TIDMDVT
RNS Number : 9348G
daVictus plc
29 July 2021
29 July 2021
DAVICTUS PLC
("DAVICTUS" OR "THE COMPANY")
FINAL RESULTS FOR THE PERIODED 31 DECEMBER 2020
daVictus plc, (LSE: DVT), a company established to seek business
opportunities in the food and beverage sector in Asia, announces
its final audited results for the period ended 31 December
2020.
The annual report and accounts is available on the Company's
website at: http://www.davictus.co.uk and in hard copy to
shareholders upon request to the Company Secretary, JTC Trust
Company Limited at daVictus plc, 28 Esplanade, St. Helier, JERSEY,
JE1 8SB
For More information:
Robert Pincock robert@davictus.co.uk
Chairman's Statement
Dear Valued Shareholders,
On behalf of the Board of directors, it is my privilege to
present the financial statements of daVictus Plc (the "Company" or
"daVictus") and its subsidiary undertakings (together the "Group")
for year ended 31 December 2020.
In line with the Company's business plan, it had successfully
recruited its first franchisee in Q2 of 2020. The first outlet is
located in the heart of Kuala Lumpur, the capital city of Malaysia.
The business launched according the plan but was unfortunately met
with the COVID-19 pandemic. The franchisee had adopted several
measures to address the limitation and restriction arising from the
pandemic and had managed to continue with its operations, albeit
with limited success.
The COVID-19 pandemic continues to impact businesses globally
and retail segment with more than one year of uncertainty, the
health crises had turned into a global financial downturn due to
the restrictions imposed by most countries to contain the spread of
the virus. This COVID-19 crisis has particularly affected the
hospitality and retail industry, and as a result, the restaurant
businesses has been one of the most affected. Many restaurants were
either forced to close or innovate in their operations with limited
time and staff or providing takeaway and delivery services.
Moving forward, the Company is aware that it needs to rethink
and reassess how restaurant industry in general, would continue
this year. There is a need to re-evaluate the business projections
with all the restrictions and changed consumption patterns
affecting restaurant firms. The Company is actively studying on how
such new trends will change after restrictions are eased and how
restaurant firms like the Company, can overcome the devastating
financial impact of the COVID-19 pandemic
The Company's trading performance for the year ended 31 December
2020 saw an impact to its projected revenue and growth. Our first
franchisee felt the full impact of the pandemic and has taken
various mitigating steps to adapt to the changes and restrictions
in order to continue its survival. We have given our full support
and assistance to our franchisee to revise restaurant guidelines to
adapt with the new normal of post COVID-19 customer behaviour after
reopening the economy.
We continue to take care the welfare of our employees and the
safety and concerns of our franchisee's customers remains paramount
and I am happy to announce that the Company had done everything it
can in taking all appropriate measures to keep people safe whilst
ensuring continuity of our operations
The Company continues to monitor the impact of the pandemic and
will assist all stakeholders to address the effects and possible
actions actively. The Company continues to keep its overhead low to
maintain the business liquidity and stay resilient in the strange
times where the future remains uncertain for at least until end of
2021.
Abd Hadi Bin Abd Majid
Chairman
29 July 2021
Operational and Financial Review
During the year, The Company was actively engaged with UKLA and
FCA to ensure the smooth transaction of conditional acquisition of
intellectual property of Typical Dutch N.V. ("TDNV") including
their recipes, collection of Cuban/Havana graphics for a restaurant
concept branded as HAVANA Rolled Cigar Music Café (or simply "the
HAVANA") and the placing of the placing of 900,000 new ordinary
shares of no par value at 15 pence per share.
On 19 February, 2020, Financial Conduct Authority approved the
transaction and the board of director is pleased to announce the
prospectus related to the transaction. As described in note 5, the
cost related to the acquisition of these IP rights was expensed in
the statement of comprehensive income.
Cash on hand as of 31 December 2020 is GBP20,040.
Financial risk management objectives and policies
The Group does not at present enter into any forward exchange
rate contracts or any other hedging arrangements. The main
financial risks arising from the Group's activities are cash flow
interest rate risk, liquidity risk, price risk (fair value) and
credit risk. The Board reviews and agrees policies for managing
each of these risks and they are summarised as:
Cash flow interest rate risk - the Group's exposure to the risk
of changes in market interest rates relates primarily to the
Group's overdraft accounts with major banking institutions.
The Group's policy is to manage its interest income, when
received, using a mixture of fixed and floating rate deposit
accounts.
Liquidity risk - the Company raises funds as required on the
basis of budgeted expenditure and inflows. When funds are sought,
the Group balances the costs and benefits of equity and debt
financing. When funds are received, they are deposited with banks
of high standing in order to obtain market interest rates.
Price risk - the carrying amount of the following financial
assets and liabilities are approximate to their fair value due to
their short term nature: cash accounts, accounts receivable and
accounts payable.
Credit risk - with respect to credit risk arising from other
financial assets of the Group, which comprise cash and time
deposits and accounts receivable, the Group's exposure to credit
risk arises from default of the counterparty, with a minimum
exposure equal to the carrying amount of these instruments. The
credit risk on cash is limited as cash is placed with substantial
financial institutions.
Board of Directors
Abd Hadi bin Abd Majid (aged 69) - Non-Executive Chairman
Hadi Majid has, since 2007, been a director and Chairman of VCB
Malaysia Berhad ("VCB"), an investment group offering wealth
management, corporate finance and a private equity division. In
this capacity Mr Majid has been responsible for growing VCB's
business within Asia. An MBA graduate, Mr Majid has sixteen years
of experience in merchant banking, with roles including General
Manager of Capital Markets and Corporate Banking Department of
Bumiputra Merchant Bankers Berhad. Mr Majid's capital markets
experience and exposure includes reviewing public listing
proposals, company take-overs and mergers, underwriting of new
share issues, underwriting for bond issues and investment portfolio
of the bank. He has experience in managing portfolios involved with
making direct loans as well as arranging for various forms of
structured fund raisings via syndicated loans, club-deals, married
deals, private debt securities namely revolving underwriting
facilities, note issuance facilities, medium term notes and bank
guarantees for bond issues.
Robert Logan Pincock (aged 40) - Chief Executive Officer
Robert Pincock is a graduate of the University of Edinburgh. In
his career in the hospitality industry he has worked in both the
United States and the United Kingdom prior to being based in
Bangkok, Thailand for over eleven years. Mr Pincock began his
career within his family's hotel business in the UK, where he
assisted in most areas of operations over a six year period. During
this time, he undertook a hotel management internship with the
Hampshire Hotels and Resorts group based in Manhattan, New York.
