underlying the loans is likely to lead to impairment in the carrying value of the loans. The security underlying these loans includes
a 213 unit apartment complex in Dundrum, Wyckham Point, a grade A office development in Grand Canal Dock and high quality
residential units. The Directors have assessed the loans and receivables portfolio for impairment by reference to the value of the
underlying collateral assets. They have determined that there is no evidence of any factors that would require them to make any
allowances for impairment on this portfolio.
The loan to subsidiary in the Company statement of financial position is subject to the same risks as discussed in relation to the
loan portfolio as its purpose was to purchase that portfolio in the subsidiary.
Cash and cash equivalents are held with major Irish and European institutions. The Board has established a cash management
policy for these funds which it monitors regularly. This policy includes ratings restrictions, BB or better, and related investment
thresholds, €25-50m with individual institutions dependent on rating, to avoid concentration risks with any one counterparty. The
Company has also engaged the services of a Depository to ensure the security of the cash assets.
Concentration of risk in receivables:
Trade and other receivables include two deposits on investment properties totalling €11,010,000. These are held in solicitors client
accounts while awaiting contract completion. Both of these contracts have completed post period end (see Note 21). The balance
of trade and other receivables has no concentration of credit risk as it is made up of prepayments and tax refunds due.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
49
18. Financial instruments and risk management continued
b) Credit risk
The carrying amount of the financial assets excluding loans and receivables represents the maximum credit exposure. The
maximum exposure to credit risk at the reporting date was therefore:
Group
2014
€’000
Company
2014
€’000
Cash and cash equivalents
Trade and other receivables
Total
291,690
11,647
291,679
11,647
303,337
303,326
c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group ensures that it has sufficient available funds to meet obligations as they fall due. The Investment Manager is responsible
for this activity and the Board monitors its performance.
Net current assets at the period end were:
Net current assets
Group
2014
€’000
Company
2014
€’000
302,403
302,434
All financial liabilities for both the Group and the Company fall due within one year.
d) Capital management
The Group manages capital in order to ensure its continuance as a going concern.
As the Group grows it is planned to finance up to 40% of the market value of the Group’s assets out of borrowings in order to
enhance the return on equity for its shareholders. This percentage may increase to 50% under the REIT regime and so the Group
may modify this leverage from time to time taking into account current prevailing economic and market conditions. This leverage
ratio will be monitored in the regular financial reporting and prior to entering into any borrowing arrangements in order to ensure
this policy is maintained.
Capital comprises share capital, reserves and retained earnings as disclosed in the Consolidated and Company statement of
changes in equity. At 31 March 2014 the capital of the Group and the Company was €370,965,870.
There are no external capital requirements on the Group.
Under the Irish REIT regime, the Group must distribute at least 85% of its property income by way of a Property Income Distribution
(“PID”). Therefore, capital available for business growth will not be augmented by dividend policy. To grow the business, the Group
must therefore consider the need to seek further capital in the market given both the inability to grow reserves and the restriction
on its borrowings as a source of increasing its portfolio size as discussed above.
The Company’s share capital is publicly traded on the Irish and London stock exchanges. In order to ensure the proper management
of the share register, the Group employs the services of a share registrar, Capita Registrars (Ireland) Limited (t/a Capita Asset
Services).
HIBERNIA REIT PLCReport and Consolidated Financial Statements
50
Notes to the Financial Statements continued
18. Financial instruments and risk management continued
e) Fair values of financial assets and financial liabilities
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which inputs
to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which
are described as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: valuation techniques for which the lowest level of inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly
Level 3: valuation techniques for which the lowest level of inputs that have a significant effect on the recorded fair value are not
based on observable market data
The Directors have determined that the carrying value of loans and receivables approximates their fair value, based on their
assessment of the value of the underlying collateral. The carrying value of non-interest bearing financial assets and financial
liabilities and cash and cash equivalents approximates their fair values, largely due to their short-term maturities.
As at 31 March 2014, neither the Group nor the Company had any financial assets or liabilities which were carried at fair value.
However, the following tables present the classification of financial assets and liabilities within the fair value hierarchy and the
changes in fair values measurements at Level 3 estimated for the purposes of making the above disclosure:
Fair value hierarchy
Group
Financial assets
Loans and receivables
Trade and other receivables
Financial liabilities
Trade and other payables
Company
Financial assets
Loans and receivables
Trade and other receivables
Financial liabilities
Trade and other payables
2014
Carrying value
€’000
2014
Level 1
€’000
Level 2
€’000
Level 3
€’000
68,563
11,647
80,210
934
934
68,416
11,647
80,063
892
892
-
-
-
-
-
-
-
-
-
-
-
11,647
68,563
-
11,647
68,563
934
934
-
-
-
11,647
68,416
-
11,647
68,416
892
892
-
-
HIBERNIA REIT PLCReport and Consolidated Financial Statements
Report and Consolidated Financial Statements
HIBERNIA REIT PLC
51
18. Financial instruments and risk management continued
e) Fair values of financial assets and financial liabilities
Fair value movements at level 3
Transfers into level 3
Transfers out of level 3
Purchases, sales, issues and settlement
Purchases
Amortisation
Balance at 31 March 2014
Company
Transfers into level 3
Transfers out of level 3
Purchases, sales, issues and settlement
Purchases
Balance at 31 March 2014
Group
Loans and
receivables
€’000
-
-
68,405
158
68,563
Loans and
receivables
€’000
-
-
68,416
68,416
Loan fair values are dependent on the value of the underlying property collateral. The valuation of the underlying property collateral
involves a significant amount of judgement, with inputs that are unobservable as defined by IFRS 13. A significant deterioration in
the underlying property could have a significant impact on the fair value.
