TIDMDVT
RNS Number : 4534L
daVictus plc
13 May 2022
13 May 2022
DAVICTUS PLC
("DAVICTUS" OR "THE COMPANY")
FINAL RESULTS FOR THE PERIODED 31 DECEMBER 2021
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
2021.
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, I would like to present the
financial statements of daVictus Plc (the "Company" or "daVictus")
and its subsidiary undertakings (together the "Group") for year
ended 31 December 2021.
After more than a year into the COVID-19 pandemic and various
economic lockdowns, the Company had successfully appointed its
second franchisee for its flagship Premium Dining restaurant chain,
Havana Dining, located in the business district of Sukhumvit,
Bangkok.
While the COVID-19 pandemic continues to affect the hospitality
business, many governments throughout the world are now moving
ahead in treating the spread of the COVID-19 virus as an endemic
and thus enabling more regular opening of businesses with the view
of further opening of the economic and tourism sectors in months to
come. Already borders of most countries have opened for unlimited
travel starting from 1(st) April 2022.
Business for the franchisees have yet to pick up as expected and
the Company foresees a slow and steady growth of revenue beginning
from April 2022 onwards and expect businesses to reach its intended
business capacity before the year end.
We continue to take care of the welfare of our employees and the
safety and concerns of our franchisee's customers which remain
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 is hopeful that no further lockdowns will be
necessary in the future such that the businesses of both the
franchisees can flourish as planned.
Abd Hadi Bin Abd Majid
Chairman
13 May 2022
Operational and Financial Review
During the financial year, the Company successfully appointed
its second franchisee. The selected location for this second
franchisee is in the business district of Sukhumvit, Bangkok.
Cash on hand as of 31 December 2021 is GBP96,624.
On 21 February 2022, The Company announced the appointment of
Shipleys LLP as the Company's external auditor.
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 72) - 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 43) - 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 61) - 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 Harland & Wolff and TomCo
Energy. Mr Groat is a Fellow of the Institute of Chartered
Accountants in England and Wales.
The Directors present their Report with the financial statements
of the Company and its subsidiary undertakings (together the
"Group") for year ended 31 December 2021.
Results and dividends
The results for the year are set out in the Statement of
Comprehensive Income on page 17. The Directors do not recommend the
payment of 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 Southeast 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 2021 were as follows:
Abd Hadi bin Abd Majid
Robert Logan Pincock
Maurice James Malcolm Groat
Directors' interest
As at 31 December 2021, Robert Pincock, one of our directors,
owns 1,250,000 ordinary shares, which represents an 9.36 %
interest.
Directors Report (continued)
Substantial shareholders
The Company has been notified of the following interests of 3
per cent or more in its issued share capital as at 2 March 2022
Number of Ordinary % of
Party Name Shares Share Capital
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%
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%
VCB A.G 900,000 6.74%
West Park Capital Manager Ltd 400,000 3.00%
Capital and returns management
Based on the Company's plans for 2022, 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 following years unless there are any
changes in the business outlook. 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 as and
when they fall due in 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
behaviour 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 behaviour 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 norm of
post-COVID-19 consumer behaviour and restaurant operations such as
exploration of take-out, drive-through and delivery options.
The Company supports increased domestic/local sourcing for
supply chain as well as meeting the standard operating procedures
fr sanitization practices in the preparing and handling of
food.
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 23 September
2021 engaging shareholders who attended to vote for the given
resolutions and approved those resolutions including the adoption
of audited account 2020, 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.
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, Shipleys 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 UK-adopted International Accounting Standards 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 13 May 2022 and is signed on its behalf by;
.................................................
Robert Pincock
Director
13 May 2022
Independent Auditor's Report to the Members of daVictus plc
Opinion
We have audited the financial statements of daVictus plc (the
"Company") and its subsidiary undertaking (together referred to as
the "Group") for the year ended 31 December 2021, which
comprise:
-- the consolidated statement of comprehensive income for the year ended 31 December 2021;
-- the consolidated statement of financial position as at 31 December 2021;
-- the consolidated statement of cash flows for the year ended 31 December 2021;
-- the consolidated statement of changes in equity for the year ended 31 December 2021;
-- notes to the financial statements, which include a summary of
significant accounting policies and other explanatory
information.
In our opinion, the financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 31 December 2021 and the Group's loss for the year then
ended; and
-- have been properly prepared in accordance with UK-adopted International Accounting Standards.