After graduating, Mr Pincock had a short stint with Tesco UK before
moving to South East Asia. In Bangkok, Mr Pincock began as a
General Manager for a new bar and restaurant group and over time
was promoted to Operations Director where he oversaw the group
growing to seven Western themed venues. This group was eventually
split between the two main shareholders. Mr Pincock retained his
involvement and initiated investments leading to him and his
partners owning and operating four venues. Mr Pincock is well
versed with the Asian culture of doing business as well as with
promoting Western brands in the local market.
Maurice James Malcolm Groat (aged 59) - Non-Executive
Director
Malcolm Groat has worked for many years as a consultant to
companies in the technology, natural resources, and general
commerce sectors. Following an early career with
PricewaterhouseCoopers in London, he held posts as Chief Financial
Officer, Chief Operating Officer, and Chief Executive Officer in
established corporations including Executive Chairman at MMM
Consulting Ltd; Finance Director at then AIM traded London Mining
plc and Platinum Mining Corporation of India plc; and Group Finance
Director and Chief Operating Officer of E C Harris LLP. Mr Groat
took on his first non-executive director role with the former Milk
Marketing Board in 2005 and was part of the team that led the
acquisition of the Community Foods Group, a supplier of health
foods and free trade products (including dried fruits, chocolate,
etc.) to many of the UK's major supermarkets. Mr Groat holds a
number of non-executive directorships with listed growth ventures.
He also serves as Senior Independent Director at Baronsmead Second
Venture Trust PLC and as Chairman at The Corps of Commissionaires..
Mr Groat is a Fellow of the Institute of Chartered Accountants in
England and Wales.
Directors Report
The Directors present their Report with the financial statements
of the Company and its subsidiary undertakings (together the
"Group") for year ended 31 December 2020.
Results and dividends
The results for the year are set out in the Statement of
Comprehensive Income on page 16. The Directors do not recommend the
payment of a dividend on the Ordinary Shares.
Company objective
The Company's primary objective is that of securing the best
possible value for the shareholders, consistent with achieving both
capital growth and income for shareholders. The Company intends to
undertake one or more acquisitions of business (either shares or
assets) which operate in or own Western F&B eatery franchises
in South East Asia and/or the Far East.
The Company will retain flexibility between: (i) establishing a
new franchise in a new region, in which case it would purchase the
franchise and then build a management team to operate the
franchise; or (ii) purchasing an established franchise and seeking
to grow this both within its established region and in other
regions in Asia.
The Group's business risk
An explanation of the Group's financial risk management
objectives, policies and strategies is set out in note 11 and the
Operating and Financial Review.
Directors
The Directors who served the Company during the year and their
beneficial interest in the Ordinary Shares of the Company at 31
December 2020 were as follows:
Abd Hadi bin Abd Majid
Robert Logan Pincock
Maurice James Malcolm Groat
Directors' interest
As at 31 December 2020, Robert Pincock, one of our directors,
owns 1,250,000 ordinary shares, which represents an 9.36 %
interest.
Substantial shareholders
The Company has been notified of the following interests of 3
per cent or more in its issued share capital as at 20 July 2021
Number of Ordinary % of
Party Name Shares Share Capital
Belldom Limited 1,259,999 9.44
Robert Pincock 1,250,000 9.36
Amber Oak Holdings Limited 1,127,000 8.44
Eastman Ventures Limited 1,104,454 8.27
Infinity Mission Limited 1,435,000 10.75
Link Summit Limited 1,388,343 10.40
Nordic Alliance Holding Limited 1,288,546 9.65
West Park Capital Manager Ltd 400,000 3.00
Capital and returns management
Based on the Company's plans for 2021, and after making
enquiries (including preparation of reasonable trading forecasts
and consideration of current financing arrangements, the Directors
have a reasonable expectation that the Company has adequate
resources to continue operations for the foreseeable future. For
this reason they continue to adopt the going concern basis in
preparing the financial statements.
Dividend policy
The Directors recognise the importance of dividends to investors
and, as the Company's business matures, will keep under review the
desirability of paying dividends. Future income generated by the
Company is likely to be re-invested in the Company to implement its
strategy. In view of this, it is unlikely that the Board will
recommend a dividend in the early years following Admission. There
are no fixed dates for dividend payments by the Company and no
dividends have been paid to date, although should the Company be in
a position to declare a dividend in the future it will consider
this at that time.
Going concern
As described in the note 2 (c), the financial statement have
been prepared on a going concern basis, which assumes that the
Group will continue to be able to meet its liabilities as they fall
due for the foreseeable future.
The COVID-19 pandemic has adversely affected and is expected to
continue to adversely affect the financial results, condition and
outlook. Health epidemics or pandemics can adversely affect
consumer spending and confidence levels and supply availability and
costs, as well as the local operations in impacted markets, all of
which can affect financial results, condition and outlook.
Importantly, the global pandemic resulting from COVID-19 has
disrupted global health, economic and market conditions, consumer
behavior and Havana franchise restaurant operations beginning in
middle 2020. Local and national governmental mandates or
recommendations and public perceptions of the risks associated with
the COVID-19 pandemic have caused, and we expect will continue to
cause, consumer behavior to change and worsening or volatile
economic conditions, each of which could continue to adversely
affect the business. In addition, the franchise operations have
been disrupted to varying degrees and may continue to be disrupted
given the unpredictability of the virus, its resurgences and
government responses thereto as well as potentially permanent
changes to the industry.
As before, even with all those risks and impact stated above,
the Group have taken and will continue to take a number of measures
to monitor and prevent the effects of the COVID-19 virus to its
operations. This includes safety and health measures for our people
(i.e. social distancing and working from home), securing the supply
of materials that are essential to our production process, raising
capital as required and keeping the option open for additional
financing from directors to support continuity of our operations as
well as keeping open communication with our key stakeholders.
Where possible and applicable as a F&B franchiser, the
company continues to assists franchisee to adopt the new normal of
post-COVID-19 customer behavior restaurant operations such as
exploration of take-out, drive-through & delivery options
The Company supports increased domestic/local sourcing for
supply chain as well as meeting the standard operating procedures
for sanitization practices in the preparing and handling food.