The Investment Manager is responsible for performing the valuation of fair value measurements included in the Report and
Financial Statements, including level 3 fair values. The Directors review and approve the valuations as part of their review of the
financial statements. The Group’s policy is to recognise transfers into and out of the fair value hierarchy levels as of the date of the
event or change in circumstance that caused the transfer.
19. Investment in subsidiary undertakings
The Company holds 10 ordinary shares of €1 each representing the entire issued share capital in the company listed below on 31
March 2014.
Entity
Hibernia REIT
Finance Limited
Country of incorporation/
Registered office
Ireland, Marine House,
Clanwilliam Place, Dublin 2
Incorporation date
Nature of business
19 February 2014
Financing activities
52
Notes to the Financial Statements continued
20. Related parties
Subsidiaries
The Company transacts with its subsidiary and has provided the funding for its acquisition of a portfolio of loans which now forms
part of the Group’s assets. The Company has provided a loan of €68,416,000 to Hibernia REIT Finance Limited to fund its activities.
Transactions between the Company and its subsidiary have been eliminated on consolidation.
Investment Manager
The Company, pursuant to the Investment Management Agreement entered into on 27 November 2013, is managed by WK Nowlan
REIT Management Limited (“The Investment Manager”). WK Nowlan REIT Management Limited is wholly owned and controlled by
Nowlan Property Limited, trading as WK Nowlan Property, and Mr Frank Kenny. At 31 March 2014, the Directors of the Investment
Manager and its owners held an aggregate of 1,600,000 shares in the Company.
Through the Investment Management Agreement, the Company has access to the asset management operation of Nowlan Property
Limited trading as WK Nowlan Property.
The Investment Management Agreement governs the provision of investment management and related services to the Company by
the Investment Manager. It has an initial term of five years and will automatically continue for three consecutive year periods, unless
terminated by the Company or the Investment Manager.
Investment Manager’s fees
The base fee for each quarter is calculated by reference to following table. The fee is based on the EPRA Net Asset Value (NAV) and
is the sum of the following amounts:
EPRA NAV:
From €’000,000
0
>450
>600
Uninvested net proceeds
To
€’000,000
<=450
<=600
%
0.250
0.200
0.150
0.125
The base fee is payable quarterly in arrears except for the fee for the periods 31 March 2014 and 30 June 2014 which were paid
in advance.
Management fees of €1,034,499 were paid by the Company to the Investment Manager during the period ended 31 March 2014,
of which €365,795 was prepaid at the Consolidated Statement of Financial Position date and is included within trade and other
receivables. Fees of €78,260 were paid to WK Nowlan Property by the Company during the period for the services of its employees
in relation to the IPO.
A performance fee is also paid to the Investment Manager and is calculated 50% by reference to the return to the shareholders
measured by the dividend and increase in NAV and 50% by reference to outperformance of the Reference Index, the SCSI/IPD
Ireland Quarterly Property Index – All Property.
No performance fees or “out of pocket” expenses were paid during the period.
Key Management Personnel
The non-executive directors are the only key management personnel of the Group. The emoluments of the directors are summarised
directly below. The management functions are delegated to the Investment Manager as discussed in the Corporate Governance
Report on page 16. Details on the basis and amount of the Investment Management Fee paid to the Investment Manager during the
period are disclosed above.
HIBERNIA REIT PLCReport and Consolidated Financial Statements
Report and Consolidated Financial Statements
HIBERNIA REIT PLC
53
Group and
Company
Period to
31 March 2014
€’000
145
-
-
-
-
145
20. Related parties continued
Directors’ Remuneration
Short term benefits
Post-employment benefits
Share-based payment
Other long-term benefits
Termination benefits
Period to 31 March 2014
21. Subsequent events
On 29 April 2014 the Group completed the acquisition of New Century House, International Financial Services Centre, Dublin 1,
Ireland for €47,631,249 including the costs of acquisition.
On 7 May 2014 the Group completed the acquisition of the Gateway site, Newlands Cross, Naas Road, Dublin 22 for €10,302,880
including the costs of acquisition.
On 16 May 2014 the Group announced the acquisition of Montague House and Hardwicke House, two office buildings in Dublin 2 in
a partially deferred off market transaction of €60m excluding the costs of acquisition.
On 19 May 2014 the Group exchanged contracts to acquire the Chancery Building and the Chancery Apartments in Dublin 8 for
€16m excluding the costs of acquisition in an off-market loan purchase transaction.
22. Approval of financial statements
The financial statements were approved by the Board of Directors for issue on 19 May 2014.
54
Marine House
Clanwilliam Place
Dublin 2
Phone: 00 353 (0)1 9058370
Email: info@hiberniareit.com
For media enquiries:
media@hiberniareit.com
HIBERNIA REIT PLCReport and Consolidated Financial StatementsTitle