-- have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
Our opinion is consistent with our reporting to the audit
committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities under ISAs (UK) are further described in the
Auditor's Responsibilities for the Audit of the Financial
Statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remained independent of the Group 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, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC's Ethical Standard were
not provided.
We have provided no non-audit services to the Company or its
controlled undertakings in the period under audit.
Material uncertainty related to going concern
We draw attention to the disclosure note 2c in the financial
statements, which indicates the existence of a material
uncertainty, which may cast doubt about the Group and 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 financial statements as a whole to be GBP4,099,
based on approximately 2% of the Group's total assets at the year
end.
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 GBP3,074.
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 GBP205. 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 Group in accordance with
ISAs (UK).
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
judgment, were of most significance on 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, including 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.
Going concern was identified as a key audit matter and has been
addressed within the "Conclusions relating to going concern"
section of the audit report. We have determined that there are no
other key audit matters to communicate in our report. 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 other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report. 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.
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 course of 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 this gives rise to a material misstatement in the financial
statements themselves. 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 respect of these matters.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 6, 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 and Group'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
Group 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.
Explanation as to what extent the audit was considered capable
of detecting irregularities, including fraud
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 tax legislation in the UK and Cayman 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. 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 reviewing accounting
estimates for biases.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances on
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement
due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through
collusion.
Our audit testing might include testing complete populations of
certain transactions and balances. However, it typically involves
selecting a limited number of items for testing, rather than
testing complete populations. We will often seek to target
particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to
enable us to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at
https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor's report.
Appointment
We were appointed by the board on 21 February 2022 to audit the
financial statements for the year ended 31 December 2021. Our total
uninterrupted period of engagement is 1 year, covering the year
ended 31 December 2021.
Use of our report
This report is made solely to the Company's members, in
accordance with the terms of our engagement letter. 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.
BENJAMIN BIDNELL
For and on behalf of
SHIPLEYS LLP
Chartered Accountants and Statutory Auditor
10 Orange Street, Haymarket, London, WC2H 7DQ
13 May 2022
Consolidated Statement of Comprehensive Income
for year ended 31 December 2021
As at As at
31-Dec-2021 31-Dec-2020
Note GBP GBP
Revenue 4 162,500 78,333
Direct cost - -
------------- -------------
Gross Profit 162,500 78,333
Other Income
Gain on Disposal of Lease 1,066 -
Interest income 8 210
-------------
163,574 78,543
Administrative expenses (181,685) (330,476)
Operating loss before
taxation 5 (18,111) (251,933)
Income tax expense 6 - -
Loss for the year (18,111) (251,933)
Loss per share
Basic and diluted (pence
per share) 7 (0.14) (2.11)
The notes to the financial statements form an integral part of
these financial statements
Consolidated Statement of Financial Position
as at 31 December 2021
Assets As at As at
31-Dec-2021 31-Dec-2020
Note GBP GBP
Other assets
Right of use asset 8 60,844 47,054
------------- -------------
60,844 47,054
Current assets
Trade and other receivables 9 47,461 35,850
Cash and cash equivalents 10 96,624 20,040
Total current assets 144,085 55,890
------------- -------------
Total assets 204,929 102,944
------------- -------------
Equity and liabilities
Capital and reserves
Stated capital 11 1,224,400 1,188,400
Accumulated loss (1,237,270) (1,219,159)
Total equity (12,870) (30,759)
------------- -------------
Liabilities
Non-current liability
Lease liability 12 30,176 26,812
Current liabilities
Other payables 13 18,537 85,584
Lease liability 12 32,420 21,307
Deferred Income 136,666 -
Total current liabilities 187,623 106,891
Total liabilities 217,799 133,703
------------- -------------
Total equity and liabilities 204,929 102,944
------------- -------------
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 13 May 2022 and signed on its behalf by;
...........................