The Company is in the process of procuring a second franchisee
in Bangkok and is looking forward to seeing the franchisee start
operating soon. Upon the appointment of the second franchisee, the
Company will see cash flows turning positive for months
thereafter.
The Company will not pay any dividends this year.
Based on the circumstances described above, the financial
statements are prepared on the assumption that the entity is a
going concern.
Corporate governance
There is no applicable regime of corporate governance to which
the directors of a Jersey company must adhere over and above the
general fiduciary duties and duties of care, skill and diligence
imposed on such directors under Jersey law.
The Group has not yet adopted a corporate governance structure
as it is still in an early stage of development. Neither the
diversity policy was adopted by the Company.
However, the board has developed corporate governance process as
discussed below. These processes have been determined with
reference to the Quoted Companies Alliance revised Corporate
Governance Code for Small and Mid-Size Quoted Companies ('the QCA
Code'), which the Company intends to adopt in the future.
(1) Structure and process. The Group is young and not yet fully
active in its chosen business. Governance is achieved by the
Directors acting together in approving all activity and by
accounting and financial control being in the hands of the
Directors acting alongside third party service providers.
(2) Responsibility and accountability. Although the team is
small, roles are clearly defined. The Board is chaired by a
seasoned Non-Executive Chairman who is not the chief executive, and
the Board also benefits from having a second seasoned Non-Executive
Director who is independent.
Corporate governance (Continued)
(3) Board balance and size. Because of its small size and low
level of commercial activity, the Group is well managed under a
Board of three Directors, none of whom works elsewhere with the
others or worked previously with the others and all of whom have
individual professional standing.
(4) Board skills and capabilities. Robert Pincock has directly
relevant and current knowledge of running businesses in the
Company's chosen sector and geographical markets. The other two
Directors have extensive financial and governance experience, one
with particular knowledge of the London markets and one with
particular knowledge of South East Asian markets.
(5) Performance and development. Each year the board conducts a
review of the performance of the Directors and of Board committees,
and make a formal consideration as to the need for change.
(6) Information and support. The Directors share and discuss all
relevant information and draw upon external advice as required.
(7) Cost-effective and value-added. Recognising the early stage
of development, the Directors do not intend to formalise a review
of this until after the Company makes its first acquisition.
(8) Vision and strategy. The Directors set out their clear
vision in the Admission prospectus. No changes have been made since
then.
(9) Risk management and internal control. These matters fall
into the remit of the Group's Audit and Remuneration
Committees.
(10) daVictus held its Annual General Meeting on 30 September
2020 engaging shareholders who attended to vote for the given
resolutions and approved those resolutions including the adoption
of audited account 2019, re-appointment of director and
auditor.
(11) Stakeholder and social responsibility. The Directors are
mindful of the impact of the Company on wider society and will
ensure a formal corporate and social responsibility regime is put
in place following the Company's first acquisition.
At a general meeting at which a director retires by rotation,
the Company may fill the vacancy and, if it does not do so, the
retiring director shall be, if willing, deemed reappointed. A
Director who retires at an annual general meeting may, if willing
to act, be reappointed. If he is not reappointed (or deemed
reappointed by the Company failing to fill the vacancy), he may
retain office until the meeting appoints someone in his place or,
if it does not do so, until the end of the meeting.
Following the Company's first acquisition, the Company may seek
to transfer from a Standard Listing to either a Premium Listing or
other appropriate listing venue, based on the track record of the
company or business it acquires, subject to fulfilling the relevant
eligibility criteria at the time. If the Company is successful in
obtaining a Premium Listing, further rules will apply to the
Company under the Listing Rules and Disclosure and Transparency
Rules and the Company will be obliged to comply with EU's Market
Abuse Regulation ("MAR).
The Company has established the following committees:
Audit committee
The audit committee, which currently comprises Malcolm Groat (as
chair) and Hadi Majid, has the primary responsibility for
monitoring the quality of internal control and ensuring that the
financial performance of the Company is properly measured and
reported on and for reviewing reports from the Company's auditors
relating to the Company's accounting and internal controls. The
committee is also responsible for making recommendations to the
Board on the appointment of auditors and the audit fee and for
ensuring the financial performance of the Company is properly
monitored and reported. The audit committee will meet not less than
two times a year.
Remuneration committee
The remuneration committee, which currently comprises Hadi Majid
(as chair) and Malcolm Groat, is responsible for the review and
recommendation of the scale and structure of remuneration for
senior management, including any bonus arrangements or the award of
share options with due regard to the interests of the Shareholders
and the performance of the Company. No remuneration committee
meeting took place during in the year.
Nomination committee
The Company does not have a nomination committee as the Board
does not consider it appropriate to establish such a committee at
this stage of the Company's development. Decisions which would
usually be taken by the nomination committee will be taken by the
Board as a whole. No nomination committee meeting took place during
in the year.
Auditors
The auditors, Crowe U.K. LLP, have expressed their willingness
to continue in office and a resolution to reappoint them will be
proposed at the Annual General Meeting.
Statement of Directors' responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations.
Company law requires financial statements to be prepared for
each financial year in accordance with one of the prescribed
generally accepted accounting principles. Under that law the
directors have elected to prepare the financial statements in
accordance with International Financial Reporting Standards
(IFRSs') as adopted by the EU and applicable law.
The directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state
of affairs of the group and of the profit or loss of the group for
that period. In preparing these financial statements, the directors
are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and accounting estimates that are reasonable and prudent;
- state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group will continue
in business.
The directors are responsible for keeping proper accounting
records that are sufficient to show and explain the group's
transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that
the financial statements comply with the Companies (Jersey) Law
1991. They are also responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for keeping proper accounting
records that are sufficient to show and explain the group's
transactions and disclose with reasonable accuracy at any time the
financial position of the group. They are also responsible for
safeguarding the assets of the company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The maintenance and integrity of the daVictus plc website is the
responsibility of the Directors.
Legislation in Jersey or the United Kingdom governing the
preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation
in other jurisdictions. The Directors confirm, to the best of their
knowledge that:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Group; and
-- the management report includes a fair review of the
development and performance of the business and the position of the
Group, together with a description of the principal risks and
uncertainties that it faces.
Statement as to Disclosure of Information to Auditors
The Directors confirm that:
-- there is no relevant audit information of which the Group's statutory auditor is unaware; and
each Director has taken all the necessary steps he ought to have
taken as a Director in order to make himself aware of any relevant
audit information and to establish that the Group's statutory
auditor is aware of that information.