Robert Pincock
Director
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Accumulated
Stated capital loss Total
GBP GBP GBP
As at 1 January
2021 1,188,400 (1,219,159) (30,759)
Proceeds from issuance
of ordinary shares
during the year 36,000 - 36,000
Loss for the year (18,111) (18,111)
--------------- ------------ ---------
Total comprehensive
proceeds from issuance
of ordinary shares
/ loss for the year 36,000 (18,111) 17,889
--------------- ------------ ---------
As at 31 December
2021 1,224,400 (1,237,270) (12,870)
=============== ============ =========
For the year ended 31 December 2020
Accumulated
Stated capital loss Total
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 ( 251,933
loss for the year - ) (251,933)
--------------- ------------ -----------
As at 31 December
2020 1,188,400 (1,219,159) (30,759)
=============== ============ ===========
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
Note As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
Cash flow from operating activities
Operating (loss) for the year (18,111) (251,933)
Adjustment for:
Depreciation of right-of-use-assets 30,422 18,097
Gain on disposal of lease (1,066) -
Interest income (8) (210)
Interest on lease liability 4,931 2,968
------------- --------------
16,168 (231,078)
Changes in working capital
Trade and other receivables (11,611) (35,850)
Other payables 69,619 55,205
------------- --------------
Net cash used in operating
activities 74,176 (211,723)
Cash Flow from Financing activities
Proceed from issuance of shares 36,000 135,000
Interest income 8 210
Repayment on lease liability (33,600) (20,000)
Net cash generated from financing
activities 2,408 115,210
------------- --------------
Increase / (decrease) in cash
and cash equivalents 76,584 (96,513)
Cash and cash equivalents
at beginning of the year 20,040 116,553
Cash and cash equivalents
at end of the year 96,624 20,040
============= ==============
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
UK-adopted International Accounting Standards 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.
On 1 January 2021, IFRS as adopted by the European Union at that
date was brought into UK law and became UK-adopted International
Accounting Standards, with future changes being subjec tto
endorsement by the UK Endorsement Board. The Company transitioned
to UK-adopted International Accounting Standards in its
consolidated financial statements on 1 January 2021. This change
constitutes a change in accounting framework. However, there is no
impact on recognition, measurement or disclosure in the period
reported as a result of the change in framework
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. 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 GBP18,111 (2020:
GBP251,933). The Group recorded net cash generated / (used) in
operating activities of GBP76,584 (2020: (GBP96,513)). At the
reporting date the group held cash and cash equivalents of
GBP96,624 (2020: GBP20,040) and net equity of (GBP12,870) (2020:
(GBP30,759)).
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.
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. The Directors believe there will be sufficient funds 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 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 (Continued)
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
As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
Franchise Fees 43,333 23,333
Brand Licence Fees 65,000 25,000
Compliance Fees 54,167 30,000
------------- -------------
162,500 78,333
============= =============
The Group revenue are derived from franchise related fees
including franchise fee, brand licence fee, compliance fee and
royalties according to Restaurant Franchise Agreement between the
Group's operating subsidiary company, Havana Dining Limited and
Havana Café Sdn Bhd and Everest Consulting Co. Limited, the
franchisees.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. LOSS BEFORE TAXATION
The loss before taxation is stated after charging:
As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
Fees payable to the Group's auditors
- Audit of the Group's financial
statements 18,500 22,000
- Other assurance services 1,099 2,768
- Non audit services relating to
corporate finance transactions - 3,293
Secretarial services fees 8,563 22,987
Professional fees 47,404 37,200
Other costs associated to the acquisition
transaction - 47,528
Depreciation of right-of-use assets 30,422 18,097
Costs related to the acquisition
of IP rights - 100,000
Interest on lease liability 4,931 2,968
Director emoluments 29,000 29,000
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 2021 and year ended 31 December 2020, 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
As at As at
31-Dec-2021 31-Dec-2020
Loss for the year from continuing
operations ( GBP) 18,111 251,933
Weighted average shares in issue (unit) 12,797,671 11,925,000
Loss per share (pence per share) 0.14 2.11
--------------- -------------
8. RIGHT-OF-USE ASSETS
The Company have cancelled its existing operating lease
agreement on 31 December 2020 and have entered into a new operating
lease agreement for tenancy of office space. The new lease
agreement is for a period of 36 months, commencing from 1 January
2021 with an option to renew the lease for a further 12 months.