This responsibility statement was approved by the Board of
Directors on 27 July 2021 and is signed on its behalf by;
.................................................
Robert Pincock
Director
29 July 2021
Independent Auditor's Report to the Members of daVictus plc
Opinion
We have audited the financial statements of daVictus Plc (the
"Company") for the year ended 31 December 2020, which comprise:
-- the statement of comprehensive income for the year ended 31 December 2020;
-- the statements of financial position as at 31 December 2020;
-- the statements of cash flows and statements of changes in equity for the year then ended; and
-- notes to the financial statements, which include a summary of
significant accounting policies and other explanatory
information.
The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 31 December 2020 and of the Group's loss for the period then
ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the European Union;
and
-- have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
"Auditor's responsibilities for the audit of the financial
statements" section of our report. We are independent of the
Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to the disclosure note 2(c) in the financial
statements, which indicates that existence of a material
uncertainty, which may cast significant doubt about the Group and
the Company's ability to continue as a going concern. Our opinion
is not modified in respect of this matter
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the ability of the Group
and the Parent Company continue to adopt the going concern basis of
accounting included the following procedures:
We evaluated the Directors' assessment of the Group's ability to
continue as a going concern, including challenging the underlying
data and key assumptions used to make the assessment. Additionally,
we reviewed and challenged the results of management's stress
testing, to assess the reasonableness of economic assumptions in
light of the impact of Covid-19 on the Group's solvency and
liquidity position.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the Company financial statements as a whole to be
GBP3,600 (2019: GBP2,500), based on approximately 2% of the
Company's total assets.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment. We
determined performance materiality to be GBP2,800 (2019:
GBP2,000).
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of GBP180 (2019: GBP125). Errors below
that threshold would also be reported to it if, in our opinion as
auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
We performed a full scope audit on the Company and its wholly
subsidiaries, both based in United Kingdom. Their accounting
accords are administered from one central location at Kuala Lumpur,
Malaysia and our audit was conducted on these records.
We designed our audit by determining materiality and assessing
the risks of material misstatement in the financial statements. In
particular, we looked at areas where the Directors made subjective
judgements, which involved making assumptions and considering
future events that are inherently uncertain, such as their going
concern assessment.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
This is not a complete list of all risks identified by our
audit.
Key audit matter How the scope of our audit addressed
the key audit matter
=============================== =================================================
Revenue recognition Our audit procedures included the following:
During the year, the Group We carried out procedures to test the
entered into franchise revenue and to consider whether the application
agreements with Havana of the revenue recognition policy was
Cafes Sdn Bhd, a related appropriate, having regard to the contractual
company. As disclosed terms and service obligations.
in note 4 to the consolidated We agreed the performance obligations
financial statements, identified by management to a sample
the revenue comprises of contracts to ensure the adopted accounting
of 3 revenue stream and policy was appropriate.
its recognition policy For a sample of transactions, we selected
varies depending on the contracts with the customers and reviewed
underlying contract and their terms and conditions. Based on
could result in each revenue this understanding, we considered if
stream being recognised the underlying income was recognised
at a point in time or in accordance with the stated accounting
over time where certain policy and IFRS 15.
conditions are met.
=============================== =================================================
Our audit procedures in relation to the matter were designed in
the context of our audit opinion as a whole. They were not designed
to enable us to express an opinion on the matter individually and
we express no such opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in
relation to which the Companies (Jersey) Law 1991 requires us to
report to you if, in our opinion:
-- we have not received all the information and explanations we require for our audit; or
-- adequate accounting records have not been kept by the
Company, or proper returns adequate for our audit have not been
received from branches not visited by us; or
-- the Company's financial statements are not in agreement with
the accounting records and returns.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement set out on page 10, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
We obtained an understanding of the legal and regulatory
frameworks within which the Group operates, focusing on those laws
and regulations that have a direct effect on the determination of
material amounts and disclosures in the financial statements. The
laws and regulations we considered in this context were relevant
company law and taxation legislation in the Jersey and British
Virgin Islands jurisdictions in which the Group operates.
We identified the greatest risk of material impact on the
financial statements from irregularities, including fraud, to be
the override of controls by management and inappropriate revenue
recognition. Our audit procedures to respond to these risks
included enquiries of management about their own identification and
assessment of the risks of irregularities, sample testing on the
posting of journals and corroborating balances recognised to
supporting documentation on a sample basis.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. We are not responsible for preventing
non-compliance and cannot be expected to detect non-compliance with
all laws and regulations.
These inherent limitations are particularly significant in the
case of misstatement resulting from fraud as this may involve
sophisticated schemes designed to avoid detection, including
deliberate failure to record transactions, collusion or the
provision of intentional misrepresentations.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Article 113A of the Companies (Jersey) Law 1991.
Our audit work has been undertaken so that we might state to the
company'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.
John Glasby (Senior Statutory Auditor)
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
29 Ju1y 2021
Consolidated Statement of Comprehensive Income
for year ended 31 December 2020
Note Year ended Year ended
31 December 31 December
2020 2019
GBP GBP
Revenue 4 78,333 -
Direct cost - -
------------- -------------
Gross Profit 78,333 -
Other Income
Interest income 210 855
------------- -------------
78,543 855
Administrative expenses (330,476) (240,422)
Operating loss and loss before
taxation 5 (251,933) (239,567)
Income tax expense 6 - -
Loss for the year (251,933) (239,567)
Loss per share
Basic and diluted (pence per
share) 7 (2.11) (2.13)
The notes to the financial statements form an integral part of
these financial statements
There is no other comprehensive income (2019: GBPnil).
Consolidated Statement of Financial Position
as at 31 December 2020
Note As at As at
31 December 31 December
2020 2019
Assets GBP GBP
Other assets
Right of use asset 8 47,053 -
------------------ ------------------
47,054 -
Current assets
Trade and other receivables 9 35,850 -
Cash and cash equivalents 10 20,040 116,553
55,890 116,553
------------------ ------------------
Total assets 102,944 116,553
------------------ ------------------
Equity and liabilities
Capital and reserves
Stated capital 11 1,188,400 1,053,400
Accumulated loss (1,219,159) (967,226)
Total equity (30,759) 86,174
------------------ ------------------
Liabilities
Non-current liability
Lease liability 12 26,812 -
Current liabilities
Other payables 13 85,584 30,379
Lease liability 12 21,307 -
106,891 30,379
------------------ ------------------
Total liabilities 133,703 30,379
------------------ ------------------
Total equity and liabilities 102,944 116,553
------------------ ------------------
The notes to the financial statements form an integral part of
these financial statements
This report was approved by the board and authorised for issue
on 29 July 2021 and signed on its behalf by;
...........................
Robert Pincock
Director
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Stated capital Accumulated Total
loss
GBP GBP GBP
As at 1 January 2020 1,188,400 (967,226) 86,174
Loss for the year - (251,933) (251,933)
--------------- ------------ -----------
Total comprehensive loss ( 251,933
for the year - ) (251,933)
--------------- ------------ -----------
As at 31 December 2020 1,188,400 (1,219,159) (30,759)
=============== ============ ===========
For the year ended 31 December 2019
Stated capital Accumulated Total
loss
GBP GBP GBP
As at 1 January 2019 1,053,400 (727,659) 325,741
Loss for the year - (239,567) (239,567)
--------------- ------------ ----------
Total comprehensive loss
for the year - (239,567) (239,567)
--------------- ------------ ----------
As at 31 December 2019 1,053,400 (967,226) 86,174
=============== ============ ==========
The notes to the financial statements form an integral part of
these financial statements
Consolidated Statement of Cash Flows
for the year ended 31 December 2020
Year ended Year ended
31 December 31 December
2020 2019
Note GBP GBP
Cash flow from operating activities
Operating loss (251,933) (239,567)
Adjustment for :
Depreciation of right-of-use-assets 18,097 -
Interest of lease liability 2,968 -
------------- -------------
(230,868) (239,567)
Changes in working capital
Trade and other receivables (35,850) -
Other payables 55,205 491
------------- -------------
Net cash used in operating activities (211,513) (239,076)
Cash Flow from Financing activities
Proceed from issuance of shares 135,000 -
Repayment on lease liability (20,000) -
Net cash generated from financing activities 115,000 -
------------- -------------
Decrease in cash and cash equivalents (96,513) (239,076)
Cash and cash equivalents at beginning
of the year 116,553 355,626
Cash and cash equivalents at end of
the year 20,040 116,553
============= =============
The notes to the financial statements form an integral part of
these financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The Company was incorporated and registered in Jersey as a
public company limited by shares on 5 February 2015 under the
companies (Jersey) Law 1991 and registered number 117716. The
registered office of the Company is at the offices of 28 Esplanade,
St. Helier, Jersey, JE1 8SB.
On 15 March 2020, the Company acquired a dormant British Virgin
Island incorporated company as a wholly owned subsidiary for
purpose of business operation.
The consolidated financial statements comprise of the financial
information of the Company and its subsidiaries (the Group), which
set out in note 14.
2. ACCOUNTING POLICIES
The Board has reviewed the accounting policies set out below and
considers them to be the most appropriate to the Group's business
activities.
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted for
use by the European Union (EU) and IFRIC interpretations applicable
to companies reporting under IFRS. The financial statements have
been prepared under the historical cost convention as modified for
financial assets carried at fair value.
The financial information of the Company is presented in British
Pound Sterling ("GBP") which is the functional currency of the
Company.
As permitted by Companies (Jersey) Law 1991 only the
consolidated financial statements are presented.
Standards and interpretations issued but not yet applied
A number of new standards and amendments to standards and
interpretations have been issued by International Accounting
Standards Board but are not yet effective and in some cases have
not yet been adopted by the EU. The Directors do not expect that
the adoption of these standards will have a material impact on the
financial statements of the Group in future periods.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries). Control is achieved where the Company is
exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through
its power over the entity.
All intercompany transactions, balances, income and expenses are
eliminated in consolidation.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Going concern
The Directors consider the going concern basis of preparation to
be appropriate in preparing the financial statements. The key
conclusions are summarised below:
The Group made a loss for the year of GBP251,933 (2019:
GBP239,567). The Group recorded net cash used in operating
activities of GBP221,513 (2019: GBP239,076). At the reporting date
the group held cash and cash equivalents of GBP20,040 (2019:
GBP116,553) and had net liabilities of GBP30,759 (2019: net asset
of GBP86,174).
As expected, the Covid-19 pandemic has been unprecedented in
scale and impact. The Group had taken swift and decisive action to
protect its customers, colleagues, franchisees and its staff and
the communities in which the Group operates, by implementing the
necessary steps to safeguard the business through the crisis, in
line with the government guidelines.
The significant impact of COVID-19 to the Company's business is
summarised below:
-- Delay in appointing the second restaurant franchisee by about
three (3) months (initially planned second franchisee in Bangkok by
July 2021).
-- Reduced royalty payment that is by percentage of gross
revenue sales as franchised restaurants are having slower than
expected business.
Subsequent to the year end, the Group raised GBP36,000 through
the issue of 1.2 million ordinary shares at a price of 3p per share
as additional working capital. In addition, the Group received an
advance remittance of approximately GBP190,000 from the franchisee.
The Directors believe there will be sufficient to pay on going
expenses and to meet its liabilities as they fall due for a period
of at least 12 months from the date of approval of the financial
statements.
The Directors have prepared financial projections for a period
of at least 12 months from the date of approval of these financial
statements. Those projections anticipate the Group will continue to
generate revenue and resume its cash collection from the franchise
operation. In view of this prolonged COVID-19 pandemic, there is no
certainty the expected cash remittance will be collected as planned
and the liability can be discharged at the timely manner. These
conditions indicate the existence of a material uncertainty which
may cast significant doubt about the Group and the Company's
ability to continue as a going concern.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. For these reasons, they continue to adopt the
going concern basis of accounting in preparing the annual financial
statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured, regardless of when the payment is made. Revenue
is measured at the fair value of consideration received or
receivable, taking into account contractually defined terms of
payment and excluding taxes or duty.
Fees receivable from franchisee according to franchise agreement
at which time the Group has performed its obligation. Fees
receivable in advance are stated on the Consolidated Statement of
Financial Position as contract liability.
Franchise fees and brand licence fees comprise of revenue for
the initial allocation of the franchise to the respective
franchisee and they are recognised over time during the licence
period.
Compliance fees comprise of assistance provided in maintaining
compliance to the brand standards, food hygiene standard, customer
service standard, dining ambience standard, environmental standard,
food, menu and cuisine standard, general quality standard, cultural
standard and compliance to various other standards and guidelines.
The revenue is recognised over time during the period.