GBP
Cost
As at 1 January 2020 65,150
Additions / (Disposals) -
during the year
---------
As at 1 January 2021 65,150
Additions during
the year 91,266
Derecognising due
to lease termination (65,150)
---------
As at 31.12.2021 91,266
---------
Accumulated depreciation
As at 1 January 2020 -
Charge for the year 18,097
---------
As at 1 January 2021 18,097
Charge for the year 30,422
Derecognising due
to lease termination (18,097)
---------
As at 31 December
2021 30,422
---------
Net Book Value
At 31 December 2021 60,844
---------
At 31 December 2020 47,054
---------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. TRADE AND OTHER RECEIVABLES
As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
Trade Receivables 40,000 27,500
Other Receivables 7,461 8,350
47,461 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. C ASH AND CASH EQUIVALENT
Cash and cash equivalents are denominated in the following
currencies:
As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
Great Britain Pound 3,102 15,680
Malaysia Ringgit 93,522 4,360
------------- -------------
96,624 20,040
============= =============
11. SHARE CAPITAL
As at As at
31-Dec-2021 31-Dec-2021
No. of shares GBP
As at 1 January 2021 12,150,000 1,188,400
Issuance of new ordinary
shares 1,200,000 36,000
As at 31 December 2021 13,350,000 1,224,400
=============== =============
On 18 Jun 2021 the Company issued 1,200,000 ordinary shares of
GBP0.03 credited as fully paid increasing its issued share capital
to 13,350,000 ordinary shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. LEASE LIABILITIES
As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
At 1 January 48,119 -
Additions 100,804 72,000
Gain on early lease termination (1,066) -
Derecognition due to lease (47,053) -
termination
Interest in suspense (9,539) (6,849)
91,265 65,151
Interest expense recognised
in income statement 4,931 2,968
Repayment of principal (33,600) (20,000)
------------- -------------
62,596 48,119
================================= ============= =============
Repayment of lease liabilities
as follow:
As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
Within one year 33,602 24,000
After one year but not later
than five years 33,602 28,000
67,204 52,000
================================= ============= =============
13. OTHER PAYABLES
As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
Other creditors (1,026) 5,860
Contract liabilities 136,666 56,667
Amount due to Director 318 318
Accruals and provision 19,245 22,739
155,203 85,584
============= =============
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. S UBSIDIARY 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
On 22 February 2022, The board approved to dispose Havana Dining
limited and novate the franchise agreement to Davictus PLC.
Thereafter, Davictus PLC will no longer have Havana Dining Limited
as its subsidiary in company structure and Davictus World Sdn Bhd
becomes a direct holding company.
15. DIRECTORS' EMOLUMENTS
The directors are considered to be the key management personnel.
Details concerning Directors' remuneration can be found below:
As at As at
31-Dec-2021 31-Dec-2020
GBP GBP
Name of Director
Robert Logan Pincock 15,000 15,000
Abd Hadi bin Abd Majid 10,000 10,000
Maurice James Malcolm Groat 4,000 4,000
29,000 29,000
============= =============
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 2021, the Group had a single operating
segment, the provision of managed restaurant franchise business.
All the activities and operations are based in Malaysia and
Thailand.
There are two franchisee during the reporting year.
17. F INANCIAL 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 As at
31 31
December December
2021 2020
GBP GBP
Financial assets
Cash and cash equivalents 96,624 20,040
Trade and other receivables 42,000 35,850
------------------ ------------------
Total financial assets 138,624 55,890
------------------ ------------------
Financial laibilities measured
at amortised cost
Amount due to a director 318 318
Trade and other payables 18,219 28,599
Lease liability 62,596 48,119
------------------ ------------------
Total financial laibilities 81,133 77,036
------------------ ------------------
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.
19. 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 2021
Amount due to director 318 318 318 - -
Trade and other payable 131,352 131,352 131,352 - -
Lease liability 62,596 67,203 33,602 33,601
194,266 198,873 165,272 33,601
--------- ------------ ---------- ------------ ----------
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
--------- ------------ ---------- ------------ ----------
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 2021
Financial assets 93,522 3,102 96,624
Financial liabilities 1,104 84,637 85,741
------- --------- ---------
Net financial assets 92,418 (81,535) 10,883
------- --------- ---------
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
------- --------- ---------
20. 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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
2021
MYR 606 606
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.
21. 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.
22. RELATED PARTY TRANSACTIONS
Included within the current liabilities is an amount of GBP318
(2020: GBP318) owing to Abd Hadi bin Abd Majid, who is one of the
Directors of the ultimate holding company.
23. CAPITAL COMMITMENTS
The Group has no capital commitments.
24. SUBSEQUENT EVENTS
On 22 February 2022, The Board approved to dispose Havana Dining
limited and novate the franchise agreement to Davictus PLC.
Thereafter, Davictus PLC will no longer have Havana Dining Limited
as its subsidiary in company structure and Davictus World Sdn Bhd
becomes a direct holding company.
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END
FR GPUQCAUPPUBW
(END) Dow Jones Newswires
May 13, 2022 05:57 ET (09:57 GMT)
Davictus (LSE:DVT)
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Davictus (LSE:DVT)
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