Taxation
The tax currently payable is based on the taxable profit for the
period. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other periods and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Deferred income tax is provided for using the liability method
on temporary differences at the reporting date between the tax
basis of assets and liabilities and their carrying amounts for
financial reporting purposes. Deferred income tax liabilities are
recognised in full for all temporary differences.
Deferred income tax assets are recognised for all deductible
temporary differences carried forward of unused tax credits and
unused tax losses to the extent that it is probable that taxable
profits will be available against which the deductible temporary
differences and carry-forward of unused tax credits and unused
losses can be utilised.
The carrying amount of deferred income tax assets is assessed at
each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each
reporting date and are recognised to the extent that is probable
that future taxable profits will allow the deferred income tax
asset to be recovered.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leases
The Group assesses whether a contract is or contains a lease, at
the inception of the contract. The Group recognises a right-of-use
asset and corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for low-value assets
and short-term leases with 12 months or less. For these leases, the
Group recognises the lease payments as an operating expense on a
straight-line method over the term of the lease unless another
systematic basis is more representative of the time pattern in
which economic benefits from the leased assets are consumed.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use assets and the
associated lease liabilities are presented as a separate line item
in the statement of financial position.
The right-of-use asset is initially measured at cost. Cost
includes the initial amount of the corresponding lease liability
adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred, less any incentives
received.
The right-of-use asset is subsequently measured at cost less
accumulated depreciation and any impairment losses, and adjustment
for any remeasurement of the lease liability. The depreciation
starts from the commencement date of the lease. If the lease
transfers ownership of the underlying asset to the Group or the
cost of the right-of-use asset reflects that the Group expects to
exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset.
Otherwise, the Group depreciates the right-of-use asset to the
earlier of the end of the useful life of the right-of-use asset or
the end of the lease term.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its incremental
borrowing rate.
The lease liability is subsequently measured at amortised cost
using the effective interest method. It is remeasured when there is
a change in the future lease payments (other than lease
modification that is not accounted for as a separate lease) with
the corresponding adjustment is made to the carrying amount of the
right-of-use asset or is recognised in profit or loss if the
carrying amount has been reduced to zero.
Loan and receivables
Loans and receivables are held with an objective to collect
contractual cash flows which are solely payments of principal and
interest on the principal amount outstanding. Such assets are
recognised initially at fair value plus any directly attributable
transaction costs.
Subsequent to initial recognition, loans and receivables are
measured at amortised cost using the effective interest method,
less any impairment losses.
Loans and receivables comprise cash and cash equivalents and
other receivables.
Trade receivables are recognised initially at the transaction
price and subsequently measured at amortised cost, less any
impairment losses.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Loan and receivables
Impairment provisions for current and non-current trade
receivables are recognised based on the simplified approach within
IFRS 9 using a historical provision matrix in the determination of
the
lifetime expected credit losses. During this process the
probability of the non-payment of the trade receivables is
assessed. This probability is then multiplied by the amount of the
expected loss arising from default to determine the lifetime
expected credit loss for the trade receivables. For trade
receivables, which are reported net, such provisions are recorded
in a separate provision account with the loss being recognised
within administration costs in the consolidated statement of
comprehensive income. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
Impairment provisions for receivables from related parties and
loans to related parties are recognised based on a forward looking
expected credit loss model. The methodology used to determine the
amount of the provision is based on whether there has been a
significant increase in credit risk since initial recognition of
the financial asset. For those for which credit risk has increased
significantly, ifetime expected credit losses are recognised,
unless further information becomes available contrary to the
increased credit risk. For those that are determined to be
permanently credit impaired, lifetime expected credit losses are
recognised.
Trade and other payables
Trade and other payables are initially measured at fair value,
net of transaction costs, and are subsequently measured at
amortised cost, where applicable, using the effective interest
method, with interest expense recognised on an effective yield
basis.
Cash and cash equivalents
The Group considers any cash on short-term deposits and other
short term investments to be cash equivalents .
Financial instruments
Financial assets and financial liabilities are recognised on the
statement of financial position when the Group becomes a party to
the contractual provisions of the instrument.
Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team including member of the Board of Directors.
The Board considers that the Group's activity constitutes one
operating and one reporting segment, as defined under IFRS 8.
Management reviews the performance of the Company by reference to
total results against budget.
The total profit measures are operating profit and profit for
the period, both disclosed on the face of the income statement. No
differences exist between the basis of preparation of the
performance measures used by management and the figures in the
Group's financial information.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Impairment of assets
An assessment is made at each of the end reporting period to
determine whether there is any indication of impairment of all
assets or reversal of previous impairment. In the event that an
asset's carrying amount exceeds its recoverable amount, the
carrying amount is reduced to recoverable amount and an impairment
loss is recognised in the income statement. A previously recognised
impairment loss is reversed only if there has been a change in the
estimates used to determine the recoverable amount, however not to
an amount higher than the carrying amount that would have been
determined (net of amortisation or depreciation), had no impairment
losses been recognised for the asset in prior periods.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in compliance with IFRS
as adopted for use by the European Union requires the use of
certain critical accounting estimates or judgements. The estimates
and judgements which have a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities within
the next financial year are discussed below:
Going concern
As disclosed in note 2 the Directors have a reasonable
expectation that the Group and Company have adequate resources to
continue in operational existence for the foreseeable future. For
this reason, the Group and the Company continue to adopt the going
concern basis in preparing the financial statements.
4. REVENUE
Year Ended Year Ended
31 December 31 December
2020 2019
GBP GBP
Franchise Fees 23,333 -
Brand Licence Fees 25,000 -
Compliance Fees 30,000 -
--------------- -------------
78,333 -
=============== =============
The Group revenue are derived from franchise related fees
including franchise, brand licence, compliance fees and royalties
according to Restaurant Franchise Agreement between the Group's
operating subsidiary company, Havana Dining Limited, with the
franchisee. For the reporting period, revenue contributions are
from a single franchisee located in Kuala Lumpur, Malaysia.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. LOSS BEFORE TAXATION
The loss before taxation is stated after charging:
Year Ended Year Ended
31 December 31 December
2020 2019
GBP GBP
Fees payable to the Group's auditors
* Audit of the Group's financial statements 22,000 11,000
2,768 1,000
3,293 17,500
* Other assurance services
* Non audit services relating to corporate finance
transactions
Secretarial services fees 22,987 17,608
Professional fees 37,200 41,000
Other costs associated to the acquisition
transaction 47,528 70,000
Depreciation of right-of-use assets 18,097 -
Costs related to the acquisition of
IP rights 100,000 -
Interest on lease liability 2,968 -
Director emoluments 29,000 29,000
During the year, the Group acquired the intellectual property
(IP) rights, owned by Typical Dutch N.V. ("TDNV"), to utilise and
develop franchise businesses within Asia region. As the purchase
related to the acquisition of these IP rights, comprised of the
unregistered trademarks, unregistered assigned rights and
materials, it was considered that these assets did not meet the
criteria for the recognition of an intangible assets. On that
basis, the costs of GBP100,000 was expensed in the statement of
comprehensive income.
6. INCOME TAX EXPENSE
The Company is not a "Financial Services Company" registered
under the relevant Jersey laws; or a specified utility company and
therefore it is subject to Jersey income tax at the general rate of
Nil percent. If the Company derives any income from Jersey
property, including development of land or quarrying, such income
will be subject to tax at the rate of 20 per cent. It is not
expected that the Company will derive any such income.
The subsidiary company, Havana Dining Limited registered under
the relevant British Virgin Island laws and therefore it is subject
to BVI income tax at the general rate of Nil percent.
Malaysian income tax is calculated at the statutory tax rate of
24 per cent of the estimated assessable profits for the financial
year. No deferred tax asset has been recognised in respect of such
losses and temporary differences due to the unpredictability of
future profit streams. Such losses may be carried forward
indefinitely.
No liability to the corporation tax arose for the year ended 31
December 2020 and year ended 31 December 2019, as the Group did not
generate any assessable profits during the reporting period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. LOSS PER SHARE
Basic loss per ordinary share is calculated by dividing the loss
attributable to equity holders of the company by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. There are currently no
dilutive potential ordinary shares.
Loss per share attributed to ordinary shareholders
Year Ended Year Ended
31 December 31 December
2020 2019
Loss for the year from continuing
operations ( GBP) 251,933 239,567
Weighted average shares in issue (unit) 11,925,000 11,250,000
Loss per share (pence per share) 2.11 2.13
------------- -------------
8. RIGHT-OF-USE ASSETS
The Company has entered into a non-cancellable operating lease
agreement for tenancy of office space. The lease is for a period of
36 months operating lease agreement commencing 1 March 2020 with an
option to renew the lease for a further 12 months.
2020 2019
GBP GBP
Cost 65,151 -
Accumulated depreciation (18,098) -
----------- -----
As at 31 December 47,053 -
=========== =====
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. TRADE AND OTHER RECEIVABLES
As at 31 As at 31
December December
2020 2019
GBP GBP
Trade Receivables 27,500 -
Other Receivables 8,350 -
------------ ----------
35,850 -
============ ==========
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses using a lifetime expected credit loss
provision for trade receivables and contract assets, as set out in
note 18(a).
10. CASH AND CASH EQUIVALENT
Cash and cash equivalents are denominated in the following
currencies:
As at 31 As at 31
December December
2020 2019
GBP GBP
Great Britain Pound 15,680 116,553
Malaysia Ringgit 4,360 -
---------- ----------
20,040 116,553
========== ==========
11. STATED CAPITAL
Number of
Ordinary GBP
Shares
As at 1 January 2020 11,250,000 1,053,400
Issuance of new ordinary shares 900,000 135,000
As at 31 December 2020 12,150,000 1,188,400
=========== ==========
On 7 April 2020 the Company issued 900,000 ordinary shares of
GBP0.15 credited as fully paid increasing its issued share capital
to 12,150,000 ordinary shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. LEASE LIABILITIES
As at 31 As at 31
December December
2020 2019
GBP GBP
Initial recognition 72,000 -
Less : Interest in suspense (6,849) -
---------- ----------
65,151 -
Interest expense recognised in income 2,968 -
statement
Repayment of principal (20,000) -
---------- ----------
48,119 -
========== ==========
Repayment of lease liabilities as follow:
As at 31 As at 31
December December
2020 2019
GBP GBP
Within one year 24,000 -
After one year but not later than 28,000 -
five years
52,000 -
========== ==========
13. OTHER PAYABLES
As at 31 As at 31
December December
2020 2019
GBP GBP
Other creditors 5,860 6,322
Contract liabilities 56,667 -
Amount due to Director 318 318
Accruals and provision 22,739 23,739
---------- ----------
85,584 30,379
========== ==========
Amount due to a Director represents director's fees payable as
at the end of the reporting year. These amounts are interest free
and repayable on demand.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. SUBSIDIARY UNDERTAKING
The details of the subsidiaries in the Group are as follows:
Name of company Country of incorporation Effective Principal activities
holding
Direct holding
:
Havana Dining British Virgin 100% Facilitator for
Limited. Island Group operation
Address: Coastal Building, Wickham's Cay II, P.O. Box 2221,
Road Town, Tortola, British Virgin Islands
Indirect holding
:
Davictus World Malaysia 100% Management and
Sdn Bhd administration
of Group operation
Address: No.9, 1(st) Floor, SS15/2A,
47500 Subang Jaya, Selangor, Malaysia
15. DIRECTORS' EMOLUMENTS
The directors are considered to be the key management personnel.
Details concerning Directors remuneration can be found below:
Year Ended Year Ended
31 December 31 December
2020 2019
Name of Director GBP GBP
Robert Logan Pincock 15,000 15,000
Abd Hadi bin Abd Majid 10,000 10,000
Maurice James Malcolm Groat 4,000 4,000
There are no other employment benefits offered to the
Directors.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. SEGMENTAL ANALYSIS
The chief operating decision maker has been identified as the
management team including the one director and two non-executive
directors. The chief operating decision-maker allocates resources
and assesses performance of the business and other activities at
the operating segment level.
The chief operating decision maker has determined that in the
year end 31 December 2020, the Group had a single operating
segment, the provision of managed restaurant franchise business.
All the activities and operations are based in Malaysia
There is one franchisee during the reporting year.
17. NET DEBT RECONCILIATION
The below table sets out an analysis of net debt and the
movement in net debt for the years presented:
As at 31 As at 31
December December
2020 2019
GBP GBP
Cash and cash equivalents 20,040 116,553
========== ===========
Cash and
cash equivalents
GBP
Net debt as at 31 December 2018 355,629
Cash flow (239,076)
Net debt as at 31 December 2019 116,553
Proceed from issuance of shares 135,000
Repayment on lease liability (20,000)
Cash flow (211,513)
---------------------
Net debt as at 31December 2020 20,040
=====================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. FINANCIAL INSTRUMENTS
The Group is exposed through its operations to the following
financial risks:
-- Credit risk
-- Fair value
-- Foreign exchange risk, and
-- Liquidity risk.
The Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group's objectives,
policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect
of these risks is presented throughout these financial
statements.
There have been no substantive changes in the Group's exposure
to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure
them from previous periods unless otherwise stated in this
note.
Principal financial instruments
The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:
-- Trade receivables
-- Cash and cash equivalents
-- Trade and other payables
-- Right of use assets and lease liabilities
Financial instruments by category:
As at 31 As At 31
December December
2020 2019
GBP GBP
Financial assets
Cash and cash equivalents 20,040 116,553
Trade and other receivables 35,850 -
----------- ----------
Total financial assets 55,890 116,553
=========== ==========
Financial liabilities measured at
amortised cost
Amount due to director 318 318
Trade and other payables 28,599 30,061
Lease Liability 48,119 -
----------- ----------
Total financial liabilities 77,036 30,379
=========== ==========
The Group uses a limited number of financial instruments,
comprising cash, short-term deposits and various items such as
trade receivables and payables, which arise directly from
operations. The Group does not trade in financial instruments and
it has no external borrowing.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. FINANCIAL INSTRUMENTS (Continued)
Financial instruments not measured at fair value
These include cash and cash equivalents, trade and other
receivables, trade and other payables, and loans and borrowings.
Due to their short-term nature, the carrying value of cash and cash
equivalents, trade and other receivables, trade and other payables
approximates their fair value.
The Group's activities expose it to a variety of financial
risks: market risk (including foreign exchange risk, price risk and
interest rate risk) credit risk and liquidity risk. The financial
risks relate to the following financial instruments: cash and cash
equivalents, trade and other receivables, trade and other payables,
and loans and borrowings. The accounting policies with respect to
these financial instruments are described above.
Risk management is carried out by the directors under policies,
where they identify and evaluate financial risks in close
co--operation with the Group's operating units. The directors
provide principles for overall risk management.
The reports on the risk management are produced periodically to
the key management personnel of the Group.
a) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. In order to minimise this risk the Group endeavours only to
deal with companies which are demonstrably creditworthy.
The expected loss rates are based on the Group's historical
credit losses experienced. The historical loss rates are then
adjusted to reflect current and forward-looking information, any
known legal and specific economic factors, including the credit
worthiness and ability of the customer to settle the
receivable.
The Group's major concentration of credit risks relates to the
amount owed by a single franchisee customer, which was past due but
not impaired, at the end of reporting year. Subsequent to the year
end, the Group received the payment of overdue debts in full before
the date of approval these financial statements.
Credit risk also arises from cash and cash equivalents and
deposits with banks and financial institutions. The Group's
exposure to credit risk on cash and cash equivalents is considered
low as the bank accounts are with banks with high credit
ratings.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. FINANCIAL INSTRUMENTS (Continued)
b) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash flow for operations. The Group manages its' risk to shortage
of funds by monitoring forecast and actual cash flows.
The Group monitors its risk to a shortage of funds using a
recurring liquidity planning tool. This tool considers the maturity
profile of the Group's financial liabilities, based on the
contracted undiscounted payments were as follow:
Carrying Contractual Within
value cash flow one year 1-2 years 2-5 years
At 31 December 2020
Amount due to director 318 318 318 - -
Trade and other payable 28,599 28,599 28,599 - -
Lease liability 48,119 52,000 24,000 24,000 4,000
77,036 80,917 52,917 24,000 4,000
--------- ------------ ---------- ------------ ----------
At 31 December 2019
Amount due to director 318 318 - - -
Trade and other payable 30,061 30,061 - - -
30,379 30,379
--------- ------------ ---------- ------------ ----------
c) Foreign currency risk
The Group has some exposure to foreign currency risk. The Group
purchases and sells in various foreign currencies, mainly Ringgit
Malaysia (MYR) that exposes it to foreign currency risk arising
from such purchases and sales and the resulting receivables and the
payables. However, the Group continuously monitors its foreign
currency position.
The carrying amounts of the Group's financial instruments are
denominated in the following currencies at each reporting year:
MYR GBP Total
At 31 December 2020
Financial assets 4,360 131,530 135,890
Financial liabilities 360 76,676 77,036
------ -------- --------
Net financial assets 4,000 54,854 58,854
------ -------- --------
At 31 December 2019
Financial assets - 116,553 116,553
Financial liabilities - 30,379 30,379
------ -------- --------
Net financial assets - 86,174 86,174
------ -------- --------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. FINANCIAL INSTRUMENTS (Continued)
c) Foreign currency risk (continued)
The sensitivity analysis in the table below details the impact
of changes in foreign exchange rates on the Group's post-tax profit
or loss for each reporting period.
It is assumed that the named currency is strengthening or
weakening against all other currencies, while all the other
currencies remain constant.
If the GBP strengthened or weakened by 10% against the other
currencies, with all other variables in each case remaining
constant, then the impact on the Group's post-tax profit or loss
would be gains or losses as follows:
Strengthen Weaken
For the year ended 31 December 2020
MYR (363) 363
-------------- ----------
d) Fair values
Management assessed that the fair values of cash and short-term
deposits, trade receivables, trade payables and other current
liabilities approximate their carrying amounts largely due to the
short-term maturities of these instruments.
19. CAPITAL MANAGEMENT POLICY
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. The capital structure of the Group consists of
the equity attributable to equity holders of the Group which
comprises of issued share capital and reserves.
20. RELATED PARTY TRANSACTIONS
Included within current liabilities is an amount of GBP318
(2019: GBP318) owing to Abd Hadi bin Abd Majid, a Director.
During the year, the Group entered into franchise agreement with
Havana Café Sdn Bhd ("HCSB"), a company incorporated in Malaysia,
where Mr. Abd Hadi bin Abd Majid has substantial interest in HCSB.
The related party transaction with HCSB is disclosed in note 4 and
the amount due from HCSB was GBP27,500 at the reporting date.
21. CAPITAL COMMITMENTS
There Group's has no capital commitment engaged.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
22. SUBSEQUENT EVENTS
On 21 June 2021, the Company undertook an equity fundraise of
GBP36,000 (gross) through the issue of 1,200,000 ordinary shares of
no par value at a price of 3.0 pence per ordinary share, to provide
additional working capital for the Company.
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END
FR EAEXNALEFEFA
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